Dr. Randy Mills is co-founder of Elutia (NASDAQ: ELUT) and has served as CEO since June 2022.
Dr. Mills is an internationally recognized expert in regenerative medicine who led three companies through IPO, creating more than $1 billion in shareholder value.
He ran some of the nation’s most respected medical institutions, including the $5.5 billion California Institute for Regenerative Medicine and Be The Match.
He also serves as a Command Pilot for Angel Flight, transporting patients in remote locations to treatment facilities.
Dr. Mills holds a Ph.D. in Pharmaceutical Science and a B.S. in Microbiology from the University of Florida and completed an internship in Clinical Pathology at Shands Hospital at the University of Florida.
The CEO of Elutia (NASDAQ: ELUT) has a specific plan and the experience to execute upon it.
“I have a Ph.D. in drug discovery and development from the University of Florida.
More specifically, my research was centered on the creation of drug-eluting biologic constructs to address infections in orthopedic surgery.
I was a founder or CEO of three public companies, starting with a company called RTI Surgical, a company I helped start with Jamie Grooms at U.F., and was ultimately sold to a private equity firm for $440 million.
After 10 years of growing RTI, I went on to Osiris Therapeutics as CEO, took them public, and led a team that really created a commercial revolution in the use of biologics in orthopedics and wound care.
Osiris was eventually sold to Smith & Nephew for $660 million.
And so that was the first 20 years of my career.
From there, I went into public service and ran some of the country’s most-respected medical institutions, including the California Institute for Regenerative Medicine, or CIRM, and Be The Match, an organization that handles all bone marrow transplantation in the United States.
And it was during that time that I co-founded Elutia with Kevin Rakin.
I came in as CEO last year, mostly because we saw an opportunity to create another revolution in the industry, by returning to where I started my career with drug-eluting biologics.
And I think this is our biggest opportunity yet…
I believe in pretty serious market discipline.
We won’t take our [Elutia (NASDAQ: ELUT)] technology into a market where we don’t see it offering a pretty clear and obvious value proposition, to either the patient, the physician, or the payor.
In the case of CanGarooRM, Medtronic has actually done a beautiful job of demonstrating the market demand for a drug-eluting envelope in the pacemaker and internal defibrillator space.
We estimate that they have about $300 million in sales of their antibiotic-eluting pouch.
They’re the only company with an antibiotic-eluting pouch on the market right now in the space.
But their pouch is made of a synthetic polymer that dissolves and degrades in the body over time.
Our data demonstrates that if you make that pouch out of a natural biologic material instead, it will remodel into the patient’s own healthy tissue.
That leads to less scar tissue being formed around the device.
It makes things like pacemaker change-outs easier for the patient and the physician.
We also have a lot of market data that shows that while physicians like the idea of using an antibiotic pouch, for the remodeling benefits I mentioned, they would much rather use a pouch made from a biological material versus one made from a synthetic material that dissolves in the body.
We view this market dynamic as highly advantageous for us.
There are currently only four primary players in the pacemaker industry.
Medtronic has about 35% of that market and offers its own antibiotic envelope.
We think the addressable market for antibiotic-eluting envelopes is about $600 million in the U.S. alone with the majority of that untapped.
We plan to introduce CanGarooRM into this market, not as a follow-on or as a me-too, but as a superior product.
We estimate that we will essentially have the remaining 65% of the U.S. market as white space without any direct competition.”
The CEO of Elutia (NASDAQ: ELUT) emphasizes the superiority of his company’s proprietary technology over that of Medtronics (NYSE:MED).
“Our proprietary biomaterials have three key advantages.
First, they’re excellent at device stabilization.
For example, with a pacemaker being placed into someone’s chest wall, oftentimes that pacemaker will migrate down the patient’s chest as a result of gravity and motion, and that can actually cause tension and pull on the leads and actually dislodge them from where they’re supposed to be making contact in the heart.
And that can lead to device failure.
The first thing that these biomatrices are able to do is help stabilize devices.
Whether that be a pacemaker or whether that be a breast implant, patients in either case are at risk of suffering from complications of device migration, and our products can prevent that.
The second has to do with the anti-inflammatory properties of using a biological material versus a synthetic.
Reducing inflammation ultimately leads to less fibrosis or scar tissue formation.
Again, whether it’s a pacemaker or it’s a breast implant, pathologic fibrosis can actually have pretty serious consequences for the patient.
In breast reconstruction, this leads to something called capsular contracture, which oftentimes will require an additional surgery to explant the device.
There’s also capsular formation around the pacemaker, which makes change-out of the pacemaker very difficult and increases the chance of infection.
So, reducing inflammation and fibrosis is the second key benefit.
The third is preventing device erosion.
If you’ve ever seen an older patient with a pacemaker that has really thin skin, where the pacemaker rubs up against the patient’s skin, they actually have a pretty significant chance of eroding through and being expelled.
Putting a natural biological pouch around these devices helps decrease the chance of erosion and significantly increases patient comfort.”
Elutia (NASDAQ: ELUT) has some important near term milestones.
“Our R&D teams have been developing this drug-eluting technology for some time now.
The CanGarooRM line for pacemaker protection is by far our most advanced.
In fact, we actually have a drug-eluting version of it on the market in Europe and have had that since 2021.
In the U.S. though, we will file for market clearance of CanGarooRM with the FDA this quarter and we hope to have that review complete and have a favorable decision within the first half of 2024.
Approval of CanGarooRM — and it’s named RM because it slowly releases the powerful antibiotics rifampin and minocycline — would give us a launch of what we would expect to be our first blockbuster product, with sales reaching potentially into the hundreds of millions of dollars.
Behind that, we have SimpliDermRM for use in breast reconstruction.
I think it’s probably worth pointing out that both of these drug-eluting versions are actually being built on the back of already successful products that are on the market and generating sales of over $25 million annually and are growing without the drug-eluting version in excess of 20%.
We really see this as a good-to-great story.”
Read the complete interview with Dr. Randy Mills, co-founder and CEO of Elutia (NASDAQ: ELUT), exclusively in the Wall Street Transcript.
Alex Letko, CFA, is a portfolio manager and partner at Letko, Brosseau & Associates Inc.
Prior to joining the firm in 2018, he worked in equity research at Barclays in New York, where he covered the oil and gas industry from 2015 to 2018.
Previously, he was an associate with the economic research team at Evercore ISI in New York (2013–2015).
He is a graduate of Columbia Business School University where he received an MBA, University College Dublin, where he received a master’s degree in economics, and McGill University, where he also received an economics degree.
Alex Letko largely endorses Sabesp (NYSE:SBS), a Brazilian based company.
“One of those companies is Sabesp (NYSE:SBS).
They’re about the third largest sanitation company in the world by revenue.
They account for about 30% of investments in basic sanitation in Brazil. So we’re talking about water treatment, we’re talking about sewage treatment, that sort of thing.
They operate in a few different areas, but Sao Paulo would be their biggest market.
They operate as part of a regulated asset base framework where your revenues and your profits are visible over the next several years until the next rate base increase.
And so, there’s a visibility in terms of earnings growth and there’s a sustainability of earnings power through the cycle, providing downside protection.
