Nyxoah SA

Ladies and gentlemen, thank you for standing by, and welcome to the Nick Sola First Half 2021 Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star then one on your telephone. If you require any further assistance, please press star then zero. I would now like to hand the conference over to your speaker for today, Vivian Cervante, Investor Relations at Gil Martin Group. You may begin.

Thank you, Tawanda. Good morning and good afternoon, everyone. Welcome to our earnings call for the first half of 2021. Participating from the company today are Olivier Talmad, Chief Executive Officer, and Fabian Suarez, Chief Financial Officer. During the call, we will offer commentary on our operating activities and review our first half financial results released after U.S. markets closed on August 31st, after which we will host a question and answer session. The press release can be found in the investor relations section of our website. This call is being recorded and will be archived in the investor relations section of our website. Before we begin, we'd like to remind you that any statements that relate to expectations or projections of future events, market trends, results, or performance are forward-looking statements. All forward-looking statements are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. All forward-looking statements are based upon current available information, and the company assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these statements. For list and description of the risks and uncertainties associated with our business, please refer to the risk factors section of our prospectus files with the SEC on July 6, 2021, in connection with our initial public offering on NASDAQ. With that, I will now turn the call over to Olivier.

Thank you, Viviane. So, good morning and good afternoon, everyone. Thank you for joining us on our first earning conference call as a publicly traded company. on both Nasdaq and Euronext Brussels to discuss our first half of 2021 operating results. Before I begin with my script, I'd like to thank our team at Nixoa for their dedication and focused execution, resulting in a Nasdaq listing during which we raised $97.8 million. Having completed two IPOs in less than 12 months puts the company in a strong financial position to achieve its vision to become a leading neuromodulation company in the field of obstructive sleep apnea. I also would like to welcome the new Nixoa shareholders and thank them for their participating in our journey. In the first half of 2021, we continued to execute on our programs, building further on key accomplishments made in 2020. This includes the first area of focus, the pivotal US IDE trial called DREAM, for which we can report steady progress, maintaining our target to complete enrollment in Q4 2021. The second key area of focus being the commercial proof of concept in Germany, where I'm pleased to report that Nixoa is now fully integrated into the German hospital system with a formal DRG reimbursement scheme, resulting in in a strong therapy adoption in the top accounts, but I will come back to this later. Further, market expansion activities in Europe resulted in a formal DRG coding in Switzerland. It's the second DRG reimbursement scheme that we have in place in Europe, and we generated our first revenue in Spain and in Belgium. Next area of focus is the therapy indication expansion for concentric collapse or complete concentric collapse, so-called triple C patients studied in the Better Sleep trial. Better Sleep top line results show that we reached primary safety and performance endpoints with a statistically significant mean reduction in AHI for both triple C and non-complete concentric collapse patients, leading to a submission with the European notified body to expand our label to include those complete concentric collapse patients. In the United States, Nixoa plans on pursuing the FDA breakthrough device designation for the Genio system in order to shorten the approval path to treat CCC patients as well. We will submit full Better Sleep study data to a medical journal for publication and announce results following further analysis. Next, Nixoa is strengthening its vision through our collaboration with the US Vanderbilt University, supported by US and German key opinion leaders, in order to integrate a new anthracervicalis stimulation technology into our scientific and technology department pipeline. Anthracervicalis is a different nerve compared to hypoglossal nerve stimulation, and it's also located in the neck of the patient. We also achieved further advancements in the tech transfer to our second manufacturing facility, the one in Belgium, by successfully completing the third phase. So far, the highlights. Let me now move to a more detailed review of our activities. Following our successful NASDAQ IPO, we strengthened our balance sheet, allowing us to continue to strategically deploy our resources to drive market penetration in Europe, steadily advance our clinical programs, scale up, and build upon our IP, product, and adjacent technologies with our focused R&D activities. Now let me walk you through our priorities, and starting with the first one being the U.S. DREAM Pivotal Study. The U.S. DREAM Study, or our Pivotal Study in the U.S., aims to, first, confirm the safety and effectiveness of the GenioSystems, and to support marketing authorization of the GENIUS system in the U.S. The study plans to enroll 134 moderate to severe OSA patients who failed first-line CPAP therapy, with 12-month effectiveness and safety primary endpoints. We continue to make progress on rolling patients into the trial. To date, we have identified 25 centers for the trial worldwide, of which 16 centers are currently active and enrolling patients in the United States. The other centers are in Australia, one in Germany, and one in Belgium. Based on the current enrollment rates, we continue to expect enrollment completion in the fourth quarter of 2021. We expect to obtain FDA approval and Genio's system to be commercially available by the end of 2023. Let me now discuss our commercial activities. We are committed to developing and then leveraging key centers of excellence as we go deep versus go wide in driving market penetration of our genius