Posted: 2016-01-28 in Press Releases
Quarterly Cash Flow Report
January 27, 2016 – Minnesota, United States and Melbourne, Australia – Osprey Medical (ASX:OSP) today released its Appendix 4C – Quarterly Cashflow Report for the period ending 31 December 2015.
Key financial details
Cash receipts for the quarter increased to US$70,000 as usage of AVERT and the launch of DyeVert in Texas continued our strong growth trajectory
· Cash at 31 December 2015 was $US11.8 million
· Total operating cash outflow for the quarter was $US2.6 million
· Presentation of pilot results from the DyeVert System at the TCT medical conference on 14 October 2015 showing > 45% dye savings
· FDA clearance of the DyeVert System on 15 October 2015
· FDA clearance for three additional marketing claims for the AVERT System – dye savings, image quality and reflux reduction from the AVERT Clinical Trial announced on 19 October 2015. All 3 claims are expected to be approved for the DyeVert System in CY Q1 2016.
· CIN reduction trend and improved dye savings findings from the Physician Steering Committee analysis of AVERT Clinical Trial announced on 18 December 2015
· US commercialization of our AVERT and DyeVert Systems underway across 6 sales territories, with plans to add up to another 14 territories by the end of CY 2016
· US commercial launch of the DyeVert System in Q4 2015 has resulted in faster than expected adoption rates and a record number of new hospitals
Osprey had a successful fourth quarter with a number of significant accomplishments. We announced FDA clearance of the DyeVert System in October and commenced US sales in November. The DyeVert System is a second generation product which offers performance improvements of increased dye savings and ease of use advantages over the first generation AVERT System. Professor Steffen Desch presented the first clinical results of the DyeVert System at the TCT conference (one of the world’s largest medical meetings of heart specialists) in October. He reported that the DyeVert System reduced dye by > 45%, was easy to use, and did not affect image quality. This dye savings figure is significantly better than AVERT which is typically around 30-35% and is reflective of DyeVert’s ability to save dye even on puff injections.
Customer reaction to the DyeVert System in Texas has been very positive. Initial physician and hospital staff feedback reflects faster customer uptake based on DyeVert’s ease of use and improved dye savings. We had a record number of 10 new hospitals evaluate the DyeVert System in Q4; with 1 purchasing the product and 9 working through the approval process. In addition, the majority of existing AVERT customers evaluated the DyeVert System with over 60% placing orders in the first 60 days of commercial release. We had 92 DyeVert samples used in the quarter which was a record and three times our normal quarterly sample volume. Revenue receipts grew by 29% quarter-over-quarter. It is noteworthy that receipts were affected by the 92 DyeVert samples used in Q4 and the $US100 lower list price on the DyeVert System vs Avert Plus System.
Hank Butcher, VP of Sales for Osprey said: “DyeVert’s improved dye savings and ease of use is driving physician interest and the elimination of an external control box is allowing for earlier physician evaluations. We have seen some cannibalisation of sales between the two products which was expected as DyeVert is a 2nd generation product. Importantly, DyeVert is attracting new customers which is already having a very positive flow-through effect on our sales pipeline. I look forward to continuing to expand our sales force, which is selling DyeVert as Osprey’s lead product in 2016.”
Clinical trial and steering committee analysis
In October we announced initial results from the AVERT clinical trial and corresponding FDA clearance of three additional marketing claims: dye savings, image quality and reflux reduction. These three claims strengthen our sales approach as we are now able to sell the AVERT as the only product backed by a randomized controlled multi-center trial which proves a reduction in contrast volumes without compromising image quality. Importantly, the expanded claims enable physicians to comply with cardiology and radiology society guidelines that encourage dye-sparing approaches with at-risk patients. Osprey has applied to the FDA to have all 3 claims “bridged” from the AVERT to the DyeVert and we anticipated clearance in CY Q1 2016.
In December we announced additional information from the Physician Steering Committee analysing the results from the AVERT Clinical Trial. Their analysis reflected a CIN reduction trend of 8.4% in patients treated with AVERT and improved dye savings of up to 46% in more complex cases. Final findings from the trial are expected to be published in the second quarter of 2016.
Following FDA clearance of our dye savings, image quality and reflux reduction claims, we started scaling our US sales force to commercialize the AVERT and DyeVert Systems. We exited CY2015 with 6 sales territories and have plans to hire up to 14 additional territories in 2016 for a total of 20 sales reps expected by the end of the year. We will hire new reps primarily in the US southern states where there is a high incidence of chronic kidney disease. Reps will initially focus on selling to participants in the AVERT clinical trial as they have firsthand knowledge of the benefits of dye-savings for patients with poor kidneys.
Osprey’s President and CEO, Mike McCormick said: “The fourth quarter of 2015 was marked by numerous accomplishments and saw the Company move forward into the next stage of its growth. We are pleased with the three FDA cleared claims we received from the AVERT clinical trial and encouraged by the CIN reduction trend noted in the Physician Steering Committee analysis. We look forward to a presentation of this data in the second quarter of 2016. In addition, FDA clearance of our second generation DyeVert System was a significant positive milestone for Osprey. We are very pleased with the initial customer reaction to DyeVert and we continue to aggressively scale up our sales force to fully commercialize our proven dye savings portfolio.”
Osprey Medical is focused on protecting patients from the harmful effects of X-ray dye (contrast) used during commonly performed angiographic imaging procedures. The Company’s core technologies originated from research conducted by Dr David Kaye at Melbourne’s Baker IDI Heart and Diabetes Institute. Its proprietary dye reduction and monitoring technologies are designed to help physicians minimize dye usage. The Company’s DyeVert™ System is a next-generation product that reduces contrast while maintaining image quality in a self-adjusting easy-to-use design. Osprey Medical’s Board and Management are comprised of experienced and successful personnel with established track records covering medical device development, regulatory approvals, sales and marketing, and mergers-acquisitions. Osprey Medical’s advisory board comprises world-recognised experts in heart and kidney diseases.
This announcement contains or may contain forward-looking statements that are based on management’s beliefs, assumptions and expectations and on information currently available to management. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements, including without limitation our expectations with respect to our ability to commercialize our products including our estimates of potential revenues, costs, profitability and financial performance; our ability to develop and commercialize new products including our ability to obtain reimbursement for our products; our expectations with respect to our clinical trials, including enrolment in or completion of our clinical trials and our associated regulatory submissions and approvals; our expectations with respect to the integrity or capabilities of our intellectual property position. Management believes that these forward-looking statements are reasonable as and when made. You should not place undue reliance on forward-looking statements because they speak only as of the date when made. Osprey does not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Osprey may not actually achieve the plans, projections or expectations disclosed in forward-looking statements, and actual results, developments or events could differ materially from those disclosed in the forward-looking statements.
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