ImpediMed Ltd

ASX:IPD

Earnings Call Transcript 2021-Q2

[Operator]

Thank you for standing by, and welcome to the ImpediMed Quarterly Results Investor Call, Q2 FY 2021. [Operator Instructions] I would now like to hand the conference over to Mr. Richard Carreon, Managing Director and CEO. Please go ahead.

[Richard Carreon, MD, CEO, President & Executive Director]

Thank you, Rachel. Welcome, everyone, and thank you for joining us today. We're hosting this conference call to discuss our 4C for the financial quarter ending December 31, 2020. Joining us on the call today is Tim Cruickshank, our Chief Financial Officer; and Mike Bassett, our Senior Vice President of Corporate and Strategic Development. I'll be referencing the 4C and speaking from the financial presentation, we lived this morning, Australian time. The presentation is a summary of the more detailed 4C. At the conclusion of my remarks, we will be taking questions. I'll begin on Page 3 of the financial presentation. We had a very strong quarter across every aspect of our business despite the ongoing headwinds from the global pandemic. Total revenue, which is comprised of our SOZO and legacy businesses was up 40% year-over-year to $2.1 million. Cash receipts from customers were $2.0 million, and we ended the quarter with $19 million of cash on hand. Page 4. The SOZO business performed exceedingly well across every metric we use to measure the health of our SaaS business. SOZO revenue had $1.9 million in sales for the quarter and was up 58% year-over-year. Our annual recurring revenue was up 86% year-over-year to $7.8 million. Our contract revenue pipeline was up 54% year-over-year to $14.8 million. Patient testing exceeded 28,000 for the quarter and growing 33% year-over-year. SaaS gross margins remained steady at 90 plus percent, and our churn remained negligible at just 1%. As I stated earlier, we are very pleased with every aspect of our SOZO business and how well it's performing. Page 5. It was by far our strongest SOZO quarter on record. You will see from the revenue chart in the middle of the page, our SaaS, device and contract fees and our clinical business all established new highs. We are pleased that the rebounding strength of our patient testing as shown in the graph on the right. Although, we continue to see robust growth, patient testing in the U.S. slowed in the last weeks of December due to the increase in COVID-19 restrictions in hospitals across the U.S. We expect to see this continue as the virus is yet to spike and resources from all over the health care system are being diverted by the new administration's efforts to vaccinate more than 100 million people in the first 100 days and to make available 300 million doses of vaccine by the end of summer. As we've done in previous quarters, we continue to monitor patient testing and utilization of our devices by customer and regionally. This allows us to place our resources where we can continue to drive growth and where we see opportunities. Let me now turn it over to our CFO, Tim Cruickshank to discuss our financial performance in more detail.

[Timothy Cruickshank, Chief Financial Officer]

