KORU Medical Systems, Inc.

Good day and welcome to the Carew Medical Systems fourth quarter and full year 2023 earnings 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 a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Louisa Smith from the Gilmartin Group. Please go ahead.

Thank you, operator, and good afternoon, everyone. Earlier today, Coru Medical Systems released financial results for the fourth quarter and full year ended December 31st, 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 events or results could differ materially due to many risks and uncertainties, including those mentioned in this 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 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 13, 2024, at approximately 430 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 filing and press releases and filings with the SEC. Joining us on the call today are Linda Tharby, President and CEO of Coru Medical Systems, and Tom Adams, Coru Medical's Chief Financial Officer. Linda, please go ahead.

Thank you, Louisa. Good afternoon, everyone, and thank you for joining us today. During today's call, we will use slides to support our commentary. I will begin by walking through results and key business updates for the fourth quarter and full year 2023. Tom will then review our financials and our 2024 guidance. Following the prepared remarks, we will open the line for questions. I'm very pleased with quarter's performance in the fourth quarter. We continue to execute on our growth strategy, exceeded our gross margin expectations, and with discipline in our capital and expense management, we continue to see improvements in our quarterly cash burn. Our full year revenues ended at $28.5 million, with growth of 2% affected by a one-time non-recurring engineering services revenue in our novel therapies business. Our overall revenue growth in our core SCIG business remains strong, with U.S. performance driven by share gains and with the overall SCIG market recovering in another quarter of sequential growth. In our international business, we deliver double-digit growth year over year, primarily driven by deeper penetration in current markets and successful entry into new geographies supported by strong IG supply. In November, we announced FDA clearance of the 50 ml Hyzentra pre-filled syringes for the Coru Freedom system. Pre-filled syringes are becoming an increasingly large part of the SCIG market, and Coru is strongly positioned to capitalize on this opportunity. We believe pre-fills will be a critical growth driver for KORU and expand our penetration in our core markets. In novel therapies, we continue to build out the pipeline, having signed three additional collaborations in 23, and having started the year strong with two new in the beginning of 2024, both of which I will touch on later. From an operational perspective, I'll let Tom cover the financials with more granularity. For growth margins, we finished above 60% for the second consecutive quarter and generated positive cash flow of $700,000 in the fourth quarter. Additionally, we exceeded our 2023 ending cash balance projections, closing the year with $11.5 million. Each of these metrics serves as a testament to the steps we've taken in our operating expense management and inventory reduction initiatives. and we expect to continue the progression in operating performance in 2024 and beyond. Finally, we're initiating 2024 guidance for net revenues to range between 31.2 and 32.2 million, representing 10 to 13% growth and gross margin between 59 to 61% for the full year. Additionally, we plan to exit the year with an ending cash balance of at least 8 million and to be cash flow positive in the fourth quarter of 24, and for the full year 2025. Tom will discuss details related to the guidance and our associated assumptions later in the call. Over the last few years, we've invested in positioning CORU for growth and profitability. And as we enter 24, we expect much of that investment is behind us. I'm seeing strong momentum in our core business, our best novel therapies pipeline to date, and a focused operational discipline that is critical to our future success. 2024 will be an execution year for our team, and we believe we are poised for a return to sustained double-digit growth and profitability. Vision 26 remains our key focus moving forward, and we are positioned for a meaningful inflection point in 24 and beyond. Moving to slide four, you'll recognize the three-pillar growth strategy that is the foundation of our Vision 26 initiative. Those three being domestic SCIG penetration and growth, the broadening of our novel therapies pipeline, and geographic expansion. This strategy will continue to position CORU as a leader in the growing large volume subcutaneous drug delivery market. As it relates to our domestic core, our goal is to increase penetration into the SCIG market and further establish our leadership position. With respect to the overall SCIG market, in the fourth quarter, we saw another quarter of sequential growth and patient volume, and the market ended the year with mid to high single-digit growth. We delivered approximately 6% year-over-year revenue growth, and our end-user sales to pharmacies were up double digits, reflective of share gains. Our distributor inventories were lower at the end of Q4, and we expect to see this inventory replenished in future quarters. Increased demand for pumps drove a double-digit increase in volumes for both the fourth quarter and the full year, often a leading indicator to consumable sales. We continue to see caregivers and patients drive therapy to pre-fills due to their convenience versus traditional FCIG biotherapy. We're encouraged by these trends and believe this will benefit the commercial launch of the 50 ml Hyzentra pre-filled syringe, which began rollout in January. We also anticipate a new 510K submission for a product in the fourth quarter 2024 within core IG. Overall, we are increasingly confident in the SCIG market growth driving new patient starts and believe we are positioned for continuing share gains in our U.S. business in 2024. Turning to