Hello, everyone. Welcome to Onward's 2022 Half Year Results and Business Update. I'm Skye Sanders, senior manager of communications at Onward. A reminder that today's event will contain forward-looking statements which often differ from actual results. Any forward-looking statements communicated today reflect the company's current views and are subject to risks and uncertainties. Today's call will be hosted by Dave Marver, CEO, and Lara Smith Weber, CFO. Dave and Lara will give a brief presentation after which they will be pleased to take your questions. I will now hand the call over to Dave Marver, CEO of Onward Medical.
Well, thank you, Skye, it's a pleasure to be with all of you today. Thank you for taking the time to join us this afternoon, here in Europe or in the morning in the U.S. For those of you who are new to this story, I just wanted to tell you a little bit about the company, starting with our vision, that is empowered by movement. People with spinal cord injury will enjoy life in every way that matters to them. Just some quick facts about the company, Onward at a glance. We were founded in 2015. We have over 90 FTEs or full-time equivalents. Our headquarters is in Eindhoven in the Netherlands, we have significant operations. Our science and engineering center is in Lausanne, Switzerland, we have a growing presence in the U.S., headquartered in Boston, Massachusetts.
We had a successful IPO last October, nearly a year ago, on Euronext Brussels and Amsterdam. We now have over 300 issued or pending patents worldwide, three FDA Breakthrough Device Designation awards, two proprietary neuromodulation technology platforms. One of our pivotal trials is already complete, it's called UPLIFT, with positive top-line results and more trials are on the way. I'll tell you more about UPLIFT during the course of this call. We have additional, I think, rather important clinical data forthcoming here in the 4th quarter for both of our platforms in fact, for ARC-EX and for ARC-IM, and we're preparing for commercialization for the ARC-EX platform in the second half of 2023. Let's talk about what we achieved in the first half of this year. We'll start with what is our real foundation, and that's science and intellectual property.
Starting in January, we had nine new patents awarded. It was a good start to the year. In February, a seminal paper was published in the world's preeminent scientific journal, Nature Medicine, and this paper detailed how for the first time, people with complete spinal cord injury, AIS A, were able to stand again, take some steps, and engage in other activities with the benefit of ARC Therapy. In March, we executed an option to license IP for brain-spine interface and Parkinson's disease intellectual property from EPFL, Europe's leading technical university and certainly the world's preeminent neuroscience research institution. In April, there was a New England Journal of Medicine article detailing the use of ARC Therapy to help restore normal blood pressure in a person with a very severe form of Parkinson's disease. In June, there was yet another Nature publication, this time in Nature Neuroscience.
This was preclinical research in non-human primates showing the promise of ARC Therapy to help people or actually, yeah, in this case, non-human primates restore a arm and hand function by employing targeted precise stimulation of the spinal cord. Between February and June, we were issued or granted another 15 patents worldwide. We now have as I said, over 330 issued or pending patents. Quite a busy first six months from a science and intellectual property perspective. We also made significant progress with our clinical development, both with ARC-EX. I'll hold this up.
This is our transcutaneous or external platform, and with ARC-IM, which is our implantable platform here that consists of an IPG and our own family of leads that are optimized for placement in the different area of the spinal cord responsible for triggering or restoring a given movement or function. This started in March, where we had first patient enrollment in the LIFT Home study. This study is designed to evaluate the safety of using our ARC-EX therapy in the home setting. In May, we had first in-human use of our ARC-IM IPG, our implantable neurostimulator. Huge news for the company, the culmination of several years of research. This is a purpose-built device with tremendous flexibility that really is designed for spinal cord injury and other movement disabilities.
This first enrollment or first use of the ARC-IM IPG also heralded the first enrollment in the HEMON study, which is a feasibility study designed to evaluate the effectiveness of using ARC-IM therapy to restore very low blood pressure in people with spinal cord injury. In June, we completed enrollment in the LIFT Home study. In September, we announced positive top-line data from UPLIFT. Now we'll go into some more detail about UPLIFT in the next few slides. First, the trial itself. This is the first large-scale trial of noninvasive spinal cord stimulation in the SCI population, the spinal cord injured population. Four-month study, significant assessments taken at baseline 2 months and 4 months. The study's goal was to demonstrate statistically significant improvement in the strength and function of the hands and arms following spinal cord injury.
