Onward Med Nv

Welcome everyone to Onward's webcast. Earlier today, we shared our results for the first quarter of 2025 and year-to-date highlights via a press release available on our site. The replay of this webcast will also be made available on our investor relations platform after the session. Before we get started, please take a moment to read this page. Today's presentation includes four looking statements, which should be considered with the appropriate level of caution as outlined in the disclaimer. Today I'm joined by Dave Marver, CEO, and Amaury Fraser, Senior Finance Director. Dave and Amaury will provide an update on our progress before we open for questions. You may submit your questions verbally or via the Q&A module on the platform. With that, I'll hand over to Dave. Thank you.

thank you sharon thank you sev thank you to all of you who are joining us today as is our tradition i like to start with a company overview for those of you who are new to the story onward is pioneering therapies to restore movement function and independence in people with spinal cord injury and other movement disabilities we are doing so with three persistent neuromodulation platforms ARC-EX, ARC-IM, and ARC-BCI. ARC-EX delivers ARC therapy externally through the skin. ARC-IM delivers ARC therapy via a fully implanted platform. And ARC-BCI pairs ARC-IM with an implanted brain-computer interface to restore thought-driven movement. We're here because there are 9 million people worldwide living with spinal cord injury. It is a large and expensive unmet need. The TAM is significant at $17 billion, and we're attacking this with innovation. We have 10 FDA breakthrough device designation awards and over 150 issued patents, nearly 300 if you include country validations. In terms of stage, we are now commercial. The ArcheX system is available in the United States with excellent initial demand and market uptake. And our future is bright. We have a robust pipeline that includes implantable and brain-computer interface technologies, including for Parkinson's disease and for stroke. Some of the highlights for the quarter. Very strong early U.S. commercial traction. That's the most important thing. We're really pleased with how the quarter progressed, and we also made significant advancements in our pipeline on the science and technology fronts. Commercially, we met our Q1 objectives for what was the phase or limited initial launch of ARC-EX. We trained and deployed our field organization. We established the sales and service process, we built a roster of reference clinics, and we sold 10 units, which was precisely our target. Demand indications are also very strong. I'll get into those a bit later. In terms of technology, we announced our fourth and fifth successful BCI implants to restore thought-driven movement. We also announced the first inhuman implant of the Arc IM lumbar lead, which is designed to help restore mobility. On the scientific front, the Pathfinder 2 study results were published in the journal Neuromodulation Technology at Neural Interface, showing that sustained access to ArcheX therapy can continue to drive functional improvements. In fact, participants continue to make gains after one year of treatment. And then on the financial front, we established a sponsored Level 1 ADR program in the U.S. to facilitate American investor trading. All right, let's dig into the launch, which is, I'm sure, foremost on most of your minds. Start out with the demand indication. Very strong. We're really pleased. Since FDA authorization in December of 2024, we have received over 3,000 leads globally. These are inbound indications of interest. Over 2,000 in the U.S. alone, 300 of which are from clinics. We are tracking exactly to our planned phase launch, strong demand, strong early traction, building momentum in the first half for the full year. So starting in Q1, which is what we call phase zero, we wanted to deploy up to 10 units, learn how to start up a clinic, get our sales organization up and running and trained and so forth, done. We sold 10 units. In the first half, our target is to sell up to 30 units, At this point, our expectation is that we will indeed sell approximately 30 units in the first half, which is almost over. It's just a couple of weeks to go. Second half of the year, we want to expand the market, expand indications, and indeed our applications for home use in the U.S. and CE Mark, which will allow us to commercialize in Europe. Both are on track. So this is really a story of momentum, and we're delighted with the first indications out there. This is an interesting slide. We wanted to share the illustrative or typical clinic dynamics for a center that, in fact, purchases and deploys RTX. So what we find is, on average, one device will support 15 or 20 patients who are coming into the clinic two to three times a week, and there's often a wait list. There are patients in queue waiting for treatment, which is driving demand for potentially a second unit, but certainly all of this demand could transition once we have home use into, again, latent interest in buying the device. So we're excited about what we're building here with in-clinic use and what that holds for the future. Those of you who follow Onward on social media, this is not a surprise to you. There's a lot