Brazil has tremendously lagged behind the rest of the world in providing basic water treatment services, and so the government has made this area a major priority.
A company like Sabesp (NYSE:SBS) will benefit from that policy thrust and thus plays a very important role in bringing what are essential services that we may take for granted in the developed world to the people of Brazil.
We think the company can grow their earnings around 18% per year between 2023 to 2027, while currently offering a 2.5% yield and trading at just 10x p/e.
So this is a great example of an opportunity in emerging markets where you can purchase growth, quality, sustainability of earnings, and a good dividend for an incredibly reasonable valuation.
And so really, if you take a step back, we like to think of emerging markets as an area where there are huge unmet needs.
You’re talking about basic sanitation services, clean energy needs, access to affordable health care, etc.
And there are companies that are working to address those unmet needs.
And given the scale of these needs, the market opportunities for these companies is enormous.
From an investing perspective, chances are that if you cast a very wide net and construct your portfolio from the bottom up with high-quality companies that have good growth prospects, you will naturally pick up companies that are addressing these needs — because that’s where the opportunities lie.
And so those are the companies investors can expect to see in our portfolio — companies like Sabesp (NYSE:SBS).
And so, those are the kinds of opportunities that we look for.
And this is a great example of a company that provides exactly the kind of risk/reward profile that we’re looking for in terms of a regulated asset base with sustainable visible cash flows.
So that minimizes your downside potential in periods of emerging market volatility.
On the flip side, your tremendous growth rate potential provides fantastic leverage to the upside over a long period of time.
So you get upside potential and protection to the downside.
And so, these are the types of profiles of companies that we really like.
And we think there are so many opportunities in emerging markets to pick stocks like this.”
Sabesp (NYSE:SBS) is not the only top pick identified by Alex Letko in this interview. A China based drug distributor also earns his accolades.
“…A company like Sinopharm (OTCMKTS:SHTDY) in China.
They’re the number one drug distributor in China, with about 20% of the market share.
They’re also the number one drug retailer.
This company speaks to a large unmet need — access to consumer health care products and services.
And so, in a country that has probably somewhat lagged behind in terms of western standards for a number of years, there’s clearly tremendous growth potential there.
That is reflected in Sinofarm’s numbers.
We think revenue and EPS can continue to grow at over 10% per year.
But this is not reflected in valuation, as they pay a very strong 5% dividend and trade at around 6x p/e.
The two examples of companies that I just gave you [Sabesp (NYSE:SBS) and Sinopharm (OTCMKTS:SHTDY)] are very representative of different types of companies that we have in the portfolio.
We’re looking for high-quality businesses with moats in their industries and that have very good growth prospects.
At the same time, we’re value investors, so we only pay reasonable valuations for those attributes.
Because we’re getting companies with strong growth prospects, our portfolio has tremendous leverage to the upside over the long term.
But thanks to the emphasis on high quality, sustainability of earnings through the cycle, and reasonable valuations, our portfolio also offers terrific downside protection amid periods of market volatility.
This has allowed us to outperform the index over a long period of time…
it’s very important not to paint these markets in broad brushstrokes. It’s very important to understand at an industry level what is going on — to do the fundamental work.
We have a team of 22 analysts.
They’re each experts in their domains.
We divide the team across industry lines.
So someone covering the retail sector in Canada will also cover the retail sector in Brazil and China, etc.
And so that gives them a global perspective when assessing the impact of something like onshoring.
That’s something that will impact some industries more than others.
In addition, it may create opportunities for other industries in emerging markets in ways that are difficult for us right now to foresee.
In the end you have to be knowledgeable about those industries and you have to do the work.
That is what we try to do.”
Get more of these top picks from Alex Letko and his team and learn more about the stock picking process by reading the entire interview, exclusively in the Wall Street Transcript.
Domino’s Pizza (NYSE:DPZ) and Papa John’s (NASDAQ:PZZA) are two of the largest pizza restaurant brands in America.
The pandemic created chaos in the convenience food segment and now the stage is set for the winners and losers to be sorted out.
Sean Dunlop, CFA, is an equity analyst on the consumer team for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc.
He covers restaurants and e-commerce stocks.
His detailed analysis uncovers the value difference between Domino’s Pizza (NYSE:DPZ) and Papa John’s (NASDAQ:PZZA).
Before joining Morningstar in 2020, Dunlop worked with All Nations Sports Academy, a small nonprofit in the Houston area.
Dunlop holds a bachelor’s degree in business economics and Spanish from Wheaton College.
The background to Sean Dunlop’s Domino’s Pizza (NYSE:DPZ) vs. Papa John’s (NASDAQ:PZZA) pick originates the in restaurant apocalypse in the COVID 19 pandemic.
“It’s certainly been an interesting couple of years to be a restaurant analyst.
Rewind to March 2020, and it was effectively impossible to set foot in a restaurant dining room.
So we saw unprecedented levels of comparable store sales declines and a lot of companies that were reporting bankruptcy.
From a small business perspective, you had a lot of independent restaurants that were tapping PPP loans to stay afloat.
We probably lost somewhere between 10% and 15% of restaurant industry capacity by units.
It was a really brutal time for the industry, as it was for a lot of other industries and for consumers in general.
Since then, we’ve seen a furious rebound.
In 2021, we saw a lot of pent-up demand and revenge spending driving pretty much a full recovery in sales.
A lot of companies like Domino’s Pizza (NYSE:DPZ) were posting crazy comparable store sales figures in the mid-teens, and restaurants were posting commensurately higher operating profit margins despite a lot of brewing inflationary pressure in things like restaurant equipment, labor and food costs.
Fast forward to 2022, and we saw the costs catch up to and exceed outsized industry sales growth.
Restaurant multiples compressed, and the industry sold off hard.
Now, I would say we are somewhere in between.
Sales growth looks strong as you stack it back to pre-COVID, to 2019 levels.
Restaurant profitability has mostly, but not fully, recovered.
And while consumers continue to spend healthily, there are increasingly some concerns about price sensitivity and declining industry traffic, which remains quite a bit lower than pre-pandemic.”
So which is the stock to buy, Domino’s Pizza (NYSE:DPZ) vs. Papa John’s (NASDAQ:PZZA)?
“It’s a good question.
I would say it depends on where you’re standing.
For a lot of the large publicly traded restaurants, online ordering has been largely incremental, and it has increased the number of transactions that a store can service, given that you don’t actually have to seat those customers.
In some ways, those orders have been responsible, as you think about the delivery channel specifically, for the lion’s share of industry growth, and call it the burger category, or call it pizza or wings.
They do tend to be incremental.
They do also tend to be higher cost.
The net effect is probably positive.
But maybe not as positive as people would think.
The downside is that the size of the proverbial pie is relatively fixed.
So if you’ve got companies like Chipotle (NYSE:CMG) that now see 40% to 45% of sales come through digital channels, or companies like Yum! Brands (NYSE:YUM), which owns KFC, Taco Bell, and Pizza Hut, which is now generating 45% of system wide sales through those digital channels, those sales are coming from somewhere else.
And we have mentioned that industry traffic is down.
The number of occasions served by the restaurant industry are down relative to pre-pandemic.
