Thank you for standing by. Welcome to Nyxoah's First Quarter 2023 Earnings Conference Call. At this time, all participants are on listen-only mode. After the speaker's presentations, there'll be a question-and-answer session. To ask a question at that time, please press star one one on your telephone. As a reminder, today's call is being recorded. I will now turn the conference over to your host, Ms. Mikaela Kirkwood, corporate communication and investor relations manager. Please go ahead.
Good afternoon and good evening, everyone, and welcome to our earnings call for the first quarter of 2023. I am Mikaela Kirkwood, Corporate Communication and Investor Relations Manager at Nyxoah. Participating from the company today will be Olivier Taelman, Chief Executive Officer, and Loic Moreau, Chief Financial Officer. During the call, we will discuss our operating activities and review our first quarter financial results released after U.S. market close 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 cause actual results or events to material differ for 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 the Securities and Exchange Commission on May 16th, 2023. With that, I will now turn the call over to Olivier.
Thank you, Mikaela. Good afternoon and good evening, everyone, and thank you for joining us for our first quarter 2023 earning call. 2023 will be an important year for Nyxoah with DREAM patient follow-up and further PMA module submissions. We completed all 115 implants in our U.S. pivotal study DREAM in the fourth quarter, and the clock is ticking to 12-month data in the first quarter of 2024. We are highly confident in DREAM outcomes based not only on our prior clinical and commercial experience, but also on the data released on the first 34 patients in the DREAM study. These 34 patients demonstrated a 65% AHI responder rate, a 76% ODI responder rate, and safety in line with expectations.
As a reminder, for the trial to be successful, of the 115 patients, at least 63% need to be AHI and ODI responders at the 12-month follow-up. These abstract data will be presented at SLEEP 2023 on June sixth in a late breaker poster session. The modular PMA submission was kicked off, with the first module having been submitted during the first quarter. We anticipate filing three out of the four modules in 2023. The final fourth module, which will include 12-month safety and efficacy data, will be submitted shortly after the follow-up period is complete. Our increasing conviction in DREAM outcomes and the market opportunity for Genio has driven our decision to accelerate preparation to enter the U.S. market. To that end, I'm very pleased to announce that Christoph Eigenmann has joined Nyxoah as Chief Commercial Officer.
Christoph brings a wealth of medical device experience to Nyxoah, having spent over 20 years at Johnson & Johnson leading orthopedic and neuro businesses in the U.S. and other global geographies. His priority will be preparing the U.S. commercialization strategy and driving international sales growth and further market access. The U.S. ACCESS pivotal study, focused on complete concentric collapse patients, is well underway, with implants expected to be completed in 2024. As a reminder, CCC patients represent approximately 30% of AGNS-eligible-to-treat OSA patients who are contraindicated to our commercially available hypoglossal nerve stimulation therapy in the U.S. and do not have suitable treatment options other than major palate surgery. The ACCESS primary endpoints are similar to the DREAM study primary endpoints, as Genio has demonstrated similar results in both CCC and non-CCC patients.
Commercially, we reported European sales of EUR 441,000 during the quarter, which was below expectations. After an in-depth review, we see the quarter was impacted by several transitory factors. First, our highest volume accounts saw a seasonal reduction in OR capacity. Second, several newly activated accounts were slower to implant due to the administrative burden necessary to clear procedure funding. Lastly, product availability was limited during the quarter, and therefore, several new accounts had to postpone procedures. The German team managed to resolve these challenges, resulting in sales thus far in the second quarter, exceeding first quarter revenue. We reported our first implant in Austria during the quarter. We continue to achieve becoming an innovation leader in the Obstructive Sleep Apnea space.
Clinicians have embraced the Genio technology driven by a single incision, leadless system offering bilateral stimulation, powered by an external battery and full-body MRI compatibility. For patients, Genio's ability to upgrade to the latest technology without the need for another surgical intervention is strongly resonating. This is demonstrated with our recent approval of the Genio 2.1, which improves patients' comfort and compliance without the need for a surgical procedure to replace the implantable component. We anticipate the ansa cervicalis feasibility study to begin this year, which will explore the stimulation of the ansa cervicalis nerve in patients who are hypoglossal nerve stimulation non-responders. We are making strong progress towards our key objectives for 2023, which are to focus on patient follow-up in the DREAM study, resulting in reaching the primary endpoints.
We begin preparations to enter the U.S. market with regulatory, manufacturing, and market access readiness and drive further revenue growth in Germany while opening new European markets. With that, I'm pleased to turn the call over to our CFO, Loic Moreau, who will provide a financial update.
