Streamex Corp. (STEX) Earnings Call Transcript & Summary

Hello, and welcome to the BioSig Technologies Unblinding of Clinical Data Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Andy Ballou, Vice President, Investor Relations. Please go ahead.

Thank you, operator, and thank you all for joining us on today's Unblinding of Clinical Data call. Speakers on today's call are Ken Londoner, Founder, Chairman and CEO of BioSig and Julie Stephenson, BioSig's Head of Clinical Affairs. Before we begin, I'll remind everyone that this presentation contains forward-looking statements, including statements that address activities, events or developments that BioSig expects, believes or anticipates will or may occur in the future, such as predictions of financial performance, approvals and launches by BioSig of new products, market acceptance of BioSig's products, market procedures, projections, financial plans and related documents. Forward-looking statements are based on BioSig's experience and perception of current conditions, trends, expected future developments and other factors that believes are appropriate under the circumstances and are subject to numerous risks and uncertainties, many of which are beyond BioSig's control. BioSig does not guarantee any forward-looking statements, and actual results may differ materially from those projected. Unless required by law, BioSig undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about the company and the risk factors that may impact the realization of forward-looking statements are set forth in the company's filing with the SEC, including the annual report on Form 10-K and quarterly reports on 10-Q. Investors and security holders are urged to read free-of-charge these documents on the SEC's website, www.sec.gov. And with that, I'll turn the call over now to Ken Londoner.

Thank you, and good day to everyone. Thank you for joining us all on the call. We look forward to describing our clinical results to you. For the benefit of those joining the call for the first time and new to BioSig, I'm going to give a brief background on the company. We were founded in February of 2009, inspired by a physician who was the Chair of Harvard Cardiology, Dr. Mark Josephson, who introduced myself to the engineers that ultimately ended up designing our technology, who told me that the quality of electrograms in the industry were causing suboptimal outcomes for the minimally invasive surgical procedure called cardiac ablation. After studying the problem for approximately a year, including patent review, competition, technology assessment, KOL input, all of us decided to form the company, and we opened an office in Los Angeles. We received our 510(k) clearance in 2018. We uplisted to NASDAQ in the fourth quarter of 2018. We made our first commercial installation in November of 2019, unfortunately, ran into COVID like every other company. We were out of the market for approximately 6 months where hospitals were solely focused on treating sick people and elective procedures were put to the side. We're thankful to see the market opening up completely today. In terms of where we are today, we are a innovator in cardiac electrophysiology, and we are commercializing what we believe to be a disruptive technology, PURE EP. The global market for electrophysiology is expected to be $12.2 billion by 2026, an estimated 13.5% compound annual growth rate. The industry is a global one. We have patents on our technology, thoroughly protecting our hardware and software. They are outstanding patents. If anybody would like to learn more, we're happy to socialize that information. We have FDA clearance, and we've announced our first customers in the first half of this year, and we have more in the pipeline to come. Today, Julie Stephenson, who is our VP of Clinical, who's been with the company for 2 years, joined us from Medtronic, great business, she's going to take you through the clinical findings and the trial itself, and then I'll come back and make some comments. Julie, turning thing over to you.

