Nyxoah SA

Hello and welcome to NextL's second quarter 2025 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 the question during the session, you would need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 again. I will now like to turn the conference over to Kirsten Dennis. You may begin.

Thank you. Good afternoon everyone and I welcome you to our second quarter 2025 earnings call. Participating from the company today will be Olivier Talman, chief executive officer and John Landry, chief financial officer. During the call we will discuss our operating activities and review our second quarter 2025 financial results released after US market closing today, 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 on the investor relations tab of our website. Before we begin, I'd 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 forward-looking 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 forward-looking statements. For a list and description of our risks and uncertainties associated with our business, please refer to the risk factor section of our Form 20-F filed with the Securities and Exchange Commission on March 20th, 2025. With that, I will now turn the call over to Olivier.

Thank you, Pearson. Good day, everyone, and thank you for joining us for our second quarter 2025 earning call. I'm extremely proud to announce that we received FDA PMA approval for our Genio system in the United States. This result was the culmination of persistent, strong regulatory and clinical execution supported by the entire passionate and committed NixSola team. For US patients suffering from obstructive sleep apnea or OSA, the Genio system provides them with a significant advance from currently available treatment options. For physicians, they now have a choice to select the optimal Agenes therapy for their patients. For NixSola, it marks the beginning of an exciting journey in the US. This PMA approval confirms the safety and effectiveness of our innovative technology and authorizes commercial distribution in the US, which now has actively begun. The Genio system becomes the first and only bilateral Agenes therapy approved in the US for treatment of OSA. It's also important to note that the Genio system is not contraindicated for patients suffering from complete concentric collapse or CCC. Another key differentiator represented in our label highlights our ability to treat patients with positional OSA. This is important as according to published data, a patient's AHI score can double when a patient sleeps in a supine position or on their back. Having this in our label serves as a validation of the clinical outcomes for more pivotal dream study, which met its primary endpoints regardless of a patient's sleep position. Also note that complete concentric collapse or CCC is not contraindicated, but is included as a warning in the company's label as the safety and effectiveness for patients suffering from CCC has not yet been established for the Genio system based on US specific clinical data. Our goal is however to make Genio available for US patients suffering from CCC as soon as possible. Therefore, we strategically elected to stop enrollment in the ACCESS study. We believe that the number of patients enrolled in ACCESS will have enough statistical power to draw meaningful conclusions on our effectiveness for complete concentric collapse patients. In addition, we see great results in real life data from patients in Europe where our CE mark already includes an indication for CCC patients. I'm also pleased to report that our dream study was published by the Journal of Clinical Sleep Medicine, which is a leading journal for the sleep community. I'd like to highlight a couple of data points that were published for the first time, which demonstrate a high level of patient satisfaction. The device demonstrated compliance of .9% and the patient satisfaction was scored at 90%. This data confirms our early experience in Europe and we believe the publication of the dream study will strengthen our US knowledge. And will also give us access to new international markets. Immediately upon receiving FDA approval, we started our focused US launch with a commercial organization with over 50 highly talented and experienced professionals. This team is now executing on our two-pronged launch strategy. They will target high volume hypoglossal nerve stimulation and planting centers where they will position GENIO, a differentiated option for patients suffering from OSA. And they will focus on developing strong referral networks with sleep physicians managing large populations of moderate to severe OSA patients who quit CPAP but are in need for treatment. Our US sales team is already actively engaging with these targeted sites, working through the Value Analysis Committee and pre-authorization approval processes. From a launch execution perspective, I am very pleased to report that already in the first week we received several VAC and pre-authorization approvals. It's also very exciting to see multiple physicians with patients lined up who are running quickly to become the first to implant GENIO commercially in the US. Regarding reimbursement, we have identified the use of CPT code 64568, which has been recognized by commercial and government payers for the OSA indication. This is the same CPT code used by our competitors, and we feel confident that we will be able to differentiate ourselves via our unique technology benefits and patient focus. As a result of our ongoing work with the American Academy of Auto Longeology and participation in the FDA's Early Payer Feedback Program, educating CMS and major commercial payers on the clinical impact GENIO can have on their OSA patients, positions as well for acceptance of pre-authorization submissions in the near term and favorable coverage decisions in the long term. With over 100 physicians in the US already trained and additionally weekly training sessions scheduled, there is strong momentum building in the medical community. Our initial traction in the marketplace is demonstrated by the many physicians lining up patients for a GENIO implant in just our first week of commercialization. This early interest gives us confidence in the success over the US Lodge. We have also identified demand from patients who are hesitant about receiving an implanted battery, which requires the need for subsequent surgery to replace this battery. The GENIO system addresses this need with its unique and less invasive design. There has recently been a lot of discussion on the potential impact of GLP-1 on the AGNS market. Contrary to our competitors, we have strategically limited our patient population to those with a BMI below 32, since that is where the efficacy for GENIO is proven. As a result, we believe that the eligible GENIO patient population will grow, not shrink. This belief is based on survey study data showing GLP-1's ability to bring patients with high BMI of 37 and above down to a BMI level where clinical data demonstrates that GENIO is effective. Without GLP-1, we would never be able to treat this high BMI patient population. While there might be patients with lower BMI's dropping out of the potential AGNS patient population, this will be out-weighted by a significant number who becomes eligible for AGNS. On another topic, prior to GENIO FDA approval, Inspire Medical initiated a patent lawsuit against Nixoa. Since Nixoa was founded, we have invested significantly in our IP portfolio and we will vigorously defend ourselves in this matter and have the means to do so. This patent lawsuit will not impact our US commercial launch, which is already underway and generating a lot of enthusiasm in the marketplace. To conclude my opening remarks, I want to emphasize that the FDA approval marks a pivotal moment for Nixoa. Our bilateral stimulation technology offers a truly differentiated solution that makes us unique for patients. We believe GENIO can fundamentally improve the quality of life of all our patients by giving them a good night's sleep. With the current ongoing momentum and physicians already lining our patients for GENIO, we are confident in our ability to execute a successful US launch. With that, I'll turn the call over to our CFO John Laundrie for a financial update.

