Francois Michelon

Thank you, Yvonne, and thank you for joining us today to review Andrew's Fourth Quarter 2023 financial results and key business developments. We're advancing our mission to revolutionize metabolic health through the practical detection and monitoring of liver disease. We've made significant progress in the following five areas. Number one, activating new clinical partner sites in our target markets to build our body of clinical evidence at the local level, which is a foundational element to achieving regulatory and commercial success. Number two, advancing our FDA de novo application for take us through close collaboration with the agency number three strengthening our commercial position by developing new and nurturing existing relationships with clinicians as well as maintaining a steady cadence of awareness building activities.
Number four, leveraging the rapid and positive evolution of key industry building blocks for diagnosing and treating liver disease, which strengthen Andrew's position and commercial opportunity. And number five, looking beyond our current markets and technology to new opportunities to license our intellectual property.
Now I'll elaborate on each of these elements. Recently, we achieved a key milestone in one of our target markets by installing the TF system in the United Kingdom King's College Hospital in London, a prestigious National Health Service institution is leading the introduction of vendors' liver system in the U.K. market. This partnership entails a clinical study comparing TS as liver fat assessment accuracy to MRI. The recognized research standard study is expected to include approximately 75 subjects and aims to provide crucial data for evaluating the TS technologies performance Moreover, the findings will be submitted for publication in a peer-reviewed medical journal. We're excited about this collaboration as it will strengthen our base of clinical evidence and potentially opens doors to strategic opportunities within the UK's extensive national health service network. Mike will provide an update on Andrews, active and pending clinical sites, and these sites are crucial for generating the body of clinical evidence needed to support our business strategy in three fundamental ways. First, clinical evidence from these sites supports our current and future regulatory filings and reimbursement claims.
Second, the clinical sites enable commercial traction serving as reference sites in key markets. They bolster our commercial endeavors by demonstrating Andrew's technology in real-world settings and help us develop compelling clinical and economic value propositions in our target segments, endocrinology, hepatology and other segments in each target market. And third, the clinical sites enable the ongoing enhancement of Andrx technology through customer feedback leading to future product improvements, gaining commercial traction and additional regulatory approvals for Andrew's innovative technology hinges on continuing to build the base of clinical evidence, the clinical abstracts we presented at the European Association of Study of the Liver last year marked encouraging progress. These presentations highlight impressive clinical performance of our technology compared to the MRI gold standard yet to convince potential users in our target market of our technologies value, we must further expand our pool of real-world evidence and do so at the local level as you're hearing, we're accelerating these efforts by activating new sites such as King's College in the UK and others we'll announce in the second quarter. Clinical evidence is essential for the successful global adoption of new innovative technologies like Enterra's.
Looking ahead, into 2024.
In addition to the foundational work of building clinical evidence, we're also advancing in other key areas. First and importantly, we're advancing our FDA regulatory submission in the US market since our de novo submission in the third quarter of 2023, we've received an additional information request from the FDA, and we're closely engaged with the agency. We've confirmed a meeting with the FDA to be held in the second quarter of this year to address open items and ensure a predictable regulatory pathway for our technology. And Mike Jordan, will elaborate on this in a minute.
The second area is we expect to achieve commercial sales with early adopters in Europe this year in our initial target markets of Germany, UK and France, leveraging our CE Mark and our growing base of clinical data from King's College and other sites to showcase our technologies, clinical and economic value propositions.
In parallel to these activities. The Andrew team has been proactive in generating awareness for our test technology and engaging with key stakeholders by attending major clinical conferences, notably at the liver meeting hosted by the American Association for the Study of Liver Disease.
