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Edited Transcript of NVCN.TO earnings conference call or presentation 5-Nov-20 9:30pm GMT

·27 min read

Q3 2020 Neovasc Inc Earnings Call RICHMOND Nov 6, 2020 (Thomson StreetEvents) -- Edited Transcript of Neovasc Inc earnings conference call or presentation Thursday, November 5, 2020 at 9:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Christopher Clark Neovasc Inc. - CFO & Corporate Secretary * Fredericus A. Colen Neovasc Inc. - President, CEO & Director ================================================================================ Conference Call Participants ================================================================================ * Ahu Demir NOBLE Capital Markets, Inc., Research Division - Biotechnology Research Analyst * Fan Wang SVB Leerink LLC, Research Division - Associate * Vernon Tolentino Bernardino H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst * Mike Cavanaugh ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good day, and welcome to the Neovasc, Inc. Third Quarter 2020 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Mike Cavanaugh, Managing Director of Westwicke. Please go ahead, sir. -------------------------------------------------------------------------------- Mike Cavanaugh, [2] -------------------------------------------------------------------------------- Thank you, Anita. Good afternoon, and thank you for joining us today. Earlier today, Neovasc, Inc. released financial results for the quarter ended September 30, 2020. The release is currently available on the Investors section of the company's website at www.neovasc.com/investors. Fred Colen, President and Chief Executive Officer; and Chris Clark, Chief Financial Officer, will host this afternoon's call. Before we get started, I would like to remind everyone that management will be making statements during the call that include forward-looking statements within the meaning of applicable securities laws, which are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 and Canadian securities laws. Any statements contained in this call that are not statements of historical facts should be deemed in these forward-looking statements. All forward-looking statements, including, without limitation, our examination of historic operating trends, prospects for regulatory approvals, expectations regarding coverage decisions, pricing and enrollment matters and our future financial expectations and results are based upon current estimates and various assumptions. Words such as expects, outlook, will, should, continue, strategy, potential, intend, try, believe, plan, and similar words or expressions are meant to identify forward-looking statements. These statements involve material risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these slowest. Accordingly, we should not place undue reliance on these statements. For more information on risks and uncertainties related to these forward-looking statements, please refer to the cautionary statement regarding forward-looking statements and Risk Factors section of Neovasc annual report on Form 20-F and the discussion in Neovasc MD&A, which are available on EDGAR and SEDAR. The information provided in this conference call speaks only to the live broadcast today, November 5, 2020. Neovasc disclaims any intention or obligation, except as required by law, to update or revise any information, financial projections or other forward-looking statements, whether because of new information, future events or otherwise. I will now turn the call over to Fred. -------------------------------------------------------------------------------- Fredericus A. Colen, Neovasc Inc. - President, CEO & Director [3] -------------------------------------------------------------------------------- Thank you, Mike, and good afternoon, everyone. We are encouraged by the strong Reducer revenue quarter the Neovasc team delivered in Q3, despite the challenges posed by the COVID-19 pandemic. Despite of the difficulty patients who are experiencing visiting their health care providers, we achieved 25% worldwide revenue growth, 50% Reducer implant growth and even more encouraging, 100% implant growth in the important DACH countries, which consist of Germany, Austria, and Switzerland. These countries are a cornerstone of the Reducer franchise. Given the strong margin, our direct sales force provides in Germany and among the leading countries driving the growth and acceptance of Reducer in the European Union. As we have said before, severe refractory angina is a debilitating disease with significant quality of life impact that are not easy to tolerate by patients even in the midst of the current pandemic. We believe the strong Q3 performance is indicative of Reducer's market value and potential. Related to Q4, we are less optimistic because of the severe flare up of the COVID-19 virus and the emerging renewed lockdown in almost every large European market. We believe this to have a significant negative impact on our Q4 results. From a core perspective, we also continued the important work of cleanup and otherwise strengthening the capital structure with multiple transactions throughout the quarter. We utilized approximately $5 million in proceeds from warrants exercised by a key shareholder, Strul Medical Group, in July and August, to retire convertible debt issued in May of 2019. The money was used to pay down principal, accrued interest and small prepayment penalties. We capped off our financing activities in August with a $12.6 million registered direct offering of shares priced at the market, which netted $11.3 million after fees. Neovasc now has adequate cash on hand to fund operations through March 2021, and at the same time, reduced the company's debt. This was truly outstanding work by our team, and I want to reiterate that this would not have been possible if investors did not recognize the value of our product assets. I want to take this opportunity to thank our investors once again for their continued support. Although