Our flagship product, Cellvizio, has been proven to improve diagnostic performances in a variety of applications through a large number of clinical trials in the US, Europe and Asian countries. It has received regulatory clearance for a wide range of applications in more than 40 countries, including the United States (with 12 different 510(k) clearances), Europe, Japan, China, Canada, Brazil, Russia, Turkey and Mexico. Cellvizio has already been used in over 20,000 procedures worldwide. We generate revenue from the sale of the Cellvizio system, along with recurring revenue from the use of consumable miniprobes and service contracts.
OTCM: What were your major accomplishments for the last year?
Dr. Loiseau: Around one year ago, we made a strategic shift in our commercialization model designed to increase the global reach of Cellvizio and improve our financial performance. A key component of our strategy is leveraging partnerships to drive adoption of Cellvizio in specific indications or geographies where we can benefit from the expertise and resources of a partner. We have announced two new partnerships over this time period – Cook Medical for urology and Fujifilm China for gastrointestinal and pulmonology applications. While we are still in the early stages of this transition, the initial results have been more than encouraging: we returned to revenue growth in the first and second quarters of 2016, with strong growth in system shipments and reorders of our consumable miniprobes. After a difficult 2015 in which sales declined each quarter, we have shown positive metrics all around in the first half of 2016: revenue grew 11% driven by 32 Cellvizio systems sold and a 60% growth in miniprobe reorders. At the same time, our net loss in the first half of 2016 was reduced by 34% and our cash burn rate excluding financing operations was down by 47%.
Very importantly, we also strengthened our management team with the addition of a very experienced Chief Operating Officer, Pierre Forest. Under his operational leadership, the company continues to improve on its sales productivity and overall efficiency.
In September, we announced one of the most important milestones ever: the endorsement by the American Society of General Surgeons (ASGS) of Cellvizio as integral to the care of patients with Gastroesophageal Reflux Disease (GERD) and Barrett’s Esophagus. Combined with the American Gastroenterological Association’s 2015 white paper which deemed the use of Confocal Laser Endomicroscopy to be appropriate for trained physicians as an alternative to random biopsies and with the material published by the College of American Pathologists on the use of endomicroscopy for Barrett’s Esophagus surveillance, we now have three important clinical endorsements for the use of Cellvizio in the treatment of these conditions. We believe the ASGS position statement will be a catalyst for accelerated utilization of Cellvizio in U.S. anti-reflux centers and hospitals, where we already are seeing strong momentum. The addressable market is estimated at about 5 million procedures annually, an opportunity that we are fully focused on.
OTCM: What differentiates your company and what is your strategy for growth going forward?
Dr. Loiseau: To put it simply, we are the only provider of a new imaging modality that is becoming central to modern medicine and surgery. With digital in vivo and in situ fluorescence microscopic visualization (or “digital optical biopsy”) and artificial intelligence algorithms designed to assist them, physicians and surgeons finally have an easy access to the most relevant information they need.
Our technology is uniquely positioned to provide benefits for physicians and patients in diagnostic and surgical applications. In the near-term, we are focused on efficiently bringing Cellvizio to the market in as many of these potential applications as possible, leveraging partners for technology development and commercialization, along with our internal team. Longer-term, we envision a future in which the Cellvizio technology is integrated as part of the standard of care with leading medical technologies, such as data-driven robotic surgery systems.
OTCM: You are traded on Euronext Paris in France and joined the OTCQX market in the U.S. in February. What is your strategy for reaching U.S. investors?
Dr. Loiseau: The U.S. is a very important market for our business on multiple fronts. First, it represents one of the largest opportunities for Cellvizio system placements and utilization, and we are still only scratching the surface in terms of adoption with about 150 leading medical centers equipped with Cellvizio in the U.S. We are excited to see adoption grow, particularly as our partnership strategy matures and we benefit from the recent ASGS endorsement. As we gain more commercial traction in the U.S., we believe it will be inevitable that U.S. investors will be exposed to Cellvizio and the Mauna Kea investment opportunity. As we work towards these goals, we are executing a focused investor relations strategy to introduce the Mauna Kea story to investors and research analysts dedicated to the small-cap medical technology sector. We also have a robust public relations strategy to drive awareness for our customers and the Company, which will have some benefit in terms of increasing our investor community exposure.
OTCM: What else do you want investors to know about your company?
Dr. Loiseau: Today’s Cellvizio platform is the culmination of years of research, innovation, development, clinical trials and enhancements from our early commercial experience. We have learned a lot from our initial success and mistakes in the market and we are extremely excited about the impact that our technology is going to make on healthcare systems and patients lives. Mauna Kea is at a major inflection point and we are well positioned to deliver improved financial results, driven by our recent ASGS endorsement, continued positive clinical data, and the acceleration of our partnership model which should expand our global presence reach in a cost efficient manner. We are in the early stages of a strategic transition, and while results are improving, there is significant unrealized potential in our existing business that we are focused on unlocking.
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