KORU Medical Systems, Inc.

Greetings and welcome to KORU Medical Systems first quarter 2025 earnings conference column. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Louisa Smith, Investor Relations. Thank you, Ms. Smith. You may begin.

Thank you, Renchu, and good afternoon, everyone. Joining me on the call today are Linda Tharby, President and CEO of KORU Medical Systems, and Tom Adams, Chief Financial Officer. Earlier today, KORU released financial results for the first quarter and did March 31, 2025. A copy of the press release is available on the company's website. I encourage listeners to have our press release in front of you, which includes our financial results as well as commentary on the quarter. Additionally, we will use slides to support further commentary in today's call, which are also available on the investor relations section of our 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 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. During the call, management will also discuss certain non-GAAP financial measures. You will find additional disclosures, including reconciliations of these non-GAAP measures with comparable GAAP measures. in our press release, the company investor presentation and SEC filings. For the benefit of those listening to the replay, this call was held and recorded on Wednesday, May 7, 2025, at approximately 4.30 p.m. Eastern Time. Since then, the company may have made additional comments related to the topics discussed. I'd now like to turn the call over to Linda Tharby, President and CEO. Linda, please go ahead.

Thank you, Louisa. Good afternoon, everyone, and thank you for joining us on today's earnings call. I'll begin today with an overview of our strategic progress and first quarter highlights. After that, Tom will walk you through our financial performance and updated 2025 guidance. We'll then open the call for your questions. We had a great start to the year, delivering strong results and continued growth. Revenue for the quarter reached $9.6 million, a record for the company representing an 18% increase over the prior year. This performance reflects the ongoing strength of our core business, which grew 21% in the quarter, driven by a solid base of recurring revenue, continued success in new patient starts, increased market share, and deeper penetration into both new and existing geographies. I'm also pleased to announce that we plan to submit two additional commercialized drugs for 510K clearance for use with the Freedom Infusion System by the end of 2025. This brings our total pipeline to five planned submissions in 2025, two for new devices and three for new drug indications. As we continue to focus on operational efficiencies, we reported gross margin of 62.8%, an improvement of 50 basis points compared to the same period last year. Given our strong first quarter performance and increased visibility into the remainder of the year, We are raising our 2025 guidance to a range of $38.5 to $39.5 million, representing a 15% to 17% year-over-year growth. We are also reaffirming our failure gross margin target of 61% to 63%, which is inclusive of our most recent analysis of the current global tariff situation and its impact on our supply chain and cost of goods sold. We're also reaffirming our expectation to generate positive cash flow from operations in 2025. Tom will provide further details on our financial performance and updated guidance later in the call. We're off to a strong start in 2025 with solid execution across our strategic priorities. The strength of our core business, our expanding new drugs on label pipeline, and our operational discipline continue to drive both growth and value creation. We're well positioned to deliver on our commitments and advance our leadership in the market. Before I get into performance across each of our growth pillars, I want to touch on Koro's strategic vision and our plans to evolve as a company. Today, we are the global leader in large volume SCIG drug delivery, supporting the at-home infusion needs of approximately 45,000 chronic and recurring patients each year. We've successfully built and continue to expand the space business as the overall SCIG market maintains robust underlying growth. Our leadership in SCIG has built a reliable growing foundation, and we are equally focused on accelerating Cora's growth through new opportunities. We're actively expanding our platform to support subcutaneous delivery of additional large volume drugs. As more pharmaceutical companies shift formulations from IB to subcutaneous, were well-positioned to be their partner of choice with our successful track record of bringing subcutaneous drugs to commercialization. We currently have nine active collaborations with new drug therapies and see a significant opportunity to expand further. These current and future collaborations will expand our addressable market and overall revenue potential. This dual focus of our strategy on strengthening the core and growing through new drugs on label supports our long-term vision. With that, I will now move on to our three-pillar strategy and our progress this quarter. Starting with our domestic core, our business grew 16% year on year, marking our sixth quarter sequential growth and share gains. The SEIG market overall grew approximately 10% in Q1, and we continue to expand our recurring revenue base through both new diagnoses and conversion of accounts. Internationally, we achieved 36% growth, driven by both patient growth and new distributor relationships in the Middle East and North Africa. We also expanded our presence within established EU markets through a key prefilled syringe tender win with a major pharmaceutical partner in the region. The win is a milestone for the company as we were selected for the business and was historically an e-pump dominated market. We anticipate further opportunities as we continue to collaborate with the pharma partner