Q4 2023 KORU Medical Systems Inc Earnings Call

Operator: Good day, and welcome to the Carew Medical 4th Quarter and Full Year 2023 Earnings Call. All participants will be in listen-only mode.

Good day and welcome to the career medical.

Systems' fourth quarter and full year 2023 earnings call all participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key, then one on a touchtone phone.

One on a touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Luisa Smith from the Gilmartin Group. Please go ahead.

Operator: To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Louisa Smith from the Gilmartin Group. Please go ahead.

Louisa Smith: Thank you, Operator, and good afternoon, everyone. Earlier today, Koru Medical Systems released financial results for the fourth quarter and full year ended December 31, 2023. A copy of the press release is available on the company's website. During this call, we will make certain forward-looking statements regarding our business plans and other matters. These comments are based on our predictions and expectations as of today. However, actual events or results could differ materially due to many risks and uncertainties, including those mentioned in the associated press release and our most recent filings with the SEC. We assume no obligation to update any forward-looking statements.

Thank you operator, and good afternoon, everyone earlier today core medical systems released financial results for the fourth quarter and full year ended December 31st 2023, a copy of the press release is available on the company's website.

During this call we will make certain forward looking statements regarding our business plans and other matters. These comments are based on our predictions and expectations as of today.

Actual events or results could differ materially due to many risks and uncertainties, including those mentioned in the associated press release and our most recent filings with the SEC.

We assume no obligation to update any forward looking statements I encourage listeners to have our press release in front of you, which includes our financial results as well as commentary on the quarter.

Louisa Smith: I encourage listeners to have our press release in front of them, which includes our financial results as well as commentary on the quarter. During the call, management will discuss certain non-GAAP financial measures in our press release and accompanying investor presentation and our filings with the SEC, each of which are posted on our website. You will find additional disclosure regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures, in our press release and accompanying investor presentation and those filings. For the benefit of those listening to the replay, this call was held and recorded on Wednesday, March 13, 2024, at approximately 4.30 p.m. Eastern Time.

During the call management will discuss certain non-GAAP financial measures in our press release and accompanying investor presentation, and our filings with the SEC each of which are posted on our website you will find additional disclosure regarding these non-GAAP measures, including reconciliations of these measures with comparable.

GAAP measures in our press release and accompanying investor presentation and those filings.

For the benefit of those listening to the replay. This call was held and reported on Wednesday March 13, 2024 at approximately 430 P. M. Eastern time. Since then the company May have made additional comments related to the topics discussed and please reference the company's most recent press filings.

Linda M. Tharby: Since then, the company may have made additional comments related to the topics discussed, and please refer to the company's most recent press filings and press releases and filings with the SEC. Joining us on the call today are Linda Tharby, President and CEO of Kourou Medical Systems, and Tom Adams, Kourou Medical's Chief Financial Officer. Linda, please go ahead.

And press releases and filings with the SEC joining us on the call today are Linda Darby, President and CEO of core medical systems, and Tom Adams Ballroom, Medical's, Chief Financial Officer.

Linda Please go ahead.

Linda M. Tharby: Thank you, Louisa. Good afternoon, everyone, and thank you for joining us today. During today's call, we will use slides to support our commentary. I will begin by walking through results and key business updates for the fourth quarter and full year 2023. Tom will then review our financials and our 2024 guidance. Following the prepared remarks, we will open the line for questions. I'm very pleased with Cora's performance in the fourth quarter.

Thank you Luisa and good afternoon, everyone and thank you for joining us today.

During today's call, we will use slides to support our commentary.

I will begin by walking through our results and key business updates for the fourth quarter and full year 2023.

Tom will then review our financials and our 2024 guidance.

Following their prepared remarks, we will open the line for questions.

I'm very pleased with <unk> performance in the fourth quarter.

Linda M. Tharby: We continue to execute on our growth strategy, exceeding our gross margin expectations, and with discipline in our capital and expense management, we continue to see improvements in our quarterly cash burn. Our polio revenues ended at $28.5 million, with growth of 2% affected by a one-time non-recurring engineering services revenue in our novel therapies business. Our overall revenue growth in our core SCIG business remains strong, with U.S. performance driven by share gains and with the overall SCIG market recovering, in another quarter of sequential growth. In our international business, we deliver double-digit growth year over year, primarily driven by deeper penetration in current markets and successful entry into new geographies supported by strong IG supply. In November, we announced FDA clearance of the 50 mL Hyzentra pre-filled syringes for the Quoru Freedom System.

We continue to execute on our growth strategy exceeded our gross margin expectations.

And with discipline in our capital and expense management, we continued to see improvements in our quarterly cash burn.

Our full year revenues ended at $28 5 million with growth of 2% affected by a one time nonrecurring engineering services revenue and our novel therapies business.

Our overall revenue growth in our core business remains strong with U S performance driven by share gains and what the overall S. H I G market recovering.

And another quarter of sequential growth.

In our international business, we delivered double digit growth year over year, primarily driven by deeper penetration in current markets and successful entry into new geographies supported by strong I G supply.

In November we announced FDA clearance of the 50 S. Merle hi, central pre filled syringes for the coral freedom system.

Linda M. Tharby: Pre-filled syringes are becoming an increasingly large part of the SCIG market, and Quoru is strongly positioned to capitalize on this opportunity. We believe pre-pills will be a critical growth driver for KORU and expand our penetration with our KOR mark. In Novel Therapies, we continue to build out the pipeline, having signed three additional collaborations in 23 and having started the year strong with two new ones at the beginning of 2024, both of which I will touch on later. From an operational perspective, I'll let Tom cover the financials with more granularity. For growth margins, we finished above 60% for the second consecutive quarter and generated positive cash flow of $700,000 in the fourth quarter. Additionally, we exceeded our 2023 ending cash balance projections, closing the year with $11.5 million.

Pre filled syringes are becoming an increasingly large part of the market.

<unk> is strongly positioned to capitalize on this opportunity.

We believe pre pills will be a critical growth driver for core route and expand our penetration in our core markets.

And novel therapies, we continue to build out the pipeline having signed three additional collaborations in 'twenty three and.

And having started the year strong with two new in the beginning of 2020 for.

Both of which I will touch on later.

From an operational perspective, I'll, let Tom cover the financials with more granularity for.

For gross margins, we finished about 60% for the second consecutive quarter and generated positive cash flow of $700000 in the fourth quarter.

Additionally, we exceeded our 2023 ending cash balance projections closing the year with $11 $5 million.

Linda M. Tharby: Each of these metrics serves as a testament to the steps we've taken in our operating expense management and inventory reduction initiatives, and we expect to continue the progression in operating performance in 2024 and beyond. Finally, we're initiating 2024 guidance for net revenues to range between $31.2 and $32.2 million, representing 10 to 13% growth and gross margin between 59 to 61% for the full year. Additionally, we plan to exit the year with an ending cash balance of at least $8 million and to be cash flow positive in the fourth quarter of 2024 and for the full year 2025. Tom will discuss details related to the guidance and our associated assumptions later in the call.

Each of these metrics serves as a testament to the steps, we've taken and our operating expense management and inventory reduction initiatives and we expect to continue the progression in operating performance in 2024 and beyond.

Finally, we are initiating 2024 guidance for net revenues to range between 31 point to $32 2 million, representing 10% to 13% growth in gross margin between 59% to 61% for the full year.

Additionally, we plan to exit the year with an ending cash balance of at least $8 million and to be cash flow positive in the fourth quarter of 24 and for the full year 2025.

