Myomo Inc.

Hello and welcome to the myOMO third quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. Please note this event is being recorded. I would like now to turn the conference over to Kim Golodetz. Please go ahead.

Thank you, operator, and good afternoon, everyone. This is Kim Galadus with LHA. Welcome to the MIOMO third quarter 2023 conference call. Earlier this afternoon, MIOMO issued a news release announcing financial results for the three and nine months ended September 30th, 2023. If you would like to be added to the company's email distribution list to receive future announcements, please register on the company's website at miomo.com or call LHA at 212-838-3777 and speak with Carolyn Curran. With me on today's call from my OMA are Paul Godonis, Chief Executive Officer, and Dave Henry, Chief Financial Officer. Before we begin, I'd like to caution listeners that statements made during this conference call by management, other than historical facts or forward-looking statements, The words anticipate, believe, estimate, expect, intend, guidance, outlook, confidence, target, project, and other similar expressions are typically used to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and may involve and are subject to certain risks and uncertainties and other factors that may affect Mioma's business, financial condition, and operating results. These and additional risks, uncertainties, and other factors are discussed in MIOMA's filings with the Securities and Exchange Commission, including the Form 10-Q for the quarter ended September 30th, 2023, which is expected to be filed soon, and subsequent filings. Actual outcomes and results may differ materially from what's expressed in or implied by these forward-looking statements. Except as required by law, MIOMA undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. It is now my pleasure to turn the call over to Myomo CEO, Paul Godona. Paul, please go ahead.

