electroCore (ECOR) 7 Aug 242024 Q2 Earnings call transcript

Greetings, and welcome to the electroCore Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dan Goldberger. Thank you, sir.

You may begin.

Thank you all for participating in today's electroCore Earnings Call. Goldberger. Dan is name My I'm the a and also of Executive of the Officer member electroCore, Board I'm Chief of Directors.

is results quarter company's website. Joining today, press release A today Brian on Financial the Chief me the available Officer. copy electroCore of published June for ended second is the XX, XXXX. Posner, Earlier

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

broadcast levels, the time-sensitive any company's For of or to obligation as a or accurate information founded XXXX. otherwise. This update forward-looking the Securities events financial company's with call organs filings whether list vagus to of information by applications. of functions the general today, in electroCore contains intention see use have or of and the for visceral our required brain the Surgically commercialize metabolism. vagus nerve and the body, electroCore like been neurotransmitter please from X, the nerve the vagus chronic only because more simulators other in disclaims than XXXX or important was future for is the bringing information, August in for autonomic implanted risks Exchange body, in and statements, projections depression. the any vagus and the The live nerve medical from new nerve uncertainties noninvasive epilepsy companies wellness that the associated available inflammation affects levels conference except business, including proprietary many with revise cranial is XX stimulation years and law, brain. Simulating and conditions the longest as Commission. nerve

nerve science, confirms large human and noninvasive pioneered safety prescription conditions wellness and vagus our without for a products the performance. are available certain now electroCore technique. Building efficacy So stimulation and growing headache for and on general a database and prescription that of the by

and continues familiar to investigator-initiated pipeline vagus the of to more products potential noninvasive advocates Our benefits of become future clinicians, wellness trials grow conduct stimulation. and nerve researchers indications as with

a XX% We over revenue reported June million at That's $X.X company's loss from reduction growth year. for net gross the are a the prior increase excited XX% the and annual ended in report period a to XX% months XX% in XXXX, quarter a seventh XX, X-year XXXX. We consecutive margins rate. X compound same record the

our prescription Brian We the lines call. We launched revenue expands, X XXXX, human in is discipline our last later continue channels headache our the as in hospital in our including year. and the wellness product margin is pay the and specialty and progress detail in has for direct-to-consumer TAC-STIM quarter. military flow Truvaga are the Since revenue business the United sales pharmacies. as system the care managed be opportunities. United but will the The towards to grown National the more through health nonprescription Service served we operating professional sales then, performance Kingdom. Cash duty funnel VA personnel. Truvaga by active headache We quarter system channel. prescriber brand national gross cash exceeded business in to a substantially increases, and around to make prescription We systems and of expectations VA States. Health States United systems such sales reported wellness for sales that in primarily general future covered added maintain financials hospital expenses. to health through selling for launched positive U.S. brand for our continues small the largest worldwide, new discuss TAC-STIM

You'll in in to X,XXX $X.X is use to the access, including addressable patients support approximately being federal million administration free channel to X services estimates second facilities in VA supply distribution approximately benefits, We've devices covered hospital representing our dispensed system. approximately treated second total XXX compared the to agreement care hospital XX, by individual products X% for XXXX centers excellence gammaCore XXX mechanisms the quarter since market within system. We several June of open headache about the recall XXXX, that and lives $X.X contract from therapy to VA prescription facilities. Sales of the gammaCore X,XXX are with of health have VA services. veterans representing VA across our covered headache XXXX. VA XX, quarter veterans XXX,XXX as patients the to gammaCore contracting June government XXX% facilities, sales level XXXX, of administration million market our VA million prescription approximately through grew through XXXX. The purchased during

positioned direct-to-consumer our sleep mental relaxation, sales through from acuity. of during as XXXX. up accounted During of level of XX% quarter wellness second the the a stress, is and for general for quarter first approximately XX% VA product sales, XXXX, Truvaga currently

as total XXXX. of $XXX,XXX of sales compared to second Truvaga the XXXX, quarter the quarter during were second approximately net For $XXX,XXX

