Nuwellis, Inc.

Good morning and welcome to the New Ellis fourth quarter and full year 2022 earnings conference call. All participants will be in listen-only mode. If 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 that this event is being recorded. Now I'd like to turn the call over Ms. Vivian Cervantes, Investor Relations. Please go ahead.

Thank you, Operator. Hi, everyone. Thank you for joining us in today's conference call to discuss Newellis' corporate developments and financial results for the fourth quarter and full year ended December 31st, 2022. In addition to myself, with us today are Nestor Jaramillo, Newellis' President and CEO, and Lynn Blake, CFO. At 8 a.m. Eastern today, Newellis released financial results for the quarter 2021 and year ended December 31st, 2022. If you have not received New Orleans' earnings release, please visit the investors page on the company's website. During this conference call, the company will be making forward-looking statements. All forward-looking statements made during today's call will be protected under the Private Securities Litigation Reform Act of 1995. Any statements that relate to expectations or predictions of future events and market trends, as well as our estimated results or performance, are forward-looking statements. All forward-looking statements are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties and could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. All forward-looking statements are based upon current available information, and the company assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these statements. Please refer to the cautionary statements and discussion of risk in the company's filings with the SEC including the latest 10-K and subsequent reports. With that, I now would like to turn the call over to Nestor.

