PetVivo Holdings, Inc. (PETV) Earnings Call Transcript & Summary

I think we're live right now. So let's jump in. Thank you, everyone, for joining today into today's webinar, inside the PetVivo story. What veterinarians are seeing, and how axis is expanding. So my name is Andrew Erickson, I'm a Managing Director on the Real Capital team. We work with the PetVivo team here, and I'll be monitoring today's call. So today, we're going to introduce the speakers. I'll throw a little bit of background on the PetVivo story, talk about how their Spryng technology is being used in practice today and talk a little bit about the commercial landscape, and what they're seeing on their side. So went through the presentation. If you have any questions, there will be a Q&A chat box on either platform that you're watching on. So submit your questions there, and we'll make sure we get to those at the end of the call. So without further ado, let's jump in. I will start with some brief introductions from the team. So John, maybe you can kick things off for us and introduce yourself.

Thanks for having us on here. So my name is John Lai. I'm the CEO of PetVivo. I've been the CEO for about 14 years, and I'll pass it off to the next person.

Dr. Juli, if you don't mind, you can go next.

Sure. My name is Dr. Juli Goldstein. I've been a veterinarian for over 20 years in both small animal practice and academic settings. And with PetVivo, I serve as the technical services veterinarian where I get to work with veterinarians every day that are implementing our products and helping to drive those discussions and case selections.

Perfect. And finally, but certainly not least, Bryan?

Yes, Bryan Monninger. I'm a lifelong pet and animal lover and have over 25 years' experience within the animal industry. And then currently, the VP of Sales and Distributor relations for PetVivo. So manage the entire sales team as well as our technical veterinarians.

Perfect. Perfect. Thank you all. So just jumping in here, I think the best place to start is a little bit of background, right? So for those of you who are maybe not familiar, PetVivo is a biomedical device company currently focused on manufacturing, commercialization and licensing of innovative medical devices of therapeutics for companion animals. So they have a commercial product that is based on the Spryng technology, which the team will get into. But just to get things going here. Maybe, John, I'll though it over to you for a quick background on who really is PetVivo, what's the brief history of the company? How did we get to where we are today? And how would you personally describe the company, and where you guys are focused?

So Pet Vivo has been focused on bringing innovative next-generation of products for each category that we feel. So we were initially funded by NIH and Department of Defense Science was developed at the Mayo Clinic, a little over $7 million was put in. And so most of the work we've done on the human side initially. So when I was brought in as CEO of the company, I said I want to take it into the animal side because of all the work that was already done on the human side. So the uniqueness is here is our particles, the Spryng particles, were declared on the human side as human medical device. So that means when you get into the companion animal side of the FDA, you didn't have to do the studies to get approval to sell and market. So that's one of the major advantages we have. So PetVivo Holdings is unique in the sense that it's really four wholly owned subsidiaries. One is PetVivo.ai. The focus there is to provide innovation into the veterinary space, create an atmosphere where the pet owner and the veterinary doctor works together to provide better health outcomes for their pets. So we're really building the bond and trust. Also we're providing the pet owner and ability to do a lot of the work [indiscernible] what may be wrong with their animal, whether the app will tell them, "Hey, you should consult with your vet, there could be a possibility here." And then from the veterinary side, we're allowing the vet clinic or the vet manager to help reduce the cost of customer acquisition because you're able to target ads specifically in your area and the general trend right now that's happening within the veterinary industry is like VCA and so on. They're giving free first visits to pet owners just to bring them in because the customer acquisition costs right now on average is about $145 per new customer. And the lifetime value of that customer is significantly larger. So we're providing an opportunity that we believe will bring that cost down significantly. Secondarily, from a management standpoint, the veterinary doctor can onboard mobile into multiple pieces of data, condense it for them, so save their onboarding time by about 80%. That means they have more time to actually practice veterinary medicine and interact with the pet owner. So we're building that bond for the next part, PetVivo.ai. The next part is PetVivo animal health. Currently, we have two products within this space. One is with OsteoCushion technology and the second product is PrecisePRP. And I'll leave that to Dr. Julie to explain, but these are quite innovative technologies as part of the trend in the veterinary medicine, this multi-mode approach and people in the veterinary space will understand how these products feed off of each other to provide longer-term health for the animal. The third piece, which we've been really moving forward with because of our partnership with Peso Bio, which is a spin-off in the University of Connecticut. They developed a very innovative advanced technology in nanofibers. And these nanofibers in combination with Spryng helped create an electrical field that electrical field is created by pressure of the joint. So once it's injected in the joint, it enhances our matrix that our particle creates to help attract a lot of the cytokine cells, whatever proteins have needed to help the joint repair itself or improve joint function because that's one of the technical advantages of Spryng as it provides long-term functionality. So that human aspect with the Connecticut partnership will allow us to look at getting into the human side of the market because we're seeing a lot of benefits occurring in small animal studies as we expand the larger animal studies with dogs and horses. Through the University of Connecticut and Piezo Bio, we expect to get a lot of valuable data that can be used on the PetVivo animal side. And then our fourth unit, which is [indiscernible] Technologies has to deal with the manufacturing of these particles and other combination products. Now the uniqueness there is that we did certifications actually for human medical device manufacturing, ISO 5, 7 and 8, which is not required in the veterinary animal. So we try to bring the highest standards of manufacturing into the marketplace. So that's a brief summary of the four units of PetVivo Holdings, which is in itself is like four individual businesses that are targeted to different segments of the market with different business models.

