ClearPoint Neuro, Inc. (CLPT) Q3 2017 Earnings Report, Transcript and Summary

Greetings and welcome to the MRI Interventions' Inc. Third Quarter Financial Results Conference Call. [Operator Instructions]. The comments made on this call may include statements that are forward-looking within the meaning of Securities Laws. These forward-looking statements may include without limitation statements related to anticipated industry trends, the company's plans, prospects, and strategies both preliminary and projected and management's expectations, beliefs, estimates, or projections regarding future results of operations. Actual results or trends could differ materially. The company undertakes no obligation to revise forward-looking statements for new information on future events. For more information, please refer to our Annual Report on Form 10-K for the year ended December 31, 2016, which has been filed with the Securities and Exchange Commission, and the company's quarterly report on Form 10-Q for the quarter ended September 30, 2017 that the company will file with SEC on or before November 14, 2017. All the company's filings may be obtained from the SEC or the company's website at www.mriinterventions.com. I would now like to turn the conference over to our host, Mr. Frank Grillo. Thank you. You may begin.

Alright, thank you, Tim. Good afternoon, everyone. Thanks for joining us for the Q3 2017 earnings call. With me for today's call is Hal Hurwitz, our CFO. And behalf of the management team and employees of MRI Interventions, we appreciate your interest in our company and for those of you who are shareholders we thank you for your support. So, first thing is first. This will be my last call as MRI's CEO as we announced a leadership transition a few weeks ago. After over a three years of a long-distance commute, I've decided that it's time to make this transition at this point. I do knowing that the company is in the best shape it's ever been. Adoption is growing, interest, it's high, and we are in a better position financially than at any time before. That made this decision to step down more difficult as I strongly believe the company is about to gain momentum and really accelerate on its growth trajectory. Regardless, this was the right time for me personally and the write time for the company to enter into this transition. We're very pleased we've found a strong leader ready to the home and bring the enthusiasm and capability to the roll that is so necessary as a CEO for a small public company. Our new CEO, Joe Burnett, who officially starts tomorrow is with us on the call today. Before I go through the quarterly results, let me turn it over to Joe for a few introductory comments. Joe.

Thanks Frank for the introduction and thank you to all of the investors on the call. As you can imagine, I am very excited to join the company. I very much look forward to capitalizing on the existing install base as ClearPoint systems to further increase procedure growth, as well as converting our large and growing pipeline of prospective sites into ClearPoint centers of excellence. During Frank's tenure as CEO, the Company has successfully commercialized its platform, has brought ClearPoint into the mainstream of neurosurgery procedures and funding the company to allow it to set sights on strategic objectives. This is an exciting time at MRI Interventions, and I look forward to working closely with our team to create further shareholder value through continued growth and further strategic initiatives. Having simple as 18 months as part of Philips neurology business, I understand the markets that we plan in and the patients that with severe disorders that we intend to help. Over the next 90 days, I look forward to meeting with the extended MRI team, meeting with our value customers and many of you on the call to continue our customer focused approach to both product development and service delivery. The patients that we serve has suffered rapid and severe losses of their quality of life. And our goal is to make MRI's products and our team an essential part of this truly life altering therapies. If we do right by our patient, then I had no doubt our company's success will continue and I can't wait to get started tomorrow morning. So back over to Frank.

