NUWE - Earnings call 3 2023

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Operator

Good day, and welcome to the Nuwellis Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

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

Vivian Cervantes

Thank you, Danielle, and thank you, everyone, for joining us in today's conference call to discuss Nuwellis' corporate developments and financial results for the third quarter ended September 30, 2023.

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

We Nuwellis' also Chief Jefferies, Medical Officer have with us Dr. John today.

the today, financial a.m. XXXX. Nuwellis X September XX, Eastern results At for quarter ended released

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

XXXX. during events relate Securities company be protected will expectations the should call, or those cautionary or these to forward-looking Accordingly, Litigation this no call Act company's be making that the statements. the today's All Private Any All or predictions During will you forward-looking to Reform of differ statements cause update statements reliance made latest refer SEC under future available estimated events material upon statements. forward-looking assumes in reports. statements. actual including implied these and involve XX-K based various statements forward-looking and forward-looking and as filings to of anticipated and of statements market to are trends statements forward-looking are results statements. the based obligation these with the information risks well on currently as and statements results from risks materially Please upon statements. our estimates These are subsequent discussion company our and not uncertainties by place the current or undue the could that performance assumptions. All

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

Nestor Jaramillo

Conference good and [indiscernible] everyone. Nuwellis XXXX Welcome morning, Call. Quarter to Third Earnings

including recently or and agreement FDA proposed our call humanitarian third with strategic selective its of an and [ received use on our Acute quarter letter device Kidney cytopheretic agreement supply exclusive for a device SCD, ] today, distribution performance an collaboration [indiscernible]. initiatives, under Pediatric give in our I update overview DaVita license for an Injury For SeaStar approvable and and our with provide will our which

collaboration add our industry. and will and will recent color provide our our Dr. on additional his renal Officer, DaVita programs John Chief the Medical perspective on also Jefferies, clinical affecting news

Rob financial results before then Financial my detailed remarks. followed Chief up will by commentary Officer, closing provide Our Scott, opening call questions, for the on the

acknowledge Before results, current of have on I short-term feel The future and X reason the like we situation market companies to turn third confident effect about in its sound like I because concerns would Nuwellis quarter Nuwellis. to fundamentally growth drivers. I is the

X core business. we in First, our is consecutive organic growth Failure have growing, by of Heart business, our year-over-year which represented quarters

products the Second And is the new within expected years. and agreement next collaboration third ] is X our commercialization X supply DaVita. of [ with

to view is our of quarter, year, Aquadex increased utilization which the XX%. XX% of number over being first the $X.X therapy in increase the third organic last utilization third play in quarter. over most prior results. number ] Turning a period generated was million therapy. quarter the continued our increase and quarter third or revenue, console with reflecting QX, Last Nuwellis [ a quarter XX% the increase in same treated growth patients circuits is the relevant of What XXXX, XXXX, in XX% versus In of and

posting console Pediatric By With XX% while the and customer targets. Care revenue a third category quarter see capital -- utilization period pleased sales a the growth, of Failure over firm drove the and Care, gains increase Higher Critical year. Heart last Pediatrics, X in Heart led X% performance. increase. Critical category, growth same across we each are Failure, XXXX XX% to a increase

XX publications from therapy. the benefits the the of We strong data over continue in economic organic especially Aquadex growth, past months, clinical to a support multiple of to Heart Failure the awareness clinical our attribute validating growing peer-reviewed and and

through and the in the the providers on logical earlier and We awareness Aquadex implemented is focused step be when care that system clinicians working are ultrafiltration among use should diuretics help of not understand pathway. are driving to a them

which oral predictable. mechanical is is our Patients controllable, or therapy, the whom precise delivering more immediately consistently positive are intravenous for that is This is diuretics move the not message effective and having results. field ultrafiltration fluid should organization and to

revenue still to installed of leading would our out constraints. is for are like in are I utilization across base to Hospitals treated. geographies for continue because QX patients point measured in by capital Aquadex multiple it we a we the lumpiness key spending place, The our Nuwellis consoles more consoles indicator that With placed see in budget although also trends. grew, installed base, growth is the and facing capital generates therapy. quickly more that, hospital

are to pleased sales, in we and we while utilization driving both this environment, systems. all rental console our programs offer As navigate increased

first this example, For of revenue rental by in increased consoles the our our sales of but were half year, soft, XX%.