Thank you Olivier. We recorded revenue of 1.3 million euros in the second quarter of 2025 compared to 800,000 euros in the second quarter of 2024 for an increase of 73.8%. Gross margin in the second quarter of 2025 was .4% or essentially flat to the second quarter of 2024. Total operating loss of the second quarter of 2025 was 19.9 million versus 13.3 million in the second quarter of 2024. This was driven by the acceleration in the company's commercial investments in the US in preparation for post-FDA commercial launch. Our cash position, including cash, cash equivalents and financial assets was 43 million euros at June 30, 2025 compared to 63 million euros at March 31, 2025. We also have 27.5 million euros available to us under our term debt facility, which can be drawn down in two equal tranches of 13.75 million euros each, which are subject to certain milestones. With that, I'd now like to hand the call back to Olivier to discuss his thoughts on the remainder of 2025. Olivier? Thank you John.

Before we conclude, I want to emphasize that this FDA approval represents a truly historic moment for NixoA. I would like to thank all NixoA employees for their persistence and effort in making this happen. We have now officially entered the US OSA market with our innovative Genio solution and the launch is actively ongoing. The enthusiastic response from physicians and their patients reinforces our confidence in the success of this US launch. We believe the remainder of 2025 will be a transformative period as we establish Genio in the US market, an advance or mission of making sleep simple for patients worldwide. We look forward to updating you on our progress on our next earning calls. With that, I would now like to open the line for question and answer.

Thank you. Ladies and gentlemen, as a reminder to ask the questions, please press start 1-1 on your telephone and then wait for your name to be announced. Before you ask your questions, please press start 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of John Block with Stiefel. Your line is open.

Thank you. Hey guys, good afternoon. I don't know if you can John, obviously, but congratulations to you and the team. I'll start off just any year-end 25 metrics, you know, the key to focus on. Train positions, I don't know, I'll throw that one out there even though I know you said you already have, I think it was over 100. Should we be paying attention to that, the number of certified centers, the number of implants? I know it's early days, but just as we think about over the next three or four months, you know, where are our eyes or where our focus should be as we think about exiting 25 in regards to the Genio launch. Thank you.

