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spk01: Ladies and gentlemen, thank you for standing by and welcome to the MODIS GI Holdings fourth quarter 2021 financial and operational update. At this time, all participants are in a listen-only mode. There will be a presentation by the MODIS management team, followed by a question and answer session. I must advise you all that the conference today is being recorded. I would like to turn the conference over to, I would like to turn the call over to Garth Russell of LifeSci Advisors. Please go ahead.
spk11: Thank you, operator. And thank you everyone for joining us for the MODIS GI fourth quarter 2021 update call today. Representing the company are Tim Moran, Chief Executive Officer, Andrew Taylor, Chief Financial Officer, Mark Pomerantz, President and Chief Operating Officer of MODIS GI. Before turning the call over to management for their opening remarks, I would like to take a minute to remind you that this conference call and webcast will contain forward-looking statements about the company. These statements are subject to certain risks and uncertainties that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions only as of the date of this call. We will not undertake any obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. Factors I could call as actual results or outcomes that differ materially from those expressed or implied by such forward-looking statements are discussed in greater detail in our most recent filings on Form 10-K and our periodic filings reported on Forms 10-Q and 8-K filed with the SEC. I would now like to turn the call over to Tim Rand, CEO of Lotus GI. Tim, the floor is yours.
spk10: Thanks, Garth, and good morning, everyone. Thank you for joining our call today. I'm excited to share an update on our progress through the fourth quarter of 2021 and highlight several key upcoming catalysts that we believe will significantly accelerate our business in 2022. Following my updates, Andrew will provide an overview of our financial performance for the quarter and year ended December 31st, 2021. And then we will open up the call to take your questions. With that as an outline, let's get started. Over the last 18 months, despite the challenging market conditions, we've delivered on many of the key milestones of our long-term growth strategy and believe the foundation has been built to move from our market development stage, where we've established important KOL relationships, gained key procedural learnings, and advanced our technology, into the next stage of our plan, which is to begin to drive broad commercial adoption and growth in the US market. We are entering an exciting time in the evolution of the company as we are now armed with the right technology, an expanding commercial team, and a significant backlog of colonoscopy procedures as a result of the pandemic. First, let me quickly provide an overview of the past quarter, which will also help to frame the momentum that we see ahead. As has been widely reported, much of the fourth quarter was impacted by the resurgence of COVID due to the Omicron variant. At our existing and target hospitals, we saw delays in commercial progress due to staffing shortages and overall capacity constraints. This had an obvious impact on the quarter, including the rate of new placements of the peer review system and disposable revenues. While these issues continued into the first quarter of 2022, We have begun to see a general lifting of restrictions and improved resources over the last month. We are optimistic that the combination of vaccine deployment and improved therapies may provide greater stability, and as a result, are hopeful there will be less disruptions to our business in the future. With that said, in anticipation of our PureView EVS system gaining FDA clearance in the first quarter, we strategically postponed new customer evaluations and engagements for those accounts that were eagerly awaiting use of the new system. This strategy was validated when we received rapid FDA clearance for PureView EVS at the end of February. We now believe we have a commercial technology that is the most advanced and intuitive solution to address the significant unmet need associated with poor visualization prior to colonoscopy. Every change we've incorporated into the all-new PureView EVS was designed to enhance the overall ease of use for the customer. We have improved navigation capabilities, especially in tortuous colons, by streamlining the disposable sleeve, making it 50% lighter and 40% more flexible. This is accomplished by utilizing a single multi-channel tube that carries both irrigation and suction versus the five individual tubes that were utilized in our previous sleeve. The new system is a true on-demand solution as we have eliminated the reusable loading fixture and drastically simplified the setup. The new process allows for bedside loading of our sleeve even onto a dirty scope in 60 seconds. Therefore, if the physician starts a case and determines the patient colon is not prepped well enough, they can quickly load the PureView sleeve on their existing scope and complete the case rather than aborting the procedure. Further, the PureView sleeve can easily be removed after use in a case where the physician prefers to complete aspects of the procedure without the device attached. This ultra-fast setup and rapid breakdown in the procedure room makes PureView a simple intuitive go-to solution that requires minimal training for the GI staff. This will eliminate the need for our reps to provide ongoing in-person support. The sleeve suction capabilities have increased by 80% with a 25% increase in the number of irrigation jets, moving from four to five. Together, this allows for faster and more efficient colon cleansing providing pristine visualization. This increase in cleansing capabilities can be extremely beneficial as we look to take the EVS platform into the upper GI space and address acute upper GI bleeding. And finally, the new PureView EVS provides a significant reduction in overall cost of goods for both the sleeve and the workstation. We believe this