Q4 2021 electroCore, Inc. Earnings Call
Greetings and welcome to electric or full year 2021 earnings conference call.
Greetings and welcome to ElectroCore full year 2021 earnings conference call.
At this time, all participants are in a listen-only mode.
At this time all participants are in a listen only mode.
A question and answer session will follow the formal presentation.
A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Mr. Rich Cockrell.
I would now like to turn the conference over to your host Mr. Rich Cockrell.
Thank you and what do you sort of think.
Rich Cockrell: Thank you, and over to you, sir. Thank you all for participating in today's ElectriCorps earnings call. Joining me on the call today are Dan Goldberger, Chief Executive Officer, Brian Posner, Chief Financial Officer, and Dr. Peter Stotts, ElectriCorps' Chief Medical Officer. Early today, ElectriCorps released results for the fourth quarter and full year ended December 31st, 2021. A copy of the press release is available on the company's website.
You all for participating in today's electric core earnings call. Joining me on the call today are Dan Goldberger, Chief Executive Officer, Brian Posner, Our Chief Financial Officer, and Dr. Peter Staats Electric <unk> Chief Medical Officer early today Electric were released results for the fourth quarter and full year ended December 31, two.
'twenty one.
A copy of the press release is available on the company's website.
Rich Cockrell: Before we begin, I'd like to remind you that management will make statements that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Before we begin I'd like to remind you that management will make statements that include forward looking statements within the meaning of federal Securities laws, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Rich Cockrell: Any statements contained in this call that are not statements of historical fact should be deemed to be forward-looking statements. All forward-looking statements, including, without limitation, our examination of operating trends and our future financial expectations, are based upon the company's current estimates and various assumptions.
Any statements contained in this call that are not statements of historical fact should be deemed to be forward looking statements. All forward looking statements, including without limitation, our examination of operating trends and our future financial expectations are based upon the company's current estimates and various assumptions. These.
Rich Cockrell: These statements involve material risk and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these four looking statements.
Statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements.
Rich Cockrell: Accordingly, you should not place undue reliance on these statements. For a list of risks and uncertainties associated with the company's business, please see the company's filings with the Securities and Exchange Commission.
Accordingly, you should not place undue reliance on these statements for a list of risks and uncertainties associated with the company's business. Please see the company's filings with the Securities and Exchange Commission.
Rich Cockrell: Electricorps disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise.
Electric or disclaims any intention or obligation, except as required by law to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.
Rich Cockrell: This conference call contains time-sensitive information that is accurate only as of the live broadcast today, March 10th, 2022, at 430 PM Eastern Standard Time. And with that, I'll turn the call over to Dan.
This conference call contains time sensitive information that is accurate only as of the live broadcast today March 10th 2022 at 430 P. M. Eastern standard time, and with that I'll turn the call over to Dan.
Dan Goldberger: Thank you, Rich. Hello, everybody, and thank you for joining us on today's call.
Thank you rich Hello, everybody and thank you for joining us on today's call.
Dan Goldberger: I'm pleased to report that our dedicated team continues to dramatically improve our operating results while advancing so many new opportunities for a proprietary, non-invasive vagus nerve stimulation therapy.
I'm pleased to report that our dedicated team continues to dramatically improve our operating results while advancing so many new opportunities for our proprietary noninvasive vagus nerve stimulation therapy.
Dan Goldberger: We've implemented several new initiatives that we expect will generate strong results during 2022 and beyond.
We've implemented several new initiatives that we expect will generate strong results during 2022 and beyond.
Dan Goldberger: Full year 2021 revenue was a record $5.5 million, increasing 56% over $3.5 million in 2020.
Full year 2021 revenue was a record $5 5 million, increasing 56% over three and a half million dollars in 2020.
Dan Goldberger: Gross margins expanded to 76% and net cash used in operations decreased to $13.6 million for the full year 2021.
Gross margins expanded to 76% and net cash used in operations decreased.
$13 $6 million for the full year 2021.
Dan Goldberger: Entering 2022, our business is more efficient, scalable, and positioned for accelerating growth.
Entering 2022, our businesses more efficient scalable and positioned for accelerating growth.
Yeah.
Dan Goldberger: Pharmacy Benefit Managers, or PBMs, including CVS, Caremark, and ExpressGrid.
Pharmacy benefit managers, or pbms, including Cvs Caremark and express scripts.
Dan Goldberger: Continue to adjudicate insurance benefits for an estimated 12 million covered lives.
<unk> to adjudicate insurance benefits for an estimated 12 million covered lives and provide gamma core therapy to patients that have a high end benefit design that does not differentiate between drugs and devices.
Dan Goldberger: provide gamma-core therapy to patients that have a high-end benefit design that does not differentiate between drugs and devices.
Dan Goldberger: These patients are subject to a co-pay of between $25 and $75 per month depending on their specific benefit.
These patients are subject to a co pay of between 25 and $75 per month, depending on their specific benefit plan.
Even for these patients we find that more than 60% of our patients going through the specialty pharmacy to have their pharmacy benefits adjudicated ultimately pay cash because the patient has not yet met deductible or copay obligations or because their benefit designs has not yet reimburse for noninvasive vagus nerve stimulation therapy.
Dan Goldberger: Even for these patients, we find that more than 60% of our patients going through the specialty pharmacy to have their pharmacy benefits adjudicated
Dan Goldberger: Ultimately, pay cash because the patient has not yet met deductible or co-pay obligations or because their benefit design does not yet reimburse for non-invasive vagus nerve stimulation therapy.
We've established three new cash pay commercial channels in recent months to improve access for patients that are willing to pay for therapy.
Dan Goldberger: We've established three new cash pay commercial channels in recent months to improve access for patients that are willing to pay for therapy.
First G C. Direct allows a prescriber descended prescription directly to our home office for processing by our customer experience team, we work directly with the patient to dispense therapy and collect payment.
Dan Goldberger: GC Direct allows a prescriber to send a prescription directly to our home office for processing by our customer experience.
Dan Goldberger: We work directly with the patient to dispense therapy and collect payment.
Dan Goldberger: Second, G-Concierge, it's a physician dispense model under which the prescriber purchases inventory from ElectroCorps at a transfer price and provides therapy directly to their patient from their own inventory.
Second she concierge, which is a physician dispense model under which the prescriber purchases inventory from electric or at a transfer price and provides therapy directly to their patient from their own inventory.
Dan Goldberger: And third, we launched e-commerce storefronts in the United States and the United Kingdom where consumers can go to our website, fill out a questionnaire that is adjudicated by a telehealth process, obtain a prescription, and then move therapy seamlessly into a shopping cart that is dispensed directly to a patient.
And third we launched e-commerce storefronts in the United States, and the United Kingdom, where consumers can go to our website fill out a questionnaire that is adjudicated by a telehealth process obtain a prescription and then move therapy seamlessly into a shopping cart that is dispensed directly to a patient.
Dan Goldberger: A world-class customer experience team is available to patients in all of these channels, providing training and support for new prescriptions and sending reminders about refill.
Our world class customer experience team is available to patients in all of these channels, providing training and support for new prescriptions and sending reminders about refill prescriptions.
During 2022, we plan to further invest in our digital awareness campaigns initially through paid search and social media in an effort to drive headache patients to our various channels in the United States and United Kingdom.
Dan Goldberger: During 2022, we plan to further invest in our digital awareness.
Dan Goldberger: initially through paid search and social media in an effort to drive headache patients to our various channels in the United States and United Kingdom.
Dan Goldberger: We expect that these new channels and campaigns can significantly increase awareness and streamline availability of NVNS therapy for patients, many of whom have historically been encumbered by reimbursement and physician access challenges.
We expect that these new channels and campaigns can significantly increase awareness and streamline availability of N VNS therapy for patients many of whom have historically been encumbered by reimbursement and physician access challenges.