Thank you, Olivier. Good day to everyone, and thank you for joining us today. Revenue for the first quarter ended March 31, 2023, was EUR 441,000. The average selling price in the quarter was EUR 20,000, consistent with prior quarters. Total operating loss for the first quarter was EUR 11.4 million versus EUR 7.3 million in the first quarter of 2022, driven by an acceleration of clinical activities, notably the start of the ACCESS study, as well as commercial investments in Europe. Last quarter, we raised EUR 15.9 million through a private investment in our ATM with historical shareholders, including ResMed, Cochlear, and Robert Taub, Nyxoah's Chairman and Founder. As of March 31, 2023, cash and financial assets totaled EUR 96.1 million compared to EUR 94.9 million in December 31, 2022.
During the first quarter, our monthly cash burn was EUR 4.9 million, and based on our current cash position, we have runway until late 2024. With that, I will turn the call back over to Olivier.
Thank you, Loic. I would like to reiterate our key objectives for 2023, which are focusing on patient follow-up in the U.S. DREAM study, resulting in reaching the primary endpoints, beginning preparations to enter the U.S. market, and driving further revenue growth in Germany while entering additional European markets. This concludes the formal part of our presentation. Operator, I will turn the call over to you and begin our Q&A session.
Thank you. Again, ladies and gentlemen, if you'd like to ask a question, press star one one on your telephone. Again, to ask a question, please press star one one. One moment for our first question. One moment. Our first question comes from the line of Jonathan Block of Stifel. Your line is open.
Okay. I think that was me. It broke up a little bit. Hey, guys. Good afternoon. First question, Olivier Taelman, just maybe on your comments for the quarter and then the trends in 2Q. I just wanna make sure it's clear. The sales for the 2Q to date have exceeded the full amount of 1Q. I guess, as we sit here in mid-May, maybe if you could just verify that. Then if that is true, and it sounded like that was the case, are you comfortable with, you know, call it over EUR 1 million in 2Q and then sort of a QoQ ramp from there for the balance of the year?
I know you don't wanna give specific guidance, maybe if you could comment on that EUR 1 million for 2 Q and then the sequential growth for the balance of 2023 off that type of a number?
Well, hello, Jon, and thank you for the question. We do not provide guidance, you know this. What we do provide is that, and what we can confirm is that the momentum in opening new accounts and capturing patients is continuing. I'm also very happy that the second quarter sales already exceeded the first quarter. I think important to understand that Q1 was rather disappointing or below our expectations. We understand why. We did an in-depth analysis, and we are extremely pleased to see that the momentum is continuing. You not only see this in the opening of new centers, but also in the lining up of new patients and of course, the number of surgeons that are newly trained. Answering your question, unfortunately, I cannot provide further guidance on Q2, but I can confirm that we started extremely strong.
Okay. That's helpful. Thank you. I'll pivot, kind of a different road to go down. On Genio 2.1, Olivier, are there any data points that you can point to that show that implanted patients on Genio 2.1 have better outcomes, have better compliance. I guess where I'm trying to go with this, maybe then you can also answer, were any of the first 34 patients where you released the data, right, when you released the data in conjunction with the analyst day, were they beneficiaries of 2.1, or were they not on that version? Thanks, guys.
Yes. No, no, thanks again for the question, Jonathan Block. Commenting on the Genio 2.1, it's a little bit funny because 30 minutes before the call, we got the first patients in ACCESS that were activated using the Genio 2.1. I can confirm that mainly driven by the trimming option, where we can gradually increase or decrease stimulation to reach an optimal outcome, was really beneficiary for those 2 patients. We really saw immediately the added value, and we were able also when activating patients to find optimal stimulation settings. That is really very promising in going forward. Now, when it comes to 2.1 in the first 34 patients that we have in the abstract for DREAM, there I can say that we did not yet implement the 2.1, so we're just using our initial device.
It's also clear that in going forward, in other DREAM patients, where we believe 2.1 can be beneficiary, that we definitely will start implementing this as well.
Okay. Maybe, sorry, just as a follow-up to that last one. 115 patients in DREAM, the 34 that you released data on, were not using 2.1, to your point. Do you know approximately how many of, call it, the remainder or the roughly 81 were beneficiaries of 2.1, you know, as the trial progressed?
At this moment, our strategy is very straightforward. Those patients who are doing extremely well, of course, we will not introduce the 2.1 because there is no need for it. In patients in going forward that has not yet reached 12 months, and where our clinical team is seeing a need, we will phase in the 2.1.
Okay. I think I'm good. I'll follow up offline. Thank you, guys.
Thank you, Jonathan Block.
Thank you. One moment, please. Our next question comes from the line of Adam Maeder of Piper Sandler. Your line is open.