on their OUS pre-fill conversion program. Moving to new drugs on label through our PST platform, we have 15 collaborations in our pipeline that have the potential to be added to the Freedom System in the near to long term. As I mentioned on the last slide, we are pleased to announce that we are planning to submit for 510 clearance on two already commercialized drugs, one for iron chelation and one on antibiotics by the end of the year. Working with our specialty pharmacy customers, our team identified that both of these drugs, while not on our label, were being used with the Freedom System by healthcare professionals for at-home administration. We will be pursuing on-label clearance, which we believe has the potential to have a 2026 full-year impact on revenue. These additions bring our total drugs that will be submitted for clearance this year to three. as the two new drugs join the rare disease biologics that we announced earlier in the year. With the addition of these two drugs, we now have nine commercial opportunities spanning the end of 2025 to the end of 2026 in our pipeline. We continue to execute on both our robust core business strategy and the many new drug catalysts on the horizon. As we discussed on our last call, 75% of our revenues are recurring from a chronic SCIG patient base. The database is 45,000 plus patients with over 2 million annual infusions, growing about 15% per year as we continue to gain share. We are confident in this demand as an underlying source of growth given the market has consistently expanded over the last two years and again this quarter. We remain very positive about this core base of revenue and its potential given the chronic nature of immunodeficiency diagnosis and resilient market growth, even in the face of macroeconomic uncertainty for our patient base. On the next slide, you'll see that our international business continues to outperform expectations and grow rapidly as we expand into key markets outside the U.S. The total international SCIG TAM is estimated at 60 million, with Koro currently holding approximately a 10% share. Our goal is to grow our share to 30% to 40% over the next several years by deepening our presence and capitalizing on emerging opportunities. Between 23 and 24, we achieved 32% growth, and we expect to maintain that momentum through 2025. This confidence is driven by several strategic initiatives, including expanding into top 10 markets where our presence is currently limited but the upside potential is high, growing our addressable market through strategic device partnerships, for example, with our new pump technology, expanding our consumable usage with electronic pumps, and capitalizing on the growing trend to pre-filled syringes, as we have successfully done here in the US. While this is a multi-year growth strategy, we are already leveraging our IG Pharma partnerships to accelerate market entry and share capture abroad. We believe this will support sustained growth across our international business. Now, turning to our pipeline slide for new drugs, it's more robust than ever, with 17 total opportunities, including 15 active collaborations with pharmaceutical partners. The two additional opportunities come from the prior mentioned iron chelation and antibiotic drug programs, which we are pursuing independently without a pharma partner for inclusion on our label. Of the 17 total opportunities, nine have commercial potential by 2026, which is shaping up to be a pivotal year for our pipeline strategy. Let me highlight the five key pipeline developments you see on the slide. First, we recently received clearance for our Freedom 60 system with all IG drugs in Japan. As one of the top 10 global markets, this represents a meaningful opportunity to expand our international footprint. We've already established distribution and are actively working with our pharma partners on a market entry and growth plan. Second, we saw the successful completion of a Phase III trial within our nephrology collaboration. This program involves an expanded indication for a drug already approved for use with the Freedom System. Upon FDA approval, it will be eligible for immediate use with our pumps. Well-addressable patient populations and number of annual infusions are smaller compared to other programs in our pipeline. We're enthusiastic about this additional shot on goal in our new drug strategy. Third, we have made very good progress with our planned entry into the oncology infusion clinic market. We've established a US advisory board with leaders from major oncology infusion centers. We have actively engaged distributor partners And this quarter, we are set to begin with five pilot sites where we will further validate the value proposition of increased efficiency using the Freedom Infusion System, the potential for positive economic outcome, all while improving nursing and patient satisfaction. We look forward to continuing to update you on our pilot site progress. Finally, we've added two new programs, iron chelation and antibiotic therapies, which we're advancing independently. As mentioned earlier, these additions were driven by strong demand from our specialty pharmacy partners who view them as ideal candidates for delivery via the Freedom platform. Both drugs are administered by nurses in the home setting. Because these clinicians are already familiar with our platform through IG therapies, adoption barriers are expected to be low. While we're still evaluating the full commercial potential, patient populations, and underlying demand, early analysis suggests these drugs, once on label, could add an incremental half a million dollars to 2026 revenue potential. Overall, we've had a strong start to the year, demonstrating continued momentum in our core business, progress across all strategic fronts, and exciting new milestones in our pipeline. With that, I'll now turn the call over to Tom to walk you through the financials.