reduction in COGS will improve overall margins, as well as allow for more flexibility in price-sensitive markets, including outpatient procedures and certain regions outside the U.S. in the future. The Pureview EVS was a focal point of our Innovation Day, during which we provided a detailed overview of the advancements I just discussed, as well as why we believe this next generation of our platform will be key to our commercial success. This event also featured valuable market insight into the clinical need of our system from guest KOL Dr. Seth Gross, Clinical Chief of the Division of Gastroenterology and Hepatology at NYU Langone Health. I'd invite you to listen to the replay of this event, which is available on the MODIS GI website. In summary, the new PureView EVS system simplifies our technology for real-world utilization and addresses the valuable feedback we've received from physicians and staff over the last 18 months. We believe we can now drive wider adoption of the EVS product, getting it into the hands of general GI physicians and positioning its utility for both hospital inpatient and targeted hospital outpatient procedures. I am pleased to report that in the first few weeks since our FDA approval, we already have PureView EVS deployed at multiple hospitals and would expect us to reach our first dozen sites in the very near future. The end user feedback from both GI physicians and their staff has been very encouraging. Rather than hear from me, let me share a few quotes directly from the physicians at these hospitals. The first is from Dr. Sri Kamanduri at Northwestern Medicine. And Sri commented, the new lightweight and slimmer sleeve design feels and functions much more like a bare scope than the second generation, providing me much better control and the ability to retroflex as needed. The next quote comes from Dr. John Rabine at Sinai Hospital LifeBridge Health. And he stated, The five focused water jets versus the four on the earlier generation provide improved irrigation capabilities that allow me to target and cleanse in a more precise and effective way. As we lean into our commercial efforts in 2022, we've discussed our plan to grow the sales force in support of the PureView EVS launch. I am excited to report that since our last call, we have already doubled the size of our sales team, moving from three to six reps. And we expect to continue to invest in additional commercial expansion throughout 2022. By strategically expanding our team, we expect to be able to go both deeper and wider, which we believe will lead to significant future revenue growth for the company. Now let's discuss our progress on key upcoming catalysts. First, let me review our outpatient reimbursement strategy and our plan for the generation of new clinical data. In Q1, we hired a new vice president of clinical affairs who came to us from Medtronic and will lead and oversee our clinical activities moving forward. As discussed previously, we have developed a multi-pronged strategy to seek and secure reimbursement of the PureView system procedure by both private and public payers. Over time, if we can secure reimbursement, we believe it will help to further accelerate our commercial expansion into the large colorectal cancer screening market for outpatients. We believe the high medical need portion of this market represents approximately 4.7 million patient procedures per year in the United States. As such, we are currently designing a large multi-center clinical trial that we expect will generate clinical and economic endpoints in the outpatient cancer screening segment that we believe will support future applications for reimbursement of the Pureview EVS system. Moving now to active clinical studies. I am pleased to announce that the European Outpatient Clinical Study is fully enrolled and remains on track for completion in the second quarter. This study is evaluating the clinical outcomes in patients with a history of poor bowel preparation using a low volume prep with limited diet restrictions and the PureView system. This investigator-initiated study is being conducted at two health centers in the European Union and has enrolled all 44 patients. The primary endpoint for this study is improvement of the bowel preparation from baseline to post-procedure as assessed by the Boston Bowel Preparation Scale. In the U.S., we are planning to incorporate PureView EVS into the existing investigator-initiated clinical study being conducted at the Cleveland Clinic. This study is designed to examine PureView in patients with lower GI bleeding utilizing minimal pre-procedural bowel prep. As such, the physician will utilize just two tap water enemas in conjunction with PureView, allowing for faster time to diagnosis compared to the standard of care. In terms of ongoing product innovation, now that we've received FDA clearance for the PureView EVS system, we have initiated a project to add upper GI capabilities to the new PureView EVS platform. If you recall, we've been running a limited pilot using our Gen 2 approval and expect the larger suction port and more flexible sleeve design to optimize PureView EVS for use in upper GI bleed cases. There are approximately 400,000 upper GI bleed procedures performed in U.S. hospitals each year and has been reiterated to us from KOL's proper visualization is a critical requirement for the physician to locate and treat the bleed. We will provide project updates and timelines in the months ahead. And finally, turning to potential strategic partnerships and collaborations. We continue to advance our relationships and dialogue with several potential strategic partners. Our focus is on evaluating all pathways to accelerate and expand our commercial efforts in the U.S. and in targeted regions outside the U.S., enhancing our technology development and unlocking value for shareholders. As we continue to drive greater awareness and utilization of Peerview EVS in the market, we believe strategic options that fit our criteria and are actionable will become available for consideration. With that, I will now turn the call over to Andrew to provide detail on our Q4 financials.
