Nyxoah Q2 2024 Earnings Report

Nyxoah EPS Results

• Actual EPS: -$0.46
• Consensus EPS: -$0.45
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: N/A

Nyxoah Revenue Results

• Actual Revenue: $0.83 million
• Expected Revenue: $1.93 million
• Beat/Miss: Missed by -$1.10 million
• YoY Revenue Growth: N/A

Nyxoah Announcement Details

• Quarter: Q2 2024
• Date: 8/6/2024
• Time: N/A
• Conference Call Date: Tuesday, August 6, 2024
• Conference Call Time: 4:30PM ET

Nyxoah (NASDAQ:NYXH), headquartered in Mont-Saint-Guibert, Belgium, is a medical technology company focused on neuromodulation therapies for sleep‐disordered breathing. Established in 2018, the company’s primary offering is the Genio® system, a minimally invasive bilateral hypoglossal nerve stimulator designed to treat moderate to severe obstructive sleep apnea (OSA). By electrically stimulating the genioglossus muscle, the device helps maintain airway patency during sleep, reducing apnea events and improving overall sleep quality.

The Genio system comprises a small, implantable stimulator positioned submentally and an external activation unit worn by the patient. Prior to bedtime, users apply the activation patch, which wirelessly powers the implant and delivers timed electrical pulses to the tongue muscles. Following a CE mark in 2019, Nyxoah initiated commercial launches across Europe and select international markets. The company is actively pursuing additional regulatory clearances, including a premarket application with the U.S. Food and Drug Administration, and is conducting ongoing clinical studies to expand the system’s indications and validate long-term safety and efficacy.

Building on its flagship product, Nyxoah continues to invest in research and development aimed at next-generation neuromodulation platforms for various sleep-related disorders. The company maintains a global footprint with commercial operations in Europe and a subsidiary in the United States, and collaborates with leading sleep centers to drive physician adoption and patient access. Nyxoah’s management team combines expertise in medical devices, sleep medicine, and implantable technologies to advance its mission of improving outcomes for patients suffering from obstructive sleep apnea.

Nyxoah Q2 2024 Earnings Call Transcript

Key Takeaways

• After submitting the fourth and final module of its modular PMA, Nextelas anticipates FDA approval for Genio as early as end-2024, positioning the company for a U.S. launch.
• Nextelas strengthened its balance sheet by raising over €85 million in new capital, extending its cash runway into mid-2026 to support commercialization plans.
• European sales in H1 2024 reached €2 million, a 29% year-over-year increase, with 55 active implanting accounts in Germany serving as a proof-of-concept market.
• The DREAM pivotal study met both co-primary endpoints, showing a 63.5% AHI responder rate and 71.3% ODI responder rate at 12 months, with a median AHI reduction of 70.8% and favorable safety profile.
• Nextelas reported a Q2 operating loss of €13.3 million and a monthly cash burn of €4 million, driven by accelerated commercial investments ahead of U.S. market entry.

Presentation

[Operator]

After the speaker's presentation, there will be a question and answer session. To participate, you will need to press star one one on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star one one again. Please be advised that today's conference is being recorded. I will pass the call over to your first speaker today, Mikaela Kirkwood.

[Mikaela Kirkwood, Investor Relations and Communications Manager at Nyxoah]

Thank you, and good afternoon and good evening, everyone, and welcome to our earnings call for the second quarter and first half of 2024. I am Mikaela Kirkwood, Investor Relations and Communications Manager at Nyxoah. Participating from the company today will be Olivier Taelman, Chief Executive Officer, and Loic Moreau, Chief Financial Officer. During the call, we will discuss our operating activities and review our second quarter financial results, released after the U.S. market close today, after which we will host a question and answer session. The press release can be found on the investor relations section of our website. This call is being recorded and will be archived in the events section of the investor relations tab of our website.

[Mikaela Kirkwood, Investor Relations and Communications Manager at Nyxoah]

Before we begin, I would 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 statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. All forward-looking statements are based upon current available information, and the company assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these statements. For a list and a description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our Form 20-F, filed with the Securities and Exchange Commission on March 20, 2024. With that, I will now turn the call over to Olivier.

