KRMD - Earnings call transcript Q2 2024 | KORU Medical Systems, Inc.

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Operator

Greetings and welcome to the KORU Medical Systems' Second Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Louisa Smith. Thank you.

You may begin.

Louisa Smith

Good afternoon, everyone.

call Medical Linda Chief Systems; the CEO President Financial on KORU of and me today Tharby, are and Officer. Joining Tom Adams, the XX, KORU quarter today Medical released results Earlier Systems ended XXXX. for June financial second A company's the available website. the copy press of is on release includes on listeners which the have quarter. of to as results encourage press release financial I front well in our you, our as commentary

of call our will Additionally, Investor to which today's are slides in the also use we Relations commentary section website. on available support

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

non-GAAP management call, the During measures. will discuss certain financial also

disclosures, additional filings. these press investor SEC and find measures non-GAAP presentation release being will our GAAP comparable including in You with accompanying measures of reconciliations

of the benefit made comments was approximately Wednesday, go please related p.m. replay, the at this Since X, listening and have recorded the For on to held August Time. Eastern discussed. Linda, topics X:XX company XXXX, those may then, the call to additional ahead.

Linda Tharby

updates, for I Thank back and you, business it Louisa. Tom, review begin by closing with will for today. guidance second Good comments. thank our results to XXXX us and turning our afternoon, key followed everyone, who joining before quarter and me you financials will

quarter record on X, we open the and revenues will as milestones for continued delivered progress our prepared Vision and XXXX quarter momentum executed remarks, towards XXXX. questions. In the we Following we our strong of another line

gains period Core in Second quarter market share same growth, revenues a XX%, driven over revenues growth business by geographic XXXX. and expansion. grew $X.X million, the XX% SCIg were

health successful our we platform, a an included III new existing quarter strong expanded QX also results pipeline indication that This for of serves into as a an trial Our business entry nephrology several and for biologic had an we to Freedom oncology for which collaboration Phase on drug. Novel feasibility Therapies closer drugs development progressed in commercialization. announced a for as the business, collaborations our

further and above breakeven Additionally, From loss June, the multiple of fourth margin guidance. for our quarter that guidance we our XX% our ranges led us fronts. Higher international gross Infusion cash important these year focused global raise gives capital clearance on in revenues our in closer received for an cash in FreedomEdge full and cash Progress Japan, we revenue reaffirmed and in standpoint, use will regulatory efficiencies improvement progress us long-awaited operations reduction against continued our and to to flow and and our efforts brought with in to milestones further our milestone growth. combined business an with confidence reach breakeven. core overall our expand XXXX all System projected operating an flow on working gross margins

like are the also our tremendous continue role confident proven Chris Chris our on and of transformative he the I results. and new drive impact update recent years how In under targets. our have to I'd needed pivotal corporate alignment And Operating about on to announcement business the brings leader, himself operational consistently delivery growth success. KORU, our refining of Pazdan, highlights, on program, additional to of Operations SVP has we to his announced This with of focus has a as providing functions delivered leader, one X product promotion am will together provide and This on structure. moving Before we month, organization to key Officer. Chief an past our the role all

and our our Moving novel and label, SCIg Within on relevance prior year the growing healthy pumps growing drugs on therapies accounts from expanding outpace results, increased key consumables. core of Domestic our double-digit of pillars. we saw our both internationally and new a revenue new strong the XX% growth single-digits. We market our Core, our domestic review business, accomplished Protecting growth business. I'll business of mid-to-high to to broadening in each and strategic with highlights penetration over this with continued and through SCIg that's addition existing

double-digit in end increase products. underlying strong of a demand We growth, starts. indication also indicating of an Ig sequential customer The for growth, sixth new recorded quarter user patient our saw market an sales a

convenient see to within strong partners prebuilt a and patients drive continue option our fastest We SCIg. more pharma for segment adoption, a growing

a momentum with aimed for We in our convenience comfort improving base. continue expect at patient product QX our new XXX(k) submission to and

international. Moving had a finishing quarter, at to year-over-year We very strong XX% growth.

was penetration further increased growth, Tom distributor expansion underlying during elaborate driven his range. new saw Excluding XX% market plus the will in new markets which and indications performance Ig and on stocking, growth into we by Strong in current markets. remarks,

pipeline FreedomEdge As Infusion including we provide market that We and signed continued currently date, prior drugs received see also in clearance further Japan subcutaneous regulatory the platform. growing number X to of development. In in this novel are our our year. upside collaborations on have efforts, mentioned, business XXXX in we development focused for XX therapy will Freedom we as beyond

will feasibility exciting for we XXX(k) for in is quarter, product we a XXXX. we that passed this as prior successfully announced commercialized oncology file This a anticipate This biologic.

