KORU Medical Systems(US:KRMD)2022-05-08 09:25Financial Data and Key Metrics Changes - KORU Medical Systems reported net revenues of $6.2 million for Q1 2022, a 15% increase year-over-year, marking the second consecutive quarter of double-digit growth [9][19] - Gross profit increased by $400,000 or 12.1%, while gross margin decreased by 150 basis points to 58% due to higher manufacturing costs and the dilutive impact of increased NRE revenues [21][24] - Net loss for Q1 2022 was $2.5 million or negative $0.06 per diluted share, compared to a net loss of $1.3 million or negative $0.03 per diluted share in Q1 2021 [24] Business Line Data and Key Metrics Changes - Domestic core business revenues increased by 13.2% year-over-year, driven by higher pump and consumable sales [19] - Novel Therapies revenues increased to over $350,000 for Q1 2022, primarily due to pre-commercialization revenues from pharmaceutical pipeline deal expansions [9][19] - International core revenues decreased by 8.6% year-over-year due to changes in ordering patterns from smaller distributors [9][20] Market Data and Key Metrics Changes - The overall SCIg drug market growth increased from 1% in Q4 2021 to 7% in Q1 2022, indicating a market recovery as patients return to regular therapy [9] - The prefilled syringe market penetration increased to 5% from 3.4% in the previous quarter, driven by label expansions [14] Company Strategy and Development Direction - The company aims to increase core SCIg penetration and expand into Novel Therapies, with a strategic plan rolled out in December 2021 [10][11] - KORU Medical is expanding its international presence, recently signing a distribution agreement with iExpert in Germany, a significant SCIg market [11][16] - The company is focused on innovation and product development, with plans for a next-generation pump and improvements to the FreedomEdge platform [18][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the U.S. market and the potential for double-digit growth, driven by the rebound in patient diagnoses and therapy cadence [27][41] - The company tightened its revenue guidance for 2022 to $26.5 million to $27 million, reflecting confidence in market growth and pipeline expansion [27][28] - Management highlighted the importance of label expansions and international agreements as key drivers for future growth [29][41] Other Important Information - The company is on track to move to a new building location in Mahwah, New Jersey, on June 1, 2022, and has strengthened its executive team with the hiring of a new Chief Technology Officer [11][18] - KORU Medical ended the quarter with $22.6 million in cash, indicating strong capitalization to support strategic initiatives [25] Q&A Session Summary Question: Impact of prefilled syringes on overall subcu penetration - Management noted a 0.5 point improvement in overall subcu penetration and a 40% growth in pump orders, attributing part of this growth to the FreedomEdge pump cleared for prefilled syringes [33] Question: Updates on new pump developments and product pipeline - Management confirmed ongoing innovation efforts, including improvements to the FreedomEdge platform and plans for a next-generation pump [35] Question: Feedback from specialty pharmacies regarding prefilled syringes - Management reported positive feedback regarding the ease of use of prefilled syringes and ongoing efforts to train pharmacies and patients [36] Question: Future developments of the Novel Therapies pipeline and international progress - Management highlighted the importance of the U.S. market recovery, Novel Therapies pipeline expansion, and the new distribution agreement in Germany as key factors for achieving growth targets [40] Question: Contribution from the recent 510(k) approval for EMPAVELI - Management indicated that the approval is expected to significantly enhance the promotion of the FreedomEdge pump and contribute to revenue growth [42]