SOLY - Earnings call transcript Q1 2020

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Operator

Good morning, ladies and gentlemen, and welcome to Soliton's First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' prepared remarks, we'll be having a question-and-answer session. [Operator Instructions].

As a reminder, today's conference is being recorded.

introduce for to conference, like would your today's host Ms. I the Founder Soliton and Ruth, Ruth President Carol of Group, firm. Investor Relations Please ahead. go

Carol Ruth

you, available being to This Thank a days. replay Internet welcome on call and company's and call. will website the today's XX be at everyone soliton.com call the live broadcast participating also of over on the is operator, for

an accessed our we posted updated from website. Investors morning which be investor This can of the section presentation

Co-Founder and Executive Klemp, Chairman; With Chris Lori Chief me Wally today Co-Founder, Executive and Bisson, Capelli, are Chief Officer; Scientific Financial Officer.

we include within States today, remarks our forward-looking the Laws. considered Securities that statements In meaning United of will statements are the

forward-looking In to in response addition, additional your management may statements make questions.

of business, and the statements may affect operations which strategy, future events on are and Forward-looking based company's trends, financial management's or performance. current expectations assumptions,

obligation current by no The detailed the the of Form The Report intends Form that XX-Q XX. March XX-K, file A the statements. quarterly quarter its those Actual expressed materially company in from faces and on risks uncertainties on Annual the contained in results or may XXXX. projection on reports discussion the reports update differ Form forward-looking X-K. ended company for forward-looking and of company to any undertakes the by is statements. end Form implied are review or estimate to today. XX-Q

allotted for minutes today's has XX company The call.

turn And over Wally. now I'll the to call

Wally Klemp

morning. good and Carol, Thanks,

story, on regarding given our uncertainty with next to the pleased XXXX and Soliton's further you share quarter especially COVID-XX. the We're results provide chapter of first color lingering

customers. demonstrates our device amid RAP current our clearly made the us, patent RAP In delay return the normalcy focus launch sense on so industry sticking device the the a device this on until aesthetic to financial for the To expected and initialization at [ph]. aesthetic feasible, the of our plan April, early pandemic profile cellulite when release ill least impact indication or launch or the tattoo of to the aesthetic This indications be for upon a into we've of the Rapid would clearance an cellulite the device. regulatory limited Instead, a that chosen announced launch the interim, crisis of wouldn't you And As the Soliton advancing be the we'll plan of both course may incorporated the indication. same becomes Treatment original have to RAP is the launch Acoustic removal or Cellulite the Pulse given recall, for can improvement advised. of device and markets. global device FDA's conditioned in revised

using to costs we're the added so be margins. down that to launch improved design we manufacturing our incorporate initial Additionally, will with product time work able

and in reevaluate companies more product course, strategy is COVID-XX to our Of time for crisis for forcing also difficult which the customers, But affording believe success. Soliton case long-term will develop us valuable we our position a the decisions. make to

the Although not from some milestones. quarter, achieving important did affected us Soliton prevent of very during all COVID-XX first it

the in for keloid XX-week as notification Generation device. hypertrophic (k) completed RAP FDA X addition, proof-of-concept and special for and First, clinical scar And well the we cellulite XXX pivotal received submitted as trial the trial. premarket clinical we our

upcoming call the regulatory and pass now the made Capelli, context progress I'll for operational milestones. on around Chris? Chris our our CEO, to more and

Chris Capelli

you, morning. good Thank and Wally,

FDA and in tattoo quarter, removal Fitzpatrick legs, premarket on XXX individuals. upon, the special special and The I-III the laser (k) the for filing during the Type to Acoustic arms, device Pulse torso designates XXX Q-switched Skin clearance Generation XXXX notification first as March. device an accessory the for filed received our touched we early in X Rapid with Wally FDA As (k) for

a Q-switched accelerated for tattoo to with it use in laser a multiple treatment they resulting passes demonstrated in laser have comparison trials laser, traditional companies in single in Clinical allows fading conjunction device treatments. in session, RAP

RAP X Generation device ease that physician's Only RAP device technology slightly removal A utilized for in commercial submission used will as device indication use RAP office. in The other trials. of removal trials the the has in tattoo launch. proof-of-concept is technology was same and same the the and cellulite Generation the for The FDA the X therapy underlying cleared modified was companies' U.S. delivers improved reviewed by device, the be the marketing. but tattoo in similar X Generation the the

