KRMD - Earnings call transcript Q1 2022 | KORU Medical Systems, Inc.

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Operator

Greetings, and welcome to KORU Medical Systems' First Quarter 2022 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Greg Chodaczek, Managing Director. Please go ahead, sir.

Greg Chodaczek

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

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

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

If regarding and reconciliations these find with release non-GAAP additional filings. our and presentation you those disclosure accompanying comparable press including these measures investor of will measures, -- find measures GAAP in you

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

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

Linda Tharby

you afternoon, us Good today. joining Greg. for you, everyone, and thank Thank

our to self-administering team to to improve quality begin, in thank life in heartfelt their and the of the quarter the infusion another I dedication we a express and delivering passion therapy for home. Before mission patients, KORU strong for want you

the brief a our quarterly commentary. I support Karen we Q&A. business and call with will guidance. open before be financials will turning to to call to results then to use a to happy up I slides discuss with begin overview Karen call, will then of updates XXXX to over today's update. turn our the ending financial for During I before will the

Before few jumping into QX leading on highlights, a progress vision delivery as comments our provider. a and drug

increase to FREEDOM Our the large expansions, patients volume being subcu home. market label is setting by into in Ig care the in over to our a XX,XXX subcutaneously health a million. drugs Infusion penetration today of growing trend over With System our used total supporting to addressable home delivery continue we infuse XXX population

We totaling continue XX our expand addition announcement this of week. with new now pharmaceutical indications our on-label another label our partnerships with to

addressable our we the as the market through market. As With we a expand, continues to market provider, $X.X leader specialty extending closer billion discuss are our our categories. disposables continue we pumps and are our that expansion driving deliver overall strengthen with to for development pharmacy total relationships will I home partners position new agreements further drug to as and into and into today, leadership pipeline them. And the subcu we

increase Turning $X.X first This double-digit of marks revenues company's the We quarter growth. consecutive to quarter year-over-year for of a of reported quarter first our million represents results. XXXX. the XX% net second and

X.X% signal drug believe in overall U.S. strategic a QX. return market business our of trends an indicative increase. these XX.X% from the our to revenues growth. in our of smaller the recognize QX continued Our strong expansion. cadence diagnosis pandemic revenues is of for in saw quarter growth pharmaceutical recovery year-over-year to domestic patient increased core to over Novel outpace in also core international few $XXX,XXX we with SCIg distributors. business first at ordering a were concerns our our The uptick as to down as patterns we X% of led X% increases pipeline regular see pre-commercialization began The over deal to quarter Therapies the We for our in market due growth plan market revenues therapy, and the underlying side. implementation from to patients Net as

X-year core We focus of and initiatives plan, turn plan are pleased rolled extending increasing to core SCIg include with update. our to penetration, December providing now to continuing pumps nearly to we a as SCIg U.S. our Novel the In driven to the a penetration new very market efforts an increase build will and starts. our our drug of strategic solid year. increase in to our start XX% I QX our pace growth, 'XX, of overall out business The Therapies strategic indicator by And doubled patient the growth. in business, a support foundation the

are last syringe has prefilled In in continue X.X% the areas of signing in expansion and German distributor the progress we QX. iExpert, quarters. X in uptick Therapies X% in products international expansion penetration of additions therapy has and services in an our label market One device particular, drug new see of the our administering X support clearance pre-fills November. biggest business, This of quarter pipeline also assisted the signed our last this one home. to for Novel in in pleased of the been business, deals the a with X QX announce the with leading to non-Ig in the of our deal months the market of over total expansion X provider patients in we in with a agreement of to and in In

and quarter. an initiatives, also revenues build a to foundation recognize for KORU. of which at we we begun development have this these announce a all to to support growth agreement quarter innovation for scope stronger milestone continue are expansion signed for completion pleased of last of We In

X. new June move New are on We track our to Mahwah, location to on building Jersey

of brings of experience product with implementation our to of is and manufacturing our outsourced Technology indications. Brian technology team out a track deeper executive label us built Case, business Chief the years the new dive development. our going final And a expanding core We support of phase expanded now XX-plus XX%-plus on for margin hiring I'm in in our to finally, little the into have who range. is Officer, QX

Our is label expansion X critical does as it things.

