KRMD - Earnings call transcript Q3 2021 | KORU Medical Systems, Inc.

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Operator

Good day. And welcome to KORU Medical Systems Third Quarter 2021 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. [Operator instructions]. Please note, this event is being recorded. to conference like to now would turn over the Mr. I Managing Director. Chodaczek, Greg Please go sir. ahead,

Greg Chodaczek

A and Chuck Medical for of website. release financial you, afternoon, the on Systems results the company's XXXX. is quarter available third Thank the good released KORU everyone. of press copy Earlier today,

differ our the During or includes as associated comments due statements. regarding on press are recent our mentioned materially business well as financial press this release the the our release make results of obligation our any and and plans predictions have those statements we and forward-looking will SEC. expectations no today, based We results events forward-looking as actual to other could in to update on call, and most risks assume commentary front which including with many certain our you, matters. to quarter. listeners These encourage I filings uncertainties, of in

During and financial the of posted call management our on SEC, our our which with in press each are website. non-GAAP the in measures filings will discuss certain release

additional find these release GAAP those including press reconciliations in will with the You regarding comparable non-GAAP measures measures filings. and our disclosure measures, of

please the replay, additional comments recorded related For the of at the company have SEC. filings made call Eastern most the reference may with and those company's releases listening and Wednesday, Time. was to held PM benefit topics and November X:XX this to recent on approximately the XXXX XX, Since press discussed, then the

ahead. and is Officer. Chief Karen of on and Medical call Linda, Systems; CEO Financial today us President KORU's Tharby, the Joining please go Linda Fisher, KORU

Linda Tharby

platform. a as new Sales; for kick welcoming today's off call Rob of today. October in for and want brings joining expertise KORU team. experiences. a Greg. XX our to I industry for three accelerating already months to pharmacy, Brian and afternoon, domestic of years business. with the in alternate deep has will and of XX the the over Brian brings us been to specialty VP in Quality increasing set and impressive on Thanks, Regulatory; of Board will growth Chris joining Cannon begun Rob Rob an of site Biopharma Both strategy. VP quality growth our Welcome each will of Leadership make and Pazdan, everyone, And as today. contribution and Medical Freedom biologics thanks a XXXk Chris drugs to customer integral who by Good and our and experience dealing as years Development. building joined members responsible responsible new to in a function, number delivery. be on bring plasma for relevant announcement core be two biopharmaceutical world-class the VP recent including Hertzog drug Brian great has Business on over team. be regulatory base, the with

the quarterly the will During objectives. more Q&A. will of continued Karen remarks, with call I open prepared a to remarks. our turn ending few financials today's the report our before and strategic up and in third the the call over results discuss quarter I term near will call, on for Then our on After progress Karen to I depth closing highlights

positive On with sequential QX into grew over X% we $X our quarter. third jump Now quarter for were of million. highlights our We let's of Beginning marking a our the our results results third basis revenues growth. sequential key for pleased QX. and consecutive of 'XX very by

quarterly adjusted also year-over-year was Our growth X%.

pumps. core net demand sales line business. top for strong our results reflect momentum our solid in our continued by Driven all Our areas of with domestic

revenues early sales were pipeline, our progress our and we grew our as up novel addition, to year-over-year. In stage international therapy continue

XXXX. of was margin gross third down to our reported As compared quarter the

outsourced the begun resulting of remain and in some to in improving we've have now increased costs. we and our third-party in delays strategic to We strategy production transition discuss anticipate confident take implementation services I manufacturing have a our the manufacturing to our and had gross margin company our time made the in executing range on XX% progress objectives. to We want low XXXX.

our key during and With focus to As to are large essential that revenue investment significant growth position we and healthcare being that and extended in home impact highlighted we long-term home can near continues difference to in new believe therapies. transition KORU We enabling volume Medical settings, make infusion call. a areas leadership previous three of believe driving and transition. drug our

in the caregiver increasing plan the and the focus three As therapy patient of IG subcue a stages areas our include; business, of all process. at to experiences improve growth reminder, core targeted penetration and therapy via

capabilities Second, support gross into through innovation extending our to need executing significant a regulatory unmet our leadership drug quality to our our and and our subcu area, profile. targeted large core to business a of initiatives investing margin and while new position, building in a and therapies expertise generate and growth, stronger novel IG Addressing excellence growing candidates. and foundation on support pipeline volume increasing this operational in

share business. in Regarding the at focus quarter within improving area the home market key our is The area to patient therapy driver focus the and first process prefilled with initiation core this third key for our of the objective, penetration syringes. primary has subcu of movement been therapy our our being and infusion caregiver increasing across market the IG

