Nyxoah SA

Good morning and thank you for standing by. Welcome to the NXOA full year 2021 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1 on your telephone. I would now like to hand the conference over to your speaker today, Jeremy Pfeffer with Vice President of Investor Relations. Please go ahead.

Thank you, Catherine. Good morning and good afternoon, everyone, and welcome to our earnings call for the full year 2021. Participating from the company today will be Olivier Talman, Chief Executive Officer, and Loic Moreau, Chief Financial Officer. During the call, we will discuss our operating activities and review our second half and full year financial results released after U.S. markets closed on March 24, 2022, after which we will host a question and answer session. The press release can be found on the investor relations section of our website. This call is being recorded and will be archived in the events section of our investor relations website. Before we begin, I would like to remind you that any statements that relate to expectations or predictions 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 currently available information, and the company assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these statements. For a list and description of risks and uncertainties associated with our business, please refer to the risk factors sections of our Form 20F filed with the Securities and Exchange Commission, on March 24th, 2022. With that, I will now turn the call over to Olivier.

Thank you, Jeremy. Good morning and good afternoon, everyone. Thank you for joining us for our discussion of operating and financial results for the full year 2021. A special thank you also to the entire Nixoa team for their tireless dedication and outstanding performance amid ongoing challenges posed by the COVID pandemic. I'm extremely proud of how our team has exceeded expectations in all our geographies. 2021 was an important year for NICSOA as we accomplished numerous clinical, regulatory, commercial, and financial milestones and positioned ourselves for continued execution and sustainable success in 2022 and beyond. On the clinical and regulatory front, our Better Sleep study achieved its primary endpoint of statistically significant absolute reduction in AHI for the entire cohort, as well as for complete concentric collapse or CCC patients. As a result, we received an expanded CMORC indication to treat CCC patients in Europe, and the US FDA granted us breakthrough device designation for CCC patients. Having achieved a 64% response rate across all cohorts at six months post-implantation, including 67 amongst non-CCC patients, these better sleep results help de-risk our DREAM-USID pivotal study and are giving us confidence that we are incorporating the right learnings to this critically important trial. We have a much greater understanding about patient phenotyping as we advance the DREAM trial, and we look forward to completing implants next quarter. Our patient-centric focus also includes our separated IDE trial for CCC patients in the U.S., which we anticipate commencing later this year to make this technology available to the 30% of patients who are contraindicated for hippoglossal nerve stimulation in the U.S., and we would know and who would no longer have to undergo an invasive drug-induced sleep endoscopy, also called DICE procedure. We also made MRI compatibility a top priority from the get-go to ensure that patients always feel safe and do not have to worry about explanting their device to undergo an MRI, of which there are more than 40 million performed in OSA patients alone every year globally. We were therefore thrilled to secure CE-MORIC MRI conditional labeling to ensure that patients implanted with Genio can undergo full-body 1.5 and 3 Tesla MRIs. On the commercial side, we were extremely pleased to move from the innovation budget to securing a dedicated DRG code for hippoglossal nerve stimulation in Germany. We are also expanding rapidly and have generated strong demand in other European countries, as we managed to secure a dedicated DRG code in Switzerland and have obtained hospital reimbursement in Spain. We are also awaiting reimbursement decisions in Belgium and the Netherlands. Our commercial strategy in Europe is based on a deep understanding of the patient journey, engaging with the implanting ENT surgeons and sleep physicians as key stakeholders in guiding OSA patients to the most appropriate therapy. Building strong relations between both referrals and implanting physicians results in the creation of a center of excellence ecosystem associated with faster therapy penetration and high patient satisfaction. On the financial side, we also successfully completed our second IPO in the span of 10 months. raising 97.8 million through our NASDAQ listing in July, after raising 84.8 million euros in our Euronext Brussels IPO in September 2020. We were proud to welcome a strong group of high-quality investors to our existing US and European shareholder base, and we look forward to building our roster further. More importantly, These offerings provided us with ample balance sheet liquidity, a cash balance of 135 million euros as of December 31st, 2021. That enables us to invest in our key clinical R&D and commercial priorities at this critical time for our company. I will go into more detail on each of these pillars. Let me first reiterate to you our overarching strategy. Our proprietary patient-centric