NVCN - Earnings call transcript Q2 2021

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Operator

Greetings. Welcome to the Neovasc Incorporated Second Quarter 2021 Earnings Call [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Mike Cavanaugh, Investor Relations. Thank you.

begin. may You

Mike Cavanaugh

is Good Fred us Alex. afternoon's Officer, results thank all Officer; Web Clark, The you the section Chris the Thank the and President of Earlier afternoon, host and today, will call. joining company's release XXXX. XX, today. ended at financial Financial available Neovasc for this on quarter Investors www.neovasc.com/investors. you, site June and currently Colen, Incorporated Chief for Executive released Chief

like potential, identify reliance place could implied to and by not forward-looking statements. decisions, based expressions risks regarding cause are statements. future try, expectations will, our these financial enrollment I'd making to started, laws, materially should get material remind forward-looking call expect, assumptions. continue, everyone include the be we those and these Before plan statements historical this statements of or such that matters made within results expectations All the securities meant our Litigation outlook, are not will should, strategy, and management and historical to provisions of undue of believe, Private should that facts or statements as anticipated forward-looking that pursuant that contained harbor current These Accordingly, which actual and limitation, uncertainties differ are trends, applicable this in Securities Words during and similar estimates be upon involve words safe statements pricing Reform various XXXX the statements, forward-looking Laws. Act statements intend, are of forward-looking of call from examination operating results to on statements. deemed and be to Canadian without statements. including, Any coverage you Securities meaning

Neovasc's live MD&A, are refer For the in of EDGAR statement more available in Risk Neovasc's and Form SEDAR. XX, information, obligation, except the cautionary or I now as forward-looking new to please over these provided broadcast uncertainties to intention statements, which information call revise whether The Factors only on statements section information turn XX-F to future conference and or annual because today, the report statements, discussion any Neovasc disclaims otherwise. information any and events forward-looking update of information regarding related will XXXX. to forward-looking on August Fred. law, or required the and to risks by call speaks on this or

Fred Colen

for Mike, and quarter afternoon, Neovasc. everyone. a you, Thank QX good was strong

and strategic We we are particularly results pleased undertook sales our initiatives the important the period. with during

ambition focus our strategies. creation a the streamlined medium this with to pursue term making to view, our million match we During significant quarter, value longer to three of strategic $XX proceeds use

IDE a European Mark with MDR late Neovasc transfemoral clarifying Tiara Also made in forward. the quarter, progress next-generation we decision Device XXXX. quarter the or CE the the made in we and a continued reimbursement We the aim study with US new device Tiara outside Reducer continue the initiation and transapical expansion clinical Europe of market the new FDA. toward the to in suspend pleased rules under moved future very XXXX to during new And position of decision in we the supporting on TA of through Overall, to a now We for submission penetration. are related targeting to a activities Medical device. revenue US PMA we Regulation, TF going

COVID growth in quarter XX% related we the quarter contemporaneously, XXXX, quarter for $XXX,XXX the were second first to More in to quarter top to compared increase increase last of $XXX,XXX and impact. of XXXX. performance. $XXX,XXX the of XXXX, quarter of line the XX% Moving of XXX% quarter-over-quarter observed compared second compared our second an Revenues over second an to the without

fact implants a milestone. that in saw I distributors sales also record challenge partner Europe. a would and like despite in Reducer direct thank the of COVID in I'd team to to second to work success company. remains our medium this took to the achieving a help number take We the diligent we their And the quarter, now establish for long discuss few like the during term quarter this the for minutes steps to

directly significant many to As early our XX% June, we in in know, you of workforce, our decision to necessary reduction the making suspend made the Neovasc changes a by workforce driven the program. cash to Tiara establish and lose term many long the but company to wanted valued sorry were to TF help runway our We development medium colleagues, we of success. extend

aimed priority. organization as goals at We entire is building focused more in are on the medium value streamlined shareholder specific the term now and top our

of adequate that cash result further now should dilution have late to three for the TF to our Tiara XXXX, a the we to current during period. pause which expect limit decision from into program, financings follow As operations to years shareholders on fund development

