Q4 2023 Helius Medical Technologies Inc Earnings Call
Yeah.
None: Good day, and thank you for standing by and welcome to the Helios Medical Technologies, Inc. Q4, 2023 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question during the session you'll need to press star one on your telephone.
None: You will then hear an automated message of Boston. Your hand is raised to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Michelle Bilsky inside Communications. Please go ahead.
Michelle Gable Bilski: Thank you operator welcome to the fourth quarter 2023 earnings conference call for Helios Medical Technology. This is Michel dusky of insight Communications Investor Relations for Helios with me on today's call are Dave Andrey <unk>, Medical's, President and Chief Executive Officer, and Jeff <unk>, Chief Financial Officer at this time.
Michelle Gable Bilski: Okay. That's had been placed in a listen only mode. Please note that this call is being recorded and access to the webcast can be obtained through the investors section of the Helios website at Www Dot Hill medical Dot Com before we begin I would like to remind everyone that our remarks and responses to your questions. Today may contain forward looking statements that are based on the current expectations of management. These forward looking.
Michelle Gable Bilski: These statements involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated including those identified in the risk factors section of our most recent annual report on Form 10-K, such factors may be updated from time to time in our other filings with the SEC, which are available on our website. All statements made during this call are as of March 28 2002.
24, we undertake no obligation to publicly update or revise our forward looking statements as a result of new information future events or otherwise except as Rick.
Michelle Gable Bilski: Wired bylaw I would now like to turn the call over to Dave <unk>, President and Chief Executive Officer appeal it.
Dane Carl Andreeff: Thanks, Michelle and thank you to everyone joining us today on helium Medicals fourth quarter 2023 earnings conference call.
Dane Carl Andreeff: Happy to report that during 2023 and over the past few months, we've taken several meaningful steps towards two important milestones in the United States.
None: <unk> been widespread reimbursement for ponds and FDA approval for stroke.
None: I'll start with our pursuit of broad reimbursement for Pons as.
None: As you know <unk> is currently authorized in the United States to treat gait deficit due to mild to moderate symptoms.
None: Matt.
None: We are thrilled that CMS recently assigned us.
None: Unique.
None: <unk> for both Pons controller and upon smoked piece effective April one 2024.
None: These codes allow us to begin negotiating reimbursement with third party payers and gives us the option to some.
None: Net claims on a case by case basis.
None: We now expect to engage with CMS in the coming weeks and at the public meeting this summer with the objective of securing Medicare reimbursement for the Pons controller and Mo piece and their next cycle.
If we are successful reimbursement will be effective October one.
None: 2024.
None: To further support our reimbursement efforts, we anticipate getting primary endpoint data from pawn step during the third quarter with preliminary study results communication before year end.
None: As a reminder, upon step as a company sponsored research trial designed to evaluate the impact of MF patient adherence to pump therapy in a real world clinical study.
None: We expect data from this program to underscore the effectiveness of Pons intriguing gait and balance impairment as well as the long term therapeutic benefit.
None: And we initiated efforts to target the department of Veterans Affairs.
None: Through their nationwide multiple sclerosis centers of excellence. The VA provides healthcare services to veterans with MFS from the time of diagnosis and through the rest of their lives and more than 28000 cases are reported to the VA annually.
Okay.
None: To establish a partnership with an authorized supplier to the VA in the near future.
None: Now onto the achievements, we've made towards our goal of securing U S commercial authorization for stroke.
None: In the U S over 5 million stroke survivors are effected by walking and balanced disability and phone is approved.
None: Prevailing concern for stroke survivors.
None: Clinical evidence out of Kansas showed that patients treated with <unk> therapy.
None: The substantial improvement in gait and balance.
None: Furthermore, in the real World database analysis, the majority of the patients before starting pump therapy were at risk of falling.
None: While routine rehabilitation physical therapy provides.
None: About a 1% to 3% reduction in risk remarkably after 14 weeks of treatment with Pons therapy, 28% of the patients were no longer at fall risk.
None: This is a clinically meaningful and impactful improvement.
None: Fall related events are dangerous to the patient, resulting in additional injuries and new or lengthen hospital stays which presents a significant financial burden to the health care system with the average treatment cost per fall estimated at 64500.
None: Dollars.
None: If you compare that to the number two our list price of pawn system at 25700.
None: The health economic equation greatly favors the use of plants.
None: With pump therapy, we have a huge opportunity to improve the lives of patients suffering from stroke, while also helping to reduce the considerable fall related economic burden to providers, which totals and estimated a $50 billion per year.
None: Canada, where pons is already authorized for stroke, the government and providers are already starting to see the clinical and economic benefit of ponds.
None: Early in the fourth quarter, we received a letter of intent from the Quebec Ministry of Health and social services to purchase 30 Pons devices.
None: We are currently working to establish five sites in five separate administrative regions as part of a government funded initiatives designed to further validate the effectiveness upon therapy when used by patients suffering the effects of stroke.
None: We believe this program will not only accelerate adoption in Canada, but will also increase the body of therapeutic evidence too.
None: Award, our pursuit of market access and third party coverage here in the United States.
None: Also critical to achieving market access is our ongoing investigator initiated placebo controlled study by Dr. Steven coach at the medical University of South Carolina, which evaluates the effects of cranial nerve noninvasive neuromodulation delivered user.
None: <unk> PON therapy on Gaydon dynamic balanced and chronic stroke survivors.
None: We also began an open label study as part of our Registrational program raising the total number of participants.
Between the two studies to approximately 100.
None: In January Brooks Rehabilitation Hospital joined the program as a second site. The Doctor coaches study and is now also the first site to have start enrolling patients in the open label study.
None: We believe that bringing ponds clinical experience two additional sites in the U S. Through the open label Open label study will further support our stroke authorization efforts.
We also recently aligned with the FDA on our stroke development plan.
None: Through this plan, we can leverage the randomized control study at <unk> as part of the Registrational program along with the open label study.
And real World evidence from Canada.
None: To significantly streamline the size timeline and the cost of the Registrational program.