You can see at bottom, we enjoyed the collaboration of many of the leading spinal cord injury research centers and clinical centers worldwide. Quite fortunate to have these collaborators on board. Some details about the study here. We enrolled 65 subjects with chronic tetraplegia, meaning they had some movement disabilities of their legs and arms. The injury severities were ASIA B, C, and D, so those with complete loss of motor function and sensory function were excluded. We did the trial at 14 of the leading SCI centers in the U.S., Canada, the U.K., and Europe, as I mentioned before. The average time since injury for the participants was nearly six years, five point nine years, and the average age of the participants was 46.5 Years. It's a very rigorous and demanding trial.
The average number of sessions was 50 over four months. This is despite COVID, these folks who had spinal cord injury found their way into the SCI clinics to conduct an average of 50 sessions over four months. We got this trial completed ahead of schedule in less than one year, which speaks to the enthusiasm that the injured community and the clinicians have for this important therapy. The trial utilized very well and commonly used assessments such as ISNCSCI, GRASSP, CUE-T, pinch and grasp force. These have been correlated to improvements in activities of daily life. We also the study was adjudicated by a DSMB. This is a non-significant risk device. It's not typical to have a DSMB, but we wanted that rigor. We wanted to conduct a study that was super high quality.
More detailed results will be available as we review the data with FDA. Here's what we can tell you, however. The key takeaways. As I said before, the first ever large-scale clinical trial of non-invasive spinal cord stimulation technology. No serious or procedure-related adverse events were observed. We achieved our primary endpoint, which was demonstrating statistically significant and clinically meaningful improvement in upper extremity strength and function. This is important because improvement in hand and arm function is the highest priority among people with tetraplegia, and we plan to submit for marketing approval in the U.S. and Europe sometime in the next six months with a goal to launch ARC-EX Therapy in both of these continents in the second half of 2023. Here's some of the response from the positive top-line data from advocacy groups, the clinical researchers themselves, and the investment community.
Starting with Marco Baptista, who's Chief Scientific Officer of the Christopher & Dana Reeve Foundation. Marco said, "The UPLIFT study represents a turning point in the field of spinal cord injury and paralysis science." Handelsblatt, the leading German business paper, interviewed the research analyst at Bryan Garnier, they said, "Onward Medical's product platform is transformative, meaning it could trigger a fundamental change in the way people are treated." Lastly, Chet Moritz, who's Professor of Electrical and Computer Engineering and Rehabilitation Medicine at the University of Washington, also Director of the Center for Neurotechnology, said, "Restoring hand and arm function after spinal cord injury is life-changing, freeing people with paralysis to feed and care for themselves and be more independent in everyday activities." This is a high impact, important trial, and these top-line results have been received with great enthusiasm.
We also continue to make improvements on the corporate front, some finance matters and some governance or leadership matters. In March, we were added to the BEL Small Index of the Euronext Brussels exchange. Also in March, we guided that we have cash through the end of 2024. That's quite a strong cash position, important in these markets. We reaffirmed that guidance today. As well, in April, Bryan Garnier initiated coverage of Onward with a buy rating, also reiterated today with their note about these first half results. In May and June, we announced new leadership of the company. We recruited a new VP of operations and a new CFO, Lara Smith Weber, who you'll be meeting momentarily. We also appointed a new board director, Kristina Dziekan.
She's currently head of market access, government affairs, and tendering with Alcon in Europe, and she's formerly Global Head of Reimbursement for Medtronic Neuromodulation. She brings very important strengths and expertise to the company. Now I'd like to hand things over to Laura Smith Webber, who will be reviewing the financials.
Thank you, Dave, and also a warm welcome to all of you from my side. Let me take you through the financials for the first half of 2022 versus 2021. As a reminder, our financials are prepared in accordance with IFRS and our reporting currency is euro. You can find the financial statements as well as our half year report on our IR webpage. Revenues and other incomes in the first half of 2022 were EUR 1 million. They are up slightly from the prior year due to a grant from the European Innovation Council and SMEs Executive Agency, focusing on the brain-spine interface to reverse upper and lower limb paralysis. Our operating expenses were EUR 16.1 million for the first half of 2022, and they are up due to four main drivers.
The first one is our R&D expenses, totaling EUR 6.2 million for the first half of 2022, and that's really driven by the continuous investment in our ARC-EX and ARC-IM platforms. Our clinical and regulatory expenses totaled EUR 3.0 million in the first half of 2022, and that increased following our first pivotal study, as Dave talked about, the UPLIFT study, and those very promising results, as well as our LIFT Home study, which is a partner study to the UPLIFT study designed to demonstrate safety of the ARC-EX device in the home setting. Our G&A costs were EUR 4.8 million for the first half of 2022.