novel therapies, we have 15 collaborations signed to date with 19 additional open opportunities across varying indications, signing three new collaborations in 2023. I'm encouraged by our progress in early 24. In recent weeks, we've announced two new collaborations, which I will discuss later. We also have two drug collaborations progressing to phase three trials in 2024. a key milestone in the advancement to commercial launch. Looking forward, during the fourth quarter of 24, we're anticipating the submission of a 510K application to support a new novel therapy indication for use with our freedom infusion system in ambulatory infusion centers. I'm very pleased by the headway we're making within NT, by the overall strength and diversity of our pipeline, and the progress on commercialized drugs in early 25 and 26. Turning to International Core, it continues to be a great opportunity for CORU. Revenue in the fourth quarter grew 8% over Q4 22 and 10% for the full year. Strong sales growth was driven by growth in our established markets as IG supply stabilized, new indication growth in CIDP and SID, and entry into multiple new markets. As was the case in domestic core, pump and consumer volumes were another strong indicator of demand with double-digit growth. Our excitement in international is at an all-time high as we anticipate continued expansion into new regions in 2024. We also expect the completion of an electronic pump trial in the first half of the year, generating further evidence for our freedom infusion system. I'd like to shift our focus back to the IG market on slide five, and more specifically, pre-filled syringes and why we're so bullish on the opportunity this presents for core and moving forward. Pre-fills represent a major catalyst for growth within our domestic and international core markets as this delivery method is increasingly penetrating share among subcutaneous therapy patients and has the potential to increase overall sub-Q penetration. Pre-filled syringe patients grew 24.5% in the fourth quarter and increased overall penetration to 14% as the fastest growing part of the overall IG market. Overall, we see a number of factors that will continue to drive growth. First, patient preference was 78% of patients preferring the use of pre-fill with the Freedom Pump versus vial administration. Additionally, the 50 mL dose clearance represents two-thirds of the pre-filled market And combined with the earlier 20 ml launch provides CORA with a broad portfolio to fulfill all patient needs. We've been focused with our pharmaceutical partners in driving a clinical practice change to pre-fills, driving even greater uptake in usage due to the increased convenience. We expect increased penetration with CIDP patients who require much higher doses and twice weekly therapy. We are excited by our position and potential for pre-bills to drive growth and higher penetration, reaching levels of 20 to 25% for foliar penetration in 24 and 50% by the end of year 25. Turning to slide six, we are very pleased to announce that we will be presenting new data at the 2024 National Home Infusion Association Conference later this month. This study focused on patient adherence to the Freedom system and collected data from over 11,000 patients with primary immune deficiencies who self-administered their SCIG therapy using the Coru Freedom pump. This retrospective study conducted over a four and a half year period revealed an impressive adherence rate of 97% to the prescribed treatment protocol. To provide context, adherence rates for other chronic conditions such as high blood pressure, cholesterol, arthritis, and diabetes range somewhere from 62% to 87%. This comparison highlights the exceptional performance of the CoroFreedom pump system in promoting treatment consistency and improving patient satisfaction. Overall, these findings underscore the effectiveness of the CoroFreedom pump system in facilitating strong adherence to SCIG therapy among PID patients, leading to improved treatment outcomes and patient satisfaction. We look forward to sharing these results at the upcoming NHIA conference with our prospective new customers. Turning to our novel therapies pipeline, we have the strongest pipeline we have reported to date. In 2023, we added three new collaborations to our pipeline. bringing our total collaborations to 15, and we are pursuing another 19 open opportunities. This NT pipeline translates to a total addressable market of approximately 2.7 billion through the treatment of over 1.6 million people globally. 2024 is already off to a strong start, and I want to highlight the two recent collaborations we've announced, the first being the initiation of a feasibility study with Coru's system, on an already commercialized rare disease therapy. And the second, a clinical supply agreement to support a pre-commercial unnamed SCIG drug entering its phase three trials. Novel therapies is a key piece to CORA's growth strategy as it creates opportunities for future drug indications that can grow our CORA business significantly once commercialized. We also anticipate entry in Japan with increasing SCIG approvals. Our team is focused on late-stage drug opportunities with potential for commercialization over the next three years in both the home and ambulatory infusion settings. The near-term targets are those collaborations we expect to go live with KORU, totaling six new potential entries by the end of 26 are highlighted in the lighter green on the far right of the slide. I'm encouraged by the incremental advancement in our funnel and truly believe that novel therapies will be transformational to increasing our leadership position as a global leader in large volume drug delivery and driving our commercial potential in our core business. In 2023, we've laid the foundation for a strong 24 and are on a path to continue double digit growth with a clear line of sight to profitability in 25. I'm excited by our current momentum as we remain focused on the execution of our Vision 26 strategy and positioning Quora for continued growth and profitability. I will now turn it over to Tom to review our financials.