Earnings call transcript Q1 2023

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Operator

Good morning and welcome to the Nuwellis First Quarter 2023 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded.

I would like now to turn the conference over to Ms. at Relations Investor Cervantes, Gilmartin Group. Vivian ahead. go Please

Vivian Cervantes

XXst, joining Thank conference today's financial for ended for corporate you, Thank you, results March quarter first operator. us the call and for development everyone, XXXX. to Nuwellis' discuss

In Nuwellis' Lynn and Jaramillo, are President myself, addition CEO; with to CFO. today Nestor us Blake, and

financial John quarter Nuwellis' Clock Medical Vice & March At X'o Officer, of also President John Kowalczyk, We Sales the Jefferies, have and today, results Nuwellis XXst, XXXX. released Eastern Dr. ended Senior Chief for the Company's Marketing.

you visit have the not release, If received Nuwellis' the company's press earnings please on Investors page website.

call, statements today's making our forward-looking call that are or predictions relate this Act events Private statements. during protected company performance forward-looking be statements. Reform made the to market as under expectations statements During well will future trends as will Securities estimated of the Any All and or XXXX. be results Litigation forward-looking of

based statements implied events and differ are forward-looking results estimates or those upon to current risks statements statements. could these actual that or anticipated material forward-looking uncertainties from involve All cause our These by materially assumptions. various and

subsequent not update forward-looking statements. the company the including and discussion to information, the filings are Accordingly, in based company's and reports. Please and All no the on with obligation SEC you the upon available assumes these reliance cautionary statements statements current place latest should statements. to undue these refer of XX-K risks

would I now turn call that, With to to the over like Nestor.

Nestor Jaramillo

overview first performance morning, strategic update today's I quarter earnings initiatives. an On XXXX Vivian, our on call, and first quarter good an provide conference Thank Welcome everyone. give our Nuwellis to you, and will call. of

then Officer, financial Lynn commentary Blake, Our detailed the provide Chief Financial will on results.

are Officer, section. available up and call Marketing, John my questions, of and on our the the Kowalczyk, Medical Chief closing question-and-answer today's remarks. during open Sales will by Senior and our be Dr. also President call John Jefferies, Vice I followed Before for

quarter the critical In a of XXXX XXXX, period respectively. and over XX% first while revenue over generated in By results. our $X.X quarter failure in revenue the segment, XX% and quarter quarter increased first XXXX. Nuwellis Turning pediatric year, to last X% revenue, care the same million declined of of X% heart first decrease first

In last heart failure, which QX is from the flow months We failure the in revenue attribute positive support in failure publications. had bolstering in XXXX. steady QX bolus clinical peer the XX% evidence, activities peer of of year-over-year to revenue follows The of sales of strong territories. six staffed has reviewed the similar heart the growth marketing a multiple growth XX% heart of and organization publications and growth in review which all fully in now

market driving specialty across cycle Key is to that penetration the to pathway. ultrafiltration understand is hospital committed awareness execution driving hospital treatment to in multiple in earlier next the and in admissions the our clinicians logical remain step We care ultrafiltration among units. providers the and

and not as In more other to precise intravenous move whom solution fluid from which effective ultrafiltration is are should mechanical such oral our and diuretics two words, past the effect. patients or therapy, for removal results a immediately having a is quarters, segment the now delivering is on is positive field heart that failure based This predictable. -- and message the organization message the controllable, is

disease. born hospitalization the first in first were include with key than continuous the in the and of replacement therapy pediatric our well accounts, expected positioned we renal pediatric, excited census of our XXXX. new expected of kidney IDE with remain by dedicated lower quarter patient approval driven results about The in In opportunities, which babies quarter fewer softer device

of XXXX. our with factors the Census-driven similar decline in trend third not to Having the in past business. are quarter new this seen

confident all system growth that treat use strategy, are While changes Aquadex the place execute predict, our measures ultrafiltration as in right in the surgery. hospital cardiothoracic failure we of census increasing to to paediatric to paediatric have including other we are and on heart such difficult conditions

have in not Today, of the including for Aquadex that -- failure XX% heart but using use last other hospitals and about year. revenue the expanding QX Aquadex us positive Overall, pediatric the our quarter number than specialty reflect more its number include, liver make excited patients, patients. same developments of the use in centers ventricular a does left which Nuwellis, assist critical activities future we hospital treating care in to and not units, to disease only one

on life for progress disease. development, saving children the product and with small at lives aimed steady and two, increasing number neonates our pediatric device of And quality kidney

changer We device game a in will this kidney be pediatric treatment. believe

updates Now making strategic our provide to at top care additional overload to initiatives I like standard the of patients for Aquadex on diuretics. aimed fluid resistant

