Nyxoah S.A. (NYXH) Q4 2025 Earnings Report, Transcript and Summary

Good day, and thank you for standing by. Welcome to the Nyxoah Fourth Quarter Full Year 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's call is being recorded. I'd now like to hand over to our first speaker today, Pearson Dennis, Investor Relations Associate. Please go ahead.

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 Taelman, 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 20-F, 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 Nyxoah. 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 U.S. On August 8, we received U.S. FDA approval for Genio, followed by actively launching our product. We secured reimbursement for Genio 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 annualized sales rep productivity,during the first full quarter of launch. From a clinical data perspective, the DREAM pivotal study was published in the Journal of Clinical Sleep Medicine. These data demonstrated Genio's 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 EUR 11 million, driven by strong Q4 U.S. launch momentum. Now let me dig in deeper, starting with our commercial update. The fourth quarter marked our first full quarter of U.S. 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 HGNS accounts in the U.S. 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 large commercial payers to date. For the past months, I've had the chance to meet multiple surgeons and fleet 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 batteries-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 HGNS 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 HGNS that facilities will use when billing for traditional Medicare patients, including specific codes, 8011, 12 and 13, which apply to external power devices, including of Genio osystem. Last Friday, CMS indicated that the new C-code 8011 used for the 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 build their physician fee for Medicare procedures. Surgeons are responsible for selecting the appropriate CPT code and potential modified use. Given recent CMS guidance, we expect surgeons will elect to use CPT 64582 for the physician fee. Let us now to commercial payers, which represent approximately 90% of our business. Claims continue to be processed on the CPT Code 64582 or 64568, depending on payer policy, contractual terms, documentation and individual case review. To date, we have seen strong trial authorization outcomes across cases submitted to commercial payers, including many of the largest in the United States. In conclusion, we view the current reimbursement agreement as a normal maturation of an established therapy. With the recent clarity on the facility fee of $31,526 for the Genio C code, we are confident that it will not have any negative impact on further Genio adoption in going forward. We remain actively engaged with specialty societies and coding authorities to support long-term dedicated HGNS CPT codes. From an internal update perspective, while the U.S. is the 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 achieved this goal. In summary, entering the U.S. market in 2025, which is the largest HGNS market in the world, completes our transition to a commercial organization. The momentum we see in the U.S. 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 gross revenue was EUR 6.3 million before EUR 700,000 of revenue deferrals, mainly due to disposable patches, which are delivered over time, resulting in net revenue of EUR 5.6 million compared to EUR 1.3 million in the fourth quarter of 2024. This growth was driven by our U.S. commercial launch, which resulted in approximately EUR 3.5 million 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 '25 was EUR 18.6 million compared to EUR 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 EUR 11 million before EUR 1 million of revenue deferrals mainly due to disposable patches, resulting in net revenue of EUR 10 million compared to EUR 4.5 million in 2024 or 122% year-over-year growth. Gross margin for the full year of '25 was 63%. Total operating loss for the full year 2025 was EUR 83.5 million compared to EUR 58.8 million in 2024. The increase in total loss reflects the acceleration of U.S. commercialization activities in preparation for commercial launch. Our cash position as on December 31, 2025, which includes cash, cash equivalents and financial assets totaled EUR 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 surgeon training, additional value analysis committee approvals and growing surgeon 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 3 sales directors in the first quarter of 2026, bringing us to a total of 40 sales reps, covering 200 of the top 400 hypoglossal nerve stimulation account. During 2026, from a clinical perspective, we are looking forward to see our 12-month ACCCESS 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 Nyxoah. With that, I would now like to open the lines for questions and answers.

[Operator Instructions] Our first question comes from the line of Adam Maeder from Piper Sandler.

Congrats on the progress. 2 questions for me. The first one is just on some of the leading indicators or metrics that you shared Olivier, if I heard correctly, you have 120 VAC submissions that were made, I think, as of December 31, last year, and I think 57 accounts activated. Can you just kind of help bridge us for the remaining 60 or 63 VAC processes and kind of where those stand? When should we expect more accounts to go active? And just talk about the funnel for new accounts as we move towards that 400 of hypoglossal stimulation account target? And then I have a follow-up.

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 time line 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, 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 5 new accounts, so that can go up to 75 additional accounts, resulting in 200 out of the 400 high-volume accounts that we will be covering during Q1 and during also Q2. Hope this is answering your question.

Very helpful, Olivier. For the follow-up, I guess I'm going to ask about complete concentric collapse and the ACCCESS study. And if I heard correctly, I think you're targeting early approval in 2027. Maybe just help us understand when we're actually going to see that data presented. I assume that's this year. And if you could just maybe put a finer point on submission timing. I think that's a PMA supplement, but wanted to confirm that.

Yes. So yes, it is a PMA supplement that we will be submitting. Now coming back on timing, we had to wait for 12-month data. So by the end of June, we will have 12-month 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 the data are looking like and also using this to prepare our PMA supplement submission. There, we are confronted with the regulatory time line that we cannot really change and influence. So that's why we calculate it more or less 1 quarter, so 90 days, that we will do once we have submitted our data, and that's how we end up entering Q1 2027 to obtain the approval. When we will we publishing the data? I mean, this is something we have to submit. We will do this as soon as we have our data. So by somewhere July and then depending on the acceptance in the journal, we will definitely publish this data and present them during one of the congresses that we will attempt.

Our next question will come from line of Jon Block from Stifel.

John, maybe I can just start with you. I mean, obviously, helpful on some of the guidance figures. But any more color you can give us around the cash burn rate either for the quarter, 1Q even on an annual basis when we start thinking about 2026? And then I'll just ask a follow-up.