Great. Great. Thank you. Yes, yes, brief, but certainly detail, right? I think there's a lot going on for PetVivo Holdings, which is exciting in nature, and there's a lot of exciting things coming down the pipeline, which we don't have enough time today to get into all those details, but we'll be constantly updating folks as those occur. But no, I appreciate that background, John. I think it's a good opportunity to springboard into Dr. Julie and some of the things you see in spring and practice, right? So Dr. Julie, I thought over to you. You're now full time with PetVivo, and you've had some experience with seeing other veterinarians using Spryng in their practice. So I would love to hear a little more -- John alluded to at the offset about your direct experience with the product, but love to get a little more perspective on the product from you and kind of what you're seeing in practice?

Absolutely. So one of the really unique things about my job that I mentioned before is I speak to veterinarians daily discussing how they're using the product, discussing this disease. Osteoarthritis is a very complex, challenging disease for pets. Humans get it as well and other species, we all suffer from this disease. And I want to throw out a little statistic before I jump into what veterinarians are saying, is that we think about it in all species as an old pet, an old human and old dog disease. And it's really not. In fact, we're seeing -- studies have shown that dogs 40% of dogs that are under 4 years old. That's still -- in my mind, that's still a puppy. And I think in our pet owners' minds it is as well. They're showing radiographic evidence of this disease already happening. And so that message is sticking in the minds of veterinarians because ultimately, the owners are coming when their dogs are older. They think it's normal to have mobility issues when they're senior pets. But we've been working really hard to educate our pet owners that this is not just an old dog or an old cat disease. So that provides an opportunity to really improve the quality of life and pets. And what I'm hearing for veterinarians is that with our products, it's giving them more options. So when you're treating osteoarthritis, there's no magic bullet, unfortunately. There's no magic cure. And so the best outcomes that we see with these patients are implementing what we call a multi-mall approach. So using things like rehabilitation, laser therapies, nonsteroidal anti-inflammatories. And Spryng and PrecisePRP have provided another option in that toolbox to work concurrently with all the other things that were veterinarians have in their toolbox, if you will, to help provide ultimately the comfort in the quality of life with our pets. And so it's been very exciting because we get a lot of positive feedback from clinicians, especially with pet owners. Pet owners are very educated these days, and there's a lot of resources out there and they want more holistic options. And when you're talking about medicine, that's not really available. There's not a ton of holistic options, and Spryng especially provides that for pet owners and clinicians that want to implement that for their patients. So it's been really exciting and to hear all the positive feedback.

Yes. No, that's a super helpful background. I think that kind of helps set the stage in terms of -- there's obviously a market here need. I think the landscape is much bigger than people realize, like you said, with how early onset we're seeing use in these animals. And so there really is a desire need. There's not really a great solution. And so I think that's a void Spryng fills. Maybe it would be helpful for you, [indiscernible], as well as Dr. Julie, if you don't mind, just can explain in practical terms how does Spryng designed to work in the joint, and how vets are typically thinking about incorporating it into their planes, like when does this come into development for them? And how does it work just so if you can get a better understanding of the use case here.