of enthusiasm and strong positive feedback from all over the US. I mean, these are representative posts coming from Michigan and Washington State. and Illinois and New York State, the device is being very well received. And this is sort of a qualitative evidence of what I presented on the previous slide, that there's a lot of interest from patients that are already engaged in the therapy or who are waiting in queue to get access to the therapy. We are continuing to build out our sales organization. So we started out with six. But based on the early demand indicators, we've accelerated an increase in that organization. We should be at 12 by early Q3. That includes, as shown here, one sales leader, eight sales territory, three clinical support staff, and then we're devoting one headcount just to focus on government and VA opportunities. Moving beyond the launch, we were busy in several other areas of the business as well, continuing our leadership in the BCI realm. There was also an important ARC-EX publication and the start of our US ADR program. Let me run through these in a bit more detail. So in January, we announced the first commercial sales of the ARC-EX system. Also in January, we announced that the ArcEX system was available on U.S. VA and government online procurement platforms. In February, we announced publication of the Pathfinder 2 results. So more detail to follow, but this is a one-year study showing the benefits of sustained access to ArcEX therapy. In March, we announced that we were awarded grants from the Michael J. Fox Foundation and U.S. Department of Defense to advance our work in Parkinson's disease. Also in March, we announced enrollment of the first participant in an early feasibility study to address mobility challenges in Parkinson's disease. Also in March, we announced first in human use of the Arc IM lumbarly designed to restore standing, stepping, and lower limb mobility. In April, we announced that we had established a U.S. ADR program, and we began trading in ADRs on the OTCQX best market in the U.S. And in May, we announced that the fourth and fifth patients were implanted with the ARC-VCI therapy, advancing our leadership position in VCI. More details follow on those in red. All right, so first Pathfinder 2. So this is a one-year study showing the benefits and importance of sustained access to RKX therapy. This is a multicenter clinical trial, 10 participants with chronic spinal cord injury. In aggregate, there were 120 sessions of activity-based therapy combined with RKX therapy. Some key takeaways here, significant functional improvements after one year of RKX therapy. The improvements were observed throughout the one-year treatment period with no plateau. That's important. In our clinical study, Uplift, we only had two months of treatment. So now this study shows what occurs after one year of treatment, and indeed, continued benefits during that one-year treatment period. Three individuals improved their AIS classification, and one individual switched from a complete to an incomplete injury. So important study coming out of the UK. We also, as I said before, introduced a U.S. ADR program, which was intended to enhance U.S. investor access, broaden our shareholder base, and increase stock liquidity. So ADRs are designed to make it easier for American investors to purchase, hold, and sell U.S. instruments representing non-U.S. securities. They offer several benefits, including convenience, they trade in U.S. dollars, and accessibility. It allows investors to gain exposure to international companies without opening a foreign brokerage account. And then BNY Mellon sponsored this on our behalf. And as stated here, they're pleased to work with Onward Medical on the important step to expand our presence in the U.S. market. We also announced, importantly, a continued BCI leadership with our fourth and fifth successful ARC BCI implants. So two additional BCI implants occurred for two different indications, one for upper limb, one for lower limb movement. We are planning additional implants in the future, including for stroke, and we are working on the technology as well. So we're advancing the BCI technology that was exclusively in license last October. Experience so far is good. This is a quote from neurosurgeon Jocelyn Block. We continue to have excellent experience with Onward Arc BCI therapy, which provides the data and resolution we need with a less invasive surgery than is required with other BCI platforms. And we benefit from continued media coverage, particularly in the US, where we've had some high-profile coverage recently, which creates additional visibility for the company and our technology. Two examples here, 60 Minutes and 60 Minutes Overtime. Pictured here is Anderson Cooper, probably the US's most high-profile news personality, and 60 Minutes is one of the longest-lasting and most highly respected news programs on the air in America. We were also recently named one of Fast Company's World Changing Ideas. for 2025. And this is important. It's good for recruiting. It's good for investor engagement. And we think eventually it's also going to introduce marketing efficiencies because we're growing awareness for the company in important markets. Now I'd like to turn it over to Amori to discuss the Q1 results. Amori, take it away.

