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Edited Transcript of IPD.AX earnings conference call or presentation 29-Oct-19 10:15pm GMT

Q1 2020 ImpediMed Ltd Earnings Call

Eight Mile Plains,Qld Nov 10, 2019 (Thomson StreetEvents) -- Edited Transcript of ImpediMed Ltd earnings conference call or presentation Tuesday, October 29, 2019 at 10:15:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Morten Vigeland

ImpediMed Limited - CFO

* Richard Carreon

ImpediMed Limited - MD, CEO, President & Executive Director

* Walton A. Taylor

ImpediMed Limited - Medical Director

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Conference Call Participants

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* Matthijs Smith

Canaccord Genuity Corp., Research Division - Senior Analyst

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Presentation

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Operator [1]

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Thank you for standing by, and welcome to the ImpediMed Limited quarterly investor conference call. (Operator Instructions)

I would now like to hand the conference over to Mr. Richard Carreon, Managing Director. Please go ahead.

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [2]

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Thank you very much. Good morning, everyone, and thank you for joining us today. We're hosting this conference call to discuss the 4C for the second fiscal year quarter ending 31 December 2018. Now the 4C was lodged this morning with the ASX and still isn't posted. So I'm going to reverse the order of how we're going to do this until it gets posted. So...

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Morten Vigeland, ImpediMed Limited - CFO [3]

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[It's posted].

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [4]

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It is posted. Okay. So we'll go with the original plan. Thank you, Morten. I apologize for the delay on the ASX this morning.

So we also lodged with the ASX yesterday morning a press release with an update on the pending presentation and publication of the interim event trial results. I'll be discussing information from both these filings during our call this morning.

Joining me on the call, as usual, is our CFO, Morten Vigeland; and a very special guest, Dr. Walton Taylor, President of the American Society of Breast Surgeons. He will be discussing the reasons why the society chose our interim trial results to be presented at their upcoming medical congress. And as we normally do, I'll take questions following my comments and those of Dr. Taylor's.

The financial results for the period ending 31 December were as follows. Our contracted revenue pipeline continues to grow at a very healthy pace, increasing to $7 million for the quarter. This is up 49% from the previous quarter, and the gross margins for this future contracted revenue remained steady at plus [98%]. The total contract value or the total value of the SOZO contracts we sold during the quarter came in at $2.7 million, and this was up 93% from the $1.4 million the previous quarter. So a significant increase. This was principally driven by a very strong calendar year-end sales.

A change to our business model from a capital-intensive one to a monthly subscription proved to be very advantageous during this period as a number of leading institutions used their year-end OpEx budgets to commit to 3-year contracts. In fact, SOZO units sold last quarter were higher than the previous 3 quarters combined. And since the majority of these sales came in during December, we will not begin to recognize the monthly subscription revenue until after we've completed the installations. This, of course, means we've exited the quarter with a very healthy installation pipeline. Today, more than 300 SOZO devices have been placed into the market.

Of particular note, since we launched SOZO 5 quarters ago, our churn has been 0. We have not lost a single account. Typical for subscription businesses in the medical device world, there is a 10% to 15% annual churn rate. And although we still plan on churn, it is notable that this is a key indicator of the market acceptance of the stickiness of our technology. The annual recurring revenue for SOZO contracts, so the revenue already scheduled to come in over the next 4 quarters, increased to $2.5 million, up 39% from the previous quarter.

Net operating cash outflow for the quarter was $4.9 million, up from $4.5 million in Q1, but down $0.7 million from the same period last year. This increase in cash outflows compared to last period is largely related to 2 items that were included in Q1, but not in Q2: receipt from the R&D tax credit in Q1 and annual STI payouts in Q1.

Cash receipts from customers for the quarter were $1.0 million, and cash on hand as of 31 December 2018 was $22.6 million. The Q2 quarter marked a milestone for ImpediMed. The quarterly revenue for SOZO surpassed our legacy revenue for the first time. SOZO revenue was $0.5 million of the $0.9 million in total medical revenue. This is significant for 2 reasons. First, it shows a growing adoption of SOZO in both new and converted customers. In terms of converting existing customers, we see this accelerating as now we have just over 40% of our old base using SOZO, and this is up from just over 25% last quarter.

