ASXC - Earnings call transcript Q4 2020

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Asensus Surgical Fourth Quarter and Full Year Business Update Conference Call. [Operator Instructions] I would now like to turn the call over to Mr. Mark Klausner of Westwicke. Please go ahead.

Mark Klausner

Thanks, operator. thank joining and call. on everyone, afternoon, you us for today's Good

Officer. the are and Executive Financial today with Shameze Fernando, Chief On me Chief Anthony call President and Rampertab, Officer;

caution our of Before of Securities from listeners forward-looking Management we the those uncertainties this including statements Private are call, XXXX. Litigation undertakes guidance from conference would differ pandemic. the by on call. update safe risks company's covered begin, or could information like under The during to due stated that information and this the statements implied associated Actual discussed business, materially to I results including certain by the company the with provided, obligation forward-looking provided Act any any no impact Reform to harbor COVID-XX provisions

a risks For we filed filings Commission, the business, to XX-K with I the Asensus SEC. make the expected you associated including Securities Surgical's uncertainties company's other to filings and today, Exchange and review Form with of encourage with and the later discussion be

Reconciliations performance for the our to are compare to strategic to to and certain present from externally Management are benchmark tables measures, non-GAAP GAAP indicative Management call, financial competitors measures and information in performance non-GAAP GAAP per this share loss investors results that against relative adjusted and presented also U.S. forecast non-GAAP to section Officer, our common common core can adjusted compensation and the taken decisions. certain attributable in which Executive non-GAAP will we turn Chief and President of now in release and to of financial call net conjunction Anthony the with pleasure my be Relations Fernando. financial found earnings useful website. information stockholders both to attributable common not believes results. net to over for loss noncash operating expenses Surgical's It our U.S. uses Asensus that is other management During measures, provide by our Investor stockholders. certain related company's the excluding plans to accompanying

Anthony Fernando

you On Shameze Thanks, discuss I performance, our today. us review before thank the over I after turning to recent our Q&A. XXXX call, Mark, will and by which, all financial our priorities I joining reviewing progress, call then to will begin for hand today's for to will

shifting Now XXXX. on update focus for to key areas an our

broadening Specific and are: first, and Starting value proposition the building development. and end first these reminder, increasing of marketplace Asia. new awareness third, and in portfolio development, validation, system by four the in the our applicability year, of features U.S., Senhance focuses system the as with expansion, Senhance; evidence, indications, our instruments. new customers in the a three initiated the new clinical involves having that visibility Senhance; three to Senhance the Europe of and As programs: with the which XX adding clinical the emphasizes in second, new market area, focus installs of by supporting success which economic market effectively on we the of are demonstrating clinical clinical the the value the of development of which

geographies. the it third training training we center partnering As demand, Senhance. training of Europe have that added an demand pipeline, help To training for site in support and a with facilities Japan will in Amsterdam. to announced Senhance agreement center we in remains relates strong. our key new agreement Through center, launch throughout XXXX, of February dedicated surgical serve staff launched the quarter We in XXXX. on Amsterdam's this skill with to a a surgeons in And

to go European facility provide Milan site site long We also train footprint second clinical will we surgical surgeons face a need and a our this development with will and in adding to continue training us in European towards world-class growing Europe, center so. studies. and a to adoption our skill engage in alongside way expand teams the addition, as In technology doing

to quarter XXXX, second a regions during with Performance seen geographic resurgences the approaching in and the during three all half of have second and two respective After procedure of over shutdowns impacted region as the of Turning by have and a continued geographies, primarily in XXXX and the the basis Asia. various rebound and improved be hitting volumes. that to volumes growing the year-over-year as we significant forced quarter low experienced the between procedure COVID of quarter note point by year third continues a levels varied sequentially to of fourth COVID-related over to volumes the volumes. encouraging XX%. areas three and world. compared shutdowns procedure the slowdowns growth, our U.S. sequential XXXX, on regions, is the was in showed quarter It of third Europe most driven

XXXX. were to compared using approximately down procedures performed full XX% the over For Senhance, X,XXX year, as

We we foundational expect to trend into of our sites, year, had start At end an we on foundational XX X to XXXX. of this up update as XXXX. the the move Shifting the revert sites. at

than slowed foundational that reminder, The slowdown are procedures these Senhance XXX elective procedures experienced of significant portion performing expansion or a with the foundational procedures are a on-track an year rate at the perform annualized clinical sites in sites. per of of hospitals As to during greater year.

are subsides, an placements, recent along positive the We recently should to that optimistic a from the foundational start acceleration start with see of portfolio. and sites our tailwinds we system impact COVID we as see from new expanded to

laparoscopy to robotic health In and an emphasis data XXXX, of performance with focus second traditional area, clinical economic surgical on impact the focus cost Senhance as relative the on to Turning of development to validation. as other continued we our well clinical systems.

