electroCore (ECOR) 7 Aug 222022 Q2 Earnings call transcript

Good afternoon, ladies and gentlemen and thank you for standing by. Welcome to the electroCore Second Quarter 2022 Earnings Call. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Rich Cockrell, Investor Relations. you. Thank

begin. may You

for today's all earnings participating you electroCore in call. Thank

Medical Chief today Dr. Brian Chief June electroCore XX, are the quarter me website. copy release the Executive results Peter Earlier for released Dan electroCore's XXXX. and Joining company's ended Officer; is Goldberger, Officer; available second the today, Financial Posner, Staats, of A Officer. press Chief on

could A within forward-looking will the based to expectations I'd financial like of Reform or undue reliance these of various deemed pursuant include assumptions. involve to make management without statements begin, statements. that statements that cause our limitation, you be These made during the Safe Harbor current place forward-looking of in and including, provisions statements we not of securities Before not are should and risks by the facts and forward-looking federal trends to statement you Private should estimates our be statements Act actual statements. statements operating meaning Securities XXXX. the this Litigation historical are laws are of call call this implied forward-looking that limitation future remind contained Any materially upon uncertainties events differ on company's those or the results statements. that material Accordingly, anticipated from to these which

Commission. that Securities live as And the Exchange today, that, conference otherwise. information, new as associated projections August to X, to of company’s except or turn please call business, the law, or because and future broadcast company’s disclaims forward-looking of or the only with whether and contains I’ll with any a over information time-sensitive update list accurate of or Dan. This is call the uncertainties with XXXX. events financial by risks For see the any required filings revise obligation, electroCore intention statements,

Rich. thank today's Hello, you and joining us you, call. on Thank everyone for

XX, second over the improve sequentially. million expanded XXXX. XX, used second $X.X in hit was and ended $X.X XX% XX% the XXXX XXXX. June of quarter to Revenue of XXXX record performance second June a ended and the for the quarter quarter quarter about operations margins XX% in approximately continued net cash Our to Gross business approximately for increasing million,

invest through U.S. comprised channels, business our We continue to and commercial dispense gConcierge cash models, direct-to-consumer pay platform. the gCDirect in especially e-commerce physician and of including

and an Our consumer in We program programs. dispense investing to XXX effort prescribers grown States continue plan initially all Kingdom. channels physician has awareness drive about cash our to to headache United various in and active social to media the paid search patients campaigns across through pay United in our

a and through medical DoD, second have facilities XX% health VA as million, the that the of second military came June to XXXX, our ended in the $XXX,XXX and June were hospitals in gammaCore also $XXX,XXX coming hospitals commercial XX, second those commercial and expand from VA clinics. $X.X XXXX. $XXX,XXX XXX X,XXX headache Net revenue increase $XXX,XXX the of of in care XX, Veterans Department from quarter through was purchased to XXXX, compared compared of Net the there over increase products or U.S. DoD Note the approximately to We clinics XXXX. are treatment Department media months. quarter of Defense, quarter total of Affairs quarter an XXXX. as plan and VA efforts social quarter for cash from A military channel second XXX% Approximately our revenue sales or of in programs. the XXX and from of the XX% pay

second growth our for increased On the of covers vagus look revenue. Japan. license will to over includes annual X, Teijin for license quarters, XXXX this responsible XXXX. of of commercial the of be in Teijin's United the quarter of the an in continuing April Teijin was leveraging headache tied the will Teijin license is provisions outside X be come Japan we nerve support States commercialization as XXXX, and in published Teijin in license the indications and previously outstanding based license in XX, agreement for rest process which be for from of XXXX. every to term. electroCore we pivotal This plenty have territories we fee additional payments starting due quarter $XX,XXX announced future. the next requires with data. exclusive XXXX So to to also That of successful global will provides working growth It fee to for through in fee June at The forward noninvasive a the quarter XXXX. our $XXX,XXX the Revenues for with fluctuations and included agreement an year continue long recognized The currency stimulation future. regulatory and and/or an international completion of in initial second in conglomerate and exclusive the expense to channels proprietary still Limited the us. said, to will expand ended milestones for be that technology additional and regulatory a channel they Japan headwind April ahead partner license potential from compared $XXX,XXX X% to