Alright, thanks Joe, and welcome aboard. Alright, now I'll turn to the quarter results discussion. We had a solid quarter in Q3 with many good accomplishments as we continue to grow utilization of the ClearPoint system. Total revenue increased 6% year-over-year to $1.7 million. Importantly, disposable sales increased 12% as ClearPoint utilization continue to rise. We sold one capital system and started two new evaluation accounts. Overall, we grew the installed base of ClearPoint Systems to 52 centers in the U.S., including our seventh top-ten children's hospital, which I think is a clear indication of the value of our technology. Capital sales are lumpy quarter-to-quarter and with the reason revenue did not accelerate still further as a couple of accounts we expected to convert from evaluations to capital sales were delayed in their closing. These timing issues are not a typical at our hospital sites, we do expect to close in this quarter and both sites are enthusiastic about their use of ClearPoint going forward. We're ensuring the pipeline is filled traditional evaluations can convergence in the fourth quarter and future quarters beyond that. For indicative of our overall growth, revenues for the nine months year-to-date, increased 39% to $5.7 million and we are feeling confident we'll end the year with over 35% sales growth compared to 2016. We also demonstrated sustained improvement in our gross margin increasing to 60% compared with 54% in the same period of 2016 and about even with last quarter. We completed 161 procedures using the ClearPoint NeuroNavigation system, an increase of 26% versus Q3 a year ago and down one procedure from our record set in Q2 of this year. The summer started out slowly in July, August picked up really nicely, although we did miss a few cases due to the storms in the Gulf and Florida. Since then September and October have been very good and November has started stronger than any month in our history. We continue to feel confident regarding long term growth in procedures regardless of its slight dip in Q3 which we believe is primarily seasonal. In fact, we're hired three additional clinical specialist since the beginning of Q3 and expect to hire a couple more in Q1 to supported expected continued growth in procedures. With the healthy balance sheet and growing procedures, we are seeing a nice increase in the number of qualified people reaching out to joint our company. Cash used to fund operations was $1.7 million compared with $1.4 million a year ago. Q4 was a little bit higher than expected following a Q2 cash use of $1.1 million that was a little bit lower than expected. As Hal will address in more detail, there is underlying factors that account for both quarters' burn rates. But looking at the longer term, the year-to-date burn rate of $4.2 million results an average 2017 quarterly burn of $1.4 million and I expect will continue to see ongoing improvement on that cash burn level which is much better than the cash burn level in 2016. In additional of the solid financial results, we made nice progress on our product development efforts this quarter. We produced working prototypes of our intra-cerebral hemorrhage product which is now entering extensive bench testing. The surgeons have mailed, have been great to work with and was also spent a lot of time and effort with them to streamline the workflow in scan sequences in the MRI, so there is going to simple efficient procedure in the MRI suite once we get to market. I am very excited about this opportunity as success opens a new addressable market for MRI one that aligns to our existing hospital centers of which 95% of our adult hospital centers have a stroke program. We also started our fall treat show season with a One Room-One Procedure laser ablation Practical Clinic during the Congress of Neurological Surgeons in Boston. And we had a good show overall. Laser is a rapidly growing market and one where our ClearPoint system has compelling benefits to the surgeon. We're seeing excellent adoption in this market and are very pleased with our progress in laser cases. In the next few weeks, we have the SNO-SCIDOT Drug Delivery Meeting in San Francisco, the AANS Pediatric Section Meeting in Houston and the American Epilepsy Society Meeting in Washington DC. This makes for a busy Q4 and numerous opportunities to meet with current and potential users of our technology. We had a successful shareholder meeting back in October, where we received support to expanding employee option pool. I can tell you that this was very much appreciated by the employees and add storability to recruit top talent into the organization. In addition, we saw a two members of our Board of Directors decline to stand for reelection. This was planned over the while ago and they left our board on excellent terms and in support to the company. We also believe our board is not more appropriate size and other than the addition of Joe Burnett, we do not anticipate adding additional board members at this time. And of course, big news this quarter, we announced the appointment of Joe Burnett as Chief Executive Officer affective tomorrow and we look forward to him joining the team. Okay, with that I'll turn over the call to Hal for more detail on the financial performance.

