electroCore - Earnings Call - Q4 2020
March 11, 2021
Transcript
Speaker 0
Good day, ladies and gentlemen, and welcome to the Electrocard's Fourth Quarter twenty twenty Earnings Conference Call and Webcast. Currently, at this time, all participants are in a listen only mode. Mayor will conduct a question and answer session, and instructions will follow at that time. Also, I'll remind that this conference call is being recorded. At this time, I'd like to turn the call over to your host, Hans Mitchum of LifeSci Advisors.
Please go ahead, sir.
Speaker 1
Thank you, operator, and thank you all for participating in today's call. Joining me are Dan Goldberger, chief executive officer Brian Posner, chief financial officer and doctor Peter Stotts, Electrocor's Chief Medical Officer. Earlier today, Electrocor released results for the quarter and year ended 12/31/2020. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward looking statements within the meaning of the federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Any statements contained in this call that are not statements of historical facts should be deemed to be forward looking statements. All forward looking statements, without limitation, our examination of operating trends and our future financial expectations are based upon the company's current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to differ materially from those anticipated or implied by these forward looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with the company's business, please see the company's filings with the Securities and Exchange Commission.
ElectroCourt disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward looking statements, whether because of new information, future events or otherwise. This conference call contains time sensitive information that is accurate only as of the live broadcast today, 03/11/2021. And with that, I'll now turn the call over to Dan.
Speaker 2
Thank you, Hans. Hello, everybody, and thank you for joining us today. Full year 2020 revenue was $3,500,000 the upper end of our previously provided guidance range of $3,300,000 to $3,500,000 Furthermore, net cash used for the full year decreased 55% to $20,200,000 for the full year 2020 from 44 and a half million dollars for the full year 2019. Brian will cover the financials in detail, but I wanna begin with a few highlights. For the full year 2020, total revenue of 3 and a half million dollars increased approximately 46% as compared to $2,400,000 for the full year 02/2019.
We're pleased that the aggressive restructuring activities in 2019 and 2020 drove growth across our key revenue generating channels in spite of COVID-nineteen pandemic headwinds. During the fourth quarter of twenty twenty, 2,647 total paid months of therapy were utilized across our three revenue generating channels, resulting in net sales of $928,000 A sequential decline from 2,881 paid months of therapy in the third quarter of twenty twenty, largely due to the third wave of COVID. The Federal Supply Schedule or FSS, which encompasses the VA, DoD, and other government and military agencies, continues to be our most important revenue channel. During the fourth quarter of twenty twenty, 71 Department of Veterans Affairs and Department of Defense military treatment facilities purchased gammaCore products as compared to 68 during the 2020 and 54 during the fourth quarter of twenty nineteen. Also, during the fourth quarter of twenty twenty, the company shipped approximately one thousand two thirty two paid months of therapy pursuant to VA and DOD originating prescriptions compared to 1,571 paid months of therapy during the 2020 and 08/1929 during the fourth quarter of twenty nineteen.
Fourth quarter sales and paid months of therapy to VA and DOD facilities continue to be impacted by the ongoing COVID nineteen pandemic, which saw case counts surge in many parts of the country in q four twenty twenty. Our sales and marketing function continues to leverage telehealth and other virtual capabilities, and management believes that the company remains well positioned to resume normalized outreach activities as the pandemic subsides. Turning now to The United Kingdom and other OUS territories. During the fourth quarter of twenty twenty, electroCore shipped approximately 143 paid months of therapy outside of The United States as compared to 1,020 paid months of therapy during the 2020 and 09/1961 during the fourth quarter of two thousand nineteen. Revenue generated outside The US was $311,000 in the 2020 as compared to $278,000 in the 2020 and $294,000 in the fourth quarter of twenty nineteen.
