MRI Interventions' CEO Discusses Q4 2012 Results - Earnings Call Transcript

Mar. 7.13 | About: MRI Interventions (MRIC)

MRI Interventions, Inc. (OTCQB:MRIC) Q4 2012 Earnings Call March 7, 2013 4:30 PM ET

Executives

Oscar Thomas – Vice President, Business Affairs for MRI Interventions

Kimble L. Jenkins – Chairman, President and Chief Executive Officer

David W. Carlson – Chief Financial Officer

Analysts

Raymond Pirrello – Pendulum Capital Markets

Ted Lou – Valley Financial Group

Operator

Greetings, and welcome to the MRI Intervention’s Fourth Quarter and Full-Year 2012 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Oscar Thomas, Vice President, Business Affairs for MRI Interventions. Thank you, Mr. Thomas. You may begin.

Oscar L. Thomas

Thank you, Manny, and good afternoon, everyone. Thank you for joining us today for our fourth quarter and full-year 2012 financial results conference call. As Manny says, this is Oscar Thomas, Vice President, Business Affairs for MRI Interventions. With me this afternoon are Kim Jenkins our CEO; and David Carlson, our CFO.

Before we begin with our presentation, I do want to point out that some statements we make during today’s call will be forward-looking statements within the meaning of the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include, for example, statements we make of our plans and objectives relating to our commercialization efforts for our ClearPoint system.

Forward-looking statements often can be identified by words such anticipates, believes, could, estimates, expects, intends, may, plans, potential, predicts, projects, should, will, would, and other words of similar meaning. Forward-looking statements by the nature address matters that to different degrees are uncertain and involve risk, and they are made based on the current beliefs of MRI Interventions’ management.

Uncertainties and risks may cause our actual results and the timing of events to differ materially from those expressed or implied in forward-looking statements we make today. Detailed information regarding the risks, uncertainties and other factors that could affect MRI Interventions actual results and the timing of events are described in the Risk Factor section of the Quarterly Report on Form 10-Q that we filed with the SEC on November 14, 2012, as well as the Risk Factor section of the Form S-1 registration statement that we filed with the SEC on February 11, 2013. You can find those SEC filings in the investor section of our website at www.mriinterventions com.

With that, I’ll now turn the call over to Kim.

Kimble L. Jenkins

Thanks, Oscar, and good afternoon, everyone. Thank you for joining us on this, our first earnings call. On behalf of the management team and employees of MRI Interventions, we appreciate your interest in our company. And for those of you who are shareholders, we thank you for your support. We’re honored to be working for you in building this great company.

2012 was an important and exciting and productive year for MRI Interventions. It was a year of growth, a year of first and a year of significant progress. During this call, we look forward to discussing with you the details of our progress and the results for the full fiscal 2012 year, as well as the fourth quarter ended, December 31.

Before we dive into the details, I’d like to take a few minutes to describe the environment and the overall opportunity for our company. I’d like to begin by reading a column from a San Francisco newspaper, a few weeks ago. Brain injury and brain diseases are really one of the last great frontiers of medicine.

I’m quoting Dr. Geoff Manley, Chief of Neurosurgery at San Francisco General Hospital. Dr. Manley’s quote continued as we have more effective treatments for infectious disease, cancer, and heart diseases. Diseases of the brain or injury to the brain continue to rise year-by-year in terms of their costs and impact to society.

Listen, Dr. Manley is correct, the neuroscience field is indeed the last great frontier in medicine. This is a topic, it’s important enough and timely enough for President Obama in the State of the Union addressed, just a few weeks ago to reference a major multibillion dollar initiative called The Brain Activity Map Project. The responses to this initiative which has now been reported on, in fact, with every major newspaper in the country is further testament to the broad-based interest in and the dire need for next-generation technology to treat the illness of the brain.

In an environment where true growth opportunities are hard to find, we believe the neuroscience field is a standout exception. And what’s driving this growth in the neuro field? It’s demographic and paradoxically, its societies incredible success in treating most other diseases. As the medical community has devised amazing therapy to keep our hearts beating, to keep our legs moving, to keep many kinds of cancer at bay, we are not losing longer. But by losing longer an increasing number of us are being diagnosed with currently uncurable neurological diseases.