[Olivier Taelman, CEO at Nyxoah]

Thank you, Mikaela. Good afternoon and good evening, everyone, and thank you for joining us for our second quarter and first half of 2024 earnings call. 2024 is a pivotal year for Nyxoah, with an increased focus on preparing for U.S. market entry. In March this year, we announced our DREAM U.S. pivotal study achieved its primary endpoints and demonstrated that Genio has the potential for best-in-class outcomes for OSA patients. Subsequently, our regulatory team filed the fourth and final module in our modular PMA submission, which has set the stage for FDA approval as early as the end of 2024. We strengthened recently our balance sheet with over EUR 85 million in new capital raised, which extends our cash runway into mid-2026, and are actively building our U.S. commercialization organization, led by our recently hired new Chief Commercial Officer, Scott Holstine.

[Olivier Taelman, CEO at Nyxoah]

Commercially, we reported first half 2024 European sales of EUR 2 million, representing an increase of 29% from the first half of 2023, and ended the second quarter with 55 active implanting accounts in Germany. To recap DREAM, the study had co-primary endpoints of AHI responder rate per the Sher criteria at 12 months and ODI responder rate at 12 months. At baseline, subjects had a mean AHI of 28 and an ODI of 27, and a body mass index of 28.5. On an intent to treat or ITT basis, the DREAM study showed an AHI responder rate of 63.5%, with a p-value of 0.002, and an ODI responder rate of 71.3%, with a p-value less than 0.001. With these strong results, the DREAM study met its primary endpoints.

[Olivier Taelman, CEO at Nyxoah]

Additionally, subjects demonstrated a median 12-month AHI reduction of 70.8%, with similar AHI improvements in supine and non-supine sleeping positions. The safety results were favorable, with 11 severe adverse events, or SAEs, in 10 subjects, resulting in an SAE rate of 8.7%. Out of the 11 severe adverse events, three were device-related, and there were three explants. We will present the full DREAM data at a lunch symposium at the ISSS conference in Miami, end of September, on September 27th, to be precise, and look forward to see many of you there. The DREAM results further differentiate Genio, as it was the first hypoglossal nerve stimulation study to require patients to sleep at least 60 minutes in the supine position and demonstrate strong efficacy with patients sleeping supine and non-supine, just like mimicking a normal night of sleep.

[Olivier Taelman, CEO at Nyxoah]

This is of particular importance since published data show increased OSA severity when a patient is on his back or in the supine position, with AHI doubling in the supine versus the lateral position. On average, people sleep 35%-40% on their back during a normal night or standard nights, which was in line with our PSG findings in DREAM. This means that irrespective of a patient's sleeping position, Genio maintains its efficacy, and that is unique. Based on feedback from the physicians, this will be very impactful on therapy selection. It supports our mission to make sleep simple again, and we have applied for the inclusion of the supine efficacy results into our label. With the positive DREAM results, we have completed our modular PMA submission. We have responded to all the FDA questions on the first three modules thus far, and submitted the fourth and final module.

[Olivier Taelman, CEO at Nyxoah]

Based upon modular PMA review cycle times, we anticipate FDA approval in late 2024. As we do not control FDA timelines, early 2025. In anticipation of the FDA approval, we are actively building our U.S. commercial organization. In July, Scott Holstine joined Nyxoah as Chief Commercial Officer after 26 years in the medical device industry. In addition to Scott, key leadership in sales, marketing, and market access are in place, and we are actively kicking off the recruitment of top sales and marketing talent. At launch, we will target the tier one or top hypoglossal nerve stimulation implanted site in the U.S., that account for 85% of all procedures done in the U.S. The organization will be composed of territory sales managers, supported by field engineers and field sleep specialists, each with their own responsibilities.

[Olivier Taelman, CEO at Nyxoah]

The territory sales manager will be the owner of the territory revenue, interacting with surgeons and sleep doctors. Field engineers and sleep specialists will be focused on high-quality implants and patient outcomes on the other hand. The advantage of this structure is that it's focused and scalable, providing territory managers the ability to drive increased territory penetration without the distraction of covering implants and performing titrations. Consequently, we can have more focused DTC, helping territory managers locally increase patients referred for a Genio implant. Independent market research and feedback from 31 top hypoglossal nerve stimulation implant surgeons in the U.S., who participated in our recent usability study, reinforced Genio's differentiation versus current HGNS technology in terms of invasiveness, patient centricity, safety, and the simplicity to treat OSA patients regardless of their sleep position.