Yeah, thanks for the question, John. In terms of some of the leading indicators that we're tracking, obviously we mentioned today the number of positions trained. That's going to be something that we keep a close eye on, as that's obviously a leading indicator. We'll also be looking at the number of value analysis committee applications that we submit to the various institutions over time, as that's also another leading indicator. I think over time we'll be looking at some other metrics -a-vis maybe number of accounts opened or pre-authorization approvals received. However, at this point in time, we're still working through that and we'll share more on our next quarterly call with all of you.

Fair enough. Thanks for that. And then I'll sort of pivot. Olivia, this one might be for you, but just, you know, obviously there was the approval, but then there was also, I don't know, maybe call it like the favorable label that went along with the approval. So can you talk about how you expect to leverage the differentiated label, you know, such as no triple C contraindication, the sleep positional data? I don't know if it's more of a commercial question, if you would, but how do you expect to capitalize on that and to go to market when we think about over the next handful of quarters? Thank you.

Thank you, John, for this question as well. Yeah, clearly it was for us an important win to also see this differentiation reflected in the label. As our mission is always make sleep simple, that starts also by being certain that we can protect patients throughout the entire night, regardless in what sleep position they are. And that is why positional OSA is so important that also there we can continue showing a highly effective technology and therapy. And so far, Genio is the only technology that is offering this. So that comes to the supine data and the positional OSA. When it comes to CCC, of course, there is extremely encouraging to see that also FDA is recognizing this by not giving us a contraindication, contrary to competition. And as you know, with access, so there we also did great work. We had our PIs implanting a significant number. So now we can closely, we can stop the enrollment earlier because also there we would like to advance on bringing this and making it available for CCC patients in the US. So both are reflected in the label. I know that you and many of your colleagues have questions on this in the past. And again, it is confirming what we were telling you that bilateral stimulation is making a difference compared to unilateral stimulation. And that this definitely will also help convincing physicians when they have to choose between the two available AGNAS technologies.

All right, great color. Thanks. I got more, but I'll hop back in the queue for now. Thanks, guys. Thank you, John.

Please stand by for our next question. Our next question comes from the line of Adam Maeder with Piper Sandler. Your line is open.

This is Kyle on for Adam. Thanks for taking the questions and we extend our congrats on FDA approval as well. Maybe just first to double click a little bit on the commercial strategy that you discussed in prepared remarks.

I

was hoping to get an idea of like which accounts you're kind of aiming to target first. Are there, you know, kind of centers from the dream study from the high volume implanters? Please give us kind of any color around the accounts and the strategy there.

Yes, no, no, definitely. So as I mentioned in the script, we have a two pronged approach. So first of all, we go and our sales team will focus on high volume people also know stimulation implanting accounts. Maybe as a quick reminder to this, you know that in the US there are roughly 1400 implanting accounts offering AG&S, but it's a very concentrated market, meaning that 350 to 400 of these are high volume accounts and are representing 75 to 80 percent of the total revenue. So those are the accounts the team will be focused on. We start with a team of 50 commercial people of which 25 are territory managers. They will all have four to six of these accounts and we have built what we call a scalable technology. So every quarter we will add a number of territory managers and increase the number of accounts so that we can cover as soon as possible all 400 of those high volume implanting accounts. So that is what we call it with our focused launch. Next, and I think as important, is also strengthening the referral paths. And the way we are doing this in the ethnic soil is totally different compared to the way it's done in the past in the sense that we will focus on patients that have moderate to severe OSA and are not quitting CPAP. And also there, focusing on those specific patient groups will definitely strengthen the trust and confidence of sleep physicians and will also further make sure that patients in need for treatment will get a sleep surgeon that can help them with a genial solution. So that's all we plan to go forward with our launch strategy.

That's super helpful. Thanks for the color there. Maybe just for my second question to shift over to reimbursement a little bit. Is there just, how do you plan to go about that process here looking forward? Is there any logistical considerations around the work that you're doing with the different payers? And then maybe more specifically, when can we expect to see some onboarding of some of the larger payers? Would it be fair by the end of this year or is it kind of more of a 2026 story? Thanks again, Ed.

