Nyxoah SA (NYXH) 2024 Q3 法說會逐字稿

Good day. Thank you for standing by. Welcome to Nyxoah at third quarter, 2024 earnings conference call at this time. All participants are on a listen-only mode. Happy to see the presentation. There will be a question and answer session to ask a question. During the session. You will need to press star 11. You will then hear an automatic advising. Your hand is raised. We know that today's conference is being recorded. I will now hand the conference over to your speaker host Mika Kirkwood Investor Relations and Communications manager. Please go ahead.

Thank you. Good afternoon and good evening, everyone and I welcome you to our earnings call for the third quarter, 2024. I am Mikaela Kirkwood Investor Relations and Communications 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 third quarter financial results released after US 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 events section of the 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 forward-looking 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 these risks and uncertainties associated with our business. Please refer to the risk factors section of our form 20 F filed with Securities and Exchange Commission on March 20th 2024.

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

Thank you, Mikaela. Good afternoon and good evening everyone and thank you for joining us for the third quarter of 2024. Earnings call 2024 has been an exciting year for Nyxoah.

In March. We announced our dream u pivotal study achieved its efficacy endpoints with a strong safety profile and demonstrated that Genio has the potential for best in class outcomes for obstructive sleep apnea patients.

Subsequentially. Our regulatory team filed the fourth and final module in a model of DNA submission at the beginning of June, based on the timing of FDA site inspections, we expect FDA approval will be in the first quarter of 2025.

We continue to be highly focused on the US opportunity ahead of our commercial launch. And we recently strengthened our balance sheet with EUR24.6 million in new capital waste in October from a single US health care dedicated fund.

Throughout 2024 we have continued to bolster our US presence in anticipation of Genio entry into the market with the hiring of executive roles in the US, which includes the addition of our Chief Medical Officer, Dr. Boon, chief HR chief commercial and strategy Officers.

Additionally, I relocated with my family to the US in August to be on the ground during this critical time in the FDA approval and US commercialization process.

As you have also seen, we have recently hired John Landry to be our new Chief Financial Officer.

John is an experienced US based public company CFO and brings a wealth of experience as we prepare for the US launch new model. The current CFO will transition into the newly created role of President International.

In this capacity, the week will focus on strengthening the company's presence in key international markets in September. We presented the full data set at this year's International Surgical Sleep Society or ISSS meeting in Miami to recap the dream. The study had grow up hypera index or AHI respond rate by the chef criteria and 12 months and oxygen desaturation index or only the IPO rate at 12 months, we reached all our grand points and demonstrated a favorable safety profile.

Looking at the efficacy. The show, the study shows a HI respond rates of 63.5 on an intent to treat or ITT base and a 66.4 on a modified ITT base with AP value of 0.002 and an ODI respond rate of 71.3 with AP value less than 0.001.

With these strong results. The dream study met its primary end point of reducing the number of apnoea and hypers as well as the number of oxygen desaturation events that occur by all of sleep.

No, what differentiates dream from previous studies is that it's the first study where patients were required to sleep at least 60 minutes or more in supine position and demonstrated comparable efficacy to nonsupine sleep position with a median 12 month, a reduction of 70.8% when sleeping on their back.

This will be of particular importance in the selection of physicians and the acceptance of patients. Since in published data, it shows that a doubles in position and people sleep on average between 35 to 40% of the night on their back.

Currently, genio is the only therapy with clinically proven evidence that it maintains its efficacy, irrespective of patients sleeping position.

Another important criteria in the selection will be reducing the cardiovascular risk, bringing it in line with those of non USA population, which was the case in the rim with 82% of patients reducing their AHI below 15.

In addition to efficacy Genio demonstrated a strong safety profile driven by a single incision procedure.

Dream safety results included 11 series adverse events or SAES in temp patients resulting in an sae ratio of 8.7% out of the 11 sae only three were device related. The safety results compare favorably to existing agns therapies.

In summary, dream data supports our mission to make sleep simple for patients and reinforce our confidence that physicians will embrace genio as a key treatment option for their OSA.

