InfuSystem Holdings, Inc. (AMEX:INFU) Q4 2022 Earnings Call Transcript

Richard DiIorio : Yes. So Alex, thanks for the question. There’s a lot to unpack there. So let me start with the prioritization of ITS and DME. I wouldn’t say we’re deprioritizing ITS. I think we’re deprioritizing Pain within ITS and the reason is the opportunity set with the Sanara and Wound Care piece is just too great, long term for us to not put resources and time into that versus Pain. It doesn’t mean we actually expect Pain not to grow. We actually have a pretty modest growth number in there, but we expect some growth from Pain. It’s just this executive team, our company’s time, marketing resources, IT resources. That’s going to largely be shifted into the Sanara’s relationship and partnership. So it’s not that we’re deprioritizing ITS, just within ITS, Pain is kind of moving second in line behind Sanara in Wound Care.

The GE opportunity, obviously, that’s a major focus because it’s here, right? It’s arrived. It’s in our hand. It’s ramping today. It’s not something that’s here in 3 months, 6 months or 12 months. So that’s certainly a priority. But I would say that, that in Sanara, like if I could write on the board, what are our company priorities to focus and execute on. It’s the GE relationship on the DME side and the Sanara preparation for ’24 on the ITS side. I would say that’s how we’re prioritizing things internally. As far as the challenges of Pain and Wound, it’s been different. Pain has been hit with a lot of things kind of out of our control from drug shortages and bag shortages 3 or 4 years ago to COVID multiple times, supply chain issues last year for almost the whole first half of the year.

It’s just things outside of its control. It’s not that the program is not great. The program is strong as it’s ever been and people love it. I just think that it’s been hit with some things outside of its control. And I think that’s a market thing with Pain. I think in Pain, it’s — the market is driven by opioids, and it’s easy for people to drop back to that versus just saying, hey, we’re going to push through issues and continue to use continuous peripheral nerve block. In Wound Care, I think that’s different. I think in Wound Care, it’s a need in the market. It’s not something that’s nice to have or we don’t have to shift people’s paradigm. It’s a product and a service group that people are going to need. Just to kind of — to pile on the Wound piece, what we launched 3 years ago with Cardinal is not what we have today.

And I want to be kind of clear about that. We launched Cardinal. We thought they were going to be a great partner. It was right in the face of COVID. It was like 2 weeks before, and we had 1 product and we had 1 product in a very limited market. We were only allowed in the kind of post-acute space or patient to home, I think it is a better way to say it. But we were kept out of the skilled nursing facilities and long-term facilities in that agreement, and that’s where the majority of the revenue is in the patients. With the Sanara relationship and the Cork relationship, it’s totally different. We have full access to the full breadth of the market with a full product suite. It’s a totally different service than what we launched 3 years ago. 3 years ago, it was an entree into the market.