Tom will discuss details related to the guidance and our associated assumptions later in the call.

Over the last few years, we've invested in positioning <unk> for growth and profitability.

Linda M. Tharby: Over the last few years, we've invested in positioning KORU for growth and profitability, and as we enter our 24, we expect much of that investment to be behind us. I'm seeing strong momentum in our core business, our best novel therapy pipeline to date, and a focused operational discipline that is critical to our future success. 2024 will be an execution year for our team, and we believe we are poised for a return to sustained double-digit growth and profitability. Vision 26 remains our key focus moving forward, and we are positioned for a meaningful inflection point in 24 and beyond. Moving to slide four, you'll recognize the three-pillar growth strategy that is the foundation of our Vision 26 initiative. Those three being domestic SCIG penetration and growth.

And as we enter 'twenty four we expect much of that investment is behind us I'm seeing strong momentum in our core business. Our best novel therapies pipeline to date and our focused operational discipline that is critical to our future success.

'twenty 'twenty four will be an execution year for our team and we believe we are poised for a return to sustained double digit growth and profitability vision.

It is in 'twenty six remains our key focus moving forward and we are positioned for a meaningful inflection point in 'twenty four and beyond.

Moving to slide four you'll recognize a three pillar growth strategy that is the foundation of our vision 26 initiatives those three being domestic SCID penetration and growth.

Linda M. Tharby: The Broadening of Our Novel Therapies Pipeline and Geographic Expansion. This strategy will continue to position Quoru as a leader in the growing large-volume subcutaneous drug delivery market. As it relates to our domestic core, our goal is to increase penetration into the SCIG market and further establish our leadership position.

The broadening of our novel therapies pipeline and geographic expansion.

This strategy will continue to position <unk> as a leader in the growing large volume subcutaneous drug delivery market.

As it relates to our domestic core our goal is to increase penetration into the <unk> market and further establish our leadership position.

Linda M. Tharby: With respect to the overall SCIG market, in the fourth quarter, we saw another quarter of sequential growth and patient volumes, and the market ended the year with mid to high single-digit growth. We delivered approximately 6% year-over-year revenue growth. And our end user sales to pharmacies were up double digits, reflective of share gains. Our distributor inventories were lower at the end of Q4, and we expect to see this inventory replenished in future quarters. Increased demand for pumps drove a double-digit increase in volumes for both the fourth quarter and the full year, often a leading indicator of consumable sales. We continue to see caregivers and patients drive therapy to pre-fills due to their convenience versus traditional FCIG biotherapy.

With respect to the overall F C. I D market in the fourth quarter, you saw another quarter of sequential growth in patient volume in the market ended the year with mid to high single digit growth.

We delivered approximately 6% year over year revenue growth.

And our end user sales pharmacies were up double digits reflective of share gains.

Our distributor inventories were lower at the end of Q4, and we expect to see this inventory replenished in future quarters.

Increased demand for pumps drove a double digit increase in volumes for both the fourth quarter and the full year, often leading indicator to consumable sales.

We continue to see caregivers and patients drive therapy to Prefill Stooges are convenience versus traditional F. B I G. Bile therapy. We're encouraged by these trends and believe this will benefit the commercial launch of the 50 ml highs enter pre filled syringe, which began rollout in January.

Linda M. Tharby: We're encouraged by these trends and believe this will benefit the commercial launch of the 50 ml Hisentra pre-filled syringe, which began rollout in January. We also anticipate a new 510K submission for a product in the fourth quarter of 2024 within CORE-IG. Overall, we are increasingly confident in SCIG market growth, driving new patient starts, and believe we are positioned for continuing share gains in our U.S. business in 2020. Turning to novel therapies, we have 15 collaborations signed to date with 19 additional open opportunities across varying indications, and we will sign three new collaborations in 2023. I'm encouraged by our progress in the early 24.

We also anticipate a new five 10-K submission for our product in the fourth quarter 2024 within core I G.

Overall, we are increasingly confident in the <unk> market growth driving new patient starts and believe we are positioned for continuing share gains in our U S business in 2024.

Turning to novel therapies, we have 15 collaborations signed to date with 19 additional open opportunities across baring indications signing new three new collaborations in 2023.

I'm encouraged by our progress in early 'twenty four.

Linda M. Tharby: In recent weeks, we've announced two new collaborations, which I will discuss later. We also have two drug collaborations progressing to phase three trials in 2024, a key milestone in the advancement of commercial launch. Looking forward, during the fourth quarter of 24, we're anticipating the submission of a 510K application to support a new novel therapy indication for use with our Freedom Infusion System in ambulatory infusion centers. I'm very pleased with the headway we're making with NNT, by the overall strength and diversity of our pipeline, and the progress on commercialized drugs in early 25 and 26. Turning to International CORE, it continues to be a great opportunity for COREU. Revenue in the fourth quarter grew 8% over Q4'22 and 10% for the full year.

In recent weeks, we've announced two new collaborations, which I will discuss later.

We also have two drug collaborations progressing to phase III trials in 2024.

Key milestone in the advancement to commercial launch looking.

Looking forward during the fourth quarter of 'twenty four we're anticipating that submission, but 510, Apple K application to support a new novel therapy indication for use with our freedom infusion system in ambulatory infusion centers.

I'm very pleased by the headway, we're making within N T by the.

Overall strength and diversity of our pipeline and the progress on commercialized drugs in early 'twenty five and 'twenty six.

Turning to international core it continues to be a great opportunity for corium.

Revenue in the fourth quarter grew 8% over Q4, 'twenty, two and 10% for the full year.

Linda M. Tharby: Strong sales growth was driven by growth in our established markets as IG supply stabilized, new indication growth in CIDP and SID, and entry into multiple new markets. As was the case in the domestic core, pump and consumer volumes were another strong indicator of demand, with double-digit growth.

Strong sales growth was driven by growth in our established markets as I G supply stabilized new indication grow and C. I D. P. N S I D and entry into multiple new markets.

As was the case in domestic core pumping consumable volumes were another strong indicator of demand with double digit growth.

Linda M. Tharby: Our excitement and international reach is at an all-time high as we anticipate continued expansion into new regions in 2024. We also expect the completion of an electronic pump trial in the first half of the year, generating further evidence for our freedom infusion system. I'd like to shift our focus back to the IG market on slide five, and more specifically pre-filled syringes and why we're so bullish on the opportunity this presents for Quorum moving forward. Pre-fills represent a major catalyst for growth within our domestic and international core markets, as this delivery method is increasingly gaining share among subcutaneous therapy patients and has the potential to increase overall subcube penetration.

Our excitement in international is at an all time high as we anticipate continued expansion into new regions in 2024.

We also expect the completion of an electronic pump trial.

In the first half of the year.

Generating further evidence for our freedom infusion system.

I'd like to shift our focus back to the I G market on slide five and more specifically pre filled syringes and why we're so bullish on the opportunities. This presents for core are moving forward.

Prefills represent a major catalyst for growth within our domestic and international core markets. As this delivery method is increasingly penetrating share amongst subcutaneous therapy patients and has the potential to increase overall sub Q penetration.

Linda M. Tharby: Pre-filled syringe patients grew 24.5% in the fourth quarter and increased overall penetration to 14% as the fastest growing part of the overall IG market. Overall, we see a number of factors that will continue to drive growth. First, patient preference with 78% of patients preferring the use of prefill with the Freedom Pump versus vial administration.

Pre filled syringe patients grew 25% in the fourth quarter and increased overall penetration to 14% as the fastest growing part of the overall AG market.

We're all we see a number of factors that will continue to drive growth.