it occurred after the third quarter close, I would now like to address the results of the FDA's Circulatory Systems Devices Panel Meeting, which took place in October 27 regarding the Premarket Approval Application, known as a PMA, which we submitted for Reducer in late December of 2019. The panel voted 14:4 in favor that the Reducer is safe when used as intended, and voted 1:17 against on the issue of a reasonable assurance of effectiveness. The third vote was 3:13 against, 2 abstained on whether the relative benefit outweighed the relative risk. While we are obviously disappointed in the outcome from the panel, I would like to review some of the history, as we have previously disclosed. One, the FDA granted Reducer breakthrough device designation; two, the FDA granted our request for an advisory panel meeting; three, Neovasc submitted a considerable premarket data set that consists of a sham-controlled, double-blind, randomized study of 104 patients. The study results were published in The New England Journal of Medicine. COSIRA was one of the first sham-controlled clinical studies in interventional cardiology and actually met its primary end point without (inaudible) data for the primary endpoint in a very difficult patient population to study. We also submitted clinical data from our Reducer 1 observational study with over 200 enrolled patients that we believe confirms the effect seen in COSIRA with current follow-up, up to 5 years. We also provided follow-up data on first in-human (inaudible). Additionally, we submitted considerable published real-world experience from investigator initiative studies that we filed further confirmed the results seen in COSIRA. Four, the company committed to conduct a robust post-market sham-controlled study. Going into the panel meeting, we anticipated that the totality of data would be seriously considered by the panel, particularly considering the context of the number of FDA guidance documents and the limited treatment options for the refractory angina patient population. There also were specific details of relevant FDA guidance documents that we believe supported the path we took to submitting the PMA. A, from December 2018, breakthrough devices program, I quote, "As with all devices subject with PMA, breakthrough devices subject to a PMA must still need the statutory standard of reasonable assurance of safety and effectiveness at the time of approval." For PMA, the designated as breakthrough devices, FDA intends to use timely post-market data collection when scientifically appropriate to facilitate expedited and efficient development and review of a device. B, from August 2019, consideration of uncertainty and major benefit risk determinations in medical device premarket approvals, de novo classification and humanitarian device exemption. Example 1a from this guidance discusses a breakthrough device intended to treat a treatment-resistant condition. In that example, they discuss 3 scenarios of uncertainty. The greater the level of uncertainty, the greater the reliance on post-market data collection. As I stated earlier, we did submit a robust post-market study for consideration. C, from August 2019. Factors to consider when making benefit risk determinations in medical devices, premarket approval and de novo classification. Uncertainty, patient perspective, availability of alternative, risk mitigation, novel technology addressing unmet medical needs. And finally, D, from April 2015, balancing premarket and postmarket data collection for devices subject to premarket approval, I quote, "Getting the right balance between premarket and postmarket data collection, specifically, where appropriate, a greater reliance on postmarket collection, including real-world data collection, can reduce the extent of premarket data collection and directly impact when patients will have access to this high quality, safe and effective medical devices." Taking into consideration all guidance documents, and the volume of data we had, especially given the focus of the program to provide more timely access of innovative medical devices for patients with unmet need, we choose to submit a PMA in December of 2019 with a request for an advisory panel meeting. We believe that the clinical data presented would support our position that Reducer, as a reasonable assurance of safe and effectiveness, and the benefits clearly outweigh the risk in this no option patient population. Again, we are supportive in the panel's vote. We must await FDA's decision on the PMA. And we are [more] hopeful about the approval of the Reducer at this point in time, given the panel's recommendation. But I want to assure you that we are working on all available options to the company to move forward from here. We will update you on any further developments as soon as possible. Late in the third quarter, we also announced that the 300 patients in Germany have been treated with the Reducer. This is an important milestone and demonstrates the continued acceptance and penetration into the German cardiovascular market. It is gratifying to see the increasing acceptance of our unique device, and that it provides a new avenue of treatment for those suffering from a painful disease that is not responding to traditional treatments. Moreover, it is noteworthy that the health care professionals using Reducer in Germany and elsewhere, are pleased with the results they have seen so far themselves in treating their patients. And importantly, those results are consistent with the published data. The majority of patients implanted with Reducer in Europe are able to lead more active lives. And for many, it has resulted in life-changing improvements. While the Reducer has been front and center recently, we also continue to make great progress on our Tiara Mitral Valve replacement program. We are advancing our regulatory submission for the Tiara TA transapical mitral valve replacement system, targeting a European CE Mark approval under the medical device directive. The review of the Neovasc Tiara TA