Dan Goldberger: Net sales of $858,000 in the fourth quarter of 2021 from our government channels, including the Department of Veterans Affairs and Department of Defense.
Net sales of $858000 in the fourth quarter of 2021 from a government channels, including the Department of Veterans Affairs and Department of Defense hospitals increased 16, 9% as compared to $509000 in the fourth quarter of 2020.
Dan Goldberger: Increased 69% as compared to $509,000 in the fourth quarter
Dan Goldberger: full year 2021 net sales from the VA and DoD grew 61% to approximately $3.3 million, as compared to net sales of approximately $2 million for the full year 2020.
Full year 2021, net sales from the V. A and D. O D grew 61% to approximately $3 $3 million as compared to net sales of approximately $2 million for the full year 2020.
Dan Goldberger: total of 100 VA and DOD military treatment facilities have purchased GammaCore products through December 31st 2021 as compared to 71 in 2020.
A total of 100 D a and D O D military treatment facilities have purchased gamma core products through December 31, 2021, as compared to 71 in 2020.
Dan Goldberger: Note that there are approximately 1,300 VA health care facilities and over 500 military hospitals and medical clinics. So we still have plenty of time.
Note that there are approximately 1300, VA health care facilities and over 500 military hospitals and medical clinics. So we still have plenty of growth ahead of us.
Dan Goldberger: Revenue from channels outside the United States increased 36% to $1.5 million in 2021, as compared to $1.1 million for the full year 2020.
Revenue from channels outside the United States increased 36% to one and a half million dollars in 2020 , one as compared to $1 $1 million for the full year 2020.
Dan Goldberger: We look forward to continued revenue growth in the UK as the MedTech funding mandate continues to roll out and we expand the indications available through the United Kingdom e-commerce site.
We look forward to continued revenue growth in the U K.
<unk> funding mandate continues to rollout and we expand the indications available through the United Kingdom ecommerce site.
Dan Goldberger: Net revenue from the U.S. Commercial Headache Channel was $679,000 for 2021 as compared to $358,000 in 2020.
Net revenue from the U S commercial headache channel with $679000 for 2020 , one as compared to $358000 in 2020.
Dan Goldberger: Approximately $321,000 of our U.S. commercial revenue in 2021 came from cash pay programs.
Approximately $321000 of our U S commercial revenue in 2021 came from cash pay programs.
Going forward, our U S sales function will be focused on the following four revenue growth initiatives.
Dan Goldberger: Going forward, our U.S. sales function will be focused on the following four revenue growth initiatives.
Dan Goldberger: Number one, going deeper into our 100 existing VA hospital customers.
Number one going deeper into our 100 existing VA hospital customers number two leveraging our VA hospitals success to open new VA hospital customers.
Dan Goldberger: Number two, leveraging our VA hospital success to open new VA hospital customers.
Dan Goldberger: Number three, recruiting additional commercial prescribers to our cash-paid business.
Number three recruiting additional commercial prescribers to our cash pay business models, while we work towards broader commercial insurance coverage and number four increasing our direct to consumer advertising spend to build awareness and demand.
Dan Goldberger: while we work towards broader commercial insurance coverage, and number four, increasing our direct-to-consumer advertising spend to build awareness and demand.
Dan Goldberger: We've grown our U.S. sales function in recent months within our customer experience team, territory business managers in the field, and sales agents.
We've grown our U S sales function in recent months within our customer experience team territory business managers in the field and sales agents, we look forward to reporting accelerating growth within the United States channels.
Dan Goldberger: We look forward to reporting accelerating growth within the United States Channel.
Dan Goldberger: While focused on commercializing our broad headache indications, we continue to advance future applications of NVNS across several clinical trials, regulatory submissions, as well as in our intellectual property estate.
While focused on commercializing our broad headache indications, we continued to advance future applications of N VNS across several clinical trials regulatory submissions as well as in our intellectual property estate.
In February 2022 data was presented at the international stroke Congress, suggesting that N VNS therapy could be an effective acute intervention for ischemic our hemorrhagic stroke.
Dan Goldberger: In February 2022, data was presented at the International Stroke Congress, suggesting that NVNS therapy could be an effective acute intervention for ischemic or hemorrhagic strokes.
Dan Goldberger: In the TRV in his trial, 69 acute stroke patients were randomly assigned to three treatment arms, sham, low dose, and high dose NVNF.
And the T are being as trials 69 acute stroke patients were randomly assigned to three treatment arms sham low dose and high dose and VNS.
Dan Goldberger: Study met its primary safety objective and all secondary safety and feasibility
The study met its primary safety objective and all secondary safety and feasibility endpoints.
Dan Goldberger: Relative infarct growth measured by diffusion-weighted imaging in the high-dose NVNS group was lower than in the sham group with a p-value of 0.05 against baseline.
Relative infarct growth measured by diffusion weighted imaging and a high dose and VNS group was lower than in the Sham group with a P value of 0.05 against baseline.
Dan Goldberger: A subsequent larger trial called Novus is more than 50% enrolled towards a 150 patient target and should be fully enrolled by early 2023.
Subsequent larger trial called no. This is more than 50% enrolled towards the 150 patient target and should be fully enrolled by early 2023.
These early data are exciting is there are relatively few acute interventions approved for treating stroke and none that can be deployed before an ischemic hemorrhagic determination has been made.
Dan Goldberger: These early data are exciting, as there are relatively few acute interventions approved for treating stroke, and none that can be deployed before an ischemic hemorrhagic determination has been made.
And VNS could be a very exciting new tool in fighting this debilitating condition, we look forward to publication of the stroke data in a peer reviewed journal later this year.
Dan Goldberger: And VNS could be a very exciting new tool in fighting this debilitating condition. We look forward to publication of the stroke data in a peer-reviewed journal later this year.
On January 12, 2022, we announced gamma core N. VNS received breakthrough designation from the U S food and drug administration or FDA for the treatment of post traumatic stress disorder, or PTSD are highly prevalent and disabling disorder with limited approved treatment options Risa.
Dan Goldberger: On January 12, 2022, we announced GammaCore NVNS received breakthrough designation from the U.S. Food and Drug Administration, or FDA, for the treatment of post-traumatic stress disorder, or PTSD, a highly prevalent and disabling disorder with limited approved treatment
Dan Goldberger: Research from an Emory Georgia Tech team showed a 31% reduction of symptoms of PTSD as well as changes in the inflammatory cytokine IL-6 when compared to SHAM stimulation.
Research from an Emory, Georgia Tech team showed a 31% reduction of symptoms of PTSD as well as changes in the inflammatory cytokines IL six when compared to sham stimulation.
The ability of N VNS to target the underlying causes of PTSD supports its potential as a breakthrough treatment for PTSD.
Dan Goldberger: The ability of NVNS to target the underlying causes of PTSD supports its potential as a breakthrough treatment for PTSD.
Dan Goldberger: We look forward to scheduling a breakthrough device sprint meeting with the FDA in coming months to discuss the regulatory pathway for NVNS therapy to treat the symptoms of PTSD.
We look forward to scheduling a breakthrough device sprint meeting with the FDA in coming months to discuss the regulatory pathway for N VNS therapy to treat the symptoms of PTSD.
Dan Goldberger: FDA offers sprint discussions to support sponsors needing a timely resolution of potentially novel issues within a set time period, for example, 45 days.
S. T. A offers sprint discussions to support sponsors needing a timely resolution of potentially novel issues within a set time period for example, 45 days.
During a sprint discussion the sponsor may provide additional information or revisions to initial proposals.
Dan Goldberger: During a sprint discussion, the sponsor may provide additional information or revisions to initial proposals.
We also plan to request a pre submission meeting with the F. D. A to discuss the N V N S for opioid use disorder traumatic brain injury, and Parkinson's disease. Among the other possible indications we will evaluate later this year.
Dan Goldberger: We also plan to request pre-submissions meeting with the FDA to discuss NVNS for opioid use disorder, traumatic brain injury, and Parkinson's disease, among other possible indications we will evaluate later this year.