First, it partners us with and prelaunch our drug a effective work and patients. pharmaceutical enables for to delivery experience safe device ensuring

service label, it patients Second, for we with make a an platform. specialty with accounts FDA-cleared pharmacy broad to easier

this So highlights two key on slide.

expansion. the label is First pace of

in indicating efforts. and We four seen in uptick have both an subcu drugs the past five and months, our new new indications delivery

addressable this United expand our we the of announced and The clear Second, disease. of use outside or Sobi U.S. The PNH total each by pump States. approximately rare with Ig. Aspaveli treat EMPAVELI branded population marketed Infusion the now diagnoses System KORU X,XXX EMPAVELI deliver United and FreedomEdge year. and by Apellis as to the new clearances patients week States the to about blood two are is in marketed used outside Aspaveli drugs market new is prescription XXX

With most subcutaneous toward our Medical by proof $X a in drug new we as $X this is the future this as a approximately high-volume per look part platform delivery. expand The critical as point established market solidifying total KORU's addressable KORU could that indication treatment of million. we leader million of to the week, outside and occurring Ig twice further

represents advantage represent opportunity today, market. market. a an syringes capturing the and from SCIg market Turning This towards string significant infused from expanded by early prefilled of the in the prior process. are Prefilled the a distinct up prefilled and efforts for total fast-growing Prefilled rapidly stage, X share X% grams quarter infusion in our November. removing driven X.X% syringes steps patients to by in label syringes offer from expansion

use Hizentra's us XXX(k) an XX ml only for opportunity cleared pump As excellent capitalize provides format, on of this the the specifically to growth. this

conversion. specific focused patient on on have effort and a commercialization We new with adoption

they We marketing strategic also prefilled out partners their coordinated of continued pharmaceutical therapies to our our efforts businesses. have have to and and our partners on as pharmacy efforts look penetration the core increase forward simplify U.S. We date, novel work our lives To with we specialty our patients. focused with and strategies. roll

home. However, international second It geographically our signed growth. patients to is capability the owned having to largest many SCIg chose did we capabilities: excited and one and an clinical exclusive of we We the European iExpert track is years German to their iExpert record diabetes best-in-class serve . is based distribution just thorough a in with to strategy over returned and utilization announce patient population, care of large double-digit our is serving where third, key agreement After market; has the I'm several the expand a not training on scale success; deliver participate. search, a Germany multi-country first markets tour, from business. of in SCIg a progress on high have

activities business as to in begin to Therapies commercial expansion is KORU's approval is regulatory QX. geographic and distribution Novel pharmaceutical broad also expect offering a to differentiated companies. This our We relevant

our business. Moving Novel to Therapies

quarter, for Therapies more is our innovation Novel application work a the encouraged by continues believe in immunology the first and aforementioned We strategy beyond the driven feasibility our room for play was Novel recent revenue During of by broad there associated support Therapies prominent evidenced that with agreement. as to successes. role

XX expand candidates our to new continue over pump. for currently pursuing our and opportunities are we drug We pipeline, for

have outside that one in announce of to signed deal hematology signed the and of deal pleased are expanded manufacturer. the we an Ig scope quarter, with This we prior a have innovation area Ig additional

pleased Brian addition. R&D Technology strengthened out years that signed an expand Novel progress Officer. Therapies a executive initiatives to see continually on over we in KORU including both another we team, significant revenues. new with are building we Chief have deals In XX we discussed with of the conjunction above, to Medical's highlight experience late engagement the our to announced time In as results, hired April, and I'm pre-commercialization We are beginning regarding veteran and dedicated team. Case, pipeline, the our

Brian area strategy. extensions, product include a As company and previously a goals QX out instrumental is the Karen pipeline. growth a And technology as our I innovation over build lead product innovation success. long-term turn its investing significant introductions strategic the innovation Novel call be Therapies to of financials. our and for system. executes business for line and our discussion next-generation will and Brian will to Near-term in new as discussed, now KORU development defines will we innovation

