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Edited Transcript of IPD.AX earnings conference call or presentation 26-Oct-20 10:15pm GMT

·28 min read

Q1 2021 ImpediMed Ltd Earnings Call Eight Mile Plains,Qld Oct 27, 2020 (Thomson StreetEvents) -- Edited Transcript of ImpediMed Ltd earnings conference call or presentation Monday, October 26, 2020 at 10:15:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Richard Carreon ImpediMed Limited - MD, CEO, President & Executive Director * Timothy Cruickshank ImpediMed Limited - CFO ================================================================================ Conference Call Participants ================================================================================ * Ian Hyde * Martyn Jacobs Canaccord Genuity Corp., Research Division - Senior Analyst * Scott Power Morgans Financial Limited, Research Division - Senior Research Analyst * Shane A. Storey Wilsons Advisory and Stockbroking Limited, Research Division - Senior Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Thank you for standing by, and welcome to the ImpediMed quarterly results investor conference call. (Operator Instructions) I would now like to hand the conference over to Mr. Richard Carreon, Managing Director and CEO. Please go ahead. -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [2] -------------------------------------------------------------------------------- Thank you, Rachel. Welcome, everyone, and thank you for joining us today. We're hosting this conference call to discuss our 4C for the financial quarter ending 30 September, 2020. With us on the call this afternoon is Tim Cruickshank, our Chief Financial Officer; and Mike Bassett, our Senior Vice President of Corporate and Strategic Development. I'll be referencing the 4C we lodged this morning, Australian time. At the conclusion of my remarks, we'll be taking questions. Today, we'll be discussing our first quarter results for 2021 financial year. We have made great strides over the quarter, and we are confident that the key drivers are in place to accelerate the adoption of the SOZODigital Health Platform over the balance of the year and beyond. Although the company faced many challenges throughout the quarter related to the global pandemic, we saw a strong rebound across our entire business. The key drivers of the rebound were the addition of new cancer centers, expansion of SOZO in current key cancer centers either by adding new devices and/or the purchase of new indications, broader adoption of our newly introduced Lymphedema Prevention Program and the acceleration of patient testing. These all contributed to our growth this quarter. Total revenue was $1.5 million, up 11% versus the previous corresponding period and up 24% quarter-over-quarter. SOZO revenue for the quarter was $1.4 million, up 45% versus the previous quarter and up 29% quarter-over-quarter. Total SaaS revenue came in at $0.9 million, up 23% from the previous corresponding period and up 1% quarter-over-quarter. When you exclude the impact of foreign exchange, SOZO SaaS revenue for the quarter was up 28% versus the previous corresponding period and up 9% quarter-over-quarter. This equates to 12 straight quarters of quarter-over-quarter growth in the U.S. SaaS revenue. Annual recurring revenue topped $6 million. This was up 54% versus the previous corresponding period and up 15% quarter-over-quarter. Contracted revenue pipeline came in at $13.1 million, up 42% versus the previous corresponding period and up 20% quarter-over-quarter. SOZO patient testing reached record highs and have recovered to pre-COVID-19 levels with over 25,000 patient tests done this quarter. This is up 42% from the previous corresponding period and up 54% quarter-over-quarter. Through the end of this past quarter, SOZO tests have now exceeded over 150,000. AstraZeneca selected our SOZODigital Health Platform to be used in their Phase II trial to measure fluid volume in patients with heart failure and chronic kidney disease. This contract is for a minimum of 175 SOZO devices to be used in 20 different countries over approximately 18 months. The value of this contract is over $2 million. We expect delivery of the devices to the clinical trial sites to begin this quarter with recurring revenue to commence in Q2 FY '21 and accelerate in Q3 of FY '21. Other achievements for the quarter. Our contracted renewal rate was 100%, representing 17 contracts. Two of these renewals were significant contracts within large U.S. hospital systems with an average monthly fee increase of over 50%. Of particular note, the power of our technology in the SaaS business model is providing a significant opportunity with existing customers through either new device sales as well as new indications, all of which increase the monthly licensing fees. And as we previously stated, our SaaS licensing fees bring with them gross margins of over 90%. We expect this trend to accelerate over the coming quarters. Our churn rate remains low at just 1%. And during the quarter, we sold 43 SOZO devices. This was a 105% increase in units sold quarter-over-quarter. This brings the total number of SOZO devices sold since our initial launch to more than 600. 10 of additional devices were sold to Baylor Scott & White Institute for rehabilitation, giving them 35 units under their program. AstraZeneca also purchased 6 units for use in the second study. We also introduced our fluid analysis software for heart failure patients after collaboration with Scripps . And cash on hand as of 30 September, 2020, was $15.4 million. We took receipt of an additional $1.4 million from the exercise of options issued to subscribers in the entitlement offer with the potential for up to a further $15.7 million to be raised by 31 March, 2021. Now let's talk about what we've achieved in our 3 focus areas. First of all, oncology. I'm pleased to announce that meta-analysis has been officially accepted for publication, and we expect its release in the coming weeks. We believe this paper will provide compelling Level I evidence to assist with enlisting further amendments to the NCCN Guidelines and with