IV deeper continued future a SCIg growth dive our patient to take development what which a market, Phase track well on of U.S. the for disease to during progressed into agreement few Ig indication market in year. the a graph is market, addition, for core as entry and world a clinics want a prime see single-digits leadership projected the optimize XXX(k) finally, also first outpacing growth discuss and growth. few into overall market to overall an market Pharma, Overall we large our III combining new enable end and mid infusion increase notes prefilled SCHOTT for growth will nephrology in In moments with drivers. leader delivery. I where syringes trials a quarter new Ig a subcu The This growth position volume we largest submission in in highlight. And the illustrates the the with grow as announced in hold And we remains growth by drug. drug is is large-volume for to to currently expected SCIg. A to the and SCIg as and marketed SCIg rare high penetration the for have both the in phase to the we biologic, we growth.

on a Most patient pump lifetime, patients of We recurring patients in chronic and large over of have have XX,XXX a creating just will recurring their of base base be the disease these revenue consumables. through sale for our U.S. the a

U.S. multiple catalysts expand ability the base. our patient are near-term there have to that addition, In

is start of patient This put primary One Xembify, a approval to the the are of for that patients start directly on care label see with required was their means investments health the therapy. prior we the subcutaneous the of immunodeficiency. therapy portfolios. therapy. A primary the include the in from expanded drug, market-wide the the significance opportunities Ig highlight to-date, had SCIg this subcutaneous SCIg. pharmaceutical of The recent provider towards shift of FDA companies approval is SCIg preferred as an to treatment-naive making IV The a can FDA quarter

remain makes overall In more option, a market, challenged convenient preferred the on and delivery emphasis addition, continues focus our our continue partnerships with new for move we patients. for new on customers it accounts practice XX% therapy. in and and key ensure about to which to devices, SCIg we'll PFS, CIDP innovation which of this accounts patient grow and Core's partner clinical leadership dexterity to for and high-volume base, SCIg diagnosis to a patient

this market we into million the some Moving our SCIg geographic pleased of what as on expansion $XX in of we international; approximately ahead growth the to representing and larger us. U.S. to TAM quarter markets altogether with a There's provide continued than alone. of TAM are outside insight a wanted U.S., see opportunity XX%

into are currently XX But in low. in our marketed relatively graphic, We you markets been overall worldwide. these as see penetration countries the has

with and on device penetration increase patient to companies tailored current and programs both continue is work drive our increased partners pharmaceutical markets into SCIg penetration strategy Our and in distribution to markets. to new

of an is Our examples. next pipeline. our novel look our place represents a population global which to to our a opportunity one continuing to therapies drug geographic opportunity our on opportunity. or drugs an new new attractive expansion indications, these XX represents want Japan innovations entry expand each patient X.X We million growth. The into it is recent forward in and existing believe slide label total total, for in efforts collaborations

now our into mentioned to expanded creating of progress prior in first the trial. In X commercial annualized and asset new oncology FreedomEdge including the potential our collaboration opportunities $XX the III by for a progression Phase path The Japan, have the use end of for XXXX, with million other a of cleared platform indicate moving indication the to be highlights we XXXX. of total, within million revenue KORU $XX drugs with clearance quarter, at nephrology

review made increased pleased our call progress team. I focused results. financial in from core our now the our our We operating our in therapies through turn multiple pipeline quarter continued we to leverage very Double-digit business, Tom and this growth with novel on progress to over are execution fronts. will

Tom Adams

you, joining this Linda, us to everyone Thank afternoon. and thanks

the We a of a prior revenues second quarter for line increase are our saw as were very XX% $X.X second quarter. compared growth another million, we double-digit quarter record to period. pleased quarter the revenue top second year results and Net with

$X.X gains. Domestic higher XX% as new with by starts a Our volumes revenue patient revenues and of result of grew share driven net consumable Core million,

growth, Our for by accelerated a approved international $XXX,XXX Ig the from discussed SID The an rate growth last year, and and million, improved orders, $X.X XX% in approximately as was shipments continued appeal driven versus geographic with international effects XX%. these result core increased year-over-year prior the we Normalized about residual expansion. BSI that grew core of revenues quarter. of included excluding supply indications XX% penetration business CIDP of

by Our consider our clinical $XXX,XXX, pre-commercial KORU novel we trial revenue products year, orders X was which of a for driven launch for improvement be collaboration clinical completion the to collaborations. and trial therapies to pipeline compared services prior XX% revenue,

