Opsens Inc

TSX:OPS

Earnings Call Transcript 2022-Q1

[Operator]

Good morning, and welcome to the OpSens Reports First Quarter Fiscal Year 2022 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I'd now like to turn the conference over to Robert Blum with Lytham Partners. Please go ahead.

[Robert A. Blum]

All right. Thank you very much, Anthony, and thank you all for joining us today. As Anthony mentioned for the OpSens First Quarter Fiscal Year 2022 Conference Call, it's for the period ending November 30, 2021. With us on the call representing the company today are Louis Laflamme, OpSens' President, Chief Executive Officer; and Robin Villeneuve, OpSens' Chief Financial Officer. At the conclusion of today's premier remarks, we will open the call for a question-and-answer session. Before we begin though, with those prepared remarks, just a couple of comments. Today's call will contain forward-looking statements that are based on current assumptions and subject to risks and uncertainties that could cause actual results to differ materially from those projected, and the company undertakes no obligation to update these statements, except as required by law. Information about these risks and uncertainties are included in the company's filings as well as periodic filings with regulators in Canada and the United States, which you can find on SEDAR and the OpSens website. Today's discussion will also include adjusted financial measures, which are non-IFRS measures. These should be considered as a supplement to and not a substitute for IFRS financial measures. Finally, today's event is being recorded and will be available for replay through both the webcast and conference call dial-in information provided in the press release. With that said, let me turn the call over to Louis Laflamme, President, Chief Executive Officer, for OpSens. Louis, please proceed.

[Louis Laflamme, President, CEO & Director]

