Nyxoah (NYXH) Q3 2025 earnings call transcript

Thank you. Good afternoon, everyone. and I welcome you to our third quarter 2025 earnings call. Participating from the company today will be Olivier Talman, Chief Executive Officer, and John Landry, Chief Financial Officer. During the call, we will discuss our operating activities and review our third quarter 2025 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 Relations section of our website. This call is being recorded and will be archived in the Events section on the Investor 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-looking 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 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 filed with the Securities and Exchange Commission on March 20, 2025.

With that, I will now turn the call over to Olivier.

Thank you, Pearson. Good day everyone and thank you for joining us for the third quarter 2025's earnings call. Since FDA approval on August 8th, our US launch activities following FDA approval of Gino have generated strong enthusiasm across the EMT and sleep communities. Physicians welcome the long-awaited optionality now available to their OSA patients and the end of a single solution market. During the recent International Surgical Sleep Society, IFFF meeting, our genial symposium and educational event drew a full room of clinicians eager to engage with real-world case discussions and shared perspectives. These discussions reflected what we continue to observe globally. Clinicians value choice in treating obstructive sleep apnea and or differentiated bilateral patient-centric design resonate strongly with both surgeons and sleep physicians.

We were particularly encouraged by conversations with physicians familiar with genius clinical in Europe, as well as the strong clinician results demonstrated in the Dreamstone. Many providers highlighted the opportunity to tailor treatment based on individual patient's needs and express appreciation for our approach to chronic disease management, patient feedback integration, and multidisciplinary care pathways.

Finally, our first commercial GENU implant in the US, completed as early as September, represented an important milestone for our teams and partners, already generating US$231,000 in revenue during the third quarter and ahead of our expectations. Early service feedback has emphasized streamlined patient management, close collaboration between EMTs and sleep physicians and strong patient follow-up engagement. While still early, this reinforces our confidence that GENIO is well-positioned to serve US OSA patients with a compelling new alternative.

We are navigating the critical steps of early commercialization and the momentum we are generating and training physicians, obtaining value analysis committee approvals, and securing coverage from major public and private payers is extremely encouraging. In our initial launch strategy with 25 territory managers, we are focused on the initial 125 of the top 400 high volume hyperlossal nerve sites, representing roughly 75 to 80% of the total AGMF volume.

We are actively tracking a number of leading indicators to measure our early progress. Since launch, until end of October, we can report that out of the 125 storied accounts, 111 surgeons have already successfully been trained on GEO. Second leading indicator, 102 value analysis committee submissions have been completed, of which already 35 approvals have been received.

Reimbursement has been secured with Medicare and 10 private payers already, including UnitedHealthcare, Blue Cross Blue Shield and Cigna. 63 prior authorizations were submitted, 21 approvals have been already received with a 100% success ratio. In all of these approvals, the CPT code 64568 was accepted. 15 implants were already successfully performed across 9 accounts in the first 4 weeks. Beginning on the road since the launch and interacting with surgeons, I've been incredibly encouraged by feedback and getting.

Surgeons are enthusiastic to finally have a second AGNS option to offer feedback over-stay patients. They commented that Gino is unique and differentiated as a solution, which resonates very well with patients seeking therapy. They highlight the powerful and symmetric tongue protrusion achieved with bilateral stimulation. They report that Vigenio procedure is efficient, with procedure times up to 60 minutes on average. In conclusion, first interaction with Vigenio was positive. Surgeons are excited to incorporate Vigenio solution into their daily practice. On the reimbursement side, we have made significant progress.

Our Genio Access program provides dedicated support to our customers for prior autorizations. Each territory manager works with a dedicated case manager who interfaces between the clinical team, patient and sales team. The program includes a reimbursement helpline and communication portal for real-time tracking. To date, we have achieved 100% approval on all our prior authorization submissions through our GENIO Access Program, including with 10 key private payers such as United Healthcare Blue Cross Blue Shield, Healthcare Service Cooperation, Anthem, and Cigna. In addition to providing this direct support to our customers, we are also seeing progress with commercial payer policy decisions. Service Cooperation or HCSC operates Blue Cross Blue Shield plants in Illinois, Texas, Oklahoma, New Mexico and Montana.

HCSC and Blue Cross Blue Shield of Michigan has updated the hypoglossal nerve stimulation medical policies to already include CPT code 64568 as a reference procedure code. While coverage of hippoglossal nerve stimulation was already established, the inclusion of this code provides additional clarity for co-virus and pairs, which the company expects will help reduce administrative barriers and streamline patient access. HCSC and BCBS of Michigan represent over 26 million members across six states. We continue engaging with additional commercial payers and expect continued progress on coverage decisions in the common quarters.

