We're gonna get started here. My name is Adam Bader. I'm one of the med tech analysts here at Piper Sandler. Very pleased to introduce the management team from Nyxoah. With us, we have Olivier Taelman, CEO, and we have John Landry, the new CFO of the company. Gentlemen, thanks so much for joining us.
Thank you for having us.
Thanks for having us.
Maybe a good place to start is just a quick overview. I wanna give you the opportunity, Olivier, to introduce Nyxoah. You're still a relatively new U.S. publicly traded company. Maybe just a one-minute recap on the company, the technology, and where you are from a commercial standpoint.
Yes. So Nyxoah, we are talking about being active in this space of obstructive sleep apnea by offering an innovative neuromodulation solution to treat patients suffering from obstructive sleep apnea. Now, how do we position ourselves? We position ourselves as a company that is really patient-centered, with having a vision in making sleep simple. I think that is everything we do must contain patient simplicity and making sleep simple again. Now, how do we do this? We have an implantable stimulator that is powered by an external power source. By having an implantable stimulator with no implant on the chest, it has quite some advantages for patients. First one is that when you have your implant, you don't need to worry when you have an MRI, for example, because it's full-body MRI approved.
You don't need to worry that the battery could be depleting and that you have to be re-operated. You don't need to worry when there is the latest technology available. You can get those upgrades, like, sent through, using a Bluetooth technology. So that's already one aspect where we are different in. Next aspect that we also look at is, like, how do we stimulate? And I do not wanna become too technical because I only have one minute, but we do this through bilateral stimulation. And why is this so important? It's important because when you respect the anatomy of the human body, it also gives you a lot of opportunity to stimulate and to have great airways that are staying open regardless what sleep position you are in, regardless what type of obstruction you have. Is it now a complete? Is it an apnea? Is it a hypopnea?
We are, again, making sleep simple, and by doing so, this is also the bilateral stimulation aspect that is contributing to this.
Perfect. Well, that's a great overview on the company and the technology and a good segue into kind of, you know, where you guys are from a commercial standpoint. And it's an exciting point at the time for the company, as you're getting closer and closer to U.S. regulatory approval. On the Q3 earnings call last month, I think you said you expect approval in the first quarter of 2025. Is that still the case? It sounds like there was one kind of box that needed to be checked, a Belgian site visit. You know, what's the status of that requirement and just what's left before getting across the goal line?
Yep. It's clear that from the beginning, the U.S. is the largest market for obstructive sleep apnea treatment by hypoglossal nerve stim, and that's also the market where we would like to be in. That is step one. To your point, in March this year, we closed our pivotal study. In September, we made all our data public at the ISSS, the sleep convention in the U.S. in Miami. And I have to say the reaction was overwhelming. Now, simultaneously, we also have the regulatory part that is taking place. We had a mock PMA. We are a category one implant, and we do still expect to have our regulatory approval in the first quarter of next year.
So far, we were able to take all the hurdles very successfully, starting with clinical site visits, having the manufacturing site in the U.S. that was inspected, the manufacturing site in Belgium that was inspected. Currently, the last thing that are being discussed is the label. How would labeling be looking like? There is, to your point, also a last visit on the clinical site in Belgium that was postponed due to, in fact, an issue with an FDA inspector on site that could not, it was not able to make the inspection, but it's now being replanned for the first week of January. I think that's very positive, and that brings us also perfectly in line with Q1 when we expect FDA approval.
That's perfect. Thank you for all the detail there. And, I do wanna circle back to the data that was shown at ISSSS, a few months ago. Maybe just for the audience, Olivier, talk about kind of the key takeaways from that data set and, you know, how is the data being received from the physician community?
Yes. So first of all, when you're active in obstructive sleep apnea, the data on the primary endpoint on efficacy are pretty straightforward. They wanna know what is the reduction of obstructions, apnea or hypopnea, expressed in an AHI index. And you have to reach a primary endpoint, meaning that you have to show minimum 50% reduction of those events, of those obstructions. And on top of this, you also need to make sure that the patient will not have more than 20 obstructions per hour. So you have to reduce it by 50. Let's say someone has 60 events every hour, needs to become minimum 29. But there is the second one. It also needs to become below 20. So this specific example needs to go minimum at 19. So that is one aspect.
