ImpediMed Limited (IPD) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the ImpediMed Limited PREVENT Trial 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.

Thanks, Kaley. Welcome, everyone, and thank you for joining us today. We're hosting this call to discuss the results of the PREVENT trial, which were just released to the ASX. On the call today joining me is Tim Cruickshank, our Chief Financial Officer; and Mike Bassett, our Senior Vice President of Corporate and Strategic Development. At the conclusion of our remarks, we'll be taking questions. First of all, we are very, very pleased to announce the PREVENT trial successfully met its primary endpoint and reached statistical significance. Now as background, the PREVENT trial is a pivotal study. It's the single largest study ever undertaken in lymphedema, and the PREVENT study is a level I randomized controlled trial to assess lymphedema prevention. The study enrolled 1,200 patients at 10 different sites involving 13 hospitals across the U.S. and Australia. Now these hospitals included Vanderbilt, The Mayo Clinic, MD Anderson and Macquarie University. The results were made available as a preprint on medRxiv.org. The preprint allows the results to be shared without compromising the ongoing peer review process. With the feedback today, we remain confident that we'll be published in a peer-reviewed journal in the coming months. A link to the full manuscript preprint is available in the ASX announcement just released. Let me review the results. The trial met its primary endpoint, and the results were statistically significant. In patients with early detection using L-Dex, the intervention resulted in a 7.9% rate of chronic lymphedema compared to 19.2% rate of chronic lymphedema in patients with early detection using tape measure. The p-value is 0.016. This represents an absolute reduction of 11.3% and a relative reduction of 59%. So let me put this into context. If 100 breast cancer patients were tested using L-Dex instead of tape measure and received intervention, 11 fewer patients would go on to develop chronic lymphedema. So this is life changing and is likely an underestimate of the real clinical benefits of L-Dex. Now the paper goes on to state that while the bioimpedance spectroscopy or BIS protocol can be easily replicated in a clinical setting, the rigor of the tape measure protocol for this study exceeded what is practical in most clinics. Thus, this may offer even more benefit across the clinical setting than what was demonstrated in this study. The additional conclusions from the paper state that: one, these statistically significant results demonstrate that BIS screening should be a standard approach for prospective breast cancer-related lymphedema surveillance; BIS is more specific for lymphedema detection than tape measure, and it had fewer triggers and longer times to intervention trigger; three, BIS as compared to tape measure provides a more precise identification of patients likely to benefit from an early compression intervention. So let me discuss the impact of this data. So we believe these results, combined with previously published data, will give clinicians the information they need to begin early intervention at a stage when it's possible to stop lymphedema from advancing. There was strong clinical support for the prospective surveillance model for early intervention with the National Comprehensive Cancer clinical practice guidelines supporting the need for pretreatment and ongoing measurements of patients at risk for lymphedema and that better patient outcomes are reached with early detection. And finally, when the peer-reviewed paper is published, the results will provide all clinicians addressing lymphedema in breast cancer patients clear scientific data regarding the optimal measurement and found evidence to switch from using tape measure. With the preprint available, we can now better prepare for the next steps following peer-reviewed publication and they include: finalizing the submissions to the National Comprehensive Cancer Network clinical practice guidelines and private medical insurance companies throughout the United States; two, expand the opportunity for providers to be reimbursed for L-Dex testing, which we believe will result in a significantly wider and faster adoption of the SOZO technology. I would like to thank the participants and the investigators for their hard work and dedication over the past several years. These results are significant not just for ImpediMed, but for the cancer patients and survivors at risk of lymphedema. So in conclusion, the PREVENT trial met its primary endpoint, and results were statistically significant. Once published in a peer-reviewed journal, these results will support applications to the NCCN clinical practice guidelines and expanded reimbursement of L-Dex technology in the U.S. Now the data released today provides great insight into our technology far beyond achieving just our clinical endpoint. Let me provide you just one example. I would urge you to take a look at Table 5, the risk adjustment progression, when you have time. This data analysis shows that BIS has a benefit for each of the risk factors identified in the studies, for BMI, cancer stages, types of procedure, nodes removed, chemotherapy, radiation and all risk factors combined. In each case, BIS showed a clear benefit over tape measure. Overall, we believe these results significantly derisk the business going forward. The study shows that BIS technology can measure fluid shifts as small as 36 milliliters. As we look to other disease states like heart failure and renal failure, we're on -- where we track whole body fluid changes, we believe the technology has even more applications. And finally, the PREVENT study was conducted with our previous generation device, the U400. And as you recall, it takes up to 20 minutes to take a measurement using this device. Today, our customers are using SOZO, which completes the measurement in less than 30 seconds. SOZO has the technology and is the platform for widespread clinical use. I want to thank each and every one of you for your continued support, and these conclude our remarks. Kaley, we'd now like to open up the lines for questions.