spk00: Thank you, Tim, and thank you, everyone, for joining us today. We reported revenue for the fourth quarter of 2021 of approximately $100,000. compared to $36,000 for the same period last year. Full year 2021 revenue totaled approximately $390,000 compared to $98,000 for the full year 2020. As Tim referenced, the Omicron variant significantly impacted our fourth quarter results. We encountered delays with both existing and previously planned new evaluations due to hospital staff shortages and limited sales representative access. Additionally, the company strategically postponed certain sales and onboarding activities at hospital accounts over the past few months in anticipation of the new system launch, which began a few weeks ago. Over the course of 2022, and with the release of our new PureView EVS system, We expect to grow our number of new system placements and finalize commercial capital contracts. We anticipate new and reorders of PureView sleeves to significantly increase throughout the year. For the three months ended December 31, 2021, we reported a net loss of approximately $4.8 million, or 10 cents per basic and diluted share. compared to a net loss of $4.4 million, or 14 cents per basic and diluted share, for the same period last year. For the year ended December 31, 2021, we reported a net loss of $19 million compared to $19.3 million for the same period last year. The net loss attributable to common shareholders was $25.2 million, which included a one-time non-cash deemed dividend from warrant issuance totaling $6.1 million associated with our warrant exchange agreement from the first quarter 2021. This compares to a net loss attributable to common shareholders of $19.3 million for the year ended December 31, 2020. Net loss per basic and diluted share attributable to common shareholders for the year ended December 31, 2021 was 54 cents compared to 60 cents for the same period last year. Excluding the one-time deemed dividend from warrant issuance, our net loss per basic and diluted share for the year ended December 31, 2021 would have been 41 cents. compared to 60 cents for the prior year. We believe this financial measure provides consistent and additional means of evaluating period over period operating performance. During the fourth quarter, 2021, net cash used in operating activities and for the purchase of fixed assets was $4 million, compared to $2.8 million for the same period of 2020. Net cash used in operating activities and for the purchase of fixed assets during the year ended December 31, 2021, totaled $14.9 million compared to $17.1 million for the same period of 2020. At December 31, 2021, we reported $22.6 million in cash and cash equivalents. This balance included $12 million from our fully funded credit facility with Creos Capital, which was put in place during the third quarter. There are no financial or liquidity covenants associated with this facility. Our current cash balance allows us to continue executing our value creation drivers and is expected to meet our overall anticipated cash needs through this year and into the first quarter of 2023. And with that, I'll now turn the call back over to Tim.
spk10: Thanks, Andrew. In summary, we are at a defining moment in our company's evolution. We have worked very hard to get to this point and to make sure we have the right technology, the right people, at the right time to ramp up our commercial activities. The team has impressed upon me their commitment to this strategy and continue to deliver again and again. I am very excited to dial up these efforts in 2022 and look forward to keeping everyone up to date on our progress. In terms of our visibility in the market over the next few months, we will be exhibiting at both the AGA Tech Summit in San Francisco in April and DDW, the largest GI conference in the world, in San Diego this May. I mention this because I believe it's just another example of our commitment to lean into the launch of PureView EVS and drive much broader adoption and market awareness in 2022. I'll now ask the operator to open the call to your questions.
spk01: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
spk04: Your first question comes from Steven Lickman with Oppenheimer. Please go ahead.
spk07: Thank you. Hi, guys. Hi, Steve. Tim, I was wondering if you could talk about the backlog. You talked about being closing in on a dozen centers. with EVS. Can you talk about what the backlog looks like? Give us any perspective on size of it? Just trying to get a sense of the momentum that you indicated is building out there.
