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spk06: Hello, and welcome to the ElectroCore fourth quarter and full year 2022 earnings conference call webcast. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Nicole Jones of CG Capital. Please go ahead, Nicole.
spk03: Thank you all for participating in today's ElectroCore earnings call. Joining me today are Dan Goldberger, Chief Executive Officer, and Brian Posner, Chief Financial Officer. Earlier today, ElectroCore released results for the fourth quarter and full year ended December 31, 2022. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during the call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant. to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements, including without limitation any guidance, outlook, or future financial expectations, or operational activities and performance, are based upon the company's current estimates and various assumptions. These assumptions involve material risk, and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list of the risks and uncertainties associated with the company's business, please see the company's filings with the Securities and Exchange Commission. Electra Cordis claims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information that is accurate only as of the live broadcast today, March 8, 2023. With that, I'll turn the call over to Dan.
spk09: Thank you, Nicole. Hello, everyone, and thank you for joining us on today's call. We made great progress advancing non-invasive vagus nerve stimulation in 2022 for various uses. we reported record sales of $8.6 million for the year ended December 31, 2022, a 58% increase over the prior year, and record fourth quarter 2022 sales of $2.6 million. Gross margins expanded nicely to 81% for the full year 2022. Revenue from the US commercial channel was $1.7 million for the full year ended December 31, 2022, a 158% increase from $679,000 in the full year of 2021. $1.6 million of our U.S. commercial revenue in 2022 came from cash pay programs as compared to $310,000 for 2021. We have several initiatives in the U.S. commercial channel which continue to grow in terms of revenue and number of prescribers. Our cash pay clinician dispense programs, GC Direct and GConcierge, have grown from 218 prescribers at the end of 2021 to 1,328 by the end of 2022. In the fourth quarter, ended December 31, 2022, we added an additional 390 new prescribers, and our prescriber numbers continue to show strong growth through the first few months of 2023. We believe the increase in prescribers could be a leading indicator of future growth. In December 2022, we announced the launch of TrueVega, our direct-to-consumer wellness product for stress, anxiety, and sleep, available online without a prescription at TrueVega.com. We're pleased with the early performance of TrueVega, which has generated sales of almost $100,000 in January and February 2023. On future earnings calls, we'll provide additional metrics around the Truvega product line, but the soft launch so far has greatly exceeded our expectations. During the year, we also announced a distribution agreement with Jerns Healthcare LLC that we believe will add more than 12.5 million covered lives within a select managed care health system. The business model with Jerns will be similar to how we work with the VA hospital system. JIRNs will handle adjudications, billing, and collections, while ElectraCore will ship directly to patients and provide in-servicing and patient support. JIRNs will pay ElectraCore for devices dispensed. We continue to work with JIRNs on the implementation, and our field sales team will be responsible for educating clinicians within those managed care systems. Net sales from the government channel, including Department of Veterans Affairs, or the VA, the Department of Defense, or DOD, and other government departments were $5.2 million, an increase of 60% as compared to $3.3 million in the full year 2022. A total of 117 VA and DOD military treatment facilities have purchased Gamma Corps products through December 31, 2022, as compared to 100 through the fourth quarter of 2021. We anticipate continued growth in the number of facilities and penetration within those facilities through our customer experience team, territory business managers, and sales agents in the field. On April 19th, 2022, we announced that GammaCore non-invasive vagus nerve stimulation has been selected for additional funding by the Department of Defense Biotech Optimized for Operational Solutions and Tactics, or the BOOST program. The BOOST research program, which will be conducted under the leadership of the 711th Human Performance Optimization Branch of the United States Air Force, seeks to optimize and validate the efficacy of NVNS in accelerated training, sustained attention, reduced fatigue, and improved mood among Air Force personnel. More recently, we signed an agreement with the prime contractor and received our first purchase commitments under that contract. We are establishing the TACSTEM brand of NBNS for human performance to commercialize the product being