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spk02: And welcome to the INVO Bioscience Report's third quarter of fiscal year 2021 financial results call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. And I'd like to turn the conference over to Robert Bloom with Litham Partners.
spk01: Please go ahead. All right. Thank you very much, Jason. Good afternoon, everyone. And thank you all for joining us during today's InvoBioScience third quarter 2021 financial results conference call. Joining us on today's call is InvoBioScience's chief executive officer, Steve Shum, the company's chief operating officer and VP of business development, Mike Campbell, and the company's chief financial officer, Andrea Gorin. At the conclusion of today's prepared remarks, we'll open the call for a question and answer session. Before we begin with the event, we submit for the record the following statement. Certain matters discussed on this conference call by the management of INVO Bioscience may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, Section 21E of the Securities Exchange Act of 1934 as amended, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. all statements regarding the company's expected future financial position, results of operations, cash flows, financing plans, business strategies, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as anticipate, if, believe, plan, estimate, expect, intend, may, could, should, will, and other similar expressions, are forward-looking statements. All forward-looking statements involve risks, uncertainties, and contingencies, many of which are beyond the company's control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. Factors that may cause actual results to differ materially from those in the forward-looking statements include those set forth in the company's filings at www.sec.gov. The company is under no obligation to and expressly disclaims any such obligation to update or alter the company's forward-looking statements, whether a result of new information, future events, or otherwise. With that said, I'd like to turn the event over to Steve Shum, Chief Executive Officer of InvoBioscience. Steve, please proceed.
spk09: Thank you, Robert, and welcome, everyone. Similar to our last quarter, both Mike and Andrea are participating on the call as well. Before we recap the third quarter and provide a general update, let me take a few minutes to address the most recent development regarding the change to our U.S. distribution approach and the termination of the Farian Agreement. It was something we announced last week and we recognize that it has created some questions. I would start by emphasizing what we conveyed in our press release. With the team we have assembled, many of whom have many years of experience in the device commercialization business within the fertility space, we feel very confident about our ability to take over and service the entire U.S. market. We are well positioned to do so, and we are excited by the opportunity to regain control of the U.S. moving forward. A tremendous amount of work has occurred over the past three years that provides a solid foundation and positions us really well to begin handling the entire US market again, and which will enable further progress moving forward. A few key points to keep in mind on this. We built a great team and a strong board of directors. We've seen much more real market usage data around InvoCell become available, along with peer reviewed papers and abstract posters. all of which reflects excellent patient outcomes, adding to the clinical validation around the technology, which builds confidence for practitioners and patients alike. Many practitioners have been trained on the technology now, including a growing list outside the US. Of course, we've just opened our first InvoCenters, a very substantial milestone for the company, and something we believe will be very impactful to the overall commercial progress moving forward. We've added marketing resources. Just recently completed our new branding, logo, website, and messaging. And we'll shortly be kicking off programs to help create greater awareness within patients and referring physicians. Again, as we regain control of the U.S. market, we can also really synchronize this marketing effort across all the key channels. We did not expect the decision by Faring, but we respect it. and thank them for their contributions towards advancing InvoCell. We knew, and I think many of our long-term shareholders also understood, that building InvoCell within the existing IVF clinics, which is where Faring was primarily focused, was and has been a slower process. Of course, this is why we are pursuing the additional channel strategies we've laid out and which are now underway. However, we also see the IVF clinics as important and we will fully support this part or channel of the market. Also, we do not need to add resources at this time to support the existing IVF clinic market. We do have a few transition details to work out with Faring, but an important point to remember is once we complete that process, we will begin selling product directly to the IVF clinics. We would anticipate that will also have the benefit of smoothing out the revenue from that part of the market rather than the occasional large orders and then periods of no activity, which will be beneficial for our planning purposes. So again, with all the foundational work and additive components that have occurred over these past three years, quite frankly, we could not be more excited to regain control over the US market at this stage. During the third quarter, we made progress towards our core objectives, especially with the Birmingham InvoCenter treating their first patients in the month of September. It was not a large number of patients, and we are running a promotional pricing program during these first couple of months. However, it's very important to note that relative how we modeled the clinics and the expectations, Birmingham ran ahead of our plan for the first month. So we are pleased, and we as we consider to be right on pace, actually a little ahead, toward the goals we have for first year operations and the expected ramp up. Equally, if not more exciting to our partners in Birmingham, as well as the whole INVO team, we now have a number of patients pregnant and on their way to having a child thanks to INVO Cell and our new INVO Center. As we've noted in separate releases, the Atlanta and Mexico centers are also now up and running