Nyxoah Third Quarter 2026 Earnings Conference Call - NYXOAH SA

Good day and thank you for standing by. Welcome to the NCSOA third quarter 2026 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question answer session. To ask a question during the session you will 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 would now like to hand the conference over to your speaker today, Pearson Dennis, Investor Relations Associate. Please go ahead. Thank you. Good afternoon, everyone, and I welcome you to our third quarter 2026 earnings call. Participating from the company today will be Liam Kelly, President and Chief Executive Officer, and Leek Moreau, Interim Chief Financial Officer. During the call, we will discuss our operating activities and review our third quarter 2026 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 relates investor relations section of our website this call is being recorded and will be archived in the events section on the investors 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-lookings statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward- lookings 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 under 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 which was filed with the securities and exchange commission on march 26 2026. with that i will now turn the call over to liam Thank you, Pearson. Good afternoon, everyone, and thank you for joining us. This is my first earnings call as President and Chief Executive Officer of OPSA, and I am very pleased to be with you today. For those of you I have not yet met, let me briefly introduce myself. I bring more than 25 years of leadership experience in the medical technology industry, with a strong focus on commercial execution in the U.S. and international markets. During my time at Teleflex, I executed on significant product launches and expansions. These include products like Easy IO, OnControl, Guideliner, Trapliner, Turnpike, Urolift, Manta, Barigel, and EasyPlaz. Many of these products are now the standard of care in their treatment modality. I also worked alongside a talented team to grow revenues, expand both growth and operating margins, and drive shareholder value. Let me begin by thanking Olivier Talman for his leadership over the past seven years. Olivier guided Nixoa from clinical development through FDA approval and into our U.S. commercial launch. The foundation he and the team built is a large part of what drew me to this company. I'm excited to join Nixoa at this pivotal stage in the company's development for three primary reasons. First, Genio is a meaningfully differentiated therapy. Second, obstructive sleep apnea is a large and under-penetrated market. And third, we have a dedicated team that is capable of executing on our opportunity. I have had an excellent start to my time at Nixos. I've spent the last few weeks learning about the Genio product and its clinical differentiation, reviewing our go-to-market strategy, spending time with some key members of the team, and meeting some of our key customers to hear their perspective. While it's still early in my onboarding process, a couple of things are clear. First, our employees are excellent. They are dedicated, driven, knowledgeable, and above all, patient-focused. They are eager to make Genio a successful product globally. They don't just want to be part of a great company. They want to help build a great company. Second, the Genio product is truly differentiated from the competition. It is the only bilateral HGNS therapy on the market. Our PMA submission, if approved, will not only allow us to serve more patients with complete concentric collapse, but will also significantly streamline the patient journey. CCC patients account for about one in four of the patients evaluated for this therapy and have no hyperglossal nerve stimulation option today in the United States. Third, we are executing well on our commercial launch in the U.S. We have seen robust performance for a new product launch, and this is evidenced in our revenue trajectory. In addition, we continue to execute well in international markets. While I am still early in my new role, three short- to medium-term objectives are beginning to emerge. Number one is to refocus Nixoa from an R&D and clinical development organization to a commercially-centric organization. Number two is continuing to invest to drive penetration in the U.S. market while maintaining solid growth internationally. And number three is to continue to expand our gross margins and manage our operating expenses prudently. In summary, I believe there is substantial opportunity ahead for Nixoa and that we have the right team to deliver the expected results as we work together to build a great company. now let me turn to a few high-level to a high- level overview of the third quarter US net revenue was 6.7 million euros representing 29% sequential revenue growth this is an acceleration from the 22% growth we achieved in the second quarter global net revenue with 9.2 million euros of 19% sequentially and and our international business continues to perform in line with our expectations. As we announced on October 19, we pre-announced revenue for the quarter and adjusted our full year 2026 revenue guidance to a range of €33 million to €35 million. While