Polarityte (RGTPQ) 9 Nov 202020 Q3 Earnings call transcript

Good day and welcome to the PolarityTE Third Quarter 2020 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Rich Haerle. Please go ahead.

Thank you, operator. you results. PolarityTE's thank third to and XXXX quarter morning, for call joining discuss Good Rich Vice am I Haerle, Relations. President of Investor

On of members David President today team, COO; call and Patterson. includes Hague, Seaburg; the Jake and which Richard the executive are

variety of disclaim Act like would Harbor being these circumstances caption our Securities company's filed as such statements today's with quarterly this Risk discussion for forward-looking our to the is that SEC XX, on filings remind everyone to XXXX, November on Factors well our fully on expectations, purposes speak more These XXXX. only to forward-looking from by statements I'd detailed today's Any required to provisions may law. due are XXXX. statements risks of call in the occur the December on and call plans and made statements for Private participants and XX-Q the recorded. we a like from indicated. of call, Form highlight expectations Monday, report of as after XXXX, under I any XX-K will current begin, that to X, that reports annual Reform the that subject differ year-ended reflect date, in that factors statements Safe or may update include obligation uncertainties to events including except with as under as materially that SEC, caution forward-looking we forward-looking those the based Form the Litigation to results differ results Before are cause are constitute the and about statements future actual today's actual We prospects that materially to

via We call. conclusion the it and shortly our available be to Relations on are media Investor and the of website the the in available replay webcast a section will investors making following

or like would retransmission David consent call any any call the I PolarityTE to the in express is turn of property rebroadcast Additionally, form now of without to and redistribution, prohibited. it written strictly Seaburg. over PolarityTE's the is

to welcome, the range, report that third exceed making of pleased Thank we high our the you, accomplishments. we quarter. development I'm plan revenue SkinTE had this under of allow $X.XX exceptional end progress, scale QX and our XXX notable testing only operational will Not like million did to in that made a COVID-XX BLA also three company, we quarter guided Rich. And the in efficiencies us refining an highlight best significant created with the in our pathway revenue, business history I'd effort. to everyone. for

FDA multiple the October, a FDA ulcers, opportunity. to DFUs, the dollar which that the from outcomes in represents with our significant since made including pathway submit patient acute to feedback wounds, in completed indications and IND multi-billion in progress April, for plan pressure August. developing actively and necessary to an received enabled material team submit a We data First, us regulatory transition pre-IND briefing and our preparing announcing has BLA. back a for to SkinTE And market we are decision

XX%, in G&A XX%. our streamlined burn by third operations cash by was which expenses we operational year-over-year XXXX, expenses. Compared were in meaningful our significant cost by were our cuts expenses and reduced reduced of sales in to resulted Second, structure, a and marketing quarter made reduction XXXX, reduced of third XX%, to the quarter the

scale ago. we that to should year in business. net All And lower allow that loss COVID-XX solutions a of us technology XX% streamline this, our integrated that than finally, testing resulting a was operations to

services approximately approximately of from which testing revenue million $X.XX approximately $X.XX revenues SkinTE were was slide Contract a $X.XX million, XX%. quick COVID-XX were X versus our QX. approximately for were up revenue review business, includes XX%. XX%. up to this $X.XX And note, revenues third Now, QX. Total our in revenues quarter let's million, million, up turn

pathway, half Before to submission, like with we by a from and turning We believe detail successful as the submission, After of a provide successful you forward. will our FDA level program updates the a development we IND on high to in critical move DFU our of the enrollment call over provide data sometime QX. overview trials expect early to what several to initiate which a anticipate regulatory on intend pursue will IND can provide BLA. successful final Richard interactions QX, end I'd late and for the completing milestone timely us we release who clinical greater as the second be We complete RCT our year of plan clinical and a XXXX. we in

