KORU Medical Systems (KRMD) 13 Nov 242024 Q3 Earnings call transcript

Ladies and gentlemen, greetings, and welcome to the KORU Medical Systems Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Louisa Smith from Investor Relations. Please go ahead.

Thank you, Ryan, and good afternoon, everyone.

Joining me on the call today are Linda Tharby, President and CEO of KORU Medical Systems; and Tom Adams, Chief Financial Officer. Earlier today, KORU released financial results for the third quarter ended September 30, 2024. press available the website. the of copy release on is company's A as quarter. encourage press our which well our to financial on in as I have you, release listeners front of results commentary the includes

today's Additionally, we to website. Relations are slides will Investor available the of call, commentary on support also section which further use in our

differ today. are regarding in materially Actual expectations and statements. other the to plans this we and recent call, business to and could results will During or predictions those due These obligation events risks and forward-looking with the our including uncertainties, make based filings SEC. mentioned comments no our any release We assume as our associated press certain of forward-looking update statements most on matters.

non-GAAP management call, will measures. certain discuss also financial the During

reconciliations SEC find measures GAAP investor our with will disclosures, You additional filings. these presentation non-GAAP measures the comparable of press accompanying and release, in including

of listening Linda, p.m. call the go call Eastern For X:XX to the may ahead. replay, then, Wednesday, and Time. approximately Linda now recorded to have President this held Tharby, Since was discussed. I'd comments to the like those XX, at the related CEO. additional on over turn company benefit November XXXX, made and to topics the please

review your and and business and questions. related financials Thank line today. you, Tom, everyone, updates, on for the we results our quarter Louisa. before followed Good joining thank will us for who commentary you up third afternoon, XXXX I'll begin open our by guidance with

goals. continue near- increased pleased growth results, operating as We to delivering we with long-term are strong and quarter our third on and progress line very leverage our top

quarter period the the performance overall prior with across digits representing totaled and over XX% Core our orders growth geographic and of new of growth. Therapies an consecutive all We market strong collaborations third double to and million, once increased again clinical quarter good $X.X growing prior revenues regions. Novel growth our of year. business the had as new with very revenue entered double-digit a Our number businesses by we marking had trial outpaced of SCIg compared third quarter year

We points improving with results XX.X%. growing gross basis operational XXX delivered gross XX% year-over-year to margin and also strong profit

balance cash, year, was the ahead fourth of delivered year-to-date we through cash the cash consistently $X.X XX% with represents as period to of which reduction ending to have anticipate a Our of a and we continue million usage the XXXX. Throughout expectation double-digit use compared same of disciplined growth quarter. in

be year, in margin to our second will guidance to As target. details time Tom our his surrounding the gross year-end commentary. increased increasing cash guidance the a pleased we revenue and balance result, review for assumptions raising this are in and addition our

to Moving slide. next the

to for underlying strategy range protect quarterly relevance SCIg Novel single-digit outpace double-digit XX% continue of We seventh grow as grew company's and growth in growing to SCIg pillar and Domestic Therapies. In the to each quarter. date make our we and growth Core continued Core, progress and we broaden consecutive which business, our with the the saw Domestic in highest Internationally our expand revenues a market, to of to delivered healthy high to

Ig share new winning market. subcutaneous achieving expands consistently are and the across gains as starts administration We patient overall

late limited will of fourth this the change of material been submission XXXk in XXXX. current mid-XXXX our next-generation device in XXXX. occur We as expect to drive revenues are executing Domestic note and a have product investing timing launch than the Please growth well previously XXXX now impact and submission innovation market within a no share. We have on that we our in for Core our business the are in quarter rather expand anticipating to

stocking BSI which of this International. excluding growth about last have the X% orders, International the normalized XX%. through ordering going Moving We excess have saw quarter, and customers that the in believe worked effects would our We growth inventory to QX patterns residual forward. to normalize of will

segment a by remains U.S. robust, growth indications, SCIg a of drivers. Ig consumables significant we volume, sustainable supported year-to-date driven gains. base several Our additional their International in growth patient and and outside strong growth, and XX% expect increase therapy share to and remains countries expand with the as our continued regions see by growing

into as X and are launches in existing as we as drug driving well pipeline commercial works had very XXXX. of we opportunities strong the team growth excited by Therapies further presence quarter, remain our to by expand markets. Novel commercial prospect by our increased leveraging diligently new penetration Additionally, our geographies a within