submissions to insurers for private pay coverage. In addition, additional paper discussing the risks of subclinical lymphedema by the extent of surgery and irradiation has also been officially accepted for publication. We expect the release of this manuscript later this quarter. In heart failure. With the release of our new software, we anticipate the first commercial sales for heart failure this quarter. To be clear, we are engaging in our initial targeted sales approach focused on key centers in order to determine optimum patient flow. So we continue to work with the FDA on removing contraindications for the use of bioimpedance spectroscopy with patients who have implantable pacemakers and cardiac defibrillators. In renal failure. The company delivered on the initial aspects of the renal failure strategy with the signing of the contract with AstraZeneca. The AstraZeneca Phase II trial will measure fluid volume in patients with heart failure and chronic kidney disease. The study will use SOZO to evaluate the efficacy, the safety and tolerability of a combination of 2 AstraZeneca drugs in heart failure patients with chronic kidney disease. The company is also focused this quarter on the initial deployment of SOZO devices to be used in this important clinical trial. And significant progress has been made on the clinical, regulatory and commercial strategies. It remains a focus of the company, and we look forward to updating the market at the appropriate time. In closing, I believe we successfully navigated another very complex and challenging quarter under the cloud of a global pandemic. As I stated last quarter, we have transformed our business to meet the ever-evolving environment. We believe now more than ever that the past initiatives we put into place have placed us in a very strong position to thrive during these turbulent times. We left this past quarter with all aspects of our business rebounding. We have seen this rebound accelerate throughout the month of October. And to date, it has been predominantly lymphedema. From this quarter on, with AstraZeneca and the expected first hospital sales in heart failure, we start to see the sales growth driven from other focus areas. And though we still face the headwinds of COVID-19, we believe we will continue to see the adoption of our technology accelerate and to see the continued double-digit growth in the coming quarters. All right. So these conclude my remarks. Let's open up the lines for questions, please. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Your first question comes from Shane Storey from Wilsons. -------------------------------------------------------------------------------- Shane A. Storey, Wilsons Advisory and Stockbroking Limited, Research Division - Senior Analyst [2] -------------------------------------------------------------------------------- The first one I've got, Rick, is just on the installed base. So 43 new devices there. I just wondered how many of those went into new accounts over the period. -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [3] -------------------------------------------------------------------------------- Tim, do you have the number? -------------------------------------------------------------------------------- Timothy Cruickshank, ImpediMed Limited - CFO [4] -------------------------------------------------------------------------------- Yes. Shane, we continue to see about 2/3 of our devices going to existing accounts. -------------------------------------------------------------------------------- Shane A. Storey, Wilsons Advisory and Stockbroking Limited, Research Division - Senior Analyst [5] -------------------------------------------------------------------------------- Great. And when I look at that, I think you called out sort of more than 600 SOZO units now. I mean, is it -- could you give a rough breakdown as to how many of those sit in the U.S. to just help with the modeling? -------------------------------------------------------------------------------- Timothy Cruickshank, ImpediMed Limited - CFO [6] -------------------------------------------------------------------------------- Yes, definitely. And we noted that as a question that was coming up. So on our latest investor presentation, which we posted last month, we gave that breakdown with roughly 2/3 of our units in the U.S. and 1/3 outside of the U.S. -------------------------------------------------------------------------------- Shane A. Storey, Wilsons Advisory and Stockbroking Limited, Research Division - Senior Analyst [7] -------------------------------------------------------------------------------- Great. Look, I just wanted to say my second question digging into the renal indication, please, just so I can understand the commercial plan. I guess the question is really around understanding the target indication there, cognizant that you sort of don't have an FDA clearance there specifically for SOZO, but anticipate one. I'm wondering whether there's an interventional component anticipated to that? Or whether we should think about this simply as measuring these quantities like total body water or dry weight with just a lot more accuracy or convenience? If you could sort of just help explain that for us? -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [8] -------------------------------------------------------------------------------- Yes. The indication that we're looking at is really for either dry weight or overhydration. Those are the 2 critical numbers that these -- how they manage renal patients, Shane. So they're looking at how much fluid overloads that they have and how much to take off during that dialysis session. The belief is that they can get more accurate than just using the scale and observation that they can actually improve the outcomes and extend the life and quality of life of these patients. So that really is what we're focused on now. -------------------------------------------------------------------------------- Shane A. Storey, Wilsons Advisory and Stockbroking Limited, Research Division - Senior Analyst [9] -------------------------------------------------------------------------------- So