Thanks, Kim. Good afternoon, everyone, and thanks for joining us. We have a lot of news to cover with you today, starting with our third quarter financial results and then last week's updates from the Centers for Medicare and Medicaid Services, CMS, about the MyoPro for patients with Medicare Part B coverage. Today we're reporting third quarter financial results featuring more than $5 million in product revenue for the first time, which is up 28% year over year and up 20% sequentially. This included a record quarter of international revenues, which topped $1 million in a quarter for the first time. Importantly, we are entering the fourth quarter with 1,046 qualified patients in our pipeline, and more than $11 million in cash, which gives us optimism about our growth trajectory. I'm pleased with these results since they validate the strategic shift in the operational changes we implemented at the beginning of the year. We decided to focus on patient candidates who had insurance coverage by payers with a track record of reimbursing for the MyoPro, rather than expending a lot of effort to obtain pre-authorizations from other insurance plans. This led to a higher authorization rate by payers including on appeal with some approvals happening within a few days of submission of the medical documentation to the insurance company. Assuming medical necessities demonstrated, Medicare Advantage plans, which cover many of these stroke survivors who are seniors age 65 and up, must provide coverage if CMS is reimbursing for the device. Along with this focus on reliable payers, we reduced our operating expenses by having fewer staff dedicated to reimbursement activity and by cutting our marketing budget by $1 million. These cost savings, along with the increased revenue we've generated, are enabling us to reduce our cash utilization year-over-year as we work through the timetable of having the Medicare Part B rulemaking and the coverage completed. For a deeper dive into our third quarter, I'll start with the top line. Year-over-year and sequential growth in product revenues is due to three factors. One, The size of the patient pipeline, which was nearly 1,000 qualified candidates at the beginning of the quarter, meaning they were covered by insurance plans that had consistently paid for MyoPro in the past. Two, the number of units in our backlog, which represented approximately $7 million of potential revenue upon delivery or collection of payment from the payer. And three, the number of new orders received and filled during the quarter for revenue based on the payer mix, what we call the fill units, which was a record number in the quarter. During our last quarterly conference call, I was a bit conservative about our revenue forecast because we had limited visibility into how many insurance authorizations we would receive and what the payer mix might be. As it turned out, we had a record 156 authorizations and orders in the third quarter, which is up 20% from the year-ago period. And we achieved this growth with a 27% reduction in advertising spend compared with the third quarter of 2022, and a 12% reduction in staff engaged in reimbursement activities back in January as we focused our efforts on payers with a track record of reimbursing the MyoPro. And now for the major news updates. It was a heck of a week for seniors with Medicare Part B fee-for-service health insurance as CMS issued two publications concerning the MyoPro brace for patients with muscle weakness and paralyzed arms. On November 1st, CMS stated that it was reclassifying the MyoPro in the brace benefit category as we had requested in the public meeting in June 2022 instead of the original durable medical equipment D&E rental category. The MyoPro product line is custom fabricated for each patient and is designed for long-term home use by Medicare beneficiaries. In the brace category, the MyoPro will be reimbursed by Medicare on a lump sum basis which is the way all other payers, Medicare Advantage, the VA, and commercial plans reimburse for our devices effective January 1st, 2024. That was good news number one for Medicare beneficiaries. Then on Friday, November 3rd, CMS issued the agenda for its upcoming HCPCS public meeting, which included the publication of proposed fees for the two MyoPro models. The MyoPro Model W, which is the elbow-wrist orthosis, coded as L8701, the proposed fee is $31,745. For the MyoPro Model G, which is the elbow-wrist hand orthosis, the proposed fee is $62,457. These fees are calculated by CMS based on their internal pricing methodology and are consistent with the presentation we made at that June 2022 public hearing. These fees will be considered at the November 29th CMS public meeting, and typically determinations resulting from a public meeting are published a couple of months later and are effective in the subsequent calendar quarter, which in this case would be April 1st, 2024. However, there is no guarantee that these will be the fixed fee amounts, the final fee amounts, or what the effective date will be. While we're waiting for these decisions by CMS staff, we were instructed to present our latest clinical research to the DMEMAC medical directors, which we did this past spring. We're also advised to provide devices to Medicare Part B beneficiaries and to file claims for payment. I'm pleased to report that we've now had five Part B claims approved and have received initial rental payments under the current HCPCS codes, which is the first time we've received such payments since our codes went into effect in January 2019. We received multiple monthly rental payments on several of these claims, and importantly, all four of the DMEMAC regents have paid for the patient's MyoPro. One additional MyoPro claim is still in process with the clinical documentation in support of medical necessity still under review. Why all this is significant for Medicare beneficiaries and the company is that Medicare Part B patients should now have access to the MyoPro based on medical necessity in any coverage guidelines that may be issued. We've had to put these Part B patients on hold until now So going forward, we'll be able to work with their physician and supply our powered arm braces to suitable candidates. We commend CMS on making these braces available to seniors with Part B coverage, as it is a major step towards the goal of health equity. I'll wrap up my opening comments with a few other highlights. Our international operations, led by Germany, achieved a record $1 million of revenues in Q3. We have a growing pipeline of patients interested in our MyoPro. a network of 100 O&P clinics across Germany who can provide the MyoPro, and more wins at the German Social Court, which has ruled in favor of patients having access to a MyoPro and requiring the payer to cover the cost of the device due to medical necessity. Our Chinese joint venture company made good progress during the quarter as medical device registrations were submitted to allow the sale of the MARC units, or the mobile arm rehabilitation kits, to rehab hospitals in China, which would be initially used for rehab training purposes for which the hospitals could generate revenues. In addition, first prototype mark units are expected off the production line during this fourth quarter. Sales of the MyoPro to individual patients will occur further down the road when the regulatory body approves the device for home use, and we just don't know the timing of such approval at this stage. We completed our second capital raise this year in August at an 80% premium to the price of our equity offering back in January. I had publicly committed to reducing our cash burn this year while growing the business and working toward Medicare coverage of the MyoPro. Year-to-date, our cash use and operations is $3.8 million, less than half the burn compared to the cash use and operations of $7.8 million for the same period in 2022. I'll now turn the call over to Dave Henry, Myomo CFO, for a review of our third quarter financial results. Dave?