Thank you, Frank. Before I get into the numbers, one modification made to the forward-looking languages that we did file the Form 10-Q for the quarter ended September 30 today. So that 10-Q is available. I will begin with the discussion with the results for the third quarter ended September 30, 2017. Total revenues were $1.7 million for the 2017 third quarter, an increase of $101,000 or 6% compared with $1.6 million for the same period in 2016. This increase was due primarily to an increase in our disposable product sales. ClearPoint disposable product sales increased to $149,000 or12% to $1.4 million for the 2017 third quarter compared with $1.3 million for the same period in 2016. This growth in disposable sales reflected as Frank mentioned a 161 ClearPoint procedures performed in the 2017 third quarter. ClearPoint reusable product sales were $208,000 for the 2017 third quarter compared with $309,000 for the same period in 2016. Reusable products consist primarily of computer hardware and software bearing sales prices that are appreciably higher than those for disposable products and have historically fluctuated from period-to-period. Gross margins for the 2017 third quarter were 60% compared to gross margin of 54% for the same period in 2016. The increase in gross margin primarily reflected decrease charges for inventory obsolescence and a favorable mix of product sold, comprised of a greater share of disposable products during the 2017 third quarter relative to the same period in 2016. Research and development costs were $590,000 during the 2017 third quarter compared to $691,000 during the same period in 2016, a decrease of $101,000, or 15%. The decrease was due primarily to reductions in software development and intellectual property costs, partially offset by an increase in new product development costs. Selling, general and administrative expenses were $1.8 million for the 2017 third quarter as compared to $1.9 million for the same period in 2016, a decrease of $120,000, or 6%. This decrease was due primarily to reduced financing costs and stock compensation expense, which were partially offset by increased recruiting expenses during the 2017 third quarter, relative to the same period in 2016. Our loss from operations for the three months - of the 2017 third quarter improved $382,000 or 22% to $1.3 million as compared with $1.7 million for the same period in 2016. Now let's turn to some non-operating areas effecting comparability between the third quarter of 2017 and the same period in 2016. In August 2016, we recorded a debt restructuring loss of $933,000 resulting from amendments enter into its two holders of our 2014 junior secured loans payable. These note holders then converted $1.75 million of aggregate principal balance of their notes into equity. In connection with our private placement of equity securities in September 2016, there was no debt restructuring in the 2017 third quarter. During the 2017 third quarter and the 2016 third quarter, we recorded gains of $110,000 and $324,000 respectively, resulting from changes in the fair value of derivative liabilities, these derivatives related to the issuance or warrants and 2013 was down around price protection and to a note amendment entered into with our note holder Brainlab AG which allowed for part of the Brainlab now to be converted in the event of a public offering of our stock. Net interest expense during the 2017 third quarter was 211,000 as compared to with interest expense of $240,000 for the same period in 2016. This represents a decrease of $29,000 or 12% which was due to the reduction of principal balances resulting from the September 2016 conversion into equity of the $1.75 million principal balance of the notes previously discussed. Net loss for the 2017 third quarter was reduced to $1.4 million as compared with $2.6 million for the same period in 2016. Now let's discuss our results for the nine-month period ended September 30, 2017. Total revenues were $5.7 million for the 2017 nine months period, an increase of $1.6 million, or 39% compared to a $4.1 million for the same period in 2016. This increase for the nine-month period was due primarily to an increase in the companies disposable and reusable product sales. ClearPoint disposable product sales increased $1.1 million, or 33%, to $4.5 million for the 2017 nine-month period, compared with $3.4 million for the same period in 2016. This growth in disposable sales reflected a record 469 ClearPoint procedures performed during the 2017 nine months. ClearPoint reusable product sales were $923,000 for the 2017 nine-month period, compared with $608,000 for the same period in 2016. Gross margin for the 2017 nine-month period was 61%, compared to gross margin of 52% for the same period in 2016 also due primarily to the effects of relatively greater sales in production volumes in 2017 relative to the same period in 2016. Research and development costs were $2.2 million during the 2017 nine-month period, compared with $2.1 million during the same period in 2016, an increase of $133,000, or 6%. The increase was due to the upfront payments under the previously announced development agreements with the Mayo Clinic and Acoustic MedSystems, which were partially offset by reductions in software development and intellectual property costs, and compensation expenses. Selling, general and administrative expenses were $5.7 million during each of the nine-month periods ended September 30, 2017 and 2016. Increases in personnel-related costs due to headcount increases in our commercial team were offset by decreases in professional fees and stock-based compensation costs. Our operating loss for the 2017 nine-month period improved $1.2 million, or 21% to $4.5 million, as compared with $5.7 million for the same period in 2016. Turning to non-operational items. During the 2016 nine-month period, we recorded a net loss from debt restructuring of $812,000, arising from the restructuring of the note payable to Brainlab and the notes payable originally issued in 2014, they were subsequently converted as we previously discussed. There was no debt restructuring in 2017. During the nine months ended September 30, 2017 and 2016, we recorded gains of $48,000 and $748,000 respectively, resulting from changes in the fair value of the derivative liabilities. Also during the 2017 nine-month period, we recorded other income of $7,000, as compared to other income of $210,000 recorded during the same period in 2016, representing a decrease of $203,000, or 97%. This decrease was due primarily to grant income from a U.S. federal agency related to a project in process during the 2016 nine months period, which was discontinued by that agency later in 2016. We have not since undertaken any additional such projects. Net interest expense during the 2016 nine-month period was $637,000, as compared to interest expense of $836,000 during the same period in 2016. This represents a decrease of $199,000 or 24%. This decrease was due to the reduction of principal balances we previously discussed. Reflecting the effects of these non-operational items, net loss for the 2017 nine months period improved to $5.1 million, as compared with $6.4 million for the same period in 2016. Now let's briefly turn our attention to the balance sheet and cash burn particularly. During the 2017 third quarter, cash used in operating activities increase to $1.7 million, as compared to $1.5 million during the same period in 2016. This $200,000 increase in burn over the 2016 third quarter was due primarily to growth of $80,000 in accounts receivable consistent with growth in revenues during the third quarter of 2017 relative to 2016, and we are planned to increase an inventory safety stock levels during the 2017 third quarter that resulted in inventory increase in $158,000 over the same period in 2016. Looking at cash burn from a sequential quarter perspective, the $1.7 million used in the 2017 third quarter for operating activities represented a $600,000 increase from the 2017 second quarter, which experienced an unusually low $1.1 million of cash for operating activities. This $600,000 increase in quarterly operational cash burn resulted from several factors. A shipment in the third quarter of a large order to Brainlab, for which we received a cast payment in advance in the second quarter. An increase of accounts receivable from the second quarter to the third quarter, due primarily to the timing of capital sales and collections within each quarter. And lastly, the increase in safety stock inventory in the third quarter. In sum, there are two important points to remember regarding our cash burn for the 2017 third quarter. The first point is that the increase burn was primarily related to balance sheet fluctuations unique to the quarter. And the second point is that the year to-day cash burn in 2017 for the year-to-date period is nearly $500,000 less than for the same period in 2016, due primarily to the improved operational results I noted earlier on this call. With that I will now turn the call back to Frank.