XX a breadth of year, support further demonstrating of across of there During Senhance complexity the procedures clinical performed. being of and the specialties, utility clinical the providing were published the papers variety peer-reviewed utility, the

cost Senhance, laparoscopy good papers, several comparative comparing robotics. made clinical we per published the two between progress including studies, Beyond procedure on and those average studies,

our focus expansion. to portfolio third Turning area,

regulatory During then, we given enabled environment pediatric XXXX, on tremendous used to made in XXXX, and October, In received of cadence a Senhance that be far February patients. were turned cases CE completed, and be COVID. the cases in approval since thus increased. what a In challenging out XXXX, Mark progress a first we to has pediatric

with Intelligent view ISU's FDA to underserved continue completion market received XXXX, announced pediatrics a a clearance the will CE Mark or now has Surgical we on first XXXX, March of from using this highly for early very significantly the Unit, received We from ISU-enabled and as and capability, capabilities vision done completed version the being surgeries Europe been feedback we In provides. cases following machine the are first systems. ISU. in we the for benefit surgeons cases In the positive. In Senhance ISU, regular of September, XXX(k) a basis the early that

the excited success of as the building are early about represents the We initial our of ISU block it strategy. digital

and ISU next-generation recognition as surgical We machine features, capability, to vision the namely intelligence augmented are scene such working incremental analytics. of add and image

quarter, fourth Senhance surgery Russian the received robotic the the surgical an underserved Federation. to believe provides is We system that grow Russian During in market installations. approval opportunity and we regulatory

surgery This The a expansion in robotic largest precision received we allows be to those surgery. high-value, growth from benefit and applicability many FDA indication by digital Just we used clinical can of surgeries which insights laparoscopy also area manual and complex such Senhance to treat of reconstructive reflux Senhance. as used obesity. for the general milestone week, technology. is major indications announced XXX(k) far of and for is the last General for expanded clearance our

year. X.X Taken general our of the throughout XXXX, in of million annually. Senhance beginning can together achieved with other vast Despite surgical Senhance of goals utilized for performed strides procedures development and in use we the great macroeconomic the that challenging over the at the indications for U.S., we made ourselves environment set majority the now be in persisted the

great addition, long we now over in the believe Shameze technology around surgical ourselves rooms we In I the the to that, a With bring turn over will innovative call to financial to to a put overview. world. provide operating term position

Shameze Rampertab

Anthony. Thanks,

fourth Turning to the quarter.

months December ended $X.X million reported the in million million systems and instruments in $X.X in XXXX, of accessories the and $X.X to $X.X XX, included Revenue fourth three company compared million of December XXXX. revenue $X.X For three the revenue leasing, ended quarter the of million XXXX in in months as XX, services.

manner. research For the million are in us to Triangle I $XX.X Asensus, ended commercial, Research Park. total clinical were new $XX.X transitioning operating to we December the gain XXXX, that in note expenses process for and new was the three the compared excluding the over goals like three corporate months our XX, space sale December the allowing AutoLap our headquarters and to assets XXXX. cost-efficient as purpose-built The of more to in a development would million, ended office pursue of effectively fully XX, from months in

For loss $XX.X or the to was months as XX, loss ended a December common net $X.XX $XX.X million of three to December share XXXX. months or share $X.XX attributable per compared per the million three net XXXX, ended in XX, stockholders

to assets, debt, all from found restructuring $XX.X the adjusted adjusted A of XX, attributable non-GAAP loss related attributable extinguishment For three consideration, to per a million common AutoLap XX, loss intangible non-GAAP items: of GAAP $X.XX net ended which to net liabilities, to GAAP months net $X.X change common assets, charges, on fair and the of was in net stockholders an our loss net is are compared of on adjusted inventory be measure. the $X.XX contingent can following million December warrant restructuring other change per share in measures release. of XXXX. for earnings gain plan and charges. ended write-down Adjusted the months December of value net loss stockholders the value of as in the in XXXX, Adjusted fair three is noncash share loss to the loss financial or reconciliation amortization sale the or

restricted sheet. offerings, separate XX, of of Subsequent in proceeds equity combined to had cash end and and balance Turning and as The company million $XX.X net we cash cash to million. working equivalents approximately of $XX.X resulting quarter, fourth of approximately the of December million XXXX. the $XXX capital the closed