None: A more efficient path to approval is great news not only for Helios, but also for the millions of stroke survivors in the U S who could benefit from ponds therapy.
None: We are targeting regulatory submission by early 2025 with the goal of receiving marketing authorization utilizing ponds breakthrough designation and stroke later in the same year.
None: If authorized to treat stroke in the U S ponds would be eligible for the proposed transitional coverage of emerging technologies or T SEC pathway, which would expedite Medicare coverage of certain breakthrough.
None: Yeah.
None: Certain breakthrough devices and allow for temporary coverage within six months after FDA market authorization.
None: An estimated 90% of stroke patients in the U S are covered by Medicare.
None: Turning now to our Canadian activities.
None: Early in the fourth quarter Pacific Blue Cross and Health Tech connect published a white paper demonstrating pons therapy can drastically improve returned to work outcomes for patients suffering from traumatic brain injury or TDI.
None: The program participants included patient that at least two years post injury, who did not respond to standard rehabilitation treatment and were not expected to return to work.
None: After 14 weeks upon therapy <unk>.
None: 89 out of the study participants said that balance and gait was no longer a barrier to work <unk>.
None: <unk>, 6% returned to work and.
None: And 80% of those who returned we're able to work full time at their prior occupations for at least six months.
None: As you can imagine these were incredibly gratifying results.
None: Pons therapy is truly a game changer for people suffering from gaining balanced impairment and we are optimistic that the findings from this white paper will advance our efforts to gain reimbursement by Canadian insurance companies and health care providers as well as demonstrating ponds significant health.
None: <unk> economic benefit and cost effectiveness as we negotiate coverage with U S payers.
None: As you've heard today, we see several upcoming milestones on the path ahead, and expect 2024 to be another year of marching steadily toward our goals.
None: With $1 $3 million raised under our ATM program since year end, our cash runway has been extended into the third quarter of this year, allowing us to continue pursuing widespread reimbursement, while making progress on stroke.
None: With that let me turn the call over to Jeff to discuss our fourth quarter financial results in detail.
Jeff: Thanks, Dan.
Jeff: It is a pleasure to be with you today.
Jeff: Total revenue for the fourth quarter of 2023 was $134000 compared to $282000 in the fourth quarter of 2022.
Jeff: The decrease was primarily attributable to the June 32023 exploration of the <unk> program in the United States, along with lower Canadian product sales.
For the fourth quarter of 2023 cost of revenue was $90000 compared to $150000 for the prior year period.
Jeff: With the decrease primarily due to decreased revenues in the current year.
Jeff: Selling general and administrative expense for the fourth quarter of client trying three was $1 6 million.
Jeff: <unk> of <unk> 4 million compared to $2 million in the fourth quarter of 2022.
Jeff: Primarily due to a decrease in compensation related expenses.
Jeff: Cash and excuse me in research and development expenses for the fourth quarter of 2023.
Jeff: We're zero point $7 million compared to zero point $8 million in the fourth quarter of 2022.
Jeff: Resulting primarily from a decrease in clinical and product development expenses in the current year.
Jeff: Operating loss for the fourth quarter of 2023 decreased to a loss of $2 $2 million.
Jeff: Compared to an operating loss of $2 $7 million in the fourth quarter of 2022.
Jeff: Net loss was $1 million for the fourth quarter of 2023 compared to a net loss of $4 9 million in the fourth quarter of 2022.
Jeff: The basic and diluted net loss per share for the fourth quarter 2023 was $1 47.
Jeff: Compared to a net loss per share of $8 66 in the fourth quarter of 2022.
Jeff: Our cash burn from operations in the fourth quarter of 2023 was $2 million compared to $2 1 million.
Jeff: Fourth quarter of 2022.
Jeff: As of December 31, 2000, 22023, we had $5 $2 million in cash and no debt.
Jeff: As Dan mentioned, we generated $1 3 million net proceeds from the sale of shares of our common stock under our ATM program since the end of the year.
Jeff: Sold at an average share price of $9 27 per share.
Jeff: Which extends our cash runway into the third quarter of 2024.
Jeff: In closing <unk> sales are currently on a cash pay basis and has a price point that is not feasible for a vast majority of the patients in our addressable market.
Jeff: Until we receive reimbursement we expect that our revenues will continue to be fairly anemic and fluctuate quarter to quarter.
Jeff: With that said however, we are right in front of several critical milestones, which <unk> previously discussed.
Jeff: That we believe will be significant value creators, putting helios in a much different place by the end of this year and even more so by the end of 2025.
Jeff: Once we secure reimbursement by CMS.
Jeff: As soon as October one of this year, we believe that revenues will begin to significantly increase and grow sequentially.
Jeff: We expect to further augment and accelerate revenue growth by adding third party payer reimbursement.
Jeff: That wishing a relationship with the VA for <unk>.
Jeff: <unk> penetrate the EMS market in the U S.
Jeff: Add to that the potential authorization in stroke in the U S. As soon as the second half of 2025.
Jeff: For which we will already have hectic codes.
Jeff: To have CMS reimbursement.
Jeff: We believe will allow us to immediately address the much larger stroke market and grow revenues and an even greater rate.
Jeff: With that Justin let's open up the call for questions.
Jeff: And thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced towards all your question. Please press star one again, please standby will be compile the Q&A roster.
Jeff: One moment for our first question.
Jeff: One moment for our first question.
Jeff: First question comes from Jonathan Aschoff from Roth <unk>. Your line is now open.
Thank you guys.
Jonathan Matthew Aschoff: Given the broad Brian for all the ponds evaluations that are going on positive data you've shown and it certainly looks like positive data more of that's come in kind of makes me focus on the key item of reimbursement. So once Medicare fully establishes the codes by October what if anything.
Jonathan Matthew Aschoff: Any remaining possible reimbursement hurdles for a Medicare patient and do you expect to encounter those.
None: They exist.
None: Yeah, Hey, Jonathan This is Dave Thanks for your question.