In many cases, that means that smaller operators who are typically paying higher commission costs and who may be a little bit more reluctant to hop on a DoorDash or Uber Eats or Grubhub, are bearing those costs disproportionately.
So it’s a nuanced question, it depends on where you’re standing, but for the largest operators, it tends to be a net positive.”
The final answer between Domino’s Pizza (NYSE:DPZ) vs. Papa John’s (NASDAQ:PZZA) is Domino’s Pizza (NYSE:DPZ).
“I would point out that Domino’s Pizza (NYSE:DPZ) has had a particularly interesting narrative, as you look back to COVID.
They saw some of the best comparable store sales growth in the company’s history strung together.
At one point, I believe, more than 10 years of positive comparable store sales growth in the United States and more than 100 quarters of positive comparable store sales growth in international markets since the firm’s 2009 turnaround up until sort of late 2021 or early 2022, when the narrative reversed.
Obviously, pizza lent itself very well to a lockdown scenario where it could be contactless, where consumers were already pretty familiar with ordering that category through digital channels.
As those volumes started to normalize, as consumers could go back to dining and restaurants, as we’ve seen sort of downtown traffic normalize, Domino’s Pizza (NYSE:DPZ) sold off very hard from a peak in the neighborhood of $560 per share to a trough in the neighborhood of $288 or $290.
And then, as the firm inked its first ever development agreement with Uber Eats, with a delivery aggregator, shares shot back up and are trading kind of in that $370, $380 range, pretty close to our fair value estimate. So that’s been an interesting narrative.
We do for the first time see some value in the publicly traded companies that we cover. Starbucks, McDonald’s and Yum! Brands are particularly attractive.
They trade at about 12%, 10%, and 10% discounts to our intrinsic valuations respectively. But there are interesting idiosyncratic concerns to consider for each.
McDonald’s, for instance, is navigating a period of pretty outsized turmoil with its franchisees, particularly in light of a recent California agreement that’s going to see hourly wages tick up to $20 per hour in that market.
Yum! Brands is having to navigate sort of a domestic turnaround of its Pizza Hut and KFC businesses.
Starbucks is dealing with increasing competitive pressure in the quickly growing Chinese specialty coffee market and also navigating what’s been a pretty turbulent geopolitical and economic environment in that region, although I think investors tend to overestimate the actual contribution of China to Starbucks’ consolidated operations, it’s really only about 10% of total sales today and a smaller component of profitability.
So, it’s a tricky question to answer, but that’s kind of what’s happening in the restaurant space right now.”
Get the complete picture on Domino’s Pizza (NYSE:DPZ) as well as a range of other restaurant stocks by reading the entire interview, exclusively in the Wall Street Transcript.
Canopy Growth (NASDAQ:CGC) and Tilray (NASDAQ:TLRY) are the picks of most of the top Cannabis Stock equity analysts and portfolio managers.
Scott Fortune is a Managing Director, Senior Research Analyst at ROTH MKM, specializing in AgTech and the Consumer Health and Wellness sector.
He brings 20 years of experience as an analyst and portfolio manager to his role.
Prior to joining ROTH MKM, he served as an Analyst and Portfolio Manager at Magee Thomson Investment Partners, where he covered micro, small, and large-cap funds.
He also gained experience at Duncan Hurst Capital Management.
Prior to his finance career, Mr. Fortune was Captain of the 1992 USA Volleyball Olympic Team and competed in three Olympics.
Mr. Fortune holds a B.A. in Economics from Stanford University and an MBA from the University of San Diego.
“To put it in perspective, little did we think that when we started coverage in early 2018 and were part of the early Tilray (NASDAQ:TLRY) IPO, that over five years later, there would be no U.S. federal cannabis policy reform movement.
But we believe this is still a U.S. state legalization story until eventual full U.S. legalization and a mature $100 billion legal cannabis industry similar to alcohol comes about.
The cannabis sector is a global industry with many different subsectors, but for now, the focus includes the U.S. multi-state operators, which are called MSOs, cannabis ancillary companies, which include equipment and service suppliers, products and distributors, CannaTech, what we call canna technology, canna specialty finance and REIT firms and specialty retail firms.
There’s also the Canadian LPs, which include mainly global cannabis companies, and hemp-derived CBD and cannabinoid medical pharma companies, as all part of the subsectors that we include in our coverage.
And while many of the names and the coverage can be listed on U.S. exchanges, U.S. plant-touching operators, retailers and growers still trade on secondary exchanges of the CSE and the OTC, limiting meaningful access to institutional capital going forward right now.
Currently, our coverage consists of cannabis companies with market caps primarily below the $750 million market cap level. But a lot of focus is on the top MSOs in the U.S. and the Canadian LPs, whose market caps are well above the $1 billion level.”
Cannabis stocks are waiting for the regulatory changes that will unleash their true potential.
“From a historical perspective, until this September, it has been an extremely challenging environment for the cannabis industry overall. In fact, over the past two and a half years — we keep marking the days — 931 days — since February 2021 highs. The industry’s challenges have been primarily due to regulations, onerous taxes, and pricing compression.
During the first half of 2023, shares in all segments within cannabis were off on average about 20%-plus, while compared to the S&P, it was up 17% and the Russell 2000 up 8% in the first half of 2023. There were a few cannabis names up in the first half, but primarily most were off significantly.
And there are some that have done well in the year, including names we don’t cover, like Glass House Brands (OTCMKTS:GLASF), which is a leading California greenhouse grower, and the multi-state operator TerrAscend (OTCMKTS:TSNDF) has had its recent shares uplisted on the Toronto Stock Exchange.
But overall, it’s been a difficult first half 2023, and that is following on the 2022 performance and returns, which saw the average cannabis stocks off about 65%.
From a historical perspective, this newly legal emerging industry of U.S. cannabis started in 2014. But it wasn’t really until 2018 when Canada legalized adult-use and more U.S. states began to add medical cannabis programs. And now, currently, there are 23 U.S. states that have converted to adult-use legal states.
Unfortunately, stock performance and returns to date in the industry have been dictated by legislation movement, regulatory easing, and strategic M&A, which all have been slow to occur.
We saw a significant run-up in the space in 2018 after Constellation Brands (NYSE:STZ) invested $5 billion with Canadian LP Canopy Growth (NASDAQ:CGC), and ahead of the adult-use legalization sales in Canada.
So, in fall of 2018, stock performance was very positive, but these have all been met with some news events driven by slow regulatory rollouts and oversupply fundamentals.
The next momentum, sentiment, and share appreciation we saw came in mid-2020 up until February 2021, when the Democrats took control of the executive and Congress branches.
Investors expected U.S. legalization, or at least reform of cannabis policy, to move forward. But that hasn’t happened and we’ve been stuck.
So the status quo on federal policy change has remained in place and challenging fundamentals driven by these slow state rollouts and price compression has resulted basically in an 80% drawdown for public cannabis stocks since the highs in early February 2021.
But the long-term catalysts for the industry remain in place, and that brings us to today’s new U.S. cannabis regulatory environment.”
Jason Wilson is a Cannabis Research and Banking Expert at ETF Managers Group, LLC.
With over 15 years of experience in the asset management, finance and structured product space, Mr. Wilson has a track record of bringing hard-to-access asset classes to market.