Thank you, Robert, and good morning to all of you. We are excited to speak with you today, again, to discuss the developments within the business. Let me also take a minute to greet the French-speaking audience. [Foreign Language] Let's move on to the highlights. On the commercialization side of our business, particularly the coronary artery disease or FFR and dPR sales, we continue to see strong commercial potential for our products despite the recent slowdown in the overall hospital-related procedures that we talked about last quarter, due to the reallocation of resources within these hospitals towards COVID-focused activities. In addition to the COVID impact on procedure, we also have a negative $400,000 impact of exchange rates, which negatively impacted our revenue growth. We are optimistic that the second half of fiscal year 2022 will show resumption in revenue growth. On the development side of our business, we remain full speed ahead and on track for an anticipated approval in the second half of 2022 for our next-generation medical guidewire, which we are calling SavvyWire. The guidewire is designed and developed for transcatheter aortic valve replacement or TAVR procedures. As a reminder to those new to the company, this is one of the fastest-growing segments within cardiology, with the market expected to reach $8 billion by 2025. In November, we completed a necessary 20 patients in-man clinical safety and efficacy study, utilizing the SavvyWire, with all patients successfully treated without any adverse effects. As a result, we submitted our clinical package for 510(k) clearance to the U.S. FDA at the end of December 2021. We also submitted for approval with Health Canada in December 2021. This was clearly a significant milestone for the team here at OpSens. I will expand upon this more in a moment, but we are now closer than ever to enter in the massive TAVR market with what we believe is the industry's most innovative ancillary products that will drive future revenue and strategic value for OpSens. Another key development this quarter is that we prepaid the entire balance of the term loan in the amount of $5.8 million, which will provide an annualized interest savings of approximately $250,000. Following the prepayment, we continue to maintain a very strong balance sheet with more than $32 million in cash at the end of November. So with that as a high-level overview, let's jump into more specifics. Starting with the OptoWire. Sales within our coronary artery disease business, or what we refer to as FFR and dPR, were $4.9 million during the first quarter, a decrease of 7% compared to $5.3 million in the year ago quarter. As I mentioned, the negative exchange rate impact of $400,000 and the continued impact of COVID on industry-wide procedure volumes negatively impacted our coronary growth. As we talked about last quarter, particularly in the U.S. market, there were impacts on the number of procedures in the hospitals due to the Delta variant wave that came through in our fourth quarter. And subsequently, there were staffing challenges impacting certain procedures. The levels of procedures did improve for November and in first quarter, but not at what I would call normalized levels. Overall, our sales in the U.S. were down 17% compared to the year ago first quarter. We are expecting a similar set of circumstances in the second quarter due to the Omicron variant, which could impact procedure volume. While this is not unique to OpSens and has impacted the overall industry, we are maintaining our focus on driving continued long-term adoption of OptoWire across the world, with a number of key initiatives including the continued addition of new customers through direct sales while capitalizing on our GPO contracts. As we have discussed, working with hospital systems and GPOs has been a key initiative, and we are optimistic about the progress made to drive market acceptance in the U.S. While still a relatively small amount, average quarterly unit sales to GPO grew 23% since we started with the new GPO accounts in Q2 2021. We opened 7 new accounts during Q1 2022 and have a commitment for an additional 6 accounts in Q2 2022. We are also planning to double the size of the sales team in the U.S. over the next 6 months. We currently are at approximately 10 territory managers and expect to be at 20 to 25 later this year. We believe the U.S. is an important market for OpSens and are focused on driving continued growth which should be bolstered by a return to more normalized hospital procedure levels. Outside the U.S., Canada was up 22% compared to the year ago period. While the impact in Canada from COVID is similar to that of the U.S., OpSens was recently awarded a multiyear contract as the main coronary pressure guidewire for the eastern part of the province of Quebec, which has been a nice growth driver for OpSens. Sales in EMEA were up 10% and Japan was also down. Overall, while we had some challenges during the quarter and less than optimal procedure volumes, we remain focused on growing OptoWire on a go-forward basis, which should be aided by a return to normalized procedure volume, which hopefully is soon. Transitioning to our business partnership for a moment, where several companies are integrating OpSens sensors into their products used in medical applications, including Abiomed's integration of our pressure sensor into their Impella pump. Sales to OEMs were $2.4 million, an historical quarterly high in Q1 2022 compared to $2 million in Q1 2021. This is consistent with our expectations given the large majority of this revenue is associated to Abiomed under a long-term supply agreement. Let's now transition to our Industrial segment. For the quarter, revenue was approximately $700,000 compared to $1 million in the year ago quarter and $700,000 in Q4 2021. As expected, Q1 2022 revenue was down due to the lumpy nature of the Industrial business. As a reminder, our Industrial segment leveraged our optical technology and knowledge through our wholly owned subsidiary called OpSens Solutions, offering key solutions in optical temperature, pressure, strain and other critical parameters for various industries, including aerospace, nuclear and power electronics. Similar to what I mentioned during our year-end call, the long-term opportunity in this segment continues to get more attractive as we are working on an increasing number of potentially significant projects where OpSens proprietary sensing component could be integrated into these critical projects. This includes the International EUREKA Network project, where OpSens and our partners are developing an optical fuel monitoring system for aerospace applications based on OpSens Solutions' patented fiber optic technology. The other key project is the International Thermonuclear Experimental Reactor, or ITER project, which is the world's largest nuclear fusion and scientific experiment project currently under construction in Southern France. As a reminder, OpSens was selected to supply our customer with fiber optic, absolute and differential pressure sensors that will provide critical information for accurate monitoring of their cryogenic valve boxes. In total, it is anticipated that there will be a large number of sensors at different phases of the ITER project, for which OpSens sensing technology will be applicable for this important project. The team at OpSens Solutions continues to do a great job, and I look forward to the continued leveraging of our proprietary optical technology through a wide variety of commercial applications. With that overview on our commercial base operations, let's jump into our lead development program for TAVR. As I mentioned earlier in the call, we completed the necessary 20-patient, first-in-man clinical study utilizing the SavvyWire in November. And in December, we submitted our package for 510(k) clearance to the U.S. FDA. We also submitted for approval with Health Canada in December as well. To those newer to the company, the SavvyWire is our new intelligent pre-shaped structural guidewire, which integrated -- with integrated pressure monitoring aimed at improving procedural efficiency and clinical outcomes by allowing multiple steps over the same device without exchange. The device has been designed to support the minimalist TAVR approach, which has been growing among structural heart physicians. With the SavvyWire, physicians can expect to diagnose and implant the valve over the same device while getting continuous and accurate hemodynamic measurements. The introduction of this novel and advanced guidewire that has the ability to both deliver the valve while allowing pressure measurement during the procedure is considered to be a significant benefit to the medical community, especially given the rapid growth in TAVR procedures. So with the solutions now behind us, we look forward to the responses from the various groups and are confident we will be looking at approval in end of the summer or beginning of the fall of this year for the U.S. market. We are also leveraging the recent positive data that was presented at the TCT 2021 Annual Meeting held in November, where SavvyWire was featured in 4 presentations by leading medical specialists, including Dr. Philippe Genereux, international cardiologist, world renowned for his innovative research and Director of the Structural Heart Program at Morristown Medical Center in New Jersey, who presented for the first time clinical data, validating the robustness of the OpSens SavvyWire algorithm in assessing pressure gradient before and after TAVR procedure compared to different diagnostic modalities. Next, Dr. Josep Rodés-Cabau at the Quebec Heart & Lung Institute in Quebec City, reported on his experience with OpSens SavvyWire as one of the lead investigators conducting our first-in-man study. Finally, Dr. Thomas Modine from CHU Bordeaux, France; and Dr. Hemal Gada from UPMC Pinnacle, Pennsylvania in the U.S.; and Dr. Reda Ibrahim from Montreal Heart Institute in Canada, joined Dr. Genereux in a panel to discuss the future of TAVR hemodynamics brought on by OpSens SavvyWire. The discussion focused on current unmet needs in the field of structural heart interventions, especially related to the need for a more efficient, safe and optimal way to assess procedural results during TAVR and the unique solutions the OpSens SavvyWire provides for these important medical procedures. We are honored these world-renowned cardiologists have presented and discussed the positive clinical data regarding the performance of our new SavvyWire. As a reminder, both Dr. Rodés-Cabau and Ibrahim were also primary investigators in our first-in-man study. The data from the TCT meeting has certainly increased the awareness and interest in our new TAVR product, which should bode well as we look to commercially launch the product later this year pending regulatory approvals. Before I turn it over to Robin for a more detailed review of the financials, let me quickly summarize, we were hit with a few negative revenue variances and COVID impacted procedure volumes. Despite the situation, we have been continuing to increase our customer base to prepare for growth during fiscal year 2022. Despite these near-term items, we remain focused on investing in the growth of the OptoWire business, with a plan to more than double the direct sales efforts in the U.S. later this year and continuing to leverage key industry relationships. Our industrial team continues to do a great job as we gear up for some exciting projects in the coming years. We completed our first-in-man study for TAVR and filed our 510(k) submission with the U.S. FDA and with Health Canada as well, positioning us to remain on track to commercialize our disruptive new technology later this calendar year. And finally, our balance sheet remains strong, allowing us to deploy resources to accelerate sales and marketing activities while increasing R&D investments to further capitalize on business opportunities ahead of us. I want to thank our employees for their hard work and dedication, especially in the face of less-than-ideal conditions we all face on a day-to-day basis. We have accomplished a number of very important milestones and developments, which I believe sets the foundation for long-term success for OpSens. Let me now turn the call over to Robin for a further review of the financial results. Robin?

