Thank you for standing by. And welcome to the Nyxoah Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today’s call is being recorded.

I would now turn the conference to your host, Michaela Kirkwood [ph], Strategy and Investor Relations Manager. Please go ahead..

Good afternoon, and good evening, everyone. And welcome to our earnings call for the fourth quarter of 2022. I am Michaela Kirkwood, Strategy and Investor Relations Manager at Nyxoah. Participating from the company today will be Olivier Taelman, Chief Executive Officer; and Loïc Moreau, Chief Financial Officer.

During the call, we will discuss our operating activities and review our fourth quarter financial results released after U.S. market closed 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 Investor section of our Investor Relations tab of our website. Before we begin, I would like to remind you that any statements that relate to expectations or predictions of future events, market trends, results or performance are looking-forward statements.

All forward-looking statements are based upon our current estimates and various assumptions. These 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 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 20-F filed with the Securities and Exchange Commission on March 22, 2023. With that, I will now turn the call over to Olivier..

Thank you, Michaela. Good afternoon, and good evening, everyone. Thank you for joining us for our fourth quarter 2022 earnings call. I am extremely excited to announce, we have implanted all 115 patients in our U.S. pivotal study DREAM and filed the first module in our model of PMA submission.

With the clock now ticking to our 12-month data, our focus shifts to strong patient follow-up. What pleases me even more is to see the first 34 DREAM patients completing 12-month follow-up, showing a 65% AHI responder rate and a 76% ODI responder rate and safety in line with our expectations.

This is supporting what we have already demonstrated in studies and European commercial patients. We have submitted this data as a late-breaking abstract to the SLEEP 2023 Conference in June. While these data are preliminary and not conclusive for final DREAM success, they are highly encouraging.

Commercially, our European sales and marketing organization continued its strong execution with sales of €1.3 million in the quarter. In Germany, we are exiting the year with roughly 34% market share and with 38 active accounts, up from 12 at the end of 2021.

Finally, we continue to expand our commercial presence in Europe as we expect to report our initial sales in Austria during the first quarter. As a reminder, 2022 was the first full year of reimbursement in Germany and I am extremely proud to see our leading German clinicians have embraced the Genio Technology.

Driven by a single incision, a legal system offering bilateral stimulation, powered by an external battery and a full body MRI compatibility. While it’s strongly resonating with patients is the ability for Genio to always be upgraded to the latest technology without the need for another surgical intervention.

We received clearance for our Belgium manufacturing facility, adding a second manufacturing site, and thereby, strengthening our supply chain. This is an important milestone in securing capacity to meet growing demand in Europe ahead of our U.S. launch.

As for ACCCESS study for complete concentric collapse patients, we have implanted the first patients. CCC patients, who want refractory to CPAP have currently no hypoglossal nerve stimulation treatment options in the U.S. These patients represent roughly 30% of the model to severe OSA population.

With the CCC label in the U.S., we would remove the important hurdle of a drug-induced sleep endoscopy, so patients will have simple and fast access to our hypoglossal nerve stimulation therapy. From an R&D perspective, we continue to innovate.

Last year, we received regulatory approval for Genio 2.1 and we may turn the progress on the ansa cervicalis project in collaboration with Vanderbilt University. We anticipate illustrating a feasibility study in 2023.

Now I would like to share our three key objectives for 2023; first is to focus on patient follow-up in the DREAM study, resulting in reaching the primary end points; next is beginning preparations to enter the U.S.

market with regulatory manufacturing and market access readiness; and last is driving further revenue growth in Germany and opening new European markets.

Before I turn the call over to our CFO, Loïc Moreau, I would like to invite all those on the call to join us for our first Investor and Analyst Meeting tomorrow, March 23rd in New York, beginning at 4 p.m. Eastern Time. The registration details can be found on our Investor Relations website.

Loïc?.

Thank you, Olivier. Thank you for joining us today. Revenue for the fourth quarter ended December 31, 2022 was €1.3 million, more than tripling from the fourth quarter of 2021. The average selling price in the fourth quarter was €20,300, consistent with prior quarters.