He has held leadership and senior positions at several leading financial institutions.
Most recently, Mr. Wilson was Senior Vice President at INFOR Financial Inc.
INFOR is a leading boutique investment bank based in Toronto, Canada, that has worked in connection with a number of companies in the legal cannabis industry, including acting as adviser to Canopy Growth (NASDAQ:CGC) in connection with entering into its strategic relationship with Constellation Brands (NYSE:STZ).
He also worked at the investment banking divisions of Société Générale, France’s third-largest bank, and at CIBC, one of the five largest banks in Canada.
While at Société Générale and CIBC, Mr. Wilson provided asset managers and financial institutions with various capital raising, financing and risk mitigation solutions and strategies.
Mr. Wilson has an LLB from the University of Western Ontario.
Prior to completing his university studies, Mr. Wilson was a member of the Canadian Forces and is a recipient of the Gulf of Kuwait Medal, awarded for his engagement in direct combat during the Gulf War in 1991.
“Canada is the home of the global cannabis players.
And because it’s federally legal in Canada and those companies tend to operate in other legal markets in Europe, they’re able to list not just on the Toronto Stock Exchange, but they’re also able to cross-list on NASDAQ or the NYSE.
They’ve also tended to receive investment from institutional investors, including alcohol beverage companies and tobacco companies that are looking to get into the cannabis space.
But from a pure market opportunity, and where we’re seeing the most cannabis-related revenue, it’s in the U.S. So even though cannabis is federally illegal in the United States, it’s by far the largest individual cannabis market.
And over 75% of the U.S. population is living in states where cannabis is legal at a state level, so there’s significant revenues being generated in the U.S.
So notwithstanding the legalities of it, the largest cannabis companies are domiciled in the U.S.
It just happens to be that they don’t trade on primary exchanges.
They trade over-the-counter in the U.S. because they’re listed on a tertiary exchange in Canada, the Canadian Securities Exchange.
And they have limited access to banking.
So if you look at an individual market, the largest opportunity is in the U.S. market.”
Get more detail on the cannabis stock sector by reading the complete interviews, exclusively in the Wall Street Transcript.
Robert Barrow is the Chief Executive Officer and Board Director of Mind Medicine (MindMed) Inc.
Mr. Barrow is an accomplished pharmaceutical executive and clinical pharmacologist with over a decade of experience leading drug development programs in a variety of disease areas.
After joining MindMed as Chief Development Officer in January 2021, he was named CEO in June 2021.
Mr. Barrow previously served as Director of Drug Development & Discovery at Usona Institute, where he oversaw preclinical, clinical and regulatory development efforts for all of Usona’s development programs.
Prior to joining Usona, Mr. Barrow served as Chief Operating Officer of Olatec Therapeutics, LLC, a private, clinical-stage biopharmaceutical company, where he oversaw the execution of numerous early- and late-stage clinical trials in the fields of analgesics, rheumatology, immunology and cardiovascular disease.
In addition, he has been responsible for the design and execution of preclinical research programs for new molecular entity drugs in brain health disorders.
Mr. Barrow has also served as both a technical and business adviser to numerous pharmaceutical organizations ranging from startups to Fortune 500 companies.
Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) has an ambitious agenda.
“When we look back at historical evidence and look at the mechanism of action, we believe there is an opportunity to impact a wide range of brain health disorders. I believe the opportunity is really vast. There’s such a common thread across many of these indications.
Our lead program, which is MM-120, our proprietary form of LSD, we’re developing for generalized anxiety disorder. And we’re doing so with psychedelics in sort of the traditional sense where we give a perception-altering dose in a clinical setting under observation.
The extraordinary promise of this use case is that we’re seeing after just acute intervention, many weeks or even months of clinical benefit in reducing symptoms of anxiety.
But we’re also exploring innovative treatment paradigms with this drug class. So we’re looking at sub-hallucinogenic doses of MM-120 in ADHD and other alternative approaches that we believe have been overlooked by the field.
Our other lead program, which is MM-402, the R- enantiomer of MDMA. We’re developing it to target core symptoms of autism spectrum disorder. The analogy we like to draw is that the way psychostimulants are used to treat ADHD, is how we envision R(-)-MDMA being used in autism — to enable enhanced social communication for individuals with autism.
We believe that there’s an opportunity that spans beyond just where we’re looking today.
But our furthest along program, one that is coming very quickly up to a clinical readout later this year is our MM-120 or LSD program in generalized anxiety disorder…”
Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) is conducting the largest experiments on humans with LSD since the CIA in the 60’s.
“We announced the completion of enrollment in our Phase IIb trial.
This is the largest modern study of LSD, and maybe perhaps the largest study of LSD ever conducted, certainly in a well-controlled setting.
It’s roughly 200 patients.
We dosed 198 patients in the study and follow them up for 12 weeks.
Our study includes five different arms, so it’s also the most comprehensive assessment of dose response in the entire drug class to date.
We expect to have a really clear indication of the activity of the drug acutely and over the course of four weeks where the primary endpoint is, then out to 12 weeks where our secondaries are in the study.
We believe that this will give us such an important insight into our development program.
And given that long history of research with the drug class, it also gives us a lot of clarity as we think about subsequent phases of development, engagement with FDA for a potential End of Phase II meeting, and really charting a path from the conclusion of the study to ultimately through a pivotal program, and hopefully to a marketing application one day.”
Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) LSD trials are testing a variety of dose delivery systems.
“…With our MM-120 program and going forward to subsequent development, we’ll be using Catalent Zydis orally-dissolving tablet, or Zydis ODT platform. They are ultra-rapidly disintegrating tablets that almost instantaneously disperse when they’re put in the mouth.
Our aim is to generate a differentiated profile of the product that can perform better, that has better pharmaceutical characteristics, that potentially has even more attractive pharmacokinetics.
When we think of some of the unique challenges and opportunities with this drug class and with historical formulations of LSD, we saw a real window to make significant improvements, to have a product that is both differentiated, that can help us protect our market and into the future, but also most importantly to perform as best as possible for patients to make sure that we’re providing a dosage form that really meets modern standards and that can be scalable and delivered out in a normal fashion.”
Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) has a potential addressable universe of 10% of the population with its LSD formulas.
“…Certainly one of the biggest things we’ve seen, there’s a recent study looking at the prevalence of generalized anxiety disorder.
Prior to the study, the belief was the prevalence of GAD was just over 3%.
And the most recent study indicates that the prevalence is actually more like 10%.
So I think the willingness to talk about it for many people, really worldwide, to go through a very challenging period of time both add strain on mental health and mental health care, and also gave people time to reflect and as a society, time to look at the stresses that were imposed both by the pandemic and all that that’s around modern life.
Of course, we aim to alter the trajectory of the mental health epidemic in this country and around the world.
But the reality is that the increase in anxiety and depression levels, the reality of increased screening for anxiety, which is now recommended for all adolescents and adults by the U.S. Preventive Services Task Force, has really shined a light on the severity of the problem.
I think when we look at the magnitude of the kind of impact we could have, it is enormous — which is of course a sad reality both societally and for all of those patients — but we believe it’s the right time for innovative new products and that there is such an urgent need that we can hopefully impact at a massive scale.”
