Nyxoah S.A. Q1 2023 Earnings Call
Okay.
Yes.
Thank you for standing by and welcome to <unk> first quarter 2023 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session.
To ask a question at that time, Please press star one wondering your telephone.
Today's call is being recorded.
Now I'll turn the conference over the house, its Makayla Kirkwood corporate communication and Investor Relations manager. Please go ahead.
Yeah.
Good afternoon, and good evening, everyone and welcome to our earnings call for the first quarter of 2023, I am account Kirkwood corporate communications and Investor Relations manager at Nextel are participating from the company today won't be Olivier <unk>, Chairman, Chief Executive Officer, and morale Chief Financial Officer.
During the call we will discuss our operating activities and review our first quarter financial results released after the U S market close today, after which we will host a question and answer session.
Press release can be found on the Investor Relations section of our website. This call is being recorded and will be archived on the investor any events section of the Investor Relations tab of our website.
Before we begin I would like to remind you that any statements that relate to expectations or predictions of future events market trends results or performance are forward looking statements. All forward looking statements are based upon our current estimates and various assumptions.
Do you stick with it.
Okay.
So our events to materially differ from those anticipated or implied by these forward looking statements.
All forward looking statements are based upon current available and the company assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these statements.
For a list and description of these risks and uncertainties associated with our business. Please refer to the risk factors section of our form 20-F filed with the Securities and Exchange Commission on May 16th 2023.
With that I will now turn the call over to Olivier.
Thank you Mikael good afternoon, and good evening, everyone and thank you for joining us for first quarter 2023.
No.
2023 will be an important here for Nick sure with dream patient follow up and for the PMA module submissions.
We completed all 150 <unk>.
The U S pivotal study treatment in the fourth quarter and the clock is sticking to 12 month data in the first quarter of 2024.
Well, how do you come to them and remote com based not only on the clinical and commercial experience, but also on the data Tvs.
First 34 patients in the Dream study.
These 34 patients demonstrated a 65% HRC spot mohit.
76, ODI he spoke at the gate and safety in line with expectations.
As a reminder.
For the trial to be successful over the 115 patients at least 63% need to be HIV.
Oh, the IV bolus at the 12 month follow up.
These abstract data will be presented at sleep 2023 on June six in a late breaker poster session.
The model of <unk>.
Michigan was kicked off with the first module.
Being submitted during the first quarter.
We anticipate filing treat all of the four modules in 2023.
The final fourth module, which will include 12 months' safety and efficacy data will be submitted shortly after the follow up period is complete.
Or increasing conviction in remote comps and the market opportunity for Jennie O has driven our decision to accelerate preparation to enter the U S market.
To that end.
I'm very pleased to announce that Crystal I can mum has joined <unk> as chief commercial officer, Chris.
Christoph brings a wealth of medical device experience to make sure having spent over 20 years at Johnson <unk> Johnson, leading off to Pete again, Newble businesses in the U S.
Global geographies.
And if somebody of based in the U S and his priority will be prepared in the U S commercialization strategy.
And I think international sales growth and further market access.
The U S excess pivotal study focused on the complete concentric collapse patients is well underway with implants are expected to be completed in 2024.
As a reminder.
People see patients represent approximately 30% of a G. N S eligible to treat OSA patients who are contra indicated two of commercially available people, who lost a lot of stimulation therapy in the U S.
And do not have suitable treatment options, although the major bulk surgery.
The excess primary endpoints or similar to the Dream study primary endpoint.
<unk> has demonstrated similar result in boat.
CCC and non CCC patients.
Commercially we report that European sales of 441002 deals during the quarter.
Which was below expectations.
However, after an in depth review, we see the quality was impacted by several transitory factors first or highest volume of calls so a seasonal reduction in oct capacity.
Second several newly activated a kohl's was slower than planned due to the administrative burden necessity to cliffs procedures funding.
Lastly book to.