[Olivier Taelman, CEO at Nyxoah]

Genio offers patients a leadless, full-body 1.5 and 3 Tesla, MRI-compatible, non-implanted battery solution, powered and controlled by a wearable component. Our vision of an implant for life concept, powered and controlled by a wearable component, allows patients to always have the most advanced technology without the need for another surgery. Given these characteristics, we expect Genio to be market-expanding in the U.S., as a significant number of hypoglossal nerve stimulation candidates currently are declining pacemaker-based platform technology due to concerns over invasiveness and having an implantable battery in their chest. This view is supported by independent surveys, demonstrating that over 20% of U.S. hypoglossal nerve stimulation candidates are turning down existing technology, and strong interest in system with Genio features and form factor. Going back to Europe.

[Olivier Taelman, CEO at Nyxoah]

First half 2024 sales was EUR 2 million, representing an increase of 29% from the first half of 2023, and we ended June with 55 active implanting accounts. As a reminder, Germany is our commercial proof of concept. Although the German market has some different characteristics than the U.S. market, there are key learnings that will help us in developing a successful U.S. commercialization strategy. Similar to the U.S. market, the German market is highly concentrated, and Genio was embraced by doctors and patients in those tier one or top accounts, resulting in an acceleration in the hypoglossal nerve stimulation market growth. Of the top 10 accounts, 9 are currently implanting Genio, and in five, we have at least 30% market share after 24 months. This is a strong proxy for the U.S. launch, where we will initially focus on the top implanting tier one accounts.

[Olivier Taelman, CEO at Nyxoah]

To continue to drive growth into these accounts, establishing a referral pathway with top sleep specialists focused on CPAP-quitting patients and converting them in a timely manner, will be a key to sustain success. The results with Nyxoah collaboration should confirm this strategy in the coming quarters. In summary, with strong DREAM data, a differentiated HGNS system, and a cash runway into mid-2026, I could not be more excited for the future at Nyxoah. With that, I'm pleased to turn the call over to our CFO, Loïc Moreau, who will provide a financial update.

[Loïc Moreau, President International at Nyxoah]

Thank you, Olivier. Good day to everyone, and thank you for joining us today. Revenue for the second quarter, ending June 30, 2024, was EUR 780 thousand.

[Loïc Moreau, President International at Nyxoah]

...Total operating loss for the second quarter was EUR 13.3 million, versus EUR 11.9 million in the second quarter of 2023, driven by an acceleration in commercial investments in U.S. as well as in Europe. During the second quarter, we raised over EUR 85 million in gross capital through a EUR 48.5 million equity offering and a loan facility agreement with the European Investment Bank for EUR 37.5 million. This extends our cash runway to mid-2026. As of June 30, 2024, cash and financial assets totaled EUR 78 million. This excludes the first EUR 10 million tranche of the EIB loan, which we drew down in July. Finally, our monthly cash burn was EUR 4 million for the quarter. This concludes the formal part of our presentation.

[Loïc Moreau, President International at Nyxoah]

Operator, I will turn the call over to you to begin our Q&A session.

[Operator]

Thank you. And as a reminder, if you would like to ask a question, simply press star one one on your telephone and wait for your name to be announced. To remove yourself from the queue, press star one one again. Please stand by for our first question. And it comes from the line of Suraj Kalia with Oppenheimer.

[Suraj Kaila, Managing Director at Oppenheimer]

Hi, Olivier and Loic. Can you hear me all right?

[Olivier Taelman, CEO at Nyxoah]

Yes, we can.

[Suraj Kaila, Managing Director at Oppenheimer]

Pardon the background noise. It's raining pretty heavily here. So, Olivier, congrats on all the progress and the modular PMA submission. Let me turn the direction to Germany, Olivier, if I could. You know, it's been, you know, more than four quarters you all have been in Germany. What are the lessons learned from Germany that are translatable to the U.S.? Is it or has it been a market that has met your expectations? And, you know, maybe if you could talk about other discussions about supine versus non-supine in Germany.