submission is ongoing. We have filed much additional information and answered many questions from reviewers at the notified body, and while we are encouraged with the progress to date, we are still not to review, expect many more questions from reviewers across as many more answers and results to be submitted. The company is targeting a potential approval decision by the European notified body for Tiara TA in the first half of 2021. We have already stated in the past that due to COVID-19 travel restrictions, enrollment in the Tiara-II is temporarily on hold. The Tiara TF, transfemoral transseptal mitral valve replacement program, is approaching important animal implants during Q4, which, if successful, could lead to first-in-human implants in the first half of 2021. This timing is delayed from our original projections and primarily the result of COVID-19 challenges. The company is encouraged by the positive feedback it has received on the device from our medical executive committee. Most notably, physicians are supportive of the system's low profile, device recapturability and unique D-shaped implant design, sets it apart from competitive offerings in development. We continue to believe in the potential Tiara TF to expand the size of the market and be more broadly applicable than competitive systems under development on our own transapical Tiara system. Overall, we are pleased with the third quarter, although disappointed in the outcome of the recent FDA panel meeting. In the third quarter, we achieved strong Reducer implant and revenue growth and reached the 300 patient milestone in Germany. We continue to advance the Tiara TA and Tiara TF devices and are targeting a decision by the European notified body on our CE Mark application for Tiara TA in the first half of 2021. We also made progress in solidifying Neovasc capital structure and operations are now funded through the first quarter of 2021. I will now turn the call over to Chris to discuss our financial results. -------------------------------------------------------------------------------- Christopher Clark, Neovasc Inc. - CFO & Corporate Secretary [4] -------------------------------------------------------------------------------- Thank you, Fred. We are pleased with the top line recovery in the third quarter of 2020, following the impact of COVID-19 in the second quarter. However, we believe the increase in restrictions in Europe at the start of the fourth quarter could severely impact our fourth quarter and overall annual performance. Revenues for the third quarter of 2020 was $626,000 compared to revenues of $500,000 for the same period in 2019, an increase of 25% as orders returned to our pre-COVID-19 target levels for the period. The cost of goods sold in the third quarter of 2020 was $150,000 compared to $138,000 for the same period in 2019. The gross margin was 76% compared to 72% for the prior period. Reducer continues to post consistent margins in the mid-70% range. But we believe this could be substantially improved with the execution resources to focus on cost optimization within the supply chain. Total expenses for the third quarter were $10.6 million compared to $7.4 million for the same period in 2019, representing a year-over-year increase of 45% or $3.3 million. General administrative expenses for the quarter were $4.6 million compared to $2.2 million a year ago, an increase of $2.4 million, principally driven by a $1.9 million increase in legal expenses incurred financing activities, and by a $300,000 increase in noncash employee-related expenses as we issued share-based incentives to our staff. Credit development and clinical trial expenses were $5.5 million compared to $4.8 million for the same quarter of 2019, an increase of $700,000, principally driven by an increase in development costs and headcount expense for the Reducer and Tiara, as we pursued 3 regulatory development properties for our products, each approaching a critical inflection point in the coming quarters. The operating loss and comprehensive loss for the third quarter of 2020 were $10.2 million and $10.4 million, respectively, or $0.51 basic and diluted loss per share as compared with $7 million and $6.6 million, respectively, or $0.83 basic and diluted loss per share for the same period in 2019. Neovasc finances operations and capital expenditures with cash generated from operations, add to equity and debt financings. The company had approximately $14 million in cash and cash equivalents at September 30, 2020. The company expects that it will have sufficient cash on hand to sustain operations until March 2021 at the current burn rate. During the current nature of the market that Neovasc shares, due to the impact of the outcome of the FDA panel meeting, the company can give no assurance we'll be able to retain the additional funds needed [on terms agreeable] to the company or at all. As of today's date, the company has 22.6 million common shares issued and outstanding, with full of share count of 38.7 million shares. We are fully reviewing all our operational and strategic options for the rest of this year and into 2021, and we look forward to updating the market as we determine the best path forward for the company. Fred? -------------------------------------------------------------------------------- Fredericus A. Colen, Neovasc Inc. - President, CEO & Director [5] -------------------------------------------------------------------------------- Thank you, Chris, and thank you all for listening to our opening remarks. We want to once again thank you and thank all of our investors for their continued trust and support. I would now like to open it up for questions. Anita? ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) And we'll take our first question from Rebecca Wang from SVB Leerink. -------------------------------------------------------------------------------- Fan Wang, SVB Leerink LLC, Research Division - Associate [2] -------------------------------------------------------------------------------- Can you hear me? -------------------------------------------------------------------------------- Fredericus A. Colen, Neovasc Inc. - President, CEO & Director [3] -------------------------------------------------------------------------------- Yes. Rebecca, I can hear you. Thank you. -------------------------------------------------------------------------------- Fan Wang, SVB Leerink LLC, Research Division - Associate [4] -------------------------------------------------------------------------------- This is Rebecca. I'm calling from SVB Leerink. Can you just give a little bit more color on the potential options to Reducer? Is that a will require a randomized control trial to address those concerns made by the panel? I don't know how do you -- how should we think about your options and strategies going forward? And I appreciate that you had enough capital until March 2021, but with spending in Europe, how should we the leverage you can call to take money and to advance some of those pipeline products? -------------------------------------------------------------------------------- Fredericus A. Colen, Neovasc Inc. - President, CEO & Director [5] -------------------------------------------------------------------------------- Yes, Rebecca, so thanks for that question. So as I said on the call, we now first have to await FDA's decision on the PMA. That is the first thing that needs to happen. And we have to await FDA's decision. And then after that, we will see what we might be able to do in potential further discussions with the FDA or not. I can assure you that we are looking at all available clinical regulatory options as well as all options available to the company in its totality. The other thing that I would like to point out is that, as you know, the company has 2 assets, the Reducer and Tiara. And that, in itself, gives us always an advantage, so that we have one and the other in the pipeline. We are continuing to see a great progress with the Reducer in Europe. As we reported, we saw big growth in the third quarter, where there was a little bit of a lift up from the virus pandemic. Unfortunately, Q4, we believe, is going to be more impacted again. But we certainly see the underlying strength of the demand for the reduced product in Europe, which are now is really driven, for the most part, by physicians' own experience with the device with their own patient population. So we have that. On top of that, we have continued development activities on the Tiara side, both for the transapical as well as for the transfemoral program, as I alluded to in my script. So we will continue to look at all options and how we move forward as a company. We certainly will also look at additional financing opportunities between now and March, and we look confidently into the future. Although obviously this was and has been a setback for us. And we will have to move forward from here and we believe there's still good opportunities for us to move forward, and we will and are working all available options to the company. -------------------------------------------------------------------------------- Operator [6] -------------------------------------------------------------------------------- And now we'll take our next question from Ahu Demir from NOBLE Capital Markets. -------------------------------------------------------------------------------- Ahu Demir, NOBLE Capital Markets, Inc., Research Division - Biotechnology Research Analyst [7] -------------------------------------------------------------------------------- I would like to ask a question regarding the FDA panel. Were there any case, the points that actually change your strategies for Reducer's spot market, political trials? And what does the time line look like? I know you mentioned you'll give detailed information later on, but I was just curious. Any of the points that actually prolong the time line, to extend of the clinical trial or any other aspect of the clinical trial? -------------------------------------------------------------------------------- Fredericus A. Colen, Neovasc Inc. - President, CEO & Director [8] -------------------------------------------------------------------------------- Yes. As I said before obviously we are disappointed in the outcome of the panel meeting. We believe that the clinical data that we presented, and I would say the totality of the clinical data we presented. This indeed supports the position that we had that Reducer has a reasonable chance of safety and effectiveness. That, combined with the very specific guidance, documentation and guidelines that I went through in detail on my script, is why we believe we have an opportunity to present this data and for all these data to be carefully reviewed. Unfortunately, that did not turn out to be very positive as it relates to the efficacy side. I do want to point out that the panel clearly voted for the safety of the Reducer. And it is actually -- we actually still have -- mostly the fact that because the Reducer was voted for as safe by the panel that more panel members, therefore, gave it a positive, mark as related to benefit over risk. However, it is what it is, and we are accepting the outcome of the panel meeting. But we now have to await FDA's decision, and that needs to come first and I would not like to speculate on anything beyond that. We will see what the FDA says, and then we will see what we do from thereon on the clinical regulatory pathway for Reducer. As a company though, we are also, in the meantime, already working on all the available options we have available to us to continue to move forward. -------------------------------------------------------------------------------- Ahu Demir, NOBLE Capital Markets, Inc., Research Division - Biotechnology Research Analyst [9] -------------------------------------------------------------------------------- And can you follow up on this, you might hear from STI and when you might disclose the details about the market clinical studies? -------------------------------------------------------------------------------- Fredericus