We are being diagnosed with Parkinson’s disease, for which there is currently no cure or given a death sentence from brain tumor, such as glioblastomas and we are living with a helplessness, associated with relentless cognitive decline of Alzheimer’s disease.

Now, the good news, however, is that major progress has been made in recent years that healthcare is coming up with powerful ways all through the electrical activity of the brain. We see brain simulation and the new technology are being developed to carefully destroy small targeted segments of disease brain tissue, while preserving the surrounding healthy tissue.

And drug and biotech companies are developing powerful new therapy to restore the function of cells in the brain. Yes, we believe the neuroscience field is our last great frontier in medicine and I’m pleased to report that MRI Interventions is well-positioned as the forefront of this major investment turns, our unique ClearPoint technology puts us in a strong and unique position to participate and drive innovation for this expanding fields as the health industry grows and expands to meet the challenges in treating neuro diseases, MRI Interventions will benefit and this in turn will benefit our shareholders.

Now, let’s drill down a bit and put a number a on the sides of this opportunity for MRI Interventions. There are over 2.2 million patients; I mean in the United States that we believe could benefit from therapies delivered with our ClearPoint system. We believe this represents a revenue opportunity of over $16 billion. Of now, our aggregate target patient population is growing each year at an increasing rate as the general population ages and as diseases of the brain threatens a larger percentage of the general population.

I would also like to highlight that this $16 billion revenue opportunity is the U.S. only number. We believe the OUS market opportunity is roughly equivalent to that of the U.S. A macro trend in neuroscience is undeniable. This trend represents a tidal wave of leading the progress of innovation that is hard and beginning to come assure. And after 10 plus years of development work, our filing patterns of securing regulatory clearances, MRI Interventions is in an excellent position to benefit from this way and to be an important part of this last great frontier in medicine.

So how are we doing that? What progress are we making now? I’d like to shift your focus in the macro level down to the micro level, and let’s talk about what’s happening today with ClearPoint, with patients, and with doctors. Doctors are using our ClearPoint systems today to aid in their treatment of Parkinson’s diseases for their patients and neuropathic pain patients with EBS.

ClearPoint is being used today to deliver therapies to epilepsy patients, to focal laser ablation. ClearPoint is being used today in the delivery of therapies to treat brain tumor patients, patients suffering from GBM and DIPG, for example, by enabling physicians placing the drug directly into those tumors. And these procedures are being performed by some of the world’s leading neurosurgeons working at some of the world’s leading neurosurgical centers, at hospitals like University of California, San Francisco Medical Center, the National Institutes of Health, Emory, M.D. Anderson, Memorial Sloan-Kettering, University of Pittsburgh Medical Center just to name a few.

Now, one of the most interesting and uplifting trends that I’m seeing is that patients are now beginning to reach out to us directly. For instance, a gentleman suffering from Parkinson’s disease living in Australia halfway around the globe reached out to us. Likewise, the husband of a woman suffering from Parkinson’s disease in the West Coast recently reached out to us.

These patients inspire us, they motivate us, and we are committed to applying our technologies and our resources to improving their lives. Now, moving from my introductory comments, I’d like to turn the call over for a few minutes to our CFO, David Carlson, to discuss our fourth quarter and full 2012 financial results.

David W. Carlson

Thanks, Kim. We’re pleased to report a very solid fourth quarter and a strong finish to 2012. We recorded revenues of $1.9 million in the fourth quarter of 2012, compared with $1.2 million in Q4 of 2011. The fourth quarter of 2012 revenues included recognition of $1.4 million in license fee revenues compared with $650,000 in license fee revenues recorded in the fourth quarter of 2011. Our license fee revenues recognized in both years relates to the amounts we’ve received previously under our agreements with Boston Scientific. Product revenues were $339,000 in the fourth quarter of 2012 compared with $451,000 for the same period in 2011.

