Onward Med Nv

Good day and thank you for standing by. Welcome to the Onward Medical half year 2025 results webcast and conference call. At this time, all participants are in 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 will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Alternatively, you may submit your questions via the webcast. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Sebastian Cross, VP of Communications. Please go ahead.

Thank you, Sharon. Good morning, good afternoon, everyone, and welcome to UNWA's webcast following the publication of our results of the first half of the year. Before we get started, please take a moment to read this page. Today's presentation includes forward-looking statements, which should be considered with the appropriate level of caution as outlined in the disclaimer. The slides and the recording of this session will be available on our investor website after the call. Today's speakers, Dave Marver, CEO, Amory Fraser, our Senior Finance Director, and Gretchen Nelson, Senior Director of Clinical Operations. We provide an update on our progress. including the RTX launch and commercial momentum, the employer BPP was also designed and further before opening 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, Seb, and thanks, everyone, for joining us today. As is our tradition, I'm just going to start with a brief company overview. Onward is pioneering therapies to restore movement, function, and independence in people with spinal cord injuries and other movement disabilities. We do that via three purpose-built neuromodulation platforms, ARC-EX, which delivers ARC therapy externally through the skin, ARC-IM, which delivers ARC therapy via a fully implanted system, and ARC-BCI, which pairs ARC-IM with an implanted brain-computer interface, or BCI, to restore thought-driven movement via our wireless onward digital bridge. We're here to solve a huge unmet need, in fact. There are 9 million people worldwide living with spinal cord injury. This is an expensive injury. The average lifetime cost of care exceeds $5 million. This is a large TAM, $17 billion or more with future indications. We are attacking that with a lot of innovation. We have 10 FDA breakthrough device designation awards, which is, I believe, unprecedented, and over 150 issued patents, over 300, actually, if you count country nationalizations. We are now a commercial stage company. The Archaic system is available in the U.S., and we're seeing strong initial demand and market uptake. And we have a robust pipeline for the future. that includes implantable and brain-computer interface technologies, including for Parkinson's disease and stroke. Despite having that robust pipeline, we are focusing first on near-term indications and a pathway to profitability. Later, at our option, we can unlock multiple additional indications and populations. So we're really thinking about this in two phases. Phase one is focusing on the immediate opportunities commercializing ArchIEX to address hand sensation and strength, and then getting ArchIEM through the EmpowerBP pivotal study, get that on the market, generating revenue. And then we can advance the pipeline with the benefit of grant funding, which is kind of a unique asset that the company has. Phase two is label, platform, and population expansion. So we can drive commercial update for ArchIEX and ArchIEM, We can pursue cost-effective label expansion leveraging Archiex and ArchIM technology, highly leverageable, including in Parkinson's and stroke, and we can advance BCI-enabled therapies. So a company with a lot of opportunity, but also a great deal of near-term focus and capital efficiency. All right, now I'm going to proceed to year-to-date highlights, which are as follows. All right. So, the highlights are that we met our commercial objectives, we received IDE approval from FDA to commence our Arc IM pivotal study, and we advanced science and technology leadership, including with our brain-computer interface platform. In terms of commercial traction, we met all of our objectives for this initial phase of our U.S. launch of ArcDX, including selling 30 units in the first half, which was precisely our target and expectation. From a regulatory perspective, for ARC-EX, we announced submission of our 510K application to the FDA to obtain regulatory clearance to expand the indication for home use. And also, we submitted our CE-MARC application to enable commercialization of ARC-EX in the EU and other countries that recognize CE-MARC. For ARC-IM, we received IDE approval for our pivotal study to address blood pressure instability after STI. That's called EmpowerVP, and we'll Go into more detail about Empower VP later in this session. In terms of advancing our scientific and technology leadership, we published the Pathfinder 2 study results showing sustained access to RTX therapy can continue to drive improvements even beyond one year. We advanced the clinical feasibility study on thought-driven movement with our