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Edited Transcript of COOL earnings conference call or presentation 12-Nov-19 9:30pm GMT

Q3 2019 Polarityte Inc Earnings Call

EDISON Dec 4, 2019 (Thomson StreetEvents) -- Edited Transcript of PolarityTE Inc earnings conference call or presentation Tuesday, November 12, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* David B. Seaburg

PolarityTE, Inc. - President & Member of Office of Chief Executive

* Jennifer Burdman

PolarityTE, Inc. - Chief Intellectual Property Officer & Deputy General Counsel

* Nikolai Sopko

PolarityTE, Inc. - Chief Scientific Officer and VP of R&D

* Paul Elliot Mann

PolarityTE, Inc. - CFO

* Rich Haerle

PolarityTE, Inc. - VP of IR & Strategy

* Richard Hague

PolarityTE, Inc. - COO

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Conference Call Participants

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* Kevin Michael DeGeeter

Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst

* Kristen Brianne Kluska

Cantor Fitzgerald & Co., Research Division - Analyst

* Sean Lee

H.C. Wainwright & Co, LLC, Research Division - Equity Research Associate

* Tyler Martin Van Buren

Piper Jaffray Companies, Research Division - Principal & Senior Biotech Analyst

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to today's PolarityTE, Inc. Third Quarter 2019 Earnings Call. As a reminder, today's program is being recorded.

And at this time, I would like to turn the floor over to Richard Haerle, Vice President of Investor Relations. Please go ahead, sir.

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Rich Haerle, PolarityTE, Inc. - VP of IR & Strategy [2]

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Thank you, operator. Good morning, and thank you for joining PolarityTE's call to discuss third quarter 2019 results. I'm Rich Haerle, Vice President of Investor Relations. With me today are members of the Office of the Chief Executive, which includes David Seaburg, President; Richard Hague, COO; and Paul Mann, CFO.

Before we begin, I'd like to remind everyone that today's discussion will include statements about the company's future expectations, plans and prospects that constitute forward-looking statements for purposes of safe harbor provisions under Private Securities Litigation Reform Act of 1995. We caution that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated. These forward-looking statements are based on our current expectations and may differ materially from actual results due to a variety of factors that are more fully detailed under the caption Risk Factors in our filings with the SEC, including our quarterly report on Form 10-Q for the quarter ended September 30, 2019 to be filed with the SEC later today. Any forward-looking statements made on this call speak only as of today's date, Tuesday, November 12, 2019, and we disclaim any obligation to update such statements to reflect events or circumstances that occur after today's call except as required by law.

I'd like to highlight to participants that the call is being recorded. We are making it available to investors and the media via webcast, and a replay will be available on our website in the Investor Relations section shortly following the conclusion of the call. Additionally, it is the property of PolarityTE, and any redistribution, retransmission or rebroadcast of the call in any form without PolarityTE's expressed written consent is strictly prohibited.

I would now like to turn the call over to David Seaburg, President.

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David B. Seaburg, PolarityTE, Inc. - President & Member of Office of Chief Executive [3]

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Thanks, Rich. Good afternoon, everyone, and thanks for joining us. This has been an exciting and transformative quarter for PolarityTE. On our last quarter's call, we identified 3 strategic priorities for the company, namely, the commercialization of SkinTE, the prioritization of our pipeline and fiscal discipline. Today's call, we will focus on the progress we made during the quarter to execute on those priorities.

After my opening remarks and commercial update, our Chief Operating Officer, Richard Hague, will provide details on our R&D and clinical trial efforts; followed by Paul Mann, our Chief Financial Officer, who will review PolarityTE's third quarter financial highlights. I will then return to open the call up for questions.

Let's move on to commercial. As we've mentioned during last quarter's call, the Office of the Chief Executive defined and targeted 3 areas of focus, with the commercialization of SkinTE being our #1 priority. We successfully executed on the commercial strategies that we identified during our second quarter call, which led to our commercial success in third quarter.

Last quarter, we highlighted 4 key metrics by which to measure our success. We are pleased to provide the following quarter-to-quarter results in those metrics: SkinTE revenue grew 66% from $504,000 to $839,000; paid cases grew 76% from 46 to 81; repeat paid users grew 64% from 14 to 23; and new paid users grew 71% from 14 to 24. We believe the 3 biggest contributors to these results was increased market awareness, wound-specific product positioning and a productivity increase across our sales organization based on optimized hiring and training. We are encouraged by the trajectory and consistency of the increases across these 4 categories. Although we will say that -- and we said this on other calls, there may be in a quarter variability with those metrics.

