Imricor Medical Systems, Inc. (IMR) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Imricor Medical Systems HY '20 Results Investor Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Steve Wedan, Chair and CEO. Please go ahead.

Thank you. Hello, everyone, and thank you for joining us today to discuss the half year results for Imricor. I'm Steve Wedan, Imricor's Chair and CEO, and I'm joined today by our CFO, Lori Milbrandt. Today, I will take you through Imricor's key achievements during 2020, discuss the impacts of the COVID-19 pandemic and provide you with an update on the business as well as our market and growth opportunities moving forward. Lori will discuss the financial results for the 6 months to 30 June, before I take you through our outlook. We'll then move to a Q&A session. We started 2020 in an exciting position, achieving a long-awaited CE mark approval, which enabled us to begin to sell our products in the European Union, and we moved swiftly to commercial launch with our first procedures performed at the Dresden Heart Center in late January, marking a tremendous milestone for Imricor as these are the first iCMR guided ablations to be performed anywhere in the world with market approved devices. The escalation of the COVID-19 pandemic in early March led to hospital restrictions banning outside personnel and postponing most electric procedures. Disappointingly, they stalled our lab rollout plans until restrictions eased in early June, and we launched at the Haga Hospital in The Hague and shortly thereafter at the Amsterdam University Medical Center. Today, we have 3 sites operational. In addition, we've progressed across a further 19 sites, a number of which we expect to launch in the next 4 to 6 weeks. During the period, we signed a Master Purchasing Agreement with Sana, the largest group purchasing organization in Germany. And we achieved a major milestone after entering into a nonexclusive collaboration -- collaborative sales distribution agreement with leading MRI vendor, Philips. These activities combined with our efforts to enhance the market's awareness of Imricor's product and our early clinical success has seen our pipeline grow significantly over the last 6 months, supporting an acceleration in our future lab rollout plans. Moving to Slide 6. I previously mentioned that the impact of the COVID-19 pandemic on our lab rollout plans and the recent recommencement of these activities are set out on this slide. It's worth pointing out that we're currently seeing lower atrial flutter procedure volumes at operational sites despite the backlog that the lockdown months created, we expect it may take some time for volumes to return to pre-COVID levels as healthcare professionals prioritize patients with more urgent and immediate needs. Across the business, we successfully transitioned majority of our workforce to remote working and established COVID procedures across our facilities, supporting the health and safety of our people whose roles require them to be on site. After suspending manufacturing for 2 weeks, we resumed these operations across 2 separate clean rooms to reduce the number of assemblers present in one room. This short break in manufacturing is the only downtime we experienced throughout the pandemic. Importantly, we experienced no supply distributions or disruptions, I should say, throughout this period. All of our manufacturing and assembly has undertaken our facilities in Minneapolis with the vast majority of our materials and components sourced from within the United States. Similarly, the supply chain to our customers has remained free from disruption with the sufficient inventory maintained in our Germany warehouse to meet the sales demand for a significant period. Moving to Slide 7. Despite the disruption from COVID-19 across the business, we maintained a very clear focus on progressing initiatives to support future growth and ensure we are in a strong position once restrictions were lifted. Our sales and marketing team adapted quickly to ensure that our pipeline of potential sites continue to grow. They rapidly pivoted to online training and educational seminars and a little bit programs, we would typically deliver at medical congresses. We signed a Master Purchasing Agreement with Sana, as I mentioned, which not only streamlines the establishment of new sites, but facilitates the access to approximately 80 sites in Germany and Switzerland that currently perform cardiac catheter ablations. We recently signed a sales agreement with Philips, which enabled Philips to sell our capital equipment as part of their iCMR implementation package, which will further drive growth in our pipeline of potential sites. In March, we established a training and installation team in Europe to ensure that we had people on the ground to begin installs once hospital bans were lifted. This team is supported by 2 U.S.