Posted: 2016-07-20 in Press Releases
Quarterly Cash Flow Report
July 20, 2016 – Minnesota, United States and Melbourne, Australia – Osprey Medical (ASX:OSP) today released its Appendix 4C – Quarterly Cashflow Report for the period ending 30 June 2016.
Key financial details
· Strong unit sales growth of 88% for the DyeVert System and 45% for the DyeVert and AVERT Systems combined in Q2 2016, as compared to Q1 2016
· Original sales territory in San Antonio, Texas was profitable in June 2016 with other territories following a similar sales trajectory
· Over 65% of San Antonio hospitals have now approved and purchased Osprey’s products, which demonstrates the clear potential for market adoption in other sales
· Cash receipts from customers increased 66% to US$113k in Q2 2016 over Q1 2016
· Cash at 30 June 2016 was US$5.8m (A$7.7m at AUDUSD exchange rate of 0.75)
Clear sales momentum
Osprey had another successful quarter commercializing its dye saving technologies. DyeVert unit sales grew by 88% in Q2 2016, as compared to Q1 2016, with DyeVert and AVERT System unit sales combined growing 45%. This represents unit sales growth of 440% for the quarter compared to the previous year’s corresponding quarter. Cash receipts from customers increased 66% to US$113k in Q2 2016 over Q1 2016.
Sample evaluations of the DyeVert System also experienced significant growth with 172 units recorded for 2Q 2016, up 42% over 1Q 2016. The growth of DyeVert samples reflects strong interest from physician’s eager to evaluate the device. Osprey has now recorded seven consecutive quarters of growth in units sold and samples, reflecting a strong endorsement from the cardiovascular physician community of Osprey’s dye reduction technologies.
The conversion rate of hospitals upgrading from samples to initial product orders remains high at approximately 85% with 29 hospitals having now purchased the DyeVert or AVERT Systems. The time from sample evaluation to initial orders has reduced in Q2 2016, reflecting strong take-up of the DyeVert System and a shortened customer acquisition time. The average selling price of DyeVert was consistent at US$355 for Q2 2016 with no change from Q1 2016.
San Antonio sales territory
Osprey piloted its commercialization efforts in San Antonio, Texas, as a blueprint for US sales force expansion. The sales history over seven consecutive quarters (Q4 2014 to Q2 2016) provides the greatest insight into physician take-up of Osprey’s dye savings products. Pleasingly, this territory was profitable in June with 100 units sold, compared to the estimated cash-flow breakeven requirement of 75 units sold per month. Ongoing developments and results in San Antonio further enhance Osprey’s confidence in relation to sales efforts in subsequent territories.
Sales growth of the DyeVert System has accelerated in San Antonio with seven new hospitals purchasing the product since it was launched in December 2015 with 65% of hospitals (15 of 23) now using the device. San Antonio physicians have now used DyeVert or AVERT Plus on 667 CKD patients, representing 40% of all CKD patients treated in these hospitals.
1. Quarterly unit sales fell in 4Q15 following the introduction of the DyeVert System, as hospitals sampled the new product
2. This chart reflects the percentage of the 23 hospitals in San Antonio that have approved and purchased Osprey’s products, since the beginning of 4Q14
The continued growth in hospital penetration in San Antonio demonstrates the clear potential for strong market adoption in other sales territories. Recent sales traction in the largest hospital system in San Antonio, the Methodist Health Care System, has been particularly encouraging, where 47 units were sold in Q2 2016.
Sales force expansion
Osprey started aggressively scaling up its US commercialisation initiatives in October 2015, following FDA clearance of enhanced claims for dye savings, image quality and reflux reduction. At the completion of 2Q 2016, Osprey had sales reps in 9 territories with plans to hire up to 11 additional sales reps and territories by the end of CY 2016. Osprey intends to hire new reps where there is a high incidence of chronic kidney disease (planned new territories indicated in blue on the map).
Key Scientific Podium presentations
The AVERT randomized controlled clinical trial results were presented as a “Late Breaking Clinical Trial” at the Society of Cardiovascular Angiography and Interventions (SCAI) May 4-7 in Florida. SCAI is one of the largest meetings of speciality heart physicians and draws a worldwide audience of physicians and scientists who are focused on angiography and interventions (diagnosing artery blockage and stent treatment). Dr Roxana Mehran, the principal investigator of the AVERT study, presented the results at the main podium stage as the first scientific presentation of the meeting. Dr Mehran was Program Chair for the SCAI meeting and the selection of the AVERT trial to lead the Scientific Sessions indicates the importance of reducing Contrast Induced Acute Kidney Injury to the physician community.
In addition, the DyeVert first-in-man clinical trial was presented at the EuroPCR meeting May 17-20 in Paris. Professor Steffen Desch presented outcomes of the 44 patient study, which was performed at the Heart Centre in Lübeck, Germany and Monash Medical Centre in Melbourne, Australia. Monash’s Dr. James Sapontis was the principal investigator of the study. This prospective, non-randomised, single arm trial found that the DyeVert System saved 47.4% contrast dye on average in all patients, 50.3% in PCI/Stenting and 46.6% in diagnostic procedures. These results further support Osprey’s commercialisation efforts in the US.
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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.