Nyxoah (NYXH) Q4 2025 earnings call transcript

Thank you. Good afternoon, everyone, and I welcome you to our fourth quarter and full year 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 fourth 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, which will be filed with the Securities and Exchange Commission.

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

Thank you, Pearson. Good day, everyone, and thank you for joining us for our fourth quarter and full year 2025 earnings call. Let me start by our 25 key milestones and highlights. 25 was a transformative year for Nixoa. We achieved several defining milestones during the year. In early 2025, in anticipation of FDA approval, we hired and trained our U. S. commercial team, including our first 25 sales reps. We developed our strategic launch plan, worked on securing market access and mapped out target accounts focused on the top 400 highest volume hypoglossal nerve stimulation accounts around the US. On August 8, we received US FDA approval for Gineo, followed by actively launching our product. We secured reimbursements for Gineo across both Medicare and commercial payers, resulting already in first implants and revenue as early as September 2025.

We successfully executed on our focused launch in the United States. We trained 145 surgeons in 125 high volume hypoglossal nerve stimulation accounts, of which 57 already received positive value analysis committee approval, resulting in $4.5 million of revenue generated in Q4. This translates into $720,000 in annualized sales rep productivity during the first full quarter of launch. From a clinical data perspective, the DreamPivotal study was published in the Journal of Clinical Sleep Medicine. These data demonstrated genius clinical efficacy in both supine and non-supine positions as reflected in our labeling and differentiating us from competition. Internationally, we continued driving growth in selected markets, including Germany, United Kingdom and the Middle East. We closed 2025 with a global gross revenue of 11 million euros, driven by strong Q4 US launch momentum.

Now let me dig in deeper, starting with our commercial update. The fourth quarter marked our first full quarter of US commercialization following FDA approval and we are excited with the first launch results. Let me share with you the key leading indicators that we are tracking to. As of December 31, 2025, with our 25 sales reps, we focused on 125 out of the 400 top AGNS accounts in the US. From these accounts, 145 surgeons were trained. We completed 120 Value Analysis Committee submissions and received 57 approvals already, with no VAC rejections to date.

U. S. reimbursement has been consistent for Medicare and many large commercial payers to date. For the past months, I've had a chance to meet multiple surgeons and sleep customers across the U. S. , hearing consistent positive feedback on GENIO's unique approach and the optionality we now offer to patients and physicians.

Surgeons are attracted by the bilateral stimulation, the single incision procedure, and the consistent therapy efficacy across all sleeping positions, which makes GENIO unique on the market. In their interactions with patients, they highlight the patient-centric design. including the battery-free implantable, full-body MRI compatibility, and no need for resurgery due to battery depletion or software upgrades.

In addition, sleep physicians note that the first wave of activated patients in the U. S. are providing strong positive feedback on therapy outcomes. From a reimbursement perspective, ahead of FDA approval, we worked to align GENIO coverage with the broad framework of hypoglossal nerve stimulation therapies across both commercial payers and Medicare. I'm pleased to report that GENIO has been consistently reimbursed by both commercial Payers, which represents approximately 90% of our business, and Medicare, which represents the remaining 10% of the GENIO business during Q4.

Recently, there has been a lot of discussion and communication regarding AG&S reimbursement overall. As is typical for a relatively new product category, in combination with an expanding landscape where GENIO enters the market, procedural coding practices continue to mature. In February 2026, CMS established new interim C codes for AGNS that facilities will use when billing for traditional Medicare patients, including specific codes 8011, 12, and 13, which apply to external power devices including our GENIO system. Last Friday, CMS indicated that the new C code 8011 used for a GENIO implant would be reimbursed in the hospital outpatient department at $31,526 in line with 2026 coverage for CPT code 64582. This also means that there is no reimbursement difference between the GENIO system and competition.

Staying with Medicare the introduction of C codes does not change how surgeons bill their physician fee for Medicare procedures Surgeons are responsible for selecting the appropriate CPT code and potential modifier use. Given recent CMS guidance, we expect surgeons will elect to use CPT 645A2 for their physician fee. Let us turn now to commercial payers which represent approximately 90% of our business. Claims continue to be processed under CPT code 645A2 or 64568 depending on payer policy, contractual terms, documentation and individual case review. To date, we have seen strong prior authorization outcomes across cases submitted to commercial payers, including many of the largest in the United States. In conclusion, we view the current reimbursement environment as a normal maturation of an established therapy.