First patient preference was 78% of patients preferring to use a pre fill with the freedom pump versus vial administration.

Linda M. Tharby: Additionally, the 50 mL dose clearance represents two-thirds of the pre-filled market and combined with the earlier 20 mL launch provides CORA with a broad portfolio to fulfill all patient needs. We have been focused with our pharmaceutical partners in driving a clinical practice change to prefills, driving even greater uptake and usage due to the increased convenience. We expect increased penetration with CIDP patients who require much higher doses and twice weekly therapy.

<unk> the 50 ml dose clearance represents two thirds of the pre salt market and combined with the earlier 20 ml launch provides core with a broad portfolio to fulfill all patient needs.

We have been focused with our pharmaceutical partners and driving our clinical practice change to pre bills driving even greater uptake in usage due to the increased convenience.

We expect increased penetration with C. I D P patients who require much higher doses and twice weekly therapy.

Linda M. Tharby: We're excited by our position and potential for prebills to drive growth and higher penetration, reaching levels of 20 to 25% for folio penetration in 24 and 50% by the end of year 25. Turning to slide six, we are very pleased to announce that we will be presenting new data at the 2024 National Home Infusion Association Conference later this month. This study focused on patient adherence to the Freedom System collected data from over 11,000 patients with primary immune deficiencies who self-administered their SCIG therapy using the Quoru Freedom Pump. This retrospective study, conducted over a four and a half year period, revealed an impressive adherence rate of 97% to the prescribed treatment protocol. To provide context, adherence rates for other chronic conditions, such as high blood pressure, cholesterol, arthritis, and diabetes, range somewhere from 62 to 87 percent.

We are excited by our position and potential for pre built to drive growth and higher penetration, reaching levels of 2020% to 25% for full year penetration in 'twenty, four and 50% by the end of year 'twenty five.

Turning to slide six we are very pleased to announce that we will presenting new data at the 'twenty 'twenty four National home Infusion Association Conference later this month.

This study focused on patient adherence to the freedom system.

And collected data from over 11000 patients with primary immune deficiencies, who self administered they're SCID therapy using the freedom pump.

This retrospective study conducted over a four and a half year period revealed an impressive adherence rate of 97% to the prescribed treatment protocol.

To provide context adherence rates for other chronic conditions, such as high blood pressure cholesterol arthritis in diabetes range somewhere from 62% to 87%.

Linda M. Tharby: This comparison highlights the exceptional performance of the Coral Freedom Pump System in promoting treatment consistency and improving patient satisfaction. Overall, these findings underscore the effectiveness of the CoroFreedom pump system in facilitating strong adherence to SCIG therapy among PID patients, leading to improved treatment outcomes and patient satisfaction. We look forward to sharing these results at the upcoming NHI conference with our prospective new customers. Turning to our novel therapies pipeline, we have the strongest pipeline we have reported to date. In 2023, we added three new collaborations to our pipeline, bringing our total collaborations to 15, and we are pursuing another 19 open opportunities. This NT pipeline translates to a total addressable market of approximately $2.7 billion through the treatment of over 1.6 million people globally. 2024 is already off to a strong start, and I want to highlight the two recent collaborations we've announced, the first being the initiation of a feasibility study with Quoru's system on an already commercialized rare disease therapy.

This comparison highlights exceptional poor performance of the core freedom pump system, and promoting treatment consistency and improving patient satisfaction.

Overall these findings underscore the effectiveness of the coral freedom pump system, and facilitating strong adherence to SCID therapy, among PID patients leading to improved treatment outcomes and patient satisfaction.

We look forward to sharing these results at the upcoming NHI conference with our percent prospective new customers.

Yeah.

Turning to our novel therapies pipeline, we have the strongest pipeline we've ever reported to date.

'twenty three we added three new collaborations to our pipeline.

Bringing our total collaborations to 15 and we are pursuing another 19 open opportunities.

This N T pipeline translates to a total addressable market of approximately $2 7 billion through the treatment of over one 6 million people globally.

'twenty 'twenty four is already off to a strong start and I want to highlight the two recent collaborations we've announced the first being the initiation of a feasibility study with cruise system on an already commercialized rare disease therapy.

Linda M. Tharby: And the second, a clinical supply agreement to support a pre-commercial unnamed SCIG drug entering its phase 3 trial. Novel therapies are a key piece to Quora's growth strategy as they create opportunities for future drug indications that can grow our Quora business significantly once commercialized. We also anticipate entry into Japan with increasing SCIG approval.

And the second a clinical supply agreement to support a pre commercial unnamed SCID drug entering its phase III trials.

Yeah.

Novel therapies is a key piece to cores growth strategy as it creates opportunities for future drug indications that can grow our core business significantly once commercialized.

We also anticipate entry in Japan, with increasing SCID approvals.

Linda M. Tharby: Our team is focused on late-stage drug opportunities with potential for commercialization over the next three years in both the home and ambulatory infusion setting. The near-term targets are those collaborations we expect to go live with KORU. Totaling six new potential entries by the end of 26 are highlighted in the lighter green on the far right of the slide.

Our team is focused on late stage drug opportunities with potential for commercialization over the next three years in both the home and ambulatory infusion settings.

The near term targets are those collaborations we expect to go live with core route.

<unk> six new potential entries by the end of 'twenty six are highlighted in the lighter green on the far right of the slide.

Linda M. Tharby: I'm encouraged by the incremental advancement in our funnel and truly believe that novel therapies will be transformational to increasing our leadership position as a global leader in large volume drug delivery and driving our commercial potential in our core business. In 2023, we've laid the foundation for a strong 24 and are on a path to continue double-digit growth with a clear line of sight to profitability in 25. I'm excited by our current momentum as we remain focused on the execution of our Vision 26 strategy and positioning Quoru for continued growth and profitability. I will now turn it over to Tom to review our financial... Thank you, Linda, and good afternoon, everyone.

I'm encouraged by the incremental advancement in our funnel and truly believe that novel therapies will be transformational to increasing our leader.

Later ship position as a global leader in large volume drug delivery and driving our commercial potential in our core business.

In 2023, we've laid the foundation for a strong 24 and are on a path to continued double digit growth with a clear line of sight to profitability in 'twenty five.

I'm excited by our current momentum as we remain focused on the execution of our vision twenty-six strategy and positioning <unk> for continued growth and profitability.

I'll now turn it over to Tom to review our financials.

Thank you Linda and good afternoon, everyone.

We closed the quarter with a total net revenue of $7 2 million, which was below the prior year by 2%. We were pleased with our quarterly performance in our domestic and international core business.

Thomas Adams: We closed the quarter with a total net revenue of $7.2 million, which was below the prior year by 2%. However, we were pleased with our quarterly performance in our domestic and international business. For the quarter, we reported domestic core revenues of $5.6 million, reflecting 5% year-over-year growth. This growth was driven by share gains in new accounts, double-digit growth in infusion pump sales, and an overall healthy FCIG market. In addition, and as Linda pointed out, end user sales, which are indicative of our demand, were very strong during the quarter, which we expect to be reflected in future replenishments of distributor inventory. The international core business increased 8% year over year with revenues of 1.3 million, driven by improved IG supply across Europe, expansion into new geographies, and double-digit growth in pump and consumable volume. Our novel therapies business reported revenues of $200,000, or a 62% decrease driven by a large revenue milestone we completed for non-recurring engineering services in 2022. Moving to slide 9.

For the quarter, we reported domestic core revenues of $5 6 million, reflecting 5% year over year growth. This growth was driven by share gains and new accounts.