Karen Fisher

XX% Linda, XXXX you, to $X.X and at sales of increase market $X.X X%. year. net rebounding XX% driven with higher Ig last of subcu a over from afternoon, domestic by from pumps the outperforming same growth growth, I'm of first with sales quarter double-digit net year-over-year growth and million pleased Thank ending our second consecutive consumables million report the core a period everybody. quarter Results were good sales of

Therapies Novel customer, revenues a innovation for is report buying expand core milestone to As the years a an from were to recognition down of Novel March sales we are due our was also to a revenues generate following. the SCIg pattern clinical XX, in customers. achievement year-over-year we XXXX, pipeline, and changes primarily from $XXX,XXX NRE ended which of few revenues continue NRE and period initial X.X% XXXX, months $XXX,XXX International Therapies increase commercialization large for excited to XXXX on X through the expected quarterly smaller to same due

a margin subcu Linda quarter we in by of Germany, in a first report that about to basis excited have in points great XX%. by large expanded excited and in XXXX, are decreased Germany. increased XX.X% mentioned distribution Gross signed a Europe. partner profit base With we $XXX,XXX As this gross reimbursement, the opportunity to while distribution previously, agreement are patient or XXX we

increase dilutive effort margin for to earlier, the we customization the higher to record impact excited revenue lower revenues the NRE was in a While this mix. had first our higher approximately the as or quarter. with million costs was last development costs the manufacturing related primarily labor gross contributing increased of to driven R&D costs million build drove same higher partially costs from last previously Also expenses, accelerated fees raw described Gilero. in were out as quarter product period $X.X majority from from were to the of are XXXX, by increase well half period which announced core and The XXXX increasing we expenses Total compared operating to through quarter our over by support our of internal the capabilities efforts as year. offset material for an for the of the increase and just business $XXX,XXX that The consulting year. agreement salary and price $X.X innovation of increase same came margin

MDR our for million were per of $X.X new in Our commercialization our compared driven as first $X.X of to the share and first over investments of EQA quarter in a to of registrations. of SG&A or or diluted diluted development. on described. indications incremental drove business expenses our EU XX% and loss support per was The million Net execute initiatives was remainder share spend loss the loss a XXXX XXXX. negative expanded prior The to $X.XX support our hires by net just the label year quarter driven we negative $X.XX our strategic by of

location. leasehold As the strengthening from in cash our use our investment quarter, for you driving manufacturing improvements, in QX remains in new and and growth equipment and see $X.X a new slide, can for the used We office focused of location. previous which our million on foundation, our $XXX,XXX on funds including includes innovation

will amount of QX arrangements have in execute we assets. We financing the in which of $X commissioning million, upon preapproved the

Additionally, turn ended call $XXX,XXX, and the to and quarter receivable will which cash, lease plan. we with company credits $XX.X still for our execute XX/XX/XXXX. for now guidance receive of to at ERC back I build-out cash the strategic for continue to we our of waiting credit expect to we recorded for The comments. and we're on our new under well Linda $XXX,XXX, were closing million capitalized of a

Linda Tharby

Karen. Thank you,

Turning to XXXX. fiscal our expectations for

market our activity pandemic, reminder, drivers, and growth, in key underlying clinical is chain recovery impact. outlook COVID-XX a from As plasma supply several rooted supply, trial continued

range million at XX% to year of gross full expansion in The the million due million, guidance are to prior market $XX pipeline. revenue is $XX U.S. XXXX, for run approaching single-digit growth, novel tightening the we our reiterates million, at our its previously For range margin our QX the $XX to year communicated high top to to year the which the an therapies rate. company end exit a guidance $XX.X

expected be We recognized finally, quarter range plan. support as in to manufacturing chain XXXX our very to QX XXXX quarter inventory. resulted in turn we move not we strong reiterate anticipate operating expenses. have in the our impacts, second onetime disruption our recur, closing, XXXX. Additionally, QX supply variances higher strategic which are and non-favorable In which will to first QX due And sequential represents start expense our a building of expenses of

