Nyxoah S.A. (NASDAQ:NYXH) Q4 2022 Earnings Call Transcript

Nyxoah S.A. (NASDAQ:NYXH) Q4 2022 Earnings Call Transcript March 22, 2023

Operator: Thank you for standing by. And welcome to the Nyxoah Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. As a reminder, today’s call is being recorded. I would now turn the conference to your host, Michaela Kirkwood , Strategy and Investor Relations Manager. Please go ahead.

Unidentified Company Representative: Good afternoon, and good evening, everyone. And welcome to our earnings call for the fourth quarter of 2022. I am Michaela Kirkwood, Strategy and Investor Relations Manager at Nyxoah. Participating from the company today will be Olivier Taelman, Chief Executive Officer; and Loïc Moreau, Chief Financial Officer. During the call, we will discuss our operating activities and review our fourth quarter financial results released after U.S. market closed today. After which, we will host a question-and-answer session. The press release can be found on the Investor Relations section of our website. This call is being recorded and will be archived in the Investor section of our Investor Relations tab of our website.

Before we begin, I would like to remind you that any statements that relate to expectations or predictions of future events, market trends, results or performance are looking-forward statements. All forward-looking statements are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. All forward-looking statements are based upon current available information and the company assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our Form 20-F filed with the Securities and Exchange Commission on March 22, 2023.

With that, I will now turn the call over to Olivier.

Photo by Robina Weermeijer on Unsplash

Olivier Taelman: Thank you, Michaela. Good afternoon, and good evening, everyone. Thank you for joining us for our fourth quarter 2022 earnings call. I am extremely excited to announce, we have implanted all 115 patients in our U.S. pivotal study DREAM and filed the first module in our model of PMA submission. With the clock now ticking to our 12-month data, our focus shifts to strong patient follow-up. What pleases me even more is to see the first 34 DREAM patients completing 12-month follow-up, showing a 65% AHI responder rate and a 76% ODI responder rate and safety in line with our expectations. This is supporting what we have already demonstrated in studies and European commercial patients. We have submitted this data as a late-breaking abstract to the SLEEP 2023 Conference in June.

While these data are preliminary and not conclusive for final DREAM success, they are highly encouraging. Commercially, our European sales and marketing organization continued its strong execution with sales of €1.3 million in the quarter. In Germany, we are exiting the year with roughly 34% market share and with 38 active accounts, up from 12 at the end of 2021. Finally, we continue to expand our commercial presence in Europe as we expect to report our initial sales in Austria during the first quarter. As a reminder, 2022 was the first full year of reimbursement in Germany and I am extremely proud to see our leading German clinicians have embraced the Genio Technology. Driven by a single incision, a legal system offering bilateral stimulation, powered by an external battery and a full body MRI compatibility.

While it’s strongly resonating with patients is the ability for Genio to always be upgraded to the latest technology without the need for another surgical intervention. We received clearance for our Belgium manufacturing facility, adding a second manufacturing site, and thereby, strengthening our supply chain. This is an important milestone in securing capacity to meet growing demand in Europe ahead of our U.S. launch. As for ACCCESS study for complete concentric collapse patients, we have implanted the first patients. CCC patients, who want refractory to CPAP have currently no hypoglossal nerve stimulation treatment options in the U.S. These patients represent roughly 30% of the model to severe OSA population. With the CCC label in the U.S., we would remove the important hurdle of a drug-induced sleep endoscopy, so patients will have simple and fast access to our hypoglossal nerve stimulation therapy.

From an R&D perspective, we continue to innovate. Last year, we received regulatory approval for Genio 2.1 and we may turn the progress on the ansa cervicalis project in collaboration with Vanderbilt University. We anticipate illustrating a feasibility study in 2023. Now I would like to share our three key objectives for 2023; first is to focus on patient follow-up in the DREAM study, resulting in reaching the primary end points; next is beginning preparations to enter the U.S. market with regulatory manufacturing and market access readiness; and last is driving further revenue growth in Germany and opening new European markets. Before I turn the call over to our CFO, Loïc Moreau, I would like to invite all those on the call to join us for our first Investor and Analyst Meeting tomorrow, March 23rd in New York, beginning at 4 p.m. Eastern Time.

