RenovoRx - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 revenue was $0.422M, up from ~$0.200M in Q1 and $0.0M in Q2 2024; revenue significantly exceeded Wall Street consensus of $0.247M, driven by early commercial traction for RenovoCath at 13 approved cancer centers and repeat orders from 4 active sites. Revenue consensus $0.247M; Actual $0.422M (+71% surprise)*.
• Net loss was $(2.895)M versus $(2.389)M a year ago, primarily due to a $(0.9)M unfavorable change in warrant liability, partly offset by a $0.4M improvement in loss from operations; diluted EPS was $(0.08) vs. $(0.10) in Q2 2024.
• Independent Data Monitoring Committee (DMC) recommended continuing the pivotal Phase III TIGeR-PaC trial after the second pre-planned interim analysis; management will defer publishing interim data to preserve trial integrity. As of 8/12/25, 95 patients randomized and 61 events, keeping enrollment completion on track for late 2025 or early 2026.
• Gross profit of $0.270M on $0.422M revenue implies ~64% gross margin; management expects device margins to rise into the 70–90% range as scale improves, supporting a lean commercialization model.

What Went Well and What Went Wrong

What Went Well

• Commercial traction accelerated: 13 cancer centers approved to purchase RenovoCath (up from 5 in Q1), with 4 active centers placing repeat orders; Q2 revenue reached $0.422M without a dedicated salesforce, underscoring early demand.
• Positive DMC outcome: “The independent DMC… has recommended that we continue the study… an expression of confidence in the potential for a positive outcome” (CEO). Enrollment progress (95 randomized; 61 events) supports target to complete enrollment late 2025/early 2026.
• Organization build-out and ecosystem momentum: Hired Senior Director of Sales & Market Development (Philip Stocton) to coordinate commercialization; launched multi-center PanTheR post-marketing registry with participating sites purchasing devices, broadening real-world data and use across solid tumors.

What Went Wrong

• Wider YoY net loss: $(2.895)M vs. $(2.389)M, driven by a $(0.350)M other expense vs. prior-year other income (reflecting a $(0.9)M) change in warrant liability), despite lower operating loss; underscores sensitivity to non-operating items.
• Limited near-term visibility: Management declined to give numerical revenue guidance, characterizing 2025 as a “learning year,” with more substantial ramp expected in 2026; could temper near-term expectations and introduce quarterly variability.
• Interim data optics: Decision to defer publishing second interim results may delay incremental clinical data catalysts (though preserves FDA trial integrity), leaving investors to await enrollment completion and final analysis triggers.

Transcript

Speaker 6

Good afternoon. I will be your conference call operator today. Please note that today's call is being recorded, and all participants other than management are in a listen-only mode. There will be a Q&A session following management's presentation. I will now turn the call over to Valter Pinto, Managing Director of KCSA Strategic Communications. Please go ahead.

Speaker 2

Thank you, Operator, and good afternoon. Welcome, everyone, to the RenovoRx second quarter 2025 conference call. I'm joined today by RenovoRx's leadership team, including Dr. Ramtin Agah, Chairman, Founder and Chief Medical Officer; Shaun Bagai, Chief Executive Officer; Lisa Gentry, Chief Clinical Officer; and Ronald B. Kocak, Vice President, Controller and Principal Accounting Officer. Before we begin, I'd like to remind everyone that statements made during today's conference call may be deemed forward-looking statements within the meaning of the Safe Harbor of the Private Securities Litigation Reform Act of 1995 and applicable federal securities laws, and that actual results may differ materially and adversely from what is contemplated by such forward-looking statements due to a variety of risks, uncertainties, and other factors.

The company's forward-looking statements are based on management's current plans and assumptions and are subject to the risks and uncertainties more fully described in the company's filings with the SEC. These statements reflect management's view of current and future market conditions, including but not limited to statements regarding the company's clinical trials and other research studies, timing for potential additional interim data readouts, and full patient enrollment for RenovoRx's ongoing phase 3 TIGeR-PaC clinical trial studying intra-arterial gemcitabine, also known as IAG, in locally advanced pancreatic cancer.

