Hello, and welcome to the Life Sciences Investor Forum. On behalf of OTC Markets and our co-host, Zacks Small Cap Research, we are very pleased you've joined us. The next presentation is from Envoy Medical. Please note you may submit questions for the presenter at any time. You can also view a company's availability for one-on-one meetings by clicking "Book a Meeting." At this point, I am very pleased to welcome Brent Lucas, Chief Executive Officer and Director of Envoy Medical, which trades on NASDAQ under the symbol COCH. Welcome back, Brent.
Thank you. It's a pleasure to be here, I'm excited again to talk about Envoy Medical and the great progress that we're making as an organization as we prepare to disrupt the hearing implant industry with the world's first of its kind fully implanted cochlear implant, one that does not use a microphone and has a long-term battery compared to what is standard of care at this point, what we believe the competition is working on. We have several points of differentiation as we look forward to disrupting this market and really bringing a truly innovative and breakthrough technology to market.
We are currently, I'm going to get into this in the course of the presentation, we are currently in a clinical trial that is fully enrolled, we are now in the data collection phase and hope to be submitting for FDA approval through the PMA application process next year. Very exciting time for Envoy Medical and a great time for an investor to do some research, look at us, do your homework, and hopefully you agree with me that this is a fantastic value opportunity to get in and get excited about Envoy Medical. Some forward-looking statements. This presentation, by and large, is on our website as well, please feel free to go to ir.envoymedical.com to pull more information down. As was mentioned, we trade on the NASDAQ under COCH.
Please follow along because we do provide updates, I anticipate a series of great milestones that potentially could be catalysts as we go forward over the next 12-18 months. Now, I'm going to hit all these as we go through the presentation, I'll just note that this is a fantastic opportunity. See, the cochlear implant world, if you're not familiar with it, is a relatively sleepy world. This is a technology that became part of hearing loss spectrum care options about 40 years ago. Frankly, not a lot has changed in those 40 years. Envoy Medical is pushing the status quo forward by bringing fully implanted devices to the market, hopefully within the next year or next two years. We're very excited. We believe we have the better mousetrap and believe that we have something that patients are very excited about.
We are incredibly looking forward to the next couple of years as we get through our milestones. When you look at the cochlear implant market, just in the U.S., the TAM is about $84 billion. We get there by just looking at the adults that could be clinical candidates for a cochlear implant. If you're just talking about adults and you're just talking about in the U.S., we could find about 2.8 million people that need a cochlear implant or could benefit from a cochlear implant. That number is relatively conservative in my viewpoint, for a couple of reasons. One, I think most people, as some publications have said, there are people out there that want two ears done. About 30% have gotten two ears done. Again, that 2.8 number should be bigger in that regard.
There's also expanding candidacy and people are living longer. As people live longer, they tend to lose their hearing. As you live longer and you're losing your hearing towards your elderly ages, you would see an increase in candidates as well. We are currently thinking about an ASP on the low end of around $30,000. Let's be conservative and say 30,000 times the 2.8, you have an $84 billion TAM. This is an attractive market. Very few players in this market, and we believe that we can disrupt this market with a first of its kind cochlear implant. A very good opportunity for us. Hearing loss. Everybody knows somebody with hearing loss, I'm not going to spend a lot of time on this slide because this slide is here to basically say hearing loss is a problem.
We all know hearing loss is a problem. We know our grandfather, or we have somebody that we work with who has significant hearing loss and it's impeded their life. It's impeded their personal life as well as probably gotten in the way of their professional life, quite frankly. It's a problem that we all know about. If you look at some of the other common disorders, hearing loss is a very common disability. Quite frankly, if you look now at very exciting data coming out, there's very exciting data coming out around cognitive decline and the connection cognitive decline and hearing loss have. I encourage you, as you research Envoy Medical, to research this connection between early cognitive decline and dementia and untreated hearing loss, because there is a growing correlation, and causation is now being discussed.
It's considered now the number one modifiable risk factor between being able to potentially stave off early cognitive decline and dementia. If you're new to the hearing market, I want to just paint a picture of where hearing aids are and where cochlear implants are. This on the slide is an audiogram, and if you want to use the analogy of vision or eyesight, perfect vision would be at the top. 20/20 vision would be at the top of this chart. Blindness would be at the bottom. Perfect hearing at the top, complete deafness at the bottom. Hearing aids are fantastic technologies that work for most people. Most people with hearing loss can benefit from a hearing aid. We are not a hearing aid company. I do not want to be a hearing aid company.