Alright, thanks Hal. To close my comments, I would like to highlight a recent story about a patient who recently benefited from the use of the ClearPoint system. This patient was suffering from a hypothalamic hamartoma kind of HH which is a rare tumor like malformation in the brain, while generally benign, they can be the cause seizures similar to those seen in epilepsy. This patient was from Greece and was suffering from frequent seizures. For his treatment, he wanted minimally invasive therapy and he learned about laser ablation for this kind of tumor. After doing some research, he landed at one of our sites were the doctor was able to successfully target the lesion with ClearPoint. The tumor was small and very deep, so the surgeon was very happy to have ClearPoint for the navigation. The surgeon took extra care to carefully confirm and adjust the trajectory to maximize distance from blood vessels, while also avoiding mammillary bodies which are related to memory all of which were in close proximity to the tumor. The ablation went very well, and the patient stayed just two days in the hospital. As a token of his appreciation, he gave the surgeon a small statue of hypocrites which seems like a perfect gift for such an outcome. To our knowledge, he has returned back to Greece and is doing much better. With that I will turn to the operator to open up the call for any Q&A. Operator?

[Operator Instructions] Our first question comes from the line of Chris Toledo of SoundView Technology Group. Please proceed with your question.

Hey guys congratulations on another good quarter. I was wondering if you could share with us some additional metrics about ClearPoint use, you mentioned you've now got I think 52 systems out there. And I'm curious if you could share with us a little bit about, how many of those systems are doing let's say over 10 procedures a quarter, how many are just doing ones and twos. Just to give a sense of what the utilization is and maybe if possible some comparison with maybe where those numbers were a year ago?

Okay. Thanks for calling in Chris, good to hear from you. Let's see in terms of utilization by site, we're seeing our average utilization per site continue to grow, so we're pleased about that. The utilization continues to be primarily, what I would describe as kind of a 30:70 rule, our top 30% of accounts do about 70% of the procedures. We love these children's hospitals that have adopted ClearPoint, they clearly see the value in it, but they typically are not real high volume. So, we do have a number of children's hospitals that are in the low volume one, two quarter kind of range. And then we had two, four, six, eight, ten, twelve or thirteen sites that were over five this quarter which is I think an all-time high for his or close to it and we have four that did more than ten a quarter which is the first time we've had four in 10 per quarter category. So continued utilization we've seen over the last year and for us continue to grow utilization as well as continuing to grow the install base continues to be kind of our do prong priorities. Hope that helps.

Yeah, that's definitely helpful and I think I can echo investors elsewhere in that. We love those kind of metrics. So, as you guys plan together on what you want to share, we love to have great metrics to kind of gauge that continued progress of ClearPoint which is obvious and year-over-year growth rate reasonable. So, thank again, I'll step up the podium for the next one.