we are disappointed to adjust our guidance, we are proud of the strong start to our commercial launch and acceleration in growth. The new guidance is based on U.S. revenues that are more reflective of historical ramps for a new technology, as physicians and centers build experience with Genio. As I step into the role, I want to clarify that it is not our intent to systematically pre-announce our revenue on a quarterly basis. Despite the change in guidance, our foundations are strong. Physicians and OSA patients want a choice in hypoglossal nerve stimulation therapy. Genio is a differentiated product, and this has led to the growing number of trained surgeons and active accounts in the United States, as well as positive feedback we received on the Genio system. Our access results and our PMA supplement submission could extend our differentiation in complete concentric collapse patients in the United States. The U.S. launch remains the primary driver of our growth and our top priority. Our U.S. Key Performance Indicators as of September 30, 2026 were strong. We trained 80 new surgeons in Q3, bringing the total to 342 surgeons trained on the Genio system. We activated 53 new accounts in Quarter 3, bringing to the total 233 active Genio accounts. We had 447 patients actively undergoing prior authorization in our GenioAccess program entering the fourth quarter of 2026. We continue to execute a focused launch. Today we have 55 sales reps with 233 active accounts at the end of the third quarter. We will, of course, continue to activate new accounts, train new surgeons, but our focus on driving growth will be to go deeper in our existing accounts and drive utilization. Now for a reimbursement update. Our CMS and commercial payer coverage remain broad and stable, and our market access team continues to execute well on prior authorization submissions. In addition, CMS has published its final rule on 2027 reimbursement for the Genio procedure. Hospital outpatient reimbursement under C code C8011 increases from $31,526 to $35,072 or approximately 11%. surgical center reimbursement increases from $27,563 to $31,283, or approximately 13%. The facility increases strengthen the economic value of the GENEO procedure. Clinical and regulatory progress was another highlight of the quarter. In September, we announced that our ACCESS U.S. physical study met its co-primary efficacy endpoints, and its safety endpoints in patients with complete concentric collapse, or CCC. At 12 months, the apnea hypopnea index, or AHI, responder rate was 77.2%, and the ODI responder rate with 87.7%, both highly statistically significant, with zero device and procedure related serious adverse events. The complete 12-month data set was presented at the International Surgical Sleep Society annual meeting on October 15th and 16th. CCC patients are currently contraindicated for commercially available unilateral hypoglossal nerve stimulation in the United States. These OSA patients have limited treatment options to date. Genio has been approved for CCC patients in Europe since 2021, and we have now submitted a pre-market approval, or PMA, supplement to the FDA to expand Genio's U.S. indication to include CCC Patients. We have initiated a U.F. post-approval study called BREATHE, focused on building long-term real-world evidence for bilateral hypoglossal nerve stimulation in routine clinical practice. Now for an international update. We continue to execute in our focused markets with a disciplined approach. International revenue grew 42% compared to the third quarter of 2025. With that, I will now turn the call over to Loic for a detailed review of our financial results. Loic? Thank you, William, and let me start with the top line. For the third quarter of 2026, net revenue was 9.2 million euros, 365 percent growth over the third quarter of 2025, and 19 percent sequential growth over the second quarter of 2020. U.S. net revenue was 6.7 million euros representing 29 percent sequential growth over the second quarter of 2026. International net revenue was 2.5 million, 42% growth over third quarter of 2025. Growth margin in the third quarter of 2027 was 63.1% compared to 60.5% in the 3rd quarter of 2025. This improvement in gross margin is being driven by spreading our cost of goods sold over a higher volume of devices. Total operating loss for the third quarter of 2026 was 21.9 million euro compared to 24.4 million euro in the third quater of 2025. As we transition to a commercial enterprise we are shifting our spending away from clinical and r d and towards investment in our commercial infrastructure we remain committed to being disciplined with our spending as we seek to reduce our cash burn quarter over quarter as in terms of cash as of september 30 2026 cash cash equivalent and financial assets totaled 77.1 million euros compared to 1997 97.8 million at june 30 2026. with regards to guidance for the full year 2026 we expect global net revenue in the range of 33 to 35 million euros we expect gross margin for the full year 2026 to be in the range of 60 to 62%. With that, I will turn the call back to Liam. Thank you Loic. Before we open the line, let me summarize our priorities for the coming quarters. Number one, deliver against our updated 2026 revenue guidance. We will do this by driving