Good morning, and welcome, everyone, to the Beyond Air financial results call for the fiscal third quarter ending December 31, 2019. Today's conference is being recorded. At this time, I'd like to turn the call over to Monique Kosse of LifeSci Advisors. Please go ahead..

Thank you, operator, and good morning, everyone. Thank you for participating in today's financial earnings conference call for the company's fiscal third quarter ended December 31, 2019. Leading the call today will be Steve Lisi, Chairman of the Board and Chief Executive Officer of Beyond Air.

Joining him today will be Douglas Beck, Chief Financial Officer; and Amir Avniel, President and Chief Operating Officer. Earlier this morning, Beyond Air issued a press release announcing its financial results for fiscal third quarter 2020. A copy of the release can be found on the Investor Relations page of the company's website.

Before we begin, I would like to remind everyone that comments and various remarks about future expectations, plans and prospects constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.

Beyond Air cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated.

Beyond Air encourages you to review the company's filings with the Securities and Exchange Commission, including without limitation to the company's Form 10-Q, which identifies specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.

As a reminder, this conference call is being recorded and will be available for audio rebroadcast on Beyond Air's website, www.beyondair.net. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, February 7, 2020.

Beyond Air undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call. With that, I would like to now turn the call over to Steve Lisi, Chairman of the Board and Chief Executive Officer of Beyond Air.

Steve?.

plug the system into any standard electric outlet, turn on the power switch and insert smart filter into the system, place the breathing mask on the face and press the start button. It's a very straightforward system. The pilot study is designed to enroll 20 patients infected with NTM with either effective MAC.

The 12-week study will evaluate safety, quality of life, physical function and bacteria removal. The FDA has emphasized recently the importance of quality of life improvement in physical function as well as improved safety profile as markers of success versus solely eradication of the bacteria.

Data from patients treated to date with NO gives us confidence that we can safely treat patients for 12 weeks at 250-plus per million, improve patients' lives on multiple parameters and improve current rates of eradication. Based on our current expectations, we expect to report interim data from the at-home study around the end of calendar 2020.

If successful in our LungFit at-home NTM study, we believe it opens the door for a very significant market for chronic, severe lung infections treated in the home. And with proper resources, we could potentially explore a program in COPD patients with severe exacerbations brought on by any pathogen, which is a very large underserved market.

I would like to point out that our preclinical toxicology testing of our LungFit system is complete, and the results are stellar. I am pleased to report that both our 12-week rat and dog studies have been completed, and the histopathology is complete as well. There are zero observations.

In other words, there were no differences, macro or microscopic, between treatment with 250 parts per million nitric oxide with the 12 weeks in control. The protocol used in these two studies mimicked the protocol that will be used in clinics in our upcoming at-home NTM study.

These results complement the 30-day rat study that was completed previously at 400 parts per million, where there were no differences versus control.

Before I turn it over to Doug to review the financials, it's important to note that we recently completed a public offering and private placement of our common stock, raising $11.5 million in gross proceeds. This will support our activities, developments and anticipated amounts at least through fiscal year 2021.

We are very excited about the outlook for the next 18 months, and I'm eager to share our vision with you at our Analyst Day on March 5, 2020 at 2 p.m. in New York. We will display our commercial-ready systems and have several members of the Beyond Air team in attendance to speak with.

We will also have KOLs presenting their perspective on acute pulmonary hypertension, bronchiolitis and NTM and why LungFit is used. These are truly exciting times for everyone involved, and we look forward to an in-depth discussion with you next month. With that, I will turn the call over to Doug for the financial review.

Doug?.

Thank you, Steve. Here's a brief review of our third quarter results ended December 31, 2019. Revenue for the three months ended December 31, 2019, were $314,000. This revenue came from the milestone payments from our partnership with Circassia. There were no revenues from the same period of 2018.

Research and development expenses for the three months ended December 31, 2019, were $2.6 million compared to $0.6 million expense in the same three-month period of 2018. General and administrative expenses for the three months ended December 31, 2019, were $2.5 million compared to $1.8 million for the same three-month period 2018.

For the three months ended December 31, 2019, the company had a net loss to common shareholders of $4.6 million or $0.43 per share compared to a net loss to common shareholders of $2.4 million or $0.28 per share in the same three-month period of 2018.