I do not want to have a hearing aid because I believe the hearing aid industry is becoming incredibly clustered with all sorts of over-the-counter. You have existing players in the market, as well as now some of the biggest tech companies in the world are coming into the hearing aid space, such as Apple with their AirPods, Meta with their glasses. All sorts of people are trying to come into that mild and moderate hearing loss. We are focusing ourselves on what we believe is the underserved market, the untreated market, and that is the severe to profound A range of hearing loss folks. That line on here is that red dotted line, and we are focusing ourselves on the severe to profound below that line.
Another thing I want you to understand is once you've used hearing aids and once hearing aids no longer work for you. What do I mean by that? Hearing aids no longer work for you when you have so much damage to your cochlea that you can't make sounds louder and get any real benefit from it. That's a clinically proven fact. At a certain point, hearing aids no longer do it for you. At that point, you need a cochlear implant. This is a therapy of last resort for a segment of the hearing loss population, which might seem small, 2.8 million might seem small when you're talking about the hearing loss population in general, 40 million in the U.S., but that is a captive audience.
This is the therapy of last resort, I think that's an incredibly important point for investors to truly understand. I'm talking about bringing a fully implanted device to market where the competition is partially implanted. You have to ask yourself, how many people in that 2.8 million bucket want a fully implanted solution over a partially implanted solution? I think there's going to be quite a number of people that are going to be interested in that, which is why I'm so bullish on this opportunity. The existing market today is partially implanted cochlear implants. Partially implanted devices are what the definition or what the name suggests.
There is a partially implanted portion that has an electrode array that goes into the cochlea, a magnet underneath the skin, then there's an external portion, a magnet on the other side that is tethered to a very large, obvious thing on the side of your head that was sometimes called behind-the-ear or a sound processor. These are incredibly obvious, incredibly visible, and they also contain the microphone. The microphone is in the plastic there that is behind that woman's ear. It is picking up the sound through that microphone. You are not at all using the ear to pick up sound. You are using the microphone within the plastic sound processor. Then you also have a battery attached and the magnet, which a lot of people find incredibly uncomfortable.
If you have to wear that magnet for long periods of time, it can be quite uncomfortable. Another couple of images from the Internet. Again, these are just to show you that cochlear implants, there are not a lot of differences between the three existing manufacturers. Form, fit, and function is pretty much the same between all of them. They have an external BTE, an external magnet, and then a wire that basically keeps you tethered to your hearing solution throughout the day. These also have to be taken off at night. They either are going to be taken off or they're going to fall off at night. They also have to have a battery that needs to be changed or charged at least once a day. Maybe you charge it overnight, you change the battery in the morning.
Whatever, these are not something that you can wear 24/7, 365 because there's continuous need to take it off, recharge the battery, change the battery, or take it off and allow your skin a break between having the compression of the magnet on the outside and the magnet on the inside. You're not going to want to wear these around water. You could damage them. You're not going to want to wear these in a lot of physical activities because you could also damage them. Imagine if you're a motorcyclist, a pilot, some of these other things where you cannot be wearing things like that on the outside of the head. What we did is we acknowledged that cochlear implants work.
Cochlear implants and delivering electricity to the cochlea has been something that has worked since Tesla, the scientist, not the company, figured out that electricity introduced into the inner ear allows you to get a perception of sound. That part works. What people complain about and what a lot of people don't want is that external. We took the part that works, the inside, and we made everything fully implanted. We put the sound processor inside, we put the battery inside. We have no microphone. We use the ear to pick up sound. We took all of the problematic parts of partially implanted cochlear implants and put them internally. I'm very excited about the design we've picked because I believe it is the best design for a fully implanted cochlear implant.
Our sensor, which is in the circle there on this slide, our sensor is a piezoelectric sensor, and it is placed on the incus. There is a bone behind your eardrum. There are three bones that vibrate once your eardrum vibrates. Just to take a quick step back, as sound vibrations are vibrating in your environment, they come to your ear, then they go down your ear canal, and they vibrate your eardrum. Once your eardrum vibrates, there's three tiny bones behind there that carry that vibration to your cochlea. Once those bones push on your cochlea, there are hair cells within the cochlea that pick up that signal and carry it off to the brain via the hearing nerve.
What Envoy Medical does that is unique and different from what has been on the market is we created a sensor that picks up the vibrations off the bone and uses that as our sound input. We do not have a microphone. We do not have a microphone on the outside. We do not have a microphone subdermally, and that separates us from everybody else. We are using or leveraging the natural anatomy. You could think of this as nature's microphone if you'd like. This is a way of naturally picking up the sound through your ear. It's very unique and I believe the best way to go about it. We also decided to put the battery in the chest.