and seeing patients, and we are moving the planned Bay Area center as our next planned opening. As we look ahead, the recent change in the U.S. does not impact our view of the market, the opportunity, and the methods in which we will continue to pursue commercializing InvoCell and open access to greater patient care. We have a clear objective and it hasn't changed. We intend to actively pursue establishing additional INVO centers. Of course, we can now also expand our approach and thinking around this effort in terms of the potential number of centers over time, but also how we might best approach such an expansion and better involve the OBGYN community. And again, we will look to fully support the existing IVF practices to drive improving utilization within that channel. Our international activities continue to progress as well. Mike will give a few highlights on this front. On the data front, as most of you know, the annual American Society of Reproductive Medicine, ASRM, conference was held last month. We were pleased to have four separate independent abstract posters presented this year on InvoCell at the event, which reflected further real-world data around InvoCell. As we've stressed many times, We cannot say enough how valuable and critical it is to have this growing body of validation data. It really helps with building confidence around the technology and will play a critical role in seeing increasing acceleration in the . This is another advantage with the InvoCenters. We expect to work with our JV partners to help further build data around our own centers that we can report on and further publish around InvoCell. To recap my remarks, we feel Invo is incredibly well positioned for success. Our team, our key opinion leaders, our partners, and our technology are all coming together nicely, although not expected we are excited to be regaining full control of the US market at the same time as this progress has occurred and we look forward to capitalizing on it. Our goals are clear and we remain focused at driving InvoCell toward addressing the very large unmet medical need and treat patients that need care. As the sheer numbers imply, There is a massive multi-billion dollar opportunity to add capacity, increase access, and treat those that go untreated today. This remains the essence of our strategy and approach. We also remain confident that the market progress and momentum occurring with both the info centers and distribution activities will become evident in the quarters ahead in terms of revenue growth and improving operating results. As we enter this fourth quarter specifically, we now have three INBO centers operating with a fourth on the horizon. Let me turn this over to Mike now for some additional details around the commercialization efforts. Mike?
spk07: Great. Thanks, Steve. So, as Steve has highlighted, the INBO bioscience team is truly excited with the new opportunities in the U.S. market moving forward. As you may know, and as Steve mentioned, our U.S. commercial and clinical team has extensive experience and some very, very strong relationships in the fertility market. We are well into the planning process to determine how best to take advantage and coordinate our various commercialization approaches to expanding in the cell utilization here in the U.S. The great part now is we can expand our thinking and evaluate additional opportunities, and more importantly, pursue our goals to better involve the OBGYN community as we see this segment is critical to truly expanding care in a more dramatic way, something the IVF industry needs to do if we're going to treat the volume of patients that need care. So we expect to be very strategic and comprehensive in our approach. Regarding our current JV partnership activities, as Steve mentioned, Birmingham, Atlanta, and Mexico are all up and running. Life Medical, our partner in California, has signed a lease on a property located in Daly City. which is just south of San Francisco and a great central location to cover many of the communities of the Bay Area. We are now in the development phase of the process and close to finalizing the clinic layout. We will be pushing the schedule as quickly as possible and plan to get this facility online in Q1 2022. Our Birmingham facility, as Steve mentioned, is doing extremely well, and they have completed two batches of patient treatment cycles in October and November with great pregnancy rates, which are consistent with what we see in the overall InvoSol data set. Patient flow is ramping within our projections, and we are truly grateful for the exceptional work and dedication of our clinical team at Innovative Fertility Specialists. In Atlanta, Dr. Sue Ellen Carpenter and a team at Bloom Fertility have initiated their initial IVF procedures last week. As Steve mentioned, there were just a few patients in the first treatment batch, but in line with how we generally laid out our forecast and ramp up to this facility. We have also been doing some outreach efforts in Atlanta to help develop physician referral programs to targeted imbocel product education. For this critical function, we have partnered with the medical marketing group MMGI, MMGI has nationwide expertise in medical device and specialty pharmaceutical launches, strategic communications, and market expansion initiatives. We have been encouraged by the positive early response and support of opening the EMBO Center in Atlanta, as a number of OBGYNs and even urologists have been highly engaged and have started to refer prospective patients for consultations. We are considering this model to help build referral networks for each of our EMBO Centers and expand the scope of these initiatives to further broaden awareness. To what Steve stated earlier, we now have several U.S.-based market channel opportunities for our technology. We plan to support the adoption and expansion of EMBO through the existing IVF Center network. We have also identified several U.S.