Looking ahead, our priorities are clear. We will continue expanding of US commercial organizations adding territory managers to deepen coverage of high volume in planting centers Training programs are scheduled through year end with a strong pipeline of surgeons requesting in-plant slots. Beyond the US, we are focused on driving deeper penetration in Germany and in the United Kingdom, where we maintain a strong presence.

and in the Middle East where we hold exclusive status as the only available AGNS solution while selectively expanding into additional geographies with strong demand for differentiated technology. This is an exciting time for MixOA. We have the team in place, we have surgeon demand, we have payers coverage, and most importantly, we have patients choosing GDO. In the fourth quarter, we are focused on execution, training more surgeons, activating more records, and treating more patients.

With that, I will now turn the call over to our CFO, John Longley, for a financial update.

Thank you, Olivier. We recorded revenue of €2 million in the third quarter of 2025 compared to €1.3 million in the third quarter of 2024, an increase of 56%. Gross margin in the third quarter of 2025 was 60.5% compared to 62% in the third quarter of 2024. Total operating loss for the third quarter of 2025 was 24.4 million euros versus 15 million in the third quarter of 2024.

This was driven by the acceleration in the company's commercial investments in the U. S. in preparation for post-FDA commercial launch. Our cash position, including cash, cash equivalents, and financial assets, was €22.5 million at September 30, 2025, compared to €43 million at June 30, 2025. I'm excited to share, as we announced earlier today, that we've secured up to $77 million of capital to bolster our balance sheet and help drive the commercialization of GMEO in the U. S. This financing includes a private placement of equity of approximately $25 million, which included existing strategic investors, Cochlear and ResMed, as well as our chairman and management team members.

It also includes a convertible bond, which can provide us with up to $52 million in two tranches, with the first tranche of $26 million available upon closing of a convertible note. The second, equally sized tranche, can be drawn down at the company's discretion for the 30 days starting seven months after the closing of the transaction. We believe the proceeds of this transaction in conjunction with currently available capital provide us with cash runway into the first quarter of 2027. For the fourth quarter of 2025, we expect global revenue to be between 3.4 million euros and 3.6 million euros.

With that, I'll now turn it back over to Olivier just some closing remarks.

Thank you, John. As we close, I want to remind everyone what truly defines Nixowa. The future of sleep medicine will be defined by those companies who understand and continuously learn from their patients. With Genio, we are not treating sleep apnea as a one-time event. We are managing a chronic condition. Our system learns from every breath every night, turning data into insights and insights into better outcomes.

We will be integrating the power of AI and self-learning in our next generation of GEO, developing a therapy that adapts, evolves, and becomes more personal over time. It's not just about features of a device. It's about creating an ecosystem that empowers patients, physicians, and healthcare payers to manage sleep apnea smarter, simpler, and more sustainable.

At NYXOLA, everything we do starts and ends with the patient, and we will continue to empower them to effectively manage their OSA through our technology. We believe that our focus on innovation, supported by clinical evidence, drives progress, and that the winners will be the patients who finally get their night back to good sleep quality.

And at NYXOA, we are excited that we can finally offer this to patients in the United States. With that, I would now like to open the lines for Q&A.

Yeah, definitely. Thank you for the question. So, first of all, as I was mentioning, physicians are extremely excited that they have optionality so that today they can offer their patients the Genio solution as well. And this is resonating extremely strong. Second thing that we are hearing as well that is always coming out is the fact that we offer a bilateral stimulation solution that is really inspecting the anatomy of the hipoglossal nerve, and that is also resulting in an option to treat patients also with more complex airway prescriptions. So those are the two main things that keep coming back, and that's what you're hearing first.

So as I was already earlier communicating, so we do a focused launch on the top 400 implant accounts in the U. S. , so the high volume AGNF size. With our current Salesforce, we are covering the first 125 of these 400. we will further scale by adding every quarter up to 15 territory managers that we can present them over 75 implant sites so if you do a little bit calculation behind after four quarters we would be able to cover all of those four long high volume in implant sites even a little bit further and we will end up with a sales force of 85 people great thanks for taking our questions and Congrats on the progress.

Yes, definitely. So we did 15 implants, spread over nine different accounts, and they were all done in the month of September.

And we did 231,000 euros in revenue.

