All right. Why don't we get started? I'm Jason Bednar. I cover med tech here at Piper. The next fireside chat is with KORU Medical. Very happy to have with us today CEO Linda Tharby and CFO Tom Adams. Thanks a lot for being here, both of you. Really appreciate it. I'm glad to have you back at the conference. We'll get right into Q & A. There's a lot of progress that's been made at KORU this year. You've executed on a number of strategic priorities. You made me look completely wrong with my rating, so congrats to you on that. Can you talk about what's gone right, Linda? What do you see as the major successes from 2025 that you can build upon when you look forward?
Yeah. Thank you, Jason, for the compliment. We don't like proving you wrong, but in this case, I'm happy with that. Talking about 2025, obviously, what we've been heading towards at KORU for several years now is a strategy that takes our growth level above that 20% level. Year to date, you know, growing above 20% driven by a few key factors. I would say the biggest one that has really propelled our growth this year has been our international expansion. We've more than doubled our international business this year. That's on the strength of prefill expansion, which is a technology where KORU was one of the first to have that device platform approved with our pump. We're able to see that. We converted our first market in Europe, and we see many more ahead of us as we move forward.
Great opportunity. We took our share position from about 10% to 20%, so lots of leg room there. Second has been our U.S. business, where we have a much stronger share position. We've just been outperforming the market. We've seen the market come back, the strongest patient diagnosis. Primary immune deficiency is our biggest patient population. We're seeing that population grow 8%-10%, and our U.S. business is growing about 10%-15%. That's been a huge lever for us this year. I would say as we look ahead, what's to come, it's exciting. We're above 20% without these additional milestones. One is four new drugs that we anticipate adding to our label, so more drugs flowing through our pumps, more patients using our system. We anticipate doing that over the course of early 2026 into mid-2026.
Finally, we released the results of our pilot study in oncology clinics where nurses preferred our platform 97% of the time, completed our U.S. sites and anticipate launching into the market in the second half of 2026, with a 510(k) submission expected at the end of this year. A lot of things are working really well, you know, international expansion, U.S. patient diagnosis, and then the new drugs coming onto the label. Excited for what we've built and what's to come.
Yeah. You kind of preempted my next question, but I'll ask it anyways and maybe summarize what you said. It, I was going to ask, you know, what's gonna make for a successful 2026? You were just hitting on some of the new drugs coming on, coming on label and launching those, moving that, moving into your U.S. business. Sounds like more international expansion and then just continuing to execute in the U.S. Is there anything that I guess I'm missing in that, or is that maybe a good summary of how you see next year unfolding?
Yeah. I would say it's a good summary, those three key points that we hit. The international expansion, the U.S. expansion, the new drugs. The only other one I would say is we've got some new products coming. We anticipate filing for a new pump in the first half of 2026. We think that will give us incremental share and ASP opportunity both in the U.S. and internationally. That is a big one for us next year.
Okay. All right. Perfect. Focusing on your core U.S. market as it stands today, the SCIg market has been healthier here, it seems like the past couple of years. That's directly translated to better U.S. growth. I guess what makes you confident that the market growth is going to maintain these levels as we look ahead to next year? What kind of visibility do you have into that end market?
Sure. Why the market has been growing and why we see projected, continued growth? Externally, we buy the data from someone who works with all the major pharmaceutical manufacturers in the immunoglobulin space. They're projecting 8%-10% growth. Where does that come from? The first thing we need to remember is that the U.S. population today, only 20% of that population is on subcutaneous therapy. The other 80% remain on IV therapy. We see a tremendous opportunity, which is not factored into our numbers for additional growth beyond that 8%-10% as we see more and more patients coming onto subcu therapy. Fundamentally, the overall patient diagnosis, we've had very high infection rates. Infection rates drive expansion in primary immunodeficiency. That's what we've seen over the last couple of years. We're very excited.
I talked a little bit about it on the last earnings call. We are seeing now all four of the primary immunodeficiency companies, immunoglobulin companies do clinical trials in the area of secondary immunodeficiency. These are immunodeficiency brought on by, often cases, cancer. In Europe, that has been approved and reimbursed. It is not in the U.S. Those trials are occurring. We expect them to conclude in late 2026, early 2027. If you can imagine, if you get a reimbursed for secondary immunodeficiency, that opens up population, which, today there's about 300,000 patients. It would more than double that patient opportunity for us, here in the U.S. I think lots of factors. You're seeing, you know, CSL, the biggest manufacturer in the space, just announced a $1.5 billion manufacturing expansion here in the U.S.
