Vivani Medical(US:VANI)2019-05-16 02:49Financial Data and Key Metrics Changes - Net sales for Q1 2019 were $1.1 million, an increase from $1 million in Q1 2018, with revenue recognized for 9 units in both periods [30] - Revenue recognized per implant increased to approximately $125,000 in Q1 2019 from $108,000 in Q1 2018 [30] - Gross profit for Q1 2019 was $0.4 million, up from $0.3 million in Q1 2018 [32] - Net loss for Q1 2019 was $9.7 million, or a loss of $0.10 per share, compared to a net loss of $9.8 million, or a loss of $0.17 per share in Q1 2018 [40] - Non-GAAP net loss for Q1 2019 was $6.4 million, or $0.07 per share, compared to a non-GAAP net loss of $8.5 million, or $0.14 per share in Q1 2018 [41] - As of March 31, 2019, cash and cash equivalents stood at $31.7 million [42] Business Line Data and Key Metrics Changes - A total of 10 Argus II units were implanted in Q1 2019, down from 16 in Q1 2018, with 6 implants in North America and 4 in EMEA [31] - Research and development expenses decreased from $2.5 million in Q1 2018 to $2.2 million in Q1 2019 [34] - Selling and marketing expenses decreased from $3 million in Q1 2018 to $2.1 million in Q1 2019 [37] - General and administrative expenses decreased from $3.2 million in Q1 2018 to $2.4 million in Q1 2019 [39] Market Data and Key Metrics Changes - Market research indicates over 500,000 people in the U.S. are legally blind from various causes, with a larger number outside the U.S. [14] - The company plans to suspend Argus II production in the near future while maintaining support for existing users [22][24] Company Strategy and Development Direction - The company aims to accelerate the development of the Orion platform, focusing on providing artificial vision to a broader range of blind individuals [7] - Orion is seen as a more attractive platform for investment and technological improvement, with plans to add over 25 key positions to support its development [15] - The company intends to evaluate supply chain manufacturing capabilities and quality assurance processes to support the transition to Orion [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential impact of Orion, citing positive results from early feasibility studies [9][10] - Discussions with the FDA regarding Orion are ongoing, with expectations for additional meetings in the coming months [18][85] - The company anticipates a restructuring charge of $0.7 million in Q2 2019 related to severance and benefits [42] Other Important Information - The company recorded a $2.4 million noncash impairment charge related to excess inventory in Q1 2019 [40] - The CMS proposed rule would waive the requirement for substantial clinical improvement evidence for FDA-designated breakthrough devices for 2 years, facilitating reimbursement [19] Q&A Session Summary Question: What is the level of available inventory for the Argus plans? - The inventory value is $1.6 million after the impairment charge, but the number of units has not been disclosed [46] Question: Is there any work being done on better-sighted RP patients under Argus? - No further work will be done for better vision RP patients under Argus; future work will be conducted with the Orion platform [47] Question: Are Argus patients eligible for Orion? - Argus patients would not be eligible for Orion; however, patients considering Argus may choose to wait for Orion [49] Question: Is there automatic reimbursement upon regulatory approval under the new rule? - The proposed rule suggests automatic add-on payments for breakthrough devices upon regulatory approval, but coverage is still being lobbied for [51][54] Question: What is the expected severance-related charge in Q2? - The expected severance-related charge is approximately $700,000 [67] Question: Can you provide an update on FDA communications regarding Orion? - The company has regular communications with the FDA and expects to have critical meetings in the next 2 to 3 months to finalize the regulatory path [84][86]