The potential of the RenovoCath device as a standalone commercial product or the Transarterial Microperfusion (TAMP) therapy platform, also known as TAMP, as a mechanism of action, the anticipated timing for and levels of revenue generation from RenovoCath's sales, the company's commercialization plans in general, the potential for IAG to treat or provide clinically meaningful outcomes for certain medical conditions or diseases, and RenovoRx's efforts to explore commercialization strategies utilizing the TAMP therapy platform. For a detailed discussion of material risks and uncertainties facing RenovoRx, I refer you to the company's annual report on Form 10-K for the year ended December 31, 2024, as well as the company's investor presentation and other reports filed periodically with the SEC, including the Form 10-Q for the second quarter of 2025, which was just filed with the SEC.

Except as required by law, RenovoRx disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. With that, it's my pleasure to turn the call over to Dr. Ramtin Agah, Chairman, Founder and Chief Medical Officer of RenovoRx. Ramtin, please go ahead.

Speaker 5

Thank you, Valter, and good afternoon, everyone. 2025 thus far has marked the most transformational period in our company history. As everyone knows, late last year, we launched the commercialization of RenovoCath device. As a standalone product, we didn't need two FDA-cleared indications for use, while we continue to make progress with our phase 3 TIGeR-PaC study. Our clinical and commercial team have executed well, and I could not be more excited about our future. Our proprietary Transarterial Microperfusion (TAMP) therapy platform, or TAMP, is designed for targeted therapeutic delivery across the arterial wall near the tumor site to bathe the target tumor. By localizing and targeting delivery of therapeutic agents via the peripheral vascular system, TAMP is designed to optimize drug concentration precisely where it is needed.

This targeted approach can minimize systemic exposure and toxicities related to chemotherapy and addresses the longstanding challenge in cancer care of poor blood supply to tumor sites. We believe that TAMP, by using the body's existing microvascular pathway called the vasa vasorum, for drug delivery, represents a significant advancement in the way cancer treatment can be approached. We began commercializing RenovoCath in the fourth quarter of 2024, and with all the sales the marketing team placed, we are proud to have achieved over $400,000 in sales in the second quarter, a significant accomplishment in a short period of time. These initial sales, prior to installing the sales and marketing infrastructure, highlight the strong clinical need and market demand for a patented RenovoCath device as a standalone targeted drug delivery product among both new and existing customers. Equally important is our phase 3 TIGeR-PaC trial.

The 52nd event in our trial occurred in Q2, triggering the pre-planned second interim analysis and review by the Independent Data Monitoring Committee, known as the DMC, which happened recently. As a reminder, the DMC reviews the trial data and makes recommendations to our company, mainly whether the data was compelling enough from their third-party point of view to move forward with the trial or not. We are excited to report that the DMC recently completed the review of our second planned interim analysis and has recommended that we continue the study. This is great news, as we believe the DMC's recommendation is an expression of confidence in the potential for a positive outcome in the trial overall.

With a view toward preserving the integrity of the TIGeR-PaC trial for FDA purposes and following our review of general FDA guidance, discussions with the Independent Data Monitoring Committee (DMC), and consultation with regulatory advisors, we have decided to defer publishing our second interim data. Outside of myself, who has been speaking directly to the DMC, our entire team will remain blinded to the interim data. We will revisit publishing the actual second interim data, most likely upon completion of this study, as is common for pivotal phase 3 trials. Meanwhile, the TIGeR-PaC trial is continuing at pace. As of August 12, 2025, 95 patients have been randomized, 61 events have occurred, putting us on target to complete enrollment later this year or early next year.

At RenovoRx, our mission remains clear: transform patient outcomes through safer, more effective targeted therapy, especially for those battling difficult-to-treat cancers like locally advanced pancreatic cancer. Thank you all for your continued support. With that, I will turn the call over to our CEO, Shaun Bagai.

Speaker 1

Thank you, Ramtin. As Ramtin mentioned, 2025 has been a breakthrough year for our company, and during the second quarter, we made meaningful progress commercially and in the clinic. The second quarter showcased the early impact of our commercial strategy, and we are pleased to report second quarter 2025 revenue of over $400,000. We are proud of the initial organic revenue growth over the first two full quarters since launching RenovoCath commercial sales, especially since this was achieved without a dedicated sales and marketing team. With the recent hiring of Phil Stockton as our Senior Director of Sales and Market Development, our goal is to stay lean while also continuing to build commercialization momentum.