Thank you, Dave. We pleased to report revenue of approximately €400,000 for the quarter. This is primarily driven by initial commercial sales of the 10 RKX units in the United States. We ended the quarter with a solid cash balance of 50.5 million euros. Our cash burn for Q1 was 9.5 million euros. This is slightly lower than the previous quarter at the end of 2024. However, as in previous years, we typically see lower spending in Q1 with activities ramping up over the course of the year. We remain focused on managing our cash position with discipline and care to support our long-term value creation. Back to you, Dave.

Thank you, Maury. All right, now for the outlook for the rest of the year in terms of milestones. And we do, as usual, have robust expected news flow. We've broken this down into each of our three platforms. starting with Archie X in impulse red here. So we already have FDA authorization in first commercial sale in the U.S. We expect for the balance in the next 12 months, home use authorization in the U.S., CE mark, which will allow us to commercialize in Europe and first commercial sale outside the U.S. in uh turquoise here is arc im where we already have first participant enrollment in an early feasibility study for parkinson's disease mobility and we further expect an interim results publication for the blood pressure indication we expect ide approval from fda to allow us to begin the empower vp pivotal study of the u.s again addressing blood pressure and stability. We expect first participant enrollment in that study. And we also expect to use Arc IM, which is quite a versatile platform to address urinary incontinence or bladder function after spinal cord injury. And we received a grant from the Christopher Reeve Foundation to support that research. In black, you see the BCI track, where we already have announced additional implants for upper limb and lower limb. After SCI, additional implants are expected, but we also expect to start a study using BCI in stroke. So that might be news to some of you. Large adjacent population using the same technology. So a lot of leverage here. And these are all kind of activity-based milestones, regulatory and technology milestones. We also expect to have an outstanding rest of 2025 powered by the level of activity that we see in the field, all the inbound leads, all the product evaluations, all the quote requests. We have a very full late-stage pipeline, and we expect significant acceleration in revenue and system sales through the end of this year. All right, let's start with Q&A here. Sébastien, wait. What's that? Back to Sharon. Well, yeah, I think we can take some of the written Q&A, and then maybe we can bring it back to Sharon first. some of the others. All right, so analysts on the line, get your questions ready, so we'll be ready for you in a couple of minutes. All right, so this is a question about when we might have approval in Europe, in particular the Netherlands. So as I mentioned in the prepared remarks, We expect to submit our MDR application in the first half of the year. Everything is on track, and we therefore expect to have CE-MARC authorization by year-end, and that would allow us then to begin commercializing ARC-EX in Europe and indeed in the Netherlands. So that's your question, Marc. We have one here from Clément from BNP Paribas. You're considering covering Onward. Thank you for your interest. Question about Archie X. You see that we're pricing it at $40,000 U.S., but you're wondering how much of that nets to Onward. So, indeed, we have a direct sales organization. We're not paying a distributor partner in the U.S., so all of that revenue comes into Onward. And in Europe, for most of the countries, we expect to go direct. Some countries, we expect to go indirect. So at this point, again, we are realizing all of the revenue, and that's reflected in the first quarter results where we sold 10 units, and the revenue was €400,000. All right. So now let's go to Sharon, and we'll hear from some analysts. And if they're not ready, we'll go back to the written questions.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. If you wish to ask questions via the webcast, please type it into the box and click submit. We will now go to the first phone question. One moment, please. And your first question comes from the line of Thomas Franken from KBC Securities. Please go ahead.

Hi, good afternoon. Thank you for taking my questions and congrats on the strong quarter. Three questions from my side. Maybe first of all, with the 10 devices that have been sold, could you provide some granularity there with the types of clinics that these were sold to? Were these all linked to the VA or do you see a mix? And also, do you see multiple devices being sold per site or is it 10 different sites? Thank you.

Okay, that was your three questions, Thomas?

That was the first one.

Oh, that's just question one. Okay, you're going to get your money over it, aren't you, Thomas? Yeah, so we were quite intentional in these first 10 units. We wanted to place them in kind of a cross-section of clinics so we could learn more about their purchasing process, the ways in which they train, the ways in which we can insert ARC therapy into their care pathways. So they are indeed a cross-section. Several of them are based in the community. Some of them are large, kind of well-respected, globally renowned academic clinics. So all over the map, so to speak. And that's what we wanted out of these first 10. My gosh, I forgot the last part of your question.