Thanks, Rick, and good morning, everyone. I'll be taking you through some of our key financial highlights. On Pages 6 to 7 of the presentation. So just to note, all figures presented are in Australian dollars unless otherwise indicated. And it's important to note the Australian dollar appreciated significantly when compared to the U.S. dollar during the quarter. When viewed using constant currencies, the results presented are even stronger. And as noted earlier, please refer to our Appendix 4C and business activity statement for more details on our results. So on Slide 6, we have our land and expand strategy, which is a key component of our commercialization strategy, and it is accelerating our company growth. The strategy is focused on: one, landing accounts through the sale of new SOZO devices; two, expanding patient testing at those accounts; and then three, further expanding accounts through additional SOZO sales and contract renewals. Executing on this strategy has led to strong revenue growth in robust SaaS metrics, including the $7.8 million in annual recurring revenue, which Rick walked you through earlier. So with remanding accounts in the quarter, we sold 78 new SOZO devices globally, which is an 81% increase over the prior quarter. The 78 units related to sales in our core business, which to date, primarily consists of sales in the oncology market. This is separate from any units supplied to the AstraZeneca trials. This brings the total number of SOZO devices sold since our initial launch to more than 680. And just as a reminder, it's separate from the 375 plus devices being supplied under our clinical business, which includes the AstraZeneca trials. Then with expanding testing, during the quarter, we had a record number of patient tests conducted at over 28,000, which Rick also walked you through earlier in the presentation. We're able to monitor accounts real-time in order to ensure our customers have the resources and tools they need to test the patients and grow their programs. And on the right-hand side of the slide, you'll see this expansion -- the patient testing resulted in additional SOZO device sales, along with our healthy renewal rate and our minimal churn rate. For Q2 FY '21, that churn rate remained negligible at just 1% globally, and we renewed 100% of the contracts that were up renewal in the period. Executing on these metrics resulted in the ARR of $7.8 million and our contracted revenue pipeline of $14.8 million. To put that contracted revenue pipeline into a bit more perspective, when you consider we achieved greater than 90% gross margins for the SaaS revenue in the quarter. We also expect 90-plus percent gross margins on the full $14.8 million of CRP that will be recognized as revenue over time. Then as we turn to Slide 7, the cash flow and balance sheet. The company has further strengthened its balance sheet during the quarter as a result of the record cash received from customers, strong financial discipline and the receipt of an additional $6.6 million from option exercises. Cash on hand, as Rick indicated, was $19 million as at December 31, 2020. We had cash receipts from customers of $2 million compared to $1.3 million in the prior quarter. Net operating cash outflows were $2 million, which is a significant decrease to the $4.6 million in the prior quarter. So due to the timing of some certain large items, payments between Q1 and Q2, a better way to look at net operating cash outflows is by looking at the full 6-month period. Net operating cash outflows were $6.6 million for that 6 months period just ending here December 31, 2020, which is significantly better than the forecasted $8 million in net operating cash outflows that we had announced in the market in October 2020. Thank you, all. And Rick, I'll hand it back to you now.

[Richard Carreon, MD, CEO, President & Executive Director]

Thank you, Tim. Let me now move on to the key milestones and achievements. Let's turn to Page 8. As reporting previously, we are focused on 3 key markets, oncology, heart failure and renal failure. In each of these areas, we've made significant progress this quarter. In oncology, the PREVENT trial completed the follow-up of the last patient. And the analysis of the data has begun. The principal investigators are committed to submitting their manuscripts to a leading journal by the end of February, so 4 short weeks from now. The meta-analysis was published and it showed statistical significance in the reduction of lymphedema. The publication has been well received by both the medical profession as well as the private payer community. We achieved our high trust security certification after 2 long years of hard work. This certification shows the IT and security departments of hospitals that we have passed the most rigorous screening of our systems used to handle patient information. The certification is already dramatically reducing our sale to installation cycle times. New South Wales expanded their lymphedema screening program with the purchase of an additional 25 units. And Dr. John Boyages has published his landmark radiation paper that supports the use of LDX for reducing the rates of breast cancer-related lymphedema. In heart failure, we secured our first commercial sales. And in both heart failure and renal failure, we were pleased to announce 2 major contracts signed with AstraZeneca in support of their clinical trials. These trials will measure the fluid volume in heart failure and renal failure patients. The 2 studies will take place in 31 countries and more than 375 centers and the contracts are valued at $4.5 million. Page 9. Let me now turn your attention to the upcoming milestones. We have some very exciting months ahead of us. The long-awaited prevent trial will be submitted for peer review by the end of February with the publication of the results to follow over the coming months. Based on the better analysis showing statistical significance, we expect the PREVENT trial to show similar results. We continue to make progress on our reimburse with success in central areas: first, we are partnering with hospitals to jointly fight and denial of insurance claims for L-Dex testing. In several key markets, we are obtaining prior authorizations from these insurance companies for testing of patients for up to a year; two, we are aggressively fighting all denied claim by payers with the hospitals we're partnering with. In 2 cases, we've moved the appeal process to the third and final appeal, and we won both cases. That was background. A third appeal is reviewed by an outside independent group of physicians that the insurance company has to pay for. If an insurance company loses a third appeal, they are heavily fined by the insurance agencies. In both cases, the insurance companies are now providing routine prior authorizations for patients that show medical necessity. So obviously, a big win for us. A major health network has approached us to discuss covering L-Dex test for all breast cancer patients, while they undergo a review of our technology and evaluate our ability to reduce patient costs. So again, a very exciting turn of events for us. And these are all very important developments that will bolster the meta-analysis and will be bolstered with the met analysis as well as the upcoming preventive trial publication. The NCCN, if the PREVENT trial show statistical significance, we expect one or more nationally recognized institutions will submit the PREVENT trial data and request inclusion of L-Dex in the guidelines. For heart failure. We expect to expand our commercial footprint in the coming months as well as establish pilot programs in key heart failure centers. We continue to work with the FDA on the removal of our contraindications for implantable pacing devices as well as the fibrillates. On the combined heart failure and renal failure front, we see growing opportunities with our support of the AstraZeneca studies. For the first time, key cardiology and dialysis centers globally will obtain real-world experience using SOZO in a clinical setting. A feedback we are already obtaining from these and other studies in terms of patient flow, software upgrades, training and implementations are proving and valuable. As more centers come online and experience the potential of SOZO, we expect to convert a number of these centers to customers. In closing, I believe we have successfully navigated yet another complex and challenging quarter under the cloud of a global pandemic. And while there's still much uncertainty ahead, we believe we have transformed our business to meet any number of these challenges. We are in a strong position, and we believe we can continue to drive strong double-digit year-over-year growth over the coming quarters begin to realize the opportunities in both heart failure and renal failure. This concludes my remarks. Rachel, would you please open the lines for questions.