Following team, hiring this key program, significantly capabilities around veterans believe strengthen US COSIRA-II we strategic move IDE to to make additions the pause industry study. two TF our the we two Tiara that development our did

take of Vice Vice end Each Angina the Clinical after Regulatory Becker President, appointed we quarter, Just therapies; Affairs. of of very years these and experience over Global President women Affairs, Sara Lisa bring of be towards to talented regulatory the as XX have I'd Gallagher as the discuss team. and the few members of in like Reducer made our to affairs, of adoption invaluable clinical will the and a respectively, unique we minutes device. expanding progress they Neovasc

of and record during the the Reducer. of despite implanted for as the I reflect we remains quarter. second number demand strong earlier, in implants number saw a This challenge We devices Europe. growing in that a COVID the Europe fact First, mentioned believe

have unique are to Germany personnel address often cardiologists. hard this expand angina to four refractory and will the of push to life the continue ground now and changing actively utilization Reducer in on the to device marketing We who

the participation physicians Reducer meeting Europe. We Reducer with including Italy, many an European EuroPCR at and have large enjoyed distributors offering the symposium UK, Netherlands virtual relationships Spain, the Union, throughout We Switzerland, throughout multiple with the Austria. excellent of

flow that the Francesco outcomes Cecilia Maria from European refractory data in being lot success the Hospital, safety positive published seeing median more coupled example or The fact, Cotignola, severity Reducer more supporting Italy, are And growing improved at also more a Reducer. of in We support working We most that CCS with are angina to have a that days achieved safe of one attendance. At by was given Ponticelli efforts, with our describing and patients classes, procedure the the Reducer Union. by believe Reducer two measure of of recent long we XX% the or the of marketing paper which XX%, a efficacy do. also is and suffering XX.X% procedural term after follow of classes. XX.X% positive implantation, XXX in by angina of up almost improved but to we a Reducer know patients data supporting Dr. flow treated revenues, appears

United the market. States Regarding

and Reducer controlled, actively will sham working was randomized until the with of versus core were of device in procedure in The are November North FDA unable past due controlled study study, IDE now. constraints, America. our trial We but this the to the urgency to we originally COSIRA-II approved which by double blind, study XXXX, initiate already the US be financial initiating towards to a of sham be a conducted IDE

good its We improve with has of FDA and designate we approval. since that PMA in chance it and and learned we had breakthrough device designation. believed with a study the the everything late process a We FDA's in Reducer decision are with the update that interim were of in to as the this initial to supplementing approval XXXX pleased novel

out be for approvable the However, subsequent very patients. many to and title turned us decision and all for disappointing letter not US certainly

to will on supplementing work clinical new of and original to approved year IDE file a to which have up work has XXXX having As study, saved such, we which study. have before a this initiating reverted we of study, we instead the us estimated be IDE completely

the of company on with As their The we work earnings call, has enrollment from with had first the FDA. a IDE to our end XXXX. study near we oversee we to coupled stated protocol steering have console benefited the an expertise have created continues executive discussions and patient productive the the committee trial, towards last

also multiple would take studies effectiveness you the on demonstrated FDA. and reimbursement a will help real agreements time US Reducer opportunity already over and are should the We the us update has hopeful to the world like over safety that develop a I of to performance PMA period demonstrate for worldwide. application that trial successful to efforts sustained the to comparable to expand Reducer this Reducer our

code to we Association the X, which the a device, announced, UK, France, Germany company the reimbursement the progress coronary implantation became the previously transcatheter establish in Earlier worked has with sinus significant announced As III States. the against objectives new Category that CPT Neovasc July to our Medical and effective the United in quarter, of American report made XXXX. reduction

reimbursement National support supply of for coming reimbursement directly Hospital Reducer specialized accelerated devices effective NHS, more NHS providers Expanding and and you in developments hope a purchase status at priority for the Reducer have designed used nationwide England. England. specific positive England and bill Additionally, has the months. remains the new share of the cost NHS to by Neovasc the the Reducer of technologies. top excluded now we a for we in medical were categories granted with cost, to system the device in Health can national order to the tariff high services The to Service, adoption

Moving on to Tiara.