-based training and installation teams to provide remote support and are in place to expand the capacity as travel bans between the U.S. and Europe ease. We continue to progress the development of our pipeline products required to support improvements in gross margin and expanded indications and progressed our regulatory approval strategies in relation to expand the indications and furthering our geographic reach. Despite lockdowns and remote working arrangements, we continue to expand the Imricor team to ensure we have the capacity and the capability to deliver on our growth strategies moving forward. Over the last few months, we have certainly not been standing still. Although COVID stalled the launch of our new labs, we've been working hard to ensure that the foundations are laid for our future success and that Imricor is well positioned as restrictions ease globally. Let's turn on Slide 8. Phase I of our commercialization plans focuses on the lab adoption across our 4 key countries, Germany, The Netherlands, Switzerland and Austria. While we saw very tight restrictions in place across hospitals at the height of the pandemic, success in containing the spread of COVID in these locations did result in a reasonably rapid lifting of restrictions. As mentioned previously, however, the volume of atrial flutter ablation procedures at our current operational sites now still remains below pre-COVID levels as doctors currently prioritize their backlog of patients with more urgent needs. It's been the case across much of Europe that we've seen recently a rise in the daily case rate across these countries. And at the moment, this is not impacting our lab rollout plans. However, we will continue to closely monitor the situation. Now thankfully putting COVID aside, Slide 10 sets out the current status of our lab rollout plans. As I mentioned earlier, we currently have 3 sites operational or actively engaged with a further 5 sites, including the Leipzig Heart Center to schedule installations and training start-up dates. These 5 sites have in place these labs, and we expect them to sign contracts and/or commence procedures within the next 4 to 6 weeks, assuming no further COVID-related disruptions. The Leipzig Heart Center, a Philips site; and the Dresden Heart Center, which is a Siemens site, have been established as training centers of excellence for the sites that follow, supporting our future rollout plans. Beyond this, we have 14 more sites that are well progressed and in the third stage of our 5-stage sales process. We expect a good number of these sites to sign purchasing agreements in the second half of 2020 and are planning for an acceleration in lab rollout during the last quarter. Today, our pipeline is the strongest it has been since our inception, as interest in our products continues to grow across the medical community, supported by the benefits of iCMR catheter ablations for atrial flutter today and more complex procedures in the future. Strong outcomes at the sites we've launched and our ongoing programs to grow awareness and education of Imricor's products. Consistent with our original intention, we continue with the controlled release of our products during 2020 to best support positive outcomes for patients and their healthcare professional. However, we're anticipating an acceleration in the establishment of new sites following the European summer vacation, which is now in August, particularly in the last quarter of this year, assuming no material COVID-related disruptions. Moving to Slide 11. Having only recently been established, we expect our sales agreement with Philips to further fuel our pipeline. This agreement enables the sale of our capital product, the Advantage-MR EP Recorder/Stimulator system can be sold as part of the Philips comprehensive iCMR lab installation package. In effect, this enables the extensive Philips sales force to drive lab adoption, allowing us to focus on support product utilization, growing our portfolio of consumable devices and expanding our indications for use. We're commencing an initial launch with Philips across all of Germany and the Benelux region for the balance of 2020. And in early 2021, we expect to expand this to other regions across Europe. Imricor will still be the exclusive provider of our consumable devices, and currently, we continue to supply capital equipment to Siemens sites. Further, to support growth, during the first half of the year, we entered into a Master Purchasing Agreement with Sana, the largest goods purchasing organization in Germany. The Sana network includes 600 cooperating hospitals and medical institutions across Germany and Switzerland, and importantly, for us approximately 80 of these sites that perform cardiac ablations and are potential customers. Under this agreement, Imricor's products are included in Sana's catalog of approved materials with the pricing set for any site that's part of the GPO. We found that in establishing new sites, contract negations can be a time-consuming component of the process. And the agreement with Sana will streamline this as well as facilitate access to approximately 80 sites, as I mentioned, for sales and marketing activities, supporting the future success of our role on strategy. Recently, we announced a sales collaboration agreement with Optoacoustics, who are the world leader in innovative, high-performance optical communication solutions for MRI applications. This agreement facilitates the introduction of the IMROC IR communication system to our customers. The system was developed specifically for use in intraoperative MRI environments, allowing medical personnel inside the magnet room to converse with personnel in the control room. And our early sites have found the system to be highly beneficial in undertaking procedures. While we do receive a referral fee under this agreement, the