Kemp Dolliver is the Director of Research and Senior Analyst at Brookline Capital Markets, specializing in healthcare sector research with a focus on radiopharmaceutical and biotech companies. Over his career, he has covered companies such as BLPH and PNT, achieving top stock picking recognition, including a notable 355.5% return on BLPH between April 2022 and April 2023 and being recognized four times in The Wall Street Journal’s 'Best on the Street' survey. Dolliver began his career in both buy-side and sell-side roles, previously serving as Managing Director at Religare Capital Markets, Avondale Partners, and Cowen, as well as holding portfolio management roles at Aetna and Bank of America, before founding his own investment firm and later joining Brookline. He holds a B.S. in Commerce and an M.B.A. from the University of Virginia, serves on the McIntire School of Commerce Advisory Board, and maintains professional securities licenses.
Kemp Doliver inquired about management's thoughts regarding the pending Medicare hospital outpatient rule, which is overdue, and the possibility of transitioning to ASP from the current MUC environment.
Brian Markison, CEO, noted the current MUC environment and ongoing lobbying efforts with CMS. He believes moving to ASP is the right long-term move for all parties but anticipates no major change for 2026, with potential for meaningful change in 2027.
Kemp Doliver inquired about Lantheus's perspective on the pending Medicare hospital outpatient rule, which is overdue, and the potential transition from the MUC environment to ASP reimbursement.
CEO Brian Markison discussed ongoing lobbying efforts with CMS, expressing belief that a transition to ASP is the right move for all parties. He does not anticipate significant changes for 2026 but foresees potential meaningful changes to ASP in 2027.
Kemp Dolliver of Brookline Capital Markets asked about the company's strategy for 2027 when reimbursement is expected to shift to an Average Selling Price (ASP) model, potentially with two Polarify versions in the market.
CEO Brian Markison stated this scenario is "perfectly in line with our strategy." He clarified that the new formulation is intended to completely replace the older one, which will improve gross margin and allow for a 340B price reset. He also noted that current contracts already allow for the addition of new portfolio products.
Kemp Dolliver sought to reconcile Lantheus's premium pricing for PYLARIFY with the competitive dynamics at smaller accounts, asking if these customers operate on a spot basis and have a commodity-focused mindset.
CEO Brian Markison and CCO Amanda Morgan explained that the company's initial strategy focused on securing long-term contracts with high-volume, early-adopter institutions. They are now expanding product availability with more flexible calibration times to better partner with and serve the smaller, later-adopter accounts that were not the initial priority.
Kemp Dolliver asked about the current state of channel inventories, particularly in Argentina, and their impact on growth and profitability. He also requested year-end figures for accounts receivable, inventories, and accounts payable, and inquired about the future role of the Chief Commercial Officer.
CEO Federico Trucco stated that inventories in Argentina are almost depleted, citing the microbiota fertilizer business as an example where consumption exceeded new sales, indicating zero channel inventory and potential supply concerns. He noted that biologicals are less exposed to inventory issues due to shelf life. In the U.S. and Brazil, inventory problems from prior years (FY23) have normalized, with utilization consistent with sales. Head of IR Paula Savanti provided year-end figures: accounts payable at $145 million, inventories at $90 million, and trade receivables at $170 million (all rounded). Trucco explained that the Chief Commercial Officer's role is being reconsidered following an unplanned departure, with discussions ongoing about whether to integrate operations more fully or maintain a strictly commercial focus, potentially adding incremental operating responsibilities.
Kemp Dolliver asked for details on the current state of channel inventories, particularly in Argentina, and how this impacts growth and profitability. He also inquired about the year-end accounts receivable, inventories, and accounts payable. Finally, he asked about the changing role and future outlook for the Chief Commercial Officer position.
CEO Federico Trucco stated that channel inventories in Argentina are almost depleted, citing the microbiota fertilizer business as an example where significant inventory from FY24 was consumed in FY25, indicating zero current channel inventory and potential supply concerns. He noted biologicals are less exposed to inventory issues due to shelf life. For the U.S. and Brazil, inventory problems from FY23 have largely normalized. Head of IR Paula Savanti provided year-end figures: accounts payable at $145 million, inventories at $90 million, and trade receivables at $170 million. Trucco explained that the Chief Commercial Officer's departure was unplanned, leading the board to reconsider whether the role should integrate operations more fully or remain strictly commercial.
Kemp Dolliver asked about the current state of channel inventories, particularly in Argentina, and how this impacts growth and profitability. He also requested the year-end figures for accounts receivable, inventories, and accounts payable, and inquired about the future role and structure of the Chief Commercial Officer position following a recent departure.
CEO Federico Trucco stated that channel inventories in Argentina are almost depleted, citing the microbiota fertilizer business as an example where inventory was consumed. He noted that biologicals generally have less inventory concern due to shelf life. For the U.S. and Brazil, inventory problems from fiscal 2023 have normalized. Head of Investor Relations Paula Savanti provided year-end figures: accounts payable at $145 million, inventories at $90 million, and trade receivables at $170 million. Trucco explained that the Chief Commercial Officer role is being re-evaluated after the incumbent accepted a CEO position elsewhere, considering a more integral role with broader operating responsibilities.
Kemp Dolliver of Brookline Capital Markets inquired about the specific additional information the FDA requested for the ProSense post-market study, the potential impact on the trial's budget, and the expected timeline for securing a CPT 1 code post-approval.
CEO Eyal Shamir explained that the FDA requested more details on the post-market study's execution, including a list of potential sites and a recruitment plan, to build confidence in IceCure's ability to conduct the study. CFO & COO Ronen Tsimerman added that the final budget is pending full understanding with the FDA. Regarding commercialization, Shamir confirmed plans to hire a sales team immediately after clearance and apply for a CPT 1 code, a process expected to take 12-18 months with support from five medical societies.
