IsoRay, Inc. Common Stock (DE)

Greetings. Welcome to ISO RAISE second quarter fiscal year 2021 call for the quarter ending December 31st, 2020. At this time, all participants will be in a listen-only mode, and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that this conference is being recorded. At this time, I'll turn the conference over to Mark Levin with ISO RAISE Investor Relations. Please go ahead, Mr. Levin.

Thank you, operator. Good afternoon and thank you for joining us today for the ISA-RAE fiscal second quarter 2021 earnings call for the quarter ended December 31st, 2020. Before we get started, I will take a few minutes to read the forward-looking statement. Certain statements in this conference call constitute forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995 as amended. When used in this conference call, words such as will, believe, expect, anticipate, encourage, and other similar expressions as they relate to the company or its management, as well as assumptions made by, and information currently available to the company's management, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs about future events as of today, February 9, 2021. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances, and the company undertakes no obligation to and expressly disclaims any obligation to update or alter its forward-looking statements, whether resulting from such changes, new information, subsequent events, or otherwise. Additional information concerning forward-looking statements is contained under the headings of Safe Harbor Statement and Risk Factors listed from time to time in the company's filings with the Securities and Exchange Commission. We will begin today's call with Lori Woods, ISO-RAE's Chief Executive Officer. and then Jonathan Hunt, ISRA's Chief Financial Officer, who will discuss the fiscal second quarter 2021 financial results. Following their prepared remarks, we will take questions from our analysts and institutional investors. I will now turn the call over to Lori Woods. Thank you, Mark.