Dane Carl Andreeff: We don't see too many hurdles there is two things we're going to be doing we do have the codes. The hikmet codes right now so they go effective April one and we're able to begin negotiating with third party payers using those codes as well as submit claims on a case by case basis.
Dane Carl Andreeff: All of this.
Dane Carl Andreeff: Activity will provide further evidence for Medicare to establish pricing.
Dane Carl Andreeff: Okay.
None: Okay, and then one other thing I'm, sorry, I'm sorry, yes.
None: One other thing that we'll be doing as well, we mentioned, we're going to be establishing ne.
None: VA distributor and be able to.
None: EAA supplier.
None: For Pons therapy to the VA there is.
None: Four centers of excellence for MFS and the VA there is well over 250 hospitals, and we look forward to helping veterans with VA.
None: Improve their daily activities.
None: Using pump therapy.
None: Okay. So is the open label stroke trial, the one that starting with the Florida Center is that two arms or as it went on.
None: The open label is a single arm study with the same primary which is gate balance, but also the key secondary.
None: The risk of falling and the durability of effect.
None: Okay.
None: <unk> is.
None: Again My question is will you have any.
None: Cannibalism from the <unk> trial, both of which <unk> four.
Approval, because you know a patient would rather go into a single arm trial, where they know they're going to get treatment.
None: Do you expect that where you have overlapping sites like a Florida center.
None: We do not believe there.
None: Yes, we do not believe there'll be cannibalization.
None: By any patient.
None: Okay, So will the opex.
None: Will the Opex track over the quarters of 2024 in line with the drop we see in just reported and <unk> 23 is that kind of a.
None: A new much less opex plan for the time being.
None: Yeah, Hey, Jonathan I'll take that this is Jeff so we typically have.
None: You can if.
Jeff: If you track on a quarterly basis first quarter is typically the highest quarter.
Jeff: <unk> expense right, because we have to have legal and audit fees and that type of thing go in and you'll see that start to step down a little bit in the second quarter, but there are still costs related to the annual meeting and those types of activity and then it typically.
Jeff: Flattens out a little bit more on the fourth quarter, so you'll see that kind of overall trend in general.
Jeff: And beyond that we do.
Jeff: Don.
Jeff: A significant cost.
Jeff: Changes or increases in the near future on a quarterly basis.
Jeff: As we as we move forward in the year as we start to ramp up revenues, there will be some costs, but those costs should be relatively modest compared to the revenue growth that will come.
None: Thank you very much guys Thats all that I had.
None: Alright, Thanks, a lot I appreciate it Jonathan.
None: And thank you.
None: And one moment our next question.
None: And our next question comes from Jeff Cohen from Ladenburg Ladenburg Thalmann <unk> Company. Your line is now open.
Jeffrey S. Mathiesen: Hey, Jim and Jeff how are you.
Jeffrey S. Mathiesen: Good Jeff Jeff.
Jeffrey S. Mathiesen: So two questions for me can you give us a sense on.
Jeffrey S. Mathiesen: The Quebec order.
Jeffrey S. Mathiesen: Deliveries in initiation with patients to expected in the second quarter third quarter fourth quarter.
Jeffrey S. Mathiesen: Okay.
Jeffrey S. Mathiesen: Hey, Jeff I'll. Thanks, Geoff This is Jeff yes, so so right now the.
The contract requires that we identify five sites by different regions. So that process is going on and we would expect that we will have those.
Jeffrey S. Mathiesen: Those sites.
Jeffrey S. Mathiesen: Coming under contract here in the second quarter, and then the third quarter with deliveries following shortly thereafter so.
Jeffrey S. Mathiesen: There may be some activity here in the second quarter and more happening in the third quarter.
Jeffrey S. Mathiesen: But the idea is initially.
Jeffrey S. Mathiesen: Yes.
Jeffrey S. Mathiesen: What was originally agreed to was extended to the end of September as far as having them all in place.
Jeffrey S. Mathiesen: And so that is something that.
Jeffrey S. Mathiesen: When you're dealing with these types of centers, it's not a situation where you can walk in and within a week kind of have a relationship set up in the contract agreed to it becomes a process and we've been doing that we've got.
Jeffrey S. Mathiesen: We've made some good progress we've got some of those sites that we believe are close to being under contract and we will continue that process. So long answer to your question, but it should play out here over the next couple of quarters.
None: Okay got it and then second for US maybe for game could you talk about how things may look towards the end of the year as foreigners ftes in personal in urine.
None: Remember centers number of folks trying to out there and just a sense of.
None: Whatsoever.
None: Thanks, just commercially from a company by the end of the year.
None: Yeah, Hey, Jeff can you repeat that first part I don't think.
None: The Internet picked up the first part of your question My apologies.
Jeffrey S. Mathiesen: Just trying to get a sense of how things look commercially.
Jeffrey S. Mathiesen: 24 equation on as far as how you're measuring yourself with personnel and number of centers number of trained folks shelter et cetera.
Yes, so what we've done Jeff we've laid a lot of levers with leverage or bowl.
Jeffrey S. Mathiesen: Areas in our business that.
Jeffrey S. Mathiesen: The old model was.
None: Of hiring 50 people.
None: Add on sales.
Another 30 in.
None: Reimbursement in customer service and support that that's not what we really need to do.
None: We're going to be able to with reimbursement hopefully effective October one.
None: CMS.
None: We see three areas of leverage first and foremost we already have our manufacturer OEM.
None: They could start producing very very quickly.
None: With this future demand and we are collecting a lot of future demand with our inquiries and.
None: And folks wanting pons therapy.
None: Second area of leverage Jeff is just our hub, our telemedicine tele appointment e-commerce.
None: E prescribing hub that is highly leverage able a patient can come in there and our greatest advocate is the patient right now and they could come in there with a prescription and get that sold and the Pons device is sent to that patient within two days and they bring that their device.
None: <unk> PON therapy straight to their registered Pons physical therapist and start training for the first two weeks.
None: Another leverage.
None: Leverage point in our model is.