The However, Aquadex news the around getting treated still constraints good consoles capital in renting hospitals patients that our sequentially, therapy. QX, sales but the revenue by consoles grew while is the soft. with rental growing our was of are budget number of

to capital elevated environment. in will hospital especially rate monitor spending, continue interest We an light of

driver new growth product introductions within second our the X years. is expected Our next

[ Pediatric distribution Medical are SCD, in where patients. the -- We exclusively Injury rights are Kidney that FDA Acute U.S. approval for cytokine use exclusive received letter ] excited device SeaStar for the we selective recently its or

clinical ] [ more requiring treated SeaStar's adverse dependency with SCD device therapy even related infections. mortality excited about kilograms XX showing patients replacement a zero are the pediatric pool continuous had analysis kidney or zero acute XX% events in serious over with XX% and from dialysis We studies at that kidney injury reduction X and noncontrolled

children with with kidney positive small impact product advance which those kidneys. and high-growth of kidney the profoundly program, issues have SeaStar's life we in many internal pediatric of significantly our Replacement along will survival to development improve category, earmarked believe therapy. malfunction, product or this Therapy neonates pediatric for patient nephrologists, Turning to continue SCD a Kidney also is born our the Pediatric without of to quality and our Continuous development complementary We, Device,

half in to in XXXX, clearance We are with of and full commercial XXXX. plan, early first IDE continue in to executing to U.S. FDA launch expect continue the the and approval

to continue we patients supply to collaboration with and U.S. to many system team, move Impairing and ultrafiltration aim to Finally, we Aquadex related DaVita's with markets. conditions the heart DaVita Aquadex from overload with to with failure ultrafiltration therapy patients congestive selected and the care fluid failure in treat suffering to agreement pilot adult unresponsive heart expand our diuretics. of forward in U.S. the

to collaboration service ultrafiltration approval has treatment sites. services study pathways We and its pilot are room, will the their X the the and conclusion delivered, deliver to finalizing ultrafiltration be expand option to accounts. engaged At of Once and terms. for up actively contracted emergency pilot, that effective outpatient units inpatient, observation in is supply facilities DaVita and approval our X-year in agreement hospital

DaVita changing Nuwellis success pilot program with the clinical profitability. potentially trajectory of path are revenue of future growth first-line the the believe with our an adoption accelerated for We when to could ultrafiltration treatments accelerate ineffective medical

DaVita Medical I like clinical who would additional provide our now over Dr. our Chief call on the color will to programs. collaboration [ and ] Officer, to Jefferies, John turn our

the affecting to recent addition, news Jefferies? In perspective industry. renal on his Dr.

John Jefferies

with to Thank and everyone. today. you, you I'd topics X like morning, cover Nestor, good

making with our impact announcements and REVERSE the thoughts class then DaVita, agonist heard our loss with weight our the so-called clinical drugs our or you of regarding third, second, we certain alluded care renal First, collaboration ongoing on are in as trial progress of to; GLP-X a the in business.

understanding expertise, to us, that powerful collaboration leverage encouraging cardiovascular medicine the continues of with DaVita our to enhance syndrome. So which our provides a to cardiorenal note it's and nephrology, for vehicle

fluid such, of safe heart continue effective patients Aquadex ultrafiltration increased as and oral and intravenous a awareness As and of forward treatment therapeutic number continues this whereas in growing center precise option approach the of recognition to to failure United treatment predictable the use very on the offers we difficult to condition. improved States therapies, a to overload diuretic look of clinical of and of more