XXXX, D I'll transactions which company and strategic our February million with plans cash capital Series C and equivalents, X, years the such as restricted over from $XXX.X well cash, come. offering Anthony. proceeds back turn as the has of Following financing call for warrants, on as to the execute us of to provides exercises and the to ATM including of cash our

Anthony Fernando

company Thanks, provide Shameze. Surgical. I the would weeks few perspectives our like we Asensus rebranded as A ago, now to on XXXX.

it we our reflect better As vision. from digital we company undergoing robotics felt a fitting company company, to a surgery to have the evolution to been an rebrand

hospital a systems on to Our seek to optimize can outcomes, calling the digitizing the drive and We elevating strategies. that and surgeon to is and with strive predictable surgery. that care to intelligence new health patient, mission believe to which between focused pioneer robotic we surgery, work innovative are clinical of we resources interface performance-guided era cost employ by unlock the surgery

we capabilities critical Post-op outcomes, being out the imagine to missing augmented empower and can intelligence This and machine intelligence visualization, surgical future intraoperative are set us and today. which level and what something performed could presenting these of support we drive analytics to a believe where framework, reviewed will predictable information in includes call knowledge. by to decision-making, preoperatively surgery little operating of that time, the we added. in and assurance gathering, As field interoperatively clinical we where of have levels those preoperative, yet improve their to experience and to analyzing is deeper the learning, deliver Over common, we realization value at leverage surgeons the current to situational surgeons all post-operative of way disposal Senhance surgery room. led capabilities. the help be insights dramatically advanced We advance technologies to the intelligent determine the with there's came data landscape surgical complications

introduction through We our ISU. have delivering towards made progress on the of performance-guided surgery early

guidance. real-time additional surgical the coming quarters applications driving introduce the new of evolution We towards will with perceptive in goal

Turning in progress and be the to the realization as will we In focus you performance-guided expanding expect from us continue XXXX, our surgery. should near to what of of Senhance the term. adoption of the towards capabilities technological driving globally Senhance

the market and continuing and that with the educate support we Senhance development While drive key as our customer we our advancement are: technological then benefits inform system; our Senhance. portfolio hands In first, is be Senhance with on the up Senhance priority continued cognizant will data efforts. focus claims. revenue, delivering market With base of our possible. potential areas of as surgeons into expanding of order Starting certainly widespread to getting development second, follow need our adoption, clinical of the many our and said, to and of for the to

we develop data As clinical to with invest, continued of systems. we as and traditional an robotic to performance economic other laparoscopy volume the have Senhance into relative well on health as of emphasis XXXX, move an high-quality, cost increasing surgical impact

the expect have papers clinical year. a this during peer-reviewed of to first journals We number published of in half

and should installed As from our is through demonstrate evidence volumes the Senhance. expansion of clinical segment to we and digital lower increase can of to we the real-world footprint, number the to to our our of that in The and delivering laparoscopy surgical with provide acceleration foundational at laparoscopy aid surgeons sites. effort procedure are the good Senhance development market benefits outcomes continue procedure that the our convert cost, this of effort global including in surgical and convince next base, a growth of hospitals

goal year Senhance Our XX another systems have this XX to for to is new installed.

While globally. to revenue and we of year, performed the being growth the expect being focus remains accelerating over on volume our number XXXX utilized systems of see procedures this

commonwealth relationships. of are through and three which Asia mix EMEA, We distributor markets: reps the primary U.S.; direct and of the our in hospitals independent targeting each a states; includes actively of

procedures to number geographies an we efforts, system increase. total material addition procedure in utilization development into additional being installations, we installed systems, focused expansion technology growth. In for terms new of of and launches as indications volumes use, the the Senhance volume and our including procedures act performed. base sites foundational The being performed, our tailwinds incremental all and to of entry volume Alongside of of of in new foundational on our of should market site across the expect are the types increase expanding growing both

to of certain foundational provide specific and to As COVID sites. of guidance headwinds procedure ongoing the a the world, in related result unable are parts we volumes

installed we do significant growth all Last a model. of as Senhance opted expect year, system a that hospitals However, to compared XXXX. to utilize leasing the

the have part option hospitals period. As agreements, purchase of system the of initial contract to end the the these at

expect In we the be revenue to agnostic primary ongoing that these will hospital pressure see of a for to decide we a eliminate the While which which incremental in manner are not and as system it we during adoption, particularly convert to do to of some continue provide the acquires as drive ultimately arrangements the hospitals through focus to us, we flexible year. a continue economic general, purchase, barriers may to system, COVID. will we to impact financial hospitals work under would

is initiative expansion portfolio continued second Our efforts. our

surgery FDA in second, of achieved Federation; marking approval recently CE initial the of general the third, the regulatory number We of have a milestones: expanded critical the ISU; version of the our first, Russian indication. the and clearance

expect XXX(k) submission first to half intelligence of and for clearance instruments; For ISU, which we first, machine following, analytics. we features, the which the of the for the next-generation during to balance and achieve XXX(k) filing towards articulating of second, such XXXX: recognition the work will year, as for all vision continue clearance for capabilities additional image scene and surgical the advanced namely includes augmented the submission

times. the health company, what tireless uncertain the As want our most over their thank upon care efforts have of of as in be during these history one amount likely looked entire the we year I accomplished back organization will tremendous a to during periods a for the challenging industry.