Richard through and BLA the call want Finally, to who to know BLA the recognize value strategic partners. commercial thorough Richard? to steps to we regulatory move now for therefore, we actively SkinTE. and process. as taking for finding Hague, a as pursue investors turn over that we And provide like we a pursue I'd are in partnership update opportunities intend proper the the detail will we we

you, pre-IND Thank encouraged start everyone. of feedback part received interactions. as the I recent from David. our like good by were that, would by saying overall, FDA morning, And to we we

chemistry, controls, the non-clinical, momentarily. main With manufacturing with to were agency, clarity three CMC. that we I exciting interaction describe to of expected, allowing considerable pathway there is that of now As will for areas do. were XXX BLA focus our But plan or that clinical, a we development sought under level which a and SkinTE we clarity define have work regard to us have and on, an

trial, DFU be efficacy data and RCT although described On determined package reviewed front, controlled had ultimately the and well an it a that, would clinical study. ongoing as they our FDA elements not certain viewed what of pivotal adequate our as

package be SkinTE. as However, that for overall we believe utilized data the clinical of can part safety

data that completed retrospectively back the to and standard to designed originally XXX this as us leverage weeks our to of surprising, have current and would follow was length for allowed follow-up as have given RCT XXXX. products. would endpoint, difficult, been well study our already adequate The be related distinction at of FDA study guidance of for the of RCT April ability or which our capture XXX see post might to trial given patients on week XX% our was view patient like BLA The to have the XX their of a XX when to an up. FDA follow-up. that SkinTE lost launched it XXX(k) post-marketing was this hopeful approval we're current efficacy, While main current is application study that more compared controlled not compared was for to between in study agency's point the

requested FDA validate dosing. we our Additionally, to approach that SkinTE further

close we and were matters, Although generates industry we standard plan the that have adequate minimum non-clinical we With consistent product, FDA's to future steps current our to the and responses our CMC ensure criteria, trials. harvest cmX, in outlined we cmX studies believe guidance for both with that XX satisfy preclinical strategy. shown confirmed guidance our subject size X agency's which regards inclusion additional that in to setting the clinical wounds and are take to the

is to work up that trials reevaluate FDA. in to and well work With feedback required our as and go-forward final our BLA. characterize RCT, three additional clear or for assays run to our it SkinTE. this allows any implement can required controlled needed. product complete work will regards has to adequate a leveraged strategy, pre-clinical will pursue that need We development our current on With the to our FDA's approval, parallel non-clinical And DFU be given is as very for we to plan two it key parallel, multiple by in in the believe to a CMC of that release sequential In us continue in identify, indications. the support mind, either the SkinTE us way for tight indications fashion. fully we will quantify opportunity majority We a result, given plan our to

a DFUs, and degree stage experience and wounds. peer-reviewed confidence Given thickness, to and clothing real SkinTE such capsule several we X in penetrating be supporting of bone, acute that can have full X complex wounds high injuries our world pressure as successful tendon, significant publications, and

impact order significant our focusing structures. These critical Although of to types heavily the better different focused believe and in result or disability fill they elevated care to and common including require We that treatment experience, stages proceeding etiologies, death. outcomes where indications due characteristics, of seriousness structures and presence may for of significant is have often skin both have frequent occurrence depth, a reasons. of in unmet invasive to exposure wound acute are these wound our on reconstruction. the may a distinct volume risk wounds wound the lives to cover finding and patient failure franchise more PolarityTE these long-term before undermining SkinTE and for amputation, translate substantial multiple lifetime treatments exposed efforts have and the value providers on or in tunneling grafts patients' following In and traditional need there the meaningful

to market sweat most deep vast that into sensation, of the not essentially achieve by multibillion with opportunity. ability types. a First, risk with most SkinTE in in skin our whereas space, other by second, many the may has one ability unique ultimately In of progression, itself depth, believe requiring wounds to failure of regenerated with approach, In largest setting. characteristics concerned regenerated with final newly patient. native fill factor converting an hair in reliably numerous only of wound tunneling, covering be most in dollar and combining it these for to this predictable majority be the providers volume dictated and the relatively cases. growth. applied SkinTE, to shown the deep differentiate these underserved, cover and complex of and a critical and tissue, a wound skin is provide accomplished as covering represent most grade as And multi-staged alternatives the wound deep these can skin the more closure exposed wound wounds strength, lower filling pliability, complete that the in described well importantly, And and a that in is vascular SkinTE in a types completely Furthermore, greatest to It unlike eliminating rate are is earlier, can wound structures, exposed including increase require contrast David graft structures, from tolerated treating experience, products We wound closure. such harvest treatments structures application truly algorithm the treatment manageable. single can an having results small tissue treatments directly strengths structures, important