-based markets that would be ideal for the EMBO Center concept based on demographics and the lack of viable advanced fertility services. What's great here is now we have the ability to actively pursue our top 20 to 25 opportunities. Regarding the rest of the world markets, we've made significant progress since our last call and I will note some of the highlights here. Chris Meyer, our America's business development manager, was with our partners in Monterrey, Mexico last week to help finalize some of the finishing touches on this facility. The center has been completed and we are finishing up the training and onboarding of the staff. The physicians have begun patient consultations, and we expect that we will begin with EMBO procedures within the next few weeks. In Malaysia, we are engaged in a 40-patient trial within a public hospital sector to compare IBC to IVF, and we expect this trial to be completed in early Q2 next year. We are also engaged in joint venture discussions with two physicians groups to establish EMBO centers for the private medical sector in Malaysia as well. In Pakistan, our partner Galaxy Medical continues to experience success with their mobile Invo center concept. This is where they transport the fertility lab equipment to regional medical practices to perform Invo procedures. Currently, they have nine mobile labs operational and plan to have a total of 30 labs operational by the end of 2022. In Europe, we're in discussions with Fertility Service Provider Group that has five operational IVF centers in Spain to add INBO as an economical option within their network. They have completed their initial evaluation with great results, and we plan to help support them with a private direct-to-consumer market expansion program to help drive patients to the centers. And lastly, some really exciting news out of Africa. Ingeborg Carlsen, our VP of Medical Affairs, will be presenting the EMBO technology in the scientific session at the Middle East Fertility Society meeting on December 3rd in Dubai. This is the region's largest fertility society meeting and we expect that it will be well attended this year. Although our product registration still is in process for Sudan, registrations have been completed for Ethiopia and Nigeria, and we have scheduled live in-country hands-on training sessions for all three markets in early February. We expect about 100 participants, including physicians, nurses, embryologists, and other fertility-related healthcare practitioners to participate. So in addition to these, our current international partnerships and distribution agreements, we have an extremely active pipeline in other world markets for both joint venture and distribution opportunities, and I hope to be able to share some of this information with you soon. Lastly, now that we are active in the commercialization stage, we are ramping up our marketing activities that Steve mentioned. We just recently rolled out our new logo, branding, and company website, which were the initial pieces of the program. We expect to add in direct-to-consumer and social media campaigns to help create awareness for the Invo procedure and some additional business-to-business programs to help build patient referral networks for all of our Invo centers. So with that, I want to thank you for joining the call today and for your continued support, and I'll send it back to you, Steve.
spk09: Great. Thanks, Mike. I'm just going to turn it right back over to Andrea to briefly review financials, and then I'll conclude some remaining remarks. Andrea?
spk03: Thank you, Steve. Hello, everybody. Revenue for the quarter totaled $219,000. which compares to $336,000 in the prior year period. We recorded a net loss of $2.2 million compared to $1.8 million in the prior year, excluding non-cash charges mainly related to equity-based compensation. Our adjusted EBITDA loss was $1.6 million compared to an EBITDA loss of $935,000 last year. The $1.6 million adjusted EBITDA loss for the quarter included $337,000 attributable to our joint ventures. So an apples-to-apples comparison would be $1.3 million in the current quarter compared to $935,000 last year. And this level of corporate expenses is consistent with our stated internal company operational goals. During the quarter, two of our operating InvoCenters, as mentioned, impacted our income statement. In Birmingham, the InvoCenter was consolidated in our financial statements. It generated $38,000 in revenue starting in September, expenses totaling $515,000 and a $239,000 loss net of non-controlling interest. The expense level does include approximately 380,000 of pre-revenue startup and labor expenses. Our note receivable, which currently has 1.33 million outstanding, was eliminated as an intercompany transaction in consolidation and is not reflected on our balance sheet. The 201,000 reflected as a note receivable on the balance sheet is due from Atlanta, from the Atlanta InvoCenter, which was operational only for a few weeks in the quarter. In addition to this note, we also made $165,000 equity contribution to the joint venture. And our third InvoCenter, located in Monterrey, Mexico, was not operational during the quarter. To date, we have invested $44,000 in the joint venture. At the end of the quarter, we had approximately $3 million in deferred license revenue to be recognized. We are still in the process of analyzing the precise timing and recognition treatment for the remaining amount. We do expect that we'll move from being a liability to equity on our balance sheet. For the avoidance of doubt, INVO does not need to return any portion of the deferred revenue to Farring. We ended the quarter with approximately 4.7 million in cash. In early October, we closed a $4 million offering. and expect to close on an additional $2 million by the end of this month. We believe that this level of cash is sufficient to support our corporate expenses and the InvoCenter development activity at least through 2022. As our InvoCenters generate an operating track record, we believe that debt financing will be available to us on reasonable terms to refinance our investment in the open InvoCenters and to support development of new InvoCenters. While the precise timing of our InvoCenter's cash flow break-even point remains difficult to estimate, we are reasonably certain that all three InvoCenters will reach that threshold and start to repay our loans and to make equity distributions during 2022. We expect that together with our current cash resources, liquidity from InvoCenter operations, and debt sources will be sufficient to meet our near-term business development needs. As of today, we have 500,000 in convertible debt with a fixed conversion price of $3.20 per share, approximately 260,000 warrants, and 11.7 million shares of common stock outstanding. Looking forward, we expect our growing activities across the globe to add financial resources and to support our efforts to deliver affordable and effective fertility treatments to those in need. It is an exciting time to be involved with Invo. Back to you, Steve.