Just to be clear, Adam, that 15 was through the end of October. Sorry about that. The 15 was through the end of October, and the 231 was through the end of September for euro to nominate revenue.

Yeah, I appreciate the question, Adam. You know, at this point, we're not going to break out the U. S. versus international in terms of guidance. We're still in the early phases here of the account activation ramp in the U. S. , and that key floor guidance really reflects the continued acceleration of U. S. implants as more accounts complete back approvals and prior authorizations, where surgeons are trained, and we also see sustained growth in both Germany and the UK.

And if so maybe just walk us through the appeal of going proximal versus distal Thanks Adam I think you must have misheard this because I never talked about proximal versus going more distal when it comes to the use of our device So I want to be very specific on this. We have our specific positioning where we place the panels on the valve, and that is also very well adapted. If I can refer to this, so it's very clear that there are no changes at all that you're making. So maybe what you heard was when we were talking about the next generation that we are developing of product, where of course we keep putting the patient at the center and then we are talking about integrating self-learning into our device, becoming smaller and more autonome, so that patients also can get more control about their own technology.

No problem, no problem.

Yes, thank you.

So first of all, I do want to emphasize how with Genio we are totally differentiated from a place that follows technology. And this is also determining the choice of physician. So I think the first part of the question was why Genio? And then who is using Genio? And what is about female, male, and further differentiation? I do think that it's clear what we are seeing is that it's a real combination of male and female. So it's not that our technology is only, I don't know, we hope to treat one or the other. It's clear that it applies and appeals very well with both male and female.

What we're also seeing is that the average age is quite young. I mean, young defined as 52 to 54 years old. And also people who are really consciously working with their health in the sense that they do value the power of not needing re-surgery when a battery is depleted, not needing re-surgery to benefit from the latest maneuvering software upgrades. And they embrace also the implants for life concept, knowing that once an implant is done, they are protected, regardless of what sleep position they are. They are protected, regardless is the airway obstruction a little bit more complex. So, this I would like to point out.

Second, I was hearing also the CCC aspect in your question. It is clear that in our label, CCC is not a contraindication. It's under the warning. but it's also not yet on label because that's where we are waiting for the access study data outcome where we close enrollment and what we expect to show next year around this period because we need to do a transplant follow-up so CCC is not called indicated it's under the warning and it can be chosen for a physician at physician discretion but it's not on label so I want to be very claim on this and then last when we also talk about Gino and compare to also the logistics in the hospitals so once we are working through the fact committee it's clear that we see that in the high volume accounts of course we break the monopoly that is currently there by giving options for choice and we're also hearing through market research very encouraging our songs that physicians of seeing this as becoming a market where it will end up in a 50-50 or even with some main pain or in our favor so a lot of enthusiasm the clear differentiation versus pacemaker a clear differentiation in patients choosing the implant for life approach with no need for the surgery going forward and no differentiation between male female it's at this moment based on the numbers and the experience we build in the U. S. , we see that both are really benefiting and then choosing for the genome.

I hope that answers your question.

For the short term, John, yes. I think, you know, for the short term, you know, maybe the near term, midterm, we'll provide these metrics. As we become a more material revenue generator, we'll probably likely, you know, drop one of them, potentially the value analysis committee packages that are submitted. We'll probably do that. We'll obviously continue to provide updates on reimbursement and service-trained. But I think the one that, you know, over time will probably drop is Value Analysis Committee. So we want to give everybody a sense as to the progress we're making based on these KPIs. And then as we become a revenue generator, we'll evaluate these going forward.

Yes, 15 implants were done through the end of October, correct?

No, and thank you, John, for the questions. And I think I can handle POS 1 and POS 2 because they're a little bit linked to each other. So when you say what was the biggest surprise, I never thought that we would advance so fast from a surgeon training all the way to a surgeon implant, and knowing that in between we had to get a VAC approval, and we got to have a pre-authorization submission followed by a pre-authorization approval by a payer before we could do an implant.

So that was for me a very positive surprise, that we can move fast, and we see that we are continuing moving fast. And then the first part of the question, I think it is related to this. So if you see and then why didn't we do more implants in this time frame? It has simply to do with the fact that we see on average when there is a pre-authorization submitted, it takes like two weeks to obtain an approval. Once you have an approval, it takes another two weeks before you generate revenue. So in total, we're talking about roughly four weeks. So if we then start looking when we did the submissions, because they are depending on the faculty approvals, That is also the saving and then that will be answering the question why not more implants were done yet in the month of September and October.