We were pleased to see a sequential increase in paid months of therapy, driven mostly by The UK, which has been and continues to be hit very hard by the pandemic. During the fourth quarter of twenty twenty, we announced that gammaCore would continue to be reimbursed in England under the NHS Innovation and Technology Payment Program, ITPP, for the treatment of cluster headache in adults for an additional six months through March 2021. With the January notification that gammaCore was selected for inclusion in a new long term reimbursement policy called NHS Improvement MedTech Funding Mandate Policy twenty one-twenty two, We are confident that broad NHS England coverage will remain as our team works with NHS England to transition from the ITPP to the MedTech funding mandate policy. In short, the policy supports commissioners and providers in the use of selected National Institute for Health and Care Excellence, or NICE approved, clinically effective and cost saving medical devices, diagnostic and digital technologies that will improve patient outcomes. A projection by NICE concludes that more widespread adoption of gammaCore as an adult cluster headache therapy could deliver cost savings to NHS of as much as 4,600,000 over the next five years.
We're grateful to NHS for their ongoing support of cutting edge therapies such as gammaCore. Similarly, we learned in January that Health Improvement Scotland, or HIS, has published a Scottish Health Technology Group, SHTG, adaptation for NHS Scotland on the use of gammaCore for cluster headache. The SHTG adaptation is now being disseminated across NHS Scotland's health boards to inform the use of gammaCore for cluster headache. In February 2021, we also learned that gammaCore's listing in the NHS supply chain catalog has been extended for an additional two years through 06/03/2023. The NHS supply chain helps NHS deliver clinically assured quality products at the best value to its patients.
And the inclusion of gammaCore in the catalog allows hospitals to purchase gammaCore Sapphire for their primary headache patients, taking into account their own budgetary restrictions. The listing of gammaCore Sapphire as an e direct product marks an important milestone in the company's provision of its medical technologies to UK patients in an easier, cost effective way. In recent months, we took meaningful steps to expand gammaCore's global availability. In December, we announced an exclusive distribution agreement with Pro Medical Baltic to distribute gammaCore in Eastern Europe, including Lithuania, Latvia, Belarus, Kazakhstan, and Ukraine. In January, we entered into a similar agreement with RSK Medical in Canada.
And most recently in March, we announced an agreement with Medistar, who will serve as the exclusive distributor for noninvasive vagus nerve stimulation in Australia. We expect to expand our global network with leading medical technology distribution partners to make gammaCore more broadly available outside The USA. We continue to make measured investments in our commercial channel in The United States, most notably through negotiations with national and regional insurers and pharmacy benefit managers for the purpose of expanding the population of gammaCore covered lives. In January 2021, we announced that CMS published its most recent level two health care common procedure coding system, commonly known as HCPCS, establishing a unique code K1020 for noninvasive vagus nerve stimulator. The coding decision covers the gammaCore sapphire d and is in response to the application that we submitted during CMS second biannual twenty twenty coding cycle for nondrug and nonbiological items and services.
That application focused on the clinical and economic advantages of gammaCore therapy. All final coding decisions for the second biannual twenty twenty coding cycle for nondrug and nonbiological items and services will go into effect on 04/01/2021. We view the establishment of unique HCPCS code for noninvasive vagus nerve stimulation as an important differentiator from other nerve stimulator technologies and a potentially significant driver of additional coverage within the medical benefit pathway. We still have a lot of market access work to do and remain optimistic that the unique code will contribute to meaningful commercial reimbursement wins in the future. On the topic of the COVID-nineteen pandemic, our employees in Rockaway, New Jersey and in the field continue to implement best practices for preserving the safety and health of all of our stakeholders.
The FDA Emergency Use Authorization or EUA that was granted to us in July 2020 for the use of gammaCore sapphire CV at home or in a health care setting for the acute treatment of adult patients with known or suspected COVID nineteen continues to generate clinician interest. GammaCore Sapphire CV is available throughout our VA DOD channels to hospitals directly from the company through a premier specialty pharmacy by obtaining a prescription from a patient's health care provider or through a telehealth consult powered by our telehealth partner, Upscript LLC. We've also set up an online portal for patients to use, www.getgammacore.com. While prescriptions generated through the EUA were not a meaningful source of revenue during the fourth quarter, we continue to be pleased with the interest that it is generating in NVNS as a viable therapy. At this point, I want to ask our Chief Medical Officer, Doctor.
Peter Stotts, to provide an update on our various clinical initiatives.