We progress advancing are strategic our making priorities. great in

have double-digit We of met our second quarter growth.

months, outside our with expansions FDA with fourth in and clearance EMPAVELI our Ig label our first progressing clearance Aspaveli. X are We of and

agreements in continue our out are expanding as clinical leading are our international commercial Therapies We both build and of a longer-term we as innovation Novel and indicator pipeline trial a strong opportunity, we team. to build beginning strategy to

drug are our player. to again of for we And date plan the We a towards against work broad I call now with will strategic longer-term pleased as ability vision KORU to execute our delivery you the becoming our turn team. Thank Q&A. to over

Operator

[Operator Instructions].

Alex Nowak Capital first Our from question is with Group. Craig-Hallum

Chase Knickerbocker

for This on is Alex. Chase

the prefilled result adds be for would penetration penetration as And me, may guys to of your seeing concerning any new is market of color you impact Ig from Have any pump start subcu to seen overall syringes in you for helpful. what be a data? this on you and patient to orders great So see. yet

Linda Tharby

So Chase, question. great

We are the we year. are seeing very starts. subcu that is it growth encouraged And impacting see prefilled by this that patient we

into is a Although the it, in lot penetration overall improvement see subcu affect point from we a did of QX X.X that there things marketplace.

our pump a So number pump for XX% syringes. to is part for in us. with that's then was that saw indication X obviously, that which that of a growth quarter specifically And growth you the FreedomEdge, was encouraging prefilled significant recorded the was attributable cleared and

a growth year prefills, We see the market the indication. a thrilled with with penetration following. see only opportunity this headroom on-label X% us we're as So of lot as for only for being it we years and

Chase Knickerbocker

thinking the very strategically color how the helpful. new pipeline the the CTO about you're starts new pump Any rolling with announcement, developments? the And about? then other on works here? should CTO on besides Any the products No, update in pump we new any as know

Linda Tharby

Yes.

experience So and from many with developing we're applications pumps say, He onboard course thrilled career both of of his in has for the have different first, someone caliber team. opportunities. just from me technology, over to let Brian's the different in-licensing

a very Brian. experienced got in player we've So

So focus forward. our you innovation, spending that's in we really in results a we efforts clearly, -- as And a opportunity is our huge the see see as of capturing drug move of more support pipeline. that we lot overall in

and on comfort short-term I our what will activities focused convenience. call be So would

our all many, our for then, And planning next-generation we're in to I what more improvements And for see is second-generation both platform, that course, geared pump. would call, new specifically platform that, of parallel You'll of FreedomEdge next-generation things Freedom that prefills. to many a pump.

like think comfort, the about So to convenience, talk X connected. themes about I

You'll we'll then at the next year see line new start form rollout to go next-gen beginning our pipeline and products that some of into that by time certainly, of in there the pump. from then extensions, into

Chase Knickerbocker

then hearing out pharmacies, to switching some previous the about subcu? with And the roll of you here, do have think specialty some as feedback specialty started things in prefilled trending concerning have are from to addressing what how And just you're heard pharmacy? pushbacks you potentially

Linda Tharby

directly certainly fantastic. clearance helped has the we CSL our allows with conferences. that them a into and all the have of question, at pump, XX now our work one is our have lot in meetings sales put of it great heard to just the syringe patient the So ml of actually head done is because which But of of Hizentra from to that we date, biggest prefilled

in is pump. into draw up or times that with and syringe that to XX, from a hear and prefilled the at challenges still syringe another into the formats have XX put the everybody X not are fact patients obviously the think XX that to today I the we XX

little a that's work. of bit So additional

forward better So pipeline say working we're CSL prefilled out looking we're on even we so But marketplace. I overall, bring patient an experience to their would that building the to can our on clinicals for this product. today. pharmacies of expectations and have patients And expectations would We're early outperformed new prefills working on the on training I a say therapy. lot our