As we look at product revenues, we segregate them into two categories, capital products and disposable products, the razor and razor blades if you will. Importantly, disposable product revenues were $308,000 in Q4 of 2012 compared with $178,000 in the fourth quarter of 2011, an increase of 73% which reflects the increased number of ClearPoint procedures being performed.

Capital product revenues were $31,000 in the fourth quarter of 2012 compared with $273,000 in Q4 of 2011. The Q4 2011 capital product revenues relates to the sale of two systems, while this Q4 2012 capital product revenues reflects the sale of certain components to suit customers.

Overall, revenues also included development service revenues of $127,000 for Q4 of 2012 and $63,000 for Q4 of 2011. These developments services were performed on a contract basis for one of our strategic partners.

For the year, we recorded revenues of $5.1 million compared with $3.8 million for 2011. The 2012 revenues included recognition of $3.3 million in license fee revenues compared with $2.6 million in 2011. Although, product revenues were $1.2 million in both years the mix of product revenues was very good from year-to-year. Disposable product revenues grew by 128% from $448,000 in 2011 to a little over $1 million in 2012.

Capital product revenues were $150,000 for 2012 compared with $707,000 in 2011, as six of the seven new sites in 2012 were installed under our ClearPoint Placement Program. Total revenues included development service revenues of $541,000 in 2012 and $63,000 in 2011. Again, these development services were performed on a contract basis. Our gross margin on product revenues was 52% in Q4 of 2012, compared with 48% in Q4 of 2011, and 53% for the full year compared with 43% for 2011.

The improvement relates to the change in mix since our margins on disposable product are higher than on capital product sales. However, the impact of mix was mostly offset by an increase in depreciation on the systems installed under our ClearPoint Placement Program. Research and Development cost for the fourth quarter of 2012 were $735,000 compared to $1.1 million for the same period in 2011. R&D spending was $2.5 million for 2012 compared with $4.3 million for the prior year.

The primary driver for the year-over-year decrease was our reduced spending on development program activities relating to our ClearTrace system. This scaling back occurred in sponsored research, consulting, and personnel. In addition, the 2012 full-year results reflect a reversal of an R&D obligation of $883.000. This credit expense relates to our Key Personnel Incentive Program and it resulted from the program participants’ voluntary relinquishment of their rights to receive service-based payments, under the program.

Selling, general and administrative expenses for the fourth quarter were $1.4 million, compared with $1.1 million for Q4 of 2011. For the year, SG&A was $6 million, compared with $4.8 million in the prior year. The net increase for both the quarter and the year relates primarily to increases and stock-based compensation expense. Although, we began expanding our sales team in 2012, the firing activities did not occur to late in the year. So they did not have a significant impact on our spending for the year.

Our operating loss for the quarter was $481,000 compared with $1.3 million for Q4 of 2011, and our operating loss for the year was $3.1 million compared with $5.9 million in 2011.

Net interest expense was $83,000 for the quarter, compared with $1.9 million for Q4 of 2011, and net interest expense was $2.6 million for the year compared with $2.5 million for 2011. Over $2 million of the interest expense for 2012 resulted from the write-off of unamortized discounts and deferred financing cost associated with convertible notes that automatically converted into shares of our common stock at the time we became a public company in February 2012.

Our net loss per share was a $0.01 in the fourth quarter, compared with $0.12 per share in Q4 of 2011. For the year, we had net loss of $0.14 per share, compared with $0.52 per share in 2011.

With that, I’ll turn it back over to Kim.

Kimble L. Jenkins

Thanks, David. As David said, we’re very pleased with our Q4 and our full-year operating results. Looking beyond those numbers, I’d like to highlight a few other items. In 2012, we significantly improved our balance sheet. We ended the year with $1.6 million in cash compared with $145,000 at the end of 2011.

Current liabilities decreased from $14.6 million at the end of 2011 to $4.2 million at the end of 2012. Total liability decreased by $13.6 million from December 2011 to 2012. I’d also note, the equity financing we closed in January of this year, yielded approximately $10 million in cash, which combined with the cash we had at the end of the year provided us with the capital to complete the commercial rollout of our ClearPoint product.