Dan Goldberger: A pre-sub provides the opportunity for a submitter to obtain FDA feedback prior to an intended pre-market submission.
A pre sub provides the opportunity for a submitted to obtain FDA feedback prior to an intended premarket submission.
Dan Goldberger: A pre-sub is appropriate when FDA's feedback on specific questions is necessary to guide product development and or submission.
These appropriate when fda's feedback on specific questions as necessary to guide product development.
And or submission preparation.
Recently lancet neurology published a review highlighting the potential role of noninvasive Neurostimulation approaches for Parkinson's disease, a progressive neurodegenerative disorder.
Dan Goldberger: Recently, Lancet Neurology published a review highlighting the potential role of non-invasive neurostimulation approaches for Parkinson's disease, a progressive neurodegenerative disorder.
Dan Goldberger: One study cited in the review found that patients who received active stimulation had significant improvements in both non-motor, especially cognitive, and motor symptom burden scores compared with patients who received sham stimulation.
One study cited in the review found that patients who received active stimulation.
Significant improvements in both non motor, especially cognitive and motor symptom burden scores compared with patients who received chance stimulation.
Dan Goldberger: We are encouraged by the growing amount of data supporting the role of NBNS as a plausible therapeutic option for Parkinson's patients.
We are encouraged by the growing amount of data supporting the role of N. BNS is a plausible therapeutic option for Parkinson's disease.
Dan Goldberger: In addition to our ongoing clinical and regulatory activities, we have also been investing in and building on our strong intellectual property portfolio. Last year we announced two new patents issued by the United States Patent and Trademark Office. The first patent
In addition to our ongoing clinical and regulatory activities. We have also been investing in and building on our strong intellectual property portfolio last year, we announced two new patents issued by the United States patent and trademark office the first patent.
Dan Goldberger: related to the treatment of stroke symptoms and methods for treating the acute symptoms of stroke or transient ischemic attacks.
As related to the treatment of stroke symptoms and methods for treating the acute symptoms of stroke or transient ischemic attack.
Dan Goldberger: The second patent is related to devices, systems, and methods integrated with smart...
The second patent is related to devices systems and methods integrated with smartphones, but allow patients to self treat medical conditions, such as migraine headache by electrical noninvasive stimulation of nurse. The specific patent is the eighth U S patent issued to us and the company's mobile connectivity platform with <unk>.
Dan Goldberger: that allow patients to self-treat medical conditions such as migraine headache by electrical non-invasive stimulation of nerves. The specific patent is the eighth U.S. patent issued to us in the company's mobile connectivity platform with additional U.S. and international matters.
<unk> U S and international matters pending.
Okay.
Dan Goldberger: We will continue building an intellectual property portfolio around smartphone-connected non-invasive therapy.
We will continue building an intellectual property portfolio around smartphone connected noninvasive therapy.
Dan Goldberger: This may provide a foundation for combining the company's clinically proven therapy with digital health platforms that could enable health care providers to use remote patient monitoring or remote therapeutic monitoring reimbursement codes.
This may provide a foundation for combining the companies clinically proven therapy with digital health platforms that could enable health care providers to use remote patient monitoring or remote therapeutic monitoring reimbursement codes.
Dan Goldberger: That combination, in turn, may enable future business models as well as expand revenue streams for the company's product.
That combination in turn may enable future business models as well as expand revenue streams for the company's products.
Dan Goldberger: Earlier this week, we announced a few changes to our board of directors.
Earlier this week, we announced a few changes to our board of directors.
Dan Goldberger: Dr. Steven Andra has resigned effective March 4, 2022, and Mike Atiyah has notified us that he will serve out his remaining term but not stand for re-election at our annual general meeting later this year.
Dr. Stephen Andre has resigned effective March four 2022, and Mike a Tia has notified us that he will serve out his remaining term, but not stand for reelection at our annual General meeting later this year.
Both directors will remain available to the chairman and CEO as advisors and we greatly appreciate their long dedicated service to electric.
Dan Goldberger: Both directors will remain available to the Chairman and CEO as advisors, and we greatly appreciate their long, dedicated service to electricians.
Dan Goldberger: I'm thrilled to announce the two fine executives, Ms. Julie Goldstein and Ms. Tricia Wilbur, have agreed to join our Board of Directors, effective March 15, 2022.
I'm thrilled to announce the two fine executives Ms. Julie Goldstein and MS. Trisha Wilbur have agreed to join our board of directors effective March 15 2022.
Dan Goldberger: Ms. Goldstein and Ms. Wilbur have had tremendous success building direct-to-consumer businesses, and we look forward to bringing their expertise to Electron.
MS Goldstein and as Wilbur have had tremendous success building direct to consumer businesses, and we look forward to bringing their expertise to electric court.
Dan Goldberger: Now, I'd like to turn the call over to Brian for a review of our financials and other guidance items.
Now I'd like to turn the call over to Brian for a review of our financials and other guidance items Brian .
Thank you Dan.
Brian M. Posner: Where the fourth quarter ended December 31st, 2021, ElectraCore reported net sales of $1.5 million and $928,000 during the same period of 2020.
For the fourth quarter ended December 31, 2021, electrical reported net sales of $1.5 million and 928000 during the same period of 2020.
Brian M. Posner: This represents a 61% revenue increase over the same period last year.
This represents a 61% revenue increase over the same period last year.
Brian M. Posner: For the full year 2021, the company reported net sales of approximately $5.5 million as compared to net sales of approximately $3.5 million for the full year 2020, an increase of 56%.
For the full year 2021, the company reported net sales of approximately $5 $5 million.
As compared to net sales of approximately $3 5 million for the full year 2020, an increase of 56%.
Gross profit for the fourth quarter of 2021 was $1 2 million.
Brian M. Posner: Gross profit for the fourth quarter of 2021 was $1.2 million as compared to $109,000 for the fourth quarter of 2020.
<unk> hundred 9000 for the fourth quarter of 2020.
Brian M. Posner: Gross profit for the fourth quarters of 2021 and 2020 included an increase in inventory reserves of $70,000 and $434,000 respectively.
Gross profit for the fourth quarters of 2021, and 2020 included an increase in inventory reserves of $70000 and $434000 respectively.
Brian M. Posner: Gross margin for the full year 2021 was 76% as compared to 63% for the full year of 2020.
Margin for the full year 2021 was 76% as compared to 63% for the full year of 2020.
Brian M. Posner: excluding the increase in inventory reserves in both years.
Excluding the increase in inventory reserves in both years.
Brian M. Posner: Total operating expenses in the fourth quarter of 2021 were approximately $6.7 million, an increase of approximately 300,000 from 6.4 million in the fourth quarter of 2020.
Total operating expenses in the fourth quarter of 2021 or approximately $6 $7 million, an increase of approximately 300000 from $6 4 million in the fourth quarter of 2020.
Brian M. Posner: Total operating expenses for the fourth quarter of 2020 included a charge of $558,000 in connection with the write-off of a right of use operating lease asset.
Total operating expenses for the fourth quarter of 2020 included a charge of $558000 in connection with the write off of a right of use operating lease asset.
Total operating expenses for the full year 2021, or 24 1 billion as compared to 26 5 million for the full year 2020.
Brian M. Posner: Total operating expenses for the full year 2021 were $24.1 million as compared to $26.5 million for the full year 2020.
Brian M. Posner: Research and development expense in the fourth quarter of 2021 was $742,000 as compared to $1 million for the same period in 2020.
Research and development expense in the fourth quarter of 2021 was $742000 as compared to 1 million for the same period in 2020.
Brian M. Posner: R&D expenses for the full year 2021 were $2.5 million as compared to $4.2 million for the full year 2020.
R&D expenses for the full year 2021 were $2 5 million as compared to $4 2 million for the full year 2020.
