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  • Reply to

    Potential bombshell from the CC

    by tables777 Nov 17, 2014 7:14 PM

    Mentioned on the last CC and at the annual meeting.

    Sentiment: Strong Buy

  • Reply to

    Potential bombshell from the CC

    by tables777 Nov 17, 2014 7:14 PM

    Where did you get the number 3 working in the VA?

  • Reply to

    Potential bombshell from the CC

    by tables777 Nov 17, 2014 7:14 PM

    What we do know is 3 of the 17 AEs they now have cover the VA.

    Sentiment: Strong Buy

  • Reply to

    GREAT CC...The unedited facts here...GLTA!

    by biosearchone Nov 14, 2014 8:35 PM

    One analyst just tweeted $400-450 per application! They have 3 AEs working the VA now. This is where the sales ramp will most likely start since they do not have to deal with CED. I'm expecting $3M a year coming from the VA by this time next year!

    Sentiment: Strong Buy

  • Reply to

    GREAT CC...The unedited facts here...GLTA!

    by biosearchone Nov 14, 2014 8:35 PM

    We need to understand the price to the VA. The latest press release shows there's going to be a significant focus: Nuo Therapeutics to Sponsor Pre-Event for 35th National Veterans Wheelchair Games

    Sentiment: Strong Buy

  • Reply to

    Potential bombshell from the CC

    by tables777 Nov 17, 2014 7:14 PM

    This has been the case forever; it's not like the VA market just came to life. I don't know the exact percentage

  • If I understood correctly, sales in the VA system are not governed by the CMS and its CED registry. That means we can pursue sales opportunities unencumbered by administrative and bureaucratic snarls. A question I have is what percentage of the $2 billion wound care market is represented in the VA system? There are many veterans with pressure wounds and I am sure some with diabetic foot ulcers or venous ulcers. But how sizable is this market? Whatever that is, it seems that vigorously pursuing sales in the VA system represents an immediate opportunity to ramp sales. So we may see a significant increase even as we await the enrollment of patients in the registry in outpatient wound care clinics. This is important. And why is this coming to light only now? I appreciate your serious comments.

    Sentiment: Strong Buy

  • Reply to

    GREAT CC...The unedited facts here...GLTA!

    by biosearchone Nov 14, 2014 8:35 PM

    This is a great point. It was news to me too. I don't know what the numbers are of those veterans who suffer from pressure ulcers. But it is probably sizable. So I agree that the VA system may be the first place we see increasing sales. One question I have is about sales price. CMS has set a reimbursement price. Does this apply to sales in the VA system? Or would the price be higher or lower than what CMS established?

    Sentiment: Strong Buy

  • here are some of the things we learned from it. The sales for Aurix were only one hundred thousand dollars,which was disappointing. We are six weeks into the fourth qtr and sales have not increased appreciable or it would have been mentioned during the cc. That one hundred thousand dollars is the number to watch each qtr. As that number goes up, if it does, that is what will drive the stock price.

  • Reply to

    GREAT CC...The unedited facts here...GLTA!

    by biosearchone Nov 14, 2014 8:35 PM

    "As a point of reminder, the CED data collection is not a requirement in the VA. This data collection requirement only applies to Medicare beneficiaries, so it does not apply to VA patients." Wow. this is new to me. If we crack the code wiht the VA, it's off to the races. The VA is like a wound care factory -- them in, get them out ASAP. If Aurix becomes the standard, sales can fly quickly. I bet we see sales in the VA be the first part of the sales ramp.

    Sentiment: Strong Buy

  • Reply to

    Strategy CMXI Style!

    by alcatorda11 Nov 14, 2014 4:39 AM

    Perhaps everybody might agree that current FDA approved product needs help, but with zero debt, $20million in cash, a sales force, they'll sell something, making the $,37 stock price absurd, maybe $1.50 is closer to the price or even $1.00 until they get news products

  • Reply to

    Strategy CMXI Style!

    by alcatorda11 Nov 14, 2014 4:39 AM

    Yeah, Grubber you got me! The work on the next generation device and the 5th protocol submission/denial misinformation were all mentioned in the latest quarterly report. Hmm..now with your profound insight you make me worry if other type of misinformation was possibly mentioned in the SEC filing. GLTA

