KORU Medical Systems, Inc.

Greetings and welcome to the Kourou Medical System's first quarter 2023 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. As a reminder, this conference is being recorded today, Thursday, May 4th, I would now like to turn the conference over to Greg from the Gil Martin Group. Please go ahead.

Thank you, Grant, and good afternoon, everyone. Earlier today, Kourou Medical Systems released financial results for the first quarter ended March 31, 2023. 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 eventual 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, we'll discuss certain non-GAAP financial measures 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 disclosures 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 Thursday, May 4, 2023, at approximately 4.30 p.m. Eastern Time. Since then, the company may have made additional comments related to topics discussed. And please refer to the company's most recent press releases and filings with the SEC. Joining us on today's call is Linda Tharby, President and CEO of Coru Medical Systems, and Tom Adams, Coru Medical's Interim Chief Financial Officer. Linda, please go ahead.

Thank you, Greg. Good afternoon, everyone, and thank you for joining us today. During today's call, we will use slides to support our commentary. To start, I will walk through business updates for the first quarter and provide updates on our progress thus far for 23. Tom will then discuss our financials and 23 guidance. I will then end with an innovation update and closing comments. Following our prepared remarks, the call will be opened up for Q&A. The first quarter of 2023 marked a strong start to the year for the company as our team continues to make meaningful progress towards our Vision 26 strategy of achieving $60 million in revenue. This strategy is focused on one of the largest healthcare macro trends, movement of care from the hospital to the home. In the quarter, we made significant progress in all three of our core business areas delivering our sixth consecutive quarter of double-digit growth. In our U.S. core business, we saw growth accelerate to 15%, and we remained focused on increasing our leadership position in the growing subcutaneous immunoglobulin market. In the quarter, we saw growth in several key areas, most notably our pump business, indicating increases in new patient starts and continued penetration of pre-fill syringes. In our international business, an increase in SCIG drug availability combined with our expansion efforts led to a strong uptick in growth in the quarter to 23%. Importantly, we continued to progress our novel therapies business with the goal of adding additional drugs to our coral freedom subcutaneous pump infusion system. In the first quarter, we grew novel therapies revenue by 62% and added another pharmaceutical collaboration bringing our total to 15. In our focus on building our foundation, I am pleased to report that we passed a significant milestone in the quarter as we completed our transition to a dual-source contract manufacturer for a consumables business. We also completed the closure of our Chester, New York facility and consolidated operations in our MAWA facility. Our operations and project management teams' great efforts will pave the way for further margin improvement and inventory reduction throughout the year. With the momentum with which we started the year, we remain confident to reaffirm our guidance and expect to end the year with revenues between $32.5 and $33.5 million, representing growth in the range of 17% to 20%. I would like to begin today with our U.S. business. where our team is focused on continuing to build our leadership position in sub-Q IG therapy. Again this quarter, we saw our growth exceed the overall market as we reported 15% core U.S. domestic growth. We continue to see the number of patients on sub-Q therapy rise as all IG drug suppliers have reported consistent supply and continue to focus their efforts in this area. While there are occasional fluctuations in reported monthly IgGram data, the overall SCIG drug market trends remain positive. This is evident by the fact that volumes grew 7% and 11% in the first and second half of 22, respectively. Volumes jumped to 12% for the first two months of 23, but fell in March, consistent with scripts, resulting in a flat Q1 versus 2022. Based on our review and conversations with IG drug manufacturers, we remain confident of double-digit market growth for 23. Additionally, overall, Koro's U.S. pump volumes grew by 16% for the first quarter of 23, a strong signal of our strength in our specialty pharmacy account activity and new patient starts. We continue to see increasing penetration of pre-filled syringes in the market due to their overall convenience in patient preference. The conversion to prefilled syringes is a critical business driver, as our Freedom Edge is currently the only pump with FDA clearance for use with prefilled syringes. First quarter saw over 130% prefilled syringe growth, with overall penetration increasing to 12% of the market. The current formats available in prefilled syringes are 5, 10, and 20 ml, which address approximately one-third of the overall market. Last month, CSL, the leader in SCIG therapy, reported exciting news. They received FDA clearance for their Hyzentra 50ML. This approval will enable a much broader addressable pre-filled market as over 60% of patients require greater than 50ML. CSL expects the 50ML pre-filled syringe will be available in early 2024. We expect to have a 10K approval ahead of their launch. and we will be well positioned to capitalize on the opportunity. Overall, a great start by our U.S. team outperforming the underlying drug market growth. Moving to our international business, we have seen increasing positive momentum. We ended the first quarter with growth across several key markets representing 23% year-over-year growth. Expanding internationally is a key growth driver for the company. New patient starts fueled by the increase in IG supply in the EU continue to drive growth, and we are well positioned to benefit with our distribution in over 25 countries. In the first quarter, we strengthened our international distribution with sales into Canada, all contributing to our overall double-digit international pump sales year over year. We have also begun to focus our efforts on conversion of electronic pump patients in Europe. and I would like to provide a few updates. The early feedback on our electronic pump conversion efforts is positive, with healthcare professionals and patients appreciating the benefits of our freedom system. The electronic pump comparison trial is expected to be delivered and completed in December of 2023. Moving to our novel therapies business, during the first quarter, we brought our novel therapies collaborations to 15. As previously announced, we signed a development agreement with an SCIG pharmaceutical manufacturer to use the Freedom System for an upcoming SCIG prefilled syringe product. This builds on our leadership position in the SCIG prefilled market and demonstrates that our market experience, patient insight, and pharmaceutical collaboration capabilities make Cora Medical the partner of choice for SCIG device innovation. This program does not require human clinical trials, and we expect it to launch commercially in the next one to two years. New collaborations are essential to our NT strategy, and the novel therapies pipeline is the fuel for increased signed collaboration. Our NT team has worked hard to build a funnel of 10 to 15 additional pipeline opportunities. This funnel spans new therapy areas, indication opportunities from existing partners, geographic expansion, and phase progression. We have seen a steady intake into the funnel, including new interest in infectious disease, increasing interest from oncology opportunities, and new geographical targets. Taking a look at our collaborations, in total, we now have 15 collaborations, including over 2.8 million potential patients and a TAM of roughly 2.5 billion, roughly two times our original aspiration. With the execution of our Q1 collaboration and our current pipeline of new opportunities, we are one step closer to our milestone of ending 23 with 20 total collaborations. We feel we have a clear line of sight to our 26th commercialization goal with multiple phase three opportunities. As we look to the rest of 23 with the pace of pipeline to sign deal, we expect our collaborations to increase in the back half of 2023. Thanks to the team for a great start 23. I will now turn the call over to Tom to review our financial results and guidance.