Right now it takes almost three months to get a neurologist appointment post COVID-19.
None: It used to take 30 days on average now it's three months if a patient wants that come through our site. We have partnered with ups script and a third party.
None: Group of neurologist and prescribers.
None: If they're willing to be diagnosed they did have an appointment for.
None: $25 and meet with a.
None: Neurologists and have that.
None: Basically.
None: Online meeting and if they are diagnosed with gait deficit.
None: That neurologists will fill out a prescription E prescription for pons.
None: <unk>.
None: And it will be fulfilled and that they will start their process.
None: <unk> place, where we see a lot of leverage is our online Pons Manuel training for physical therapists for them to become registered ponds physical therapist.
None: Right now all they have to do is send us an E mail their clinic their name their number.
None: And once we validate their PT number <unk> number.
None: They are now they gather access too.
None: The software and it's free to them and within three hours or less.
None: They become registered Pons trainer, so we could sell in the map very quickly.
None: With demand.
None: For patients so they do not have to drive 30 40 minutes for a register Pons trainer they could they could either have their own.
None: Be trained up if they already use a PT or.
None: They could look at our our map and see the closest PT registered PT trainer so that their first two weeks.
None: Can start very quickly.
None: So could.
None: Could you give us a sensible number of PTC you anticipate being trained this year with you this quarter, we updated our suppliers all throughout the quarters.
None: Yes, Jeff we havent.
None: Give those.
None: I haven't given those numbers out.
None: For for investors just yet.
None: We are looking to eventually plan to do that with reimbursement so that analysts like yourself can track.
None: All are our financial numbers that could track sales.
None: And that includes our prescribers.
None: <unk> and alike.
None: Okay perfect. That's helpful for us thanks for taking my questions.
None: Great. Thanks, Jeff.
None: And thank you.
None: And if you would like to ask a question that is star one one again, if you'd like to ask a question that is star one one and one moment for our next question.
None: One moment please.
None: And our next question comes from Anthony Vendetti from Maxim Group. Your line is now open.
Anthony V. Vendetti: Thank you.
Anthony V. Vendetti: Yes, good afternoon. So.
Anthony V. Vendetti: My questions.
Anthony V. Vendetti: Surrounding the therapeutic experienced program, how many centers of excellence.
Anthony V. Vendetti: Did you add in in 2023 and any updates on the goals for the program.
And then if you had a statistically have any added in the fourth quarter.
Yes.
None: That would be.
None: One step clinical trial Youre, referring to correct Anthony.
Anthony V. Vendetti: Yes, yes, yes.
Anthony V. Vendetti: Yes, so we have six total.
Anthony V. Vendetti: Site centers.
Anthony V. Vendetti: Centers of excellence for the PON step.
Anthony V. Vendetti: Okay.
Anthony V. Vendetti: Yes, I believe yes, I think we believe.
Anthony V. Vendetti: We've announced all six of them.
Anthony V. Vendetti: Okay and.
Anthony V. Vendetti: In 2024.
Anthony V. Vendetti: How many would you like to add.
Anthony V. Vendetti: We are at.
Anthony V. Vendetti: Full enrollment for now we will not be adding any more.
Anthony V. Vendetti: Okay.
None: I think we announced third and fourth quarter, we'll be providing.
None: Sure.
None: Additional information on some of those results for the first 14 weeks.
None: And.
I may have missed this because I was on another call but.
None: I know you went to the.
None: Physical therapy Association conference last year in San Diego This year in Boston I was wondering if you could talk about.
None: The recruitment efforts.
None: How that how that went.
None: Also.
None: <unk> potential.
None: Whether it's physical therapist or.
None: What else you were able to learn to glean from the Congress.
None: Yes so.
None: The apta as one of our best conferences that we will.
None: We present we.
None: Have a wonderful booth.
None: Our mechanism of action is on the TV. It usually brings in a lot of people that are that never heard of ponds. They become very very curious.
None: We are the only prescribed treatment there for all of these PT clinics, both nationally superregional and regionals and also a mom and pop there is roughly 17000.
None: Apta members and the like that show up.
None: And the conference in Boston, we've had tremendous amount of inquiries.
None: The Pts.
None: One big notice this year was a lot of VA rehab specialists neuro rehab Pts give.
None: Given that veterans do have.
Yes.
None: A tremendous amount of balance and gait issues and thats not only in MFS, but thats in traumatic brain injury and the number one indication that the VA treats is in stroke.
None: Alright perfect.
None: Okay, I think with that I'll hop back in the queue. Thanks, Dan appreciate it.
Dan: Thank you Anthony.
None: And thank you.
None: Okay.
None: And I am showing no further questions I would now like to turn the call back over to Dave for closing remarks.
Dane Carl Andreeff: Thank you everyone for following <unk> medical technologies.
Dane Carl Andreeff: As you just heard we are very excited to be right in front of some very significant milestones and we look forward to keeping you updated as we pursue coverage and reimbursement and continue bringing <unk> therapy to the millions who need it. Thank you.
None: And thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
None: [music].
None: Okay.
None: [music].
None: Sure.
None: Yes.
None: [music].
None: [music].
None: Yes.
None: Yes.
None: [music].
None: Yes.
None: Okay.
None: Good day, and thank you for standing by and welcome to helium Medical Technologies, Inc. Q4, 2023 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one.
None: One on your telephone you will then hear an automated message a bias in your hand is raised to withdraw. Your question. Please press star. One again, please be advised that today's conference is being recorded of and I'd like to hand, the conference over to your speaker today, Michelle Bilsky inside Communications. Please go ahead.
Michelle Gable Bilski: Thank you operator welcome to the fourth quarter 2023 earnings conference call for Helios Medical Technology. This is Michel Belsky of insight Communications Investor Relations for Helios with me on today's call are Dave Andrey <unk>, Medical's, President and Chief Executive Officer, and Jessica Beeson, Chief Financial Officer at this time all participants.