geneal system is the only hippoglossal nerve stimulation device that requires only one incision, which shortens procedure time to around 60 minutes and reduces the risk of infection compared to multiple incisions. It delivers bilateral stimulation, which we believe results in an expanded total addressable market. Eliminate the need for patients to have to undergo the drug-induced sleep endoscopy procedure to determine if they have CCC or not. And last, it is compatible with both 1.5 and 3 Tesla full-body MRI. We are leveraging or strengthened balance sheet to build a growing body of clinical evidence to ensure that this technology is available to as many moderate to severe OSA patients as possible. A population that numbers more than 1 million new patients per year, including more than 500,000 in the US who are eligible to treat with and without complete concentric collapse of the soft palate. Last June, we announced that Better Sleep had achieved its primary safety and performance endpoint of a statistically significant absolute reduction in baseline AHI at six months for the entire patient cohort, as well as for the non-CCC patient subgroup, and importantly, the CCC patient subgroup. This is a critical development for Nixoa, and these clinical results which were presented in a poster at the World Sleep Congress earlier this month in Rome, represent the first body of evidence to demonstrate that bilateral hypoglossal nerve stimulation can be an effective treatment for patients with CCC, who comprise approximately 30% of the moderate to severe OSA patient population and who are contraindicated for other hypoglossal nerve stimulation options that are approved in the U.S., The study also generated a statistically significant reduction in oxygen desaturation index, or ODI, across all patient cohorts. Per the SHARE criteria, as used in our DREAM US Pivotal Study, better sleep achieved responder rates of 64% for the entire population, 60% for the triple C cohort, and 67% for the non-CCC cohort. Considering that as the growing body of clinical data and real-world experience suggests that patient response improves meaningfully between month 6 and month 12, these strong responder rates in all patient cohorts already after 6 months further increase our confidence in positive outcomes for the ongoing dream study. where we need to demonstrate a responder rate above 65% after 12 months. We also note that the mean AHI reduction exceeded 70% amongst responders in both CCC and non-CCC organs, making them super responders. In other words, when a patient responds, the type of airway obstruction will not influence the outcomes using the Genio system. WorldSleep was an outstanding success for us as we not only present better sleep data, but also hosted a physician event entitled Shifting Paradigm in OSA Therapy with Genio that was attended by more than 55 key opinion leaders from the US and Europe. It was invaluable opportunity for us to present our data directly and answer physicians' questions. And we are encouraged by the growing interest and enthusiasm for hyperlossal nerve stimulation in general, and GENEO in particular. To this end, in October, the notified body in Europe expanded our CE mark indication to include triple C patients amongst those eligible to be treated with GENEO. And GENEO is now commercially available in Europe, and the first triple C patients have been successfully implanted in Germany. As a reminder, the ability to treat triple C patients means that all moderate to severe OSA patients will no longer have to undergo a DICE procedure to determine if they have CCC. In addition, the US FDA in September granted Genio Breakthrough Device designation for triple C patients, which provides us with priority review. More on this in a moment. Turning to our clinical program in the U.S., the DREAM Pivotal Study. The DREAM Pivotal Study is our study in the U.S. that aims to, first, confirm safety and efficacy of the genius system, and second, 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 POP treatment with 12-month efficacy and safety primary endpoints. The trial includes 16 US and 6 international sites currently activated, screening, enrolling, and implanting patients. Let me walk you through our progress on patient enrollment and the funnel that leads from initial enrollment to implantation. As of today, we have enrolled 430 patients, of whom 52 have made it through the funnel to implantation. There are additional 104 patients in active screening who underwent an initial polysomnography and are awaiting a confirmatory PSG to determine if their baseline AHI meets the minimum criteria to be implanted. Based on our experience, approximately 70% of these patients in active screening moved to implantation. meaning we likely have enough patients in the funnel to complete the necessary 134 implants. And we continue to enroll new patients as we speak to fill the funnel to ensure that we have more than enough to complete the study. Of those enrolled patients who do not progress for enrollment, they screen out because a DICE procedure indicates they have triple C, their BMI is too high, or an initial PSG determines that their AHI is not high enough. But to reiterate, we are encouraged by the pace of enrollment and by the number of patients who are moving through active screening. Today our focus is further secure all our slots and making sure that the baseline PSGs can be performed as soon as possible. Now to be