We will continue to gather important data about our market, such as sales cycles, activation times, individual customer preferences, and other commercial matters as we seek to grow our customer base, fulfill repeat RenovoCath orders, and position ourselves for commercial growth over the long term. We believe RenovoCath is positioned to address a significant unmet need in oncology, supported by a compelling market opportunity as an innovative approach to drug delivery. Our commercial vision and internal market analysis continue to support an initial U.S. total addressable market for RenovoCath as a standalone device, as an estimated initial $400 million peak annual U.S. sales opportunity. Beyond historical RenovoCath usage, we are already beginning to see interest in the adoption of our technology for the treatment of other solid tumors through our commercial efforts.

This broad interest serves as the basis for our belief in the potential for a several billion dollar total addressable market for the RenovoCath device alone as we expand into additional cancer applications. On the clinical front, as Ramtin mentioned, we received a positive independent DMC recommendation to continue our phase 3 TIGeR-PaC trial based on interim data review. We are very excited about this development and what it means for the future prospects of our phase 3 trial. I would now like to turn the call over to Lisa Gentry, our Chief Clinical Officer, who will elaborate on our clinical programs. Lisa.

Speaker 6

Thank you, Shaun. To reiterate, the Independent Data Monitoring Committee (DMC) has recommended that RenovoRx continue the TIGeR-PaC trial following their review of the pre-planned second interim analysis, which was triggered at the 52nd event. As Ramtin mentioned, as of August 12th, 2025, we have randomized 95 patients and 61 events have occurred, keeping us on track to complete enrollment later this year or early next year. The trial design calls for 114 patients to be randomized, and the final TIGeR-PaC analysis will be triggered upon the 86th event. We are also advancing our research pipeline. Last week, we announced the launch of our multicenter post-marketing registry study called PANTHER to follow patients undergoing cancer treatment delivered by RenovoCath to solid tumors. The PANTHER study is an important initiative aimed at evaluating the safety and effectiveness of RenovoCath in real-world clinical settings.

This study is designed to assess long-term safety and survival outcomes in patients with solid tumors who receive targeted drug delivery via RenovoCath. By collecting real-world data on the use of RenovoCath across a broader range of tumor types, the PANTHER study aims to provide valuable insights into patient outcomes and support the generation of additional safety data. PANTHER marks a significant step forward in our commitment to better understand and demonstrate the long-term safety and therapeutic potential of our RenovoCath device. I will turn it back to Shaun.

Speaker 1

Thanks, Lisa. You and your team have done a wonderful job with our phase 3 trial. We are excited about the continued validation of our platform, progress of our commercial strategy, and strong execution by our team. Additionally, each cancer center participating in the registry study will purchase RenovoCath devices from RenovoRx for use in the study. With that, I'll turn the call over to Ronald B. Kocak, our VP, Controller and Principal Accounting Officer, to review the financials before Q&A. Ron.

Speaker 4

Thank you, Shaun. For the second quarter of 2025, ending June 30th, RenovoRx reported revenues of approximately $422,000 from commercial sales of RenovoCath, driven by new customer purchase orders and early repeat orders from our initial sites. Research and development expenses were $1.4 million for the second quarter, reflecting a $0.1 million decrease from the same quarter year over year. The decrease is primarily due to other clinical and regulatory expenses, including an allocation of selling, general, and administrative expenses of $0.2 million. This decrease was offset by an increase in non-recurring engineering costs on our RenovoCath device of $0.1 million. Selling, general, and administrative expenses were approximately $1.5 million, remaining unchanged from the same quarter last year. We ended the quarter with $12.3 million in cash and cash equivalents on hand. We anticipate revenues from RenovoCath sales orders to reduce our burn rate over time.

We believe that cash as of June 30th, 2025, will fully fund both ongoing RenovoCath commercial scale-up efforts and additional progress towards the completion in the phase 3 TIGeR-PaC trial. Common shares outstanding as of August 11th, 2025, totaled 36,645,884. With that, I will turn the call back to the Operator for Q&A. Operator, please open the line for questions.

Speaker 6

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Scott Henry with AGP. Please proceed with your question.

Speaker 7

Thank you. Good afternoon. Certainly a lot to talk about. I guess just for clarification, the decision was to maintain the trial at the same number of patients. I know sometimes they can add patients. It sounds like they did not, but just to clarify that.

Speaker 2

Yeah, thanks for the—hey, Scott. Thanks for the question. That's a good thing to point out is the DMC feedback we got seemed very positive and maintaining the same number, sample size, the same number of patients. We did not add patients to the trial.