Good afternoon, and thank you for joining us today for ISRA's fiscal second quarter 2021 Earnings Conference Call for the quarter ended December 31, 2020. Following my prepared remarks, our Chief Financial Officer, Jonathan Hunt, will provide a more detailed review of the fiscal second quarter financial results. Although our overall business continued to be impacted by the COVID-19 pandemic, I am pleased that we once again have achieved year-over-year growth in our fiscal second quarter of 2021. Total revenue increased 7% versus the fiscal second quarter of 2020. Similar to the trends we've been experiencing since the onset of the pandemic early last year, our core prostate revenue declined modestly versus the year-ago quarter, while our non-prostate revenue increased significantly year over year. Driven again by treatments for brain cancer, including the sales of cesium-131-powered gamma-tyl therapy, non-prostate revenue increased 92% year-over-year. Despite the ongoing near-term challenges resulting from the pandemic, we continue to be very optimistic about the long-term growth opportunities for cesium-131. As we have discussed previously, we believe that many men have been delaying annual checkups, screenings, and the treatment for prostate cancer over the last several months. This unique situation is likely leading to a growing backlog of patients needing to be treated eventually. This is evident in the American Cancer Society's 2021 Cancer Facts and Figures Report that was released in January. The widely respected annual publication estimates that nearly 250,000 new prostate cases will be diagnosed in 2021. This represents a staggering 30% increase over 2020. The report notes that this trend is expected to continue with further increases in new prostate cases in 2022 as well. While we have yet to see a significant rebound in our prostate cancer business, the growing number of men with prostate cancer gives us continued confidence in the abundant opportunities for growth in our core business. Leveraging the unique therapeutic benefits of our proprietary cesium-131 isotope, Isoray has continued to advance our leadership in the field with continued enhancements of our prostate product offerings. We believe that this will drive further adoption and market share gains. Most recently, this can be seen with the FDA 510 clearance we received for the use of C4 Imaging's serious MRI markers with cesium-131 seeds. We believe this partnership with C4 Imaging will further expand our market opportunity within prostate brachytherapy. This partnership gives doctors who prefer to use MRI as their imaging component the flexibility to do so with our seeds incorporated with the C4 marker technology. We will be selling C4's MRI marker technology in conjunction with cesium-131 to those customers who prefer to use this type of imaging. We are just now beginning a limited market release on the combination and expect it will be available for full market release later this calendar year. As I mentioned earlier, we are excited about the growth of our non-prostate brachytherapy business that continues to become an increasingly important part of our operations. Through the first half of fiscal year 2021, 20% of total company revenue has been derived from the sales to treat cancers other than prostate using cesium-131. Currently, the growth in these surgical applications for hard to treat cancers is predominantly being driven by the treatments for brain cancer, including sales of gamma-tyl therapy. GT Medical Technologies began enrolling patients in the gamma-tyl registry trial late last calendar year. You may recall that the objectives of this multicenter observational study were twofold. It is designed to evaluate real-world clinical outcomes in addition to patient-reported outcomes that measure the effectiveness and safety of gametyl powered by our proprietary cesium-131 seeds. We look forward to updates on the study from GT Medical Technologies as compelling results of this trial and other clinical studies for Gamma Tile could accelerate adoption of this unique treatment for patients battling brain cancers. Given the highly critical nature of brain tumors and typical fast growth, the study should begin to reveal results in a relatively short period versus similar studies for other types of slower growing cancers such as prostate. Gamma Tile is a key example of Isoray's R&D and business development efforts that aim to expand the application of our unique isotope to a variety of hard-to-treat cancers. For these surgical applications, we are continually exploring innovative delivery technologies that highlight the effectiveness of cesium-131. Whether these innovations are internally developed at ISER-A, achieved through partnerships with other innovative companies, or acquired, expanding the breadth of delivery technologies will be central to the growth of cesium-131 in a variety of surgical applications. Developments such as these are why we remain excited about the growth opportunities ahead in both our core prostate business as well as the continued expansion into the treatment of other cancers. We believe the use of cesium-131 in the treatment of such cancers as brain, head and neck, gynecological, and lung hold great promise. As we look to the future of cancer treatments, and how cesium-131 and the role of targeted radiation will play, our vision continues to include a focus on the importance of immuno-oncology. As we have shared with you, we firmly believe that immunotherapy will increasingly be central to the treatment of cancers in the future. Key to this will be the further investment in R&D resources for the studies on the combination of immunotherapy utilizing cesium-131 for the treatment of different cancers. In that regard, we look forward to updating you on the progress of two studies moving forward that we have discussed previously. The University of Cincinnati Key Truda study for recurrent head and neck cancers remains on track. This planned 50-patient Phase I-II clinical trial will be the first brachytherapy plus PD-1 inhibitor combination study. We believe immunotherapy in tandem with resection and cesium-131 may assist patients in the clearing of disease sites outside the surgical and radiation fields. The other study, which focuses on the treatment of metastatic melanoma, will evaluate the effect of combining cesium-131 brachytherapy with an immune checkpoint inhibitor. This pilot study should be enrolling their initial patients soon. We are also actively evaluating potential new studies and developing collaborations with additional institutions for similar combination therapies for the use of treating other cancers. Opportunities and growth naturally lead me to talk about our recent financing. Last week we had a successful secondary offering that raised gross proceeds of $51.75 million. This capital raise positions us to properly evaluate and capitalize on the growth opportunities ahead. In closing, we believe the steps we have taken to reinvigorate the organization and build on our successes with expanded adoption and new applications for the treatment of other cancers holds great promise for a bright future. Building awareness has opened the door to capitalize on what we see as robust growth opportunities in our core prostate market. The steps we are taking today in expanding innovative delivery technologies like Gamma Tile to grow the applications of cesium-131 in difficult-to-treat cancers is another key part of that future. Just as important is our pivotal involvement in the future of immuno-oncology and the decisive role we expect cesium-131 to play. From my vantage point, these steps speak to what I told you when I became permanent CEO two years ago. At that time, I noted that it was a start of a period that I believed would be punctuated by growth, expansion, and opportunities to better convey to all of our stakeholders that Ice Ray has just begun to hit its stride. Together, we are paving the way for new successes and seeing that vision become a reality. Now I will turn the call over to Jonathan to review the results of our fiscal second quarter in more detail.