spk09: Thank you, Andrea. On our five-day clinical efforts, of course, we are continuing to aggressively complete those requirements. We are just wrapping up the remaining data we needed and should be submitting to FDA this month. Similar to last quarter, I will just conclude our prepared remarks by expressing an appreciation to our entire team, including our internal operating team, our board, our scientific advisory board, our partners, and key consultants. We have a lot of work in front of us, and even more so here in the U.S., but we are excited and up for the challenge. Moderator, let's go ahead and open it up for questions now.
spk02: Thank you. We'll now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we'll pause momentarily to assemble our roster. Our first question comes from Kyle Bowser from Collier's Securities. Please go ahead.
spk08: Kyle Bowser Great, thank you, and thanks for all the updates today. So, maybe I'll start with U.S. commercialization. It's great that you'll regain those rights for InvoCell. Just kind of curious, were there any hurdles that Fering had while selling InvoCell or any difficulties in getting traction with InvoCell adoption or with the termination of the agreement, just kind of a function of changing dynamics and perhaps the clear advantage of opening centers versus their sales efforts?
spk09: Well, you know, we don't, we're not privy to all the decision-making that was occurring inside Farian. We don't necessarily want to speculate on why they made their decision. You know, certainly, again, as we mentioned, the process of seeing and traction in the existing clinics has been slower. That could have been a factor in Farian's evaluation. You know, remember, most IVF clinics are very busy clinics, and so it takes time to adopt a process and procedure. One of the other, you know, items we identified early on, or we believe, is that, you know, the targeted patient, the underserved patient often isn't, you know, seeking care to an existing or traditional IVF clinic. So that's something on the patient awareness front that we want to, you know, work on, especially as we go into next year. So, you know, we're excited to take over the whole market. We're excited to work on servicing the IVF clinics. You know, you've certainly heard us talk over the last number of quarters. We're equally excited about pursuing the additional channel opportunities. We think those will be quite effective at helping to build overall traction and awareness in the market. We think that will help within the existing IVF clinics. So, yeah, that's, you know, again, we're just focused on how we see it and now what we want to do as, you know, as we move forward from here. You know, maybe, Mike, if you want to add anything further to any of that.
spk07: No, Steve, I think that's really accurate. And, again, you know, as Steve mentioned, pretty sudden decision, and we are actively pursuing our commercialization strategy. And as Steve mentioned, we're certainly going to get on all three roads and just look at all these opportunities. And, lastly, we have a ton of experience here, both myself, Chris Meyer, Inga Brickhausen, or in the fertility market for many years, and we know who these accounts are, and I think we can just pick the ball up from selling and run with it.
spk08: Sure. No, agreed. That's helpful. And, you know, given the update, and sorry if I missed this, but how might your assumptions have changed for 2022 in terms of the number of INVO-only centers in the U.S.? ? You know, any kind of internal goals or plans for opening up new ones would be great.
spk09: Well, we're still in the early phases of reevaluating some of our plans, but I would just say at a high level, we certainly are expanding our thinking and approach to the market. I mean, we always felt under the fairing agreement that we would have the ability to expand beyond seven once we brought the first seven up and operational. But, you know, now we can, you know, again, we don't have to worry about potential limitations. And we're looking across, you know, the market. We've done some analysis already. We've done this early on. We think we've identified a number of ideal locations based on demographics and current level of fertility care. So we're eager to, you know, pursue aggressively those additional opportunities. And I would say as we finalize, and we also may be, you know, a little more creative in how we approach some of the partnering activities and with who. So... you know, we're certainly expanding our thinking along those lines and look forward to perhaps a more aggressive rollout plan.
spk08: Got it. Appreciate that. And then lastly, if I may, I think you said you'll submit some additional data to support your label enhancement to five-day this month. Just kind of curious what types of interactions you had with the FDA and you know, once you submit that, what's your expected timeline for a decision? Thank you.
spk09: Yeah, like I said, our goal is to wrap up the additional collection of data, which has taken longer, but we're pretty close, and prepare that and look to try to submit that this month. From there, I would think that we'll be, you know, somewhere between a 60 and 90 day timeframe for review and any questions to come back from the FDA. We're certainly hopeful that we have addressed everything they had asked for, but there could be additional questions. Got it.
spk08: Okay, thanks so much for all the updates.
spk02: Thank you, Kyle. The next question comes from Scott Proctor from Platinum Point. Please go ahead.