Yeah, with regards to whether it's multiple devices being sold per site or...

Yeah, I'd say year to date. We do have some instances where clinics have purchased more than one. So driven, for example, by the queue, by the wait list. But most of our sales are indeed one unit per one clinic.

Okay, that's clear. And following up on that, from the perspective of these treatment centers, how successful are they in bringing back their long-time spinal cord injury patients, especially for patients where the injury has been years ago? How quickly do they reconnect to these patients, or do you see any bottlenecks there?

Well, it's interesting. Patients that are already... undergoing care, certainly opting to try ARC therapy, but we also have a lot of patient-driven demand. They've heard about the device on social media or via conventional media. They're going in, they're asking whether they can try the device in the clinic, or if the clinic doesn't have the device, they're asking them to purchase it and make it available. So we're seeing patients really come from all corners, I would say.

Okay, thank you. And then maybe as a final question, that's more on the BCI side. I was wondering, and we're now at implant four and five, with regards to some of the earlier or the first implants that you have done, how would you rate the efficacy or the durability of efficacy there? Is the functionality of those devices still maintained there? Or do you see rather a decrease over time as we have seen with some other BCI players in the marketplace?

Yeah, thank you. Very good question. We're not seeing any degradation in signal quality or function. And that's indeed... a result of the form factor. We are not penetrating the dura. We're not penetrating the brain. This is an epidural system. The brain is not going to fight back or encapsulate electrodes with our system. This is among the chief reasons that we selected it to continue our work with BCI. It's highly clinically viable and enduring. And indeed, there's seven-year, almost eight-year safety data showing that there is no degradation in signal. So this is among the reasons that we feel we have a leadership position in BCI. It's the viability and practicality of the BCI itself, as well as onward expertise in understanding how to stimulate the spinal cord.

Okay, that's very clear. Thank you so much, Dave. Much appreciated.

All right, next, Sharon.

Thank you. Your next question comes from the line of David Sinev from DeGroff Petercam. Please go ahead.

Hello, David.

Hi. Good afternoon. Maybe on the stroke efforts. I know you have one patient already implanted with the BCI for upper limb. But yeah, just curious there if you shoot any If you should expect any more update on the WIMP plan soon and just in general how the stroke opportunity compares to SCI and Parkinson's disease. Thank you.

Well, certainly stroke is a large patient population, and there are opportunities to use ARC-IM, ARC-BCI, ARC-EX to address stroke. We're still in the early stages, the learning stages. We are spooling up in collaboration with a large U.S. clinic a study on ARC-EX in the stroke population, and we expect to start an ARC-BCI study in Europe on the stroke population. So I think it's too early to comment on how effective this is. Again, we are in learning stage here. And this is a good opportunity to also reiterate kind of what we've set up here. Onward is very focused, using ARC Capital in careful ways to drive commercial uptake of ARC-EX and then execute the Empower VP study for ARC-IM. And in the meantime, we are advancing the future pipeline with the benefit of grant funding, as is the case with both of these studies that I just described.

Okay, perfect. Let me be just, just one quick, one quick follow up if I may. So if all goes well and you score the home use approval by, by year end, right? Of, of RKX, how, how should we look at this home use? Which rate do you expect this to, you know, go gradually throughout, uh, 2026 or do you expect a rapid, uh, a rapid, uh, switch there in the, in the fourth quarter already of the patients that have been exposed to the treatment throughout this year?

Yeah, thank you, David. Indeed, we do continue to expect home use clearance as well as CE mark before year end. Can't tell you precisely when that's going to be. We can control the part of that that we can control. And we're very actively driving clinic sales here so we can deliver an excellent year. So home use would be a nice accelerant there. I can't tell you how quickly it's going to happen, but we are filling the pipeline. We are filling the queue because Each of these patients who are experiencing Archie X therapy in the clinic or on the wait list, they all then become candidates for home use when indeed we get the clearance. And so this pool of candidates is just growing each time we sell and start up a clinic with Archie X. So thank you, David, very much. Sharon, let's move on to Ed Hall.

Thank you. One moment, please. Ed, your line is open.

