TriSalus Life Sciences Q1 2024 Earnings Call Transcript

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May 15, 2024

There are 5 speakers on the call.

Operator

Good morning, and welcome to the Trasalis Life Sciences First Quarter 2024 Earnings Conference Call. Currently, all participants are in a listen only mode. We will facilitate a question and answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to your host, Jim Young, Senior Vice President of Investor Relations and Treasurer at Trisales for a few introductory remarks.

Speaker 1

Thank you all for participating in today's call. Joining me today from Trisales Life Sciences are Mary Zella, President and Chief Executive Officer Sean Murphy, Chief Financial Officer and Doctor. Steven Katz, Chief Medical Officer. Earlier this morning, Trisales released financial results for the Q1 ended March 31, 2024. A copy of the press release is available on Trisales' website.

Speaker 1

Before we begin, I would like to remind you that management will make statements during this call that include forward looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Reform Act of 1995. Any statements contained in this call other than the statements of historical fact are forward looking statements. All forward looking statements, including without limitation, statements relating to our projected sales, costs, operating results and cash runway business strategies, objectives and growth products value and adoption and anticipated product launches future clinical data and future product development and approvals are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties, including the impact of macroeconomic conditions and global events that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements. Accordingly, you should not place undue reliance on these statements.

Speaker 1

For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our Form 10 Q on file with the SEC and available on EDGAR and in our other reports filed periodically with the SEC. Trisales disclaims any intention or obligation except as required by law to update or revise any financial projections or forward looking statements whether because of new information, future events or otherwise. This conference call contains time sensitive information and is accurate only as of the live broadcast today, May 15, 2024. And with that, I'll turn the call over to Mary.

Speaker 2

Good morning and thank you all for joining today's call. We're thrilled to kick off the discussion by highlighting our strong start in the Q1 of 2024, setting an optimistic tone for the rest of the year. I'm expressing my sincere appreciation for the dedication and efforts of the entire Tricallis team in delivering exceptional results for our patients, physicians and shareholders. Their unwavering commitment to our mission continues to drive our success, enabling us to achieve significant milestones, advance our pipeline and reshape our company's future. Today, we'll discuss this quarter's key highlights and provide updates on our groundbreaking drug delivery technology, TEDD and our promising investigational therapeutic, meletolimod for liver and pancreatic indications.

Speaker 2

Starting with quarterly performance, I'm delighted to report a remarkable 116% growth in revenues, all of which is from the sale of TriNav compared to the same period last year. This growth fueled by permanent reimbursement, promising clinical data and sales force expansion underscores our position as one of the fastest growing medtech companies with another consecutive quarter of over 50% growth. We've been actively engaging with the interventional radiology and hospital community to share the outcomes of our health, economic and outcome research study. This study underscores the value of TRINAB, particularly in treating complex patients with diverse clinical challenges. We're updating our analysis to include the latest clinical data from 2023, further reinforcing TriNav's potential to become the standard of care for these patients.

Speaker 2

This data, in addition to our previous clinical data, demonstrates the value of TRINAB in complex patients defined by patients involving 1 or more of the following: previous embolization or therapy, multinodal or bilover lesions, essentially significant tumor burden, very large tumors greater than 8 centimeters in size, multiple comorbidities, hypovascular tumors and diffuse tumors. Given this robust data, we are positioning TRINAP to become the standard of care for these patients and implementing a range of educational and reimbursement support program to facilitate the technology's adoption within the high volume embolization hospital. As we move ahead, we're eagerly anticipating the launch of TRINAB Large in the second half of the year, along with the forthcoming clinical results from our neletolomod trial across various cancer indications. Enrollment has been successfully concluded for our Phase 1 clinical trial for uveal melanoma liver metastases, PARIO-one, intrahepatic cholangiocarcinoma and hepatocellular cancer, PARIO-two, with enrollment nearing completion for pancreatic cancer PAREO-three. We are currently awaiting the predetermined follow-up period to conclude, during which we will thoroughly evaluate the data and strategize our next steps in terms of which indications to pursue.

Speaker 2

Our dedication to innovation remains steadfast and we look forward to presenting promising data from Pareo II at the upcoming American Society of Clinical Oncology Annual Meeting. In addition to our clinical advancements, we've made significant strides in optimizing manufacturing and gross margin, achieving an impressive 85% gross margin this quarter. These efforts coupled with our strategic investments and focus on operational efficiency position us for sustained growth and pipeline advancement. With recent positive developments in reimbursement, robust clinical data and the dedication of our seasoned executive team, we're confident in our ability to execute our company building strategy. Our objectives of achieving over 50 percent top line revenue growth, advancing our pipeline and strengthening our operational foundation remain firmly on track.

Speaker 2

In summary, we're pleased with this quarter's progress and I'll now let Sean delve deeper into our financial performance.

Speaker 3

Sean? Good morning, everyone, and thank you, Mary. I am pleased to announce that Trisales achieved outstanding results in the Q1 that ended March 31, 2024. Our revenue solely driven by the success of the TriNab device in the U. S.

Speaker 3

Reached 6,500,000 This sales achievement represents the highest quarterly sales in the company's history, reflecting a very strong 116% increase compared to the same period in 2023. Chrysalis has a track record of growth as illustrated on Slide 1, which demonstrates the company has grown at a compound annualized growth rate of approximately 50% since the launch of the product in 2020. We continue to forecast 2024 growth over 50% and this segment of the business excluding nelotolamide clinical costs is expected to approach positive EBITDA late in 2024. In the Q1, we captured 32 net new hospital accounts. This amount is favorable to our internal projections due to penta customer demand at the end of 2023 associated with achieving our previously announced permanent reimbursement in December.