spk10: Sure, Steve. Thanks for the question. We've been working since I would say the end of the third quarter on qualifying our pipeline and targets, as well as, as you know, adding more salespeople. I would say right now very comfortably that each of our salespeople have anywhere between 10 to 15 fully qualified accounts. So in aggregate, that's in the range of 60 to 90 hospital targets. that we're working with. Let me define that a little bit further. So fully qualified means we have a GI champion, we understand their value analysis committee process. In most cases, we've already submitted pricing and a quotation to start that process. And we are scheduling or already, in some cases, in evaluation to get them converted to the new EVS system. So the team has done a very nice job working through those accounts and making sure that we're prioritizing accounts that can move quickly to revenue. That's a key gating item. And we'll continue to build from there. But right now, that's what the pipeline looks like, Steve. And we'll expect that to grow over time. But that's certainly plenty to work with for now. Great.
spk07: And thanks, Tim. On the outpatient strategy, do you believe that the trial that you discuss will be the only data that will be needed by payers to ultimately and And when do you expect to start that trial?
spk10: Yeah, so Steve, we've had some good engagement with insurers and with CMS and taken their feedback through a variety of different methods, some being the fast-track programs that you know we were engaged with last year. And one of the things that was clearly stated to us was while they're pleased with the data that we've generated to date, which really shows the efficacy and safety profile of PureView. Now it's been used on hundreds of patients. They have been asking for kind of more of the heart endpoint. So we provide visualization at a pristine level. But what does that actually do for the physician and connect that to both clinical and economic outcomes? So as we design this new study, that is the key goal. I'll ask Mark to expand just maybe a little bit more color on that. the work and kind of the guidance and inputs that we're getting around the design. But I think, Steve, from our understanding, if you couple that type of study along with the data that we've already generated, it should put us in an optimal position to apply for and hopefully gain reimbursement. But Mark, why don't I pass it to you? Maybe you can provide a little bit more color to Steve in terms of the advisory board and some of the other things that we're doing to ensure that we have the right study as we initiate.
spk08: Sure. Hi, Steve. So as Tim alluded to, we've actually got some of the top KOLs in the world. Folks are involved in writing some of the guidelines around colonoscopy and what it means from a prep and visualization perspective and folks that even sit on the RUC to really help guide us on the clinical trial that we're designing. We're also working interactively with the CMS, so to make sure that the trial we're designing is going to be meeting their needs, you know, as we then move forward with that and putting all this together to make sure we design the right trial with their input. You know, our anticipation is that we would get this trial, you know, initiated towards the latter part of this year, you know, as we work through the final trials and all the IRB submissions and contracting, etc., And then, in addition to that, you know, we do anticipate also investigator-initiated studies and other activity happening to create, you know, more of a broader ecosystem with, you know, additional studies in the works, as we talked about, you know, even the new EU study that's coming out, which is an outpatient study, will be supportive as well, you know, and then also working with, you know, some of the GI societies to help support this activity as well, so we create sort of not only the study, but the great support network that we need to really push this activity forward. Great.
spk05: Thanks, Mark.
spk10: And Steve, if I can just add one additional comment there. So obviously, this is an important investment and an important catalyst for the company. It opens up roughly around 5 million outpatient procedures in the U.S., which clearly will be a nice growth opportunity for the business in a couple years. But with that said, I don't want to lose sight of one of the comments I said in the prepared remarks. The new design of the PureVu EVS and the ability now that the physician can load the sleeve onto the scope, a dirty scope, That's very critical for outpatient, and we believe that we will now, at our hospitals, start to drive more hospital-based outpatient procedures. We're already getting some of those, but what we're finding is oftentimes in the outpatient, they'll start the case, they take the patient's word for how well did they do with their prep before their exam is scheduled. They get them on the table to start the case, and lo and behold, the patient is not nearly as clean as they were anticipating. Well, now they're able to take that scope out, put our sleeve on in less than a minute, go back in and complete that case. Whereas in the past with the second generation, they would have to load our sleeve onto a brand new scope in a separate room because it was a reusable loading fixture. and then bring the device in. And that time, you know, that is associated with that, you know, would have us missing out on cases. So we believe just the design change that we've made with EVS will open up some kind of early outpatient procedures, if you will, at the hospital centers.
