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| EX-99.1 - PRESS RELEASE - SANUWAVE Health, Inc. | snwv_ex991.htm |
| 8-K - CURRENT REPORT - SANUWAVE Health, Inc. | snwv_8k.htm |
Exhibit 99.2
SANUWAVE HEALTH, INC.
CONFERENCE CALL TO DISCUSS THIRD QUARTER 2017
FINANCIAL
RESULTS AND PROVIDE A BUSINESS UPDATE
Tuesday, November 21, 2017
10:00 a.m. Eastern Time
Operator
Good
day, ladies and gentlemen, and welcome to the SANUWAVE Third
Quarter 2017 Financial Results and Business Update Call. All lines
have been placed on a listen-only mode. [Operator
Instructions]
At this
time, it’s my pleasure to turn the floor over to your host
Lisa Sundstrom. Ma’am, the floor is yours.
Lisa Sundstrom – Chief Financial Officer
Thank
you. Good morning. We appreciate your interest in SANUWAVE and in
today’s call. SANUWAVE will now provide an update of our most
recent activities during the quarter, as well as our third quarter
2017 financial results. Our quarterly report on Form 10-Q was filed
with the SEC on November 14, 2017. If you would like to be added to
the company’s distribution list, please call SANUWAVE at
770-419-7525, or go to the Investor Relations section of our
website at www.sanuwave.com.
Before
we begin, I would like to caution you that comments made during
this conference call by management will contain forward-looking
statements that involve risks and uncertainties regarding the
operations and future results of SANUWAVE. We encourage you to
review the company’s filings with the Securities and Exchange
Commission, including, without limitation, our Forms 10-K and 10-Q,
which identify specific factors that may cause actual results or
events to differ materially from those described in the
forward-looking statements.
Furthermore, the
content of this conference call contains time-sensitive information
that is accurate only as of the date of the live broadcast,
November 21, 2017. SANUWAVE undertakes no obligation to revise or
update any statements to reflect events or circumstances after the
date of this conference call.
With
that said, I’d like to turn the call over to our Chairman of
the Board, Kevin Richardson. Kevin?
Kevin Richardson – Chairman and Chief Executive
Officer
Thank
you, Lisa. And, thank you everyone for joining us on our call
today.
I want
to first apologize for the delay in the conference call. Last week,
the team was in Germany for MEDICA and the other part of the team
was in Canada for Wounds Canada, so logistically would have been
extremely difficult to organize a conference call. The good news is
we had extremely successful shows both in Germany and Canada. We
will discuss some of the details on this call, but we received our
initial look for international orders for 2018 and, regardless of
FDA approval, it should be a record year.
Today,
we will update you on the many initiatives SANUWAVE is undertaking.
This will cover Q3 results, Brazilian update, FDA update, including
what we have done to prepare since our last call, international
initiatives, our wound symposium, which is scheduled for early
December, and then some new initiatives as well.
I will
finish with concluding remarks. Overall, we remain positive about
the FDA process and remain laser focused on preparing for wound
care market entry in 2018, which is why we feel confident in
hosting our first symposium. You will also hear us announce
participation in a number of medical conferences for 2018, where we
will be sharing abstracts and presenting posters for the first time
in over five years. The journey has been long, and we truly feel as
if we’re coming out of hibernation, and we’re prepared
to take on the challenges now facing the wound care
industry.
With
that, let me turn it over to Lisa to review the
financials.
Lisa Sundstrom – Chief Financial Officer
Thank
you.
Revenues for the
three months ended September 30, 2017 were $162,000, a decrease of
$94,000 or 37% from the prior year. Our revenues resulted primarily
from sales in Europe, Asia, and Asia-Pacific of our orthoPACE
device and related applicators. The decrease in revenues for 2017
was due to lower sales of new orthoPACE devices and applicators in
Europe and Asia-Pacific as compared to the prior year.
Research and
development expenses for the three months ended September 30, 2017
were $267,000, a decrease of $1,000 from the prior
year.
General
and administrative expenses for the three months ended September
30, 2017 were $475,000, a decrease of $171,000 or 26% from the
prior year. The decrease for 2017 was due to lower legal fees,
lower salary and benefits related to reduced headcount, and a
decrease in our bad debt reserve.
Net
loss for the three months ended September 30, 2017 was $851,000,
compared with a net loss of $1.1 million in 2016, a decrease in the
net loss of $289,000 or 25%. The decrease in the net loss for 2017
was due to lower general and administrative expenses and a
reduction in amortization costs.
Looking
at cash flows, as of September 30, 2017, we had cash on hand of
$40,000 compared with $134,000 at December 31, 2016. Net cash used
by operating activities was $945,000 for 2017 year-to-date compared
with $2.7 million from the same period in 2016. The decrease in
2017 cash used by operations was primarily due to lower operating
expenses.
