PetVivo Holdings, Inc. (NASDAQ:PETV) Q3 2023 Earnings Call Transcript

PetVivo Holdings, Inc. (NASDAQ:PETV) Q3 2023 Earnings Call Transcript February 9, 2023

John Dolan: Greetings, and welcome to the PetVivo Holdings Third Quarter of Fiscal Year 2023 Financial Results Conference Call. My name is John Dolan, the Chief Business Development Officer and General Counsel at PetVivo. Today’s call is being webcast and will be posted on the company’s website for playback. Before we begin, I would like to remind everyone that comments made during this conference call by PetVivo’s executives may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to risks and uncertainties. Any statement that refers to expectations, projections or other characterizations of future events, including financial projections or future market conditions, is a forward-looking statement.

PetVivo’s actual future results could differ materially from those expressed in such forward-looking statements for any reason, including those listed in its SEC filings. PetVivo assumes no obligation to update any such forward-looking statements. PetVivo filed its earnings release and Form 10-Q with the SEC today, which provide a detailed discussion of our financial results. These documents can be found in the SEC website and the Investor Relations section of our website. I would like to now turn the call over to John Lai, the CEO and President of PetVivo. Please go ahead, John.

John Lai: Thank you, John, and welcome. Also joining me today will be Bob Folkes, our Chief Financial Officer. I would like to begin by discussing some highlights from last quarter then Bob will discuss our financial results in greater detail. I will conclude by sharing some additional thoughts on our business strategy, key focus areas for fiscal 2023 before we open the line up for questions. Our key highlights for the third quarter of fiscal 2023 were we reported revenues of $510,000 as compared to $51,000 in the third quarter of fiscal 2022. Revenues for the third quarter included net revenues of $457,000 from shipments of Spryng to MWI Animal Health subsidiary of AmerisourceBergen. They are our exclusive distribution partner which we signed June 2022.

Photo by Autri Taheri on Unsplash

We continue to expand our national presence highlighted by our attendance at the American Association of Equine Practitioners’ annual conference in November of 2022, which Dr. Manning, our senior technical veterinarian, did a theater presentation, actually two theater presentations, where we did get very good response, and we opened accounts in over 47 states. We are starting to see the results of the investments we have made in expanding the awareness and efficacy benefits of Spryng with Companion Animals. I would like to now turn the call over to Bob Folkes, our Chief Financial Officer, who will discuss our financial results.

Bob Folkes: Thank you, John, and good afternoon, everyone. For the three months ended December 31, 2022, we reported revenues of $510,000 as compared to $51,000 in the prior year. And as John noted, this increase was driven by revenues of $457,000 related to shipments of Spryng to MWI. For the nine months ended December 31, 2022, we reported revenues of $792,000 as compared to $60,000 in the prior year period. This increase was driven by revenues of $575,000 related to shipments of Spryng to MWI. At December 31, 2022, the company had $375,000 in cash and working capital of $171,000. In January 2023, we raised approximately $1.4 million after dejecting transaction expenses from the sale of just over 610,000 shares of our common stock in a registered direct offering at a price of $2.32 per share.

We also entered into a lease agreement for approximately 14,000 square feet of production and warehouse space. This new facility will include multiple clean rooms for large-scale production of Spryng as well other medical device and therapeutics in our product pipeline. We plan to move all of our production to this facility beginning in August of 2023. And just to conclude here, we continue to invest our resources to expand our sales and marketing efforts clinical studies and manufacturing capacity to gain vet acceptance and support increased revenues from the sale of Spryng. So now I will turn the call back over to John.

John Lai: Thank you, Bob. I would like to talk about our business strategy and key focus areas for fiscal 2023. The first one is to generate clinical evidence to support the equine and small animal markets. So we have a whole series of studies that we have commissioned last year or the year before that many of them are coming to conclusion. And for fiscal 2023, we expect quite a few of these to – become public through publications as well as presentations. We’re also focused on hiring at least two additional territorial sales managers, business development managers, to focus our relationship with MWI expanding that relationship. Another focus was we talked about doing promotion awareness of Spryng at these major conferences.

