Hyperfine, Inc.

Thank you for standing by and welcome to the Hyperfine Fourth Quarter 2023 and Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Marisa Veitsch from the Gilmartin Group. Please go ahead.

Thank you for joining today's call. Earlier today, Hyperfine Inc. released financial results for the quarter and year ended December 31, 2023. A copy of the press release is available on the company's website as well as sec.gov. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. All forward-looking statements, including without limitation, those relating to our operating trends and future financial performance, expense management, expectations for hiring, training, and adoption, growth in our organization, market opportunity, commercial and international expansion, regulatory approvals, and product development are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factor section of our latest periodic filing with the Securities and Exchange Commission. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, March 21, 2024. Hyperfine, Inc. disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. And with that, I will turn the call over to Maria Sainz, President and Chief Executive Officer.

Good afternoon, and thank you all for joining us. On the call with me today is our Chief Administrative Officer and Chief Financial Officer, Brett Hales. In the fourth quarter, we achieved revenue of $2.7 million, up 89% compared to the same period last year. For the full year, 2023, we achieved revenue of $11 million, up 62% compared to 2022. I am pleased with the growth we delivered as we continue to lead the development of this new category of ultra-low field-grade MRI with our unique portable subsystem. We drove adoption in our big head markets inside the hospital, which are critical care and pediatrics, and we have made significant progress to expand our use cases through clinical evidence and innovation. In the fourth quarter, we sold seven subsystems, predominantly U.S. direct sales, and once again recognized a record average selling price. And we have highlighted in previous calls, our deals require alignment with multiple constituents, and can often demand long and variable sales cycles. I am pleased with the deal traction we have seen so far in 2024, many of which started and were cultivated in 2023. We're exiting 2023 with many commercial accomplishments. We have now sold subsystems into flagship institutions such as Weill Cornell in New York, Stanford, and Children's Hospital of Philadelphia. Further, our SOUP implementation programs run by our clinical support team are yielding strong user advocates and champions across different departments inside the hospital setting. We now have SOUP pioneers across multiple settings inside the hospital, such as the operating room, critical care unit, neurology clinics, emergency departments, and pediatric wards. We entered 2024 with a stable of reference sites and a deeper understanding of how to target and build strong soup programs, which positions us well for further expansion. Overall, the past year has been transformative to how we manage our business. We have exercised strong spending discipline, and we are doing more with less across our operating expense lines without compromising investments in our three strategic pillars, innovation, clinical evidence, and commercialization, with the outmost focus on execution and operating clean. I'm proud of the execution of the team, the transformation of our financial profile, and the strong foundation we have established for the future of our business. This brings me to our priorities for the year ahead. In 2024, we remain committed to our three pillars and plan to maintain a robust cadence of innovation to augment clinical evidence supporting the use of soup, especially evidence focused on stroke and in Alzheimer's, and to grow commercially, including through our strategy to expand to select international markets. Before I cover each of these in greater detail, let me highlight the opportunity for our technology in Alzheimer's. One of the greatest catalysts I see for the adoption of our technology is using SUP in the Alzheimer's treatment workflow. There is a strong potential fit for SUP to assist in reducing barriers to accessible and equitable Alzheimer's care. As many of you know, There are currently over 50 million people suffering from Alzheimer's disease globally, and the cost and burden to patients and healthcare systems is enormous. In 2023, 2023, sorry, was a breakthrough year for advancement in the fight against Alzheimer's. With the FDA approval and CMS reimbursement of biogen-designed Lekembe and amyloid targeting therapy, or APP, as well as advancements in blood testing for the diagnosis of Alzheimer's, and separately milestones related to additional coverage of PET scans to enable Alzheimer's diagnosis. Lilith Donanema, another ATT, is also expected to be FDA approved later this year. These approvals are opening a new category for therapy, which shows significant promise to delay the progression of the disease and potentially offer patients and their families additional years of independent living. The developments have also brought two issues to the forefront. The first one is associated with the FDA labeling for amyloid targeting therapy, which requires at least three monitoring MRIs during a patient's initial year on this medication. The monitored MRIs must be conducted at prescribed intervals to screen for amyloid-related imaging abnormalities, also known as ARIA. As a result of this scanning requirement, the industry is seeing significantly greater demand for brain MRI technology against what is already backlogged, burdensome, and time-consuming imaging workflow that patients experience. This scanning requirement also creates significant care navigation challenges for patients on these drugs who must add imaging to their already complex monitoring and infusion schedule. The second issue is one of access and equity for patients in low-resource settings globally. At 2050, it is estimated that over 70% of the people suffering from dementia will live in low- and middle-income countries. We believe that our portable soup system can play a significant role in addressing the pragmatic hurdles to getting treatment to patients in these low-resource settings and care for them appropriately. Together, these advancements to address Alzheimer's disease offer an enormous incremental opportunity for brain imaging. Our portable soup system is highly differentiated for this use case