As of December 31, 2019, the company had cash, cash equivalents, restricted cash and marketable securities of $15.5 million. This cash is sufficient to fund operations beyond the next 12 months. I'll now hand it back to Steve..

Thanks, Doug. Before we go to questions, I would like to acknowledge the excellent job and tremendous effort by the Beyond Air team.

On most fronts, we have met or exceeded our goals, and we expect to continue this trend and launch our LungFit PH system later this year, have our LungFit BRO pivotal study completed during 2020, '21 winter season and complete our at-home LungFit NTM study in the first half of 2021. Thanks to our many supporters who've helped us get this far.

We will never stop pushing to improve patients' lives with LungFit and reward our investors, the patients that believe in us. Now we would like to open up the call to your questions.

Operator?.

[Operator Instructions] Our first question comes from Suraj Kalia with Oppenheimer..

Steve, can you hear me all right?.

Yes..

Okay. So on BRO, Steve, walk us through what data should we expect in a few weeks from the pilot study? And also for the pivotal study, the second quarter '21 time line highlighted, can you walk us back through the data from the pilot? And then how that parlays into pivotal number of patients? Any color there for the pivotal BRO would be great..

Sure. So the study that we'll be reading out in a couple of months, this is a 90-patient study in Israel, and it's blinded, so we don't know anything yet. But we'll be showing efficacy safety data in a small number of patients.

Again, this is helping us to potentially reduce the size of the pivotal study, and it gives us some confidence on a few things, a few tweaks that we should have trialed this on and, ultimately, [indiscernible] things. So I'll give you one example. One example is the mask. We wanted to optimize mask, continue the study, [indiscernible].

We wanted to make sure we have something that will work on one-month old and the 12-month old. So we tested a lot of masks in the study and we put it in, and it's actually going very well. So we're very happy with that. That's one example of cumulative study, which has been better than the pivotal study.

And there are some data points that we'll be looking at that maybe boost the size of pivotal study. So right now, the pivotal study, you asked about the size, I'd say the pivotal study is going to be somewhere between 250 to 300. And maybe if -- we might be [indiscernible], we will be able to reduce the time significantly [indiscernible].

So we may be able to study that will help a couple of dozen patients enrolled in the pivotal study, which is -- which should be input actually might even justify the cost that we spent [indiscernible].

So I don't know if there's any further detail you wanted on bronchiolitis or I can walk you back on the time line that should be '21 because of absence in this data..

Right. No, that's good enough. And if there isn't a roll in, right, for the 90 patients on the pilot that potentially could be brought over into the pivotal, correct, the pivotal would be completely separate, 250 or 300 patients. And there wouldn't be data mixed in. Okay..

No, not at all. It's absolutely simple..

So second question, Steve, you mentioned coronavirus.

And forgive me, I don't have your exact words from your prepared remarks, but what has been done so far vis-à-vis coronavirus? Your comments caught my attention there?.

So look, in bronchiolitis, there's coronavirus in these infants. About 65% of bronchiolitis is caused by RSV. The other viruses, the coronavirus is being one of them. So we really didn't do a lot of genotyping here.

We didn't -- in our studies, we didn't say, hey, we really want to know exactly what subtype there are in each infant, but we do have some data, but some of the hospitals are doing that on their own. They will know what type of virus was in the input, some do, some don't.

So we scoured back through the data in the trial, two trials that are completed, obviously, the trial we're doing now, again, obviously, in the middle of the trial, we're saying, hey, who is doing this? And if you're not, can you for the rest of the babies? So we don't know if we're going to have any coronavirus in this study.

But in the other two we did, and we've looked at it. And it's obviously, from two different studies, it's a very low number of patients, but there's definitely promise there. I can say that. It certainly piqued our interest to look at it. And it gave us confidence to kind of move forward and look at more options.

So we will be doing some in vitro work in the very near future. It will not be with the coronavirus from China. Obviously, I'm sure most of you know, it's very hard to get a hands on it, number one. And number two, you need proper type of lab to do it in. It's very difficult to have that. We don't have that.

So I don't know what will happen going forward, Suraj. We have the data, we'll have some more data. Again, there are different trains of coronavirus, and we'll do our best to get as much as we can. And we'll see. Obviously, everyone knows that many governments around the world are looking for help. We will present what we have.