additional on our future work core as agreements continue and commercial collaborations that customer to diversify we business. our We bolster will pipeline base

to first increase an Our improved margin XXX prior year. the quarter compared point basis XX%, gross to

due the marks excellence graph largely right, to by we As on our of identify we the This U.S. operational margins our achieved driven XX%. bar improvement operations. strong fourth across that sites. efficiencies the continue the indicated and consecutive quarter was improvements and than realized And to manufacturing have manufacturing efficiencies greater leverage on consolidation to the manufacturing

therapies novel in we our sales in Additionally, I'd mix like the we core selling higher from U.S. margins have in seen trial average clinical of increases note year-over-year to And with orders. valuation improved gross levels prices. recur business, gross that positively of half about points expect improvement quarter, in by the the of adjustment impacted margin in that $XXX,XXX second XXX that was resulted basis year. we not do inventory margin the in to recognized

cash, stock The usage overall level XX, an over cash compensation, cash to of $X.X noncash of had excludes and was net by representing on we quarter in which This usage amortization. prior items June of of the million, year. an $XXX,XXX, of cash of ending the as quarter. Moving million $XX.X in improvement $XXX,XXX partially of depreciation driven losses balance was the

production quarter, in to new capital were addition, uses for in offset by our And In our offsetting equipment was we inventory lines. accounts working respect insurance. for $XXX,XXX brought these the paid our which Partially $XXX,XXX And used down invest D&O improvements same also we with our we in cash capital a of line for to by cash financing the receivable, of quarter. partially by driven revenue strong levels. of strength

cash and cash since the And million. are a remain cash $X reducing on first track. usage our half As targets year. our substantially the cash year, we last burden had we flow of look In ahead, we of

new balance coming quarter. as being the million like greater of spending We to cash related first half the a market. We than cash be cash remind well the is of for products our $X undrawn facility million with fourth growth exclusive flow also production to everyone least cash as confident usage to $X R&D by half bring and investment second our our in QX, year capital balance with outlay is majority will driven breakeven I being remain capital. would that expect the of end on $XX innovation our credit reserved million that in line project strategic peak at for the ending that than spending we new higher to the

X growth our those our XXXX being that guidance, to syringe when we on of high penetration novel enable growth, mid some single-digit key therapy set originally would drivers to we prefilled noted underlying and XX% SCIg new guidance, Moving to success, market collaborations XX%.

have we quarters X milestones our very and behind syringe against increasing us, market SCIg therapies healthy with that novel are we Now have seeing delivered prefilled a demand.

our We revenue gross are margin raising guidance. and

the following of remainder in that year. sales from commentary range levels not we $XX do to that second prior million of recurring. million year, growth and over to to million $XX.X million, note, $XX.X prior in international the XX% for expect growth revenues We And the of we our on we quarter mentioned please be anticipate the XX% the $XX.X saw to representing up

the sales for accounts of year. guidance updated normalizing rest for the Our international

margins, full between gross As we the year XX% and expect XX%. margin gross for now

margin ASP our regions, more continue face lower with anticipate supply we into to While expanding pressure pressure chain. from we inflationary on

improved We additional to margin novel hold with internally therapies. have efficiencies improved margin managed sales in manufacturing and and our mix,

finish which ending approximately includes in balance Lastly, cash million includes $XX.X I is cash $XX million reach mentioned balance breakeven we to in of flow the that with we 'XX. expense. before, stock fourth ending $X exclusive operating of than and of an quarter expectation This the more compensation million, to will expect

for will opportunities, Our for remarks. for back in strategic that, call facility included available credit is now remains to ending to turn estimates Linda us closing not cash balance. With reserve the growth I XXXX our but

Linda Tharby

Thanks, Tom.

U.S. we and quarter, expanded so digits, double focus execute We saw the growing on international did as to our strategy. business we and our in half. we'll strong We continue SCIg continued This this results reach. back outperforming market grew a

business. as approached our therapies novel development on Our pipeline approval drugs for inflection becoming critical increasingly the use point a business efforts multiple are platform, relevant for

and we KORU by for a of drug submission XXXX. We continued the end our new differentiation a see will expect Freedom Infusion of product that a with in platform new

We each also of breakeven highlighted. gives Vision business us goals. by our of progress our leverage milestones to cash towards towards of the revenues areas generated our year. longer XXXX made each record operating confidence flow of milestones meaningful our progress These across our our in reiterate of goal This strength are strategic indicators and end term XXXX

a KORU each the I in transform do a for work to like we our first Medical I'd team experience journey superior continue drug for the value everyone the turn hard momentum large delivery. In will over is patient they half subcutaneous as Q&A. volume drive our stakeholders. Operator, every Our day to encouraging for to thank closing, now in to of on company create the and global leader call

