electroCore, Inc. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Revenue Growth: 2024 revenue was $25.2 million, up 57%. Fourth quarter revenue was $7 million, the ninth consecutive record revenue quarter, up 36% from the prior year's fourth quarter.
• Product Launches: Launched two new non-prescription general wellness product lines in 2023: Truvaga (direct-to-consumer health and wellness) and TAC-STIM (for human performance).
• Acquisition: In December 2024, entered into a definitive agreement to acquire NeuroMetrix to accelerate becoming a leader in the bioelectronic health and wellness sector, expected to close in the second quarter of 2025.
• Distribution Agreement: In February 2025, announced a distribution agreement with Spark Biomedical to offer Sparrow Ascent product line in VA hospital sites.
• Truvaga Performance: Truvaga showed strong growth in 2024, with net sales surging due to holiday season gift giving.

Segment Performance

• Prescription gammaCore: In the full year ended December 2024, sales in the VA channel grew 85% to $17.8 million from $9.6 million in 2023. In the fourth quarter of 2024, sales in the VA channel grew 47% to $4.6 million from $3.1 million in the same period of 2023. The U.S. prescription gammaCore channel recorded revenue of $1.5 million in 2024, down 15% from 2023.
• Truvaga: Net sales were $2.8 million for the year ended December 2024, a 174% increase over 2023. In the fourth quarter of 2024, Truvaga net sales were approximately $1.2 million, a 271% increase from the fourth quarter of 2023.
• TAC-STIM: For the full year ended December 2024, TAC-STIM sales were $1.2 million compared to $1.7 million in the same period last year.
• Outside the United States: Revenue from channels outside the United States was $1.9 million for the full year ended December 2024, flat compared to $1.8 million in the full year ended December 2023.

Guidance

• Pending the close of the acquisition of NeuroMetrix, refraining from providing guidance for 2025.
• Expect Truvaga to continue to show sequential growth month to month and quarter to quarter.
• The acquisition of NeuroMetrix and the Spark Biomedical product are expected to provide upside in the second half of 2025 and beyond.

Risks

• VA Hospital Disruptions: Ongoing disruptions at VA hospital customers due to macro forces, though no direct effect on business cadence currently.
• Supply Chain Impact: Supply chain may be affected by trade policies, but currently not involving geographies subject to recent tariffs.
• DoD Procurement: Opaque and lengthy DoD acquisition process for TAC-STIM, making revenue prediction difficult.
• Product Mix Impact: Change in product mix could affect gross margins.

Question and Answer

Q: On the NeuroMetrix acquisition, once complete, how to sell the Quell product?

A: After closing, add Quell to FSS contract and contracting mechanisms, train sales, customer service, and medical affairs teams, and aim to push it to VA hospitals.

Q: How is the Joerns channel progress?

A: Progress has been slower than hoped, but there are more than 30 repeating prescribers, processing 1-2 prescriptions per month, with green shoots appearing.

Q: What caused the strong growth in the Truvaga channel in the quarter?

A: Attributed to holiday season gift giving.

Q: Does VA personnel reduction impact gammaCore business?

A: No material impact yet, but supply chain side is affected by distraction from personnel changes.