Although I would like to remind everyone that the sales team is doing extremely great And if you can say that you already have nine centers like active implants took place in seven weeks post approval I think this is a very encouraging result and I want to applaud my team for this.

Yeah, sure, David. Thank you. Thanks for the question. So, from a, you know, average selling price perspective, you know, we're right in the zip code of, you know, $25,000 from an average selling price for our implants. But, you know, there's not exactly a, you know, one-for-one correlation with the revenue that's booked. We have, you know, as we do in Europe, we defer a small piece of the revenue when we ship because we spread out the disposable shipments over the course of the year, so the portion that we spread out over time. So there's, you know, that delta.

And then in terms of the, you know, the guide, we don't necessarily, We're not breaking out U. S. versus international here for the fourth quarter to get to the 3.4 to 3.6. But as we look at our number of cases we've done in October, as we look ahead to where we're going for cases that need to be performed in the months of November and December, and in order to fulfill that demand for those cases, we would expect our U. S. revenue to grow from October to November and then from November again to December. So that's how we're thinking about it and the visibility into the number of cases that we're expecting here in the remaining 60-ish days of the quarter here.

Sure, absolutely. So, as you think about gross margins, you know, long term, we have, you know, an opportunity to get our gross margins, you know, into the 80% range. And I think it's really a multipoint program to get there. One is we have our next generation GEO 2.2, which will enhance the patient experience from an activation SHIP perspective as well as the SPOS will patch perspective, but also significantly reduce the cost. So that's more of a tail end in 26, early 27, but that will be a meaningful step up in gross margin from there. The other item is in terms of volume. As we scale our production volumes of our in-plant, we have different volume breakpoints in our contract manufacturing unit.

So as we drive volume, we'll see those continue to reduce over time. And then just overall working through supply chain and logistics as we're in the early stages of that right now. And as those systems mature and we work through the referral of goods throughout the entire supply chain channel, that will help be the final leg of the stool to get us up that, you know, 80-plus percent gross margin range. So in the near term, i. e. , you know, fourth quarter this year and, you know, 26, probably not many, you know, drivers in the way of moving gross margin up from where we are today. I'd expect that more towards tail end of 26 going into 27.

Welcome.

Yes.

Thank you.

Thank you.

And also refreshingly in a new voice on the analyst call. So thank you for the question on the reimbursement.

So first of all, to your point, the CPT code 64568 which is a recognized code by Medicare for all the same education it is the same code used currently for Agnes therapy being genial or being the alternative therapy and it's providing a clear pathway for reimbursement with both Medicare but also commercial pairs so in going forward we do think that this will be the coding that will be further used and since we only launching since August 8 that is also the only code that we are using and have been using because it is the code that fits best also our technology and we're also seeing that this is the coding also where the latest innovation is used for HGS so I thought this was a big win because we knew also that this was still a question that could only be answered once you submit a reimbursement file and And you also actually receive payment.

And it's, of course, fairly rewarding for us to see that we did not only receive payment to Medicare, but also to private payers, as I was mentioning.

Yeah, and I'd really like to point out and recognize our market access team is doing a tremendous amount of work and doing a great job with our GNO access program to help work through this initial process. And I think the HDSC and across the Shield of Michigan, where we have 64568, is a reference procedure code. I think, you know, that's just sort of the start of it. I think over time we'll have more and more of these payers included, including the 64568. It's a reference procedure code, which will help facilitate the process. I think the thing that's very encouraging to us to see right now is that from a cycle time perspective, from a pre-authorization perspective, we're seeing roughly a two business week cycle time from the time of submission to approvals.

And then on the back end, once the implants are done, we're seeing another two week cycle time roughly for the facilities and the missions to get paid. So it's been pretty consistent and we're really very excited about that and look forward to seeing that continue.

Maybe too, I could close on this one. as well as you see and look at the future of the sort of forward. So sometimes it's nice to be second because there was a lot of work done already and I think AGNS is already extremely well recognized through payers. So we do not need to do the work on habiliting with every single payer step by step because they are familiar with AGNS and what it can be in the treatment of more literacy to be our same.

Thank you.

I would like to thank everyone for participating. Thank you for the good questions. As I was mentioning before, it's the most exciting time for the company. We've been waiting and working hard to get to FDA approval. We obtained it, and our focus is launching, continue launching, opening more sites, treating more patients, and this is, in fact, why we were in this business and what we wanted to offer this solution to seriously impact patients' lives. So thank you and good afternoon, good evening everyone.