Perfect. Thanks, Dave, and congrats on the quarter. A couple of questions on Archie X from my side. I think if we look into H2, how can we think about account permeation? Of course, you've had a controlled release so far, and obviously given the strong interest that you've seen, so how can we see in terms of the accounts you expect to permeate by the end of the year? I guess that would be the first question. And then just in terms of you mentioned a lot of clinics are running backlogs, and you've seen a sort of high number of leads that you shared on that slide. I think that's great. But in terms of the visibility, what does that give you in terms of Archiex placements for home use? And what is the lead time of manufacturing for this? And I guess, obviously, is there a percentage that you could take into account that may not continue with this current lead? I'm just trying to get a sense of how viable is the backlog? What is the lead time in manufacturing this going forward?

Well, so, Ed, next time you ask a question, I definitely need to write everything down. So I'm not sure I'm going to get to everything. I'll repeat that. I didn't write it all down. But let me just address this qualitatively, okay? So in terms of account penetration, we haven't given a number. But, you know, you know what the consensus is, you know what you forecasted for revenue and, you know, we're confident we can place enough units by the end of the year to meet consensus based on the activity level, the demand indicators that are out there. And we actually track those demand indicators and our funnel very carefully. So we track all the way from inbound leads to initial engagement with customers to product evaluation to quote generation and so forth. And then we attach probabilities at each stage of the funnel. And so we have, in my view, acknowledged that we're fairly early in the launch. We have a pretty good view as to what we can do in the second half, which is why we have confidence that we can meet consensus for the year based on the demand that's out there. In terms of how the queue will impact home use, I don't know yet, right? I mean, we have a lot of patients that are having a really good experience in the clinic. It's not so easy if you have tetraplegia to get to the clinic two or three times a week. And so, you know, I'm confident that's going to translate into demand. But, you know, I would say the majority of that's going to be in 2026, pending, of course, when we get home use approval this year.

Perfect. And then just a couple of follow-ups. Just quickly on the manufacturing side, obviously the leads are a significant number. So what's the turnaround time in manufacturing an Archiex device? Could you just remind me? And then just a housekeeping point from my end, the 0.4 million euros in revenue, is that entirely driven by Archiex or is there any grant money in there? That would be my final two. Thanks.

you bet um so first on manufacturing we have ample inventory on the shelf and ready to ship so i don't anticipate any manufacturing or supply constraints for the balance of this year in terms of revenue just one moment 60. sorry i couldn't read your writing Oh, the granted comment is de minimis.

Perfect. Okay, so negligible. Ignore it effectively. Yeah, yeah, yeah. Perfect. Thanks very much and congrats. All right.

Thanks, Ed.

Thank you. There are currently no further phone questions.

All right. Let me see here. Let me take some questions. Mr. Pepper always asks the question. Thank you. When available for home use? Commented on that earlier. Let me just reinforce that the submissions are proceeding in line with our plans for home use and European approval. We continue to expect that we'll have those before year end. okay another one from mr. Kirsch so in the upcoming news flow and catalyst we characterize those as in the next 12 months could some of those happen already in this calendar year yeah indeed and the important ones that I just discussed CE mark home use we expect those to occur this calendar year we also expect to commence our pivotal study, what some of you call our phase three this year in the U.S. and Europe. Okay. What else do we have here? Okay. Another question from Thomas from KBC, because three is not enough. Any impact from U.S. import tariffs? At this point, it remains unknown, the impact of tariffs. However, as we discussed on the The last call, we do believe we are exempt from import duties due to our category, and we are pursuing clarification on that front. So more to come there. This is a question from JP Morgan. Stein, thank you for your question. Who manufactures our devices? So we work with very well-respected MedTech CDMOs, so Contract Design and Manufacturing Organizations, in Europe and the US. For Arc EX, we work with a partner called Demcon in the Netherlands. For Arc IM, we work with Osifka and Integer. And those are disclosed publicly, so I'm very comfortable sharing those. So I think that's about it. Seth, anything else? No, I think we've covered everything.

Thank you.

All right. Amaury, thank you. Thanks, everyone, for joining. We're going to go ahead and post this on our investor website, right?

Absolutely. The replay and the deck will be made available later today on the investor relations platform.

And as always, we're quite active on social media. So if you want to stay updated, please follow us on LinkedIn, Onward Empowered, O-N-W-D, Empowered. Thank you very much. Thank you.