Brian M. Posner: selling general and administrative expense in the fourth quarter of 2021 with 5.9 million dollars as compared to 5.4 million for the same period in 2020.
Selling general and administrative expense in the fourth quarter of 2021 was $5 $9 million as compared to five 4 million for the same period in 2020.
Brian M. Posner: SG&A expense for the full year 2021 was $21.6 million as compared to $21.8 million for the full year 2021.
SG&A expense for the full year 2021 was $21 6 million as compared to $21 8 million for the full year 2020.
Brian M. Posner: Gap net loss for the fourth quarter of 2021 was $4.9 million as compared to a gap net loss of $6.3 million for the same quarter of 2020.
GAAP net loss for the fourth quarter of 2021 with $4 9 million as compared to a GAAP net loss of $6 3 million for the same quarter of 2020.
Brian M. Posner: gap net loss for the full year 2021 was $17.2 million as compared to a gap net loss of $23.5 million for the full year 2020.
GAAP net loss for the full year 2021 was $17 2 million as compared to a GAAP net loss of $23 5 million for the full year 2020.
Brian M. Posner: Adjusted EBITDA net loss in the fourth quarter of 2021 was $4.4 million, as compared to a loss of $4.3 million during the fourth quarter of 2020.
Adjusted EBITDA net loss in the fourth quarter of 2021 was $4.4 million.
Impaired to a loss of $4 3 million during the fourth quarter of 2020.
Brian M. Posner: Adjusted EBITDA net loss for the full year of 2021 was a loss of $15.8 million as compared to an adjusted EBITDA net loss of $18.4 million for the full year 2020.
Adjusted EBITDA net loss for the full year of 2021 was a loss of $15 8 million as compared to an adjusted EBITDA net loss of $18 4 million for the full year 2020.
A reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net loss that's been provided in the financial statement tables included in today's press release.
Brian M. Posner: A reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net loss has been provided in the financial statement tables included in today's press release.
Brian M. Posner: Net cash used in operating activities during the quarter ended December 31st, 2021 was approximately $4.4 million as compared to $3.6 million in the fourth quarter of 2020.
Net cash used in operating activities. During the quarter ended December 31, 2021 was approximately $4.4 million as compared to $3.6 million in the fourth quarter of 2020.
Brian M. Posner: Net cash used in the fourth quarter of 2021 included approximately $700,000 due to the company's refund of overpayments.
Net cash used in the fourth quarter of 2021 included approximately $700000 due to the company's refund of overpayments.
Brian M. Posner: it received related to the sale of New Jersey Net Operating Losses and the termination of the company's lease for its former corporate headquarters.
We see related to the sale of New Jersey, net operating losses, and the termination of the company's Lee sports former corporate headquarters.
Brian M. Posner: Net cash used in operations for the full year 2021 was $13.6 million, as compared to net cash used of $20.1 million reported in 2020.
Net cash used in operations for the full year 2021 was $13 6 million as compared to net cash used of $20 1 million reported in 2020.
Brian M. Posner: Cash, cash equivalents and marketable securities at December 31st, 2021 totaled approximately $34.7 million as compared to approximately 22.6 million at December 31st, 2020.
Cash cash equivalence and marketable securities at December 31, 2021 totaled approximately $34.7 million.
Compared to approximately $22 6 million at December 31, 2020.
Looking ahead.
Brian M. Posner: For the first quarter of 2022, we expect net revenue to be at least $1.7 million and net cash usage to be less than $5 million.
For the first quarter of 2022, we expect net revenue to be at least $1.7 million and net cash usage to be less than $5 million.
Brian M. Posner: The increase in expected net cash usage in the first quarter of 2022 compared to the fourth quarter of 2021 is largely expected to be due to seasonal factors affecting working capital and increased spending in cash pay initiatives. And now I'll turn the call back over to you.
The increase in expected net cash usage in the first quarter 2022 compared to the fourth quarter of 2021 is largely expected to be due to seasonal factors affecting working capital and increased spending in cash pay initiatives.
And now I'll turn the call back over to Dan.
Thank you Brian .
Brian M. Posner: We're pleased with our improving operating results and we are in a strong financial position.
We're pleased with our improving operating results and we are in a strong financial position.
Brian M. Posner: Longer term, clinical indications beyond primary headaches supported by the ongoing clinical developments discussed earlier could greatly expand the total addressable market for NBNS therapy.
Longer term clinical indications beyond primary headache supported by the ongoing clinical development as discussed earlier could greatly expand the total addressable market for N VNS therapy.
Brian M. Posner: We continue to build our intellectual property portfolio, and we're developing some very exciting next generation product platforms to leverage.
We continue to build our intellectual property portfolio and we're developing some very exciting next generation product platforms to leverage it.
Our V. A D O D channel continues to grow as the pandemic recede and we remain optimistic for our direct to consumer initiatives in our commercial channels.
Brian M. Posner: Our VA DOD channel continues to grow as the pandemic recedes and we remain optimistic for our direct-to-consumer initiatives in our commercial channel.
Brian M. Posner: While our United Kingdom business was impacted by COVID during the first few months of 2022, we look forward to accelerating growth in the near future.
The United Kingdom business was impacted by Covid. During the first few months of 2022, we look forward to accelerating growth in the near future.
Mike Roman who and his operations team have driven gross margin to 76% for the year ended December 31.
Brian M. Posner: Mike Romineau and his operations team have driven gross margins to 76% for the year ended December 31. A healthy increase in gross margins is a good sign.
Healthy increase from 2020.
Brian M. Posner: Brian Posner's finance team have maintained discipline around operating expenses and I have faith in their continued vigilance as we make targeted investments into commercial channels and product development.
Brian Posner his finance team have maintained discipline around operating expenses and they have faith and their continued vigilance as we make targeted investments in the commercial channels and product development.
Brian M. Posner: We look forward to further penetrating our large opportunity in the VA DOD channel in the United States under Mr. Sean's capable leadership, while Ian Strickland is leading the growth of our international businesses through the continued rollout of the MedTech funding mandate in the United Kingdom and our growing group of distributors in other countries. As we look forward to 2020.
We look forward to further penetrating our large opportunity in the a D O D channel in the United States under Mischance capable leadership, while Ian Strickland is leading the growth of our international businesses through the continued rollout of the med Tech funding mandate in the United Kingdom, and our growing group of distributors in other countries.
As we look forward to 2022 I see many growth drivers, including first continued penetration of our V. I D O D channel in the United States.
Brian M. Posner: including, first, continued penetration of our VADOD channel in the United States.
Brian M. Posner: continued penetration of the United Kingdom market as the pandemic recedes, growth in our U.S.
Continued penetration of the United Kingdom market as the pandemic recedes.
Growth in our U S commercial channels, driven by cash pay business models and direct to consumer advertising.
Brian M. Posner: driven by cash-paid business models and direct-to-consumer advertising.
Brian M. Posner: longer term we're going to continue our efforts to gain commercial insurance.
Longer term, we're going to continue our efforts to gain commercial insurance coverage.
Brian M. Posner: And fourth, expansion of our international business through our growing distributor network and added traction within the United Kingdom e-commerce
And fourth expansion of our international business through our growing distributor network and added traction within the United Kingdom ecommerce store.
Longer term there are real opportunities for label extensions into PTSD opioid use disorder in traumatic brain injury that could come as early as next year.
Brian M. Posner: Longer term, there are real opportunities for label extensions into PTSD, opioid use disorder and traumatic brain injury that could come as early as next year.
Brian M. Posner: Lastly, we are exploring growth opportunities to enhance and leverage distribution channels through acquisitions.
Lastly, we are exploring growth opportunities to enhance and leverage distribution channels through acquisitions, our focus will be on revenue stage targets that optimized channel synergies to enhance topline growth.
Brian M. Posner: will be on revenue stage targets that optimize channel synergies to enhance top-line growth.
Speaker Change: I'll turn the call over to the operator. Operator, please open the line for questions.