resistant Kazory were to was quarter, the heart In Acute patients we publication announce a use for in Amir to and and Cardiorenal pleased Ultrafiltration Extracorporeal publication The by Heart Medicine contributing the Nephrologist diuretics. Physicians. for authored first title failure peer the of ultrafiltration Failure Dr. featured review advocating Journal

pooled The seven includes a participants. of data with patient publication of total the controlled trials ultrafiltration, review from randomized XXX of the

failure, X.X heart States First, as mortality. contributing include deaths of of the the one million the of outlined have a eight adults authors clinical United heart scale in and Approximately cause failure in burden heart failure. the

with estimated highest of of within days almost XX% the with heart patients readmitted who and readmitted among US, XX% billion expenses with $XX annual all six cost the in years related accounting develop within And for is conditions, patients Heart hospital of for the Nearly has medical XX% diagnosis. of the to costs. heart failure the total die months. XX XX% at XX% care re-hospitalization five of failure failure rate patients within patients

of and expenses. function, compared to related The which as were adjustable removal efficient clinical the ultrafiltration. authors Predictable, health a without application adverse reduction impact renal readmissions care on value The hospital to fluid important then with leads and most and highlighted follows. clinical more findings ultrafiltration diuretics in

ultrafiltration management importance utmost settings clinical outpatient therapy ambulatory their as of and where use admissions. and prompt and patients expanding burn to such the other of into in units hospital surgery, specialty require before become is symptoms centers cardiac other of fluid settings severe other ultrafiltration active and and Applicability treat volume

continue been the using peer and our segment plan to have of grow We study failure review to heart and this further our expand business. efforts

of activated make quarter. since a XX We progress to also patients the and last continue enrolled With our failure increase trial. heart on reverse two-fold number in sites

primary and intravenous you the failure look mechanical loop as ventricular comparison Aquadex a We a device failure therapy heart of endpoint reverse mortality trial evaluate to Aquadex of ultrafiltration diuretics. within and updating XX reminder, fluid As events heart supporting days data additional including the the to ultrafiltration and on clinical indications therapy effectiveness forward will implantation. using assist liver disease removal use new device as left treat a between

the issues this small could population are kidneys. about the initiatives, of our the and we beyond approval with replacement track patient children life the addresses or neonates with excited of increase development XXXX. as We, malfunctioning and with pediatric physicians, and needs of to on device, anticipate the kidney therapy significantly remain kidney of to unmet born namely continuous first IDE product for quality pediatric Turning development pediatric those product renal without quarter along in our we continue it nephrologists,

life whom suffer fluid from overload. of threatening All

to treatment. conclusion, resistant our device to be team on focused data drive mentioned fluid will As overload game diuretics. In a market in believe build we treat changer the our earlier, patients to Aquadex remains awareness clinical penetration system of I steadily our and pediatric leveraging ultrafiltration

We centers. are addressing a with $X market outpatient opportunities service billion inpatient multiple across and plus units specialty

is day continue out executing who which limitations in and Our and day patients highly to the the standard the of on our team battling diuretics, engaged support growth agenda lives as in improve is current are of of and clinicians care. caregivers we

removal we overloaded a patients confident is using Aquadex fluid are system ultrafiltration fluid diuretics, the resistant solution. alternative the For that to mechanical

I Now, Blake, QX to turn call over discuss officer, our financial to to Chief like results. our Lynn would Financial the

Lynn Blake

was quarter Revenue in care By increased XXXX of the million, XX% while over and a XX% pediatrics and year, failure good last revenue first morning, X% declined and approximately X% heart for same Nestor, you, everyone. year-over-year. period quarter first Thank the respectively. segment decline XXXX approximately $X.X critical

basis in to of year decline prior gross XX.X% pediatrics, points by than XXX was ASPs with circuit admissions. lesser was mix. of extent, the driven increase margin quarter, a expected Gross XX.X% mentioned, in the margin an and increase primarily an lower lower sales compared neonate driven geographic of as to by fourth the favorable patient census, hospital product and quarter, Nestor In for sales

legal year-end first stockholder This million increased million XXXX to related year-end expenses, expenses and administrative due quarter increase by last higher increased compared general our work XXXX Selling, associated $X.X were seasonally quarter in of increased October XX%. the or with the were both meetings. year, reflects SG&A additional staffing expenses first expenses approximately and year related to and and company which public this audit financing $X.X

associated incurred we professional in Additionally, related consulting with incremental strategic to our fees the quarter. initiatives

an the research quarter approximately $XXX,XXX compared expense XX% million, was development first $X.X increase of quarter First year. and to or last

product basis, These associated ongoing On sequential by device. increased development quarter a development our R&D the XX%. with expense of increases dedicated costs pediatric were driven or increased $XXX,XXX

increase to million expenses in last year. an $X.X were compared million $X.X $X.X million operating approximately as quarter, Total the of

share of share or quarter Given a to common compared same in the loss per net of the million factors XXXX. in common first discussed. The the $X.XX $X.X basic million net or for per diluted diluted and loss basic was $XX.XX period and $X.X loss a

adjusted in non-recurring The of on conjunction associated expense reverse of the recorded a That for loss approximately financing. other expense with Debt October is non-cash quarter's was our our in split. issued stock warrants expense XXXX income revaluation net the the with loss includes statement. December current $XXX,XXX