Speaker 7

Okay. Great. I know after the first analysis, you did comment on a lot of the data, but not the second analysis. Is that because it's closer to the end? Is there any kind of reason why it was okay the first time, but not the second time? I certainly understand that's the way a lot of these things work, but I just wanted to hear your thoughts.

Speaker 2

Yeah, Scott, you nailed it. As a reminder, we had very significant or positive results from our phase 1/2 trial showing a potential for increasing the lifespan of pancreatic cancer patients and really reducing the side effects and toxicities. This allowed us and gave us the confidence to jump straight into a phase 3 randomized, which would be a pivotal trial. The FDA agreed that based on our preliminary data from the phase 1/2 trials, we could jump to a phase 3. In most circumstances, you do a prospective phase 2 trial to help inform the design. With that confidence, we went to the phase 3. Not having done the phase 2, taking a very early look, i.e., 30% of the data would give us confidence that we are on the right track, almost in lieu of a phase 2 trial.

Being that early in the study, we didn't feel like it would bias or jeopardize the study in any way. You nailed it. Now that we're nearing the end of the trial and already there's an enthusiasm for the potential positivity, we didn't want to introduce any bias at this late stage in the game, how close we are to the finish line and the DMC's confidence to move forward to completion and then potential preparation of an AMA filing. To protect the integrity of the trial, it made sense to keep this with the highest chance of success with the FDA at the end.

Speaker 7

Okay, it makes sense, certainly. You know it looks like you need to enroll 19 more patients. The pace of the past few months would seem to indicate that that could reach till kind of mid-2026, but it sounds like you think it could be a little bit earlier. Are you expecting kind of a ramp-up? Is it kind of the fall? Maybe it's slow in the summer, but it seems like the enrollment pace is expected to increase near term.

Speaker 2

Yeah, Scott, thanks for the question. A couple of things to keep in mind is in terms of enrollment, we do enroll patients treatment-naive. We then go through an induction phase to weed out patients that might have micrometastases and then randomize truly locally advanced pancreatic cancer patients. There is kind of a fallout in that middle phase. We've randomized 95 to date, need to randomize 114 to stop the study or to complete enrollment and randomization. Enrollment completion is what we're aiming for, and that we anticipate to be towards the end of the year, first quarter next year. As far as a ramp goes, you're 100% correct. We've added some larger volume, more well-known cancer centers in the last several months, including University of Nebraska, Northwell, Johns Hopkins.

We anticipate that with these larger cancer centers, we should start to see a ramp as we're coming out of the summer. It's a combination of getting enrollment done to be able to randomize that 114th patient and these new centers coming on board in the recent past to help accelerate enrollment towards the end of the year, if not the beginning of next year.

Speaker 7

Okay, great. Just the final question, and then I'll jump into the queue. On the PANTHER registry, you know when should we see data coming out of that?

Speaker 2

It's interesting. It's a broad-based post-market device registry, and so there's not a pre-specified endpoint with data. As investigators and the company see interesting findings, we can publish and present on podium data along the way. One of the exciting aspects of the PANTHER registry, it is a solid tumor registry. While our experience to date has not fully, but been primarily in pancreatic cancer, it does allow us to collect, capture, and then present on data outside of pancreatic cancer. As we start to see either trends in usage or trends in results, we can start to publish and present data along the way. Not a great answer in terms of timing, but it is imminent, and we look forward to being able to explore the use of the RenovoCath technology beyond where we've seen it to date.

Another interesting aspect about the PANTHER registry is that these centers will be purchasing devices to be able to use to explore further uses of the RenovoCath, which could help with revenue as well.

Speaker 7

Okay, great. Thank you for taking the questions, and congratulations on a lot of progress in the past few months.

Speaker 2

Thank you, Scott.

Speaker 6

Our next question comes from Edward Wu with Ascendiant Capital Markets. Please proceed with your question.

Speaker 3

Hi, it's Rafay for Ed Wu Ascendiant Capital Markets. Can you give an update on your previously mentioned partnering with the top 200 cancer centers?

Speaker 2

Yeah, thanks for the question. Great to talk to you. Thanks for calling in. As I've kind of outlined in terms of market potential, there are about 200 cancer centers across the U.S. that treat the majority of non-metastatic GI solid tumors. It's a good example market for us for pancreatic cancer. The way I've characterized these 200 centers is it wouldn't take a large sales force to attack them. As we operate in this commercial environment very leanly without hiring a large, expensive sales force, we're able to have deep penetration in the broader market by focusing on some of these top centers. We've already made announcements that we're in 13 hospitals with VAC approvals, which means that the hospitals who are approved to purchase the device have already issued purchase orders for RenovoCath with our early commercial efforts.

