SMTI - Earnings call transcript Q2 2021

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Operator

Good day, ladies and gentlemen, and welcome to the Sanara MedTech Inc.

Second Quarter 2021 Results and Business Update Conference Call. All lines have been placed on a listen only mode and the floor will be open for questions and comments from the web and phone following the presentation. At this time, it is my pleasure to turn the floor over to your host, Callon Nichols, Director of Investor Relations at Sanara. Sir, the floor is yours.

Callon Nichols

morning, good and Karen everyone. Thanks, welcome I'd conference Sanara earnings to for like the to call XXXX. quarter MedTech's XX, you ended June issued yesterday We release earnings afternoon. our that link And have our also like I page. highlight would Investor Relations posted today's to a deck on to we XX-Q be deck, the available page. well on earnings as of transcript supplemental a copy this a This the this of as release, and call, will

remarks today. We will in reference this our information

Litigation for McNeil, minutes in Act conference Chairman expect our Chief today's Q&A. call of statements Surgical, this from include comments and and deck Securities our Fleming, Financial release the We time looking forward press Mike Zack of Ron Reform Nixon, Officer; Certain of to supplemental Board; meaning in the last to within XXXX. and statements prepared the our Private President the of approximately allow XX

products acquisition, company's care. Rochal Forward-looking and approval regarding, of statements include statements new the expansion other things, benefits and the wound development in anticipated telehealth and the of asset among of business the

more uncertainties statements, most and our see and involving Form about information XX-Q XX-K. please report recent the annual forward-looking on For Form risks

to over Ron, floor to yours. the I'd the turn Ron. Now is like call

Ron Nixon

focus million I'll our product everyone. territorial experienced adding in sales Surgical team each will and and the dive continued with in sales more the quality for Sanara $X.X on the record million his the Thank topic quarter to specifics revenue slides. in sales. generated Zack in and remarks. growth fourth $X.X regional managers in surgical the and was second This good company was continued this deeply high in and a then you, Callon product to discuss loss adoption for hospital morning, by an team. row of a in and quarter quarter of has driven overview start second we'll the XXXX. of subsequent net

products pipeline our strong solutions a COVID-XX in for growth market experience. on effects efficacious to and good surgical pending bringing significant or to long-term our proposition. product of the and opportunity offer no value focused virus continue see that highly We constantly We're

We our fit areas. see focus partners that see continue proprietary six our within to cap products

of have development In We XX-K we applications the the next numerous XX to assets, several products pipeline months. Rochal products submit now intend projects in within acquisition addition, for in-house. of to these XX following our five

the for it contributor quarter, development be the Industries. of certain the strategy. and believe will we've completed Subsequent to to end an Rochal partner and growth our of a research the Biotech. as on We partnership our Zack to that latest business our With the win-win structured Wound Cook team The was I'd between like overall referred proprietary app. demonstrates mobile at wound like skin engaged costs efficacy and WounDerm to I'd United is our proposition WounDerm telemedicine virtual and wound We our of Now related company's pilots in WounDerm, we discussions its prove the and more multiple discuss only value skin and and to to solutions and now over surgical it and turn care and parties. EMR acquisition important future actively development Solutions WounDerm Previously our outcomes to of name. business. which plans feel and this Skin with renamed is to discuss regarding overview, comprehensive acquisition assets Fleming to the appropriate to

Zack Fleming

Thanks, Ron.

sold there CellerateRX we’ve the The could used. managers, centers are discussed across and both regional over ASDs. in use over had of believe the our hospital hospitals for new and be hospitals we continues ambulatory quarter, of size terms product over end and Our territory total second managers. approvals In sales and is the team. as bringing sales, hired regional XXX AFCs in sales Cellerate that where XX to grow in surgical At to hospitals approved the States division eight surgery United XXX XX,XXX XX of And potentially in QX, states. been before, and currently we the

the plan distribution extracellular is half to FORTIFY and exact Cook to have in timing and FORTIFY rollout the for and rolled VIM repair on tissue graft fully that which for Amnion TRG, the working matrix products. of for We're the year. Turning that sale product. available marketing We FLOWABLE this of matrix out second the and currently strategy

back our more it product turn in discuss I'll pipeline to Now to detail. Ron

Ron Nixon

Thanks, Zack.