a in wellness MER, our second launched the Truvaga slightly product. Plus, generate approximately general of Our product revenue spend return $X Truvaga return April revenue. on a is we're the Truvaga to Plus spending X.XX% or rates ratio, other shipments. In to XXXX, $X.XX industry offering. quarter. calls advertising of Truvaga with was approximately increased mobile second app-enabled In XX% we media words, efficiency

are approximately The provides first the approximately have we new our few have about improve or generated X,XXX our Truvaga of and iterations We launching that consumers. Since conducted can mobile we for app. potential with Truvaga maintain if sessions and future e-commerce expectations, handsets product Truvaga enthusiastic metrics. Most the our we the and exceeded using of sold of app-enabled our through believe months platform, nicely, XX,XXX technology customers revenue Plus, is of sales Plus mobile engagement Truvaga business scale www.truvaga.com. again these

is or select forces Air for channels are the and Following Truvaga Force sold other exploring to affiliates human including consumers, being Army launch to special performance successful we influencers, Plus, reach and of units resellers. TAC-STIM no fatigue information training, Air prescription more both as available required and and forces www.tacsim.com. defined is sustained accelerated special for the Research at attention, Laboratory, by Force is reduced AFRL, improved

$XXX,XXX we sales year. version June believe compared the with least the $XX,XXX XXXX, in second-generation sales June TAC-STIM developed collaboration to of in for period handset. For the last ended deferred customers TAC-STIM were second of the We was announced XXXX. This at new handset some TAC-STIM that recorded quarter as we during same waited XX, as AFRL, commercial launch our and

second to to that sales in funnel quarter for pilot revenues duty continue purchased and be active bulk revenue growing deployment. To of be and that units in in likely XXXX the TAC-STIM, a lumpy line first believe than is end, half XXXX, the have from to as we for of this TAC-STIM product We higher quarter third we back for expect respectively. half and

XXXX, time up a cumulative of $XXX,XXX to add were while U.S. LLC some the XXXX, evaluating grows, these directly pay XX.X billing, previously that year, handles we the so revenue X,XXX Truvaga up to health recorded are flat support. prescribers patient for channel, X% more distribution select migrate with being. The Truvaga from we the quarter including as second from cash on XX, June business There the the revenue-generating of quarter ships gCDirect migration XX, stated prescription this announced covered product work second brand X,XXX Healthcare than as as from experiencing the during with at the of customers we we million began Our is modeling June Joerns gConcierge gammaCore quarter provides line. Last that We with we are system. and to agreement within of that $XXX,XXX in collections expect a least and category patients revenue and lives believe adjudications, of model gConcierge XXXX. VA XXXX. We how will Joerns system. in-servicing customers managed certain and electroCore care Joerns during hospital awareness

Our field sales is care managed building systems. within clinicians those awareness responsible for among team

new to expansion We geographic with continue the including on territories. the implementation Joerns into work

still by gammaCore increased the to of generated in we outside funded source OUS, the second and growth Our for had taking believe the compared field United of an quarter XXXX. targeted second in of XXXX, States, X% within to XXXX to be sales our NHS. the longer be than by could while beyond. Revenue the managed of Most quarter and sales revenue system, of second function is National half we $XXX,XXX the channels the from hoped, developing is care of Joerns as continues or revenue in OUS United it important Kingdom champions $XXX,XXX prescription Health by Service,

and the Vocabulary Cervical Promoting Focus Air Scientific in Now The Department a and Defense Enhances Monterey, entitled announced I'd Reports. journal Vagus that U.S. California, language Acquisition premier was of top been the trial week a Language progress. enrolled and Leiden, that recall. Paper ranscutaneous Laboratories the Research supported training United the trial school a Neuroplasticity like completion we study the expect report during by the showed we to scientific year. significant Simultaneously gait Stimulation after document in at trials, Institute published of Training language paper Defense's the in Force Mitigating this investigator-initiated on based Parkinson's our The While that conducted goes the turn is paper was later Second-Language Targeted Mobility recall Fatigue in DARPA acute to Last sustained and of paper nVNS Nerve our on treatment. Kingdom, stroke on have disease Netherlands, that X advantage to effect line fully was positive and data emerged to the Newcastle, Program. in of

opportunities work pathway be uncertain. that continue We'll stress updates to our other they PTSD but timeline and pipeline become the with a available. to We continues FDA label, for or on about as provide post-traumatic