In addition, the average number of devices placed in customers continues to increase. In the last several quarters, our increase in SOZO revenue has been largely offset by decreases in legacy revenue. We believe our overall medical revenue will begin to grow on a quarterly basis due to the increase in SOZO subscription revenue we expect from new and existing contracts going forward.

Another sign of our growing adoption is the number of patient tests conducted. To date, the number of patient tests has surpassed 25,000. Fueling this growth is both new placements as well as increased utilization in existing customers. More than 30% of the tests that I just mentioned were conducted in just this last quarter. 2 weeks ago, we announced a purchasing agreement with Ascension Health. Ascension Health is the largest non-profit health system in the U.S. with 151 hospitals. This agreement sets the price in an IT integration process on a national basis and keeps us from having to negotiate separate contracts for each opportunity. We see this as a positive endorsement of our technology and an opportunity to accelerate sales into this organization. We will keep the market informed of any initial sales.

Now let me provide you a quick update on heart failure. During the quarter, we announced first-patient enrollment in the 200-patient heart failure study. We've signed a number of new sites and continue to enroll patients into this study. The investigators continue to review data from their ongoing studies, and we expect to see further publications on the impact of our technology in this important market over the coming months.

Now let me move on to the PREVENT trial and our reimbursement strategy. As I said earlier, we have the President of the American Society of Breast Surgeons with us this morning, Dr. Walton Taylor. Please note that Dr. Taylor has graciously joined the call between seeing patients. I will discuss our reimbursement strategy following his comments. Operator, would you please unmute Dr. Taylor's phone and add him to the conference line?

Dr. Taylor, thank you for taking the time out of your busy schedule to join us this morning. I'll turn the conference call over to you now.

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Walton A. Taylor, ImpediMed Limited - Medical Director [5]

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Okay. With that, I'll just talk a little bit about the American Society of Breast Surgeons and about an upcoming study that's coming out. And so who we are. We're about 3,500 breast surgeons in the United States and around the world. We're the largest collection of breast surgeons in the world. I'm their president this year, and we've got our annual meeting, and your PREVENT trial is being presented at it.

There's some level of controversy. We have embargoed the data, so your -- the publication around that is not coming out until after the meeting. We're not discussing the data. It's available in some very limited circumstances with nondisclosures, which we've given the company the ability to do to take out to some select payers and other people to look at. But we think the data is very good, and we think that it's something we were excited about and want to present at the podium and then release and publish at that time.

So with this first really very large prospect of randomized trial, that will be presented at our podium this year and then published in the May journal. So we've actually asked the company, and they've agreed to let that go out following the meeting, so we can sit there and have that come out after our meeting. We're excited because this meeting will be also focusing a keynote speaker, Kathy Bates, who has lymphedema. And that is one of our sort of themes of this, survivorship, the serious nature of lymphedema and then also some exciting data around the PREVENT trial and where that's going. So you'll be able to see more of that coming to you in May. And we're at -- well, in May, the very first week in May when that's released and then when the publication comes out. So that's where that's going and that's why that's not out there to you right now. The company's agreed to do that with us so we can get that out in a way that's meaningful and actually gets it out there. We felt that doing it in a haphazard way or in a piecemeal way wouldn't get our members or society to see it in a way they need to see it. If we released it in a very coordinated and meaningful way and did stuff together, we could raise awareness and get a more uniform understanding of the disease and how it could be managed or affected much more appropriately. So -- and we want to thank the company for that. And so you'll see that coming along.

That sort of covers the main point of why I'm here. Again, I can be on the call a little bit later if there are questions. And Rick, if there's anything else you'd like me address, feel free to mention it.

