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HomeBusinessInvestmentNyxoah S.A. (NYXH) This fall 2021 Earnings Name Transcript

Nyxoah S.A. (NYXH) This fall 2021 Earnings Name Transcript


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Nyxoah S.A. ( NYXH -2.95% )
This fall 2021 Earnings Name
Mar 25, 2022, 8:00 a.m. ET

Contents:

  • Ready Remarks
  • Questions and Solutions
  • Name Individuals

Ready Remarks:

Operator

Good morning, and thanks for standing by. Welcome to the Nyxoah full yr 2021 earnings convention name. [Operator instructions] I might now like handy the convention over to your speaker immediately, Jeremy Feffer, with — vp of investor relations. Please go forward.

Jeremy FefferVice President, Investor Relations

Thanks, Catherine. Good morning and good afternoon, everybody, and welcome to our earnings name for the total yr 2021. Taking part from the corporate immediately shall be Olivier Taelman, chief govt officer; and Loic Moreau, chief monetary officer. In the course of the name, we’ll talk about our working actions and overview our second half and full yr monetary outcomes launched after U.S.

markets closed on March 24, 2022. After which, we’ll host a question-and-answer session. The press launch might be discovered on the investor relations part of our web site. This name is being recorded and shall be archived within the occasions part of our investor relations web site.

Earlier than we start, I wish to remind you that any statements that relate to expectations or predictions of future occasions, market traits, outcomes, or efficiency are forward-looking statements. All forward-looking statements are primarily based upon our present estimates and varied assumptions. These statements contain materials dangers and uncertainties that might trigger precise outcomes or occasions to materially differ from these anticipated or implied by these forward-looking statements. All forward-looking statements are primarily based upon present — presently accessible info.

And the corporate assumes no obligation to replace these statements. Accordingly, you shouldn’t place undue reliance on these statements. For an inventory and outline of the dangers and uncertainties related to our enterprise, please confer with the chance components sections of our Kind 20-F filed with the Securities and Alternate Fee on March 24, 2022. With that, I’ll now flip the decision over to Olivier.

Olivier TaelmanChief Govt Officer

Thanks, Jeremy. Good morning and good afternoon, everybody. Thanks for becoming a member of us for our dialogue of working and monetary outcomes for the total yr 2021. A particular thanks additionally to your entire Nyxoah group for his or her tireless dedication and excellent efficiency amid ongoing challenges posed by the COVID pandemic.

I am extraordinarily happy with how our group has exceeded expectations in all our geographies. 2021 was an vital yr for Nyxoah as we completed quite a few scientific, regulatory, business, and monetary milestones and positioned ourself for continued execution and sustainable success in 2022 and past. On the scientific and regulatory entrance, our BETTER SLEEP research achieved its major endpoint of statistically important absolute discount in AHI for your entire cohort, in addition to for full concentric collapse or CCC sufferers. In consequence, we acquired an expanded CE mark indication to deal with CCC sufferers in Europe.

And the U.S. FDA granted us breakthrough system designation for CCC sufferers. Having achieved a 64% response charge throughout all cohorts at six months post-implantation, together with 67 amongst recognized CCC sufferers, these BETTER SLEEP outcomes assist de-risk all DREAM U.S. IDE pivotal research and are giving us confidence that we’re incorporating the suitable learnings to this critically vital trial.

Now we have a a lot higher understanding about sufferers phenotyping as we advance the dream trial, and we look ahead to finishing implants subsequent quarter. Our patient-centric focus additionally contains our separate IDE trial for CCC sufferers within the U.S., which we anticipate commencing later this yr to make this know-how accessible to the 30% of sufferers who’re contraindicated for hypoglossal neurostimulation within the U.S. and we might know — and who would now not must bear an invasive Drug-Induced Sleep Endoscopy, additionally known as DISE process. We additionally made MRI compatibility a high precedence from the get-go to make sure that sufferers all the time really feel protected and should not have to fret about explanting their system to bear an MRI, of which, there are greater than 40 million carried out in OSA sufferers alone yearly globally.

We have been due to this fact thrilled to safe CE mark MRI conditional labeling to make sure that sufferers implanted with Genio can bear full-body 1.5T and 3T MRIs. On the business aspect, we have been extraordinarily happy to maneuver from the innovation price range to securing a devoted DRG code for hypoglossal neurostimulation in Germany. We’re additionally increasing quickly and have generated sturdy demand in different European international locations as we managed to safe a devoted DRG code in Switzerland and have obtained hospital reimbursement in Spain. We’re additionally awaiting reimbursement selections in Belgium and the Netherlands.

