Perimeter Medical Imaging AI Inc
XTSX:PINK
Earnings Call Analysis
Q4-2023 Analysis
Perimeter Medical Imaging AI Inc
Adrian Mendes, CEO of Perimeter Medical Imaging AI, Inc., highlighted the company's transition into the scaling phase of its business lifecycle during the recent earnings call. He emphasized the company's progress in enhancing team collaboration, culture, and execution pace since mid-2023. These improvements come as part of a strategy to bolster the company's infrastructure in anticipation of planned growth. Mendes also discussed structural leadership changes aimed at better focusing on sales, marketing, and product innovation, which are seen as critical for achieving Perimeter's ambitious business objectives.
The CEO shed light on the company’s flagship S-Series OCT imaging technology, which provides surgeons high-resolution images to assess tissue structures at the cellular level in real-time during operations. He noted a robust sales pipeline and process improvements aimed to shorten sales cycles, which historically have been protracted. Noteworthy advancements include an expanded clinical education team and real-world endorsements from surgeons. These testimonials are seen as an inflection point in validating the technology and fostering its integration as the standard of care in cancer surgery.
The company has made significant strides in rejuvenating product development, underscored by the promotion of cofounder Andrew Berkeley to Chief Innovation Officer in 2023. This move highlights Perimeter's commitment to expanding its product development endeavors. The CEO articulated the implementation of structured product roadmaps and teased upcoming product innovations expected to be unveiled in the coming months. These innovations are part of Perimeter's broader aim to consolidate its market position through a robust product lineup.
Mendes stressed the progress of the B-Series device, which integrates the company's OCT platform with the proprietary ImgAssist AI technology. The AI has undergone enhancements resulting in better sensitivity and specificity, with the potential to reduce repeated operations in breast cancer surgery. Following interactions with the FDA, the new AI algorithm is actively used across ongoing clinical trial sites. Positive trial enrollment and the addition of new sites at notable institutions are set to bolster the development of the B-Series. With the AI improvements, Perimeter seeks to refine diagnostic accuracy while expanding patient enrollment for the clinical trial.
Looking forward, Perimeter aims to amplify its commercial presence by building relationships with influential surgeons and leveraging its proprietary image database, containing over 2 million images related to breast cancer. The intention is to scale up the installed base by targeting regions with lower barriers to entry and enhancing image training support. The company's robust IP position, coupled with its AI and medical technology expertise, is expected to drive the expansion of the product pipeline. Furthermore, as of December 31, 2023, Perimeter maintains financial stability with approximately USD 14 million in cash and equivalents, ensuring that its clinical and product development plans stay on course.
The call ended with an optimistic outlook for upcoming advancements and a promise for updates on future developments. Perimeter's focus on its mission to mitigate the challenges of repeat surgeries is closely aligned with its strategy to revolutionize the diagnostic landscape for cancer surgeries, offering a compelling narrative for investors watching the company’s trajectory into 2024.
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Good afternoon, ladies and gentlemen, and welcome to the Perimeter Medical Q4 2023 Conference Call. [Operator Instructions] This call is being recorded on Thursday, March 28, 2024. I would now like to turn the conference over to Jodi Regts. Please go ahead.
Thank you. Good afternoon. Thank you for joining us on this call and webcast to provide the fourth quarter and year-end 2023 results for Perimeter Medical Imaging AI or Perimeter. Joining me on today's call is Adrian Mendes, Perimeter's Chief Executive Officer, who will provide an overview of Perimeter's progress across the business, along with Sara Brien, Chief Financial Officer; and Andrew Berkeley, Perimeter's Chief Innovation Officer, who are available to answer questions when we open up the call for Q&A after our prepared remarks.
Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding the future financial position, business strategy and strategic goals, commercial activities and timing, competitive conditions, research and development activities, projected costs and capital expenditures, research and clinical testing outcomes, the potential benefits of our products, including Perimeter S-Series OCT, Perimeter B-series OCT and Perimeter ImgAssist.