spk08: Great. On top of that, you know, one of the things, and Tim alluded to it in his prepared remarks, is, you know, because of the pandemic and people not getting screened, There is a backlog, and some of the literature says that it could be much as three years of a backlog for people getting screened. So it's only more important for folks to kind of have their first colonoscopy a successful one and not have to come back under an early surveillance period, you know, because they weren't appropriately cleaned and the physician isn't comfortable, you know, to wait the five to ten years that they would normally require. So we think that's going to add some nice tailwinds to us as well.
spk07: Great.
spk08: Thank you, guys.
spk07: I'll leave it there, and I'll jump back in queue. Thanks a lot. Thanks, Steve.
spk01: Next question, Jeffrey Cohen with Ladenburg-Fallman.
spk02: Hi, Tim, Andrew, and Mark. How are you? Hey, Jeff. How are you? Just fine. A few questions from around. So firstly, the 12 sites for EVS that you discussed, how many of those may be overlaps from the previous system?
spk10: Yeah, so it's a great question, Jeff. I don't want to get to the exact number, but I would say probably approaching half in that first dozen are existing accounts that were had either purchased the equipment or were under some type of program, and we were able to get them upgraded immediately, which will start to drive revenue cases now, obviously using EVF. But we've also positioned new customers in this early mix. So I would say it's a pretty good blend, getting our existing accounts on board, generating disposable revenue, but getting new deals done as well.
spk02: Got it. That's helpful. And for the – For the outpatient clinical trial that you're planning on conducting, can you give us a sense of how many patients and how many centers may be involved?
spk10: Sure. I don't know that we're ready to give hard point estimates on that. As Mark said, we're actively working with our clinical advisory board and taking their input. Mark, if you want to just maybe touch on just some general kind of high-level points on the study, that'd be great.
spk08: Yeah, so we do anticipate, Jeff, it being a fairly large trial, you know, for one, to obviously make sure we drive the statistics and we really are looking at doing things that are highly powered. In the study so we want to make sure there's no question on the outcome from from that perspective And also just to help, you know, make sure it's broadly applied as well You know We look at a significant number of centers and we want to make sure that we cover a cross-section of centers that are you know Really show the demographics across the country because that's something that CMS is going to look for You know is the is the solution in the study you did, you know generalizable to the population So we need you know inner-city centers rural centers, community centers, you know, to really make sure that it's going to meet the needs of CMS. So obviously, you know, just in doing that, it'll be a fairly large trial.
spk02: Got it. And then lastly, I think probably for Andrew, as far as the sales and marketing expense for 22, and then beyond, you talked about increasing the sales force from three to six. I think, you know, our models are three, three and a half, $4 million for 22. Does that creep up towards five or six and 22, or is that more of a 23 activity?
spk00: Yeah. Hi, I'll, I'll, I'll jump in. Um, you know, I would say ballpark, we don't give specific guidance on, on the exact numbers, but, um, I think overall we're looking at somewhere in the ballpark of a 30% increase across the board on our expenses. Um, you know, it'll grow to that. It's not going to be, you know, first quarter of 22 is 30% higher than, than it was in 21. But I think it'll grow to that level over the course of the year, um, on our operating expenses in general, and obviously more of a plant towards the commercial side of things, um, with some of the other areas being, you know, flatter.
spk02: Okay, perfect. And one more, if I can, any, um, any change in previous thoughts as far as, uh, margins and how they're being modeled out there as you hopefully in 22 increase some volumes.
spk05: Andrew, you can take that as well.
spk00: Yeah, sure. Yeah, so in general, again, we don't give specific guidance as we haven't in the past as well, but we've talked publicly that our margins on the EVS product are expected to be higher. Our cost of goods is reducing. We're able to hold our value-based pricing constant. And in fact, in some cases, we'll likely tick up. And so when you put that equation together, we do anticipate that the margins will continue to increase over time. And really out of the gate, comparing EVF to Gen 2 will be higher. And then certainly as we grow in volume, we'll get additional benefit on the margin as well.
spk02: Perfect. Thanks for taking our questions.
spk05: Thanks, Jeff.
spk01: Next question, Matt O'Brien with Piper Sandler.