In 2012, we became a publicly traded company, something we believe is quite an accomplishment given the challenging capital market at that time. We began trading at $0.75 per share on May 21. Today, we closed at $1.58 per share. Our average trading volume on a daily basis is almost 80,000 shares. Although, it required a lot of senior management time, becoming public has been very beneficial for the company. Predictably, it has given us easier access to capital and is providing liquidity for our shareholders.

A less obvious, but very important benefit, it has increased our visibility to neurosurgeons, to neurologists, to hospital administrators, and patients regarding the revolutionary capability of our ClearPoint product. To give you a specific example, from a single press release on November 27, we generated 320 external links, 130 visits to our website and 48 journalists and blogger views.

This is really exposure that we simply would not have had if we had remained private. As we move into 2013, we’ll be doing more to leverage this asset. In 2012, we continue to grow our ClearPoint in (inaudible). We previously reported that we ended the year with 20 ClearPoint installations, that’s 18 in the U.S and two in Europe; the two most recent sites with the Johns Hopkins University and UC San Diego, both very prestigious institutions to add to our growing list of leading neurosurgical centers of excellence with our ClearPoint technology.

The interest and enthusiasm for our ClearPoint system continues to build. I would say that one of the most frequent comments that I get from neurosurgeons regarding ClearPoint is, this product is the future of the field. I’m pleased to report that we’re now receiving unsolicited sales opportunities.

In late January, I answered a phone call, placed our general office number and was pleased to hear the voice of a neurosurgeon. This was a doctor we did not know. He called to request a meeting with us just for bringing ClearPoint in his hospital, and this has continued.

As recently as two days ago, our office manager, Melissa fielded a similar call from another hospital in the Midwest. In 2012, we began expanding our sales team. In November, we hired Mr. Robert Korn, a seasoned neuro sales executive from Medtronic to lead the ClearPoint commercialization effort. Rob is doing a fantastic job for us. We ended the year with five salespeople including Rob and going forward, we will continue to add the sales.

Now, the sales team is coming together, we need to build out our clinical field support staff. This is an area of focus for us. We’re still understaff to here, and to be frank, as our number of ClearPoint site is expanding, field support is a bottleneck for our case volumes and utilization rates. We’ve identified this issue and we’re focusing on solving this.

A quick update on our strategic partnerships, our ongoing work with Siemens, with Boston Scientific and Brainlab continues to progress. These relationships are solid. They continued to provide stability and opportunity for MRI Interventions going forward.

We’ve made great progress in 2012 in the area of direct drug delivery and we made an exciting announcement just a few minutes ago. As most participants on this call probably know, we’re getting drug to the right location in the brain has been the tremendous challenge for the pharmaceutical industry for many years; many promising neurological drug that failed in clinical trials, not necessarily because the drug didn’t work, but because the issues and uncertainties related to the delivery of the drug.

We believe ClearPoint solved this problem by enabling physician delivery of the drug, directly into the target tissue under real-time in MRI guidance, because of the breakthrough nature of this capability during 2012, we became involved in three drug trials to treat their brain tumors. Neurosurgeons are using ClearPoint to deliver a drug known as (inaudible) to treat GDN tumors; IL13 to treat brain tumors; and a radioimmunotherapy drug to treat pediatric DiTG brain tumor.

The involvement in drug trials is a major area of focus for MRI Interventions and here is why ClearPoint changes the paradigm. The drug is reliably delivered directly into the target anatomy. For the patients, they are little to no systemic side-effects. For the neurosurgeon, he sees that the drug has been delivered into the disease tissue, and for the drug company, ClearPoint separates out delivery effect from drug effect.

Now, drug problems are equally important to our shareholders. We believe the drug delivery use of ClearPoint is MRI Interventions, some of the dramatic upside opportunity usually associated with the biotech company within the confines of a medical device company.