Andrew, I hosted a panel discussion with multidisciplinary key opinion leaders in hepatology, endocrinology and radiology. And this platform enabled the sharing of unique perspectives on met on managing metabolic dysfunction associated steatohepatitis, also known as NASH, Andrew's participation in industry conferences in 2023, such as the European and International Liver Congress and the diabetes professional care meeting in the U.K. contribute to raising awareness of our TS. technology plans are in place to attend the most critical European and American conferences this year and the cadence of visibility underscores Endo's commitment to fostering relationships with potential customers and partners highlighting our technologies potential.
The third area in alignment with our FDA initiatives, we're exploring an intriguing new opportunity in the U.S. bariatric and obesity management market because of the popularity of the GLP-1 drugs. This market is rapidly evolving from a surgery centric approach to a broader mandate as metabolic disease management centers. Our research so far indicates that the obesity management market is characterized by high patient self-pay and relative price inelasticity with highly motivated patients who demand clinically relevant services to support their weight loss journey with three to four monitoring visits per year. This aligns really well with Andrew's technology since liver fat is a key biomarker for metabolic syndrome. And this potentially expands Andrew's addressable market beyond hepatology and endocrinology and holds promise for revenue streams based on patient self pay per scan on a broader market basis, three crucial building blocks for diagnosing treating and managing liver disease are rapidly advancing, providing hope for the millions affected and opportunities for companies like Endo.
The first building block is that leading clinical societies that already updated their screening guidelines for fatty liver. As an example, the American Diabetes Association and the American Association for Clinical Endocrinology now recommend screening of fatty liver disease for prediabetic diabetic and obese patients. Those guidelines alone encompass 50% of the adult U.S. populations with either diabetes or pre-diabetes and 41% of the U.S. population who are obese that's approximately 150 million people in the US alone.
The second building block is that the World Health Organization has issued a new ICD-10 CM code, specifically for fatty liver disease. The ICD 10 CM is a global coding system that indicates a diagnosis for reimbursement purposes and it facilitates standardized billing and documentation for insurance processes in the US. Europe and other markets. Andrew believes the ICD 10 K. seven six code issued specifically for the diagnosis of fatty liver represents a significant opportunity for innovation as healthcare providers now have a more straightforward path to integrate advanced diagnostic technologies like Andreas and the third building block involves the FDA's recent approval of resident from Madrigal Pharmaceuticals pioneering drug therapy for national mash marking the beginning of a whole new chapter in liver disease management. This therapy, along with other emerging targeted treatments for liver disease will significantly impact both health care providers, insurers and patients major insurers like Blue Cross are requiring adherence to nine specific authorization criteria for resin deferral, including an MRI-PDFF liver fat exam, which can only be performed by the most advanced subset of the world estimated 58,000 MRI. This underscores the complexity of managing Nassib NASH and highlights the need for precision in diagnosing and treatment, whereas different and similar drugs will consequently drive demand for more accessible point-of-care diagnostic tools like Andreas tails that are capable of facilitating the screening and monitoring of liver disease, which affects over 2 billion people.
Finally, we're actively exploring collaborations and strategic pathways to expand the applications of our Talus platform beyond the liver. By leveraging our intellectual property and engaging in strategic partnerships and out-licensing opportunities. We aim to capitalize on the potential of Talus in new therapeutic areas. We have engaged patent vest, a leading intellectual property advisory firm to spearhead the valuations of Andrew's IP competitive landscape analysis and M&A outreach efforts. This collaboration will strengthen our position in the rapidly evolving medical technology landscape and enable us to explore a new set of opportunities for the TS platform to that end, we've been aggressively expanding our global intellectual property portfolio with the issuance of 16 new patents in the U.S., China and Europe in 2023 and two patents issued so far this year. With these additions, ANDREW patent estate has reached an impressive 75 issued patents worldwide. These patents safeguard key innovations that are integral to the tier system and reinforce our competitive edge in the market.
I'll now turn the call over to Mike Thorne, our Chief Technology Officer.