As we move forward, we continue to focus on the following: one, driving clinical evidence through our 2 ongoing multicenter randomized clinical trials for diabetic foot ulcers and venous leg ulcers; two, increased market awareness, penetration and adoption in trauma and surgical wounds through conferences, our newly implemented speakers bureau program and the generation of clinical data; three, providing the sales and clinical teams with more intensive and focused training, field materials and targeted sales strategies; and finally, four, engaging with thought leaders and clinical advisers to optimize SkinTE in large burns.

It is this strategy, in combination with the hard work from the entire organization, that helped to drive some of the commercial traction we witnessed in the third quarter. And we look forward to building upon that growth as we mature as an organization. While there is considerable work to do, our #1 focus remains on the adoption and growth of SkinTE. We are pleased with our third quarter progress.

And now I'd like to turn the call over to Richard Hague to provide an update on our clinical trials and R&D activities. Richard?

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Richard Hague, PolarityTE, Inc. - COO [4]

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Thank you, David, and good afternoon, everyone. As David mentioned, we recognize that the generation of meaningful clinical data is key to the broad adoption of SkinTE. To that end, I would like to update you on our progress based on specific wound types.

In chronic wounds, as referenced in Slide 4, we have previously reported the positive data from our DFU and VLU pilot studies and are expecting publication of these data in the very near future. Our DFU randomized controlled trial is actively enrolling across 14 sites, and we anticipate the readout of interim data in late Q1 2020. It is our feeling that the combination of the published pilot data and the interim RCT data will allow us to have meaningful dialogue related to SkinTE reimbursement with key payers during the first half of 2020. Our VLU RCT is also ongoing, and we expect to hit interim enrollment late in the second half of 2020.

Another area of focus and of high interest in the chronic wound space is with pressure ulcers. Early results with SkinTE in this challenging population have been very encouraging. And as a result, we are in discussions with key centers to generate data for this important and hard-to-heal patient population. We hope to initiate this study in the first half of 2020.

Specific to trauma wounds, in order to further enhance our value proposition in this space, as shown on Slide 5, we expect to initiate a 20-patient lower extremity prospective traumatic wound study in early 2020.

In burns, we have concluded our head-to-head trial. We had initially anticipated presenting this positive interim data by year-end 2019. However, due to the scheduling conflicts on the part of the investigators, we are now targeting the data to be presented at the March 2020 American Burn Association Meeting. And to fine-tune and accelerate our strategy in large burns, we recently created a SkinTE advisory board made up of highly respected KOLs from top burn centers in the country. The feedback from our initial meeting was very informative and has helped to fine-tune the protocol for our perspective burn study, which we anticipate will kick off in the first half of 2020.

I would now like to transition to our research and development activities. As stated earlier, accelerating adoption and growth of SkinTE remains our #1 priority. As highlighted in Slide 6, we have prioritized 2 projects that we believe will assist in achieving this goal. The first is SkinTE cryo. We have substantiated our ability to cryopreserve SkinTE final product for up to 3 months and are currently working to extend that out to 6 and possibly 12 months. SkinTE cryo would allow us to offer multiple deployments from 1 original harvest. We anticipate this being a valuable offering in several instances: first, in patients susceptible to multiple chronic wounds; second, in patients that providers suspect might require a second deployment of SkinTE due to past noncompliance with rehab protocols; and third, in large wounds where, due to wound location or patient circumstances, a provider may prefer a stage deployment regimen. We expect SkinTE cryo to be available in the mid-2020 time frame and plan to finalize our business model and launch plan in the coming months.

Second is the development of a SkinTE point-of-care device that could potentially allow for the processing and deployment of SkinTE immediately following the initial harvest at the point of care. While in early stages, we have made progress in moving towards a development of working prototypes, and we look forward to reporting future updates on this project in the coming quarters. Lastly, we have an active development project underway related to our unique bioactive dressing platform.

And finally, we remain encouraged by the SkinTE scientific evidence that continues to build in the awards that SkinTE has received. I won't read through the entire list, but as you can see in Slide #7, we are proud that our work has been recognized in multiple occasions over the last few months.