The expected benefits of Perimeter's updated version of its ImgAssist AI, Perimeter's ability to broaden its user base and the expected approval of its proprietary AI, expectations regarding new products and the timing thereof and expectations regarding opportunities for market expansion. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEDAR filings.
Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statements. For additional information about the risks and uncertainties facing our business, management encourages you to review the company's public filings and press releases, which are posted on sedarplus.ca. A news release summarizing this quarterly update will be made available under the Investors section of our website at perimetermed.com and filed with SEDAR. Now I would like to turn the call over to Adrian.
Thanks, Jodi. Good afternoon. Thanks, everyone, for joining our call. Today, I will begin by walking through where we've come from in 2023 and the progress made since I joined the company midyear. After conducting a thorough analysis of the business, we focused on improving key areas of the business, and I believe we have made significant progress in this regard. Perimeter is entering the scaling phase of its evolution, and as such, we aim to strengthen the company's infrastructure to support our planned growth.
We set clear goals to improve team morale, increase employee retention and remove any silos, preventing effective collaboration across the organization as a whole, all with the intent of greatly increasing our pace of execution. We made the changes at the Board and executive levels to augment our leadership, focusing on sales and marketing, finance and product innovation. We are gelling as a team, and together, we're creating a strong culture that will enable us to achieve our ambitious business goals. Before I came on board as CEO, I had conducted a thorough diligence on Perimeter's technologies. And just as I concluded then, we continue to see today strong evidence of a compelling product market fit for Perimeter's commercially available S-Series OCT device. Of note, we've made some important investments in our sales organization over the past year and implemented some key process improvements.
As a reminder, Perimeter's S-Series represents our flagship interoperative OCT imaging technology, which provides surgeons with image resolutions capable of visualizing tissue structures at the cellular level down to the critical 2-millimeter depth, we're assessing margins real time in the OR. Something we have consistently maintained is a robust sales pipeline of surgeons interested in learning more about using -- more about and using our technology. However, historically, the sales cycle has been lengthy.
One key achievement this past year was to significantly add to our clinical education and image training team and to redeploy resources to help eliminate bottlenecks in our sales cycle. We've also had a high degree of success placing additional S-Series devices within existing customer networks. This has shortened the sales cycles for those placements and led to additional follow-on word-of-mouth recommendations from surgeons to their colleagues within their broader health network.
This is a bit of an inflection point for Perimeter's commercialization journey, and we believe these testimonials from surgeon end users as well as other stakeholders in the broader health care system further validate the value of Perimeter's technology and our goal to make it the standard of care in cancer surgery. The network of early expert adopters who are capable and driven to use our groundbreaking technology continues to grow.
In addition to seeding our early-stage revenue stream, these customers provide us with a direct conduit to gather additional product feedback from the field in order to iterate and improve upon current features. More commonly applied to computer software and hardware development, we're successfully applying this agile approach, not just to our current product offering, but also to support our future product pipeline as well. Let me pause here for a moment and ask a bit about our -- and speak a bit about our approach to building a robust product pipeline and reenergizing product development at Perimeter.
In 2023, we promoted one of Perimeter's cofounders, Andrew Berkeley, to the newly created role of Chief Innovation Officer. Not only did this decision reflect the well-deserved recognition of Andrew's efforts over the years, but it also emphasize our strong commitment to broaden our new product development pipeline and Perimeter. Importantly, we formalized our product road map processes, and we have identified a number of product innovations that we expect to roll out in the couple -- in the next coming months. That leads me to the progress made across our next-gen AI development and the ongoing pivotal trial.
By way of background, perimeter's B-Series device combines our innovative OCT platform with our proprietary ImgAssist AI technology. The new enhanced AI, which takes advantage of additional training data and our latest advancements demonstrates improved sensitivity, specificity, precision and recall. We recently published results from a peer-reviewed retrospective study that demonstrated Perimeter's deep learning model showing high levels of sensitivity and specificity accurately identifying 96.8% of pathology positive margins.