[Operator]

[Operator Instructions] Your first question comes from Shane Storey from Wilsons.

[Shane A. Storey, Senior Analyst]

Can I just get you just to return to that anecdote, you just shared about fighting the insurance senile. I mean it seems like there was a positive outcome there. But is that something that you are anticipating that ImpediMed will, I guess, formalize as a part of your business in lymphedema?

[Richard Carreon, MD, CEO, President & Executive Director]

We're going to continue to make that a formal part of our business until we start to see payment and coverage. So here's what we're doing. We know that we now have a body of evidence that is very strong. And so we've contracted with an outside group to fight every single denial with hospitals that sign up for this service, and a number of them already have signed up. So I don't see this as a long-term business proposition. I see this as a short-term until we start to see routine coverage. Is that clear?

[Shane A. Storey, Senior Analyst]

Okay. Yes. I understand that. It's not uncommon. Maybe overly, just go back to the core business and the numbers just for a second. Could you comment on how new contracting activity has tracked for you over the last few quarters? So I'm curious to know whether you've seen an uptick in lead generation, say, following the positive evidence development that we've seen both internally over the last 6 months?

[Richard Carreon, MD, CEO, President & Executive Director]

Yes, Tim, I'm going to take the first part. You may want to answer that in a little bit more detail. What we have seen with the positive evidence that's come out and we're just starting to see that evidence from the meta-analysis start to make a difference. So we really see this is twofold, one, we've seen a growth and the expansion of our business, as Tim pointed out our land and expand strategy. So more and more customers, expanding the current program. And we're using the body of clinical evidence that we have to obtain new business. So we see growth on both sides of our business. So Tim, do you have any specifics you can share with Shane?

[Timothy Cruickshank, Chief Financial Officer]

Thanks for the question, Shane. Yes, we continue to see a little more than half of our units going to new customers. So it's quite a healthy mix of new and existing with the expansion of just under half of our sales coming from our existing customer base.

[Shane A. Storey, Senior Analyst]

That's helpful. My last question relates to the pending results from the PREVENT trial, surprise, surprise. We've seen [ that you are going to ] submit the manuscript next month. But can we expect to see sort of some top line summary data on the primary endpoint before that?

[Richard Carreon, MD, CEO, President & Executive Director]

Shane, I think we would all like to see data as soon as possible. And that's really going to be up to the principal investigators as well as the publication that accepts it. A number of publications have explicit instructions when you submit that no press release can be released in regards to that data. So they're monitoring a couple of things. One, which publication -- excuse me, which of the journals, high, high-value journals that they're submitting and the rules and regulations and which cover those. So obviously, if we can release early results and top line results, we certainly will. If we're legally bound by submissions or the principal investigators are, we're certainly going to abide by those. We don't want to jeopardize anything that would cause us to not be able to publish these final results after more than 7 years of hard work.