In summary, I am very encouraged with the progress we are making on the clinical trials and R&D front. We remain confident that the successful execution of our strategy in these areas will significantly enhance future shareholder value.

Now I'd like to turn the call over to Paul Mann for a financial update.

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Paul Elliot Mann, PolarityTE, Inc. - CFO [5]

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Thank you, Richard, and good afternoon, everyone. For the third quarter of 2019, we reported approximately $1.4 million in total revenues, which includes revenues from SkinTE, which we refer to as products in our 10-Q; and our contract service organization, which we refer to as services in the 10-Q.

Revenues from products during the quarter were approximately $839,000, up approximately 66% versus Q2. Revenues from services were approximately $556,000, down approximately 32% versus Q2. It's important to note that our contract research organization continues to run at full capacity. However, we are currently prioritizing the facility to advance our own pipeline, and while then, cannot work for external customers.

For the third quarter 2019, cash used in operations was $11.86 million, approximately $3.95 million per month, a 3% improvement relative to the cash used in operations during the second quarter and a 28% improvement relative to the cash used in the first quarter.

We finished the third quarter of 2019 with approximately $45.9 million of cash, cash equivalents and short-term investments on our balance sheet. As mentioned, cash used in operations during the third quarter was $11.86 million, and we believe there is sufficient liquidity on the balance sheet to fund our operations beyond the next 12 months.

Please turn to Slide 9. As we've previously mentioned, one of the 3 key mandates of the OCE is fiscal discipline. We remain very focused on this initiative. Since the OCE took control of the management of this company in June, we've implemented a significant reduction in cash manufacturing costs. Combined with improved volumes, this is translating into gross margin improvements, and we achieved a 62% gross margin for our products division in the third quarter.

As you will see from incremental gross margins achieved between the second and third quarter, our current average wound size, approximately $0.90 of every incremental dollar of revenue, flows through the gross profit. We believe this is highly unique to the wound care industry, which typically operates with a 50% to 60% gross margin. Our aim has always been to create a company that provides the best patient outcomes with the best economics for providers and payers whilst achieving the highest margin for shareholders.

We will continue to remain very focused on costs, gross margins as a function of product size, and we also anticipate reductions in cash -- manufacturing costs during the next 6 months. In addition to improvements in cash manufacturing costs, we've also cut headcount and expenditure in areas of the business such as software engineering and design technologies. These are not core competencies for a biotech company, and the OCE decided that outsourcing these roles have a significant benefit on our cash burn while having little to 0 impact on the customer's experience and our growth.

I'll close by saying that we remain steadfastly focused on fiscal discipline and the commercialization of SkinTE, and we are encouraged by the initial progress we have made to manage costs in the third quarter.

I'd now like to turn the call back over to David Seaburg for some concluding remarks.

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David B. Seaburg, PolarityTE, Inc. - President & Member of Office of Chief Executive [6]

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Thank you, Paul. I'd like to quickly address the recent decision of our Board of Directors to implement a shareholders' rights agreement. As stated in our press release last week, the plan was put into place to ensure that all PolarityTE's stakeholders receive fair treatment in any potential transaction. It allows our Board and management adequate time to make informed strategic decisions. Importantly, the rights agreement is not intended to deter offers that are fair and otherwise in the best interest of our shareholders. Beyond the press release and 8-K issued last week and these remarks, we have nothing further to add regarding the shareholders rights agreement at this time.

And in conclusion, I'd say based on our third quarter results and what was presented here today, we are clearly making progress executing the strategies we put in place. We recognize the SkinTE brand is having tremendous value. With our growing body of successful patient outcomes, strong scientific evidence and numerous industry awards and recognitions, the wound care industry has taken notice. We believe SkinTE will continue to deliver positive outcomes for patients and has the potential to provide considerable savings to payers and providers while generating significant returns for shareholders.

Thank you for joining our call today. I'd like now to open up the call for Q&A. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) And first, from Oppenheimer, we'll hear from Kevin DeGeeter.

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Kevin Michael DeGeeter, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [2]

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Definitely congrats. Some good progress here. Can you just comment with regard to the fourth quarter? Recognizing it's early in commercial adoption, but any sense as to whether there's some seasonality to end-market demand for SkinTE in terms of your current users of the product?