  • Reply to

    Strategy CMXI Style!

    by alcatorda11 Nov 14, 2014 4:39 AM

    Never have shorted. Although am short of patience for Martin. I will never understand how a "leader" gives himself a raise and bonus when the share price is at or near 52 week low. Absurd. I realize some rationalize his actions and say that submitting data for CMS approval was sufficient for said raise and bonus. He did nothing extraordinary. He has done nothing for shareholders. He and his band of yes men milk shareholders. Nonetheless, I believe in the product. Maybe Tozer will resist the greed temptation and support shareholders

  • Reply to

    Strategy CMXI Style!

    by alcatorda11 Nov 14, 2014 4:39 AM

    Funny how you are so blatantly short this stock that you must be panicking right now to dream up detailed misinformation posts like this. It looks like the like of you and Lettuce are about to cover big time. Hope you don't lose your shirts.

  • Operator

    Greetings. And welcome to the Nuo Therapeutics Third Quarter 2014 Financial Results Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] As a reminder this conference is being recorded.

    It is now my pleasure to introduce your host, Mr. Lee Roth of The Ruth Group. Thank you. You may begin.

    Lee Roth - The Ruth Group
    Thanks Jesse, and good morning everyone. This is Lee Roth with The Ruth Group, Investor Relations Advisors to Nuo Therapeutics.

    Joining me on today's third quarter 2014, financial results conference call from Nuo Management are Chief Executive Officer, Martin Rosendale; Chief Financial Officer, Steve Shallcross; and Chief Commercial Officer, Dean Tozer.

    By now you should have all received the press release that was issued yesterday following the close of trading announcing the company's financial results for the third quarter of 2014. If you haven't received this release or if you’d like to be added to the company's distribution list, please call TRG in New York at 646-536-7000 and ask for myself or Joseph Green.

    Before we begin today's call, I’d like to remind everyone that the comments made during the conference call will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Nuo Therapeutics and that our actual results could differ materially from those projected.

    Please review the company's filings with the U.S. Securities and Exchange Commission, including but without limitation to the company's annual report on Form 10-K and quarterly reports on Form 10-Q, which identifies specific risk factors that may cause our actual results or events to differ materially from those described in the forward-looking statements.

    Furthermore, the content of this conference call contains time sensitive information accurate only as of the date of this live broadcast, November, 14, 2014. Nuo Therapeutics undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances that may occur after the date of this conference call.

    With that, it's now my pleasure to turn the call over to Martin Rosendale, Chief Executive Officer. Marty?

    Marty Rosendale - CEO
    Thank you, Lee. Good morning everyone and thank you for joining us today. During the last several months we have made significant strives toward repositioning the company to capitalizing the significant potential within the multi billion dollar chronic wound care market. Our primary strategy has shifted and our total focus today is on the success of our newly rebranded core product Aurix.

    We outlicensed the Angel asset and we discontinued the ALD-401 program and closed our R&D facility in Durham, North Carolina which allowed us to shift financial resources to the Aurix commercial initiatives including the expansion of sales and support infrastructure, product rebranding, and CED protocol implementation.

    All of these initiatives culminated in the transformation of our company into a commercial organization focused on biologically dynamic therapies for healing.

    Last month at the symposium on advanced wound care, we formally introduced Aurix, the new name for our best-in-class biodynamic wound treatment system, and unveiled our new corporate identity, Nuo Therapeutics.

    While this may have seemed like a larger cosmetic change, these actions are indicative of an entirely new organizational focus. We are directing our efforts exclusively toward the chronic wound care market in both the hospital outpatients and VA setting, which have a large overall market opportunity and where we believe we can differentiate ourselves from competing products.

    We are confident that we can succeed in these market segments as we educate customers on the significant advantages of the Aurix system, offering therapeutic benefits, demonstrated in a robust body of clinical evidence and cost or economic benefits that did well within the new reimbursement landscape in wound care.

    FDA cleared and fully reimbursed by Medicare, Aurix represents the paradigm shift in the wound care market as the U.S. healthcare system continues to place more and more emphasis on value based premiums.