developed under the BOOST program, and we're exploring ways to make our initial product offerings available to all branches of the active duty military and first responders in the United States and abroad. In 2022, TACSTEM product sales contributed $125,000 of the government channel revenue reported above. Revenue from channels outside the United States increased 7% to $1.6 million in the full year 2022, as compared to $1.5 million for the full year 2021. In 2022, $139,000 was attributed to licensing fees associated with the exclusive relationship for NVNS in Japan. Now, turning to our clinical progress on September 7, 2022, The company announced the publication of a peer-reviewed manuscript, Transcutaneous Cervical Vagus Nerve Stimulation Reduces Behavioral and Physiological Manifestations of Withdrawal in Patients with Opioid Use Disorder in the Journal Brain Stimulation, which was conducted with the support of Emory University and Georgia Tech University and sponsored by a grant from the National Institute on Drug Addiction. We subsequently participated in a pre-submission meeting jointly with the FDA and NIDA, where we discussed the pivotal trial to support a future regulatory submission for an indication to treat the symptoms of substance withdrawal. NIDA has indicated that they're likely to finance that pivotal trial in its entirety. On October 20, 2022, we announced data from an oral presentation at Neurocritical Care Society's 20th annual meeting held in San Antonio, Texas, on the possible role of GammaCore in the acute treatment of traumatic brain injury, or TBI. Additional work on the potential benefits of NVNS on TBI will be funded by an exploratory development research grant, an R21, from the National Institute of Neurological Disorders and Stroke. We will continue to provide updates about our pipeline and other opportunities. Now, I'll turn the call over to Brian for a review of our financials and other guidance items. Brian?
spk02: Thank you, Dan. For the quarter ended December 31st, 2022, ElectroCorps reported net sales of $2.6 million, representing 72% growth compared to 1.5 million in the same period of 2021. For the full year 2022, the company reported net sales of $8.6 million, representing 58% growth as compared to net sales of 5.5 million for the full year 2021. The increase of $3.1 million is due to an increase in net sales across all major channels, including the US Department of Veteran Affairs, US Commercial Channel, and sales from outside the US. Gross profit for the fourth quarter of 2022 was $1.9 million as compared to $1.2 million for the fourth quarter of 2021. Gross margin for the fourth quarter of 2022 was 75% as compared to 80% in the fourth quarter of 2021. Gross profit for the full year 2022 was $7 million compared to 4.1 million for the full year 2021. Gross margin for the full year 2022 was 81% as compared to 75% for the full year of 2021. The fourth quarter of 2022 included a charge of $217,000 to gross profit related to the change in estimate of the useful life assumption for certain of the company's licensed products. Gross margin excluding the change in the estimated useful life charge would have been 84% for the quarter ended December 31st, 2022. Total operating expenses in the fourth quarter of 2022 were $7.8 million as compared to 6.7 million in the fourth quarter of 2021. Total operating expenses for the full year 2022 were $29.9 million as compared to 24.1 million for the full year 2021. Research and development expense And the fourth quarter of 2022 was $1.6 million as compared to $742,000 for the same period in 2021. R&D expense for the full year 2022 was $5.5 million as compared to $2.5 million for the full year 2021. This increase was primarily due to targeted investments to support the future iterations of our product platform. including the implementation of our intellectual property around the delivery of smartphone integrated and smartphone connected non-invasive therapies. Selling, general, and administrative expense in the fourth quarter of 2022 was $6.2 million, as compared to $5.9 million for the same period in 2021. SG&A expense for the full year 2022 was $24.3 million, as compared to $21.6 million for the full year 2021. This increase is primarily due to targeted investments to support our commercial efforts, particularly around sales and marketing efforts for our cash pay initiatives. Note that the $300,000 increase in Q4 2023 SG&A drove a corresponding $700,000 increase in revenue for the quarter, signaling accelerating leverage from our sales and marketing spend. Gap net loss in the fourth quarter of 2022 was $5.8 million as compared to a gap net loss of $4.9 million in the fourth quarter of 2021. Gap net loss for the full year 2022 was a loss of $22.2 million as compared to a gap net loss of $17.2 million for the full year 2021. Again, The year-over-year increase was largely driven by our investment in new product development. Adjusted EBITDA net loss in the fourth quarter of 2022 was a loss of $4.7 million as compared to a loss of $4.4 million in the fourth quarter of 2021. Adjusted EBITDA net loss