Academy is in at Upon to completion Dermatology presentation of of meeting where medical the conference COVID-XX was notified us cellulite virtual will mid-June AAD, Annual trial the Conference, place to year. was American of take for accepted due community. pandemic, this the March expected the a cellulite now in postponed. scientific pivotal the the The we findings data trial, our present to But has our AAD

XX% to $X We're with treatments the this excited over RAP very on as annually spent of cellulite U.S. indication, with billion affects in women up new

of during quarter. clearance of FDA's should filing quarter receive second process. the the an of first for cellulite as this Currently, to indication the anticipated the (k) possibly XXXX, in experience the cellulite the FDA treatment study believe, of Results we support our for in we FDA delays XXXX, fourth the quarter pivotal as XXX could early with we

XX-week initial the scar proof-of-concept volume indication Although completed in encouraging focused our were in keloid cellulite average study the the very hypertrophic was XX% longer-term. from January indication scar exciting the results hypertrophic and near-term, in we're an is approximately single treatment. indication keloid expanded and demonstrating in advancing which scar Clinical on highly potential reduction

XX-week volume device overall hypertrophic the scars of efficacy in the visits potential height of the follow-up with further our appear the reduction after keloids of RAP both show and to and The treatment average scars.

the trial important keloid this even indications for action on believe work RAP we may and early for as liver scars fibrotic be devices capsular reaching disease, fibrosis. and far mechanism and Peyrone's addition, In same The such to and impact other support proof-of-concept disorders. provides of reduce hypertrophic contraction,

pleased building device multi-indication the very about in progress hyper that future made aesthetic customers during provides highly optimistic our I'm the technology innovative close, focused with of an the and the the market. We're latest Soliton. quarter To on

me over performance. our let call pass financial Now, will who review to the Lori,

Lori Bisson

Thank and morning good you, Chris, everyone.

the compared in million partners from to are $X.X first $X.X of resulting For to operating costs development first as ongoing trials attributed related clinical The research higher million quarter, for with primarily to quarter the development and expenses is expenses, cellulite. XXXX. greater our spending increase and

March million or basis. for $X.X Net quarter first a and loss basic XXXX, the diluted XX, ended on per share was $X.XX

prior-year, on a $X.XX share basic the loss the period For diluted basis. in and or net same $X.X was million per

XX, approximately million. are March shares outstanding of As XXXX, X.X

Total XXXX, as XX, $XX.X million compared was as of million cash $X.X December March of XXXX. XX, to

December our be into third will finance We quarter cash had balance the adequate of XXXX. previously operations that to indicated

and we've assuming Given financial spending finance that or commercialization the timeline modification our related unforeseen any in instability expenses. in not to market, reduced encounter expect cash our planned December to on the and we hand our do costs now the XXXX, to operations

our innovative result commercialization our committed incremental shareholders. our been providing facing and generating value Although for COVID-XX, with a has long-term customers technology timeline future to modified, Acoustic of Pulse Rapid the we're challenges remain we and as

I'll now for closing turn to remarks. call the over Wally back

Wally Klemp

Lori. Thanks,

thank that Soliton and of a financial instability We team created recover world have for like ready to remain by clear optimistic to dermatology to aesthetic diligently look once support. clarity details customers. when our is remains for markets lack forward the mission. continued launch the the we I'd our of ongoing We driven U.S. for a their by will they And conditions investors working employees be dedication of in and their do. our our Although stabilized providing at commercial future our and have state COVID-XX, Soliton

Operator? call I'll for over turn With Q&A. that, the

Operator

Instructions]. Thank [Operator you.

question Scott Henry Capital. first from Our comes ROTH with

now is line Your open.