This was a very intentional choice that our competitors appear to have overlooked, but we think this is going to separate us from the others working on a fully implanted cochlear implant. With the battery in the chest, you could have multiple days of a charge before you have to recharge it. You also have the ability to easily replace that battery in a very minor procedure if that is what you want. If you want to have a new battery in, say, 10 years when your capacity starts to diminish, you could do that without having to remove the entire system. This is going to be a key factor and something that separates us from the others.
I want you to think about when we think about battery life, what I want you to think about is your cell phone. Your cell phone is top of mind when you think about battery capacity. Current batteries get about 1,000 charge cycles. Charge, discharge, recharge, charge cycles. After 1,000 charge cycles, you start to lose capacity. That's why your new cell phone easily gets you through a day on one charge, but after a year or two or three, you start to notice it's going to have to be charged at least once a day, maybe a couple of times a day.
That is one of the reasons why we put the battery in the chest, because we wanted the distance, the time between recharges to be as great as it could be, and that would allow our patients to have a battery that does not diminish in capacity prematurely. We're very excited about our design, and we think we've picked the better design. We've patented around the modularity of this implanted subsystem, and I think we're in a great position to really disrupt the market. We obviously have great patent protection. I want to tell you, patent protection is one moat. It's one barrier to entry. Regulatory approval is another.
If somebody wants to come along and try to recreate what we've done, not only do they have to worry about our patents, not only do they have to figure out the incredible engineering and spend tens, if not $100 million to do it, they need to go through the regulatory and clinical process. I'm very excited about how far along we are, and I believe we're a first mover that has first-mover status and should enjoy several years with this market to ourselves. Again, fully implanted. It's obviously Invisible Hearing. We have Invisible Hearing trademarked, in part because we are the only company that I'm aware of that can truly say we offer Invisible Hearing to patients. I'm going to get to some of the differentiators between our competitors in a little bit. 24/7 hearing.
Let's not forget, if you're a parent like me, young kids, you want to be able to hear at night. Something happens at night, you want to hear it. If I was deaf and wearing a cochlear implant and I had to take that cochlear implant off and recharge it at night, or take it off because I couldn't wear it when I'm sleeping, I would be completely deaf. Our patients have the opportunity to hear throughout the night. Very, very important to some people. Ease of use. You don't have to worry about doing this. You don't have to worry about messing with the external. Oh, by the way, for those other devices, when you take the external device off, or sorry, if it falls off or it breaks, that's going to cost you somewhere between $6,000-$10,000.
The fact that we have nothing on the external to come off or to break or to be disrupted is something that I think patients are going to enjoy. Not going to spend a lot of time on our first product, Envoy Medical was actually the first and only company to get any fully implanted active hearing implant through the FDA, and that was our Esteem. Our Esteem device is a fully implanted active middle ear implant, got FDA approval in 2010. CMS has made the very poor choice to call this a hearing aid, which it is obviously not. Nobody else calls it a hearing aid, just CMS. It's a hearing prosthetic. We're working on getting that changed, and if we do, it should be a pretty significant watershed moment for the company.
What we did do is we took that sensor, that piezoelectric sensor that we used with the Esteem, and we put it with the Acclaim. We know that we know how to make that sensor. We know that we can manufacture it, that we have IP around it. We know what we're doing when we talk about that sensor. That is not unique to us. It's been a validated technology in a prior product. There is absolutely a race in the cochlear implant space. In the cochlear implant world, there is a race to fully implanted. Envoy Medical is the catalyst for that race. I do not believe the other companies would have woken up to this need had it not been for Envoy Medical.
I take pride, and I think our employees should be very proud of the fact that we are moving the industry towards fully implanted devices. Because of that, because we are the first mover, we are the furthest along. We have Breakthrough Device Designation from the FDA. We are the only one that I am aware of that has that. We got that in 2019. We started an early feasibility study, and then we have an IDE and started a pivotal study, which is now fully enrolled. I do not know the exact status on Cochlear and MED-EL at this point, but I do know that Advanced Bionics, the third player, does not have a fully implanted program that has been publicly talked about.
I am going to now talk, and this is potentially the most important part of the presentation in my view, the durable differentiation that Envoy Medical has between what we are doing today and what our competitors, two competitors, Cochlear and MED-EL, are doing when they talk about their, what they call Totally Implantable Cochlear Implants. Envoy Medical is the only one using that piezoelectric sensor. We are the only ones that are not using a subcutaneous microphone. We are the only ones that do not have a magnet in our system, and we are the only ones that have the battery in the chest that is replaceable. That is going to be very important.