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [6]

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Yes, Walt. I guess the one thing I would say is the key here from a controversy standpoint, I think the controversy is fairly simple. It's that everybody is excited about seeing the data. Dr. Ridner, the principal investigator, has said this is medically meaningful and practice-changing. And I guess the only controversy is that we're going to have to wait about 90 days before it becomes public. But otherwise, from everything else, this is a very exciting time.

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Walton A. Taylor, ImpediMed Limited - Medical Director [7]

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I'll say this, and again, I'm bound to not release anything as is everybody else. All of the -- the company is going to be able to sit there and take this, I believe, to select payers if they signed nondisclosures to sit there and not be held back in that realm. But the reality is with data like this, and again, please don't go publish this out there or any place because this, again, will take away from the hope of this. And that is if you deliver a message well in a coordinated fashion with a publication after a talk at a major meeting, people actually hear the message. You can get the bang for the buck, and people hear it. If you trickle it out, you don't get the message out. It just doesn't happen. It doesn't get the effect.

And so actually, Henry Kuerer, who actually if you -- is who -- at MD Anderson, he's a full Professor at MD Anderson and actually wrote the textbook for breast cancer and breast cancer management. A great guy. He actually was the one that, independently of all of us, asked to do this because he thought that would get -- he loved the trial, thought it was really well done and thought that would be able to get the most impact around the country and around the world if this was done. He had no love of the company, no love of the disease, no love of anything, but after reading the study really did and felt like that's where he could get the real push.

And so again, please don't feel free to put that out there because, again, you'll destroy the value of embargoing the data until we get it out there, but that's where you really see the ability to affect these people's lives. Again, the whole goal of this is to improve the lives of patients. People don't realize they can make a difference and don't try to make a difference. But if you can get out there and get a lot of fanfare around it and get a lot of press around it and make it a big deal, sure, it's great for the company and we're all happy for that for all of the people that are on this phone call. But on my side, we're really happy for all the patients who actually get to go on and not be debilitated, the patients who get to live normal lives, not become crippled, not become devastated by a horrible complication. So in our world, if this goes off well, we actually get to affect people's lives and have them have great outcomes and not become devastated by a preventable complication.

So please, again, remember, we're doing this not just for the company. We're really not doing this for the company at all. We're doing it for all these patients who have preventable complications that if this goes off well, they don't have to have. So again, please remember, we're doing this for a really legitimate reason of making people's lives better.

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [8]

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Perfect. Well, thank you, Dr. Taylor. We appreciate it.

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Walton A. Taylor, ImpediMed Limited - Medical Director [9]

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[You're welcome].

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [10]

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Okay. Thank you.

I just want to say from a company standpoint that we are honored that the PREVENT trial was chosen by the ASBS to be part of their scientific podium session at their May meeting. Now this is a significant achievement that few companies ever are able to achieve. This abstract was one of hundreds that were sent in. And it was chosen, one, because of the scientific nature of it; but two, of the trial design. And to my knowledge, we're the only diagnostic technology chosen for an oral presentation at a surgical meeting. So we're very proud of the study. We're also very proud of the fact that the publication will come out in the prestigious Annals of Surgical Oncology the following day, following the presentation, along with the press release from the ASBS. So again, very exciting time. We're very honored about this. This is a very, very big deal.

So now we've stated that once the PREVENT trial was released, we would aggressively pursue private pay reimbursement. The manuscript has been accepted, as you know, for publication, and we just discussed, it will be part of a key podium presentation. This is great news for the technology. So what does this mean for the aggressive reimbursement strategy we talked about during our October roadshow? Well, the ASBS, the Annals of Surgical Oncology and the principal investigator of the PREVENT trial have all agreed to release the embargo manuscript under a nondisclosure agreement to private payers and to the NCCN even though we, as a company, don't have access to the manuscript. Now in the United States, this is common practice to allow payers to review data from a clinical trial that has been accepted for publication, but has not yet been made public to ensure it does not negatively impact decisions that may otherwise be beneficial to patients and their outcomes.