Sure. So Spryng has a dual mechanism of action. So it does two different things within the joint. And as I mentioned before, this is a naturally derived product. So it's composed of collagen and elastin, things most people have heard of, and it served to mimic the natural tissues or extracellular matrix that the joint capsule is partially composed on. So the veterinarians inject it into the joint, and then the first thing it does is it helps with the lubrication properties of the joint or the synovial fluid. So that's that fluid in that capsule that's so important for a smoothness of movement. So when you think about it, most people are familiar with arthritis and you think about that kind of bone-on-bone effect. And that's because there's no cartilage and the fluid is very unhealthy in there. And actually, that joint fluid is the first thing -- one of the first things when arthritis happens that becomes unhealthy or degraded. So Spryng goes in there and it helps improve that, which it helps improve movement. Then the second thing that Spryng does after about two weeks, it then incorporates within that joint capsule itself. And that location is where we get all that nasty cell signaling. So John kind of mentioned this before with having -- with the Piezo product, getting those positive cytokines. So within the joint when arthritis happens is this domino effect, right? And so we have unhealthy tissue that then sends out signals to say, put more inflammation in here and it continues on. When you have healthy tissue and healthy going capsule, that doesn't happen. So Spryng serves as a scaffold, if you will, so that the joint can then produce healthier joint tissue with the hope of decreasing those signals that are causing this inflammation to perpetuate. So that's the -- that's about the basic way that it works, it's obviously very complex science, but it's basically allowing improved mobility for the patient because we're having a healthier joint environment overall. So -- and then how veterinarians are incorporating it? So it's unique because there's a lot of ways that vets are using this product because it's provided that option. One example, I mentioned the multimodal effect. But one example I'd like to start off with. So times are tough. Finances are hard for the average pet owner and surgery is expensive no matter who you're talking about. And a lot of times, when you have something like a torn cruciate or torn ACL, it's very similar to that in humans. That's an expensive surgery for pet owners. And a lot of times, that's not an option, or it's not an option in the immediate term. And so what I'm seeing a lot of clinicians do is inject those joints with spring because; a, either surgery is not an option, which is standard of care for a cruciate tear, or the owners need that time to get that their finances together to pay for that surgery. And so this is a wonderful auction because otherwise, what they're doing is just is masking the problem. They're throwing various pain medications at their patients because they need it for comfort. But that can be problematic to in certain pets that their bodies can't handle that. So that's a really exciting option that's been offered to veterinarians. We're using it to support not only their senior dogs with OA, but they're younger dogs as we start to recognize this disease in our younger patients. So that's a very common use of Spryng. I have some clinicians that they're doing their yearly spring injection. Just to maintain that health of that joint as the patient ages when it already has the early signs of arthritis. And so those are probably two really exciting examples. There's many more we could have a whole multiple hour discussion about how to use this. But again, it's that nice support tool that they can have for these unique patients.

Yes. No, that's amazing. That's incredibly helpful. And I can certainly speak for personal experience, too, where we had a family dog where there was a $10,000 check that had to come, and sometimes you don't always have the convenience, like you said of masking the problem, right? That is something that folks do, but sometimes you don't have that luxury even it something you need to do sooner rather than later. And so having a solution that you can practically get ahead of some of these problems, just is a tremendous opportunity, I think, for a lot of folks and obviously, most supportive to pet. So one thing I'd just like to add on quickly, Juli, was with your experience because, obviously, it's immediate, and it's really interesting is when you talk to a Spryng, what do you think they value the most about? Is it the mechanism? Is it the duration? Is it how these patients are doing post the post the therapy, like what is like the driving factor to why vets are really considering using and are using Sprying in today's environment?

Sure. Well, all the things that you mentioned, but I think ultimately, it provides a way to have quality of life for their patients. And that's as veterinarians, we take an oath to do no harm, take away pain help the animals that are placed in front of us, and we need those options to do that. And Spryng has been a wonderful and positive way that they can offer to their pet owners, their pet parents to improve the pet's quality of life, and that's ultimately why we're all here.