I believe we have the better architecture, and if I am right, the prior two companies that I talked about are going to have a very hard time going back and trying to redesign quickly as patients pick what is obviously, in my opinion, the better architecture for a patient to go through their life with. A couple of important design choices that I want to talk about. Again, subcutaneous microphone. MED-EL and Cochlear, at least in their publicly disclosed documents that I have seen in their publications, papers and whatnot, this is what is out there. They have a subcutaneous microphone. We do not. Subcutaneous microphone is a microphone that is essentially implanted underneath the skin. Again, not in the ear. You are not leveraging the ear like we leverage through the piezoelectric sensor. They both have a magnet.
They both need a magnet because they have an external sound processor that is going to be used to supplement the hearing for part of the day and also possibly to recharge it. We do not have a magnet in our system at all. Then they both have their rechargeable battery inside the head. I think this was a huge mistake. Quite frankly, I am surprised that it was decided upon, because when you have a small battery that is rechargeable in the head, first of all, you are not going to get a very long battery life, and secondly, you are going to have to recharge that frequently. When you recharge it frequently, as we just talked about earlier, you have that charge, discharge, recharge, discharge cycle.
That means that battery's going to wear out sooner than if you had a larger battery in the chest, which you can have longer time between the recharges, which would suggest that you can have a longer time before that battery starts to diminish its capacity in a significant way. Very excited, again, about our choices that we made years ago, patented around, and moved the program forward with. I think we absolutely made the right choices. As I've talked about before, this is a concentrated market. It's a relatively sleepy market, in my opinion. These are companies that have been making a significant amount of money for a long period of time and have not had a lot of competition.
I am very excited about the fact that this is a tightly controlled oligopoly that is looking for fresh innovation, it's looking for a fresh face, and Envoy Medical, I believe, is that company that can come in. Trying to move along quickly here so I can open it to questions in the next few minutes. I see there's plenty that are coming in. I do want to highlight, we are in the pivotal study. Feel free to look it up on clinicaltrials.gov. As I mentioned, fully enrolled. We are fully enrolled with our trial. We are at seven sites, some great institutions. All 56 patients have gone through their implant, have gone through activation, and are now in the data collection phase. These are some of the sites. We're not working with slouches.
We are working with top-tier organizations and some of the leading implanters in this country. Very excited that these folks have put their faith in Envoy Medical, and I think that speaks volumes to what we have potentially coming forward. When I started out as CEO in 2015, we were far to the left, so far to the left, we're not even on the screen. We are now almost all the way to the right. It's incredibly exciting time for people to learn about Envoy and get involved in this investment if you are at all interested in medical devices, disruptive technology, or hearing loss. We are now, again, fully enrolled. We are in data collection phase. We anticipate that all 56 patients will be through their 12-month visit somewhere around the end of Q1 next year, beginning of Q2.
We will submit to the FDA with our PMA application. That'll go in, hopefully in Q2 of next year. We have 180 days on the shorter side of things for FDA approval. Sometimes that drags out a little bit. As folks know, the FDA can take some time for their review. End of 2027, on the earlier side, maybe beginning of 2028 on the slightly longer side. Very excited to be this far along with our trial and really having a great opportunity ahead of us. This is just a real high level. I'm not going to spend too much time here, but some folks ask me about the commercialization strategy. I just want to highlight that this is not going to be a company where we need to go out and spend a tremendous amount of money commercializing this product.
Obviously, there's going to be some additional expense there. This is not something where I need to go hire 100, 200 sales folks to go to 500, 600 sites across the country. The cochlear implant industry is a relatively niche market with a very tight population of people who do these implants. I only need to sell a couple of hundred, a couple of thousand devices in the first couple of years to really start making an impact. We are targeting the sites that we're working with in the trial, some of the people we have prior relationships with, and really hoping to move the needle quickly by going deep with sites versus going too far along. I'm actually going to switch over to the questions to be respectful of folks who took the time to do that, and happy to answer any additional questions.
There's one question. "On the Esteem, if you're successful in getting CMS to recognize it as a hearing prosthetic rather than a hearing aid, how big could the market segment be between hearing aids and cochlear implants?" From a candidacy standpoint, the market for middle ear implants could be larger than the cochlear implant market. When you're talking strictly candidacy, there's actually more people that could benefit from a candidacy standpoint than the cochlear implants. The limiting factor for that device was absolutely reimbursement, if there's an opportunity to change that, it could be significant. One question, "Do you see potential to leverage AI or adaptive algorithms to continuously optimize sound?" This is a very interesting question. We are not planning on putting AI, at least not yet, in our system.
