IsoRay, Inc. Common Stock (DE)

Good day, ladies and gentlemen, and welcome to the Isoray Inc. Q1 FY 2022 call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mark Levin. Sir, the floor is yours.

Thank you, operator. Good afternoon, and thank you for joining us today for the Isoray Fiscal First Quarter 2022 earnings call for the quarter ended September 30th, 2021. 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 meaning 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 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, November 10th, 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, Issa Rae's Chief Executive Officer, and then Jonathan Hunt, Issa Rae's Chief Financial Officer, who will discuss the fiscal first quarter 2022 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.

Lori Woods Thank you, Mark. Good afternoon and thank you for joining us today for ISRAE's Fiscal First Quarter 2022 Earnings Conference Call for the quarter ended September 30th, 2021. Following my prepared remarks, our Chief Financial Officer, Jonathan Hunt, will provide a more detailed review of our fiscal first quarter financial results. I am pleased to share with you the steady growth we experienced in our first fiscal quarter. revenue for the first quarter of fiscal 2022 increased 8% versus the year-ago quarter to $2.56 million. I'm encouraged by the general trend we experienced this quarter as our prostate business grew year over year for a second quarter in a row. Our non-prostate brachytherapy business, notably the treatment for brain cancers, including the sales of gamma-tyl therapy, continues to become a more meaningful driver for the company. As you may recall, the summer months of July through September historically tend to show some modest seasonality. This is typically when both physicians and patients take vacations or time off. We believe this seasonality played an even greater factor this quarter than in past years. We consistently heard anecdotes from both physicians and patients taking extended vacations during the summer months as many parts of the country began to reopen. Additionally, we are being told by hospital administrators that nursing and other related staffing shortages are making it difficult to perform elective and non-emergent procedures in many markets. This reinforces the rationale of our recent strategic pivot to drive more procedures to ambulatory surgery centers and licensed physician offices where inadequate staffing is not as pronounced as it is presently in many hospital settings. Ultimately, cancer doesn't go away. We continue to believe that the increasing backlog of patients who have delayed seeking treatments or who may have not been diagnosed yet will eventually flow through the system and be treated. A development that we expect will benefit cesium-131 treatment opportunities comes in the latest action from the Center of Medicare and Medicaid Services, or CMS. On November 2nd, CMS released the calendar year 2022 Hospital Outpatient Perspective Payment and Ambulatory Surgery Center Payment Systems Final Rule, which becomes effective January 1st, 2022. This rule also includes the final rule on the Radiation Oncology Alternative Payment Model or ROAPM. In this final rule, CMS has kept the proposed changes from July, specifically that brachytherapy and sources such as cesium-131 are removed from the list of included modalities. This means that brachytherapy treatments will still be reimbursed under the current fee-for-service model and sources or seeds will continue to be paid separately. We maintain our belief that this will prove to be the best outcome for patients, physicians, and payers. We expect one likely immediate benefit to patients will be for those who need dual treatment to treat intermediate or advanced prostate cancer. Those patients will now have access that is supported by reimbursement from CMS. And since CMS guidelines typically drive reimbursement policies that other insurance companies follow, we believe that this will increase access for patients with private insurance as well. Looking back on the quarter, another very important development is one that we believe will create more market traction. At the end of September, we announced that the American Brachytherapy Society has recognized cesium-131 in a new consensus statement on low dose rate prostate brachytherapy sources. This was noteworthy because it represents the first time cesium-131 has been included in ABS's highly respected consensus guidelines. We noted in our press release that ABS is a neutral professional organization. It does not rank or endorse any specific treatment option instead remaining evidence-based and providing insight into research surrounding the use of brachytherapy in addressing malignant and benign conditions. Physicians hold this information in high regard, so we believe that this is another substantial step forward and provides additional credibility. As a result, we believe it should further augment Isorae's opportunity to continue to gain market share within the prostate brachytherapy market. Another potential driver for future growth in our prostate business is one that you may remember we shared with you at the beginning of the calendar year 2021. At that time, we received