Thanks, Ken, and thanks, Andy. Hello, everyone. It is a pleasure to be here today to present the findings from the PURE EP 2.0 study. As Ken mentioned, VP of Clinical Affairs, I've been at BioSig 2 years. And I come with 20 years of cardiac medical device experience prior to joining BioSig. I also was fortunate to squeeze in an MBA from the University of Virginia back in 2008. And prior to all of that, I was a critical care nurse for about 10 years with experience in cardiac surgery, cardiac cath lab and electrophysiology. So this is a spoiler alert. I've been asked not to bury the lede. So I'll be starting the call today with the key findings from the study in my first slide, and then I'll fill in all the other details and the greater context around the study over the next 10 to 15 minutes during my presentation. So here we go. Based on the ratings for each side-by-side signal example, a cumulative total of 204 PURE EP signals out of 218 were rated superior or equivalent for this data set, which equals 93.6%, with 75.2% earning a superior rating. PURE EP signals were statistically rated as superior in 3 different categories with a p-value of less than 0.001 in each of those categories. And those 3 signal categories are overall signal quality with a 92% superior or equivalent rating, ability to discern near field versus far field with a 96% superior or equivalent rating and small fractionated signals of clinical interest with a 95% superior or equivalent rating. I'll go into more detail about what these categories mean in future slides. But first, I want to review with the group the clinical -- the overarching clinical data strategy for the PURE EP System. So this pyramid represents the overarching clinical data strategy. It's the framework that I built almost 2 years ago to help guide the PURE EP clinical work. The first step in our strategy was to validate the superior quality of the PURE EP signals. This was accomplished with the PURE EP pilot study that we conducted last year and then was further validated with the findings from the PURE EP 2.0 study, which we're here to review today. The primary goal of the PURE EP 2.0 study was to help clearly define the clinical significance of PURE EP signals. In parallel to this study, we were also creating an infrastructure to harness the growing database of our PURE EP signals. And currently, we're working to quantify the economic benefits of the PURE EP system. This strategy and our study findings are already helping BioSig accelerate the commercialization of PURE EP and inform our product pipeline and software modules. Let's look at the growing database that I just referenced in the strategy. So beyond the data that we're gathering for our clinical studies, we are also gathering signal data from most of the procedures that we support. So to date, we have over 1,000 PURE EP procedures from more than 10 hospitals across the United States. And you can see in the larger donut there in the center of the slide, how that database stacks up as of just a few days ago, July 22. So 34% of the PURE EP database is comprised of paroxysmal AFib procedures, 29% of the database is persistent AFib procedures, 22% from VT and PVC procedures and then 15% represents supraventricular tachycardias. These procedures are similar to the reported procedure mix in most EP labs across the country. So it's great to see that the PURE EP System is valued in all types of ablation procedures routinely. This database is already helping support smaller independent investigator studies. It's contributing to the development of additional software modules and AI applications, and it's informing future multicenter clinical studies. So this is a really busy slide, but it does walk us through the 3 clinical studies that we have conducted over the last 18 months, and it introduces a study that's currently ongoing. And it does show the systematic progress we've made as a company to gather the data needed to support our commercial efforts and to build the foundation for additional clinical studies in the future. So on the left side of the slide, in September of 2020, we announced the findings in the PURE EP pilot study with signals gathered from the first 15 AFib ablation patients, which showed 85% of the time, the PURE EP signals were rated superior or equivalent to conventional sources of signals. Today's Webex is hosted to share the findings from the larger PURE EP 2.0 study, where we had about 100 signal samples from 51 patient procedures, and this study was designed to define the clinical value of those signals. So the study expanded -- the larger study expanded on the pilot study from last year with more patients, across multiple centers and all ablation types. And it was powered for statistical analysis. So again, the major findings from this study are 93.6% of the PURE EP signal samples were rated superior or equivalent for this data set. And the PURE EP signals were statistically rated as superior in 3 different signal categories. And we'll go into those categories in a few slides. But on the right side of the slide, we show another study that's currently ongoing, the redo AFib ablation study. It's a single center study to help us explore whether PURE EP signals when used as the sole source of signals during the procedure, results in different ablation targets and improved procedural efficiency. 50% of the patients in this study will be randomized to PURE EP, 50% were randomized only to the conventional signal system. And the study has already completed enrollment, and we will be conducting the blinded signal analysis sometime in Q3. We had a strong group of electrophysiologists who are leading our clinical investigations, conducting our core lab review work and the blinded panel of electrophysiologists to analyze our signal samples. We had 3 enrolling centers for the PURE EP 2.0 study, the Texas Cardiac Arhythmia Institute in Austin, Texas; Mayo Clinic in Jacksonville, Florida; and Massachusetts General in Boston. The panel of blinded EPs came from 3 prominent academic institutions. They were Brad Knight from Northwestern; Wendy Tzou from the University of Colorado; and Rob Schaller from the University of Pennsylvania. Andrea Natale served as our principal investigator and Amin Al-Ahmad is the first author on the study manuscript. The core lab review work was conducted by Deepak Padmanabhan and Omar Yasin, and we are very fortunate that we had such esteemed physicians supporting and guiding our work on this. So now we're going to dig into the details. So first, this is another busy slide, but I'll walk you through it. Let's look at the top of the slide. So we followed a robust process when we collected the signal samples to ensure the highest quality and integrity in our data. So once all of the side-by-side signal samples were collected from all the procedures, they underwent a core lab review, and that review was designed to identify specific signals of clinical interest in each sample. Through this process, the core lab reviewers identified signals in 4 different categories. The first category in yellow at the -- in the table at the top, were small fractionated signals of clinical importance. These types of signals in patients with cardiac arhythmias indicate areas of scar and abnormal conduction in the heart. And these types of small fractionated signals are often the culprit of the tachycardia. The second category in orange was the ability to discern near-field versus far-field signals. These types of signals are important because physicians during the procedure, as they're manipulating the catheter inside the heart, they're trying to understand whether that signal is coming from nearby the catheter or further away from the catheter. Is it near-field to the catheter or far-field from the catheter? That's something that they're always trying to discern as they analyze these cardiac signals. The third category of signals in green is the ability to recover quickly after pacing and cardioversion. So it's not -- it's fairly common during the procedure for the physician to need to pace or cardiovert. And we need the signals to recover quickly after those maneuvers and -- so that was our third category of signals. And then the fourth, in purple, is the ability to interpret relevant signals during the ablation treatment itself. Oftentimes, when you come on ablation treatment, there's a lot of electrical noise that's seen on the signals. And ideally, we'd like for that noise to be gone so that the physician can assess the impact of that ablation treatment as it's being delivered. So those were the 4 categories of clinically significant signals that our core lab reviewers identified. Now let's look at the bottom of this slide. So out of that review process, we ended up with 92 signal sets and a blinded assessment with 235 questions. We subjected that analysis to all 3 of our blinded reviewers. And we found when we got those results back that 93% of the responses showed consensus across the blinded reviewers. We were really pleased to see this because it indicated that there is a strong consistency across the panel of reviewers. Based on the ratings for each signal set, we also -- and this is something I announced on the first slide, we found 93.6% of the PURE EP signals were rated as superior or equivalent for this data set. But I do want to draw your attention to the table there, bottom right. And just ask you to see the difference between the number of signals rated as superior versus those rated as equivalent. And you can see that the superior rating occurred 4 times more than the equivalent rating. So even though the PURE EP was superior and equivalent -- or equivalents, we saw a strong tendency towards a superior rating there. Now let's look a little deeper at the statistical analysis. We found when we looked by signal category, that PURE EP signals were rated statistically superior in 3 particular categories: overall signal quality, ability to discern near-field versus far-field signals and the clinical value of the small fractionated signals, with each of those categories showing a p-value of less than 0.001. Again, the ability to discern whether a signal is near-field or far-field is important during the procedures because it indicates whether that signal is coming from nearby or further away from the catheter that the physician is using to treat the patient. Small fractionated signals are clinically important because they indicate areas of scar tissue or abnormal conduction inside the heart and that can oftentimes be the area where the abnormal heart rhythm is originating. Then we analyze the data by procedure type, and we were very pleased to see that the PURE EP signals were rated statistically superior in every type of ablation procedure. Regardless of the type of ablation procedures the patient had, we saw that the PURE EP signals were providing great clinical value with p values, again, of less than 0.001 in each of those ablation procedure types. So this shows that PURE EP is providing important contributions regardless of the cardiac ablation procedure. As you can imagine, we were very pleased to see these results. So now I want to revisit the PURE EP clinical data strategy in my last slide. So the PURE EP 2.0 study plus the growing database of greater than 1,000 PURE EP procedures has helped us achieved -- squarely achieve the second level of this pyramid. As mentioned earlier in the presentation, BioSig has also completed enrollment in the next clinical study, a redo AFib ablation study. This study will provide more data on the clinical significance of PURE EP signals and provide objective data to support the economic benefits of PURE EP. The blinded analysis of those signals will take place sometime this fall. So what do these findings mean for patients suffering from cardiac arrhythmias? Really what is, at the end of the day, why are these study findings important? Signal data is a critical factor in successfully diagnosing and treating all cardiac arrhythmias. Intracardiac signals are one of the most important inputs driving physician's decisions during an ablation procedure. So with these study results today, we can now say PURE EP represents a new standard in signal acquisition, and provides superior physiologic cardiac signals well above the conventional systems on the market. We routinely hear from our physician users that PURE EP makes them more confident and efficient, and this is great news for patients, for doctors and for the hospitals that they work in. So Ken, so that's what I've got. Do you have anything else you'd like to add?