wounds As in currently or our We six we're I on pipeline novel within an market. which to FDA cleared minor five XXX(k) skin of products this fit as Rochal various licenses barrier, focused product damaged film the liquid of product, on a development. options is film bring product acquiring and earlier, an waterproof partnerships a at breathable currently antimicrobial and intended exploring dressing application mentioned damaged CuraShield, products our potential have manufacturing to was that areas. Sanara's barrier from creates forming wound focus for skin. developing Industries protecting and stages innovative film,

our hydrolyzed final ready cleanser to develop it's file once cleared products expect debrider and complementary application that through the collagen testing the a formulation XXX(k) formulation progress and a to currently XXXX. have be continue and process. in biofilm We efforts to finalizing XXX(k) will to the to We're our

the the expected which antimicrobial skin quarter our been the of believe and solution in to currently this compared to next have cleanser infections [indiscernible] significant We're we our collagen plan our fewer at antimicrobial in on and [Biosurge] the standard testing reducing driven could BIAKŌS previous biofilm product biofilm leading many the is from generation newly an to current next of surgical be is start with line. results be it acquired derived next additional for site an I've products surgery first initiative hydrolyzed date irrigant key wound developing This wound said We the working on to products, to calls. these care. surgery. and product sales team of will for product, generation ours, when impact wounds, have surgical and Our is Rochal. by

our Mike of to the turn our QX to like results. discuss half to McNeil, CFO, over financial year first I'd it and Now

Mike McNeil

Ron. you, Thank

the quarter, during $X compared million increase over During generated XX% prior increase Year-to-date and million products revenues of XXX% we through independent XXX% June million to continuing and as over both expand network expansion compared the of our our primarily markets. the in existing second to to which the representing result sales XXXX the half strategy totaled first of over surgical a year, million year. distribution The first higher sales second revenues force for last sales XXXX, of quarter $XX.X represented US XXth $X.X same were period the of our of half to ongoing and of increased XXXX XXXX. revenues increase in due $X.X our new

We result loss of second a the access In the to compared had addition, pandemic. for and $X.X United quarter XXXX. $X.X due second the elective revenues restricted negatively to XXXX in a million impacted net quarter of the second of patient net of throughout XXXX of for of suspension a of most surgeries of quarter COVID-XX parts facilities to the were loss as States

million million in primarily XXXX. due $X.X of loss sales half of of The period in loss much revenues we for XXXX. improvement $X.X had to to higher the of XXXX, first was the net a same compared our net a For loss net

Finally, shows acquisition. financial the ended cash a million discuss I in second Ron back a position to at turn it will $XX.X balance we on asset sheet with Rochal our the quick of quarter look hand. to now strong over

Ron Nixon

Mike. Thanks

certain certain acquired FDA recently we assets including property, to mentioned, supplies. and under we equipment license and products currently technology intellectual four development, XXX(k) As from rights products, Rochal, cleared

Rochal In as hired the products. skin wound is acquisition This extensive development distribution The experience in as which effective technical network. team their commercializing us combine and well to X, all to addition, the our XXXX, of Rochal additional Sanara’s we comprehensive strategy, technologies transaction, was personnel. Rochal allowed extensive July and with strategic surgical the

that that's our As at to collected through new we data healing, have capability The bedside products of team the and license. to for acquisition license team the The as of Rochal the the at the refusal an data based regulatory product certain will Sanara’s is strengthen not products on at development Sanara’s of under compliance, economic date, to on right well expected work first more as has innovative expertise, chooses manufacturing addition agreements, Rochal Sanara in-house were closing Sanara quality also rights analysis bedside. control. products gather for precision the

consideration a of year developed following the entitled Rochal time. Sanara asset For receive from to products for during purchase, period execution that is the three