I think they also see what we see in terms of increased opportunity in the area.
What's the timeline you think that we should have in mind for those secondary immunodeficiency opportunities?
Yeah. I would say 2027 would be when we see those trials concluding.
Yeah.
If all four companies are doing them, I would say there's, and the fact that it's already approved in the EU, I would say that the factors look quite well, quite good that we'll get an approval here in the U.S.
Okay.
2027.
Okay. Yeah. Definitely something to look forward to. It's hard for us to measure a bit, but what does the competitive landscape look like for you right now as you look across the U.S., Europe, and even within the trial space that you're working with?
Yeah. Great question. Here in the U.S., we have one primary competitor. It is a mechanical pump market here in the U.S. Electronic pumps have not been reimbursed for Ig. Our primary competitor is a privately held company called EMED. They tend to be a fast follower. They're creative, fast follower at a cheaper price than we are. Being innovative, continuing to set the standard both from a product perspective and from a clinical perspective is how we maintain. If we go to Europe, the primary competitor has been electronic pumps. Great news about electronic pumps is they do not have a consumable that goes with it. We have been able to work with them, but the big share gain has been the electronic pumps that are the incumbents in Europe do not work with prefills, which is where the market is moving to.
That's given us an opportunity to get in and gain a lot of share there. And then as we look at our PST business and bringing new drugs onto our label, we are in this very unique, you know, there's about 1,000 drugs in development in subcutaneous therapy. I compare that to a few years ago, probably five years ago, there were probably 200 drugs. You've seen that go up by fivefold. Within the space that we're in, 10 mL +, you know, it's a pretty niche space, about 100 drugs in total in that area. The biggest incumbent that we, well, the incumbent is KORU in large volume, but on-body, there's been one approval by a company called Enable.
They focus in the 10 mL- 20 mL space, but that I would say is the biggest competitor. Difference between us and them is, you know, we can get you into the clinic immediately with very low risk. We have 50,000 patients on our system on a global basis today. They have less than a thousand. The cost difference between the platforms is about tenfold per use. We're about $20 per use. They are several hundred dollars per use. We see lots of advantages relative to our platform and being able to maintain that. We do believe that more competitors in the space is a good thing to drive more people to subcutaneous therapy.
Great. Tom, you can feel free to respond here as well. Either of you, whoever feels comfortable or tag team it. As we look forward, not just in the fourth quarter, but also in 2026, you know, Linda, you referenced, you know, feel confident in being a 20% revenue grower. You know, the quick math is you gotta pick up about $8 million in revenue. The genesis of the question for me is where does that $8 million come from? As I look across your three segments, it's not a question of can you get there, but help me bridge. If I think about U.S., think about international, PST, where does that $8 million come from?
Yeah. I'll answer generically and then I'll hand it to Tom for the specifics. You continue to see that U.S. market growing in that 8%-10% range as outperforming that. The international growth, you're gonna project well over 30% growth for our international segment. Obviously the new drugs coming on label is the third piece, Tom.
Yeah. I would just say, Jason, you have to remember too, our patient base is chronic. As we add patients throughout the course of the year, Q1, Q2, Q3, you have the annualization impact of those patients, right? They do not just go off of our product, especially in the Ig space. We will continue to grow as we grow our patient base, as well as, you know, as Linda mentioned, the U.S., towards the end of the year, we are gonna see some new product launches in the U.S., which will give us some uplift. We also have those new drugs that are also coming onto market next year where we have four of them. That will also be a nice increase in our revenues.
Okay.
Just for timing wise, I mean, I think U.S. international will kind of progress and grow. I mean, you got some funky comps in there at times, but throughout the year, progress and grow pretty steadily, you know, not assume anything crazy on like stocking or international movements, which I know we had here recently, but more so on the PST side, when do we start seeing the lift? I think you referenced mid, mid- 2026 when you start really seeing some of those, or you start assuming some of those, those, products come on, onto the, the system. Is that, is that the right way to think about that?
Yeah. We'll have our first drug we hope approved in Q1, which is a rare disease candidate, and then we'll have another drug also, a big one, vancomycin, which is delivered in the home. That's a huge patient population. In the back half, we anticipate the oncology, which, you know, you're looking at today, greater than 500,000 patient population there. You add all of those up and those start to factor into the back half of 2026, more meaningfully in 2027. The other big lift we're seeing is the prefill expansion, right? We know that the growth internationally was driven off of one major market that was converted. This year we think there will be five new markets where the pharmaceutical manufacturer will convert those markets to prefills.