The strategy, from hereon, is to do exactly what we said before. So let me reinforce that. First of all, we set out more than a year ago to start to build a footprint in top cancer centers. And that has paid off, and it will continue to pay off. But let me tell you, as soon as we remain aware of how this is going to be handled by the society, by the publication and by the PI, we literally made several phone calls. And these key players that we contacted and key institutions immediately helped us start to arrange meetings with several insurance companies. And as such, we've already secured agreements from 3 payers for meetings once we finalize the key opinion leader schedules for these meetings. We'll then be able to move on and confirm the presentation dates.

Now based on historical events, as we've always said this, payers will typically provide you a meeting within 90 days of your requests and provide you an answer within 90 days from your meeting date. We also stated in October that we would apply for the NCCN guidelines and request a technology assessment from a major payer. Both of these initiatives are well underway, and we expect to submit applications to both of these institutions in the coming days. So we said we were going to be aggressive, and we have been, and we're very pleased with how fast we're able to move with this opportunity.

So in summary, we made some great progress this last quarter both in our cancer and heart failure programs. Our clinical evidence is stronger than ever and is now being recognized both in the medical and scientific communities. We are very pleased with the strong performance commercially from SOZO, having placed a record number of devices in Q2. We'll continue to build our SOZO customer base in the coming quarters, and we would expect this to accelerate once we start seeing payments from private payers.

So Reanne, I'd like to now open it up for questions from the audience.

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Questions and Answers

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Operator [1]

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(Operator Instructions) First question comes from Matthijs Smith from Canaccord.

Sorry, we've just lost him. Let's go to [Ellyse]. She's on the line. We'll get Matthijs back in a second.

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Unidentified Analyst, [2]

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Congrats on a great quarter. Just a quick question around the guideline inclusion, specifically. When did the NCCN get access to the publication? And since you guys haven't seen the publication itself, what's the extent of communication and discussions you're having with both the NCCN and payers, if you're not able to answer specific questions for them?

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [3]

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Yes. Very good. So let me walk you through the 2 parts of this question. First of all, the NCCN will accept an application and the publication itself will be sent directly from the principal investigator under a nondisclosure agreement to the NCCN where they'll consider all of the information at one time. So our application will have a placeholder for that. We will not attach the paper because we won't have access to it, and they will just attach it as part of the overall application. Now understand, we do know the top line results. Obviously, the very, very positive top line results, as we said last year, and the principal investigator in the WebEx talked about the fact that this was practice-changing. So we do know the top line results. So we are able to fill in portions of the application just based on that information.

The hard facts with all the statistical information is what's being put in the paper. So that's with the NCCN. So with the payers, the way the process works with the payers is that you prepare a presentation that goes to the payers with a summary of information, and you attach the pertinent -- the department studies. So for instance, the studies that we're currently looking at are 8 critical studies to include the PREVENT trial. We would send them 7 of the 8, again, with a placeholder for the 8, we would contact the principal investigator of which once she received assurances of confidentiality, then she would send that paper to the appropriate person at either that -- at whatever insurance company we're talking with.

So again, this is something that is pretty standard in the U.S. And there's just certain procedures that ensure its confidentiality. So when we make our presentation during these meetings, the insurance companies never delve deep into the clinical data. They'll do that on their own. You just have to submit what you believe are the most important papers. And again, we've identified 8 papers that we think are critically important. One of the papers, our PREVENT trial, was a level 1 evidence and the other 7 studies are level 2b evidence study. So these are very, very high-value studies. Two of which have come out just in the last recent months, one from Macquarie and one from our most prestigious cancer center in the U.S., MD Anderson. So again, we're just following what has already been laid out from a historical precedence of other companies in the same situation, [Ellyse].

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Unidentified Analyst, [4]

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Sure. That makes sense. So any ideas then around the time lines for that NCCN and private payer submissions?

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [5]

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No. I think the time line with the private payers are -- we've already requested meetings with 3 private payers through our key contacts. They've agreed to meet with us. Now what we have to do is we have to submit the names of the key opinion leaders to them, arrange everybody's schedule. So again, here's what happens with one in particular that we just contacted. They have 5 medical directors spread out over 5 states in the U.S., and they have to find a time when those 5 medical directors are physically together for a meeting, and then we'll get our key opinion leaders. And so right now, it's marrying up time. So again, within 90 days, we'll have our meetings. And within 90 days, we'll see the results from the private payers.