Rochal. an During or has Rochal of the by that Rochal the entitled in grant work as done receives equal amount period, to of Sanara proceeds XX% same receive the to cash

silicone that point. the The Sanara ready assets may we questions have not products for certain the details forward more opportunities. agreements we the open we up licensed to see to licensed the future on XXX(k) and For our at and the already royalty time that development. just with you call questions, of including we thank filed. commercialization at adequately Sanara enough have That above were Sanara. deal, were at rights the that we're look an concludes that appropriate have excluded to the the the products licenses under of these to monetize felt will approved and reason come license we excluded appropriate value not for In all would on five any to prepared had please you. didn't streams that time to Operator, during currently One, product We deal this, remarks clarity for could price, to products assets order Q&A. assets. answering them the for was review that from already

Operator

first [Operator open and Cantor Brandon Fitzgerald. the Instructions]. floor from question is for And comes Ladies gentlemen, our from Folkes now questions

Brandon Folkes

Can those elaborate similarly continue being So market go the in accounts get to just very in additional of just well hospitals then approved bring terms to over opportunity done to and ACSs, as on and you've ASCs. deeper and in hospitals ASCs. along XXX. approved in And you same those XXX lines XXX products you're Cellerate, firstly, used hospitals in over you the

I territory, there splitting So what's Are of needed ordering in color traditional are the second sales terms new would approved, that in the people. question, territories any using to other helpful? and those of just guess, covering get And terms any secondly, just be just they product? my then XXX

Ron Nixon

you answer Zack, don't that you wouldn’t if why mind.

Zack Fleming

the how go the hospitals also but the I broader, first deeper was, XXX. the across in question into we’re do we XXX into think XXX So

product first we're XXX wide that this So And approximately. go applications the key is very specialties. is across I'll surgical into the XXX in, and

that appropriate if surgical wounds, this and kind for. just is be working on anybody stop of So think you would

get bunch of of from a the point that doing standpoint, well. of broad general favor that you of orthopedics, go specialties. helping surgical very But group a could you a course this Really could plastics of that that's keeps use kind there's patients spine. is maybe So whole if product healing a they them healing in specialties from comorbidity aren't well from have

is really widely very it So applicable.

get XXX. In from terms get to do of XXX full closer how we the and

of we have go course, into new the And as into approvals. we're going ties you territories expand and where to then additional And to it hiring that think territories, next mentioned. of I we try people, are part your we to those and is into question. know, try

from hard So each of and those those to that are people of very us. of important interest each highlighted certainly working and those hospitals much nowhere are IDNs, all gain are very We've hired, obviously we've our surgeons. to those

it's seen in simply promotionally it product you and We've is this played that very for responsive. very model So been when field, very with have put person consistently out the the reach successful a a us.

start the and So it. product in need other for immediately see words, to people this use

product to So and a reaching getting of hands. it's matter just in the their out those surgeons

I of third that. ahead… answer Go think didn’t the I part

Ron Nixon

to one point that by add they like ends No, Brandon, that is surgeons Zack, see. and u that, was this to going getting the adopted really that I just product other that key results

to word of more up opposed adoption the the product. really So more selling This being therefore, mouth of as ends of is product. it

nurse that orthopedic or side from surgeons that across territory spread they've with the what talking we’ve XX well because group your as worked seen surgical surgical then first, and mid fifths the practitioners, specialty. And those surgeons the PAs, within surgical benefits in of group and and group, there's to obviously, And with the is more wounds. any within you fill the surgeons or to also the usually the levels, as and about across the group it surgical see that helping plastics that product. more get you in each to are with through that work group so with surgery the start usually And other XX

Brandon Folkes

question, additional if may. I One

half going around in at any Any remiss lot on on variants your substantial the year, color we’ve got I this launched of of seen these of what if very timing of Delta and COVID interesting with You've but variants ask. stage? back be the number I'd a didn't a thinking launches or product other

Ron Nixon

I always seen what it's product mindful would eye impacting What once goes we're tell on already this think that actually since an launches. year. you through went and on is don't our last we've and keep before, this I

maybe So to any stopped. to attention And want get color we're Zack, to the mindful temporarily that. you paying to starting of elective surgeries where add