Our business technique in Europe is predicated on a deep understanding of the affected person journey, participating with the implanting ENT surgeons and sleep physicians as key stakeholders in guiding OSA sufferers to essentially the most acceptable remedy. Constructing sturdy relations between each referral and implanting physicians, ends in the creation of a middle of excellence ecosystem related to sooner remedy penetration and excessive affected person satisfaction. On the monetary aspect, we additionally efficiently accomplished our second IPO within the span of 10 months, elevating 97.8 million to our Nasdaq itemizing in July after elevating 84.8 million euros in our Euronext Brussels IPO in September 2020. We’re proud to welcome a powerful group of high-quality traders to our current U.S.

and European shareholder base, and we look ahead to constructing a roster additional. Extra importantly, these choices supplied us with ample stability sheet liquidity, a money stability of 135 million euros as of December 31, 2021, that permits us to put money into our key scientific, R&D, and business priorities at this crucial time for our firm. I’ll go into extra element on every of those pillars. Let me first reiterate to you our overarching technique.

Our proprietary patient-centric Genio system is the one hypoglossal neurostimulation system that requires just one incision, which shortens process time to round 60 minutes and reduces the chance of an infection in comparison with a number of incisions. It delivers bilateral stimulation, which we consider ends in an expanded whole addressable market, eliminates the necessity for sufferers to must bear the Drug-Induced Sleep Endoscopy process to find out if they’ve CCC or not. And final, it’s appropriate with each 1.5T and 3T full-body MRI. We’re leveraging our strengthened stability sheet to construct a rising physique of scientific proof to make sure that this know-how is accessible to as many moderate-to-severe OSA sufferers as potential.

Our inhabitants, that quantity is greater than 1 million new sufferers per yr, together with greater than 500,000 within the U.S. who’re eligible to deal with [Audio gap] with and with out full concentric collapse of the taste bud. Final June, we introduced that BETTER SLEEP had achieved its major security and efficiency endpoint of statistically important absolute discount in baseline AHI at six months for your entire affected person cohort, in addition to for the non-CCC affected person subgroup and, importantly, the CCC affected person subgroup. This can be a crucial improvement for Nyxoah.

And these scientific outcomes, which have been introduced in a submit on the World Sleep Congress earlier this month in Rome, signify the primary physique of proof to show that bilateral hypoglossal neurostimulation might be an efficient remedy for sufferers with CCC, who comprise roughly 30% of the moderate-to-severe OSA affected person inhabitants and who’re contraindicated for different hypoglossal neurostimulation choices which can be accepted within the U.S. The research additionally generated a statistically important discount in oxygen desaturation index, or ODI, throughout all affected person cohorts. Per the Sher standards, as utilized in our DREAM U.S. pivotal research, BETTER SLEEP achieved a response charge of 64% for your entire inhabitants, 60% for the CCC cohort, and 67% for the non-CCC cohort.

Contemplating that because the rising physique of scientific knowledge and real-world expertise recommend that affected person response improves meaningfully between month six and month 12, these sturdy response charges in all affected person cohorts already after six months additional improve of confidence in optimistic outcomes for the continued DREAM research, whether or not we have to show a response charge above 65% after 12 months. We additionally notice that the imply AHI discount exceeded 70% amongst responders in each CCC and non-CCC, making them tremendous responders. In different phrases, when a affected person responds, the kind of airway obstruction is not going to affect the outcomes utilizing the Genio system. World Sleep was an excellent success for us, as we not solely current BETTER SLEEP knowledge but in addition hosted a doctor occasion entitled “Shifting Paradigm in OSA Remedy in Genio” that was attended by greater than 55 key opinion leaders from the U.S.

and Europe. It was invaluable alternative for us to current our knowledge instantly and ask physicians questions, and we’re inspired by the rising curiosity and enthusiasm for hypoglossal neurostimulation on the whole and Genio particularly. To this finish, in October, the notified physique in Europe expanded our CE Mark indication to incorporate CCC sufferers amongst these eligible to be handled with Genio. And Genio is now commercially accessible in Europe, and the primary CCC sufferers have been efficiently implanted in Germany.

As a reminder, the power to deal with CCC sufferers signifies that all moderate-to-severe OSA sufferers will now not must bear a DISE process to find out if they’ve CCC. As well as, the U.S. FDA in September granted Genio Breakthrough Machine Designation for CCC sufferers, which offers us with precedence overview. Extra on — extra on this in a second.

Turning to our scientific program within the U.S., the DREAM pivotal research. The DREAM pivotal research is our research within the U.S. that goals to, first, verify security and efficacy of the Genio system; and second, assist advertising and marketing authorization of the Genio system within the U.S. The research plans to contain 134 moderate-to-severe OSA sufferers who failed first-line high remedy with 12-month efficacy and security major endpoint.

The trial contains 16 U.S. and 6 worldwide websites presently activated screening, enrolling, and implanting sufferers. Let me stroll via to our progress on affected person enrollment and the funnel that leads from preliminary enrollment to implantation. As of immediately, now we have enrolled 430 sufferers, of whom 52 have made it via the funnel to implantation.