[Operator]

Your next question comes from [ Ian Hyde ], private investor.

[Unknown Attendee]

Just following on a few things from Shane. Just with the new contracts -- or sorry, not so much the new one, with the existing ones are being renewed. You mentioned they've all been renewed, but there was no details as to how many were renewed. And also you have mentioned previously that when they are being renewed, there for longer terms, obviously, more devices and the price increase due to upscaling on the package that they're taking. So color around that.

[Richard Carreon, MD, CEO, President & Executive Director]

Tim?

[Timothy Cruickshank, Chief Financial Officer]

Yes. Thank you for the question. We have a number of international contracts renewed during the quarter. There weren't as many in the U.S. that happened to be up for renewal. During this quarter, we had 6 contracts in the U.S. that were renewed, or 6 devices, I should say, in the U.S. that were renewed. We're going to start to see those numbers increase as we get into next financial year when a lot of contracts come up for renewals. So over the next 2 quarters, we won't see a lot of change or a lot of uptick in terms of price increases and additional value from some of those renewals. It's really when you get out 2 plus quarters where you're going to start to see that start to have a bigger impact. So we'll continue to update the market as that becomes more of a significant portion in the coming quarters.

[Unknown Attendee]

Okay. And so I had a question of just -- it's just gone. But also the meta-data now so, obviously, with the strength of that data, and you've already touched on it that there are starting to see improvements in people looking at it and taking new positions with the device. Is the company doing, or is this something that the private payers will do, are they now actually crunching it out to get real data around now that we know how much of a reduction you can get in lymphedema, et cetera, from all the different categories of the disease. So they can just crunch out on a pure spreadsheet as to say, okay, we can cover this because we're going to save this much money and all our down the line cost of treating patients.

[Richard Carreon, MD, CEO, President & Executive Director]

Yes. I would tell you, this insurance companies are not going to do that kind of analysis until we have a formal meeting with them. And then typically, they ask for us to crunch the numbers, provide them with the analysis, and then they have their value analysis teams, review the data and verify that kind of information. So I would say, as we start to get the PREVENT trial in the marketplace, and we start to have face trial, virtual meetings with insurance companies, we are going to be well prepared to show them that. Also remember that there was a great publication on cost savings out of the Cleveland clinic that we used extensively. So we already have a package we're submitting. I believe with PREVENT trial, we'll be able to show them even a robust package. We've already crunched the numbers. They'll have to do it, but no insurance company is going to spend time doing it on their own until they see a formal application or a request from a company.

[Unknown Attendee]

So okay, that alignment was a bit of a head scratcher, that's what they do. Well, because I would have thought that just all about saving money. So after spreads it synthesizes money. It's like a. So it's quite a spot and that's what they do. So another question, one that I forgot. We know how many devices you've sold, are you going to start detailing how many contracts or actual hospitals or clinics that those devices are actually installed in? Because off the top of my head, there's something like 10,000 hospitals and clinics in the U.S. is a round figure. And if we've only got these devices in 50. Well, that also starts to show to the world just how far this has got to go rather than just some thought bubble.

[Timothy Cruickshank, Chief Financial Officer]

Yes. Those are great comments. Obviously, a lot of stats and a lot of different metrics we can give. So we're just trying to hone in on the most pertinent ones to give to the market to help you understand the story, but that's definitely something for us to think about as we move forward.

[Unknown Attendee]

As an investor, I can assure you I would really love to know.

[Richard Carreon, MD, CEO, President & Executive Director]

That's a good observation. I think the one thing, though, let's keep in mind that when you're saying there's 10,000 hospitals and clinics in the United States slips, let's really be careful of how that breakout. There's about 3,000 to 3,500 cancer centers in the United States. So when you have 680, not all of those are in -- obviously, in the U.S., but majority of them are, that really shows that we are making some headwinds. I could also tell you there's 28 NCCN centers. So these very prestigious cancer centers in the U.S., and we have 20 of them currently using our device. So I think the way we need to take a look at is how many cancer centers and what's your penetration, that may be a more effective way of looking at it versus lumping every clinic and every center. Because there's a number of hospitals that don't have cancer centers or don't have breast cancer or don't have certain kinds of cancers they tend to specialize. So I think that's an important point to bring up and something we'll consider.