So we reached our primary endpoints, and that was really, really, really great that we reached the primary endpoints from every angle you look at it because, you know, you can look at a study from intended to treat, modified, intended to treat. We reached our primary endpoints. That's one aspect. Second aspect is safety. And I would like to highlight the safety aspect. We have a single incision procedure. If you compare with competition, they had three incisions. Now they're going to two incisions. We are the only one with a single incision. And you see this also in the severe adverse events. So we had 8.7% severe adverse events. If you put this a little bit in context, competition, if I have to use the comp the word competition or let's say the unilateral stimulation company, they are showing 21.7%.
Overall, in neuromodulation, you see on average that it's somewhere around 15%. We do have also a very favorable safety profile. I think also important to know for patients. Then last, where do we differentiate? When we are sleeping, and then we wanna do this again, talking about the patient at the center and making sleep simple, when you sleep, you don't stay in the same position the entire night. You turn. Sometimes you sleep on your back, sometimes on your side, sometimes on your belly. We are the only company with actual data that regardless what sleep position a patient is in, you will always maintain the same airway openings, also in a supine sleep position. That is something that resonates very well with physicians but also with patients when they are making a selection.
Next, you also wanna make sure that when you treat someone, that you understand that you wanna reduce the cardiovascular risk. People suffering from OSA, yes, they snore, but more important is the mortality goes up, specifically cardiovascular risk. Risk for stroke doubles, cardiovascular risk goes up by five. Now, if you can make sure that you bring a patient back below 15 events, so 15 or lower, then you bring the patient back to the same level of cardiovascular risk than someone who is not suffering from OSA. We are extremely proud that we can say that 82.8% of all patients implanted in the study, we were able to reduce their AHI below 15. Even below 10, we had quite a significant number.
So if you combine sleep position, combine it with the reduction in cardiovascular risk, bring it back to a normal person without OSA, I do think these are key differentiation points compared to what other companies are doing.
That's great color. And, you know, as a follow-up there, you know, just a question I sometimes get asked by investors is the journal publication. When will we see the data published in a medical journal? Do you have a timeline?
Yes. So in fact, the timeline is that we expect to be accepted in a leading journal. So that's what we're aiming for. And we do expect that still this year that that should be the case.
Publication acceptance by the end of the year or publication by the end?
Acceptance by the end of the year and then followed by the publication.
Okay. Okay. Perfect. You just touched on supine versus non-supine sleep and how Genio has efficacy, is efficacious in both scenarios. Maybe just spend a minute on the label. How do you expect your label to look, from FDA and maybe compare and contrast that to what's currently available in the marketplace?
Yep. And we had this discussion earlier with some other colleagues and investors that came across and are asking the same thing. So first of all, I do think it's important that when you have data really differentiating your technology from other technologies, that this is reflected in a label. So we are negotiating with FDA also in having supine data reflected in the label. That's one thing. Second thing is FDA. They know only one company at this moment that is doing HGNS, and they also only know their label. In their label, there is a contraindication for complete concentric collapse patients. And Adam, as you are aware, we have already clinical data coming from Australia on complete concentric collapse. These data resulted into a label expansion in Europe where we are now actively implanting patients suffering from CCC.
In the U.S., we have a study ongoing on CCC patients only, exclusive, called the ACCESS study. Also there, we would like to, over time, do a PMA supplement so that we can also in the U.S. expand our, our label to CCC. Now, coming back, in the current label discussion, we do not wanna have a contraindication for CCC based on what I just explained. These are the two topics that we are discussing. One, adding supine based on DREAM data, and next, getting rid of contraindication for the Genio technology in the U.S. based on existing clinical evidence.
I just wanna make sure, I'm clear on this point with triple C patients. So.
Yes.
When you first receive approval, you expect to have the supine data in the label. You also do not expect to have a contraindication for triple C. Did I hear that correctly?
That is correct.