[Robin Villeneuve, CFO & Corporate Secretary]

Thank you, Louis, and thanks to everyone joining us on the call. As we hit on a few of these items, I will try to add some additional details where I can. The company reported sales of $8.1 million during the first quarter. This was broken down as $4.9 million in our coronary artery disease lines of business, $2.4 million in our optical medical systems, which is mainly our agreement with Abiomed for integration of our pressure sensor into their Impella pump, and $700,000 in our industrial or OpSens Solutions segment. A few key notes. As we stated, procedure volumes, while improved in the November quarter compared to August, are still not at normalized levels and may yet again be impacted from the recent Omicron variant for the current February ending quarter. We are monitoring purchase levels actively. Our OpSens Solutions business continues to see an increase in orders. However, we do not have clarity on timing, particularly as it relates to the larger projects we mentioned. Our OEM revenues should maintain constant growth with normal viability. And finally, similar to what I mentioned last quarter, because the company's revenues are generated in U.S. dollars, Canadian dollars, euros and British pounds, fluctuation in the exchange rate affects revenues. For the 3-month period ending November 30, 2021, revenues were negatively affected by about $400,000 compared to the same period last year. When you look at gross margin mainly due by negative exchange rate impact, margins were 51% in Q1 2022 compared to 56% last year. We continue to believe we will see year-over-year increase in gross margin percentage due to higher sales volume and the related economies of scale combined with enhanced productivity. From an operating expenses standpoint, as planned, overall operating expenses increased by $1.7 million during the first quarter of fiscal 2022 compared to the first quarter of fiscal '21. The increase is largely explained by our investments in sales and marketing as we are ramping up our sales efforts to continue growing market share in the U.S., along with increases in our general and administrative costs pertaining to higher headcount and professional fees. As Louis explained, we are making additional investments in sales and marketing and research and development over the coming quarters to capitalize on the opportunities we have to accelerate growth of OptoWire and development of our SavvyWire. As a reminder, the company received CAD 500,000 grant from the Canadian government during 3 -- Q1 2021, which was not received in Q1 2022. EBITDA, which we define as net income plus financial expenses, depreciation of PP&E and right-of-use assets, amortization of intangible assets and stock-based compensation costs, was a negative $1.1 million in the first quarter of '22 compared to a positive $1.3 million in the first quarter of '21. The decrease is mainly due to higher sales and marketing and administrative expenses and a higher amount of Canadian grants received last year. Looking at net income. We are reporting a net loss of $2.1 million in the first quarter of 2022 compared with a net income of $600,000 in the year ago first quarter. The net loss is due to our investment to capitalize on business opportunities with additional spending in sales and marketing, R&D and others for operating expenses, increasing $1.7 million, as I mentioned. We also had CAD 500,000 during last year, which was not recognized in this year, first quarter. Finally, on the balance sheet, we ended November with $32 million of cash and cash equivalents. And as we mentioned, in September 2021 the company prepaid the entire balance of the term loan in the amount of $5.8 million, which will provide an annualized interest savings of approximately $250,000. With that, I will turn the call over to Louis.

