IsoRay, Inc. Common Stock (DE)

Good afternoon, ladies and gentlemen, and welcome to the ISO-RAE fiscal second quarter 2022 earnings call for the quarter ended December 31st, 2021. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your 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 ISRA fiscal second quarter 2022 earnings call for the quarter ended December 31st, 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, February 8, 2022. 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, ISRA's Chief Executive Officer. and then Jonathan Hunt, ISRA's Chief Financial Officer, who will discuss the fiscal second 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 second quarter 2022 earnings conference call for the quarter ended December 31st, 2021. Following my prepared remarks, our Chief Financial Officer, Jonathan Hunt, will provide a more detailed review of our fiscal second quarter financial results. I am pleased to share with you the continued growth we experienced in our fiscal second quarter. Total revenue for the fiscal second quarter increased 19% versus the year-ago quarter to $2.82 million. This represented the third straight quarter of year-over-year growth for our core prostate business as well as total company revenue. I believe there are encouraging trends in our business. In fact, this quarter is the second highest revenue quarter in the company's history. right behind the quarter ended March 31, 2020, at the very beginning of COVID. The second quarter marked a return to a more normal pace of business for us. Access to clinicians and hospitals increased as COVID seemed to settle down and patients increasingly worked through the referral process. I remain confident that the steps we are taking will benefit us even more as our end markets rebound further from the impact we have been experiencing due to the pandemic. In addition to growth in our core prostate business, our non-prostate brachytherapy business, which is about 25% of our total revenues now, grew 46% year over year. This was largely driven by continued expansions of treatments for brain cancer, notably gamma-tyl therapy, We're happy to report that GT Medical Technology continues to make progress in increasing awareness of the value of Gamma Tile to both patients and clinicians. We look forward to sharing more information with you regarding their ongoing clinical trials and the benefit of this therapy later this year. The growth we've been experiencing over the past few quarters in our prostate business reinforces our confidence in this market opportunity. This is especially true when we look at this growth in context of the ongoing pandemic. I believe the pandemic-related headwinds to our prostate business will persist, but with diminishing magnitude moving forward. Ultimately, I believe that what we have been saying repeatedly over the last two years remains accurate. Cancer does not stop due to the pandemic. Consequently, we believe the number of men diagnosed with prostate cancer is going to grow at a historically high rate. Data such as that highlighted in the American Cancer Society's 2022 Cancer Facts and Figures Report that was published in January support this position. This report estimates that nearly 270,000 men will be diagnosed with prostate cancer this year. which is almost 50% more than the number of men diagnosed annually in the years just prior to the pandemic. This also reflects a higher number than the estimated 250,000 diagnoses published in the 2021 report. Despite these historic challenges driven by the pandemic, we continue to believe IsoRay is well-positioned to accelerate our growth and expand our share of the prostate brachytherapy market. Certainly, the compelling long-term data we have continued to accumulate over the past few years speaks to cesium's efficacy. This combination of increasing clinical evidence of cesium-131 as a powerful option for the treatment of prostate cancer and the likely growing market opportunity points to now as the time to accelerate our sales and marketing effort. With that in mind, we recently engaged in a thorough review of the prostate market opportunity and how our sales and marketing strategy should be aligned. One of the facets of the review was focused on identifying the programs that were most beneficial to promoting cesium-131 as the isotope of choice for intermediate and high-risk prostate cancers. Sales, supported by marketing, will be tasked with implementing changes to reflect what we have learned from this internal review to advance our efforts to broaden awareness with clinicians as well as patients. One component aimed at achieving broadened awareness as well as increasing market penetration is our plan to increase our headcount in sales. We expect to increase the number of territory managers from 7 to 10 over the next 12 months. We believe this, combined with our increasing clinical evidence, will accelerate new clinician adoption of cesium-131 in our core prostate market. It is our expectation that it will also increase the utilization of complementary value-added products, such as the C4 serious MRI markers. We will also be dedicating more marketing resources to both clinicians and patients. Our market research has reinforced the notion that although radiation oncologists and urologists generally are receptive to the clinical data on cesium-131, their awareness of the product is relatively low and they are more likely to use the isotope they were originally trained on. To that end, we are going to have more frequent company-sponsored trainings. Important to our training plans is the implementation of Proxime as a virtual tool for those clinicians and their teams that don't have the time or the desire to travel. Additionally, we are receiving renewed interest in in-person training once again, which we have reinstated for those who are ready to return to that training setting. Another aspect of this effort is tied to our work with the Cesium Advisory Group, or CAG, to update the guidelines on how to successfully implant the prostate