Operator

from Instructions] of Cronin [Operator First we Caitlin Canaccord question is Genuity. have

Caitlin Cronin

guidance. a to driver prefilled Just penetration mentioned start, being revenue you the of syringe

is Given point? you raised progress the that year? syringe this of is launch the where earlier off revenue the syringe how penetration guidance, prefilled on XX-ml prefilled at jumping this And

Linda Tharby

by progress excited congrats. the this the for We're thanks So quarter.

as is are through now the our has in entire which is prefilled which CSL, aware, the prefilled to platform market The compatible Specifically is is end syringes, devices. syringe getting launched the the with as by their U.S. intention related leader market, KORU syringes platform, over year. move entire prefilled of QX to to their their uptake stronger you

we're to versus patient We prefilled for again, seeing bring around that to anticipate, the us, So as an longer is driver think term the potential we category more that it's the format one-on-one to vials. where from a patients vials this use opportunity prefills is easier the into for conversion. syringes

is prefilled for a progress in overall U.S. us. change format continued market; excited So and syringes the by our

Caitlin Cronin

clearance to pursue CUVITRU Japan And as geographies other in well? the clearance. congrats you Do plan on

Linda Tharby

missed that sorry. end the back I I'm question. of

Caitlin Cronin

that to clearance Do first that's you've pursue in than you that drug? other because plan other CUVITRU for clearance geographies Japan, the believe I had

Linda Tharby

Or more just Or it CUVITRU expanded specifically. is geographies.

Caitlin, go ahead. Sorry,

Caitlin Cronin

cleared for well No, no. the in I other talk as specifically you was CUVITRU to you are about I that's expansion regions But great. don't just want mean broader asking since no, I mean, CUVITRU drug. believe about that if I

Linda Tharby

Takeda drug. for We today, are a is which CUVITRU cleared usage

U.S. into that market. Yes, just cleared the significance receive did we CUVITRU. drug, We that in for drug, specifically the and Japan for with Japan the clearance internationally broadly are overall is so the entry market for the

CSL's clearance Japanese in XX% overall We the though of market, received that market. which with also drug about HIZENTRA compose

So in and Asia the Latin look significance the CUVITRU a for approvals, in significant top Ig that specifically us, we for obviously, Pac And Japan market. would is is more anticipate XX will overall future. for America we

Operator

The next of Lake question Capital. Frank from we have is Takkinen Street

Nelson Cox

see But to market you impacting on with SCIg. to Cox for Great prepared start that you in mentioned heard your patients Xembify, Nelson the I Frank. label straight more overall? I remarks. it to should how business is this a us expanded This wanted through all to progress. the can for in we go about bit think the just and walk allowing the

Linda Tharby

and you of Sure, sure. note Great for congratulations. question the thank

So for the all to labels dose SCIg the IV been Those in start to an patient for care over existing progressing the of provider a health now. Ig on decade today have before labels existence called of subcutaneous initial therapy. well therapy

to the straight cripples Xembify SCIg. to to this And drug significance after allowed go of manufacturer the those label so a label go is was that them with first

the While standard certainly becoming of it this was was practice, usage. off-label

see to be coming health update think use will going you to practitioner relative I have on the just to we're and idea that. just will care like. love So I'd we easier ball, of give SCIg. that it what If I to progression crystal a anticipate an to go a make that this might to much sure we had what look to directly you quarters But happens in

Nelson Cox

Can guys other about the the entering approval following of do And any strategy And in and on intend Or then direct? you go to should access? that we July. kind will you talk Japan. work do you ensure How geography? about need think you there maybe to just following to up

Linda Tharby

Yes.

So set still distributor up we both our programs. this will working to company pharmaceutical are be -- and

do believe details of Ig. So We be a It have still an is we market. significant it be through. it initially. for the a time, market. Japan will of top believe that electronic consumables We We pump markets distributor play see relationship we're working existing our XX over one an all but largely as will largely

number to don't So we in use consumables in will it And international. number be overall growth our adding I market. X% see XXXX big focusing for about the our on XXXX, of a but see that in

Operator

[Operator have Capital Group. Instructions] Chase The Knickerbocker next question from of we Craig-Hallum is

Chase Knickerbocker

I just new well. want what's just me, outperformance IV? for patient from Linda, to driving subcu predominantly to or here say it's had pass would congratulations half of Maybe more as the on in the first my year, you say conversions the starts if first you

