Axonics(US:AXNX)2020-08-09 19:28Financial Data and Key Metrics Changes - Axonics generated net revenue of $15.2 million in Q2 2020, a significant increase from $1.5 million in Q2 2019 [13] - Gross profit for Q2 2020 was $6.8 million, resulting in a gross margin of 44.4%, which was lower than prior quarters due to COVID-19 related overhead absorption issues [13][14] - Net loss for Q2 2020 was $19.8 million, compared to a net loss of $19.1 million in Q2 2019 [15] - Cash and cash equivalents were approximately $288 million as of June 30, 2020, following a $140 million equity offering in early May [15] Business Line Data and Key Metrics Changes - U.S. revenue accounted for $14.6 million of the total revenue, with certain European markets and Canada contributing the remainder [13] - Axonics has seen a recovery in new order flow, reaching approximately 70% of the weekly average achieved in Q1 2020 by June [8] Market Data and Key Metrics Changes - The company reported that nearly 90% of patients trialed with their External Trial System were implanted with a permanent device, which is 10% to 15% higher than historical clinical literature [30] - Over 20% of implants to date have been associated with physicians replacing their InterStim devices with Axonics, indicating a strong trend in physician-driven conversions [31] Company Strategy and Development Direction - Axonics aims to become the global leader in sacral neuromodulation, focusing on innovation and improving patient experience [34] - The company is working on a long-lived, non-rechargeable device to expand its product line [33] - Axonics believes the sacral neuromodulation market is significantly underpenetrated and poised for growth, with expectations of market expansion in the coming years [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or exceeding analysts' consensus estimates for the second half of 2020, despite challenges posed by COVID-19 [16] - The company noted that the recovery in outpatient elective procedures is contingent upon factors outside of their control, but they are well-positioned to take advantage of the demand for sacral neuromodulation [17] - Management highlighted positive feedback from physicians regarding the efficacy and ease of use of Axonics products, which is expected to drive further adoption [22] Other Important Information - Axonics received three significant FDA approvals in recent months, enhancing the patient experience and expanding the capabilities of their devices [9][10] - The company has signed over 135 corporate agreements with national and regional integrated delivery networks (IDNs) and large urology groups, allowing access to a broader market [33] Q&A Session Summary Question: Can you confirm the recovery tracking at around $3 million weekly revenue run rate prior to COVID-19? - Management indicated they are tracking close to that level [37] Question: Can you provide insights on the 540 unique centers and their contribution to implants? - Management confirmed the increase from 350 centers and noted that these centers are consistently reordering products [38][39] Question: What percentage of revenue in Q2 occurred in June, and how did July compare? - July was better than June, with a return to pre-pandemic order levels [48][49] Question: How is market share distributed among accounts? - Management noted that many accounts are fully committed to Axonics, with some still splitting business, but overall, they are seeing significant switching to Axonics [52][53] Question: Can you discuss the pace of recovery in July and August? - Management reported consistent order velocity throughout July and into early August, with no significant fluctuations [58] Question: What is the strategy regarding competition and bundling? - Management clarified that patients need either Axonics or Medtronic devices, and there is no bundling of products in sacral neuromodulation [59][60] Question: What is the timeline for the primary cell device filing? - Management confirmed plans to file the primary cell device with the FDA in early 2021 [62]