prefilled week. Hizentra to announce strategy, indication for CSL this FDA this earlier to XX XXXk received to this of part the ml As expand with the we FDA for clearance excited that filed the I'm label include the pump syringe. we bearings FreedomEdge

only market. an therapy drug infusion fastest growing Prefilled steps the and specifically of yesterday, of KORU now a process cleared use product the and eliminating syringe. process matter fact, challenging a is the in by As prefilled with is syringes simplify transfer XXXk for segment SCIG IG the

also to of stepped number in on of up our areas. number of new on SCIG due the ways strategies on part in in the increase pandemic, fluctuate that the focused remain patients To to continues progress increase SCIG therapy, have several market the patients we we As therapy. QX new will executing

IG physician we First, channel the our route administration. collaborations initial of with our and the who pharma partners focus expanded on

the our partners. penetrated to to Second, generated Board pilots These our of opportunities. switch educate and kits we who infusion the system the transition with easier. our start subcue intended under finally, therapy of new They do to multiple added and make these pharmacy aligned have have held that grow. we continue pharmacies to confirm users an channel further patient patients And and initial started initial initiated will and specialty is advisory opportunities to value patient self-administration IG therapy Freedom onboarding leading

offering. We have early success witnessed will broaden and some this

review go-to by brand and to understand define the to pharmacy drive specialty completed targeted with plan to also a increase resources to employ a to commercial initial pump our where We CIG and in targeted KORU partners Medical market well. the Germany, We've the where our continued and in progressing penetration geographic are efforts also expansion efforts market international of expansion supporting pharmaceutical share. plan general placements

in indicator a As start our performance experienced SCIG double-digit where pump we increase outperforming of volumes business pump market. core placements, patients a of the in new measure new a success is key

$X represents pipeline, of total focus billion. is opportunity reported near our last we’ve that a on which our second term approximately Our call

milliliters domestic over We new Medical candidates above large the KORU leader. for is the XX volume drug market space XX have identified

with of three quarter our new progress We opportunities our securing signed quarter in XX%. are pleased build our collaboration agreements during by funnel. in pipeline the the to We expanded new and

system therapies, biopharma drug new in our these FDA of expand and to our new core using in has market cleared majority Freedom the EU SCIG With for strong in interest opportunities expressed drugs. and

core primarily is funnel Phase opportunities X SCIG Our trials. for

geographically, develop product indications enhancements. grow partners our new As and pursue

reformulations. entire and work span Phase the opportunities from X development drug market X, ranging X to feasibility to studies, new IV drugs, including cycle Our and new early subcue

and the quality we area support to of initiatives to innovation company's third near to a building investing term new class strategy. faster, system on started building have bring our world excellence. foundation regulatory include and operational market products continuing work These the capabilities is focus on building and growth our The

We have portfolio. our at-home as and term to our continue look with we core have we kicked focus, excited off near made infusion products and evolving to innovation, a collaboration are Gilero

increasing be partner valued a this process. efforts in innovation our will are and Gilero We

the next our implementation Additionally, phase we of our began with Command. outsource partner manufacturing

all rollout we've vital will a next we While this Karen plan we I momentum. call the we progress more quarter phase, gross strategy the in long-term about our turn of to continue forward. made moving this will areas Both for confident in of be review. foundation the to over as delay to the of these in We're our financial now detailed build excited margins. some part of experienced remain increase our relationships a

Karen Fisher

September manufacturing continue to the increased consumable as negative sales. as sales net Total compared $X good $XXX,XXX or increase Pumps last same margin delays X% of And adjusted the sales 'XX the compared quarter XX last we for in sales prior sales for sales year, The pipeline. driven prior transition three year, was driven of approximately growth with driven which a Linda. growth our XXXX, Needle. you, net decline was the months secondary was Thank expand pharmaceutical of the afternoon the X.X% everyone. of last Sequential from also X.X% with grew source. XX.X% for by by Removing ended majority Novel 'XX, third was year. quarter by domestic and increased net XX.X%. period to to year, therapy the were core third inventory year, stocking quarter from XX% of Gross our X% decline International year-over-year. million

We offset process also in and by recorded scrap. product a was favorability reserve This for partially material mix.

development therapies. doubled and due in $XXX,XXX same XXXX. margin we the in share, administrative period the increased internal the for we consulting in decrease quarter due for development $X.X compared to of quarter our path from accelerate commercialization team higher related or Selling research fees same our the as general in second XXXX. compared per period third half as Research negative diluted Net was are a confident $X.XX of last and loss period expenses and improvement as team, the year, quarter novel of XXXk with higher million same and the and build building for XX.X% expenses filings third to year, the or as to in $X.XX our We for related XXXX benefits for last quarter our salary to have and to efforts. support fees $XXX,XXX salary third the development primarily well product expenses to and