From first balance and We the shares the end quarter. had and quarter common on $XX.X we outstanding cash X.X the at ended cash, perspective, million no in of with marketable equivalents a million the sheet. debt approximately liquidity securities

we'd Operator, concludes now, prepared please. to remarks. to This questions open the like our call

Operator

Instructions] question-and-answer Thank begin Jeffrey The you. with [Operator question with Ladenburg ahead. the Cohen first Thalmann. go comes We'll now session. Please

Jeffrey Cohen

for you guess, that. of the my in could you So a that and census also like revenue light end. And few lower firstly, of percent that was candidates the give was? far quarter could about. your a Talk from pediatrics as pediatrics talk questions came therapy. frame sounded about us about reference for talk as It for I

Nestor Jaramillo

Okay. Good much critical we accounts, than shortfall we and being you experienced accounts. in admitted question. meaning lower and neonates for Jeff. needing also these The those morning, that therapy was our for qualify large mainly expected In legacy our care. have Thank pediatrics census your patients

treated of ultrafiltration are system patients remember, you label. the with Aquadex are As most that these off

the lower pediatrics, We're XX the provide above. increasing that do percentage as to attributed? focus on our now. you such on that and failure answer of still to for are census kilograms cardiac indications the is indication heart want Lynn, Our other on revenue And we compensate surgery, right was seeing on the

Lynn Blake

of Sure. in The XX% revenue total quarter. was Hi, QX pediatrics. Jeff. XX% the

Jeffrey Cohen

Perfect.

Okay. correct? 'XX. Is in -- it. pediatrics, jumping an you the quarter ID first Got of anticipating you're And while we're to on over answered approval that

Nestor Jaramillo

That's correct, Jeff.

Jeffrey Cohen

Okay. conclude? number. But enrollment what's reverse at? And talk you little when percent you what and trying and to bit? then are I you're there a XX might I the the enrollment you total that trial that heart a failure could think number percent to about get what centers, heard

Nestor Jaramillo

the somewhere total have patients. is anticipate XXX to Jeff, that Right. we number around

with but we we're in to done. favor a lower that change may the not analysis our statistical redoing that done size, a perhaps number, However, of statistical completely analysis need be that sample all are

if target discussed the enrolling finish our to believe over use that are XX%, XXX, enrollment. investigators, of little a that XXXX. about achievable. we is and have bit with But I we are That's patients total all principal We our in we anticipate about XX% we

Jeffrey Cohen

it. Got

I'm to to Then heart over jump Okay. failure. going

you impact you're anticipate the this territories. the the line for on year? staffed fully your that top on would What balance of be Now to

Nestor Jaramillo

we drive we We will to awareness all that failure clinicians. in continue have see clinical will growth among double-digit continue to heart the data to obtained on and execute

Jeffrey Cohen

Could LVAD. Okay. you typical areas Got and populations and what what as other seeing And in about some you're talk hospital on? such segment about utilization you there the of some it. talked liver that

Nestor Jaramillo

to been LVAD and a few question, good has have been Jeff. for And they with that account a mentioned Recently quite follow-ups. my us immediately they transplant Yes, visit, it that us. I've of that later after visited years. have used on we a Aquadex patients treated good number for an on account

a that On very journal. the published unity center But City They publication the of we in York New using -- it be hospital. usually in submitted to the liver, a department, waiting is unit has for important who we have are in for been that publication a that have a liver liver. delivery

Jeffrey Cohen

Got it.