in revenues quarter's fluctuate number year. progression this by prior timing nature the partnership revenues Novel of the as increased of and typically growth in projects. clinical the to This And Therapies moving represented well diversity revenues due forward with XXX% as more we business. of steady consistent over expect a collaborations trials,

submission that we the to submission we moments for slide. And company. Again, with the anticipate a this remain the for on our rare finally, The opportunity, discussed We pleased delayed favorable for further in revenue pharmaceutical the timely to As FreedomEdge linked KORU sometime of biologic milestone our we is into we the in now data a clinic the in directly of setting, to grant its which bit have first the impacts with syringe manual will a few important a upcoming product were disease work a are as original clearance to present us delay partner. collaboration expectations, XXXk will I'll timing I also from ago. submission updating to filing material don't closely it XXXX. next our relates administration. recently as an infusion clinic infusion anticipate we discuss committed happen year's entry it this be versus this and significant for about oncology KORU's use use drug to pump

the $X.X Therapies within pipeline collaborations and our the states these and a collaborations current that devices disease to launches, are the or each to in serve XXXX XX patients, and clearance. cover drugs, device our of our the X of add Of as represent by disease across our their are collaborations each. have broad potential population be million a following the these and about and will of and near-term base Ig business, of XX more for launch to our which entry Novel development either covered drugs commercial current which addressable the business. expanded by generate patient Moving an stage potentially we drug end impactful XXXX the expect catalysts we clinic, represents opportunity biologic to and device infusion drive estimate share X these total our market collaborations is global oncology more opportunities X to population. rare pipeline, we biologic, billion in expanded geographic our in slide. on of geographies and/or anticipate launch expected of patients. Each X than revenues large here given that In a XXXX, total, market label These for new represent gains. The Of XX of we

paired close strategy, biologic XX infusions global pipeline care while oncology finally, drugs, highly using for million constant to approximate and XX partners PODD, the drugs, to progress apply delivery of versus FreedomEdge workflow prospective order to working large to We creates viscous opportunity trend an Delivery nurse the preference performed of more patients oncology syringe The Partnerships present limiting and in continue meaningful our to expand oncology efficiency. collaborations assess portfolio. And method biologic to pain all is for results simultaneously these our within X.X significant of KORU simultaneously while for indications drugs oncology the infusion syringe an to with transitioning volume and we add opportunities causing of our number existing with on in method to the potential for in manual to alignment nurses, a both improved infusion the our minutes subcutaneous for subcutaneous This, make and beyond standard manual a the nurse drugs pleased with at administration a the centers. requires syringe today. It Drug the formulations Conference, are administration discomfort increased study deliver system. of nursing of pressure

discomfort of observed XX% versus results manual had less KORU administered XX% finding over total more the subcutaneous in manual nurses using efficient noting the who they to use time PODD method infusion. Each during previously the at reasons in the choice. the patient XX% and favorable infusions with observed biologic presented nurses oncology use study study manual system push XX% efficient points XX FreedomEdge push culminated recommending drug used of these the less of their same a Our pump with main of the yielded October nurses the within KORU data hand XX% from drug pain, pain an for interaction, FreedomEdge study over patient push the with X,XXX and of KORU system currently increased experiencing The method. less easier and being reporting

We center infusion may are the setting. by these to in an KORU substantial which encouraged pumps to deliver evidence that and add patients results, nurses value

opportunity pain to is our on efforts and first multiple steps the the pumps. this points the our in While market, this to with are address oncology we capitalize of could solved many to enter be that journey our clinic eager continue

we to board. our the leverage in of XXXX. I'll With Before that our improving turn specifics of I'll our results raising by the consistent and with a and of now year I pleased quarter over results, turn confident strong to are call reiterating discuss financial which another to rest this, execution very growth, the Tom, across end for the are and solid we it operating the outlook over close increase. represented to guidance expect double-digit Tom

quarter consecutive for a top performance prior were million, delivered Thanks, over Net We strong the third double-digit the Linda. increase year third line period. of revenue growth. quarter $X.X XX% the revenues with

revenues the patient Ig Our continue was growth XX% representing growth we $X.X driven new to and by XX% and and continued outpace penetration. This were account Domestic market. year-to-date, starts Core year-over-year of million, underlying

growth grew business in Core and million by X% and markets in International new performance with and driven revenue, $X.X strong XX% in existing geographies. consumable Our year-over-year quarterly new year-to-date