XX our hospital evidence, body XXXX. increase and continue the and XX enrolled on we progress To heart REVERSE-HF patients of our of sites within days a XX since number trial, of clinical now evaluating discharge. have we and sevenfold to of failure mortality activated QX make date, Building events in on

failure. weight agonist reports that are receptor loss in GLP-X known type failure with the the risk drugs, and reduce of agonists are diabetes. receptor levels. X that increasingly heart and These these sugar heart to may evidence in events prescribed improve also internationally. of are relates There drugs other blood symptoms GLP-X patients U.S. also it drugs may to There's As help regulate cardiovascular

are use will reports determined. Therefore, how GLP-X in these of be yet areas long-term to agonist these benefits and unclear is the impact currently it ultrafiltration. are receptor small However, relatively

these fluid as to benefit around the patients strong number Given which likely some patients, heart be will of for opposed interventions. there the failure in a diuresis mechanical need still increasing of globe, will removal drug-based from

In renal drugs mean there options to addition, It advanced multiple from rates failure and heart additional this the means may be class have the diseases progression disease. that ultimately other as such as of curve may of bend that benefit to Aquadex. therapeutic which phenotypes, across will different such potential end-stage more may people

therapy opportunity instead failure treated experience presents of volume improve to therapy transplant, assist acute to heart ventricular mechanical status with going these may be left deliver medical example, or a guideline-directed us continue for heart settings. which as and ultrafiltration device, For to a to a an such patients in device and chronic exacerbations,

it Thank to Nestor. back I'll you, and over turn

Nestor Jaramillo

Jefferies. call me now to Rob? QX Dr. you, discuss Rob to results. With let that, over Thank financial the turn our

Robert Scott

Thank you, everyone. Nestor, good and morning,

representing increase the XX% third revenue Pediatrics of year, quarter respectively. customer approximately XXXX over By was XX% the Revenue the year for Heart same XXXX. third last quarter $X.X period of this a of in in Care million, increased and XX% for a and the XXXX Critical quarter quarter XX% in third X%, and category, increase increased versus Failure second

Critical hospital constraints, increases pleased while growth the capital are Aquadex Pediatric sales performance. console in to category and led of drove despite Failure increases utilization highlight budget systems Heart We Care that

prior lower in for gross The console third compared quarter driven XXXX margin manufacturing volumes. XX% the margin of the was year to period. by Gross primarily was XX.X% in decline

our industry line which However, are product with XX%, margins U.S. in technology are standards. disposable medical

expense. Selling, decrease compared $XXX,XXX and year related administrative $X.X the third million, count the general of head compensation reduced approximately were in a by driven quarter, and to quarter prior expenses

approximately to development of and development of of expense new we $X.X the modest increase IDE submission. quarter to billion, pediatric in spend increase final XXXX, as research reflecting an was a compared of quarter our device $XXX,XXX Third third CRRT phases approach related

quarter, operating sequential in were decreases Total decrease due XX% $X.X approximately quarter million compared to sequentially. early implemented decrease in of year-over-year cost-saving a the to XXXX of were and third of a and the the expenses XX% Both QX. measures

loss driven a by $X.XX in share compared of or Net loss equivalents or million cash and sheet, We $X.X in the X.X year-over-year lower increase with increase per year prior and an loss million of ended the and quarter at million no per shares in net weighted third per the $X.X net loss debt in share common was we million is sales, $X.X count. $XX.XX period. to September average decrease a common and in quarter share the the third share spend XX. outstanding had in an balance common cash on The

redeemable XX, commissions and we J proceeds gross underwriting warrants. public convertible, million Series stock closed offering of a discounts of October in before On $X.XX deducting and preferred

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

Operator

Street Aaron [ Capital. The Instructions] from [Operator comes Witmer Lake ] question from first