main goal is to facilitate the supply of this communication system to our customers when these sites are launched. As you'll see on Slide 12, feedback from the medical professionals using our products continues to be excellent. Both from an ease of adoption as they transition from the traditional environment to the iCMR lab as well as the benefits of enhanced visualization and undertaking these procedures in MRI. While at this stage, we're still gathering post-clinical data, anecdotal outcomes support reduced procedure times as well as excellent results. We are seeing a growing excitement across the medical profession supported -- supporting pipeline growth has the potential to establish a new structure -- a new standard of care in the treatment of heart arrhythmias becomes a real reality. As we mentioned earlier this year, a contributor to the speed at which the Dresden Heart Center got started, with a new imaging technique our engineers and scientists developed in the latter part of 2019, which we call Active Catheter Imaging, as shown on Slide 13. This technique uses native MR Imaging to easily identify the location of the ablation catheter within the patient without the use of a mapping system or active tracking, and it's opened the door for more clinical sites like Dresden to more quickly commence atrial flutter ablation guided by real-time iCMR. Active Catheter Imaging has proven to be highly effective in procedures undertaken at the Dresden Heart Center, and feedback from physicians performing these procedures has been excellent, including faster procedure times compared to active tracking and mapping. While helping to accelerate adoption for atrial flutter, active tracking and mapping systems remain important for complex cardiac ablation procedures. These systems are provided by Siemens and Philips and are at this stage yet to achieve CE mark approval, although both are well progressed. Currently, the Philips' iSuite system is available as a research version, able to be purchased and used in clinical cases with Ethics Committee approval. The Siemens' Monte Carlo system is also available as a research version, which has been placed at some key sites and is available for clinical use with Ethics Committee approval. However, Imricor's Active Catheter Imaging enabled sites on the Siemens platform to commence atrial flutter procedures without this active tracking and mapping system. Overall, there are no constraining factors on our future growth associated with these systems, either in relation to lab rollout or commencing new clinical trials. Moving to Slide 15. Despite disruptions associated with the COVID-19 pandemic, we continue to grow our workforce across all functional areas, expanding our capacity to support our commercialization and growth strategies. We fully retained our manufacturing team, building inventory to support the growth in the second half of the year. To drive improved productivity and margins over time, we also recently appointed a production supervisor who is joined by an additional manufacturing engineer supporting manufacturing efficiency, product line expansion and volume. We've been fortunate to welcome a number of talented individuals from high-caliber organizations within the medical technology sector, including a Director of Marketing, with over 20 years of industry experience, including 13 years at Medtronic, where he was the Director of Heart Failure and International Products Marketing, launching the company's MRI compatible pacemaker products. A clinical Account Manager who joined us from Boston Scientific, where he was a field specialist and account manager in the electrophysiology and cardiac rhythm management space. A Regional Sales Manager for the Benelux/West Germany, who is a seasoned sales professional with over 15 years' experience recently with Arthrex. And a Director of Clinical Affairs, who has over 9 years of global clinical trial experiences with Medtronic, and a Regional Sales Manager for Eastern Germany, who brings 6 years of cardiology experience with Bioventrix and Medtronic. Today, we employ a workforce of over 50, approximately doubling our size since the IPO in August last year. And we're fortunate to have a team of very talented people who importantly have really leaned into the challenges COVID post for our business, remain focused on the future success and on developing -- delivering great outcomes for patients and healthcare professionals. Before moving on to our growth drivers, I want to briefly touch on our addressable market as set out on Slide 17. Market data published very recently for the U.S. and Europe, European represented by 5 countries: Germany, France, Spain, Italy and the U.K., shows catheter sales of about $2.3 billion in 2020, accounting for the impacts of COVID-19. It is expected that cardiac catheter sales within these markets will grow to over $6.1 billion by 2029, representing a compound growth rate of 8.3% over 10 years. These numbers don't include system sales or other support devices that we also sell. As you can see on Slide 18, we continue to see the market for catheter ablation procedures grow strongly with catheter volumes of almost 2 million in 2020 and expected to rebound back to over 3 million post COVID. As we start with atrial flutter indications, we can address about 23% of this market with the opportunity to increase this