and the ideal technology for patients taking APP, providing a versatile, convenient, and streamlined alternative to conventional MRI. We're positioned to offer a unique solution by placing a portable MRI in an easy location to support patients through their treatment. At a global scale, an affordable and portable brain MRI tool is highly desirable to improve equity in Alzheimer's care and increase access to the latest treatments available in low-resource settings. Given the vast and compelling opportunities this represents for Hyperfine, we have mobilized to build a robust and comprehensive Alzheimer's program quickly, which is a key focus for us in 2024. Before I discuss the aspects of the program, I want to remind everyone that scanning brains of Alzheimer's patients of any age is already covered under our current FDA labeling. Therefore, we do not need any additional regulatory clearances to access these new business protocols. Our work on Alzheimer's is focused specifically on the opportunity to simplify and streamline the imaging workflow for patients who receive Lecambi and soon Donanemab, making portable suprain MR available in a convenient and less burdensome location for patients and care partners. Our Alzheimer's program has several components, including data generation, market building, and optimizing workflows. For the most part, Clinicians caring for Alzheimer's patients are not familiar with portable brain MRI, as these clinicians have not been within our initial commercial target. Today, we're most focused on the data generation and clinical evidence element of our program. On that front, we're excited to share that we have initiated a new study called CARE-PMR. Care PMR is a utility study led by Dr. Benzinger at Washington University School of Medicine in connection with BJC Healthcare. In this study, clinicians have placed soup systems at local infusion centers and are comparing high-field MRI and portable ultra-low-field MRI to assess the ability of soup to detect aria complications. By bringing imaging closer to the patient than a conventional MRI system, we hope to significantly optimize workflow and ultimately open up the opportunity for more patients to be treated safely and efficiently. We expect to see a readout of care PMR data before the end of the year. Alongside our investment in Alzheimer's, we remain committed towards three strategic pillars, which I will provide an update on right now. Starting with innovation in the fourth quarter, we received FDA clearance for our latest AI power software update and launched it in the past few months across our installed base. Systems now have our updated DWI sequence and additional ease of use features designed to aid users with patient positioning and faster image upload properties. This is our eighth FDA clearance since our initial system launch in 2020. It includes proprietary AI and deep learning algorithms in the DWI sequence and expands our AI denoising capabilities by incorporating advanced image post-processing into the DWI sequence. The system's other sequences, which are the T1, the T2, and FLIR, already incorporated these AI features. Denoising enables a CRISPR image that potentially helps clinicians more accurately diagnose and make clinical decisions for their patients undergoing brain imaging. As we move forward, we will continuously invest in improving our AI-powered image quality and system usability. leveraging each image-focused software release to further improve the performance of our subsystems. In 2024, we have a strong cadence of technology iterations across hardware and AI-powered software planned to further advance the image quality, the speed of image acquisition, clinical utility, ease of use, and clinical applications of ultra-low-field MRI. I look forward to sharing updates here throughout the year. Turning to clinical evidence. Starting with the stroke, we have now enrolled over 100 patients in our ACTION PMR study, a multicenter evaluation to assess the use of the subsystem in detecting acute skinning stroke. We remain bullish about this opportunity which will open up the placement of sup units in ED and hub and stroke networks, and look forward to sharing updates in the coming quarters. Additionally, our technology was highlighted in four abstracts at the recent International Stroke Conference in February. The abstract spoke to the depth and breadth of research into the clinical utility and applications affordable ultra-low field brain MR imaging. Now relevant to the detailed use case today inside the hospital, imaging patients in critical care. Three studies highlighting ultra-low field imaging data were presented at the RSNA meeting in November. These studies analyze how portable MR brain imaging may assist physicians in the diagnosis and management of neurological conditions in critical care settings. This is in addition to data from the SAFE MRI ECMO study that was presented at the APELSO meeting in Seoul, South Korea, and has now been accepted for publication. This study further underscores the role of MR-based neuroimaging in acute brain injury detection and the potential for enabling improvement in neurological outcomes. And turning to our final pillar, commercialization. With a more tenured and experienced commercial team in the US, our deal pipeline is definitely growing. As I mentioned earlier, Our recent soup sales include system additions within several flagship U.S. institutions. We're very pleased that we are continuing to build traction with new U.S. institutions. This year, we're also expanding our commercial focus to select international markets. We have a strong track record of international clearances, including CE and UKCA approval of our latest AI power software, and we have now begun building up commercial infrastructure and relationships in certain countries where we see immense opportunity. I am very encouraged by the level of interest and activity we're seeing for the subsystem internationally, and I remain excited about global expansion as a growth opportunity this year and beyond. Before I turn the line over to Brett, I would like to reflect on the strong progress we have made over the past year and the fact that we have demonstrated our ability to drive meaningful progress on our three strategic pillars while significantly reducing spending. These have translated into strong growth, gross margin improvement, and cash flow reduction. I will now turn the call over to Brett to review our recent performance and discuss our 2024 financial outlook in detail.