And then over time, with the ACCESS data, that's your triple C study, you will then maybe get a specific claim for triple C.
That is correct. And then we would align the label in the U.S. with the label that we are currently having already in Europe.
Okay. And I guess, probably an impossible question to answer, but just the level of confidence that you will be successful in having supine on label as well as no contraindication for triple C?
So I do think, and we looked a little bit at other companies when they had some specific data. I do think FDA is pretty open and to listen to this, and it's more a matter of educating our reviewers and understanding, helping them understand what the data precisely are. And then I do think that we have a good confidence level that this will be the case.
Okay. Interesting. The next topic that I'd like to tackle is, you know, some of the kind of the work that's being done ahead of launch and, you know, specifically as it relates to reimbursement and sales force. Let's start with reimbursement. You know, a lot of questions about which CPT code you're going to use. Your technology is different. It goes in a different part of the body, etc. I think we actually asked you on the Q3 earnings call about which code you plan to use. You said something along the lines of an established CPT code that's recognized by payers for the indication of OSA. I personally, you know, assume this means CPT code 64568 or CPT code 64582, but wanted to see if that's a reasonable assumption, and sorry for.
Yep.
The specific question.
As you know, I'm a Belgian citizen, yes, so not a U.S. one, and sometimes I need to be a little bit careful when I express myself in the U.S., although I just moved with the family. I'm starting to get to know a little bit and understanding a little bit better how things are done and set and not set. First of all, congratulations. I like the analysis you made; it's exactly what we are doing internally as well. Where I do wanna be a little bit prudent is that we will know with 100% certainty what code we will be having accepted by payers the moment we get payment. I'm not making any statements like before we have FDA approval, before we have submitted our first pre-authorization files on exactly what kind of code and how certain we are on this.
But I think to your point, there are two things. One, if you wanna have a CPT code, it should reflect your technology. And with the 68 that you used as an example, it does. And then the second thing is when you have a code, payers should also know this code and having been paying for a kind of indication, OSA treated with AGNS. And that is also the case for this code. So what we are seeing, hearing back in early payer programs from FDA, combined with also the endorsement of the AAO and talking with reimbursement experts in the U.S., that will be the strategy that we will be pursuing. We will be working with pre-authorizations, and then we will see how payers will react on this. But we do think that this is the correct approach.
Just for clarity, because again, I get this question a lot, did I hear your comments correctly? It's either going to be the 68 code or the 82 code. You're just not willing to say which one it is, or is it going to be the 68 code?
I think at this moment, I'm not really willing to say it's this one, but if you listen carefully what I was just explaining.
Sure.
You know, with that, which direction we are going.
Okay. Perfect. Fair enough, and I appreciate you sharing some incremental detail there. Now, coding, as we know, is just one part of the equation. Maybe just talk about the level of confidence that payers will, you know, quickly provide coverage for Genio.
Mm-hmm. And then it's a little bit more on the same that I was just explaining. So when you have a coding, a CPT coding, and then in order to obtain coverage, when a payer knows your technology, understands what you are doing from a mechanism of action, from a patient phenotyping perspective, when, let's also not forget, there is a precedent because all the heavy lifting has been done by Inspire in really educating payers also what AGNS can do. And we are very thankful that they did. So we also sometimes realize that it's nice to be second. And in this one, I do think there will be a kind of positive spinoff for us that we will have coverage the moment we have FDA approval and that payers will recognize our technology as well.
Okay. That's great color. Let's talk about sales force and commercial strategy, and I don't know if this is better.
Mm-hmm.
Question for you, Olivier, or John, if we wanna get him involved. Just how big of a sales force will you launch with? Maybe talk about the U.S. account strategy. How broad will you go? I believe you have a pretty targeted approach.
Mm-hmm.
going deep versus wide, but maybe just expand on Salesforce and account targets.
I will take the strategy part, John, and then you can come in with the numbers and how much it will be costing and how many people we can afford to add to launch with our strategy will look like. I like to keep things simple, really simple. I think it already became clear. Make sleep simple. You know, also when you launch a technology, I do think it's important that your strategy is also having a kind of simplicity. On one hand, we would like to go where the patients are, and we know where they are today because there is, again, a company that has done a tremendous job in making sure that you have patients finding their way to ENT surgeons.