Zack Fleming

into cases will meaning be that sell the our Sanara. of and/or where And existing agents is think regional based just have on that product. the work availability in influence that Volume would we're for facilities. using volume access with managers sales us, I Yes, the launch relationships, that and targeted we launch surgeons like fit an opportunistic a to the that

Ron Nixon

I’d we that that things Brandon, up that geographies, are COVID also do variants that decline. see hotspots the pick -- continue hope is if other into geographic less if we one on those add, expansion difference any our that the to impact of of of so impacted there we reach, focus the will or of can are which those the

Operator

from And Neil is Instructions] our Capital caller [Operator Management. next Cataldi Blueprint

Neil Cataldi

there. little How maybe Could on to go-to-market any wound revenues timeline the on that? is a the for further elaborate us ramps you strategy give a maybe and it care pilot, what updates and and bit

Ron Nixon

going facilities. weeks and very multiple pilot a within to first is it home healthcare, is next begin The will the two in large include it

much therefore, feel. on very is better we'll that's PDGM. a And a much so This get company focused

on brings patient it that that like that where and has group wound understand that’s morbidities to conditions driven wound. relates value ascribed and them to to there modeling is patient as a has that that so focused And value care the being multiple higher

will we console. our So be testing virtual

obviously, that. out. in We testing be used how And be -- our will to proposition value be overall will data plays our we'll our see products gathering

facilities And or be end progressed, We're XX-day done will of judge to give next be the we’ll since the the that not will next their so within COVID. can nursing They're the skilled a assume I way able home patients exactly seeing movement to seen quarter be And that in nursing but have to has towards because that facilities skilled facilities. acuity, pressure by with. you're that the on that's episodes updates safe able higher that today. sure been keep we'll make dealt going how abandoning -- is on quarter, under typically the just census. the ever We've since health a more in to acuity people they to home decrease their scrambling

patients. home, at seeing of the [SNP] You're coming these the with lot of seeing bypassing on hospital focus the you're a

is their health over focused under to [SNP] they've year. the be had situation with is the getting on while with area kind home gone that think the what we of last an COVID need control So we

at probably in that's point all this So we say can time.

that pilots agreements. other we're other we we'll updated those have exploring become providers. now material you different right We And those as and keep execute as with

Neil Cataldi

the currently do hire this XXX year? how balance How I counts. RSMs to or different and to the analyst more I the more, around many on penetrate you first hire may. know One spin you the you're the looking was asked more hospital that question many are a RSM maybe wondering, two of and I hospitals to have in, maybe if just not it. through

Ron Nixon

ahead, Zack. Go

Zack Fleming

that's is looking as the agents. at market this X,XXX of I would key. to we And as terms to our we go through current via way are in think able be agents the long hire, number we're those that say, managed really I

geography. little roughly cover bit so of a two you And that northeast, tighter in can imagine obviously, can that's RSM the And kind about states.

travel difficult are there However, there. that demands are

of a of somewhere you of lot regional if concentration heard have go is is to where while be you into to reasons going large a probably TM go manager exactly employing where territory think the us the be need stationed say, trying MSA And with around new I we strategy, first TM, to we're model, in don't which approximately the all where hospitals a going which that's XX that's we're what the was, is to to really to know coverage is managers. one a of we're trying to So get facility. and XX question deeper

and this into a more surgeons So deeper additional really and on identifies can sits where those CellerateRX further we few accounts, use TM facility.

your that hopefully answered So question.

Neil Cataldi

How about is three, the color six six more should ramp? Is it there? months Any training it XX? we think or to

Zack Fleming

really to So want well. trained we our people be

that cetera. we includes week go track so through, about have And internal five rides, field a which internally, et they training,

then field. seeing just and par it’s about because talk just by serve to starting the we approvals with the get able And in weeks customers to and surgeons. talk to the the go find of roughly up and and quicker be So to go six time the now can right get in that back terms impact, of well, sitting are out to in terms there, be to out being able they

don't into a If we territory, longer. you're bit of little where few take penetration lot which a it do does a have of going we in blank have a those hospitals,

Ron Nixon

other people from some Neil, really beginning is focused experience. the experienced have surgery thing, they finding we're the And where on

to come we're in to them, what not years we want in want with surgery. on So three fully them on at totally agreeing least that they're surgery. of don't them educate if goes to experience come they have training when We and in