[Unknown Attendee]

So look, I appreciate that model hospitals are the same. And my last question for the day is just with the AstraZeneca trials and going global. I know it's early days now, but you are clearly going to be focusing on using there's a huge foot in the door to get to global expansion with all of these different institutions and countries?

[Richard Carreon, MD, CEO, President & Executive Director]

We are. We're carefully looking at a couple of things. First of all, what centers are going into and what the regulations are for those different markets you take a look at. So for instance, I can tell you that a concentration -- and I can't reveal any of the details. So this is really just an example. So let's say that there's a high concentration of studies that are going on with AstraZeneca, for instance, in Germany, if that were a country where they had 20 or 30 devices. Certainly, that's where we're going to focus our effort versus Sweden where they may only have one device. So we're carefully looking at as they start to roll out where they're going to be placing these devices where the clinical and regulatory pathway would be. And in most cases, we already have a CE mark. So it's probably not a regulatory. It's going to be more of a language translations for the documentation, the paperwork and so forth. And then is there a potential partner that we could use. So we're looking at AstraZeneca as a great opportunity for us in a number of fronts. And we are carefully scrutinizing the countries in which they're doing the studies, and there are ease an ability to get into those countries. But again, I want to emphasize, it's an area of opportunity. We're going to look at it that way, but our focus is still on our 3 main businesses of oncology, heart failure and renal failure.

[Unknown Attendee]

So look, I understand and appreciate that it was future thought bubble, but while I'm on the line spend the $0.02 worth?

[Richard Carreon, MD, CEO, President & Executive Director]

Yes.

[Operator]

Your next question is from Sally Watson from Oblique Logic.

[Sally Watson]

Can you hear me okay?

[Richard Carreon, MD, CEO, President & Executive Director]

Certainly can, Sally.

[Sally Watson]

I just wanted to pick up on your earlier comments about the impact of the pandemic on clinics and the comment about looking for opportunities and where to best place your efforts. Can you give a bit more color in terms of what kind of metrics you're looking at and how you're responding to it?

[Richard Carreon, MD, CEO, President & Executive Director]

So I'll give you a perfect example. As different parts of the country shut down, we typically will know before there is a formal announcement that they're running out of their ICU beds. And simply because if we have devices placed in those markets, we see testing or use of our devices in real time. So one example that I think really illustrates the point is we were working with a major customer on the eastern seaboard of the United States and started to realize that they were running into major issues that the main cancer center across the street at a different hospital, they -- we saw testing starting to come down. And so we knew that the negotiations we were entering into were probably going to be short-lived. And so we quickly contacted the account. We laid all the groundwork for the future development of the product. We ship them, a couple of SOZO devices to put in storage and made it very clear when they get through this wave that, one, they would have devices to use, and two, that we would be ready with a formal proposal. So we didn't have to spend a lot of time going through some negotiations that we realized where they were just not going to be able to execute that. So as we look across the country and we see that. We know where case -- where our devices are being used, and they're on the increase. And we know that there's an opportunity for other devices in that marketplace, it's not in that customer. And if we see the caseloads going down, we know right away that anything we have in that market probably is going to be -- take longer to close that sale as they start seeing resources from the cancer center to help address some of the issues they're seeing with the vaccine rollout and the handling of COVID patients. So it's an interesting thing that we look at. We used to look at it weekly, and I look at it almost where we see the ups and downs in the marketplace. And then again, adjust where we're going to spend our time and energy.

[Sally Watson]

Okay. That sounds like pretty powerful information access to actually. But I'm just -- I think that part of my question. What I'm trying to do is get color on maybe how the pandemic in general is affecting business in the next quarter. I know there's lots of stuff on the horizon in terms of this quarter coming up. But just in terms of gathering an idea what seems -- might be over the next quarter.

[Operator]

Your next question comes from [ Craig Brown ], a private investor.

[Unknown Attendee]

Hello?

[Richard Carreon, MD, CEO, President & Executive Director]

[ Craig ], can you hear us? So you're breaking up, and I hear you very faintly.