Speaker 3
Thanks, Dan. You will recall that gammaCore SAFIRE CV is currently being evaluated in two investigator initiated clinical trials or IITs in hospitalized COVID patients, one in Valencia, Spain, and the other in Pittsburgh, Pennsylvania. These studies known as savior one and savior two respectively are measuring the safety and efficacy of gammaCore sapphire CV plus standard of care versus standard of care alone in patients hospitalized with COVID nineteen across a broad range of clinical and laboratory endpoints. SAVIOR one enrollment completed at 110 subjects and our SAVIOR two trial, which aims to enroll 60 hospitalized COVID nineteen patients, is ongoing. We look forward to seeing preliminary data from SAVIOR one later this year.
In December, we announced that gammaCore had been selected by the National Institute of Drug Abuse for a NIDA sponsored randomized controlled study in opioid use disorders. The study will assess the ability of MVNS to decrease opioid cravings in subjects with a history of opioid use disorder who are stable on medication, as well as examine the possible mechanisms that might facilitate this clinical effect. The study is being run by Douglas Brevner, a leading researcher in this field, who you may recall is also leading a VA sponsored study of gammaCore in PTSD. Just a few weeks ago, we announced that full enrollment had been achieved in the TR VENUS study, which is evaluating the utility of MVNS for the acute treatment of stroke. TR VENUS is a phase two double blind, randomized, sham controlled, multicenter clinical trial conducted at nine major centers across Turkey, supported by the Turkish Neurological Society, and partially funded through an unrestricted research grant from electroCore.
There is a strong scientific hypothesis supporting this study as preclinical evidence suggests that vagus nerve stimulation can provide a measurable improvement in outcomes after ischemic brain injury. We look forward to reporting data from the TR VENUS trial later this year as well. In December, we announced positive top line results from our PREMIUM two study of gammaCore in migraine prevention. Recall that this study was terminated early in April 2020 due to the COVID nineteen pandemic. However, an analysis of the data demonstrated that all study endpoints, including several patient assessed quality of life measures showed benefit from noninvasive vagus nerve stimulation with many endpoints showing a statistical significant improvement with NVNS compared to sham stimulation.
The positive results of PREMIUM two add to the significant body of evidence demonstrating that NVNS is among the most effective, safe, and flexible treatments available to help patients looking for a way to take control of their headache treatment. We look forward to a peer reviewed publication of the data later this year. In another positive development on the migraine front, just a few weeks ago, FDA cleared our five ten ks submission to expand gammaCore label to include the acute and preventive treatment of migraine in adolescents between 12 and 17 years of age. It's estimated that ten percent of all school aged children and up to twenty eight percent of teens between the ages of 15 and 19 live with migraine. And we believe that a nondrug treatment option will resonate with this patient population.
With this expansion, gammaCore is now cleared for most forms of primary headache. Finally, in February, we announced the publication of a study in the journal Colorectal Disease that further demonstrates the broad potential of NVNS. The study evaluated the effectiveness of NVNS in preventing postoperative ileus following elective major colorectal surgery. Postoperative ileus is a serious condition that can result in complications from surgery and extended hospital stay. While only a pilot study, the group using NVNS showed a greater improvement in several clinically important endpoints, such as decreasing the amount of oral morphine equivalent used in post surgery compared to the sham group.
The results detailed in this paper strongly suggest continued development in this indication, and a larger study funded by the National Institute for Health Research in England is ongoing. We are thrilled that the ongoing clinical studies of NVNS and headache, PTSD, COVID, opioid use disorders, stroke, post op alias, and other indications may ultimately improve the lives of our patients everywhere. We are also optimistic that the foundation of clinical work will increase the total addressable market for NVNS as evidenced by the label expansion to adolescent migraine last month. At this point, I'll turn the call over to Brian for a review of our financials and other guidance items. Brian?
Thanks, Peter. For the quarter ended 12/31/2020, electroCore reported net sales of $928,000 as compared to net sales of $1,081,000 in the third quarter. The sequential decrease in revenue was due to the ongoing effect of COVID nineteen, particularly in our VA and DOD channels. Revenue for the quarter ended 12/31/2019 was 675,000. Paid months of therapy shipped to the VA and DOD declined 22 sequentially to 1,232 in the 2020 from $1,005.71 in the third quarter.