Yeah, thanks, Collic. I can take this question. So in terms of our reimbursement strategy, we have a comprehensive reimbursement strategy. So we're using, as you may be aware, an established CPT code. At launch, we're using the 64568 code. We've worked closely with the AAO on that particular code. We've participated in the FDA's early payer feedback program. And we've also been working with engaging CMS and major commercial payers in the U.S. around this particular code. So as we work through this multifaceted approach and strategy, we expect these decisions will start coming in first for the pre-authorizations. We expect some of those to come in this year, clearly. I think you mentioned we had our first one now, but we expect more of those to come in over the balance of the year. And then as we start moving into more of the coverage decisions, if you will, that'll be probably more of a 2026 item,

Kyle. Perfect. Thank you.

Welcome.

Please stand by for our next question. Our next question comes from the line of Faraj Khalia with Oppenheimer. Your line is open.

Hey, Olivier. John, can you hear me all right?

Yes,

we can. Hello, Suhas. Perfect. Gentlemen, congrats on the approval. I know it's been a long time coming. And on the label. So, Olivier, a quick one. Let me start out. You mentioned access enrollment of these staff. I presume that the SMB chimes in and helps you all reach that decision?

Yes. So when it comes to the access study, in fact, we reach a significant number of patients that are already implanted that gives us the confidence that if we have to draw statistics, statistically conclusions that are statistically forward enough to use this terminology that we have more than enough patients. Maybe to give you some background, Suhas, on this. And I'm looking also at what is going on, what is happening in the OSPRI study. We know that the number of patients that we are having, we have already more than doubled the number of patients that have an OSPRI where they're also looking at CCC patients. So that's just as a side comment, but I think important information for you to know as well. And then the next thing on this, why we make this decision is we want to help patients with CCC in the US as well. Like we are doing in Europe in a very successful way, like we demonstrated in Australia in the Better Sleep Study. And therefore here we cannot wait. And when you have enough patients implanted, we do think it is a well calculated decision to stop earlier and that we can activate the 12 month follow up timeframe. So by the same time, same period next year, we will be able to publish those data. Then we submit a PMA supplement and we should already be able to end of 26 beginning, latest, beginning 27, also to add this to our label in the US and be able to help CCC patients that are currently contraindicated for AGMs.

Olivier, I'll ask you a question. This is the second one for me. How are you thinking about patient outreach and packaging with products specific to active use, supine, CCC, lack of a battery, what not? How are you thinking about packaging this? Do you think you're making that even if the same inspired CCC ads make sense or are you intending to launch a targeted approach for bilateral testing?

So first of all, Suraj, we will further leverage on our clinical data. I think this is really important so that we look at patient phenotypes where we know we are extremely efficient. You know the adult patient population, then when it comes to AHA, and I would like to point this out in DREAM, the AHA range is 15 to 65, which is already different compared to competition where it's 20 to 50. So there we're already able to in-store to demonstrate a strong number 15 to 65. So that is one aspect. Another aspect is what we learned in market research is that for physicians it's extremely important to know that their patients will be protected throughout the entire night. So this is something that is not only resonating well with ENT surgeons, but it's very well resonating with sleep physicians who have to refer patients because they see this effect when they start studying polysomnography sleep exams. They see exactly when a patient is in what position. So it's a great benefit being able to show protection throughout the night for a sleep physician, providing them confidence when they refer a specific patient all the way to an ENT surgeon for a genome. And then last, when it comes to the outreach, yes, we have a focus launch. We start with 25 territory managers. They all cover four to six centers. I think I already explained how concentrated the business still is in the US, and we will scale quarter after quarter by adding roughly 50 new territory managers and each time adding up to 75 new implant sites. And that, to John's point, will also become one of our key metrics in measuring our success going forward. And it gives us the ability in short term also to reach all 350 to 400 high volume sites. I hope this is answering your question.

Thank you. Please stand by for our next question.