Read the entire interview with the CEO of Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) to get all the details on the LSD application for official pharmaceutical use.
Tempur Sealy International (NYSE:TPX) and DoubleVerify (NYSE:DV) are just two of the top picks from US Small Cap Portfolio Manager Mathieu Sirois.
Mathieu Sirois, CFA, is Partner, President and Senior Portfolio Manager, U.S. Small Cap Equities at Van Berkom and Associates Inc., where he is responsible for all the investment decisions related to this product and for the management of the U.S. Equity Team, and for conducting research on a broad spectrum of the U.S. small-cap equity market.
Mr. Sirois is a member of the Executive Management Committee, a member of the board of directors and a significant shareholder of Van Berkom.
He became President of Van Berkom and Associates Inc. in 2021.
In 2007, he was promoted to the position of Senior Portfolio Manager for Van Berkom U.S. Small-Cap Equities, and prior to that, he was part of the U.S. Small-Cap Equity Team since joining the company in 2000.
Mr. Sirois is a CFA Charterholder (2003) and holds a M.Sc., Finance from HEC Montreal (2001).
His portfolio methodology leads directly to top picks like Tempur Sealy International (NYSE:TPX) and DoubleVerify (NYSE:DV).
“There are many, many examples in the past whether it’s small caps or large caps, where if you overpay for a good business, you may not generate above-average and outsized returns for your investors.
So at Van Berkom, it’s always been very, very important that all the companies that make it into our client portfolios, not only do they have all the quality criteria we’re looking at, but they have to be mispriced, significantly undervalued by the market.
And again, the small cap market being so big, being so opaque in many ways with the information flow, not as consistent as large cap equities, it creates these amazing situations where we can take advantage of big inefficiencies in our market to invest in a great business, but only when it is misunderstood and mispriced and undervalued by investors.
The way we go about this is, for any investment candidate that we strongly consider for our client portfolios, we go through a very deep extensive research process that involves several steps, and we look at all the quality criteria of a business and do research on each of these aspects, and we have to, with a lot of conviction and confidence say, “Yes, this company ticks all the quality boxes that we have.”
However, we also build a full detailed financial model on all of the investment candidates we’re seriously considering for our client portfolios, leveraging our deep knowledge, our superior knowledge, and using such superior deep knowledge for the key assumptions, key inputs of our financial model to project and predict 10 years of estimates, income statement, cash flow statement, balance sheet, through our proprietary research process, coming up with key assumptions on revenue growth, margins, working capital, capital expenditures.
From these estimates, we come to a discounted cash flow valuation methodology where we will estimate with a lot of conviction what the true intrinsic value of a business is.
And recognizing that a DCF — or discounted cash flow — methodology is quite sensitive to the assumptions that we’re using, we will work with various scenarios: a more pessimistic scenario for revenue growth, for margins.
What if the company is not performing quite as well?
A base case scenario which is really what we think is the most likely outcome for the next few years, and then a more optimistic scenario.
And that will give us, these three scenarios, a range of fair values of intrinsic values, and then we compare the current stock price, the current market value with this range of intrinsic values.
And if we see a double or more over the next five years, that’s when we will commit to a new investment in our client portfolio.
So we do a deep dive financial analysis, full discounted cash flow valuation, and then we also work with valuation multiples.
We look at historical valuation multiples in absolute, so relative to itself and also versus peers.
And again, applying historical valuation multiples that range to our five-year-out estimates gives us another measure of where the stock could be five years out.
Again, if we see a double or more over the next five years which is our typical investment horizon, then we will go ahead and commit to the investment.
So yes, we buy the very best businesses, great business model, great track record, fantastic management team, but we also want to buy these great companies in our client portfolios only when they’re undervalued, and that’s why we spend a lot of time assessing the true valuation of any business that we’re considering for our client portfolios.”
This methodology identifies companies like Tempur Sealy International (NYSE:TPX) and DoubleVerify (NYSE:DV).
“…There is no question that developing a better mousetrap, as they say, is one of the key advantages or investment merits of small cap companies.
Oftentimes, they create a better service offering, a better product, and then the smart management teams will build a strong moat around that offering such that it’ll become difficult for new entrants and existing competitors to try to replicate the offering, whether it’s a product or a service.
So innovation can play a role in all kinds of areas.
I’ll give you a few examples.
Tempur Sealy International (NYSE:TPX), the largest manufacturer and marketer of mattresses and bed products in the world — they in many ways develop products through innovation R&D that have become best-in-class and the most preferred sleep options from consumers, and therefore today, slowly but surely over the last two decades-plus, they’ve gradually gained shares to become the largest company.
A lot of it happened organically.
They’ve also acquired some competitors such that today, they have the best brands in the industry, highly sought after by consumers.
They have the best manufacturing, they have the best distribution, they have the best footprint at retailers, and they can outspend everybody else on brand-building, on advertising.
They can outspend everybody else in the industry on R&D.
So they’ll continue to innovate and outpace the industry and come up with products that resonate really well with consumers while also building their brand like nobody else is capable of doing it in the industry.
That’s an example of a company that has, through innovation in terms of marketing, in terms of manufacturing, in terms of R&D, has developed products that have been highly sought after, that have been synonymous with quality.
They’ve been able to gain share, and now it’s very difficult for the competition to catch up.”
“Then we have a company like DoubleVerify (NYSE:DV), they develop very sophisticated algorithms through a huge base database to help companies measure the efficacy and the effectiveness and efficiency of their online advertising.
So they help companies measure the efficacy, the productivity, the ROI on their digital advertising while also helping them prevent fraud on their brands, on their products.
So they’re detecting fraud, they’re helping companies measure the effectiveness of advertising.
They have the best data in the industry that they’ve been able to put together.
And now, through AI and machine learning, they’re coming up with very sophisticated algorithms.
So they work with most big advertisers, most advertising platforms, and they’ve steadily gained market shares within that market.
As the market has shifted more and more toward digital advertising from traditional, they’ve been able to benefit from that as a secular growth trend while continuing to innovate with additional products and functionalities such that this is a company that has maintained a very strong growth profile, very high returns, high margins.
So that’s another example of what innovation can do, especially in the small cap landscape.
I can go on and on.
We’ve got many such portfolio companies that have definitely benefited through innovation.
They’ve been able to build a great business model, and then gain market share as they’ve been able to sell these solutions, product and/or service to customers offering them a better mousetrap, better ROI, better value proposition, and then creating ingredients for a strong moat around this business such that they can sustain that outperformance, that faster growth and these market share gains.”
Get all the top picks beyond Tempur Sealy International (NYSE:TPX) and DoubleVerify (NYSE:DV) by reading the entire interview with Mathieu Sirois, CFA, Partner, President and Senior Portfolio Manager, U.S. Small Cap Equities at Van Berkom and Associates, exclusively in the Wall Street Transcript.
Unifi (NYSE:UFI), Heartland Express (NASDAQ:HTLD), and Hurco (NASDAQ:HURC) are 3 top picks from John E. Deysher, CFA, President of Bertolet Capital.
John E. Deysher, CFA, is President of Bertolet Capital LLC, adviser to the Pinnacle Value Fund.
He is responsible for the fund’s daily investment activities and has more than 40 years of investment management experience.