Those 13 centers are some of the top 200 large volume cancer centers across the U.S., four of which have started using the device, treating patients, and having reorders as well. As far as using their names publicly, we did mention a couple of centers, including Hackensack Medical Center in New Jersey. As we get permission to use names, we'll start publishing more on exactly which centers we're partnering with. We are also on the verge of launching a RenovoCath website where patients can go to find which centers are offering the technology. In the not-too-distant future, you'll be able to see which centers are involved as well once we get permission to use your name to help drive patients towards centers to be able to receive treatment.

Speaker 3

Okay, great. Can you also discuss any plans for the RenovoCath for international markets?

Speaker 2

Yeah, it's an interesting topic. Given the reimbursement tailwinds and the cost of doing business here in the U.S. and the large market and unmet need here, we're hyper-focused on the U.S. market first. We do anticipate down the road, once we establish the U.S. market, to explore internationally. There is a large volume of cancer patients without great technologies or therapies across Europe and different Asian countries as well. We've begun to have dialogues with investigators there over the years and also potential partners. As we start to really get traction in the U.S., we'll further explore outside the U.S. markets, either with a partner or on our own.

Speaker 3

Great. Thank you very much.

Speaker 2

Thanks for the questions, Ed.

Speaker 6

As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. Our next question comes from Swayam Pathula with HC Wainwright. Please proceed with your question.

Speaker 3

Thank you. This is RJ from HC Wainwright. Good afternoon, Shaun. Looking at your revenues of $422,000, I'm just trying to figure out, is any of the revenues coming from purchasing for the clinical studies itself, or is all of it really commercial dollars?

Speaker 2

RK, this is a great question. I really appreciate you asking it because it's a great delineation. This is all non-TIGeR-PaC phase 3 revenue. These are all brand new customers who were outside of the clinical trial or outside usage of the trial. Any revenues, and we do charge for the catheter, and it is reimbursed within the phase 3 TIGeR-PaC trial, but any revenues from those are not recognized as revenue, but considered an R&D offset, which you can see from our filings. It is important to note that the revenue stream is all external to TIGeR-PaC. As mentioned earlier in Scott's question, we do aim to complete enrollment towards the end of this year, beginning of next year.

After that, those 18 centers that are in the TIGeR-PaC trial can and most likely will convert to commercial paying customers where they can start treating patients with various ailments or tumors using the device, and those purchases will be revenue towards a company in terms of revenue recognition. The TIGeR-PaC sites using catheters do help our bottom line, but the $422,000 just announced does not include any of that revenue recognition. On the flip side, because the PANTHER registry study is a post-market device registry, revenue obtained for the PANTHER sites will count towards a revenue recognition.

Speaker 3

Okay. On the PANTHER registry study, do you really have a specific number of centers or anything like that? It obviously depends upon which center wants to run this, utilize the device, and be part of the registry. How does that work?

Speaker 2

It's relatively open. We don't have a specific small limited number of patients or centers. As we're discussing with centers, if there's academic interest in collecting data around certain patient populations, we'll partner with them. It's not limited. We are also looking at investigator-initiated trials. There are some very interesting research ideas outside of where we've seen the usage so far that would most likely fall under the registry or an IIT, and those don't have to be mutually exclusive. We could also perform investigator-initiated studies within the registry and use those research ideas. It gives us a lot of leeway and optionality in terms of what patients might be studied, and then subsequently what data might be published or presented to show where the RenovoCath can really help patients and really push the science behind this and also help us capture additional hospitals with academic interest in these areas.

Speaker 3

For the PANTHER registry, I know you're not really started bringing in patients, but in general, when you started talking with your advisors and whatnot, what sort of solid tumors, you know, where they're thinking could be a good possibility for the utility of the RenovoCath?