Our

next question comes from Milana Ross-Ausblom with Canter Fitzgerald. Milana, please.

Hey guys, this is Matt Park on for Ross today. Thanks for taking the questions and congrats again on FDA approval. So starting off with Olivier on VAC approvals, how should we think about a reasonable pace for account openings through the remainder of 25 and into 26? And then are there any headwinds here that we should be mindful of?

Yeah, no, it's an excellent question in the sense that what the team did really successfully is start segmenting also the VAC committees by time they need in order to reach a decision. And what we learned is you have some that go extremely fast. As I already mentioned, we have the first, we have several of those fast VAC committees where we already passed the VAC committee. But you also have a number of VAC committees that will really take their time. And time can go up to nine months in some, in some advantage and so in some cases. So here we will focus and follow the segmentation. The fastest, of course, there we are present immediately. And that's how we further scale up. And I do not want to set expectations on saying this is the precise number that we will achieve by the end of this year. But it is clear that in our targeted approach, all the hospitals that we are targeting, they also will go through the VAC and we expect all of them to gain us an approval in the coming six months.

Got it. That's super helpful. And then that one for John here. You know, as we're thinking about spending the back half of the year and into 26 as you guys filled out your commercial infrastructure in the US, can you kind of walk us through some of the puts and takes around operating leverage that we should be mindful of?

Sure, absolutely. From an OPEC perspective, we don't provide specific guidance, but maybe we can provide some color in terms of how we're thinking about the investment levels. So for the back half of this year, in terms of OPEC spend, we'd expect to see R&D continue at a pretty consistent rate and then maybe be a little bit up year over year, considering some of the investments we're making in the IP litigation front. From an SG&A perspective, that will be up obviously year over year, considering the investments that we made in our sales and commercial efforts in the US with the 50 highly talented professionals we have in that organization. And then as we look at 2026 from an overall investment level perspective, we'd expect the majority of the increase next year to be in the way of SG&A as we increase the size of the commercial organization, again, by expanding it by those scalable units of 15 territory managers over the course of the year. So, you know, we could expect to see potentially the SG&A spend, you know, nearly double in 2026 over the level seen in 2025.

Got it. Thanks for the color. Congrats again, guys. Thank you.

Please stand by for our next question. Our next question comes from Alana David Rescott with Bayer. Your line is open.

Great. Thanks for taking the questions and congrats on the approval here. I wanted to ask first on reimbursement, the VAC, the prior off processes that you have called out. In the preparatory marks, I guess, can you just help us understand, you know, what considerations go into those, you know, VAC and prior off, you know, conversations? Are you definitively kind of locked in to reimbursement there? Is that fully ironed out? Just how do we think about what the prior off and VAC processes are relative to kind of what the line of CBT code and commercial coverage?

Sure. Yeah. Thanks for the question, David. Yeah. So early on, it's, you know, clearly early on in the process, but in terms of the approvals that we receive -a-vis the VAC and or the pre-authorization, the answer is yes. So we've gone through the process. I think really what we're looking to do there is demonstrate the clinical efficacy and the effectiveness of the technology, certainly utilizing the HTNS code, the 64568 code on the CPT side. And we've been able to have success in demonstrating that, at least in this early stage, to those hospitals and accounts and centers where we've completed the VAC. And as Olivier mentioned, there are various lengths of process for these VACs as well as the pre-authorization process. The VAC approvals can range anywhere from very short periods of time, up to nine months. And, you know, in the pre-authorization process, it's, you know, extended as well. So that's where we're at this point in time and look forward to continuing to build this body of approvals.

Yeah.

And maybe in addition

to this, if you allow me to add, AGNS is no, there is no longer one company that is offering an AGNS solution. I mean, with Genio, we enter the market, there is no option to choose. And that's why today, as of today, there is an AGNS treatment solution and there are different companies offering this. And I think that's also important. So the previous work done in the past, it was also linked to AGNS. So all the faculties, they recognize this and they know what it is and what it can do. And as of today, there are two companies who can offer a solution. And it's up to their physicians that will decide together with the patient what solution they will choose.