Following the dream results, we submitted the fourth and final module of our PMA in June.

We are currently in an interactive review with the FDA which has already included several US clinical and manufacturing site visits completed without any deficiencies based on this progress made. In combination with the latest FDA communication regarding the final site visit, timing in Belgium, we anticipate FDA approval first quarter of 2025.

On our way to commercialization, we are progressing with our reimbursement strategy in advance of obtaining our own CPT code. We have identified the CPT code that best fits the genio technology and is recognized by payers in the OSA indications.

We are now working closely with the American Academy of Otology of the AAO and reimbursement experts. In addition to participating in the FDA initiated early payer feedback program to begin the process of educating C MS and other large commercial payers like United Healthcare, Blue Cross, Blue Shield and Apia. To help with obtaining coverage post FDA approval.

Once approved by the FDA, we will have a dedicated team to support preauthorization efforts at the site level.

In anticipation of FDA approval, we continue to actively build of us commercial organization.

We are already on board. Our senior commercial leadership team including the Chief Commercial Officer, the VP of Sales, the chief commercial Strategy Officer and Director of Market Access.

Additionally, we have sent out offers for the first wave of territory managers as well as key marketing and market access personnel with the aim of having the commercial team fully operational. By the time of launch, we anticipate the size of the commercial organization will be approximately 50 people at this time or at that time.

As we think about a commercial loan strategy, it is twofold.

First, we will focus on tier one hipo also nerve stimulation implanting accounts where market research suggests that physicians and patients are actively seeking an attractive alternative to currently available therapy.

Second, we will focus on driving referrals from sleep physicians who currently manage a high number of patients with moderate to severe OSA who are in need of an alternative treatment.

Both of these efforts will be supported by focused DDC investments.

We are coming into our US launch with a well of experience for our efforts in Europe, in particular Germany, which has served as a proof of concept for the technology and the go to market approach.

Although the German market size is much smaller than the US market, there are key learnings that have informed of us commercial commercialization strategy similar to the US market. The German market is highly concentrated with the implanting accounts making up a majority of the market of the TOP10 accounts. Genio has quickly been embraced by nine of them.

Additionally, we are focused on establishing a referral pathway with top sleep specialists focused on patients who have quit cap. By the end of 2024 we will have 15 referral sleep samples across Germany.

The Rasma Nikola collaboration should confirm the strategy in the common CORS these activities are being supported by focused DTC efforts or entry into the market has resulted in an acceleration of A G&S market growth in the region and we have achieved a 25% overall market share only 24 months after launch.

We believe that our approach to the German market and the success we have had in the region can serve as a good proxy for adoption trajectory in the US.

In summary, with strong dream data, a differentiated A GNS system, upcoming regulatory approval and a cash runway that has been extended to mid 2026. I could not be more excited for the future of Nyxoah as we move closer to a US commercial launch.

With that. I'm pleased to turn the call over to our CFO Loïc Moreau who will provide a financial update.

Thank you Olivier.

Good day, everyone and thank you for joining us today.

Revenue for the third quarter ended September 30th 2024 was EUR1.3 million.

The total operating loss for the third quarter was EUR15 million versus EUR11 million in the third quarter of 2023 driven by an acceleration in commercial investments in US.

During the third quarter, we secured a loan facility agreement with the European Investment Bank of EUR37.5 million and drew down the first range of 10 million in July.

We also raised EUR24.6 million through our ATM program on October 7th from a senior US health care dedicated fund.

This additional capital provides incremental flexibility as we shift into our US commercialization and extends our cash runway until mid 2026.

As of September 30 2024 cash and financial assets totaled EUR71 million and our monthly cash burn was EUR5.6 million during the quarter, September 30 cash position of EUR71 million excludes deposit from the 24.6 million raise.

This concludes the formal part of our presentation. operator, I will turn the call over to you to begin our Q&A session.

Thank you, please. And gentlemen, if you wish to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced to remove yourself from the queue. Simply press star 11 again. Please stand by while we compile the Koster.

And our first question coming from the line of Adam Mather with Piper Stanley. Your line is now open.