should you be able to get that in a more timely way. I'm just trying to wonder how that sort of does improve the outcomes? And then maybe as you answer that, to think -- because I'm sort of conscious that there's a dialysis center setting and there's a home care setting there that's probably available. And I'm just wondering whether there's any differences there in the way you sort of approach those and then the reimbursement tools that, I guess, potential users can tap into? -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [10] -------------------------------------------------------------------------------- So the opportunity, obviously, is with the dialysis center. That's where the vast majority of these patients are. There is a trend moving to the at-home. But for both sites of service, home and in the clinic, it really is about the hydration issue, how much excess fluid they have and how much can they take off. And again, the belief is that if they have a true indication of fluid, that they can set the dialysis machine to be more effective to pull off less fluid or more fluid given a certain period of time and that these patients will get better outcomes. Now the reimbursement has already been established for CMS. In the United States, for instance, over 90% of all dialysis patients are Medicare eligible. And so Medicare, the federal government runs the program irregardless of what your age is in the United States. So it's one of the few exceptions where if you're a young adult child or adult or elderly, this is covered by the federal government. And those themes have already been established, and they continue to evolve. There's 2 things happening now. Improving the outcomes is what's critically important for these patients and then trying to move them to an at-home setting. So there's a large initiative in the U.S. today on moving these patients at home, so that they're more comfortable, that they are probably better tolerable of the longer sessions and that they get the better outcomes at that point. So for us, it's getting the indications that's necessary, and it may take several steps for us to do that. But in the end, that reimbursement has already been established, and there's other opportunities to increase certain rates and to get new codes approved by CMS. -------------------------------------------------------------------------------- Shane A. Storey, Wilsons Advisory and Stockbroking Limited, Research Division - Senior Analyst [11] -------------------------------------------------------------------------------- Great. That's very helpful. Maybe my final question, just around regulatory. Do you feel like you have enough evidence to support when you file for that clearance now? Or do you anticipate that you maybe need to contemplate more clinical work? -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [12] -------------------------------------------------------------------------------- Well, as I said, that I think this could be a phased approach. I think the regulatory hurdle in the beginning will be our device, can you use it to remove fluid -- excess fluid off of a patient. I don't think we're going to get dry weight out of the blocks here. But I do believe that if set up correctly that you can get an indication or use for removing fluid off of a patient and then move longer term to a dry weight or an overhydration indication. We really see this probably as a step in as we continue our discussions with the FDA, that will become more apparent over time. -------------------------------------------------------------------------------- Operator [13] -------------------------------------------------------------------------------- Your next question is from Ian Hyde from Keystone Wealth. -------------------------------------------------------------------------------- Ian Hyde, [14] -------------------------------------------------------------------------------- Two quick ones. The annual recurring revenue and contracted revenue, do they include the AstraZeneca leases or they're on the side of that? -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [15] -------------------------------------------------------------------------------- Tim, do you want to handle that? -------------------------------------------------------------------------------- Timothy Cruickshank, ImpediMed Limited - CFO [16] -------------------------------------------------------------------------------- expectation of annual recurring revenue over the next 12 months and the total contract is in the contracted revenue pipeline. That's correct. -------------------------------------------------------------------------------- Ian Hyde, [17] -------------------------------------------------------------------------------- Okay. With the -- you mentioned there are some contracts that were renewed with a 50% increase for license fee. Do we know roughly what those new fees are per device? And is that contract increase due to them taking on new indications or packages in the model or it's just because they're seeing value and you can actually put a price increase? And on the back of that, do you think that would be where new contracts going forward will be signed at that rate? -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [18] -------------------------------------------------------------------------------- Well, first of all, on a new contract, there's a number of ways for us to get additional increases with customers. First of all, there is a commensurate price increase. Remember, these contracts were signed for 3 years -- for up to 3 years, and most of our contracts are now 3 years. And then the other way to do it is to expand our current footprint, which we seem to do on a regular basis where they start with 1 or 2 devices and they eventually get more and more and more. And we just talked about the Baylor Scott & White rehab institute that now has 35 devices. So that's one way to get it, adding more devices in there for a monthly fee. And then there's the indications, using more of the software. So every time you want to add