These results highlight the clinical viability of AI-enhanced margin visualization using OCT in breast cancer surgery and its potential to decrease reoperation rates. Following productive interactions with the FDA last year, we successfully implemented our substantially enhanced AI algorithm in the ongoing pivotal clinical trial under the existing study protocol. As a result, all clinical trial sites are now using the updated AI as patients continue to enroll in the ongoing study.
It is expected that this updated version of ImgAssist AI will contribute to more accurate classification as well as fewer false positives and negatives. In addition, we are permitted to enroll additional subjects up to 531 and successfully added new clinical trial sites at Mayo Clinic in Florida and Fred Hutch Cancer Center in Seattle to support accelerated patient enrollment.
While I'm proud of all we have accomplished in the past 6 to 9 months, we are focused on the future and have set aggressive goals to accomplish in 2024. Within our clinical trial, patient enrollment is tracking well and actually trending better than modeled. With the potential to become a new standard of care during breast conservation surgery, we look forward to keeping you updated on our progress advancing Perimeter B-series OCT with ImgAssist AI. We will execute on our blueprints to further expand our reference sites and surgeon champions.
We expect to broaden our installed base by connecting with high-potential surgeons, leveraging existing institutional relationships within the health care networks and identifying the optimal geographic regions, in particular, those which offer the lowest barriers to entry and lowest cost to providing image training support. Our go-to-market strategy is further supported by a strong IP position protected by numerous patents and importantly, a proprietary image database with over 2 million images related to breast cancer alone. We will remain disciplined in our product development road maps and leverage our extensive AI and med tech expertise to broaden our product pipeline.
Our world-class AI team has developed models tailored for real-time applications in health care settings and use our vast image library to train these models to achieve an industry-leading result. In fact, our use of AI extends far beyond the standard image classification use case. And our AI team is doing a wonderful job working to deploy AI models throughout our technology stack to improve the customer experience in many different ways. We're excited to begin sharing some of these advancements with you as a rollout over the course of this coming year.
I believe that Perimeter's AI leadership represents a key value driver as we build a product pipeline that aims to improve [ social ] outcomes and also broaden our addressable market through a variety of tissue types beyond breast. Turning briefly to our financial position. As of December 31, 2023, cash and cash equivalents were approximately USD 14 million. All of our clinical -- all of our current clinical and product development plans remain on track and within our current financial modeling. For more details, please refer to the annual report and press release filed today.
Before concluding, I want to highlight some recent important peer-reviewed research coming out of the University of Texas MD Anderson Cancer Center. This demonstrates -- this data demonstrates that high reoperation rates after breast conserving surgery persist and are correlated with elevated risks and adverse outcomes for patients, concluding that more attention and continued efforts should be made to reduce reoperation rates. The fact this problem continues to be widespread, hugely impacting on a social level and a very large economic level, reinforces Perimeter's mission statement.
Our work at Perimeter strive to directly address the significant cost and negative patient outcomes due to reoperations. By providing innovation interoperative imaging technologies, our goal is that no patient has to go through the emotional and physical trauma of a second surgery due to cancer left behind. Our entire team is galvanized by this mission. We see out here an opportunity to make a real difference in the lives of patients. We intend to execute on our commercial, clinical and product development strategies and look forward to keeping you updated on our progress.
In conclusion, I'm very excited about what lies ahead for Perimeter. 2024 is going to be a big year from us. With that, I will now open the call up for questions. Operator?
[Operator Instructions] There are no questions at this time. I will now turn the conference back over to Jodi Regts for closing remarks. Please go ahead.
Thank you. Thanks, everyone, for joining us today. We look forward to keeping you updated on our progress. This ends today's call.
Ladies and gentlemen, that concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.