XX% X inventory through for customers sales or prior the progress represented excess International Linda mentioned, result by the BSI and of as the excess been year-over-year services earlier have this growth collaborations As return year the compared and been NRE, strong will normal growth resolved Core in year-to-date. quarter. Novel XXX% customer inventory, Therapies product trials. totaled that on patterns as would QX. driven believe a was XX% X notice support we of in have since work This as growth well Normalizing approximately for nonrecurring order purchased in revenue in has engineering $XXX,XXX to to worked clinical

the over we we XX.X%, increase the improved in was improvement in in margins representing as have and delivered from offset prior and margins development the resulting year, XXX was This The quarter, on, through engineering above year. of from third NRE as gross XX% driven activities gross consistently basis Moving by contractual partially product a in gross by margins price reported margin changes in-house ASPs bringing increase growth well mix. point sales an increases.

September balance we cash had we line. in On call, the items, making a quarter This largely that contributors $X.X new were as of in of certain the the excluding investing knowing purchases this that with Of XX, cash, usage, which usage of cash driven in million $XXX,XXX product net noncash was the $XXX,XXX, million, our well we investments usage amount $X.X loss by for expectations quarter. a representing guided the cash to of second consumables as of capital be line were $X.X our would in activities, million biggest quarter. as

had as capital, supply was due in $XXX,XXX inventory chain macroeconomic higher by strike advancing we the which primarily U.S. such Southern and working the from Additionally, to of our eastern dock usage seaboard purchases mitigation for driven hurricanes

sheet will improvement we cash usage, end on substantially Year-to-date, to breakeven of get our contributors, in year cash balance a are is only we've for consistent P&L the to potential improvements which a growth to million full credit our still and cash strategic reach and fourth now quarter facility quarter, of compared investments. the for both access into at when have a with available XXXX. XX% continue to the and million as a on debt next more across X the us we have key least cash to ahead, reduced track Looking flow reserve on I sheet with as year. And reminder, balance and million. $X.X the balance $X.X to long-term our anticipate The slide, remains the burn that $XX and

sheet. As and slide, balance on I prior basis, on across entire P&L performing the year-to-date mentioned we the a are well

XX% XXX improvement the These operating the to led points is disciplined operating revenue top XX% at results basis achieved. our burn, impressive and QX XX% testament have and a net and focused beyond respectively. We Our teams and to driven has continue and lower fourth on quarter XXXX. disciplined expense reported line this have plan EPS commercial cash in losses line improvements as paired flow well improvements operational growth as management the a positivity leverage, top to operations in as in growth, and of stay been and with improved flow margin management breakeven we XX% expansion to our cash cash in leverage strong

raising Following second X guidance straight raising revenue our of our the our third quarter metrics. guidance are across for quarter results, we and all

of XX% $XX.XX $XX.X revenue $XX a our or We million are XX% a to or from range $XX.XX to XX% million our growth to XX% of million prior to to increasing growth. million growth target range

guidance our as to efficiencies XX% our are Therapies' supply gross margin XX% have XX% been Novel prior from we to We and XX% pressure manufacturing inflationary profitability our able seen overcome to of the to our chain. increasing in have improved range

increasing after as ahead performing improvements As balance of flow, in plan to margins for our we cash cash as and revenue $X working $X.X ending gross capital. from well million million in are

finish Given million versus we OpEx stronger previously slightly exclusive spend, at $XX.X the to have million million will guided. revenue of $XX million stock of $XX.X to comp, $XX performance, higher

call flow year to to be positive, back and of that, will We the Linda flow remarks. cash now capital breakeven XXXX. With over cash reach QX for like in for will the turn I'd closing expenditures, full of exclusive

Thanks, Tom.

both was We businesses. performance strong once third of our quarter short- and and digits each our again another The towards great long-term execution quarter goals. of double grew delivered in

recurring within a as be penetrates leader Domestic we our to our the patient add new Core to we further base. continue and We market accounts, win market SCIg

collaborations in the our year a hard towards we add our open like questions. may to the diverse accelerated International presence for the KORU thanking entire I'm journey we customers up finish near with expand revenues in all, Core are for line setting delivery XXXX. on close drug as pipeline solid us to as to the team our creating growth solutions and by momentum geographies. in new work pipeline We the Therapies a their for now I'd seeing and continue as for And Novel strong, we our of with robust, best is in you our term. All opportunities patients. Operator, excited expect

