AirXpanders (ASX:AXP) President & CEO Scott Dodson provides a quarterly update on the company and their US success to date, including record sales and well as meeting manufacturing milestones to meet demand for their AeroForm® product.
Jessica Amir: Hi I’m Jessica Amir for the Finance News Network. Joining me now from AirXpanders Limited (ASX:AXP) is President and CEO, Scott Dodson. Scott hi, welcome back.
Scott Dodson: Thank you very much for having me, I appreciate it.
Jessica Amir: First up Scott, you’ve just released your third quarter business update. Can you tell us about some of the key highlights?
Scott Dodson: As you’ll recall, AirXpanders is a medical device company that’s focused in the area of breast cancer reconstruction. And our device really helps a woman recover her body, after she goes through the devastating effects of breast cancer and has a mastectomy. In that we’ve had terrific third quarter results, where we were not only able to double the number of surgeons that we brought on board as a company, but we were also able to increase the number of hospitals that we have on board, that can utilise our product as well. So we not only have a very robust pipeline of surgeons, we also have a very large customer base of hospitals. And the reorder rates have been quite high at over 80 per cent, as well.
Jessica Amir: Great and I believe that’s also bolstering your revenue?
Scott Dodson: It is very much so. So our revenue increased 108 per cent from the second quarter to the third quarter and we went from about $0.2 million in Q2, to over $1.2 million in Q3 this year. So we’re very pleased with our early days success, we have a long way to go, but the business prospects are looking very favourable.
Jessica Amir: Just as important as the product quality is the manufacturing capacity. Tell us about that?
Scott Dodson: In the third quarter, while one of our long-term projects that we’ve been working towards is opening up a new contract manufacturer in Costa Rica, we’ve partnered with a group called MedPlast Group Inc. And this is the largest contract manufacturer in Costa Rica, and they make medical devices for 10 of the top 12 medical device companies in the United States. So what we’ve been able to do with them is dramatically increase the overall capacity for our technology, increasing the overall rate to about 20,000 units per annum. In our small California facility right now, we can only produce between three and four thousand units per year. So MedPlast on board has really helped us significantly increase that rate.
Jessica Amir: You recently released some new data on AeroForm. Tell us about that?
Scott Dodson: We have, we’ve recently published results from our XPAND 11 trial. This is really a continuation study from a randomised control trial in the United States. The results were really phenomenal with 100 per cent success rate in the patients that we treated, and physician and patient success over 98 per cent. So this really reaffirms the overall patient benefits for AeroForm.
Jessica Amir: Just remind us how many women each year undergo breast reconstruction surgery in the US. And for you guys, what’s the addressable market?
Scott Dodson: The overall addressable market in the United States is about an $800 million opportunity. There’re about 350,000 mastectomies that happen in the United States on an annualised basis, and about 100,000 reconstructions that are performed out of that group. That equates basically to about 120,000 devices used, times our average selling price, which creates that $800 million opportunity.
Jessica Amir: Last question now Scott. What are the businesses key priorities for the next six months?
Scott Dodson: Our key priorities as a company are really around all sales execution. Now that we have a greater capacity out of our Costa Rica facility, we can focus on bringing more surgeons on board, ensuring that they have good outcomes. And if not more importantly, making sure the patients are treated well and that they have a successful outcome also.
Jessica Amir: Scott Dodson, thank you so much for the update and good luck with the forthcoming quarters.
Scott Dodson: Thank you very much, we appreciate it.