for the full year 2022 was a loss of $19 million as as compared to an adjusted EBITDA net loss of $15.8 million for the full year 2021. A reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net loss has been provided in the financial statement tables included in today's press release. Net cash used in operating activities in the quarter ended December 31, 2022, was $4 million, as compared to $4.4 million in the fourth quarter of 2021. Net cash used in operating activities for the full year 2022 was $16.6 million, as compared to net cash used of $13.6 million reported in 2021. This increase is primarily due to the increase in our net loss from operations. Cash, cash equivalents, and restricted cash at December 31, 2022, totaled $18 million as compared to $34.7 million as of December 31st, 2021. Looking ahead, for the full year 2023, we are guiding to $14 million to $15 million of net revenue. We believe that our legacy headache channels will grow again by more than 50% to at least $12 million for the full year and revenue from new products in the Travega and Tax Stim brands could be more than $2 million for the full year. We expect net cash usage in the first quarter of 2023 to increase as compared to the fourth quarter of 2022, largely due to seasonal factors affecting working capital and increased investment in product evolution. And now I'll turn the call back over to Dan.
spk09: Thank you, Brian. I'm super excited about our year-over-year operating results and the momentum we're carrying into 2023, and I'm even more enthusiastic about the company's long-term prospects. Continued investments in our cash pay and covered business models have greatly expanded the NBNS therapy market, as reflected by the revenue growth realized in 2022. We are also very enthusiastic about the initial results of our new wellness proposition to Vegas. We believe our metrics are trending in the right direction and we'll continue to evaluate our investments in all of our cash pay channels as the year progresses. The BOOST project, being financed by the Air Force, could accelerate the adoption of NDNS for human performance among our active duty military. Interest from different branches of the military continues to build for our tax NIM product, which may result in expanded adoption in future quarters. Orders within the VA DOD channel have been strong in January and February, which we believe may bode well for the first quarter. Similarly, TrueVega sales are outpacing our initial expectations, which could add a nice lift to our commercial revenue in 2023. Our cash pay initiatives are showing positive results. Our physician dispense programs are growing faster than expected as new prescribers make GammaCore available to patients directly through their practices or directly from ElectroCore. The Jones announcement we discussed earlier is expected to dramatically increase the number of covered lives with access to insurance coverage for NBNS and could generate material revenue later this year. Further out, we continue working towards additional indications to treat post-traumatic stress disorder and or opioid use disorder. Look for new product launches in 2024 featuring our app-enabled technology that can provide digital health solutions. That product platform will be launched in headache, wellness, and human performance as we ramp up our supply chain. I see many potential growth drivers in 2023 and beyond, including continued penetration of our VA DOD channel in the United States, growth in our U.S. commercial channel driven by cash pay business models, further development of the Truvega product for wellness, anxiety, and sleep driven by an increased spend directed to consumer advertising efforts, further development of the TACSTEM brand for human performance in the active duty military and beyond by leveraging the BOOST program financed by the Air Force, and our app-enabled new product platform that will facilitate consumer-facing digital health solutions and unlock new business models. We quietly instituted a reduction in force during the first quarter of 2023 that will reduce operating expenses by about $700,000 the remainder of 2023. While we are primarily focused on revenue growth, we're constantly looking for ways to streamline our operations in the path to profitability. In closing, I would also like to point out that several directors of the company bought common shares in the open market during the fourth quarter of 2022. In February 2023, we implemented a 1 for 15 reverse split and regained compliance with NASDAQ listing requirements on March 6, 2023. At this time, I'll turn the call over to the operator. Operator, please open the line for questions.
spk06: Certainly. When I'll be conducting a question and answer session, if you'd like to be placed in the question queue, please press star 1 at this time. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to move your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. One moment, please, while we poll for questions. Our first question today is coming from Jeffrey Cohen from Lattenburg Farm, and your line is now live.