an indication, then we add an additional fee onto the monthly fee. So it really would be a combination of all of those that I just described, the price increase, adding new devices and adding new indications. And I can tell you that every quarter, every month, those numbers change and fluctuate, and we'll find a way to start reporting those. But again, we're -- this is the second quarter that we reported 100% renewal rates, and we've always had 100%. But in the second quarter, we've given this level of detail, and we're very pleased with the fact that we're seeing these increases. Now I can tell you that 50% of these 2 was very large institutions taking more devices and new indications. Last quarter, we looked at the price increase came out about 6% across the board. So I think you're going to see a combination, I think you'll see that fluctuate depending on which contracts come due that quarter. -------------------------------------------------------------------------------- Ian Hyde, [19] -------------------------------------------------------------------------------- Sure. Okay. And I know it obviously changes from contract to contract to some degree from what you just said. But do you have some sort of a ballpark figure as to license fee per device per month, just to give some context as to what hopefully will be coming through? -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [20] -------------------------------------------------------------------------------- We haven't given that information. I think it's something we should consider doing based on what you're saying, so you can help with your models. But again, we just started seeing -- remember that our devices have only been out there about 3 years. So we're just starting to see the renewals of these contracts over the last couple of quarters. And so I'm not sure 6 months gives us a good indication of how the future will be, other than the fact that we should start to see that on a regular basis. But let's do this. We'll take that under consideration and look at reporting some future numbers, so it will help with the modeling. -------------------------------------------------------------------------------- Timothy Cruickshank, ImpediMed Limited - CFO [21] -------------------------------------------------------------------------------- And I would say, Rick, on Slide 33 of our last investor deck, we do have a breakdown of a bit of the average fees that we're anticipating that we're -- we look to get for each contract. So if you go there, you'll find a lot of that information. We do target up to $1,500 on the first license and then continue to add licenses from there. Hopefully, that would help with your modeling as well. -------------------------------------------------------------------------------- Ian Hyde, [22] -------------------------------------------------------------------------------- Yes. You mentioned we had an increase with Baylor Scott & White, but there's been no update with McKesson. Is there anything available there? -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [23] -------------------------------------------------------------------------------- We haven't reported anything. We continue to work with McKesson on a regular basis and hold regular meetings. And as that starts to evolve, we'll certainly be making announcements on that. -------------------------------------------------------------------------------- Ian Hyde, [24] -------------------------------------------------------------------------------- Sure. Okay. And lastly, there's 175 devices that's got to go through to AstraZeneca. How is the company's capacity to manufacture and install devices -- I guess, scaled up because this is the biggest contract in one go? And then if everything else lines up, I guess you could say not really wanted to have a bottleneck that we can't go forward as quickly as we like because we can't get enough devices out and installed from manufacturing, et cetera. -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [25] -------------------------------------------------------------------------------- Yes. Let me tell you that we're feeling very good about our ability to scale up and to handle the contract. We're working very closely and have weekly calls with AstraZeneca. They have started to provide us the 175 locations they want these devices delivered to over a long period of time. And so we have a good idea of exactly where they'll start going, at least in the beginning. As they sign their contracts -- their clinical trial contract sites, we get the information, we can ship them. And even -- we're feeling very good that even if we had a large influx which we would love to be able to have that we could easily handle the production at this point. We're in very good shape with our contract manufacturer, with our inventory of raw materials and we anticipated going into COVID-19 that we wanted to make sure that we had inventories in case we did have some opportunities that we've been working on for a while come to fruition. So raw material, contract manufacturer and produced devices already, we're in very good shape. -------------------------------------------------------------------------------- Operator [26] -------------------------------------------------------------------------------- Operator Instruction] Your next question is from Peter Gregory, a private investor. -------------------------------------------------------------------------------- Unidentified Participant, [27] -------------------------------------------------------------------------------- Rick and team, firstly, congratulations on the AstraZeneca Association. I think that's really great. But I'd like just to ask about that deal. You mentioned there are trials in a number of geographies. That means the product is going to be used all around the world. Does this mean effectively that you've got a whole lot of demo sites being established in new geographies that you currently don't have any presence? And would AstraZeneca support sort of demo sites approach with their locations? And if so, are there coverage and support