And if they want our help, we're more than happy to do it. But at this time, we're still probably a couple of weeks away from knowing if anybody will start help specifically..

Got it. And finally, Steve, PPHN if delayed by -- if the submission is delayed by approximately a quarter, if you have -- are to launch, let's say, Q4, calendar Q4 '20, then can you just walk us through what all needs to be done between -- obviously, you submit, as we understand, its max is a 6 month or at least statutory is 6-month review period.

How you all are thinking through it to give your confidence in the 4Q launch time frame?.

Sure. So just to recall, we definitely stated that our submission is going to be towards the end of March, given that we're working on our IDE submission for bronchiolitis. So I wouldn't say we start by an entire quarter, that would be the end of June. We're very disappointed in that. So I don't think that's the case.

So we think that 180 days gets us to a point in the fourth quarter where we will have time to launch. And just to reiterate, I've done a few times when people have asked that the launch is not a big giant launch to over 1,000 hospitals on day 1. This is more of a slow launch with a small number of hospitals.

So getting it launched quickly, it's not really an issue if we are going out to 1,000 hospitals to do the launch immediately. So that's not the plan, it never was the plan. So launching in the fourth quarter of this year should be a problem. If we get approval in October and November, it won't be an issue at all.

Obviously, if it happened in December might not happen, we feel so. So right now, we feel comfortable that we'll be able to launch another new [indiscernible] this year. So again, there's no reason to believe at this point that, that wouldn't happen..

Our next question comes from Matt Kaplan with Ladenburg Thalmann..

Congrats on the progress during the quarter. You mentioned in your prepared remarks here, discussion is ongoing with potential partners for the PPHN program U.S., ex U.S.

I guess, question is, is there anything really that -- any recourse that Circassia has at this point that could prevent you from signing a new partner in the U.S.?.

It's a great question, Matt. I don't know if I have the answer. We took action. In our action, we feel very comfortable with what we did. We think it was the right thing to do. And therefore, in our opinion, they don't have much of a recourse to stop us from progressing forward.

I can't speak for potential partners in the space what their opinion is about it, about the situation. So I really don't know how to answer the question exactly. Our opinion is there's nothing stopping us from operating our business and moving forward in any way we choose to, but others may have a different theme..

Got it.

And then ex U.S., that should be [indiscernible], correct?.

That's outside of China technically. Technically, the deal with them was for U.S. and China. So I don't want to -- I just want to make that clear. But outside of those two territories, there was no rights to them. So yes, that would be correct..

And then just a follow-up on the BRO program pilot study specifically.

In terms of helping us to that kind of, let's call, expectations in terms of what you're looking for in the endpoint there with respect to efficacy, can you help us understand what to look for when you report out data?.

So it's the same thing that -- and again, this study is small. So it's not powered for statistical significance, just want to make that clear. 90 patients have not powered to show statistical significance, we don't expect to see it.

We should expect to see, obviously, separation, but it won't be statistically significant, which is not big enough, and that was done on purpose. So we can only get expectations up for a P value of 0.05, it's not the goal of the study. But we are looking at the influence of the same as the studies before. We're looking at oxygen saturation.

We're looking at the modified power score, which is positive improvements for four endpoints in that composite, two objective and two subjective, and we'll also be looking at hospital length of stay. Those are the main ones.

And again, in the previous study, the current endpoint was half the actual physician's decision to discharge patient from the hospital? In this study, we're going to be looking at that. We're also going to be looking at the composite influence of the Tal score and oxygen saturation. So it's the same as before. So let me try to explain it simply.

A physician in the last study could not make a decision for discharge, unless the Tal score was met and oxygen saturation endpoint was met. Both of those endpoints, secondary endpoints, in the previous study needs to be met before the physician was even allowed to consider a decision for discharge. Okay.

So in this study, we're going to be looking at each endpoint individually. We'll be looking at the composite of those two endpoints combined and looking at the discharge. In the previous study, we didn't do that interim step. We didn't look at the combination of Tal score and oxygen saturation before the physician made a decision. It wasn't looked at.