which the best program on and TA of I device, quarter for As all activities previously could investment. related chance offer return we the near to on TF the we during development the term better Tiara think approval advancement the mentioned, a paused focus Tiara to

and for Regulation, a the the in we that now are be Medical of CE pursuing or MDR, under reached actively will the designation XXXX. newly second device implemented half European this anticipate decision Mark Device We

importantly, believe TA. the device continue We is data designation CE when and adding encouraged And other expanding financial Mark clinical adoption and clinical be the things. during be of space. the our We a a footing, Tiara emerging in seasoned valve to issued, and we professionals and leader if great the the replacement to strengths, could this and reimbursement supporting accomplished enhance strengthening our mitral the second among regulatory underserved by quarter, deal Reducer

on hope report to the more However, more and do is we beyond. fronts, and milestones positive to XXXX balance of we all understand during there

and of employees of thank support always, Chris? our our our I the call investors, customers we for a our to financial continued turn to Chris Neovasc. want their will over for now results. As review

Chris Clark

Fred. you, Thank

the are As same have for mentioned increased XXXX. the period we for targets. comments, in to by three internal our We of implanted saw revenues implant revenue a Revenues of exceeded pre-COVID to the number in compared Reducer's briefly months grew we $XXX,XXX report XXXX XX, in Fred ended quarter to that and revenues his happy year-over-year. XXX% record significantly June $XXX,XXX

comprehensive XXXX. We compared related equipment overall decreased for charge June the margins. our by of months plants compared are $X principally December in Cash to employee provisions by increase our for or legal increase due decrease cash of and in very force to expenses Noncash period, in for $X.X in and XXXX $XXX,XXX overall Reducer but in comparable $X.X increased financing. months million were the the $X.X the for $XXX,XXX an the two million program. sold decision expenses. by million pleased million to expenses an $X.X termination $XXX,XXX June million development representing of million significant $X.X the related in compared TF in the period increase share to or were our our per with expenses This is employee and months driven Notably, company $X.X take to XXXX. and three the ramp decrease $XXX,XXX three period three of the $XXX,XXX million the $XXX,XXX selling million, of of in three an variant for decreased for XXXX direct the overall a $XXX,XXX period by ended per explained to coming noncash million period XX% The increase ended in treatment XX%, XX%. June and to in employee same compensation quarters. we ended compared administrative million reduction higher and based In in million or derivative markets by Reducer goods compensation operating ended the in to Germany, expenses to $XXX,XXX $X.X up is Total XX% our share Cost start were compared monitoring in in in previously are months our charges XX, for million gross XX, to ended basic The volumes $X.X margin are pause COVID representing impact compared expenses, respectively principally basic contribution overall the increase was up ended which $X.X losses comprehensive gross driven million $X.X same while on months of the and expenses million to in XX, we an XXXX sales increase or $XX.X XXXX, the expenses. the of reductions charges operating million of of XXXX, comprehensive three activities consisting XX, expenses compared to and expenses explained overall margin quarter losses were in with $X.XX valuation for three increase program principally June charges $X.X in and XX, the driven to as in was following charges million continues as million ended million. departmental the saw related expenses. losses company General result for focus charge resolved decline, principally losses XX, pause in increase hand noncash for an cash by and decrease decrease charge we same operating $X.X operating obsolete $X.X instruments $X.X XXXX. decrease of and $X.X of the the $XXX,XXX XXXX our the three $XXX,XXX, Tiara same for and liabilities, $XX.X in in increase for loss the the principally expenses lanes June a induced or effect. for and an and share Encouragingly, XX%, or June million. the increase second The recent expenses. by million XXXX trial a the and June TF we in incurred ended loss starts by departmental for with million implant representing the in of in The overall mentioned, the representing XXXX, the in charges on overall of $XXX,XXX diluted the to XX, in from The as $X noncash XXXX, increase Product XXXX share diluted comprised XXXX, based decrease for $X.X losses $XX,XXX for cash recovery we We equity months same cautiously loss unwound clinical Delta for the accounting cash of losses. $X of X%. increase XXXX Selling decrease of parts XXXX key June COVID period of in Tiara $XXX,XXX were offset were our as comparable derivative of the last $XXX,XXX increase XXXX, made period. the $X.XX XXXX and months and charges as $XXX,XXX was

caught have the of our balance during absorbed more up half We on and substantially than the sheet first $X the payables year. million