Double digit growth in the infusion pump sales and an overall healthy <unk> market.

In addition, and as Linda pointed out the end user sales, which are indicative of our demand were very strong during the quarter, which we expect to be reflected in future replenishment of distributor inventory.

International core business increased 8% year over year with revenues of $1 3 million driven by improved <unk> supply across Europe expansion into new geographies and double digit growth in pump and consumable volumes are novel therapies business reported revenues of $200000 or 62.

Or cent decrease driven by a large revenue milestone we completed for.

For nonrecurring engineering services in 2022.

Moving to slide nine for the full year 2023, total net revenues were $28 5 million, increasing 2% over the prior year domestic core sales totaled $22 4 million.

Thomas Adams: For the full year 2023, total net revenues were $28.5 million, increasing 2% over the prior year. Domestic core sales totaled $22.4 million, which was a 6% year-over-year increase, driven by growth in pumps and consumables attributed to share gains in national and regional accounts. 2023 also marked a record year in infusion pump unit sales. With this growth, we expect our consumables revenue to follow as our pumps make it into the hands of nurses and patients. International core revenues were $4.6 million, representing a 10% increase compared to the prior year. Growth internationally was driven by increased sales in established markets, as well as expansion into new geographies. Novel therapies revenues were $1.5 million, reflecting a decrease of 41% in the year.

Which was a 6% year over year increase driven by growth in pumps and consumables attributed to share gains and national and regional accounts.

2023 also marked a record year and infusion pump unit itself with this growth we expect our consumables revenue to follow as our pumps make it into the hands of nursing patients.

International core revenues were $4 6 million, representing a 10% increase compared to the prior year growth internationally was driven by increased sales in established markets as well as expansion into new geographies.

Novel therapies revenues were $1 5 million.

Reflecting a decrease of 41% in the year. The decline was a result of higher NRI recognized and increased clinical trial orders from the prior year.

Thomas Adams: The decline was a result of higher NRE recognized and increased clinical trial orders from the prior year. We carry revenue potential from a number of pipeline opportunities into 2024. Moving on to gross margins on slide 10, for the fourth quarter, we delivered GAP gross margins of 60.3, which was a 470 basis point improvement over the prior year. Our non-gap gross margin for the quarter was 63.1%.

We carry revenue potential from a number of pipeline opportunities into 2024.

Moving onto gross margins on slide 10 for the fourth quarter, we delivered GAAP gross margins of 63, which was a 470 basis point improvement over the prior year.

Our non-GAAP gross margin for the quarter was 63, 1% the non-GAAP gross margin, allowing for a one time inventory adjustment related to the product discontinuation had no impact on that.

Thomas Adams: The non-GAAP gross margin allowed for a one-time inventory adjustment related to a product discontinuation that had no impact on revenue. Margin improvements in the quarter were driven by increases in manufacturing efficiencies relating to a site closure, outsourcing of consumable manufacturing, and favorable changes in product. For the full year 2023, gap gross margin was 58.6, a 350 basis point improvement over the full year 2022, which was driven primarily by our outsourcing efforts and improvements in manufacturing productivity and product. Non-gap gross margin for the year was 59.6, which allowed, again, for a one-time adjustment for a product. On slide 11, at the end of the fourth quarter, we finished the year with a cash balance of $11.5 million, representative of a $700,000 cash gain for the quarter.

Margin improvements in the quarter were driven by increases in manufacturing efficiencies relating to a site closure outsourcing of consumable manufacturing and favorable changes in product mix.

For the full year 2003, GAAP gross margin was $58 six or 350 basis point improvement over the full year of 2022, which was driven primarily by our outsourcing efforts and improvements in manufacturing productivity and product mix non-GAAP gross margin for the year was $59 six which again.

For a one time adjustment or a product discontinuation.

On slide 11 at the end of the fourth quarter. We finished the year with a cash balance of $11 5 million.

Representative of a $700000 cash gain for the quarter. Our Q4 cash improvement was driven by lower losses in the second half of 2023 driven by.

Thomas Adams: Our Q4 cash improvement was driven by lower losses in the second half of 2023, driven by improved gross margins and discipline operating expense control. Additionally, there was an increase in CapEx in the quarter on tooling related to the development of our Next Generation product. Offsetting these uses of cash, we achieve significant working capital improvement led by the completion of our inventory reduction plan, collection of earned retention credits, and typical year-end. During the fourth quarter, we also record a non-cash valuation allowance against our deferred tax. As we review our cash usage by quarter, we improved directionally throughout 2020. The first quarter had a higher level of spending as a result of one-time investments in CapEx and the onboarding of new hires, which tapered off significantly throughout the year.

Improved gross margin and disciplined operating expense control.

Additionally, there was an increase in capex from a quarter on tooling related to the development of our next generation products.

Offsetting these uses of cash we achieved significant working capital improvement led by the completion of our inventory reduction plan collection of earned retention credits.

And typical year end accruals.

During the fourth quarter, we also recorded a noncash valuation allowance against our deferred taxes.

As we review our cash usage by quarter, we improve directionally throughout 2023, the first quarter had a higher level of spending as a result of one time investments in capex and onboarding of new hires which taper off significantly through throughout the year.

Thomas Adams: Moving into 2024, we expect quarterly cash usage to remain consistent to follow a similar cadence, but at a significantly lower burn rate. As Linda noted earlier, given our improved operating leverage and our planned reduced cash usage, we expect to be cash flow positive in the fourth quarter of 2024 and for the full year 2025. Net loss for the fourth quarter of 2023 was 7.5 million or 16 or negative 16 cents per diluted share compared to a net loss of 2 million or negative 4 cents per diluted share for the same period of 2022. Net loss for the full year of 2023 was $13.7 million or negative 30 cents per diluted share compared to a net loss of 8.7 or negative 19 cents per diluted share for the same period of 2020. Our net loss in EPS for both the quarter and the full year included a tax valuation allowance of $6 million.

Moving into 2024, we expect quarterly cash usage to remain consistent to follow a similar cadence but at a.

Inefficiently lower burn rate.

As Linda noted earlier, given our improved operating leverage in our plan.

Cash usage, we expect to be cash flow positive in the fourth quarter of 2024 and for the full year 2025.

Net loss for the fourth quarter of 2023 was $7 5 million or 16 negative 16 cents per diluted share compared to a net loss of <unk>.

$2 million or negative four cents per diluted share for the same period of 2022.

Net loss for the full year of 2023 was $13 7 million.

Were negative 30 cents per diluted share compared to a net loss of $8 seven or negative <unk> 19 cents per diluted share for the same period of 2002.

Our net loss and EPS for both the quarter and the full year included the tax valuation allowance of $6 million adjusted.

Thomas Adams: Adjusted EBITDA for the quarter was negative $1 million or negative $0.02 per diluted share versus negative $1.6 million or negative $0.04 in the prior year, and adjusted EBITDA for the full year was $6,000,000, or negative $0.13 per diluted share versus negative $6,000,000.1 or negative $0.14 per diluted share in the prior year. Moving on to slide 13, we are setting our revenue guidance for the full year 2024 between $31.2 and $32.2 million, representing roughly 10 to 13% growth. Key drivers behind these estimates include One Core SCIG Drug market growth in the mid to high single digits. Second, adding three new collaborations to the novel therapies pipeline. And the third, pre-filled syringe penetration of approximately 20% to 25% of the overall SCIG.

Adjusted EBITDA for the quarter was.

Negative $1 million or negative <unk> <unk> per diluted share versus one negative $1 6 million or negative four cents in the prior year.