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Richard Hague, PolarityTE, Inc. - COO [3]

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Kevin, this is Richard Hague. Thanks for the question. Yes, you can see that for -- certainly, this time of the year with Thanksgiving and Christmas and New Year's, that can come into play and impact the amount of not only selling days, if you will, but also for treatment visits by patients. So that can come into play in Q4 for sure.

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Kevin Michael DeGeeter, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [4]

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And turning to some of the life cycle management initiatives you described. With regard to the cryo product that you talked about potentially having an update in 2020. Can you just kind of walk us through what the incremental steps in terms of what might be required and what we might or might not see in terms of data on that next generation products prior to a potential commercial introduction?

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Richard Hague, PolarityTE, Inc. - COO [5]

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Sure. It's really not what we would describe as next generation. It really is a matter of just capabilities of being able to validate the sale viability in terms of the cryopreservation process. We have been able to do that for a 3-month period, and we're literally in the process of doing that and believe we can do it for 6 months and potentially longer. We are also upgrading our facilities in order to have the right equipment in place to be able to handle and store the product. And we're getting that online early next year. So as we finalize the validation process and the storage, we'll work through in the interim the launch plans. So it's coming together nicely, and we expect that we can -- to get this product out there, as I said, midyear, and we feel like it's got -- has some very nice upside potential.

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Kevin Michael DeGeeter, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [6]

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And then maybe just one more for me then I'll get back in the queue. Can you just comment on the current size of the commercial sales force and whether or not there are any open territories or whether you are, in fact, fully staffed in terms of the field sales force?

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Richard Hague, PolarityTE, Inc. - COO [7]

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Sure. So right now we have approximately 20 salespeople and an additional 10 clinical science folks that support the sales team. Certainly, we believe that we can expand the sales force more aggressively to cover open territories. But in terms of having a full staff based on what our goals and objectives are for this period of time, we're fully staffed. So we feel good about that in terms of the coverage that we have in key centers. But we certainly believe there's an opportunity going forward to look at expansion.

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Operator [8]

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And moving on, from Cantor Fitzgerald, we have Kristen Kluska.

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Kristen Brianne Kluska, Cantor Fitzgerald & Co., Research Division - Analyst [9]

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Congrats on the progress this quarter. Are you able to comment on some of the specific metrics outside of users and revenue that you have observed since restructuring about half of your sales team over the summer? So for example, maybe the average time you're getting the product used at these centers for a trial?

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David B. Seaburg, PolarityTE, Inc. - President & Member of Office of Chief Executive [10]

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Sure, Kristen. It's David Seaburg. I'll start by saying like from the beginning of Q2 through Q3, what we've observed is the new reps hired in the platform, there was an improvement by roughly 1 month for their first case. For our seasoned reps, the overall case volume between that same time period have improved by roughly 87%. So all of this is really driven by educational and certain training programs that we've put into place. We've been utilizing a lot of data to identify appropriate targets. And also marketing, our marketing effort has picked up dramatically, and we absolutely have much more awareness with the markets. So I think the combination of all that has really helped us drive the metrics this past quarter. And we're still very, very steadfast about making sure that we continue to push that process.

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Kristen Brianne Kluska, Cantor Fitzgerald & Co., Research Division - Analyst [11]

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Great. And then for the repeat users of the product, can you talk about how SkinTE is changing their treatment regimens? Are they using SkinTE in situations where other therapies have failed or using it as a first-line product? Or is it a mix of the 2?

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Richard Hague, PolarityTE, Inc. - COO [12]

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Yes. This is Richard. That's a great question. It's really a mix of the 2. I think early in the trial process, they actually throw SkinTE at the kitchen sink, so to speak, patients that have failed other procedures, difficult, hard-to-heal patients. And when they see positive outcomes from those types of patients, then obviously, that opens up their thought process to using it more broadly. So we're seeing a mix at this point.

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Operator [13]

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(Operator Instructions) We'll move onto Tyler Van Buren with Piper Jaffray.

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Tyler Martin Van Buren, Piper Jaffray Companies, Research Division - Principal & Senior Biotech Analyst [14]

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I just want to ask about the mix of acute, chronic and burn wounds this quarter. Last quarter, based upon the numbers, looks like there was about $11,000 of paid case. It's pretty similar maybe closer to $10,000 this quarter. I guess that indicates that you're getting a pretty even mix between acute and chronic wounds. So I guess, would you agree with that? Were there -- was there even a single paid case of a burn wound? And I guess how do you see that changing in the coming quarters?

