Neovasc Inc.
Q4 2020 Earnings Call Transcript

Published: 11 Mar 2021

[Operator:]

Greetings, and welcome to the Neovasc Inc Fourth Quarter and Year-End 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Mike Cavanaugh, Managing Director at Westwicke. Thank you. You may begin.

[Mike Cavanaugh:]

Thank you. Good afternoon, and thank you for joining us today. Earlier today, Neovasc, Inc. released financial results for the quarter and fiscal year ended December 31, 2020. The release is currently available on the Investors section of the company's website at www.neovasc.com/investors. Fred Colen, President and Chief Executive Officer; and Chris Clark, Chief Financial Officer, will host this afternoon's call.

[Fred Colen:]

Thank you, Mike, and good afternoon, everyone. Overall, we are pleased with the progress we made in 2020 despite the serious challenges posed by the COVID pandemic and a setback around FDA approval of the Reducer in October. We all know that patients are experiencing serious barriers to visiting their health care providers and undergoing surgical procedures. Nevertheless, Reducer implants recovered sharply from the pandemic-related lows of the first half of the year in the third quarter, but were impacted again in Q4, overall, generating approximately $2 million in revenue. While we have much greater aspirations for Reducer, we believe this is a testament to Reducer's underlying demand and potential to help people with refractory angina, who often suffer serious quality of light issues and have nowhere else to turn.

[Chris Clark:]

Thank you, Fred. As everyone is actually aware, a restriction on elective procedures, which included Reducer implants, was implemented by the hospitals, health authorities and governments of a substantial portion of all our major markets due to COVID-19. This caused Reducer implantations to significantly slow beginning in March 2020. Beginning in June 2020, we saw a return of implants in several of our international markets with a strong rebound in Germany, Italy and other select markets. We then experienced a second reduction in revenue during the second wave of COVID-19 lockdowns. As a result, revenues decreased by 6% to $1.96 million for the year ended December 31, 2020, compared to revenues of $2.09 million for the same period in 2019. The cost of goods sold for the year ended December 31, 2020, were $446,000 compared to $458,000 for the same period in 2019. The overall gross margins for the year ended December 31, 2020, were 77% compared to 78% for the same period in 2019.

[Fred Colen:]

Thank you, Chris, and thank you all for listening to our opening remarks. Neovasc is finally, after almost five years, on a new foundational footing. We have achieved the transformation of this company to a now more typically funded startup company with a clean balance sheet. This is primarily due to the strength of our two products, which I'm convinced, will transform the lives of millions of patients to come, but it is also due to the Neovasc team, a loyal, dedicated and very hard-working group of individuals across the globe, in Canada, the U.S. and Europe. Nothing scared them or us, and we continued moving forward, underscored by the huge turbulences around us. Finally, it is due to a large group of dedicated long investors and investors who completely support our never-give-up mantra and who are always there to support the company. Once again, we want to thank you all for your dedication and your continued trust and support. I would like to now open the call up for questions.

[Operator:]

[Fred Colen:]

Thank you. Bye-bye.