And adjusted EBITDA for the full year was $6 million negative or negative <unk> 13 per diluted share versus negative $61 1 million or negative <unk> 14 from the prior year.

Moving onto slide 13, we are setting our revenue guidance for the full year of 2024 between 31 to $32 2 million representing.

Representing roughly 10% to 13% growth.

Key drivers behind these estimates include.

One <unk> drug.

Market growth in the mid to high single digits.

Adding three new collaborations to the novel therapies pipeline and a third pre filled syringe penetration of approximately 20% to 25% of the overall <unk> market.

We expect gross margins to range between 59% to 61% primarily as a result of geographic expansion into lower ASP markets.

Thomas Adams: We expect gross margins to range between 59% to 61%, primarily as a result of geographic expansion and lower ASP markets, Supply Chain Inflationary Pressure, and Startup Costs for our new production line in the second half of the year. Finally, we expect our 2024 ending cash balance to be greater than $8 million, implying a significant cash flow decrease from priority. Assumptions for this guidance are driven by managing operating expenses of approximately $23.5 million to $24 million, exclusive of stock compensation expenses.

Supply chain inflationary pressure and startup costs for our new production line in the second half of the year.

Finally, we expect for 2024, and the cash balance to be greater than $8 million implying.

Implying a significant cash burn decreased from prior years.

Assumptions to this guidance are driven by managing operating expenses of approximately 23 5 million to $24 million exclusive of the stock compensation expenses.

Thomas Adams: We are also expecting cash flow to break even in Q4 and to be cash flow positive for the full year of 2020. Finally, all our cash guidance I just mentioned is exclusive of our new $10 million credit facility. Our new credit facility consists of a $5 million line of credit and a $5 million term loan with HSBC USA, with which we have established a new commercial banking relationship. We are pleased to have this new reserve available to us for strategic growth capital opportunities. I will now turn the call back to Linda for closing comments. Thanks, Tom.

We also are expecting cash flow to a breakeven in Q4 and to be cash flow positive for the full year of 2020.

Finally, our cash guidance I, just mentioned is exclusive of our new $10 million credit facility. Our new credit facility consists of a $5 million line of credit and a 5 million dollar term loan with HSBC USA with which we have established a new commercial banking relationships.

We are pleased to have this new reserve available.

To us for strategic growth capital opportunities.

I will now turn the call back to Linda for closing comments. Thanks, Tom.

And the last several years, we've invested in our R&D pipeline and new product innovation to drive increased penetration share gains and accelerated growth.

Linda M. Tharby: In the last several years, we've invested in our R&D pipeline and new product innovation to drive increased market penetration, share gains, and accelerated growth. As we discussed, we have already received FDA approval for the 50ml Hyzentra on our Freedom 60 platform, which will aid in expanding our customer base. In the near term, we expect a 510K submission for our new infusion set, which will provide a more comfortable and convenient experience, and our next generation infusion pump for IG. In the longer term, we expect a pump platform for novel therapies that will be customizable to the pharmaceutical partner's needs. We are very excited to bring each of these products to market as we look to assist both customers and pharmaceutical drug manufacturers in providing the best subcutaneous infusion experience for patients.

As we discussed we have received FDA approval for the 50 ml highs and draw on our freedom 60 platform, which will aid in expanding our customer base.

In the near term, we expect a five 10-K submission for our new infusion set which will provide a more comfortable and convenient experience.

And our next generation infusion pump for IAG.

And the longer term, we expect a pump platform for novel therapies that will be customizable to the.

Pharmaceutical partners needs.

We are very excited to bring each of these products to market as we look to assess both customers and pharmaceutical drug manufacturers and providing the best subcutaneous infusion experienced patients.

In closing we have a few key milestones that I would like to highlight for 2024 within our financial and operational performance.

Linda M. Tharby: In closing, we have a few key milestones that I would like to highlight for 2024 within our financial and operational performance. We anticipate returning to double-digit net revenue growth versus full year 23. We look to accelerate our U.S. core share gains through increased penetration of 50 mL prefilled syringes, while also continuing our international expansion in current and new markets. On the novel therapies front, we expect to enter three new collaborations in the year, focusing on late-stage candidates that have a higher probability of reaching commercialization prior to 2026. We are projecting the submission of two 510Ks, one for a new product and the other for a new drug indication on the Freedom platform.

Dissipate returning to double digit net revenue growth versus full year 'twenty three.

We look to accelerate our U S core share gains through increased penetration of 50 ml Prefilled syringes will also continuing our international expansion in current and new markets.

On the novel therapies front, we expect to enter three new collaborations in the ear focusing on late stage candidates that have a higher probability of reaching commercialization prior to 2026.

We're projecting the submission of two five 10-K, one for a new product and the other for a new drug indication on the freedom platform.

Linda M. Tharby: Finally, it is our commitment to break even cash flows in Q4 of 24 and be cash flow positive for full year 2025. Each of these milestones is a strong indicator of the progress we are making toward CORU's overarching Vision 26 goal. Overall, I am pleased with our fourth quarter and 23 results and am strongly encouraged by our strategic outlook across all of our businesses heading into 24. We continue to strive to evolve our company to be a leader in drug delivery in both the clinic and at home setting, thanks to the convenience of our products, as demonstrated by our long-term plan and milestones for the year. In closing, I would like to thank the entire KORU team for their continued passion and dedication.

Finally, it is our commitment to breakeven cash flows in Q4 of 'twenty, four and cash flow positive for full year 2025.

Each of these milestones are strong indicators of the progress, we're making toward cargos overarching vision 26 schools overall.

Overall, I am pleased with our fourth quarter, and 23 results and I'm strongly encouraged by our strategic outlook across all of our businesses heading into 'twenty four.

We continue to strive to evolve our company to a leader in drug delivery and both the clinic and at home setting.

Should the convenience of our products as demonstrated by our long term plan and milestones for the year.

In closing I would like to thank the entire core ROE team for their continued passion and dedication.

Operator: Operator, I will now turn the call over to you for Q&A. Welcome to our question and answer session. To ask a question, you may press star, then one on your touchtone phone.

Operator, I will now turn the call over to you for Q&A.

A question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset by pressing the keys. If at any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then two my first one.

Operator: If you're using a speakerphone, please pick up your handset by pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star, then two. Our first question comes from Frank Takkinen with Lake Street Capital. Please go ahead.

Question comes from Frank <unk> with Lake Street Capital. Please go ahead.

Frank James Takkinen: Great. Thanks for taking the questions. Congratulations on all the progress and the strong start to the year. I was hoping to start with one on guidance.

Great. Thanks for taking my questions. Congrats on all the progress and the strong start to the year I was hoping to start with one on guidance I saw that I saw and heard the comments around some of your assumptions about the S. S. P. I G market growth novel therapies pre filled syringe penetration.

Linda M. Tharby: I saw and heard your comments around some of your assumptions about SCIG market growth, novel therapies, and pre-filled syringe penetration. I was hoping you could kind of break it down by line item, maybe domestic, international, and novel therapies. How should we think about the growth profile, the guide for 2024? And then to add on to that, how should we think about the contribution from Hyzentra 50 ml? Okay, I think I have got it all.

You can kind of break it down by line item, maybe domestic international and novel therapies, how should we think about the growth profile there.

The guide for 2024, and then to add on to that how should we think about the contribution from the highs that draw 50 ml.

Okay.

I think I got it all I'll I'll start and then turn it over to Tom first yes, our overall performance 31 to $32 2 million expectation for 2024, we do not guide by business, but let me give you a couple of the key points in our U S business, we would anticipate.