    In our view, it's not only a best-in-class treatment system for chronic wounds but a potential to change the way in which healthcare providers think about treating venous leg ulcers, diabetic foot ulcers and pressure ulcers, as the cost of care continues to have an increasing influence over treatment decisions.

    The reaction to Aurix at SAWC last month was enthusiastic to say the very least. We have experienced our members of the wound care community are embracing the Aurix system, recognizing the significant advantages that brings to the wound treatment arena and giving us confidence in the potential of the product as we continue to expand our market presence.

    As we discussed previously, our commercial strategy encompasses two distinct highly promising markets, specialized hospital outpatient wound care centers and the Veterans Administration.

    Since the mid-October launch, our VA in hospital outpatient teams which now totals 17 sales professionals are out in the field aggressively pursuing opportunities in their respective market segments and we’re pleased with the progress.

    On the hospital outpatient side, we’ve completed the onboarding process at several sites and these sites have become active in the last few weeks. As a reminder, the onboarding process for new clinics involve a series of procedural steps to implement the administrative and data collection infrastructure and facilitate the CED protocols required for reimbursement under our national coverage decision from CMS.

    Although the facilitation of these protocols continue to have an impact on the initial revenue ramp following the Aurix launch, the process is going well overall. We continue to believe that the CED designation affords us a substantial opportunity to further differentiate Aurix from competing solutions by reinforcing the products overall value proposition for clinicians, patients, and payers.

    Turning to the VA, the product is being evaluated at a number of targeted facilities. As one would expect of government organizations, the sales process is lengthy. We’re making good progress in this regard and have begun treating patients at select sites with product sample kits while we work through the former procurement process.

    The response from doctors who have used Aurix to treat veterans has been incredible and we look forward to expanding this work with the VA as we continue moving through the sales process.

    As a point of reminder, the CED data collection is not a requirement in the VA. This data collection requirement only applies to Medicare beneficiaries, so it does not apply to VA patients.

    In addition to our direct sales efforts to the VA, we’ve also initiated a relationship with the Paralyzed Veterans of America, an organization committed to supporting veterans by fighting for quality healthcare and investing in the development of new treatments and cure for veterans with disabilities.

    Over the next few weeks, you would have more better involvement with this organization and the great work that they do.

    Before turning the call over to Dean to get some additional color on the commercialization of Aurix, I’d like to spend a minute on the final CMS payment roles for 2015, which as you likely know we released on October 31.

    As we expected the final roles were consistent with what CMS proposed earlier in the year, this means that in 2015, Aurix will be reimbursed at $430 per treatment, 5% up from $409 this year. Similarly the higher cost in substitute products received a 2.5% increase in reimbursement.

    As the Medicare pricing and reimbursement environment continues to experience significant volatility and change, wound care centers are becoming increasingly insensitive to product pricing and more broadly the overall value what treatment option provides both financially and clinically.

    For Nuo, this is simply another opportunity to position Aurix as a compelling option based not only its strong efficacy and ability to drive positive clinical outcomes but also on its economic value and attractive price point.

    It is also important to note that as we expected, two of the major competing wound treatment system, EpiFix and Grafix, will lose their pass through status effective January 1, 2015, and will join the group of products reimbursed at the bundled rates.

    We continue to believe that the changes taking place at CMS in response to the significant financial burden our healthcare system currently faces board extremely well for Nuo, as we bring Aurix to the market.

    Overall, we’ve made significant progress so far this year in building a solid foundation on which to grow. We have a robust commercial infrastructure in place and a highly capable sales and support team in the field, helping potential customers in the VA and hospital outpatient segments fully understand the value of the Aurix system.

    It's only been a few weeks since we completed the launch but we've made great progress in that time. As we move forward, we will be introducing specific methods that will allow you to better track the success of our market penetration efforts and we hope that you will continue to share in our enthusiasm.

    With that, I’d like now to turn the call over to Dean Tozer, our Chief Commercial Officer to give you some additional details in the launch of Aurix. Dean?