There are extra 104 sufferers in lively screening who underwent an preliminary polysomnography and are awaiting a confirmatory PSG to find out if their baseline AHI meets the minimal standards to be implanted. Based mostly on our expertise, roughly 70% of those sufferers in lively screening transfer to implantation, that means we seemingly have sufficient sufferers within the funnel to finish the required 134 implants. And we proceed to enroll new sufferers as we communicate to fill the funnel to make sure that now we have greater than sufficient to finish the research. Of these enrolled sufferers who don’t [Inaudible] for enrollment, they display screen out as a result of a DISE process signifies they’ve CCC, their BMI is simply too excessive, or an preliminary PSG decided that their AHI isn’t excessive sufficient.

However to reiterate, we’re inspired by the tempo of enrollment and by the variety of sufferers who — who’re transferring via lively screening. At the moment, our focus is additional safe our slots and ensuring that the PSG — the baseline PSG might be carried out as quickly as potential. Now, to be completely candid, we totally anticipated to finish implants by the tip of Q1 2022, which is subsequent week. Based mostly on the numbers I simply shared with you, we is not going to hit the goal within the subsequent six days.

Whereas I don’t wish to make excuses, it is a incontrovertible fact that the omicron variant precipitated important disruptions for hospital, notably with respect to surgical procedure. Many U.S. states positioned moratoriums on elective procedures, as did European international locations like Germany, in addition to Australia. Whilst issues start to open up, the backlog of delayed surgical procedures meant it was more and more tough for surgeons to schedule OR time.

We, due to this fact, noticed little or no implanting exercise in December, and issues steadily improved as we moved via January and into February. I am very happy to see the sturdy momentum now we have constructed during the last six to eight weeks as extra key physicians have been activated and have accelerated this tempo of implantation. We at the moment are assured that we can shut previous implants throughout the second quarter, which might put us on monitor to have full 12-month affected person follow-up knowledge within the mid of 2023. We could have rather more to say on this particular regulatory pathway as we transfer via this yr, however we count on to pursue a mannequin of PMA pathway that we hope will allow us to safe FDA approval of business launch within the U.S.

in early 2024. Returning to the dialogue of CCC, now we have been inspired by our dash discussions with the FDA concerning the design of a separate IDE trial centered on CCC sufferers. We’ll name this trial “Entry with three C’s,” as in CCC. And we hope to start enrollment later this yr.

We could have rather more to say about this trial, together with pattern measurement, design, endpoints, and timing as soon as now we have the ultimate phrase from the FDA concerning our IDE submission, which we anticipate occurring earlier than this summer time. Turning now to our business progress for 2021. As with our different achievements in 2021, I am extraordinarily happy with the numerous progress we made in our business operations. We stay dedicated to our technique of going deep, as goes vast, as we focus our efforts on creating a middle of excellence ecosystem with excessive degree of scientific experience between implanting ENT surgeons and sleep physicians, offering extra remedy choices to their massive affected person swimming pools.

We’re first centered on skilled hypoglossal neurostimulation samples, with an current OSA referral accomplice. Moreover, now we have additionally managed to open new websites, feeding the funnel of latest sufferers with a custom-made digital advertising and marketing technique and focused referral packages. Our focus stays on Germany, the place we invested in constructing a Nyxoah devoted gross sales and advertising and marketing group of 13 individuals in an effort to show our business proof of idea. Supported by the sturdy endorsement of German KOLs and ENT society, we obtained a devoted DRG coding in 2021.

As of December thirty first, we have been in 12 lively implant websites and count on to be lively in ’25 earlier than summer time 2022. Subsequent to Germany, we additionally made significant headway in different key European markets throughout 2021. We secured DRG code in Switzerland. We obtained hospital reimbursement in Spain.

We proceed to await reimbursement selections within the Netherlands and Belgium. We additionally additional put money into wider market entry within the Nordic international locations. Final, I wish to flip an replace on our R&D actions. As talked about earlier, in January 2021, we acquired a CE mark for MRI conditional labeling, making certain that sufferers implanted with the Genio system can now bear full-body 1.5T and 3T MRI scans.

MRI compatibility is in step with our patient-centric mission and aids in sufferers’ high quality of life, understanding that over 40 million MRI scans have been carried out in OSA sufferers globally in 2020. To this point, we stay the one firm with an MRI compatibility label for the total physique and 3T Tesla, which is essentially the most generally used MRI setup. We even have submitted to the notified physique in Europe and to FDA our Genio 2.1 next-generation system, which features a new patient-centric smartphone app that may empower each the doctor and the affected person to trace progress. This app will even empower the sufferers, permitting them to regulate the stimulation amplitude at residence.