Total operating loss for the fourth quarter was €9.1 million versus €6.5 million in the fourth quarter of 2021, driven by an acceleration in clinical, commercial and R&D activities. As of December 31, 2022, cash and financial assets totaled €94.9 million, compared to €135.5 million in December 31, 2021.

This represents a monthly cash burn of €3.4 million. Based on our current cash position, we have a runway into the second half of 2024. With that, I will turn the call back over to Olivier..

Thank you, Loïc. I would like to reiterate our key objectives for 2023, which are focusing on patient follow-up in the DREAM study, resulting in reaching the primary end points; beginning preparations to enter the U.S.

market with regulatory, manufacturing and market access readiness; and driving further revenue growth in Germany, while opening additional European markets. 2023 will be a pivotal year for Nyxoah, which I look forward to reviewing in more detail during our Investor Analyst Meeting tomorrow. I look forward to seeing many of you there.

With that, I will open the call to Q&A..

Thank you. [Operator Instructions] Our first question comes from the line of Adam Maeder of PSC. Your line is open..

…questions and congrats on the progress. A couple from me and maybe just to start, I wanted to ask about the announcement on the 12-month data that you submitted for a late breaker at SLEEP, I think, I heard 34 DREAM patients.

Can you put the 65% AHI responder rate, the 76% ODI responder rate in context with the broader DREAM trial design and kind of what’s needed for success? I guess that’s my first question, and then I had a follow-up or two. Thanks..

Yeah. Thank you, Adam. Thank you for the question. So starts to put them in the right perspective, for the trial, the DREAM trial to be successful, out of 115 patients at least 63% of patients need to be AHI and ODI responders at a 12-month follow-up. Within the abstract, the result is 65% AHI for the 34 patients and an ODI of 76%..

Okay. Perfect. That’s very helpful. Thank you for that. And also I wanted to ask about DREAM and congrats on finishing implants there. Can you put a finer point on when you did the last patient implant in the DREAM study? Just trying to get a sense for kind of exactly when that 12-month follow-up clock started. Yeah, any color there, Olivier? Thanks..

Yeah. Yes, Adam. Definitely. So the last patient was implanted in the first week of March. So next to this, we plan on completing the final PMA module submission soon after the data is released in the first quarter of 2024.

That said, we do not want to predict the exact timing of FDA decision, given it will be subject to variables we cannot influence, but we do expect FDA approval before year end of 2024..

Okay. That’s helpful. So I think on the Q3 call, last quarter you were kind of aiming for Q2 2024 approval.

So it sounds like a little bit of a push out there, but before end of 2024, did I hear that correctly, Olivier?.

Well, yes, correct, and due to mainly -- due to difficulties in scheduling PSG and DISE procedures, due to long waiting lists in the site that we are active with in combination with some of it in the holiday period, the final implants took longer to complete than expected, that is correct.

But now we have officially started the clock and that’s why we are really confident with the timelines that I just disclosed..

Okay. Perfect. Thank you for the clarification there. And if I can just squeeze in one last question, maybe on the Q4 results. Can you kind of just talk about -- I think you have some carryover from Q3, some orders that were impacted by supply issues that ended up in Q4.

So maybe just talk about kind of the Q4 results, how much of that was kind of organic revenue in Q4 versus catch-up revenue and help us think through just broad strokes to patient commercial sales going forward in 2023? Thanks so much for taking the questions..

Yeah. So also on this one, so in -- we had to push implants from Q3 -- quarter three into Q4 and I am really happy to see that we did not lose any patients and the underlying demand remained high.

Despite limited work capacity in some of the German sites that we were active in combination with the Christmas season, Q4 still was a strongest quarter of the year. We remain -- I am going to the second part of the question about 2023, we remain highly confident in expanding Genio adoption and strong commercial execution.

That being said, Adam, as you know, we are not providing guidance and we note that the first quarter is impacted by seasonality..

