Viveve Medical, Inc.

Good afternoon and welcome to the VIVV full year 2021 financial results and corporate update conference 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. Please note this event is being recorded. I will now turn the call over to Jeannie Swindle, VIVV's Senior Director of Corporate Communications.

Thank you, Operator, and welcome, everyone. Before we begin, we would like to remind you that this conference call may contain forward-looking statements regarding future events or the future financial performance of the company. Any statement that is not a statement of historical fact is a forward-looking statement. This includes remarks about the corporation's timing, progress, and results of its clinical trials, fluctuation of global market economic conditions, impact of the novel coronavirus on clinical development, regulatory review and clearances, manufacturing, system placements and utilization, projections, expectations, plans, beliefs, and prospects. These statements are based on judgments and analysis as of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties are described more fully in the company's annual report on Form 10-K and other filings made with the Securities and Exchange Commission, which are also available on the company's website. Also, any forward-looking statements represent management's view only as of the date of this conference call and should not be relied upon as representing management's views as of any subsequent date. Speaking on today's call will be Scott Durbin, the V's Chief Executive Officer, and Jim Robbins, Senior Vice President of Finance and Administration. I will now turn the call over to Scott Durbin

Thank you, Jeanne. Good afternoon, everyone. We appreciate you joining us for our call on this St. Patrick's Day in the United States. I'll begin our call this afternoon with a brief business summary and then have Jim Robbins provide the 2021 year-end financial results. I will then provide a detailed corporate update. To begin, 2021 was a transformational year for Vaviv. attributable to the significant advancement of our stress urinary incontinence or SUI clinical development program, namely initiation and completion of full enrollment in our U.S. Pivotal Pursuit Trial for SUI in Women. Achievement of this critical milestone was the focus of our entire organization in 2021. The fact that many clinical trials were delayed or halted during the past year due to the continuing impact of COVID-19 precautions and patient concerns, highlights the extraordinary work performed by our entire team and our investigational sites to enroll, randomize, and complete these phases of this landmark trial. I will also add that it speaks to the high level of interest from women living with incontinence who are actively seeking a non-invasive treatment option. The success of our SUI program continues to be our focus as we execute the final phase of our pursuit trial throughout 2022 towards a top line readout anticipated at year end with the ultimate goal of obtaining a new commercial SUI indication in the future if the results are positive. I will expand on our clinical and commercial progress following Jim's report of our financial results. But importantly, VIV is in a strong financial position with the capital resources to support operations into early 2023, including the planned completion of the Pursuit Trial. In 2022, our strategic focus continues to be to successfully execute the currently underway Pursuit Trial and achieve a positive topline data readout anticipated at the end of the year, And if positive, preparing to commercially launch the first FDA-approved, patent-protected, endovaginal dual-energy office-based treatment for urethral hypermobility to improve SUI in women. Secondly, continuing to focus our commercial and market development efforts in the U.S. and Asia Pacific regions through the expansion of our installed base targeting urology, urogynecology and gynecology core specialties. And third, supporting our customers with successful initiatives to continue to drive increased consumable treatment tip utilization and sales. With that, I will now turn the call over to Jim Robbins.

Thank you, Scott. Good afternoon, everyone, and thank you for joining the call. Today, we reported total revenue for 2021 of approximately $6.4 million from the global sale of 46 systems, and in the U.S. under our recurring revenue model program, the placement of an additional 24 systems. As of December 31st, 2021, we had a total installed base of 884 systems worldwide. Additionally, a total of approximately 10,750 disposable treatment tips were sold globally in 2021. Total operating expenses for the year were approximately $22.2 million compared to $18.8 million for 2020. The increase is a result of the company's efforts to advance our SUI development program and complete enrollment in our pursued clinical trial in the U.S. Spending on research and development for 2021 was approximately $9.7 million compared to approximately $5.1 million in 2020. The increase in R&D spending was primarily due to costs associated with engineering and development work related to product line improvements and efforts to advance our SUI clinical development program. Total selling, general, and administrative expenses during 2021 were approximately $12.5 million compared to approximately $13.7 million in 2020. The decrease in SG&A spending in 2021 was primarily due to operational measures to lower costs and reduce our cash per grade. We ended the year with cash and cash equivalents of $19.2 million as of December 31st, 2021, compared to $6.5 million as of December 31st, 2020. I will now turn the call back over to Scott. Thank you, Jim.