using Cesium-131. This group is comprised of experienced clinicians who are eager to share best practices in planning and executing cesium-131 prostate implant procedures. We will then add this information to our company-sponsored clinician training programs. We believe the CAG recommendations will empower clinicians to use our isotope by following the guidelines and encourage those who have not used this isotope previously. We believe this will accelerate adoption of cesium-131 in new centers. This emphasis on clinician engagement and training extends to our plans to deepen our engagement with ABS, the American Brachytherapy Society. Most recently, we have seen a change that is of great interest. ABS and Grand Rounds in Urology are collaborating. Grand Rounds in Urology is a leading network of clinicians who provide best practices and current clinical updates for the treatment of urologic disease and conditions, including prostate cancer. They are building on their strengths to bring expanded programs and training opportunities on brachytherapy to radiation oncologists, urologists, and physicists. We are looking forward to attending an event in early March where these clinicians will be on hand, as well as a number of ABS senior executives. The program is an outgrowth of the International Prostate Cancer Update, or IPCU, one of Grand Rounds in Urology's program offerings. It includes a multi-day CME-accredited conference focused on prostate cancer treatment updates. ICER-A will be exhibiting at this conference, and I, along with several senior ICER-A executives, will be there to assure a strong brand presence and take full advantage of some key networking opportunities. We continue to make progress towards the launch of the C4-serious MRI markers in combination with our cesium-131 seeds for treating prostate cancer. We believe that in the immediate future, the incorporation of MRI will offer a significant improvement in the planning, execution, and evaluation of prostate brachytherapy. The benefit from the integration of MRI extends to both patients and clinicians in offering higher quality implants than possible with currently available imaging technologies. The FDA cleared prostate treatment we developed in partnership with C4 brings together MRI-assisted radiotherapy with cesium-131. This represents a step forward as it advances imaging technologies that have been in place for over 30 years with little or no innovation during that time. At the end of February, we will be conducting an internal launch preparation meeting regarding this new prostate treatment opportunity, which will train our sales teams so they will be better able to engage with key institutions and providers. To promote greater awareness amongst patients, we will be growing our direct-to-consumer advertising and marketing programs. Increasingly, patients have more influence on treatment decisions in many healthcare settings. We believe this is also very true for the prostate cancer market. It is our sense that the value proposition of cesium for the treatment of prostate cancer is compelling and easy to understand. As a result, we feel it should be well received by many of the growing number of men facing prostate cancer. Patient engagement is also behind our intent to increase our presence with the key advocacy group Zero Cancer. Given their established position as a leading patient advocacy group, we believe it will contribute to our drive to further recognition of cesium amongst patients. Underpinning all of these programs will be our continued concentration on refining Cesium Blue's brand image and related messaging across our website, collateral, and outreach to patients. I am equally excited about the growing opportunities for our proprietary isotope in treatment areas like brain, head and neck, and lung. In fact, we are currently awaiting a response from CMS on a reimbursement code for high activity seeds that support our surgical applications. This is important because there are certain types of lung cancers that may benefit from a high level of activity. For example, Seeds with a higher isotope activity may be more effective for non-surgical treatment of certain lung cancers. And finally, I am happy to report that our immuno-oncology study combining cesium-131 with Keytruda for the treatment of recurrent head and neck cancers continues to gain momentum with recent additional patient enrollments as we move beyond COVID-related hospital restrictions that have been a headwind to the study thus far. Additionally, we continue to have ongoing discussions with other leading institutions interested in potentially collaborating with the University of Cincinnati to potentially make this a multi-center study. We are hopeful that enrollment will continue to accelerate and that we will have enrollment completed in the coming months. I do want to share with you that we have made significant inroads towards these Phase I and Phase II clinical trials. We will keep you updated as progress is made. Our clinical trial strategy is ongoing and will continue to represent a significant portion of the R&D expenditures going forward. In closing, we are increasing our activities on a number of fronts. We believe that our multi-pronged undertakings aimed at our core prostate business surrounding training, sales, and marketing at this time, when we expect the overall market to expand, is essential. We feel it will support ISRAE returning to the growth rates our prostate business was experiencing prior to the pandemic. At the same time, we see strong progress in the developing opportunities to treat applications for brain, head and neck, lung, and other cancers. Lastly, we continue to make progress with respect to a number of strategic collaborations and investments, which we will share with you once we have more details, barring any unforeseen circumstances. I am encouraged by the recent growth and future opportunities for ISAR-A. Now I will turn the call over to Jonathan to review the results of our fiscal second quarter in more detail.