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Richard Hague, PolarityTE, Inc. - COO [15]

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Yes. Again, this is Richard. Yes. There were -- we did treat some burn patients in this quarter. Obviously, they can vary by size. Sometimes people perceive burns to always be large, but of course, they can be small as well. And I'd say the mix is pretty consistent as you described right now. It's -- from a number of cases treated, chronic wound is still the primary application. But we're getting some nice uptake in trauma, and we're seeing -- that revenue number would increase obviously as those sizes increase. So I think the mix is consistent as you described.

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Tyler Martin Van Buren, Piper Jaffray Companies, Research Division - Principal & Senior Biotech Analyst [16]

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Can you give us a sense of how big those smaller burn wounds are?

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Richard Hague, PolarityTE, Inc. - COO [17]

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Well, they vary. I don't know the numbers off the top of my head. I mean we track burns as a general category, and these sizes can vary. So 1 large wound can skew the average size considerably.

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Tyler Martin Van Buren, Piper Jaffray Companies, Research Division - Principal & Senior Biotech Analyst [18]

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Sure. Sure. Okay. And then with respect to the burn trial, you mentioned the results were positive. I know we have to wait for that full data readout. But since you said they were positive, can you give us any color at all on the results for that trial?

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Richard Hague, PolarityTE, Inc. - COO [19]

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Yes. So I'd probably would refer that question to Dr. Nik Sopko, who is also on the line remotely. Nik, can you respond to that, please?

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Nikolai Sopko, PolarityTE, Inc. - Chief Scientific Officer and VP of R&D [20]

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Yes. Absolutely. And as we mentioned, we plan on having a full readout in March. But taking a look at what we know now, the things we're really concerned with, of course, are safety and things like graft take. And with our current understanding of the data, that was very promising and encouraging, and hence, we made the decision to move forward in the larger prospective trial.

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Operator [21]

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And moving on, from H.C. Wainwright, we have Sean Lee.

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Sean Lee, H.C. Wainwright & Co, LLC, Research Division - Equity Research Associate [22]

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My first question is on the SkinTE cryo. Could you provide a little bit more color on the product? How is this differentiated from SkinTE? What kind of wounds do you think it's probably the best for, stuff like that?

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Richard Hague, PolarityTE, Inc. - COO [23]

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Yes. It's actually the exact same product. Simply what happens is when the provider sends in a harvest, we process that harvest as we would normally. However, we're able to hold aside a certain portion of that product, that final product, and that's the product that we cryopreserve. So upon the providers' need for additional product, we can thaw that product down and eventually ship that product out so that the provider does not -- and the patient does not have to go through another harvest. But it's basically the same product. It simply is a -- it's the convenience aspect that allows the physician to treat the same patient more than once without having to harvest more than once.

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Sean Lee, H.C. Wainwright & Co, LLC, Research Division - Equity Research Associate [24]

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I see. Just as a follow-up on that. My understanding -- okay, so how many times can a patient be treated then from each harvest? Or is it because you've been able to improve the yield of the product? Or how is this managed? I'm just wondering.

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Richard Hague, PolarityTE, Inc. - COO [25]

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Dr. Sopko, would you like to respond to that?

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Nikolai Sopko, PolarityTE, Inc. - Chief Scientific Officer and VP of R&D [26]

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Yes, absolutely. Regarding the number of times, because we're able to treat large wounds with a pretty small sample of skin, there's often plenty of skin available to harvest. And so in this case, especially if you're going to anticipate, let's say, a large burn, you can take a bit of a larger -- slightly larger harvest than you normally would and then be able to freeze down the parts that you don't need immediately.

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Sean Lee, H.C. Wainwright & Co, LLC, Research Division - Equity Research Associate [27]

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I see. My second question is on the burn studies. You mentioned that the first study is completed with the full readout expected next year, and you plan to do a larger prospective study as well. So could you tell -- walk us a little bit on the design -- what's the design for the larger study? And what are the -- are there any differences during that and the completed one?

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David B. Seaburg, PolarityTE, Inc. - President & Member of Office of Chief Executive [28]

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Nik Sopko, you want to answer that?

