Tivic Health Systems(TIVC) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - ClearUP revenues for Q2 2024 were $140,000, a decrease of$63,000 or 12% compared to the first half of 2023, primarily due to a 27% decrease in unit sales, offset by a 20% increase in the per-unit average sale price [6][9] - Gross profits for the first half of 2024 were $197,000, showing margin improvement to 42$1.3 million for Q2 2024, which is an improvement from a net loss of $2.1 million in 2023 [9] - Cash and cash equivalents totaled$3.7 million as of June 30, 2024, compared to $3.4 million at the end of 2023 [9] Business Line Data and Key Metrics Changes - Cost of sales for Q2 2024 was$110,000, a decrease of $86,000 or 24$1.2 million, down from $2.2 million in 2023, reflecting a year-over-year cost reduction of$1.5 million [8] Company Strategy and Development Direction - The company is focusing on developing a novel vagus nerve stimulation (VNS) system, which is a critical part of its strategy to build shareholder value [5][6] - The company aims to broaden its footprint in bioelectronic medicine, leveraging learnings from its first product to target high-value medical applications [13][35] - The company is prioritizing noninvasive VNS, which is expected to have lower costs and risks compared to implanted devices, allowing for quicker market entry [22][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the macro environment, including increased supply chain costs and tighter marketing restrictions, which may limit short-term profitability of the ClearUP product [12] - The company is optimistic about the potential of its VNS program, with plans to validate market opportunities and optimize applications for strong commercial results [34][35] - Management emphasized the importance of transparency with investors regarding future plans and the potential for significant shareholder returns from the VNS program [13][35] Other Important Information - The company received a notification from NASDAQ regarding non-compliance with the minimum bid price requirement, with a 180-day period to regain compliance [10] - The company has a robust patent portfolio with nine issued patents and ten pending patents, which are crucial for protecting its innovations in VNS [41][42] Q&A Session Summary Question: What is the company planning to do with ClearUP as it turns towards VNS? - Management indicated that while ClearUP is a valuable product, the focus will shift towards exploring alternative monetization strategies, including licensing and international distribution agreements [39][40] Question: Does the company have resources to move forward with the VNS program? - Management confirmed that while operational cutbacks have been made, the research pipeline is crucial for building shareholder value, and there will be a need to expand the clinical research team as the program progresses [40] Question: What diseases is the company considering targeting based on the VNS study? - Management stated that there is a prioritized list of potential targets, but specific indications are not ready to be communicated publicly yet [41] Question: Are there any patents pending, and what is the risk of expiration? - Management confirmed the existence of a robust patent portfolio with no immediate risk of expiration, as the patents are newly issued and the company expects to bring products to market quickly [42]