Sure, Jon. Thanks for the question. In terms of cash burn, we're looking at approximately EUR 20 million cash burn here in the per quarter in the near term. We -- recall in the fourth quarter, we raised capital vis-a-vis PIPE as well as convertible debt 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, EUR 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 into the first quarter of '27.

Okay. Got it. Very helpful. And then let me pivot. Olivier, maybe for you, maybe I could throw a couple of questions your way. The first 1 is, I think your compeititor has been pretty transparent about pursuing their own code and maybe going down that road for Jan 1 of 2028. I think the C codes bridge you for a little while, but your thoughts on pursuing your own code, what that will entail and what that may mean. And then can you give us an implant number, the number of implants that were done maybe as of the end of the year or any even color that you're willing to give us into 2026, because clearly, of those 57 accounts activated as you should be. I mean you're selling into the shelf a little bit when we start thinking about the revenue number.

Yes. Thank you, Jon. 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 on the facility fee and that we fully understand what the use of Code or an interim C code means and how it's impacting also business 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 a 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 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 CPT 64582 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 U.S. in Q4. And you also know what the average prices 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 implants numbers. I hope this is answering your question, Jon?

Yes. Okay. I mean I get the math of the ASP and the revenue, and I can do that. But again, some are sitting on the shelf, right? So you were previously giving implants. I guess I'm trying to just get more granular on how many implants were done, not how many units were sold, of which a subset is sitting on the shelf. But I could follow up with you offline.

No, no, but I can -- 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 we -- 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 times, they are coming with 3 to 5 patients. And based on this, we make sure that we provide them with that number of implants, and we always at 1, maximum 2 implants depending whether it's 3 or 5 cases [ they're ] prepared so that there is some backup in case something will go wrong. And I think -- I hope to answer your question more clear in that sense, Jon, because I do think it's important. We are not lowering shelves. We are implanting patients.

Our next question will come from the line of Suraj Kalia from Oppenheimer.

Olivier, can you hear me all right?

Yes, perfect.

Perfect. Olivier, congrats on all the progress. Olivier, I just wanted to follow up on the previous question, so that I get my bearings right. Your competitors' key approach. I hope you can hear me, there's some background noise.

Yes, there's some police cars driving by. My apologies.

So your competitors' approach has been like to have minimum 4 to 5 units upfront sale when a new site is added on. And the larger sites, our field checks tell you can have 10, 12 implants on the shelves. So Olivier, when you say a new site comes online with the 3 identified patients, is your approach also really about 4 to 5 unit upfront sales, really for that matter? That's the right way to think about it. And by the same token, I'm curious how in the high-volume centers as LivaNova also comes online, do you think this dynamic is sustainable of respective inventory of each player on the shelf. I know it was a long question. Hopefully, you've got the gist of it.

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 3 patients that are lined up for implants, we are selling 4, maximum 5 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, 3 patients lined up for implant. We sell 4, maximum 5, just to make sure there is some backup just in case. That is one aspect. Second thing, you touched on LivaNova. 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. Now what we do expect, if you look a little bit at the technology is that you will have a clear differentiation, there is Genio, bilateral stimulation, external variable component, single incision, and then there will be 2 players with a pacemaker platform that will be more alike and most likely also more be considered when a compact physician in making patient choices or selection, which patients 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.

Fair enough. And 1 follow-up, Olivier. The 57 or so sites that you all have trained, Olivier, admittedly, it is early. But what are you seeing as the key driver for Genio in these sites? Like what is the key reason that physicians are asking, hey, I need this also on the shelves. And the reason I ask is, look, there have been a chatter about men with beards not having -- not wanting Genio so on and so forth. So just give us an idea about what you're seeing in the field to set the stage for market share approximations, at least between the 2 current players?

Thank you, Suraj. So maybe starting by clarifying something. So we have trained more than 57 accounts in the U.S., just to be very clear about this. we have already 145 surgeons and they represent or they're active in 120 accounts of the 125 high-volume accounts that we are targeting. So we're 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 3 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 the surgeon, also the bilateral stimulation and the related quality of airway opening with a beautiful [ tongue hold ] solution. This is something that we are hearing back constantly also with staying efficient in complex airway obstruction. So those are the 3 things. I hope this is answering your question.

Yes. Thank you.

[Operator Instructions] Our next question will come from the line of David Rescott from Baird.

This is Tommy Han on for Dave. I was wondering if you guys would like to put a finer point on your assumptions and guidance around new account adds versus increasing utilization in your existing accounts relative to the Q4 exit rate?

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 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 a waiting list. So we are doing trading 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 VAC submission that takes place, it is depending a little bit on by account by account, how fast it can go. We see that it can happen sometimes in 2 weeks, sometimes it takes a month, sometimes even longer. But what you can expect and gradually scaling up is that over time, and when I define overtime, by the end of Q1, we should be covering all the way up to potentially 200 implants accounts where w'ere present.

Great. And I was wondering if you guys wanted to provide a little bit more color around OpEx guidance and gross margin guidance for '26, and what the drivers are behind that? And separately, maybe for procedures performed so far, can you help us understand where those patients are coming from? Is it those who are expecting to get another HGNS device or more so people who have been waiting on the sidelines?

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 those patients are 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 an 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're confronted and being proposed and explained what Genio can do. So that is one aspect. And 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 question there, Tommy, 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 allows us to significantly reduce the cost of the disposable patch going forward. So the next step function up. 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're going to 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 Olivier 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 3 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.

I'm not showing any further questions at this time. With that, this concludes the question and answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.