Speaker 3

Our account utilization reached 14.5 units per account compared to 11.2 units per account in the Q1 of 2023. We are proud to report a robust gross margin profile of 85% in the Q1 of 2024, compared to 78% in the Q1 of 2023. This favorable margin in 2024 can be attributed to increased factory volumes, improved batch yields and other operating efficiencies. Our facility in Westminster, Colorado can support our growth over the next 5 years with minimal capital investment. Regarding our investment in research and development, expenses for the Q1 of 2024 totaled 5,900,000 dollars an increase of 4% from the Q1 of 2023.

Speaker 3

We expect our clinical costs to decrease for the balance of 2024 as we finish follow-up and analyze the data from the trials. Our investment in sales and marketing continues to increase in support of our growth strategy. In the Q1 of 2024, we invested a total of $6,700,000 a 106% increase from the Q1 of 2023. These investments are closely tied to our ongoing sales force expansion from 10 representatives at the beginning of 2023 to our current level of 27 representatives and 7 clinical specialists. General and administrative expenses totaled $4,600,000 in the Q1 of 2024, an increase of 30% compared to the Q1 of 2023.

Speaker 3

These increases are primarily related to the costs associated with becoming a public company in August of 2023. Our operating losses for the Q1 of 2024 totaled 11,700,000 dollars compared to losses of $10,100,000 in the Q1 of 2023. As mentioned earlier, the increased losses in 2024 can be attributed to higher operating expenses in sales and marketing, R and D and general administrative expenses. These expenses were primarily offset by the increased gross margin from increased trinab revenues and improved gross margin profile. As noted in our press release, we are pleased to announce that we closed a debt financing facility in April with OrbiMed.

Speaker 3

Under the terms of the credit agreement, we borrowed $25,000,000 at closing and have an aggregate up to 2 addition up to an additional $25,000,000 available in 2 tranches at our option, subject to achievement of certain revenue thresholds. This financing assuming we borrow the entire $50,000,000 along with our $4,000,000 in cash and cash equivalents on hand as at the end of the quarter and other sources of liquidity, we are expected to provide sufficient runway to fund our operation through the end of 2025. And now, I'll turn the call back to Mary for closing remarks.

Speaker 2

Thank you, Sean, and a warm welcome to all who are participating in the call today. In brief, at Tricallis, we're thrilled to share the significant strides we've made in bolstering our TriNab business and advancing our perio clinical programs. Furthermore, we're proud to announce the successful extension of our cash runway, a testament to our commitment to shaping a promising future for our company and shareholders. With that, I'm pleased to open the floor to answer any questions you may have. Your interest in our company and your inquiries and perspectives are genuinely valued.

Operator

Thank you. Our first question comes from the line of Justin Walsh with Jones Trading. Your line is now open.

Speaker 4

Hi, congrats on the excellent quarter and thanks for taking the question. I'm wondering if you can provide some color on what we can expect from the upcoming data readouts for nelotolimod and how you anticipate these informing your decisions about which indications to move forward with?

Speaker 2

Good question, Justin. Right now, no further updates on the clinical data. What we're waiting for is for all the recently enrolled patients to mature. So we had enrolled quite a number of patients in the December timeframe, early January timeframe. So we'll wait until they get to the 6 month mark.

Speaker 2

And then we're going to do a comprehensive evaluation. I think as a small company, our approach is going to be we're only going to pursue an indication where we think the competitive environment is low, that we have a very significant treatment effect, that we have a very clear regulatory pathway, potentially even an accelerated approval, definitely a breakthrough indication. And we'll make that recommendation to the Board in the Q3. But and we also as we go through this whole process, we're going to be looking across a range of different indications And we likely will only pursue 1, just based on our ability to finance. However, if the data is really spectacular, look at other options as well.

Speaker 4

Got it. Thanks. And one more quick one for me. I'm just wondering if you can provide some commentary on your sort of preparation efforts for the commercial launch of TriNet Large and any color on enthusiasm and desire you've gotten from the physician community to have that available?

Speaker 2

Yes. I mean, right now, one of the things that we've done at Tricales, which we think is a very important approach for any new product, what we've done instead of just launching it into the market and learning as you go, we've gone through a fairly extensive market evaluation where we go to a number of key users, understand how they would use it, get feedback on them and we're going to be completing that in the Q3, launching in the Q4. And today, I think what we validated is having a larger size of TriNav is very important, particularly in case cases, where the viscosity of the solution is more thicker and more difficult to perfuse. And this is where the TRINAB large makes a big difference. I think number 2, just vessel size for some of these patients where they have a very significant tumor volume, this is going to be a very appropriate type of technology.

Speaker 2

So I would say overall, we validated the need in the marketplace. I think there's quite a bit of enthusiasm about it and then we'll plan to launch in the Q4.

Speaker 4

Great. Thanks for taking the question.

Operator

Thank you. And I'm currently showing no further questions at this time. I'd like to turn the call back over to Mary Zeller for closing remarks.

Speaker 2

Well, first of all, thank you all for taking time to listen to our call today. We really appreciate your interest and involvement in the company and appreciate your time. Thank you everyone.

Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect.

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Earnings Conference Call
TriSalus Life Sciences Q1 2024
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