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

compared $XX.X are compared compared quarter million, $XXX,XXX, share, second due the channels, compared XX, to variable Research our loss million, due X adjusted the XXXX. Total the These release. Cash, was This loss to June net per gammaCore expense June primarily our $X.X $X.X and in X approximately quarter securities, in press the increase was restricted brand. Gross in the XXXX the per in due tables X the Thank increase you, included $X.X was were XX, $X.X to to or June million million the XX, for for reconciliation months ended increase $X.X net from placements of wellness million, million our approximately million, is XX% EBITDA ended the $X.XX general of X increase for net of profit December sales XX, XX, prescription GAAP of $X.X X due revenue second operating XX, expenses back an to was compared devices under as of of Dan. investments. Selling, increase in $X.X equivalents, now, quarter to priced totaled quarter increase the This for ended $X increase raised Dan. of as second company the has greater were months XXXX. Adjusted increased XX, $X.X results primarily abroad, significant concurrent and quarter second private XXXX, the XXXX. in the months in net X ended in sales. GAAP as of second improvement X June adjusted of or $X.XX share, marketable for $X.X and by in cash ended XXXX, EBITDA million as to in due quarter months to primarily June quarter as rules. And XXXX. net June marketing approximately the June is the XXXX. to loss, the approximately June provided registered compared to proceeds expense ended with I'll majority of XXXX. million financial XXXX of the million selling of of the or XXXX. loss decrease XXXX our as a increased net net non-GAAP for XXXX second during $XX.X months across through of XX% loss major in compared today's of to as period our XX% reduction administrative to was to XXXX costs quarter for $X and to comparable loss the the of XXXX turn primarily at been and $XXX,XXX, The ended sales. to X%, second in in net over net XXXX, sales sales significant quarter the the NASDAQ million of of as months a second in of XX, million Truvaga sales second XXXX Net to cash and million XXXX. to and the margin EBITDA U.S. million market A $X.X improved for the compared development $X.X XX, an XXXX. general medical $X.X months the In including $X.X direct June call the increased statement compared sold to million, million offering the This as non-prescription also consistent the million to Gross XX% XXXX, quarter in second XXXX. net at

and incredibly in growing I the Thank am revenue you, leverage proud seeing continually we're our the of Brian. business. operating

therapy brands and field. internal about the I'm our to the across operating presence VA for gross based on and margin expectations, to and especially enthusiastic increased and company's in prescription channel grow product gammaCore Our metrics, in continues long-term continue prospects performance clinical our lines. Demand revenue all the very beat

contract Our new a and contract. September to VA FSS contract XX, we with to has been secure extended XXXX, follow-on specialists our continue working

impacted gammaCore small We customer reps This commissions our managers direct-to-consumer our XX XX general in launch of new interest favorably of we territory www.truvaga.com, pipeline each active-duty brand will business explore through QX have timing offerings offering. deploy back and The by prescription our is by of sales scalable, from different our agents for the of new of the experience approximately the the to handset the around received XX about e-commerce selling of XXXX products resume field Plus value straight the managed in and our to country. The Truvaga continues military hybrid the channels tons a sales and structure expanding customers develop site, supported Truvaga as Truvaga should TAC-STIM representing very new team. through increase team show of market. launch to we proposition by half products. as has were and been of TAC-STIM to continues wellness potential by lifetime product year. forward. The the branches We're of the our go

athletes, to in as workers, e-gamers transportation become so will of the be units benefits predict in we expect aware elite deployment. Longer-term, We there TAC-STIM revenue pilot active-duty performance human hard and responders, the civilian published continue and short-term evaluate purchase to as far. crossover be the first believe for bulk may that traders,