I'd now like to further my remarks on our opportunity in SUI and fully enrolled pursuit trial that is underway. It's important for me to state that SUI is a condition that affects an estimated 25 to 30 million women in the United States alone, and based on our estimates, represents a $10 to $12 billion total available consumable market opportunity. Today, few effective non-invasive treatments exist that reduce urinary leakage associated with SUI. In fact, there is a large gap in the current treatment spectrum between physiotherapy at one end, such as Kegel exercises and electrical muscle stimulation designed to strengthen the pelvic floor musculature, to the other end of the spectrum, such as invasive approaches like bulking agents or sling procedures. We believe that Vaviv has the potential to address this tremendous unmet need with a clinically proven treatment option. In plain terms, to expand the continuum of care for SUI with our non-invasive endovaginal office-based treatment, which can be completed in approximately 45 minutes, to safely and effectively improve urethral hypermobility, the primary cause of SUI, and significantly reduce leakage for women. Baviv's Landmark Pursuit Trial is a randomized, double-blinded, sham-controlled trial that enrolled 415 subjects with moderate SUI, defined as greater than 10 mLs up to 50 mLs of urine leakage on the standardized one-hour Padway test at 30 study sites in the United States. Randomized in a two-to-one ratio, subjects in the active arm received the cryogen-cooled monopolar radiofrequency, or CMRF, treatment, while subjects in the control arm received an inert or energy-less sham treatment. The primary efficacy endpoint of the pursued trial is a comparison of the proportion of patients who experience greater than 50% reduction in urine leakage compared to baseline on the standardized one-hour pad weight test at 12 months, versus the inert sham procedure. The study also includes several secondary endpoints also assessed using the one-hour pad weight test, the three-day bladder voiding diary, and other behavioral and quality-of-life questionnaires. Subject safety is also monitored throughout the study. The PURSUIT trial was initiated in January 2021, and 30 investigational sites were onboarded in the following months. Full enrollment was reported in mid-December 2021, and post-treatment follow-up visits at three, six, nine, and 12 months are currently underway. Recognizing that this is a double-blind trial, we can state that as of early this week, approximately 86% of trial subjects have completed the three-month post-treatment visit, 52% of subjects have completed their six-month post-treatment visit, just over 20% their nine-month follow-up, and the final 12-month post-treatment visit has been completed by 3% of pursued trial subjects. Vaviv's expert clinical and medical affairs team is tracking and monitoring progress at all investigational sites, maintaining regular communication, and providing continuous clinical support. In essence, the months ahead represent a countdown as we diligently execute our PURSUIT trial towards the announcement of top-line results at the end of this year. We have a high level of confidence in PURSUIT's trial design to assess the primary efficacy endpoint, and if positive, we are equally confident in our ability to execute our strategy to achieve a potential SUI indication in the United States, which again, would expand the continuum of care for women by providing a durable, non-invasive treatment option with a multibillion-dollar total available market opportunity. On the commercial and market development front, we demonstrated growth in 2021 in new system placements as well as treatment tip sales. As Jim reported, total year-end revenue was approximately $6.4 million. This represents 17 percent year-over-year growth. Throughout 2021, we saw steady improvement worldwide for medical practitioners and clinics, although the effects of COVID-19 and its variants continued. In the U.S. and Asia Pacific regions, our areas of focus practices continue to regain operations, patient flow, and elective procedure volumes. Our dedicated customer care team in the U.S. and distribution partners internationally continue to provide high quality service and support to drive increased procedure volumes and treatment tip utilization. Receptivity and adoption by physicians to our innovative dual energy technology in the U.S. and Asia Pacific markets continues to grow. as our small commercial sales organization directs their efforts towards core medical specialties of urology, urogynecology, and gynecology. Our goal is to continue to increase awareness of and build upon our growing body of clinical evidence that supports the safety and efficacy of our treatment as we advance our clinical program towards a potential new SUI indication in the United States. BEVIV's strategic market development efforts in 2021 were additionally rewarded mid-year by the approval of a new technology Category 3 CPT code from the American Medical Association for our non-invasive single-session durable SUI procedure. Supported by key medical societies, issuance of the new code established a long-term pathway for future payer reimbursement. and reflects the clinical evidence and potential benefit of our treatment for improving SUI in women. Contingent upon a positive pursuit trial readout and FDA approval of an SUI indication, obtaining reimbursement is a long-term process, but one that we plan to pursue to support and expand the company's potential long-term commercial opportunity. It is our belief that Vaviv's dual energy procedure could ultimately become a preferred non-invasive sui treatment option that may be broadly covered by insurance in the future the long-term importance of the milestones achieved by vaviv in 2021 was significant yet our drive and strategic focus continues in 2022 to successfully complete our landmark pursuit trial achieve a positive top line readout at the end of this year and thereafter obtain a new sui indication in the us The success of our upsized public offering in January of 2021 was a testament to the confidence in our ability to execute our strategic path and provided us with the capital resources to support operations into early 2023. We will continue to expand our install base in the U.S. and Asia Pacific regions with core medical specialties, support our existing customers to drive increased treatment tip utilization and sales, and continue the operational measures that has lowered our cash burn rate considerably. I want to thank the talented team at Viviv for their tireless determination and efforts throughout 2021 and for their continuing resolve towards the goal of providing our non-invasive endovaginal treatment to the millions of women who suffer daily from SUI. Thank you again to everyone for participating in our conference call today. Operator, this concludes our prepared remarks.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.