    Dean Tozer - Chief Commercial Officer
    Thanks Marty. And thanks to all of you for joining us. On our last call, I shared my excitement about everything we had accomplished through the first half of the year and everything that we expected in the second half.

    As the risk of signing [Arthrex] [ph] brought me even more excited now than I was when we spoke in August. I'm extremely pleased to say that we delivered on two of the important initiatives I highlighted on the August call.

    At that time, we said that we were targeting direct sales force of approximately 20 by year end, and we now have a team of 17 strong in the field promoting the Aurix system and educating providers on its significant benefits in the treatment of chronic wounds.

    This team of 17 representatives, the optimal number of representatives and - this team of 17 represents the optimal number of representatives and is the number we will have for the balance of 2014.

    We also talked about the longer term opportunities we had as a result of the CED designation Aurix was given by CMS. We said that the 120 centers we had access to through our first partnership was a good start, but that we were pursuing partnerships with additional EHR providers.

    Since the August call, we have expanded and announced additional agreements with other specialized wound care EHR providers, and are working on other arrangements that will expand our CED correction capabilities even further.

    As I've consistently said from the beginning, our key to our long term success is the establishment of the data collection capability to make the CED data collection relatively transparent to our customers, while ensuring we assemble high quality data that meets CMS expectations. We are on our way to accomplishing that goal.

    I’d also like to point out that even though developing this data collection infrastructure is taking time, once we complete this process and have all the data, we will possess the largest prospective wound care study ever completed year-to-date. That has the potential to be a huge competitive advantage for us down the road.

    As Marty pointed out, the response to Aurix at last month's SAWC Fall Meeting in Las Vegas was overwhelming, giving us confidence that we have the right strategy for the right market at the right time.

    Interest in the product is going rapidly, which is of little surprise given it's advantage of our competing wound treatment of the solutions. With that said, having a great product is only part of the equation.

    Any commercial effort is driven focused and capable sales professionals. To this end, over the last several months, we have assembled what I consider to be an all start team of sales and support professionals.

    The members of our sales team has deep experience and records of success in selling advance wound care products. They have relationships with the decision makers at the outpatient centers in the VA, they know the market landscape and have an intimate understanding of what clinicians need in order to provide the best possible care for the patients.

    And each of our 17 dedicated sales professionals believe that Aurix is a solution to major unmet need for in-health care. The enthusiasm our commercial team has shown thus far is remarkable. They believe like I do, that Aurix is the future of chronic wound care and they take great pride in bringing this product to the market.

    In these initial steps of commercialization our team has laid their focus on the successful execution of our sales approach, targeting specialized outpatient wound care centers in a very specific set of VA facilities across the country.

    We are positioning Aurix based on a compelling value proposition for physicians, patient, and payers, highlighting its key scientific differentiators, alongside the tangible benefits both clinical and financial and the early results suggests that this story is being very well received.

    As we continue to move forward, we plan to further expand our sales, clinical reimbursement teams to support the growth of Aurix in the market. At this time next year, we expect to have well over 20 dedicated sales processionals in place, and believe that the process will be underway to expand coverage and reimbursement beyond Medicare and its private sector.

    We continue to believe that our measured approach to growth is the most prudent course both now and over the long term as we work toward our goal of positioning Aurix as a preferred option in outpatient wound care.

    We thank you for your continued support and look forward to sharing our accomplishments with you as we move forward.

    With that, I’ll hand the call over to Steve for the financial review.

    Steve Shallcross - CFO
    Thanks, Dean. Total revenues for the third quarter of 2014 were $1.7 million compared to $3.4 million in the third quarter of 2013. The year-over-year decline in revenue was the result of the $1.3 million one time sale with existing placed Angel centrifuges orders to Arthrex in the year-ago period, lower Angel disposable product sales to Arthrex and related transition service revenue, partially offset by an increase in royalty revenue that resulted increased Angel sales by Arthrex.

    Revenues for the quarter breakdown as follows, $1.1 million of Angel product sales to Arthrex, $0.1 million of Aurix product sales, $0.4 million in royalty income, and $0.1 million at Aurix license and Arthrex license revenue.

