Spectral AI, Inc. Q3 FY2024 earnings call

Key Points - Dr. Michael DiMaio, Chairman, emphasized the company's focus on the 3Fs: finance (revenue from BARDA and MTEC), focus (regrouping and laser-focused on completing projects, including FDA submission in H1 2025), and finish (completing BARDA project, MTEC device, and FDA clearance). - Vince Capone, CFO, reviewed financial results, noting R&D revenue growth, improved gross margin, reduced G&A and other expenses, narrowed net loss, and reiterated 2024 revenue guidance of approximately $28 million. - The company is developing a DeepView system for burns with BARDA partnership, has devices in the UK with positive feedback, and plans to roll out to Australia via a special access pathway.

For the third quarter of 2024, research and development revenue rose by 138% to $8.2 million from $3.4 million in the third quarter of the previous year. Gross margin improved to 44.9% from 42.8% in the prior year's third quarter. General and administrative expenses declined to $4.6 million (55% of revenue) from $5.6 million (164% of revenue) in the third quarter of the previous year. Other expenses decreased to under $800,000 from $6.5 million in the same period last year. Net loss narrowed to $1.5 million or $0.08 per share from a net loss of $10.6 million or $0.77 per share in the third quarter of the prior year. Adjusted EBITDA loss for the quarter was approximately $700,000 compared to an adjusted EBITDA loss of $3.9 million in the prior year's third quarter. As of September 30, 2024, cash and cash equivalents totaled $3.7 million, and the company had approximately $6 million in notes payable.

Guidance - Reiterated 2024 revenue guidance of approximately $28 million, expected to increase about 55% from the $18.1 million reported in 2023. - Anticipate continued operational focus on the BARDA PBS contract as working towards FDA submission in the first half of 2025.

Risks - Forward-looking statements involve known and unknown risks, uncertainties, and factors outside the company's control that could cause actual results to differ materially from forward-looking statements. Risks include those described in the company's SEC filings, such as regulatory hurdles, market acceptance, and competition.

Q: How are you preparing for FDA submission?

A: Enrollment for the burn center portion of the study has been completed, images are being truthed, an algorithm is being developed, and data is being collated for submission in the first half of 2025. The company is in frequent interactions with the FDA.

Q: What's the status of U.K. commercialization?

A: There are several devices in the UK, with positive feedback from doctors. The company is working towards NICE designation and plans to roll out devices to Australia via a special access pathway.

Q: What about U.S. commercial readiness?

A: The BARDA contract helps kickstart the sales force, and clinical studies will be conducted to show the value proposition of the device. Devices will first be in the hands of doctors.

Q: Any update on DFU indication?

A: Temporarily on hold while the company focuses on the BARDA product. Will revisit after streamlining for FDA submission.

Q: Details on MTEC award and milestones?

A: Working on the portable version of DeepView, getting feedback from the Brooke Army Medical Center, and iterating the device for military use.

Q: When can we expect top-line data from the burn study?

A: Expect data in December, focusing on metrics like Dice coefficient, sensitivity, specificity compared to clinical judgment.