Earnings Call Transcript - PETV Q1 2024

Operator, Operator

All right. Welcome, everyone, to the PetVivo Holdings, Inc., 2024 Fiscal Year First Quarter Earnings Report. We will now hand over to John Dolan and take it from there. Thank you.

John Dolan, Chief Business Development Officer and General Counsel

Thank you, operator. Greetings, and welcome to the PetVivo Holdings first quarter of fiscal year 2024 financial results conference call. My name is John Dolan, the Chief Business Development Officer and General Counsel at PetVivo. Today's call is being webcast and will be posted on the company's website for playback. Before we begin, I would like to remind everyone that comments made during this conference call by PetVivo's executives may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties. Any statement that refers to expectations, projections, or other characterizations of future events, including financial projections or future market conditions, is a forward-looking statement. PetVivo's actual future results could differ materially from those expressed in such forward-looking statements for any reason, including those listed in its SEC filings. PetVivo assumes no obligation to update any such forward-looking statements. PetVivo filed its earnings release and Form 10-Q with the SEC today, which provide a detailed discussion of our financial results. These documents can be found in the SEC website and the Investor Relations section of our website. I would now like to turn the call over to John Lai, the CEO and President of PetVivo. Please go ahead, John.

John Lai, CEO and President

Thank you, John, and welcome. Also joining me today is Bob Folkes, our Chief Financial Officer. I would like Bob to begin by discussing some highlights and financial results for the first quarter of fiscal year 2024. John Dolan will provide an update on our clinical studies, and I will conclude by sharing some additional thoughts on our business strategy and key focus areas for fiscal 2024 before we open the line up for questions. I will now turn the call over to Bob.

Bob Folkes, Chief Financial Officer

Thank you, John, and good afternoon, everyone. Our key highlights for the first quarter of fiscal year 2024, where we reported revenues of $117,000 as compared to $58,000 in the first quarter of fiscal year 2023. Revenues for the first quarter included net revenue of $34,000 from shipments of Spryng to MWI Animal Health, a subsidiary of AmerisourceBergen, a leading distributor of animal health products, pursuant to our distribution and sales agreement with MWI dated June 17, 2022. We also reported revenues of $83,000 on direct sales to veterinary clinics as compared to $58,000 in the first quarter of fiscal year 2023. We added Spencer Breithaupt, a veteran in the animal health industry and former member of the leadership team at MWI Animal Health, to the company's Board of Directors. We also raised $2.1 million from the sale of the company's common stock in a registered direct offering in April 2023. Also, subsequent to June 30, 2023, the company raised an aggregate of $2,325,000 in net proceeds from two offerings. On July 27, 2023, the company raised net proceeds of $550,000 in a private offering of convertible notes, and then on August 9, 2023, the company raised net proceeds of $1,775,000 from a registered direct offering of its common stock conducted concurrently with a private offering of warrants. We continue to invest our resources to expand our sales and marketing efforts and clinical data to gain veterinarian acceptance and increase revenues from the sale of Spryng. Now I would like to turn the call over to John Dolan to provide an update on our clinical studies.

John Dolan, Chief Business Development Officer and General Counsel

Thank you, Bob. We provided a detailed overview of PetVivo's clinical studies in our last earnings call on June 30, 2023. To summarize, PetVivo has a total of eight clinical studies in progress or that have been completed; six small animal clinical studies, i.e., canine and feline; and two equine clinical studies. We are fortunate to be working with a number of world-renowned research organizations, such as Colorado State University, Ethos Veterinary Health, and Inotiv, Inc. We anticipate that three of our small animal clinical studies will publish within the next three to four months. Furthermore, we are looking forward to the presentation of the final results of our clinical study conducted by Ethos Veterinary Health at the American College of Veterinary Surgeons Conference in October of 2023. The study is related to evaluating the benefit and tolerability of intra-articular injection of Spryng into the stifle joints of dogs with suspected partial or complete cranial cruciate ligament rupture. An abstract was presented at the Veterinary Orthopedic Society Conference in March 2023, demonstrating that Spryng is a minimally invasive management option for dogs suffering from cranial cruciate disease. The acquisition of clinical data proving the safety and efficacy of Spryng in a multitude of indications is incredibly important to PetVivo. The company plans to organize and conduct more clinical studies in addition to the ones in progress in order to expand our library of data that demonstrates the safety and efficacy of Spryng in a variety of indications. Such a library will assist our sales team in gaining veterinarian acceptance for Spryng. I would like to turn it back over to John Lai.