Michael Thornton

Mike, thanks for as well. In the third quarter of 2023, and we received an additional information request known as NAI. from the FDA related to our 2023 de novo submission.
Yes, I request included questions related to the final configuration of our system. The clinical data submitted nonclinical testing such as electrical safety and compatibility testing and cybersecurity. Over the past 12 weeks, we've had a number of interactions with the FDA, including providing additional information and we submitted a request for an in-person presence of meeting. The FDA has granted Android, an in-person meeting in the second quarter of 2024 in anticipation of that meeting and potential request for additional clinical testing and or has prepared a protocol for a proposed statistically powered multi-site clinical study using the latest version of our technology. It's the statistical analysis plan and hypothesis were based on data collected on 45 subjects supplementing the data presented in 2023 at European Liver Conference. This this additional clinical data further confirmed our product's historical performance and was provided to the FDA for the first time as part of the pre-submission at the pre-sell meeting, we plan to demonstrate the product and obtain alignment with the FDA on the final device configuration and clinical study design. We believe that our recent interactions with FDA reviewers has pretty significant alignment and understanding related to the principles of operation of our test platform and a specific understanding of the tasks required for the regulatory grant of our technology.
In summary, Endo believes that was close communication and alignment with the FDA regarding the device configuration and clinical study protocol design and can achieve a successful outcome. As I mentioned, we're excited to have added KCH. London as a clinical collaborator site earlier this year. In addition, we recently received IRB approval for a new study comparing our test derived fat fraction measurements to MRI-PDFF in collaboration with the University of Michigan that brings and grows global currently active clinical study partnerships before including Rocky, this, the University Medical College of Wisconsin, the Michigan site and King's College in the UK. I'm happy to report that both the TCH and Michigan studies have initiated and recruited several subjects. These study sites are critical to supporting Enterra's clinical validation efforts and ultimately clinical adoption of our technology. The team and I was excited about our clinical activities in 2024, and I look forward to sharing more about our progress in this area.
In subsequent conference calls.
Now with that, I'll turn it over to Rena Pepsi-Cola for a financial update. I read it.

Irina Pestrikova

Thank you, Mike. Turning now to review of our recent financial performance for the year ended December 31, 2023, our operating expenses decreased to $10.5 million from $13.2 million for the same period in 2022. The decrease was mainly due to lower research and development and sales and marketing expense. Our research and development expenses decreased year over year by approximately $1.6 million as we completed the development of our initial products, our sales and marketing expenses decreased by approximately $609,000, mainly due to the departure of our Chief Commercial Officer, general and administrative expenses decreased by approximately $478,000, mainly due to two-year management bonus write off and lower professional fees. Our net loss in 2023 was $10.1 million or $1.58 per share. This compares with a net loss of $13.2 million or $4.50 per share in 2020. Cash and cash equivalents were $2.8 million as of December 31, 2023. In the fourth quarter, the company raised $677,000 in gross proceeds from the sale of common stock through at-the-market equity facility and $1.1 million from the exercise of warrants. We're currently evaluating alternatives to raise capital to provide for our future funding needs.
Now I will turn the call back to Frank.

Francois Michelon

Thanks, Rina and Mike. In summary, for our listeners, we remain committed to driving innovation and our market presence through the following five levers, number one, activating new partner sites in Europe and the U.S. to build our body of clinical evidence and achieve our regulatory and commercial goals. Number two, continuing to engage closely with the FDA to advance our regulatory submission in the US. Number three, strengthening our commercial position through clinical relationships and local awareness building activities, fourth, leveraging the accelerating market developments in the detection and treatment of liver disease to strengthen Andrew's position, and fifth, leveraging our intellectual property to grow beyond our current markets and clinical focus. On behalf of the entire Andrew team, I want to extend our thanks to the shareholders for their continued support. And now, operator, we're ready to open the call for questions.

Question and Answer Session

Operator

We will now begin the question and answer session. To ask a question. You may press star then one on your telephone keypad. If you are using a speakerphone please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two, our first question comes from Edward Woo with Ascendiant Capital. Please go ahead.

Edward Woo

Yes, thank you and my question. Yes, hey, guys. Congratulations on the progress you guys have. It looks like the FDA on deadlines or decision timeframe has been pushed while past to expect 150 days. Is there any new guidance of when you think a decision may be made?