system. Our activities center on active engagement, education, and market development across patients, physicians, and hospitals, with focus on high-volume EMT surgeons and sleep doctors. who see, diagnose, and treat patients with OSA. We also tailor our programs to suit local and regional reimbursement needs, including the pursuit of a fast follower strategy in regions where there is already hypoglossal nerve stimulation therapy and establishing market leadership in new regions where we intend to develop coverage. In the first half of 2021, In Germany, we successfully transferred our existing NUB coding into a dedicated diagnosis-related group, or DRG, for hypoglossal nerve stimulation. This shift allowed us to ramp up our commercial activities with the German accounts. NYXOA commercial proof of concept consists of a two-step approach. Step 1, 12 months after DRG reimbursement, becoming German market leader in these top accounts, tier one accounts, or center of excellence. And 24 months after DOG reimbursement, becoming market leader all over Germany for hypoglossal nerve stimulation. In the first half of 2021, 20 genius systems were implanted in these top accounts or tier one accounts in Germany. During the first half of 2021, there was an increased commercial penetration with a six-time increase in accounts in Q2 versus Q1, resulting now in 12 active German accounts. In addition, Nixowa invested in building a German commercial organization by having eight full-time employees in Germany led by a German country director. All these employees were trained and were operational by the end of June. The recruitment of two additional sleep experts who will interact directly with sleep labs and patients, and on top of that, a dedicated German marketing manager is ongoing. Simply put, we are strategically hiring personnel as we build out both our organization and infrastructure to grow our business. We plan to drive further expansion by entering new markets. During the second quarter of 2021, we were able to generate revenue in Spain which is a complete new market for hypoglossal nerve stimulation, and in Belgium. In these two countries, several accounts were activated. And last but not least, Switzerland. Reimbursement under an OSA-specific DRG code obtained from the Federal Statistic Office was obtained. We also submitted a new reimbursement dossier for hypoglossal nerve stimulation in Belgium. Further, we are preparing market entry in the Nordic countries, Italy, and Israel by actively engaging centers of excellence. Turning to our clinical program for international markets, where the focus is clearly on the Better Sleep Study. Better Sleep, as a reminder, it's a multi-center, prospective, open-label, two-group clinical study to evaluate the safety and efficacy and performance of the Genio system for the treatment of OSA in adult patients with and without complete concentric collapse of the soft palate. This study is the first study of its kind to include those triple C patients. It was conducted in nine medical centers in Australia and New Zealand. In June 21, we announced that the Better Sleep trial reached its primary safety and performance six-month endpoints, in 42 implanted patients. Of these 42 implanted patients, 17 were complete concentric collapse patients. And the data showed us a statistically significant mean reduction in the AHI score from baseline to six months post-implantation in the full analysis patient population, meaning both triple C and non-triple C patients, the same statistically significant mean reduction in AHI in the triple C patient subgroup only, and a statistically significant mean reduction in AHI from baseline in the non-CCC patient subgroup. To quote our principal investigator, Dr. Richard Lewis, the most impressive aspect of the result is the response rate of the complete concentric collapse patient subgroup. In summary, we continue to build a body of clinical data in support of our bilateral hypoglossal nerve stimulation technology. We publish the full data set of our Better Sleep study and already have productively dialogued and interaction with the European notified body. In the United States, Nixoa plans on pursuing the FDA breakthrough device designation for the Genio system which we hope will have a positive impact on shortening the approval path to also offer a treatment solution for complete concentric collapse patients. Let me now turn to a discussion of our resurgent development activities. In the first half of 2021, we made important progress in our R&D programs. In January 2021, We received a CE mark for an MRI conditional labeling, ensuring that patients implanted with the Genio system can now undergo a full-body 1.5 Tesla and 3 Tesla MRI diagnostic scan within approved parameters. We note that MRI compatibility aids in OSA patients' quality of life with over 40 million MRI scans performed on OSA patients in 2020 alone, with 60% of MRI scans performed in the thorax or abdominal area, and 40% of MRI scans in 3-TESLA. To date, we are the only company with an MRI compatibility label for 3-TESLA. And in February 2021, we announced also or exclusive licensing agreement with the Vanderbilt University. This is allowing us to access to technologies and capabilities to build our pipeline. We have started development of this new technology in collaboration with US key opinion leaders, but also with the help of some German key opinion leaders. New treatment options will focus amongst others on stimulating the ansa cervicalis nerve. As previously noted, we developed our proprietary junior system with the obstructive sleep apnea patient in mind. Our R&D initiatives maintain that focus. Building on these accomplishments, we look forward to delivering on additional milestones ahead. For the second half of 2021, we expect to begin marketing in Switzerland Nordic countries and Italy, with an increase in revenue generated in countries where we are already present with the key focus on Germany. We also look forward to opening our manufacturing facility in Belgium to further scale up production capacity. And finally, in the US, we continue to expect to complete enrollment in the DREAM IDE trial by the fourth quarter of 2021. With this, let me now turn the call over to Fabian for our financial discussion.