are still various operate XXXX. is of or headwind our difficult We be recovery, we Because be continue to and how of in predict is on operations during to business it variety in are mindful to stages our resurgence geographies, COVID a an having likely which impact that impacted. is will

to are less future now questions. teams pre-op non-COVID an to expect the COVID in we bringing in we However, like system to the hospital for widely entire market. and to see superior summary, planning progress fully to We case been that, demands to we more we are expect perspective, unlocking procedures our the in for can analysis, about From ready lifted become novel a as performance-guided year, on to our devote see open and outcomes at I With are as related become. clinical challenging that to the to installations volumes the surgical for consistently gain capabilities approximately Asensus staff are also operational through vision we and a the commercial more new bandwidth have as restrictions long-term would surgery. are paradigm standard as intelligence increase performed. matters. access elective operational would year, from the having excited new environment deliver would line broader In to very we expect attention we and surgery the what of for surgery, enable With post-op hospitals

Operator

Instructions] comes Ramakanth [Operator question ahead. Swayampakula from The H. C. Wainwright. go first Please from

Swayampakula Ramakanth

This from H.C. Wainwright. is RK

the part. and You that years great on certainly COVID-XX, despite congratulations crossed

time as leases remarks, But that decent how you of get you sales takes potential do your XXXX. get leads immediate sales customers that And have seemed general, over stated in initiated you buyout? to feel operational has done? an lease start regarding pretty you talking especially the helped, So in than cycle, when more in you to also, operational gone to terms it

Anthony Fernando

this Anthony. RK, is

On has as agreement a leveraging beginning Because signed capital time that don't the to same approval go hospitals the takes model time, the to the need cycle a through from say go some I operating think, of reduced installation. you know, definitely and it would lease to conversation I processes.

part installed that a anyone of second I is the your definitely provide. system helpful. think can being utilized that's evidence the and question, to best So And having

surgery surgeons with or on hospitals it basis, running, our process. whether and helps regular other definitely system it's when go so that doing is a other colleagues, So up and speak accelerate

Swayampakula Ramakanth

stated the done Great. than greater X,XXX procedures in procedures number Then of XXXX. there regarding the procedure, you was and that

is of you surgery, So in there varies general, per what are what is, approvals, it especially on, comment. in - But we and revenue? a as the approvals do could about such understand One, procedure procedure. obviously, two done, get important, impactful depending very revenue? is, also more for questions general, which should how per based things: recent procedure I think be the getting revenue? then when you second one, you're part on that volume procedure these that two procedure general And the

Anthony Fernando

Okay.

track RK, different geographies varies So revenues we model. leasing also don't because directly from the per procedure with it and

that's you So procedure reasons. track standard instrumentation. associated instrumentation standard if proactively we no to that not something per multiple set do, to then cost at use dissectors Because look procedure any it. specialty you tend revenue also And like vessel has used, certain which a there's matter with incremental of for a

for revenue of those the up. in I opens those the I to we new speak So proactively But think this it. GI areas, procedure up recently whether were have expanded to that fundoplication the side in general surgery, just with we upper surgeons received second U.S., the kind sleeves and us the able track don't part, bariatric respect Nissen opened procedures, the with to be that think side it's indication or of areas gastric

we So those procedures encouraging didn't we types previously. forward surgeons our looking are that use of system to to have for

Swayampakula Ramakanth

question. last one Then

the you I expansion, the are - market Russian geographical approval. about On Russian talking mean

thinking, a in you market? And Russian So do for into how is develop think that how market yourself? to long could big take meaningful it your the

Anthony Fernando

question. a That's Okay. great

good building out to Russia a the market been We've working before, time. very we've of function. sales in who's who really of - a we've distributor been and presence with as teams, a Germany, They're distributor have service market. They manufacturer has So a some well field Russian the established. alluded clinical the teams cover in even device Russian also for support relationship kind

is would grow to respect robotic leveraging is Russia enter are opportunity be there market. also distributor really relatively definitely I of that we With cost And there's in say the market good that a low. infrastructure concern market penetration and to with So because to the respect cost. able size, to procedure that that

we think can with economics lower I the So per offer procedure Senhance.