percentage by expanding our indication. The size of the forecast growth of this market underpins our future growth strategy, overlaid by the fact that we were the only company globally to offer cardiac catheter ablation devices for use in the MRI environment. As shown on Slide 19, our revenue growth is driven by a number of iCMR labs that are established in the market and the number of procedures undertaken in these labs. Our core strategies are focused on these growth drivers as set out in the following slides. Moving to Slide 20. Geographic expansion is a key driver for us. Our CE mark approval enables us to market and sell our products for use in flooded atrial flutter procedures in the European Union. Our expansion across Europe is broken down into 3 phases, with our initial focus on Phase 1 countries of The Netherlands, Austria, Germany and Switzerland. Phasing has been determined based on the number of factors that include the number of existing ablation centers in that country, reimbursement structures and time lines of payments by customers. We're also continuing to pursue expansion in geographies outside the European Union. In Australia, we are in the final stages of appointing a local agent to facilitate TGA approval and the sales distribution partner. Our strategy on approval in the United States is well progressed, with discussions with the FDA underway and a clinical trial to support this approval targeted for the 2021-2022 time frame. Another key growth driver is expanding the approved indications for our products to procedures in the left side of the heart, including atrial fibrillation and ventricular tachycardia. As you saw back on Slide 18, AF represents about 39% of ablation procedures. VT makes up about 8% of procedures, but has tremendous growth potential, and we believe the benefits of MRI guidance will help fuel this growth. It is this future capability, the opportunity to perform AF and VT ablations in the iCMR lab that is adding real fuel to the clinical interest of Imricor's products. We have to start with atrial flutter but we cannot and are not stopping there. We are driven to deliver on the promise -- a full promise of iCMR-guided ablations for complex indications as we aim for them to become the new standard of care. Our research and development pipeline remains a clear priority, particularly regarding products that will enable the treatment of expanded indications, requiring access to the left side of the heart via the interatrial sep. We remain on track to begin clinical trials for our steerable sheet and transseptal needle that are required to perform these procedures during 2021. We're also progressing well with our diagnostic catheter, which will deliver material improvements in gross margin and expect to have this product ready for commercial release mid-2021 pending CE mark approval. Moving to Slide 23. The first half of 2020 has been a busy time for our sales and marketing team. Our sales and marketing strategy is designed to address the key drivers of our revenue growth with the number of labs and the number of procedures performed in these labs. As previously mentioned, our sales agreement with Philips will enable Philips to leverage their strong European sales force to drive iCMR lab adoption, leading us to focus -- leaving us to focus on supporting product utilization, growing our portfolio of consumable devices and expanding our indications for use. We work closely with Siemens to target and drive lab adoption at certain sites and continue to pursue an agreement that would enable Siemens to include our capital equipment as part as their overall lab construction package. With both MRI vendors, we work closely together to provide training, installation and early support of new sites. The key focus for our marketing team is on building awareness of Imricor's products and providing educational programs. Given the restrictions on travel and gatherings, we have continued to engage with the medical community through online seminars, supported in particular by doctors Thomas Gaspar and Stefan Ulbrich of the Dresden Heart Center. To date, we have held 4 of these seminars, including focused seminars exclusively for members of the Sana network. Overall, these seminars contribute to positive outcomes in relation to our pipeline of potential sites. Our Director of Marketing, Nick Twohy, recently presented at the Siemens MAGNETOM World Summit as an industry expert on the topic of interventional MRI. And this session was attended by over 600 healthcare professionals. To further support awareness, we recently launched a corporate procedural video, which you can view on our website. To support early success at new sites, we're providing comprehensive training and ongoing support to our customers. And as mentioned earlier, we transitioned training and installation activity to our European team some months ago, and we expect an acceleration in lab adoption in the fourth quarter of the year. More recently, we were granted permission for our U.S. personnel to travel to Europe for new site training and clinical support. Slide 24 provides you with links to the video content, covering some of the sales and marketing initiatives, I just mentioned. So you can view those at your leisure. I would now like to hand it over to Lori, who will take you through the financial results for the half year period.

