Oventus Medical Limited (ASX:OVN) Managing Director and CEO, Dr Chris Hart talks about the company's North American sales process via its lab in lab model and how this improves patient outcomes.
Rachael Jones: Hello. I'm Rachael Jones for the Finance News Network. Joining me today from Oventus Medical (ASX:OVN) is MD and CEO Dr Chris Hart. Chris, welcome back to the network.
Dr Chris Hart: Hi, Rachael. Thanks for having me again. Pleasure.
Rachael Jones: Now Chris, Oventus is rolling out its devices for the treatment of obstructive sleep apnoea across North America via the lab in lab model. Can you tell us how this is progressing?
Dr Chris Hart: Sure. Look, it's progressing really well. As in line with recent announcements, we have 29 sites contracted now across the US and Canada. They've each got minimum device orders of 20 devices per site per month. Five of those sites were launched late in the last quarter. Now we have another eight sites that are going through implementation at the moment, so some of the sites have started scheduling and others are undergoing their training and we're installing equipment.
As well as that, you know, we have a very strong funnel of potential deals coming down the deal pipeline. It doubled in the four months since we launched it in July, and it's actually increased significantly again in the last few weeks since our last market update, so still have enormous interest in both the technology and also in the lab in lab program, with multiple contracts being negotiated and more underway.
So we're in a very strong position and very excited about what we're going to achieve at the end of 2019, going well into 2020.
Rachael Jones: And for those who may not be familiar with the lab in lab model, can you give us some background on what it is?
Dr Chris Hart: Sure. Traditionally, oral appliances have been prescribed by a dentist in a dental clinic, or have been fitted by a dentist after being prescribed by a sleep physician in a sleep clinic. So, we have a siloing of professions and locations. We found that approach leads to a very complex patient journey and the patient potentially falling outside of care as they move from one stage to another in the process.
With the lab in lab model, we're simplifying the patient treatment journey by providing a collaborative approach to care for both dentists and sleep physicians, as both these groups are needed for the effective treatment of sleep apnoea. Under the model we use, we employ our unique treatment platform and digital workflow to act as a conduit between both sleep physicians and dentists. The patient can be scanned in a sleep facility by a dentist with one of their devices without having to leave the facility. And what that effectively does, it allows the dentist and the sleep physician to provide end-to-end treatment solutions to the patient in a commercially attractive framework. And for patients, it means they have a seamless treatment journey, irrespective of where they started their treatment journey from.
Rachael Jones: And, Chris, how is the progress with lab in lab affecting your revenues?
Dr Chris Hart: It's early days. We have our first five sites operational this quarter with more coming online at the moment. And as a result of that, we are seeing an increase in revenue. But also as a result of the launch of the O2Vent Optima, our flagship device, in the US. It was FDA-cleared in September, and we've just started selling that now into the US market. That was also the trigger for us to start launching a lab in lab program in the US And as we said in previous communications, we're expecting a modest increase in revenues this quarter, but as we move forward into 2020 we would expect to see those revenues grow. Also, out of the capital that we raised recently in our July capital raising, we're starting to invest that into the implementation process so that we can speed up the implementation and reduce the lead times to revenue.
Rachael Jones: And you've also just announced some board changes. Can you give me some details on that?
Dr Chris Hart: Yeah, so one of our co founders, Neil Anderson, is retiring from the board. Neil made an enormous contribution to the company, and we're grateful for that. To replace Neil, we've recruited Paul Molloy. So, Paul is a phenomenal new board member. He's a Non-Executive Director, he's coming on as. He brings considerable medical device industry experience to Oventus, with over 25 years experience in public, private, and venture capital-funded healthcare companies, including other board roles. He's currently President and CEO of ClearFlow Inc, a US-based medical device company, which is revolutionising the surgery recovery process with technology that prevents postoperative complications. Paul also serves on the board at Augustine Medical, which is a privately held market leader in medical arena temperature management and Inscope Inc, a VC-funded critical care firm. He's also exited a number of leading US medical device firms, including publicly traded blood pressure measurement firm, CIS Medical Inc and Revolutionary Medical Devices, which develops products, again, for airway management, so some nice synergies there. His experience and contacts within the industry I think will be hugely beneficial for Oventus.
Rachael Jones: And finally, Chris, what can investors expect from Oventus in 2020? What are the key milestones they can look forward to?
Dr Chris Hart: We've got a great cash balance, with a strong balance sheet after our recent capital rising. We've got our key regulatory clearances in place for the O2Vent Optima. We're in a strong position to scale sales substantially across our key markets of Australia, Canada, and the US, and as I said before, we expect to secure further agreements across these markets with a view to significantly scaling through the end of calendar 2020.
We are looking to also launch our ExVent positive end-expiratory pressure (PEEP) valve into the US market next year. It's an accessory that fits into the open airway of the O2Vent Optima device to augment traditional oral appliance therapy, by further stabilising the airway. We have multiple agreements we are negotiating and multiple sites we are launching our technology across.
Overall, it's a really exciting time at Oventus. We've got a number of key milestones ahead, and we'll continue to update the market with our progress in terms of commercial execution, as we move forward with the lab in lab model.
Rachael Jones: Dr Chris Hart, thanks for the update.
Dr Chris Hart: Thanks, Rachael. Appreciate it.