Hi. Good afternoon, guys. Thank you for taking the questions. Maybe to start, I'll actually ask one on the P&L and just how to think about OpEx spend going forward. It looks like R&D spending stepped up in Q1, so would love to get some more color in terms of how those dollars were spent. You also made, I think a comment, Olivier, that you're accelerating preparation for the U.S. Just any color you can give us both on the R&D and SG&A line would be helpful. Thank you.
I will leave the first part of your question to our CFO, so Loic.
Thanks, Adam, for the question. As you saw acceleration in R&D, the biggest driver of this is that we are now running ACCESS study on top of DREAM. If you compare with Q1 last year, we only had DREAM, and that's the driver for the increase in R&D. Sorry.
When it comes to a further acceleration in the US preparation of commercialization, I mentioned it already, we are extremely pleased to be able to recruit a caliber like Christoph Eigenmann to join Nyxoah. With more than 20 years at Johnson & Johnson in neuro and in spine, leading the US organization, I think it's very clear that he has a very strong proven track record, and that he will add a wealth of experience and added value when we are preparing our launch in the US. Not only this, also internationally, we can also benefit from his experience and his proven track record, especially in Germany. That's one part. Next to this, Adam, you know that we are in the interaction with AAO and AMA in obtaining more coding clarity.
Also there was some work done, and we are waiting for further results. Besides this, in going forward, as we always communicated, it is an open label study. The more confident we are getting, the more patients we are seeing reaching 12 months, will also explain our future hiring in the second half of 2023 in preparing further commercialization in the US.
Okay. Got it. Thank you, Olivier Taelman and Loic for the color there. I guess just one kind of quick follow-up there. It sounds like the level of R&D spend, given that you have the ACCESS study that's commenced, given that DREAM is ongoing, this is kind of the new baseline to kind of work off of going forward in our models. Is that fair for R&D expense?
Yes and no, because we expect in the second half of 2023 to see a decrease of the DREAM monitoring costs with more and more patients exiting the study. In term of overall burn, we're not expecting to see an increase for the next quarters in 2023.
I would like to highlight-
Okay.
I would like to further comment on this, that it's clear that driving patient-centered innovation, it's key and crucial for Nyxoah. I think Genio 2.1 already demonstrated the added value in the first ACCESS patients. Next to this, also the ansa cervicalis project, starting off the feasibility study in collaboration with the Vanderbilt team, is also very exciting for us to further explore and to offer solutions on patients that are currently non-responding to hypoglossal nerve stimulation. I just want to summarize with this. We will be continue showing innovative leadership and investing strongly in further innovation that will help benefiting our patients.
That's a helpful color. Thanks, guys. Just for the follow-up, Olivier, you just touched on reimbursement considerations for the U.S. Was hoping just to get a little bit more details there. You know, do you have any sense for when you should expect to get an answer in Q3, I think is when you previously kind of said you expect to learn more. When will we get an update in terms of path forward on reimbursement and any more visibility on that process that you can share at this point in time? Thanks so much for taking the questions.
I-- We are working with the ENT scientific society, AAO, the American Academy of Otolaryngology, to define our CPT code, what would best support Genio. The recommendation has been made to AMA. We are waiting for the response. Unfortunately, this is not completely in our control. I know the timing of the response is not completely in our control. We definitely expect some kind of response definitely before year-end or even sooner. There are two options. I explained this already in the past. One option would be using the existing AGNS code. The second option would be using the existing neuromodulation code that is closest to our technology. Under either scenario, we anticipate reimbursement being at least the same as for the existing AGNS procedure. That's where we are from a reimbursement perspective.
I can, again, also add a little bit more color on the regulatory perspective. There, the first module has been submitted. We expect to submit module 2 and 3 before year-end, and then the final module with clinical data review and IFU labeling will be submitted the moment we have 12 month data in the first quarter of 2024.
That's perfect. I'll leave it there. Thank you.
Thank you. One moment, please. Our next question comes from the line of Mike Polark of Wolfe Research. Your line is open.
Hey, good afternoon, good evening. Thanks for taking the question. I wanna follow up on the revenue in the quarter and just wanna make sure I understand what happened in the first quarter specifically. You know, it's a really low number measured anyway. I mean, last year, you were averaging EUR 800,000 a quarter throughout the year. You know, I heard the influences you flagged, but kinda what else can you say to provide some comfort that this isn't, you know, centers not interested in the product, share loss, that sort of thing, I guess. It strikes me as a low enough number such that I'd hope for a little more than maybe just kind of, you know, timing of OR access and slow to ramp new accounts.
Any other color you can provide there as to kinda what you see on the ground in Germany?