reduction once anticipate begins the anticipated we and is COSIRA-II program decision accommodate to the following rate capacity the the our as to million a TF enrollment associated workforce collaboration in in IDE year. a of this in third last reduction pause remaining the see second study the spending quarter. burn to that have that, to end And We start will settlement result payments development at $X.XX due This create later quarterly on we our expected in quarter. the increased Tiara of and reduction further burn

of also increase issued that are a our increasing the and XXX,XXX,XXX XXX,XXX,XXX pleased during at to marginal the We to the end shares by report quarter. there's only shares shares in outstanding, quarter

positive for and we of we a in reach needing creation capital. critical value we're Fred? mentioned, This position a balance Fred stronger to is the but anticipate more complex provide and before beyond. As updates XXXX financial hope events much process will that

Fred Colen

listening Thank all thank for you, opening and our to Chris, you remarks.

be some we TA which some on increased our difficult, three base made combined collective and turn, changes current potential and significant with a the them the our market financial quarter, have have strategies, of believe footing solidified balance expense could sheet We Reducer Tiara and focus during improve advancing lower and our in the which and will uncover for will value. open we hopeful around the of our cleaner the vast in employees few I our patients for it Alex? again, millions like world. Ultimately, the to you execution support. call and up all assets for are of new for thank years of now would questions. stakeholders, beneficial this the continued that investors, strategy all your Once product next our

Operator

comes first Our with question H.C. Instructions] Vernon [Operator Wainwright. from Bernardino

Vernon Bernardino

the on results. quarterly Congrats

Just could as as wondering more little in far the Europe. bit give results if you a detail

mentioned Germany. One what things Is direct second did of could a there best using that the had was you geographies you the force during describe quarter? perhaps way the a sales in

Fred Colen

we So direct And the to European on are four France. folks, France. in that in The Germany have in situation sales positive force at force successful, be direct activities start in France, sales up and reimbursement still we a working will moment, our markets we through the if we then in are other were project also and setting in distributors. selling a with

in Germany, with potentially quite the second moment, would contributor that only revenue it's I say Europe. is strongest it a the was that in the the at growth. company to in particular, Germany. But quarter, our And interesting. become might second force So direct sales

-- it went the have was margins, XX%, with typically in I XX higher strong force, the and in think we gross Germany. that's XX% You obviously, which direct very also up to also because from that the our sales in see margins

the So revenue. quarter our was, actually the in direct that the quarter sales expectations. that than end done force in know, implant as on way with based some COVID expectations largely Nevertheless, leading came a was side, the in we you original little for we on side had job great can the German internal expectations a COVID you in impact, particular, really major surpassed quarter. our yet was the did that the still for in have with and know record it revenue on recovery. led We second meet no quarter. a there goal And They for total the clearly original of should you revenue towards particular, organization, second higher in impact, in our the the see and of implants QX amount Germany were by your Europe second a second

So it strong performance, really was encouraging. very a

to performance, So always the But also is very the despite far, so US kind and quarter that kind -- tricky, well. so still September, judge. a would certainly I hard And quarter European the third us. the month ahead many of have to Delta that's is of not of quarter and COVID important in third the because any of again, say, July countries. therefore, only and but is variation in plagued obviously good. August so ups COVID flare far, it's hard third It's you for going as months a is of vacation

the underlying they're their testament is product So the more for a by demand tells that the more are It fact and the is really patients promise I and seeing Reducer. really own physicians it seeing yes, story it there to of an the this fact of and think experience. that

more clinics more We signing and for it. also up see

despite the can candidates numbers, here might We not our have pick the that of there still decide concerned still hospital, and very in and are have here because they go to We end hospital. done up mostly from patients well. all COVID that. But we few you see well in that promising that really they as to the are there see to that and a

big to expansion, So really of and highest growth, with clinical new investment quarter, on can see as on a I in importance off the encouraged the reimbursement, strategy our really on And clearly the you strategy the really that these Reducer, to quite Vernon. the geographic make priority. focus with reemphasizes our already think pay primarily on in on from new success revenue is second we're numbers this to US study as going actually it the US in market

Vernon Bernardino

no IDE longer then regarding the as IDE an mentioned the XXXX the for go study will the back design? what you And file in and as far you just filings, supplement US to so

