Helius Medical Technologies(HSDT) - 2020 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported total revenue of $133,000 for Q2 2020, a decrease from $518,000 in the prior year period, significantly impacted by COVID-19 disruptions [17][29] - Gross profit for Q2 2020 was $69,000 compared to $306,000 in the prior year [32] - Operating loss for Q2 2020 was $3.7 million, an improvement from $5.8 million in the prior year [34] - The net loss for Q2 2020 was $3.4 million or $0.08 per share, compared to a net loss of $186,000 or $0.01 per share in Q2 2019 [35] Business Line Data and Key Metrics Changes - Product sales represented approximately 95% of total revenue in Q2 2020, up from 91% in Q2 2019, driven by sales to neuroplasticity clinics in Canada [29] - The company authorized five additional clinics in Canada during the quarter, bringing the total to 19 authorized clinics [27] Market Data and Key Metrics Changes - The COVID-19 pandemic led to the closure of all PoNS authorized clinics in Canada by the end of March, with productivity significantly impacted due to capacity restrictions [21][22] - By the end of June, almost all clinics had reopened, but were operating at about 30% capacity due to ongoing restrictions [43] Company Strategy and Development Direction - The company is prioritizing the pursuit of an indication for multiple sclerosis (MS) as a pathway for obtaining U.S. clearance for the PoNS device, based on favorable clinical data [10][11] - The company aims to submit a request for de novo classification and clearance in the second half of 2020, having received Breakthrough Designation from the FDA [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed frustration over the uncertainty caused by COVID-19 but remains focused on regulatory and commercial strategies [42][45] - The company is optimistic about the potential of the PoNS technology to improve the lives of patients with neurological conditions [45][46] Other Important Information - The company had $5.3 million in cash as of June 30, 2020, a slight decrease from $5.5 million at the end of 2019, with no outstanding debt [36] - The company raised approximately $6.7 million in financing activities during the first half of 2020 [38] Q&A Session Summary Question: What is the size of the clinics currently open and their patient run rate? - The clinics are private neurological clinics with varying sizes, focused on developing a network in Southern Ontario. They are eager to return to full operations but face challenges due to COVID-19 [50][51] Question: When will the company hear back from the FDA regarding the submission? - The first review is an administrative one, and the company expects it to be a formality. They will report any material feedback from the FDA [54] Question: What is the expected cash burn for the second half of the year? - The expected cash burn has been reduced from $1.2 million to approximately $1 million per month [55] Question: How quickly will the newly added clinics start treating patients? - The clinics are eager to start treating patients, but their capacity is limited due to COVID-19 restrictions. They are working to increase patient flow as conditions improve [57][60] Question: What is the status of the PoNS cost to users? - The company has implemented a program allowing patients to pay over time, reducing upfront costs for the initial treatment [80]