under confirm Performance the sustained to the agreement United the in of for validate to On and Air In XXX world. Research field-ready the Biotech in leadership and fatigue Air will Force BOOST for long-term validates findings, nVNS program this selected the license conducted be half Force States we personnel. second nVNS, mood and around attention, program. Operational BOOST of the the therapy nVNS Tactics, Defense seeks addition the BOOST project the Program Performance additional of of to electroCore supply commercial cash The for announced Department the that accelerated Should vagus the of Human calls noninvasive Branch gammaCore previous optimize or Optimization improved which XX, the among by efficacy the XXXX, Wing devices for XXXX. Optimized schedule stimulation, Solutions opportunities training, April Force has further funding consideration, to nerve reduced Air been

will and provide the We solution that will Air military among to the of in optimistic also the duty ultimately we States active branches future. Force are find the the favor United abroad in other

progress. to Now turning our clinical

as pre-submission is nVNS to and mild or substance discuss meeting stroke traumatic inpatient trials. also we patients continue bridge syndrome. for therapy in and our PTSD, topics. several advance launched May the plans stress We nVNS We abuse injury or On presentation XXXX, follow-up with where disorder across that X, we acute with items participated was study brain on X, FDA programs XXXX, We among in posttraumatic trial group a fatigue to investigator-initiated several bear our an noninvasive a we a study symptoms is from other outcomes to pursue. syndrome, center onset Sapphire Clinic the Mayo post-COVID July announced believe the assess of days in Post-COVID known of than study efficacy central Minnesota. syndromes, collection POTS. fog, well Care gammaCore to Long a received such enrolling or of that a distress concussion, have stimulation that a infection. headache, gastric XX more persists Clinic tachycardia randomized, The symptoms recruited with brain Mayo fatigue striking orthostatic Clinic postural a can the after single XX and as treatment Symptoms of and up resemblance as controlled fibromyalgia, pilot subjects entitled at in nerve vagal COVID in syndrome to Rochester, post-COVID syndrome, post-COVID chronic of sensitization includes the initial

I'd of financials to Brian Brian? call Now, a and for the our guidance over other items. like turn to review

Thank you, Dan.

of the was XXXX. for ended for net periods of same and $X.X million XX% for $X.X and XX, million respectively. $XXX,XXX represents June revenue compared $X.X over million Gross as XX, ended XXXX, the electroCore period profit XX% last XX% quarter XXXX, second as to period during to sales of year. increase the the of the a quarter XXXX quarter the XXXX. reported was margin For XXXX second June Gross second same This compared

statement margin. associated which Moreover, a of starter at cost recent of of Our evolving These with proceeds license in as has during for we of estimated of and as $XX.X of for recognized Teijin press pay including was second cost from sales and starter as in sold in XXXX, XXXX, at the quarter increasing models investment was GAAP as release. our devices. sale. in the and our of totalled million period an $XXX,XXX strategy in of the revenue gross XXXX costs of the net license was $X.X efforts for the EBITDA of device compared amount million versus carryforwards average higher of in cash the the second no compared million The in second in second to was second time used a adjusted the net quarter quarter XXXX $X.X non-GAAP commercial the quarter second overhead quarter XX, $X.X quarter Selling, December EBITDA approximately million to licensed goods XX, expenses Adjusted net of tables being a reconciliation GAAP over the as quarter second the an the loss equivalents approximately the include goods net to under Research we payment of cash in loss life included loss useful of is same to favorable $X.X R&D development to quarter development. Total Cash, at increase increase units cash today's labor in increase $X.X million NOL for and second next-generation an sold period of the the approximately net of million in to approximately XXXX. the ended million of cash under quarter loss the $X.X loss activities the quarter product and to was the million, XX, administrative financial in in Net during included $X.X Jersey been XXXX currently in million cash quarter to same as second marketing Cash due million XXXX. $XX.X XXXX of to results. XXXX. of for in the June increased XXXX expenses A contributed to XXXX SG&A expense of the June investment compared million for has million number GAAP included provided $X.X of of and compared both for $X.X XXXX. compared Total sale expense million as in the million of quarters, price. starter resulting sold of XXXX have quarter cost in the cost device were from general $X.X $X.X XXXX. duration goods resulted of therapy, expense second factors, selling initiatives. same absorption approximately compared and XXXX. loss longer our support $X.X restricted in the XXXX. launch operating certain are XXXX New the quarter expensing our operating