Michelle Gable Bilski: The banks have been placed in a listen only mode. Please note that this call is being recorded and access to the webcast can be obtained to the investors section of the Helios website at www Dot helium medical Dot com.
Michelle Gable Bilski: Before we begin I would like to remind everyone that our remarks and responses to your question. Today may contain forward looking statements that are based on the current expectations of management. These forward looking statements involve inherent risks and uncertainties that could cause actual results could differ materially from those indicating including those identified in the risk factors section of our most recent arrow part on Form 10-K.
Michelle Gable Bilski: Such factors may be updated from time to time in our other filings with the SEC, which are available on our website. All statements made during this call are as of March 28, 2024, we undertake no obligation to publicly update or revise our forward looking statements as a result of new information future events or otherwise, except as required by law I would now like to turn the call over to Dale Andres.
Dane Carl Andreeff: President and Chief Executive Officer of helium.
Thanks, Michelle and thank you to everyone joining us today on helium Medicals fourth quarter 2023 earnings Conference call I'm happy to report that during 2023 and over the past few months, we've taken several meaningful steps towards two <unk>.
Dane Carl Andreeff: Important milestones in the United States, achieving widespread reimbursement for ponds and FDA approval for stroke.
Dane Carl Andreeff: Start with our pursuit of broad reimbursement for Pons.
Dane Carl Andreeff: As you know Pons is currently authorized in the United States to treat gait deficit due to mild to moderate symptoms.
Dane Carl Andreeff: From Aetna.
We are thrilled that CMS recently assigned us unique.
Dane Carl Andreeff: Codes for both Pons controller.
Dane Carl Andreeff: The Pons mouthpiece.
Dane Carl Andreeff: <unk> April one 2024.
Dane Carl Andreeff: These codes allow us to begin negotiating reimbursement with third party payers and gives us the option to submit claims on a case by case basis.
We now expect to engage with CMS in the coming weeks and at the public meeting this summer with the objective of securing Medicare reimbursement for the Pons controller and Mo piece and their next cycle.
Dane Carl Andreeff: If we are successful reimbursement will be effective October one.
Dane Carl Andreeff: 2024.
Dane Carl Andreeff: To further support our reimbursement efforts, we anticipate getting primary endpoint data from pawn step during the third quarter with preliminary study results communication before year end.
Dane Carl Andreeff: As a reminder, upon step is a company sponsored research trial designed to evaluate the impact of MF patient adherence to PON therapy in a real world clinical settings.
Dane Carl Andreeff: We expect data from this program to underscore the effectiveness of Pons in treating gate imbalance impairment as well as its long term therapeutic benefit.
Dane Carl Andreeff: Suddenly we initiated efforts to target the department of Veterans Affairs.
Dane Carl Andreeff: Through their nationwide multiple sclerosis centers of excellence. The VA provides healthcare services to veterans with MFS from the time of diagnosis and through the rest of their lives and more than 28000 cases are reported to the VA annually.
Dane Carl Andreeff: Okay.
Dane Carl Andreeff: To establish a partnership with an authorized supplier to the VA in the near future.
Dane Carl Andreeff: Now onto the achievements, we made towards our goal of securing U S commercial optimization for stroke.
In the U S over 5 million stroke survivors are effected by walking and balanced disability and falling is approved the prevailing concern for stroke survivors.
Dane Carl Andreeff: Clinical evidence out of Canada shows that patients treated with <unk> therapy see substantial improvement in gate imbalance.
Furthermore, in the real World database analysis, the majority of the patients before starting ponds therapy were at risk of falling.
Dane Carl Andreeff: Wow.
Dane Carl Andreeff: <unk> rehabilitation physical therapy provides.
Boat, a 1% to 3% reduction in risk remarkably after 14 weeks of treatment with PON therapy, 28% of the patients were no longer at fall risk.
Dane Carl Andreeff: This is a clinically meaningful and impactful improvement.
Dane Carl Andreeff: Fall related events are dangerous to the patient, resulting in additional injuries and new or lengthen hospital stays which presents a significant financial burden to the health care system with the average treatment cost per fall estimated at 64500.
Dane Carl Andreeff: Dollars.
Dane Carl Andreeff: If you compare that to the number two our list price of pawn system at 25700.
The health economic equation greatly favors the use of ponds.
With PON therapy, we have a huge opportunity to improve the lives of patients suffering from stroke, while also helping to reduce the considerable fall related economic burden to providers, which tolls and estimated of $50 billion per year.
Dane Carl Andreeff: Canada, where ponzis already authorized for stroke, the government and providers are already starting to see the clinical and economic benefit of pods.
Dane Carl Andreeff: Early in the fourth quarter, we received a letter of intent from the Quebec Ministry of Health and social services to purchase 30 Pons devices.
Dane Carl Andreeff: We are currently working to establish five sites in five separate administrative regions as part of a government funded initiatives designed to further validate the effectiveness upon therapy when used by patients suffering the effects of stroke. We believe this program.
Dane Carl Andreeff: We will not only accelerate adoption in Canada, but will also increase the body of therapeutic evidenced toward our pursuit of market access and third party coverage here in the United States.
Dane Carl Andreeff: Also critical to achieving market access is our ongoing investigator initiated placebo controlled study by doctors Stephen Couch at the medical University of South Carolina, which evaluates the effects of cranial nerve noninvasive neuromodulation delivered.
Dane Carl Andreeff: Using pons therapy on Gaydon dynamic balance in chronic stroke survivors.
Dane Carl Andreeff: We also began an open label study as part of our Registrational program raising the total number of participants between the two studies to approximately 100.
Dane Carl Andreeff: In January Brooks Rehabilitation Hospital joined the program as a second site the Doctor coaches study.
Dane Carl Andreeff: It is now also the first site to have start enrolling patients in the open label study.
Dane Carl Andreeff: We believe that bringing pond clinical experience, who additional sites in the U S. Through the open label a open label study will further support our stroke authorization efforts.
Dane Carl Andreeff: Okay.
Dane Carl Andreeff: Also reasonably aligned with the FDA on our stroke development plan.