Thank you, Steve, and hello, everyone. As a reminder, all numbers are in U.S. dollars. Our results have been reviewed by our prior auditors or unaudited. As set out in Slide 26, we generated revenue of $277,000 in the first half of 2020, which included $170,000 from the sale of consumable products, significantly impacted by the COVID-19 pandemic, which stalled our lab rollout plans and also resulted in a temporary suspension in procedure volumes at the Dresden Heart Center. The consulting revenue of $100,000 we earned during this period related to the termination of a joint research agreement, which resulted in the recognition of a previously recorded liability. This had no impact on cash receipts during the first half of the year. Operational expenses, excluding R&D, increased by $1.8 million to $3.1 million in the period. This was largely driven by staff costs as we increased headcount across a number of functional areas as well as the incremental costs associated with becoming a public company. Our R&D spending increased by approximately $600,000, reflecting our investment in pipeline products to drive future growth. The reduction in finance costs between the first half of 2019 and 2020 reflects the conversion of convertible notes to CDIs as part of our IPO in August of 2019. During the first half of the year, we incurred a foreign currency exchange loss of $265,000, the majority of which relates to proceeds from February institutional placement, which had been held in Australian dollars. The net loss for the period was $5.8 million. As shown on Slide 27, our operating cash flow -- outflow for the first half of the year was approximately $5.8 million, up $2.7 million from the prior period due to our increased headcount and public company costs, as previously mentioned as well as the build in inventory we undertook during the period to support our commercialization plans. Investing cash outflows in the half year consisted of the purchase of manufacturing and R&D equipment as well as leasehold improvements and furniture relating to the build-out of our additional R&D facility. In February this year, we completed a AUD 20.3 million institutional placement, which raised back net proceeds in U.S. dollars of $12.7 million to fund our commercialization and future growth initiatives. At June 30, we had a cash balance of $11.4 million. In relation to our balance sheet, on Slide 28, we have adjusted the balances at December 31, 2019, for the net proceeds of the February placement to provide a better like-for-like comparison. In terms of key balance sheet movements, in the first half of 2020, our inventory balance increased approximately $1 million as we build the inventory in preparation for commercialization combined with the COVID impact of our sales during this period. As mentioned on the prior slide, we made further investments in property, plant and equipment during the first half. However, $596,000 of the overall $1 million increase relates to leasehold improvements, which were landlord funded and capitalized in accordance with the lease accounting standards. We also extended the lease across our facilities in the period as well as taking on more space, which has driven up current and noncurrent lease liabilities. As Steve mentioned earlier, we certainly did not stand still during the first half of this year, and we have continued to advance a number of initiatives to both support and drive future growth and financial performance. In particular, we've undertaken a number of activities to deliver future margin growth through development and manufacturing improvements and initiatives. These are set out on Slide 29 and includes quadrupling our lot size for sterilization and additional coil winder to triple capacity and catheter design and process improvements to reduce material costs build time and scrap rates. At the back end, we have implemented a robust inventory management system, enhanced our human resource efforts to efficiently manage growth in headcount and ensure we delivered on our compliance requirements. Unfortunately for me, have bolstered our finance team to support increased demand, both internally and externally. In light of our expanding workforce, we have undertaken analysis of employee benefits, which has enabled us to enhance our offerings to employees and no additional cost per person. It has been a very busy 6 months. And as we grow, we will continue our focus on enhancing value for our shareholders. I will now hand it back to Steve to take you through our outlook.