Thank you. One moment please for our next question. Our next question comes from the line of Jon Block of Stifel. Your line is open..

Thanks, guys. Good afternoon. Olivier, maybe the first one in Germany, I think, you may have cited a 34% market share exiting the year and that arguably might have benefited from some of the push that we saw around the third quarter and the 34%, I think, is below the ambitious plans that you had to exit north of 50%.

Maybe you can just talk about why you think you didn’t quite reach the 50%, you still had the label expansion with CCC.

Maybe just talk to us on what prevented that exit rate from being a little bit higher than you had initially expected?.

Sure. It’s clear, Jon, that when we started to be monthly update result [ph] in 30% market share. Now exiting the year with 34%, I can only -- I will be very complementing the team in Germany to achieve these results. So we do see this as really a strong result.

Now being very ambitious and also saying that we would like to become market leader and even have a higher market share, this is also the thing that we will continue pursuing during 2023 this year by opening more new sites, by further increasing [inaudible] penetration, and of course, to your point, also having the CCC impact much more impacting the overall results.

Now that being said, if you look at the performance in the top 10 accounts that we have in Germany, there we do see that we managed to become market leaders in really high volume account and this again is giving us a lot of confidence that the physicians are really embracing our technology and that it’s also clearly illustrating from a patient perspective that there is a need for a second technology available so that patients and physicians have an option to choose.

So, overall, we are pleased with our results with 34% market share. We expect to further increase going forward in 2023 hand-in-hand and parallel with opening more new accounts, and we are also seeing that the CCC impact that this will also further accelerating our market share update..

Okay. Great. That was very helpful. Thanks for that. And maybe just two more for me. You completed all 115 patients and I think in the PR from a week ago or whenever it was, you also said the first module had been submitted, obviously, the last module will come in with the data.

But the next two, Olivier, I think, I had that correct, are there two more before the clinical data call out and will those two be submitted in 2023? I guess maybe walk us through the timing for the next couple of modules that you expect to submit and then I have just got a final question to ask? Thanks..

In total there are four modules. So the first one we have submitted. The next two modules, to your point, will be submitted before we have the 12-month DREAM safety and efficacy data. So they will be submitted this year. And our last module will be submitted, of course, upon 12-month DREAM data.

To go a little bit more in depth is also what the module one we also -- is containing product overview and preclinical data. In the second module, it’s the remaining preclinical data. In the third module, we have a manufacturing validation.

So those three modules will take place in 2023 and then the last module or the final one is the clinical data review and the ISU [ph] mainly..

Okay. Great. Thanks for that color.

And the last question, let me see if I can get your cost clearly on the phone, I think, it’s an important one and you had the helpful footnote in the release that says, for the trial to be successful, of the 115 patients, at least 63% of the patients need to be AHI and ODI responders at 12-month follow-up, okay? And then for the first 34 patients, it says, 65 % are an AHI responder and 76% are ODI responders and so I guess what I am trying to ask you, are those apples-to-apples? In other words, of the 65% that are an AHI responder for those first 34 patients, are all of those ODI responders, so that we could think about for the first 34 patients you hitting the threshold that seems to be necessary for the trial to be successful and let me know if that made sense, and hopefully, you did and you can give us some color? Thanks..

Yeah. No. Definitely, Jon. And I hope to welcome you tomorrow as well during the Analyst Day, because I am sure that there we have more time to go more in depth on this with occupied kind of next clinical also growing more into depth than we abstract. But let me already start answering.

So the AHI responders and the ODI responders do not need to be the same patients.

So you can -- we have to show all of the cohort of 115 patients that will at least showing 63% AHI response and then in the cohort of 115 we also have to show patients that are at least showing a 63% ODI response, but they don’t -- it does not need to be the same patient. I hope this is answering your question..

It is. In other words got it. So you hit both criteria in the first 34.

You are sort of well above on ODI and slightly north on AHI, but to your point, that is an apples-to-apples when we think about the 34 versus the 115, is that fair?.