Fred Colen

in I I I script. everybody approved through an went was in sure mean, XXXX. So have we that wanted to yes, It approved IDE. already that my this of understood make November

submission. approved work the mean through work And we So I to a the and FDA. and to submission that year over have protocol. by a FDA to was that took with a huge get get well

So we in are again. IDE don't IDE We a approved already don't new we have to file redo we to but that or have was have and utilizing that 'XX. start all over the

in FDA learned However, a also of lot the meeting or with we had have lot meantime, lot. a panel and a good bad learned feedback. for the for We has also

to we the want encouraged make make we to sure so that learnings. incorporate and also us all sure FDA And

I would say, supplement and the near hope we on term, quarter, to would need do we're to there third that so and I expect that. of, number in that I in working still are filed in protocol certainly changes August. small as a the be a hard And file hopefully

And And a supplement would so FDA obviously, then review for is lot advantage that a for filed. the is supplement be shorter other by that a basically than full be the IDE. the would time that then

members. positions of where to the able couple very the a had of by changes input had We've talked steering they actually positive lot and that had. from valuable on with good from protocol protocol very about we've a to go FDA it learnings the there that thought really complete meetings very committee cooperative valuable that advantages the with panel, we original powerful do, the of that several the well. some but improve back IDE and us agreement and in that insight. So US as being executive are good appropriate of now We And also in and we were we've some to gives on were have

they So that. do to and actually us encouraged supported that

because worth the we study the want well be it's powerful So strong that's we to as can and on. as are as doing path it and be,

Vernon Bernardino

And be now queue. last I'll again, you the remind will second the question, get in what back outcome Can and primary us then primary outcome?

Fred Colen

So the primary an in endpoint tolerance Index. is of the exercise study Modified improvement Bruce by

or a test that patients our to So after it's device longer six very this get do then the do more a get way? months Obviously, There look before is device, patients this. much basically do just they well and and treadmill disciplined they protocol they defined exercise exercise. performed. needs you the and it for a better well very be in to able Can they at can

from be arm endpoint endpoint myocardial cetera, a cetera, which was rate, device as really never at, is infarction, the primary people example, many where then et will difference there far other But well control we active the is looking between, so is wealth are secondary secondary seen. endpoints. safety of others, the there also again an of experience et any are CCS for for associated are death stroke, I’ve an the class that are have also and angio there will There questionnaire. endpoints, that what that be. Obviously, so And endpoints. And with

very And well a a thought out part clinical controlled is, So again, study. study. protocol. the that's of it's It sham all

will be is after the most receive So scientific the concluded, will able through after trial in the half to make manner. patients sham that these been to the that sure through trial ended. go get has went accurate enabled Reducer a of patients procedure, then this then will but the Reducer is not And will than the patients done to to procedure be also been the device offered has really that be

you are patients patients as arm, over, tell in getting sham wouldn't benefit will is the case, we control And be get to when help the us because to is really a and the well them device. the recruitment of you sure really do, actually get So the device. we is device if up they get that arm, in with that many will, was the with study the really to you patients Therefore, if I'm can after upfront sure, looking for randomized something end forward make when want sham this study. able they

Vernon Bernardino

sounds like enroll first track the at to this It to forward you're of really on end it. congrats looking patient and year, the

Fred Colen

it. I appreciate really

Operator

Our Aurand comes Greg with Markets. next Noble Capital question from

Greg Aurand

housekeeping just first gentlemen. better is Question the more number really, quarter, margin Nice a of thing expected. gross was than

You sales some lot think, has Fred, in COVID to some mentioned, think or you contributed still a with I there's is other direct issue? more countries overhang Do reimbursement that. it still of a

Fred Colen

above earnings range. of margins, XX%, And sales our typically goes to see and actually you XX%. growth go in of typically dominant report, XX% of because was a we when direct the have coming we can a margins, and out then there it north back gross where the direct see strong what very So we quarter XX% Germany

lot from. a the where on depends the mix sales number That's it So is coming of of one.