In this study, we'll be looking at that as an endpoint as well. So it's the same three endpoints we're looking at, but there's an interim step endpoint that we added to the study to look at. So in other words, oxygen saturation is an endpoint, Tal score is an endpoint.

Then the combination of those two occurring will be a third endpoint and then discharge will be the fourth endpoint. So you'll see that we're looking at -- that we'll report on four endpoints in this study, rather the last one, where we reported on three. I don't know if I'm making sense to everybody, but I can explain it on March 5 a lot better.

The slides will look great..

That's really helpful. That's really helpful.

And then in terms of what you're thinking for the pivotal study as a primary endpoint?.

Well, that's what we're going to find out. I mean, I think that interim step that I mentioned just now. I think that we may be looking at that as primary endpoint rather than actual discharge from the hospital. That's going to be -- we'll see what happens here and there could be a discussion with FDA. I think, either way, it doesn't matter to us.

We'll win on either one. So it's just a matter of what we see in this study as there it's been through that. So for us, it doesn't matter. But FDA wanted to -- they wanted to -- for us to answer some questions before they signed off and that's what we're doing..

Great, great. And then last question. In terms of your PPHN PMA file. Previously, you had said that there were some software engineering, things that you need to complete.

What do you view as kind of the late limiting step now in terms of completing that PMA file?.

Paperwork, let's call it. Organizing all of the test reports, putting them into a prepped form for PMA. We haven't completed all the testing. So I don't want to share the testing right now. But I think that doing the test, completing the test, that's not a problem.

Just putting everything together the right way and making sure it's a high-quality PMA filing. This is just kind of blocking and tackling with our partners, our vendors and making sure that we can get everything coordinated. That's the state that we're at. You'll see the system on March 5. This will be a representation of a commercial system.

This will be one of the devices that we've built for the -- on the commercial line for evaluation by the FDA. So this will be what would go into the hospital. So you'll see it. It's ready for prime time. We just need to take the system, obviously multiple systems, off this line and do the requisite testing that FDA requires.

Now all the requisite testing FDA requires, we just completed all that testing with our bronchiolitis system for our IDD. Testing is very similar. Obviously, there will be a few differences, but it's very similar.

There's just a lot more with the ventilated competitive system than the bronchiolitis system, in terms of data generated paperwork and so forth, plus the PMA versus an IDD. So it's work that we just did, it's just going to be on a little bit bigger scale with the ventilated compatible system.

So it's just a matter of getting it together and getting the resources from our partners and making it happen. The software that we mentioned many, many months ago, you'll see on the 5th that, no problems, everything is working beautifully. We showed it down in November at AARC.

That was not the commercial-ready LungFit PH system, but it was a fully functioning ready LungFit PH system on a ventilator. So that system is great. Now we have the one coming off the commercial line. So it's ready to go. So again, it's just a matter of us -- our ability to coordinate everything with our partnership and make it happen..

Our next question comes from Scott Henry with Roth Capital..

Steve, with regards to the PTHN launch, which would happen in Q4, calendar year.

How late can you wait before making that partner, non-partner decision? Meaning, at what point do you have to kind of prepare for the launch one way or the other?.

Yes, I think that once we submit -- I think, that first 30 to 60 days after we submit, we're going to be putting on the commercial side, we'll be putting in a lot of effort on our side to put things in place. So if someone's going to do something, it would be shortly after that PMA submission.

I think if we get past 30 or 60 days, we would have to just say we're not going to [partner]. So I think that's kind of the timing. I wouldn't -- at that time, I'll let you know, "Hey, there's something close and we may not go alone still", but at this moment in time, you asked the question.

I think that 30 or 60 days after we submit, if we don't have somebody that -- if we do have a structure of a deal that's conducive to us, it's something that we believe is worthwhile taking, we would go along..

Okay.

And with regards to Europe, I believe you were planning on filing in the first half of 2020, is that still the case?.

No, we removed that guidance a while ago, nine months ago, I think. Because the -- 6 months ago, we removed that guidance, it's just been a while. So the new rules in Europe come out April 1. And it's just been -- we're a small company here. We don't really know everything that's going on. We have some consultants and people that we know.

And they're just as confused as we are and they're kind of just waiting for these new regulations to come out of Europe. So once they come out, we will evaluate them and see what we can do. So it could be a back half of this year filing, could be another two years.