Okay, great. And then maybe on the, you know, CCC patient

population,

you know, you've got the no contraindication, you know, there's the warning that it wasn't tested, but you have access that is coming. So one, I guess, I don't know if you called out a timeline, I might have missed it on the access side for when that data should read out. But I guess, how do we think about the patients that are on the CCC side that can get treated, you know, today versus those that you can kind of go after and target once you have access kind of fully in hand?

So when it comes to the access trial, so now we stop the enrollment. So the time clock for 12 months can start. So 12 months from now, we will have the data of all access patients. And then based on the study data, we will submit a TMA supplement. Normally, this takes roughly another six months before FDA grants you a supplement. So if you do the math, the earliest end of Q4-26, beginning Q1-27, we could have CCC patients added to the label. Today, with having no contraindication, we are very proud that FDA is recognizing already that CCC is something where they would like to see US specific data before adding the label, but where they also recognize the fact that CCC should not be a contraindication. And I think that's an important first step in the direction in opening it up in the US market for patients, also OSA patients suffering from CCC.

Okay, so would it be fair to assume that you can start treating CCC patients, say since there is no contraindication, maybe pump the gas on that once you have access out in the PMI supplement, or in the near term, are you really kind of just waiting for the access results? Thank you.

So we are waiting for the access results, and let me be very clear on this one. We would never promote an off-label indication. And today's CCC, it's also for genio off-label in the US. So we would never, ever promote this. But on the other hand, it is clear that it's not a contraindication, and it is in the warning section of our labeling. So physicians, they know what this means. Okay, perfect. Thank you.

Thank you. Please stand by for our next question. Our next question comes from the line of Michael Pollock with Wolf Research. Line is open.

Good afternoon. I have two. First one, pricing. Can you confirm, as you launch now in the US, intent to price at inspires level 25,000, or has the thought process on pricing changed?

No, indeed. So we use the same CPP code, and we are following also the price strategy that comes with the CPP code, to your point. Okay.

That's what I figured. Just thought it worth clarifying as we go into launch. And then my second question is, if you look to open accounts, is there an ask you're making of these surgeons? You know, you invest in them, you train them. They're going to be, you know, bargaining and competing for patients on their behalf. That's an investment that you make. What kind of return do you ask of these initial centers, if anything? And I'm just thinking, like, look, they're all in the business of hypoglossal nerve stem. They have large wallets. What is a share of wallet that you're wanting? Kind of a, maybe not as a firm commitment, but a soft commitment from these surgeons as you get going in this initial cohort. Is it 10%, 20%? Is it more? I'd love a feel for how you go about those initial conversations and signing up this initial group of implanters. Thank you.

No, thank you, Mike, for this question. And it's also a question, of course, as you can imagine, that we have already discussed as well, because we have a lot of demands from physicians who are reaching out to be trained on the genome technology. And we can unfortunately not train all of them at the same time. So what we are asking is before a physician is eligible to join a training or invited for a training, they need to come with five patients, clearly defined patients, and we use the criteria as the same criteria as in the dream study. So we ask them to come with five patient cases. Then they get the training. We can already discuss those five patients so they can be implanted right after they go back after being trained. That's what we do. When it comes to market share, because you were all wondering also, do you ask 10% or 20% market share? Honestly, we don't at this stage. We do think that if they are well-trained, high-quality training, they do their five cases, meaning that they will all go through their surgical learning curve. Then we are convinced that they will make the right decision when patients are coming, and that also patients will know if they can choose a bilateral stimulation with a single incision. You know, all the different differentiating factors, full body MRI compatibility, that we will be able to capture a lot of patients with our new technology. Thank

you for the color.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I will now turn the call back over to Olivier Kalman for closing remarks.

Thank you again for your time today and your continued support of Nixoa. As I mentioned in the beginning, this is the most exciting time in our company history. We are so excited to be able to launch in the U.S. I will also not forget our international markets where we are also making good progress, but it's clear that the market is in the U.S. And finally, after so many months, years of hard work, I'm pleased that we can enter this and the environment is extremely exciting. So you will and I will look forward also updating your progress in the coming months. So thank you all again and have a nice day.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.