From 1990 until 2002, Mr. Deysher was a Portfolio Manager, Senior Analyst with Royce & Associates, an investment firm specializing in the securities of small cap companies and adviser to the Pennsylvania Mutual Fund.
Mr. Deysher began his investment career with Kidder Peabody in 1983, where he managed equity and fixed income portfolios for individuals and small institutions.
He holds a bachelor’s degree from the Pennsylvania State University, and master’s degrees from both Indiana University, Bloomington (Business) and the University of California, Berkeley (Engineering). He is a CFA charterholder, and lives and works in New York City.
His three top picks are Unifi (NYSE:UFI), Heartland Express (NASDAQ:HTLD), and Hurco (NASDAQ:HURC).
“We’ve been buying three stocks recently. One is Unifi (NYSE:UFI), a Greensboro, North Carolina-based maker of texturized polyester and nylon yarns, used to make synthetic fabrics that go into apparel, home furnishings and automotive.
Roughly 30% of their yarns are made from recycled plastic so it’s an environmentally friendly company.
However, sales of apparel and home furnishings have been weak recently and they’ve had trouble passing through raw material cost increases.
Margins are under pressure, but the balance sheet is in good shape.
Once they return to normalized earnings, the stock price should go up.
They also have two activist shareholders, who own greater than 5% each, so perhaps they can make something happen.
Another name that we’ve been buying recently is Heartland Express (NASDAQ:HTLD), a Des Moines, IA based truckload carrier.
Post pandemic, the industry benefited from strong demand but now with demand returning to normal, margins and earnings are under pressure, hitting the share price.
They made two acquisitions that doubled their capacity which they’re in the process of integrating.
So there’s lots of room for improvement once the cycle turns and they’re paying down debt quickly.
We like companies like Heartland that increase capacity near the bottom of the cycle so they’re well positioned for the upturn.
The CEO has been buying shares, and the founding family owns 40%.
A third name we’ve been buying is Hurco (NASDAQ:HURC), an Indianapolis-maker of machine tool systems used to produce various types of capital goods.
The end markets are cyclical and sales and earnings have been trending down recently.
Hurco has been through down cycles before and their conservative balance sheet has always allowed them to emerge intact on the other side.
The yield is almost 3% and there’s no debt.
Hurco is also a net-net, a value investing concept pioneered by Ben Graham many years ago.
It involves selecting stocks having a market capitalization less than net current asset value calculated by subtracting total liabilities from current assets.
Hurco has a net asset value of $28/share — significantly above the current price of $21.
Finding quality firms like HURC trading at less than net asset value is extremely rare in today’s market.”
The process for identifying small cap stock picks like Unifi (NYSE:UFI), Heartland Express (NASDAQ:HTLD), and Hurco (NASDAQ:HURC) begins with an assessment of management.
“We look for a few things in management.
Are they hands on, honest, intelligent, energetic and opportunistic? Do they act as owners not caretakers?
Do they have a good grasp of strategic, operating and financial priorities?
That’s why the proxy is so important; it gives details on compensation, share ownership and prior experience.
We look closely at related party transactions which often indicate whether management is acting in the best interest of shareholders.
Assessing management is tricky.
Sometimes the management teams that we had high hopes for are disappointing and other teams we thought were average turn out to be exceptional.
Assessing management is just one element of our due diligence.
Viable business models, strong balance sheets and other elements are also very important.”
The fund has had difficulty in finding small cap value in recent months.
“…We are holding more cash simply because we’ve taken profits in a lot of names that we bought during the lows of the pandemic.
They’ve worked out well and now trade at or above our estimate of intrinsic value.
We’d like to put the cash to work and are looking diligently for opportunities.
Holding lots of cash is not a market timing move but a consequence of the absence of compelling opportunities.
We’d like to bring it down as soon as possible…
We have a few concerns.
While we can’t predict where the economy or interest rates go, we do think about the consequences for the stock market.
Whether the Fed can engineer a soft land remains to be seen.
Our $33 trillion national debt may have some serious consequences at some point.
We’re also concerned about the amount of financial leverage embedded in the system as a result of low interest rates.
Many firms have variable rate debt that ratchets higher with each uptick in interest rates.
Bankruptcies are at their highest level in a decade and we expect more to come.
We’re also challenged by the proliferation of competitors like private equity, venture capital and hedge funds.
Many have large pools of capital to put to work and are often willing to pay higher valuations for public companies than we are.
Our universe of investable public companies has declined dramatically over the years since many have been acquired by strategic or financial buyers.
It’s also increasingly difficult to get proprietary information that no one else has.
We work hard at this, but the internet has really levelled the playing field so it’s a challenge.
That’s why maintaining a strong relationship with management is so important.
The only silver lining is that with higher interest rates, many potential deals may not generate the returns necessary to justify an investment.
We also think prospective buyers — strategic and financial — are thinking carefully about how a potential slowdown might impact future earnings.
So going forward this might trigger a reset in valuations that allows us to accumulate positions at reasonable prices.
So, we’ll stay conservative and let valuations be our guide.
We have a universe of 100-plus companies we’ve done the work on and want to own at the right price.
At some point there will likely be a disruption of some type that will present opportunities to put our cash to work.
While we think about the economy, we try to focus on events that impact the stocks we own or would like to own.”
Unifi (NYSE:UFI), Heartland Express (NASDAQ:HTLD), and Hurco (NASDAQ:HURC) are three of many stock picks from John E. Deysher, President of Bertolet Capital.
Read about more in the complete interview, exclusively in the Wall Street Transcript.
John E. Deysher, CFA, President, Bertolet Capital LLC
Peter B. Ritz is the CEO and Co-Founder of artificial intelligence pioneer FatBrain AI (LZG International Inc.).
Mr. Ritz has also served as an executive advisory board member for Exceda and as a Co-Founder and Managing Director for KeystoneNAP.
Additionally, he has been an Adjunct Lecturer at the University of Pennsylvania Law School and a Managing Director for CloudR Labs LLC.
Furthermore, he has served on the Service Provider Advisory Board for VMware and as President, Managing Director, and Co-Founder of Xtium.
Mr. Ritz received a B.A. in Biochemistry and Molecular Biology and a B.S. in Computer Science from the University of Maryland, and an A1 in Science from Baltimore Polytechnic Institute.
FatBrain AI was an artificial intelligence technology pioneer.
“…We were actually founded as a business in 2015, way, way before the words AI were really interesting or would get people excited about what’s going on in their daily life.
And the way we got started was working for really large companies.
Some of the customers we had early on were people like Goldman Sachs, to help them with trading optimization; folks like Comcast, to help them get the viewership for their clients better, and so on.
And people like Bank of America, to get the financial crime compliance in line and everything else.
But a few years back, we thought what would be really powerful is to take those kinds of AI solutions that we’ve been delivering to really large, well-capitalized businesses and aim them at helping the sector of the economy, what we call the middle of the pyramid, that drives most growth, both in terms of jobs and just overall economic activity.
And that is businesses that are 500 people or less; some are in finance, some are in health, some are in landscaping, plastic surgery, you name it, but it’s really the middle of the pyramid that we think has a tremendous value, both in terms of mission going forward to grow everybody’s fortunes together, but also impact.
