Nyxoah SA

Good day and thank you for standing by. Welcome to the NCSOA third quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll 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 1-1 again. Please be advised that today's conference is being recorded. I want to attend the call over to your speaker today. Pearson Dennis, please go ahead.

Thank you. Good afternoon, everyone, and I welcome you to our third 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 third quarter 2025 financial results released after U.S. 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 the risks and uncertainties associated with our business, please refer to the risk factors section of our form 20F 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 the third quarter 2025 earnings call. Since FDA approval on August 8th, our U.S. launch activities following FDA approval of Genio have generated strong enthusiasm across the EMT and sleep communities. Physicians welcome the long-awaited optionality now available to their OSA patients and the end of a single solution market. During the recent International Surgical Sleep Society, IFFF meeting, our Genio Symposium and educational event drew a full room of clinicians eager to engage with real-world case discussions and share perspectives. These discussions reflected what we continue to observe globally. Clinicians' value choice in treating obstructive sleep apnea and their differentiated, bilateral, patient-centric design resonate strongly with both surgeons and sleep physicians. We were particularly encouraged as well as the strong clinical results demonstrated in the DreamStorm. Many providers highlighted the opportunity to tailor treatment based on individual patients' needs and expressed appreciation for our approach to chronic disease management, patient feedback integration, and multidisciplinary care pathways. Finally, our first commercial Genu implant in the U.S. completed as early as September represented an important milestone for our teams and partners, already generating $231,000 in revenue during the third quarter and ahead of our expectations. Early service feedback has emphasized streamlined patient management, close collaboration between EMTs and sleep physicians, and strong patient follow-up engagement. While still early, this reinforces our confidence is well positioned to serve U.S. OSA patients with a compelling new alternative. We are navigating the critical steps of early commercialization and the momentum we are generating in training physicians, obtaining value analysis committee approvals, and securing coverage for major public and private payers is extremely encouraging. In our initial launch strategy, With 25 territory managers, we are focused on the initial 125 of the top 400 high-volume hypoglossal nerve sites representing roughly 75 to 80% of the total AGMF volume. We are actively tracking a number of leading indicators to measure our early progress. Since launch until end of October, We can report that out of the 125 targeted accounts, 111 surgeons have already successfully been trained on GLEO. Second leading indicator, 102 value analysis committee submissions have been completed, of which already 35 approvals have been received. Reimbursement has been secured with Medicare and 10 private payers already. including United Healthcare, Blue Cross Blue Shield, and Cigna. 63 prior authorizations were submitted. 21 approvals have been already received with a 100% success ratio. In all of these approvals, the CPT code 64568 was accepted. 15 implants were already successfully performed across 9 accounts in the first 4 weeks. Beginning on the road since the launch and interacting with surgeons, I've been incredibly encouraged by feedback I'm hearing. Surgeons are enthusiastic to finally have a second AGNS option to offer to their oversight patients. They commented that GEO is unique and differentiated as a solution, which resonates very well with patients seeking therapy. with bilateral stimulation. They report that Regenio procedure is efficient with procedure times up to 60 minutes on average. In conclusion, first interaction Regenio was positive. Surgeons are excited to incorporate Regenio solution into their daily practice. On the reimbursement side, we have made significant progress. Our GenioXS program provides dedicated support to our customers for prior authorizations. Each territory manager works with a dedicated case manager who interfaces between the clinical team, patient, and sales team. The program includes a reimbursement helpline and communication portal for real-time tracking. To date, we have achieved 100% approval on all our prior authorization submissions through our GenioAccess program, including with 10 key private payers, such as United Healthcare, Blue Cross Blue Shield, Healthcare Service Corporation, Anthem, and Cigna. In addition to providing this direct support to our customers, we are also seeing progress with commercial payer policy decisions. Healthcare Service Corporation, or HCSC, operates Blue Cross Blue Shield plans in Illinois, Texas, Oklahoma, New Mexico, and Montana. HCSC and Blue Cross Blue Shield of Michigan has updated the Hippoglossal Nerve Stimulation medical policies to already include CPT code 64568 as a reference procedure code. While coverage of Hippoglossal Nerve Stimulation was already established, the inclusion of this code provides additional clarity for providers and payers. which the company expects will help reduce administrative barriers and streamline patient access. HCSE and BCPS of Michigan represent over 26 million members across six states. We continue engaging with additional commercial payers and expect continued progress on coverage decisions in the coming quarters. Looking ahead, our priorities are clear. We will continue expanding our U.S. commercial organization, adding territory managers to deepen coverage of high volume implanting centers. Training programs are scheduled through year end with a strong pipeline of surgeons requesting implant slots. Beyond the U.S., we are focused on driving deeper penetration in Germany and in the United Kingdom, where we maintain a strong presence. And in the Middle East, where we hold exclusive status as the only available AGNS solution, while selectively expanding into additional geographies with strong demand for differentiated technology. This is an exciting time for MixOA. We have the team in place We have surgeon demand, we have payer coverage, and most importantly, we have patients choosing Genio. In the fourth quarter, we are focused on execution, training more surgeons, activating more records, and treating more patients. With that, I will now turn the call over to our CFO, John Lombry, for a financial update.

