Streamex Corp. (STEX) Earnings Call Transcript & Summary

All right. We're moving right along here to our next speaker here. I've gotten Natasha Drapeau here with me. She is the Vice President of BioSig Technologies. We can probably bring it on right now. Let's go ahead and do that. Natasha, how are we doing this morning?

Spencer, good morning, very well and very engaging conversation.

We're going to switch gears a little bit, Natasha. It's going to be like whiplash, but we're going from metals and mining to biotech and health care. But before we get to that, I was doing some research on. You've got a bit of an interesting story in terms of how you got here. You've definitely done a lot in your career. So walk us through, like, that journey and sort of how you ended up -- because you were more like -- you weren't always in this industry, right? So how did you end up here?

Thanks, Spencer. Yes, and I think it's a good segue actually from previous presentation because I was in a similar sector to where Ed was. So I spent most of what my career in financial services industry and in fintech, having worked for one of the world's oldest and largest trading companies in London and the U.K. So I saw with my own eyes how the industry has advanced based on technological progress and some of the data-driven progress and solutions. So when I joined -- when I met -- prior to joining BioSig, when I met the founding group at BioSig with Ken, the Chairman and the founder of the company and some of the original group members, I was immediately drawn to the very simple value proposition, which was all really focusing on delivering better intelligence to advance one of the most critical areas of our lives, health care.

So okay. Walk us through BioSig and what you're actually doing.

Right. So we are a signal processing and acquisition company. Our core competency is in delivering more clear cardiac signals during the procedures that are called cardiac ablation. And so those that -- viewers that perhaps now that when -- the field, cardiac ablations are procedures that are being performed to treat heart rhythm disorders also called as arrhythmias. And they affect over 33 million people worldwide and contribute significantly to the hospitalization rates, both in the U.S. and globally. And it is a highly progressive condition. So which means if it's not treated early, and it's not [indiscernible] it worsens over time. And many patients remain [indiscernible] for a period of time. But those that have been diagnosed typically have to choose between 1 of the 2 parts, which is a pharmaceutical solution or that typically helps manage the symptoms of the disease or the minimally invasive procedure called cardiac ablation. And out of those 2, it's the cardiac ablation procedure that actually has a chance to cure the disease and restore the healthy heart rhythm.

So what are we actually -- we're talking about a device, essentially, right?

Exactly. It is essentially a computer system called the PURE EP that acquires and processes the signals that are delivered during the procedure. So the physician gets an opportunity to get a complete cardiac picture. Basically, see the entire and spectrum of electrical activity within the heart in real time. And it's critically important because actually, the company was founded to address a widely recognized but an unmet clinical need in this field, electrophysiology and that is the subsector of cardiology that treats a irregular heart rhythms. Because what was -- what became very apparent in the early days of BioSig is that even though the procedures were well understood, the outcomes were still suboptimal. And even today, Spencer, a typical success rate of the first-time ablation can be as low as 60%. In other words, 1 out of 2 patients typically comes back for a second procedure, which is far from ideal. And unfortunately, even in my own experience, I've met many patients that have 3, 4, sometimes even 5 procedures, so it is a critical need. And of course, one would say, well, there are many factors that contribute to the success or the failure of procedure, which is correct. But there is a general consensus amongst the physician group that the quality of electrograms that are supplied during the procedure, and it's the electrograms that the physician is making his decisions or his or her is based upon. And that quality is often compromised, which means that the physician actually doesn't have a complete picture of the electrical heart. So that's what we're focusing on. We have a proprietary technology that has a novel hardware architecture, but also some of the novel solutions on the software side that allow us to deliver a signal that preserves the raw diagnostic data that is not altered. And it's that data that has -- that holds a very critical value during the procedure.

So this is a device that could provide signals that could then determine what the course of action, right? Is that, like, [ inerrant ]?

That is absolutely correct, Spencer. So it's used in 2 ways, right? It's by means of diagnosing the condition during the procedure, which means that the physician can read the electrogram and then help -- it can help him locate the spots, part of the tissue that are causing irregular heart rhythm. And -- but also, yes, that course of action can lead to the successful termination of disease.

So what exactly is this chart? Is this chart just showing us the total number of procedures that were a direct result of readings from the -- from your system?

