Carolyn Herbert: Hello I’m Carolyn Herbert for the Finance News Network and joining me from Osprey Medical
(ASX:OSP) is President and CEO, Mike McCormick.
Mike welcome to Sydney.
Mike McCormick:It’s a pleasure to be here.
Carolyn Herbert:Now can you start by giving us an introduction to Osprey Medical.
Mike McCormick:Sure, Osprey Medical is a company that is focused on protecting patients’ kidneys that have to go in and have normal and routine heart procedures. We protect that kidney from a substance that they inject into the heart called contrast dye and that’s what we’re focused on; protecting those patients from that dye that is used in the cardiovascular procedure.
Carolyn Herbert:And Mike, for people who aren’t familiar with the use of dye in x-ray imaging, can you tell us what it’s used for and why?
Mike McCormick:So commonly when you go in for a heart procedure, the most common heart procedure that is done is called an angiogram and that’s where they’re going to take pictures of the vessels in the heart, the arteries in the heart. And the way that they visualise those arteries is that they inject a substance called contrast media or dye, and it lights up on x-ray and that’s how they’re able to see the arteries on your heart and what they’re looking for. And what they’re looking for is a blockage and if they find a blockage what they do is they put a stent in place to prop that vessel open so that the blood flows naturally again.
Carolyn Herbert:And what are the side effects and who are most at risk?
Mike McCormick:The side effects that we focus on is the administration of that dye that they have to inject to see the blockages. For patients with pre-existing bad kidney function or chronic kidney disease, that dye presents a problem for them because anything that is injected into your blood stream has to be filtered by the kidney. That’s the work of the kidney, your kidney is the big filter for your blood stream. So when the dye is injected into the arteries it has to be filtered by the kidneys, so those patients that have pre-existing poor kidney function are at risk that the dye could further damage their kidney.
Carolyn Herbert:Now you’ve recently announced some exciting results from the trial of your AVERT device last year. Can you explain those and what’s the significance there?
Mike McCormick:Yes, last week in particular was a very significant week for us; there was a large meeting of cardiovascular physicians in the US and at that meeting the announcement of our clinical trial results; we did a clinical trial of 578 patients where we were looking for specific marketing claims that we could claim that our device helps reduce the amount of this dye that needs to be used in these cardiovascular procedures and helps those patients avoid kidney damage. So those results were presented at a scientific meeting.
Carolyn Herbert:And Mike based on those results what does that mean for your FDA claims?
Mike McCormick:So we were very excited by the trial results last week because they have allowed us to get significant claims in the US and in Europe. We have FDA approval for three separate claims; dye savings, which is obviously the focus of our product, to reduce the amount of dye but we’re doing that without affecting the image quality. The only reason the physician wants to inject dye to begin with is so that they can see the image of the heart. So when we reduce the dye, we don’t want to degrade the image quality. The FDA gave us approval for a dye reduction device that doesn’t affect image quality, and then also we got approval for a third claim of reflux reduction. That’s the way our product works, that’s the way it can save dye without affecting image quality is through reflux reduction. So we’re thrilled with those three claims that we have that will allow us now to commercialise and talk specifically about what our product can do.
Carolyn Herbert:And Mike, you recently started commercialisation of the next generation DyeVert device, what success have you had so far?
Mike McCormick:Yes, so we’re very excited about the DyeVert. DyeVert represents the second generation device for us; second generation in that it is much easier for the cardiologist to use and the sales result thus far has been outstanding. In fact, if you look back at the first six quarters of sales for us since our first commercial revenue, we’ve had six consecutive quarters of growth. The last quarter was over 50 per cent growth from Q4 of last year to Q1 was over 50 per cent growth; so we’ve been very excited by the DyeVert and how fast it’s been growing.
Carolyn Herbert:Now taking a look at financials, what were some of the highlights from the FY15 results?
Mike McCormick:FY15, the highlights for us were that we finished AVERT randomised control trial, and that we were able to get key FDA claims that help us to commercialise our product. As soon as we got those claims, we started scaling the organisation; we went from one rep to today, we have eight reps in the field. And we look by the end of this year to have a total of 20 sales reps, so we’re rapidly scaling our sales organisation to take advantage of the claims and the product that we have.
Carolyn Herbert:So when do you expect to be cash flow positive?
Mike McCormick:We anticipate cash flow positive to be at about the $25 million mark in revenues, about the time we hit $25 million a year, that’s when we’ll be cash flow positive. I would expect that that would take place sometime in 2019.
Carolyn Herbert:And finally Mike, where would you like to see the company this time next year?
Mike McCormick:This time next year we’ll have 20 sales territories in place and the focus for us is to fully commercialise our device so that it can help protect patients with poor kidneys from having further kidney damage because of the administration of contrast dye.
Carolyn Herbert:Mike McCormick thanks for the update on Osprey Medical.
Mike McCormick:Thank you very much.