Thank you, Olivier. We recorded revenue of 2 million euros in the third quarter of 2025 compared to 1.3 million in the third quarter of 2024, an increase of 56%. Gross margin in the third quarter of 2025 was 60.5% compared to 62% in the third quarter of 2024. Total operating loss for the third quarter of 2025 was 24.4 million euros versus 15 million in the third quarter of 2024. This was driven by the acceleration in the company's commercial investments in the U.S. in preparation for post-FDA commercial launch. Our cash position, including cash, cash equivalents, and financial assets, was 22.5 million euros at September 30th, 2025, compared to 43 million euros at June 30th, 2025. I'm excited to share, as we announced earlier today, that we secured up to $77 million of capital to bolster our balance sheet and help drive the commercialization of GMEO in the U.S. This financing includes a private placement of equity of approximately $25 million, which included existing strategic investors, Cochlear and ResMed, as well as our chairman and management team members. It also includes a convertible bond, which can provide us with up to $52 million in two tranches, with the first tranche of $26 million available upon closing of the convertible note. The second equally sized tranche can be drawn down at the company's discretion for the 30 days starting seven months after the closing of the transaction. We believe the proceeds of this transaction in conjunction with currently available capital provides us with cash runway into the first quarter of 2027. For the fourth quarter of 2025, we expect global revenue to be between 3.4 million euros and 3.6 million euros. With that, I'll now turn it back over to Olivier for some closing remarks.

Thank you, John. As we close, I want to remind everyone what truly defines me so well. The future of sleep medicine will be defined by those companies who understand and continuously learn from their patients. With Genio, we are not treating sleep apnea as a one-time event. We are managing a chronic condition. Our system learns from every breath, every night, turning data into insights and insights into better outcomes. We will be integrating the power of AI and self-learning in our next generation of Genio, developing a therapy that adapts, evolves, and becomes more personal over time. It's not just about features of a device. It's about creating an ecosystem that empowers patients, physicians, and healthcare payers to manage sleep apnea smarter, simpler, and more sustainable. At Nixola, everything we do starts and ends with the patient, and we will continue to empower them to effectively manage their OSA through our technology. We believe that our focus on innovation supported by clinical evidence drives progress, and that the winners will be the patients who finally get their night back to good sleep quality. And at Nixoa, we are excited that we can finally offer this to patients in the United States. With that, I would now like to open the lines for Q&A.

Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 1-1 on your telephone. If your question from the queue, please press star 11 again. We will pause for a moment while we compile our Q&A roster. Our first question comes from Ross Osborne with Cantor Fitzgerald. Your line is open.