I'll turn the call over to the operator.
Operator, please open the line for questions.
Thank you.
Speaker Change: At this time, we will be conducting a question and answer session.
At this time, we will be conducting a question and answer session.
Speaker Change: If you would like to ask a question, please press star 1 on your telephone keypad.
If you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: A confirmation tone will indicate your line is in the question queue.
A confirmation tone will indicate your line is in the question queue.
You May press Star two if you would like to remove your question from the Q4.
Speaker Change: You may press star 2 if you would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
One moment, please while we poll for questions.
Thank you. The first question comes from the line of Jeffrey Cohen with Ladenburg Thalmann.
Speaker Change: Thank you. The first question comes from the line of Jeffrey Cohen with Leidenberg Thelman. Please go ahead. Oh, hi Dan, Brian and
Please go ahead.
Alright, Dan Durn computer how are you.
Good.
Yeah.
Good so.
Jeffrey Cohen: Good. So I guess firstly, perhaps for Dan or Peter, if you could talk about some of these other indications and more specifically talk about the type of data you expect to see from this 150 patient trial when that reads out, as well as maybe talk a little bit about.
I guess firstly, perhaps for.
Dan or Peter if you could talk about some of these other indications.
More specifically talk about the type of.
Do you expect to see from this 150.
The patient.
Trial, when they reach all disclose maybe talk a little bit about.
Jeffrey Cohen: treatments as far as times, frequency, and power for various indications as far as if it's any different from current.
Treatments as far as time's frequency and power for various indications as far as China is different from currently.
Jeffrey Cohen: Peter, do you want to take that one? Yeah, sure, I'll take that one. So, thanks, Jeff. You know, this is really an exciting time in a variety of different areas. The first area that I'll just comment on for your question is the stroke data.
Peter do you want to take that one yeah sure I'll take that one so thanks. Cathy this is really an exciting time and a variety of different areas. The first area that I'll.
Just comment on it per year.
Your question is the stroke data.
Peter Stotts: The stroke data that was presented at the International Stroke Conference showed that in doses higher than what we previously recommended for headache, particularly the high dose stimulation of vagus nerve stimulation, it required two sets of two, over two different hours, seven stimulation, so 14 stimulation.
Stroke data that was presented at the international stroke conference showed that in doses higher than what we previously recommended for headache, particularly the high dose stimulation vagus nerve stimulation required two sets of Oh with two different hours seven stimulations of 14.
<unk> stimulation or or 28 minutes.
Peter Stotts: or 28 minutes, showed a really dramatic improvement in the.
So they're really a dramatic improvement in the ER or mitigation of the size of the growth of the evolving stroke.
Peter Stotts: or mitigation of the size of the growth of an evolving stroke.
Peter Stotts: And there's mechanistically that kind of mirrors what we saw in the animal models. And there's still some questions to be asked. And one of the questions that is being asked in the subsequent trial being performed in Europe is whether or not we need to stimulate for an extended period of time and whether or not we can get longer term and better benefit.
And there's mechanistically that kind of mirrors, what we saw in the animal models.
And there's still some questions to be asked and one of the questions that is being asked in the subsequent trial being performed in Europe is whether or not we need to stimulate for an extended period of time and whether or not we can get a longer term and better benefits.
Peter Stotts: I suspect that we will need more stimulations than what we've been doing for a...
I suspect that we will need more stimulations than.
What we've been doing for a typical headache.
Peter Stotts: Right now, it is all within our current label, I mean, in terms of the number of stimulation.
Right now it is all within our current label.
In terms of the number of stimulation.
Peter Stotts: but that will be an easy thing for us to go back to the FDA with when we are applying for a new indication if we need to expand the number and amount of stimulation that we're using in that indication.
But that would be an easy thing for us to go back to the FDA with when they are applying for a new indication if we need to expand the number and amount of stimulation that we're using in that indication.
Peter Stotts: Now with other indications that we're looking at, for example, opioid use disorder or post-traumatic stress disorder, it does not appear that we need to use much more than what we've been using all along for our headache trials, for the original asthma trials, or for the gastrointestinal trials that have been done. Those all seem to be somewhat in line with the periodic usage of our device.
That with other indications that we're looking at for example, opioid use disorder with post traumatic stress disorder. It does not appear that we need to use much more than what we've been using all along for our headache trials for the original asthma trials or for the gastrointestinal trials that had been done those all seem to be somewhat in line with the periodic usage.
Of our device.
Yeah.
Okay Super Thats very helpful. So and secondly, as a follow up I guess for growing it if you could maybe talk about.
Speaker Change: Okay, super. That's very helpful. So, and secondly, as a follow up, I guess for Brian , if you could maybe talk about.
Brian M. Posner: the margins a little bit, and the SG&A as far as the 5.9-ish level, kind of the new level as you expand through 2022. And then thirdly, talk a little bit about the inventory. I don't know if I saw a specific.
Margins, a little bit and the SG&A as far as the as.
The final 0.9 ish level kind of the new logo as you expand through 2022, and then certainly.
Talk a little bit about the inventory I don't know if I saw a specific.
Brian M. Posner: Not Delta for the fourth quarter, but how does inventory look as far as supplies and in backlog and ordering etc?
No delta for the fourth quarter, but how does your inventory as far as our supplies and.
Backlog in order and et cetera, Okay, well I'll, thanks, Jeff I'll start with the margin.
Speaker Change: Okay, well, thanks Jeff. I'll start with the margin. We continue to see margin expansion quarter over quarter. We had a very strong quarter of gross margin in Q4 of about 80% and that's basically driven by labor and overhead absorption as well as product mix.
To see margin expansion quarter over quarter, we had a very strong quarter of gross.
Gross margin in Q4 of about 80% and that's basically driven by labor and overhead absorption as well as product mix.
Speaker Change: We were 76% overall for the year.
We were 76% overall for the year.
Speaker Change: And we're confident we can, you know, stay at, you know, very strong levels in terms of our gross margin. In terms of our SG and.
And we're confident we can stay at very strong levels in terms of our gross margin.
In terms of our S.
SG&A.
Speaker Change: We were at, as you mentioned, 5.9 for the quarter. We would expect that to increase as we continue to invest both in our sales footprint, as Dan outlined in his remarks, as well as our direct-to-consumer marketing.
We are we were as you mentioned a.
5.9 for the quarter, we would expect that to increase as we continue to invest both in our sales footprint as Dan outlined in his remarks as well as our direct to consumer marketing.
You know I think this management team has proven.
Speaker Change: You know, I think this management team has proven, you know, it's a good guardian of shareholder capital. There's a chance we'll spend more when we see things are really working to promote growth, and we'll cut back in areas where we see things aren't working as well as we had planned. So you would expect that number to go up somewhat in 2000.
It's a good guardian of shareholder capital there was a chance we will spend more when we are where we see things are really working to promote growth and will cut back in areas, where we see things aren't working as well as we had planned.
So you would expect that number to go up somewhat.
In 2000.
Speaker Change: In terms of inventory, we still have quite a bit. We have about $5.3 million as of the end of the year. We have enough to get
'twenty two.
In terms of inventory, we still have quite a bit we have about $5 3 million as of the end of the year.
We have enough to get us through that.
Speaker Change: next year and probably well into 2024 as well. And, you know, we're working on or starting to work on the next generation of our product, you know, for several years.
Next year, and probably well into 2024 as well.
And you know we're working on are starting to work on the next generation of our product.
You know for several years down the road.
Okay.
Speaker Change: Okay, got it. Perfect. Thank you all for taking our questions. Thank you. Thanks, Jeff.
Okay got it perfect. Thank you all can take your questions.
Thank you.
Yeah.
Thanks, Jeff.
Thank you.
The next question comes from the line of.
John .
Speaker Change: Gwendolyn Mawston with Zax SCR, please go ahead.
Random Austin with Zacks SCR. Please go ahead.
Alright, great. Thank you and good evening, everyone I wanted to start off with them.