spk05: Hey, Steve. Congrats on the shift in the business strategy here. Certainly an exciting time for Invo. I guess I have a question just about how things are going in Atlanta. I know there's a little bit of a head start with Alabama as that was already kind of a hot place for Invo. How are things going in Atlanta? How do you guys feel about the uptake there relative to you know, what you've seen in the more established area of the country.
spk09: I think I'll pass that one to Mike and let him give you some color on that.
spk07: Yeah. Hey, Scott, Mike Campbell. And yeah, it's right along with what we expected. So of course, you know, Karen Hammond and the group at Innovative Fertility Specialists were already in the in-vote procedures. So, you know, that thing took off a little more quickly. Alabama is a new facility, and Swell and Carpenter just put this team together, and we started the patient recruitment and consultations not too long ago. So it's in line with our expectations, and, of course, it's going to take some time for that facility to ramp up. So really no surprises there.
spk09: I would say, Scott, too, in addition, as Mike mentioned in his prepared remarks, too, that we implemented a program to do some outreach to referring positions in the area. And I think, you know, everyone was pleasantly surprised with the positive feedback and engagement that's been occurring around that. For us, I think it speaks to everything that we've always assessed around the market. which are there are a lot of patients. They're often getting stranded at the OBGYN location and unable to progress to a conventional IVF center. It's a big population in Atlanta. There's a number of practices that are seeing those patients. And like I said, I think the feedback, the early on feedback has been really terrific.
spk05: Excellent. Thanks for that color. Certainly a really exciting development. I saw in the prepared remarks or I heard earlier on that you guys have identified more than 20 cities where you believe that there are kind of the right characteristics to open up additional in-vote only clinics. And you mentioned you're thinking about potentially a more aggressive approach, financing through debt. That all sounds... Sounds really good. I guess, do you guys have any way of measuring the impact of how the Invo brand is just growing generally through these success cases versus kind of what you guys have been doing in the past, just going through distributor channel? How do you guys think about the, I guess, the byproducts of just success stories within individual Invo clinics as a marketing strategy versus just traditional distributor channels?
spk09: Well, I think you're bringing up a really good point, which is, you know, additional validation data. And we talk about that a fair amount, but it has a cumulative effect that every time you have more, just it, it, it adds on top of your, your data pile, if you will. And it really lends itself to a lot of confidence building and it, It's still early in the overall awareness, especially what we've seen in Atlanta. Even though the engagement has been terrific, it was also a dynamic where very few or even any of the potential referring physicians we spoke with had even really had much familiarity, if at all, on InvoCell. So again, we can see that it's early, but there also is clear growing momentum and I look at it as I think that has an accelerating effect as you continue to progress down the timeline and build more evidence and you build more you know knowledge in the marketplace and awareness in the marketplace it tends to again I would see it as we believe it will start to accelerate and there's even early signs of some of that And I think the InvoCenters have been a big boost on that front.
spk07: Yeah, Steve, I just want to throw just one more comment on that, which is really critical, and that's the creating awareness. As Steve mentioned, a lot of these patients are not aware of the technology. And their conversation with their primary care physician is typically, right now, we can only refer you to an InvoCenter. So creating awareness and direct-to-consumer campaigns are very high on our list, and we want to create the awareness that this alternative technology is available. And initially, we were just going to target our info center markets, but again, our thinking has been expanded due to the recent events, and we're putting programs together to look at expanding this throughout the entire market now.
spk05: Great. That sounds amazing. I guess just real quick, last question for me, and I know you guys don't issue guidance or anything like that, but you mentioned earlier that you anticipate all three current info centers that have been open to be break-even or better sometime in 2022. That's pretty fast. I'm just wondering if you guys have any kind of indication of where these clinics will top out in terms of capacity from a revenue standpoint, just so I could update models on my end with you know, the potential for more clinics, you know, coming to market than, you know, initially thought under the prior remote fairing, um, you know, where do you think like revenue wise or like on a quarterly basis, these, uh, these clinics could operate, is it like in the three to 5 million area?
spk09: Yeah, Scott. I mean, what we've, what we've stated and we'll, we'll continue to state is that, uh, approximately 200 patients per year, the clinic should be approximately breakeven. But our near-term objective, and that's probably within a 12 to 18-month period, is to bring them to in the neighborhood of 500 to 600, you know, sort of patient, annualized patient volume. We believe they'll have greater capacity than even that, but that's our kind of immediate focus and objective. So based on average patient procedure costs, you'd probably be in the $3 million to $4 million range. Great.
spk05: Thanks. Appreciate it, guys. Congrats again, and looking forward to following the story.
spk02: Thank you, Scott. Again, if you have a question, please press star, then 1. Our next question comes from Rodney Baber from Paulson Investments. Please go ahead.