Earlier today, we were very pleased to announce another meaningful expansion of our drug trial activities. ClearPoint will be used in two new trials in the delivery of two promising gene therapies to treat Parkinson’s disease. In one trial, neurosurgeons will use ClearPoint in the delivery of AADC into the payment of subjects with Parkinson’s disease. This Phase 1 bridging study is being funded by the Michael J. Fox Foundation, with initial cases to be conducted at UC San Francisco, and we’re almost expected to begin shortly.

In another trial, ClearPoint will be used in a delivery of AAV2-GDNF into the putamen of patients suffering from Parkinson’s disease. This Phase 1 open-label dose escalation safety study is being sponsored by the National Institute of Neurological Disorders and Stroke is partly NIH with initial cases to be conducted at the NIH. Enrollment in this front has already began, but first case is not yet been conducted.

Our participation in these two new trials is a very significant development for MRI Interventions. Our ClearPoint system is already being utilized in three drug products with the treatment of brain tumors. These two new trials expanded our involvement into gene therapy to treat Parkinson’s disease. We believe these five trials further underscored the clinical importance of our ClearPoint sytem for the delivery of promising drug and gene therapy to the brain.

Now switching gears, I would like to highlight a few areas for you to watch in the coming quarter as a way to monitor our progress. We’re too early in the rollout at ClearPoint to provide formal guidance on this call. However, here are three areas, monitoring in 2013. First, growth in ClearPoint in sales side; we believe this is an important near-term measure of our progress. Our business opportunity that hospital starts with getting ClearPoint installs to select that numbers.

Second, growth in disposable revenues; we’re seeing a lot of momentum in business. Demand is strong and the number of ClearPoint product is growing. As I mentioned a few minutes ago, we still do not have enough field support personnel in place and that is impacting the number of ClearPoint procedures that can be performed. So as you watch our disposable revenue numbers, also look for progress in building out our clinical field support chain.

And third, product enhancements that leverage our ClearPoint platform; ClearPoint is a platform for providing a wide range of minimum invasive neurosurgical procedures. By owning the platform, we have the opportunity to continue to expand the utility of ClearPoint for a neurosurgeon and the hospital through product enhancements and ancillary ClearPoint products. So watch for our progress in this area as well.

I’d like to close by giving you a first hand perspective from the field. Over the last several weeks, I had the opportunity to meet with neurosurgeons, both existing ClearPoint users and prospective ClearPoint users. I’ve met with radiologists with neuro-coordinators. I’ve met with nurses. I’ve talked with prospective ClearPoint patients. I was at a conference just last week, where a neurosurgeon presented his favorable results from using ClearPoint.

I recently have been in Southern California and Texas and the mid-Atlantic and in Midwest and what I will say in my travels that I’m as convinced as ever that we have a product that will change neurosurgery. We’re at the beginning of the next major wave in healthcare and we believe that MRI Interventions is one of the handfuls of companies well positioned for this role. With their unique technology and our growing global presence, with the commitment of our employees and the sport of our shareholder, we look forward to making significant impact in the area of medicine and in the lives of many, many patients to come.

So with that, we’re ready for your questions.

Question-and-Answer-Session

Operator

Thank you. We’ll now be conducting a question-and-answer session. (Operator instructions) Our first question comes from Raymond Pirrello of Pendulum Capital Markets. Please go ahead.

Raymond Pirrello – Pendulum Capital Markets

Thank you, and how are you doing?

Kimble L. Jenkins

Hey, Ray.

Raymond Pirrello – Pendulum Capital Markets

Hey on the two new trials are going to be happening, the microwave [sox] and the other. Well, how many participants are there looking to sign up please?

Kimble L. Jenkins

Yeah. I think so, we got links in our press release to those two trials. But my recollection is that it’s about 10 patients for one of the trials and about 24 patients in the other trial. So it’s on the order of 30, 35 patients.

Raymond Pirrello – Pendulum Capital Markets

And every patient would be a case for our file.

Kimble L. Jenkins

That’s right.

Raymond Pirrello – Pendulum Capital Markets

Okay.