Thank you very much, Julie. And we're going to turn to questions in a moment. First, I wanted to make a comment on our observations about what we see in the market and a word on the industry. Obviously, with COVID and the vaccine coming into view, the industry has opened up quite a bit. Second quarter results out from the larger corporations note an overall momentum across the Med Tech sector and follows a favorable second quarter commentary from companies like Intuitive Surgical, Johnson & Johnson, Abbott and others. Abbott said recently that their medical device sales increased almost 20% in the quarter; while Johnson & Johnson noted medical device sales increased 60% in the second quarter, driven by procedural volumes and new products. HCA, which is the largest publicly traded hospital system, on the New York Stock Exchange in the country indicated that hospital procedural volumes are increasing, too, which is good news for patients and for companies like BioSig. Hospitals have had an infusion of government monies to help them get through COVID, and they have seen a dramatic improvement in financial results. Obviously, for new product introductions, that's a beneficial backdrop for us to be marketing our product. We said at the beginning of the year, we gave guidance along the lines that we would expect to be in 20 hospitals by the end of the year under evaluation and some would convert into paying customers. We are on track, possibly a little ahead of plan as far as what we expected to do this year. And we're in planning -- after the Heart Rhythm Society Convention, we'll be in planning to lay out 2022. We've been very pleased with procedural volumes. Our clinical account management team led by Julie and John Kowalski, our Head of Sales, has really done a great job getting us onto the different playing fields in these EP labs. If you look at the expanded product adoption slide, you'll see how many procedures we've done. As of 7/13/2021, we're now at 1,105 procedures. And at the beginning of the year, we noted we felt we'd do 1,000 procedures. We revised that guidance several weeks back to say we think we'd do 1,500, but we continue to see a dramatic increase in product utilization. And from all my years of being in the med tech industry, our internal belief is that increased utilization of the system is a precursor for product adoption. These folks wouldn't be using the PURE EP system if they didn't see a value in it, and they are being supported by an outstanding clinical management team. We're also seeing an expanded use of physicians. So it's not just the number of procedures, it's trying to touch as many physicians as possible, and you will continue to see us striving to get new people learned and trained on the system. And in terms of the pipeline for new installations, we see an increase in interest as the work starts to get out. We believe this clinical data will be of benefit, not only in introducing the product to new hospitals, but also in the commercialization process. It allows our sales teams to refer to clinical output. And we believe this multicenter study done at some of the best hospitals in the United States with the CRO fully blinded is a great step forward for the company. In terms of going forward, we have the Heart Rhythm Society Convention coming up next week. And there is a slide that shows all of the experience that an attendee can have at this event. We will be recording these events with television cameras, and we will be posting the presentations up on our website shortly thereafter the Heart Rhythm Society. As you can see, we have 2 evenings planned out where we have physician leaders there to discuss their experience with the PURE EP system. The first evening is entitled PURE EP, A New Standard in Signal Processing. Dr. Pasquale Santangeli from University of Pennsylvania, Dr. Pedram Kazemian from Deborah Heart and Lung in New Jersey, and Dr. Miguel Valderrabano from Houston Methodist will be presenting. We couldn't be happier about that. And then on Thursday, July 29, we have a dinner called PURE EP, Clinical Data to Clinical Applications with Dr. Christopher McLeod from the Mayo Clinic in Jacksonville and Dr. Andrea Natale from Texas Cardiac Arrhythmia presenting. In addition, we have 2 scientific presentations on Thursday, July 29. We have a podium presentation of data collected and produced by Dr. Pedram Kazemian on post-ablation bipolar voltage by PURE EP as a marker of lesion assessment. Very important subject within the procedure. And then Jonathan Salas will be presenting atrial unipolar electrogram filtering to better delineate amplitude and morphology during radiofrequency ablation. That is a poster presentation, and he is from the University of Pennsylvania. So with all that said, we would like to open it up to questions. Thank you.