challenges that you might find difficult to work with and capitalize on the opportunities that might be there? I wonder if you could just discuss that with us. -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [28] -------------------------------------------------------------------------------- Certainly. So the AstraZeneca -- we've been working with AstraZeneca for more than a decade on a number of projects, very small projects, just our older generation devices. When they came to us with this large opportunity, we spoke to them about SOZO and how easy it was to set up, to train, to establish and to test patients versus our older device with the gel-backed electrodes and having to have a specific waiting room and a highly skilled individual. And that's really what sold them on the fact that we could support this large effort. It also shows that during COVID-19 that we were able to show them the number of devices we sold, installed, trained and got information off of. And so we feel very confident we can support their efforts across the board, and we find remotely we can do this and in all the countries they're looking at. Since our security is cloud-based and the cloud -- the information is in that particular country, they're also feeling very confident of our ability to handle the large amount of clinical data that they will be looking at. So that aside, I feel very confident about that. Let's talk about what you mentioned earlier, Peter, what you said from a demo site. We wouldn't approach them about using these as a specific demo site where we could bring other physicians into to take a look at it because this trial for them is a Phase II trial, so obviously a very critical trial for them. And we wouldn't want to disrupt or interrupt the patient flow for their testing. However, think about it for a moment. There's 20 countries that this device is going into, which gives us footprint and these clinicians, the nephrologists and cardiologists, are going to be looking at a new technology they've never explored, probably have never seen before. So I think that gives us a great opportunity to at least explore the option that once we start moving through the process and establishing these devices, is there an opportunity for them long term to purchase those devices when the -- when we terminate the lease agreement for that particular site. So I think there's a number of things we're looking at today that we think could provide some opportunities for us. -------------------------------------------------------------------------------- Unidentified Participant, [29] -------------------------------------------------------------------------------- Yes. That's really great to hear. Just one further question, if I may. Do you have any new projections on time frame to profitability? -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [30] -------------------------------------------------------------------------------- No. We haven't given any information on that, but I think you can see as our expenses continue to come down and our revenue, as we talked about, we continue -- we've said that we will continue to see double-digit growth. So I think when you model it out and start to take a look at it, I think the analysts all have us out in FY '22, I believe. So I think I would stick with what they're looking at. -------------------------------------------------------------------------------- Operator [31] -------------------------------------------------------------------------------- Your next question is from Scott Power from Morgans Financial. -------------------------------------------------------------------------------- Scott Power, Morgans Financial Limited, Research Division - Senior Research Analyst [32] -------------------------------------------------------------------------------- Rick and Tim, congrats on solid results. Just one question for me. Just once the meta-analysis is published, can you talk us through the steps with the NCCN, please? -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [33] -------------------------------------------------------------------------------- Certainly. So the NCCN has, what they call, a face-to-face meeting once a year, and then they have regular submission meetings. And then any time you have new data, you can supply that information to the NCCN. And so depending on when we get our hands on the copy of it, we'll take a look at what's the best opportunity. I would foresee though that we're going to wait -- excuse me, that we will immediately turn that around. And I think the principal investigator has already agreed to submit that on behalf of the analysis that his team has conducted to the NCCN. So it will go in for a regular review. We're not going to wait 6 months until the face-to-face review. We'll take it as soon as we can get it. And then we'll take the PREVENT trial coming out by Q1 of next year and send those results in as well. So we want to take advantage of this cycle of NCCN. We'll accept any paper that is groundbreaking or that reaches significance to use that opportunity to file for a new -- to file for the NCCN to consider taking us on as bioimpedance spectroscopy in the guidelines. -------------------------------------------------------------------------------- Operator [34] -------------------------------------------------------------------------------- Your next question is from Martyn Jacobs from Canaccord Genuity. -------------------------------------------------------------------------------- Martyn Jacobs, Canaccord Genuity Corp., Research Division - Senior Analyst [35] -------------------------------------------------------------------------------- Congratulations on the results. I was just wondering given that last quarter was impacted by COVID or -- the June quarter and this quarter you've had a significant improvement, but hospitalizations and inspection rates are on the rise. Are you seeing any signs that this might negatively impact you again? Or are you able to sort of just -- everyone's adjusted that you can trade through