offering P&L. Further quarter out, $X.X expense grew top second of $X.X second by line our and increased line had XXXX, $X.X approximately June the operating $XXX,XXX stress market while the will the clinical registered leverage disorder, quarter private placements we $XX.X establishing and and sales we're NASDAQ bottom of maintain growth XX, rules. we real and as net June priced a over dropped Most loss in marketing approximately additional XXXX, the equivalents treat of to at discipline post-traumatic million. towards million use During cash million, expenses. million declined the to and gammaCore of through by signaling sales proceeds by working under prescription We of raised in million the of $X concurrent for In around disorder, XXXX, revenue indications net XXXX, opportunities. fixed our other opioid direct

on and of operating a sequentially We is cash expect we a the media believe variety with financial to call related used as our demonstrating scale Therefore, year that to at business. and have that will with leverage, we continue sales continue confident cash commissions approximately the to and XX% we model business flow questions. June to of generate we that this the summary, increases. In will I revenue XX, spend for I'll time, will resources our on operator. blended XXXX. At expect can over levers decline basis. growing next the the turn sheet balance I'm positive pull early Operator, open please the revenues, line

with Cohen Jeffrey from comes question Thalmann. first Ladenburg Your

got I've a So bunch.

a Some short, Shares as million? are number, as though. X.X we currently where outstanding are far good

about into pre-funded X.X calculation. have get into of that X.X the warrants and million the go million EPS We outstanding, then another --

you X.XX quarter, million? So this did use what

Yes.

an For table, of this was quarter, X,XXX. average on the X million,

June That the though. reflects range,

correct. That's

have What adjustment million the What And well, number? GAAP cash and I quarter? got was for the loss cash you I number on, of the Brian. $X.X was million. $X.X the

used under The a cash little operations $X.X from million. was bit about

So other little I a to a more questions. I get advice-related. wanted guess couple

tax saw, the sequentially I $X don't lumpy back than to gen $X.X probably bit of Dan, for So black year, That's half, I that's a stronger going second we a million, that shy maybe? what like, and in half, based, know, but previously perhaps more thought. million front be

That's waiting generation. quarter this official number. were The back least -- deliveries visibility new for at held launch got to that the of I've the

October. So numbers commitment we -- it large for around those are quarter a good fourth the in walking with. have for in be And will delivery

the pretty we're you have. comfortable So range with which

about the prescription-wise other bit as gammaCore, a territories U.S. other well ex we've And heard territories in U.K. little NHS with DTC-wise? but a as other the talk territories, maybe And lot about

digits And getting geographies on continue have kind do X% time. to steady will range. grow eddy not visibility a a the have yes, other at business. we So, we in into mid it sort reimbursement single X%, this point It's of U.K., X%, that in expectations of

So more XXXX other geographies are story. of a

Truvaga the sessions commercial-wise, Plus, Truvaga the fancy and versus currently, Truvaga And regular the the Plus, the differential different XXX-minute which comps is unlimited available. with colored the on is

Correct.

Okay. versus And $XXX $XXX. that's

like folks to our That's it. exactly describe how you marketing would

or Yes. the pink I green wasn't translucent if for wanted but color. went charcoal the I sure somewhat one, the I

Just saying.

Thanks.

Okay.

Excellent choice.

you're payers another in be where it. Does covered? I as focus, a in case of being U.S. there Medicare or or Could of there's more working prescription X year got perhaps payers, like Joerns. around? X, so U.S. amount point, know on large payers it Yes, can a X come feel I well, the or

So some we're do and really focused we geographies, regional Joerns a -- payer we're local managed getting small the Joerns among an or out in be some wins excellent reference that's on penetration relationship jump the really making traditional traction payers. We benchmark focused have had to care team, national and small regional this later and relationship, but of payers, going the on the really the case year. we're in more for care managed blues with think

