AirXpanders (ASX:AXP) President and CEO Scott Dodson talks about its expansion into the US, highlights from its Q1 2017 results and outlook.
Carolyn Herbert: Hello I’m Carolyn Herbert from the Finance News Network and joining me from AirXpanders Inc. (ASX:AXP) is President and CEO, Scott Dodson. Scott, welcome back.
Scott Dodson: Thank you Carolyn.
Carolyn Herbert: For those who aren’t familiar with the company, can you start by giving us a refresher on your technology, what stage the company is at and what the market response has been?
Scott Dodson: Our device is used in the area of breast cancer reconstruction. And it’s used to help a woman recover her body, after she’s gone through and had a mastectomy procedure. So typically, what happens is a lot of her native skin and tissue has been removed. And if she chooses to recover her body, a space has to be created under her chest muscle, to accommodate a permanent implant. So our device is placed under the chest muscle and over a period of time, helps her stretch that skin and create a pocket for a permanent implant to go within.
So thus far, we’ve been commercial in Australia here for about the last two years. And since January, we’ve been commercial in the United States. So while it’s still very early days, we’ve had a tremendous amount of receptivity with regards to bringing the technology in and really for surgeons being able to treat patients, using the first new true innovation in this segment, really in the last 40 or 50 years.
So we’ve been able to on-board a significant number of surgeons, they’ve been able to start treating patients. All with the design of a device to put control back in the woman’s hands. And make it necessary, so that she doesn’t have to go through so many visits to her surgeon’s office, or the needle sticks that she had to go through, before a device became available. So we’re very happy with where we are thus far, we still have a long way to go.
Carolyn Herbert: Scott, you have been expanding in the US. So can you tell us a little bit more about what’s going on in this market?
Scott Dodson: What we did at the beginning of the year, once we received our FDA Approval, was we hired a direct organisation. So we have about 17 to 18 territory managers out across the United States. And they now have started calling on surgeons and converting hospitals, and making it available in multiple locations across the United States as well. So we’re in the process of training these surgeons, helping patients to become aware that this technology is available. So that they can seek it out and help themselves recover their bodies after breast cancer surgery.
Carolyn Herbert: How does AirXpanders go about engaging with surgeons and hospitals in the US?
Scott Dodson: Over the last four to five years, we’ve been at a lot of the major conferences that the plastic surgeons attend, demonstrating our device, having surgeons from Australia on the podiums talking about their experience with the device. And really putting together peer reviewed publications and the literature. To date, we have over 17 peer-reviewed publications and we’ve now really completed five clinical trials. So really Carolyn, no longer are we getting asked the question of does it work and can you prove it? The number one question we’re getting today is really, when can I get my hands on it? So it’s really a nice way to turn the corner and transition the company from really being more clinically focused, to one that’s way more commercially focused.
Carolyn Herbert: What is the company doing in preparing for increased demand for AeroForm in the United States?
Scott Dodson: So we’ve had to put on a second shift in our California facility. But we’re also in the midst of opening up a new line of manufacturing, down in Costa Rica. So the line in Costa Rica will dramatically increase the capacity of devices that we have available, to manufacture for this market. And will also help us lower costs on those devices over a period of time, and help with the profitability of the company as well. So each line that we drop into Cost Rica will be able to produce between 15,000 and 20,000 units per annum. So the first line will come and become available, about at the end of the September timeframe this year.
Carolyn Herbert: Turning to financials now. Can you tell us what were the highlights from your first quarter results for 2017?
Scott Dodson: Glad to Carolyn, I mean we had a great first quarter result that we reported in our 4C. Just in Australia alone, our unit sales were up 64 per cent to the same period, the timeframe before. With the United States coming on board, the overall percentage increase over the year before was about 172 per cent. So we’re expecting a great rate of response here throughout the balance of the year. Australia’s in the midst of a record quarter right now and the United States is coming on strong too. So we’re real happy with where we’re at, at this present time. And we’re looking forward to our quarterly achievements and the milestones, really as we go on through the year.
Carolyn Herbert: Finally Scott. What’s your long-term ambition for AirXpanders?
Scott Dodson: Our long-term ambition is to create a company with a technology that helps all women, get to their new normal after breast cancer surgery under their own control. And to do that, we’re trying to run as successful a company as we can, by doing the basics really really well. We want to make sure that surgeons have great experiences with our device. We want to make sure that our patients have good experiences and they can educate other women, about the great experience that they had in helping themselves recover their body, after a really really difficult time during their lives. So I think if we do those fundamentals really well, we can create a very successful enterprise.
Carolyn Herbert: Very good. Scott Dodson thanks very much for the update.
Scott Dodson: You’re welcome, thank you.