All right. Thanks Chris.

[Operator Instructions] Our next question comes from the line of Scott Billeadeau of Walrus Partners LLC. Please proceed with your question.

Hi, guys, I know you mentioned that you had a couple of evaluations that didn't quite convert and that you had to two new evaluate, I mean that's something you're going to continue, how many evaluations are out there right now and as you go forward certainly what's the final look like again as you are certainly be like to kind of get a feel for what what's out there, what's come and what's the pipeline look for maybe a few could give us any color on that that would be great?

Sure. Yeah, thanks for calling in. So first of all, let me make sure that my lingo is consistent here. When I say that we had a couple of evaluations that did not convert, I mean they did not convert into sales in that specific quarter. Both those sites are still committed, and we're told that we are in the capital cycle for purchase order, so we do expect both of those two sides to come through, it's just we expected them to come through last quarter. So still feeling good we're going to get those sales and it's not at all that they decided they didn't want to do ClearPoint, we do expect to get those sales. Any given time, I would say we have anywhere from 6 to 8, 6 to 9 evaluations outstanding that are in process and that's the number that we're always adding a couple to each quarter and then as they execute the purchase orders for the equipment at the end of the evaluation period, it comes out the other end. And I think that's been a pretty consistent number for a while somewhere in the 6 to 10 range and we continue to add a few and close a couple out each quarter. In the last year, I can think of only one where we win in on an evaluation and it just does not look like it's going to precede to capital sale. So, I still think our hit rate is very, very good, not perfect but very, very good.

And with that 6 to 9, I mean is there the comfortable capacity, do you have capacity to do more, is it a capital issue because you need to place a system. If you give us - 12 months from now, should we still be thinking 6 to 9 or 6 to 10 evaluations going on or is it something you want to ramp up or not?

Yeah. I would say we definitely have the capacity for more than that and it really comes down to how much time does an individual sales rep have to manage this process. So, we have four sales reps in the U.S. right now, we are looking to add to that number. And as we add reps, we'll we would expect to add to the evaluation pool and does the capital sales as well. However, it is a very specialized area and, so we do know most of the accounts that we need to follow-up on, it's just a matter of getting to them given the size of our sales territories. Year from now, I would expect the evaluation pool to be bigger and that expect us to be closing more capital sales per quarter but it's a little bit hard to forecast out that far.

Yeah. And then just one other question as you - with R&D as you're developing the stroke opportunity. Can you maybe give us a little sense for kind of where that is and how that process would work in terms of or would it be quite similar to making sales as you do now evaluation and that go through have them execute, maybe give us a little sense for where that opportunity is at this point in time?

Sure. And I'm excited about the opportunity. It's - the thing I really like about this program is it's very synergistic both commercially and technologically with our existing product lines. So, for stroke for intracerebral hemorrhage, so again this is evacuating the clock that is formed after a hemorrhage in the brain to and you want to do that within three days of the stroke itself if not sooner, I believe the protocols are stabilize the patient for 12 to 24 hours and try to evacuate the clock within the next 24 hours. And again, this is post hemorrhage not in an ischemic stroke. So that is a procedure that is done in major stroke centers. Most of our sites other than children's hospitals, children's hospitals typically are not stroke centers, virtually all the rest of our sites are so they've already got a major stroke program which means they understand these protocols, they see these patients and they have the surgeons to do these procedures. In terms of the sales cycle, I would expect that A, for if we already installed on an MRI system in an account, there's really not much to the capital sales cycle at all. We will start out utilizing the same software we have now and be able to proceed in that manner. We already can anticipate a couple different generations of this product as we go, we'll start out with something that's completely similar to what to our software now, we can envision a few improvements to it to simplify it and put out an additional update to our software, so that people can be more selective on how they use it. And it really, it's turning into a nice roadmap for product development. We - as I mentioned, we're getting into extensive bench testing of the prototypes now. FDA submission should be sometime at the end of Q1 or beginning of Q2 and then this is a 4, 5, 10 cases, so there's probably a 90 to 150-day turnaround to get that through the FDA at which point would begin doing initial human use with the product. So just laying out all the details of those plans now.

Great, okay, appreciate it. Thanks so much.

Thanks for the question. Bye, bye.