They were up EUR 1.6 million, that was largely following the results of now being a listed company, since we had a successful IPO last year on the Eur1xt. Our total result for the period, our net loss for the period was EUR 16 million, it is fully in line with our expectations as we continue to grow and as we move towards regulatory approval and also towards launching our first commercial product. Let's look towards our cash position. As Dave said, we reaffirmed our cash reach until the end of 2024 in March this year, we are also reconfirming that number today. We had almost EUR 77 million cash on hand as of June 30th, 2022, which was a cash burn of EUR 12.6 million for the first half of 2022. That again is fully in line with our expectations. Thank you. Back to you, Dave.
Thank you, Lara. We're not done. We're gonna continue executing and making strong progress in the second half, and we've already started. Because we're in the second half, we can talk a bit about September. In September already, as we've reviewed, we released positive top-line data from the company's first ever pivotal trial called UPLIFT. We also added an impressive new board member, Vivian Riefberg. Vivian retired recently from McKinsey & Company, where she was a senior partner. She was practice leader for the public sector practice at McKinsey for the Americas, and she also co-led the healthcare practice there. We're very pleased to be able to announce her appointment.
Some things for all of you to look forward to, we expect to release top-line data from the LIFT Home study, which is an observational study designed to test again the safety of using ARC-EX Therapy in the home setting. We also expect to release top-line data from HEMON and STIMO-HEMO. This will provide clinical validation for our first planned indication for our implantable ARC Therapy that is normalizing very low blood pressure. By the end of this year, our expectation is we will have clinically validated our ARC-EX platform via the positive top-line data from UPLIFT and our ARC-IM platform via top-line data from HEMON and STIMO-HEMO. Beyond that, we're working very hard to prepare the regulatory submission.
It's a De Novo submission for ARC-EX. We can get the clock ticking and we expect commercial release of ARC-EX again the second half of next year, hopefully within a year or so from now. Thank you for your attention, and Lara and I would be very pleased to take your questions at this point. Let's see, Alex, has anything come in? I'm gonna end the slideshow so I can see better. Stop sharing. Any questions?
We have two questions. I'm gonna start with Jay Berggren. You're now allowed to talk.
Yes. Hi, Dave and Lara. Thanks for taking my questions. I was wondering about the combined top-line data we should expect from STIMO-HEMO and HEMON. If we should expect top-line data now in H2, when should we expect detailed data? Will you present the detail results from these trials once you have them available, or will you have a discussion with the FDA before you present them similar to what you will do for the UPLIFT results?
So-
First.
Yeah, sure, John. Thanks for joining. Nice to hear your voice. We wanna release top-line data from STIMO-HEMO and HEMON as soon as we there's a sufficient number of participants for us to proclaim with confidence that the therapy is proving to be viable. These are feasibility trials and in our belief, this is truly breakthrough research, it likely merits a Nature paper or something of that caliber. It's likely that the more detailed results and findings will be accompanied by a major publication of that sort.
Okay, thank you. Could you please remind us if there are any differences between these two trials, except for the fact that you're using your own IPG in the HEMON trial?
Indeed. STIMO-HEMO is a trial that's sponsored by our research partners at CHUV EPFL. They are actually using repurposed and modified pain stimulators for this research to validate the therapy as a proof of concept, they are actually placing the lead in two different locations, thoracic and lumbar, to demonstrate our hypothesis that the thoracic location is indeed optimal. HEMON is a feasibility study, it's one step beyond that proof of concept study where we're implanting one can, that's our IPG, our neurostimulator, we're placing the lead in the thoracic region. Those are the two differences.
Got it. Thank you.
Mm-hmm. All right.
All right. David, you're up next. I'm gonna allow you to talk right now.
Okay. Thank you very much. Afternoon. A bit similar to the previous questions. Regarding STIMO-HEMO and HEMON for blood pressure management, can you talk a bit about your expectations for the secondary efficacy endpoints you're assessing, such as the head tilt test and trunk stability, and what type of data you would be comfortable with going forward?
Yeah. It. First of all, David, thanks for joining. It remains to be seen what exactly we'll be sharing. Some of the elements of the test include a tilt table test, which is a sort of a standard assessment of for orthostatic hypotension or low blood pressure tied to changes in posture or body position. That's 1 thing that's potentially going to be part of the top-line data. We might be talking about a more functional measures such as the time required to get out of bed in the morning and transition from bed to chair. There might be other quality-of-life measures or patient-recorded outcomes that are included. Fundamentally, the most important thing would be the tilt table test.