The Genio 2.1 activation chip will combine a number of sensors, together with a place sensor to regulate stimulation ranges primarily based on sleeping place and affected person motion, what would even be making our know-how clever. We additionally stay centered on creating our longer-term pipeline to seek out new and progressive methods to deal with a higher variety of OSA sufferers. To this finish, in February 2021, we introduced our unique licensing settlement with the U.S. Vanderbilt College, permitting us entry to applied sciences and capabilities to develop next-generation obstructive sleep apnea options.

We’re happy that we will accomplice with Dr. David Kent, who’s the director of the sleep surgical procedure at Vanderbilt College Medical Middle, to develop new neurostimulation applied sciences, beginning with one which centered on the Ansa Cervicalis nerve stimulation. The power to deal with OSA sufferers differently will additional develop remedy choices for physicians, leading to enlarging the eligible-to-treat OSA affected person inhabitants. We’re constructing first prototypes in the meanwhile, and we could have additional updates on this mission later this yr.

Lastly, I am happy to welcome new CFO, Loic Moreau, who joined us January 1st. I’ll now flip the decision over to Loic for our monetary dialogue.

Loic MoreauChief Monetary Officer

Thanks for the nice and cozy welcome, Olivier. Good day to everybody, and thanks for becoming a member of us immediately. I am thrilled to be a part of the group, and I am excited to embark on this journey with the Nyxoah group and with all our stakeholders. I’ll present some highlights from our P&L and our stability sheet.

For additional particulars, please confer with our earnings press launch issued earlier immediately and our annual report. Income was eight 852,000 for the total yr ended December 31, 2021, in comparison with 69,000 for the total yr ended December 31, 2020. The rise in income was attributable to the corporate commercialization of the Genio system, primarily in Germany, and with some contribution from Spain and Belgium. Income for the second half of 2021 was 497,000, a 40% improve versus the primary half of the yr regardless of headwinds associated to the omicron variant throughout the fourth quarter, which included a moratorium on elective procedures in Germany.

Complete price of products bought for the total yr 2021 was 303,000, with gross revenue of 549,000, representing a gross margin of 64.4%. Whereas we’re not offering any particular steerage on gross margin for 2022 or past, we do count on gross margins to enhance over time according to all of the neurostimulation firms as we obtain higher business scale. Normal and administrative bills rose to 11.1 million for the total yr ended December 31, 2021, from 7.5 million in 2020, due primarily to elevated business efforts in Germany and different European markets. Now we have additionally scaled up our company infrastructure and count on to proceed including headcount throughout the group going ahead.

Analysis and improvement bills elevated considerably to 2.4 million in 2021, from 473,000 in 2020 after a capitalization of three.4 million, pushed by our efforts to develop the following era of our Genio system. Scientific bills elevated to 2.7 million in 2021 from 1.1 million in 2020 after capitalization of 6.1 million euro. The rise was primarily on account of: primary, the completion of the BETTER SLEEP trial implantations; second, the continued recruitment for the EliSA trial; and third, the initiation and ramp-up of the DREAM IDE trial in the USA. This may stay a key funding focus for us in 2022 as we work to finish DREAM implants and handle affected person follow-ups.

We additionally anticipate commencing our entry IDE trial for CCC later this yr. We count on that R&D and scientific expense will signify roughly two-thirds of our working bills in 2022. We realized a internet lack of 27.6 million for the total yr ended December 31, 2021, in comparison with a internet lack of 12.2 million for the 12 months ended December 31, 2020. On the finish of 2021, money and money equivalents totaled 135.5 million in comparison with 92.3 million euro in December 31, 2020.

The rise in money and money equivalents was due primarily to internet proceeds that we generated from our July 2021 preliminary public providing within the U.S., wherein we bought 3,260,000 unusual shares, together with Over-allotment, at a worth of $30 per share. This resulted in whole gross proceeds of $97.8 million earlier than deducting underwriting reductions and commissions and estimated providing bills. The rise in money from IPO proceeds was offset by internet money flows used from working bills of 25.3 million euro. Based mostly on our present money stability and burn charge expectations, now we have ample liquidity to go to U.S.

commercialization in 2024. With that, I’ll flip the decision again to Olivier.

Olivier TaelmanChief Govt Officer

Thanks, Loic. In closing, I wish to reiterate my pleasure for the place we stand immediately as an organization whereas our devoted group has constructed an execution tradition that produced various important scientific, regulatory, business, and monetary accomplishments in 2021. And I hope this provides you confidence in our skill to proceed to execute in ’22 and past. For ’22, you possibly can count on our full focus to stay on: first, finishing the DREAM trial; subsequent, business execution in Germany; and commencing our CCC IDE research within the U.S.