spk06: Steve, how you doing? It's good to hear about all this. These are exciting times, so I'm really looking forward to seeing this play out. A lot of the good questions have been asked, but trying to ask something that might be helpful in just giving us your thinking. And Mike, you may have the most fun job in the company right now because of the opportunities. And with your skill set and background and all that, I want to ask you this question because... When you're thinking about how you spend your time, you've got a number of different ways to go at it. You can go open a new clinic, or you can go after an OBGYN group, or you have other distribution channels available to you. How do you view that right now? Would you be happier if you could open up another three or four clinics? Do you need to bring the OBGYN groups in because they provide a different flow that can be managed in a different way? I mean, how do you think about setting your priorities and how you move this forward? In other words, if we were a year from now and we were looking back on what you've done this next year, what would we have seen? What do you think you would have produced, and how would you have decided what that was, and where do you think it could possibly be? And I'm not asking for a projection. I'm just saying – You've only got so much you can do in a day. How do you take on these priorities and execute with them? What's your thinking now after going through this for a while?
spk07: Yeah, yeah, that's a great question, Rodney. And, you know, these are great problems because we do have multiple channel opportunities. I think I'll stop by saying that, again, based on the current available fertility specialists in the U.S., there just isn't enough capacity for or human capacity to handle the number of procedures or the clinically infertile people that need treatment. So that all indicators point that we really need to expand the utilization. And through the existing IVF centers, it's not possible. So we have to expand that point. So that just means more providers, and again, You know, the OBGYN is a great network. You know, it's not been tested. It's not been tried. But we think that, you know, it's the perfect opportunity to add that element into this equation. And it's something that we just need to test. So I'm going to tell you, we're going to get on all three roads. And, you know, we're going to service the IVF centers. We're going to go in there and help them with utilization and adoption and integration. I think that's really where the key is. You know, they've been trained on the technology. Not a whole lot of utilization, and I think that's because of the difficulty of integrating this into their current practice. So I think that's possible. So, yeah, we've got a lot of good problems we have to sort out. Myself, Steve, Andrea, the team, we're going to get together and think through all this and put everything on the table and develop the best strategies going forward that's going to benefit not only the company but the field. I would say you're going to see a year from now, A little bit of all of it. Hopefully the IVF centers will increase their adoption. Hopefully we'll build, you know, another half a dozen or so IVF centers and then in-vote centers and then, you know, add the element of the OBGYN community in here somewhere, somehow. That's the plan.
spk06: Well, let's go to the OBGYN sector for a second. So six centers would be terrific. But OBGYN groups, I understand you've had some real success in the Atlanta area with people, groups wanting to come in and get involved. And they have hundreds of doctors that can feed into, you know, the clinic you install somewhere that you use. Give us a little more color. Let's say that you've got your reference account and you're rolling him out. And he's got 100 doctors. and he's got X number of patients that are rolling in. How would that develop? Do you put a clinic in his center where this guy is running his business, or do you use your center, your clinic that you've got that you're using the Invo Center with, and you run them through there? I mean, what would be the way that would work?
spk07: Well, you mentioned Atlanta, and the way that's working now with our outreach program is just to create awareness that this technology exists. So The OBGYN, you know, at the end of the road with their fertility patient has another option for them. If they can't have the ability to go to an IVF center, now there's an option to refer that patient to our EMBO center, which is in Atlanta. So, I mean, I don't think that's your question, but your question is, you know, typically how are we going to install the EMBO embryology services with additional patients Is that what you mean?
spk06: Yeah, more or less, yeah. And what's the potential for that? I mean, how many OBGYNs are there in the Atlanta area? Is it 1,000? Are there 20 groups that could use your services? Give us a perspective on the size of the opportunity for that channel.
spk07: Yeah, I'm not close to that program, so I don't know the numbers there, Rodney. I couldn't. You know, I couldn't answer that question right now. But, again, we have an outreach program into those facilities that's being managed by, you know, a company that we contracted. So I just don't have that number for you.
spk06: Gotcha. Steve, let me come back to you, and I'll jump out of the queue and let somebody else ask. But just coming back to Birmingham for a minute, I'm under the impression you've done a couple of trials just now, 16 or 17 patients each. And I'm just wondering, what does the pipeline look like? You've had a couple months and 30-something patients through there. Is your pipeline going to grow rapidly? Is it going to continue to be that size as you work out the kinks? Or do you see your outreach program and awareness program providing a larger pool of people to pull through that center as it gets to maturity?