With the recent clarity on the facility fee of $31,526 for the Gineo C code, we are confident that it will not have any negative impact on further Gineo adoption in going forward. We remain actively engaged with specialty societies and coding authorities to support long-term dedicated AG&S CPT codes. From an international update perspective, while the US is the primary growth driver, international markets continue to provide a consistent revenue contribution. Our goal is to ensure each of our international markets are profitable, with Germany being the first that has reached this goal.

In summary, entering the US market in 2025, which is the largest AG&S market in the world, completes our transition into a commercial organization. The momentum we see in the US launch reinforces our confidence in the opportunity ahead.

With that, I will now turn the call over to John for a detailed overview of our financial results.

Thank you, Olivier. Starting with the fourth quarter of 2025, gross revenue was 6.3 million euros before 700,000 of revenue deferrals, mainly due to disposable patches, which are delivered over time, resulting in net revenue of 5.6 million euros compared to 1.3 million in the fourth quarter of 2024. This growth was driven by our U. S. commercial launch, which resulted in approximately 3.5 million euros of net revenue in the fourth quarter of 2025.

Gross margin was 64% in the fourth quarter. Total operating loss for the fourth quarter of 2025 was 18.6 million euros compared to 18.3 million in the fourth quarter of 2024. Notably, operating loss remained relatively stable year-over-year despite significant commercial investments made to support our U. S. commercial launch.

Now, let's turn to the full-year 2025 results. Gross revenue was 11 million euros before 1 million of revenue deferrals, mainly due to disposable patches, resulting in net revenue of 10 million euros compared to 4.5 million in 2024, or 122% year-over-year growth. Gross margin for the full year of 2025 was 63%. Total operating loss for the full year 2025 was $83.5 million compared to $58.8 million in 2024.

The increase in total operating loss reflects the acceleration of U. S. commercialization activities in preparation for commercial launch. Our cash position as of December 31, 2025, which includes cash, cash equivalents, and financial assets, totaled $48 million. Now as we turn to revenue guidance, we expect U. S. net revenue for both the first and second quarters of 2026 to grow 25% sequentially. This sequential growth in the U. S. reflects continued surge in training, additional value analysis committee approvals, and growing surge in adoption. International revenue is expected to follow typical seasonal patterns.

With that, I'll now turn the call back to Olivier for closing remarks.

Thank you, John. For 2026, our priority is clear. Continue executing on our U. S. commercial launch. To that end, we increased already our sales force by 15 sales reps and three sales directors in the first quarter of 2026, bringing us to a total of 40 sales reps, covering 200 of the top 400 hyperlossal nerve stimulation accounts. During 2026, from a clinical perspective, we are looking forward to see our 12-month excess study data on complete concentric collapse and subsequent PMA supplement submission, potentially leading to a U. S. label expansion in early 2027. As a fast-growing company, we are expanding our internal manufacturing footprint to further strengthen our competitive position and improve our gross margins.

We expect our 2026 execution to translate into a very strong financial profile as we gain market share in the U. S. Thank you for listening and your continued interest and support for Nixoa.

With that, I would now like to open the lines for questions and answers.

Thank you, Adam. So, to your point, we have submitted 120 VAC submissions, already 57 are approved. The other ones, they will be approved, and we already saw the first ones being approved in Q1. As you know, not every hospital has the same timelines when it comes to VAC approvals, but we were extremely pleased to see already the first 57 during Q4, so you can expect the remaining to start being approved during Q1. So that is already, I think, answering the first part of your question. The second one is regarding to the sales force and how many accounts we are covering and how many new accounts we will open in going forward. As I mentioned during my call as well, we already increased our hiring of 15 additional sales reps.

So we went from 25 to 40. And with that, on average, each of those 15 will add five new accounts. So that can go up to 75 additional accounts, resulting in 200 all of the 400 high volume accounts that we will be covering during Q1 and also Q2. Hope this is answering your questions.