    Gross margin for the quarter increased to 21.1% from 15.3% in the third quarter of 2013. The gross margin increase was primarily related to the aforementioned one time sale of existing placed Angel centrifuges at Arthrex in the third quarter of 2013. The sales price and related cost of sales from these centrifuges were recorded at fair value which resulted in a zero margin transaction.

    Total operating expenses for the third quarter of 2014 were $4.9 million compared to $5.1 million in the year-ago period. The decline in operating expenses was primarily attributable to the previously announced the termination to close the Durham, North Carolina research and development facility and discontinue the ALD-401 development program.

    The reduction in expenses associated with those events was partially offset by increased expenses related to the expansion of our commercial organization, product rebranding activities, and the implementation of CED protocols with outpatient wound care centers.

    As we have discussed previously, the Durham facility closure and discontinuation of the ALD-401 program are expected to save approximately $4 million on an annualized basis. This is a significant cost savings but it’s also important to point out that a portion of these savings will be reallocated in the near term to help fund the Aurix commercial ramp initiatives.

    Net loss was $4.8 million or $0.04 per share in the third quarter of 2014 compared to $5 million or $0.05 per share in the third quarter of 2013. We finished the quarter with cash and cash equivalents totaling approximately $20 million compared to approximately $3.3 million as of December 31, 2013. This increase was primarily attributable to our $35 million convertible debt financing with Deerfield.

    With that said, we'd now like to open up the call to your questions. Operator?

    Question-and-Answer Session

    Operator

    [Operator Instructions] Our first question is coming from the line of Jason Napodano with Zacks Investment Research. Please proceed with your question.

    Jason Napodano - Zacks Investment Research
    Good morning, everyone.

    Dean Tozer - Chief Commercial Officer
    Good morning, Jason.

    Jason Napodano - Zacks Investment Research
    So let me start up with Angel, the $1.1 million in Angel product sales, I assume you booked that at – as pure cost when you transferred to Arthrex, I just want to make sure, is there any small transfer price that's included in that number? Is it zero margin?

    Dean Tozer - Chief Commercial Officer
    For your modeling purpose, Jason, it’s essentially zero margin, so ideal with that.

    Jason Napodano - Zacks Investment Research
    Okay. So if I take that number and then I gross it up to what I think margins are at Arthrex, I apply some kind of royalty number based on what you've disclosed. It doesn’t quite match up with what you've reported on the royalty line, so I am assuming there is either a lag or there is some other kind of dynamic going on. Can you provide any color on those two lines, the product sales line versus the royalty line?

    Marty Rosendale - CEO
    So, Jason, this is Martin. Yeah, there is - you can’t make a direct correlation. Our flow of product to Arthrex for inventory doesn’t and isn’t going to match directly with the sales coming out of Arthrex. There are number of things that can affect that, the manufacturing plant shutdowns for two weeks over the summer for maintenance and repair, that will cause issues and often we will produce the product in large lots and ship that in the inventory.

    So you can't make a direct correlation between whether it sold two Arthrex, as far as volume, and what is sold by Arthrex to the end-customer.

    Jason Napodano - Zacks Investment Research
    Okay. So just trying to get a sense of how we can kind of judge the performance there? I am assuming that because of the fact that you’re selling them inventory and then they’re going out and then selling the product which is paying you the royalty, then there is some kind of lag, will we see your product sales line take-off before we start to see your royalty line take off again, I am just trying to get a sense of what we could look at as far as the income statement to see progress there.

    Marty Rosendale - CEO
    Sure. So, a couple of things - couple of points to make and answer in that question. First of all, the best and most direct measure of the progress is the royalty line. And the royalty has continued to grow quarter-over-quarter.

    In addition as you might expect, you can transfer the technology to Arthrex, there's been some customer churn, but despite that Arthrex continues to grow the business and continue to increase that royalty. So the best direct monitor is to monitor the growth in that royalty.

    Now, for your other point, you're likely to see some bump in the transfer of product to Arthrex prior to increase in sales there. It's possible, it may actually more likely be the former sale of devices versus disposables. I can, one of the challenges that we've had is in keeping up with the Arthrex demand for devices and therefore we have recently got an agreement from our manufacture to double up on shifts and help us increase the output for those devices.