[Olivier Taelman, CEO at Nyxoah]

Okay. Thank you for the question, Suraj. So, first of all, when we look at Germany, our launch goals were to demonstrate proof of concept by, one, breaking the monopoly that is currently for hypoglossal nerve stimulation, and two, expanding the hypoglossal nerve stimulation market. Those two objectives we have accomplished. Now, other things, to your point, where we see the European experience is showing our ability to take share. Just as a reminder, we had 27% German market share for the second year of the launch. I think that is also something that exceeded our expectations. Nine out of the 10 German accounts are implanting Genio, and we estimate that we go minimum above 30%, and in some of those top centers, we are even market leader after 24 months.

[Olivier Taelman, CEO at Nyxoah]

So that is also a very concrete learning that is giving us confidence for the U.S. launch. And also the fact that we see in Germany, based on independent survey data, but also from talking and interacting with patients, that we see that there is over 20% of hypoglossal nerve stimulation candidates that are declining a pacemaker due to the invasiveness of the procedure and the system. And therefore, Genio can further expand the market. So, so far, so good. I think those were the learnings. That being said, let's also be very open on this. Germany still is a very small revenue market, and there is still the potential for quarter-to-quarter variability, driven by limited number of accounts implanting and implant volume.

[Olivier Taelman, CEO at Nyxoah]

But if you look at, and we feel that it's more accurate, looking at a performance in the first half of the year, where we still were up to almost 30% versus the first half. So I do think overall, we are pleased with what we see in Germany. We take the lessons, helping us prepare for a successful U.S. launch. And also, as a last reminder, the positive feedback in Germany since we were able to release the DREAM data is definitely helping us in driving future growth. So I think that's all the first question? Yeah.

[Suraj Kaila, Managing Director at Oppenheimer]

Olivier, for my follow-up question, maybe I missed it in your prepared remarks on the status of the ACCESS trial. And also for the U.S., as you have planned out for your commercial launch, the 31 sites that you referenced, how would you characterize the volume that these 31 sites do and the reps you would need? Thank you for taking my questions.

[Olivier Taelman, CEO at Nyxoah]

Yes. So the 31 sites, to start with, with the end of your question, those are all high-volume implanters or implanters that are part of what we call the tier one HGNS implanters in the U.S. So that is the, that is the first part. Second part, when it comes to ACCESS, so we continue to make progress with the study. We are not disclosing the number of patients implanted, but that said, we plan to close implant by the end of 2024. I do not want to... I go back to Germany on this, but as you know, in Europe, we have CCC integrated in our label, and the response that we are getting there is that also physicians are confirming similar results for CCC patients as for non-CCC patients.

[Olivier Taelman, CEO at Nyxoah]

So this also is giving a confirmation that bilateral stimulation is a key differentiator when it comes to treating successfully CCC patients.

[Operator]

Thank you. One moment for our next question. It comes from the line of Ed White with H.C. Wainwright.

[Ed White, Managing Director at H.C. Wainwright]

Good afternoon. Thanks for taking my question.

[Olivier Taelman, CEO at Nyxoah]

Hi, Ed.

[Ed White, Managing Director at H.C. Wainwright]

Olivier, maybe you could just tell us about your U.S. reimbursement strategy?

[Olivier Taelman, CEO at Nyxoah]

Yeah. No, no, definitely. And then first of all, I'm really excited that we are having these questions because it also means that we are getting extremely close to launching in the US. Now, as I already mentioned in a previous earning call, we are partnering with the American Association of Otolaryngologists, the AAO, which will make a formal recommendation on an established, what they call bridge category one CPT code, for use at launch. And I think this is so important, that at launch, we have our CPT code in place. That is not the final code, but it's the bridging code. And in parallel, of course, we are pursuing a Genio specific CPT code over time, but based on precedent, we know that this likely will take a little bit longer, even up to a couple of years.

[Olivier Taelman, CEO at Nyxoah]

Now, that being said, at launch, and I keep coming back to this and insisting, doctors will submit Medicare claims using the bridge category one CPT code, which is currently covered by all Medicare administrative contractors or the MACs. Reimbursements will be in line with current HGNS payment rates. And I think that this is the most important update for today. Now, to be really complete, and we have to give credit to our competitors because they have done a terrific job educating the commercial payers about the benefits of hypoglossal nerve stim, resulting in all having HGNS coverage policies in place. We have enrolled in the FDA Early Payer Feedback Program, and we are conducting payer advisory interviews. We have already engaged in an informal discussion with the payers, and we expect to be able to leverage those policies at launch.