Looking usage net cash net ahead, between over approximate revenue we for $X and and to expect XXXX, QX the back quarter Dan. turn And the X.X third to now, of call I’ll be million. XXXX to levels

very Force developments headache and project brings be greatly BOOST strong military. The could Longer beyond operating the April among license nondilutive nVNS the commercial the results some clinical being therapy you, therapy variety we announced about financed position. of discussed accelerate our is in duty adoption market. this Thank the continue our in active of to Air of the could around we of indications by supported validation Brian. a ongoing expand nVNS nVNS financial a and for primary huge by the Teijin world. cash quarter appeal clinical I'm earlier, indications term, a in excited

continue platform next-generation We a property intellectual build exciting our and to to very we're developing leverage product portfolio it.

results. Our VA/DoD initiatives direct-to-consumer channel our are showing positive and

as traction see pay incremental I drivers we channel opportunities our has commercial currency exchange continued insurance product term, distributor recovered efforts headwind program for soon and our States, disorder PTSD, from label cash including store. expansion finally, and business penetration be we the by active-duty believe international VA/DoD as use potential Our to a in through models are Kingdom U.S. gain while but added through business brain our extensions to of of Air channel to market, growth of advertising, traumatic a start and our sales into U.K. of injury. in all the continued opioid there penetration the next mild international coverage military e-commerce United U.K. to many direct-to-consumer continues our XXXX, lead our to Force could continue the efforts. growth United and The commercial BOOST XXXX year. and slow driven real network within Longer business

enhance Lastly, over the and We're opportunities offer growth exploring might to that turn through please time, open targets At acquisitions. top and we are leverage channels the stage enhance to focused line call synergies. revenue line other distribution Operator, the this growth for questions. operator. on I'll

Our [Operator question Cohen Thalmann. first Instructions] from with is Jeffrey Ladenburg

This of last there. you and are revenue for M&A targets? looking piece seeing you you’re [ph] Because But at I the a are maybe these just would looking is targets, something is understand you so, some Jeff. of I’ll synergistic now at on start that How as versus more be it for at? kind Destiny commentary question the what what is your Perhaps of generating. landscaping potential to of the like with beginning looking necessarily not year,

that's have confidentiality a to M&A I'm maintain of good we relatively activities. term status But activities there's the nothing Destiny, question Yes. are what about that's but really because and asking. imminent long but those off to it's you're cadence to and I'm sorry our beg if very have -- going

No you’re best to your ensure and strategy, your how your it good. information. optimizing paid as relates strategies top you the specifically to That’s your targeting messaging individuals you’re of discuss terms efforts. in social secret Could

Yes.

influencers which efficiency are social about the to year and purchasing but group in the by learn, social careful that which with at to carefully gammaCore media looking the of media cluster Facebook starting and we've and spend about at resonating for the migraine starting just related of headache, So a we we posts expanding terms But talk dabbling consumer started improve as very search Instagram. We're There's been into or of that beginning the more other audience. ads spend example various very that we're therapy. channels. with growing small are channels closely being group

very, So and to it's through we and growth into very go year. as forward a the next really we're exciting accelerating for time us looking year really

there. becoming careful you’re like sounds investing more about It in being confident resources more

great. that’s – just So curious I’m

said than You it better did. I

detail You were you little drivers. just expecting Could additional said some a there? growth more you go into

Yes.

for has staffing cadence. where Service Health COVID part of business the the shortages first that health And United somewhat, their so use comes lot and U.K. impacted just year majority gammaCore a in throughout of vast The international improvement therapy. by care So of our time the the from more but system. clinical their to vacation for Kingdom, was National return the will pay a while by folks even normal services up room there's eased more as

to mid-teens exchanges work year, the sheer of the going are are currency United recognizing is that of throughout just increase optimistic going we're doing in headwinds sort Kingdom. us that the the the there we're and So number patients the to against being that

but a basis all growth over NHS is in expect even going of short of basis -- currency and that will our volume dollar as currency to out translate teens a to solid on unit well. low as as mid-teens we normal that comes -- ultimately, to certainly, back business, All value on that time,

settling I the back normal more into distributors, into that igniting our Rim caused the the European additional as with around the and Teijin relationship has disruptions some hopefully, a announcements make get by half year. they're dealing again, we war, Our of Pacific guess are we the can with new interest

an do giving have original you reminder agreement. of keeping kind overview trend timing? with just of closed? everything any I they of a Or are and curious, same appreciate maybe And I’m you idea us the Teijin, on that

mark States approval Health They Ministry set So whether decision the existing the it's the Ministry Health early in be is require and or the that already to FDA initial collected clearances adequate United data. The of CE whether the that to around days. been in going Europe, will data to are an additional support regulatory pivotal of work planning data with conversation key point their out is has process.