Yes. That's absolutely correct, Spencer. So you can see, and those are quarterly figures. And our procedural numbers right now stand at approximately 1,760 patient cases have been conducted with our technology. So we've been -- we actually more than tripled the number of procedures done with our technology in the past 12 months. So this time last year, we were at approximately 425 cases. So we raised our procedural targets this year because our goal actually for 2021 was to complete 1,000 procedures. So this has been terrific. And there are a couple of factors that contributed to the rise in procedural numbers. First of all, and if you quickly go to the previous slide, if you don't mind, Spencer. So I just wanted to -- yes, so I just wanted to show you, this is our installation map right now, and we're focusing on 3 strategic areas of interest here, which is the Northeast, Texas and Florida. Those 3 are some of the largest areas that are -- that conduct arrhythmia treatments. And there are over 1,000 EP labs that contribute billions in electrophysiology charities. So they represent a very significant opportunity for us. So if you go back to the next slide, you can see that, obviously, the rise in procedural cases is a direct effect of our accelerated installation process. But also, the -- we've been growing our footprint in most of our installation sites, which means that typically, a site would start with 1 system and then they would request more units, which means that the number of sites may remain similar, but we've been going deeply into each of those sites, and we're engaging more physicians. And lastly, the post pandemic recovery has helped us tremendously. Because last year, most elective procedures have been put on hold. And as we started to return to hospitals, more physicians become available, more patients have become more comfortable being in clinical settings. So thankfully, more procedures have been conducted, which has been a very welcome sign of relief for both physicians and patients, because as we know, the focus over the past 18 months was pretty much on COVID, but there are many chronic conditions, including cardiovascular, that have been somewhat obscured by the pandemic, and it's important that the procedures are now being back on track.

Is the PURE EP -- is that like the most important thing for the BioSig story?

It is most important absolutely. I mean it is our first product. So we're still a very small and young company. We've been around for 13 years, and it is our first product, but it really is the reflection of our competency in acquiring and processing cardiac signals that are more precise than what has been currently available, and that represents a significant learning opportunity for field. Because as we deliver more information, more intelligence, better procedures, better procedural decisions can be made. And if you go to Slide 7, actually, Spencer, I just wanted to show what a typical installation looks like.

Yes, sure. Not that one.

Yes. So that's the one. I think it is important to see just how complex. The setup really is. You can see that the system goes into 2 rooms. So during the procedure, we operate out of 2 facilities there. And if you look at the right-hand side, you can see Dr. Andrea Natale, which is -- who is globally recognized for his contributions to our arrhythmia field. And our unit, the PURE EP system, which is the black box that is just below the patient table, and that unit acquires the signals that are then being displayed to the multi-display screen that the physician is looking at. Then at the same time, on the left-hand side, you can see the second part of the system that operates out of the control room. And so you can see where the orange arrow is pointing. That's the 2 monitors, stacked on top of one another. That's the PURE EP screens. So -- and the representative for the lab manager that operates the system from that room is in a constant communication with the physician as they read the signals and they help them -- help physicians pay attention to some of the important areas. So as you can see here, Spencer, there's a lot going on here. There's a lot of equipment that is being deployed at the same time. So on the left-hand side of our system here, you can see a mapping system by -- called CARTO by Johnson & Johnson. And on the right side is a recording system by GE. So -- which means that there is a lot of equipment that is deployed at the same time and operates on similar level of frequency. And so what happens as a result of that, much -- very similar to how all of us experienced the loss of mobile or cell signal or WiFi when we're in crowded areas, for instance, the airport. So because all of that equipment is operating at the same time, it can be a very noisy environment. So our core focus is on cleaning up the signals that are being acquired by the physician and by other technologies. So we work in sync with all of the other systems in the lab. And our goal is to deliver a cardiac picture that is free from those artifacts.

I want to go back to this previous slide. No, no, no, that one. Do you have plans to expand to more hospitals or more regions?

Absolutely. This is really one of our core focuses for 2022. So we are now in the phase that is called targeted commercial launch. And so we are growing our presence in those 3 strategic regions. But you will see us going much deeper in all of those areas, but perhaps also entering new territories. So -- and really, our focus is on the high-volume procedural sites across the country. And the need is definitely there. But we also want to -- as we sort of restarted working with some of the leading centers of excellence, teaching facilities. But we're also looking at the needs of smaller hospitals that endorse, that oftentimes see very complex cases. So that's -- this is our, really, focus to bring our technology to more centers and empower physicians with better tools, with better information to deliver better outcomes.

I'm just curious, Natasha, what is, like, a typical -- maybe you don't know this. But, like, what is the typical sales cycle for one of these things? I mean, I -- it's good that, here -- it's good that you showed this chart or this slide because I didn't realize how complicated this was. I thought it was a much smaller device. So, like, I would imagine, like, equipment like this, it's complicated and it takes time to learn. You have to have a tech operate it as well. And I would imagine it's not as easy for a hospital to ingest as something that goes on your finger, right, obviously.