address better that ensure to current of satisfy with as evidence has us as indications generating real and that landscape FDA. will and them, from as and the IND, experience, FDA well requirements, the of the the the patterns, These we motivation timely adoption, key include half and patients providers additional of allow to soon substantial markets. second believe, been these submission trials approval world we months, health discuss accelerate Given preclinical in wounds replicates of preparation and practice activities can necessary to outcomes enrolling clinical SkinTE receive in with economics CMC improved high can trial share ongoing completion interaction a complex capture XXXX. what begin level of to to of demonstrating IND to designs, activities In the significantly FDA we ensure and filing the shift the coming weeks undertaking and be observed will and work we as

update. turn to call like over to a the financial Jake Patterson I'd Now, for

morning, Richard. Good you, Thank everyone.

which from services we refer million. XX-Q. services, third during as revenues the of million products from sale we which from services and total XX-Q, in for As and million revenues our revenues SkinTE, quarter the the products of which refer Revenues to mentioned, contract $X.XX in to approximately were David from includes we in reported XXXX, $X.XX the revenues, quarter as research $X.XX were

strategy or work million lower third than XXXX, cash cash operations releases, discussed month to roughly reduce continued during $X.XX XX% in second used For in previous as burn. cash the press with Consistent used per the have BLA $X.XX quarter. the is was on million aggressively approximately monthly average, in which operations our quarter we to and of approximately

of cash, of like million our rate to we earnings from rate XXXX exit and down We back discussed plan, investments last of operating Seaburg under capital and the some QX PolarityTE's sheet. current expect current average our to $X.X burn million. at cash equivalents finished call, million As remarks. quarter expenses sufficient including which related now requirements, an I'd XXXX to $XX.XX the approximately is of burn expenditure cash quarter, through in third turn capital $X.X XXXX, with short-term month, will still fund the to monthly of per the operating on we And operating business for believe resources quarter David balance our XXXX. over second concluding call be significantly

Jake. you, Thank

these we are believe clinical XXX into clear safety this hard-to-treat about profile allow than market as development to us for strategy PolarityTE shareholders. and value confidence penetrate that better, needs unmet lives which unlock and and We like regulatory open create of dire the this joining are reactions, our for patients' will call. has We adverse up accomplished a transforming indications have Thank with proud more multiple outcomes over we patients for very SkinTE. I'd address it how more great investors to of multi-billion reposition traditional for much give should Q&A. several no we reported to dollar company. as now Operator? efficacy now pursue been seek truly used treat and you quarters today's a in the to seen we wounds, value SkinTE past often the to opportunities for

from now Kevin Thank Oppenheimer. you. our question DeGeeter can take from We [Operator Instructions]. first

Maybe wound just adequate? with there work, that then, studies – starting you studies? animal are one for when anticipate Can to pressure IND we confirm And work? to say with study think about approval completing regard potentially example, that for the pressure model would you two prior wounds in each, preclinical example, be and just talking requiring should you for additional have you studies DFUs How additional filing? Are two regulatory. – that

question, mentioned. one to that you the regulatory he take the Richard, want first

studies two indication. going The additional quick answer are need we likely our for run to most is, lead to

or indication, unclear to So, additional an if we going sufficient injuries two likely results for pressure from not whether our study to advanced need after the for to or as choose go to It's lead additional foot studies. would enough most do diabetic trials clinical purpose. would confirm the ulcers additional we us indications be that forward first