Scott Henry

the I Thank I to this first good Generation for and following morning, removal. tattoo you for guess I X approval sure wanted was make correctly, clarity.

to all because a you that be that going know that Generation Generation same XXX want I will is filed is clarity the X to well, PMA product or to that? when to X X that is I there Generation the reduction? will (k) switch the be just to you cellulite same refer get X the X And for with there around as or have Generation Now,

Wally Klemp

Yes, Wally. is this Scott,

It's glad sounds. it launch. I'm Generation usability some you features incorporates that device simpler than the that X commercial The So asked important for question. really are

-- (k) we XXX there device launchable. that product a but are but that enough special so change the And X in required a of is Generation it

cellulite getting that have the Okay, capable cellulite But we'll X of course we the Generation same cellulite be approval to the supporting indications and on both then this of platform. that approval. tattoo it's get

device that learn now. future to Generation X, doesn't incorporates initial picture refer an the market limited that enter we we so version when That's envisioned launch, that So future from the really a opportunity. right what that's

Scott Henry

helpful. That's Okay, great.

it you deem, this like have about aesthetic the how to think when we launch point when cellulite launch gating for deem time. And the both should would and favorable, you seems at market cellulite you So approval, you same the Is factor that at approval. is that?

Wally Klemp

Yes. that's right -- That's bet. right, you

Scott Henry

question keloid perhaps is expect favorable you event Okay. a the start waiting to environment? And more on or for study, near-term a separate when that that indication, dosing second

Chris Capelli

This is Chris.

nine in work to work indeed we to initiate our year. determine you this our to have the we the was and clinical study it's before trial this take submission the evaluate scheduled around to proof-of-concept feel impact done FDA; kick-off the therapy. optimum know, and we're a studies would for still At having As continuing months XXXX. of work that to do half we this that any This could in dosing proof-of-concept We COVID be on study. done we regime possible in be decisions more still to complete prior scar to field to expect is time, the read this with second the of pivotal to make dosing to

Lori Bisson

correct, Chris? study, pivotal The

Chris Capelli

The pivotal study, yes.

Lori Bisson

Yes.

Operator

Thank you.

comes question Group. Maxim next from Vendetti with Our Anthony

line is now Your open.

Anthony Vendetti

we same goal plan on check do do to KOLs. was to know those up And when removal. have and conserve cash original it you to do cellulite. wait cellulite? wanted off, other to just XX for it? you in as for conjunction XX with I it KOLs launch with launch the Are be now And eventually KOLs KOLs set XX tattoo going the hold I the

Wally Klemp

that maybe would start and but -- you've Lori, Anthony me off Chris here got thoughts that if help let So

Lori Bisson

Sure.

Wally Klemp

right operating reduction. clearly, KOLs let's doesn't devices for indication, to a of -- very a users, that lot different get tattoo were or heavy demand that's us Anthony, cellulite what tattoo high least to among have if would add in. call the only select Definitely profile, who select it practice for would at a the players launching make would say I we removal, but a do different and sense that profile than them the

are provide there awaiting look, think So, we've and core the margin, onto to, some give discretion important devices market cellulite We're going that think we're choosing the us regardless. you're players feedback likely probably, so have they're to I have there really to devices to this device we where to who tattoo. to think good going undoubtedly some guide market now I eagerly in the players we KOLs something device that who will be to really But promised feedback. they're will the addition

confusing bit more it's mix. So a

can driver. you based a gotten cellulite what clinicians the unmet big I clear we've on from But tell really it's need so the that in that far, feedback is

going that to deploy at demand. into least us heavy to anticipated it's natural So for be that

Anthony Vendetti

reduced extend particular reductions could until you No, from in back it related helpful. what end the if cost is this push Lori, have what? were for the the to you about there cash guess And availability of the launch I you year, specifically or that just cash to other pushing to that's expenses or took then cut talk

Lori Bisson

Sure, main Anthony. cost our activities bucket pushback I would into the reduction launch. related three One to our of categories.

line. pushback of the So fixtures we like for that validation manufacturing would and we spend things money our

So are hold. on those costs

aren't we Secondarily, this clinical and execute had in for the we patients back doctor's spend in that today's again half trials to clinical into because work. coming year. couldn't were That environment, there planned offices budgeted frankly of money quite

year. So those this could have costs been avoided

and them some the as in markets were on that the investment the put well. recover aesthetic there or lastly, G&A the both hold we have in market type as then, watch to And spending markets call categories financial see we meantime

system of also So that ramp-up things and Anthony. like and paused, been staffing any investment paused, sort has thing in upgrades

Anthony Vendetti

catching Lori. it. That's clarity, clearances, safe to very forward the Appreciate the to healthy. Thanks helpful. stay soon. Look and for and again forward Look up

Lori Bisson

Thanks, Anthony.