    So at this point - I don't know exactly what that might look like but it is possible that you may see a bump there before it's reflected in the royalties.

    Jason Napodano - Zacks Investment Research
    Okay. And just as far as, I know you don't want to speak for Arthrex, but as far their efforts, would you say that they’re kind of still in the preparation ramp up mode? Or have they - now that we're in the fourth quarter, have they really started to count the payment on this, so to speak?

    Marty Rosendale - CEO
    I would say - I would describe it as being at the tail-end of the preparation and ramp up mode. As I mentioned, the biggest challenge that we've had is in keeping up with their demand for devices, giving them the inventory that they need in order to go out with confidence and really launch the product, right. Because they’ve got a lot of sales people behind it and the last thing they want us do, initiate the full-on launch and then end up with the stock out situation.

    So I would describe it as them being at the tail-end of the preparation for that launch, but that said, we've talked about them creating new kit for bone marrow aspiration and preparation, that kit is been created and is in the market, the build up in inventory and the devices as I described, we’re responding to that demand by increasing our ability to manufacture. So all those final pieces now are falling in the place.

    And I do want to point out, Arthrex continues to be an exemplary partner for us, and I am convinced, we're absolutely convinced, this is the right partnership and we made the right transaction here in transferring the technology to them.

    Jason Napodano - Zacks Investment Research
    Got you. Let me move on to Aurix, I am curious, basically I want to talk about the name change, first, you guys have spent obviously a long time building up a business with VA hospitals and private pay. You've been at numerous room conferences over the past several years, most recently SAWC in the spring, where you presented what I thought was impressive data.

    Changing the name of the product I wonder - to me it looks like a total reset, right, total ahead of the reset button and, how much brand awareness did you lose on AutoloGel and all of the data so to speak that you've presented at these conferences before when the product was called AutoloGel, and now it's got a different name.

    Marty Rosendale - CEO
    Let me start - and then I am going to let Dean speak to it because obviously this has been one of Dean's key projects. So a couple of things upfront on this, Jason, the product name itself - the previous product name AutoloGel, we've noticed and it’s been apparent for quite sometime that people struggle with that name. We've heard many, many mispronunciations and it's just been problematic.

    And so with the full on transformation of the company, it just was an appropriate time, we knew that ultimately we were going to need to change that name. And it was just the appropriate time to do it. As far as the brand recognition, one point that I'd like to make having just come from the symposium on advanced wound care meeting, that was a phenomenal meeting for us.

    One of the ways that you measure the interest often is how big is the crowd, how big is the line waiting into your exhibit booth. And I can tell you that our exhibit booth was one of the few booths that was crowded during the entire meeting. And so I think our commercial team which in my opinion is the best in the industry today has done a phenomenal job with the branding process and the launch, and I don't personally think we’re going to lose anything in the process but I will stop here and pass it to Dean.

    Dean Tozer - Chief Commercial Officer
    Sure. Now the other thing to consider too is – and we've talked about it a little bit is, we’re changing a lot of our point of call with the new sales team. So for example in the past a lot of the focus was in long term acute care. Even now we still have relationships there, that's not an active point of call for us to per say, and we're much more focused in hospital outpatient.

    Hospital outpatient because it never had appropriate Medicare coverage before now, was not tremendously familiar with the product. So similarly in the VA, although we had smaller efforts over the past years in the VA, we've are not also in a area where there was a huge amount of brand awareness.

    So if I step back and I say where we're going to drive our business in the future at hospital outpatient VA, they were pretty naïve sites related to the brand. And so I don’t think its going to be a huge issue Jason.

    And as Marty said it’s - the brand has been very well received and as a lifelong marketer primarily, you generally have an issue when people can’t pronounce or sometimes spell your brand name. And so it just was the right time to go ahead and make the change.

    Jason Napodano - Zacks Investment Research
    Okay. So Dean, I wonder if you could talk a little bit more about the sales process and maybe the interaction between your new reps, and the Docs, and the center. It seems like there is obviously a lot of education that needs to take place, education on the new payment procedures, education on CED, and of course an education on Aurix.