[Operator Instructions] Our first question today is coming from Yale Jen from Laidlaw & Company.

First, congrats on your outstanding outcome. Seems like a home run to me. And so it's much broader in the procedures as well as a higher sort of success rate. My first question is that, although it's not something to be discussed -- fully explored data set, what do you anticipate the potential benefit the physician could benefit from use of the PURE EP System in their procedure, ultimately what type of benefit the patient could receive because of using the system?

Julie, do you want to take that?

Yes. Thank you, Ken. I'm happy to take that question. So essentially, what are the anticipated benefit to the patient for using this kind of technology. So first of all, thank you for the comment and the question. It's -- there's no doubt that using the PURE EP system and having a higher fidelity, clearer signal -- physiologic signal information will serve the patient because the physician conducting the procedure will have a clear line of sight to where that tachycardia could be coming from. And it will also help them be more efficient in their procedure. So if you've got a better signal information to guide the procedure, we -- there is some likelihood that it could help the procedure go faster. The physician would be potentially delivering less ablation lesions inside the heart because they can be more specific in their ablation target. And so I think all of that then would translate perhaps into improved outcomes where, in particular, with the patients who have atrial fibrillation, there's a relatively high percentage of patients who need to have redo procedures. So it is our work with this next clinical study that we've just completed enrollment in that we will have some data to show specifically how PURE EP can impact even procedural outcomes.

Okay. Great. And maybe -- I'm sorry, go ahead.