John Lai, CEO and President

Thank you, John. I would like to talk more about our business strategy and key focus areas for fiscal 2024: clinical studies from Ethos and Inotiv and podium presentations to support the upcoming national trade shows, and support the MWI small animal sales team. As of today, still the majority of our sales, around 90%, are in the equine space. We have not pushed the MWI sales reps as well as our sales reps to go after the small animal clinics. With the data that we expect to be receiving over the next three to four months, it will open up the avenue and provide the ammunition needed. Now the podium presentations and clinical or clinician presentations will be occurring, the first one at the ACVS in October of 2023. That is a dog study. Then, in November of 2023, the AAEP, we actually have multiple presentations by veterinary doctors at that conference. That is the biggest conference in the United States for equine vets. The first of the year, I think it's the second week in January of 2024, is the VMX. We will have presentations there. In the previous year, when we had two speakers talk about Spryng, we ended up getting 2,700 badges scanned. We feel we will get very good traction now that we have very important data as well as literature and supporting data for the small animal vets. In February, we have the biggest show on the West Coast, the Western Veterinary Conference in Las Vegas. We also have presentations there. We feel these are really large potential events that will create an adoption by many of the veterinary doctors. We had a nice little surprise about five weeks ago. There was a peer-reviewed article that showed up in Today's Veterinary Practice journal, the July-August issue, written by Dr. Tammy Grubb, recognized nationally and internationally as an expert in canine pain management. She is the President-elect of the International Veterinary Academy of Pain Management and also an adjunct professor at Washington State University. She has been using our product for about two years. In the article, she made some very important comments that will help us from the standpoint of educating veterinary doctors. One of the biggest key takeaways was she stated that Spryng with OsteoCushion technology is a frontline-use product. The second takeaway was that dogs that have an adverse reaction to NSAIDs, of which there are 83 million dogs in the United States and approximately 5% cannot take NSAIDs, could find Spryng to be a very good alternative. From an economic standpoint, Spryng is one of the lowest-cost options for dogs that cannot take NSAIDs and has the potential for the least number of adverse events or side effects. I want to address the frontline-use product aspect. In past calls, I mentioned that when a small animal doctor or a canine veterinary doctor orders our product, they tend to use it as a last-resort product. They try everything else. If the dogs are not functioning, or they're not getting any results, they are ready to put the dog down before trying our product. They see tremendous mobility improvement in the dogs, yet the mindset of veterinary doctors sees this as a last-use product. It takes time for them to learn. We're in a position to, with all this data and outside peer-reviewed articles, make them comfortable using it as the first line of treatment. The general pattern is that for six months, they use it as a last-resort item. Then, they become comfortable over the next 90 days to inject a couple of other joints. After a year, they start to include it in discussions for checkups, noting that a dog is likely to get hip dysplasia at age seven. They start to suggest Spryng at the first signs. This positions Spryng as a much earlier-use product. Dr. Tammy Grubb's statement that we should consider this as a frontline first-use product is highly significant. I am not saying it will replace NSAIDs but it may serve as an alternative or be used in conjunction with them. We have also observed a significant reduction or elimination in the need for NSAIDs upon introducing Spryng. To give you a sense of the market size, the NSAID market in the United States is valued at $385 million for the last reported year. Moving forward, we anticipate more journal articles to be published. With MWI having all this data will help us to increase veterinary acceptance in the small animal sector. In the last call, we talked about the turnover at MWI, and it appears we are smoothing that out, and things are back in line. We will also increase our social media focus, showcasing actual real-world cases using platforms like Pinterest and Instagram. We've found that veterinary technicians and consumers are reaching out to their vets. We did a news release stating we are now in 47 states and are starting to gain traction with good-sized clinics in major cities. The consumer is now reaching out to their vets, leading them to find other vets in their area using our product. We’ve been seeing positive results from our social media strategies. I would now like to open the line up for questions.