Potentially we could be talking about the magnitude of change in blood pressure, milligrams of mercury. At this point, there are a number of things that we might include with the top-line data. I don't wanna commit to anything specifically.
Okay. Secondly, I was wondering if you can give an update on patient enrollment in HEMON and on the number of patients that are implanted now with the Onward lead rather than the Medtronic lead?
Mm-hmm.
If you ultimately also expect to have data from these 16 enrolled patients using the full RKM setup.
Yeah. We haven't guided on the number of patients thus far. I would expect that we will not release top-line data until we have double-digit participants that in our view would constitute validation. That's 1 of the things that in our view may trigger release of the top-line data. That's something I would expect probably by year-end. As far as the lead is concerned, we are implanting our IPG, but we're not yet implanting our lead. There's still some development work ongoing with our partner there, which is a U.S.-based component supplier that supplies leads to many of the active implantable companies worldwide. Very reputable supplier, and it's a very robust platform. We're expecting it's on the way, and so that when we do engage with FDA and we're talking about the platform that will be used in the pivotal, certainly that will be inclusive of both our IPG and our lead.
Okay. The data that will be released from HEMON will be a, let's say, a mixture of the Medtronic lead and your own Onward lead then.
Yeah. Remains to be seen. Likely, the top-line data will be with our IPG only, then we'll fold in the lead as soon as it's available, then all of the implants thereafter will be with our complete system.
Okay. Nope. That's clear. Thanks, Dave.
Mm-hmm.
All right. Edward, you're next.
Edward.
Hi, Dave. How are you?
Very good.
Just a few questions from my end. In terms of the UPLIFT data, obviously great news there. I was wondering when we can expect sort of greater granularity in regards to sort of secondary endpoints, et cetera. Then moving on from there, when can you talk about sort of the planned ramp-ups of sales, ramp-up you have in regards to that moving forwards into when you come to market?
Sure, of course. We have the data and there's been, I think a rich harvesting of data that will allow us to look at secondary endpoints and subgroup analysis and all sorts of things. We expect a primary manuscript, but also a number of other publications coming out of UPLIFT because it is the largest ever trial of this sort in-
Yeah
spinal cord injury. The researchers are quite keen. We feel very confident releasing the top-line data before we've reviewed the data with FDA because of the strength relative to the primary endpoint. We don't wanna release any other data points until we've had a chance to sit with FDA, and we agree on just maybe some of the finer points that could affect some of those reported outcomes, you know, even by a small measure. We'd rather release those once they're certain. We released the top-line data because that's obviously material. I would say we should expect more granularity and additional visibility to study outcomes over the course of the next six months as we have an opportunity to meet with FDA multiple times about UPLIFT and other ARC-EX related matters.
As far as the launch ramp or the commercialization plans, we're intending to launch in the U.S. and Europe as early as, you know, the middle of next year. I would conservatively say toward the end of next year, about a year from now. The target markets in Europe at this point are Germany, France, the U.K., and the Netherlands. We're open to pursuing other markets if we can do so efficiently with distribution partners, but we wanna be really focused in terms of our own expenditure on field resources. This is not going to be a large investment in field assets because of the concentration of customers here. In terms of ramp, it really depends on when we get home use labeling.
Yeah.
When we're at first confined to clinic labeling, there are a finite number of clinics who will use this technology, 200 in the U.S. and Europe, each of which may buy multiple systems. It's only when we have the home use authorization to market that every person who has some sort of upper extremity disability becomes a candidate. That's when the market really increases for the ARC-EX platform.
Perfect. Actually, that rolls into my next question quite nicely. In terms of the LIFT Home study, I know that, given positive results, there's a potential to bundle this together and accelerate this approval. The ramp up, the sales ramp up, that does... Does that change in regards to if there's a positive result with the FDA? My last question is, obviously, with the new sort of update in terms of the HEMON top-line data, you're really gonna get clinical validation of both your ARC-EX and ARC-IM potentially by the year-end. How much synergies do you expect to have between the sort of blood pressure indication and the mobility in terms of obviously using the same IPG, similar leads, et cetera?
Yeah. If indeed we're able to bundle the LIFT Home observational data, and LIFT Home was intended to study the safety of using ARC-EX Therapy at home, whereas UPLIFT was designed to study the efficacy of the therapy. The argument will be, we've shown it's effective, we've met the primary endpoint. We've also shown in five centers in 17 participants that it can be safely used at home. Therefore, you know, we'd like to have labeling in both settings. If we're able to make that argument successfully, indeed, then the ramp up will be far more steep. That would be a good scenario for the company. We're not counting on that, so I wouldn't build that into the model. That's an upside scenario for us. We're counting on having to do a sort of a modest-sized pivotal trial to get the home use approval. In terms of synergies, I think you asked about synergies for ARC-IM across those indications.