Just don't know until we get the final regs from them, and we get our people, who are experts over there to shift through it and try to figure out how our product fits in. So I really just don't have a definitive answer for you on timing on that, because we are -- we're at the mercy of what these new regulations are going to say..

Okay, fair enough. And with regards to the at-home trial to start in the middle of this year.

Are there any gating factors for that trial to begin? Or is it more up to your timeline?.

Well, there's always a gating factor. So there's IRB approval. That's a gating factor. We are going to make our submissions on the time lines that we've been told, we need to make them for the IRB review. So if the IRB is reviewing in the timeline they're supposed to, that's good. So I can't control that.

But given the timelines that we've been told, we're going to meet those timelines to submit to IDE, and they will review and we'll be ready to go. With respect to manufacturing, we just manufacture our bronchiolitis systems, they'll be the same systems used in the home NTM study for now. This is a pilot study.

So we don't have a commercial-ready NTM home system. We don't need it, the study would tell us a lot on how to make that final design. So those systems need to be built, which again, I don't think it's a problem. We've got timelines for both our filters and systems, but in fairness, they're both contracted out.

So if they miss the timelines, that's a problem. But right now, the timelines are on track, shouldn't be any issues. And this study is going to take place outside the United States, study is going to take place in Australia. So hopefully, our shipping guys don't have any customs problems. But I mean, that's really it, Scott.

These are normal things in the trial, normal things that you go through. And right now, we've got schedules for everything. Everything is in place. And so nothing should stop us within the timeline or then something out of the ordinary, something out of left field that we can't control. But we're on track for that study. I'm very excited to go to it..

Great. And then just for clarity on the bronchiolitis program.

Is the IDE? Is that going in next week? Or has that already been submitted?.

The bronchiolitis IDE?.

Yes..

I'll let you know it's supposed to go in today. So it happens today, happens today. If it happens, Monday, it will happen Monday. But the team has all the information and it's just a matter of getting it into the format and shipping it off to the FDA.

So I can't -- I don't have the confirmation that it was done today or will be done today or if not today, it'll be Monday. But our team, obviously, is moving on after today to the P&A. So that's where we are. Everything was done for it.

Just I'm not clear to how you need to submit these things to the FDA in this format? And if we can get done today, we will, if not, then it'll be Monday..

Great. And just a final question, more on the accounting side. Given what's happened with Circassia.

Going forward, do we pull out those milestones? Do they not get counted anymore? Or just any accounting changes that we should think about in our model, given what's happened?.

From the Circassia deal. I mean there's nothing. That's it -- they don't exist any more in the model..

So the amortization, which happened in this quarter won't continue?.

I'm not sure, Doug, if there's still going to be more because we recognize that, I think it was just a couple of hundred thousand quite or so. There might be a little bit less next quarter.

Doug, do you know, if there's a little bit left in the end?.

There's about 650 or so left. Most likely we'll be taking in the revenue based on what is performed on this obligation in the future..

So over the next two quarters, Scott, that will be in there. We don't know exactly how it will be -- it will break down between the two quarters, but it's basically amortized from the deal signing to the PMA solution on the organizational schedule..

It's really based on the cost-to-cost method, is what we expended..

Our next question comes from I-Eh Jen with Laidlaw Company..

Steve. The first question for the potential partner versus the sales and marketing. Given the program, theoretically, a little more due risk.

Do you anticipate or do you want a deal that's better than the Circassia deal to be the goal or the requirement to sign the deal? Or you have other considerations as well?.

I think there are other considerations and I mean specifically global deals, for example, that would be -- we won't be able to compare it to what the terms were prior. It's shown in the deal. Yes, you would think it would be at least those sort of methods, but there are some other considerations that we will keep..

Okay, great. Two more quick ones. First one is that the -- can we anticipate in the Phase II meetings in the third quarter of this year for bronchiolitis, given that you will start a trial in the fourth quarter of this year.

The pivotal study in the fourth quarter of this year?.

Yes. I don't know who does the FDA again. Obviously, after we get the results. And I'll pause with my team really to see but at this point, I don't think we need to check on FDA.

Again, I think we've already set balance with them and think we are pretty much -- you expect us to cooperate they that have told us and guided us to cooperate and when they asked us very recently. And you're going to hit everything, they're asking for a pivotal trial design.