Kimble L. Jenkins

Ray, as we talked about before we really liked the drug delivery opportunity. It obviously gives us an opportunity to participate and what we think is a tremendously meaningful area of medicine. It also gives us an opportunity to get into a hospital and to get started with a neurosurgeon with his neurosurgical pain at that facility. And so again it’s a very positive area for us.

Raymond Pirrello – Pendulum Capital Markets

Are these two trials being run in two existing facilities? Is it two new facilities now for us?

Kimble L. Jenkins

Yeah, so one of the trials, the initial studies, our initial trials will be conducted, initial cases will be conducted at UCSF. The other is at the NIH and both of those are existing sites for us right now.

Raymond Pirrello – Pendulum Capital Markets

Okay; second question in terms of the goal or the sales force for 2013, what is the goal of new sites for the team for the year?

Kimble L. Jenkins

Yeah, so as I mentioned before, we’re not ready to give guidance yet, either financial guidance or guidance on this sort of question. What I can say is that Rob is doing a terrific job in putting together a professional, a sales organization. He’s been in this field for 15 plus years. He’s got a lot of contacts. He knows what he’s doing. He knows how to build the infrastructure and he’s hiring folks for us. And so that’s something we want to continue to do, it’s important. And it’s something that you’ll see us continue to make progress on.

Raymond Pirrello – Pendulum Capital Markets

How many sites are in the target for this system in the U.S. and then also overseas?

Kimble L. Jenkins

I don’t have a number off the top of my head. What I can say is that we’ve got dozens and dozens and dozens of sites that our sales team is meeting with, that I’m interacting with that are dealing neurosurgical procedures the old fashioned way. And as I mentioned in my formal remarks, the level of…

Raymond Pirrello – Pendulum Capital Markets

I’ll correct the question. How many sites available, whether they are the old way or the traditional way of doing this being done, manage your 100 sites, is there a 1,000 sites in the world, I mean how many sites are there? What is the upside for us in terms of sites as far as the market?

Kimble L. Jenkins

Yeah, so let me give you a couple of numbers. For us neurosurgeons are really more important in sites. In the region I’d say that is some of our sites, we’ll have one ClearPoint system, but multiple neurosurgeons at the hospital using it. There are over a 3,500 neurosurgeons in the U.S.

There are about 350 of those 3,500 that have really been focused on functional neurosurgery for uses of the system related to the placement of BBS leads the functional neurosurgeons are kind of center of the bull’s eye. But when you start looking at epilepsy procedures that can go beyond that initial, with that kind of core group, if you look at brain tumors, it goes beyond that group. So I think one good way of measuring it Ray, is the number of neurosurgeons out there.

The second way of measuring it is the number of scanners in the United States that can be upgraded if you will to handle our technology and enable these ClearPoint procedures along with the diagnostic uses. That number – the number of MR scanner suite in hospitals in the United States is over 5,000.

Raymond Pirrello – Pendulum Capital Markets

Okay.

Kimble L. Jenkins

Thanks a bunch, Ray. I appreciate you dialing in.

Operator

Thank you. (Operator Instructions) The next question is from [John Curley] a Private Investor. Please go ahead.

Unidentified Analyst

Hi, Kim, good job.

Kimble L. Jenkins

Hi, John Thank you.

Unidentified Analyst

I have a couple of questions. The first question I have is on ClearTrace. I know that’s been pushed back in terms of introducing it. But what is your plan, plan to introduce that?

Kimble L. Jenkins

So we haven’t spoken of that. We haven’t talked about the release of that system. As you mentioned, we really are focused on the buildup in the commercialization of ClearPoint. That said, we continue to work with our partners in connection with ClearTrace.

Our main strategic partner with ClearTrace is Siemens. Our main research partner is the University of Utah. I’m pleased to say that The University of Utah has been very active in talking about the value of real-time MRI guided catheter based cardiac EP to treat AFib. There have been additional publications that have come out in recent months on this topic that we’ve been a part of. And the lead researcher there, that the Head of EP, Dr. Nassir Marrouche has been a vocal proponent of ours on the podium.