Operator, Operator

Ms. Ribble.

Unidentified Analyst, Analyst

I don't know if anyone can hear me.

John Lai, CEO and President

I can hear you, but there's feedback.

Unidentified Analyst, Analyst

Is that better?

John Lai, CEO and President

Yes, much better.

Unidentified Analyst, Analyst

I'm curious about the timeframe for when you'll start using smaller animals. I'm just not clear on the exact timing for that.

John Lai, CEO and President

Well, right now, veterinary doctors can buy the product for dogs and cats. We haven't pushed on that side because we talked about all these clinical data and presentations on the small animals coming out in September and October. We feel that's a big catalyst. In the meantime, we're seeing a lot of great results occurring on the dog and cat side. In many larger cities, we have multiple clinics using our product. Does that help answer the question?

Unidentified Analyst, Analyst

It does. I understand you're referring to smaller animals, but isn't there a long-term intention to focus on larger animals as well?

John Lai, CEO and President

No, we started off on the equine because that's an easy market for us. Veterinary doctors see the results right away. When dealing with small animals, they like to have the clinical data to support our statements. Plus, when they inject a dog, they may not see that dog for six months to a year for their next checkup before they realize how well the dog is doing. This results in much longer adoption periods for small animals, but the market is significantly larger. There are about 10 million horses, 83 million dogs, and 60 million cats in the United States.

Unidentified Analyst, Analyst

Okay. Awesome. Thank you.

John Lai, CEO and President

Okay.

Operator, Operator

I have a raised hand from a phone number ending in 4735. Please go ahead.

John Lai, CEO and President

Hello.

Unidentified Analyst, Analyst

Hello, can you hear me okay?

John Lai, CEO and President

Yup.

Unidentified Analyst, Analyst

Oh, hi, John. This is .

John Lai, CEO and President

Hi.

Unidentified Analyst, Analyst

I have a question. You mentioned something I am not familiar with since I am relatively new to this field. It was referred to as NSAIDs. What is that?

John Lai, CEO and President

NSAIDs, yeah. So that's the standard treatment that a veterinary doctor gives. It's basically an anti-inflammatory.

Unidentified Analyst, Analyst

Okay.

Bob Folkes, Chief Financial Officer

Advil.

John Lai, CEO and President

Naproxen or something.

Bob Folkes, Chief Financial Officer

Advil.

John Lai, CEO and President

Thank you. Yeah.

Unidentified Analyst, Analyst

Okay, got it. How do you spell that?

John Lai, CEO and President

The NSAIDs?

Unidentified Analyst, Analyst

Yes. How do you spell it?

John Lai, CEO and President

Oh, N-S-A-I-D.

Unidentified Analyst, Analyst

Okay. Great. Yeah, thanks. I appreciate that. You referred to it more than once, so I thought, what is that?

John Lai, CEO and President

Okay, no problem.

Unidentified Analyst, Analyst

And do you have an update on human trials?

John Lai, CEO and President

No. We mentioned that we have conducted the necessary reviews on the human side based on feedback from external experts regarding the timeline. We plan to soon announce our advisory team, which will include specialists in this area to guide us on the way forward. Considering the global opportunity for humans in the OA market, it represents approximately $240 billion annually. It's important to note that human trials will be considerably more costly. However, any fundraising will occur within the subsidiary, not PetVivo Holdings, to avoid affecting PetVivo's share structure or expenses. Furthermore, when we do secure funding in that area, there may be a slight reduction in the overall operating expenses of PetVivo Holdings, the parent company.

Unidentified Analyst, Analyst

Okay. That sounds great. Thank you.

John Lai, CEO and President

Yup.

Operator, Operator

All right. No further questions. Thank you. This concludes our conference for today. Thank you for your participation, and you can find any information on the company site.