For the NCCN, it's a matter of sending in the application and waiting for a response. I can't tell you how long that will take. There is no set precedence. They update the NCCN guidelines any number of times a year. They've been done twice a year. We've seen up to 6 times a year, they update it. So again, I couldn't tell you on that. I can just tell you that we've already submitted one application for a change to the protocol that was submitted by Dr. Sheila Ridner out of Vanderbilt. And then the next application going in, we'll use the PREVENT trial for a request of putting our technology, bioimpedance spectroscopy, in the guidelines. So we're hoping again that we get institutions to make that application versus it coming from the manufacturer ourself. It's just a more powerful way of getting an application before the NCCN.

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Unidentified Analyst, [6]

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Great. And then I guess you'll announce to the market once that submission has been made?

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [7]

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Not when the submissions have been made. We'll announce to the market any decisions we hear coming from them because, again, like I said earlier in my statement, we believe that in the coming days, we'll have those applications going forward to the NCCN and then to the technical review by a major payer.

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Operator [8]

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Your next question comes from Matthijs Smith from Canaccord.

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Matthijs Smith, Canaccord Genuity Corp., Research Division - Senior Analyst [9]

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Rick and Morten, I think I'm here this time. Can you hear me?

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [10]

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I'm hearing you. I don't know what happened. I -- sorry about that, Matthijs.

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Matthijs Smith, Canaccord Genuity Corp., Research Division - Senior Analyst [11]

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That's okay. I won't take it personally. First -- my first question is -- you provide some very encouraging numbers around all the past metrics for SOZO, but the one number that seems to be missing, and I may have missed it, is just the basic revenue line. Are you able to provide what the revenue was for this quarter and just possibly break it down in terms of device sales, subscription sales, legacy for U400 and also test and measurement?

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Morten Vigeland, ImpediMed Limited - CFO [12]

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Sure, Matthijs. So obviously, this will be part of our half year report. But I think Rick mentioned it in his notes that medical revenue for the quarter was $0.9 million, of which $0.5 million was -- of that $0.5 million was SOZO revenue and $0.4 million was from legacy devices. We did not include any revenue from test and measurement for this quarter as we exited that business early October.

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Matthijs Smith, Canaccord Genuity Corp., Research Division - Senior Analyst [13]

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Sorry? Sorry, there's a plane just going. So SOZO revenue was $0.5 million. How much of that was device and how much of that was subscription?

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Morten Vigeland, ImpediMed Limited - CFO [14]

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So device revenues of that was $0.2 million, and the subscription in the SaaS model was $0.3 million.

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Matthijs Smith, Canaccord Genuity Corp., Research Division - Senior Analyst [15]

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Okay. That's fine.

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Morten Vigeland, ImpediMed Limited - CFO [16]

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If you look at it over -- so if you look at it over the last 6 quarters on the revenue line that, in my view, matters to most, which is the SaaS subscription revenue line, we've had increase quarter-over-quarter for the last 6 quarters now.

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Matthijs Smith, Canaccord Genuity Corp., Research Division - Senior Analyst [17]

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Okay. That's very useful. The second thing is in terms of Ascension Health, do you see that that's going to lead to a much more rapid adoption across that health care network? Or I guess the question is to what extent is that decision by head office at Ascension Health, an endorsement that would encourage those hospitals to start using SOZO in their clinical practice?

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [18]

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Yes. Great question. So let's talk about Ascension Health for a moment. 151 hospitals spread across the United States, the largest nonprofit hospital. Typically, when you go to an Ascension hospital, and you don't have a corporate contract, you have to get clinical buyoff. And once you get clinical buyoff, then it's a one-off contract. And you have to go through all of the hassle and pain of trying to negotiate. And the question that keeps coming up is, why don't you have a contract, national contract? Have you been to corporate headquarters? And then you get into the IT process. Why do we have to do this? This is going to make a change to our systems. Do you have corporate support for this?