Yes So yes it is a PMA supplement that we will be submitting Now coming back on timing we had to wait for 12 data So by the end of June we will have 12 data of all patients Then we will go into the analysis of the clinical data. That will take up to 30 days. So, by the end of July, we should really have a good view on how the data are looking like and also using this to prepare our PMA supplement submission. There we are confronted with regulatory timelines that we cannot really change and influence so that's why we calculated more or less one quarter so 90 days that you will do once we have submitted our data and that's how we end up entering Q1 2027 to obtain the approval.

Sure, John. Thanks for the question. In terms of cash burn, we're looking at approximately $20 million in cash burn here per quarter in the near term. We recall in fourth quarter we raised capital vis-a-vis of pipe as well as convertible debt, which provided us additional cash to get into the first quarter of 2027. So with the capital we have on the balance sheet and the cash burn, which, again, $20 million here in the near term, which will decrease as we gain revenue traction here in the U. S. That will provide us the capital again the first quarter of 27.

Yes, thank you, John. So, yes, when it comes to the reimbursement coding, I'm finally pleased that we see that there is progress made, that there is clarity also now on the facility fee, and that we fully understand what the use of C code or an interim C code means and how it's impacting also the business in going forward.

Yes, also on the fact that we would like to evolve to our own coding, and there we are following, in fact, the same pathway forward as competition is doing as well. And I do think listening carefully and interacting with AMA and also listening carefully to what is going on is that there will be dedicated coding for GENIO also in place, most likely somewhere beginning 2028. But in the meantime, facility fee is clear. We are now waiting for the physician's fee. Also, although physicians and experts are telling us there that they don't expect many differences to, how it used to be, meaning using the previous CPT64582 coding also to calculate the physician fee. So that is one aspect.

Second, number of implants. We decided in our leading indicators not to communicate on the precise number of implants. But on the other hand, I do think it is relatively easy also to get a good estimate when you know that we generated $4.5 million of revenue in the US in Q4. and you also know what the average price is for the system being $25,000. So that's also, I think, an easy way forward to get your answer there. But in our KPIs, we don't give and we do not provide clear implant numbers.

I hope this is answering your question, John.

No, no, but I can, you know, I think it's an important question and topic that you mentioned. I do not want to avoid this. So first of all, it's clear that we have no policy in putting products on the shelf. We also clearly don't do any consignment. I just want to point out that there is also no consignment. and the way our sales force is operating in the field on business, when we train surgeons, they come with pre-identified patients.

Once they have these patients, most of the time they are coming with three to five patients and based on this, we make sure that we provide them with that number of implants and we always add one, maximum two implants, depending whether it's three or five cases they have prepared so that there is some backup in case something would go wrong. And I think I hope to answer your question more clearly in that sense, John, because I do think it's important. We are not loading shelves. We are implanting patients.

Yes, perfect. Perfect. Perfect.

No, I will start by answering the first part. So, as I was saying, we treat patients and we do not want to load shelves. I keep insisting on this. And with the example that you used, when we have three patients that are lined up for implants, we are selling four maximum five devices depending on what the surgeon prefers as a potential backup. So that's what we are doing. So we are not additionally selling more devices that are sitting there on the shelf. We are not doing this. So I do think your calculation in the example was correct. Three patients lined up for implant, we sell four maximum five just to make sure there is some backup just in case.

So that is one aspect. second thing we touched on leave a no one so I was also carefully reading and hearing today's announcement and I want to congratulate them with this but it also means that they are not launching actively currently but they are waiting till somewhere q1 if my information is correct or somewhere beginning 27 to launch no what we do expect if you look a little bit of the technology is that you will have a clear differentiation There is GENIO bilateral stimulation external wearable component single incision and then there will be two players with a pacemaker platform that will be more alike and most likely also more be considered when it comes by physician in making patient choices or selection with which patient will get what.

But I feel very confident with our GENIO differentiated approach that we can continue also rolling out successfully in going forward and that patients also will know what to choose, a single incision with bilateral stim versus a pacemaker.