We
continue to project that our cash burn-rate from operations will be
approximately $125,000 to $225,000 per month in 2017 as we continue
to expand our international market, prepare for the
commercialization of dermaPACE, and continue research and
development of non-medical uses of our technology.
Now,
let me turn the call to Pete Stegagno for regulatory
update.
Pete Stegagno – Vice President-Operations
Good
morning, everyone.
I’m going to
address, probably, the one or two questions pretty much on
everyone’s list. What’s happening with the dermaPACE de
novo and the FDA review process? And, do we have any idea of FDA
decision, and when will that be? And, that’s three questions,
but who’s counting?
There
has been a flurry of communications with the FDA over the past
month, particularly from the lead reviewer and the medical officer
in the review team. We’ve been working on a transparency
document, which discusses the device, the indications, the
warnings, precautions, contraindications, device function, and
trial data in very specific form, and we have submitted all the
requested data in the requested format.
Final
cautionary statements have been completed and added to the user and
patient labeling. We believe the review team is near or has
completed their work. The next step is for the review team to
submit the final transparency document to upper management, along
with their recommendation for review and final action.
At this
point, we don’t know when the document will actually be moved
up to chain, we don’t know how long it will take upper
management’s review and approve, and we don’t know what
the review team’s final recommendation is. So, all we can do
is sit and wait and basically enjoy some turkey and football on
Thursday.
We’ve done
some calculating on the timelines of this de novo submission. It
was submitted to FDA 15 months ago in July 2016. We received their
first set of questions in January of this year, submitted our
responses to those questions to FDA in July, and we’ve been
working consistently with the review team since August. This
package has been going through FDA’s clock for over 300 days
now. Unlike PMAs and 510(k)s, the de novo does not have a
particular defined review period, although there is a draft
guidance coming out shortly, and they are recommending a 120 day
review period. We’re basically at the end of the process, and
we can only hope that a decision will be communicated to us
shortly.
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On a
different note, we attended SAWC, the Symposium from Advanced Wound
Care, in October, and came away with some impressions and how we
plan to move forward with dermaPACE. One is that there really
isn’t any new device product on the market for wound care.
The latest buzz seems to be amniotic-based products, and there are
more and more providers coming onto the market. We believe that
dermaPACE will be able to develop our own niche because of its
clinical performance, it’s not invasive nature, and its ease
of use. We came away with a number of leads to follow-up on in
regard to supplement in dermaPACE with supportive products and
technologies, including imaging and wound care management suites.
We’re excited about what we can do once we hit the US market
and, of course, the next 18, 24 months and beyond.
We’re looking
forward to an active year in the clinical side for 2018.
We’ve been lining up key researchers to collaborate with us
and follow on DFU studies to support reimbursement for dermaPACE.
We’re also planning on expanding indications for dermaPACE
into such areas as venous leg ulcers and other vascular and
perfusion indications, and also scarring. We expect to have results
and publications from ongoing studies in Belgium, where dermaPACE
is being used in a home treatment setting and from South Korea
where KOLs are using dermaPACE for DFU’s, and, interestingly,
scar reduction after C-sections.
We plan
to continue this work in Brazil for both DFU and scarring with our
new partners there. We’ve also breathed new license into the
Canadian market where we have partnered with wound care
professionals to place dermaPACE with key wound care centers.
Finally, we have many distributors, particularly in Europe, whom we
will collaborate with in investigating use of our shock-wave
technology in treating erectile dysfunction.
With
that said, I’ll turn it over to André.
André Mouton – Vice President-International Sales and
Relations
Thanks
Pete. Good morning, everyone.
During
our last call, we guided and updated all the countries, and we
would like to emphasize that registration per country is a time
consuming and ongoing process. We are working very closely with our
identified distributors to ensure and make this process as
effective and smooth as possible within the required country
regulations. South Korea is still our leading market. During our
recent meeting Dusseldorf at the MEDICA conference, our current
distributor KOVE gave us more feedback on various studies they are
undertaking in the wound care space and have agreed for ongoing
trial data sharing and access to the key opinion leaders to ensure
we maximize our own network between distributors.
We had
the same positive discussions with Matek from Italy, also Ortho
Medico from Belgium, and Prim from Spain. It became very clear that
all our current distributors believe in the product and our focus
on specific actions within the wound care market and that all the
targets can be achieved. The positive meetings we had will be
followed up with attendance at our training seminar, in December,
and distribution of all the key opinion leaders’ key findings
within our distribution network.
We have
finalized registration in Taiwan and are awaiting final stage in
Romania and Indonesia. These include access and listing of our
product on the national tender programs per country. These
activities will be followed up by the first purchases of the
clinical demo units and/or outright commercial product sales. We
have started the registration process in South Africa, as well as
registration of our orthopedic unit in Canada.