A. Colen, Neovasc Inc. - President, CEO & Director [10] -------------------------------------------------------------------------------- So on timelines, I mean, typically, the FDA takes another 3 to 5 months or so after a panel meeting to finalize their process. That's just based on general observations and to the history, so we'll have to wait and see when that comes. But we'll see what happens in the next few months. I think that's probably how I can best answer the question now. -------------------------------------------------------------------------------- Ahu Demir, NOBLE Capital Markets, Inc., Research Division - Biotechnology Research Analyst [11] -------------------------------------------------------------------------------- Okay. And my last question will be on Tiara. I know we expect some delays due to corona, of course, but I was curious, do you plan to move by any other strategies that team plant to, again, the second [close-on] in major places in Germany, France. Do you like to implement any additional strategies to maybe speed up the process a little bit or not? -------------------------------------------------------------------------------- Fredericus A. Colen, Neovasc Inc. - President, CEO & Director [12] -------------------------------------------------------------------------------- You're talking about Tiara now? -------------------------------------------------------------------------------- Ahu Demir, NOBLE Capital Markets, Inc., Research Division - Biotechnology Research Analyst [13] -------------------------------------------------------------------------------- Correct. Yes. -------------------------------------------------------------------------------- Fredericus A. Colen, Neovasc Inc. - President, CEO & Director [14] -------------------------------------------------------------------------------- Yes. So on Tiara, we are going through a very lengthy and very detailed process for the transapical Tiara device in terms of the (inaudible) marketing process. So we are working with the notified body. We have filed the original application, or a CE Mark approval for the transapical Tiara device. And we are in continuous and constant contact with the European notified body. We have received a lot of questions. We have answered a huge amount of questions. We've submitted a lot of additional data, and we continue to do so. We are not quite through the entire process yet. There are still more questions that we expect, and there's still more answers to be given and data needs to be submitted. And as we have stated before, we anticipate a decision by the European notified body on a potential CE Mark approval for the transapical Tiara device sometime in the first half of 2021. And as it relates to the transfemoral Tiara program, during Q4, we expect some critical animal implants to be done. If those go well, then we would be able to set ourselves up for a first human implants sometime in the first half of 2021 as well. So those are the key milestones that we have ahead of us on the Tiara program. And I think those are actually quite encouraging. Noted is that our financing run through the first quarter of next year. And we are certainly also looking at any potential option to extend the financing for at least another 3 months beyond that. -------------------------------------------------------------------------------- Operator [15] -------------------------------------------------------------------------------- And I will take the next question from Vernon Bernardino from H.C. Wainwright. -------------------------------------------------------------------------------- Vernon Tolentino Bernardino, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [16] -------------------------------------------------------------------------------- Do you think that Reducer, from the data and use in Europe is a promising and should be used right? So regarding to revenue in Europe. How much would be needed to conduct clinical trial of adequate size in the United States, should you have to do another one? -------------------------------------------------------------------------------- Fredericus A. Colen, Neovasc Inc. - President, CEO & Director [17] -------------------------------------------------------------------------------- Well, we have stated before that we believe such trial would be in the range of about $20 million. We stated that earlier. However, and I think it's too early to talk about that at this point in time. We just need to wait FDA's decision on the PMA, and then in the meantime, we are continuing to make more progress and all different options that we have as a company. We are looking at all the potential probabilities as a company, what is the best path moving forward. And in many different ways, that is clinical regulatory-wise and certainly also as a company overall. So that's all being looked at. In the meantime, we'll wait for FDA's decision on the Reducer, and then we'll take it from there. And once we get to that point and once we have more updates on all the different options that we might have and that we're working on, we'll certainly update everyone. -------------------------------------------------------------------------------- Vernon Tolentino Bernardino, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [18] -------------------------------------------------------------------------------- Great. That makes sense. As few and other companies have to go through this environment. What are you seeing as far as how elective procedures are being done in Europe? Do they just continue and just has lower activity? Or hospitals again swamped by treating COVID-19 cases and a lot of spaces taken up that would have been useful in procedures in treating your patient. It's really crazy out there. -------------------------------------------------------------------------------- Fredericus A. Colen, Neovasc Inc. - President, CEO & Director [19] -------------------------------------------------------------------------------- Yes. Yes. Right. So