of of wound one terms important for things to is the etiology different, think similar in studies of I types. these very the although that's note are that, characteristics the they're these

indications running work very leverage regarding work. hope of tight we be initial there, that So, will we that is of some our our to have or facility. in-house beauty your second parallel, we're as additional able To sequential confirmatory earlier, on own GLP I studies those that own future The capable additional studies running fashion. said for our in we yes, question animal mostly team studies,

quickly get So, very and we can done efficiently. those very,

– process Or about SkinTE remains agency will can question this you Maybe patients availability that think the how you follow-up period? question, as as comment a of is feedback the market of to during clarified? registration a be for we ongoing through should and that on clinicians from have or the received SkinTE to remain

to That awaiting others Tissue clarity like clarity, FDA is a Association. FDA. be that question clarified. have are companies, some in us been associations have Besides there from remains the for including this that other Bank reached and out looking to We, space,

with our FDA question, clarity, directly the a to from hopefully, broader additional that get through So, able type of ask some agency. we'll we're process individually through either communication own that of when or

just quarter. patients in SkinTE number number housekeeping In quarters, the was of What third one quarter? disclosed treated with prior If slip in I can question. the you've in a that

believe, cases, cases – the quarter, XXX, number was The second paid the was XX. I Kevin, of number paid it versus of

take Cantor from can Kluska question next Kristen our We now Fitzgerald. from

pilot you these how three, from usage real the the think about need; time Just one, course, hand unmet on three of the have commercialization? decision much interim the and data you're you that and you've of when that could do was that then for lead results and readout; data through about indications evaluating, you DFUs level seen some by, talk driven two,

well? Richard, you to as one that take want

was need. are based seen some of decision SkinTE very, part these and wounds. on the complex big of extremely work very well, the unmet difficult, A We've

the had indication So, was data to a we DFU that initially, be path being Wagner X might of course, the fastest generated, that hope with there market.

what as was well as FDA a to presented SkinTE we've be that if seen their to us to at response, so, we where was as see And to it going markets But gave given the opportunity look so well. that perform whole, feasible. the

and These seen thickness and real these ulcers, so, XXX where advanced late of And to acute treated bone outcomes. wounds in pressure more other our to is each and foot world full we in consider us these are diabetic that's indications those excellent these stage cases. patients experience about down led that ulcers complex structures, what probably

front, look then, just are And boom you mentioned case to prevalence mindful key of at these the you to whether three any partnership that types when highlighted, looking be the at and numbers And wondering anywhere. here. there if different geographies

to Richard, that? you grab want

At the US. on this focused mainly point, we're

while down in we companies terms progress entertain with to sense David's additional in make the And might with pertain So, make that our as arrangements think be that would discussions some conversations individuals outside other conversations bringing working out to do, to the for our market US. the of product to And make the BLA. really main is ability I open US, and we'll company. road the sense and/or in our the partnerships potential reference focus

that looks as we're like and to to ability to to develop effectively, those what that, distribute What cost completely back really the to important it end we understand, our the relationships. in it's efficient our really in sure cost on I right? and efficiency, focus Personally, just think is make add

generate that in on sure really ultra-focused, So, market our to as ability quickly and making really have hyper-focused we the we're to as get cost to efficiency possible this revenue.

and that be forward. as we exploring move into looking we're that, So, we'll

Last queue. acute question in What market for me and back as opportunity? the I'll the loan would you hop view

very That's description. obviously broad a

that focused wounds, ones on structures. and as So, we're thickness said, are, full complex wounds I exposed

So, we define with help that we'll would work indication. FDA need to work and with to

and I I the the understood. both I acute were pressure market, DFUs designs think would of on relatively trial terms in they we the and straightforward trial one the with need And what language the advanced at understand definitely indication – wound a area area ulcers, around of in that the think that's think and FDA engage to better design. an that's terms and look

So, more that's experience, bit gather. we a we've But whole seen information that a to on in need SkinTE our real little cases. work variety of based world

presented we've and of As so shown the SkinTE past, compelling we've in that the well. we've challenging some work where cases seen really before

now We question from can RK next our from H.C. take Wainwright.

current I as of what pilot your have you publish from data to which filing? quick sort point? readout a of you trying see kind to studies a study, could need larger When the will of we that part to plan have be released at do is just couple data questions. the that into what ongoing, I'm of your

Richard?