it? -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [36] -------------------------------------------------------------------------------- There is a concern in the U.S., they're calling it a twindemic, right? They're talking about flu season, and they're talking about the increasing cases, right? And I can tell you that everybody in the U.S. has their eye on that. But we also said we have a unique ability to see when a site is starting to close now because our devices provide us real time information. We review that data -- I review that data on a daily basis, how many tests are coming in, are they slowing down in any particular region. And we can shift our resources. What we've learned during the most difficult, challenging times, which was the March, April, May, June time frame, is that by shifting resources and our ability to sell our product remotely that we could take advantage or at least set things up. But we have seen some slowing in some markets in the U.S. where they've maxed out their hospital capacity for COVID-19 patients. And in other parts, where they have seen a reduction in those cases or at least a flattening of those cases, where -- that's where we're putting in our resources and our time. But I did -- I'd also mentioned during the call that we did see an increase -- or we have seen a continued acceleration of that rebound. So for right now, we're feeling very good about the coming quarter. Even if there is a big second wave, we believe that we'll still have a very strong quarter. -------------------------------------------------------------------------------- Martyn Jacobs, Canaccord Genuity Corp., Research Division - Senior Analyst [37] -------------------------------------------------------------------------------- Okay. And just following on from Scott's question around the NCCN guidelines, do you have any kind of revised timing expectations of when you might be successful with ? -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [38] -------------------------------------------------------------------------------- Well, we think there's 2 key catalyst points we've talked about before, Martyn. One, the meta-analysis is critically important because it does take a very large number of studies and a significant number of patients, and then with our own data coming out. So over the next, call it, 4.5, 5 months, you're going to see 2 Level I evidence papers come out. And we are starting to get more and more interest by insurance companies. We just need to have this Level I evidence. I've always said, what's going to be important for us to have that final dialogue. So leading up to this point, we've used all the evidence that we've had and all the information that we've had and think about how fast we're still growing the business without widespread reimbursement. So we feel very good about that, that it will come. And to give you proof of that is we're starting to see some insurances provide -- some private payers' insurance starting to do preauthorizations. So these are insurance companies that -- we're working closely with major institutions, where we're helping them prepare the packages and they submit these packages and the insurance companies are improving these patients for a series of tests throughout their cancer treatment. So we're seeing that as the first break in the private payer. So again, we're feeling that this is an opportunity for us with just this additional data that will take us to the next level of the clinical endpoints for the PREVENT trial, we believe, should take us to the next level with private payers. -------------------------------------------------------------------------------- Martyn Jacobs, Canaccord Genuity Corp., Research Division - Senior Analyst [39] -------------------------------------------------------------------------------- Okay. And just finally for me, on the FDA and removing contraindications, are you able to provide any more color as to where that stands? -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [40] -------------------------------------------------------------------------------- Well, as you know, the challenge with the FDA on all of these things is we're now dealing with -- lymphedema is not life-threatening. When you take a look at a possible interference with a defibrillator or a pacemaker, they take that very, very seriously. And so we have gone through a series of tests. We provided that information to the FDA. They continue to review it. They continue to ask us for additional information. And we're feeling very comfortable with the information that we've been able to provide them and the guidance that they have given us. They're just looking for, I think, a preponderance of data that would tell them that we will not interfere with a particular pacemaker or a particular defibrillator. Now understand, there's 5 major manufacturers of defibrillators and pacemakers. These are the main players, right? They control a large portion, but they also have dozens of models between them. The good news is the FDA has not asked us for live patient model testing, right? They're asking for specific bench testing information that we have been providing them. So we think it's a matter of us just going through this and looking at the various pacemakers, defibrillators, getting them information, and so we will continue to do that and work with the FDA on this situation. -------------------------------------------------------------------------------- Operator [41] -------------------------------------------------------------------------------- There are no further questions at this time. I'll now hand back to Mr. Carreon for closing remarks. -------------------------------------------------------------------------------- Richard Carreon, ImpediMed Limited - MD, CEO, President & Executive Director [42] -------------------------------------------------------------------------------- Thank you, everyone, for joining us today. We appreciate your continued support, and we're looking forward to report throughout this quarter with the meta-analysis coming up and with the irradiation paper and so forth. So everyone, have a good afternoon. Have a good morning. Thank you.