spk09: Well, yeah, that's, that's certainly what we want to do is, uh, you know, right now Karen and team are, are doing, um, their own efforts to, you know, pull patients in. And so we haven't even really come in to support their efforts with additional efforts. We'd like to do, you know, what we're basically doing in Atlanta. Um, just as a follow up, uh, cause Mike didn't have the Atlanta info, but I, I believe the group we're working with had identified about 600 OBGYNs within about a 100-mile radius of Birmingham. So I would imagine it's probably even bigger in Atlanta area. So there's a good pool to begin an outreach program in their area. Karen had enough flow of patients to start with to run through the first couple of months and working out all the clinic procedures and things like that. So I think she and team are supportive of having us start to apply increasing efforts on top of theirs to help drive additional patients. They're 100% aligned with us in terms of wanting to ramp that clinic up to a flow of patients that's consistent with our objectives and goals. Like I said, they're 100% aligned with that. And as you heard both Mike and I say, You know, we just recently completed some of our new marketing logo and messaging, and the new website went up. So we, you know, now we'll start the next phase of that, which is preparing some of those additional programs, of which we'll be to support Karen and the clinic in Birmingham.
spk06: All right. One question, and I'm going to jump out for a second. The 600 OBGYNs near Atlanta, is it fair to say that those guys are sending people the patients that have fertility issues to the IVF centers in that neck of the woods?
spk09: Yeah, but that number was what was in the area around Birmingham, actually. Okay, that's Birmingham? Yeah, I mean, yeah, I think, and Mike would tell you this, I think often what happens is when a patient has failed the potential options at the OB-GYN office, the options are... if that's available to the patient. And so, yeah, I think often what happens.
spk06: For some reason, you're going out as far as me hearing you. You were kind of going out there for a second. You're going grainy. I don't know if this is just me, but I couldn't really hear that answer. No, it could be me. Okay. But I'm just trying to get a handle on what would the 600 OBGYNs around the Birmingham area what kind of flow that would mean versus, you know, how many of those people are going to the IVFs now. If there was any stats on that, that'd be a fun number to know because you could take market share from the IVF clinics based with your outreach program, but you probably don't have that number handy. But anyway, let me jump out for a minute and see what else comes up. And, you know, thank you.
spk02: Sure. Thanks, Rodney. Our next question comes from John Herdink from Vista Partners LLC. Please go ahead.
spk04: Hi, gentlemen. This is John Herdink. Congratulations on the quarter and the progress made. Excited to see where you guys are headed. A quick follow-up to go a little deeper on your other questions is regards to Birmingham being a great example As to what was going on with Dr. Karen Hammond before you, in a sense, plucked her and created this joint venture where you own 50% of now and innovative. And what she did in a year before that, and I believe the numbers correct me if I'm wrong, were about 700 of these cycles she had done with it when things were going at full speed there at her last outfit. Could you speak to that? And I believe she was averaging about $5,500 a cycle, which puts her on close to around $4 million. Is this what gives you confidence or in sort of as you model these 20 sites that you're looking to go forward and sort of verify that? Because if that's the case, you're sort of looking at somewhere between a $60 and $100 million business just there here in the U.S. initially. if I'm doing my math right, and one or two, see if I can get some confirmation about that.
spk09: Well, yeah, and to be clear on the prior practice Karen and her team were associated with, they, because it was a COVID year, they had months, they had individual months where they did in fact treat, I think, you know, 60 plus patients in a month. I don't believe they were doing that consistently every month just because of some of the volatility around COVID and patients dropping off because of travel concerns and things like that. But the bigger point is that it was a pretty small footprint practice and she certainly felt that they would be capable of doing anywhere from 700 plus patients per year in that clinic. And so It does give us a tremendous amount of confidence. It was probably one of the key data points that gave us the confidence to pursue the whole effort of building dedicated INVO centers. We were fortunate to convince Karen to team up with us to do the first one. And we specifically built that first Birmingham practice that's a little bigger in terms of both the people resources and the physical footprint. So, it can, in fact, do even more capability than what her previous practice was capable of doing in terms of volume. What we need to do is develop the programs to drive the consistent patient flow into that clinic. And of course, as you've heard, that's definitely going to be a pretty important focus as we move forward from here for not just Birmingham, but all of the clinics is to, again, drive the awareness both in the patient market as well as referring physician marketplace.
spk04: That makes sense. Thank you. I guess beyond in the 20 sort of sites that you've thrown out here, which is exciting now that you're not restricted by the fairing relationship moving forward, and I guess it's an initial target, is have you looked beyond that? Is there, you know, what is the grander thinking? Is there at this point realistic to think you would have one of these in 50 states at some point? as this scales up? Or is it necessary? Is it not necessary? Do you think? I mean, we have over 400 plus IBF clinics, I think 440 across the U.S., and they're not making a dent in servicing this underserved market. So 20, although that's exciting to see scaled up and you got three going and four on the way, it seems like that's just possibly just a small portion of what might it might take to really service this massive market here in the US. Am I seeing this wrong or is that correct? How would you address that?