I XXXX Turning Linda to year to ended end turn closing at $XX.X $XX.X of in with to million now remarks. we -- quarter XXXX. for million our quarter third it the balance will cash sheet, compared over

Linda Tharby

areas three of growth In work Karen. business quarter growth. strategy. in thank you third I third to we on our produce as strategic closing, solid Thank our hard the strengthen on want executing and laser their we for foundation the are all our Throughout with team hires quarter focused the

In patients, strategic our and addition, our and operator the now to on have Q&A. update sharing in shareholders. towards for plans plan over value to our for early scheduled look call our increase to we forward an growth and I'll back turn the strategy more customers our December,

Operator

Piper [Operator with Please O'Brien And question first Instructions] ahead. the go will from Matthew come Sandler.

Unidentified Analyst

Hizentra. Or Hi, the or now driving prefilled good form? focusing product combination of approval you taking detail the to a it thank of things? on what a for for in ladies. new this afternoon, like is To able that of those users rollout starts? Simran is start, Can questions. converting congrats for distribute the This on you're Are [ph] patient on you it existing Matt, FDA looks you kind

Linda Tharby

Yes, the received excited for yesterday, has thanks very by works question. been we're have XXXk approval, Simran, we with So CSL. long which in but the the

think the about this the has years. I pump market in we're the the for using great is that been FreedomEdge several that part

preferred the and sent our XX% need channel, market will no with into patients over no that So using. same specialty be The they share, are so any the need product the also today the for pump to switch we is syringes And a prefilled did really these products when is patient up channel. at research, vial is of drug difficult one really what most our factors of the aimed the syringe. biggest, pharmacy the to combination two a drawing is, from

able be pump. to directly going transfer difficult of a the into whole you part vial that remove FreedomEdge process. you're now syringes, that prefilled place to And So

very excited that. So about

see You'll immediately. it marketing materials the on

Unidentified Analyst

was three a FDA makes that And you new you yes, Okay, indications by Thank year having had note, you. more end? still that on for Are sense. on pump the most mentioned then are? lot to how along? you clearances for your hematology term near And think that's what that coming can remind track hitting opportunity? I goal you us it those how post? have And then indications mentioned

Linda Tharby

with new But remain no SCIG. on the two both will are terms FDA do. process track the of And for indications FDA can one in in what reported. we our the so predict Yes, we filing what

So indication get is hope we late to we've us that one three, early completed and hematology that more year. track when for I by get The to said for in. submit end of XXXX, XXXX, the got also one we two maybe the on

Unidentified Analyst

any a then then and broadly labor supply perspective, just been perspective? like if space. talk hearing little both challenges the to internal lastly, we've And the Can business, an impact that Okay. shortages about in bit you chain and has had medtech a from about distributor workforce

Linda Tharby

perspective. our disruptions, Yes, so supply from are material labor or a not chain in any a either first, we experiencing

paying did and bit complete workforce, to the I which retain manufacturing, represents change with we're ahead very supply for think this a loyal a has got how this what a year, for our we earlier we workforce us to helped us. of dual manufacturing in a outsource think is Also source us space. our I of little it

So that affect chain supply would we don't in any year. our again, interruptions see our

Unidentified Analyst

Thank Okay. it. Got you.

Operator

question Hallum Craig Alex Capital Group, ahead. go please will with Nowak come The next from

Trenton McCarthy

Alex. This the it's it leading anything in that Great. on guys for this I that update But is event? want here. to December, can is great have on you see strategic for finally us there McCarthy plan you to talk had up you to about scheduled preview schedule the Trent just

Linda Tharby

lot the strong core call do we SCIG. on million. at-home to trying of today increase huge opportunity to only our a healthy have Fundamentally, we a think therapy, today is subcutaneous a about challenge market close it with is potential $XXX the today. million core to I patients market we're previewed I what XX% overall on of a Well, and very are And $XX see business that

in that's have of a home which many large volume, the KORU. number we great not in So one Number two, new or XX the position candidates, there's large therapy, core focus leaders area. do volume infusion about know drug

So really the doesn't like got on going someone static. what's for we

And with the therapies. do is that is new drugs So position and second of extending into did example what how palace we that. leadership Greg, part a a course, of really prime we

started now total this So have reporting we're excited pipeline by last We agreements quarter, the eight our pipeline. progress signed in first in we the year.