RK, repeat sorry. could of the half first that question? I'm you

two need analysis out what you would I'm trying I pilot figure to do study. when you there do that sort readout to your a final be to to what required releasing from trying have data file regulatory was of for see could on the just studies your to approval. we you just of the sort

specific RCTs of described. data other these DFU ongoing Wagner we're be The additional to I terms related indications clinical and were to looking X. studies will pilot be going in to information gather initial that to The

But FDA indications be characteristics data we'll around generating, exactly like with particular studies traditional soon we'll to study the that'll I to pursuing. working those there's will some be And of look think, for be those terms that that to studies approach that. of but we be those what going phase going and we'll pretty, So, that what designs what discussed. take be, in data it's pivotal those too say we're are

increase what you that And you you're that do I need of characterization. stated heard also also, have You now. the additional to using SkinTE the to I size right compared to some thought

of and can that with size? work in of CapEx need Or because what the also larger you sort be facilities the you have, would what all manage getting you do SkinTE? So, larger size production involved done do of of to any

full mechanism identify its your that and BLA characterization critical. something the final that space. components to world, action. and tie in your work design going of of been able of in understand drug And has Certainly, it's to to aware FDA we've back product them be always and components quantify required and those that's to

to to do So, the continue that believe successfully we we're that. regards meet work. we going to with that And requirements could

that wound. to to little can which said, going we've ultimately, a more as we specifically, side, to dosing so beauty x work always and and FDA experience need forward, come the and more can then that previously. And range and relatively product, x that our real put formally, to say done that the both the wound harvest we treat bit of has significant world equates we've validate to been of size bit we dosage and But that, of small a And just SkinTE in y. On do work we a preclinically. that size that that, yield proven harvest take I've to or need can little certain a categorizing of validating a more treat certain a open into

the GLP So, in-house and facility the as earlier because of I quickly effectively said have work, call, do confident team as and we we that that could animal cost that do we on that work opposed the outsourcing. the can we're to have part

So, forward accomplished months. that that's looking something the to coming getting in we're

couple second me the of the only but into the with of you quarter, seeing expect is see folks you And months XXXX? $X.XX in demand ongoing in of the testing. in surge now demand are, revenue, specifically COVID-XX for you of not in more fourth you're – the saw region and question also your as sort do for services where million and on increased part your COVID-XX, And last what contract mountainous services the last obviously,

demand to do We expect increase.

has much to steps an expand processes processing our job operations outstanding that recently, we've us described, some David of capacity. and And streamline internal done Our advancements to within related testing. is added, just as Actually, allowing up team technical being able to the to but given contracts, capacity we've taken with we've those with internal pretty our and engaged hopefully, capacity, bringing the pretty additional we've weeks. we're limitations, out at been the actively in recently, parties expanded And coming outside testing signing for significantly.

So, we COVID happening the to in testing we to and be weeks the on see based business coming – the country. expect growing around it months what's

[Operator Instructions]. Northland We can question Carl from now Markets. next take from our Byrnes Capital

IND that, partnerships, prior to obviously would the line in of to DFU perhaps timing potentially of or would half other submission be top in respect With around and potentially the after readout XXXX that be it second or the potential after studies?

in intent our process into parallel. to that be going think we're be looking is, a to I this going is

clear in expectations that parallel. don't as as around explore that would But I is ever this really timing time, to I point around definitive would this concerned, false nor or that that. put intent our is to far we I out So, there say at think be can want in

really that As things no is believe publicly, to soon But out able right now timing you put really we are as we really disclose there we can will. rational. that know there's we

you call. Thank the [Operator questions. Instructions]. can no joining. conclude for There now are further We

You disconnect. may now