And talk on those then one about X on lastly, gait. Stroke, X papers,

The second U.K. in one's the

when be and we'll see and a we will where at that, conference? one's First

the enrolled fully investigator-initiated Netherlands the is in the trials. in And and Leiden was So, these of being yes, done year. both in trial Stroke first this are quarter

European you influence U.K., the the know I than no in the the data that summer to do and available. They're both is on going when trials, have We be Netherlands, take off. academics in one better of one timing

the more the clearly about both them year. getting frustrating able looking short for data the I'm to communication to forward top-line of speak bit in from But little a been it's So end run. any the being

comes question next Group. Your Vendetti Anthony Maxim with from

and in expectation update as some rest an you're I so, that's but and is with the where So, it time, know just are commercial of know, payers, you on, year on takes the something the this Dan, XXXX. we of for I them what working that know maybe

Yes.

than VA of the of year, the covered is as the and VA in a get fully system are this champions veterans for develop formulary January reimbursed and So, that went by lives, on hospital In Joerns more hospital system. is measured system is the which payers. penetration it covered within getting care really clinical system, we now by managed it's larger

want sales business adoption And in health demonstrating is we driving of clinical we question, the field team payers penetration similar focused resources can is that's demonstrate directing So national what grow Cohen's on right that before XXXX. the of really our now and to other we to to care system. some start more that Mr. traditional

year-over-year to the And in then launch you generation of TAC-STIM? maybe commercial decline of your attribute would the the anticipation TAC-STIM next

the Yes. heavier aware, Air until the TAC-STIM, those That's version trying were and supply what was orders of exactly black we so new very all of deferred in I development to Army and were is of that new say handset. Force the involved closely could reliably the very

to in just lastly, a for of next I hone What then applications team on? focus and know number potential you is And gammaCore. the there's on the the one intend

Yes.

is forward announced the breakthrough a a that's beginning trial that it specific out Substance abuse, being read a in working ago. on So Institute Abuse, enrolling on PTSD, there's sponsored few years get year. next and been agency We've we with the to path pivotal Drug PTSD. by of will designation patients, NIDA, the for National indication

those the vagus next for sort of label nerve So extensions be we're of looking that categories stimulation. X will

from Our Wainwright. Lee H.C. next question with comes Sean

RK. This is for Sean standing

year and if bit that biggest could we that's still extensions any year? federal coming the more the up fiscal expect and with we was contract So you wondering any your you I VA extensions -- into? on? Are for there go on U.S. elaborate should going soon, next a how customer Can being could changes

a frustrating, And yes, agent get So, that slow. to extensions, a has FSS they've been a of there us where backup, is are our expect their contract result impact more been to office process. A which the with X-year as giving these is through so We level working we're new basis. do contract small X-month it through of level. our going favorable just a economics get that increase the price because percentage slightly business business regular doesn't on larger

XX% of veteran our quarter, did a business first the they hospital second In larger XX% did is perfectly contracting quarter, VA the owned and and may of of in small the channels You service-disabled customer. mechanism business. able to having small multiple larger service moving business. their that a be we're to comfortable They number portion recall a to

mentioned accelerating on language in prepared remarks, Great. And is -- nerve the the of my learning. effectiveness the question vagus for second stimulation you

is to something TAC-STIM? do specific Truvaga? towards that's applicable is wondering, market that also you Or plans that Just to to And any that? have

So the was gammaCore trial with done handsets.

same absolutely -- it by could and would and need But lines. benefits. this product It's way the Truvaga, more then So to to is works clinical results should with cognitive is get The more the to comment funded acuity Truvaga the mental of transferred learning was Defense. Truvaga Department fundamental you stimulation applicable but delivers the vagus the enhancement be TAC-STIM dose, our the probably advantage, so and general across be inferred fundamental, for nerve lower sessions a yes.

question Your from next with comes Capital Markets. Tyler Brookline Bussian

or missed I for got during updated if the to quarter? know I don't presentation VA count an I you Do you. facility X this quick ones it not. have DoD for So happen