Availability was limited during the quarter.
Therefore, several new ago had to postpone procedures.
The German team managed to resolve these challenges, resulting in sales thus far in the second quarter exceeding first quarter revenue.
Finally, we reported our first implants in Austria during the quarter.
We continue to achieve becoming an innovation leader in the obstructive sleep apnea space.
Clinicians have embraced the GTO technology, driven by single incision lead with system offering bilateral stimulation, both by an external battery and full body MRI compatibility.
Four patients general's ability to upgrade to the latest technology without the need for another surgical intervention.
Totally resonating.
This is demonstrated with our recent approval of the general 2.1.
Which improves patient control and compliance without the need of a surgical procedure to replace the implantable components.
Finally, we anticipate the answer regardless feasibility study to begin this year.
Which will explore the stimulation of the answer Saturday College knowledge in patients walk Ebola from nerve stimulation normally spotless.
We are making strong progress towards our key objectives for 2023, which up to focus on patient follow up in the Dream study that he has.
<unk> and reaching the primary endpoint.
We begin preparations to enter the U S market with regulatory manufacturing and market access readiness.
The revenue growth in Germany, while opening new European markets.
With that I'm pleased to turn the call over to our CFO Loueke modal who will provide a financial update.
Thank you Olivier.
Good day to everyone.
Thank you for joining yesterday.
Revenue for the first quarter ended March 31, 2023 was 441000.
The average selling price in the quarter was 20000 consistent with prior quarters.
Total operating loss for the first quarter was $11 4 million to.
$7 3 million in the first quarter of 2022.
Driven by an acceleration of clinical activities, notably the stop of the access study as well as commercial investment in Europe .
Last quarter, we raised $15 9 million through a private investment and our ATM, which is still a core shareholders, including an estimate cochlea and all that.
So as chairman and founder.
As of March 31, 2023, cash and financial assets totaled $96 1 million euro compared to $94 9 million in December 31 2022.
During the first quarter, our monthly cash burn was $12 9 million and based on our Q1 cash position, we have runway until late 2024.
With that I will turn the call back over to Olivier.
Thank you Luke.
I would like to reiterate of key objectives for 2023.
Which are focusing on patient follow up in the U S Dream studies, resulting in reaching the primary endpoint.
Beginning preparations to enter the U S market.
I think further revenue growth in Germany, while entering additional European market.
This concludes the formal part of our presentation.
Operator, I will turn the call over to you and begin our Q&A session.
Thank you again, ladies and gentlemen, if you'd like to ask a question press star one on your telephone again to ask a question. Please press star 111 moment for our first question.
One woman.
Our first question comes from the line of Jon Block of Stifel. Your line is open.
Okay. I think that was made you broke up a little bit hey, guys. Good afternoon.
First question Olivia just maybe on your comments for the quarter and then the trends in <unk>. So I just want to make sure it's clear.
Sales for the second quarter to date have exceeded the full amount of one Q I guess as we sit here in mid May and maybe if you could just verify that and then.
And that is true and it sounded like that was the case are you comfortable with.
With over $1 million of million euros in the second quarter, and then sort of a Q over Q ramp from there for the balance of the year. I know you don't want to give specific guidance, but maybe if you can comment on that million for <unk>.
The sequential growth for the balance of 'twenty three off that.
That type of a number.
Okay.
Hello, gentlemen, and thank you for the question.
We do not provide guidance.
But what we do provide is that and what we can confirm is that the momentum and opening new accounts and capturing patient discontinuing and I'm also very happy that the second quarter sales have already exceeded the first quarter.
I think important to understand that Q1 was disappointing.
Disappointing or below our expectations, we understand why we did an in depth analysis and we are extremely pleased to see that the momentum is continuing and you not only see this in the opening of new centers, but also in the lining up of new patients and of course, the number of New York.
Any trend. So obviously your question. Unfortunately, I cannot provide further guidance on Q2, but I can confirm that we still have an extremely strong.