We’re additionally excited to start holding quarterly convention calls in 2022. And we look ahead to offering Q1 replace in Might. This concludes the formal a part of our presentation. Operator, I’ll flip the decision over to you to start our Q&A session.

Thanks very a lot.

Questions & Solutions:

Operator

[Operator instructions] Our first query comes from Adam Maeder with Piper Sandler. Your line is open.

Adam MaederPiper Sandler — Analyst

Nice. Hello, Olivier. Hello, Loic. Congrats on the progress final yr and thanks for taking the questions right here.

Possibly, simply to start out, we will speak in regards to the U.S. pivotal trial, the DREAM research. Acknowledge, , a number of the challenges that COVID-19 has introduced, and also you’re actually not the one medical know-how firm to be impacted right here. However possibly simply speak in regards to the degree of confidence in delivering in opposition to the revised expectation being finished with implants in Q2.

What informs that confidence given, I feel, the mathematics implies you might want to implant 82 sufferers within the second quarter. After which possibly simply speak somewhat bit extra particularly in regards to the traits you are seeing within the trial in current weeks. I imply, it sounds such as you’re happy with the current momentum, however hoped you could possibly put a finer level on that. After which I had a follow-up or two.

Thanks.

Olivier TaelmanChief Govt Officer

Thanks for the query, Adam. So, immediately, as I already pointed it out, we’re on the 52 implants. So, the calculation is appropriate that we have to do some bit greater than 80. What’s giving us confidence is the truth that the lot of progress made on the enrollment with greater than 4 — virtually 30 sufferers enrolled.

However I feel extra vital is once we drill down one step additional on this funnel, having over 100 sufferers that, the truth is, already handed DISE, that handed the primary PSG, and that extra are ready for his or her baseline PSG. As I discussed, we calculate roughly 70, however I feel it can be somewhat bit increased. It is somewhat bit some particular, however the 70% as much as 75% of these that may find yourself in doing after which getting an implant. So, what we see immediately, enrollment, what’s within the funnel, what already has been finished, we needs to be good to succeed in 134 implants.

Now, the opposite websites that I wish to level out is that, presently, we actually have 16 U.S. websites totally up and operating on doing implants. Now, what the group did nice is that they began additionally discovering and going after options in an effort to safe OR time slots and likewise to collaborate with specialised pace labs to have an acceleration in getting PSGs finished the place now we have the sufferers which can be ready within the funnel. So, should you mix all this, the deal with already wanting OR time, getting extra sleep labs to carry out PSGs, and having the affected person base already within the funnel, passing the primary display screen out the place we lose them on DISE, on BMI, additionally will not be being monitored.

That offers us a whole lot of confidence that we can shut by the tip of Q2.

Adam MaederPiper Sandler — Analyst

OK. That is actually useful. And possibly simply to make clear, it feels like, when it comes to baseline PSGs and securing OR time, it feels like you will have some visibility as we glance forward, and that form of informs the boldness and expectation that you can full implants in Q2. Am I fascinated with that? Or did I hear that proper, Olivier?

Olivier TaelmanChief Govt Officer

Properly, that’s appropriate. So, after which — and once we take a look at the totally different samples that we’re having, our group is, after all, in shut and every day contact with them. And we are also introducing some dashboards once we safe the OR time, what affected person will go into this funnel. So, there’s a concrete execution deal with getting them implanted.

Adam MaederPiper Sandler — Analyst

OK. OK. Very useful. Thanks.

After which for my subsequent query, wished to ask just a bit bit extra, , broad strokes on on the back-half business efficiency back-half ’21, after which up to now into 2022. Simply curious to get extra shade on how that trajectory has regarded. I feel it will simply be useful to get some baseline for our fashions. We take into consideration forecasting right here in 2022.

So, any shade there you could possibly present, Olivier or Loic, can be very appreciated.

Olivier TaelmanChief Govt Officer

So, first, I wish to actually level out that our business proof of idea, now we have a full deal with Germany. So, once we are speaking about numbers, about implant, it is actually centered on Germany. And that is additionally how now we have outlined our future success by turning into market chief within the German market. So, coming again second half of the yr, extra particularly This fall, we have been actually impacted by omicron.

And I’m — I feel I am not the one one who’s making that assertion. I hate to make use of that as an excuse, however typically, when it is a reality, it is a reality. You already know, what we noticed throughout this time is that the group actually did a powerful job in persevering with, figuring out, and positioning of know-how in new websites. And that may outcome that we’ll have as much as 25 websites earlier than summer time this yr.

At the moment, now we have 12 who shall be doubling the variety of websites within the coming 4 months. And all these websites are recognized and the conversations are ongoing. And we’re setting them as much as do profitable Genio employment. That is the very first thing.