Thanks, Lori. So while the COVID-19 pandemic has been a disappointing disruption for our early commercialization plans, I'm very pleased with our positioning as we move into the second half of this year and beyond. Our focus remains on continuing to execute a controlled launch of our products through Europe with an acceleration in these plans expected in the last quarter of the year, we will continue to pursue opportunities to grow our pipeline at potential sites, working collaboratively with Philips and Siemens to drive lab adoption and grow market awareness and education through our direct sales and marketing activities. While early days, I expect our recent sales agreement with Philips to further enhance our pipeline of potential sites and further accelerate our lab adoption plan. As set out earlier, we will continue our R&D focus on products to expand our indications and deliver margin improvements while also pursuing regulatory approvals in Australia and in the United States, supported by our developing strategies around clinical trials. I feel it's important to reinforce that while we expect to see a real traction in our commercialization plans this year, 2021 and beyond are exciting years for Imricor, particularly as we pursue opportunities to expand our future indications and geographic reach to drive accelerated growth. We're excited about these opportunities ahead, and we look forward to keeping you updated on our progress. With that, I'd like to hand it back to the operator to commence questions.

[Operator Instructions] The first phone question comes from Sarah Mann from Moelis.

Just wanted to ask, I guess, about your strategy around marketing going forward. So historically, I guess, conferences have been a really important part of marketing. And with COVID, things have kind of gone remote and you guys have pivoted really well, but just interested in kind of the medium term. What role do you think kind of conferences play? And how you're going to kind of adapt your marketing strategy in light of that?

Well, Sarah, that's a really great question. What we hear from the doctors is they really want to get back together. They miss the environment where they can socialize, I suppose, everybody in the world is feeling like this, where they can socialize with their collaborators and their friends and their coworkers and so forth. So it's -- I think that we certainly haven't seen the end of in-person conferences. But I do think it will be some time before those conferences come back, and many of them are taking place online now. And we will find ways to participate in those that are effective. But we also hear from other companies as we've talked to folks that maybe they can use the money that they would spend on those types of interactions in a more effective way to get to customers. So we're going to continue to look at how that progresses and how that evolves over the next 12 months, essentially. But I do expect at some point, we'll be back at conferences. It certainly is an important place for us to have the doctors that are using our procedures present about it and to spread the word. It's one thing for our marketing team to say how great what we're doing is, much better when doctors say it themselves. So like a lot of things as we come out of COVID, we're going to continue to monitor it and think through how best to react.

Great. And then just specifically on the Siemens conference that you kind of alluded to in your presentation. Just interested in, I mean, any feedback from that, that you can share with us and how you expect that to kind of flow through to increased interest in your product going forward?

Well, the feedback I got was from -- and Nick may have gotten more feedback and Greg Englehardt, our Sales Director, also from specific customers, which I haven't heard yet. But I got some feedback from Siemens themselves. And what they said was, it was, if not the, it was one of the best attended sessions of the seminar. And so it was really a highly attended. So they thought that was a very, very good sign. That's the feedback I received so far.

Okay, great. And then just in terms of building the body of clinical events, getting key opinion leaders to share their experience with using your product, do you know if any of your existing hospital customers or perhaps some that are kind of in the pipeline, planning on doing their own studies around MR-guided ablations at all? And if so, do you know specifically what they might be looking at?

I think there will be some -- I know there are some plans to do that. There's some clinical trials that we, of course, have and are planning ourselves to expand our indication. But we do expect that there will be additional studies that folks will want to do. And we'll support them. I don't have any particular one on the top of my head right now, but we'll support them through that as well. What we -- when we target initial sites, of course, we're looking for key opinion leaders and folks who want to do groundbreaking work and hence can tell that work effectively to the world so that others will follow. And that's working up very well so far. We -- the month of August has been a bit slow for us in lab rollout because it's summer holiday break, but we have several sites planned to get started in the coming weeks. And we're really looking forward to how that rolls out.

[Operator Instructions] The next phone question comes from Elyse Shapiro from Bell Potter.

You mentioned a number of sites is the like third stage out of a 5-stage sales process. What do those equate to in terms of revenue numbers? If you can provide some clarity around that, please?

So I want to make sure I understand the question, Elyse. Are you asking what those sites will contribute in terms of revenue as they come on?

Yes, just -- I mean, whether they are kind of larger sites, smaller sites, just any, kind of, any color on patient volumes within those groups?

Yes. It's very variable. It depends on the site for how many atrial flutter ablations they perform. And it's -- it can be regional, and it can depend on the focus of that institution as well. So we have some sites that may do 75 cases in a year. We have some sites, in particular, Leipzig Heart Center is planning to do 200 cases a year. Somewhere in the 110 to 130 range is what we expect about the average to be. But as we grow, that number comes from us, Poland doctors prior to our IPO to find out how many they actually thought they would do in the sites we had lined up. As we start to ramp up, we'll have less visibility of what their plans are, but we'll have more visibility about what our traction is looking backwards. And it will be easier for us to predict on average, what a new site will deliver in terms of revenue. But now it's pretty early for us to say, but that's pretty close to the volume we expect.

Got it. And then it seems like you have a pretty good understanding on commercial strategy in the post-COVID and COVID recovery environment. But what's -- I mean what's the impact of COVID on timing of U.S. regulatory submissions and clinical work to expand the indications?