And we have technologies that help along with that, and we have a focus to drive that value.”
LZG International (OTCMKTS:LZGI) artificial intelligence is based on “peer intelligence”.
“We’ve all actually used peer intelligence in traffic navigation. Anybody who’s ever used the Waze application usually understands that, because people are driving relatively close to you on the road, they are contributing their speed and some other information into a bigger traffic awareness and insight, and you’re able to navigate better and faster.
So, in this case, each contributes a little bit of their data, their personal data, into this bigger hole. And all of a sudden everybody can see better and avoid traffic better. So that’s how we’ve all experienced an example of that.
We took this simple idea, and we took it into what we call peer intelligence, as you said. And the example there is, the first thing that businesses normally would like to know is, how are they doing in their region? And specifically in their sector? If you have a landscaping business or if you have an insurance business, how am I doing versus my peers and what does that really mean?
And by the way, if you’re a large company, this is what McKinsey would do for you. The first thing that the management consulting firm McKinsey will do for you is just ground you as to where you fit, which quantile you fit in relative to your peers. So this first step in peer intelligence is to get you to understand quantitatively where you fit.
Just coincidentally, it’s a fundamental need we have as human beings because we always want to know, wait a second, where are we relative to the outside world? So, every business in this context wants to know, where do they fit relative to their region, relative to their market, and so on. So, it’s one of the things that the idea of peer intelligence gives you.
The next thing that’s very interesting that we’re able to provide is, wait a second, if I am in the middle quintile, right in the middle of the pack, or maybe I’m below the middle, how do I actually advance? What’s a practical way for me to podium up and become top quantile or better and do this on a continuous basis, so I can always improve?
And that’s a little bit of the two sleeves of what peer intelligence usually provides. One is, where am I today? And then two, how do I get to improve and what are the simple practical things I can do to get there? So those are the two things that we think are a big deal for every business to try to improve what we call their business wellness.
We have so much data coming to us now from our general ledger, from our portals and everything else. So the data is there, but how you make sense of it so it can help you improve in really simple ways is what peer intelligence is all about.”
The applications from LZG International (OTCMKTS:LZGI) artificial intelligence technologies are increasing rapidly.
“…We have a solution in a foreign exchange market.
There is a study that we use to underpin our solution and this study was by the International Monetary Fund, which found that small business that imports into United States or exports from United States pays 25 times more in foreign exchange fees, if you will, than some of the larger businesses that have treasury departments and manage these things.
And in very simple terms, small business always gets hit pretty hard. If they have a $50,000 or $100,000 invoice and they have to convert it from, let’s say, Norwegian kroner or they have to convert it from some South Asian currency into dollars and vice versa, they pay 25 times more — not 25%, 25 times more — for this kind of transaction.
And we’re able to do all sorts of things to help them and really save a lot of money.
What’s interesting in this context is in a clothing industry and it’s called the wholesale industry, there is a strange dynamic happening.
Because of COVID, government has subsidized a lot of grants and loans and other things to help businesses during the pandemic.
All those subsidies are going away.
In other spaces as well, but just keeping with the clothing wholesale business — and by the way, it’s a $60 billion business, so it’s a meaningful business just in the U.S.
Well, the problem is, they used to have factoring on their invoices that were 2% to 3% in terms of the interest rate on the factoring for that invoice.
Today, with inflation and all the interest rates going up, it’s ballooned probably closer to a double-digit number.
So the big issue everybody’s figuring out is like, oh my god, what can we do?
Well, we have a solution that, through a subscription, is going to substantially decrease the cost of that ballooning factoring interest rate and improve something on the foreign exchange front.
So as a bundle, it provides a tremendous saving.
So we see it from a customer perspective of what’s the customer facing, and how we can help.
And what we’re very excited about is that not only can we help, but there’s great solutions to almost unlock them from their existing relationship that’s going to charge them a double-digit rate in addition to the foreign exchange situation and really help them along through a subscription.
So we think that’s going to be helpful to them and it’s going to be super accretive to us.”
Get all the detail on the development of artificial intelligence applications from FatBrain AI by reading the entire interview with Peter B. Ritz, the CEO and Co-Founder of FatBrain AI (LZG International OTCMKTS:LZGI), exclusively in the Wall Street Transcript.
ReWalk Robotics Ltd. (NASDAQ:RWLK) and its new acquisition Alter G are technologies that permit stroke, accident and warfare victims new hope for regaining mobility.
Larry Jasinski has served as Chief Executive Officer and as a member of the ReWalk Robotics Ltd. board since February 2012.
From 2005 until 2012, Mr. Jasinski served as the President and Chief Executive Officer of Soteira, Inc., a company engaged in development and commercialization of products used to treat individuals with vertebral compression fractures, which was acquired by Globus Medical in 2012.
From 2001 to 2005, Mr. Jasinski was President and Chief Executive Officer of Cortek, Inc., a company that developed next-generation treatments for degenerative disc disease, which was acquired by Alphatec in 2005.
From 1985 until 2001, Mr. Jasinski served in multiple sales, research and development, and general management roles at Boston Scientific Corporation.
Mr. Jasinski holds a B.Sc. in marketing from Providence College and an MBA from the University of Bridgeport.
“ReWalk has been primarily focused on exoskeletons that allow paralyzed individuals an ability to walk once again. And most of our strategic focus has been built around gaining CMS reimbursement, because 56% of that population relies on Medicare. So our mission has been really driven around that one product.
Part of our longer-term growth goals was to use some of the cash we had and the structure in which we worked to add additional product lines, to help us on the pathway to profitability. And so the combination of where our focus has been from a technology point of view, expanding to adding more product lines, to have the company profitable on its current cash balance.”
ReWalk Robotics Ltd. (NASDAQ:RWLK) CEO explains the acquisition of Alter G.
“First, for the reason that we are focused initially on the clinics where our patients get trained and AlterG is highly active in the U.S. marketplace with products in over 4,000 clinics worldwide. But importantly, almost all the clinics where we would sell the ReWalk have AlterG.
So there’s an immediate synergy of the companies where they have relationships in places where we want to be able to expand the exoskeleton presence once we have CMS payment.
So that’s the excellent part of the fit at a high level because we need those doctors to write prescriptions once they believe this can be paid for.
But parallel and equally important to us is that they brought a very innovative nominal technology that’s heavily used in the clinics.”
ReWalk Robotics Ltd. (NASDAQ:RWLK) has recently gained new US government reimbursement support.
“It is probably the most significant thing that’s happened, will ever happen to this industry other than the creation of the product.
The whole challenge with this market has been lack of access.
So, we had plenty of people or doctors that would like to prescribe for someone to be able to walk once again.
But it’s a population that generally didn’t have the means to get the equipment and use it on a day-to-day basis.
Specifically with CMS, we spent many years building up our database.
When we first gained our FDA clearance, we had less than about 10 papers.
In the citations that have developed from all those smaller studies and two randomized studies over the years, we have 117 citations in a lot of what was provided to CMS.
The steps at CMS are important.
We went through a public hearing process and did have a code created for the category of exoskeletons for the industry.
Once that code is created, it then needs a benefit category in which to be paid, and pricing.