So we will be focusing as a fast follower on those high-volume implanting counts and making sure that we position our technology. And hopefully also this will result in taking market share. We have a precedent what we are doing in Europe, in Germany, although it's a different market, but there are some similarities. The market is much smaller than the U.S. But what we learned in Germany is when you use the fast follower approach, first of all, we were embraced by the majority of the implanting accounts. Second, if you look at the top 10 in Germany, they're all implanting Genio next to what they are doing with the Inspire technology. So that's already one key learning. Second, how was success? In fact, how do we look at success? We have 25% market share after 24 months being active in this country in Germany.
That gives us quite some confidence that physicians and patients are waiting for an alternative next to what is existing, and Genio is offering this alternative. That's one aspect. Fast follower account, you go where the patients are. The second thing is where are the majority of patients today? They are still in sleep labs, so with sleep physicians where they get their prescription for a CPAP mask. We also know that with CPAP, that you have quite a lot of patients that simply quit using their mask in a time period of one to two years. When I say quite significant, we're talking up to 50%.
Identifying those patients, converting those patients, and linking them with surgeons that can provide an implant for AGNS and making sure that the correct or the right therapy will find the correct patient, resulting in great results, that is the second aspect of our strategy. We go where patients are, tier one. We further expand the market with sleep labs that are treating patients with CPAP and know that they have quitting CPAP patients. In order to do so, we will have a scalable playbook or a playbook for scalability. We will not come with 300 people in the beginning, but we will continue to grow. That's maybe a good bridge, John, to you on how many people and how we see this.
Absolutely. Thank you, Olivier. So I think in regards to that, we wanna be efficient with the capital that we deploy as we ramp up the commercial organization. So just maybe put some numbers beside this. So we're looking at launch to have about 50 sales and clinical and marketing professionals in the U.S. commercial organization. Breaking that down a little further, we're gonna have about 25 territory managers or account reps going into these accounts to make sure that, to your point, the reimbursement is there. We're gonna have 10 people dedicated to prior authorization process to make sure that those procedures are paid for. And we're also to ensure the optimal clinical outcome for these patients, especially in the early stages. We're gonna have 10 clinical engineers out in the marketplace assisting with those procedures. So we'll have a leadership group wrapped around that as well.
The goal is to make sure that the optimal clinical outcomes, procedures are covered. We have a target sales organization that's economically efficient. As we deploy capital, we can scale it. This initial batch of representatives will be targeting, you know, three to five accounts, four to five accounts, I should say. With the first batch of 25 reps that are out there, we'll get to about a third of that top 300 to 350 accounts that are in the marketplace, which provides, to Olivier's point, a scalable model that we can deploy as we continue to see success in the marketplace. That's really good color, John. Appreciate that. And thank you to you, Olivier, as well. Maybe sticking with you, John, let's talk P&L a little bit. I guess gross margins.
Mm-hmm.
How do we think about gross margin progression in the model over the next couple of years? And.
Mm-hmm.
Would love it if you could also just comment on pricing strategy in the U.S. marketplace, how you plan to price Genio.
Okay. Sure. Absolutely, so touching on gross margin first, right now we have a low 60% gross margin profile right now. We're at, you know, limited scale, limited volumes, and we're still working through the production lines, setting up contract manufacturers, etc. So, right now 60%. As we continue to grow and as we get to scale, we see ourselves getting to the low 80% range from a margin perspective as we work through first pass yields, get to scale. Scale, when we think about scale for us, is roughly 10,000 implants will allow us to get to that 80% level, by working the yields, working the cost curves, etc. So from a pricing perspective, what we wanna focus on there, Adam, is we wanna be aligned on price but differentiate on technology.
A lot of the features that Olivier pointed out around the benefits of single incision, from a patient perspective, from a physician perspective, we wanna differentiate on that perspective but be aligned on price, which is obviously one key element of the gross margin equation.