Francois Michelon

Yes, thanks for that on. So to be clear, the 150 days we referenced is a target from the FDA on their website in terms of review days and I hope we clearly emphasize that this was part of a range and a goal by the FDA. First, I would say the good news is we're clearly in close communication and engage with the FDA on the fact that they granted us a meeting to advance the discussion to demonstrate the product and review some of the clinical data is a good thing I think these things take time and before turning it over to Mike, you know, we're doing everything we can. Although we don't control the entire process, we remain confident based on the clinical data we've collected and the performance as well as the tone and the type of questions that we've received from the FDA, that we will reach a positive outcome together I cannot, however, and this is the bad news. I can't give guidance because not all of that is within my control. And so I understand we want things to happen as quickly as possible. And Andrew is certainly working in that way, but I think the fact that we're engaged and closely aligned with the FDA is a very good sign.
Mike, do you have other thoughts you might want to add?

Michael Thornton

Yes. And just to follow up on some of the comments that François made in the past 12 weeks, as I mentioned, we've had several interactions with the reviewers individually and sub groups and up the clinical study design is something specifically we will look to discuss with them and align on our in-person pre-submission meeting coming up in the second quarter. Once we have, that will be much better able to forecast timing of those studies, if required and said subsequently, other key events in the regulatory process.

Francois Michelon

I hope that's a fair and transparent answer.

Edward Woo

That sounds good. You mentioned if there's a date in the second quarter, would you be announcing when that meeting will happen? Or will you just it disclosed after you have the meeting and any?

Francois Michelon

Yes, these things can shift. And so it's in the second quarter, it's confirmed us assuming the FDA sticks to that, we'll have it. And then we will, as we always have done, even if it's out of sequence with quarterly reporting, update investors on that meeting. So it's set. It's been accepted number of people attending in the second quarter, and we'll update investors after that.

Edward Woo

Great. And my last question is, it didn't seem like you had as many issues getting approval in the EU? Is there just something different in terms of getting the approval in the EU? That's very different from what the FDA is requiring?

Francois Michelon

Yes, it's a great question and thank you for highlighting the fact that we have a major regulatory approval of the CE Mark in Europe, but they are quite different. And I'll let Mike speak to that, that distinction, but FDA is definitely a higher bar. And so it's not surprising that the requirements and the time lines tend to be a little bit longer. But Mike, if you'd help our listeners better understand that distinction and why it takes normally a little bit more work to get the FDA approval.

Michael Thornton

Sure. So CE., a clearance of medical devices, including new technologies such as ours and novel technologies such as ours, is largely focused on safety and processes. The Efficeon is absolutely focused on those same items and then has a much greater scrutiny on efficacy, including clinical efficacy, and that's even more true with new technology. So since they've introduced the de novo pathway, I would describe the pathway for most other companies now going through the process as being directed more and more through the de novo pathway, just like Andreas, I think Francois said were really being treated very similarly to other similar new technologies, including ones for liver health and the dual pathway definitely requires clinical data. That's one of the key pieces that differentiates it from the five 10 K process which we pursued earlier.

Francois Michelon

Thanks, Mike. And just to tag on an extra bit of reaffirming some of what we've said, the CE mark enables us to sell the product in Europe. But as I mentioned, having a body of clinical evidence from local users in each target market is the missing link. And so that's clearly what we and other companies do and King's College being a good example of that will be a source of data. We'll be able to bring our potential customers in the UK to visit that site. They'll be able to see the system on the ground in the UK, they'll be able to eventually review the data from that study and we'll do the same in Germany and France and other markets. So the CE mark is a great starting point. I think it reflects the product quality and combined with the clinical data that we're building on that will lead to commercialization. And in parallel, certainly same thing will happen here in the US with the FDA. I hope that's helpful.

Michael Thornton

Yes, that was very helpful. Thank you very much for answering those questions that again, I wish you guys a good luck. Thank you.

Francois Michelon

Thank you so much.

Operator

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

Francois Michelon

Yes. Thank you, operator, and thank you to my team and to the listeners today for listening to our progress. I'll close the call and wish everyone a good long, Easter weekend if you're celebrating Easter and looking forward to updating everyone with news as we progress. Thank you. Bye.

Operator

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