FDA 510 clearance for the use of C4 imaging's serious MRI markers with cesium-131 seeds. We believe that the pairing of these innovative technologies gives doctors who prefer to use MRI as their imaging component and even more precise targeted prostate brachytherapy treatment option. I am pleased to report that we completed our pre-market activities related to the serious marker in September. We have now begun our product performance evaluation of this technology with the first few patients having been successfully treated in the past couple of weeks. Outside of prostate, we remain excited about the prospects from the University of Cincinnati Phase I-II clinical trial. You may remember that this involves a study of the combination for Arcesium-131 seeds with Merck's PD-1 inhibitor immunotherapy drug Keytruda for the treatment of recurrent head and neck cancers. We are pleased to report that the first patient was enrolled at the end of October and has begun receiving treatment. Of note are the hospital-related restrictions that have been in place in many parts of the country due to COVID. These have proven to be a headwind for finding and enrolling patients in clinical trials such as this. Hopefully, we are turning the corner on that front and enrollment will begin to expand from here. We believe that immunotherapy in tandem with resection and cesium-131 brachytherapy could be an effective treatment option for patients who continue to battle this critical cancer. We are not alone in this belief. We have recently heard from other leading institutions who have expressed interest in potentially collaborating with the University of Cincinnati on this study. If this were to evolve into a multi-center study, it could likely speed up and broaden patient enrollment for the study. We look forward to keeping you updated on further developments We recently attended the annual meeting of the American Society of Therapeutic Radiation Oncology, or ASTRO, held last month in Chicago. There were several presentations and abstracts on cesium-131 that continue to support the use of cesium-131 for recurrent brain cancers both with gamma-tyl and iso-rays legacy product with strands. We believe the results of these presentations and abstracts continue to add to the growing body of data suggesting that cesium-131's targeted radiation therapy has a place in the treatment of brain cancers. We remain excited about iso-ray's potential here as the ease of use of gamma-tyl therapy with cesium-131 and the related therapeutic benefits may serve to drive further adoption of our unique radioisotope as a compelling option in the treatment of brain cancer. Cesium-131 received additional positive recognition in the treatment of different cancers in the recent edition of a respected regional medical publication. I hope you've seen the article on Cesium-131 in South Florida Hospital News and Healthcare Report. It is on our website under News and has recently been featured in social media posts. The article includes comments from three doctors who are treating brain, head and neck, and prostate cancers, respectively. A bit of information about the publication. It is the South Florida region's only monthly healthcare newspaper. Its reach includes more than 32,000 healthcare professionals in the Broward, Miami-Dade, Palm Beach, Monroe, and Martin counties. Its audience is an extensive group of professionals comprised of healthcare executives, administrators, practice administrators and managers, hospital department heads of all key areas, physicians, business executives of health-focused companies, and South Florida's top business and political leaders. The article was shared through their print publication as well as one of their email newsletters serving to maximize its reach. We are interested in expanding our presence in this key market given its demographic profile. To that end, we will have a full-time salesperson located there starting January 2022. Before I turn the call over to Jonathan, I want to touch on some of the increase in expenses this quarter. Recall that we are continuing to evaluate a number of strategic opportunities. This process has extended over the past several months since our capital raise earlier this year. To successfully capitalize on potential new opportunities, as well as the growth we anticipate from our existing business, we continue to add more staff in key areas, including operations and R&D over the past several months. A specific example is the new Project Management Office, or PMO, which we initiated during the quarter. This department will be integral in the implementation of the strategic opportunities that we are currently evaluating. As our innovation pipeline continues to evolve, we concluded that it is strategically critical to have the dedicated resources, a framework, and the necessary processes here within the organization. The PMO bridges strategy and execution to ensure that ISRAE has the ability to successfully integrate these opportunities. We believe that these investments in additional headcount and functions are critical to support the scaling of the organization in anticipation of future growth. Now I will turn the call over to Jonathan to review the results of our fiscal first quarter in more detail.