Unidentified Analyst

What will be a significant incremental cost for our product already has system in place for the ClearPoint to taken on the ClearTrace one in each other?

Kimble L. Jenkins

So I’m not sure about on the cost side. I’m not sure that I know or not to answer that question with a lot of specificity. But here is what I can say that is quite important, when we go to a hospital and we tell them about ClearPoint, there is activity required or as they come from the neurosurgeon, and also from the radiology department.

Once we’ve gotten the system installed, really we’ve got momentum in that hospital. We’re thinking about the benefits as using IMR to visualize the procedure in real time, to see with detail in the soft tissue. And so it’s my belief that as we continue to rollout ClearPoint and then move into ClearTrace that those hospitals that already adopted ClearPoint will be easier targets.

Unidentified Analyst

Okay. Just wanted some more quick questions, how many neurosurgeons are currently using you system and others had to perform at least one procedure?

Kimble L. Jenkins

Let’s me just think about that, We’ve got the 20 sites, and I’m guessing probably 30, 35-ish something like that, and I don’t know the answer for sure. That would be a decent guess.

Unidentified Analyst

Okay. And my final question is you had covered all the short delivery clients up already. And then one of the programs, which is quite extensive for delivering and cancer to the brain, I think you mentioned earlier last year that you had 1,100 patients were signing up for this clinical trial. Is that a correct number and if so that’s going to require a lot more sites more and more using your system?

Kimble L. Jenkins

So Jack, what you’re referring to is the Tocagen relationship we have, which we’re quite proud off. We announced that in the summer. I think that your number, I don’t remember that they’re being a number of 1,100 patients. I don’t think Tocagen’s ever talked about a specific number of patients in that trial. So that’s not accurate.

Unidentified Analyst

Okay. Do you have any idea and what the number of people are in that trial?

Kimble L. Jenkins

Off the top of my head, I don’t. What I know is that, we’re pleased with the way it’s going. The focus of Tocagen, Harry Gruber, the CEO leads the way it’s going. And so, again we’ve got – it’s one of these areas where we got a lot of momentum and we’re expecting to continue to see good things coming from that in the coming months.

Unidentified Analyst

And those people – and then trial more in existing hospital installations or new additions…

Kimble L. Jenkins

No, actually I will give you an example. We announced UCSD as one of the new hospitals and that will be Tocagen side.

Unidentified Analyst

All right, thanks. Thanks very much, Kim.

Kimble L. Jenkins

Thank you so much.

Operator

Thank you. (Operator Instructions) The next question is from Ted Lou of Valley Financial Group. Please go ahead.

Ted Lou – Valley Financial Group

Hi, Kim, I hope you’ll forget me. But I wondered if Dr. Ben Carson from Johns Hopkins has been exposed to your technology?

Kimble L. Jenkins

Essentially, I’m certainly well aware of Dr. Carson and his huge contribution to the field, particularly in pediatric neurosurgery. I don’t know Dr. Carson, and as we’d expect, I guess my hope in the near future to have an opportunity and interact with him. As you may know, he worked out of the Johns Hopkins University and that’s one of our new sites.

Ted Lou – Valley Financial Group

Also Dan Hanley is at Johns Hopkins Head of Neurology, I believe. It would be great advocates for you?

Kimble L. Jenkins

Yes. I think that’s a great comment and Dr. Brent is the Chair of Neurosurgery there, met with them and so again Johns Hopkins is a fabulous facility a great hospital. Got a great tradition of neurosurgery with Dr. Fish, and so back many, many years ago, we’re excited about being in that facility.

Ted Lou – Valley Financial Group

Thank you very much. Sorry for the suggestion.

Kimble L. Jenkins

Well, thank you for the comment.

Ted Lou – Valley Financial Group

I’m a happy shareholder.

Kimble L. Jenkins

Thank you.

Operator

Thank you. We have no further questions in the queue at this time. I would like to turn the floor back over to management for any additional remarks.

Kimble L. Jenkins

Again, thank you very much for you time for our first earnings call. We appreciate your interest in the company and hope you have a good evening.

Operator

Thank you. Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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