The second factor is — and with out disclosing, I actually, actually — and the implant charge or income that we see a really sturdy traction in Q1. And as I discussed, we at the moment are aligning, additionally doing Q1 or quarterly earnings calls, so it could be important. I shall be very happy to additional replace you with exact numbers on the Q1 exercise. However we’re actually feeling assured, and we’re additionally seeing that particularly in Germany, once more, the COVID days are actually are the — actually behind, and issues are returning again to regular.

So, that is the second factor. The third factor is we considerably invested within the knowledge and digital advertising and marketing actions and in actually fine-tuning and additional filling the funnel of referral sufferers. So, these are the three issues we’re doing. And I shall be very joyful to come back again to Q1 and telling you the progress we made with particular numbers.

Adam MaederPiper Sandler — Analyst

OK. Understood. We’ll keep tuned there. And it is encouraging to listen to.

It feels like Q1 is off to begin, so recognize that commentary. After which possibly only one final one for me and I will soar again within the queue. However I hoped you could possibly speak somewhat bit in regards to the accounts that you simply’re in immediately in Germany. Simply any early learnings there, Olivier, , how are clinicians using Genio, how are they splitting — or are they splitting between gadgets or are they selecting one system over the opposite? You already know, I do know it is comparatively early nonetheless, however simply interested in how your clients and physicians are using the product at their respective practices.

Thanks a lot for taking the questions.

Olivier TaelmanChief Govt Officer

So, I — initially, what we hear again general is that the physicians are extraordinarily happy to have an alternate or to have a selection inside hypoglossal neurostimulation. To this point, there was just one possibility they may suggest to sufferers. And immediately, they’ve two choices. And that is actually one thing that we’re listening to again as an awesome win, additionally to deal with extra sufferers and a few sufferers which may be previously can be misplaced hypoglossal neurostimulation.

That is the one factor, having the choice to decide on. Second, what we are also listening to again is by not having the battery implanted, it offers them additionally a whole lot of — or shall I say, a whole lot of convincing energy with sufferers who’re somewhat bit afraid of surgical procedure. But, we stick with a single incision process: 60 minutes, skin-to-skin time. It goes quick.

And sufferers which can be afraid of surgical procedure are extra open additionally to just accept hypoglossal neurostimulation. After which final, what we’re listening to again is the scalable software program platform that we’re providing with affected person software, with the chance to work together with out seeing the sufferers bodily. So, I feel these are the three main learnings. We’re broadening the variety of sufferers eligible to deal with hypoglossal neurostimulation by giving physicians a selection.

We see that by making it much less invasive, just one process, it helps additionally convincing sufferers which can be somewhat bit afraid of surgical procedure. And final, with a scalable know-how platform, that is additionally — and with the ability to monitor sufferers with out seeing them bodily can be a huge win.

Adam MaederPiper Sandler — Analyst

Very useful. Thanks once more for taking the questions.

Olivier TaelmanChief Govt Officer

With pleasure.

Operator

Thanks. Our subsequent name — query comes from Jon Block with Stifel. Your line is open.

Jon BlockStifel Monetary Corp. — Analyst

Nice. Thanks, guys. Good morning. Olivier, possibly the primary one for you.

And I will begin on DREAM as nicely. The 104 in lively screening, after which I feel you stated 70% in lively screening normally go to implants. And I simply need to focus there for a second. Is there any shade — , fascinated with just like the timing of these in lively screening to get the implant the place then the 12-month clock begins? Is {that a} one-month course of, a three-month course of? Simply as many particulars you can give.

As a result of it is a huge quantity, the 104. That is a excessive share, the 70%. However possibly should you can speak to the timeline that normally accompanies that course of can be very useful.

Olivier TaelmanChief Govt Officer

No, Jon, that is actually a superb query. And to reply this, first, I’ve to say, that is actually site-specific. So, once we speak — once we take a look at some websites, it is a query of a few weeks to push them via. The place in one other web site, it is a query of a few months to push them via.

However on common, we’re seeing that in an effort to do that, we’re speaking about 5 to 6 weeks. So, after doing the baseline PSG to the implant, it is 5 to 6 weeks on common. However no, as I discussed earlier than, after all, the problem of our group and the main target of our group is to shorten these push-through timelines to a most and to additionally incorporate the learnings from websites after doing this in a few weeks. However on common, 5 to 6 — 5 to 6 weeks, the quickest one.

A few weeks, the slowest one, they go all the way in which as much as two months.

Jon BlockStifel Monetary Corp. — Analyst

OK. That is very useful. So, possibly to your level, it is 5 to 6 weeks. It offers you the excessive conviction that you simply’re throughout the purpose line, so to say, by the tip of the second quarter the place we extrapolate that again to the 104 — the 70% of the 104.