Capital [Operator Instructions] Frank first The line Markets. the question comes of from Takkinen from Lake Street

hoping the cleared that can happened a Congrats was into a you on be of an kind of that? progress to then the with exactly and what then that And us insight thereafter? we next-generation an give you start once little a Can all color Linda, of is submitted, expect overview in how plans when you out with launch more that give being little bit. pushed could little quarter. bit just us pump the the I on bit --

Sure.

expected and first, actually new in delay was XXXX. on still We be pump the our early launched have to consumables. our So

to to for decision very we to -- product we at all the as overall the roll overall submission. said our us a months of just it compiling to the challenging. the development, know, can new to looked as few as it's production need and as So starting took we a there, well that, we're you going get be data And as take extra XXXk pause out

to near And broad on will we finish happen think XXXX. that launch confident of anticipated as the of had call, are in the not I in anticipated and line We midyear this XXXX. the across We launch a we end that get said XXXX by the XXXX. I

see material don't impact our on we revenues. any So

And time, star the the we the our care deliver advantage, pump and benefits delaying combined to think I of our health what product for we will the us hope we which comfort remain advantages for that of done also do research think patients. customers. will I and the in the in of and think a the that will the terms launch consumable for with we've same commercial will drive one allow very again, team confident shining and our studies we've both providers convenience at be with and done that significant launch patients that,

the That's give for taste Okay. us you're remind as to hiring then of aspirations piece about, we commercial And then over sales helpful. of kind kind the just you And with Can reps, last maybe territories? shifting talking us look forward? where you a team. stand

Sure.

our our of form for driven I greatest subcutaneous So everyone pharmaceutical the companies. are the of in model lot one remind by a business just of therapy about demand to that is things scripts want

person the do with of then expanded we in to overall the a the basis. docs our script the And So another of commercial here in of recently work But script. X in volume. we network U.S. internally. X total upwards our -- sales have we in the account purchase force, the About -- reps of people generate our have customers pharmacies. about U.S., That we've our there key adding covering specialty XX% to goes here have total, new

on. Outside with them, have we with U.S., in we So total. work a we group very of fantastic focus relationships XX distributors, which talented the

his Commercial week comments, led distribution very there. do we Officer work in International. a and engaging meeting the pretty we're making just the they're up about Chief And Our last fired per progress

the work U.S. the very we outside closely with So network distributor

initial said some great one, we I'm give to think it the are XX% helpful. to some any like growth, kind And that your to coming maybe are towards end And driving there's what and reaction to maybe on of sure any growth? of going be XXXX, just the pipe? of That's with doing as XXXX, I thoughts to based my us new something and look reluctance initiatives on Street then down for which now, speak last what business the the but Okay. detail, some like items -- of kind are right key Core is going that that the be

Yes.

right. going yes, I'm to not XXXX. So you pegged clearly, it on comment

We are midst that the in of all of together. putting

specific the will is the think early terms making. numbers, be commenting all that XXXX. I that In things about would progress we're on drive of and say What we company in the let's

where helping, doubling basically day-to-day see. our that You biggest see business, ago. Healthy which are on gains Ig share the but part Core is year our we're from driving the to market is U.S. were business, growth their a of impressive basis they a

And so of that business growing now double feels great biggest your part when the digits. is

So kudos to that team.

is, Second International. obviously,

quarter We past continue opening markets, to new expand up another this in into market Austria. new

course, XXXX, happening we which some along markets most this the in work Of of the Japan have will that et entered launch, including see additional there year, we we the of with cetera. Turkey,

Novel So trials the right? in new Therapies, lot consistency International happening just call products momentum got We've entering to business. And mentioned lots of a prepared an revenues. a collaborations, in of finally, comments increased now that and number we're more those I clinical then my number number. our starting a of in in see overall

So overall growth nice that we our as should Therapies some business well. believe show Novel

getting of at have that of So those you peak, -- revenues parts of quarters of all that them portfolio seen. X basically performing we've their best some

XXXX. that's as we great makes and end good about so feel repeat, way And the a I'll think us to year,

Chase from Capital comes The the Craig-Hallum from Knickerbocker next of question line Group.

my of Linda, to ask upfront. I'll questions start, just maybe both

device that the come going are approved concurrently, filings cetera? And the it as more we should What kind you on be to market then device? understand how of get for those supply those the something QX? of of get those general first? there filed X we they of to with those filings? have SCIg Can dynamics? you a quarter healthy, next-gen in the think some et those so drugs drugs market after cadence see year, kind device I'd on those Is love of just kind Is market when are and the seeing Is -- X be next they bit where filings far? concurrent for in then I in kind little XXXk expect to so commentary that Just

lot. right. All on the Right. that Thanks Chase, quarter. a was on first the congratulations