[Louis Laflamme, President, CEO & Director]

Thank you, Robin. So thank you to all our investors for their continued interest and support of OpSens. We are working hard every day to capitalize on the opportunities ahead of us to position OpSens for long-term success. Operator, let me now turn the call over to any questions.

[Operator]

[Operator Instructions] Our first question comes from Rahul Sarugaser with Raymond James.

[Rahul Sarugaser]

So just a quick housekeeping question to start with. We noticed that there's been a little uptick in G&A as well as R&D. I'm assuming the R&D was because of the clinical trial that's now complete. Could you give us a little more sense in terms of how those upticks and how should we be thinking about those going forward?

[Louis Laflamme, President, CEO & Director]

Robin, you may take the details. But at a high level, I mean, we -- for R&D, this is in line with our expectations and plans. For administrative costs, I mean, usually -- I mean, it's based on the accounting rules that we get the full expense for the audit of the financial statements in the first quarter. So it's having some impact when you compare this with Q4. But -- and we have worked different projects for the long term that may have generated a little bit more legal costs. But overall, the structure has not -- has not materially changed from what we had in 2021 from an administrative standpoint, and we expect this to continue over -- or over the fiscal year 2022. Robin, is there any additional detail you would like to provide on this?

[Robin Villeneuve, CFO & Corporate Secretary]

No, no. I think you completed the -- all the details.

[Rahul Sarugaser]

Great. Great, thanks. So now turning to FFR. It's good to hear that there's been additional 7 accounts opened and that you're building up the sales team. So how should we be thinking about this translating into revenue going forward? And also, will the sales team be primarily focused on FFR and/or TAVR? And how should we be thinking about those time lines?

[Louis Laflamme, President, CEO & Director]

Okay. Well, first, the strategy that we have is that the sales team, the territory manager will sell both products. So we think there is great synergy because we are talking about, I mean, the same cath labs, often with the same doctors. So they will be focusing on both. And from a timing standpoint, obviously, before the end of the summer or the beginning of the fall, we don't expect the SavvyWire to be approved. So in that context, they will focus on the OptoWire. And I mean, we -- as I mentioned today, we are developing accounts. We -- somehow, we were hoping for more revenues, the volume in general in the hospital, I mean, the shortage and personnel, all those COVID-19 impact did not help. To your question, when you say, okay, how should we see this about -- from a revenue standpoint from -- for the rest of the year, we still expect that Q2 will suffer from a volume standpoint. I mean if we look so far, let's say, you all know that the Omicron had an impact in general on procedures that even are going beyond what we call elective procedure. And if I remind everybody, in the case of our FFR business, there are some cases that are elective, but there are some that are not. Historically, COVID has some impact. But right now, we saw a stronger impact just because of the shortage of personnel in the cath lab.But coming to your question, I mean, we -- we expect Q2 somehow to suffer for those conditions. Still, I mean, we expect to maintain the revenue at a significant level. But it's not going to show the growth that we've had historically. When we look for Q3 and Q4, we think we are doing the right thing. We are developing customers. So in that context, we expect to find growth at a more usual level in those quarters. And this response was referring to the coronary artery disease revenues. When we look to the OEM business, this is a different dynamic where -- there are some customers that are impacted. This being said, we expect to see growth in revenues in this business through the year. And I mean, when you look to the OEM business, where we have a large group of customers, very strong customers that are leaders in their application, it was an historical record for Q1 2022. And we can expect that Q2 and the second half of 2022 should also go in that direction. And just one -- last point on the industrial business. And I mean it's quite impressive what we see, but we do see a good volume of new orders that are coming in. So we expect to do fairly well for that business unit.

