KORU Medical Systems, Inc. (NASDAQ:KRMD) Q3 2023 Earnings Call Transcript

Linda Tharby: Yes. Okay, so the 15 and 5 collaboration we did this quarter, you’ll see that the signed collaborations, which means we have a signed deal, we are actively exchanging elements of value, whether that be the drug, whether that be dollars, in order to get the product approved on our pump. In addition to that we have 18 open opportunities that we have in our funnel. The biggest focus that we’ve seen of late is that a number of new indications are being approved for subcutaneous use in the clinic. There, those usages for us, and there was one such drug that was just approved a few months back a drug called UCB [inaudible], and given the fact that we are the largest subcutaneous product being used in the home, nurses are very familiar that also worked in those infusion clinics.

So we’re seeing a lot of demand for what I would call launch market products in late stage three, which is what we’re very excited about, because obviously a Phase 3 is much closer to market and some of the fine collaborations we have there today. And many of them that we see are concentrated in the oncology clinic. Specifically, I spoke briefly in my script about Europe, where in Europe we’re seeing a lot of adoption of our platform in infusion clinics. So looking to learn from our experience in Europe and bring some of those into the US. Little bit of time, some time to get those on our label, but very excited.

Operator: The next question comes from Caitlin Cronin from Canaccord Genuity.

Caitlin Cronin: Hey, thanks for taking the questions. Just a quick one on cash flow breakeven. I know you said Q4 ’24 when you are planning for this. How do you really expect to drive this towards possibility?

Linda Tharby: I’ll Adam that one.

Tom Adams: Hi, Caitlin, thanks for the question. So as Linda mentions so the number one thing is the excitement that we see with the increased diagnosis and what we’re starting to finally start to see in the market. And really what that means Caitlin is getting back to a double digit growth, right. So you have to believe that we get back to that double digit growth rate. You have to also believe that we continue to maintain our margin expansion that we’ve demonstrated here in the third quarter. And you have to also believe that we continue with our operating expense discipline with increased leverage and an operating leverage on our OpEx. And then finally, with that is our choice well decisions in our CapEx deployment. So if we can manage all those things, we could certainly get back to that cash flow breakeven by Q4 of ’24.

Linda Tharby: And maybe the only other thing that I would say is that certainly our outlook does not look at ‘22, we had a 19% growth level, we’re not looking at those levels to get to that cash flow breakeven level, but very confident in those four areas that Tom just talked to.

Caitlin Cronin: Got it, okay. And then just on novel therapies, I think your goal earlier in the year was for I think, six in 2023, so two in the first half and another now, what’s your confidence in really reaching this goal for the full year?

Linda Tharby: Yes, so we have said that our confidence level now is four to five. Of course, there’s always opportunities to us, for us to exceed the six. But we’ve gotten a lot smarter, Caitlin, relative to how long lawyers take to markup a red line agreement. So we’re setting our expectations in that four to five level, of course, we’re excited by the new one that we just announced aftermarket today. And what I would say about our novel therapies business may be different than where we were six months ago, or even a year ago at this time, is that we have a backlog now of revenues and of deals relative to the close collaborations we’ve already done that we’re taking into 2024. So that’s also [inaudible]