utilization in our existing US accounts while continuing to train new doctors and expand into new accounts. Advance the CCC label expansion opportunity through the FDA review of our PMA supplement. And third, maintain financial discipline while investing behind our highest return and highest growth opportunities. We have a differentiated therapy, a large market, and a growing base of physicians who use Genio. Our focus now is to execute with discipline and to convert that adoption into increased procedure volumes. We remain confident in our ability to build durable growth in the United States and to improve care for OSA patients. I wish to thank the Board of Directors for the opportunity to lead Nixoa and the entire Nixova team for their execution this quarter and for the warm welcome I have received. With that, I would now like to open the line for questions and answers and hand it back to the operator. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, press star 2-1-1 again. As a remainder, to answer a question please press Star 1-2 on your phone and wait your name is announced. To withdraw your question, please press star, one, one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Tommy Han from Baird. Great, thank you. Good afternoon, Liam and Loic, and thanks again for taking the questions. And Liam, congratulations on the new role. I know you're just a little over the month into the role now, But I wanted to ask what you're most excited about to tackle in your new role and kind of what drew you to this opportunity. Tommy, thanks for the question. What I'm most excited about is the opportunity in front of Genio to penetrate the U.S. market. I think that we are at an inflection point for the growth of the company in the United States. And that is what excites me. And obviously, that's what drew me to this opportunity. I think having bilateral stimulation is a differentiator. Hopefully, and we anticipate we'll get the PMA approval for CCC patients. That will improve workflow. It'll actually allow us to expand the market and to address roughly one in four patients that cannot be addressed today. And as I went out on the road and I met with some of our key customers, They want an alternative out there. They are embracing the fact that there is a new technology on the market. They recognize that bilateral is a knew option for them. They recognized that CCC is an untreated pool of patients. patients and i think that they recognize that there is room and and look there is room for two players in this market there's room for three players there's room for four players in the market i think the more players that enter into this space the better it will be for the patients the better will be for the doctors it'll give people more choice and ii think it'll ultimately expand the market and we've seen that happen multiple times in the history of medical devices where a number of companies enter into the market it doesn't contract the market it actually expands the market and i think all all the players will will benefit in the long run and ultimately patients will benefit from the long run great thank you and as a follow-up um you know with the updated guide and you know what seems like a new guidance philosophy where do you think expectations should be heading into 2027 and maybe any first look you'd be willing to provide us in terms of the cadence of sequential growth or otherwise in 2027? Thank you. Yeah, Tommy, thank you very much for the question. Before I get into 2027, and the outlook for 2027. I think, you know, first of all, I would say I'm pleased with the launch momentum in the US. If we just take a step back, we've now achieved an annualized run rate at Q3 of almost 27 million euros or 31 million dollars. That's best in class. It is encouraging and demonstrates the ability of Genio to penetrate the HGNS-OSA market and become, as I said earlier, an additive option in OSA patient care. And as I stated earlier, the CCC indication, if we get it, will be another milestone for us to address those patients. And from a financial perspective, we expanded our gross margin by 260 basis points year over year and reduced our cash burn by two and a half million. And while I don't want to get into 2027, Tommy, we'll get into that when we give our Q4, we report out in Q4 and give our guidance for the following year. I think the opportunity that's in front of Genio to grow into this market and to expand the market is very encouraging. We're bringing on new centers. We're training more docs. We'RE recruiting more reps. We now have 55 reps in the territory and they are beginning to get very productive out there in the marketplace. And once we get through the fourth quarter and then we expect to hit our results, I think that will again show further progression as we head into 2027. And I think investors should feel confident in our ability to achieve what we put forward for 2027 and Loic, myself and the entire team are going to be focused on execution, especially on the US launch, but also to keep international growing at the same time. Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, press star 1 1 again. At this time, I am showing no further questions. This concludes today's conference call. Thank you for participating. You may now disconnect.