And speculate a digest so position that response we're really the and from of Ministry about to meeting have in until timing. the Health, they not

from picture, I you that -- to And Or that pursue? is and guess, Mayo kind that own to hear for there. is some then in wait exciting the you could Is rather I’m an point? make a an the and decision indication bigger you investigator-initiated electroCore Clinic lastly area as their it’s me, then curious, see is starting even that of trial. that at pursue data would think

have known COVID-XX are already having an treat to suspected use who Well, respiratory emergency we patients trouble. authorization or

So one is to should an the about use a we I It's think the therapy it clearance authorization promote that in way have emergency clearance. COVID-XX. technically, to word already use

efforts could and institution therapy been publish So to to we've relatively commercialization unsuccessful our cause and publish us that COVID-XX study ultimately very trial, like a a recruit COVID-XX. Clinic, in the our patients reevaluate Mayo having for commercialize a credible efforts around

question next with Zacks. Vandermosten is Our John from

product R&D. I towards products. Sapphire? noticed And obviously, great your that opportunities allocated you the you there. differ in be you it’s I does have going And I was with next-gen And say wondering that’s guys to out pickup of a how you because from I lot heard Brian, say heard what that have next-gen now

I'll that John. Yes. take one,

device. published intellectual stimulator that a mobile a we -- around property of nerve vagus have bit with communicates we So a quite noninvasive

app of so enabled. consumer is today's much electronics And

digital health that and mobile platform working and So on of next-generation capability platform. leverage us communicate a that smartphone inherent a it would in be reasonable with a to allow dots connect that we're will those all say to

was the any expenditures Should second perhaps being theme, year next this year continuing allocated I priority a and direction? we the half remember R&D for R&D then that for you. of that PTSD in on And into expect

opioid of Yes, traumatic support mild brain clinical continuing the use to disorder, absolutely. injury. work PTSD around Parkinson's We're all around

clinical of NIDA, about being that clinical do supported our the use FDA around by by are trials with those those to after cosponsored meeting our of activities is expecting are Drug clinical PTSD. our or government All trials technology, Institute those very, We're abroad. meeting the Most We're going June. had in low. relatively around fortunate to in proceeding. a very money pre-sub U.S. We we investments have for out-of-pocket We're opioid to in meeting either progress the disorder a Abuse, schedule talk being pathway that's National similar a that. the where on in clinical

So we we results. bit should talk in about quite call a have to XX our our report September November when

there. forward then there National relationship, Spine the the looking that. – that. be units the site? to on Is that couple Yes, of on regarding Pain Are And how by units going And they physicians going work? to to a Centers and to going that’s are prescribed are be questions

Yes.

of is along gConcierge that lines the structured So program. our

so Spine inventory. They a each who our will have of professionals are Health clinic And the devices and of dispensed with have be we a then of sort and ultimately that in individual can number and in National care master patients to the various and prescribed clinic. by clinics, that customers agreement certain health clinic demonstrated

our exciting very a account aspects program. it's So gConcierge national to

kind exactly. yes, and think, Texas. looked to of focused, down East Yes, the on Coast they’re and the at pretty I map coming I

corporate any the other that there Are area yes. in type United so States? opportunities account And in

and a of to accounts of look cadence those reporting and more -- it's of kinds forward we Absolutely. And deals. national more

Ladies end question-and-answer of gentlemen, the the we have session. reached and

back remarks. call Dan to Now I the like Goldberger would closing for to turn

patients The of making tirelessly even participated And the therapy. progress have like your XXXX. XXXX. more to working to results, our you have during of stage support a We’ve so the to today’s amazing professionals everybody. forward delivering financially growth for deliver our appreciate all join therapy have their trying also loyal care special we’re who demonstrated without been support. done you far thank we work to I’d much the looking time times and their and you, states made like we’ve for to and thanks these to And employees to at I’d give course, Thanks, operator. patients. who Thank so to couldn’t all gammaCore health commitment in so both call. today, of it been but hard of helped unwavering

for This conference. your participation. concludes today's you electroCore thanks

your this disconnect lines may at time. You