Speaker 2

I really appreciate this question because given the success we've seen in pancreatic cancer, there is a vast interest beyond what we studied primarily, specifically locally advanced pancreatic cancer. The biggest few interests have been one in locally advanced pancreatic cancer following FOLFIRINOX treatments. As most are aware, the phase 3 clinical trial design has a gemcitabine plus Abraxane induction phase. Many patients opt for FOLFIRINOX, especially the younger, healthier patients. Coupling local treatment with the FOLFIRINOX induction is of interest. Also, exploring the use of the technology beyond locally advanced pancreatic cancer, for example, in resectable in the neoadjuvant setting or borderline resectable pancreatic cancer patients. There is also an interest in studying or using the device in metastatic pancreatic cancer patients.

Physicians are saying they have patients with a single metastasis or multiple metastases where local control could be important or could even have effects on the immune system with different agents as they try different agents through the device as well. Those have been some of the top research and ideas and interests. Beyond pancreatic cancer, the most common requests or discussion is around cholangiocarcinoma or bile duct cancer. Given the similar nature of these tumors being hypovascular, having less blood supply, and also using the same drugs like gemcitabine, for example, to treat, there has also been an interest in studying bile duct cancers. Beyond that, there has been interest in certain subsets of non-small cell lung cancer, sarcomas, head and neck tumors. It's great to see this level of interest across different specialties based on early success in pancreatic cancer.

Speaker 3

At one point, we were talking about how outside of the chemotherapy, additional drugs or drug categories could be also part of the RenovoCath. Do you envisage that sort of data within this PANTHER registry study, or is it going to be purely the typical chemotherapy that you are currently using within the TIGeR-PaC clinical trial?

Speaker 2

I do. Beyond other tumor types, that's exactly what will be studied is other agents as well. There's been interest from physicians to move beyond or in addition to gemcitabine, either with multiple therapies or other drugs that might be more caustic or toxic to the body. For example, platinum-based drugs are a big interest and one of the biggest limitations of systemic FOLFIRINOX. There are several classes of immunotherapeutics that have been tried, tested, and failed in pancreatic cancer and other tumors. One of the reasons is because of this desmoplastic barrier, high pressure, and really tumor resistance and lack of blood vessels feeding the tumor. We overcome that with our Transarterial Microperfusion (TAMP) therapy platform and with the RenovoCath.

Being able to deliver different agents that might have an immunotherapeutic effect to turn on the body's immune system to attack metastatic disease can really open up a large potential for patients. The registry, both in and of itself, and also the investigator-initiated trials that we're discussing and negotiating with physicians, both give us an avenue to look into these areas and collect data and present data in these areas beyond just gemcitabine and beyond just locally advanced pancreatic cancer.

Speaker 3

Okay. The last question, I know I've taken a lot of your time, but the last question from me is bringing onboard Phil Stockton. What should we expect now that you have your career sales Senior Executive? Should we expect, say, three or six months down the line, the trajectory of revenue to be much better, or is this responsibility more to get ready when you get through the TIGeR-PaC and get through any additional FDA approvals?

Speaker 2

I appreciate the question, RK. It's the former. Given the early traction we saw, and we posted, I believe, two good quarters so far with primarily grassroots efforts on the behalf of me and some of my team members without having a sales and marketing team in place. Given that we can see the upside in market penetration and potential to drive revenues to a level that would support the company at some point in time, bringing on Phil to bring on a small team to really start ramping for commercialization efforts now makes sense. That's with a pure RenovoCath, not needing to wait for the drug-device combination in TIGeR-PaC. The goal is to have the team fully in place and positioned by the end of the year.

I anticipate continuing revenue over the year and really gearing up for success in 2026 to start driving towards profitability at some point in time or cash flow break even as that team gets in place and we drive market penetration. I see 2025 with Phil at the helm, really learning the sales cycle, the activation timelines, collecting other sales metrics on how we can optimize that, and then really plan for more of a full penetration and launch in 2026 into some of those 200 accounts as I had alluded to.

Speaker 3

Okay. Thank you. Thanks for taking all my questions, Shaun.

Speaker 2

Thanks, RK. I appreciate the questions.

Speaker 6

Our next question comes from Jason McCarthy with Maxim Group. Please proceed with your question.

Speaker 0

Hi, guys. This is Chad for Jason. Thanks for taking the questions. We were wondering, have you guys engaged or plan to engage with FDA regarding a potential accelerated approval pathway?

Speaker 2

Thanks for the question, Chad. From the DMC readout, the goal is to complete the study as an overall survival study. The plan would be, as we prepare for an NDA, to engage at that time with the FDA to see if there's an accelerated approval. Given the unmet need and failed treatments in pancreatic cancer, getting this from trial completion to potential approval as fast as possible makes sense. The short answer to your question is yes. As we start narrowing final data, we will engage with the FDA to see if acceleration is a possibility.