Our next question comes from the line of Jeb Terry of Aberdeen Asset Management. Please proceed with your question.

Hello, Frank.

Hey there Jeb. How are you?

Great. Great, thanks. Could you help us updates more on that progress in laser ablation particularly given the safety protocols that were there and then what you call, I think you call it One Room-One Procedure efforts and the interest you had in the recent conference, just curious about penetration in that marketplace, how many of the hospitals are you doing and what do you see in the future for that? Thanks.

Great. As always Jeb, it's a lot of questions in one sentence. So, let me go through it. So, for one thing for other listeners on the call, Jeb is referring to a paper that came out earlier this year Risk Management doing later ablation cases where the fiber is placed in the operating room, the patient is wheeled down the hallway and inserted into the MRI while under general anesthesia and the ablation is performed. That's the traditional way of doing laser, with our system the entire procedure is done inside the MRI, you get rid of the patient transport, you get rid of the risk of having a fiber sticking out of someone's head as they wheeled down the hallway. And the paper that came out in April did a good job of outlining the risks of really either approach and how much simpler it is to utilize ClearPoint and that's what we call our One Room-One Procedure approach to laser ablation. We did see a nice pickup in laser cases, in absolute cases and in particular in a percent of our total cases this quarter. I attribute that to two things, one, I think we did have a very high-volume DBS surgeon who - couple high volume DBS surgeons who are on vacation the first two weeks of July and frankly I think that hurt our DBS numbers. But we also saw a significant pick up in absolute numbers of laser this quarter over prior quarters, so we were at about 40% laser cases which I think is all-time high for us in terms of mix for laser. So, we're definitely seeing that looking at 40%. So, we're definitely seeing continued uptick in lasers. We've also seen a couple of our traditional high-volume DBS accounts start doing laser ablation now too which is just great because we're already in there, it doesn't require another capital sale, but they do utilize disposables for those procedures and it's a very synergistic way of growing utilization within an account. So, I feel like we've seen a little bit of a change in momentum in the market overall for laser and also in our adoption just in this last quarter or two where both laser companies seem to have recommitted to the market and making good progress themselves.

Great. Thank you for that detailed answer. And what about what about the drug delivery opportunities?

Well, drug delivery, I think anyone who follows MRI, I think should also be following Voyager Therapeutics who announced some very promising results. I think they had a couple of announcements in the last few months about the results of their Phase 1 studies, where they're utilizing the clear point system and our SmartFlow cannula to inject their treatment for Parkinson's into the putamen. And so, they are wrapping up their Phase 1 studies and they publicly stated they are looking to get their Phase 2 studies up and going in the first half of next year. And so, I think it's the first time to put that out publicly which I was encouraged to see. And that could be a significant pickup in patients that they started rolling. So, we're very pleased to see that program moving forward, safety profile still appears to be excellent and indications of efficacy are also quite strong. We've had conversations with a couple other folks in drug delivery this quarter. Nothing to really talk about publicly, but at least one more Parkinson's program and then one in some gene therapy programs for a couple of rare childhood diseases have approached us about using our products. So all-in-all, we're feeling good about those. And then the last one I would mention is a program at Memorial Sloan Kettering that was surgeon sponsored has wrapped up their Phase 1 study, I believe it's wrapped up and now they're moving forward towards Phase 2 through the pediatric brain tumor consortium and we're going to support that study financially support it as well. And so that's an exciting one for pontine glioma in children. And so, we're just more and more activity there and next week, we have bi-annual meeting every two years that is focused - it's at the society of neurological oncology and this is a subsection of that meeting, that is focused on drug delivery to the brain and we will be attending that next week and getting updates on all of these programs and of course looking for additional partnerships while we are there. So, looking forward to that meeting next week.

That sounds very encouraging. Thanks very much.

Alright, thank you, Jeb.

Our next question is a follow-up question from the line of Chris Toledo of SoundView Technology Group. Please proceed with your follow-up.

Yeah. Thanks. I actually had a follow-up to Jeb's question on drug delivery. Just to clarify there's obviously the home run benefit which is ultimately some of these gene therapy drugs for the brain get it get approved. But I wonder if you could also update us on are there any trials or trial activities go on and could you talk about how they impact the company's P&L?