Operator

next question Our Jason from Sandler. is Piper Bednar with

Joseph Downing

This is for Yes. Jason. on Joe

Novel levers and return So investments mentioned guys reiterated today, in to pull internationally Therapies you question, growth. QX, and and to back is XX% the pipeline in so -- to levers Europe my obviously,

of as in levers. developments is agreement distribution pipeline we moving how about we're the And should these Therapies actually Obviously, get as Novel top we the the can Germany curious particularly Europe? progress XXXX that So with announced odds line future thinking be beyond. the impacting and XX% forward in in growth to with well back then

Linda Tharby

Great Joe. Thanks, question.

just what the obviously comfortable this of high getting to which the and guidance, to to which is going our maybe to aiming So to for. more about we're with, XX%, build I'll all getting we're pathway moving then I'm back XX%, the end the talk

clearly, range So be January, happen talked what first in is in and XX% growth the back in I a on thing in -- to like and we looked February growth in the saw average a about going growth the that rebound market U.S. the X% to XX% us but that quarter, X% the plus growth March. biggest it drives a quarter, X%

to us. So that's encouraging very

signed We've marketplace, an inked an to encouraging QX. got the we our product scope that the pipeline therapies. hands we've Beyond innovation that, have and early. us obviously, I representatives That's then all mentioned just Germany of that therapies very the in for opportunity. well, do, of expanded in to see deal, training fact we novel the get we've finally, that as novel and agreement we the in what don't their the into it's

XX%, to this double grow going U.S. to things. see we'll to at -- as incremental very agreement XX% say So be on we that focused I quarter-on-quarter, U.S. that's look other X Number can will digits well signed for double Novel getting say it's XX% I market would year? If one would grow is, with beyond Combined encouraging. markets go and Germany, a on a the the positive from deals digits year-on-year basis, get time some complete on innovation to us be also to so then that growth. international Therapies. our opportunity And to that expansions finally, we're market

-- So prefill to I thing customer multiple the prefills is other prefills, I guess us. X% is would see encouraging a at And customer. I is a again, mention KORU

it's our when position XX% grow to XXX% prefill from customer. the we of So market a

guess need on on come those numbers. recording each to all So describing those more shots goal bit bit back. I you to Therapies I'm But I quarter see a with we're closer little expand multiple the XX% what get little And us getting more time proof to pipeline. XX%. the just is market to A from Novel see points, we to think time we're that

Joseph Downing

for That's really me. just helpful. And then more one

should on XXX(k) the the it business, approval about what to forward? the you just extent this see So bit a how from the patients using to great thinking off-label obviously. been approval with little talk about FreedomEdge looking for Can be congrats pump? And may recent for have already we EMPAVELI, contribution

Linda Tharby

Yes.

can't I indication, their they the was to know for although we speak pump KORU trials in did on that approval. clinical the off-label early preferred that So

have kept the So on -- would assume that we those and pump. some of doctors would pharmacists have patients

base we're to overall convert. trying that start somewhere the patient already numbers is out see talk platform. and patients potential. the if That we And this there and about in this that year for the number we see at the Apellis. new that pumps to from on numbers the we competition have reporting, Apellis the U.S. of So look XXX,XXX the every year electronic going We overall, between is And I'm I and or have opportunity remember, overall, market XXX year XXX,XXX communicated. prior would so this

FreedomEdge do is and able EMPAVELI. for our I to tremendous come go this and obviously, that pump lift the we'll reporting indication us be numbers. in a right are, know I through So see with and Aspaveli they But we to they're and promote now, they label better, now to if going hope think be

Operator

like reached turn and of gentlemen, closing the I question-and-answer the to for to back end Linda have would you. and remarks. call Thank session, Tharby the we Ladies

Linda Tharby

for the And today. listening fantastic in KORU again, XXXX. to everyone, entire a to you, thank you start say Thank to I for team, want

Operator

you. Thank conference. This today's concludes

disconnect may for at you your your time. Thank You lines participation. this

KORU Medical Systems (KRMD) 8 May 222022 Q1 Earnings call transcript