Our
regional discussions with identified targeted Southeast Asian
distributors are still on track. We will also have direct
communications with potential distributions by the biggest wound
care player in Thailand. During the recent MEDICA conference, we
met up with a lot more potential partners, as we are now in the
process of getting the paper work done, especially the NDA’s,
to ensure that we share more detail. We have identified regional
players in Europe and are now finalizing the shortlist for France,
United Kingdom, and Finland as well. The search for distributors
within Eastern Europe, with key focused countries for wound care
like Poland and Russia, is still ongoing.
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Our
Canada exposure has been increased by engaging a well-known wound
care nurse practitioner on a success fee basis. This means further
access to key opinion leaders, as well as more insight within the
government structure and their rules around purchasing. We also had
a presence at the recent Canada wound conference with her as well
as one of our senior management members representing the company
and demonstrating the dermaPACE device and
functionality.
We
mentioned during the last call that we are shifting our focus for
the Middle East, India, and China given the size and market
potential. This current process of identifying groups we can work
with as potential investment partners for that specific area is
ongoing. The recent success we had with Brazil is helpful with
these countries, as well as the new discussions we started with
Mexico. We must ensure that whomever we pick as a partner, that
will handle our distribution and our key opinion leader
relationships, must be in line with our overall focus and
strategy.
We are
now following up and finalizing our target sales numbers for 2018
that we got while at MEDICA from our distributors. Based on these
initial feedbacks, it looks like it’s going to be a record
year for us, regardless of the FDA decision in 2018. We’re
also planning to add more countries as partners before year-end as
we go through to 2018.
That
being said I will turn the discussion back to Kevin for concluding
remarks.
Kevin Richardson – Chairman and Chief Executive
Officer
Thank
you, André.
Concluding remarks
today will be brief because the team has covered pretty much
everything we wanted to cover today. Once we hear from the FDA, we
will hold the conference call as it is clearly material. We did
this when we announced Brazil, and we will do so when we announced
any deal of similar size due to the materiality. Q3, we focused on
meeting FDA’s comments, preparing for a successful commercial
launch, and interacting with the international partners. Pete spoke
about the FDA and I’m sure in Q&A we can answer any
questions, as best we can, whatever you ask.
We
really cannot comment on commercial plans yet, but we will discuss
shortly after an approval. Internationally, the big event Q3 was
signing Brazil. The Mundi team is fantastic. They have been
interacting with our team constantly, and all plans remain on track
for a successful launch in 2018. Mundi’s also made their
payments to us, so, from a milestone standpoint, we’re on
track there.
In
fact, the Brazil team will be sending four people, including two
KOLs, to our symposium, which will take place in two weeks. These
are highly regarded doctors who will become part of the Mundi
SANUWAVE launch in 2018. Regarding the symposium, we have had an
overwhelming response and we had to move the location because of
the international demand. As many of you are aware in the US, we
cannot market dermaPACE product until we receive clearance, so this
symposium is really an international event.
We
originally thought we’d have eight to ten participants, now
we’re over thirty. Countries represented are Brazil, Italy,
Belgium, Germany, South Korea, Taiwan, Canada, Mexico and the
Middle East. We’ll also have researchers from Harvard
University, University of Georgia, Chang Gung University,
University of Illinois, and King Saud University. Keynote speakers
at this will be Dr. Wang and Dr. Seimenow. Dr. Wang is considered
the godfather of shock-wave. He runs a shock wave institute in
Taiwan, and he has published more studies on shock wave than any
other doctor. Dr. Seimenow is well respected for her work in
plastic surgery and microsurgery. She was the person in the US who
performed the first face transplant. We will also have our partner
eKare presenting, and the highlight, for me at least, will be
discussing the various studies being performed using dermaPACE
around the globe. 2018 will be a year when we make our presence
known again. You’ll see many of these research papers and
cases published in poster form and presented at various wound
forums.
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Speaking of the
wound forums, we plan to attend SAWC, EWMA, and Korea Wound, along
with other internationally known wound forums in 2018. We are
finally at the time when we can reemerge from hibernation to make
great strides. Our product, as Pete mentioned, is the only new
product in the wound market that is in great need of a way to
increase vascularization. Finally, you will see us announcing new
partners and new employees in the coming months. We have begun
interviewing key professionals, which will round out our team, and
allow us to launch successfully in US and build upon that for the
future.
With
that, let me open up to Q&A.
Operator
Thank
you. There appear to me no questions at this time. I will now turn
the floor back over to Kevin Richardson.
Kevin Richardson – Chairman and Chief Executive
Officer
Great.
Thank you everyone for joining the call. Thank you for the update.
I’m hoping that we’re going to be back on a call before
we announce Q4 results, talking about the FDA or talking about
another country that we’ve entered from a joint venture
standpoint. Hopefully, that will happen soon, and we’ll be
chatting again. In the meantime, if anyone has any questions,
please feel free to reach out to us, and we will answer as best we
can. Thank you.
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