That is completely correct..

Okay. I will see tomorrow and look forward to it. Thanks very much guys..

Same likewise..

Thank you. One moment please. Our next question comes from the line of Suraj Kalia of Oppenheimer. Your line is open..

Hi, Olivier, Loïc.

Can you hear me all right?.

Clearly, Suraj..

Hi..

Hello. Good afternoon..

Perfect.

So, Olivier, congrats on DREAM enrollment, a few questions from my side, Olivier, when the final data set is presented next year, would there be cohorts or subgroups where the learning curve impact would also be assessed? Specifically, what I am trying to understand is, most physicians are pretty well versed with Inspire, right, and now this is something different.

So is it a learning curve part of the equation that different subgroups of patients would need to go through that we can analyze the data?.

So, Suraj, the short answer is, no. When we look at the DREAM study design, this is not part of the study design. So, that being said, of course, we will further analyze the data and we will also report the regular earnings.

And then if I understand the question also correct, I think, what you are referring to is the fact that when surgeons starts during the first implants, they are going through a learning curve and once day reach, we saw already in commercial patients and also in previous study patients that after four implants that they really pass the learning curve and that the placement and also the speed of the implant is only increasing.

So repeating a little bit of somehow [inaudible], no, it’s not part of the study design, but we will definitely take the learnings and also incorporate them going forward and we see that the surgeons only get better after they pass the learning curve of 34 in that..

Fair enough. Olivier, in terms of compliance i.e. they have turned on the Genio and all, how is that being maintained in DREAM, because again, Inspire is an internal pacemaker, right, and you guys are not.

So I am just curious if that is a variable that we need to be cognizant of in the final data analysis?.

Yeah. Suraj, as you can understand, I cannot comment on compliance in the DREAM trial. But based on historical clinical and commercial compliance data, we know that we are reaching a 91% reporting and compliance reporting using the Genio system more than five days a week and minimum 5 hours a night..

Got it. In Germany, Olivier -- and I will keep this as the last question. In Germany, on an apples-to-apples basis, for the same site, it may be somewhat unfair, forgive me, Olivier, I know it’s early in the game. But, let’s say, Suraj walks in into tubing in hospital, right, and he needs hypoglossal nerve stim.

How has the decision matrix made between, let’s say, Inspire versus Genio, all things -- all other things remaining equal? Thank you for taking my questions..

Yeah. And it’s a very interesting question, Suraj, that you are asking. So what we learned and what we notice this that the influence of the voice of the patient is really important in the selection of the technology that they will get.

And also, therefore, we are really increasing our efforts in DTC, we are increasing the effort that we are doing in having a patient health line, and of course, we are also increasing our efforts in interacting not only with ENT surgeons that are doing the implant, but also with SLEEP physicians.

So if you would enter the hospital, I am sure that, first of all, the surgeon would inform you what is available and there are two systems at this moment. And then second, I also -- I am sure that you as a patient would also have a clear say in the selection of which technology you will go.

And that’s one of the reasons where we feel very confident, because if you explain the position of system has been the single incision, fast procedure, always benefiting from the latest and greatest technology update, I think, not having to undergo a DISE, so let’s not forget. In Germany, we have the label in Germany and Europe.

We have the label expansion. The path to getting a treatment solution of hypoglossal nerve stim is much faster if you choose Genio than if the surgeon of the patient would go for the competitors..

Got it. Thank you..

Thank you. I am showing no further questions at this time. I’d like to turn the call back over to Olivier Taelman, Chief Executive Officer, for any closing remarks..

Yes. Thank you. And I just can say thank you for joining us today. We look really forward to welcome you as many as possible on the Analyst Day and Investor Day that we are hosting tomorrow and we are really excited of 2023, because as I mentioned before, it will be a great year for Nyxoah. Thank you..

Thank you. Ladies and gentlemen, this does conclude today’s conference. Thank you all for participating. You may now disconnect. Have a great day..

Thank you..