Well, keeping in mind Chris that during these trials these clinical trials where they're utilizing our system and our products, we are getting paid for the products right now, I mean our products are 510-K cleared, so the hospital buys them in order to participate in the trial. I think the big question is for instance if Voyager goes into a Phase 2 trial next year, how many patients will that turn into. I mean their Phase 1 efforts have been I think it's 18 patients over almost two years, so it's never been a huge patient volume. Their Phase 2 trial and I don't know if they publicly given out a target for how many people will be in that, but it will obviously be more than 18. And so, I think it might even be like 50 take a pause and then do another 100 or something like that although again I don't know if they publicly said exactly what it will be. So, if they couldn't roll over two years say that's actually a nice pickup in cases for us right there. As others move into their Phase 1 then it becomes pretty exciting to get more and more of these going. Drug delivery procedures can be very lucrative procedures for us if they're bilateral and they're doing an injection on each side of the brain. And then even if they're unilateral and they're just doing one injection that can also be a pretty good procedure for us in terms of revenue per procedure. So overall, drug delivery in terms of driving cases this quarter and next quarter, it's absolutely something we'd love to have but it's not a huge driver of our procedure volume yet. But it's certainly indicative of where we can go to as a company.

Okay. Yeah that's very helpful context. Thanks, Frank.

Okay.

[Operator Instructions] Our next question comes from the line of Jeff Porter of Porter Capital Management. Please proceed with your question.

Yeah. Could you give us some sense what average selling price would be for disposables in a procedure for a drug delivery and is that greatly different from a laser ablation procedure?

Sure. Thanks for the questions, Jeff. Yeah absolutely. So, I'll go through the whole gamma in fact, so laser ablation procedure right now is about revenue per procedure of about $5000, that's a unilateral procedure meaning they're doing the surgery only on one side of the head and that is probably going to say 95% of our laser ablation procedures are unilateral. There are a few unusual that can be bilateral but generally they're unilateral. Now deep brain stimulation on the other hand is typically a bilateral procedure. So, they're inserting a lead on each side of the head for the stimulation to address the symptoms of Parkinson's that turns into an ASP revenue per procedure probably around 9,000 or 9,500 for us as are just utilizing two sets of products rather than one. And our products they tend to come in kits because there's the SmartFrame itself had a number of accessories, so they use two kits and one drape instead of one kit and one drape in laser, so much higher ASP. Drug delivery cases, we've experienced drug delivery cases that are both unilateral and bilateral. The difference though is there is additional product used in the form of our SmartFlow cannula. So that is the injection device itself that works with our SmartFrames so that and that we have an ASP on that of about $1,800. So, a unilateral drug delivery would be about 5,000 for the SmartFrame and drape plus 1800 for the cannula for total of about 6,800. A bilateral drug delivery case tends to be a very lucrative case that $12,500 to $13,000, it is two SmartFrame kits and two cannulas. The Voyager cases to date have been bilateral some of these other cases for instance the pediatric trial I mentioned those are unilateral. And looking at the trials coming down the pathway I'd say half are going to be bilateral and half will be unilateral to give you a sense.

Yeah, it's very helpful.

Okay.

There are no further questions over the audio portion of the conference. I would now like to turn the conference back over to management for closing remarks.

Alright, operator. Thank you, Tim. So, as you can see we're very excited for the final quarter of the year. Not only do we foresee further growth in procedures across our user base, we continue to launch new sites which are beginning in own ClearPoint programs. We're very excited to have Joe Burnett come on board and I am committed to a smooth transition which has already begun. I leave the company as significant stockholder and have full confidence in the company and in Joe. We also have exciting opportunities in the year ahead. Our software 20 project and our ICH projects are progressing nicely, and recent feedback has been very promising on both of them. These will give us the opportunity to enhance and expand our product offerings and capitalize on the technology we've developed over the year. With a leadership transition underway, we will focus our attention on customer facing meetings this fall as well as a limited number of investor meetings. We are scheduled to present at the LD Micro Small Cap Investor Meeting in Los Angeles in early December and several meetings throughout the spring where Joe will have an opportunity to meet with current and potential investors in attendance. If you have interest in meeting on these or other events in the future, please contact Matt Kreps at Darrow Associates, our Investor Relations firm using the contact information on our press release. They will work to ensure you are added to our meeting rosters at these or other upcoming events. As always, we appreciate your support for the company and thank you very much. Good afternoon.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time. Have a wonderful rest of your day.