Exactly, yes.
It's the same IPG for all indications. It's a very flexible design. We get a lot of leverage out of the R&D, R&D investment that's already been made, and the flexibility in the system is really in the lead portfolio. We have a family of leads. Each of them is optimized and designed for placement in a different area of the spinal cord. The idea is that you can use different leads, but the same can to effect outcomes depending on what you r interests are, what you want to restore, what function. Our IPG has two different ports, so you could theoretically use two leads with one IPG.
This is a lot of the work that we're gonna be doing between now and when we start our pivotal trial for the blood pressure indication and indications to follow, trying to build in as much flexibility as possible. The bottom line is we have a platform technology. It's not a single indication, and we can use that platform to pursue multiple indications for SCI, but also Parkinson's and other movement disabilities. You saw the science review. Already, there was a paper in The New England Journal of Medicine in the first half of the year showing that the same therapy, same lead, same IPG, can also potentially increase or normalize blood pressure in people with Parkinson's disease that have very low blood pressure. The same can be said for the promise of using these therapies to help people with Parkinson's address freezing of gait and other mobility disabilities.
Perfect. That's very clear. Thanks, Dave. A very exciting potential, and have a good rest of the day.
All right. Thank you, Ed.
We have two questions, Dave, on the chat, on the Q&A chat, one from Andrew, one from David. Andrew about commercial launch plans. Some of it you may have answered, but specifically around KOL sales cycle and expected adoption patterns.
Sure. Andrew, thank you for your question. I think we're well poised. You saw the list of research centers with whom we've been engaging for ARC-EX, for UPLIFT. We've also started outreach to those and other leading centers in the U.S. and Europe to talk about potential participation in our pivotal trial for the implantable device. We are attending all of the major conferences where we typically are invited to deliver some sort of keynote address. Our visibility among KOLs and researchers is already quite high. I menti1d before the number of important spinal cord injury treatment centers is numbers around 200 in the U.S. and Europe.
We already, by virtue of our research relationships, have relationships with the sort of influential or KOL centers, and we can step right into those when the device has FDA approval and CE mark. We're expecting a quick ramp, but I wanna temper expectations. If we only have clinic approval, there's a finite number of clinics to whom we can sell, and they may purchase between two and 12 units per center. Really the opportunity presents when we have home use authorization to market there. Did I answer your question there, Andrew? Please feel free to follow up if I didn't.
Okay.
All right. The next one.
David, about the science, for instance, how EX affects upper limbs.
Oh, sure. Well, thank you for that question. The way our ARC Therapy works generally is when somebody has a spinal cord injury, even an AIS A, usually there's some spared connection between the brain and the spinal cord. That connection is able to navigate its way through the lesion. The signal coming from the brain, the amplitude, the strength, is not enough to trigger movement or the autonomic function. By stimulating the other side of the injury, where the spinal cord is intact but dormant, we stimulate that intact, dormant part of the spinal cord, and that stimulation, that amplification, coupled with the signal from the brain, that volitional intent to move, results in movement.
With ARC-EX, what the device does is it allows the person to move and engage in rehabilitation, they can regain strength, coordination, and so forth, and that's the effect that the device has. We have other indications, though, around autonomic functions like blood pressure, where our research partners have identified the precise area of the spinal cord that's responsible for that autonomic function. For example, blood pressure, they've identified this hemodynamic hotspot in the low thoracic region where, when stimulated, it immediately, within one or two min, normalizes very low blood pressure. The mechanism is different depending on what we're trying to restore or improve. There's another mechanism under study now to restore the ability to void, to go to the bathroom, without catheterization.
This is really what we work on with our research partners, principally at EPFL, is finding a predictable therapy that can be easily scaled and adopted by centers worldwide, so we can help these folks. I hope that answered your question. Okay. Is that it, Alex?
For now, yes. Anybody else with a question, feel free to raise your hand or throw in the Q&A.
All right. Well, thank you everyone. If you wanna follow the company more closely, please sign up for updates on our website, which is O-N-W-D, onward.com, O-N-W-D. You can sign up for updates there. You can also follow us on all of the major social media channels, where our handle is onwardempowered, O-N-W-D, and then the word empowered. We look forward to reconnecting with you during our next update, and we expect a lot of news flow between now and then. Stay tuned, and thank you for your interest and support. We appreciate it.