That'll be the other big lever that we see that'll start, you know, in Q1.
You say this year. 2026, you're expecting five new markets. Can you, in the context of the one major one that you converted, just relative sizing?
Yeah. Two are much bigger and two are a little smaller.
Okay.
Obviously, if you think about the overall growth and how much international grew was, you know, more than 50% of our growth this year, you can see that we're giving ourselves some room in next year's number relative to that opportunity, but still is a big factor in our growth next year.
Okay. All right. Tom, you know, I love my margin questions. You, I know you've been itching for me to ask them. As we think about the, called the interplay of all of these growth drivers, U.S. core, the international launches, some of these new, new products coming on, how does that, how does that influence how you think about the gross margin trajectory? Knowing we still have a little bit of the, the tariff noise in there too.
Sure.
Set that aside, I'm more concerned about like how does the business mix affect the gross margin trajectory for KORU?
Yeah. I think to your earlier point, I mean, this year we've been able to guide, right, 61%-63% gross margins. We've been able to handle all the tariff noise, as you mentioned. We've also been able to handle all the, all the expansion in Europe with the lower ASPs. As we look forward, we're gonna be entering into new markets and, as I mentioned, new drugs, which will demand a higher ASP. As Linda mentioned earlier, with our new products that we're launching in the back half of the year, those will also generate a higher ASP. That helps from the pricing side. When I think about the COGS side of the house, you know, capital allocation is something that we do every year.
We have choices to make back into our manufacturing to help our operational folks with margin improvements that we will also consider and contemplate as we set the operating plan for 2026.
Okay. You mentioned pricing, h ow it's not something we've ever had to really think about in a major way for your business.
Yeah.
It's material enough that you called it out. I mean, what's the, you know, parameters here? Low single, mid- single, like how much of a price lift should we expect from, you know, from the new pump?
Oh, from the new pump? Yeah. We do not typically give that for competitive reasons, but, you know, I would say depending on the market we are in, obviously we are going to be launching it in the U.S., which demands a higher premium than you would see obviously in Europe. You know, again, I will not get specific on the pump due to competitive reasons, but you can expect a lift on our pump.
Okay.
In the U.S.
Price lift, COGS difference on the new pump?
Yes. Yes.
Higher or lower or?
Yeah. I mean, again, you know, we were working closely with our operational folks. We have really strong people that, you know, are working with suppliers every day to really, you know, wind down the costs and find opportunities on the procurement side.
Maybe just if I can talk a little bit just broadly, right? We've been seeing price appreciation of about 1.5% on our business overall in the last few years. We expect that to continue. We are, they're delivering drugs. Our pump delivers drugs that are anywhere from $200,000 a year to $750,000 a year per patient. If your pump is performing accurately and being delivered consistently and reliably, which we are, then the providers are willing to pay for that in order to ensure that that patient's therapy is being delivered appropriately. Our new pump will take, as you know, our pumps today are in, call it the $500, you know, $300-$500 range. Electronic pumps are between $1,000 and $1,500. Think about our new pumps being somewhere in the middle of that range.
Still better value than electronic pumps, but appreciably higher price per delivery. And we've shown that the reduction in training time is going to be pretty significant with our new pump for use with prefilleds.
Okay. All right. Like I should scoop my chair away just a little bit on this question. Why, why can't the margins be better if the revenues grow 20%? I mean, it's more of a, why can't you get better leverage? I can almost say the negative approach, but like what's stopping it from being better? Is it business reinvestment that's going on?
No, it's, it's a very fair question. I mean, we outsource most of our, and if you recall, a couple years ago, our margins were in the 55%, high 50%. We made that transition from U.S. manufacturing to Central America, and we saw a nice lift in margin, a step change, if you will, in margin. We are constantly looking at our supply chain and looking at other alternatives, at CMOs, etc., and keeping everybody sort of in the mix with that. You know, from a supply chain perspective, as we launch new products, it becomes more opportunities, right? As you know, we have a new pump out there. We have a new consumable base out there that we're gonna be launching down the road. I feel that the operations team, you know, they're making good decisions.
I, you know, we are directed to get that, our five-year strategy is to get those margins to that 65%+ . We are, you know, working that way through with our strategic plans.