The registration details can be found on our Investor Relations website. Loïc?

Loïc Moreau: Thank you, Olivier. Thank you for joining us today. Revenue for the fourth quarter ended December 31, 2022 was €1.3 million, more than tripling from the fourth quarter of 2021. The average selling price in the fourth quarter was €20,300, consistent with prior quarters. Total operating loss for the fourth quarter was €9.1 million versus €6.5 million in the fourth quarter of 2021, driven by an acceleration in clinical, commercial and R&D activities. As of December 31, 2022, cash and financial assets totaled €94.9 million, compared to €135.5 million in December 31, 2021. This represents a monthly cash burn of €3.4 million. Based on our current cash position, we have a runway into the second half of 2024. With that, I will turn the call back over to Olivier.

Olivier Taelman: Thank you, Loïc. I would like to reiterate our key objectives for 2023, which are focusing on patient follow-up in the DREAM study, resulting in reaching the primary end points; beginning preparations to enter the U.S. market with regulatory, manufacturing and market access readiness; and driving further revenue growth in Germany, while opening additional European markets. 2023 will be a pivotal year for Nyxoah, which I look forward to reviewing in more detail during our Investor Analyst Meeting tomorrow. I look forward to seeing many of you there. With that, I will open the call to Q&A.

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Q&A Session

Operator: Thank you. Our first question comes from the line of Adam Maeder of PSC. Your line is open.

Adam Maeder: questions and congrats on the progress. A couple from me and maybe just to start, I wanted to ask about the announcement on the 12-month data that you submitted for a late breaker at SLEEP, I think, I heard 34 DREAM patients. Can you put the 65% AHI responder rate, the 76% ODI responder rate in context with the broader DREAM trial design and kind of what’s needed for success? I guess that’s my first question, and then I had a follow-up or two. Thanks.

Olivier Taelman: Yeah. Thank you, Adam. Thank you for the question. So starts to put them in the right perspective, for the trial, the DREAM trial to be successful, out of 115 patients at least 63% of patients need to be AHI and ODI responders at a 12-month follow-up. Within the abstract, the result is 65% AHI for the 34 patients and an ODI of 76%.

Adam Maeder: Okay. Perfect. That’s very helpful. Thank you for that. And also I wanted to ask about DREAM and congrats on finishing implants there. Can you put a finer point on when you did the last patient implant in the DREAM study? Just trying to get a sense for kind of exactly when that 12-month follow-up clock started. Yeah, any color there, Olivier? Thanks.

Olivier Taelman: Yeah. Yes, Adam. Definitely. So the last patient was implanted in the first week of March. So next to this, we plan on completing the final PMA module submission soon after the data is released in the first quarter of 2024. That said, we do not want to predict the exact timing of FDA decision, given it will be subject to variables we cannot influence, but we do expect FDA approval before year end of 2024.

Adam Maeder: Okay. That’s helpful. So I think on the Q3 call, last quarter you were kind of aiming for Q2 2024 approval. So it sounds like a little bit of a push out there, but before end of 2024, did I hear that correctly, Olivier?

Olivier Taelman: Well, yes, correct, and due to mainly — due to difficulties in scheduling PSG and DISE procedures, due to long waiting lists in the site that we are active with in combination with some of it in the holiday period, the final implants took longer to complete than expected, that is correct. But now we have officially started the clock and that’s why we are really confident with the timelines that I just disclosed.

Adam Maeder: Okay. Perfect. Thank you for the clarification there. And if I can just squeeze in one last question, maybe on the Q4 results. Can you kind of just talk about — I think you have some carryover from Q3, some orders that were impacted by supply issues that ended up in Q4. So maybe just talk about kind of the Q4 results, how much of that was kind of organic revenue in Q4 versus catch-up revenue and help us think through just broad strokes to patient commercial sales going forward in 2023? Thanks so much for taking the questions.