Revenue from the VA and DOD also declined sequentially to $509,000 in the 2020 from $646,000 in the third quarter. Revenue from the VA and DOD was 378,000 during the fourth quarter of two thousand nineteen. Paid months of therapy shipped outside The US increased 12% to 1,143 in the 2020 from a thousand 20 in the third quarter. Revenue from outside The US increased sequentially to $311,000 in the 2020 from $278,000 in the third quarter. OUS revenue was $293,000 during the fourth quarter of twenty nineteen.
Net revenue from the commercial channel was $54,000 for the 2020 as compared to a 112,000 for the third quarter. Gross profit for the 2020 was a $109,000, inclusive of an increase of $434,000 in inventory reserves as compared to $284,000 for the fourth quarter of twenty nineteen. Gross margin for the fourth quarter, excluding the increase in inventory reserves, was 59% compared to 42% in the fourth quarter of twenty nineteen. Total operating expenses for the fourth quarter twenty twenty were approximately $6,400,000 as compared to $8,900,000 for the comparable period in 2019. SG and A expenses declined approximately 26% to $5,400,000 in the 2020 from approximately $7,300,000 for the comparable period in 2019.
Research and development expenses decreased by approximately $600,000 or 37 percent to 1,000,000 in the 2020 from 1,600,000.0 in the year ago period. This reduction is consistent with the company's strategy of significantly reducing its near term investment in research and development as well as early termination of the PREMIUM II study in March. GAAP net loss for the fourth quarter twenty twenty was $6,300,000 compared to a GAAP net loss of $8,500,000 in the fourth quarter of twenty nineteen. Adjusted EBITDA net loss for the 2020 was a loss of $4,300,000 as compared to an adjusted EBITDA net loss of $6,700,000 for the same period in 2019. The company defines adjusted EBITDA net loss as GAAP net loss, excluding income tax expense or benefit, depreciation and amortization, stock compensation expense, write off of right of use operating lease, increase in inventory reserves, restructuring and other severance related charges, legal fees associated with stockholders litigation, and total other income and expense.
A reconciliation of GAAP net loss to non GAAP adjusted EBITDA net loss has been provided in the financial statement tables included in this afternoon's press release. Now looking at the full year. For the full year 2020, we generated total revenue of $3,500,000 as compared to $2,400,000 for the full year of 2019. The gross profit for the full year 2020 was $1,800,000 inclusive of an increase of $434,000 in inventory reserves as compared to $1,200,000 for the full year 2019. Gross margin for the full year 2020 was 50% as compared to 52% for the full year of 2019.
Excluding the increase in inventory reserves, gross margin for full year 2020 was 63%. Total operating expenses were $26,500,000 for the full year 2020 as compared to 47,300,000.0 for the full year 02/2019. The decrease in full year operating expenses was due to significant reductions in our cost structure implemented during 2019 and 2020 as well as the elimination of costs related to our premium two trial, which terminated early due to COVID. GAAP net loss from operations for the full year 2020 was 23,500,000.0 as compared to $45,100,000 for the full year 2019. Our adjusted EBITDA net loss for the full year 2020 was $18,400,000 as compared to $39,000,000 for the full year 02/2019.
Cash, cash equivalents, and marketable securities at 12/31/2020 totaled 22,600,000.0 as compared to 24,100,000.0 at 12/31/2019. Subsequent to the end of the fourth quarter of two thousand twenty, the company raised approximately $6,900,000 through the company's previous announced stock purchase agreement, resulting in a pro form a cash balance of $29,500,000 as of 12/31/2020. For the fourth quarter of twenty twenty, our net cash usage was $3,700,000 representing a decline as compared to both the third quarter twenty twenty net cash usage of $4,100,000 as well as fourth quarter twenty nineteen net cash usage of $9,400,000. Looking ahead, for the first quarter of two thousand twenty one, we expect net revenue to be approximately $1,000,000 and net cash usage to be in a range of approximately $4,500,000 to $4,800,000 The increase in expected net cash usage in the 2021 compared to the 2020 is largely due to seasonal factors affecting working capital. And now I'll turn the call back over to Dan.