Dane Carl Andreeff: Through this plan, we can leverage the randomized control study at M USC as.
Dane Carl Andreeff: Out of the Registrational program, along with the open label study and real World evidence from Canada.
Dane Carl Andreeff: To significantly streamline the size timeline and the cost of the Registrational program.
Dane Carl Andreeff: A more efficient path to approval is great news not only for helium.
Dane Carl Andreeff: But also for the millions of stroke survivors in the U S who could benefit from Pons therapy.
Dane Carl Andreeff: We are targeting regulatory submission by early 2025 with the goal of receiving marketing authorization utilizing pons breakthrough designation in stroke later in the same year.
Dane Carl Andreeff: If authorized to treat stroke in the U S pods would be eligible for the proposed transitional coverage of emerging technologies or T SEC pathway, which would expedite Medicare coverage of certain breakthrough.
Dane Carl Andreeff: Yes.
Certain breakthrough devices and allow for temporary coverage within six months after FDA market authorization.
An estimated 90% of stroke patients in the U S are covered by Medicare.
None: Turning now to our Canadian activities.
None: Early in the fourth quarter Pacific Blue Cross and health Tech connect publish a white paper demonstrating pons therapy can drastically improve return to work outcomes for patients suffering from traumatic brain injury or TDI.
None: The program participants included patients at least at least two years post injury, who did not respond to standard rehabilitation treatments and we're not expecting.
None: Expected to return to work.
None: After 14 weeks upon therapy <unk>.
None: 89 out of the study participants said that balance and gait was no longer a barrier to work.
None: 56% returned to work.
None: And 80% of those who returned we're able to work full time at their prior occupations for at least six months.
None: As you can imagine these were incredibly gratifying results.
None: Pons therapy is truly a game changer for people suffering from gaining balance impairment and we are optimistic that the findings from this white paper will advance our efforts to gain reimbursement by Canadian insurance companies and health care providers as well as demonstrating ponds significant hedge.
None: <unk> economic benefit and cost effectiveness as we negotiate coverage with U S payers.
None: As you've heard today, we see several upcoming milestones on the path ahead, and expect 2024 to be another year of marching steadily toward our goals.
None: With $1 $3 million raised under our ATM program since year end, our cash runway has been extended into the third quarter of this year, allowing us to continue pursuing widespread reimbursement, while making progress on stroke.
None: With that let me turn the call over to Jeff to discuss our fourth quarter financial results in detail.
Jeffrey S. Mathiesen: Thanks, Dan.
Jeffrey S. Mathiesen: It is a pleasure to be with you today.
Jeffrey S. Mathiesen: Total revenue for the fourth quarter of 2023 was $134000 compared to $282000 in the fourth quarter of 2022 the decrease.
Jeffrey S. Mathiesen: This was primarily attributable to the June 32023 exploration of the Pea tab program in the United States, along with lower Canadian product sales.
Jeffrey S. Mathiesen: For the fourth quarter of 2023 cost of revenue was $90000 compared to $150000 for the prior year period.
Jeffrey S. Mathiesen: With the decrease primarily due to decreased revenues in the current year.
Jeffrey S. Mathiesen: Selling general and administrative expense for the fourth quarter client try three was $1 $6 million.
Jeffrey S. Mathiesen: Decrease of zero point $4 million compared to $2 million in the fourth quarter of 2022.
Jeffrey S. Mathiesen: Primarily due to a decrease in compensation related expenses.
Jeffrey S. Mathiesen: Cash and excuse me in research and development expenses for the fourth quarter of 2023.
Jeffrey S. Mathiesen: We're zero point $7 million compared to zero point $8 million in the fourth quarter of 2022.
Jeffrey S. Mathiesen: Resulting primarily from a decrease in clinical and product development expenses in the current year.
Jeffrey S. Mathiesen: Operating loss for the fourth quarter of 2023 decreased to a loss of $2 $2 million compared to an operating loss of $2 $7 million in the fourth quarter of 2022.
Jeffrey S. Mathiesen: Net loss was $1 million for the fourth quarter of 2023 compared to a net loss of $4 $9 million in the fourth quarter of 2022.
Jeffrey S. Mathiesen: The basic and diluted net loss per share for the fourth quarter 2023 was $1 47.
Compared to a net loss per share of $8 66 in the fourth quarter of 2022.
Jeffrey S. Mathiesen: Our cash burn from operations in the fourth quarter of 2023 was $2 million compared to $2 1 million in the fourth quarter of 2022.
Jeffrey S. Mathiesen: As of December 31, 2000, 22023, we had $5 $2 million in cash and no debt.
Jeffrey S. Mathiesen: As Dan mentioned, we generated $1 $3 million of net proceeds from the sale of shares of our common stock under our ATM program since the end of the year.
Jeffrey S. Mathiesen: Sold at an average share price of $9 27 per share.
Which extends our cash runway into the third quarter of 2024.
Jeffrey S. Mathiesen: In closing pawn sales are currently on a cash pay basis and has a price point that is not feasible for a vast majority of the patients in our addressable market.
Jeffrey S. Mathiesen: Until we receive reimbursement we expect that our revenues will continue to be fairly anemic and fluctuate quarter to quarter.
Jeffrey S. Mathiesen: With that said however, we are right in front of several critical milestones, which David previously discussed.
Jeffrey S. Mathiesen: We believe will be significant value creators.
Jeffrey S. Mathiesen: Putting healy is in a much different place by the end of this year and even more so by the end of 2025.
Jeffrey S. Mathiesen: Once we secure reimbursement by CMS.
Jeffrey S. Mathiesen: Soon as of October one of this year, we believe that revenues will begin to significantly increase and grow sequentially.
Jeffrey S. Mathiesen: We expect to further augment and accelerate revenue growth by adding third party payer reimbursement.
Jeffrey S. Mathiesen: <unk> relationship with the VA.
Jeffrey S. Mathiesen: To further penetrate the EMS market in the U S.
Jeffrey S. Mathiesen: Add to that the potential authorization in stroke in the U S. As soon as the second half of 2025.