    I think, Marty called it onboarding to get various centers on board essentially, how long does it take or how many sit downs does it take between a rep and a Doc, or a rep and a center before the light, lets say goes on for them about Aurix and kind of all the pieces come together?

    Dean Tozer - Chief Commercial Officer
    Sure. One of the things that maybe I should start with is, when we recruited our new sales team, the new members that we brought in. One of things we set out to do when we hired those people was to find people who had very strong routes or relationships, whatever term you want to use, with large wound care centers in the geographies that we were interested in.

    So, we made a conscious decision on our hiring to recruit those kind of people so we could shorten the cycle. So that was one thing we did.

    And what we have seen is that that has actually borne out pretty strongly, that those people are going into centers where they’ve done business before, they’re selling the value proposition of Aurix, the centers are very interested and then it becomes at that point as Marty used the right term, kind of an onboarding process.

    Walk the center through, what’s involved with the data collection, how that’s going to work, there is a few administrative things we typically have to do with the facility but overall its not impossible, its more a some steps that we have to go through.

    And I would say we’ve consistently said throughout this year that 2014, was a building year and a learning year. We have definitely over the last six months refined our process, learned a lot more about what its going to take in these centers. We’ve build out, for example, our own clinical team in-house to support the sales organization.

    So there were things that we learned very early on like any new process that we needed to modify and improve on. I think we’ve done a great job on that.

    And I firmly believe we’re going to shorten that time even more as over the back half of this year and into first part of the next year. I think we’ll have a pretty much nail down to a very defined process that we move through pretty quickly.

    Jason Napodano - Zacks Investment Research
    As far as your programs that you have going on, the three legacy programs and the randomized trial, obviously you can’t talk about data from a randomized trial, but I'm wondering what kind of update you guys are going to provide in terms of number of patients that you have enrolled in these programs?

    And is that a way for us to kind of judge the performance of the product or the ramp of the product and how quickly these things are enrolling? And, well I'll leave it that. What are we as investors and analysts going to hear throughout 2015 about those trials? Or is it kind of radio silent until it’s collected and done?

    Dean Tozer - Chief Commercial Officer
    No, we are not going to be radio silent Jason. What we’re going to do is, as we get a good feel and understanding of exactly how long the onboarding process is going to take, we will begin to report metrics as we’ve said. And most likely sometime in the first or second quarter, and those metrics will include sites coming onboard, patients being treated.

    We’re not sure yet how much we’re going to be able to follow directly the number of claims that get processed and the number of claims that get paid, but to the extent that we can get that information.

    Those are the kinds of metrics that we will likely be reporting because all of that is a direct indication of the acceptance and the uptake of the product until we get to the point where we’re comfortable giving financial guidance going forward.

    Jason Napodano - Zacks Investment Research
    Okay. That’s encouraging. And then the last question, read the Q last night and I saw that you’ve looked to initiate a fifth protocol and there is some back and forth with CMS. Can you talk a little bit about that?

    Dean Tozer - Chief Commercial Officer
    Sure. So first of all it’s not unusual. Often when people have asked me about CED estimate into some of the other CED programs, one that was approved the same year ours was which is the Transcatheter Aortic Valve program or TAVR, in there if you go and take a look you see that there are 11 approved protocols, and Medtronic is the sponsor of five of them.

    Typically what happens - CED is a relatively new paradigm for government payment, government reimbursement, and so you learn lessons as you go through the process. We were certainly the first organization to fully operationalize the CED program in the wound care space.

    And so the fifth protocol is designed to incorporate some of those lessons learned, right, simplify the process to some extent. And a great example is a single protocol that represents three wound mediologies.

    So our customers are - only have to deal with reviewing and improving a single protocol. And so again it’s an unusual, it’s routine.

    The process that we’re going through with CMS is also routine. For CMS has come back to us with an initial denial and a list of issues that we need to address. We are addressing those issues they have agreed to an alliance with us and we believe that we stand a good chance of getting the protocol.

    But I will go back and remind you, the four protocols that we have are intended to complete the CED process. So we’ve got four approved protocols now that we’re working from.

    In addition, while Medicare makes up the majority of the population of wound patients, don’t lose sight of the fact that we also have good access in the VA and with the private payers as well.