Okay. That's helpful. Thank you and then I'll pivot.
Kind of a different road to go down engineer 2.1.
Are there any data points.
That you can point to that showed that implanted patients on junior to one better.
Better outcomes and better compliance and I guess, what I'm trying to go with this maybe then you can also answer or any of the first 34 patients where you released the data right. When you released the data in conjunction with the analyst day.
Beneficiaries of 2.1 or were they not on that version thanks guys.
Yes, Manav and thanks again for the question John .
Commenting on the $2, one it's a little bit funny, because 30 minutes before the call. We got the first patients in excess that were activated using digital to 0.1 and I can confirm that.
Mainly driven by the timing option, where we can gradually increase or decrease stimulation to reach an optimal outcome, what's really beneficiary for those two patients. We really saw immediately added value and we were able to also when activating patients to find optimal stimulation studies. So that is really very promising going forward.
When it comes to $2 one in the first 34 patients that we have in the abstract for dream that I can say that we did not yet implemented the $2. One so we'll be just using our initial device, but it's also clear that in going forward in other dream patients, where we believe 2.1 can be beneficiary as we definitely will start implementing.
Here as well.
Okay, and maybe sorry, just as a follow up to that last one.
15 patients and dream of 34 that you released data on we're not using $2. One to your point do you know approximately how many are called the remainder or roughly 81.
We're beneficiaries of $2 one.
As the trial progressed.
So at this moment so our strategy is very straightforward those patients who are doing extremely well of course, we will not introduce a $2. One because there is no need for it in patients and going forward Thats not yet reached 12 months and that our clinical team is seeing a need we will phase into 2.1.
Okay.
I think I'm, great I'll follow up offline. Thank you guys.
John .
Thank you one moment please.
Our next question comes from the line of Adam Mater of Piper Sandler Your line is open.
Hi, Good afternoon, guys. Thank you for taking the questions.
Maybe to start I'll actually ask one on the.
The P&L and just how to think about opex spend going forward. It looks like R&D spending stepped up in Q1 so.
Would love to get some more color in terms of how those dollars are spent.
You also made I think.
A comment Olivier that youre accelerating in preparation for the U S. So just any color you can give us both on the R&D and SG&A line would be would be helpful. Thank you.
I will leave the first part of your question to our CFO sort of weak.
Thanks, Pat Thanks to them for the for the question. So as you as you saw acceleration in.
In R&D.
The biggest driver of this is.
We are now running access study on top of dreams. So if you compare with Q1 last year.
We only had dream and Thats.
The driver for the increase in AR.
Sure.
In in R&D sorry.
And when it comes to a further acceleration in the U S preparation of commercialization I mentioned it already we are extremely pleased to be able to recruit.
Caliber like Crystal vegan mum to join the exon with more than 20 years at Johnson <unk> Johnson in new and in spine, leading the U S organization.
I think it's very clear that he has a very strong quarter and track record that he will add a wealth of experience and added value and we will keep adding will be launched in the U S and not only this also internationally. We can also benefit from his experience and his proven packet heckled, especially in Germany. So Thats. One book next to this Adam you know that.
And the interaction with.
AA.
And then updating more coding clarity also there was some really dominant we are waiting for the results and besides this and going forward as we always communicated it is an open label study.
The more confident we are who we are we getting the more patients. We are seeing reaching 12 months will also explain.
Are you hiring in the second half of 2020 and preparing for commercialization in the U S.
Okay got it thank you Olivier and look for the color there and I guess, just one kind of quick.
Follow up there so it sounds like the the level of R&D spend given that you have the access study.
Thats commenced given that dream is ongoing this is kind of the new.
Baseline to kind of work off of going forward in our models is that fair for R&D expense.
Yes, and no because we expect in the second half of 2023.
<unk> III to see a decrease of the of the.