Neil Cataldi

the on already new hires Yes, and the we've pedigree looks some great. work done

find last a today anything pipeline on the product My in on now. financials, majority could which guys to able you're come share that? your you just people Cellerate. make to revenues I'm on to kudos to the impact be question the that an you pipeline, might expect you one a right little that bit So next the of pertains wondering from would

Ron Nixon

Zack, do little you bit to Cook [Biosurge]? want then and talk products the a also about

Zack Fleming

the products. really them have weren't other by a really and we're that if products fit really excited we need products, the So added wouldn’t served isn't being about -- Cook

So I an think that's that's space. why exciting

the that just you're or field. challenge, as product in approvals with any big Our the is out acceptance any and launching, gaining company

month out product and where been we So getting trials surgeons. in or science two coming we'll we're actively response. They're of us giving already from approved technology. cases be the the their in around will use reviews and positive FORTIFY initial Both in already the by FORTIFY providing with where field FLOWABLE up a are FIS They've next have that very lot doctors are TRG. products. for backed

we're So a kind that. with excited to really field we're and of about going the armamentarium lot

Now a exactly which you a projections broad label, we a really to micronized just what really to that is and capsule could it as FORTIFY the help working wound, surgeon down FORTIFY FLOWABLE, in implanted swish in And and the well. tissue, like fills becomes and And TRG. product that's that and still assess is reinforce it about of what product one again, thing part one soft then product that the big products, two neat it's is works needs. And the it be and very other a kind Both terms between to size, the going of into the able the goes then into is product that’s to forth then comes syringes market gel. this those we're be. back cavities,

Ron Nixon

think the out powder, in benefits BIAKOS, side wound they believe that well Neil, cleanser will of pilots seen to then seen. and we We in our our have business economic proposition be what and data is field and that, on well And we both as gel, our that also will received there. our addition these will and that prove as other the the we've value Hycol that and have care. that And see on we the gathered the gel

[Multiple those that to get bigger that to right groups You add these we're strategy. that'll We care to the make are virtual XXXX. going be now it efficient of where pilots more We recognize and Speakers] a we'll way the well. wound kinds talking sales products think lift about in through to make that as that console do will

Zack Fleming

to if now. much right to mention don't me know guys is a I I you forgot process very But development touch [Biosurge] want ways little on a But still are of go surgery. [Biosurge]. with that. off, certainly very are space, and that product that into that and washes the would some entrants medicate in looks that the market which attractive other wounds in

Neil Cataldi

in right the while now, sort listening And looking and were talking provided. deck I of you was at you

I'm possible well? wondering there means CuraShield the partners that in like effect or more similar products think looks what I a you partnership. mentioned that with as and other what just maybe

Ron Nixon

That is product health, that it home, more Cavilon. damaged indicated specifically towards wound in skin a though a we a believe and nursing home wound competitor And a a really use product to skin. hospital in geared is for it's be is even head-to-head of in more but with product, considered than product that is it's

and that XX so in the the of something and the days inventor years product ago. its for the Cavilon XM formula And XM early Rochal original is original was product

film antimicrobial So needed. the is well that's for an and it's have It's think first the that indication to wound. an barrier area we first

that but the hard potentially that could And today not segments maybe exactly say help would what we're on the skin so in escalate to sales penetration. partnerships looking that adoption we're at be, that certain channel rate in side

Operator

to like further closing there for over are the And be the Nixon questions web. to phone time no [Operator and Ron questions remarks. appear to at back this floor turn no on there I'd Instructions]

Ron Nixon

come of earnings reporting and Thanks you, for forward all our good Brandon in questions, first for listening All Thank calls. all you attending. to many right. Thank for next you Thank quarter. on look And everyone the our for Neil. participation. to we to

Operator

thank participation. gentlemen, does We conclude for your this today's and Thank teleconference. you Ladies you.

lines this at have You time your and a day. great may disconnect

Sanara MedTech (SMTI) 17 Aug 212021 Q2 Earnings call transcript