So we've eliminated all of that. We've been working on this for a very long time, getting corporate support for this. And I believe this will help accelerate it because we do have a number of Ascension hospitals who would like to go on the program, but also don't want to pioneer a stand-alone contract because they also -- this is also not good for them. So one, we believe the national contract, at least as an endorsement of your technology that they went through the entire process of evaluating it, assessing it and ensuring that it could help their patient population if it was adopted. Two, we had to go through a separate IT component where they had to take a look at our process, what changes we were going to make to their IT security issues, confidentiality of patient information and so forth. And once they bless all of that, they gave us a national contract number. We're currently working with a number of accounts, and we should be able to start making announcements this quarter. And we'll fill the market in on the initial sales. Obviously, not everyone. But on the initial sales, at least, I think the market will get a feel that we're gaining traction on this. But right now, we see this as very, very positive for the company and for our technology.

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Matthijs Smith, Canaccord Genuity Corp., Research Division - Senior Analyst [19]

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And sorry, just going back on when you're talking about the 83 new contracted SOZO devices. So out of the 317, those 83 would have made a relatively minor contribution, and we can expect to see that contribution coming in subsequent quarters. Is that correct?

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [20]

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Yes. Absolutely. I mean, I think the key thing, as I noted in my comments, was that this was the end of the calendar year, obviously. And hospitals that have extra OpEx or CapEx budgets like to spend that money. We were able to take advantage of that. And most of those units were sold in December. So obviously, they were not installed. And so we've exited the quarter, last quarter in December with a very strong and robust pipeline for installations.

And so we will see those revenue streams come on this quarter and next quarter. But yes, that had made very little impact last quarter. That's why we're very, very -- feeling very good about that crossover point of having more than 50% of the revenue finally being SOZO and then having this robust pipeline of installations. We really are feeling very, very bullish on the future here.

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Matthijs Smith, Canaccord Genuity Corp., Research Division - Senior Analyst [21]

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Okay. And my final question, just in relation to the embargoed data that is the first analysis of the PREVENT trial. So what, was it around 500 or 600 patients for 1 year. I guess to what extent does that embargo cover other elements of data from the trial, in particular, 2-year data from that same cohort and 1-year data from the entire patient pool that's in it because the partner -- both of those milestones or pickover points have been met. And I imagine it's just a matter of analysis between now and then. But obviously, those data sets could steal the thunder from the PREVENT paper.

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [22]

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Yes. Right now, that would have no impact. That would be a separate publication, that would be a separate data set. And so the embargoed data would have -- they wouldn't embargo those papers because, again, you would cut the data differently, right? It would be a different time period. And it would be different parameters. So no, it would have no impact on it. I think what's critical -- what's critically important about this and to understand about the embargoed data, again, it was chosen among hundreds of scientific papers.

And there's 2 things, and I think Dr. Taylor's spelled it out. The head of their Publications Committee, who was an Endowed's [Carer] at MD Anderson thought the paper -- that the trial was one of the best design trials he had ever seen. Two of the data was extraordinarily compelling, and it was medically meaningful and, what Sheila says, it is a game-changing or practice-changing technology. They felt it was important enough to announce it at a major scientific congress, but more importantly, to allow it to be sent out selectively for reimbursement issues.

So again, I think, one, it sends a very big message, I will tell you, to insurance company when they take possession of an embargoed study, right? Because they know that it's been carefully reviewed by a society. Two, it's gone through a high degree of scrutiny. And three, to be presented -- and right on the paper itself, the authors were required to put that the study had been embargoed for presentation at the American Society of Breast Surgeons. So there -- it's higher level of scrutiny.

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Matthijs Smith, Canaccord Genuity Corp., Research Division - Senior Analyst [23]

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No. It certainly was very clear from Dr. Taylor that it is the most impactful route. I guess the question was more about, if today, you had your 2-year data on all 1,100 patients, would you be able to put out headline data tomorrow around that? Or would that be seen as kind of still stealing the thunder a little bit?