[Unknown Attendee]

I've got 2 questions. One is just some clarification. With the -- you've got -- I guess, you've got -- as my understanding is you've got 2 main sort of obstacles there. One is the medical profession in the hospitals and the other one is the insurers. Are you saying that generally, the medical practitioners and the hospitals are on board and the insurance companies are the ones who are sort of a recals trend or difficult to get across the line? That's the first question.

[Richard Carreon, MD, CEO, President & Executive Director]

Yes. I would say this. I think you can tell by the growth of our business that, in general, the medical community has bought off on the fact that our device can detect the early onset of clinical diseases such as lymphedema or fluid and heart failure patients or in renal patients. I think, by and large, that's an accepted practice. We have enough clinical evidence. In lymphedema, we have more than 150 clinical studies. So the growth is being driven by a couple of things. One, the new device is making an impact. The information we provide and the impact we have on patients. The insurance companies are reluctant to pay for the tests, and they're asking for level 1 evidence data. And as you heard earlier, the 3 key areas that we're focused on to drive that. I think as soon as we get private pay starting to pay on a regular basis routine basis, you're going to see a step-up in the growth trajectory that we already have for the business. I feel confident about that because, again, we don't -- when we go in and meet with accounts, the physicians, we're not arguing if the device any longer is effective where the technology really can do what it can do. We're really talking, in 90% of the cases, about reimbursement and what can we do together from the reimbursement standpoint, patient flow and things like that. So I would say that really the upscale that we face is the insurance company, and that's why we're paying so much time, energy and resources to overcome that one final obstacle.

[Unknown Attendee]

Yes. So there, I mean, they're essentially , well it sounds like bureaucracies that you're dealing with where it's difficult to get -- you've got to go through the whole lot of hoops to make it happen.

[Richard Carreon, MD, CEO, President & Executive Director]

Yes. I would tell you this. Insurance companies are going to make it difficult for any new technology because they're in the business of making money for their shareholders. And every dollar they don't have to pay in the health care arena is a dollar more, they can either reinvest in the business or return to shareholders. So insurance companies are making record profits at this point. And so again, they're going to scrutinize everything. The good news is that once you make it into that realm and you get -- you can show the outcomes to patients and reduce costs, you're in a very good position because the likelihood of you getting dropped are very small, and so you're in a very good place. So they make the hurdle very, very high. But again, I think we've done a good job of positioning ourselves and developing a strategy to overcome it. And as you could see from my earlier comments, we are starting to overcome some of those, and we expect that to accelerate in the coming quarters.

[Unknown Attendee]

Okay. Yes. And secondly, one of the -- like my understanding is you've got the tight -- you've got the tight measurement method, and you've got your bioimpedance technology. And there doesn't seem to be anything else. Is there anything else that is in development phase or isn't about there, it would -- which would make -- it could make bioimpedance technology less valuable.

[Richard Carreon, MD, CEO, President & Executive Director]

So let's take a look at it from a device standpoint. Do we see any devices on the horizon on the near-term horizon? Am I aware of any? No, I'm not aware of any that we think goes a challenge to us for a couple of reasons: one, they either have not been able to obtain FDA clearance; or two, they don't have the frequency sweeps necessary to have the sensitivity and accuracy of our device. So one, I don't see that. The other thing is, there are an optical scanner called pyrometry. It's about a $50,000 device. There's no reimbursement. There's no FDA clearance, but it does have some use in the United States. But again, it's very high end, very difficult to use and very expensive to maintain. So there is some of that in these high-end institutions that want to dabble in R&D. So from a high-end and from a device standpoint, we're in very good shape. If we crack or when we crack the reimbursement market, there may be other competitors because we've done the heavy lifting. But I think we've got with more than 600 or almost 700 devices in the market and growing and large leaps and bounds. I think at this point, it would be hard to displace us. So let's talk about the other things that are out there. There are surgical procedures that they're pioneering that is trying to reduce or eliminate lymphedema. I can tell you now that those centers, which are typically done by microvascular surgeons or plastic surgeons are using SOZO to decide when to do the surgery and if their surgery is successful. So they're finding new uses for our technology. Memorial Sloan Kettering is a very good case in point. It's probably one of the most prestigious cancer centers in the world, and we have devices in their plastics department for their surgical procedures to do lymph node transfers for patients who are very high-risk or who develop them edema. So I think people are finding that lymphedema is going to be around for a very long time until we become the standard of care, and then we would see a significant drop off. And even those new drugs that they're looking at or meet surgical procedures. They're having to use our technology because no insurance company wants to pay for very expensive surgery without some proof. So I think we're in very good shape into at least the medium term, if not long-term future at this point as far as I can see.