For which we'll already have hectic codes.
Jeffrey S. Mathiesen: To have CMS reimbursement.
Jeffrey S. Mathiesen: We believe will allow us to immediately address the much larger stroke market and grow revenues at an even greater rate.
Jeffrey S. Mathiesen: With that Justin let's open up the call for questions.
Jeffrey S. Mathiesen: And thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to which all your question. Please press star. One again, please standby will be compile the Q&A roster.
Jeffrey S. Mathiesen: One moment for our first question.
Jeffrey S. Mathiesen: One moment for our first question and our first question comes from Jonathan Aschoff from Roth and km. Your line is now open.
Jonathan Matthew Aschoff: Thank you guys.
Jonathan Matthew Aschoff: Given the broad Brian.
Jonathan Matthew Aschoff: The pons evaluations that are going on in positive data, you've shown and it certainly looks like positive data more of that's come in it kind of makes me focus on the key item of reimbursement. So once Medicare fully establishes the codes by October what if anything.
Jonathan Matthew Aschoff: Are any remaining possible reimbursement hurdles for a Medicare patient.
Jonathan Matthew Aschoff: And do you expect to encounter those.
Jonathan Matthew Aschoff: If they exist.
Jonathan Matthew Aschoff: Yeah, Hey, Jonathan this is Dave Thanks, Thanks for your question.
Dane Carl Andreeff: We don't see too many hurdles theres two things were to be doing we do have the codes. The hectic codes right now so they go effective April one.
Dane Carl Andreeff: We're able to begin negotiating with third party payers using those codes as well as submit claims on a case by case basis.
Dane Carl Andreeff: All of this.
Dane Carl Andreeff: Activity will provide further evidence for Medicare to establish pricing.
Dane Carl Andreeff: Okay.
None: Okay, and then one other thing I'm, sorry, I'm sorry, yes.
None: Knowing that we will be doing as well, we mentioned, we're going to be establishing a.
None: V a distributor and be able to.
None: B a supplier for.
None: For Pons therapy to the VA.
None: There is four centers of excellence for MFS and the VA is well over 250 hospitals and we look forward to <unk>.
None: Veterans with VA.
None: Improve their daily activities.
None: Using pump therapy.
None: Okay, and so is the open label stroke trial, the one that starting with the Florida Center is that two arms or is it one of them.
None: The open label is a single arm study with the same primary which is gate balance, but also the key secondary.
None: The risk of falling and a durability of effect. Okay. So like my question, though is.
None: Again My question is will you have any cannibalism from the <unk> trial, you know both of which you need for it.
None: Ah.
None: Approval, because you know a patient would rather go into a single arm trial, where they know they're going to get treatment.
None: Do you expect that where you have overlapping sites like a Florida centric.
None: We do not believe there.
None: Yes, we do we do not believe there'll be cannibalization by by any patient.
None: Okay, So will the opex.
None: Will the Opex track over the quarters of 2024 in line with the drop we see in just reported and <unk> 23 is that kind of a.
None: A new much less opex plan for the time being.
None: Yeah, Hey, Jonathan I'll take that this is Jeff so we typically have.
None: You can if.
Jeffrey S. Mathiesen: If you track on a quarterly basis.
Jeffrey S. Mathiesen: First quarter is typically the highest quarter.
Jeffrey S. Mathiesen: Spence right because we have to have.
Jeffrey S. Mathiesen: Legal and audit fees and that type of thing go in and you'll see that start to step down a little bit in the second quarter, but there are still costs related to the annual meeting and those types of activity and then it typically.
Flattens out a little bit one third and fourth quarter, so you'll see that kind of overall trends in general.
Jeffrey S. Mathiesen: And beyond that.
Jeffrey S. Mathiesen: We don't see significant cost changes or increases in the near future on a quarterly basis.
Jeffrey S. Mathiesen: As we as we move forward in the year as we start to ramp up revenues, there will be some costs, but those costs should be relatively modest compared to the revenue growth that will come.
None: Thank you very much guys Thats all that I had.
Alright, Thanks, a lot I appreciate it Jonathan.
None: And thank you.
None: Yes.
None: And one moment our next question.
None: And our next question comes from Jeff Cohen from Laden with Ladenburg Thalmann <unk> Company. Your line is now open.
Jeffrey S. Mathiesen: Jim and Jeff how are you.
Good Jeff or larger.
Jeffrey S. Mathiesen: So two questions can you give us a sense on that.
None: The Quebec order.
Jeffrey S. Mathiesen: Deliveries in initiation with patients through expected in the second quarter third quarter fourth quarter.
Jeffrey S. Mathiesen: Yes, Dave.
None: Jeff I'll take Jeff Jeff, Yes, so so right now the.
Dane Carl Andreeff: The contract requires that we identify five site by different regions.
Dane Carl Andreeff: That process is going on and we would expect that we will have those.
None: Those sites kind of coming under contracts here in the second quarter in the third quarter with deliveries following shortly thereafter, so there's there.
None: There may be some activity here in the second quarter and more happening in the third quarter.
None: But the idea is initially.
None: Deloitte was originally agreed to was extended to the end of September as far as having them all in place.
None: So that is something that.
None: When you're dealing with these types of centers is not a situation where you can walk in and within a week kind of have a relationship set up in the contract agreed to it becomes a process and we've been doing that we've got.
None: We've made some good progress we've got some of those sites that we believe are close to being under contract and we will continue that process. So a long answer to your question, but it should play out here over the next couple of quarters.
None: Okay got it and then.
None: Second for US maybe for game could you talk about how things may look towards the end of the year as far as our Ftes and personnel in Europe.
Number <unk> number folks trained out there and just a sense of.
None: Whatsoever.
None: <unk> commercially from a company by the end of the year.
None: Yeah, Hey, Jeff can you repeat that first part I don't think.
None: The Internet picked up that first part of your question My apologies.
None: Just trying to get a sense of how things look commercially.
