Here is my Q&A with Joe and Rich Purcell on 10/15/2019

Quote:

Steve: Okay. I saw the wound closures with Excellegen, and I mean that's awesome,
the wound closure pictures--I mean the pictures tell a thousand words, so that
looks like an excellent process. And how are we coming along on
manufacturing that product? Is there... what of time lag is it to grow that
product or develop it to be able to be resold to help people?
Joe: There's always a time lag for manufacturing. But right now, we're still in the
launch, right? So, let's put it like this--Rich Purcell could probably add to
this... but you have to give out a lot, a lot of products, as far as samples, to
doctors, institutions, to wound clinics, to hospitals, for them to go through
their process of testing the product on patients before they actually start
ordering and you start making money.
Steve: Good point.
Joe: So, we've gone through a lot of that already, and now everything has just
really picked up and so have the costs of that. So, Rich, maybe you can add a
little to that on the process.
Richard: Sure. Happy to, Joe. The first batch of products was made in the 0.8cc
syringe, and they were distributed to hospitals and the VA, where the valueadd committees--the VAT committees--evaluating the products to see if it'll
go into surgical units, and this is where in the hospital, these units are using
Excellegen for surgeries and for diabetics, put in all sorts of venous leg
ulcers, for various treatments with 17 different wounds that Excellegen can
be used for as cleared by the FDA.
So, there's a whole process that goes on in using this in a surgical suite under
a DRG. And that's what's going on. We just launched a 3cc syringe, and now
there's 0.5, 0.8, and 3 cc syringes, and they're all available, and they're being
sold now, and there's an uptake in the market apparently right now. It's being
distributed through McKesson, and we just signed another agreement with a
distributor specializing in the VA, and they're under a federal supply contract,
so they're an FFF supplier, and that should open up the VA to further
distribution going forward.
So, we're really excited about the use of it; we've got very good feedback
from the market. To date, we've got some great anecdotal evidence, and the
SAWC just ended up where the whole team from all the regions has been out,
and actually _____ [00:53:44] would be on the call right now, otherwise, he'd
be on the plane coming back from SAWC.
But _____ [00:54:07] presented Excellegen data--the SAWC is the wound
convention that was just held in Las Vegas. And there's a manuscript that's
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just published as well. So, we're really excited about the efficacy... obviously,
the safety is clear--it's a Collagen product, there are no safety issues
whatsoever, and the efficacy is wonderful. We're getting great feedback from
the physicians who are getting use out of it in the VAT Committee reviews,
and we have private practitioners who can use the gel in the office to treat
diabetic foot ulcers in office instead of sending everybody to a wound clinic
every time.
So, I think there's a whole lot of--
Steve: That brings up a few questions. The three questions would be--again, not
being a scientist, you said 0.5, 0.8, and 3cc syringes. So, the first question
would be like what size of wounds does that treat? The second question then
would be, are you able to share a cost structure as far as what it's being sold
for? But I guess you probably don't want to do that for a couple competitions.
Richard: There's a couple of things here. There is a very easy answer on the coverage:
the reason that it's sold in three different sizes, is to eliminate waste. One of
the problems with the current cellular and tissue therapy products is that they
come in sheets--they're tissue sheets; they have to be cut to the size of the
wound, and you throw the rest away. So, these are thousands of dollars they
cost.
Steve: Yeah, it's a frozen product versus our refrigerated product.
Richard: Right, and our products last for two months in the refrigerator--their products
have to be thrown away after seven days. But it's not even about the
competitors here, it's more about us and keeping the price of a cellular tissue
therapy specific to what that patient needs. So, if you have a 30 square
centimeter wound, that's a 3 cc syringe; an 8 square centimeter wound is a 0.8
cc. So, the square centimeter is defined by the size, and you can make mix
match--it's all priced under linear pricing too, and you can get that pricing
from the _____ [00:56:45] physician.
Joe: I'll give you one example of how. So, we sent the product to one hospital--
they wanted samples--and one of the doctors had a patient that was scheduled
for amputation. The wounds were hugely...
Richard: They venous leg ulcers and wounds that were open and wouldn't heal.
Joe: Yeah, and they wouldn't heal. And so, the doctor said, "Before I go in for an
amputation, let's try this product out on him." He applied the product
multiple, multiple times, now the patient kept his leg complete from the knee
down, is walking around on it, it's vascular again, and all the wounds are
closed up. So, the product has been far exceeding our expectations on even
more tragic wounds it is working on.
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Steve: That's awesome. I mean I guess Rich answered my question. I was curious as
to a 3 cc size, and he mentioned it's 30 cm...
Richard: 30 square centimeters of 3 cc.
Steve: Okay, so that gives an idea of how much. Now, one last question for you,
Rich, then, let's say we're totally out, how long does it take to manufacture--
Richard: Who's out? Who's out of what?
Steve: Well, I'm saying let's say you're totally out of product. [Laughter]
[Crosstalking]
Richard: No, there's no question of being out. If we run out, everybody is going to be
very happy. If we run out of all the products we've made, everybody would
be very happy.
Steve: Sure. Well, as I said, I'm just trying to figure out, to make a 3 cc, it takes us a
month--
Richard: Yeah, it's like market research. No, everything is on target for our
manufacturing.