[Operator Instructions] Your first question comes from Shane Storey with Wilsons.

Rick, maybe if I can get a clarification, please, as my first question, just on exactly where that peer review process is up to. I mean the articles just comes through an unusual channel. So perhaps you could shed some light on how that process is to complete from here.

Certainly. So the paper is currently under peer review. But with COVID-19 pandemic, where we have an unprecedented situation with a large volume of scientific and clinical evidence being submitted to peer-reviewed journals, now there's a backlog of papers, and those journals are working, trying to work through those. And at this point, it's a waiting game. It's just a matter of time. So one of the avenues that's opened up, especially during COVID-19, is to go to a preprint server. So medRxiv is the leading one for releasing information. And to make it very clear, you can post the information there. The leading journals all post that they do not consider that a breach of the peer review process, releasing the data early. This allows information to get out into the public domain. People can look at this information. They can review this information. And they can start to see what is coming down through the peer review process. So it's become mainstream during this time of a global pandemic. In fact, the latest statistics show there's more than 42,000 papers that have been published on COVID-19. So you can see they've really taken a large percentage of the available publication space. So we're feeling very confident this will get published. And you can see from the results and the statistical analysis as you look at it, this is a very remarkable study and then conclusions are all validated.

Look, the last 3 questions I've got are really just around that clinical interpretation. And the one that I'll open with, I mean, I can see that there's been -- the significance has been preserved across all of those different risk stratifications. And I also know that physicians tend to put their breast cancer patients into different risk buckets. So my question is, I mean, which of the stratifications are the most interesting to -- for us to focus on?

Shane, again, we just got this information and we're now going through the data. I would say that for us in the beginning here, I think what's going to be critical on Table 5 is when we meet with the clinicians. Are those patients -- are they going -- are they undergoing biopsies, how many nodes removed, chemotherapy. So the ones that have the greatest risk factor is probably the ones that we're really going to focus on at the beginning.

Second one is...

But I think what this tells you, though -- yes, go ahead.

No, no, no. It is a related question. I was then thinking about -- just interested in your thinking on -- that you had very different time to trigger. I mean there's a 6-month difference between the groups there. That's probably the most statistically striking difference between the groups of all. Just interested how you might be positioning that with, I guess, as you go to the NCCN, another team might be positioning that piece of information from the trial.

Well, that is something, as you know, was also part of the interim analysis. And really, what we started to really start to understand about cancer treatment, that could be swelling due to radiation, it could be swelling due to taxanes used in their chemotherapy -- excuse me, yes, their chemotherapy treatment. And so what we're finding is that L-Dex is able to detect the fluid that's building up in the lymphatic system, which is significant, where a tape measure is picking up any kind of swelling, whether it's fluid, whether it's fat, whether it's whatever. It's not as robust as L-Dex is at picking up fluid shifts specifically for lymphedema. And I think it bodes well for the NCCN as well as insurance companies, right? We're not picking up false positives. We're not detecting patients. We're not treating patients who truly don't have lymphedema. So I think across the board, this is going to bode very well for us as we go to the NCCN and as we go to insurance companies.

Fair enough. Look, my last one, just sort of also, I guess, which followed on from the interim study. We also saw in this full analysis about 20 patients in each arm who progressed before their first follow-up. So do you think that introducing a 1-month follow-up may have made a difference there? And I wonder whether that is prevalent in clinical practice today, whether if there's any investigators who do start assessing earlier than the 3-month time point?

Well, I think what this study has showed, and like I said in my remarks, the amount of information we're seeing is pretty significant. And there's always been a discussion since we designed the trial more than 8 years ago, what is the proper protocol for maximizing the clinical utility of this technology. So I think what this is going to do is force everybody to relook at it. Should you be testing earlier during the first year and then going to a quarterly. So every time they come into a clinic, either monthly or every 2 months -- and with SOZO being so easy to use, and as you know, some of our hospitals have up to 50 devices spread throughout their campuses, there's now an opportunity to test these patients more regularly. I think we need to spend more time with it, but I would bet that we will start to see more people looking at testing early and testing often at least through the first year of a cancer survivor's journey.

[Operator Instructions] Your next question comes from Martyn Jacobs with Canaccord Genuity.

Rick, congratulations on the release today. The results clearly in your favor. So well done, a long time coming.