Unknown Analyst

I This the on relates of your see as I to you the the color with them aspect this little going expectation with split is sort you them? more on to want the expect forward what have DaVita we just guess and morning. sort get for can in trying it but bit know remarks, contributing mentioned of arrangement partnership regarding prepared to financial to with you Aaron here? bit a your what success line of Brooks I'm sort that I a

Nestor Jaramillo

Yes, good question.

medical that inpatient well are team what As dialysis staff dialysis hospitalized for DaVita to their and patients patient of you rooms. the and know, they as dialysis they that in needing as a provide service both dialysis DaVita have multi-treatment ambulatory provides in call nurses

do So ultrafiltration, in their their to the rooms. is idea that is the for contract ultrafiltration with have DaVita in patients for dialysis

large their when have dialysis. they that look see hospitals a you the contract that Now of at they documents you published, during have number public

will with provide idea for us to to patients. is this the ultrafiltration and in they DaVita product the supply fluid the sell services overload So do to and to collaboration the hospitals

Aaron? Does answer that question, your

Unknown Analyst

[indiscernible], different with would Yes, guess? -- I or that that question yes. the And guess how how then would sort I differ of in same reference SeaStar,

Nestor Jaramillo

with Well, well patients life. SeaStar the them. distribution to and come have improve with be treated their device an device for reaction quality pediatric needing use, their pediatric can exclusive significantly as hospital inflammatory with into we their as license Patients and agreement mortality of the

So product the idea ones our where we organization, in field organization hospitals, also pediatric us, to the for distribute have our is for business. ultrafiltration the especially that

Unknown Analyst

you. Got

then operating if I one fairly expenses this ask there was reduction to significant follow-up. And Okay. Obviously, just quick could a quarter.

sort some cost of do see path to due achieving You were OpEx? sort of to forward the different goals? saving these sort to Is they longer-term mentioned to plan a make that continue of moving of Or cuts measures. to you sort this your

Nestor Jaramillo

savings and more we measures to also did to cash. provide question, our last QX rightsize the some runway On needed in we because

will anything in to in effective in as efficient, and the more our we So the as ways more find we product the be margins. our well to don't field here but anything expect both continue headquarters with to future, future, do drastic in

Operator

Anthony The Maxim comes question next from Group. from Vendetti

Anthony Vendetti

little a a on DaVita. of Just more follow-up bit

I you about pilot plan XXXX this centers? this what do to can And phase, a there So in Or sales the a How all? expect but situation? know be more bit little for rollout? it contribution it's to during you the many is talk a a pilot at quarter of is either phase,

Nestor Jaramillo

Yes. question, Good Anthony.

it's Just be the with to to treatment. clear, this is collaboration DaVita new in mean every I new and to is to us, -- stakeholder we were it's to doing hospitals. it's DaVita, this new this that new

this patients, to do decided for just we a their hospital which learn we treatment to with everything pathways have that do customers. DaVita contract about that to need learn pilot collaboration, a to includes So billing amendment would

as So take the the us. both [ to well we and for ] for hospitals that make as well DaVita to goes for wanted time sure everything

fitted of And collaboration. are the this are pilot. that's sites in this So why to the the we're that we pathway more are initiating care process defining where do

we're the good having and fit staff have DaVita, issues, they collaboration reasons want but needs a hospitals by capital results, so or budget acceptance that a feel lot issues by So will contracted with of their for ultrafiltration do that of lot are they good appropriate. they nursing to DaVita

that So treating patients hospitals. impact and DaVita part to we your the buy QX. of the consoles question idea answer would circuits your second the in the about the as start Well, is in

Anthony Vendetti

Okay.

So them. actually they'll purchasing start

Is Or like? do you it so mentioned they standardize has that DaVita lot Could certain their customers to have look flexibility rent? amendment contract just they a the amendment with a there? customers? to that they You And [indiscernible] their would -- add there the contract amendment what purchase? how to a DaVita agree Are and that add in in? -- small they are to with of Is and attempting -- ultrafiltration.