Hi, good afternoon Olivier and the week and thank you for taking the questions. I wanted to start with your dream data which was presented at ISS a couple months ago. Congrats on the presentation Olivier, you know what's been the feedback from the clinician community on the data? You know, in particular, as it relates to Supine versus non Supine, you know, how is that resonating? And then there were three cuts of data from dream that were presented on the primary end points, intention to treat modified intention to treat them per protocol. You know, which of those data sets do you think is most relevant for positions? And then, and then I had a follow up.

Thank you, Adam. So let me maybe start by answering the first question. Like how did in fact, the audience at ISS reacted on the published data and how we differentiate? So it's clear that we showed published data for patients sleeping 35 to 40% in the Cine position. And we know that their A H I is twice as high when they go in the back compared to when they are sleeping in a nonsan position. And I have to say there was a lot of positive reaction from physicians on the fact that dream is currently the only study to require patients to sleep minimum 60 60 minutes in a supine position that it was measured in effect based in a 12 month follow up visit and that it resulted. And I think that's the most important topic in a similar I reduction compared to sleeping in a non buying position. I think that is maybe an answer to, to, to your first question. Now, the next question also when looking at ITT modified ITT, I do think that the modified ITT is the, is the number that resonates most with physicians. For the simple reason that in a modified ITT, we include all patients that have reached a 12 month follow up PSG and there we see that we have data that will show a response rate of 66%. So I hope this is answering your question.

That's helpful. Olivier. Thanks for the color there. And then I, I feel compelled to ask about reimbursement and, and sorry to push there. But you know, that's one of the big questions that we get from investors. So you know, any more color or details that you can give us around the CPT code that you're planning to use. And then I think you also have stated you have the expectation that you can on board us payers, you know, pretty quickly after launch to just talk about the confidence there as well. Thanks for taking the question.

Yeah. No, Thank you for this question. I can only confirm that this is a question I get on a regular basis from a lot of investors. So as you know, we are executing a comprehensive reimbursement strategy. And in fact, the reimbursement strategy includes a couple of different approaches. First, we using an established CPT code that is recognized by payers for the OSA indication at launch. So that should answer the question. Will we have a reimbursement the moment we have FDA approval in our thinking. The answer is clearly yes.

In parallel, we are planning to pursue a genial specific CPT code over time.

In order to do this, we are working closely with the AAO the American Academy of Geology and we're also very pleased that we can participate in the FDA feedback program because it's putting us in close of close contact, engaging with CMS, but also major commercial payers including United Health, Blue Cross, Blue Shield and Apnea and being able to educate them on our technology on the mechanism of action. And also how this is in fact also already a reimbursed indication for the stimulation in the US. So I hope that this is answering your question and maybe in the conclusion, I sometimes it's nice to be second and then being able to piggy back also on the work and the half and the strong work that was done before by office.

Thank you.

And our next question coming from the line of John block with Stifel, your line is now open.

Hey, everyone. This is Joe Federico for John Block. Thanks for taking the questions. I guess I'll just start with a two part. I just following up on the recent conferences. I think the thought at the time was that the peer reviewed dream data, what was going to be published kind of in short order following the conferences? Is there any update on the timing of that publication? And then I could be wrong. I don't think we ever saw the peer reviewed Better Sleep Data that was supposed to be published, I guess a few years ago at this point, but I I know it was due to COVID complications. But do you think you could face any challenges there with commercial payers on, on the reimbursement front? You know, without that breadth of peer reviewed data.

So let me start by maybe answering the first part of the question, the publication strategy. So yes, indeed, we presented the dream study at ISS in September in Miami. And we anticipate the study being published in the leading medical journal. So the study is currently being prepare for the submission is currently being prepared by our PI of the study. Doctor Woodson, supported by some other PI colleagues. They are doing this in a complete independent way so we can of course not, not interact or not push them to, to, to submit the publication earlier before they feel that they have done appropriate work to submit. I expect that this will be done in the coming weeks. Because that is based on the latest feedback we get directly from them.