Gwendolyn Mawston: All right, great, thank you, and good evening, everyone. I wanted to start off with a.
Speaker Change: How you doing, Dan? Start off with a question just on all your opportunities. Just on the call, you mentioned stroke, PTSD, opioid use disorder, and others.
How are you doing Dan I'll start off with a question just on all your opportunities there.
On the call you mentioned stroke, PTSD opioid use disorder, and and and others.
Dan Goldberger: And I know you're waiting for data, especially in that stroke with the Novus trial.
And I know you're waiting for data, especially in the stroke with the Novus trial, what what you know what you would be looking for going forward in order to allocate funds towards this and then how will you think about R&D in light of that will you pick the best one of the of the indications that are out there or will you allocate based on you know.
Dan Goldberger: What you will be looking for going forward in order to allocate funds towards this and then how will you think about R&D in light of that? Will you pick the best one of the indications that are out there or will you allocate based on just the individual opportunity? You could either spend $5 million on R&D or $10 million. I'm just wondering how you're thinking about that and how the opportunity might change based on the data that you get from these studies that are ongoing.
The individual opportunity. So you know you could either spend $5 million on R&D or $10 million I'm, just wondering how youre thinking about that and how the opportunity might change based on the data that you get from these studies that are ongoing.
A very good question John .
Speaker Change: A very good question, John , and a lot of it is going to be answered as we talk.
He is going to be answered.
Speaker Change: the sprint meeting for PTSD and the pre-sub meetings for opioid use disorder, concussion, et cetera.
Uh-huh spring meeting for PTSD pre sub meetings for opioid use disorder concussion et cetera.
Oh.
Speaker Change: We expect that the agency will give us some guidance on regulatory pathway and of course
We would expect that the agency gave us some guidance on regulatory pathway and then of course.
Speaker Change: A key element of the regulatory pathway is what kind of data we ultimately will need to provide against what kind of indications were asked.
A key element of the regulatory pathways and what kind of data, we ultimately will need to provide.
Against what kind of indications we're asking for.
Speaker Change: Most of these indications, PTSD, concussion,
Most of these indications a P T S be crushed and opioid use disorder.
Speaker Change: opioid use disorder, our current product configuration will work very nicely.
Our current product configuration will work very nicely.
Speaker Change: We already have quite a bit of data that's in process. The vast majority of it is through investigator-initiated trials that are being funded by government agencies like the hospital system or NIDA, the National Institute of Drug Abuse. So our cash spend to get the label would begin commercialization.
We already have quite a bit of data that's in process. The vast majority of it is through investigator initiated trials that are being funded by government agencies.
The hospital system war or neither the National Institute of drug abuse, So our cash spend to <unk>.
Get the label would began commercialization.
Okay.
Uh huh.
Got it.
Yeah.
Hello, John you're able to hear us.
Speaker Change: I can hear you. I think Dan faded out.
I can hear you I think Dan trade it out.
Oh, sorry, I was talking to myself.
Yes, I think Johns line is disconnected, but he's still chewing on did talk mode.
Speaker Change: Yes, I think John's line is disconnected, but he's still showing on the talk mode, so we'll take the next question now. Thank you
So we'll take the next question now thank you.
Some of it anymore.
It's Paul.
So the next question.
Speaker Change: So the next question comes from the line of Swayampukula Ramakast with HC Wainwright.
Comes from the line of Slam Qunar com.
It's C wainright.
Please go ahead.
Swayampukula Ramakast: Thank you. This is RK from History of Android. Good afternoon, folks. Hope all are well. Can you hear me?
Thank you this is RK from H C Wainwright good.
Good afternoon folks.
Oh Wow.
Can you hear me.
Done.
Yes can you hear me.
Speaker Change: Yes, can you hear me?
[laughter] so so.
RK: Okay, so, so, um...
RK: On the cash pay business, certainly, you know, you're done the, not only the talk the talk, but also walk the walk, what is the market, per se, for the cash pay business? I'm just trying to understand, you know, in terms of thinking about growth from here onward to that business, what's the cash pay market business both in the U.S. and the U.K.?
On the on the cash pay business.
Suddenly.
You've done the.
They're not under the talk the talk but also walk the walk.
What is the market.
Per se for a cash paid business I'm just trying to understand you know in terms of thinking about growth from here onwards should that business, what's what's the cash pay market business.
In the U S and the U K.
RK: And I don't know if you have any internal landmarks to try to get to in 22.
And I don't know if you have any.
Turnover.
Landmark's to try to get to.
And 'twenty two.
[laughter].
Yeah. So thanks for the question RK.
Speaker Change: Yeah, so thanks for the question, RK. In headache, which is the indications that we can market for today.
In headache, which is the the indications that we can market for today.
Speaker Change: As you know, there are tens of millions of migraine sufferers. There are almost a million cluster headache patients in the United States.
As you know there are tens of millions of a migraine sufferers there are almost a million.
Western headache patients in the United States.
Speaker Change: You know, within those large numbers, you know, all of the cluster headache patients are reasonable.
Within those large numbers you know all of the cluster headache patients.
Our reasonable targets for us and you know the the sort of 5 million.
Speaker Change: and the sort of five million migraine headache sufferers out there that are on prescription meds currently are probably targets for us. So, you know, the.
Migraine headaches sufferers out there.
That are on prescription meds currently are probably targets for us. So you know the challenge that we have is our relatively.
Speaker Change: that we have is our relatively.
Speaker Change: de minimis insurance coverage at this time and so we are making our therapy available through these various cash pay channels directly to consumers.
De Minimis insurance coverage at this time and so we.
We are making our therapy available to these various cash pay channels directly to consumers.
Speaker Change: And the total addressable market is very large, but we still need a prescription. And so we need to be conscious of the friction in the channel.
And the total addressable market is very large, but we still need a prescription and so we need to be conscious of where the the friction in the channel.
Very good.
Speaker Change: Very good. In terms of the VA market and the VA centers, as, you know, things are opening up in general from the pandemic...
And in terms of.
The VM market.
These centers.
As you know things are opening up in general from the from the pandemic.
Situation.
Speaker Change: what are your sales, what is your experience of your sales force now and also in terms of
Or what are your sales what does the experience of your sales for small and also in terms of.
Speaker Change: you're making new visits to physicians beyond the 100 centers that you're in now? Yeah, so...
Making them a new.
New a new visits stupid I appreciate it.
Physicians beyond the 100 centers that you're in now.
Yeah. So.
The earn out in the fourth quarter, you know Brian went through some of the numbers.
Speaker Change: the numbers in the government channel for the fourth quarter, and things really started to return to growth in the fourth quarter, and we've carried that momentum over into the current quarter. So we're getting increasingly excited about momentum in the government channels for the reasons that you just talked about. The pandemic is receding, getting back to a more normal
Government channel for the fourth quarter and things really started to returned to growth in the fourth quarter and and we've carried that momentum over into the current quarter. So we're we're very we're getting increasingly excited about momentum in the government channels for the <unk>.
If you just talked about the pandemic is receding.
Getting back to a normal more normal cadence of our patient visits and dealing with headache patients. There's also in the VA channel quite a bit of excitement about breakthrough designation for P. T. S V and that gives our field sales force and our inside sales force.
Speaker Change: cadence of patient visits and dealing with headache patients. There's also in the VA channel quite a bit of excitement about breakthrough designation for PTSD, and that gives our field sales force and our inside sales force
Speaker Change: great talking points and another reason to be in the office.
Great talking points in an another reason to be in the office communicating with physicians Peter has been spending a lot of his time talking to clinicians about PTSD and the breakthrough designation and what that means so we're very excited.
Speaker Change: communicating with physicians. Peter has been spending a lot of his time talking to clinicians about PTSD and the breakthrough designation and what that means. So we're very excited about momentum building in that channel.
Excited about our momentum building in that channel.
As we speak.