Great color. One more for you, John, and maybe just double-clicking on the sales force build-out and how you're thinking about OpEx spend.
Mm-hmm.
For 2025, any qualitative or quantitative color that you wanna give? And maybe if you could just wrap in cash runway as well.
Yeah. Absolutely. So from a cash OpEx perspective, you know, I would expect to see cash OpEx uptick from where it was in Q3. So as we build out the commercial organization here now in Q4 as well as into the first half of 2025, I would expect cash OpEx to increase in Q4, Q1, Q2. From a cash burn perspective, I also expect to see that increase Q4, Q1, and Q2. Then in the middle of the year, as we start to see commercial traction and start driving revenue to the top line, which then will fall to the bottom line, we'd expect to see cash burn neutralize and then improve from there. So how does that play into the cash runway? So with in the early fourth quarter, we raised about $27 million via our ATM that provided pro forma cash of about EUR 96 million.
That cash that we have on the balance sheet will take us into mid-2026.
Okay. Perfect. I wanted to kinda finish the conversation. I think we have three minutes left with a couple questions around innovation and pipeline because I know you're working on some interesting things there, Olivier. So, you know, I guess the first question we'll ask about your triple C study. We talked a little bit about that earlier called Access with three Cs. Any update in terms of where we are from an enrollment standpoint, and how do we think about having that triple C claim potentially from FDA?
Yes. So again, I'm in supporting our vision and making sleep simple. So in the ACCESS study, we have exactly the same primary endpoints as we had in the DREAM study because we do think that when a physician is seeing a patient, that we would like to eliminate burdensome examinations like the DICE to see whether a patient has CCC or not. We like to eliminate this. But then you also need to give something back to the physician and to the patient, knowing that whether they have CCC or not, they can expect the same outcome once implanted. So that's why we do not differentiate in the ACCESS trial from primary endpoints compared to the DREAM study where we treated non-CCC patients. That's one aspect. Second thing is also there it will be 12 months follow-up.
The key difference will be that at that moment it will be a PMA supplement that normally can be done in three to six months and resulting in a label expansion. We expect all this to be done mid-2026. So 12-month follow-up, three to six months we would do, the label regulatory work resulting in label expansion. On enrollment, we were saying we would like to finish enrollment this year. We do see that we are a little bit slower on this. So that's also what I was saying in the earnings call, that it will run into the first half of 2025. So if you do the math and I see your accounting, you have the first half of 2026, 12 months, and then you have your three to six months. So somewhere second half 2026, we should have the label expansion.
Okay.
Assuming, and that's maybe a little bit new, assuming that we do not close our study earlier based on favorable results, and because we are talking about implanting over 100 patients, but on the other hand, it also happens, and you see this with other companies at this moment, that there can be a kind of prediction that you don't need all your implants until, and still reaching your primary endpoint, so this is something that at this moment, of course, we don't know because we don't know the data, but we will be knowing this in going forward.
Okay. Perfect. Well, that's, that's great color. And I do appreciate you spoon-feeding me the timelines because it's, it's been a busy week. Maybe to sneak in one more question, Ansa cervicalis, that's a pipeline initiative that you have, you know, a little bit of a different modality in terms of stim, you know, the neural target that you're stimulating. Where does that program stand today? And, you know, are you bullish on, on that program going forward? You know, do you think it plays a role? Just any update you wanna give us on the, the Ansa cervicalis program.
Yeah. So Ansa cervicalis, to make it very simple, we see that it can make patients that today are not successfully treated with AGNS alone also becoming responders. And that's why we would stimulate the second nerve, the Ansa cervicalis, in combination with the hypoglossal nerve. That's one aspect. We are doing this together with Vanderbilt University, with Dr. Kent. The collaboration is outstanding. And we are now just about to start our feasibility study. And then based on the feasibility, then of course we will go further into really a commercial study setup that should result in commercialization. That's where we stand.
Perfect. Well, we are out of time. So we will wrap it there, but wanna say thanks again, Olivier. Thanks again, John, for joining us. Really appreciate the update.
Thank you for having us.
Thank you for having us.