[Ed White, Managing Director at H.C. Wainwright]

Okay, thanks for taking my question.

[Olivier Taelman, CEO at Nyxoah]

Thank you.

[Operator]

Thank you. One moment for our next question. That it comes from the line of John Block with Stifel.

[Joe Federico, Analyst at Stifel]

Hey, everyone, this is Joe Federico on for John Block. Thanks for taking the questions. I guess just to start maybe on the revenue result in the quarter, that was a bit below what we were modeling, and that, you know, follows stronger revenue results in the fourth quarter of last year, and last quarter. You know, during that time, your competitor was also having some regulatory dynamic issues. And I just wanted to, you know, ask for some additional clarity, you know, now that they've kind of sorted that out this quarter, revs took a step back. Do you think that played a role in, in kind of the revenue dynamics for this quarter?

[Olivier Taelman, CEO at Nyxoah]

Yeah. So first of all, let me start by saying that competition is good for the market. It's always nice to have two options to choose for physicians and for patients, and it also keeps everyone sharp, you know, and then really making sure that we can provide the latest and greatest technology and then upgrades to patients. Now, I have to repeat a little bit what I was answering to Suraj. Germany still stays overall a very small revenue market, if you look at the total HGNS market. So that is one aspect, and therefore, potential quarter-to-quarter variability, driven by limited numbers of implant volume, is the case and it's a fact. That is correct. Now, going back and assuming that because of product shortage or issue with competition in Q4, this would have strengthened our Q4 results.

[Olivier Taelman, CEO at Nyxoah]

I think it's not completely true, because if I'm well informed, I do think there was quite some inventory of products in Germany, especially with the top accounts, to continue having also competition in counting in Q4. Overall, we see that the market of HGNS keeps growing strong. I think that's a confirmation of all this. And of course, without providing real guidance, it's also clear that we anticipate revenue in the second half of 2024 to increase over the second half of 2023.

[Olivier Taelman, CEO at Nyxoah]

As mentioned, quarter-to-quarter sales are harder to forecast, but given the process in the third quarter, this fourth, also the collaboration with ResMed on identifying new patients that are quitting their CPAP and actively converting them, it's something that maybe took a little bit longer than we expected, but we do see the results, and we are more than excited also to see the impact of this on our revenue in the second half of 2024.

[Joe Federico, Analyst at Stifel]

Okay, great. That's, that's helpful color. And then just quick follow-up. You know, you had said that FDA approval for Genio could come as early as year-end 2024. Is your expectation, you know, to get approval by year-end 2024, or could that maybe flip into early 2025? And then could you remind us, you know, just the number of sales reps you're targeting upon the eventual U.S. launch and maybe, you know, training centers in the first 12 months? Thanks, guys.

[Olivier Taelman, CEO at Nyxoah]

Yes, definitely. So, to your point, we have a mode of PMA. You know that after you submit the fourth and final module, there is the 180 days time clock that is currently activated. I can already share that there is a lot of activity from FDA, that we have very positive engagements with them so far. And if you then do simply the math, we should be good to have FDA approval by the end of 2024. So we are still very confident that this will happen. However, I want to be a little bit prudent in the sense that I'm not controlling FDA timeline completely. So that's why sometimes we're also mentioning up to early 2025.

[Olivier Taelman, CEO at Nyxoah]

But if you just stick to the math, we see the interaction, all the work has been done, the files have been submitted, everything interactive, reviews, ongoing, site visits taking place. So we are very confident that by the end of this year we could have FDA approval. No, the second part of the question is like, how would we launch? I think I already elaborated a little bit how important it is for us to work with territory managers, fully focused on revenue and patient referral. And next to them, we would have field engineers, fully focused on high-quality implants, sleep specialists, fully focused on post-implant patient follow-up and titration. Some numbers, we will start and we will make our approach scalable since we are focused on the tier one accounts in the U.S., the high volume sites, and we will start with 15 territory managers.

[Olivier Taelman, CEO at Nyxoah]

They are under the lead of 1 sales vice president that we already have on board. Then all 15, there will be another 15 in total, field engineers and sleep specialists focused on the patients. So in summary, our sales leadership is in place. We will go for a scalable approach with 15 territory managers, only focused on revenue and driving new patients, and they will be supported with, in total, 15 field engineers and sleep experts.