[Rahul Sarugaser]

Great. That's very helpful. And one -- just one last question. We have anticipated a response in Health Canada likely in Q2, FDA Q3. Are those -- do you still expect that those time lines are maintained? And you may not be able to answer this tough question, but I'll ask it anyway. Is there anything you're able to share around sort of M&A and our partnership interest in the TAVR program?

[Louis Laflamme, President, CEO & Director]

Okay. Well, 2 components in your question. So from a regulatory standpoint, let's say, we -- so far, right after filing, there was those initial screening steps that we think we met the expectation, the request rapidly. So in that context we feel that the progress, from a regulatory standpoint, has been very good between the last conference call and today. So we are very glad about this. From a partnership -- so just to complete on the -- for the regulatory plan, I mean there will be some interaction with the authorities. When we built the time line, there was assumption that there would be a certain number of rounds of questions. And this is a bit difficult to predict. So -- but the message there is that we think in the time line that we gave, we had appropriate, let's say, we were conservative and reasonable with the real expected time line where we can get the approval. It could be faster, but it could be -- it could take longer. But we think what we are giving to you today is really our best estimate. And from a partnership standpoint, what I can say at high level is that the TCT event was really impactful. It generates various inbounds or -- to us. The commercialization plan remains to place the SavvyWire in our portfolio, to drive this commercialization with our existing sales channels, being the direct sales force in North America, and the sales channels with distributors that we have in Europe and Japan. The company will assess other opportunities if they come. But right now, I would say that despite the real interest, we still believe that the plan is what we will execute.

[Operator]

Our next question comes from Justin Keywood with Stifel.

[Justin Keywood, Director of Equity Research]

Just had some follow-up questions on the opening comments. On the procedures expected to return to normal, is there not a larger backlog that's building here? I assume these procedures are just being deferred, not canceled. So when these procedures do return, would there be an acceleration of growth?

[Louis Laflamme, President, CEO & Director]

It's -- Justin, it's an interesting question. Obviously, the patients that were expecting to have a procedure and they got a cancellation, they don't feel any better after. This being said, I think the capacity of the hospital may be a limiting factor where they won't be able to catch up over a month or 2. So yes, there is a backlog of patients. And we expect this -- that the backlog will decrease over time. But we don't expect this to happen in one quarter.

[Justin Keywood, Director of Equity Research]

Okay. And to be clear, the return to growth that's expected around Q3, fiscal Q3?

[Louis Laflamme, President, CEO & Director]

Yes.

[Justin Keywood, Director of Equity Research]

Okay. That's helpful. And then on the sales and marketing expenses, increasing the team from 10 to 20 to 25 reps, if I heard correctly. What's the expected ROI on this investment as far as new sales levels that could be achieved?

[Louis Laflamme, President, CEO & Director]

I mean we are not ready to share with the Street the ROI that we expect. This being said, what we can say is that usually, there is a certain -- the first few months are not the most effective from a revenue standpoint. Usually, we see the impact of new territory manager happening more after, let's say, one quarter of training and developing relationship with the hospital or just reengaging the contacts those territory managers may have. So in that context, we are continuing to hire. And you will see revenues from those hirings, mostly starting in Q3 and mostly in Q4.

[Justin Keywood, Director of Equity Research]

Okay. Understood. And what's the incremental expense on the sales and marketing line for those additional hires?

[Louis Laflamme, President, CEO & Director]

You mean for the full fiscal year?

[Justin Keywood, Director of Equity Research]

Yes. However, it's best to describe it on a quarterly basis, I assume that we won't see the full expenses until Q4.

[Louis Laflamme, President, CEO & Director]

Exactly. I mean it will follow what I just said from a revenue standpoint, but maybe a few months in advance. But I mean, you -- we had $2.1 million in sales and marketing cost. And you can expect this amount to grow, let's say by, something like 30% to 40% gradually over the year.