Linda M. Tharby: I'll start and then turn it over to Tom. First, yes, our overall performance is 31.2 to 32.2 million expectations for 2024. We do not guide by business, but let me give you a couple of the key points.

Linda M. Tharby: In our U.S. business, we would anticipate the market overall to grow somewhere in that seven and a half percent range. And we expect our performance to be a couple of points above that driven by share gain, primarily pre-filled syringe, and increasing pre-filled penetration, particularly in the CIDP patient. Our international performance, you can expect, so that in the U.S. business, a nice acceleration from where we ended this year, on our overall international business, we would expect the overall year in our international business to be up appreciably from where we ended this year, probably think about a growth trajectory somewhere in the 15 to 20% range. And then finally, for our novel therapies business, we would say, overall, you can expect that business somewhere between the $1.5 and $2 million mark.

Anticipate the market overall to grow somewhere in that seven 5% range and we expect our performance to be a couple of points above that driven by share gain primarily pre filled syringe, a pre filled syringe and increasing prefill penetration, particularly.

Literally and the C I D P patient base.

Our international performance you can expect a so so not in the U S business is a nice acceleration from where we ended this year on our overall.

International business, we would expect the overall year and our international business to be up appreciably.

[noise] appreciably from where we ended this year, probably think about a growth trajectory somewhere in the 15% to 20% range and then finally offer our novel therapies business. We would say overall you can expect them.

That business somewhere between the one five and $2 million Mark overall in the year.

Linda M. Tharby: Okay, perfect. That's helpful. And then maybe just as a follow-up to one of the earlier PRs from this week on the ambulatory infusion setting, maybe talk about that specific opportunity and extend that into kind of how you think about the ambulatory infusion market as an overall opportunity going forward. Yeah, so ambulatory infusion centers just to set the stage there is a market that exists between the hospital and the home setting, where drugs there have been eight new drugs launched in the last three years, which require administration by healthcare professionals in that setting.

Okay perfect. That's helpful. And then maybe just as a follow up to one of the earlier P. Ours from this week on the ambulatory infusion setting maybe talk about that specific opportunity and extend that into kind of how you think about the ambulatory infusion market as an overall opportunity.

Are you going forward.

Yeah, So ambulatory infusion centers just to set the stage there are.

A market that exists between the hospital and home setting where drugs there had been eight new drugs launched in the last three years, which require administration by health care professional in that setting.

Linda M. Tharby: As I noted in our investor day, that was a key area of progress for us because the drugs are already commercialized. So I'm very excited that we were able to finalize this deal, and announce it in the first quarter for a drug asset that is already commercialized in those settings. On top of that, that asset will use a customized Quoru platform.

As I noted in our Investor day that was a key area of progress for.

For us because the drugs are already commercialized. So I'm very excited that we were able to finalize this deal announced it in the first quarter for a drug asset that is already commercialized in those settings.

And on top of that that asset will use a customized portal platform.

Linda M. Tharby: And we anticipate that we will file a 510k for that in the US, followed by non-US geography. We continue to see infusion centers as being an opportunity for incremental growth, a new area that represents near-term commercial potential, and just overall very, very excited about the opportunity. We have several more that we are focused on in our pipeline, and hopefully, we will have more to report in the coming quarter. Okay, I'll stop there. I'll let someone else out.

And we anticipate that we will file a 500 10-K per that are in the U S followed by ex U S geographies.

<unk>.

We continue to see the infusion centers as being an opportunity for incremental growth.

A new area that represents near term commercial potential.

And just overall very very excited about the opportunity we have.

Several more that we are focused on our in our pipeline and hopefully more to report in the coming quarters.

Perfect. Okay, I'll stop there and let someone else up and thanks for taking the questions.

Linda M. Tharby: Thanks for taking the question. The next question comes from Alex Nowak with Craig Hallam Capital. Please go ahead. Okay, great. Good afternoon, everyone.

The next question comes from Alex Nowak with Craig Hallum Capital. Please go ahead.

Okay, great. Good afternoon, everyone, maybe to follow up around the core business for crew, we've spoken a lot about the 50 milliliter pre filler launch but I'm.

Alexander David Nowak: Maybe to follow up on the core business for Kuru. We've spoken a lot about the 50 milliliter prefilled launch, but I'm curious. I've been seeing a lot of TV ads on CIDP recently. So are we seeing a bigger uptake in that part of the market than we maybe would have thought? What are your thoughts there? Yeah, so currently, our total user base, CIDP would account for about 10% of our total user base and is only today about 10% penetrated into SCIG therapy. So this is a major focus of all of the SCIG players to convert them from IV to SCIG therapy. With the advancement of pre-fills because of the convenience, you know, about 80% of patients prefer these, and the very large doses that they require, this is a significant opportunity to take that 10% penetration level and grow it to levels that are similar, for example, in PID, we would see about 50% penetration in that patient base.

I'm curious have you been seeing a lot of television ads and see IDP recently, so are we seeing a bigger uptake in that part of the market than maybe we would've thought what are your what are your thoughts there.

Yeah. So.

Currently the total user base C. I D P. What account for about 10% of our total user base and is only today about 10% penetrated into Sci gene therapy. So this is a major focus of all of the S. P. I G players to convert.

Them from IV to SCID therapy.

With the advancement of pre.

Prefills because of the convenience.

You know about 80% of patients prefer these and the very large doses that they require this is a significant opportunity to take that 10% penetration level and grow it to levels that are similar for example in PID, we would see about 50% penetration in.

That patient base. So overall C. I D. P. In the coming years is a significant area of growth and speaking to our customers. They are reporting daily pay.

Linda M. Tharby: So overall, CIDP in the coming years is a significant area of growth. And speaking to our customers, they are reporting daily patients coming in, asking, and being converted with doctor prescriptions to go from IV to subcu therapy. So very excited overall for the opportunity. Okay. So certainly, the prefilled 50 milliliter prefilled is going to be very helpful, whether it be PIDD or CIDP.

Patients coming in asking.

And and being converted with with Dod.

<unk> prescriptions to go from IV to subcutaneous P. So very excited over all for the opportunity.

Okay got it so certainly the pre fill the $50 million pre filled as it would be very helpful. Whether it be <unk> CRT P. So that makes total sense, what do you need for crude to get ready to help Takeda with their launch in Japan.

Linda M. Tharby: So that makes total sense. What do you need for Kuru to get ready to help Decatur with their launch in Japan? and approval by the regulatory bodies. We have been waiting for this one.

And approval by the regulatory bodies, we have been waiting for this one yes. So as you know we submitted that file some time, we continued to progress commercial discussions with all of the pharmaceutical partners for that entry. So we are excited.

Linda M. Tharby: Yes. So, as you know, we submitted that file some time ago. We continue to progress commercial discussions with all of the pharmaceutical partners for that entry. So we are excited. And it's just a regulatory approval that we need. Okay, got it.

And it's just a regulatory approval is what we need.

Okay got it and then a clarification and then just one more question on three new collaborations that was mentioned in the prepared remarks, a couple of times do you mean, three new collaborations in total for 2024 or three more than what we've already been.

Linda M. Tharby: And then a clarification. And then just one more question on three new collaborations was mentioned in the prepared remarks a couple of times. Do you mean three new collaborations in total for 2024, or three more than what we've already been starting to announce so far up until now? Yeah, that would be three in total, which would include the two we've already announced. And what I would say is we have a lot of work to do on the 15 that are already in the pipeline. You know, these generally start with feasibility. Many of them involve innovation agreements, and they then go into clinical trial approvals. So a lot of work to do in there. But three is the number.