Honestly, in the U.S., the regulatory process is going just really quickly. In the past, what we would have to do is we would put a package together. We'd submit to the FDA. We'd ask for a meeting time. We get that scheduled. We put a bunch of people on an airplane go to Washington, D.C. Hopefully, everyone's schedule fall align and we have that meeting then we'd come back and regroup. Now with the video conferencing that everybody is doing, we're getting meetings scheduled faster, and we're executing them quickly. And we're not wasting the time traveling and the whole process is actually moving forward with remarkable efficiency. So it's really -- we're really excited about what the FDA has been able to do during this critical plan outside COVID. Of course, they're doing great stuff inside COVID as well. But for cardiology, it's still those efficiencies are working.

Great. And then just in terms of any delays on the clinical side, especially in Europe on indication extensions?

No, we're actually still on track. Now we would hope to have had a bunch of sites up and running. So I should say we're on track in the context of the pause we took in establishing our labs. We still were planning to do trials essentially when we are -- when we will do them. But at this point, we thought we'd have more people, more sites up and running and getting experience in the environment. So we're just going to want a really keep a good eye on that, and we'll have to engage more quickly at the end of the year to get people signed up for the trials that we're hoping to perform next year.

Yes. Like once you get the sites onboarded, kind of, post their summer holidays, you kind of expect things to pick back up there?

Yes. The strategy that goes into a trial for an expanded indication is about trial design, study design, statistics, indications, registrations, certain things like that. These are all things that we can do now. But now we want to start enrolling sites and getting them excited about because they're already excited we're doing that. So we know that already, but getting them signed up and ready to execute. So that's the part that we just -- we'll do it at pace so that we can get started when we want to get started.

The next phone question comes from Eric Roles from Moelis.

Steve and Lori, I was just wondering, you obviously have seen delaying procedures as hospitals cope with COVID and I assume patients are reluctant to go into hospitals for procedures. Can you provide a bit of color and an update on your outlook, especially as we come out of the European summer on procedures and in terms of frequency going forward for the rest of the year? And what you're seeing on the ground in terms of getting people into hospitals and being able to perform procedures?

Sure, absolutely. I don't see -- I haven't heard any stories from Europe about patients not being excited about going to the hospital. It seems to be the opposite where people have been waiting to get these procedures done, and they're pretty anxious to get in and get them done. Now while everything was on lockdown for a couple of months, there were things even in some of our labs where we're starting in a diagnostic lab to do procedures, maybe once a week, they're going to do procedures in this otherwise diagnostic lab while their iCMR lab is being constructed. Well, now coming out of COVID, there are people who have been waiting for months to get a brain scan to find out what -- if they've got a tumor and what the status of that is. That's a long time to wait for something like that. So what doctors and hospitals are choosing to do is postpone, in one case, postpone until now in this coming month. What would have been a start last month, just to be able to get all these folks in there and get their diagnostics being done. When it comes to ablation procedures in dedicated labs, the doctors are focusing on the more life-threatening types of arrhythmias at first and continue to medically manage their patients and then get them in a little bit later. So we've seen a slower ramp up of procedures. For instance, at the Dresden Heart Center, we were looking at 2 to 3 procedures per week, 3 to 4 procedures per week. We're seeing maybe 1 less procedure per week than we were seeing prior to the pandemic. So we think that will all normalize. The doctors expect it will normalize. And then the last thing about the COVID in Germany as it seems to be, in Germany, in particular, it seems to be very regional. In some places, they were all geared up for COVID, and they didn't have a big outbreak. And so things have gotten back to normal quite quickly there. In other places, it was a bigger issue. Just recently, and I think it kind of makes sense as they come back from summer break, they had a couple of spikes coming up. But they're really well prepared there. And they handled it well last time, and we're not seeing things get out of control. And we haven't heard anything from any doctors saying that they're concerned that they're going to go back into some sort of lockdown associated with the pandemic. And in fact, we have date schedules and continue to schedule dates to get sites up and running. So we feel like it's clear sailing. If nothing blows up that we're going to move into the second half of this year. And in particular, the end of the third quarter and the beginning of the fourth quarter, we'll really start to ramp up through lab adoption.

At this time, we're showing no further questions. I'll hand the conference back to Mr. Wedan for closing remarks.

All right. Well, thank you again for joining Lori and me today. We look forward to catching up with many over the coming weeks, and have a great evening and a great day.

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