Linda Tharby

But I combination. a So the efforts in certainly, well the performance market performance our front overall as new starts. as Ig patient in our international Core mean, in say is the growth businesses well therapy. business it's I incredibly would doing subcutaneous our are and half, the development the novel driving of Domestic

the is driving all we half growth. in X strength front what So see

Chase Knickerbocker

some kind the And CSL we've maybe just seen on the that think benefit benefit as or that of a maybe of kind from of part the maybe of Do thoughts half, there? could kind get of from you outperformance prefilled already conversion increased just some in we first vials. prefilled into some benefit

Linda Tharby

Yes.

going per our date. to prefilled the is plans launch think internal I

of which users. new will of in that towards to innovations our prefilled think back the the year I get XXXX, see product half other as are benefit we them the and we one mentioned tailored into coming some I coming the one more of upside

our think So performing first is I see as I the we'll per think expectations. half And then. more

Chase Knickerbocker

SCIg going Or to in kind there second of this revenue into so should first think we you it little year? of is down are guidance sequentially half unchanged. from expected. of expectations seasonality think speak a kind the just here market we the Things Maybe growth of are some the as overall as implying of about from this Should conservatism? a year bit half. step sounds And like

Linda Tharby

Yes.

question. So thank great you,

the perspective. U.S. down to tend we new and slow health traditionally, and slowdown, patient internationally bit the from patient QX, starts, vacations both care from a see of a the as yes, here So both provider in overall perspective

longer as The we with due Tom consider we to the is, that therapies to pulled that cleared. than finally, you, revenues since of intention together expected. was complete earlier. second mentioned to our But quarter then BSI this And to timing thing is accelerated with always issue collaborations, pharmaceutical have into the which had we working X regulatory prior takes novel we our $XXX,XXX clearance, sometimes

So in we certainly all those call it collaboration say And NT we both course, conservative. and outperform at have hope look things. international penetration of back we of think to half I X I would that opportunities wouldn't I time. that But with further the

Chase Knickerbocker

the oncology speak launching how be perspective novel for early And you those Linda. infusion kind was going to novel new plans just of into then -- you to target therapies, guys guys Maybe to maybe from are helpful. to of just kind patient-administered that clinics rare these of speak disease. have a last Maybe any market, that that plans? on launching me, expect here in are commercial the commercialization to asset That kind deliver be you a that therapies going into

Linda Tharby

have partnership label, itself. our pharmaceutical on launches our of with any we the company early most is important With the

and whether work them we that's them points, launch target a work specific So their and understand the or And clinic. ensuring out plans with closely figure their right to we that targeted messaging. call we a country with on where

those on about. we So drugs And we'll first. efforts that's talked continue new those

And then drug service Second, that disease work end with that of that focuses drug plans expect oncology, in rare with of the with we're finalizing launch our the that plan oncology of for market. for specializes to we today by clinics the who in we which distributor I referenced, for work many pharmacies that specialty the commercialization drug. our a process for that we'll QX. and file launch, will we But

Operator

Schock Anderson have B. Securities. from is The of next question we Riley

Anderson Schock

Anderson the Kyle. quarter. Congratulations on This for great on is

know you here? And were have I into see study on should when to do there that initially, but expansion how Canada? any first, the approval progressing? delays updates some is potential expect So we

Linda Tharby

Yes.

in the we So pharmaceutical in our those continue partners discussions markets. with

that products. progressing see a in completed launch expect And that of our of launch frame. XXXX is we really XXXX, well. early launch And extremely those likely couple into a Canada contingent so be is occur So the upon new to in time

Anderson Schock

And the some you contribution us on therapies collaboration? collaboration? be just SCHOTT Freedom developing on Will And potential this for just then about could more give pumps? use revenue the color new pharmaceutical they how should think we from

Linda Tharby

just System that SCHOTT is focus use So so first, manufacturer the excited the partnership. device our syringes. with prefilled world, partnership world's announce on I'll of quite prefilled in reiterate Freedom The to their this platform the largest will

that prefilled We would update the in start on with I do have expect -- We We're the be device. We on of to collaboration. there early and so at convenience pipelines is prefilled the includes the best platform their pharmaceutical our end and will with which service the the time et platform. ensure joint will working of customer with customer conferences, commercial about But that, we're joint calls, cetera, Freedom think potential. with just between business to XXXX. the focus is an a jointly to advantages intend required getting too many combined and to this X looking talk this who which companies, at device, to of more infuse at to syringes

Operator

call. question-and-answer you conference with gentlemen, And today's for have Thank conclude end of session. that, we reached and we Ladies joining the the us.

lines. now may You your disconnect

KORU Medical Systems (KRMD) 7 Aug 242024 Q2 Earnings call transcript