[Joe Federico, Analyst at Stifel]

Great, thank you.

[Operator]

Thank you. One moment for our next question, and it comes from the line of Ross Osborne with Cantor Fitzgerald.

[Ross Osborn, Director and Lead Research Analyst at Cantor Fitzgerald]

Hey, guys. Thanks for taking our questions. Starting off, we'd be curious to hear how your manufacturing ramp efforts are progressing ahead of U.S. launch. Do you believe you will have sufficient scale to meet demand in 2025?

[Olivier Taelman, CEO at Nyxoah]

So the short answer, Ross, is, is yes, we do believe we have significant demand. As you also know, that we have currently our Genio 2.1 version. That is the one that we are using commercially in Europe. And it allows us to have stimulation trimming to be adjusted at smaller increments to provide patient-sensitive to stimulation more options. And it also offers patients daily feedback using an app and even the autonomy to adjust stimulation amplitude with predefined boundaries. That is our current product that we have and that we are using commercially in Europe, and that we also use clinically in our studies.

[Olivier Taelman, CEO at Nyxoah]

Now, we already have our 3.1 generation, with a ceramic encapsulation of the internal component, making Genio an implant for life, a more ergonomic activation chip that will contain the coil, improving gross margins and eco-friendliness, and a patient hub, which will be the base for cloud connectivity and advanced feedback. With this product, we are planning to launch in the U.S. wide after FDA approval, and also there, we have manufacturing lines set up in the U.S. with a service provider and also in Europe and going forward, so that we have also de-risked our manufacturing and increased our capacity in the U.S. and also outside of the U.S.

[Ross Osborn, Director and Lead Research Analyst at Cantor Fitzgerald]

Okay, great. And then one modeling question. You know, looking at OpEx and anticipating an inflection, ahead of the U.S. launch, should we think of that as more of a 3Q or a 4Q activity?

[Loïc Moreau, President International at Nyxoah]

We, so, yeah, if you look at the cash, the shape of the cash flow, we expect an inflection that will start in Q3, because as Olivier was saying, we have started to recruit the management for the U.S. organization, and we will add the first rep. So yes, the cash burn will start to increase in Q3 and continue to increase in Q4. So it will be a steady increase that we expect in the second half of the year before the sales start in Q1 next year.

[Ross Osborn, Director and Lead Research Analyst at Cantor Fitzgerald]

Okay, great. And then lastly, and I realize it's early on, but following the hiring of Scott, how has he shaped your commercialization plan for the U.S. launch?

[Olivier Taelman, CEO at Nyxoah]

So next to Scott, we have also hired our sales leader. We have hired our marketing leader of reimbursement, of market access leader. We are finalizing a search for a human resource, U.S. or global leader. We are also looking at our operational director, and then we also started actively recruiting our sales force. And what really, really gave me great confidence is just seeing the high number of spontaneous applications that we are getting. And I do not want to, I mean, start throwing in numbers, but it's really a high number of people reaching out that want to be part of the Nyxoah team that will be launching in the U.S.

[Ross Osborn, Director and Lead Research Analyst at Cantor Fitzgerald]

Great. Thank you for taking our questions.

[Olivier Taelman, CEO at Nyxoah]

Thank you, Ross.

[Operator]

Thank you. Our next question comes from the line of David Rescott with Baird.

[David Rescott, Senior Research Analyst at Baird]

Oh, great. Thanks for taking the questions. I want to clarify a couple pieces. I heard some numbers saying thrown around and have been heard around calls as well. So I want to make sure I'm hearing everything correctly. I thought the last call you had talked about maybe the 75-100 higher volume centers. Again, I may have totally heard it wrong this quarter, but I heard the number 31 kind of called out there. Also heard, you know, you're looking to go after where about 85% of the volumes in the U.S. are occurring. So can you just help kind of clarify what maybe the near, intermediate, and then kind of longer term, you know, go-to-market account opening strategy is in the U.S.?

[Olivier Taelman, CEO at Nyxoah]

Apologies if things were not completely clear, but oh, let me try to make it clear. So the 31 tier one accounts that I was referring to were the surgeons that participated in our usability study, and that provided us feedback. Just as a reminder, they were trained on the product—from an anatomic perspective, from an implant perspective, in both animals and cadavers. And then within 24 hours, they had to reproduce an implant in a cadaver independently. And their overall feedback was extremely positive, and they were really waiting and asking when this technology would be available for them to be used in their accounts. That's the 31 number. The other numbers I was referring to, I'm always saying we focus on tier one accounts.