Bought it. After which simply to pivot somewhat bit, , I consider — and I could be mistaken. However I consider your filings calls out for SAEs in DREAM. And, , I feel, one, is that appropriate? And two, rather more importantly, are any of these device-related or any shade that you simply’re capable of present in these SAEs? And I ask as a result of I need to be clear, , per Encourage’s STAR research, nicely, that SAEs will not be unusual in any respect.

However they’re known as out quite a bit for device-related. So, possibly should you might touch upon that, , the quantity. After which any shade you possibly can present on these can be useful.

Olivier TaelmanChief Govt Officer

No, it is appropriate. So, having a part isn’t unusual. And I feel it is like — it is one thing that additionally surgeons and firms are studying from. In our research, we see that there isn’t any increased variety of SAEs than you’ll count on with different research.

So, the 4 that you simply’re referring to, at this second, there are nonetheless, I feel — let me attempt to be exact. I feel there are nonetheless two that have to be additional decided whether or not it’s device-related or procedure-related. To this point, what we noticed was not device-related, the 2 which can be nonetheless below examination. It should develop into — it should develop into extra clear going ahead.

However I additionally wish to return to the BETTER SLEEP research and even do our BLAST OSA research relating to SAEs, and stating that additionally there, we noticed nothing irregular to say it like this. We had a low quantity, most of them resolved after time or associated to the process. And should you put this into perspective in all of the research, it was fully appropriate. So, we count on no distinction in any respect within the DREAM research.

Jon BlockStifel Monetary Corp. — Analyst

OK. I am sorry. Simply to — for readability functions, of the 4 that we all know of, two have been outlined as not device-related, and two are so-called TBD, to be decided.

Olivier TaelmanChief Govt Officer

That’s appropriate.

Jon BlockStifel Monetary Corp. — Analyst

OK, nice. And final query. Simply, , to go over to the business aspect of issues, possibly simply look, you’ve got acquired, , the expanded indication for CCC or the contraindication taken away. And it is a huge transfer.

And you’ll deal with an entire different subset of sufferers. And you are able to do it with out the DISE. Simply at a excessive degree, should you can speak to what these lively facilities — , there’s 12 facilities are — or let you know how possibly the suggestions has modified since you’ve got been capable of deal with that complete different subset of sufferers and, , the way you suppose you possibly can construct upon that momentum into ’22 and past. And that is it.

Thanks on your time, guys.

Olivier TaelmanChief Govt Officer

Mmm hmm. So, first, it was nice to have the ability to speak and work together with all of the 50 implant surgeons throughout the World Sleep Congress in Rome and likewise speaking about this query. And [Audio gap] We had the primary CCC affected person implant commercially in Germany. It has merely to do with the impact that we needed to look forward to the IFU to be adopted and likewise to present a while to speak and place this with physicians.

I feel we will go to the following in line. What I believed John was saying, it was his final query.

Operator

OK. Our subsequent query comes from Laura Roba with Degroof Petercam. Your line is open.

Laura RobaDegroof Petercam — Analyst

Sure. Good. Good afternoon. Thanks for taking my query.

Thanks for the presentation. Um, one query from my aspect concerning in regards to the opex pattern going ahead. You talked about within the press launch this morning additional investments to be made within the accounts, forward of the U.S. business launch.

May you present extra granularity on that when it comes to timing, for instance?

Olivier TaelmanChief Govt Officer

I’ll — I’ll give this one to our CFO.

Loic MoreauChief Monetary Officer

Sure. Completely. So, in 2022, this yr, we count on to extend headcount primarily in scientific and R&D. We’re beginning with peak commercialization in U.S.

however very frivolously this yr, as you possibly can think about. And we’d speed up solely once we would have extra visibility on the DREAM knowledge and the 12 months which is deliberate mid-2023. So, you possibly can count on opex improve for the following 12 months. After which primarily based on DREAM knowledge, we’ll see what degree of funding is required to make a profitable launch in U.S.

within the second half of 2023. That is how we’re taking a look at this.

Laura RobaDegroof Petercam — Analyst

OK. Thanks. After which one other query concerning the variety of lively websites. So, am I flawed right here? As a result of I feel that in H1, you already introduced 12 lively websites.

Does it imply that there have been no new lively websites in H2?

Olivier TaelmanChief Govt Officer

So I feel you are referring to Germany.

Laura RobaDegroof Petercam — Analyst

Precisely, yeah.

Olivier TaelmanChief Govt Officer

And that’s — yup. No. And that’s appropriate. That’s appropriate, Laura.

So, we opened the primary 12 websites. We centered on what we known as Tier 1 or excessive quantity websites. Within the second half, we recognized the service. However the omicron variant got here in in This fall.

And we actually devoted a spotlight, the truth is, on those that have been activated. And that is additionally why you’ll be seeing — however, no, you make me say issues that I need to save for Q1. However that is why additionally, you will see the acceleration within the first quarter —

Laura RobaDegroof Petercam — Analyst

OK.

