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

Frank Takkinen: Great. Thanks for taking the questions. I wanted to start with one on the pump growth, you guys referenced 40% in the quarter, I assume this means that the consumables were a primary advocate of the number coming up a little bit shorter, obviously, that dovetails well with where prescriptions came in and whatnot. But I was hoping you could talk a little bit more about why you think those consumables may have come in a little lower. My understanding is maybe these patients were more chronic in nature, and they would stay on SubQ. So did these patients potentially switch back to IV? Or was there something else that was occurring, specifically related to consumables in the quarter?

Linda Tharby: Yes. So first, maybe let me start. Hi, Frank, great to have you on the call. So our consumables revenues tend to lag our pump revenues by a couple of months. So we did see a bit of softer pump growth in Q2. And then last year, we had a significant one time impact, which was we saw greater than backorder that we basically cleared the backorder in our Q3 of last year and also rebuild the channel with inventory. So we had a difficult compare to last year, specifically on our consumables because that’s where our volume was. Regarding any switch back to IV, we do not see 99% of patients when they go to SubQ therapy will stay on SubQ therapy given the benefits, both in their time savings and the associated side effects of IV versus SubQ.

So we see very little switch back, the IV market and any strength that we would have seen there as being driven by increased diagnosis of CIDP. They are typically IV patients, only 15% of CIDP patients are on SubQ therapy. And they are typically IV users, mostly because of the volume of drugs. That’s why we see the opportunity with prefilled. Given now patients that were say on 400 ML would have been inaccessible with a prefills now it’s actually a shorter infusion time. That can be done with prefills with CIDP. So that is a major market that we believe CSL will go after now, as they’re the only company able to service those patients with the CIDP indication with prefills.

Frank Takkinen: Got it, that’s helpful color. And then maybe one of the new collaboration you guys announced today seems like you’re looking to develop a one size fits all and I assume there’s a cascade of positives that come with that specifically in the financials, economies of scale and things like that, but maybe we just do a catch all of the significance of that collaboration, when we could see that progress, what this could do to margin impact over a long period of time, and any other strategic benefits that may be missing.

Linda Tharby: Yes. So first, let me just start with the value prop right that we have obviously the pharma partner saw an increasingly as we begin to show this in very confidential discussions with some of our pharmacy partners, the biggest dilemma right now is as you call the simplicity rules, so we can supply a pump that is able to satisfy the needs of all prefills and bio patients, that’s a big game changer for them. So obviously, with our partner that we’re working with, they saw the advantage of that. And I would also say that three of the four major IG companies have made the decision to go prefills and they’ve been public about that. So we see a lot of legroom in this area. And without getting into any further specifics, relative to the total infusion experience we intend to have for our patients, I would say that we believe this product both from a pump and a consumables program will be add significant convenience for patients, save a lot of time.