Uroplasty Inc.’s (NSDQ:UPI) performance finally “began to reflect the potential of the company” in the third quarter, CEO David Kaysen said during the company’s earnings call.
The Minnetonka, Minn.-based device company ramped up its sales force, won over five new regional Medicare carriers, and boosted global revenue by 14 percent to $3.5 million during the quarter, which ended Dec. 31.
U.S. sales were up 33 percent compared to last year’s third quarter, a result of a promising relaunch for one of its technologies and the withdraw of a competitor in another category, although the company still stayed in the red for the quarter.
Uroplasty reported a loss of $1.5 million, or 7 cents per diluted share, on its $3.5 million in sales during the three months ended Dec. 31. That compares with a loss of $386,736, or 3 cents per diluted share, on sales of $3.1 million for the same period in 2009.
“Certainly the most important development during the fiscal beginning efforts of U.S. field sales organization as they geared up for the relaunch of our Urgent PC Neuromodulation system,” Kaysen said.
The Urgent PC system won FDA approval for overactive bladder treatment in 2006 but later ran into sales and reimbursement problems. Uroplasty decided to invest in new clinical studies, and that data helped it win a unique reimbursement code, which went into effect Jan. 1. The system works by sending an electrical pulse into the spinal nerves that control bladder function. The treatment is an alternative to drugs and requires 12 weekly sessions lasting about 30 minutes each.
The product won Medicare reimbursement approval in November, and it’s since earned coverage by nine of the 13 regional Medicare carriers. Two of the remaining carriers have negative rulings that predate the more recent clinical data. One is covering the treatment on a case-by-case basis. National Government Services, a regional carrier for Connecticut, Indiana, Kentucky and New York, said in December that it would not cover the treatment.
Company officials are undeterred by that setback and say they are actively working on converting the remaining four regional holdouts.
“We did not expect to have all 13 sign up immediately. It can often take a year or more for carriers to adopt coverage of a new product or procedure,” Kaysen said. “I would characterize our coverage today of being very sound, very good and very positive for this stage in the launch process.”
As a result of the Medicare approval, the company ramped up its sales force, growing it from 19 reps in September to 31 in December. Most of those were added during October and November, meaning their full-impact won’t be seen until the fourth-quarter, Kaysen said. Still, the company boosted the number of Urgent PC customers from 185 in the second quarter to 236 in the third. The company may look at adding more sales reps gradually beginning in April or May, he said.
Uroplasty’s Macroplastique product line saw U.S. sales increase 64 percent, largely the result of a competitor ending sales of a similar product.
“There’s a lot of opportunity ahead for the company,” said Kaysen. “In the quarters moving forward we will be working hard to ensure successful execution of our plans to drive growth of Urgent PC and Macroplastique in the U.S., while planning for longer term growth drivers. Assuming that we execute our plans, we are optimistic about the future outlook for all of our stakeholders.”