The major development on that occurred in June of this year when a proposed rule was published by CMS.
It is currently in a 60-day comment period, which is just coming to its conclusion — August 29 is day 60.
Then they will issue a final rule based on the comments they gained in that period.
That will issue approximately in November.
In parallel, the pricing will begin moving along as a part of the process with a pricing proposal at the next HCPCS meeting, which we think will also be in November or so — pricing that may go through a public comment period — and then we can finalize pricing early next year.
So the rule will take effect in January, the pricing will be very close to that.
In parallel, we have already started submitting patients’ claims.
So we put 11 in in June; we’re going to put in about 35 this year.
And so, we are at the beginning stage of all these patients who lacked access having the ability to stand and walk once again.
So the progress in CMS has been our number one focus and we’ve hit a major milestone so far.
The next one is this rule, pricing, and the first units being paid for…
Germany is still our strongest market.
That will be eclipsed rather quickly by the United States just by virtue of the size of the two markets.
And our primary focus today has been the United States and Germany. They’re sizable markets.
They will have a method to pay in the United States hopefully soon and the Germans are now covering it.
The other element in the United States is the VA does pay for it.
So we do have one vehicle here.
Outside of that, we have spotty coverage.
We see some other countries starting to follow the German lead in Northern Europe.
But generally, the sales outside the two major direct markets for us are either by individuals that self-pay or that find other means to pay.
So in the future, hopefully some of these other countries will adopt the policies that the German and American governments are heading towards…
The device has a list price of $186,000.”
ReWalk Robotics Ltd. (NASDAQ:RWLK) CEO Larry Jasinski emphasizes that patient outcome drives his business forward.
:…The changes in patients’ lives are as dramatic as ever.
When a person could stand up and stand with their spouse or children for the first time and walk with them again, it’s life changing.
And that hasn’t changed in any manner or measurement with what we’ve gotten.
And it’s something to really pay attention to why we believe we’re getting coverage for this product, it’s because it is life changing and of great benefit.
It’s just taking the time to work through these systems that we’re pretty much on track — it just seems like it’s been a long time.”
Get the complete picture by reading the entire interview with ReWalk Robotics Ltd. (NASDAQ:RWLK) CEO Larry Jasinski, exclusively in the Wall Street Transcript.
Larry Jasinski, CEO, ReWalk Robotics Ltd.
Marlborough, MA 01752
Artificial Intelligence (AI) covers alot of different target markets and SoundHound AI, Inc. (NASDAQ:SOUN) is the platform that supports artificial intelligence (AI) voice interface technology.
Keyvan Mohajer is Co-Founder and Chief Executive Officer of SoundHound AI, Inc. (NASDAQ:SOUN).
Inspired by science fiction and the promise of speaking naturally with the devices around us, Mr. Keyvan launched SoundHound.
As Co-Founder and CEO, he envisions a world where custom voice assistants transform how we interact with machines — making lives more convenient and productive.
Mr. Keyvan earned his Ph.D. in Electrical Engineering from Stanford University.
“I was a Ph.D. student at Stanford, specializing in speech recognition and machine learning and AI, and our vision with my co-founders was that what we now call voice AI would happen in our lifetime.
So, within our lifetime, we would talk to computers and robots and devices in natural language and they would speak back to us, and we can ask them to do things and ask for information. It’s a vision we came up with nearly 20 years ago and it was ahead of its time.
We started the company to be a part of that transformation, and we knew that it was a long-term vision. In fact, I always said from the start that this transformation will happen in about 20 years. This is SoundHound’s passion and our vision and our mission.
We spent the first 10 years building all the voice AI technologies that we needed. It’s very rare for companies to have all the ingredients for voice AI. We didn’t want to be a system integrator or to use other people’s technologies. We thought we needed to invent and own the technology so that we could disrupt and leapfrog the voice AI space, by making it ahead of the state of the art.
And in 2015, we unveiled our voice AI platform. In 2016, when we launched it, we raised several hundred million dollars from strategic and financial investors, companies like Nvidia, Samsung, Hyundai, Oracle invested in us, and then we went public in 2022.”
SoundHound AI (NASDAQ:SOUN) CEO Keyvan Mohajer predicts a bright future both for AI and his company.
“We have three pillars of revenue.
In the first pillar, we provide a branded digital assistant to physical products like cars, TVs, IoT devices and the revenue is a form of royalty.
The device manufacturers pay us a royalty for our technology.
We believe every device should have an AI assistant.
It’s the future of human-computer interfaces and 75 billion IoT devices that are projected by 2025, I believe.
A lot of these devices can’t have a touch screen, they don’t have a keyboard or a mouse, but they can afford a small inexpensive microphone and that’s all it takes to voice-enable products.
So, our pillar one is royalty revenue from devices where we provide digital assistants.
In the second pillar, we provide AI customer service for businesses.
Let’s say you call a restaurant to place an order for food, instead of a person picking up the phone, or not picking up the phone and missing out on the orders, our AI will pick up the phone, take the order, and put it on the restaurant’s point-of-sale system.
Other examples include appointment booking, reservations and so on.
The revenue model of the second pillar is subscription.
Businesses will pay us a monthly fee for our AI customer service.
If you think about pillars one and two, they can succeed on their own without one depending on the other one.
We can provide that to devices and services with well-proven business models.
Now that brings us to the third pillar, which is when we bring these together — we can bring the services that we voice-enable to the products that we voice-enable. Let me explain.
Imagine you’re driving your car and you’re talking to your car to control the radio, to play music, to control the air conditioning, to control your navigation.
And then you can also talk to your car to find restaurants and order food.
And you can have the food be ready for pick-up when you get to the restaurant or have it delivered to your house.
So you don’t even have to go to the drive-thru.
You don’t have to call the restaurant.
You don’t have to use a mobile app.
You just continue to talk to your car, and you can order food, you can book appointments, you can make reservations, and so on.
This is our third pillar.
The revenue of this pillar is monetization revenue because the leads we generate for the businesses, like restaurants and other merchants, are new leads for them.
It’s not their existing users that are calling them directly.
If you’re generating new users and transaction opportunities from the users of these devices — like drivers of cars and viewers of TV devices — the businesses will pay us for that lead generation, and we will share that revenue with the device maker.
This means the car maker makes money, the TV maker makes money from providing a service, and most importantly the end user is happy because they have the convenience of a voice-enabled transaction.
We expect our third pillar will create a flywheel effect, because more services will want to be on our platform so they can get new leads. More products will adopt our platform because they can generate revenue while making their users happy.
And the end users, the most important part of this equation, will be happy because of the convenience of a voice-enabled transaction.”
The SoundHound AI (NASDAQ:SOUN) product is constantly being improved.
“…The current state of voice and conversational AI is that it has become really good. And in just the last six to nine months, we’ve seen an inflection point where they became so good that the technology can be better than humans. The path to mass adoption is very clear.
So they’re very good today, but they will always get better. And that’s what makes our job really exciting, because even though our technology and solutions are incredible today, our job will never end. We can make it better and better every day.”
To get the complete picture of the future for SoundHound AI, Inc. (NASDAQ:SOUN), read the complete interview with CEO Keyvan Mohajer, exclusively in the Wall Street Transcript.