Again, I think the results that will come out now is really going to help us pilot the study process. It's [indiscernible] so it's very much changed from the FDA as we see it..

Okay. Maybe then last question, that in the press release, just one thing you mentioned there is the collaboration gas deal with MESA Specialty Gas.

So do you want to elaborate a little bit more or just giving the significance of that particular deal?.

Yes. So yes, Two questions. Right now, the only calibration gas that's available in the U.S. comes from a sector Aspect, for the specific purpose of calibrated immune systems that used for humans. Obviously, there's plenty of calibration investments back, as I mentioned Aspect in being some of the different vendors.

In our opinion, management-wise, the level of being allowed to sell their gas to hospitals to calibrate mass bronch systems, who use [indiscernible], anybody can do it first except. If we were to come to market without a source of cal gas. That would be a problem. I can imagine why Circassia wanted to sell to its [indiscernible].

So it's very important to secure supply. And that's what we did. We said it's fantastic what they did. If they happen to have anything important, I think we're going to be ready to go with that. In addition to that this gas is not only going to be for common hospital systems from it's going to be for all of our systems.

So if we [sell] the bronchiolitis system and [indiscernible] systems, the at-home system treating any lung infection. Those systems will be compatible as well. So now we have to supply the calibration gas to all of our systems and global to make that currently shipped product to [indiscernible] comes down the road.

So if you have those distribution systems in channels to get the gas wherever you use them.

So as we move forward, we have ultimate confidence that we keep supply calibration gas to any hospitals or any partners that have home system, so that we can make sure that the calibration can be effective given that they rely on others who have most likely our competitors and probably [indiscernible]. So it's very important to have this locked up.

We did it early in [indiscernible]..

Okay, great. Thanks and congrats and have a pretty eventful year to come..

[Operator Instructions] Our next question comes from Dave Sherman with LifeSci Capital..

This is Rahul on for Dave. Just two quick ones for me. If you guys were going to take on U.S. commercialization in PPHN yourself.

There are certain hospitals you would target early on? And how could that potentially change if you were to find a new commercial partner?.

I'm not so sure that the initial target hospitals are going to change much, not that it's also important beyond -- there are several factors at play and I just don't think it matters if it's done by us or a partner with the same hospital that we targeted. And I'm pretty sure [indiscernible] to treat them..

Okay. Great. And then in terms of the study design for the at-home trial and NTM.

Can you remind us of your plans for monitoring these patients in the study? How frequently you will be checking in and what kind of freedom you have to engage with them and kind of help them optimize treatment?.

We're not going to be helping them in at-home. That's the whole point that you should be able to do this on your own. So there will be visits, obviously, I've just mentioned calibrations act. So we have to calibrate the systems, just normally calibrate it once a month. So if they're going to be treated for 12 weeks at home.

Obviously, there's going to be at least two visits for calibration. So we'll be able to visit them and calibrate systems and also do a check.

But these patients -- if there's any issues in learning and then they're going to be -- they are going to be patients who have underlying serious illness, some type of bronchiectasis, that is slightly CF or non-CF.

So they're going to be in communication with their physicians if there's anything from a medical perspective, they'll be able to go their physician and see their physician whether that is at the hospital or elsewhere. But with respect to the system itself, we are certainly going to be at least in the home twice in the time period.

And probably, there will be a couple of new checks on the patient and on the systems to ensure -- as you can imagine, using the filters, we probably don't want to give any problems with the filters at one time. We'll probably stop off a couple of times, dropping those filters on a regular basis, rather than just giving them the entire amount at once.

You don't need them, two days after they go home, at which point [indiscernible]. So there'll be ample times -- ample opportunities for us to interact with patients, helping the patients answering some questions and the patients will be trained in the system before they go home obviously.

So as long they are be able to go home and use the system, half the training that we will be giving them will be specifically at this point. So we're very confident with the trial design because a lot of parameters [indiscernible] for safety and then we can get it going..

Got it. That was very helpful. Yes. I mean, I think that's it from us, we're just excited everything as over the next 12 months..

Our next question is from James Molloy with Alliance Global Partners..