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Nikolai Sopko, PolarityTE, Inc. - Chief Scientific Officer and VP of R&D [29]

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Yes, absolutely. The key differences between the different trials, with that initial head-to-head trial, we called it -- it was one of our first trials and it was very conservative, and we are treating a relatively small area with the SkinTE. And so this next trial will be a single-arm, multi-centered, open-label trial. And that's -- because there's such good historical data on burns, we don't necessarily need a direct comparator. And -- but the big difference will be we'll be treating much larger areas with the SkinTE and collecting the high-quality data, things such as patient outcomes and as such.

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Operator [30]

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And next, we'll move to -- back to a follow-up from Kevin DeGeeter with Oppenheimer.

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Kevin Michael DeGeeter, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [31]

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Just one follow-up for me. Can you provide us an update with regard to interaction with the USPTO with regards to patent filings and sort of how to think about a general time line for just some sort potential decisions there?

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David B. Seaburg, PolarityTE, Inc. - President & Member of Office of Chief Executive [32]

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Sure. We have Jen Burdman, our IP Attorney here right now actually to answer those questions. Jen?

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Jennifer Burdman, PolarityTE, Inc. - Chief Intellectual Property Officer & Deputy General Counsel [33]

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Thanks so much for the question. The IP program is going according to plan. The patent applications that have been filed with the U.S. Patent and Trademark Office remain pending. Really can't give you a time line for when they would be granted. A lot of that has to do with the USPTO. But nothing has been abandoned, and nothing has been terminally rejected.

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Operator [34]

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Okay. And now I'll turn the floor back to Richard Haerle, who, I believe, has a question that was submitted via the webcast.

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Rich Haerle, PolarityTE, Inc. - VP of IR & Strategy [35]

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Yes. Thanks, operator. So the question relates, "To what metrics do you plan on using going forward to measure your success?" And I'll turn that over to David.

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David B. Seaburg, PolarityTE, Inc. - President & Member of Office of Chief Executive [36]

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Yes. I mean I -- we identified, and I believe very clearly, last quarter when we laid out the metrics that we believe were the most valuable metrics to really measure our success. We did talk about it again in this presentation. Paid cases, repeat paid users and new paid users, and obviously, revenue are the most important drivers in our opinion. I think we were pretty clear on the metrics that we had in place prior to this management team taking over. We're not incredibly helpful to investors to really kind of paint a path for them to understand the traction that we have in the marketplace, so we decided to make sure that we stuck with some clearer metrics that gave investors much more clarity around that. So we do intend to stick with those metrics moving forward.

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Operator [37]

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All right. And it looks like we also do have a follow-up question from Kristen Kluska at Cantor Fitzgerald.

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Kristen Brianne Kluska, Cantor Fitzgerald & Co., Research Division - Analyst [38]

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If I may just squeeze in one last question. So for the second stage of your adoption letter, which types of cases do you see SkinTE mostly being used for the product evaluation phase. And because it's the first time they're using, how do you think this influences how that treating physician or surgeon could use for future cases once approved?

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Richard Hague, PolarityTE, Inc. - COO [39]

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Yes. Thank you for that question. It really varies by the point of care and the specialist. So if you think of the outpatient setting where the majority of patients are chronic wound patients, it's generally the recalcitrant patients that is initially treated with SkinTE or a patient that might have a deep wound down to underlying structures. And as I said earlier, it's the approach that the first-time user wants to try SkinTE on some of the most difficult cases to see how it will respond there. And when they respond -- when those patients respond positively, that leads to broader use. And then that can be used throughout a treatment algorithm for a physician in the chronic wound space.

In the traumatic wound space, it really varies considerably because you can see a variety of different types of wounds, whether they be accidents or actually surgical reconstruction. So really, the first level of use is tied to a particular doctor and the type of patients they happen to see at a given point in time when they are in communication with us. So that can really vary. But again, it's the same approach. They are open to utilizing SkinTE because there's not a lot of great choices for those types of patients. And when they see that type of success at least in more than 1 patient, we have seen those physicians then broaden their usage and the types of patients that they're going to apply SkinTE to. So it really does vary by specialty and by point of care. But it's a great question and one that we're excited about in terms of the adoption accelerating, especially as reflected by our number of repeat users.

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Operator [40]

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All right. Ladies and gentlemen, that will conclude the question-and-answer portion of today's call and bring us to a close of the PolarityTE Third Quarter 2019 Earnings Call. Once again, we do thank you all for joining us. That concludes the program today. You may now disconnect.