[Justin Keywood, Director of Equity Research]

Okay. That's helpful. And then just finally, to clarify, the Health Canada response, that could happen in Q2, and then the FDA response, that could happen in Q3. Is that calendar this year?

[Louis Laflamme, President, CEO & Director]

Yes. Well, okay, just to be -- that's a good question and we'll be very clear. So what we said about Health Canada is that since they went through our files before granting us the approval to do the first-in-man study, we have some hope where the review could be faster. So in that context, at the last conference call, I was talking about an approval somewhere around May or June 2022. For U.S., we do expect or plan for a few round of questions, which would lead us to an approval somewhere in the September, October 2022 time frame.

[Operator]

Our next question comes from Scott McAuley with Paradigm Capital.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

One thing I'm kind of interested in is kind of expected catalysts or news flow kind of over the next 6 to 9 months. We have the SavvyWire approval, potentially late summer, fall somewhat expanding the sales force. But kind of between quarters, is there anything particularly that we should be looking for to kind of keep interest up over the next 6 months?

[Louis Laflamme, President, CEO & Director]

Sure. I mean, one thing that we do not necessarily talk in detail during this call, but OpSens is deploying a strategy to increase its market share in U.S. And this strategy includes developing some business with purchasing group, GPOs. So we already have under signature 2 significant contracts. We are in discussion for a certain number of new contracts. So it would be reasonable to expect that in the next few months, OpSens could announce at least one new major contract. In addition to this milestone, you can expect to see potential new contracts in the industrial business. You can expect also to -- you could see some publication of data or some work that has been discussed during the call. So potentially some clinical papers that would further support the SavvyWire consolidation. And -- I mean there is -- OpSens, as you know, we have a very interesting platform. So there is -- various opportunities that are in discussion right now. It's difficult to share with you any timeline, any schedule. But there is various discussions that could lead to positive development for OpSens that would be a value-creating event for shareholders.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

Absolutely. No, that's great, Louis. One other question around kind of international submissions for SavvyWire, either Japan or through Europe, do you have a kind of estimated time line for those?

[Louis Laflamme, President, CEO & Director]

Well, for Europe, EMEA, I'm confident that this will be done -- when we'll talk in our next conference call, it will be done. Actually, the file is very well advanced. There is different considerations that are slightly different than the requirements from the FDA or Health Canada. But this should happen very rapidly. For Japan, let's say, we -- I would prefer to withhold on this. It should also happen fairly rapidly. We've been in contact with the Japanese government since many times. So we are progressing in that direction. But when we do a step back, just to be very clear that, okay, for the coronary artery disease business, let's say that the market is very large in Japan, very large in Europe and very large in North America. In the case of TAVR, the split is not exactly the same. Where clearly, I mean, U.S. and Europe and Canada are key markets. Japan, it's a market that will develop. But right now, it's not, let's say, as significant in terms of representation of the worldwide impact. There is much more representation for Japan in the coronary artery disease than the TAVR opportunity.

[Scott McAuley, Analyst of Healthcare and Biotechnology]

That's great, that makes sense. And just lastly, I think you mentioned in some of the filings kind of restarting some clinical trials or launching new clinical trials throughout the year that had been kind of put on pause by COVID. Are those, kind of, related to the SavvyWire, kind of new data on OptoWire? Or is there any kind of information you can share on all those, kind of new clinical trials?

[Louis Laflamme, President, CEO & Director]

So the lines that you are referring in our documents, we're talking about different clinical activities that we do for the OptoWire. On the SavvyWire, we have the opportunity right now to talk with top [indiscernible] leaders in the field. So we are further defining what we will do once we get the approval. So right now, I would say most of the clinical dollars that are being spent are spent on the OptoWire.

[Operator]

[Operator Instructions] Our next question comes from Doug Miehm with RBC Capital Markets.

[Douglas Miehm, Analyst]

My question just has to do with the procedures that you're monitoring right now, or closely monitoring. Maybe, Louis, you could just tell us if -- when you look at how those procedures are changing, would you say that outside of foreign exchange, let's leave that out, in the United States, would you be over or under-indexing relative to the 17% or so decline that we saw in that market today?

[Louis Laflamme, President, CEO & Director]

Can you precise a little bit your question? I'm not sure I understand well, Doug, your question.