perfectly candid, we fully expected to complete implants by the end of Q1 2022, which is next week. Based on the numbers I just shared with you, we will not hit that target in the next six days. While I do not like to make excuses, it's a fact that the Omicron variant caused significant disruptions for hospitals, particularly with respect to surgeries. Many US states placed moratoriums on elective procedures as did European countries like Germany as well as Australia. Even as things began to open up, the backlog of delayed surgeries meant it was increasingly difficult for surgeons to schedule a wartime. We therefore saw very little implanting activity in December and things gradually improved as we moved through January and into February. I am very pleased to see the strong momentum we have built over the last six to eight weeks as more key physicians have been activated and have accelerated their pace of implantation. We are now confident that we will be able to close out implants during the second quarter, which would put us on track to have full 12-month patient follow-up data in the mid of 2023. We will have much more to say on the specific regulatory pathway as we move through this year, but we expect to pursue a modular PMA pathway that we hope will enable us to secure FDA approval and commercial launch in the US in early 2024. Returning to the discussion of CCC, we have been encouraged by our sprint discussions with the FDA regarding the design of a separate IDE trial focused on CCC patients. We will call this trial ACCESS with three C's, as in triple C, and we hope to commence enrollment later this year. We will have much more to say about this trial, including sample size, design, endpoints, and timing, once we have final word from the FDA regarding our IDE submission, which we anticipate occurring before this summer. Turning now to our commercial progress for 2021. As with our other achievements in 2021, I'm extremely proud of the significant progress we made in our commercial operations. We remain committed to our strategy of going deep versus going wide as we focus our efforts on creating a center of excellence ecosystem with high level of clinical expertise between implanting ENT surgeons and sleeve physicians, providing more treatment options to their large patient pools. We have first focused on experienced hypoglossal nerve stimulation centers with an existing OSA referral path. Additionally, we have also managed to open new sites, feeding the funnel of new patients with a customized digital marketing strategy and targeted referral programs. Our focus remains on Germany, where we invested in building an Ixoa dedicated sales and marketing team of 13 people in order to demonstrate our commercial proof of concept. Supported by the strong endorsement of German KOLs and ENT society, we obtained a dedicated DRG coding in 2021. As of December 31st, We were in 12 active implant sites and expect to be active in 25 before summer 2022. Next to Germany, we also made meaningful headway in other key European markets during 2021. We secured the DRG code in Switzerland. We obtained hospital reimbursement in Spain. We continue to await reimbursement decisions in the Netherlands and Belgium. We also further invest in wider market access in the Nordic countries. Last, I would like to turn an update on our R&D activities. As mentioned earlier, in January 2021, we received the CE mark for MRI conditional labeling, ensuring that patients implanted with the Genio system can now undergo full-body 1.5 and 3 Tesla MRI scans. MRI compatibility is consistent with our patient-centric mission and aids in patient quality of life, knowing that over 40 million MRI scans were performed in OSA patients globally in 2020. To date, we remain the only company with an MRI compatibility label for the full-body entry TESLA, which is the most commonly used MRI setup. We also have submitted to the Notified Body in Europe and to FDA our Genio 2.1 Next Generation System, which includes a new patient-centric smartphone app that will empower both the physician and the patient to track progress. This app will also empower the patients, allowing them to adjust the stimulation amplitude at home. The Genio 2.1 activation chip will integrate multiple sensors, including a position sensor, to adjust stimulation levels based on sleeping position and patient movement, what would also be making our technology intelligent. We also remain focused on developing our longer-term pipeline to find new and innovative ways to treat a greater number of OSA patients. To this end, in February 2021, we announced our exclusive licensing agreement with the U.S. Vanderbilt University, allowing us access to technologies and capabilities to develop next-generation obstructive sleep apnea solutions. We are pleased that we can partner with Dr. David Kent, who is the Director of the Sleep Surgery at Vanderbilt University Medical Center, to develop new neurostimulation technologies. starting with one that focuses on the ansa cervicalis nerve stimulation. The ability to treat OSA patients in a different way will further expand treatment options for physicians, resulting in enlarging the eligible to treat OSA patient population. We are building first prototypes at the moment, and we will have further updates on this project later this year. I'm pleased to welcome our new CFO, Loic Moreau, who joined us January 1st. I will now turn the call over to Loic for financial discussion.