spk09: Hey, guys. This is Drew on for Matt, and thank you for taking the questions. Hey, Drew. I do just want to follow up on the answer to the first question. You know, those 60 to 90 accounts, you know, how many of those accounts have seen Peerview in the past? And then, you know, how many have you had a chance to get EVS in front of them so far? And can you just remind us, you know, how long the new product evaluation process has taken in the past in those accounts where you have been successful?
spk10: Sure. Let me unpack that a little bit, Drew. So the 60 to 90 is a blend of customers that we've had some touch points with, customers that are already existing accounts of PureView, and then a lot of new customers. Obviously, we're going back to places that we've already done a lot of the heavy lifting in terms of evaluations, or they've seen the product and they were waiting for the next generation enhancements to come out. Those are low-hanging fruits, so they're in there. I would say it's probably between And I'll call it 25 to 40 are accounts that we've had some touchpoint with. The other are accounts that we've had touchpoints with in the last, call it, couple months as we've added to the sales team. So as you recall, as we're hiring in these reps, most of them have, I would say, at minimum, 8 to 10 years of experience in the GI space from typically a much larger medical device company. So they're coming with relationships. So getting accounts engaged, meeting with physicians and hospital staff, and kind of getting them into our process has moved relatively quickly, even for folks who just joined, you know, 30 days ago because they're able to kind of go back and call and leverage those relationships that they have. In terms of the timing, you know, what we saw with – it was very difficult if you look at the last kind of year as an example. There were so many macro – issues associated with evaluations with stopping and starting due to COVID and access and, you know, accounts being distracted, that it was hard to really get a good sense of, you know, in a normal world, what will it look like from start to finish? You know, so we were staying somewhere between, call it, you know, three to six months. I believe with EVS, and we're only about three and a half weeks into this, but I believe with EVS, things are going to move more quickly. And the reason I say that is the inservicing process, or education staff training to kind of get an account up and running with the second generation required a lot more time and handholding and making sure that really every tech understood exactly how the device got connected and loaded and set up with the workstation Because if they didn't understand it, either it wouldn't get used or they would connect something incorrectly, and obviously that is not something that you want them to do. What we're finding with the new device and all of the enhancements that I talked about and we shared on the Innovation Day, it's super simple, right? So this is something that in one minute or less you can make a couple connections, you've got the sleeve loaded, and you're able to do the procedure. So what I think that's going to translate to is much shorter evaluations. And we're also, based on that thinking and kind of learning from the last several months, we're also putting a defined kind of end point on evaluation. So we're not going to let an account use our product for six months without making a decision to purchase. So we'll have some more kind of hard lines on how long an evaluation can run before the decision to purchase needs to be made. So we think we'll shorten it, but I would say when we get on next quarterly call, we'll have a full quarter under our belt, and I could probably give a much more informed, answer to what it's looking like in terms of sales cycle.
spk09: Okay. Yeah, that was super helpful. Thanks for that. Thanks. Second question, I guess maybe just an update on the minimum sleeve purchase agreement. You know, you signed a couple of those over the last year or so. So maybe just an update on how those accounts are tracking relative to those agreements and just how that will be structured in light of EVS rolling out as well.
spk10: Thank you. Yeah, good question. So in a few cases, we've already transitioned those customers actually over to a purchase or a lease program. So I won't get the specific accounts by name, but one of the accounts that ran through all four quarters, they met their quarterly compliance each quarter. They moved at the end of the year over to a 24-month lease. So now they're off of that minimum contract. commitment, they're paying a monthly lease. The good news is their procedure volume continues at the levels actually is now improved with EVF than what we have seen before. Drew, I think you'll see probably less of those types of agreements. I'd like to see us selling more capital and or leasing more capital as opposed to, you know, kind of trading capital in return for volume commitments. When we do that, I think our view is now to do it on a shorter-term plan. So we'll do it for the set number of months before their capital becomes available to make the purchase, and we'll just have to see how that plays out over the next couple quarters, but that's our thinking.
spk05: Very helpful. Thank you. Thank you.
spk01: Next question, Yi Chen with HC Wainwright.
spk06: Hi, this is Bubalan dialing in for Yi Chen. Can you hear me okay?
spk05: Yes, we can hear you great.
spk06: All right, awesome. So a couple of questions from our end. Obviously, the PureView AVS has a lot of attractive features. Just curious, can you discuss the pricing terms of PureView AVS in terms of capital versus lease?