Ross Osborne Hey, guys. Congrats on the progress. Excited to see the U.S. launch going well right off the bat, and thanks for taking our questions. So maybe starting off and, you know, more on the qualitative side, could you provide some feedback that you're hearing from docs as well as their patients on why they're choosing Genio versus other options?

Yeah, definitely. Also, thank you for the question. So first of all, as I was mentioning, physicians are extremely excited that they have optionality so that today they can offer their patients the Genio solution as well. And this is resonating extremely strong. Second thing that we are hearing as well that is always coming out is the fact that we offer a bilateral stimulation solution that is really respecting the anatomy of the hipoglossal nerve and that is also resulting in an option to treat patients also with more complex airway obstructions. So those are the two main things that keep coming back and that you're hearing first.

Okay, great. And then lastly, and apologies if I missed this, where do you stand on your Salesforce build-out?

So as I was already earlier communicating, so we do a focused launch on the top 400 implant accounts in the U.S., so the high-volume AGMF sites. With our current sales force, we are covering the first 125 out of these 400. We will further scale by adding every quarter up to 15 territory managers that would represent them in our 75 implant sites. So if you do a little bit calculation behind, After four quarters, we will be able to cover all owners for long high volume in the England side, even a little bit further, and we will end up with a sales force of 85 people.

Great. Thanks for taking our questions, and congrats on the progress.

Thank you.

One moment for our next question. Our next question comes from Adam Meador with Piper Sandler. Your line is open.

Hi, good afternoon. Thank you for taking the questions, and congrats on U.S. launch. A couple from me, if that's okay, and maybe just to start, Olivier, I think I had a bad connection. So I just wanted to double-check the number of implants that were done in the U.S. in Q3. Can you just give us that number again, as well as the U.S. revenue in Q3?

Yes, definitely. So we did 15 implants. We spread over nine different accounts, and they were all around the month of September. And we did 231,000 euros in revenue.

Okay. Just to be clear, Adam, that 15 was through the end of October. Oh, sorry. Sorry about that. The 15 is through the end of October, and the 231 was through the end of September for euro to nominate revenue.

I got it. Okay. That's helpful. And I guess just, you know, kind of a related question, but as we think about models for Q4 and U.S. launch, appreciate, John, you gave us, you know, 3.4 to 3.6 million euro outlook for the overall business. Any finer point you want to put on U.S. versus OUS at this point?

Yeah, I appreciate the question, Adam. You know, at this point, we're not going to break out the U.S. versus international in terms of guidance. We're still in the early phases here of the account activation ramp in the U.S. And that Q4 guidance really reflects the continued acceleration of U.S. implants as more accounts complete back approvals and prior authorizations, more surgeons are trained, and we also see sustained growth in both Germany and the U.K.

Okay, understood. And just one last one, if I may. Olivier, if I heard correctly, did you say the device is going to become potentially more proximal over time. Did I catch that remark correctly? And if so, you know, maybe just walk us through the appeal of going proximal versus distal. Thanks.

Adam, I think you must have misheard this because I never talked about proximal versus going more distal when it comes to the use of our device. So I want to be very specific on this. We have our specific positioning where we place the pedals on the valve. And that is also very well if I can refer to this. So it's very clear that there are no changes at all that we are making. What you heard was when we were talking about the next generation that we are developing of product, where, of course, we keep putting the patient at the center, and then we are talking about integrating self-learning into our device, becoming smaller and more control, so that patients also can get more control about their own technology.

Okay. Thanks for clarifying, Olivier. Apologies about that. Thank you. No problem. No problem at all.

One moment for our next question. Our next question comes from Suraj Khalid with Oppenheimer. Your line is open.

Hi, Olivia. John, can you hear me all right?

Yes, thank you. Hi, nice to see you.