Speaker 0

Okay, got it. Thanks. How does the 16-month median OS from the first interim compare to outcomes from other trials in the setting that also used induction chemo and SBRT?

Speaker 2

Chad, I appreciate the question because it's important to see that we are aligning with what we expect this patient population to do. Previous large randomized studies have shown that locally advanced pancreatic cancer should yield an overall survival from time of diagnosis to, and the report out's been anywhere between 12 to 18 months or 14 to 18 months, maybe more contemporary trials. The 15.5 months, estimated 15.5 months we saw in the control arm in our first interim analysis fits right in the middle of that. Further validation can be seen with the previously completed Penova III Novocure trial. In their trial, I believe they showed 14.2 months in their gemcitabine plus Abraxane control arm and about 16.2 months in their tumor treating fields plus gemcitabine plus Abraxane. We're right smack in the middle of what's expected of locally advanced pancreatic cancer.

What's interesting with the Novocure study is that they were able to achieve local control and a two-month survival benefit, which added about $1 billion of market cap to their company with those types of results. It really shows both on the finance side and also the physician interest side that the bar is very low for this patient population. To have that much success with a two-month benefit, we can imagine what we can accomplish achieving much more than that down the road.

Speaker 0

Okay, great. Thanks for taking the questions again and congrats on all the progress.

Speaker 2

Thanks, Chad.

Speaker 6

Our next question comes from Scott Henry with AGP. Please proceed with your question.

Speaker 7

Thank you for the follow-up question. Shaun, I just wanted to ask a couple of questions about the catheter business. Gross margins, I believe they're 64% in the quarter, which is a pretty high number for this level of revenues. Is that a sustainable number? Where could gross margins get to on the catheter sales? Thank you.

Speaker 2

Yeah, Scott, I appreciate the question. That's one of the benefits and the reasons why we're deciding to commercialize because this looks like it could be extremely profitable for the organization. As far as the direct margins in terms of the cost of the actual materials building the catheter, generally, new medical devices, as they start to achieve success, start reaching that 70% to 90% range, and we're actually in there. There are additional expenses, I believe, reported in the queue. We believe we'll keep pushing that higher towards that 70% to 90% range in the not-too-distant future. I see the gross margins increasing over time as we scale. This is with a reimbursement in place. This is part of the decision to go ahead and commercialize at this stage in the company's development process, given the high potential margins of the technology with the current reimbursement landscape.

Speaker 7

It would seem with these numbers and just looking at the spending, how it compares to prior quarters, that it's already significant, maybe not significantly, but it's already cash flow positive. By the time you add this team, it should probably still be accretive at that point. Would you agree with that statement?

Speaker 2

I do. It's looking at the device manufacturing itself, it is accretive. As mentioned, it doesn't take a big expense of sales force. I think that's really one of the big advantages we have as an emerging commercial medical device organization outside of the phase 3 trial is that usually the burn is very high and the margins are low. We've been able to, as you know, achieve a lot of momentum and success and value creation with very little money. With this type of a niche market, very focused market, we could achieve high revenues with a handful of sales reps. It's also important to note that with the reimbursement in place, each patient receives multiple treatments. Once a patient's identified at a given hospital, they end up receiving between five and ten treatments. The numbers add up pretty quickly in terms of revenue.

Without the need for a large sales force, our burn can stay low, but our revenues will continue to ramp through the end of this year and the end of the next year as well.

Speaker 7

Okay, great. I would be remiss not to give you an opportunity to talk about your thoughts for the rest of the year of the catheter revenue. I'm not trying to get guidance out of you, but would you expect sequential gains in Q3 and Q4? I know sometimes there's a lot of upfront bolus sales, and then you have to wait for reorders, but it seems like reorders are moving. Do you look for, would you expect sequential gains in the coming quarters?

Speaker 2

Of course, as you can imagine, with such a new effort, we can't give guidance currently as I really look at 2025 as a learning year. I wouldn't measure success on a quarterly basis because there will be ups and downs and fluctuations this early in the process, especially since there's multiple procedures per patient. A couple of patients can really change the needle. Going from pretty much $43,000 or pretty much zero just over six months ago to where we've achieved so far with $420,000 plus this quarter is fantastic. I do see us driving hard, learning, and penetrating deeply, bringing more of those 13 centers across the finish line to start ordering catheters and treating patients. We do have a pipeline of another 20 or 30 hospitals behind them.