Yeah. No, definitely, Mike. Hello and thank you for the question. Let me first be very straightforward also. The Q1 sales is really below our expectation. There is no need in hiding this. It's below the expectation. When we dig in, and I keep repeating myself, we see that we were really faced with seasonality in mainly our leading accounts. On the other hand, we also are experiencing in opening new accounts that have not yet funding experience with hypoglossal nerve stimulation, that this is taking longer than we expected. Last, also a little bit part of the success in opening new account is also the need for proctors. We were also struggling with this, more specifically in the last three weeks of March, in finding more proctors.
That being said, I like to look really positive to the future. To answer your question, do you see further momentum? Yes. We now have 41 accounts that are fully trained, that are activated, and where the first patients are lined up. That's a continuous growth of opening new accounts. Just for the reference, we know that competition is having over 50 accounts in Germany. We are now getting more and more close with 41 accounts. That's one thing. Second thing we are seeing is also the result, the patient result and the feedback that we get in accounts that are experienced with Nyxoah, they are really very positive. This will also lead in further case report and also further publications on these first experience that will be shared in going forward. That's the second thing.
Last, we are also seeing that we continue building momentum not only with ENT implanting surgeons, but also with referral physicians. We get more and more requests from sleep physicians to better understand what our technology is doing. We also continue to invest in DTC in Germany because we see that a helpline, we see that also the number of hits on our website is really showing an increased interest resulting also in concrete patients that are eligible to be treated. Last, we also invested in a rental sales force that is now actively visiting sleep physicians positioning Genio. That's the color that I can provide on what we are doing in Germany.
That's helpful. I'll leave it at one. I, thank you for the response.
Thank you, Mike.
Thank you. One moment, please. Our next question comes from the line of Suraj Kalia of Oppenheimer. Your line is open.
Hi, Olivier. Can you hear me all right?
Yes, I can. Good evening or good afternoon.
Good afternoon to everyone. Olivier, two questions from my side. What percentage of your 41 German sites overlap with Inspire?
It can be very precise. We have 34 that are overlapping, and we have 7 sites that are unique or exclusive with Nyxoah.
Fair enough. Olivier, do you expect U.S. pricing also to be 20, excuse me. Was it EUR 20,000 and reimbursement approximately around EUR 30,000? Is that sort of the thought process?
The short answer is yes. As I was explaining, we have two different scenarios. In both scenarios, the price point will be around the same then and also in line with what you just mentioned and in line with the current price point for AGNS in the US.
Got it. Olivier, one of the questions we both asked, and I'd love your clarification on this, is if there are requirements in terms of for men to shave every time, you know, you have to attach the external power source. Just trying to determine if that's another burden for the patient or not.
First of all, Is there a requirement? The answer is no. There is no requirement. What we learned in our daily clinical practice is of course to have the best adhesive connection with your skin, that it's best when there is no facial hair. We do recommend that people are shaving, as you can understand, it's different man to man and but there is no official requirement to shave. We do recommend that a very... How do you say this? Chin without facial hair is the best way to have the adhesive connecting to the skin.
Fair enough. Olivier, if I could just ask my last question. Olivier, correct me if I'm wrong, the last patient in DREAM was implanted in, I believe it was January or February. Please correct me if I'm wrong. More specifically, what I'm curious about is, let's say Q1 2024, the last patient 12-month follow-up would be over, right? You'll think you can turn around the data analyses and mining and everything, you know, and deliver the outcomes or at least report the outcomes by Q1. Thank you for taking my questions.
Thank you. I will try to answer very clear. The last patient was implanted in the first week of March, to be very precise. We plan on completing the final PMA module submission soon after the data, the 12-month data is released in the 1st quarter of 2024. That said, we do not predict the exact timing of FDA decision, given it will be subject to variables we cannot influence. We expect FDA approval before year-end 2024. I think also a question was, is 2024 still realistic? There the answer is yes, it is realistic based upon the review timelines around the module, around the modular PMA.
Thank you.
Thank you. One moment, please. Our next question comes from the line of Ross Osborn of Cantor. Your line is open.
Hi, Ross.
One moment please. Looks like you disconnected. Okay. Ross, if you have a question, you can star one one again. I'm showing no further questions at this time. I'd like to turn the call back over to Olivier Taelman for any closing remarks.
Thank you. For the closing remarks, I would like to repeat again that our key objectives for 2023 are focusing on patient follow-up in the U.S. DREAM study, resulting in reaching primary endpoints. Of course, we will continue with the preparations of the U.S. market and driving further revenue growth in Germany and also continue opening new sites in Europe. Thank you all for joining. Thank you for the questions and happy to connect more if there should be more questions. Good evening or good afternoon.
Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.