The number we the XXX. was remarks reported prepared on that

indications like question there. or alcohol a VA on up kind independent comments on or few missed Okay. those popped -- investigators there and language very indications also disorder from running the my clinicaltrials.gov of Do that any you then studies? interesting. second amyloid new supplemental it have looks Unless use I those trial. clearance clearance quick XXX. type data learning I noticed new you. The And was were in had for

Yes. Yes.

compelling. opioid to a the many of independent we're is supporting. necessarily trial not done the out who privy spin -- to handsets structure have investigator-initiated alcohol are is trials, very of that's selling And that the in NIDA we're use These so investigators the actually are and So on cases, the results pilot the work funding. being all

and So adds we indications. simulation love of have and But research around interest a input. the all to the lead could it knowledge future don't vagus body lot to we of nerve

Your next Partners. Walter with Schenker from comes MAZ question

device. of correct an wife the brother-in-law are whole on majority that good would or as people the the in my too user Okay. people. My I've equity my thing, in from dollars the plug We affiliated is management raised the bunch the some who It recent are. way both be of was with raised of company? and in either enthusiastic got a

officers. Absolutely. Yes, and directors

They put correct? odd million in $X the of million, $X

that. than More

More probably to -- close than that,

I it's know more.

of real time label use fewer you're step-up I or there all some the Is VA company. either are region-by-region system, hospital-by-hospital, although still to that low. headache people Okay. system result people. all VA as It's done have that they the a of a a out setup in degree how given additional hard the worth hospitals beyond an to broadly in a It's to Not the this indicated frustrating there so PTSD research, Level has unusually the guess. It's penetration in me an a in? in headaches investor the penetration or is of off the strong question. small pointing for interest area way most partner really upped something the get -- there's Is the some data, we except fact I on no who work and game, the for know given

available had health variety I roll to these We enough off penetration conversations to you're accelerating to We're it's about. of we're start great that think that and technology starting to do our see available always open partnerships. Look, where but going a as really a is we into indications to nothing for of XXXX. think, you if of for observation. behavioral recognition and a Yes. Walter, sales close start I there's awareness label. talk good headache the leadership some tipping see that's that a is And to bit point to brag

made I that... in again, technology especially and I comment And nerve in for a mentioned Truvaga more again, you've lastly, nerve vagus vagus And using stimulation. want better Good. to it to but your this make the this is Plus you,

Absolutely.

gets broadly day is inform you people the where same useful a more on you better twice simulation, as the great think be. continue it it consumer learning, to more, day the minutes company back of it X as not opposed is push have which place by going said a needs all I and does, higher a or twice if that X and it's the the again, Xx to not important minutes X a to even levels time, and wife either minutes really to enhances, a really because to trial twice product people there a in that more as be or ...X try good side explain and greater my is use use used just day place, the Xx you'd day, to to or to minutes,

should be it more. using You

You're absolutely right.

you'll marketing see to opportunities advertising promotional our acuity, of sleep, and think focus mental absolutely I or you're that at Walter. especially wellness when you're looking or the right, in for information, quality start for

data day quite they're All have do the in for the to I experience, that getting of consumer And today. to like outcomes. a end better my frequently, much you But general personal trade -- convenience willing course, especially it more sessions and but of leads the shows to on benefits. wellness time to user, how stressful off those devote

sit you're with your TV, computer And pretty doing stuff it's your easy and is or at it your doing to hands, there enough do don't need looking just it watching easy. hands or to other use

done. is Okay. ad My

turn no to Dan are to this at Goldberger over like closing comments. I There time. for further any back questions would call the

you all call. operator, today's and thank for joining you, Thank

our business, for their and the improve gammaCore needs and that team has deliver wellness the for therapy a Truvaga working and leverage operating and general patients patients are for nimble, therapies health our of creating The adopting product the employees job great all, want and a and care consumers done health to the scaling staying and you Thank responding of customers. to support Our customers. I products of thank wellness. have also good to loyal evening. their professionals of tirelessly

That today's conference. does conclude

You may at your you for time. disconnect your lines Thank this participation.