So to really for opportunity we and points believe board that some hope the that put good on market. this in us year there's a

Operator

Harris next Raymond question from Please from Frank The ahead. James. go comes

Frank Harris

in off, and in you U.S. Frank mentioned it last I general for noted indication, about you procedures. XXX,XXX to and the release indication procedure surgery TAM This expanded to would quarter, X.X obviously, on TAM that X.X then bringing the just million general But is X.X Larry. million. million surgery was guess the the about to with today, the the expand start by press

is us the So could there there? difference you reconcile we're missing? that something Or just help

Anthony Fernando

question. Frank, yes, good

just previous That all just the X.X general the hernia overall So million use our that know, part as previously, gall Because, talked is colorectal surgery. was about and included for recently you procedures, indication surgery. bladders. and we about talked general today of

we addition, point in total colorectal what previously that X.X the clearance gets that includes X That's with it's we the of million space to which a had. So - us X.X number. million, received, new the addressable

Frank Harris

And Great. Okay. now you and opportunity for for break general that annual the procedures have could various out each surgery, you've the added? plans that then you

Anthony Fernando

can cases incremental now. upper with Those were procedures GI that GI you that the And are offline. tell more But originally bariatric most and right the included. the recent were included. the answer bariatric Yes. give procedures and I can I I that not couldn't the are exact upper you Maybe approval, numbers space. in

follow-up So numbers. you we the can you give and with exact

Frank Harris

Perfect. Okay.

hospitals last just how since clearance from Okay. impact And interest and increased but lease forward going about then wanting of are you the thinking a to you week, and obviously, system? got the

Anthony Fernando

Yes.

reimbursement same from for use definitely and patients will surgeons interest And reflux also high of to the think direction. able level the procedures I One, be two in the that bariatric increase that we and also interest a believe have to procedures reasons. technology. So the applicable levels from are

procedures. for that reasons, these those for kinds of So will interest believe be higher we

Frank Harris

follow-up one How quick two then one then after procedures think system U.S.? which that pace the within have general quick the placements one current to one. surgery should And we I last about ones, should a up just at that. start ramp to within being Okay. And

Anthony Fernando

Sure.

So majority the and be surgery general to of procedures for in I but mix currently, the say, in us space gynecology. very not precise, are U.S. also it's, the the the would for procedure U.S., probably in

So we portion that current growth with - new definitely general procedures believe procedures the the in even the U.S. this and clearance, of faster compared the rate with a see surgery with placements gynecology to will performed with existing placements.

Frank Harris

And close Okay. just I then That's helpful. guess, to out.

So there obviously, instrumentation. you and thinking the opportunity the the it's update obviously, penetration about pediatrics, hear good a of and the expectation size have Could to the going you're forward? X-millimeter just pediatric with us for market unique about you how

Anthony Fernando

Yes, Frank.

again, approvals pediatric primarily, are Europe. we for the we - have So

primary our market. that's So

now in hospitals are two for now. We at pediatrics Europe

that some are that we get find we breakthrough work to there's can outcomes procedures. - see So data in any even Europe trying and and also if in initial through on collect some performance

haptic technologies market's So pediatric not of instrument. X-millimeter you But gotten for the the has combination, The with relatively scope though the X-millimeter that's common it also good relatively little very instrument, trauma stability is the and that use what real for it's and of is space a and But X-millimeter adoption more When market's what ease from pediatric to not feedback manipulate surgeons, and the offer even haptic layer market, surgical - X-millimeter - to surgeon available able feedback. the the a would less the and using gain They're we combine there's becomes patient. large. smaller surgeons these available just point is add technology space. the of to and scope view X-millimeter been I that, instruments from the are a pediatrics. the X-millimeter instrument instrument that instrument the tailor-made X-millimeter a in feedback that say, a to with with powerhouse we've not incision

in procedures we'll we to the the once get really completed able proposition are So we there. that's more And much think Europe, opportunity how I value size building better. be up

Operator

I question-and-answer remarks. Anthony now call will the back to Fernando our That concludes session today. for for closing turn

Anthony Fernando

updating interest in look for on you call. to our next our quarterly again Thank forward you. your you and we progress Thank Surgical, on Asensus

Operator

conference today's concludes call. That

have may Thank participating, now you your day. lines. You a and for pleasant disconnect

Asensus Surgical (TRXDW) 12 Mar 212020 Q4 Earnings call transcript