is that on to be what that market, of addressable to So do a really And potential. total And getting standards, a course, excellence we're more lot to international, exciting share. our little about look the billion-dollar foundational range And are about taking progress trying beginning quality out what and really which for really of new spending the build potential include with extending revenue core candidates, our a excited to And the our plans And cash that our longer us. biopharma our that cetera. so focus we're term about initiative. projections, to to but that lot our a or to seeing we're et you're operational course is plan related talking to commercialization, that overall going happen is bit plan. we'll already then out what make roll that of longer, regulatory flow third, we're about and pretty like capabilities also innovation, and with talk is also for to

Trenton McCarthy

you the you kind on, at and to core IG pipeline, it take you be see was growth are my business year, about expecting? rate And thinking helpful. and you growth spoke of layer that's next you whatever yes, in sort how will what the the Okay, end, of follow-up the there just when

Linda Tharby

project Yes, December. we'll in about all XXXX. what We'll that talk early we about talk for so

stay So tuned.

Trenton McCarthy

Appreciate Perfect. the questions.

Linda Tharby

Greg. Thanks,

Operator

will question next The Kyle come please Canaccord, go ahead. from Rose with

Unidentified Analyst

impact? a Kyle. of very any start And much you guess end, of from you the you to novel are outsized year? quarter have of how out of And sales? terms terms Thanks the therapy, Great. there Maybe of maybe was the third you. quarter in COVID call sort beginning anything going for from far? about on patient And Brian into Thank thinking perspective, to next in in fourth new months I month-over-month thus my starts seeing what the impact couple drug next in are the

Linda Tharby

of were there's Brian, Okay, a questions. lot

and try me Let unpack.

what saw saw we're we why high in seeing. first, of our So pleased market outperformed We waves with the quarter-on-quarter? a due see single and terms that in did that digit so we and were really bit growth. of pandemic quarter softness of little three, overall the the market three results likely quarter That's the to

pleased with very that. were we So

we'll thinking is of record when we're quarter we speak early December. terms in how of that. on In think been update about to more an have you I four, do saying I

digits XXXX. market low December. digit high getting single in look we to double to ourselves you progress We're we'll a update to the Now, to back to continues go single digits to project from in how and see and position going

there I Brian. all anything else? think got it Was I the

Unidentified Analyst

that's that, guess do are you maybe start few bit appreciate to next to about the in a Linda, more shots start goal that incremental we over on No, the cadence months opportunity how to great. And does other what look And XX have over thinking the Hizentra, some too? maybe you that up like on you the coming next I months? unpacking that of of the dig translate there how over rollout?

Linda Tharby

let a look you things. the like what can we we us of again, prefilled for think Yes, but highlight me really couple really we’ll opportunity show just

with indication the you that KORU the today on First pump is system that all, only to market a have prefilled the an FreedomEdge of think syringe. has the

into of kind the known, mid a just thank you gotten XXXX midst have prefilled already of year X% market. about pandemic, and a over the from of have the they market to launched they've nothing syringes captured were Second, ago,

So helping patients as move an area for said, major to more be KORU. opportunity our for, we look subcutaneous share a us also for but position. this only growth as to I to Not move therapy,

the four our about prefill So think into more on to certainly, give looks thinking the over what next details pharma strategic their entries years. are you like of we we'll partners IG that market. five But all

be So will exciting. it

Unidentified Analyst

how even high does start here on Excellent. maybe announcement if I squeeze of just some it, to more from can we the early at And the just congrats a but collaboration, appreciate Thanks, then recent with and days in Gilero maybe one come quarter. I can again, on that level, partnership those see and to fruits start together And when evolve? sort that the efforts? good here,

Linda Tharby

you much. Thank so

on team. two innovation So laser we They R&D right for is the our side, XXXk on focused out where submissions. to our first of build now big internal us one efforts capabilities continue are

great have it's capabilities. So a partner to Gilero’s of

number again, end filing a the We are started expect a got building the that but concepts beginning of products. process. methods and XXXX, of to partnership. that are that new our not And waiting, first by I have out we test hope new at regulatory as would for of that product methodologies of our through process foundational core some we've filed least have now get they are a we will our They result critical just business. already for they're

Linda Tharby

it everyone right, done to I the thank turn think I'll for want three. and to call. All questions. the close thanks back over the we to team I operator again with are quarter to

Operator

you concluded presentation. now has conference The today's for much. so attending you thank Thank

You disconnect. may now

KORU Medical Systems (KRMD) 11 Nov 212021 Q3 Earnings call transcript