spk09: Well, yeah, in order to properly service the market and if we achieve our goals of opening up the market with the use of InvoCell, I would say it would certainly require more than 20 or 30 centers. But to Mike's point, you know, in how this may evolve over time, you know, it's likely there may be more involvement in trying to, you know, involve the OBGYN community. And so rather than necessarily building a center like what we did in Birmingham, you know, there may be opportunities to, you know, provide embryology services and team up with, you know, existing OBGYN practices. That could be, We think that could be a highly efficient way to ultimately really open up access to care and open up transaction volume with InvoCell as the primary technology helping to address that underserved patient market.
spk04: That makes sense. And that would afford an even greater amount of scalability without having to build out very exciting and still having control um which is what i think most excites me about uh the business model going forward uh that info is in control um and working with physicians and distributors and uh and patients right and really taking this to the market sort of similar to what has happened with in other industries uh smile direct etc that we're patient populations are informed of a more affordable option that might be even more attractive than what's existing in the market today. It's very interesting to me to see how this plays out going forward, but I think the potential seems to be extraordinary to me. And I guess speaking of the OBGYNs, I know you hired Dr. Barbara Levy as head of your global clinical affairs, and now she's been in there a few months now, and you've also had some real marketing power come to the table in the form of a board member, Rebecca, and who had, you know, formerly, I guess, 20 plus years at Coca-Cola and then former head of global marketing at Uber. Can you speak to that, how those two very powerful women, and before that, Barbara Ryan, right, who is, you know, 30 plus years on Wall Street and very involved in many women's health companies, both biotech and otherwise, who's also on your board, how those three women in particular are really helping guide this company and helping you on a day-to-day basis in some way.
spk09: Well, you're just highlighting why we always highlight the value of our team, because it even goes deeper than that. You know, Mike Campbell, Chris Meyer, Ingrid Carlson, all of our other people on the team that are experts, you know, in the field. of, uh, you know, their wheelhouse, um, as well as our key, you know, our key opinion leaders, our partners that are, you know, uh, excellent partners as well, our board members, um, you know, it's, it's across the board. I think it takes a, it takes a team to really, you know, build something like this. And I would say that I think one of the great things that that INVO has done is put some really valuable people together to really help accomplish our mission. And they're all very active in what they bring to the table. Rebecca has been fantastic in working with our internal marketing person, Marilyn Chamberlain, to work through some of our marketing strategies and some of the new materials that we've created and some of the new activities we're going to be unveiling here soon on the marketing front and awareness front. Dr. Levy, Mike works very closely with her. This is a big part of our initiative because she's helping us figure out what's needed to really be able to take advantage and leverage the OBGYN community because we're going to need that network of practitioners in order to be able to bring care to the volume of patients that we believe need care. So we can't speak highly enough about her. I'm sure Mike could give you chapter and verse of how excited he is to work with her. But again, even our other internal people that have deep relationships in the space are very excited to leverage everything, all the tools we now have in this company. And now that we have these standalone INVO centers to point to as well, I think we're really starting to have more experts in the field, more practitioners, and even patients starting to take notice and become increasingly aware of INVO. And that's a great thing because, as I said, I think that all that cumulative effect will have an accelerating effect to our progress as we've moved forward from here. Mike, I, you know, sorry to ramble. I didn't want to let, you know, you have anything else you'd want to add there?
spk07: No, I think you hit the nail on the head, Steve. You know, everybody brings their expertise and yes, I can't say enough about, you know, some of the folks who were brought to the table here to help us. And Barbara Levy is certainly a key. And again, this is not a simple process and, She's an expert in the industry, and there's certain things we need to have and do that she's help guiding and help putting together the strategy. But the key here, John, again, is the human capital. You know, again, there's a lot of patients that need help. That's why we're all here. I think we have a great solution for them. And we just have to figure out, you know, how do we get this technology to the masses? What is the best strategy? What is the best route? And whatever that turns out to be, that's what we're going to do. And, again, we have different channels, market channels that are accessed, and we're going to explore them all. So it's going to be an exciting year next year. And, yeah, I think you are going to see a different company here in the next 12 months.
spk04: Well, thank you. Thank you, gentlemen. Again, congratulations on the progress and look forward to the future. I'll step back in line here.
spk02: Thanks, Sean. This concludes our question and answer session. I'd like to turn the conference back over to Steve Shum for any closing remarks.
spk09: Thank you again for everyone that listened in. We appreciate your interest and support. And as always, if any of you have any follow-up questions, do not hesitate to reach out to us. We're happy to make ourselves available as needed. Thank you.
spk02: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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