[Olivier Taelman, CEO at Nyxoah]

If you look at the tier one accounts, in total, they are representing 85% of all hypoglossal nerve stimulation revenue. We are talking about 200-250 accounts in the U.S. Out of this number, we will be focusing on 150 from the beginning. We will be doing this in a scalable approach, meaning with our 15 sales rep in quarter one of launch, they will go after the first, let's say, 50-75 accounts. Every quarter, the number of accounts will increase until we reach also the 200+ tier one top implanting accounts. In parallel, of course, we will increase also our number of territory managers, field engineers, and sleep specialists. I hope, Ross, this is more clarifying your question.

[David Rescott, Senior Research Analyst at Baird]

Yeah, that's great. Thanks. Maybe just on, you know, heard some of the comments on the PNL, that the cash balance where you're at today, and how the ramp maybe should look over the next couple of years, that mid-2026 cash runway. Have you kind of thought about what that longer-term kind of break-even profit number should look like? I know it's still pretty far away, but just wondering, you know, if we were to model out over the next three to four years, how we should be thinking about the rest of the PNL? Thank you.

[Loïc Moreau, President International at Nyxoah]

Thank you for the question. So as discussed during the call, our U.S. launch strategy will be focused at scalable. We will initially target the top HGNS account and selectively invest in DTC to drive patients referrals. With our commercial structure, the territory manager will be supported by field engineers and field sleep specialists, which will enable a highly productive commercial organization. That's what we have in mind. So with this approach, we anticipate achieving profitability at around $250 million of sales in the US. So that's what we have in mind.

[Olivier Taelman, CEO at Nyxoah]

I think in addition to Loic's comment, if I can add, for us, it was crucial also to have a healthy balance sheet that is fully funding the U.S. launch. We have this because of the equity raise in combination with the loan facility, and we are now having more than EUR 85 million added to our existing balance sheet. I think it is also giving us some comfort to fully focus on the execution of the launch.

[Operator]

One moment. For our next question, please. It's from the line of Adam Maeder with Piper Sandler. Please proceed.

[Analyst at Piper Sandler]

Hi, this is James on for Adam. Thanks for taking the question. Just one. I wanted to give you guys the opportunity to comment on the SURMOUNT-OSA study that was recently released at ADA. We were just curious to get your reaction to that data, and if there's been any change to how you guys are thinking about GLP-1s, and the impact on your business. Thanks.

[Olivier Taelman, CEO at Nyxoah]

I was saying from CPAP that we welcome GLP-1s overall, because it will definitely help increase also the total OSA market, OSA market and patient numbers to treat. What we learn, if I go a little bit more in-depth, is that if we look at the data, we see a placebo-adjusted 50% reduction in AHI and an 18% reduction in BMI coming out of the SURMOUNT OSA data. The recent data demonstrated a placebo-adjusted reduction in OSA severity and magnitude of OSA reduction that was below those shown by hypoglossal nerve stimulation. I think that's also very important to point out. And then last, both published data and commentary from leading KOLs indicate that to have the highest hypoglossal nerve stimulation response or therapeutic effect, it is best to lower BMI and bring it below 35 than to treat high BMI patients.

[Olivier Taelman, CEO at Nyxoah]

In that perspective, the SURMOUNT data reinforce our view that GLP-1s will increase the hypoglossal nerve stimulation patients funnel, as in the GLP-1 only arm, AHI went from 15-22, with a BMI from 39-32. That gives us great confidence, as I was saying in the beginning, and we welcome therefore, also GLP-1s into the market.

Participants

Executives

• Loïc Moreau, President International
• Mikaela Kirkwood, Investor Relations and Communications Manager
• Olivier Taelman, CEO

Analysts

• David Rescott, Senior Research Analyst at Baird
• Ed White, Managing Director at H.C. Wainwright
• Joe Federico, Analyst at Stifel
• Ross Osborn, Director and Lead Research Analyst at Cantor Fitzgerald
• Suraj Kaila, Managing Director at Oppenheimer
• Analyst at Piper Sandler