Wally Klemp

Anthony. Thanks,

Operator

Thank Instructions]. you. [Operator

Our Williams a next Private Investor. question [ph], is from Kristine

now line Your is open.

Unidentified Analyst

Hi, taking ones yes, thanks questions. quick for here. the Two

recovery? First of would indicators are evaluating all, what you that signal market market

Lori Bisson

their market aesthetic point Kristine. cosmetic minimized closed at today, treating seeking or watching Sure. they're call the to just recovery. going the the Hi, thanks to urgent where most practice be carefully for with least on Today, or very for of needs. We're practice being dermatology patients have signs

to to see in. traffic practices And those so have need we're to see start those start going to reopen practices coming and

We dermatologists expect procedures initially initially are that been cash back and space. procedures of cows thing of Quite expect them waiting will procedures that expect like that to redone capital require have have that Botox start we patients to that the and the focus for purchases first treatments to be kinds on outlay. that cash and dermatology comes are come last And frankly, don't in aesthetic we those thing. in sort

we're practice. board within in communication that So with in are we the in are respected all companies our industry. touch members with board -- And and Members them we in group firms scientific management with of are aesthetic advisory well senior them. positions regular cosmetic of partner are in that a

getting so input solid all determination to the feedback make really those right for players. we'll we're us from And launch our and our is guidance products. take that time and And best

Unidentified Analyst

Great, of physicians any and your have update the environment there. if can any provide More on so? practices you specifically, their feedback thanks for that reopened

Lori Bisson

Sure.

to the That's or to under state-by-state would last stay-at-home and are we're today is so different regularly started has be as states not to as week very provision. So operating two different on reopen. and preparation planning But talking going a everyone physicians what expect is reopened over decision happening fully their the much going practice. that have

And just so that but to to get it's signs back the going to start seeing first are we're starting. work, doctors now

Operator

John And [ph], question next our comes Furman from private a investor.

Your line open. now is

Unidentified Analyst

had just Do question cellulite I questions. a approval? expect in due to indication a approval. the taking for delay about Thanks COVID-XX you

Wally Klemp

good it's John. question, Yes, a

regulatory they're continuing FDA constant advisors We our that FDA And on the committed to -- getting a basis. the that their is hit touch is with timelines. stated have device of been in feedback the is obviously division to

So there. observation setting say looks an COVID-XX like We're and But clearance in doesn't we're of the back that that would be I of the look impact officially, could all good it just so side like there FDA. shape. also unofficially, concerned sort it is the in device pretty process is far,

a And XXX not -- pivots you may on treated question (k) of big this is us know The for description or is de novo. indication decision or the be going predicate as we as that those the a FDA. there are by connection out a clearances There cellulite accepted technologies, ours pretty indication. that to unique. have is the device devices even for And have other is though we good think whether

We was than the is predicates for our us and our actually predicates us between connection removal. it tattoo and here between stronger think the

about optimistic opportunity know. we're the here, you but So never

and timeframe it's accept say around needs (k), to are they a argument XXX And Well, that predicate kind process. so be arguments, accept XX-day approval. if it the forward novo application. our this predicate a six is they nine those to of Probably to move months way. -- they it taking don't instead de our for in If probably an no,

both good at in we before still So indication ready in we plan. the tattoo we're instance, have either really the believe to cellulite shot launch. a the indication That's and place having

Unidentified Analyst

the present Thanks specific AAD quick color That's the a helpful. or date And time you follow-up, cellulite on has that. given to for one just the data?

Chris Capelli

that conference Chris. This beginning having will June We virtual is be understand AAD XX. their

specific goes presentation when I We be days. will not a our think have given. for it do few a time,

right So now. we are that's sort where of

Lori Bisson

get more with we information will concrete We it. update investors when

Operator

the Klemp, remarks. now Chairman closing pass I Walter to Executive call back for

Wally Klemp

again for this taking up time you Thanks, and us. early to with getting Operator. Thank everybody

a just feel email and and got questions, free please aggressively giving and an follow-on to safe be unfold And as have who link We've for have our milestones do them. that at address us to updates we're website have you more everybody forward right follow-up. questions day. investors If we monitor looking and for you good now,

Operator

you thank for now This concludes conference. program your does and gentlemen, may on participation and today's Ladies you your disconnect.

Soliton (SOLY) 14 May 202020 Q1 Earnings call transcript