[Unknown Attendee]

If that's okay. So my understanding is that the economics for the insurance companies is such that they better off with this technology than your -- so that's my understanding. Secondly, if that's the case, once you get all the insurance companies on board or the majority of them, what do you think is the potential for sales or the potential for revenue in dollar terms or percentage increases from now and whatever?

[Richard Carreon, MD, CEO, President & Executive Director]

Well, we've said our addressable market is north of $1 billion. And I would say that if we had all the insurance companies paying and we didn't have any more hurdles, I would say that, that would be a realistic long-term prospect for the company. But again, I think it's going to take us a while to get there. I think the other thing you have to sort to understand is this new platform we've developed was to go after more than lymphedema. We already have additional claims that we have, additional indications from the FDA that we're now starting to add on the device so we can become a bigger player in the oncology space. So we really see lymphedema as our foot in the door. And we have a number of accounts who are already exploring our ability to test fluid for hydration, our ability to provide them accurate information, on-body composition, so on and so forth. So I would tell you this. I would say our opportunity for the short to medium-term is lymphedema, the need in the long-term is more of the oncology type. That's why we keep talking about our oncology business, Greg.

[Operator]

Your next question comes from Martyn Jacobs from Canaccord Genuity.

[Martyn Jacobs, Senior Analyst]

I'd first like to just endorse the previous comment about putting it out installation data, which I believe is -- given where you've got to now is a critical data point for people to understand revenue generation and revenues going forward. So if you could provide that data for the next time. And beyond that would be, I think, much appreciated by everybody. Secondly, do you have a sense of time line for the first insurance policy change?

[Richard Carreon, MD, CEO, President & Executive Director]

I don't. I mean -- so let me walk you through the process that we have is once we get in front of the insurance company. We have a chance to present our case, and we take clinicians with us to present the clinical data. We present the financial data. They review it. And they tell you they'll get back to you. They would hope to get back to you within x amount of days, 90 to 120 days. And sometimes they do and sometimes they don't. And then you just ask for another meeting and you keep going through the process. So it is a very challenging process even before COVID-19. With COVID-19, we're doing more virtual video conferencing. But I will tell you this. I think the insurance companies are starting to realize that we're a force to be reckoned with. We're not going away anytime soon, that we're in very good shape as a company. We continue to see expansion of our technology. And I think with more clinical data, especially the meta and the PREVENT data, that it's going to be difficult for them to continue to say, we need more, we need more, we need more. And I can tell you also as we put pressure on them from the claims offices -- I think we're putting together a case where we'll start to see the first one. Remember, nobody wants to be the first one to open up new technology for payment because they all know that eventually -- that once the first smaller regional payer goes, the next one will start to fall in line, and then eventually, the large national payers will fall in line. So it's a matter of who's going to be pressured into being that first insurance company to fall. But I would say that we would expect significant progress within a couple of quarters after the release of the PREVENT data.

[Martyn Jacobs, Senior Analyst]

Right. The next point or related point is going back to your comment on those 2 stage 3 claims that you've won. Could you say that -- just to verify, did you say that those insurance companies are now processing all claims as standard? Can you just clarify what you meant?