Perfect. Hey, Olivia, I'll ask both my questions together. And pardon the background noise. I'm at an airport. So, Olivia, of the current implants, admittedly, they're relatively a smaller quantity, right? Can you give us an idea of where the initial appeal is? Is it lemon? Is it CCC? Is it lack of IPG pockets? Is it supine, non-supine? Again, with this initial cohort of implants, have you all seen any pull through specifically in one category? And if I could just also lump in my second question quickly, Olivier, of the 100 plus sites that you're targeting, I appreciate you walking us through in terms of CTV codes and whatnot that are getting through SIROS. How is GEO being slotted from a logistic perspective? Because most sites of these high-volume sites have these quote-unquote inspire dates, right? And obviously the push is on to ramp up Inspire 5 and put more. And is GEO slotted on inspire dates or are you all seeing this separately? at least from a logistical perspective. Gentlemen, thank you for taking my questions, and congrats on the progress.

I will try to answer as complete as I can today, because it was quite a long question, and to your point, the sound quality wasn't as good as I would hope it to be. So, first of all, I do want to emphasize how with Genio, we are totally differentiated from a place, pacemakers, that's foreign technology, and this is also determine the choice of physicians. So I think the first part of the question was why Genio and then who is using Genio and what is about female, male, and further differentiation. I do think that it's clear what we are seeing is that it's a real combination of male and female. So it's not that our technology is only to treat one or the other. It's clear that it applies and appeals very well with both male and female. What we're also seeing is that the average age is quite young. I mean, young defined as 52 to 54 years old. And also people who are really consciously working with their health in the sense that they do value the power of not needing resurgery when a battery is depleted. not needing re-surgery to benefit from the latest software upgrades. And they embrace also the implant for life concept, knowing that once an implant is done, they are protected regardless of what sleep position they are. They are protected regardless if the airway obstruction is a bit more complex. So this I would like to point out. Second, I was hearing also the CCC aspect in your question. contraindication it's under the warning but it's also not yet unlabeled because that's where we are waiting for the access study data outcome where we closed enrollment and what we expect to show next year around this period because we need to do a 12-month follow-up so ccc is not contraindicated it's under the warning and it can be chosen for a physician at physician's discretion but it's not unlabeled so i want to be very clear on this And then last, when we also talk about Genio and compare to also the logistics in the hospitals, So once we are working through the VAC committee, it's clear that we see that in the high volume accounts, of course, we break the monopoly that is currently there by giving options of choice. And we're also hearing through market research, very encouraging, that physicians are seeing this as becoming a market where it will end up in a 50-50, or even with some paying off in our favor. So a lot of enthusiasm, a clear differentiation versus pacemakers. a clear differentiation in patients choosing the implant for life approach with no need for resurgent going forward and no differentiation between male, female. It's at this moment, based on the numbers and the experience we build in the U.S., we see that both are really benefiting and then choosing for genome. I hope that answers your question.

One moment for our next question.

Our next question comes from John Block with Stiefel. Your line is open.

Thanks, guys, and good afternoon. John, maybe the first one for you, you know, just a level set. Like, as we build out and refine our models, are these the KPIs that you're going to be providing, you know, on a quarterly sort of consistent basis? In other words, should we be focusing on the number of surgeons trained, the number of accounts that have been planted, the VAC figures? Is that the expectation, that these will be the metrics and transparency with it every three months or so?

For the short term, John, yes. I think over the short term, maybe the near term, midterm, we'll provide these metrics. As we become a more material revenue generator, we'll probably likely um, you know, drop, um, one of them, potentially the value analysis committee packages that are submitted. Um, you know, we'll probably do that. We'll obviously, you know, continue to provide updates on reimbursement, uh, and surgery trained. Um, but I think the one that, you know, over time we'll probably drop this value analysis committee. So we want to give you, give everybody a sense as to the progress we're making based on these KPIs. And then as we become a revenue generator, uh, we'll evaluate these, um, going forward.

Okay, that's helpful. And the second one is sort of a two-parter. Maybe the first one, because we were sort of flip-flopping between September and October. So September, John, 231,000 euros implies, I don't know, 10 to 11 U.S. implants in the month of September. And then is the number of implants total 15 through October? Do I have that correct?

Yes, 15 implants were done through the end of October, correct? Correct.