Speaker 2
Thank you, Brian. We're pleased with our performance during the quarter and the year as we achieved several important milestones related to commercialization of our headache indications and ongoing clinical work. I also want to point out that we believe we are in a very healthy financial position with pro form a cash of 29 and a half million dollars on the balance sheet as of 12/31/2020, including the subsequent $6,900,000 raise mentioned earlier and substantial success in reducing our burn rate. As the pandemic recedes, I'm excited about the prospects of returning to sequential revenue growth in our VA DOD headache market and achieving accelerated growth in our UK subsidiary as the med tech funding mandate takes effect later this year. Our unique h c p c s code will become effective in April 2021, and I'm optimistic that the regional MACs and other national and regional payers will become increasingly receptive to reimbursement of NVNS therapy as we go through 2021.
We've recently announced three new international distributors, and I look forward to continued expansion of that channel throughout the year. Longer term, label expansions beyond cluster and migraine supported by the exciting ongoing clinical developments that doctor Stath discussed could dramatically increase the total addressable market for NVNS therapy. Finally, I want to again recognize our dedicated staff for working steadfastly through the pandemic disruptions and to thank the health care professionals that prescribe gammaCore and their patients for their loyal support of gammaCore therapy. At this point, we'll ask the operator to open the line for questions.
Speaker 0
Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. Our first question comes from the line of Ryan Zimmerman with BTIG. Please proceed with your question.
Speaker 4
Great. Thank you and good afternoon, everyone. And Brian, appreciate the guidance for the first quarter. It's helpful. Maybe, Danfrey, you you guys have you recognized a little bit of sales in the commercial channel this quarter.
I'm just wondering if you could kind of give us some flavor on the tenor of the conversations in the commercial channel. You know, it's poised to be a good opportunity for you going forward, kind of, you know, where are they at today, and and how would you characterize kind of the requirements you you have given the coding updates you've gotten and and kind of where you're at. So let's maybe start there, and then and then I can turn to another question.
Speaker 2
Yeah. So thanks, Ryan. You know, we've said previously, we have on the commercial side, we have roughly 12,000,000 covered lives through CVS and through Express Scripts. And those patients are paying $25 up to as much as $75 per month as a as a co pay. So there is a an out of pocket component to that.
The the challenge is that that's not a critical mass. We we really need to get to a much larger number of covered lives in order to make the e commercial channel an efficient call point. The new, the HCPCS code that goes live in April is a huge step forward. Right now, all of our prescriptions get get coded to miscellaneous. Once we have a unique code, that sets the stage for us to to negotiate with the regional max about Medicare coverage.
But even more importantly, it it streamlines the process for the the national and regional private insurers to do the same, to establish unique coverage, to add us to more and more of their benefit plan. So all that work is is gonna be kicking off really in earnest in April once the code goes live, and we can run test scripts, and we can have specific conversations with different insurance companies around their benefit plans. So a lot of work yet to do over the course of 2021. You know, look for additional announcements about coverage decisions as we go through this year, but the revenue lift is really gonna come in 2022 as we can take advantage of those coverage wins in the back half of the year.
Speaker 4
Okay. I appreciate that color, Dan. It's helpful. And then, you know, on the OUS side, you know, the NHS continues to be a solid area for you as a commercial channel, but you now have added Australia, Canada, some Eastern European countries as far east as Kazakhstan. So Mhmm.
You know, I think there's some sales minimums associated with those agreements and just wanna understand how to think about that, you know, incrementally relative to, say, the NHS. And could we see a much broader and diverse, I guess, revenue contribution internationally this year, as we move through the year and, you know, maybe as COVID subsides.
Speaker 2
Yes. You're you're absolutely right. Ian Strickland is is our, UK, general manager of our UK business, and he's got the the broad broad scope to to build up our business around the world. You know, using our success in The UK under a national health care system as a template, we're becoming more and more attractive to stocking distributors around the world. And and to your point, you know, not only do those agreements, you know, have some obligations for sales, but they also come with some upfront commitments to buy product from us at a at a fair transfer price to be used in launching.
So you you definitely see a revenue lift, you know, not not so much in the current quarter, but as we roll through the year. And and you're also gonna see additional distributor announcements as we go through 2021.
Speaker 4
Okay. Thanks for taking the questions, guys.
Speaker 0
Thank you. Our next question comes from the line of David Turkaly with JMP Securities. Please proceed with your question.
Speaker 5
Yeah. Hi. This is actually Danny on for Dave. Thanks for taking the questions. My first one, so you guys have taken steps to mitigate spending in 2020, and I appreciate the color as far as guidance for the first quarter.