Already been announced so far up until now.

Yeah that is three in total which would include the two we've already announced and what I would say is we haven't a lot of work to do on the 15 that are already in the pipeline. They these generally start with feasibility many of them involve innovation agreements. They then go into clinical trial approval.

So a lot of work to do.

In there, but three is the number we obviously hope to exceed that number but but three is what we're counting on for our guidance right now.

Linda M. Tharby: We obviously hope to exceed that number, but three is what we're counting on for our guidance right now. So obviously excited that we have two of those out of the way, a couple of months in.

So obviously <unk> decided that we have two of those out of the way.

A couple of months in here.

Yes. It makes total sense and then just lastly.

Linda M. Tharby: Yep, it makes total sense. And then, just lastly, 2024, it should be a good year and should be building up into, I think, a very strong 2025. If you put together the core IG business, the K to Japan launch, the 50 milliliter prefilled, and the rare disease launch, what is a realistic view of what the longer-term growth can start to look like for Kuru? Is the growth, you know, that provided in the 2024 number, the longer-term growth? Or could we get above that? I would say thank you, because you just named off, you know, all of the key areas that we're looking at, right, and I would say, in addition to that, continued strength in the IG market, you know, our share gains here in the U.S., the NT progression, and successful commercial entries, all of which I laid out today, six shots on goal, you know, coming into 25 and 26, and That's become a real driver for us.

In 2004, it should be a good year and should be building up into a I think a very strong 25, if you put together the core <unk> business Takeda, Japan launch the 50.

Bill either pre filled the rare disease launch what is a realistic view on what the longer term growth can start to look like for Peru is the growth.

And the 2024 number the longer term growth or can we get above that.

I would say thank you because you just named off you know all the all of the key areas that we're looking at right now and I would say in addition to that continued strength in the <unk> market you know our share gains here in the U S. B N T progression and successful commercial entries.

All of which I laid out today six shots on goal.

Going into 'twenty, five 'twenty six and then it incremental.

<unk> expansion internationally.

It's become a real driver for us so overall.

Linda M. Tharby: So overall, you know, we believe our numbers can be 20, 25 plus percent growth is what we're looking at for 25 and a little bit stronger. Sorry, the only thing I missed was new products, obviously. Those new products launching add to that share grain percentage. All right, excellent. Thanks for the update.

We believe our numbers can be 2025 plus percent growth is what we're looking at for 25 million and a little bit stronger sorry. The only thing I missed was new products, obviously, those new products launching add to that share gain perspective.

Alright excellent thanks for the update.

Caitlin Cronin: Thank you. The next question comes from Caitlin Cronin with Canaccord Genuity.

Thank you.

The next question comes from Caitlin.

Cronin with Canaccord Genuity. Please go ahead.

Caitlin Cronin: Please go ahead. Hi, everyone. Thanks for taking the questions. Just to start off with 2024 guidance, what does that really imply from a quarterly cadence perspective for both revenue and gross margin? Maybe I'll let Tom handle that question.

Hi, everyone. Thanks for taking the questions.

Let's start off with 2024 guidance, what does that really imply from a quarterly cadence perspective for both revenue and gross margin.

Maybe I'll let.

Tom handle that question.

Sure. So we typically don't guide by quarter, but you can expect.

Thomas Adams: Sure, so we typically don't guide by quarter, Caitlin, but you can expect increasing revenues throughout the quarter. And I would say that, on the novel therapy side, as you know, that business is rather lumpy, and revenue is reflective as work is performed and milestones are completed. But I would say on the core side, that's more of an increasing type of revenue that you can model. And then in terms of gross margin, yeah, I mean, gross margin, there's three things that are impacting the year.

Creasing revenues.

Throughout the quarter.

And I would say that on the novel therapy side is as you know that business is rather lumpy and revenue is reflective as work is performed the milestones are completed.

But I would say on the core side, that's more of an increasing type of revenue you can model out.

And then in terms of gross margin yeah.

Gross margin of three things that are better.

That are impacting the year and the first thing is we are launching new products and we are.

Thomas Adams: And the first thing is that we are launching new products. And we're, we're ramping up our facilities in the second half of the year. And when you do that, you typically have some inefficiencies within manufacturing as you start up a new facility. Again, that's the second half of the year. And then I would also say, with that, we are growing. We are growing internationally, and those ASPs are generally at a lower ASP than what you'd see in the US market.

We're ramping up our facilities in the second half of the year and when you do that you typically have some inefficiencies with the manufacturing as you start up a new facility.

Again thats the second half of the year and then I would say also with that we are growing.

We are growing internationally.

And those Asps are generally.

At a lower ASP than what you'd see in the U S market. So I would say all in all you can you can you can you.

Thomas Adams: So I would say all in all, you can you can you can, You can mile out of gross margin that would be pretty consistent with maybe a little bit of a drop in the Q3 timeline and then a bounce back up. Caitlin, maybe the only additional thing that I would add to what Tom had to say is that you would expect that our quarterly revenues would follow prior year patterns; we typically tend to have a stronger Q1, generally driven by new insurance, so where people switch providers, and we'll get new pumps and or new consumables with that provider. I got it.

You can mine a lot of gross margin that would be pretty consistent with maybe a little bit of a drop in the Q3 timeline.

A bounce back up in Q4.

Okay, and maybe the only additional thing that I would add to what Tom had to say is.

You would expect that our quarterly revenues would follow prior year patterns, we typically tend to have a stronger Q1.

Generally driven by new insurance to where people switch providers and and we'll we'll get new pumps, and our new consumables with that provider.

Got it Okay and then just on gross margin again are the supply chain inflationary pressures that you've noted in the press release or these new or is this just a.

Thomas Adams: Okay. And then just on gross margin, again, are the supply chain inflationary pressures that you noted in the press release new, or are these just pressures that have been going on for some time, and you've noted them in the guidance? I'd say a combination.

Crushers that have been going on for some time.

I'd say a combination of as you know inflation has not gone away, it's still out there and so we still we still anticipate some.

Thomas Adams: As you know, inflation has not gone away. It's still out there. And so we still, you know, we still anticipate some pricing pressures from some of our vendors. And also, you know, we just completed our budget. And typically, a lot of our new contracts, you know, they renew in the first quarter. So there are some some pricing increases from those renewals that were working. Thank you. Operator, any further questions?

Pricing pressures from some of our vendors and also we just completed our budget and typically a lot of our new contracts are they renew in the first quarter. So.

There are there are some some pricing increases.

From those renewals that were that were working with.

Okay. Thank you.

Thank you.

Yeah.

Operator further questions.

Operator: Again, if you have a question, please press star and then one. Our next question comes from Jason Bednar with Piper Sandler. Hey, good afternoon.

Again, if you have a question. Please press star and then one our next question comes from Jason Bednar with Piper Sandler.

Hey, good afternoon, thanks for taking the questions here.

Jason M. Bednar: Thanks for taking the questions here. I'm going to maybe follow up on some items that have been touched on, but just hopefully, unpack a few things a bit more. You know, Caitlin's question there around cadence, you know, maybe if I string that together with a prior question around, you know, acceleration to 25. I mean, it would seem like your comps, first half versus second half, you should have an acceleration, you know, first half versus second half in the growth rate this year. So we're not looking at such a large step up in the growth rate heading into 25.

Maybe follow up on some items that have been touched on but just hope hopefully unpack a few a few things a bit more.

K ones question, there around the cadence, maybe if I <unk> string.