Asked for a geographic breakdown of revenue for the quarter, specifically the growth in North America and Europe versus the decline in Asia, and whether revenue was solely from probe and system sales.
The company reported an 11% year-over-year revenue increase in North America and a 60% increase in Europe. Sales in Asia declined, but the base numbers are small and tend to fluctuate. All revenue for the quarter was confirmed to be from probe and system sales.
Kemp Dolliver of Brookline Capital Markets asked for a geographic breakdown of Q1 2025 revenue, specifically requesting details on growth in North America and Europe versus the decline in Asia. He also sought confirmation that all revenue was from probe and system sales.
CFO & COO Ronen Tsimerman provided the year-over-year revenue breakdown, stating North America grew by 11% and Europe by 60%. He noted that sales in Asia declined, with Japan down approximately 60% and other parts of Asia down 40%, emphasizing that these figures are based on smaller, fluctuating numbers. Tsimerman confirmed that all revenue for the quarter was derived from probe and system sales.
Kemp Dolliver questioned the drivers behind the sharp sequential increase in accounts receivable and asked about the current trend in Gross-to-Net (GTN) deductions, especially given the increased use of the $25 co-pay program. He also clarified if the WAC price had changed.
John Kirby, Interim CFO, attributed the rise in commercial receivables to the company's 60-day collection terms. Regarding GTN, he noted that while direct guidance isn't provided, the increased use of the co-pay program may influence future GTN rates. Kirby also confirmed that the WAC (Wholesale Acquisition Cost) for YCANTH has not changed since its launch.
Asked about customer reordering trends, the average number of applicators used per patient, and sales force turnover.
The company is seeing solid growth in customer reordering and retention. The average patient likely uses 2-3 applicators. Sales force turnover is at industry standard levels, with good retention of core performers and strong interest in new roles.
Kemp Dolliver asked about trends in customer reordering rates, the average number of YCANTH applicators used per patient, and sales force turnover and retention.
Executive Jayson Rieger reported positive trends, highlighting solid growth and retention of reordering customers, which he attributed to a positive clinical experience. He estimated patients use 2-3 treatment cycles on average. Regarding personnel, Rieger noted solid retention of core sales performers and strong interest for new roles, with plans for incremental hiring based on market demand.
Asked about the timing for YCANTH's gross margin normalization and requested clarification on the volume of compounded products previously shipped by competitors Dormer and Lighters.
The company expects gross margins to begin normalizing in the second half of 2024, with a long-term expectation of being in the low 90s percentage range. They reiterated that Dormer had shipped approximately 24,000 vials to the U.S. and confirmed they have no visibility into the historical shipment volumes from Lighters.
Asked about the timeline for adding 200 more offices for MydCombi, the typical size of these offices, the nature of the cost of sales this quarter, and sought clarification on the timeline for the MicroPine data release.
The company plans to add 200 more offices for MydCombi in the current quarter. They target offices with at least five lanes. The cost of sales adjustments were for inventory write-downs and overhead, not related to the MicroPine buyback, and are considered sunk costs. For the MicroPine data, there will be two disclosures: an initial go/no-go announcement from the review committee, followed by a release of the full top-line data analysis several weeks later but within the same quarter.
Asked about the company's cash runway, the importance of the Gen 2 device for achieving profitability, and the status of export approvals for clobetasol.
The company believes it has sufficient cash runway to reach the Q4 MicroPine data readout, supported by cost reductions, partner funding, and upcoming product launch revenue. The Gen 2 device is crucial for profitability due to its significantly lower cost of goods. The export approval for clobetasol from Taiwan is pending a final report, with an expected receipt in July, enabling an August launch.
Inquired about the enrollment pace for the IMNN-101 COVID vaccine study and the status of the end-of-Phase II meeting request for the IMNN-001 ovarian cancer program.
Enrollment for the IMNN-101 study is steady, over 70% complete, and not dependent on seasonal COVID waves as it involves healthy subjects. The primary goal is proof-of-concept for the DNA vaccine platform. The company is "within days" of requesting the end-of-Phase II meeting with the FDA and expects to start the Phase 3 trial in Q1 2025, aligning with a full data presentation in the fall.
Inquired about how payer positioning and clinical practice in the EU, particularly the EU5, differ from the U.S., and specifically asked if the practice of starting with off-label Avastin is common there.
The EU market varies by country, but the general paradigm is similar to the U.S., with a low-cost off-label segment and a high-priced brand segment. The practice of starting with off-label bevacizumab and switching to brands exists in Europe. Outlook Therapeutics believes its regulatory-approved, quality product offers a strong value proposition in this context, aiming to be the preferred choice in the lower-cost segment.
Asked about progress on working capital accounts, the recent resignation of a board member, the status of the U.S. operations in Florida, and details of a new debt agreement.
The company stated that working capital improvements are ongoing but delayed by customer actions. The board member's resignation was due to impatience, but a representative remains. The Florida facilities are progressing, with the Funtrition facility starting packaging and the Softgel facility aiding R&D, with meaningful sales from both expected in 2024. The new debt agreement is a ~$60M club deal that extends maturity to 6 years, providing financial stability and moving debt from short-term to long-term.
Asked about progress on working capital accounts, board stability following a director's resignation, the status of the US operations in Florida, and details of a new debt agreement.
Progress on working capital is ongoing but has been delayed by customer pressures; initiatives are in place to improve it. The board is considered stable despite the resignation, which was attributed to impatience. The Florida facilities are advancing, with the Funtrition plant starting packing operations and the Softgel plant supporting R&D, with meaningful sales from both expected in 2024. A new debt agreement was signed, consolidating debt into a ~$60M club deal, extending maturity to six years, and shifting debt from short-term to long-term.
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