I'll X the So start let me both and launches, apart. them piece with

launch. with So had the a rare our anticipating next that we're clinic first disease we is infusion entry an launch coupled That biologic. year with consumables

of those terms fairly we so And in filing. X coming hand-in-hand close anticipate the

of same biologic, So submitted the would product parallel it we dependent end assessing that be of in assumptions. currently That with current mid that occur line, one and the we we legacy not with anticipate is time our any that that and to at product And current we are the plan, we of be by but by anticipate oncology both on new delivered delivering our launch expect product XXXX. -- can have. XXXX. The product of platform

second feel part on here in of the was market, the question overall both great Internationally. We SCIg general the The market. and U.S. the

strong I players the and results, is double-digit reporting in market, if great X their you which look think the they're see. at look growth, CSL, biggest to Takeda you and reported at

tracking market feel underlying high-single in ahead We that about. the in U.S. generators growing And market, marketplace. all that demand we great we here are for We're is see strong which Overall, digits. the of performing ahead.

system, marketplace, that's number are chronic. the are patients subQ underlying Once a of are to quarter, they overall come our into in our base. and on life. the recurring They supply strong single And drivers. overall for the pump which product being they movements therapy, patient in increasing all increases So strong every diagnosed into

about we market. So that feel very we where overall, good with sit

I think all. them got I

B. question line Anderson Schock Securities. Riley next from comes The the from of

for Anderson Kyle. on is on the Congrats quarter. great This

outpaced growth market Is main overall So updates prefilled core this again. you first, SCIg here? driver any the do adoption? on Your the the business syringe have

syringe be market trading a Overall, of the it's a customer for that -- us now a we prefilled vial converted presentation. basically syringe. to first, XX% as overall from prefilled continues to a a syringe, adoption So is About prefilled vial to to prefilled anticipated.

market increased drive opportunity us reasons total and about or continue of up? I the So can subQ market that say in the our can market on would share growth that prefills it to for number for for patients longer-term share. increased I subQ the our therapy? market more for growth drive overall are is, U.S. market the think overall

great may some training the have to do yes, are our with conversion So just efforts to experts fact but that accounts. clinical able all have support reps of we're and key with day-to-day the it we to that also of prefills, doing the

answers So hopefully, prefills. on question that the

how Great. distributor progressed? Yes. then you pharmaceutical has in and Do commercialization Japan And have company any your updates on there? programs

What is doing a team great is I partners pharmaceutical in job market. the working would the say that with

the leading both are X So we in with. Ig collaboration manufacturers, working close

we are sales the and our that final a details in is distribution out of top in XXXX. XX market, That market. We still early Ig working anticipate

positive be us. for So should very

again. Congrats

Cronin next the from Instructions] The [Operator of from Canaccord comes Caitlin question line Genuity.

a on quarter. Congrats great

guys with impact an starting are an Is issues, the hurricanes expecting something seeing Tom, the you or see macro on Just potentially the I you port that on? impact strike. pointed and think to to them,

No, in no we was those events What amounts, inventory the purposely them just dock that. as our impact on strike. quarter weather during the anticipation well of we as grew actually did

sheet, in quarter. had we the showed we here which on inventory in we growth our back come to expect So some -- down balance fourth

partnership updates synergies the and then Got just it. on SCHOTT any there? That makes R&D And early any sense.

Yes.

with met advantages say out starting at teams X in Again, are I'll that that highlight we So first, the that see just their I just them I past meeting quarter the team this the Europe. to materialize. felt the we're partnership, of know headquarters come would would regularly. that

second prefilled the pipeline pump patient for experience. synergy potential that optimized is opportunities. collaboration use our ensuring with and our in one of first -- The best syringe the the is And the their is

I fronts. that those know both on of So have well progressed we

Novel So the I our remain that to for the excited position devices further about partnership combined and marketplace, in Therapies' pipeline. our devices, drive best collaborations secondly, the as potential to in

As to for there are comments. would the further Tharby I her closing hand conference Linda now no questions, over

a team again thanks to for for want today. and quarter, thank KORU I all great just listening the to in third

Thank you.

operator. Thanks,

you Thank now you. for The KORU conference has Systems participation. Thank of Medical concluded. your

You now lines. disconnect may your