spk07: Oh, hey, Dan and Brian.
spk06: How are you? Good.
spk07: How are you doing? Thanks for the verbose readout. So a few questions from Aaron. I know you talked about the small OPEX reduction. Talk about if that's coming out of R&D or SG&A, and then maybe talk about tying that into R&D and all these programs. It's wonderful. You've got a lot of programs pushing forward, and it sounds like there are some grants and sponsorship out there. So we anticipate a similar level of R&D for you, but getting more for less, if you will, as far as programs.
spk09: Yeah, there's... First of all, Jeff, I'm going to dodge the question about the RIF. I don't like to talk too much about people's livelihoods. The various... The R&D spending is shifting from clinical work that was ongoing in 2019 and 2020 towards product development work for the new platform that we expect we'll be able to launch in 2024. And that new platform is very exciting. It'll lead to a family of app connected platforms that in turn opens up the opportunity to get into some digital health. In addition to our traditional vagus nerve stimulation, it gives us quite a bit of freedom with business models. So look for quite a bit of innovation on the product side as we go into 2024 and, and, And as you know, the nature of product development is that it's lumpy. You end up with a large outlay up front, and then that engineering work tails off as you get towards product launch. Okay, got it. As far as medications go, post-traumatic stress disorder is next up for us. And then working with Dr. Bremner's group, on opioid use disorder financed by the National Institute of Drug Abuse would be following that. But those are probably both 2024 opportunities.
spk07: Okay, I got it. Can you talk about the prescribers a bit? It sounds like you had a nice uptick toward the end of the year and it sounds like it's carrying through. Are you seeing any lumpiness there in the first quarter as far as deductibles and payers go? Or would you expect that kind of the trajectory that you've gone upon recently is going to continue at this pace?
spk09: Yeah, so for better or worse, most of our commercial business is driven by those prescriber numbers, the cash pay. And so while folks are using their HSA cards or their FSA cards, we're not really exposed to the deductible cycle on that cash pay portion of our business. We do have a small but hopefully growing cohort of insurance-covered patients, and those do indeed slow down in the first quarter, but it's very small compared to the cash pay component right now.
spk07: Perfect. And then lastly for Brian on the financial side, any commentary on margins? It looks like 2022 overall is very strong, and perhaps you got some headwinds from – the labor environment or the supply chains out there. But for 23, I think we were previously thinking high 70s. Any reason here or there to think lower or higher on that firm?
spk02: Hi, Jeff. No, we've been consistently in the 80s up until this quarter where we had that change in estimate. But as we said in our prepared remarks, we were over 80% without that charge. So we're fairly comfortable that we're going to still see north of 80% in 2023 as well.
spk07: Okay. And do you expect the Truvega portion of that business or the direct-to-consumers to drive that lower or higher from previous levels?
spk02: I think at this point, it won't have a significant impact either way. So, you know, I'm very comfortable, again, with the overall 80% or better gross margin going forward.
spk07: Great. Okay. Super. Thanks for the readout and taking our questions.
spk06: Thank you, Jeff.
spk07: Thank you, Jeff.
spk06: Thank you. Next question is coming from John Vandermosen from Zax.
spk05: Good afternoon, you guys. Great to speak with you again. I thought I'd start out with a question on your guidance. It looks like it brackets what we have over here at Zax. And I was wondering if you could break down some of the areas where you think it's coming from. I think you said earlier on the call that there was $2 million coming from Truvega and the tax stem program. But how do you see VA, OUS, and just, you know, some of the other more legacy, I guess, areas growing year over year in 2023? Yeah.
spk09: Thank you, John. Great question. You know, our VA hospital business has two pieces to it. The first is going deeper into our existing customer accounts, and the second is opening up new hospitals and And increasingly, we've been able to grow our field sales. I call them sales agents. In the trade, we call them 1099 reps. These are folks who get paid straight commission, so it's all variable expense as we grow the business. The VA hospital business, through the pandemic, we grew it 60% year-on-year from 21 to 22, and and 60% the year before that. So I'm looking for at least 50%, 60% growth in that channel this year as we continue to recruit 1099 reps and go deeper into our existing accounts. The U.S. commercial business, you know, as I was just chatting with Jeff, is largely cash pay at this time. Um, although, uh, the, the announcement about Jaren's giving us access to the Kaiser hospital system, uh, once we get the bureaucracy worked out, that's another 12 million covered lives that could come on in the back half of the year. That's, that would be a very exciting upside to the numbers we're talking about. Um, but our cash pay business is driven by those prescriber numbers. And as we sign up a new prescriber, that's interested in offering NVNS therapy on a cash-paid basis, that should have a multiplier effect going forward. So it's been growing far more than that 50%, 60%, and starting from smaller numbers. So I think that can grow very aggressively through the rest of this year. The new products, TaxSim and TrueVega, very, very exciting starts. We already have some revenue from TaxSim as we reported in the fourth quarter. fast start to our Truevega launch. And by the way, everybody who's listening, please go take a look at our new products at truevega.com. But lots of reason for acceleration in all of our business channels as we go through the year, especially in the back half of the year.
spk05: Okay, very good. And looking at the gross margin, I remember you had a lot of inventory that was helping keeping up that gross margin. Should we expect that to continue through 2023? And Brian, I know you had mentioned something to Jeff on that. Just wondering when that might run out and you have to start using newly manufactured inventory.
spk02: Well, as Dan mentioned, we have some new products coming out scheduled for 2024.
spk10: So we'll have some outlays for supply chain down the road, but right now we're still very comfortable with our inventory levels for 2023.
spk05: Okay, so no new manufacturing is probably going to be required to satisfy anticipated demand in that $14 to $15 million range?
spk02: No, we should be fine. The revenue should more than cover the cost of that. We should be fine. Okay, great.
spk05: Just the last one for me is on all the patents you have granted recently. And, Dan, you'd also mentioned that, you know, we have some new products coming up. Can you associate some of those patents that have been announced? I think there are at least five that may be applicable to next year's launch of new products.
spk09: Yeah, we have two, broadly speaking, we have two families of patents. The first is around extending our noninvasive vagus nerve stimulation program. technology to other indications. And I'm using the term other indications broadly because the work that the Air Force and now the Army is doing around human performance, where they're talking about cognition, where they're talking about attention, is not what you would traditionally think of as a medical indication. And the second group of patents are around taking our product platform and moving it into the mobile phone app-enabled digital health space. And so vagus nerve stimulation that communicates with an app, broadly speaking, is covered by this new family of patents.
spk05: Okay, great. Thank you, Dan.
spk06: Thank you. Next question is coming from RK from HCV. Right, your line is now live.
spk04: Thank you. Good afternoon, Dan and Brian. Thanks for doing this. It looks like you suddenly had a good year, and you're looking to an even better year, especially with your guidance that you just provided. In terms of... the confidence in your guidance, you know, going up, you know, quite a bit from where you are now. Can you just highlight some of the things that gives you that sort of confidence?
spk09: Yeah, thank you. Thanks for the question, RK. Look, our largest revenue stream for the last two years and we expect in 2023 is our VA hospital business. You know, the first half of 22 was impacted by COVID, and I'm very excited about sort of, on the one hand, the back-to-normal access that we will have for the full year 2023, multiplied by just the increased number of feet on the street we have because we're recruiting 1099 reps. So growing that business 60%. in 2022 over 2021, we ought to be able to grow it at least 50% and probably more like 60 or 70% in 2023 over 2022. Similarly, starting from smaller numbers, but our cash pay GC directs, G concierge, we rattled off some of the prescriber numbers. Prescriber numbers are growing in the first couple of months of 2020, of 2023. So I think that that's going to see accelerating momentum as we go through the year. The Jones announcement and opening up access to the Kaiser system in the back half of the year, not even counting any of that. So Lots of reasons why we should exceed that 50% growth in our base headache business and very few reasons why we'll miss on it.
spk04: Perfect. So just to kind of dig a little bit deeper into some of those things which you just stated, in terms of the VA centers and also I'm more interested in the BOOST program, You stated that you have a contract in hand for the BOOST program. Is there anything more you can say other than just saying that you have a contract? In the sense, even if you can give us the numbers, how is this being set up? In the sense, is it going to be just a quarter at a time? or the contract that you have, that revenue would be spread over the full year?
spk09: So the specific boost contract will have some revenue in the current quarter and in the second quarter. But over and above the boost contract, we have now been getting orders for deployment of small number of product. And we have about a half a dozen quotations out there for deployment in certain units of Air Force Special Forces and Army Special Forces. We have not gotten anything from Navy Special Forces yet. So while the BOOST program was a specific R&D contract, We are now getting some small deployment orders, and those will be recognized as product revenue when we ship and collect on them. And that could be significant in the second and third quarters of this year.
spk04: Okay, great. And then on the commercial program, on the cash pay business, I know you're constantly adding more prescribers into that system, but just want to understand how that is working in, you know, how that is working in relationship to the number of prescribers, because you have had this going for almost a year plus now. You know, is there some kind of a, correlation between the number of people you're adding in and getting scripts? Or is this going to take a little bit longer until you have more prescribers test it, get their patients to test it? So I'm just trying to understand, you know, when would you get to a point where you feel comfortable with the increase in prescriptions in relationship to these prescribers?
spk09: Yeah, so that's a great question, and I have to slice it a few more ways. Historically, we have been a neurology company. Over the course of 2022, we've dramatically increased our call points. So roughly one-third of our prescriber ads in 2022 come from traditional neurology or pain practices but another third come from functional medicine integrative medicine practices which already have a cash pay model and and clientele and then the third third of our prescriber base are chiropractors which again already have a cash pay business model and clientele. So, uh, I'm very enthusiastic about the uptake. Uh, the traditional neurology pain, uh, markets, uh, are slower to adopt because they, uh, their clientele, uh, generally have traditional insurance. Uh, but these other two segments, um, have already embraced a cash pay business model and their demographic is already open-minded in that direction.
spk04: Very good. And then one last question from me, you know, talking about Jones Healthcare, I would imagine there are multiple organizations in the country similar to Jones Healthcare. So in terms of your growth strategy, are you waiting to see how Jones executes before you start trying to look for other organizations or these are all parallel conversations that are ongoing?
spk09: No, you're exactly right. We want to make sure that the, that the journey's launch goes smoothly in that DME business model. There is a lot of back office work to adjudicate the prescription figure out what benefit plan that particular patient is on, collect co-pays or deductibles from that patient. And so we want to make sure that that channel is all working smoothly before we try to take it more national.
spk04: Perfect. Thank you very much, Dan, for being patient with me and taking all my questions.
spk09: Of course. Anytime, Arquette.
spk06: Thank you. As a reminder, that's star one to be placed in the question queue. Our next question is coming from Anthony Zendetti from Axel Group. Your line is now live.
spk01: Hi, this is Thomas on the line for Anthony. I appreciate you taking the time to answer my questions, and I'll just jump right into it. So, firstly, could you guys provide a little bit more color? I know you guys spoke on it briefly on the call. But could you provide a little more color on the initial sales trends you've seen with the TrueVega product? And then just maybe a little bit looking forward, when do you expect to have a full commercial launch? And just kind of your strategy or how you're looking at making sure you guys have enough in the way of sales and marketing team to meet demand. Is that going to be 1099 reps or are you guys going to start to build out an internal team to meet the demand that you're expecting with the TrueVega product?
spk09: Yeah, great question. Appreciate it. So truevega.com went live in late December of last year. So January and February are the first full months of sales through that channel. And it is exclusively an e-commerce business model for a product that treats anxiety and sleep and stress and in healthy people. It is not a medical device. It's a wellness product and so does not need a prescription. And for 2023, we are going to stick primarily to that e-commerce model. We've been spending some money on Google search. We've been building out various social media assets. A surprising number of influencers have started to pick up the story. It turns out that vagus nerve stimulation, vagus nerve therapy is somewhat topical in the wellness community right now. So we're pretty excited about how that can grow as an e-commerce business model as opposed to a traditional med tech sales rep business model.