Olivier TaelmanChief Govt Officer

In opening extra new websites with exercise in Germany.

Laura RobaDegroof Petercam — Analyst

OK. Good to know. Many thanks.

Operator

Thanks. And now we have a query from Ross Osborn with Cantor Fitzgerald. Your line is open.

Ross OsbornCantor Fitzgerald — Analyst

Hello. Good morning, and congrats on the progress. So, I suppose simply a few questions on price. I do know you will have that formal gross margin steerage, however might you stroll via a number of the headwinds and tailwinds you noticed throughout the second half of 2021 and simply how that is progressing yr so far, and the way you suppose that is going to form out for the remainder of the yr.

Loic MoreauChief Monetary Officer

Yeah. So, now we have a gross margin in ’22 of 64.4 million — sorry, 64.4%.This was broadly according to H1 one. We aren’t offering steerage for 2020 — we aren’t offering steerage for 2022. However as we attain higher scale when it comes to — and volumes, principally, we count on the gross margin to extend considerably and be according to the — all of the neurostimulation firms.

So, progressively ’23 — ’22, ’23, it should improve steadily as our quantity will increase.

Ross OsbornCantor Fitzgerald — Analyst

OK. After which I suppose.

Olivier TaelmanChief Govt Officer

And simply possibly —

Ross OsbornCantor Fitzgerald — Analyst

Sorry. Go forward.

Olivier TaelmanChief Govt Officer

No, sorry. And I need to possibly simply add one thing to this one as nicely. In case you take a look at our know-how the place we should not have an implantable pulse generator, which is the very best price should you take a look at the full implant additionally there, we’re actually feeling assured that we’re aiming and we shall be ending up extra in second time, as an instance 85-plus % gross margins. So, that is the place our goal is in going ahead, in line, after all, with — goes hand-in-hand with the quantity improve.

Ross OsbornCantor Fitzgerald — Analyst

OK. Nice. That is useful. After which I suppose simply on the opex, did you type via a few of possibly the advertising and marketing actions that you simply presently have occurring and possibly any new ones which can be going to come back out in 2022.

After which lastly, can we simply discuss possibly some rep hires deliberate for this yr?

Olivier TaelmanChief Govt Officer

Yeah. So, when it comes to advertising and marketing price, that is primarily associated to our actions in Europe, particularly in Germany. So now we have our group of 13 that is in Germany, and now we have digital advertising and marketing so not directly visiting clients, and we’re digital advertising and marketing as nicely. So, we shall be spending barely in different international locations in Europe.

However this is almost all of the group now we have in headcount and in Europe in the meanwhile. Possibly on addition to this, will we plan to additional rent new headcount? This goes hand-in-hand with the market entry or the reimbursement in international locations. As I discussed earlier than, we’re ready Belgium, Netherlands, Nordic international locations. We noticed that we additionally made our first hospital price range securitization in Spain.

So, vital for Nyxoah that now we have a devoted salesforce. And the second now we have view on acquiring reimbursement in a selected nation, after all, we begin hiring, and we’ll additional develop. So, concrete, sure, you possibly can count on, as an instance, 5 to 6 extra headcount in Europe. And what we already touched on additionally, within the pre-commercialization for the U.S., that we need to make it possible for we’re additionally making the wanted investments in headcount, like for instance, a market entry director within the U.S., getting ready — and already getting ready the panorama for future reimbursement within the U.S.

as nicely.

Ross OsbornCantor Fitzgerald — Analyst

Sounds nice. Congrats once more. And thanks for taking my questions.

Olivier TaelmanChief Govt Officer

Thanks.

Operator

Thanks. And that is all of the questions I’ve. I wish to flip it again to Olivier Taelman for closing remarks.

Olivier TaelmanChief Govt Officer

Sure, thanks. And the closing remarks shall be very quick. So, initially, thanks for becoming a member of us once more. Thanks for the nice questions.

Thanks very a lot and looking out ahead to replace you once more within the close to future. Within the close to future shall be our Q1 earnings name that we’ll be internet hosting on Might tenth. So, inside six weeks, if I am not mistaken. Thanks, and revel in the remainder of the day.

Operator

[Operator signoff]

Length: 53 minutes

Name contributors:

Jeremy FefferVice President, Investor Relations

Olivier TaelmanChief Govt Officer

Loic MoreauChief Monetary Officer

Adam MaederPiper Sandler — Analyst

Jon BlockStifel Monetary Corp. — Analyst

Laura RobaDegroof Petercam — Analyst

Ross OsbornCantor Fitzgerald — Analyst

Extra NYXH evaluation

All earnings name transcripts

This text represents the opinion of the author, who might disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis – even one in every of our personal – helps us all suppose critically about investing and make selections that assist us develop into smarter, happier, and richer.





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