Second, when you are asking the question on better sleep, so totally correct. And for those who are relatively new to the to study the technology, better sleep was a study done in Australia in which we have included patients suffering from non CCC comparable to the dream study, but also patients suffering from CCC. Based on the study data, we were able to have a label expansion ex expansion already in Europe. As you know, we are redoing a study in the US called access specifically focused on CCC patients. And to answer your question, Joe in going forward, it's clear that we will use all the available evidence including better sleep data, also commercial data on CCC patients in combination with the access data and going forward to also apply for a label expansion for CCC patients in the US.

Okay, thank you. That's, that's really helpful. And then maybe just a clarifying question. I mean, the language around the FDA approval timeline for Gio seemed to change a little bit. I think last quarter it was I think, you know, a sense of confidence was conveyed in in the year end 24 and it kind of just read more leaning towards the one Q this time around. And so I just to clarify, did you say that was more just the manufacturing inspection which I think is the third module if, if you can just maybe give, you know, color around, around, you know, the change there that would be helpful.

No, thank you for this question. I think it's very important. So as you know, we submitted our final model in June, beginning of June to be precise, we made a lot of progress since then, including us clinical site visits, the US manufacturing audit, all our deficiencies, the timing has changed slightly because of Belgium site inspection was delayed when the RBA investigators or inspector arrived in Belgium, the FDA had to reschedule the inspection to a later date due to unforeseen circumstances unrelated to nor we are currently working with FDA to find a new date for the inspection while we do not control our timeline, we now believe that approval in December is unlikely and therefore staying cautious we feel confident with the Q1 2025 approval.

Thank you. And our next question coming from the line of Suraj Kalyan you with Oppenheimer. Your line is now open.

Hi Olivier. Congrats on all the progress.

So Olivier, I know a number of questions have been asked and let me come at it from a different angle regarding your anticipated commercial launch.

So Olivier, you guys are making senior leadership changes. Fine. We understand all that. How do you expect your marketing strategy to be different than inspire?

And how would you know, what do you consider as the low hanging fruit?

Yeah. Well, first of all, thank you so much. Nice, hearing you and thank you for the question. So I would like to push back a little bit on changes in leadership and more rephrase it to additions. So it's clear that our focus has shifted to the US because that's also where the market opportunity lies. And we are definitely strengthen our leadership in the US with the hiring of a Chief Commercial Officer, the chief commercial Strategy Officer, marketing, but also the recent appointed CFO John that has joined us. And while we are doing this, we also make sure that we do not forget international markets. So maybe as an introduction and answer as the first part of the question. Now, second from a marketing perspective and from a strategic perspective in the US, how do we want to make a difference. I think we have a two prong approach. First, we will focus on tier one AG and implementing cost as market research strongly suggests that physicians and patients are actively seeking an attractive alternative to current available therapies. So that I think already the first strategic approach. Second, we will work on driving referrals from sleep physicians who currently manage a high number of patients with moderate or severe in need for an alternative treatment.

I think this strategy will overall be supported by a commercial organization of approximately 50 people. We will add it to a focused DTC and we will have also. And I think this is really important, the dedicated team supporting preauthorization efforts.

When implementing this approach based on our German experience, we see that we are able to secure adoption in tier one accounts. We see that we are also able in establishing referrals which funds to start referring patients. And we also saw that this is really demonstrating also an acceleration in market expansion. No. Last and I want to be very complete to how do we differentiate? It's clear that we have clinical data that are both strong in efficacy but also in safety. And I would like to point this out when we look at the efficacy, you have the supine HI reduction. I think this makes us unique. Then we are able to reduce A I below 15, reducing the cardiovascular risk to patients without AOSA. Then also we have more than 82% of patients in the dream reaching this result. And as I mentioned safety, we have say below 10% which is also very favorable. If you compare with all the A GN treatments and next to the clinical data differentiation, there is also the product differentiation. So let me just remind you that there is no implantable code generated. We go for the implant for life concept. We are fully scalable and we also have a single incision and we learned through market research that these arguments are really resonating very strong with patients in their acceptance criteria and especially with surgeons in the selection of therapy, sorry to be a little bit longer. But I hope I was complete in answering your question.