I had a quick question on the potential marketing -- additional marketing partner for the U.S.

launch? I mean, what -- can you speak to the interest level that you're seeing and sort of what the ideal new partner or a new deal for a new partner would look like from XAIR's perspective?.

Yes. I mean, there's interest. And again, you have to understand that this is a niche market. It's not like there's 50 or 100 companies that want this, it's not a GP market. It's not a general hospital based product either. It's a very specialized product within the hospital.

So the universe of potential partners is a lot smaller than your average products that really do have interest. And I don't know what ideal is. We have to see.

There's a lot of factors here, who the partner is? What their abilities are? What the kind of -- if you can embattle the royalties and the front payments and how do they match up on custom made and not custom made [indiscernible] space? I think that's an interesting question that's out there.

So there's a lot of different things here that could lead to an optimal deal for us depending on different factors that we're looking at, but just -- everybody has asked this question. So you have to keep in mind that the second indication of bronchiolitis, and that's a hospital based product, that it is being used in the hospital 100% of the time.

It's pediatric purpose, which are going to be babies. They are going to be infants, that have another trials at optimum year of age. So it's a little different than new borns, but still it is pediatric purpose in hospital. So this would be a lot of overlap with Sales force.

So as you can imagine, if we do have a partner who might be interested in looking at a [indiscernible] notes perspective, that would be to give us a leg up in the bronchiolitis branch. It's going to be about two years behind this stage. So that's a major factor for us in terms of having discussions on the forms.

We've been talking to them about the kind of structure they'd like to have. So when you look at the bigger picture of our company, don't keep the bronchiolitis branch in mind. This isn't just a one-off thing [indiscernible] and nothing for the rest of our company, which is not true. From a commercial perspective, if you look at our at-home product.

Yes, there's really not much. There's not much overlap between the hospital and the at-home systems in terms of use of need. So we will have that in our minds as we think about this deal because we do have to take a look at a lot of the details..

And then just a follow-up on that. What do you anticipate? I know that there's going to be a tough question to answer on a call because competitor's probably on this call, but coming in with a fairly disruptive technology should -- that we see.

What do you see as a potential responses from sort of the installed base in this niche and sort of the plans that you guys have to respond to their reactions?.

Yes, I don't know what they're going to do. So we have a whole bunch of scenario announces that we've gone over into '20. So hopefully, we've thought of every possible thing they can do, and we're prepared for us to respond to it. But you have to ask them what they think of us [indiscernible] I really don't know which triggers they will pull.

I think [indiscernible]..

Got you. Well, last question then, just to touch on, briefly, the coronavirus thing, and I know that you're simply not planning it up as a big part of the story and it sounds like if you can be of some help, you will. But it's certainly a topical story, obviously.

And what kind of timing would you anticipate were there to be some actual developments along those lines from you guys?.

Yes, I think that the governments around the world that are looking for help. They want something fairly quickly. I don't think -- I think they're looking for people, the companies that could help within the next 30, 60, 90 days, is my guess. I think if we get into the summertime and they have no solution, then there's probably no solution.

So I think it's going to happen fairly quickly. We're in February. I'd be surprised if we got past May or June, where they didn't have things ready to go. So if it's going to happen and it happened quickly. Again, you're going to throw a hat in the ring. And if we can be of service, we'll do it.

And they think our products can help and our treatment can help. We're going to do what we can. And I think that our manufacturing partners will do the same thing. They would do the best that they could in terms of turning out product as quickly as they could to help with this situation.

So yes, I'm not playing it up, Jim, because this is not part of our plan. This is just something that's happening in the world. And if we can help, we will. And it's not the time to talk about how much money a company can make. This is not the time to talk about it -- no time to talk about it's -- our other products.

Right now, it's just -- if we could be of service, we will and I have no idea what kind of compensation we'd get for that. I really -- we haven't even thought about that.

If there something great -- it's not something that we are -- we're planning on? Or are you thinking about? We're just trying to get as much data as we can together, as quickly as we can to show them, "Hey, we're an option for you, if you need us.".

We have reached the end of the question-and-answer session. At this time, I'd like to turn the call back over to management for closing comments..

Thanks, everyone, for spending time with us. And it's a long call. Thank you very much for all the questions, and look forward to seeing everyone on March 5..

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation..