KORU Medical Systems, Inc.

Greetings. Welcome to the Coru Medical Systems fourth quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Greg Hodachick. You may begin.

Thank you, Shamali, and good afternoon, everyone. Earlier today, Kourou Medical Systems released financial results for the fourth quarter and full year ended December 31st, 2021. A copy of the press release is available on the company's website. During this call, we will make certain forward-looking statements regarding our business plans and other matters. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to many risks and uncertainties, including those mentioned in the associated press release and our most recent filings with the SEC. We assume no obligation to update any forward-looking statements. I encourage listeners to have our press release in front of you, which includes our financial results as well as commentary on the quarter. During the call, management will discuss certain non-GAAP financial measures and in our press release and accompanying investor presentation and our filings with the SEC, each of which are posted on our website. You will find additional disclosure regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures in our press release and accompanying investor presentation and those filings. For the benefit of those listening to the replay, this call was held and recorded on Wednesday, March 2, 2022, at approximately 4.30 p.m. Eastern Time. Since then, the company may have made additional comments related to the topics discussed. And please reference the company's most recent press releases and filings with the SEC. Joining us on the call today is Linda Tharby, President and CEO of KORU Medical Systems, and Karen Fisher, KORU Medical's Chief Financial Officer. Linda, please go ahead.

Thank you, Greg. Good afternoon, everyone, and welcome to Coro Medical Systems' fourth quarter and full year 2021 earnings call. Before reviewing our Q4 2021 highlights from the year, I would like to start by thanking our incredible team. Our company is supported by a talented and growing group of individuals who believe in our mission to improve patients' quality of life by developing and delivering high quality therapeutic drug delivery solutions for use in the home. Each quarter we continue to build upon our foundation and Coro Medical today is a stronger organization due to each individual's continued dedication and hard work. Today we will be using a slide deck to guide our comments. I will begin with a brief overview of Coro Medical systems and our fourth quarter highlights. followed by an update on our strategic milestones delivered during the quarter. I will then turn the call over to Karen to discuss the quarter and year-end financials in more detail. I will then review our 2022 guidance before ending with a few closing remarks. After our prepared remarks, Karen and I will be happy to open the call up for Q&A. Prior to jumping into Q4 highlights, I wanted to begin with an overview of who we are today and how we are positioning ourselves to deliver continued value to our customers and shareholders. We have enabled over 25,000 patients to receive at-home subcutaneous immunoglobulin treatments or SCIG treatment via our market-leading Coru Medical Freedom Infusion System. We have a proven pharma partnership model with over 11 commercialized drugs and indications on our freedom infusion system and registrations in over 26 countries. As we continue to grow our business, we have a scalable foundation from which we can build. We have a recurring monthly consumables revenue stream supported by our specialty pharmacy partners who deliver to our patients in their home. As we look to the future, our goal is to expand our total addressable market from $300 million today to over a billion dollars through continued penetration of sub-Q therapy into the broader IG market. Further, our intent is to add new drugs to our CORU system as the overall growth in drugs in the pipeline for sub-Q delivery in the home continue to expand. We will continue to solidify our position as a market-leading SCIG home infusion platform and further establish CORU Medical as the premier at home large volume drug delivery infusion company. Turning to our results for the fourth quarter, we reported net revenues of 6.5 million, an increase of 60% or 28% on an adjusted basis for 2020 stocking. This represents a return to double digit growth and our fourth consecutive quarter of positive sequential growth. On a year-on-year basis, we had strength across all three businesses, domestic core, international core, and novel therapies. The fourth quarter year-on-year growth was driven by double-digit pump growth in the U.S. domestic core market, with our growth outpacing the overall market. Higher consumables due to new business wins in international core markets, and through initial revenues recorded for new agreements in our growing novel therapies pipeline. While we don't expect this level of growth for each quarter in 2022, it is important to note that we are outperforming the underlying market for sub-QIG therapy and we look forward to continuing this momentum. In December, we held an investor day and rolled out our vision 2026 intended to drive the company to the next phase of value creation. I want to reiterate the plans we discussed and the key milestones related to our vision. Our five-year plan is designed to generate approximately 60 million in revenue by 2026, and importantly, drive our addressable market from 300 million to over a billion dollars, as we move from being a leader in large volume home sub-Q IG infusion to being a leader in the much larger market of large volume sub-Q drug delivery. We know that to support our vision, we will need a strong foundation, and we did great work this year in building the foundation for an even better company. We hired over 30 new employees this year, bringing our total headcount to over 80, with a specific focus on commercial excellence, particularly in U.S. sales and marketing and novel therapies, on quality and regulatory to build to biopharmaceutical standards, and in beginning to build out our innovation capabilities in research and development. We also progressed our outsource manufacturing agreement, enabling a dual source of production, and driving future gross margin improvement. And we ended the year securing a new facility and a prime recruiting location in northern New Jersey that will become a center of excellence for our new products. Our plan will be driven by two pillars of growth, including increasing core SCIG penetration and extending that subcutaneous home infusion leadership position into new novel therapies. The first pillar is focused around accelerating our penetration in the SEIG market we participate in today. This market is significantly under-penetrated with less than 15% of total IG drugs administered today delivered sub-Q. The first area of focus in this area is on new patient starts. We are building our funnel and increasing our work with our pharma partners through the clinical development and regulatory approval process to gain on-label indications. Once a drug receives regulatory approval, our pharma partners begin their physician detailing, and we have recently increased our level of training and support to their efforts. The second target area is SCIG pre-fills. Prefills have grown rapidly since their introduction about 18 months ago and now represent about 3.5% of the total market. We see tremendous growth potential in prefills because of their convenience for the patient. As we have seen our ex-US drug label expand, you will see further efforts in 2022 to define our international core sub-Q strategy. Turning to our second pillar of growth, our goal is to extend our leadership position in sub-QIG drug delivery into novel therapies or new sub-Q drugs in development. Our team has identified a robust target list that spans all three clinical trial phases. We have identified close to 1,000 new drugs in development and are targeting roughly 100 of those whose volume has been established as over 10 mLs. We are projecting five new large-volume drug candidates going through phase three trials with Coro Medical by 2026, and we have assumed one additional new commercialized drug by 2023 to drive top-line growth towards our five-year goal. We continue to build momentum as a broad drug delivery partner due to our patient satisfaction, form factor with capability to handle drugs over 10 mL, our safety profile, and track record of regulatory clearances. We have the proven capability to ensure we can support the drug through approval and through the channel with our specialty pharmacy relationships. Underlying our success in both of these areas is a renewed focus on innovation. This is a major area of strategic investment for the company as we define opportunities to simplify and improve the infusion process for our patients. Innovations include line extensions and product improvements all focused on improving comfort and convenience of the infusion process for patients. Additionally, we are investing in a next generation system that will retain core freedom infusion system qualities and further improve convenience and add capabilities such as connectivity. Now let's transition to the progress we have made in Q4 in executing on our strategic initiatives. Regarding the first pillar, increasing SCIG penetration, a critical driver is additional FDA clearances for on-label indications. The company committed to having three new on-label indications before the end of 2021, and I'm happy to report that we achieved that in the fourth quarter, making a considerable step forward. In November, we received 510 clearance for the use of our Freedom Edge infusion pump system to be used with Isentra, 20 ml pre-filled syringes. Hyzentra is the most prescribed SCIG product and the first to be available in a pre-filled syringe format. The pre-filled syringe market has significant penetration potential due to its convenience, and this FDA clearance will be an essential growth driver for us. In late December, we received FDA 510 clearance for on-label use of the Freedom 60 infusion system for two additional SCIG drugs, Octopharm's Cutiquig and Griffil's Zembify. This FDA clearance is a significant milestone as it allows us and our partners to market the Freedom60 as an on-label infusion device for two of the faster growing drugs in the market. In addition, we are in the FDA review cycle and expect to have Apellis M. Pavelli on-label indication by end of Q2 2022. and an EU label indication in Q1 for Apella, Sobeys, Aspavelli. Having these new clearances gives us and our drug partners the green light to promote the Freedom 60 for these drugs to our customers, which we believe to be a considerable advantage. We're excited to hit three of the eight total 510 commitments we had made for the five-year vision. They demonstrate the strong capabilities of our clinical, research and development, and regulatory leadership team. Regarding our second pillar of growth, expanding novel therapies, we have made significant advancements to our pipeline. During the fourth quarter of 2021, we closed four new novel therapies agreements. We define a closed agreement as an agreement for current or future revenues based upon an exchange of products or services. In line with our strategy, two of the closed agreements are focused on increased sub-Q penetration with phase three trials with IG therapies, and two are in earlier phase trials for non-SCIG therapies. Among the four agreements, we are supporting trials for our current area of immunology, and we are expanding in new drug areas with new novel therapy agreements in respiratory and oncology drugs. Three things of note for novel therapies. First, we're expanding beyond immunology and immunoglobulin. Second is our PACE. improvement with four of the six agreements we have secured occurring in quarter four. And finally, we have over 50 new opportunities that we are pursuing in our pipeline. As reporting on our pipeline progress is fairly new, we will continue to mature and begin to expand both on total addressable market expansion as well as short-term commercial opportunities for products and services. With a strategy and a clear set of goals, milestones, and objectives, we look forward to and remain excited about the next phase of value creation at Coru Medical. Rooted in the strength of our foundation and existing business, we believe we have a pathway to execute on our innovation and strategic growth initiative areas. We are excited to continue updating our milestones as we extend our leadership position in the home sub-Q drug delivery market. I will now turn it over to Karen for a review of our financials.