Oventus Medical Limited (ASX:OVN) Managing Director & CEO Dr Chris Hart discusses the company's sleep apnoea treatment platform Canadian sales agreements.
Jessica Amir: Thanks for your company. I'm Jessica Amir for the Finance News Network. Joining us now for an update is Oventus (ASX:OVN) managing director, CEO and founder, Dr Chris Hart. Chris welcome back and great to chat to you again.
Dr Chris Hart: Great, Jessica. Thanks for having me.
Jessica Amir: First up, Chris, you recently announced the first sales agreements in Canada for Oventus' sleep apnoea treatment platform. Just give us a summary of that announcement.
Dr Chris Hart: We launched our O2Vent Optima in Canada in February. Since then, we've been reaching out to sleep groups, in particular. We focus on sleep groups set up for the sale of our products due to their uniqueness in the way they manage the airway. We started talking to sleep groups in Canada around about a month ago, and since then we've had an enormous amount of interest. This is the first material agreement we have with sleep groups in North America where we're supplying O2Vent devices directly to the sleep facility, and they're treating patients within the sleep facility with our devices.
We've signed up two groups with seven locations between them. Within our agreements we have a minimum quota per site of 20 devices per site, so we're quite excited by that. We do believe that these groups in time will be able to deliver a lot more devices then that. But what it means is that we have an average of 140 devices a month, which we aim to deliver through these sites in the coming months. We think it's about a two to three month ramp time in implementation time and through to the back end of the year. We're pretty excited to see some growing sales through these first two agreements. And behind that we have a significant number of other agreements being negotiated, as well. We're very excited with the reception that the O2Vent Optima has been given in the Canadian and North American markets.
Jessica Amir: With the seven sites you're talking about, what revenue do you expect to add to the top line on a monthly basis?
Dr Chris Hart: Look, even on these minimum orders across these seven sites, we'd expect to see once they're operational, which they will be before the end of this calendar year, we'd expect to see annualized revenue north of a million Australian dollars a year off those first seven sites, and utilising this model, where there's a huge opportunity to help these patients get into care and to help these sleep facilities treat their patients with our technology. Again, we're very excited about what's ahead of us.
Jessica Amir: In the announcement notes, this agreement represents a launch of your lab-to-lab model. Just explain the concept and model lab-to-lab.
Dr Chris Hart: Well, traditionally I guess oral appliances or mouth guards to treat sleep apnoea have been delivered by a dentist in a dental clinic. We've found that that really leads to a complicated patient journey and many patients falling out of care. Also, our technology is not a mouth guard per se, but it's our airway technology and our PEEP valve technology, which goes into these mouth guards that makes them significantly more effective than a standard mouth guard. We see our success rates increasing from around 55 per cent for a standard mouth guard, up to 80 per cent for our technology, especially now since we've launched our ExVent PEEP Valve, which we registered last week and will be for sale in Canada very shortly.
In the lab-in-lab model, the patient can actually be scanned within the sleep facility to one of our devices, and from there the device can be delivered directly to the patient. We're taking the treatment to the point of care, so we're allowing the patients to be treated in one facility as opposed to having to go and bouncing between their GP, a sleep physician, a CPAP reseller or distributor, and a dentist before they finally end up in care. This model, again, really aligns everyone's interests. It puts the patient first, and it enables everyone to generate value from that technology.
Jessica Amir: You announced an agreement about six weeks ago in North Carolina and now this agreement in Canada. Is this a sign that sales are starting to move more rapidly for Oventus?
Dr Chris Hart: It's a sign that the adoption of the technology is starting to gather pace. We've been in the North American market for the last 12 months or so, working hard to educate stakeholders, sleep physicians, dentists, primary care physicians, and GPs about our technology. And now we've had some great peer-reviewed data published in the Sleep Journal two weeks ago while we were at SLEEP 2019 in San Antonio. This peer-reviewed data plus our latest flagship device, the O2Vent and our add-on PEEP valve are really driving adoption of the technology. I think this is just the very first signs of what is really a new treatment modality being introduced into the sleep apnoea industry. They really are embracing it and taking it under their wing and running with it. We're really excited by the opportunity here, and there are a number of sites and groups that are looking to adopt the technology in the coming weeks and months, and we think there'll be some fairly rapid growth in adoption in the back end of this year and well under 2020.
Jessica Amir: Well, thanks so much for the update, and congratulations, Chris Hart, on all the success.
Dr Chris Hart: Great. Thanks very much, Jessica. Appreciate it.