String that together with the prior question around you know.

Acceleration into 'twenty five.

I mean, it would seem like your comps first half versus second half you should have an acceleration.

First half second half and the growth rate this year so.

So that we're not looking at such a large step up in the growth rate heading into 'twenty. Five. So I guess is that the right way to think about it on that side and then Tom on your gross margin points. There again. It was <unk> question on the supply chain costs, taking a little bit higher.

Jason M. Bednar: So I guess, you know, is that the right way to think about it on that side? And then, you know, Tom, on your gross margin points there, again, it was Caitlin's question on the supply chain costs, again, a little bit higher. Is this, you know, do we need to have like a little bit of a downshift in how we were thinking about gross margins in your 26 plan? Are those incremental to that 26 plan?

Is this do we need to have like a little bit of a down shift in how we were thinking about gross margins.

In your 26 plan are those incremental to that 26 plan or.

Thomas Adams: Or are those contemplated within there? Just try and understand if anything's changed. Yeah, so let me start with the gross margin since we were just on that topic. I would say that, you know, there are some one-time gross margin impacts. Again, as I mentioned, the starting up of a new production line definitely creates inefficiencies when you do that, as you're trading on volumes from one site to the other.

Are those contemplated within there I'm just trying to understand if anything's changed.

Yes, So let me start with the gross margin since we were just on that topic I would say that there are some onetime gross margin impacts again as I mentioned the <unk>.

Starting up of a new production line.

It definitely creates inefficiencies.

Inefficiencies when you do that.

Measure trading of bonds from one site to the other.

Thomas Adams: So that's one piece that I would imagine would resolve itself in future periods after this year. And then just in terms of your question around revenue growth, sure, we will see an increase and we will see, You know, as we see the pre-filled syringes uptick over the quarters, we will see upticks. We also will see, you know; we are expecting approval for the Japanese market. And there are some other drivers that are included in the back half of the year, which will help which will help our revenue. And maybe the only other thing I would add to that is, given the revenues we carried in on novel therapies this year, you can expect a more even cadence in our novel therapy revenues throughout the year. They will not be as back-end loaded as what we anticipated last year because of what we carried into this year. Okay, all right, got it. I want to shift gears.

So that's that's one piece that I that I would imagine would resolve.

Resolve itself in future periods. After this year.

And then just in terms of your question around the revenue growth sure.

We will see increasing and we will see.

As we see them.

The pre filled syringes uptick over the quarters, we will see.

Upticks, we also will see.

We're expecting approval or.

For the Japanese market and there are some other drivers that are there.

That are included in the back half of the year, which will help.

Which will help our revenue.

And maybe the only other thing I would add to that is if you could given the revenues we carried and novel therapies. This year, you can expect a more even cadence and our novel therapies revenues throughout the year, they will not be as back end loaded.

What we anticipated last year because of what we carried into this year.

Okay got it.

I wanted to shift gears I don't think it's been touched on yet I apologize if I missed it but you mentioned in your PR today and assessment report from your European notified body.

Jason M. Bednar: I don't think it's been touched on yet. Apologies if I missed it. But you mentioned in your PR today an assessment report from your European notified body. You know, what does this mean for your European business? Does it affect at all your ability to sell in that market or get products approved in that market? You know, when do you expect to hear an update from BSI? Just anything additional there? Because I, again, it could be important. It's just hard to tell if it is or isn't.

What does this mean for your European business does it affect at all your ability to sell in that market or to get products approved in that market.

When do you expect to hear an update from BSI just anything additional there because again it could be important I'd just hard to tell if it is or not.

Yeah no. Thank you for the question Jason.

Linda M. Tharby: Yeah, no, thank you for the question, Jason. So let me start by saying that we are currently certified for sale in the EU. So, so no issue there. Every year you go through an annual recertification process. They were in BSI as our auditors in February, to which we had zero nonconformances.

So let me start by saying that we are currently certified for sale in the EU. So so no issue there.

Every year you go through an annual recertification process. They were in BSI is our auditor. They were in in February to which we had zero non conformance is so that's awesome and our manufacturing and quality systems.

Linda M. Tharby: So that's awesome. In our manufacturing and quality systems, we had one open technical file on one product, and they recommended we had submitted our response to that open file to BSI, and we were informed by them that they would come back with questions or that the file was closed.

We had one open technical file on one product and.

They recommended we had.

Submitted our response to that open file to be assigned and we had been informed by them that they would come back with questions or that the file was closed that was in March of 2023. So we were quite surprised when we got this report last week, saying that they were not recommending our recertification do.

Linda M. Tharby: That was in March of 2023. So we were quite surprised when we got this report last week saying that they were not recommending our recertification due to this one product and open technical file. We have launched an appeal. As of last evening, they came back and acknowledged that they had received that appeal, and we expect to resolve this in cooperation with them in the coming months. We expect little to no interruption in our sales in the European market. Our permanent products will continue to be certified, marketed, and sold in the EU.

This one product and open technical file.

We have launched an appeal as of last evening. They came back and acknowledged that they have received that appeal and we expect to resolve this in cooperation with them in the coming months.

We expect little to no interruption in our sales in the European market are permanent products continue to remain certified marketed and sold in the.

Okay, Alright, that's helpful. I mean, again I don't want to throw out like worst case, but just so we're prepared.

Linda M. Tharby: Okay, all right. That's helpful. I mean, Linda, again, I don't want to throw out a good worst case scenario, but just so we're prepared. I mean, what's the best case is we come back and we have, and there's like, no impact whatsoever, or it's de minimis, or but what's the worst case here just so we can prepare accordingly? Yeah, great, great question.

What's the best cases, we come back and where you can there's like no impact whatsoever.

De minimis or but what's what's worst case here just so we can prepare accordingly.

Yeah, Great Great question. So so best case is that there is no interruption at all we are well, we while we work through this situation any product that we have in the market. We can continue to sell so so that that's best case and worst case, what I would say is.

Linda M. Tharby: So, the best case is that there is no interruption at all. We are well; we will work through this situation. Any product that we have in the market, we can continue to sell. So, that's the best case. And, worst case, what I would say is, worst case would be that they say we are not. They stand by their original and do not accept our appeal.

Worst case would be that.

They say.

Say we are not.

They stand by their original and do not accept our appeal again I feel that's highly unlikely given what we've sent them on their prior communication to US which is that's why we're appealing.

Linda M. Tharby: Again, I feel that's highly unlikely, given what we've sent them in their prior communication to us, which is why we're appealing. But if they decide to uphold that, then I would say it would take us several months to resolve. We feel we can resolve it on our end in several months. We feel it may take them some time to review the file. So you take all of those things into consideration.

But if they decide to uphold that then I would say it would take us several months to resolve we feel we can resolve it on our end and several months, we feel it may take them some time to review the file.

So you take all of those things into impact I would say the worst case scenario would be several months of not supply I would cap out at probably 333 months and in Europe of Noncompliant product.

Linda M. Tharby: I would say the worst-case scenario would be several months of no supply. I would cap that at probably three months in Europe of non-supply. Okay. All right. Very helpful. Thanks so much. This concludes our question and answer session. I would like to turn the conference back over to Linda for any closing remarks. In closing, I just want to say thank you to the Coru team and to all of our investors for the continued progress in 2023. And we look forward to a great year in 2024.

Okay, great very helpful. Thanks, so much.

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

In closing I, just want to say, thank you to the core of the team and to all of our investors for.

For the continued progress in 2023, and we look forward to a great year in 2024.

Linda M. Tharby: Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Thank you.

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