The dream monitoring costs with more and more.
Since exiting the study.
In terms of overall burn we're not expecting to.
<unk> increase for.
For the next quarters in 2023.
But I would like to highlight that we'd like to further comment on this that it has created.
Patient Centricity innovation, it's key and crucial for Nyx or <unk> $2, one already demonstrated the added value in the FERC access patients.
Next to this also the anchor Saturday College project starting off the feasibility study in collaboration with Vanderbilt team is also very exciting for us to further explore and develop solutions on patients that are currently non responding to EBITDA loss from non stimulation. So I just want to summarize with this we will be continue showing innovative leadership.
Chip and investing strongly in further innovation that will help benefit the operation.
That's helpful color, Thanks, guys and just for the follow up Olivier just touched on.
Reimbursement considerations for the U S.
Hoping just to get a little bit more details there.
Do you have any sense for when you should expect to get an answer.
In Q3, I think is one you've previously kind of said you expect to learn more so.
When will we get an update in terms of the path forward on reimbursement and any more visibility.
On that process that you can share at this point in time. Thanks, so much for taking my questions.
Yes, so we are.
We're working with Emt Scientific Society, the American Academy of Otolaryngology to define or CPT code, what with basketball, Virginia. The recommendation has been made to EMEA and we are ready for the response. Unfortunately, they're just not completely in our control while the timing of the response is not completely in our control, but we definitely expect.
Some kind of response <unk>.
<unk> before year end or even sooner.
They have two options I explained this already in the past one option would be using the existing EGF Scott the second option would be using the existing Neuromodulation code that is closest to our technology.
This scenario, we anticipate reimbursement being at least the same as for the existing EGF procedure.
That's where we are from a reimbursement perspective I can again also a little bit more color on the regulatory.
Perspective, there. The first module has been submitted we expect to submit modules two and three before year end and then the final model that the clinical data. If you issue labeling there'll be submitted at the moment, we have 12 month data in the first quarter of 2024.
That's perfect I'll leave it there thank you.
Thank you one moment please.
Our next question comes from the line of Michael Pollack of Wolfe Research. Your line is open.
Hey, good afternoon. Good evening. Thanks for taking the question I wanted to follow up on the revenue in the quarter.
Just wanted to make sure I understand what happened in the first quarter specifically.
It's a really low number measured anyway, I mean last year, you're averaging 800000 euro quarter throughout the year.
I heard the influences you flagged, but kind of what else can you.
To provide some comfort that this isn't you know.
Center is not interested in the product share loss that sort of thing I guess.
It strikes me as.
Hello enough numbers, I'd say that I'd hope for a little more than maybe just kind of.
Timing of our access and slow to ramp new accounts or any other color you can provide there as to kind of what you see on the ground in Germany.
Yes.
Currently Mike and Hello, and thank you folks. Thank you for the question. So let me first be very straightforward also the Q1 sales is really below expectation.
No no no no need in.
Below the expectations, when we dig in and I'll keep repeating myself, we see that we were really faced with seasonality and mainly the.
A leading accounts.
On the other hand, we also are experiencing in opening new accounts that have not yet funding experience with it will have some amount of stimulation that this is taking longer than we expected and loss also a little bit part of the success of the success in opening new accounts is also the need for practice and we will also.
With this more specifically in the last three weeks of March and finding more properties, so that being said.
I'd like to look really positive to the future and to answer. Your question do you see further momentum yes. We know have 41 accounts that are fully trained.
Activated and ready to first patient all lined up so that's a continuous growth of opening new accounts.
For the half of them you know that competition is having over 50 accounts in Germany. We are now getting more and more close with 41 in Cogs. That's one thing second thing. We are seeing is also the result.
The patient <unk> and the feedback that we get in a COVID-19 our experience with <unk>. They are really really very positive and this will also lead in Thunder Casey book and also further publications on this first experience.
And so that will be shared and going forward the second thing.