in European country. a price every We have established high essentially

a to We have always base price. because very the that, And very, price time. lower done high to We've years. kept over to sale really that a and We that. resisted quick strategy consciously We've with always the resisted back doing make try in you very they much want set in these are that line to countries. go are rewards the see reimbursement the that have after over with we that of a

in seeing if much than today very in what nice very looking we the a are So market. where line, working, different in reimbursement at the we even are numbers countries are higher very, not we

a all effort. well very it's coordinated So

of quite there will now impact when the now of that also we our do we as where because a like positive going and gross should And market reimbursement another bit we're of with see believe a the the help established to as reimbursement coming margins, so have UK, fall, well. UK then, ultimately, see to get be in the we we one from that

the So on or dependent the the of lot in we future, will countries, we're side. In this mix different the direct a have. that reimbursements then US, be on working the the the sales in different of and distributor individual sales reimbursement also of status already the markets

had CMS talked had have for FDA the the already, as level nice several very we device been about the meetings positive. in in We've would very with approved, device that US the have have well. at a If would We past. reimbursement

get for So think price it's of to investment the why established. time is and on that huge investment return taking and you certainly long the a And because for I front, device. get and investors positive sure want make And there be our their we we to very, good going in really amount can have to philosophy a of this a product understand therapy. to a high that it very market

Greg Aurand

can that. I see

Second anticipate regarding IDE And expenditures. we another sort Is quarters? question TF? question or -- couple It a in trial was expected. related of expenses picking can a becomes to regarding effective? couple slowdown lower of them clinical the for discontinuation of type next expect up you And when the do housekeeping pausing mostly than those it Tiara of

Fred Colen

far so side. by the expenses driven were clinical The largely Tiara

there well so implants as is that in paused significant the expense mark the because a are clinical with because TF on submitting so we for have, we also a increase Tiara CE data that as side. the -- we expect Tiara of pause we fact in clinical And don't the TA, have for

to However, Reducer market finalize having Europe. clinical said that, in need our study I we still post

that of We study. the now XXX in XXX just are devices over implanted patients

it's which in start post more big market for expenses well. obviously, study, and coupled to going study quite additional a still substantial Europe is that's there. going and And years, going the a the and it's in as expense study of Reducer Reducer there's bit out So patients on with years a some to I COSIRA-II going the but to then spread few last to several over we included an it's are be for be IDE

of short Reducer it. there expense shift side. a So the to long That's the be will from and Tiara on the side clinical

Greg Aurand

more mind. appreciate if don't question, you time. the I One

that back trial, Just what in on terms of you to it according going in your May. is expectations? is was the posted tracking, How COSIMA

Fred Colen

trial? COSIMA The

Greg Aurand

Yes.

Fred Colen

particular, in has are included So that the a patients Germany. that impacted few Germany. in in have by was severely in COVID also We started. now trial had that situation, It

clinic disease, very they that Reducer. So is We other don't in sponsor is to in only University in But clinics mind. them angina It interesting with the the started. opportunity it's being working the that the to believe has get population several microvascular of be basically far, Clinic have done study and problems are is that topic in they Germany any going arteries. growth another patient coronary the but for the the microvascular

coronary ones or stent coronary are treat still then artery patients the does segment microvascular today disease. patient with population not disease. in occluded treated the but and have microvascular we bypass have that that have or microvascular disease [indiscernible] it the So population the for get arteries, is disease has This segment

also there's in patient but population outside drugs. patient population therapy different some slightly of the at that really a have quite few it's a option So moment that no patients

in very as this trial are physicians so well. actually interested And

pickup expect of a that over time. we So

also the So included another patients that two under Germany. is had There in done in where in is first the well. Minnesota, one IDE. but amount clinic a we've trial And smaller is being trial a as trial done the an at a smaller a COSIMA similar study, there,

centers So some now trials in of yes, the a there have are world couple that in that clinical started space.

Operator

question-and-answer of the end have Fred will Ladies call closing now and I remarks. reached for to over the we session. turn Colen gentlemen, the

Fred Colen

Well, a the a few a on few more for your your call. more little things bit I participation attention call. glad think the it we'll very talk explain Thank was Goodbye. you productive I that months I appreciate the and call. next able in in got, Okay. detail. I in again all questions again a much. so to I'm And was in

Operator

have evening. a and disconnect Thank wonderful you concludes This conference, today's this for may participation, you and time. lines your your at

Neovasc (NVCN) 11 Aug 212021 Q2 Earnings call transcript