Got it fair enough. And Olivier, my second question, I'll keep a two part and hop back in queue. So Olivier, our assumption still is that you all are seeking Supine label of you know, on genio, could you just confirm that that is still, you know, on the deck? And when do you anticipate to get, start getting into labeling discussion? And the second part of your question, Olivier would also love to get your take on the current status of the HENS market in the US.

And the reason I asked that is it seems at least based on the numbers right now, you know, utilization for your competitors relatively flattening out. It's basically a push into new sites.

And as you guys launch genio, how would you advise us to measure the ROI of Genio's launch? Admittedly a few quarters down the line? Thank you for taking my questions.

Yes. So first, the label question, I can already confirm that the label discussion is ongoing with FDA. And it's also clear that based on our dream data, we do want to see the Cine data reflected in our label. Of course, at this moment, I cannot make any statements as the discussion is ongoing and I definitely do not want to undermine or create the expectations, but I can confirm that based on real data based on the ongoing discussions we are going and we would I see it as as more than appropriate to also see this reflected in our global. So that's I think the first part of the question when we look at the hipo gosal nourish stimulation market, I do think if we look in the US specifically that the market is still growing strongly. I was also listening yesterday to what was presented and I'm hearing almost like over 30% growth. So this is also having a positive impact on, mix and on genio. And it's even, you know, encouraging us to continue work even harder to get our US commercial market access in place that is already first port but when it comes to new sites and the return on investment measurements. So when we will be launching, it's also clear that of course, we will measure our revenue success. But next to this are PME and that is the opening of new sites. That is one that is also the further expansion, expansion of territories. And that is also the uptake of implants that are done by side. Because I do think to your point that it is important that you have a kind of Center of excellence approach where you will educate samples and make sure and equip them that they can implant a high volume of OSA patients. It will make them better in their quality outcome because they are doing it on a weekly basis. It will also reduce the risk of complications because of their experience. And I also think it will have a positive overall impact on the healthcare system and the payers if they know that when patients are referred, they will get the highest quality implant as possible. I do think that this is where we will be focused on and we will shoot, if I can use marketing terms, we will shoot more in having a high number of center of excellence and we will not shoot so broad in having more than 1,000 centers of which the majority is only doing a low number of implants.

Thank you.

Now, next question coming from the line of Ross Osborne with Cancer Fitzgerald. Your line is now open.

Hi guys. Congrats on the progress and thanks for taking our questions. So maybe starting off on your commercialization strategy for next year. Can you walk us through the process of turning on or activating the 31 tier one accounts upon approval and following up on this, how do you define tier one accounts? Is there a quarterly or annual volume number you can share?

So, I first of all, I would like to be very clear that I'm not focusing on 31 accounts. I if I misunderstood or if I understood, correct. So what I am saying is we will first focus on the hipoglossal implanting accounts on the high volume tier one, not 31 but the tier one accounts, I think that's important and loss. It will be more than 31 accounts just for the record. So, and then the next thing also when we are talking about how to prepare physicians, I also to do this, we are heavily investing in training education team that will make sure that we can already onboard physicians right after the moment we are at the airport.

Okay, great. And then just the second part of the question on, you know, how you define tier one accounts? Is there a volume number you can share?

Yeah. So if we currently look at the market as you know, we have more than 1,300 sites in the US. And when you drill a little bit more deeper, you see that roughly 300 to 350 of those are representing more than 80% of current revenue. So with those 300 to 350 that we have identified as the one accounts and that we will start by going after.

Okay. Got it. And then lastly, how are you feeling about your ability to meet demand from a supply standpoint?

So also here we made quite some progress in the sense that we have no manufacturing site in Belgium that is up and running. But we also have a concrete manufacturer in the US that already had the pleasure of having FDA visiting the site. And I'm extremely pleased to say that they passed with all any form a tree or any deficiency question. So we have two manufacturing sites with, with, with several manufacturing lines and based on our forecasting, it's also we will have inventory built and we will have definitely an occupy present to sort of the US and the European market.