spk01: And do you have any insight on when you expect to do a full commercial launch for the Truvega product?
spk09: We're not going to comment on that right now. Okay.
spk01: All right. Understandable. Yeah. And then just kind of going back to the topic of e-commerce, you know, I was kind of curious to see where you guys were at. I know you guys were trying to launch or relaunch your e-commerce platform and Um, and I know that, you know, a couple of calls ago you spoke about, and you just mentioned that you were spending on Google because, uh, you know, the number of hits had gone down or, or just like the, the order in which you guys were listed had decreased. So I was just kind of wondering where you're at with that. Has that gotten back to historical levels? And then, and then again, just where you're at with, uh, relaunching the entirety of the platform.
spk09: Yeah. So in, in 2021, um, we, we launched, uh, with a telehealth partner. uh, for our prescription headache therapy. And, uh, and that was frankly disappointing for a variety of reasons. So we, we, we shut down that relationship, um, took a deep breath and, uh, and chose instead to launch this completely new directed consumer wellness product that does not require a prescription.
spk01: All right, great. Those are all the questions I have for right now, and I appreciate you taking the time. I'll jump back in the queue.
spk06: Yep.
spk09: Thank you, sir.
spk06: Thank you. Next question is coming from Kemp Fowler from Brookline Capital Markets. Your line is now live.
spk08: Great. Thank you. First, with regard to Kaiser, what level of effort in terms of additional 1099 reps do you think you'll need to pursue that opportunity?
spk09: So we're going to be very systematic about it. We already have a small number of vocal clinical champions in the neurology department of Kaiser. The challenge has been the supply chain bureaucracy, for lack of a better term. And as you know, Kaiser is a is a big animal. And once we demonstrate that we're reliably getting prescriptions through the Kaiser bureaucracy, then we're going to be much more aggressive about scaling up the number of sales assets that we apply in California. So it is event-based, not calendar-based.
spk08: Right. Well, you mentioned California, which is their largest footprint, but they do have some density in some other markets. So it sounds like you'll focus on California initially and then go to the other markets or California exclusively.
spk09: No, we're going to make sure that things work in California before we go to Colorado and Georgia and the other states where they do have a significant footprint.
spk08: Got it. Second question relates to NHS and currency. So it's in a way two questions, but sounds like NHS is still going to be, you know, say a stable contributor in 2023. And how are you? How does currency look for you at this point? Neutral, negative, or any help?
spk09: That's a good question.
spk08: Let's assume steady state and go from there.
spk09: Currency, I'm not going to try to hedge on, but our NHS business is driven by the number of headache specialists that are authorized within the National Health Service and You know, the good news is we've got robust coverage through NHS. The bad news is that it is effectively rationed by the relatively small number of headache specialists and the waiting time under that NHS system to get to see a headache specialist. So that those logistics sort of keep a throttle on how quickly our business can grow. Our team in the United Kingdom is lobbying NHS to open up a prescription to a larger cohort of neurologists, not just the headache specialists within the system. But that's a Sisyphean, a Herculean task to get NHS to pay attention to us, much less change their way of doing business. So we keep trying, but It's going to grow high single digits until or unless we can convince NHS to open up the number of prescribers that are available to us.
spk08: Great. Great. Thank you.
spk06: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to management for any further closing comments.
spk09: Yeah, thank you, everybody. We greatly appreciate your making time today. I want to give special thanks to all of our employees who have been working tirelessly to not only grow the headache business but launch two entirely new product lines. I encourage everybody, please go take a look at our new consumer product offerings at truvega.com. Of course, I also want to thank the healthcare professionals and their patients for their loyal support of our vagus nerve stimulation technology. Thanks, and have a good day.
spk06: Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.
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