Yes. Yes. Fantastic. Thank you for that. John, I'd like to pivot over to the commercial landscape and get a little bit of Bryan in taking on some of this stuff, too. But as you think about, given your position kind of leading the company here and some of the things you said at the offside of the call, hearing some of the feedback you hear from clinics that Juli just explained to us, how do you think that lines up with how you think about Spryng's place in the broader joy of health landscape, right? How is that what you're hearing from these veterinarians and [indiscernible] next line up with what you're thinking in terms of the development of this technology and the PetVivo story, really.

So understanding the macro environment, veterinary doctors are trying to use less pharmaceuticals, just like human doctors Spryng offers that opportunity because in the human trials, we showed it was total neutral to the body. So if you think of NSAIDs and so on, we have found after 2, 3 weeks of injection of Spryng, you're going to see a reduction in different pharmaceutical meds for masking the pain and so on. And as Dr. Juli suggested, the evidence show prolonged use of NSAIDs and so on will cost gas track issues, kidney issues, and livery issues. So the more we can help minimize side effects of pharmaceuticals, it's perfect. And there is a big push in human doctors as well as veterinary doctors. So we're starting to really hit the proper trends that's happening in the marketplace. And ours is a much longer-term solution than other methods out there. But the best result come is when you hit some of the short-term issues that's creating the problem. So if there's a really inflamed joint, you want to bring that down because you're blocking IL-6 or [indiscernible] 6, which is the key market for inflammation. So once you block that, you have a more stable drug. Then when you inject a Spryng, Spryng can do its job over time because as that scaffolding effect it draws in the proper cytokines and proteins to help that journey period. So the key is we want to make sure that the veterinary doctors, we're catching them on the right trend, and we believe we are with our introduction of products because it really helps minimize the time that the doctor needs to use the therapy. And as Dr. Juli said, you do an annual injection as a prophylactic product. And we're educating the industry. It's all part of our continued medical education. We're seeing the insurance companies start understanding this. Insurance companies are actually putting together committees to identify advanced technologies that could reduce their cost of future situations like operations that are $7,000 to $10,000 if you can prolong that joint functionability and maintain quality of life, that's a major savings to them, especially when -- more and more people are getting smart. They're buying insurance earlier, so they're locking in the rate, and they're going to be taking care of going forward. So it's much easier to manage when you don't have surprises in health issues that may arrive -- that may occur.

Yes, absolutely. So I appreciate that context and that makes a lot of sense. So now what I'd like to do is shift a little bit and connect the clinical side of the story to the commercial and the access side of the story, which I'd like to throw over to Bryan here. So Bryan, maybe from your perspective, it would be good to start kind of the high-level access strategy, right? How do you think about working to make Spryng and PrecisePRP for that matter, more accessible to veterinarians, both in the U.S. and internationally and start at the top of the funnel here? And how are you thinking about it?

Yes. So it's, as you said, no matter how good the product is, if the industry or the profession doesn't have access to it, it's a problem, right? So PetVivo, we've made big strides over the last couple of years. We're basically now partnered strategically with every single major U.S. veterinary distributor as well as we've got distributor partners now already set up in the U.K., the EU, Mexico and we'll be coming soon to Canada because we have received the Health Canada approval as a veterinary medical device as well.

Very nice, very nice. And can you touch a little bit on that, I think it would be helpful to understand too is, do you touch a little bit on that distribution part of strategy, and how that's evolved over time. Obviously, you're taking a global approach, not just focusing on the United States and kind of the market there, even though that's probably the highest near-term market. But how do you think about that distribution and partner strategy for the near term and long term?

Yes. So the partner strategy makes sense from the point of view of we don't want to make it difficult for the profession or the clinics, right? So really, we want to be wherever their preferred partner is, right? So that's why it's really helped boadening our number of distributor partners. Because now really no matter what a doctor or a clinic prefers as far as how they get supplied, Spryng and PrecisePRP are available through those channels. And obviously, we are -- we started and are most focused in the U.S. and North America. But as interest has grown around the globe, we have thought to be able to provide it in those areas as well. And so we're continuing to follow up on that because the veterinary industry is a very large thing, but it's also very small in a lot of ways. And so you do get a lot of exposure globally, just even by attending major global conferences that are held here in the U.S. every year, which we've been doing.