Great. Thank you for taking Our questions.

Thank you all.

Thank you.

And our last question comes from the line of David Brisco with Bear Deal and is open.

Oh, great. Thanks for taking the questions. I appreciate the comments you gave on reimbursement already but wondering if you could provide, you know, maybe some, more color on that. You know, and more curious on kind of what gives you the confidence that the existing codes or the identified codes that you have out there that are, you know, well understood. At least it sounds like by the, a physician or payer community. You know, is something that you, you can achieve. I know that on the back end, obviously, you know, there, whether it be maps or CMS, there's, there's some things that, you know, probably have to be done to make sure that you, you know that the code is, is eligible to, to be mapped to or to be used. So just wondering, you know, if you can give us any color on the, the, the back and forth or, or the conversations that you've had with, with some of the payers that leads you to believe that that you'll be able to utilize this, you know, kind of on day one of, of the launch next year.

Yes.

Well, first of all, we are fully recognizing the strong work that has been done in this field by having us payers covering hipo mark stimulation. And as I mentioned before, sometimes it's nice to be second and to be able to, to piggyback a little bit on this hard work that has been done. So that's number one, as I mentioned before, most important for the wise to have coverage according and the coverage in place right after FDA approval. And there we are establishing ac PT code that is recognized by payers for the OSA indication, but also the code that is really covering the technology that we are offering, including the mechanism of action. So we have identified the code at this moment. I don't think it would be wise to comment further on this. As you know, you will see the code once that is at the approval and once you have submitted in fact, your first files to payers and then they accept and reimburse for your technology. So that is step number one. In the meantime, I think we are doing what we have to do in the right order. Meaning working closely with the Physician Association. In our case, the American Academy of Autolog.

Next with RD's Early payer Feedback program. It gives us a unique opportunity to present and to educate C MS but also major commercial payers so that they are prepared. All of technology can do what it can bring and also the clinical data and safety data behind. So I'm feeling really confident that we are making the right steps that we are making the progress. We feel super work from both organizations a but also the good discussions at the repair feedback. And then I think last, we will also make sure that we have the sites when they work with the authorizations to relieve them a little bit from this administrative burden and make sure that the files are complete and fully prepared when they submit to payers, so that's all for now.

Okay. Thanks. I'm not maybe just on the P&L you know, on the investment that, you've talked about it. I think in the past, you, you called out maybe this 50 million or so of incremental investment ahead of the launch. Just looking at, you know, the, the difference in, in OpEx that you have in the quarter, you know, appreciate that the you know, the hiring process is kind of really starting to ramp up. So, from a cadence perspective, I mean, it is the fourth quarter of this year, a quarter in which we're going to start to see a more substantial sequential step up in, in kind of the OpEx Line associated with a lot of new onboarding. Or is that something that might, you know, be pushed closer to the, the first part of 2025? Thank you.

You know, that the difficult questions I hand over to the CFO.

Now thank you for the question. So, indeed, as you, as you have seen, our, our burn is increasing in Q3. It's now 5.6 million per month. We anticipate it will continue in Q4 with the hiring of the first wave of territory manager notably and continue to ramp up in Q1 and Q2 Next year, we then believe that it will reduce with the ramp up of the sales in in the US.

So, with this, we have cash into 2026. So that's what we have in mind. So first we see the suation and that has started, then it flattens around mid next year and it starts to decrease with the ramp up of sales in the US.

Okay, Any just high level thoughts on maybe how you, you kind of quantify what that you know, Q4 OpEx number looks like. I mean, does it double quarter over quarter is up 5 to 10 million. Just, any thoughts there would be helpful.

No, I will not give you precise guidance, but definitely we will not double the OpEx far from this.

Okay. Thanks.

And, an important point there is we, we are increasing the commercial investment, but at the same time, we decrease the clinical and R&D investment because we are shifting from a pure R&D clinical organization to a commercial organization. So that's what you're going to see in the next quarters.

Thank you and Ladies and gentlemen, at this time, we have no further questions in the Q&A queue. This will conclude today's conference call. Thank you for your participation and you may now disconnect.