I just wanted to see if Ken had anything else that he wanted to add to that response.

No, that was very good, Julie. Yale, did you have a second follow-up?

Yes, I do. Just a quick one. Basically, you just mentioned about the ongoing study. First of all, when is this study you may report the data? You're analyzing the data in the third quarter. Would that be -- would the readout will be in the second half of this year? And maybe the last question here is that you guys are attending the HR meeting tomorrow -- starting tomorrow. For Ken, what would be your anticipation or hope to get out from this meeting in terms of maybe increasing the accounts or other sort of benefits?

Sure. Julie, do you want to take the first -- yes, go ahead.

Yes. So the redo AFib ablation study that I mentioned, we've closed enrollment. We are gearing up for the blinded analysis of those signal data in the fall, sometime late Q3. And then we would need some time to analyze those data, working with the statistician, et cetera. I wouldn't realistically expect results to be shared until sometime early 2022. Ken?

As a remainder if you like -- please go ahead, forgive me.

No, no. Ken?

The answer to the second part of your question, Heart Rhythm Society is a very large event. We have a comprehensive lineup of different meetings from scientific data, podium and poster presentations. We have demonstrations to future customers, existing customers and other constituencies in our booth. We'll have full demo on the floor, and we will have customers coming through inquiring about how PURE EP works. We'll be giving them a demonstration, taking them through the data. And we expect a pretty full turn out based on all the behind the scenes and outreach that we've done.

Great. So thank you. So we'll take a couple now. Operator, I'll read a couple here from the webcast questions that have been written in. So in signal assessment, is there a threshold that hospitals would want in order to consider switching to/adding PURE EP? It would seem that anything over 50% would mean hospitals should buy PURE EP? And I think, Julie, if you could take a shot at that, that would be great.

Very good. So yes, so thank you for the question. I would -- I think it's difficult to speak specifically to what that threshold is in -- as it relates to hospitals making purchases of new equipment. But there's no doubt from these findings that PURE EP represents the new standard in signal acquisition and processing in the electrophysiology space. So I think once these results get disseminated across the space, and I think the Heart Rhythm Society represents a great opportunity for the company to disseminate these results to a larger group of EP users, potential EP users, that there will be, I anticipate, a growing demand for this technology. But it's difficult to know. The hospital purchasing process is complex, as probably many of you recognize. And this would represent an additional piece of equipment that would need to be purchased. And -- but I have no doubt that these results do represent the new standard in signal acquisition in the electrophysiology space. I hope that answers the question.

That does. Great. Thank you, Julie. We have another one coming in from the webcast. This is for you, Ken. What do these trial results mean for commercialization experience?

Thank you. In order to commercialize, you have to convince the physician that the technology is of value to them in their practice. So they need user experience. That's the reason we do the installations and the trials. So then the hospital administration needs to see data. They need to be able to check the box in their administrative review of the value of PURE EP that there is clinical data. And I believe today's results give us the opportunity to check that box when we're in commercial conversations. And this data, to remind everybody, is going to be published in a leading medical journal. And as that gets published and it gets presented and socialized at not only this Heart Rhythm Society, but other industry events, I believe that will only support our commercial opportunities. Next question.

[Operator Instructions]

Operator, while we're polling for questions, I've got another one here from the webcast. And this one, I think, goes to Julie. Can you say with confidence that these small fractionated signals that the PURE EP detects hold the key to curing an arrhythmia?

So Andy, thanks for the question. So these small fractionated signals, as I mentioned, represent areas of scar tissue inside the heart and slow abnormal conduction. And these very small, highly fractionated signals can be -- until PURE EP was invented, were very difficult to acquire and see in the conventional systems. I'm talking about signals with an amplitude of less than 0.05 millivolt. And we're seeing these types of signals more routinely on the PURE EP systems that haven't really been able to be appreciated on the conventional technology. And what we're discovering is that these signals that we're seeing, when we treat there, do tend to lead the physicians to the origin of those tachycardias. So I do think it is an important finding for us. And we do have additional research work where we really want to dig into these small fractionated signals in more detail and look by ablation type and arrhythmia type to really help the EPs understand those signals in more detail and describe them in the future. But yes, it's a very important finding for us for sure.

We've reached the end of our question-and-answer session. I would like to turn the floor back over to Ken for any further closing comments.

Thank you, everybody, for your time today. We look forward to seeing a number of you at the Heart Rhythm Society. Don't forget we have a dinner on Wednesday with physicians and customers speaking to the technology. We also have a dinner on Thursday evening as well. We look forward to answering your questions at the Heart Rhythm Society. Thank you.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.