• Revenue: $6.1 million for Q2 2024, a 73% increase from Q2 2023.

• Gross Margin: 86% in Q2 2024, up from 84% in Q2 2023.

• Net Loss: $2.7 million in Q2 2024, reduced from $4.9 million in Q2 2023.

• Adjusted EBITDA Net Loss: $1.9 million in Q2 2024, improved from $4.5 million in Q2 2023.

• Cash and Equivalents: $14.5 million as of June 30, 2024.

• VA Channel Sales: $4.6 million in Q2 2024, a 120% increase from Q2 2023.

• Truvaga Sales: $572,000 in Q2 2024, up from $290,000 in Q2 2023.

• TAC-STIM Sales: $55,000 in Q2 2024, down from $311,000 in Q2 2023.

• US Prescription gammaCore Revenue: $476,000 in Q2 2024, a 7% increase from Q2 2023.

• OUS Revenue: $464,000 in Q2 2024, a 9% increase from Q2 2023.

• Warning! GuruFocus has detected 3 Warning Sign with ECOR.

Release Date: August 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• electroCore Inc (NASDAQ:ECOR) reported its seventh consecutive record revenue quarter with $6.1 million, marking a 73% increase over the prior year.

• The company achieved an 86% gross margin and reduced its net loss by 46% compared to the same period in 2023.

• Sales in the VA channel grew 120% year-over-year, with 160 VA facilities purchasing gammaCore products.

• The Truvaga product line exceeded sales expectations, with a media efficiency ratio of 2.81%, indicating strong return on advertising spend.

• The company raised approximately $9 million through a registered direct offering and private placements, strengthening its financial position.

Negative Points

• TAC-STIM sales declined compared to the previous year, attributed to anticipation of the new product launch.

• The company continues to face challenges in expanding its penetration within the VA system, with only 1% of the addressable market reached.

• The Joerns managed care relationship is taking longer than expected to develop, delaying potential revenue growth.

• Research and development expenses decreased significantly, indicating a reduction in investment in new projects.

• The timeline for FDA approval for new indications, such as PTSD, remains uncertain, potentially impacting future growth opportunities.

Q & A Highlights

Q: What is the current number of shares outstanding for electroCore? A: Brian Posner, Chief Financial Officer, stated that electroCore has 4.6 million shares outstanding, with an additional 1.6 million pre-funded warrants included in the EPS calculation, totaling an average of 7.05 million for the quarter.

Q: Can you provide more details on the expected sales for the second-generation TAC-STIM? A: Daniel Goldberger, Chief Executive Officer, mentioned that they have visibility to at least $1 million to $1.5 million in sales for the year. Deliveries were delayed due to the launch of the new generation, but a large commitment is expected in the fourth quarter.

Q: What are the expectations for ex-US sales, particularly in the UK and other territories? A: Daniel Goldberger explained that UK sales are expected to grow in the mid-single digits (4%-6%). However, there is no visibility on reimbursement in other geographies, which are more of a 2025 story.

Q: How is electroCore progressing with commercial payers in the US, and what are the expectations for the Joerns managed care relationship? A: Daniel Goldberger emphasized the focus on developing clinical champions and penetration within the Joerns managed care system. They aim to demonstrate business growth before targeting traditional national payers in 2025.

Q: Can you elaborate on the potential new indications for gammaCore, such as PTSD and substance abuse? A: Daniel Goldberger noted that they are working with the FDA on a PTSD indication and that a pivotal trial for substance abuse, sponsored by NIDA, is underway, with results expected early next year.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.