Okay. So maybe you just want to talk about, you know, why the number of implants were to get cut in half from September to October. Maybe that's just a stocking dynamic and how they go out to the facilities, but help us out there, please. And Olivier, you know, more of a high level question for you. I'm just curious as you take a step back and obviously you've been waiting for the U.S. launch for quite some time now. What was the biggest surprise in your view, you know, from the U.S. launch over the past couple of months? Thanks for your time.

Yeah, thank you, John, for the questions. I think I can handle part one and part two because they're a little bit linked to each other. So when you say what was the biggest surprise, I never thought that we would advance so fast from a surgeon training all the way to a surgeon implant and knowing that we, in between, we had to get a vac approval and we got to have a pre-authorization submission followed by a pre-authorization approval by a payer before we could do an implant. So that was, for me, a very positive surprise. the first part of the question i think it is related to this so if you see and then why didn't we do more implants in this time frame it has simply to do with the fact that we see on average when there is a pre-authorization submitted it takes like two weeks to obtain an approval once you have an approval it takes another two weeks before you generate revenue So, in total, we are talking about roughly four weeks. So, if we then start looking when we did the submissions, because they are depending on the faculty approvals, that is also the failing, and then that will be answering the question, why not more Indians were done yet in the month of September and October. Although, I would like to remind everyone that the sales team is doing extremely great. And if you can say that you already have nine centers where active implants took place in seven weeks post-approval, I think this is a very encouraging result, and I want to applaud my team for this.

Thank you.

One moment for our next question. Our final question comes from David Rescott with Baird. Your line is open.

Great. Thanks for taking the questions here, and congrats on the launch. I wanted to follow up on a couple points you made relative to, you know, the Q4 guide. First on pricing, I believe the math, again, based on the 10 to 12 implants or so in the quarter versus the reported U.S. number. puts you at that 20 to 25 grand ASP. So just wanted to confirm that that on a US dollar basis was correct. And when we think about this number for Q4, again, we can see what's been done in in October, and so that puts, you know, a bigger number in the, you know, November-December timeframe. So, you know, how do we think about that kind of November-December cadence to hit what this implied guide is for Q4, assuming that this step-up is more based on the U.S. number?

Yeah, sure, David. Thank you. Thanks for the question. You know, average selling price perspective, you know, we're right in the zip code of, you know, $25,000 from an average selling price for our implants. You know, there's not exactly a, you know, one-for-one correlation with the revenue that's booked. As we do in Europe, we defer a small piece of the revenue when we ship because we spread out the disposable shipments over the course of the year, so the portion of it that we spread out over time. So there's that delta. And then in terms of the guide, we're not breaking out U.S. versus international here for the fourth quarter to get to the 3.4 to 3.6, but as we look at our You know, a number of cases we've done in October as we look ahead to, you know, where we've gone for, you know, cases that need to be performed in the months of November and December. And in order to fulfill that demand for those cases, we would expect our U.S. revenue to grow from October to November and then from November again to December. So that's how we're thinking about it and put the visibility into the number of cases that we're expecting here in the remaining 60-ish days of the quarter here.

Okay, that's helpful. You know, I guess on more of the P&L side, I think gross margins were in the low 60s this quarter. I'm guessing some of the rollout, you know, is impacting that. But maybe can you give us a sense for, you know, into the fourth quarter, you know, into 2026, how we should be thinking about this contribution from the U.S. rollout, maybe impacting the gross margin line as you scale up and more broadly roll out. Thank you.