spk05: the price point in the market? Is that the question? Yes, I can hear you.
spk06: Yes, that's the one.
spk10: Yeah, so from a pricing perspective, as you know, Our price on the previous system was $68,500. That was the capital cost, and the disposable sleeve was $975. We anticipate being in that same range from an ASP perspective. We took the capital list price up to $75,000. We took the disposable sleeves up just a small bit. I think it's around $1,100. That's really just with anticipation that as we drive greater volume to more customers across the U.S., there will be expected discounting off of the list price, so gave a little bit of room to kind of hold the same end-user price points.
spk06: Okay, that's very helpful. And can you sort of provide high-level comments on your business outlook for 2022 and some of the items you would like to accomplish this year?
spk10: Sure. Yeah, I mean, as I said in the prepared remarks, but It's been a long haul, as our investors know and as our team knows. The last couple of years have been very difficult, not just for Modus GI, but for everyone. And particularly when you're kind of an emerging growth company that has a new business. innovative technology, and you're trying to change the kind of hearts and minds of the market and build out a new space. With the impacts of COVID, that's been very difficult, and I don't want to go back down that path. Everyone understands what those have been. We believe we're at an inflection point for the company. We truly believe that despite those hurdles, we've listened to our customers. For a small company and a small commercial team, the relationships that we've built in the market with some of the top GI physicians at the top facilities across the country have have given us tremendous feedback over the last 18 months that our then innovation center in Israel and our really talented R&D and engineering teams were able to incorporate into this new device. So we believe we're at an inflection point from a technology perspective. And if you think about other technology and the time it takes to kind of eventually get it broadly adopted, it sometimes takes some iterations to get there. So we're feeling very confident about where we are at the tech. So that's one. The other is from a people perspective, you know, I've talked about this before. We made the right decisions over the last couple of years by keeping a very lean team and running the business as lean as possible, knowing what was happening in the kind of macro environment. But now is the time to go with a much bigger force and And as I said, we've doubled the team. It's still a small number. We're at six. I'd expect to see us hire a few more folks even in this upcoming quarter. And that's meaningful because if every one of these reps can drive 10, 15, 20 reps, new accounts over time, you can start to do the math and start to see the type of business and the revenue uptake that we can build. So execution is our number one priority right now, Boubalon. Execution as it relates to our engagement with customers, getting through the sales cycle quickly, getting accounts up and running, having a great experience, that's a key priority. So commercial execution. The second thing is we talked on this call quite a bit about the investment in clinical activities. We need to execute over the next couple years in the hospital market, and we can build a very nice business doing so. However, the investments that we're making now can be a tremendous catalyst for this company if we can get reimbursement for the large outpatient market. Everyone knows the size of that market. There's 18 million outpatient procedures in the U.S. each year. We believe 5 million, as I said earlier, are really qualified and perfectly positioned for PureView to help them and to help their physicians. And that's three times the size of the patient population that we're calling on today in the hospital. So really excited for the work we're doing. As I said, we hired a vice president of clinical affairs that comes with significant relationships in the industry, very talented person that's going to help Mark and help us execute on this clinical program and get this off the right way in 2022 and position us well for reimbursement in the future. And then the last thing I'll say is, You know, in terms of partnership opportunities, you know, I mentioned we continue to build those relationships. Folks know in the market what we're up to and what we're doing. If there becomes an opportunity that will drive shareholder value to accelerate our plans, we will take a look at that and we'll consider those types of things. But we're also looking at opportunities outside the U.S. in the a geography that we otherwise wouldn't enter today due to resources. So all of those things are still on the table for us, and we'll continue to evaluate them. But I think first and foremost is getting EVS off the ground over the next couple quarters and establishing it in the market.
spk06: That's very helpful. Yeah. Thanks for taking my questions.
spk05: Great. Thank you for the question.
spk01: I will now turn the call over to Tim for closing remarks.
spk10: Great. Thank you, Operator. I just want to thank everybody for joining our call today. You can hear it, hopefully, in our comments, our excitement and enthusiasm about 2022 and what we're able to do with our new PureView EVS and our larger team. And we'll look forward to updating everyone on the next quarterly call in May. So thank you very much for joining the call.
spk01: This concludes today's teleconference. You may disconnect your lines at this time. And thank you for your
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