Jeffrey S. Mathiesen: It was 24 plays on as far as how you're measuring yourself with personnel and number of centers number of trained folks shelter et cetera.
None: Yeah. So what we've done Jeff we've laid a lot of levers with leverage or bowl.
None: Areas in our business that the.
None: The old model.
None: Of hiring 50 people in and going out on sales in <unk>.
None: Another 30 in.
None: Reimbursement in customer service and support that that's not what we really need to do we're going to be able to with reimbursement hopefully effective October one.
None: With CMS we.
None: We see three areas of leverage first and foremost we already have our manufacturer OEM.
None: They could start producing very very quickly.
With this future demand and we are collecting a lot of future demand with our inquiries and.
None: And folks wanting pons therapy.
None: Second area of leverage Jeff is just our hub, our telemedicine tele appointment e-commerce.
None: E prescribing hub that is highly leverage able a patient can come in there and our greatest advocate is the patient right now and they could come in there with a prescription and get that sold in the Pons device is sent to that patient within two days and they bring that their device.
None: <unk> PON therapy straight to their registered PON physical therapists and start training for the first two weeks.
None: Another leverage.
None: Our leverage point in our model is.
None: Right now it takes almost three months to get a neurologist appointment post COVID-19.
None: It used to take 30 days on average now three months, if a patient wants that come through our site. We have partnered with ups scripts and a third party.
None: Group of neurologist and prescribers.
None: If they're willing to be diagnosed they did have an appointment for.
None: $25 and meet with a neurologist and have that.
None: Basically in.
Online meeting and if they are diagnosed with gait deficit.
None: Neurologists will fill out a prescription E prescription per ponds and.
None: And it will be fulfilled and that they will start their process.
None: The last place, where we see a lot of leverage is our online Pons module training for physical therapists for them to become registered ponds physical therapist.
None: Right now all they have to do is send us an email their clinic their name their number and once we validate their PT number O T number.
They are now they gather access too.
None: The software and it's free to them and within three hours or less that they are they become registered pons trainer.
None: So we could sell in.
None: The map very quickly.
None: Demand.
None: For patients so that they do not have to drive 30 40 minutes for a register pons trainer they could they could either have their own.
<unk> trained up if they already use a PT or.
None: They can look at our our map and see the closest P. T Register PT trainer so that their first two weeks.
None: Can start very quickly.
None: So drew could.
None: Could you give us a sense of the number of teachers are you anticipate being training this year or do you wish a quarterly update as it plays out throughout the quarters.
Drew: Yes, Jeff we havent.
Drew: Give those.
Drew: I haven't given those numbers out.
Drew: For for investors this year.
Drew: We are looking to eventually plan to do that with reimbursement so that analysts like yourself can track all are our financial numbers that could track sales.
Drew: And that includes our prescribers.
Drew: And the like.
None: Okay perfect. That's helpful for us thanks for taking my questions.
None: Great. Thanks, Jeff.
None: And thank you.
None: And if you would like to ask a question that is star one one again, if you'd like to ask a question that is star one one and one moment for our next question.
One moment please.
None: And our next question comes from Anthony Vendetti from Maxim Group. Your line is now open.
Anthony V. Vendetti: Thank you.
Yes, good afternoon. So it's.
Anthony V. Vendetti: My question's about surrounding.
Anthony V. Vendetti: Surrounding the therapeutic experienced program, how many centers of excellence.
Anthony V. Vendetti: Did you add in in 2023 and any updates on the goals for the program.
Anthony V. Vendetti: And then if you had a statistically have any added in the fourth quarter.
Anthony V. Vendetti: Yes.
None: That would be the <unk>.
One step clinical trial Youre, referring to correct Anthony.
None: Yes.
Anthony V. Vendetti: Yes, yes.
Anthony V. Vendetti: Yeah. So we have six total.
Sites or centers of.
Excellence for for the PON step.
Anthony V. Vendetti: Okay.
Anthony V. Vendetti: The I believe yes, I think we believe.
Anthony V. Vendetti: We've announced all sexually.
Anthony V. Vendetti: Okay and.
Anthony V. Vendetti: In 2024.
None: How many would you like to add.
None: We are at.
Full enrollment for now we will not be adding any more.
None: Okay.
None: And I think we announced third and fourth quarter, we'll be providing.
None: Sure.
None: Additional information on some of those results for the first 14 weeks.
None: And.
None: I may have missed this because I was on another call but.
None: I know you went to the.
None: A physical therapy Association conference last year in San Diego This year in Boston I was wondering if you could talk about.
None: The recruitment efforts.
None: How that went.
None: Also.
None: New potential.
None: Yeah.
None: Whether it's physical therapist or.
None: What else you were able to learn to glean from the conference.
None: Yes so.
None: The apta as one of our best conferences that we.
None: We present, a we have a wonderful booth.
None: Our mechanism of action is on the TV. It usually brings in a lot of people better that never heard of ponds, they become very very curious.
None: We are the only prescribed treatment there for all of these PT clinics, both nationally superregional regionals and also a mom and pop there is roughly 17000.
None: Apta members and the like that show up.
None: And the conference in Boston, we've had tremendous amount of inquiries.
From the <unk>.
None: One big noticed this year was a lot of VA rehab specialists neuro rehab pte's give.
None: Given that veterans do have.
None: <unk>.
None: A tremendous amount of balance and gait issues and that's not only an en masse, but that's in traumatic brain injury and the number one indication that the VA treats is in stroke.
None: Perfect perfect.
None: Okay, I think with that I'll hop back in the queue. Thanks, Dan appreciate it.
Dan: Thank you Anthony.
None: And thank you.
None: And I am showing no further questions I would now like to turn the call back over to Dave for closing remarks.
Thank you everyone for following <unk> medical technologies.
Dane Carl Andreeff: As you just heard we are very excited to be right in front of some very significant milestones and we look forward to keeping you updated as we pursue coverage and reimbursement and continue bringing pons therapy to the millions who need it. Thank you.
None: And thank you. This concludes today's conference call. Thank you for participating you may now disconnect.