Nestor Jaramillo

what Anthony. we with questions question, is those to answer plan pilot. this obtain Good The to

hospitals So DaVita dialysis. to contracted now, do has right

the their to do with those amend to they patients have and to ultrafiltration. staff. product own contracts the DaVita will us, provide clinical will services they from So their will buy

patients. or to all assuming So per this care patient the that or of them having assume a is to DaVita the DaVita ultrafiltration. patients for are treating hospital. staff, treat that's what take the benefit is ultrafiltration way rest. And those the budgets what that hospital viable are would I But for we will a for some for capital is nursing pay fee Hospitals

Anthony Vendetti

follow-up between on pediatrics. device and difference SeaStar's a then for And that SCD maybe the

and that customer what is then situation ultrafiltration -- So depending you for? is your what separately that a for sell from where device SeaStar similar looking the -- on purchased device either you

Nestor Jaramillo

Correct.

will the me services. SeaStar to sell from with ultrafiltration customer let the say too. and But our then it we something will here, just clarify We -- product purchase

own Our device, new have. the with would device, with now. that the CRRT already their start device use the right pediatric that Right that's device pair CRRT dedicated to when now, a device would devices that will a we be SeaStar's hospitals be be we selling SeaStar

Anthony Vendetti

see. I

the they using device. are device continued pair you'll hospitals now, renal CRRT? that with what device Your new whatever is therapy But device the available, replacement until for is have right SCD

Nestor Jaramillo

Correct. in these pediatric the is devices Right only used CRRT being there [indiscernible] market, now, in patients.

device CRRT device will adult. Be they used ]. any will dedicated with a this be a much So change. to currently better these pediatric [ with This well therapy the SeaStar as patients. believe be as we used we for pediatric the these going many is that all When But together SeaStar introduced our why is to patients. device gain device nephrologists treat CRRT

Anthony Vendetti

partnership. It sounds a good like

Nestor Jaramillo

Correct.

Anthony Vendetti

wanted of say X others You this to products time? mention X you did or this about to just -- new mention that were you -- X did not you there talk mentioned could -- I them, at being

Nestor Jaramillo

Anthony. observation, Good Yes.

new very be Starting device. in are We have the catheter We're to That's mid-XXXX, next the X our soon then we pediatric introducing with to years. -- be additional used products plan commercialize dedicated X with Aquadex that the one. we SeaStar system. catheter venous going to device. And introducing CRRT also an

the So years. X the next those are X devices in

Operator

Seeing Instructions] further like Nestor I turn to remarks. conference back questions, no over the Jaramillo that [Operator are for closing there would to

Nestor Jaramillo

Operator. you, Thank

category opportunities accelerate core organic by XXXX, SCD growth encouraged approval, for early and SeaStar are path XXXX We we approval. of this, the expanding device business. add the in or approval lead by program to our our service targeted our To therapy profitability. commercialization will believe new on pediatric We marketing in depending ultrafiltration high-growth multiple with our product for DaVita year-end HDE to across initiatives, ultrafiltration progress pilot including deeply [indiscernible] our revenue and growth meaningfully

ultrafiltration to in continuing our Finally, Critical in categories. advance our with awareness of and Failure, evidence, penetration with are Pediatric and Heart market economic clinical growth utilization our Care in healthy we increased therapy of therapy body

thank like our stakeholders, employees, workers field. as our I the call, to all stockholders, would patients As we and healthcare physicians, nurses, well as in conclude

support and drive fluid ultrafiltration a full Aquadex meaningful system our with transform the We lineup appreciate continued ahead overload opportunities we you. progress and exciting as lives Thank in patients your have to of initiatives therapy. from suffering of our

Operator

now concluded. Thank you today's has conference attending The presentation. for

You now may disconnect.

Nuwellis (NUWE) 7 Nov 232023 Q3 Earnings call transcript