Financial Data and Key Metrics Changes - Total revenue for Q1 2020 was $734,000, compared to $675,000 in Q4 2019, within the guidance range of $700,000 to $750,000 [20][41] - GAAP net loss from operations for Q1 2020 was $8 million, an improvement from a net loss of $13.9 million in Q1 2019 [46] - Adjusted EBITDA from operations for Q1 2020 was a loss of $6.4 million, compared to a loss of $13.4 million for the same period in 2019 [47] - Cash and cash equivalents at March 31, 2020, totaled approximately $15.6 million, down from approximately $24.1 million at December 31, 2019 [48] Business Line Data and Key Metrics Changes - Paid months of therapy increased by 20% sequentially to 2,633 in Q1 2020 from 2,195 in Q4 2019 [20] - Paid months of therapy shipped to the Veterans Administration (VA) and Department of Defense (DoD) increased by 31% sequentially to 1,084 in Q1 2020 from 829 in Q4 2019 [42] - Revenue from VA and DoD increased by 20% sequentially to $454,000 in Q1 2020 from $378,000 in Q4 2019 [24][42] - Paid months of therapy outside the U.S. increased to 1,008 from 961 in Q4 2019, but revenue from outside the U.S. decreased to $277,000 from $294,000 [31][43] Market Data and Key Metrics Changes - The company reported that more than 2,850 American physicians had written at least one gammaCore prescription by the end of Q1 2020, up from 2,735 at the end of Q4 2019 [19] - The National Institute for Health and Care Excellence in the UK recommended the use of gammaCore for treating cluster headaches, which is expected to enhance market penetration [29] Company Strategy and Development Direction - The company is focusing on leveraging its proprietary nVNS therapy to assist patients suffering from symptoms related to COVID-19, including submitting an emergency use authorization application to the FDA [12][70] - The company has redeployed sales resources to focus on the Federal Supply Schedule and the UK National Health Service, which are key revenue channels [21][30] - The company is exploring additional clinical trials to expand the indications for gammaCore therapy, including studies related to COVID-19 [37][72] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance despite the challenges posed by the COVID-19 pandemic, noting that the business has remained flat while many others have declined [67] - The management highlighted the potential for pent-up demand for gammaCore therapy as the migraine prevention label was approved, which could lead to increased sales once access to physicians improves [68] - The company anticipates revenue in excess of $700,000 for Q2 2020 and expects operating cash burn to be between $5 million and $6 million [52] Other Important Information - The company recorded a restructuring charge of $365,000 related to the transition to a new Chief Medical Officer [46] - The company raised $5 million through a stock purchase agreement and received $1.4 million from the Federal Paycheck Protection Program [49][50] - The company is asking shareholders for authority to implement a reverse stock split if necessary to preserve its NASDAQ listing [40] Q&A Session Summary Question: How are providers taking advantage of the migraine prevention indication? - Management noted that there is a cohort of prescribers who were waiting for the migraine prevention label, and they are starting to re-engage with these customers, although COVID-19 has limited immediate engagement [56] Question: What drove the increase in gross margins this quarter? - Management attributed the increase to aggressive expense reductions and higher volumes spreading fixed expenses over a larger revenue base, indicating that gross margins are expected to continue expanding [57][58] Question: How is the VA operating in terms of patient treatment? - Management indicated that VA facilities are making decisions based on local COVID-19 conditions, but some are beginning to schedule live meetings and see patients again, with telehealth being well-received [61][62] Question: What is the outlook for pent-up demand once operations normalize? - Management expressed optimism about returning to solid growth, noting that there is significant pent-up demand for gammaCore therapy due to the expanded indications [68] Question: What is the status of the EUA application for treating COVID-19 patients? - Management confirmed ongoing communication with the FDA regarding the EUA application but could not speculate on timing or approval [71]
electroCore(ECOR) - 2020 Q1 - Earnings Call Transcript