    We have established a full reimbursement team. We’ve got a reimbursement outline; we are processing insurance verifications today. The results that we’re getting are great as the number of denials that we’ve seen in those private page, insurance verification has been very small compared to the approvals and the approvals with prior authorization.

    So, we have a lot of opportunities ahead of us. The fifth protocol is something that of course we’d like to have and we believe we can get. As I said, its routine and we will continue to work with CMS on that path.

    Jason Napodano - Zacks Investment Research
    Okay guys. Thanks for taking the questions.

    Dean Tozer - Chief Commercial Officer
    Thank you, Jason.

    Operator

    Thank you. Our next question is coming from the line of Scott Pittman with Calton & Associates. Please proceed with your question.

    Scott Pittman - Calton & Associates, Inc.
    Good morning, gentlemen. You have covered my question on the quality of the 17 reps, sales reps. Are the [indiscernible] that you approximately a year ago, how many of those remain with you and how many are new and where did you get them from, what competition, did they used to work for?

    And the second question is, you’re sitting on about a year cash remaining, what are you plans for future cash?

    Dean Tozer - Chief Commercial Officer
    This is Dean, I'll take the first question. So of the 10 that were with the company, actually before I even joined, five of those are still with us and so the remaining 12 are new recruits and the majority of those reps have come from other, what I would call large, very well respected wound care companies.

    That was something we specifically recruited for. We felt we did not have the time to try to teach a new rep the wound care market and so what we did is we made a very concerted effort to look at people who are high performers in companies that were already in our space.

    So, I would say we’ve picked up our reps from organizations that many people consider competitors in some regard.

    Steve Shallcross - CFO
    This is Steve I'll take your last question there about capital raise. So I guess I'll answer it this way. We’re taking sort of a strategic and measured approach to how we view our options in the marketplace.

    We continually go through the process where we evaluate our needs and as you appreciate that fact that we are deploying our resources in the field now and as we sort of watch how the marketplace accepts the role out of our product, we look at our operational performance and we evaluate market conditions in general that will inform us as to the timing and the right point which we decide whether or not we go back to the markets and when.

    Scott Pittman - Calton & Associates, Inc.
    Very good. Thank you.

    Dean Tozer - Chief Commercial Officer
    Thank you, Scott.

    Operator

    Thank you. We have reached the end of our question-and-answer session. I would now like to turn the floor back over to management for any additional concluding comments.

    Marty Rosendale - CEO
    Thank you, Jesse. So we’ve made great progress so far this year but more important than what we’ve done today is the fact that we’ve established the foundation for long term success. We are approaching 2015 with a singular focus on the success of Aurix.

    We’re confident in our product, our strategy, and our team, and look forward to capturing the significant opportunities that lie ahead.

    Thank you everybody. Appreciate your time and attention this morning.

    Operator

    Thank you. Ladies and gentlemen, this does conclude today’s teleconference. We thank you for your participation and you may disconnect your lines at this time.

    Sentiment: Strong Buy

  • Posting on the old board. Nuot up .35 today. LOL You won't see that again, anytime soon.

  • This is exactly where we were a year ago. Even reading Napodano's report is kind of weird: change the names, the year and the target priced( fair value), and it looks identical with the one he wrote last year: from
    The proved economics to the projected trial enrolees.....it becomes evident that the CED is a smoke screen: you can sell, but not really.....the only way to stay afloat is to sell Angel to an interested party( not sure it's possible under the arthrex agreement)..... The only thing left to save the day is if the new CMS rules cripple the completion .... If not, it's a curtain call late next year

    Sentiment: Sell

  • I think we hit $1.5 next year; but that's just the beginning. It appears that CED will become more pervasive. As Tozer said on the CC, when they master CED, they will have an amazing competitive advantage. Other biotechs will likely want to partner with them because they will be abel to accelerate the launch of new products that also have CED requirements. Big pharma should want to have this capability under thier umbrella, allowing them to more confidently buy new product that have CED requriements.

    Sentiment: Strong Buy

CMXI
0.3591+0.0091(+2.60%)Nov 13 12:21 PMEST

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