in the first quarter, we actually had the headwind of still, let's call it, some lower-level COVID pandemic issues, where hospital providers and physicians who are busy with COVID patients. And we, nevertheless, had a very strong Q3 quarter, with big growth on the revenue side and even bigger growth on the implantation side. And particularly, in Germany, as I said before, we had a 100% growth quarter-over-quarter in terms of implants in Germany, which is -- no, I should say, not only, but I should say DACH, that's really Austria and Switzerland, although Germany was the biggest contributor in that. So that is very encouraging. And going into Q4, I'm sure you have heard that a major flare-ups in Europe and in all the European markets of the COVID virus, and quite a few lockdowns again in many countries, at least through the beginning of December, which is why we said we are seeing an impact to our business because the hospitals are, again, very busy with COVID patients. But we also see that the underlying demand and growth of the therapy is there. So we already have a list of patients that want to get the Reducer and where the procedure has been postponed, as we have seen before in the second quarter as well. So we clearly see an impact in Q4. We see strong demand. We can even say that if it wouldn't have been for the pandemic in Europe, we believe we would indeed be on our Q4 plan, but that is not going to be the case because the pandemic really came back rather strongly in many European countries. So there is quite a bit of an impact at the moment. So we have seen and we still continue to see strong underlying growth in demand for the therapy. -------------------------------------------------------------------------------- Vernon Tolentino Bernardino, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [20] -------------------------------------------------------------------------------- Okay. So I guess, perhaps we could see that at some point in 2021, the return to growth and momentum because it looks like the benefit and in fact, improvement in lives is already recognized. It's just the hospital has just really are able to do as much as they can, which is great because these all lead to excess at some point. Regarding the AdCom and Reducer safety, the (inaudible) on the safety is very intriguing to me. But then at the same time, with a broad and perhaps what leads me to think about is also abstentions, if just the amount of data that did not lead enough to conclusion or benefit over safety or they did not believe enough in the benefits so that they conclude that there was enough benefit over in terms of safety and growth. -------------------------------------------------------------------------------- Fredericus A. Colen, Neovasc Inc. - President, CEO & Director [21] -------------------------------------------------------------------------------- Well, so first of all, to be very clear, the panel did, I would say, pretty clearly vote in favor of safety of the Reducer price. I think that is the first thing that should be clarified. And as it relates to efficacy and benefit over risk, I think there are 2 major factors that, as I went through in my script. One is that the panel, unfortunately, did not really look at the totality of the data that we submitted. We submitted a very strong data on 200 patients from our post-market Reducer 1 study. We submitted many independent investigator studies that have been published, which are all very consistent with the efficacy that was demonstrated in the COSIRA trial. And I think the other factor was that there was very little discussion about the nature of the breakthrough device. And that is why I went in detail to the different guidelines from the FDA for breakthrough devices and the importance of the opportunity for post-market collection. And so as I said, we did propose to do a robust post-market study as part of this PMA submission. And I think that was the discussion around the different aspects of the guidelines and the possibility of the FDA to put more emphasis on the post-market study, I think, was another thing that wasn't really put in the forefront at this panel meeting. So I think those are the key factors, and I pretty much alluded to that in my script. -------------------------------------------------------------------------------- Vernon Tolentino Bernardino, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [22] -------------------------------------------------------------------------------- Okay. It was quite a bit to get through the outlook and good guidance. Obviously there's a lot there as far as what they presented. And so it just looks to me, would you agree that -- and that's why you are definitely waiting for the FDA's decision because there's still a chance that they could ignore or is there only a very small chance or no chance that they could ignore the efficacy decision and you could still get approval for Reducer? Are you just really saying that you don't expect, and that's to say for you to go? -------------------------------------------------------------------------------- Fredericus A. Colen, Neovasc Inc. - President, CEO & Director [23] -------------------------------------------------------------------------------- What I already stated that before that given where we are now and this outcome of the panel meeting, we are much less positive on an FDA approval. I already stated that before. We will originally [report] for panel meeting. But given what happened at the panel meeting, we are -- we basically are saying we're not really counting on FDA approval. But again, I don't really want to speculate. We just have to wait and see what the FDA is going to say. -------------------------------------------------------------------------------- Operator [24] -------------------------------------------------------------------------------- Thank you. In the interest of time, this will conclude today's Q&A session, and this concludes today's call. Thank you for your participation. You may now disconnect.