I need you to bear with me here, because what you need to understand is because you can use the ear to pick up sound, you can use external third-party accessories. As Apple, Google, Meta, all these people that are working on rapid advances on things like hearables and technology that you can put in your ear, a patient of ours with an Acclaim cochlear implant could put that in their ear. We've already heard some anecdotal reports from patients in the studies who have said, "I love the fact that I can just pop my AirPod in on a call, or if I'm listening to a podcast, and get that benefit." You don't get that with the others. That's a very important point. I'm sorry, I'm just reading through these.
From here to FDA decision, what would you highlight as the key data and corporate milestones investors should track, especially additional interim data readouts or major medical meeting presentations? I would say from here until potential FDA approval, which again, I'm hoping for is the end of 2027, beginning of 2028, there will be at least some acknowledgment of milestones met along the way. We will have the one month, three month, six month, 12 month data point. We will have, hopefully, there is a publication that I'm aware of that potentially will summarize some more of the data from the first 10 patients. We had a staged approval, 10 patients had to be approved before we could get expansion to the second stage. I know there's a publication that is pending, related to that. Hopefully, some of those will come out.
Then we tend to go to the big ENT or the big hearing conferences, there's another one coming up in the fall, then there's several in the spring. There should be a more regular cadence of what we're doing going forward. Given that Advanced Bionics does not appear to have a fully implanted CI program, do you see or yourself as a potential for future strategic partnerships or distribution alliances with existing players as Acclaim moves closer to approval? The way I answer this question is I have a fiduciary duty to shareholders and investors in my company. I am, by the way, a long-term shareholder in this company. My family is heavily invested in this company. Absolutely, I am looking out for the investors first and foremost, and I will take anything seriously.
However, I think that the opportunity to really optimize this investment comes two, three, four years after commercialization and after we demonstrate that not only is this as big a deal as I've been telling everybody for the last 10 years. One of the things that the existing players tend to say to me is, "Oh, we're not so sure that the patients want a fully implanted devices." Nonsense. If you talk to patients, if you talk to anybody with an external hearing device, and you ask them if they would rather have a fully implanted, the majority of those people will say yes. This is absolutely going to be a big deal. I think a couple of years of commercialization and proving that would make us incredibly valuable.
I also think the existing players have slept on us for far too long, there is a point coming up where they may not be able to rectify that. I think the real interest could come from much larger strategics, existing medical device companies with much deeper pockets, and that could be far more interesting for Envoy, than just sort of selling to an existing player or partnering with an existing player. Let's see here. COCH added experienced med tech leaders to the board. How are these additions shaping your commercialization roadmap and potential strategic options? Yes, we had a fantastic addition of Chas McKhann, who came onto our board this year. Chas has himself been a small company, small cap, mid cap public company CEO and has had tremendous success.
Chas sold two companies to Boston Scientific, I am already thirsty for the knowledge and experience that he has. He's also a commercial leader or was a commercial leader, prior to becoming a public company CEO, and now he sits on several boards. He has a great experience in what do we want from the reimbursement side? What's the information we need to bring forward? I think it's a great sign that somebody of Chas's pedigree is willing to come in and very excited for the addition of him. It's absolutely going to gain some attention from other folks and very excited about that. With debt limited and fresh capital in the door, how are you prioritizing spend between clinical development, regulatory, and building commercial infrastructure? Yes, we were able to remove our debt.
We had some debt on the company after we de-SPAC'd. That debt was retired with an agreement between the debt holder and Envoy. We didn't convert. We just were able to purchase it for a very nominal sum. That and the fresh capital, we are focused on absolutely completing and getting to FDA approval, as well as looking forward to how do we scale this appropriately? What are the steps we need to take to make sure that our manufacturing and quality is up to a standard where when we go commercial, it's going to be well-received? Because I absolutely believe the demand for this will far outstrip our ability to supply it in the beginning. I think there is going to be a need to quickly grow, and we want to make sure we can do that appropriately. I need to end the webinar now.
I thank you for your time. Please feel free to reach out to us. If I didn't get to your question, I'm being told that I will be emailed those. Please feel free to contact me or the company at any time, and I'd be happy to engage with any of you. Thank you for your time, and look forward to the upcoming months. Thank you.