Okay.

think us. for taking the Thanks questions. that does for I it

Nestor Jaramillo

Jeff. you, Thank

Operator

Thank Anthony Please go with you. The Group. Maxim next ahead. Vendetti question comes with

Anthony Vendetti

reverse say Thanks. you Maybe trial. are the point? Did this sites HF just a at follow-up on all activated the

Nestor Jaramillo

me, XX Excuse have sites a be target Jeff. to we participating. No, Anthony, of

them We getting activated, have rest the now et cetera. are IRBs for contracts approvals XX in the the of of activated, getting and process

Anthony Vendetti

in size you of the that message talk the units is the convince guess, Okay. Aquadex the is mean, trying Thanks something for hospital I feel of then the what's treat you you multiple about on And just overload. opportunity. have but I you huge have the clarifying goal do because hospital, can salespeople, point? should How messaging is other it's a stated, sites on to the market the that multiple should fluid you. that in you that. in you Aquadex. to terms as clearly, of this terms more something for depending Do

Nestor Jaramillo

I'm very let Yes, Marketing overload in turn over Sales is Anthony, hospital. that's before a But answer it good Kowalczyk, Senior to VP John everywhere him, I and fluid question. our going question. to the that of

in units. ICU. in It the and is heart down in in It is the failure is emergency burn room. It step the the

our So to physicians. awareness create is among target

to you to over But hear are to go for our the conveying strategy them sales are tell we deliver implementing organization message turn more you to to we for the to about him customers. And awareness. will patient's soon that let our John John? that is marketing me it after

John Kowalczyk

Nestor. Thank Anthony. morning, Yeah. you, Good

the message So really this. is

is data. fluid by and As everywhere Nestor it's overload indicated, supported the

fact, matter degree XX% of results. are some a patients hospital to of resistance or As of that experiencing the the suboptimal will admitted diuretic be

those And and patients documents on identifying real the Kazory to those tenure earlier earlier and using so world clinical by Dr. experience. like published in other our messaging, is the based process identify Abington to the include data data, Haas' published patients

more mechanical educating that can clinical the or then by and We're earlie physicians use message the by Aquadex to a to multiple removal CRT supported minimize being downstream alleviate potentially system ultimately doing like so, with sequela over fluid say occur that of we time to is aggressive data says AKI, then or leads and given potentially which medications that forms contribute dialysis. clearance

drives not cost hospital patient, the for a Through the that less patient, needs to process, that result up of length which the then of the then incur. incurs advantageous extends stay the for only what but also

those now our data. So messages. the And on this are it's published well. to responding based And the are pretty physicians

Anthony Vendetti

Okay, great.

data sale a executives you're one of So key the is this Is the with actual it them. physicians? to And hospital? the dealing it at Is the is when presented process, broadly? attend upcoming work? does the conference you'll How the the on side, getting out conferences that combination? a are that it then And there specific KOLs, to lastly, get there message

Nestor Jaramillo

Good Anthony. question,

and a your the Jeffries, Let the me as to Dr. practicing and determine who best believe it to is how Officer, clinician question he therapy. And company be the I in John that joined person Medical would Chief used hospital John? has use? answer he as to to process is a the over turn the our

John Jefferies

Sure. question. Thank Thanks you. for the

right? of I with is the and the part of but time needs science. approach. get support speak the is think the sort hospital use data, need unique, discussion you of every How mean messaging, to you of having to to I be clinicians the it about a most dyad really your clinician can

contemporary do hearing is data. been HF. exactly that to is what you've reverse That's intended Obviously about provide

is other on administrative side. obviously piece, the The though,

just other through committees approval different has and a to happen. go before things technology Just budget mean of that because It wants doesn't lots those happens. and it a physician

the this accounts the whenever the trying use the obviously that to at that trying keep the think value but hospital, I and we're the I've point clinicians which So are substantial. that to this to is is support administration, collectively approach what the proposition data of to provide been do we true we very the or and to message that physicians technology, mind want in

happen of continuing of which use that the about technology sort I momentum, think data. can from this Nestor the will phenotypes matter build to you the But different heard for very successfully. a just is So with we

I can points of one number the think that's in touch hospital. we to any going expand have

So not just a cardiologist.

to could liver talk pediatric an hepatologist, Now, a to surgeon, pediatrician, transplant a a you a surgeon, cardiothoracic intensivist, nephrologist. a

So all these opportunities different going of sorts grow. continue to only are to

Nestor Jaramillo

Thank John. you,

Anthony Vendetti

Thank you.

Operator

back session. the our Jaramillo Mr. concludes ahead. question-and-answer turn you. Nestor conference like to to for Please Thank closing This would any remarks. over go I

Nestor Jaramillo

Yes.

hope on we optimism from we pediatric. that and the execution failure, As as also such that I convey have this heart growth you were we to liver, able strategy indications to other conclude call, our LVAD, our

as and clinical heart failure as therapy dedicated pediatric also that building we're Our our device well trial. the unique device

to With our clinicians our as you Thank from fluid we care help, patients support. health transforming that, much shareholders, stakeholders, all I staff. would well for like our the able thank not would of be Without employees, our help your as your physicians overload. suffering very lives to medical all the and

with thank you very that, much participation. for So your

Operator

This conference for Thank today's is now presentation. concluded. attending you

disconnect. may Have good a now day. You

Nuwellis (NUWE) 9 May 232023 Q1 Earnings call transcript