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [24]

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No. No. They can -- they can put that out. If they have that data and it was accepted and they wanted to provide top line results, they could certainly put that out without fear of breaking the embargo on the current paper.

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Matthijs Smith, Canaccord Genuity Corp., Research Division - Senior Analyst [25]

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Okay. And is that likely to happen? Because just based on when we had the first year data, which had all the data cleaning that was involved, presumably that the full patient cohort could be put out before that would be announced at ASBS.

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [26]

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You know what, I -- at this point, I have not spoken with the principal investigator on that, Matthijs. I had been so focused on getting ready to execute the reimbursement. It's been my singular focus since the last roadshow. So as soon as I know anything, obviously, I'll let the market know.

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Operator [27]

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(Operator Instructions) Next question comes from [Ian Hyde], a shareholder.

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Unidentified Shareholder, [28]

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Just regarding Ascension, that's your first contract with the GPO. Do you see this as now a focus of increasing sales by further GPOs such as Premier or so on? Or is that yet to be determined?

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [29]

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Great question. So let me make a distinction here. Ascension is not a GPO. Ascension owns those 151 hospitals. So a GPO is an organization of hospitals that may or may not be owned by that GPO, and typically aren't, and they sign a universal contract. So we don't have a strategy at this point to go after the GPOs. We want to get our reimbursement in place first. But Ascension was a big opportunity for us because they are owned hospitals, much like the Kaiser Group is. It's a stand-alone nonprofit large medical group, the second-largest medical group nonprofit in the U.S., the Kaiser Group. So we made a very specific decision at this point not to go after the GPOs because we are finding success in these GPO-affiliated hospitals that we don't have to go and do a national contracts.

So as long as we continue to see traction on that front, we will not make a specific decision or go to a GPO. We have not been to one of the large GPO's corporate headquarters to start negotiating. And again, it's just for a very specific reason. It's just that we don't -- at this point, we've not found it to be a hindrance to our ability to place devices. So for instance, the 83 devices that we sold last quarter went into a number of GPOs, and not having a national contract did not slow that process down.

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Unidentified Shareholder, [30]

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Sure. Makes sense. So now that I understand Ascension's not actually officially a GPO, that's a different model. So do they actually assist in coming up with recommendations or approve protocols or procedures around the device and its utilization in their hospitals? Because GPOs I know are different in that regard, but since you've explained Ascension is not that type of GPO or a GPO at all, does that change how they can actually facilitate [spending up though] and recommend and so on?

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [31]

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Yes. Great. Great point here. So let me explain that -- what this advantage was. So if I went to a GPO, they would not have an IT component of it of how to install because every hospital is different, could be on different systems. Because Ascension has a standardized system throughout their entire hospital group because they own those hospitals. And when they buy a new hospital, they slowly integrate and bring online all of their current software. When we went in and talked about how we needed to install our software on a server, had to go through the protocol of security and everything, we were able to work with their corporate group and get a streamlined procedure when we walk in.

So today, it could take us several months just to get through the IT checklist. The installation of our device literally takes less than 45 minutes, but it's just getting through the security, getting through the checklist. Because Ascension owns these accounts, they have a standardized IT procedure, we were able to do it at a national level. So now when we go in, it's a matter of we've checked all the boxes, we've got all the security, we've done all the work. If you want to buy the product, let's move immediately into an installation. So that's the big difference. I'm glad you brought that up. So that's the advantage of going into an Ascension and then to any other large medical group that owns their hospitals and have integrated all of their systems.

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Operator [32]

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There are no further questions at this time. I would now like to hand back to Mr. Carreon for closing remarks.

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Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [33]

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Well, thank you, everyone. We appreciate your time today. I apologize for the delay on the ASX of our 4C. I don't know what happened there, but I'm glad we're able to get that straightened out. I'm glad you had a chance to hear from Dr. Taylor, the President of the ASBS. And listen, it's an exciting time for the company as we start to execute on the reimbursement phase of this journey. So thanks, everybody. Have a good day.