We kicked off the conference season at the Veterinary Medical Expo in Orlando. What we’re seeing, because we had talked about focusing on getting more podium presentations, even though we didn’t officially do a podium presentation at this event. A couple of the veterinary doctors that were doing presentations brought up our product and kind of talked about the success that we’re having. So our booth got inundated with a bunch of veterinary doctors as well vet techs, substantially big numbers. As well as at the AAEP, when Dr. Manning did his theater presentations, both days, the theater was full of capacity which, in that place, is probably about 100 vets. We were standing room only in a lot of us. So we continue to invest in those presentations at the various trade shows and coming up in mid-March is our first small animal presentation by Ethos to one of the major organizations, the Veterinary Orthopedic Surgical Association.

I think that one’s mid-March. So we believe that will provide even more evidence and more podium presentations that will draw awareness in the marketplace. I would like to now turn the call over to John Dolan who will provide an update on our clinical studies, clinical data derived from these studies about the efficacy of Spryng and will be helpful to gain more acceptance from the veterinary doctors. John, go ahead.

John Dolan: Thank you, John. We have a robust upcoming year when it comes to clinical trials. PetVivo has a total of seven clinical trials in progress at this time: five small animal clinical trials, i.e., canine and feline; and two equine clinical studies. We are fortunately working with a number of world-renowned research organizations such as Colorado State University, Ethos Veterinary Health and Inotiv Inc. We anticipate public disclosure of these clinical study results to begin in March 2023 and continue intermittently throughout the remainder of our next fiscal year. The company plans to organize and conduct more clinical studies in addition to the ones in progress in order to support our relationship with MWI and gain vet acceptance of Spryng. I’d like to turn it back now to John Lai.

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Q&A Session

John Lai: Thank you, John. I would like to now open it up to a Q&A session. Operator, will you please explain to the callers or people that are online what they need to do to ask a question.

Operator: Absolutely

Unidentified Analyst: Hello I’m on.

John Lai: Yes, you are?

Unidentified Analyst: Hi John, , John, that was great – I think it was a great start in the relationship with MWI. So congratulations to the takeoff. I was fortunate enough to visit you over at the World Equestrian Village and got a chance to talk to some of the MWI guys, and they tell me it’s doing great. So congratulations.

John Lai: Thank you.

Unidentified Analyst: Hopefully – you’ll see a very big ramp-up as they go throughout the distribution. Could you basically just talk about the size of the markets in terms number of animals in each of the markets, I guess, between the two small animals and also the horses, and the differentiation between the size of show horse market versus the pet market. So that way, people can get a better idea of number of number animals that MWI is going to be helping to get access to it and how many vets service all these people?

John Lai: So the MWI relationship is working out extremely well for both parties, and we’re both very happy because what happens before every one of these shows. MWI does business with like 90% of the veterinary doctors in the United States where they have accounts. So they would do a promotional e-mail for us to the vets that they know or the vet techs that are coming to the show to kind of give them a little highlight about Spryng and they should drop by our booth. So that’s a very good introductory approach for us. So the size of the market in terms of dogs in the United States, there’s about 64 million dogs, 53 million cats and the numbers for horses range anywhere from 8 million to 14 million. It’s just depending on the source because there are quite a bit of wild horses out there, too.

Currently, I would say that the product mix or the revenues or majority of it are coming from the equine space just because the vets, they tend to see the horses a lot more often than if a small animal vet does the injection. They don’t see them for a while and also the small animal side will pick up probably second half of 2023 on a calendar basis because, once those studies start coming out, the MWI reps now will have data to be able get to the smaller animal vets. The market is quite large in terms of OA lameness and potential rehab markets. I mean it is north of $4.8 billion a year in the United States. So I hope that answers the question.

Unidentified Analyst: Yes, it does. Is there any other organic and basically organically derived products that are out in the marketplace, that are basically veterinarian medical devices right now or is this pretty much an open market you guys?

John Lai: So I feel our product is quite disruptive and unique in the sense that it deviates from what everyone else has been focused on. Our product is targeted at the root cause of osteoarthritis and other lameness issues while competitive products are focused at more treating the symptoms, while we’re focused at actual disruption of friction between bone-on-bone contact. So I feel we’re unique in that sense, and that’s what becomes part of the educational process because when a veterinary doctor leaves vet school, they learn that it’s a lifetime management of osteoarthritis. It’s multimodal approach, you’re using NSAIDs, then you move on nonorganic asset, then you go on to steroids and then and then eventually stem cells joint replacement.