Sure, absolutely. So, as we think about gross margins, you know, long-term, we have, you know, an opportunity to get our gross margins, you know, into the 80% range, and I think it's really a multi-point uh program to get there one is we have our next generation genio 2.2 which will enhance the patient experience from an activation shift perspective as well as disposal patch perspective but also significantly reduce the cost so that's more of a tail end in 26 early 27 but that'll be a meaningful step up in gross margin from there the other item is in terms of volume as we scale our production volumes of our implant, we have different, you know, volume breakpoints in our contract manufacturing movement. So as we drive volume, we'll see those continued to reduce over time. And then just overall working through supply chain and logistics as we, you know, we're in the early stages of that right now. And as those systems mature and we work through the referral of goods throughout the entire supply chain channel, they'll help be the final leg of the stool to get us up to that, you know, 80 plus percent cost margin range. So in the near term, i.e., you know, fourth quarter this year and, you know, 26. Probably not many, you know, drivers in the way of moving gross margin up from where we are today. I'd expect that more towards tail end of 26 going into 27.

Okay, perfect. Thank you.

Welcome. And pardon me, this is Kevin, the operator. We did have someone just recently queue up. Did you want to go ahead and take that question? Yes. Okay, one moment. Our next question comes from Paige Chamberlain with Wolf Research. Your line is open.

Hi, guys. Good afternoon. Thank you for taking the questions and squeezing me in. I just have a couple on reimbursement. I appreciate the updates and the prepared remarks there. I guess ahead, I'm just wondering if you can help us frame, you know, how to think about the phasing of unlocking wider spread reimbursement in the U.S. and, you know, how that progress should flow into our build of the U.S. commercial ramp. And second question, I'll lump it in here. On a similar note, obviously, there have been some changes in moving parts around coding in the HGNS space. 64568 is the code you guys are using now. I'm wondering if that is still the code that is intended to be used in the long term. Thanks so much.

Thank you. Thank you. And also, refreshingly, a new voice on the analyst call. So thank you for the question on the reimbursement. So first of all, to your point, the CPT code 64568, which is a recognized code by Medicare for OSA indication, it is the same code used currently for AGNS therapy, being Genio or being the alternative therapy, and it's providing a clear pathway for reimbursement with both Medicare but also commercial payers. So in going forward, we do think that this will be the coding that will be further used. And since we are only launching since August 8, that is also the only code that we are using and have been using. Because it is the code that fits best also our technology. And we're also now seeing that this is the coding also where the latest innovation is used for AGS. So, for us, this was a big win because we knew also that this was still a question that could only be answered once you submit a reimbursement file and you also actually receive payment. And it's, of course, very rewarding for us to see that we did not only receive payment through Medicare, but also through private payers, as I was mentioning.

Yeah, and I'd really like to point out and recognize our market access team that's doing a tremendous amount of work doing a great job with our GenioAccess program to help work through this initial process. And I think the HCSC and Blue Cross and Shield of Michigan, where we have 64568, is a reference procedure code. I think that's just sort of the start of it. I think over time we'll have more and more of these payers included. including the 64568. It's a reference procedure code, which will help facilitate the process. I think the thing that's very encouraging to us to see right now is that from a cycle time perspective, from a pre-authorization perspective, we're seeing roughly a two business week cycle time from the time of submission to approvals. And then on the back end, once the implements are done, we're seeing another two-week cycle time, roughly, for the facilities and positions to get paid. So it's been pretty consistent, and we're really very excited about that, and we're looking forward to seeing that continue.

And maybe to close on this one, as long as you see and look at the future, we should go forward. So sometimes it's nice to be second. Because there was a lot of work done already, and I think AGLS is already extremely well-recognized through PAIRS, so we do not need to do the work on heavy lifting with every single PAIRS step-by-step, because they are familiar with AGLS and what it can do in the treatment of moderate to severe OSA.

Thank you. I'm not showing any further questions at this time. I'll turn the call back over to Olivier for any further remarks.

I would like to thank everyone for participating. Thank you for the good questions. As I was mentioning before, it's the most exciting time for the company. We've been waiting and working hard to get to FDA approval. We obtained it, and our focus is launching, continue launching, opening more sites, treating more patients, and this is, in fact, why we were in this business and what we want to do, offer this solution to seriously impact patients' lives. So thank you, and good afternoon, good evening, everyone.

Ladies and gentlemen, this does conclude today's presentation. We thank you for your participation. You may now disconnect and have a wonderful day.