We are also seeing.
That will be continue building momentum not only with Emt implanting surgeons, but also with referral physicians. So we get more and more requests from sleep physicians to better understand sort of technology is doing we also continue to invest in DTC in Germany, because we see that outline you see that also the number of hits.
The website is really showing an increase in paas, resulting also in concrete patients eligible to be treated.
And last we also invested in a handful salesforce that is not actively visiting sleep physician will receive positioning GTO.
That's what I can that's the color that I can provide on what you are doing in Germany.
That's helpful.
I'll leave it at one I. Thank you for the response.
Thank you Mike.
Thank you.
Please.
Our next question comes from the line of Suraj Kalia of Oppenheimer. Your line is open.
Hi, Olivier Alright, yes.
Yes, hi, Kevin good evening or good afternoon.
Good luck.
Two questions from my side.
41, Jimmy.
Overlap with <unk>.
Fire.
So it can be very precise so we have 34 Wheeler the overlapping and we have seven sites. That's all of the unique exclusive with <unk>.
Okay.
Do you expect U S pricing also to be 20.
Kevin.
Or was it bureaus.
Repurchasing approximately around 30000.
Is that so.
Process.
So the short answer is yes, as I was explaining so we have two different scenario, but in both scenarios the price points will be around the same then that also in line with what you just mentioned and in line with the current price.
Grasberg from Ags in the U S.
Got it.
One of the question.
And I would look at.
Our expectation is.
Sure.
Our.
Sure.
Shape.
Hi.
Absolutely.
Okay.
So our souls.
So just trying to determine if that.
That's not a burden for the patient or not.
So first of all.
Is that it requires a month the answer is no there's no.
No requirements with what we learned in all the daily clinical practice is of Cogs, who has the best adhesive connection with.
It's best when there is no facial hair. So we do recommend that people are shaving, but as you can understand it's difficult man to man and.
But there is no official looky quieter month to shape, but we do recommend that.
Or do you say the.
Chin with oats facial Ed is the best way to have data.
Connecting to the skin.
Fair enough and Olivia if I could just ask my last question Olivia correct me, if I'm wrong the last patient.
<unk>.
Was implanted in Egypt.
He is just January or February please correct me if I'm wrong.
And more specifically what.
Curious about is let's say Q1 2024 last patient 12 months follow up would be over right.
Thank you I can turnaround.
The data analysis and mining and everything.
Deliver.
The outcomes are a case report the outcomes by Q1, Thank you for taking my questions.
Thank you.
Well I'll try to answer is very clear. So the last patient was implanted in the first week of March to be very precise.
We plan on completing the final PMA module submission soon after the data. The 12 month data is released in the first quarter of 2024.
We do not predict the exact timing of FDA decision given it will be subject to variables we cannot influence.
But we expect FDA approval before year end 2024.
I think also the question was is 2024 still realistic and there. The answer is yes. It is realistic based upon the review timeline on the module.
The model of the PMA.
Thank you.
Thank you one moment please.
Our next question.
Our next question comes from the line of Ross Osborne of Cantor. Your line is open.
Hi, Ross.
One moment please.
It looks like he disconnected.
Okay.
Ross do you have a question star one again.
Well.
I'm showing no further questions at this time I would like to turn the call back over to Olivier.
Thompson for any closing remarks.
So thank you.
For the closing remarks, I would like to repeat again that all key objectives for 2023 off focusing on patient follow up in the U S Dream study, resulting in reaching five primary endpoint.
And of course, we will continue with the preparations of the U S market and driving further growth in Germany and also continue opening new sites in Europe . So thank you all for joining thank you for the questions.
Happy to collect Marc if there should be more questions. Good evening good afternoon.
Thank you ladies and gentlemen, this does conclude today's conference. Thank you all for participating you may now disconnect have a great day.
Thank you. Thank you.
Okay.
[music].
Okay.
Okay.