Awesome. Yes, very multipronged approach and leveraging that part of strategy to distribute as wide as possible. I think it always makes a lot of sense for this type of product more so very helpful. Now I want to be cognizant of time. I see some questions coming in. So -- and some questions that can answer some of the things that we probably didn't even get to yet. So I think it's a good time to pivot to that. So couple of questions here. Like I said at the offset of the call. If you have any questions, feel free to submit them now as well, and we'll try to get to them. And for any questions we don't get to, we'll certainly follow up with e-mail. We have our own information we submitted, so we will do that. But let's jump into this Q&A here. So look at the list here. I think this first one would be a good one for John. It says for investors who are following the story after today, what are the top 1 or 2 milestones used to adjust they watch over the next 6 to 12 months to measure your execution.

So I think one of the first ones to look for is probably really enhance and expanding our partnership with Piezo. We see that there's potential for multiple products using that technology for both the animal health side as well as the human side. So that's one key milestone. A second one would probably be more studies getting published and coming out. I'm personally very excited about the studies we're doing with Piezo in the dog and the equine side because those directly impact our sales and marketing team because hopefully, we will have a lot of good data that we can submit as we move into the human market. as we file that for an IDE, hopefully by the first quarter, calendar quarter of next year. So as you see progressions of that, I think those are very pivotal type events that signal, we're making very good advancements and that we're providing the veterinary side as well as the human side, good scientific data to support that we're creating innovative technologies for the improvement of life for the animals as well as eventually rolling into the human sector.

Fantastic. No, that's great. A few different things for people that [indiscernible], so that's exciting. This next one, definitely probably for Bryan on the sales and distribution side. It says from a sales and distribution perspective, what are you most focused on as you work to expand access to spring and the rest of the portfolio?

Yes. The team is actively focused on really -- we're very lucky because with our products, we're able to provide we've got a really strong and impactful basically animal well story. We've also got a very strong science and medical story. And then also have a great kind of revenue flow story as well for the clinic. So it's really taking that high level of interest we're getting from those perspectives, and turning it into action, and turning it into initial usage and then broader client-patient usage within the clinics.

Great. Thank you for that. And I think we've got time for one more, which I think works well because I want to send this one towards Dr. Juli. So Dr. Juli, this one says, based on the conversations you're having with veterinarians using Spryng, what gives you the most confidence that it has a place in their joint management toolkit.

Great. That's a great question. And I think I'm speaking with all types of veterinarians, so general practitioners, surgeons, rehabilitation specialists, internists, and I'm getting across the board a lot of positive feedback that we're seeing improvement in pets mobility and ultimately, quality of life. And hearing those diverse conversations from veterinarians that have very similar but different approaches in their practice, all saying that same positive, it's helping these pets really does give me the confidence that this is the perfect product to put in your multimodal osteoarthritis toolbox.

Fantastic. Fantastic. And yes, I think that's about all the time we have today. I see there's 1 or 2 other questions in here. So like I said, we'll get back to you on those directly for those who submitted those, or you're just up against time for right now. So what I'd like to do is just thank you, everyone, again for today for joining today's call. I think it was a great opportunity to not only get PetVivo story, but what this broader platform is, the several opportunities to have within that PetVivo story. We heard from Dr. Juli directly on what veterinarians are seeing and the feedback on Spryng, and why there's a lot of optimism for the product moving forward. And then we got to understand the sales and distribution, right, and how it's going to expand access to these bets, but also the patients, the animals at the end of the day who need this technology to improve their situation. So I think this was very helpful. John, I guess I'll throw it over to you really quickly for a 30-, 45-second closing remarks you have for the audience.

Well, thanks for having us on. One of the things is as we move forward, I do encourage people to go to our website and look at the announcements we made because we are making very good advancements in educating the public as well as veterinary doctors because Dr. Juli and Dr. Kirsty, they've been getting CE credit, continued education credit forces, putting up there for veterinary doctors, which they all have to take on an annual basis. So that's helping us educate the pet side. And our goal on my side is and Bryan's is to also to educate the consumers, the pet owners because the pet owners working with the veterinary doctors is what's going to really drive adoption. So we're excited for the next year because we think we're going to see a lot of advancements, tangible advancements within PetVivo.

Fantastic, fantastic. Well, thank you all for joining today. Thank you to the audience for joining the call. I hope it was helpful. Just as a brief kind of compliance reminder, this session was for informational purposes only and does not constitute an offer to buy or sell securities, but we thank you, everyone, for joining the call today, and look forward to keeping you updated on PetVivo.