Thank you, Vivian, and good morning, everyone. Welcome to New Orleans' fourth quarter 2022 earnings conference call. On today's call, I will provide an overview of our fourth quarter and full year performance and give an update on our strategic initiatives. Our Chief Financial Officer, Lynn Blake, will then provide detailed financial results before opening the call for questions, followed by my closing remarks. 2022 proved to be a year of growth for New Orleans, with 42% year-over-year revenue growth in the fourth quarter, a revenue increase of 13% sequential, and an 8% revenue growth for the full year. Revenue growth in the quarter was led by our pediatric segment, which increased 92% year over year. This was followed by 47% growth in our heart failure segment and 24% growth in our critical care segment. Our momentum continues to be fueled by the execution of two key growth strategies that we have mentioned in the past. First, our expansion in the field organization, especially with our clinical education specialists, or CESs. Our CESs played an important role supporting our account managers within the inpatient and outpatient facilities, and I will provide more detail later in the call. The second initiative that fueled our momentum in Q4 is the growing body of clinical evidence in the last seven months, supporting the use of the Aquadex in all the three segments of our business. I'd now like to turn to the business update on our key strategic initiatives, starting with growing our clinical body of evidence. A key area for us and investment at New Wellness is having a robust clinical evidence. In doing so, we have more leverage to change practice guidelines towards making Aquadex the standard of care for fluid overload and further driving clinical adoption. We are pleased to be able to announce many new publications poster presentations at medical conferences, and peer-reviewed data, further reinforcing New Wellness technology in cardiac surgery, heart failure, and pediatrics throughout 2022 and thus far in 2023. As previously mentioned, cardiac surgery, we had two peer-reviewed publications. On August 31st, we announced the publication of a new peer-reviewed clinical data demonstrating 100% survival at 30 days following the use of ultrafiltration in high-risk postoperative coronary artery bypass grafting, or CABG patients. In January of this year, the Annals of Thoracic Surgery The authors commented on a key turn order set or hospital protocol for cardiac surgery associated acute kidney injury that included a recommendation to use ultrafiltration for post-cardiac surgery patients that are unresponsive to diuretics. This recommendation validates our Aquadex therapy to improve outcomes post-cardiac surgery and is supportive of our goal to leverage our body of clinical evidence to change practice guidelines for ultrafiltration. In the heart failure segment, we highlighted the multicenter controlled randomized clinical trial called AVOID-HFP. that was analyzed under the newly favored statistical analysis called WIN ratio. This new analysis, presented at the 2022 Heart Failure Society of America Scientific Meeting, showed the strong benefit of ultrafiltration over diuretics in reducing cardiovascular mortality and heart failure events at 30 and 90 days in fluid overload heart failure patients who are unresponsive to diuretics. In addition, in the fourth quarter, we announced a peer-reviewed publication of a single center, 10-year real-world retrospective study of 355 consecutive patients supporting lower heart failure hospitalizations and readmissions in a year after using the AQUADEX. The data demonstrated 81% lower heart failure hospitalizations per year, and a 48% decrease in rehospitalizations from the national average of 30 days. We are now actively leveraging this data to educate providers and facilities of the economic benefit and cost savings New Orleans can provide with the use of the Aquadex system in both inpatient and outpatient settings, as well as the improved quality of life in patients. We also continue to make progress on our pivotal reverse HF trial. As a reminder, the primary effectiveness endpoint of reverse HF will evaluate mortality and heart failure events within 30 and 90 days as a comparison between Aquadex therapy and intravenous loop diuretics. Today, we have activated nine clinical study sites, and we are on track to achieve our Q1 2023 milestone of 12 sites enrolled by the end of the first quarter. We expect to present the results of this study to the medical societies responsible for establishing medical guidelines. Further, in pediatrics, the fastest growing segment of our business We announced peer-reviewed data demonstrating 71% survival in kidney replacement therapy using Aquadex in low birth weight preterm neonates. Finally, completing our clinical program, I would like to extend my warm welcome to Dr. John Jeffries, our new chief medical officer. Dr. Jeffries brings with him over two decades of cardiology and heart failure expertise, both adult and pediatric patients, and we are excited to have him in our team as we continue to build our clinical body of evidence. Our second strategic initiative involves the targeted expansion of our commercial footprint to drive penetration. This includes both expansion of our commercial team and of installed base of active accounts. As of the end of Q4, we are pleased to be able to say that we have now filled all open sales leadership, account management, and clinical education positions. As previously noted, our clinical education specialist, or CSS, all of whom are trained nurses directly partner with the patient care team on the optimal use of our ultrafiltration system. In so doing, they facilitate not only successful patient outcomes, but also support increased use of our therapy across multiple specialty units in the hospital, in addition to helping drive adoptions at new targeted facilities. As for our expansion of our installed base, console placement, the razor in our razor blade model, increased more than six times in the fourth quarter compared to the year-ago period, and increased 44% in 2022 versus prior year, with focused expansion in key geographic locations and high-volume centers. We achieved record U.S. console sales in Q4, with 20 consoles sold. To date, we have established a strong foot in the East Coast and in the U.S. Turning now to our third strategic initiative of targeting outpatient clinics treating heart failure patients. Through our research, we have found many real-world case studies that suggest the current standard of care for managing fluid overload in heart failure patients is extremely costly for both patients and hospitals. due to higher cost of care and high hospital readmission rates. According to the data, it cost over $24,000 per patient per encounter to treat a heart failure patient hospitalized for average of eight days, in addition to the unreimbursed cost of hospital readmission within 30 days. As mentioned before, we now have the clinical evidence demonstrating that Aquadex reduces heart failure hospitalizations by 81% and lowers heart failure readmission rates by over 50%, thereby decreasing both the total cost of care and unreimbursed cost of the hospitalizations. Another major milestone of New Orleans in 2022 was the assignment by the American Medical Association of a new dedicated Category 3 CPT code for therapeutic ulcer filtration. We have been leveraging this code in our conversations to reactivate outpatient clinics who had previously been using Aquadex but later discontinued use due to the lack of reimbursement. We continue to believe that there is a line of sight toward our goal of achieving a category one CPT code in two to three years, which will allow New Wales to further leverage the benefit of Aquadex for providers and facilities alike. Turning now to our fourth strategic initiative, which is on the product development front, as well as the strategic partnerships. I will begin with an update on our recent announced exclusive U.S. licensing and distribution agreement for C-STARS Medical Selective Syrophoretic Device, or CS-SCD, for preventing pediatric acute kidney injury. Clinical studies have demonstrated that SCD's potential to eliminate dialysis dependency shorten ICU time, and restore the lives of critically ill pediatric patients. This agreement further reinforces our previously communicated decision to focus on the pediatric segment and also further expands our product portfolio, enabling us to save more lives in this under-deserved patient population. Sistar Medical expects the FDA to complete its review of a humanitarian device exemption, or HDE, for the use of its SCD in children in the first half of this year. We look forward to keeping you updated on the progress in the coming weeks and months. On the product development front, we are on track with progress on our pediatric continuous renal replacement therapy device and continue to anticipate IDE submission by early 2024. Early feedback from physicians and pediatric nephrologists in particular have been enthusiastic, noting how our technology uniquely addresses the unmet needs of this patient population and could potentially be a game changer in pediatric treatment. In conclusion, I want to reiterate how excited I am for the future of New Welles. Our goal of making aquadex therapy the standard of care for restoring fluid balance remains intact. We believe we are approaching an inflection point towards reaching this goal. The work that we did in 2022 advanced us down this path, and I look forward to continue a strong execution in 2023 and beyond. Now, I would like to turn the call over to our Chief Financial Officer, Lynn Blake, to discuss our Q4 and full-year 2022 results.