Speaker Change: So, because it looks like the PTSD is probably the closest indication that we can talk about in terms of new areas of expansion. How...
So so.
Because it looks like the PTSD is probably the closest indications.
We can talk about in terms of.
So new and new areas of expansion.
Hum.
Speaker Change: You know, what is the route there? Like, you know, what do you have to do in terms of trying to get that expansion now that you have this breakthrough designation? And also, do you need to generate additional data or all that needs to be hammered out with the FDA? So what is...
Worked is the route that like you know what.
What do you have to do in terms of I'm trying to get that expansion now that you have this breakthrough.
<unk> mission.
And also do you need to generate additional data on all of that gets to be hammered out with the FDA.
So what is the situation there yes.
Speaker Change: Yeah, so we're we're working to schedule the sprint meeting with the agency.
Yeah. So we're we're working to schedule the sprint meeting with the agency and in the near future.
Speaker Change: in the near future. We believe that we have adequate data from the VA hospital system sponsored trials. DARPA also participated in sponsoring those trials. But the agency may say that we need additional work. So until we have that sprint meeting, I really shouldn't speculate.
We believe that we have.
Adequate data.
From the VA Hospital system sponsored trials DARPA also participated in sponsoring those trials.
But the agency may say that we need additional work so until we have that sprint meeting its.
I really shouldn't speculate.
Okay.
Speaker Change: And then for the stroke, I know there was some questions ahead of me, but I'm just trying to understand, do you need to have not only the data that you already published, but also the NOVUS data before you file for an approval? Or can you take the current data and have a conversation with the FDA if they can?
Hum them then.
For the stroke I know Hum.
Questions.
But I'm just trying to understand do you need to have not only the data that you already.
Published.
But also the August data before you file for an approval or can you take the current data and have a conversation with the FDA.
Speaker Change: take this and then you can back it up with the NOVA state on there.
Take this and then you can back it up with another state on data.
So the door number two we are a we're planning to schedule a pre submission meeting with the FDA on the on the stroke work.
Speaker Change: So door number two, we're planning to schedule a pre-submission meeting with the FDA on the stroke work. The Novus trial, we don't expect it to be fully enrolled until the very end of this year or beginning of next year. And you're exactly right, we wanna start the process with the FDA, set expectations with the FDA before that trial is fully enrolled and reports out. Thank you.
The no. This trial, we don't expect it to be fully enrolled until the very end of this year or beginning of next year and you're exactly right. We want to start the process with the FDA set expectations with the FDA before that trial is fully enrolled and reports out.
Yeah.
Okay perfect. Thank you very much for taking all my questions.
Speaker Change: Thank you.
Thank you.
Speaker Change: The next question comes from the line of Anthony Vendetti with Maxim Group, please go ahead. Hi, this is actually Jeremy on the line for Anthony, how is everyone doing?
The next question comes from the line of Anthony Vendetti with Maxim Group. Please go ahead.
Hi, This is actually Jeremy on the line for Anthony how it's different than.
Good good so just okay.
Jeremy: Okay, so just to start off on the cash pay new initiatives, could you just explain a little bit more what the difference between the GC Direct and the e-commerce sites, because I think both of them are being bought directly from you as opposed to through a position where it has bought the GammaCore from you?
Okay. So just to start off on the cash and the new initiatives. What's can you just explain a little bit more what the difference between the GEC direct and the e-commerce sites, because I think both of them are being bought directly from from you as opposed to through a physician who has bought the gamut from you.
Speaker Change: Correct. So for GCDirect, a patient goes to their favorite doctor, that doctor writes a prescription and sends the prescription to the company and we fill the order. For the e-commerce platform, the patient goes to our website, fills out a questionnaire.
Correct. So for D. C direct a patient goes to their favorite Doctor that Doctor writes a prescription and sends the prescription to the company and we fill the order.
For the E Commerce platform the patient goes to our website fills out a questionnaire.
Speaker Change: we're providing a telehealth service so a health care professional looks at the questionnaire and creates a prescription for that patient. So the nuance is that if I have a doctor that I like and will write the prescription, that's GC direct. If I don't want to bother my family practitioner, I can just go to the internet and get a telehealth.
And we're providing a telehealth services or with it. So we're a health care professional looks at the questionnaire and and creates a prescription for that patient. So the nuance is that if I have a doctor that I like and will write the prescription that's P. C. Direct if I don't want to bother my family practitioner I can just go to the.
Internet and get a telehealth prescription.
Speaker Change: Okay, I understand. And so what has been the reception from physicians for these new the GC direct and the GC concierge? Is there anything any more information or anything you could provide? regarding yeah, so so Um, we just reported on our fourth quarter results where where those those programs were just getting started Uh, we'll be putting up some kpis when we report out In a couple of months on the first quarter, but it's very exciting
Okay, I understand and so what has been the reception from physicians for these new the juicy direct and the GC concerts is there anything or any more information or any thing you can provide regarding yeah. So so we just reported on our fourth quarter results were where those those programs were just getting started.
We'll be putting up some kpis when we report out in a couple of months on the first quarter, but it's very exciting right now.
Okay. That's good to hear and then I guess I know this is still always up in there, but if you could maybe.
Speaker Change: Okay, that's good to hear and then I guess I know this is still always up in the air, but if you can maybe
Speaker Change: You know, one of it's been an initiative for a while now to get more insurance coverage. Could you give us any information where you are in talks with potential commercial payers? You know, when do you think is that a 2022 event? Is that something maybe early 2023? Any more details you could provide?
You know one of them that's been an initiative for a while now to get more insurance coverage could you give us any information where you are in talks with potential commercial payers. When do you think is that a 'twenty 'twenty. Two event is that something maybe early 2023, I mean any more details you can provide.
Speaker Change: So it's been the back half of 2021 was very frustrating. All of our initiatives were met with quiet.
So it's been the the back half of 2021 was very frustrating.
Are all of our initiatives where were met with quiet.
Speaker Change: It's been very frustrating. I wish we could report more progress.
So it's been very frustrating I wish we could report more progress.
Speaker Change: A key element of getting the commercial insurers to pay attention is consumer demand. And so the work that we're doing in the cash pay channels
A key element of getting the commercial insurers to pay attention is consumer demand and so the work that we're doing in the cash pay channels is likely to have a spillover effect and create some demand pool.
Speaker Change: is likely to have a spillover effect and create some demand pull among the commercial insurers.
Among the commercial insurers, we continue to have conversations with Kaiser who continue to have conversation with Tricare and.
Speaker Change: We continue to have conversations with Kaiser. We continue to have conversations with Tricare.
Speaker Change: Many of the regional blues, some of which have already given us positive benefit determinations, but if not, it's going much slower than we had anticipated.
Many of the regional regional Blues, some of which have no I have already given us positive benefit determinations, but it's not it's going much slower than we had ever hoped.
Okay, I understand and then I'll just it doesn't seem like there's been any issues that other companies have had supply chain issues inflationary pressures is there anything that you're seeing on your end or you have enough inventory I know you mentioned so that's not so much were in yeah. We're in a unique situation of having.
Speaker Change: Okay, I understand. It doesn't seem like there's been any issues, but I know other companies have had supply chain issues, inflationary pressures. Is there anything that you've seen on your end, or you have enough inventory, I know you mentioned, so that's not really a supply chain issue? Yeah, we're in a unique situation of having quite a bit of inventory.
Quite a bit of inventory is as Brian mentioned it.
Speaker Change: As Brian mentioned, at something like $5 million of inventory on our balance sheet and at 75% gross margins, that's quite a bit of revenue.
Something like $5 million of.
Inventory on our balance sheet and at 75% gross margins, that's quite a bit of revenue.
Speaker Change: Okay, nice. And then just last question, is there a target, you know, you said one of your initiatives for the 2022 growth is to grow your sales function, grow out your sales rest. Is there any target you have and how is that going to be split up among the different channels of your business?