I do see growth over the next half of the year, but I really see that ramp start to take place with these few new sales hires as we work on infrastructure right now, more in 2026. I anticipate success throughout the year and then really ramping next year.

Speaker 7

Okay, great. Thank you for taking the questions.

Speaker 2

Thanks, Scott. I appreciate it.

Speaker 6

As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Stephen Reed with Pitt Investments. Please proceed with your question.

Speaker 3

Hey, guys. Great progress. I have a couple of questions on the FOLFIRINOX. Are you going to be moved to putting that in PANTHER first, or what's kind of your next steps?

Speaker 2

Thanks for the question, Steve. Always great to catch up with you. As we look to gemcitabine, one of the reasons we chose gemcitabine initially in the phase 3 clinical trial is it's so well characterized, and we did have a lot of early experience with it. As we look to other drugs, we will perform animal experience to ensure we're not causing any major detrimental vascular damage. As we discuss investigator-initiated trials and even registry patients with physicians, as we look to other agents, we will make sure we perform preclinical studies in conjunction with those physicians or on our own to ensure as we move into humans that we don't have issues. Short answer to your question, yes. We have begun exploring what other drugs do to the vessel wall. Like gemcitabine so far, it looks like we don't have any issues.

Speaker 3

Okay. Do you think a few of those studies you'll be sharing with us in the next quarters on which preclinical studies those might be where you have the most interest?

Speaker 2

Yeah, we haven't disclosed publicly where we are in the process of the preclinical studies and which drugs, but for sure, as we move into patients being treated, especially under the guise of launching the registry, either during that time or in advance of that, if we have publishable data, we'll do so.

Speaker 3

Okay. It's great to see your in-house sales team coming together. I was curious if you could give us an update if you're simultaneously still working on some partnerships, distributors. I saw in March and June that you might have issued some restricted stock in consideration for commercial contracts. Really, any color around that would be helpful as well.

Speaker 2

Yeah, thanks for the question, Stephen. To clarify, we issued some stock options or restricted stock to our contract manufacturer, Medical Marie, in conjunction with ramping production to get us to where we are today and then take us to the next level in terms of providing enough catheters for sales to treat patients. That's on the partnership side. On the manufacturing side, that's complete and underway. As far as the distribution side, we've been talking to several potential strategic distribution partners. What I've said publicly previously is we'll do the math around what makes most economic sense. Given what we've achieved so far without any sales or marketing in-house team, besides myself and a couple of my team members for the most part, it's been prudent financially to make sure we capture all the revenue versus revenue share for this initial market entry.

We've done the math on it, keeping our burn relatively the same with the addition of Phil Stockton. He's pulling in a handful of sales reps over the next several months or quarters. We'll make a decision down the road as we want to scale or need to scale based on usage in which tumor types and how far we can scale. If we should grow the sales force even further down the road next year or actually strike a partnership and leverage the distribution channel of a large medical device company, those discussions, as I said publicly, are ongoing. For the short term, in the meantime, we do plan on driving with our in-house team to capture the best value for our shareholders.

Speaker 3

Thanks, Shaun. That's all I have.

Speaker 2

Thanks for the question, Stephen.

Speaker 6

As a reminder, if you would like to ask a question, please press star one on your telephone keypad. It appears that there are no further questions today. I would now like to pass the floor over to Shaun Bagai for closing comments.

Speaker 2

Thank you for the opportunity and for those dialing in and listening. Thank you, and I appreciate the questions from those who called in as well. I'm very happy and thrilled with the results we've had for our second quarter of this year, both in terms of the commercial success to date without an in-house sales and marketing team, and the progress we're making with the additional hire of Phil Stockton as he builds out his team. Also, timing was excellent and a great happenstance to have the Independent Data Monitoring Committee (DMC) have the ability to review the second interim analysis. We're proud and happy to see the continuation, which gives us confidence that we should be hopefully moving towards a successful clinical trial in a phase 3 manner in locally advanced pancreatic cancer.

I'm also happy with the prudent decision here to protect the integrity of the trial just so we have the best chance of success with a potential NDA application down the road. Thank you again for everyone chiming in, and I look forward to following up with individuals down the road.

Speaker 6

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.