Maybe just, and Tom hinted at this a little bit, but our priority of our capital allocation has been to top-line growth. Now that we see that 20% +, Tom hinted at this in his earlier statement, but we're starting to allocate more to gross margin improvement. We do have a plan to get it to 65% +. I think with the influx of international expansion, and also with some new products coming in, it's gonna take us, you know, more than a year to get there, but we think the pathway is very clear. Jason, we agree with you. We're thrilled that we have opportunities to improve that gross margin line. It is now increasingly a part of our discussion.
I think with a company growing + 20%, with the kind of leverage that you've seen through the income statement, taking that gross margin up, is just a natural for us.
Yeah. Okay. Nice segue as we think about capital allocation. How do you, how are you thinking about that real time as you think about allocating between R&D and commercial expansion to still fuel that top-line growth versus, say, building cash? Cash is not an issue for you, but it is something that I think investors would still probably like to see, maybe a little bit higher cash balance, maybe gives you a little bit of optionality to deploy that cash in other ways.
Maybe I'll start and then, and it's Tom. Thrilled this year that we hit cash flow positive. We had positive EBITDA this quarter. That's a huge milestone for us. Obviously a lot of work to get there. Why does that happen, right? You see us taking the majority of our growth today coming from our current platform, and expanding with current drugs on our platform. It's a fairly low cost of capital for us to get there. We love those. We're gonna do those all day long. Those are in-year paybacks that should start to flow cash to the bottom line. There are a couple of big things that we're working on that we hope can lead to what I would call just step changes in revenue. Think beyond 20% +, and those would be twofold.
First is PST collaborations. Today we have 11 in our pipeline. What we're working on is more of a co-label strategy where either they spec our pump into their label. What does it mean? It means that instead of 30%-50% share of that drug's patients, we can get 100% of that drug's patients. The drug is shipped, our pump is shipped. Working on a couple of things where if that were to happen, that would be a big expansion, and maybe, you know, we would need more capital to pursue something like that. The other one is oncology, right? Oncology, we're excited today. We're going into the U.S. market. U.S. market goes extremely well. There are seven drugs out there. We're adding one to our label. Do we add a lot more to our label? Do we pursue international opportunities with those oncology?
Really comfortable in that 20% + range with our current capital. If we see opportunities for step change, then obviously we'd look to pursue those.
Yeah. I would say that's right. I mean, what Linda summarizes, we've been very disciplined, right? We've been disciplined with our cash, with our investments. As we see opportunities, we're gonna take them. Right now we feel that our trajectory is cash flow break even and to start really getting in, in the black, right, and generating some positive cash. That won't hold us back if we see some near-term, short-term investments that have a nice return.
Okay. All right. Last couple minutes, I wanna talk about the, the new pumps, new, sorry, new pumps, new consumables that are coming. I think they're already submitted 510(k). How has the, has the government shutdown at all impacted your discussions with the FDA or the timelines that you're thinking about in, in receiving approval there?
Yeah. We have a new drug that has been submitted already. It got ahead of the shutdown. We anticipate that one, an approval in Q1. We've already been in active communication, so we're okay there. Our oncology submission for the new drug is anticipated by the end of the year. We expect that one to be on track as well. We don't anticipate the slowdown affecting any of this. Then the new pump, and a product we call a flow controller.
Yeah.
Which expands our opportunity into new markets. We anticipate filing those in the first half of 2026.
Okay.
I'm hoping that the government comes back and everything's okay, but we don't see any major disruption to our business via the government slowdown.
How should investors think about new pump coming in and things that could go along with a new product launch of like a pause or a lull, knowing like for, like, consumers or acquirers or, you know, those purchasing the pump, you know, sometimes wait for the new thing?
Mm-hmm.
Rather than buying the old thing and then six months later having to come back and buy the new one. I guess how do you, how do you prevent that pause or how are you planning for that, and then thinking about like the wind down, destock, if you will, of the old legacy pump?
Yeah. I think the great news for us is that the purchasing decision is made by the specialty pharmacy, and so in this case, that is a process we know extremely well. We've been working with them already for several months on what this will look like. They will take our new pump in. They'll do a clinical trial for three months with their patient base. Provided that goes well, we would switch out all of our current platform into the new platform. The good news is that we're working on that and, you know, excited for that market entry.
All right. Perfect. We are at a time. Very helpful. Love the discussion here today. Thanks so much for your time.
Great. Thank you, Jason.
Thanks, everyone.
Thanks.