Financial Data and Key Metrics Changes - Net revenue for Q2 2020 was $0.9 million, down from $2.2 million in Q2 2019, with product sales decreasing from $1.3 million to $0.2 million and service revenue from $0.9 million to $0.7 million [20] - Gross profit margin for Q2 2020 was negative 30%, compared to negative 27% in Q2 2019 [21] - GAAP net loss for Q2 2020 was $10.1 million or $0.43 per share, an improvement from a net loss of $15.1 million or $1.16 per share in the prior year [24] - Adjusted EBITDA for Q2 2020 was negative $8.4 million, compared to negative $7.8 million in the prior year [24] Business Line Data and Key Metrics Changes - Revenue from the vascular segment in Q2 2020 was $0.1 million, down from $0.4 million in the prior year [21] - Revenue from the dermatology segment was $0.8 million in Q2 2020, compared to $1.8 million in the prior year [21] - SG&A expenses for Q2 2020 were $7.9 million, down from $13.8 million in the prior year, including an increase of $2.0 million in accrued costs related to government investigations [22] Market Data and Key Metrics Changes - The COVID-19 pandemic has significantly impacted the ability to activate new clinical trial sites and enroll subjects, with many sites operating at reduced capacity [14][15] - The dermatology business has seen delays in capital equipment purchases, but recurring revenue from service and lease agreements has mitigated some impacts [17] Company Strategy and Development Direction - The company is focused on engineering improvements for the DABRA catheter to enhance its market penetration in the atherectomy market, including extending shelf life and increasing robustness [10][11] - The company is exploring the development of larger diameter catheters for atherectomy procedures in larger vessels [13] - A strategy for the dermatology business is under evaluation, with potential for revenue growth both domestically and internationally [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate the challenges posed by COVID-19 and highlighted successful capital raises during the pandemic [9] - The company is optimistic about the return of procedural volumes in clinical settings and is actively working to support trial sites for the atherectomy study [42] Other Important Information - The company secured a $2 million loan under the Paycheck Protection Program, which may be forgiven if used for specified purposes [19] - Cash and cash equivalents as of June 30, 2020, were reported at $29.4 million, with an additional $10.6 million raised from a public offering shortly thereafter [19] Q&A Session Summary Question: Can you provide more detail on the progress regarding the catheter shelf life issue? - Management identified issues related to the catheter's fluid core and coating, expressing confidence in resolving these by year-end [28][29] Question: What are the components of the increased SG&A expenses? - SG&A expenses included litigation costs and increased spending in quality and R&D, with a cash burn of $12.8 million for the first half of 2020 [30][31] Question: How is the company addressing the atherectomy trial enrollment process during COVID-19? - The company is actively adding sites and has amended the protocol to include more severe patients, while also supporting trial sites with clinical specialists [41][42] Question: What is the timeline for completing enrollment in the atherectomy trial? - Management could not provide a definitive timeline due to the unpredictable impact of COVID-19 but indicated that updates would be available in future calls [45] Question: What is the strategy for the dermatology business as offices reopen? - The company sees opportunities for growth in the dermatology business and is evaluating strategies to capitalize on the rebound in procedures [46][47]
Catheter Precision(VTAK) - 2020 Q2 - Earnings Call Transcript