Okay and then just last question is there a target you know you said youre going to one of your initiatives for the 2020 to growth is to grow your sales function grow. It yourself breadth is there any target you have and how is that going to be split up among the different channels of your business.
Yeah. So internally so of course, we have targets, but we haven't we haven't said anything about that publicly.
Speaker Change: Yeah, so internally, yes, of course, we have targets, but we haven't said anything about that.
Okay. All right. So that's that's all the questions for me. Thank you I'll get back in again.
Speaker Change: Okay. All right. So that's all the questions for me. Thank you. I'll get back in the queue.
Yeah.
Thank you.
Speaker Change: Ladies and gentlemen, if you wish to ask a question, please press star 1 on your telephone keypad.
Ladies and gentlemen.
If you wish to ask a question. Please press star one on your telephone keypad.
The next question comes from the line of John Winter months Chin.
Speaker Change: The next question comes from the line of John Wender-Monston with ZaxSER, please go ahead.
Zacks SCR. Please go ahead.
Alright, Thanks for taking me back.
John Wender-Monston: All right, thanks for taking me back. You may have answered the part of my question I was going to ask next, just about all the investment opportunities. I wanted to see what the R&D thoughts are for 2022 and perhaps beyond, and how that might relate to the first part of the question I asked earlier.
You may have answered part of my question I was going to ask next just about all the investment or the investment opportunities are.
Wanted to see what the R&D thoughts are for 2022, and then perhaps beyond and how that might relate to the first part of the question I asked earlier.
Yeah.
Speaker Change: Yeah, so we haven't given guidance on R&D spending for 2022. We have kicked off
Yeah. So we we have not.
We haven't given guidance on R&D spending for 2022.
We have kicked off a design projects for the next generation vagus nerve stimulator, so that program.
Speaker Change: a design project for the next generation vagus nerve stimulator. So that program will step up our R&D spending compared to 2021. The clinical work.
We'll we'll step up our R&D spending.
<unk> to 2020 one.
The clinical work is not likely to.
Speaker Change: increase our R&D spending. As we mentioned earlier, we're really blessed that the vast majority of
Increase in our R&D spending rate.
As we mentioned earlier, we're really blessed that the vast majority of the work is sponsored by government agencies in the U S and abroad. So that particular element, where we're making a lot of progress.
Speaker Change: work is sponsored by government agencies in the U.S. and abroad.
Speaker Change: So that particular element, where we're making a lot of progress.
Speaker Change: is not going to impact our R&D spending in 2022.
It's not going to impact our R&D spending in 2022.
Oh.
Speaker Change: Okay, great. So it sounds like it's going to tick up a little year over year, but that's about it.
Okay, great. So it sounds like it's going to tick up a little year over year, but but that's about it.
That'd be the best way to plan for it yes.
Okay great.
Speaker Change: Great. Last one for me is just on ProMedical Baltic. I don't know if they have been generating any revenues for you so far, but can you update us on?
Last one for me is just on on pro medical Baltic I I don't know if they had been generating any revenues for you so far.
But.
Can you update us on.
Speaker Change: on how much maybe they've contributed so far and what impact that might have.
On how how much maybe they've contributed so far and what impact that might have in the future.
Yeah, we're not we haven't broken that out.
Speaker Change: Yeah, we haven't broken out international distributors as a separate reporting item, but in general, greater Europe right now is really challenged. Our UK business has been challenged.
International distributors as a separate reporting item, but in general Greater Europe right. Now is a is really challenge or our U K business has been challenged our first because of Covid and now because of the Ukraine.
Speaker Change: first because of COVID and now because of the Ukraine mess, the public states are in the line of fire. So, you know, we really have to be patient about how our business in Europe ...
Ukraine mess.
A big states are in the line of fire. So yeah, we really have to be patient about how our business in Europe .
For the first half of this year.
Speaker Change: And have you provided any kind of indication on sales from any of the distributors so far? Kind of how those are progressing? No, we have not.
Got it got it and have you provided any kind of indication on on sales from any of the distributors. So far kind of how those are progressing not wouldn't have not.
Alright, Thank you Dan appreciate it.
Yeah.
Thank you.
Speaker Change: Ladies and gentlemen, if you wish to ask a question, please press star 1 on your telephone keypad.
Ladies and gentlemen.
If you wish to ask a question. Please press star one on your telephone keypad.
Again.
Speaker Change: If you wish to ask a question, please press star 1 on your telephone keypad.
If you wish to ask a question. Please press star one on your telephone keypad.
Thank you.
The next question comes from.
Speaker Change: John Beatty with Lazarus Fund.
John Bailey with Lazard as fund please.
Please go ahead.
John Beatty: Yeah. Hi Dan, how are you doing? Good, thank you. How are you, sir?
Yeah, Hi, Dan how are you doing.
Good. Thank you how are you sir.
Got it.
John Beatty: On the cash pay front, and I see the challenges with the insurance coverages.
On the cash pay front and and I see the challenge is what the insurance coverages.
John Beatty: Have you reached out to any of the health care ministries?
Has have you reached out to any of the health care ministries, like Samaritans purse or Christian healthcare ministries are any of those are essentially have always run on a cash pay model anyways.
John Beatty: like Samaritan's Purse or Christian health care ministries or any of those are essentially have always run on a cash pay model anyway.
Speaker Change: So that's a very good point. I'm not aware.
So that's a very good point I'm not aware that.
That we have.
Speaker Change: that we have made an initiative in that direction. So that's a very good question.
That we have made in an initiative in that direction. So that's a very good question.
Speaker Change: Yeah, I mean they would very much put pressure on insurance companies also because they are much more affordable than insurance companies. I myself participate in Christian health care ministries, so I think it should not be overlooked. Agreed. Thank you for bringing it to our attention.
Yeah.
They they end.
Would very much put pressure on insurance companies also because they are.
Portable [laughter] insurance companies.
I myself with dissipate and.
And Christian healthcare ministries.
No.
I think it should not be overlooked.
Yes.
Great. Thank you for bringing it to our attention.
Okay. Thank you.
Yeah.
Thank you.
Ladies and gentlemen.
Speaker Change: Again, if you wish to ask a question, please press star 1 on your telephone.
Again, if you wish to ask a question. Please press star one on your.
Telephone keypad.
Thank you.
Speaker Change: As there are no further questions, we have reached the end of question and answer session. And I would like to turn the call back to Dan Goldberger for closing remarks. Thank you.
As there are no further questions. We have reached the end of question and answer session and I would like to turn the call back to Dan Goldberger for closing remarks. Thank you.
Dan Goldberger: Thank you, everybody, for joining today's call. 2021 was an exciting year of changes for the company, and we look forward to a transformational 2022. Stay tuned. I want to again acknowledge the hard work that Dr. Ondra and Mr. Atiyah have performed on our board of directors, and I look forward to the fresh perspectives that our new directors, Ms. Goldstein and Ms. Wilbur, will bring.
Operator.
The body for for joining today's call 2021 was an exciting year changes for the company and we look forward to a transformational 2020 to stay tuned.
Oh again acknowledge the hard work the Doctor Andra and Mr. T. I have performed on our board of directors and I look forward to the fresh perspectives that our new directors, Ms Goldstein and Ms Wilbur will bring.
Dan Goldberger: I'd like to give a special thanks to all of our employees who worked tirelessly through the pandemic. Their hard work and commitment in these trying times has set the stage for our expected growth during 2022. I also want to thank the healthcare professionals and their patients for the loyal support
I can give a special thanks to all of our employees, who work tirelessly through the pandemic their hard work and commitment in these trying times and set the stage for our expected growth during 2022.
I also want to thank that care professionals and their patients and loyal support.
Dan Goldberger: We've made so much progress, and it couldn't have been done without your wavering support. Thank you all, and have a good day.
We've made so much progress and it couldn't have been done with wavering support.
Thank you all and have a good day.
Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.
Speaker Change: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
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