Thank you.

I was wondering about the incorrect diagnosis of lymphedema in tape measure and what that means for the insurance industry. And I guess -- and also in the context of the fact that we don't have a peer-reviewed publication today, do you think the insurance industry will still sort of sit on their hands until they finally get that final box ticked? Or will you start to see movement on that? And then secondly, when is the next time that the guidelines committee sits? And is there a reasonable chance that we'll get a change in that meeting? Or was it going to be sort of later on?

Yes. So let's talk about tape measure for a moment. So if you think about it today, it is the gold standard. However, there is no payment from the insurance companies on a tape measure. What they end up paying for are all the ancillary things like when a patient gets cellulitis and they're hospitalized and that's costing them $10,000 or $12,000 for that visit or they have to have pneumatic pumps or they have to go through decongestive therapy. That's what they're paying for today. So they're not worried about the tape measure. What they're looking at is can I prevent those downstream costs. Now what the study has done -- what's the great thing about the final results of the study for the endpoint is there was nothing that was an outlier here. This has reconfirmed everything that the interim analysis said, that the meta analysis said, that the 150 studies that are out there have talked about. That we can detect early, and if you intervene, you can have great results. We're just now showing through a level I evidence study of 1,200 patients that we have statistical significance. So we're continuing to make headway. We do have private payers starting to pay today with all of the efforts we have and with the clinical papers that we've had, especially the meta analysis. So we will continue to make that progress. What will happen is once this gets peer-reviewed, it will just add 1 more layer of clinical evidence at a very high level, and we think that will be the final push through. We're making progress on a weekly and monthly basis with insurance companies today because we can show them the downstream costs can be significantly reduced. And with having more than almost 800 devices in the marketplace, we now have a lot of institutions submitting claims, and we are finding almost all of those claims that these hospitals allow us to get involved with. So we see a lot of progress being made. We believe that final step will be when this publication is finally published. And we expect that in the coming months. So let me get to the guidelines. Now the guidelines, the good news about the NCCN guidelines is they sit once a year. So we have 2 opportunities, one from the survivorship committee and one from breast cancer. So those have already sat for the year, but we've always said this, and the NCCN is very good about this. If you've got late breaking, groundbreaking new clinical evidence, they will review that information on a real-time basis. And so what we plan to do is now use this time to finalize our submissions once it comes out in a peer-reviewed journal, attach that information and send that in for an immediate review to the NCCN. So that will happen very quickly once we get the peer-reviewed journal article out.

[Operator Instructions] Your next question is a follow-up from Martyn Jacobs with Canaccord Genuity.

Yes. Sorry, guys. I was just thinking that given that there's sort of a final step to go here before everything is wrapped up in a bow for various stakeholders, do you think the hospitals will act before policy changes on reimbursement in terms of buying significant volumes of SOZO units? And of course, in advance of the guidelines, and I note the recent announcement on the -- from ICON Group, I think it was. So can you just give us a flavor on how you see the pipeline coming through?

Well, we've always had a very good pipeline. Even during the midst of COVID, we've always had a strong pipeline. And we've really gone about it in 2 ways, right? We've always said we've had this land-and-expand strategy. We go in with the device work, too, and we slowly expand. And we've got some facilities that have 20 or 30 or 50 plus devices on their campus. We will continue to push that right now. Will a hospital make a decision, in and of itself, on a preprint? No, that's not what preprints are all about. What it does do, though, it does allow them to start to assess the information and wait for that final step, as you said, put a bow on it. But understand this, is we're making great strides in our corporate accounts group with very large institutions like the Icon Group. We've talked about other groups and so forth throughout the various quarters. And we continue to make progress because, again, the data is so overwhelming. This is not like a number of small start-ups that have 1 or 2 papers. Remember, we've got 150 journal articles. We've got a peer-reviewed meta-analysis, it's a level I evidence study. This is just one more piece of evidence at level I. So we'll start the process. We'll make people aware of the information. I think what this will do, this will start to fast track a number of those opportunities because now they can see the data, they can see what the conclusions are, and now they just have to wait for it to go through the rest of the peer review process. So again, we think this allows us to start to accelerate on a number of fronts our abilities to move forward.

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

Kaley, thank you very much. We appreciate everybody's time this morning. It was -- obviously, we just got this information, a lot of great information and we're still digesting it. So you'll see more and more discussions over the coming weeks as we tear through the information, look at it and see what the significance is and the impact it will have on the future of the business. But we're very, very excited. And again, thank you for all of your support.

That does conclude our conference for today. Thank you for participating. You may now disconnect.