fourth and fifth successful BCI implants, and we implanted the first human with our Arc IM lumbar lead, which is designed to help restore mobility. We now have an Arc IM thoracic and an Arc IM lumbar lead, and we have additional leads in development. From a financial perspective, we ended the first half with revenues, cash balance, and financial profile in general in line with expectations. Let's now talk about what's foremost on most of your minds, which is the Arc EX launch and commercial tractions. starting with the demand indications. So these are data as of August 31st, so very fresh. We continue to see strong demand since our FDA clearance with many inbound requests for information and engagement. This is just U.S. data at this point. We'll begin to publish European data when we get CE mark, but already over 2,600 inbound leads collected, including over 340 clinic leads. Let me just put that in perspective. We estimate there are 420 U.S. clinics, so already 80% of those clinics have proactively reached out to the company to learn more about ARC-EX. Sometimes when I've met with some of you, I've explained that we're not going to have the same SG&A costs that a lot of high-growth med tech have, and this really illustrates that. There's already a high level of awareness and interest in our product that we don't have to generate with sales and marketing costs. Our sales are expected to increase every quarter in line with analyst consensus, thanks to our broader U.S. clinic launch and emerging OUS opportunities. So in the first half, we met all of our objectives for this phased launch. We wanted to sell 10 units in Q1 and 30 units in the first half, and now we're broadening things. We have a full complement of 12 field staff in the U.S., all of whom are trained physical and occupational therapists. We expect our sales to accelerate significantly in the second half. Here we're pointing to a minimum of 60 units sold through Q3, so another at least 30 units in Q3, hopefully more, and then we expect to achieve in line with analyst consensus of over 150 units sold. Importantly, not only are we selling units, we're also penetrating a lot of clinics. So in the first half, these 30 units sold represent approximately 25 clinics penetrated. We expect to have penetrated over 50 clinics by the end of Q3 and over 100 clinics by the end of Q4. So you can see the footprint and the adoption is proceeding extremely well. And and we're really advancing this launch. I don't know of a lot of other new technologies that reach this many clinics in year one. The reason that we have confidence in our projections for the full year is that we keep detailed data on our engagements with clinics. And this is what you see here is a probability-weighted pipeline, starting with process initiation when our reps or our insides salespeople first make contact with accounts. Here the probability of sale is relatively low. And then as we advance through product demonstrations, provisions of quotes for budgeting purposes, and then finally a verbal commitment, you see that the probability of sale increases dramatically. So you can take in aggregate the row at the bottom, expected unit sales, and you can see that already at this point in time, we have more than 110 units that we believe on a probability-weighted basis we can expect to sell this year. We still have, obviously, a lot of the year to go. So this is why we have confidence that our sales will indeed accelerate significantly through the end of the year. We also, though, in addition to U.S. sales, have some upside opportunities. On the basis of regulatory applications we filed in June and announced, for authorizations, regulatory authorizations. One of them being U.S. home use, which would be label expansion. We filed our 510K application with FDA in June, and the average time for such an application is about 150 days, which is why we continue to expect that in Q4. And then we also filed our CE mark application to enable commercialization for RKX in the EU and other countries. that respect EU. Again, that was filed in June, and we continue to expect that to be received in Q4. So, these are upcoming milestones that will further accelerate our commercial launch globally. All right. Now, I want to transition into the Empower BP pivotal study. We announced within the last two weeks that FDA had given us IDE approval to commence that study, and some of you have asked in the previous month, why blood pressure? Why is blood pressure important? This is not something that's commonly known in the general public. It's certainly acknowledged as important within the spinal cord injury community. And yesterday I had an opportunity to have this brief video interview with Dr. Nuno Abreu from Portugal, who was one of the first-ever recipients of the Arc IM device to address blood pressure instability. So, Sharon, could you start the video, please, and let's hear from Nuno. Nuno, it's great to see you again. Thank you for joining me today. How have you been?