Right, right. No, it's a good point, Spencer. It is a capital equipment. So the sales cycles can be longer, especially now in the current environment, the hospitals -- often, hospitals are a little bit constrained. But the business model, really, for capital equipment and particularly, the capital equipment that we represent is well understood by the administration. So there is a lot of value in it. And really, the decisions are being made based on how valuable the technology is to a physician and to the hospital. And all of that other equipment in the lab is falling a similar par. So -- and we really see our opportunity there is when it comes to a sales cycle, we're looking at the capital equipment sale, but we also have that very significant software opportunity, and that's where the most normal components that will be driving acquisition experience are, they are on the software side. So we even -- this year, we already delivered a couple of significant software enhancements. We delivered up to 19 novel software features that are all driven based on physician insight. So we feel that the hospital administration understands the value very well. So they definitely want to drive procedural numbers. They want to be able to conduct shorter procedures. They want to see more patients. So the need is definitely there.

I just want to clarify something you said earlier. Did you say that hospitals are back to their pre-COVID level of cardiology operations or cardiological procedures?

Pretty much, Spencer, yes. So the bounce-back was very good. It started in the first half of this year and we're pretty much back to 2019 levels. Of course, it depends state by state. Some numbers would vary, but the centers that we're currently installed in, they're all very busy. They operate multiple facilities and the patient flows are very healthy. So pretty much back to pre-pandemic levels.

Nice. All right, so what is the next catalyst here? Because you talked about being in the commercial expansion phase. What is the next catalyst that we can have a look forward to?

Right. So we have a couple of catalysts there. And yes, I did talk about the commercial expansion. I would just want to briefly go back to Slide 5, if you don't mind, Spencer.

Sure.

And so generating clinical data and clinical evidence is one of our core catalysts for next year. So Slide 5, that's right.

This one.

Yes. No, no, sorry.

That one. That one.

Five? There you go. So one of the catalysts for -- in 2021 was the -- was delivering off meaningful results from our first clinical trial. It was a multi-center trial that we've done across Mayo clinic, Texas Cardiac Arrhythmia Institute and Mass General. And we've demonstrated that signals delivered with our technology resulted in over 75% improvement in overall signal clarity and an over 83% improvement in the level of confidence with each physician was able to make procedural decisions. So this is a really strong foundational trial, and we really couldn't be happier with the result, because that set the tone for the future clinical work. So our clinical work shifts gears, and you will see a more targeted focus studies coming out next year and beyond. And we will start focusing on delivering more publications that are perhaps looking at the specific arrhythmia types. So we're moving 1 step higher from that foundation that we laid, and obviously, in a peer-reviewed publication. So this is one of the catalysts that will be coming up. And also, I have mentioned -- actually, just before I move on, if you go to the next slide, Slide 6, I just want to very quickly show the viewers. Because I talk a lot about signal clarity, right? But I wanted to show what that actually looks like, because you don't need to be a physician to appreciate the difference. So on this screen, you can see the capture from our system and the conventional system that was supported at the same time. And on the left-hand side, you can see a circle that highlights a very small, but a very important signal call the late potential. And on the right-hand side, this is a real-time capture that -- from the system that was deployed in parallel the whole diagnostic value was not captured. So you really don't need to be a physician to see the difference here. So that's really where our core focus is, is on delivering better intelligence and that will translate into more clinical work and also some of the normal R&D opportunities. Some of the viewers will be familiar that we initiated 2 strategic initiatives on artificial intelligence this year, 1 with our long-standing partner and collaborator Mayo Clinic, but we also started working with the Technion Institute of Technology based out of Israel. And we're now looking at gathering the data that we collected with our technology and processing that by means of developing novel AI and machine learning powered solutions, that will be targeting specific arrhythmia types. So we want to give physicians more tools and more information that -- to make them more efficient in the lab. So this is a, really, one of the cornerstones, I would say, in our strategy, you will definitely see us advance this work next year. We look forward to reporting on the results. And yes expanding our commercial installation base, because we've gathered a tremendous amount of intelligence over the past 18 months. And our goal right now is to enhance our commercial strategy and accelerate product adoption.

Natasha Drapeau is the Vice President of BioSig Technologies. Natasha thank you so much for coming on All Access today. I appreciate it.

Spencer, thank you very much.

All right.