So maybe starting by clarifying something So we have trained more than 57 accounts in the US just to be very clear about this We have already 145 surgeons and they represent or they are active in 120 accounts of the 125 high volume accounts that we are targeting. So we have trained in 120 accounts. The 57 number is the number where we already have a full approval, where the VAC is approved, and where we actively were doing business during Q4. Just to clarify this one.

Then answering the question on why are surgeons choosing Genio? And I think you can summarize it in three major buckets. First of all, there is the optionality that we are providing by breaking the monopoly that was existing, and not all patients like or accept a pacemaker.

Second, there is the genio-differentiation, so a clear single incision implant technique, something that resonates extremely well with surgeons to having a single incision compared to multiple incisions. And then last, for a surgeon, also the bilateral stimulation and the related quality of airway opening with a beautiful tongue protrusion. This is something that we are hearing back constantly, also with staying efficient in complex airway obstructions. So those are the three things.

I hope this is answering your question.

So as I was mentioning, we have a focused approach. With the 24 salespeople starting immediately post FDA approval, we were able to reach 125 out of the 400 high volume. Today, we added 15 reps, so now we are already reaching out to 200 out of the 400 accounts. Then next to this is we have already trained 145 surgeons.

We have surgeons lined up for training. There are even waiting lists, so we are doing trainings almost every weekend across the U. S. and we will also significantly increase the number of accounts we can do business with and we can implant patients. So that can go up all the way to 200. But in the meantime, of course, there is each time the VEX submission that takes place. It is depending a little bit account by account how fast it can go. We see that it can happen sometimes in two weeks, sometimes it takes a month, sometimes even longer. But what you can expect in gradually scaling up is that over time, And when I define over time, by the end of Q1, we should be covering all the way up to potentially 200 impendicons where we are present.

Great.

Yes. So I will take the last part of the question, and the first part I will hand over to our CFO, to John. So the last part, where are patients coming from? It is clear that in those high-volume accounts, there are well-established referral networks, and we see patients being referred the moment that they arrive with the surgeon. So today with Genio, there is optionality.

Patients are proposed both technologies, and we see that a high number of these patients are choosing for Genio for the reasons I mentioned from a surgeon perspective. But when it comes to patients, what is driving them is that, in fact, Genio is designed so patients can forget they even have an implant. So it's a very minimum invasive surgery, and it's also designed to evolve with patients. As example, upgradable software, an intuitive patient app, and no need for resurgery. So that is where we see a lot of patients being very appealed by when they once are confronted and being proposed and explained what GENIO can do. So that is one aspect. In going forward, it's also clear that we are establishing strong relationships with sleep physicians and that we are also working on referring our own GENIO patients.

John with that maybe on the gross margin yes thanks for the questions there Tommy on the on the model in regards to gross margin I would expect gross margin to increase slightly over the balance of the year really due to increased sales volume and being able to spread the overhead over more units so you'll see a slight increase in 2026 as we move through the year the major step function increase in gross margin that you can expect to see is probably more in early 2027 when we launch our next generation disposable patch activation chip, or Genio 2.2 specifically, that will allow us to have an enhanced patient experience, plus also allow us to significantly reduce the cost of the disposable patch going forward.

So the next step function up, you know, into say the 70% range will come in 2027. In terms of OPEX, we don't provide specific OPEX numbers in terms of guidance, but let me give you some color here if I can to provide some direction. In terms of our R&D expense, which includes things like quality, regulatory, medical affairs, clinical, in addition to the true R&D spend, what you can expect to see there is that number to go down over the course of 2026 sequentially on a quarterly basis as some of the investments that we made in 2025, getting ready for commercialization, will start to fall off over the course of 2026. In regards to SG&A, the main driver there, Tommy, is really around U. S. sales expansion.

So as Olivia mentioned, we expanded by 15 sales reps in 2026 in the first quarter. So you can expect our Q3, Q4 run rate to increase due to the increase of these 15 sales reps, as well as their three respective sales directors. So that would be the major investments we make in the SG&A sphere this year, all the other infrastructure investments. We're going to leverage those as we build those out in 2025. So hopefully that's helpful as you think about the model, and that's what we're looking at for 2026.

You're welcome.