[Douglas Miehm, Analyst]

Yes. So you indicated that you're closely monitoring procedures that are going on in the marketplace, let's say, in cath labs, et cetera, et cetera. With that information in your hands, would you say that you're doing better or worse than the declines you're seeing in the cath labs from a revenue perspective?

[Louis Laflamme, President, CEO & Director]

Sure. We think we are doing better. So we think that -- and I mean, just -- we were looking to existing customers that we have, and those customers have been ordering very -- with very stable and growing orders since a good number of quarters. And suddenly, I mean, we saw a decrease. And when we talked with them, it's not related to any -- on such section about the product. In general, the feedback is incredibly positive about the OptoWire. So we think we are doing better than the market. We are opening new customers. The speed to open new customers could also have been better. I mean, COVID is not helping us to install new monitors or to add access to hospitals. But in general, I mean, we -- there was a lot of effort that was done in improving the execution of the North American team, and we feel that we are progressing well there.

[Douglas Miehm, Analyst]

Okay. Great. Second question just has to do with that panel that you described with, I believe that Dr. Genereux was running. Could you maybe walk us through what you felt were the top 2 or 3 points that came out of that and the potential implications have for SavvyWire once it's introduced.

[Louis Laflamme, President, CEO & Director]

Yes. Interesting question, and I know you always ask questions that are really appropriate where we are not necessarily exactly prepared for that. But in summary, what we learned is that -- I mean, the TAVR market is moving towards patients that are honestly in a moderate situation or less extreme than, let's say, most of the current TAVR procedures. And because of that, it will be even more critical to make the right diagnosis, to make the right call. So having the right information is crucial. The second thing that we learned is that -- I mean the trend around the minimally invasive approach, or a minimal TAVR, where you're trying to reduce the number of equipment, reduce the length of the procedure, reduce the stay at the hospital. All those things -- it's what the hospitals are trying to achieve. And the good thing is that we think that the SavvyWire can have a positive contribution on this. Because, let's say, it -- and of course, this remains to be proven on top of the first-in-man study. But we think that if you use the SavvyWire with all the functions, you can eliminate, let's say, a pacing lead, so you can eliminate equipment, you can eliminate access. So it means less time for the staff of the hospital, less risk for the patient, some direct cost savings. You can save the current guidewire that is being used to deliver the valve. And you can save other steps where after the valve implementation, the doctors are trying to understand if the valve has been successfully deployed. And again, that's an area where the SavvyWire can contribute. So in summary, what we learned from the hemodynamic roundtable is that -- okay, all doctors may not have exactly the same approach, the same practice to execute their TAVR. But we were seeing for all of them -- or they were seeing value proposition for the SavvyWire in all of their cases.

[Operator]

Our next question comes from Nicholas Cortellucci with M Partners.

[Nicholas Cortellucci, Analyst]

Just a couple of questions for me. Firstly, I was wondering if you guys could provide some color on how the OptoWire is progressing within your existing GPO contracts.

[Louis Laflamme, President, CEO & Director]

Yes, sure. What we can say is that -- let's say that there is approximately 40% of our accounts in the U.S. right now that are under GPO contracts. I mean, this is obviously a big figure, and we don't want to overstate that. There were some that were OpSens customers prior to our GPO initiative. But if we use the growth that we got since we started this process, we were able to grow the volume by 23% as an average.

[Nicholas Cortellucci, Analyst]

Great. That's helpful. And then the other one for me, on the TAVR side, what are you guys doing to ramp up production in terms of manufacturing of the units?

[Louis Laflamme, President, CEO & Director]

Well, we are working on this right now. I mean the approach -- and OpSens has a very good knowledge and experience with this. If we come back, I mean, the OptoWire, we started this from scratch without any manufacturing infrastructure. Today, we can use all this knowledge and experience and place this in the SavvyWire. So we -- during -- between today and the next conference call, we will have started the regular manufacturing of the SavvyWire in preparation for the launch. We already have done, I mean, multiple batches of production. And so we are working internally on adding the right equipment to meet the demand from our customers. We are also working very closely with our suppliers to make sure that they get a good understanding of the capacity, the volume that we need to ensure that, again, we will meet customers' expectations.

[Nicholas Cortellucci, Analyst]

Perfect. That's all for me. Congrats on the quarter.

[Operator]

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

[Louis Laflamme, President, CEO & Director]

Well, thanks to everyone for participating on today's call. We look forward to hopefully speaking with all of you again shortly. Thank you.

[Operator]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.