[Richard Carreon, MD, CEO, President & Executive Director]

So I was very careful in how I worded that, Martyn. And the reason I am. So here's what happens is when it goes to the third appeal and if they lose a third appeal, they're fine. Then if it comes back and they lose again, they'll find even more. So they walk a very fine line. They don't have a coverage policies yet, but here's what's happening, and they don't just accept everything. So I was very clear in my comments on that is that what they have to do is as long as that physician writes a letter of medical necessity. So they outline the patient has breast cancer. They've had multiple lymph dons removed. They've done through taxane, chemo, so on and so forth. They write a letter, justifying medical necessity, those insurance, those 2 insurance companies are now providing prior authorizations for those patients for testing to a year. And then they'll have to redo the letter, the second year and the third year. So that's not an issue. Once you get a letter pretty easy to continue to do that letter. But they're making us jump through that next level of hurdles. And by the way, we've already drafted the letter of medical necessity for the physicians. So it's a matter of a template. They fill it out and submitted. So it's not as easy as the insurance company gets a claim when they automatically pay for it. But it is much easier than it was just several months ago for those 2 particular insurance companies.

[Martyn Jacobs, Senior Analyst]

All right. Okay. Thirdly, can you -- is it possible to give a sense of the outlook for unit sales or cash flows over the next half?

[Richard Carreon, MD, CEO, President & Executive Director]

We haven't provided that. I mean obviously, with COVID-19, we're -- I think we've got a pretty good track record, though. I mean this quarter, with the number of devices we placed and ones we have last one. I would say that you're probably going to see on the order of magnitude of, I think, between those 2 going forward, I think there'll be the ebbs and flows. As I said earlier, we're starting to see that our -- the peak of the virus hasn't hit here yet. So I think as a peak, it's then, we'll have some challenges. But again, I think we have other opportunities in other areas. So I would say that we're going to be between last quarter and -- the last 2 quarters in the number of devices we place going for at least the next, probably, a quarter or 2.

[Martyn Jacobs, Senior Analyst]

Right. It's interesting because hospitalization data has dipped down over the last couple of weeks. We're vaccinating or they're vaccinating over 1 million a day. So it's interesting to see at what point things actually start to loosen up again?

[Richard Carreon, MD, CEO, President & Executive Director]

Well, I say what everybody I talk to, and I talk to administrators and hospital physicians on a weekly basis, they're expecting once they have an adequate supply of vaccines coming in. And so once they start to reach that 1 million to 1.5 million vaccine today after 30 to 60 days, they should start to see those rates come down dramatically as long as the supply of vaccines can continue, and you should start to see it opening up. So mean the President announced today, the new administration announced today that they expect to have 300 million doses available by summer. So we're talking a short 3 or 4 months away before we will start to see massive evacuations on scale of well over 1.5 million a day.

[Martyn Jacobs, Senior Analyst]

And just finally, you're making progress on the renal failure indication, is there any sense of -- we're likely to see, I guess, we're likely to see a distribution agreement before we see regulatory clearance? Is there any sense of when that distribution agreement with some party might exist?

[Richard Carreon, MD, CEO, President & Executive Director]

No, I would say, first of all, one, we do have a CE mark already for rental value. So our ability to place the devices outside the United States, we can start doing that. I would say that to get a U.S., yes, that's still a regulatory pathway that we need to execute. And I would say that we're prepared to go either way, either an agreement or on our own. Because, again, we see the opportunity here is pretty significant. It's all about fluid, just like heart failure or just like lymphedema. So it's no change to relate to the technology, just how we apply that technology. So for us, either way offers us some significant opportunities.

[Martyn Jacobs, Senior Analyst]

Do you see an overseas entry before U.S. entry?

[Richard Carreon, MD, CEO, President & Executive Director]

Well, for renal value, we certainly have that because of the CE mark available. And I will tell you with the AstraZeneca trial, there is growing interest in new technology. As I said earlier, we're going to see SOZO placed in 375-plus major cancer -- excuse me, major cardiology and nephrology and dialysis centers globally. These are people who have never seen a device. Most of them I bet, you would have never experienced the device, and they'll be able to get real-world experience with it. And we're already starting to see inquiries coming in from the few that we've already shipped. So I would say that we're going to get a lot of exposure. And that's only going to help the ability for us to move forward in the renal failure space.

[Operator]

There are no further questions at this time. I'll now hand back to Mr. Carreon for closing remarks.

[Richard Carreon, MD, CEO, President & Executive Director]

Thank you, everyone, for joining us. We appreciate it. I know it's been a long morning already, but I think we had a lot of good things to say. And we're looking forward to the upcoming announcements over the coming months and quarters. Thanks, everyone.

[Operator]

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.