But I was just curious, how should we think about operating expenses and cash burn for 2021? You mentioned should have more normalized outreach once COVID subsides. So are there any costs that will come back online post COVID that we should be keeping in mind? Or, you know, any other color there would be really helpful. Thanks.
Speaker 2
Brian, you wanna take that one?
Speaker 3
Yeah. Sure, Dan. Yeah. Basically, I think the way you looked at it, yeah, we've done a a significant reduction in costs over '19 and 02/2020. I think we're gonna make targeted investments where it makes sense in sales and marketing.
You know, we've made some additional investments in the government channels that we announced late in 02/2020. And the cash burn going forward is gonna be largely dependent on our revenue growth. And as, you know, I've said in the past, we have a lot of inventory. We just reported up $5,700,000 of inventory on our balance sheet. But the good news is after all that use of cash to acquire that inventory, that'll be a source of cash as we sell it.
So that'll be, you where cash is more favorable than GAAP results as we start ramping up revenue going forward in 2021 and beyond.
Speaker 5
Great. And then I just had one follow-up. In the past, you had talked about the benefits that gammaCore could bring to an adolescent audience and given that it avoids systemic impacts of pharmaceuticals. So could you just give us any color on how significant of a market this could be as you look at it here in the short term as well as in the mid and long term? And, you know, what next steps in this indication, what what could those look like?
Would it be, you know, marketing campaign, patient outreach, anything along those lines would be great? Thanks.
Speaker 2
Yeah. Thank you. And thank you for for noticing. It's it's, been a long time coming, and you're you're absolutely right. Getting the label extension to adolescence, is a significant business opportunity for the company over the long haul.
Step one is for us to because it's brand new. Step one is for us to educate the prescribers, primarily headache specialists. But as you know, adolescent migraine is is managed by more than just the neurology headache specialists. So we we have a substantial awareness opportunity ahead of us, working with our small, but nimble direct sales force, but really trying to leverage that with the awareness campaigns through social media and and other media outlets. So for this year, it's gonna be building awareness.
There are some headache specialists that we've been in contact with who specialize in adolescents. So we're we expect to be able to talk about to brag about some some early clinical successes in the adolescent population anecdotally. So, you know, again, not a whole lot of lift in 2021, but really setting the stage for a substantial increase in our total addressable market in 2022.
Speaker 5
Great. Thank you, guys.
Speaker 0
Thank you. Our next question comes from the line of Sean Kang with H. C. Wainwright. Please proceed with your question.
Speaker 6
Hi. Thank you for taking my question. Regarding ex U. S. Distributorship, do you have any ongoing additional discussion for additional distributorship in the ex U.
S. Region?
Speaker 2
Yes, absolutely. And you can look forward to a few more announcements later in 2021 as we successfully conclude or launch some additional international distributors.
Speaker 6
I see. And I'm not sure if you already mentioned, but regarding study data, do you expect to see or release any data from the stroke study by Turkish Neurological Society?
Speaker 2
Yes. So, you know, the enrollment concluded. One of the endpoints is reading CT scans, and that's gonna take some time. But we should be able to we should see top line results from that trial in the second half excuse me, in the second half of twenty twenty one.
Speaker 6
Second half of twenty twenty one. Okay, sounds good. Thank you.
Speaker 0
Thank you. Our next question comes from the line of Anthony Vendetti with Maxim Group. Please proceed with your question.
Speaker 7
Thank you. Yes, just a follow-up on the commercial payer rollout. I know you have the new code.
Speaker 8
Just you talk about the strategy, how do you approach each each commercial payer? What's sort of the timeline of getting some of the commercial payers on board?
Speaker 2
So I'm I'm the the line was a little staticky, but I I think you were asking for timing of additional commercial payer announcements. And, you know, the the 12,000,000 covered lives that we have today are on or are skewed towards those those very high end, what you would consider platinum benefit plans. There are several payers that have signaled their intention to cover once the code goes live through their medical benefit pathways. And so we'll have to run those test scripts in April to to validate all of that. So you may see some announcements as as early as May or June through those benefit plans that have have previously signaled that they're going to cover the therapy.
But that would be an upside. The heavy lifting is going to be negotiations with the regional max, which never go quickly, and the various national health care plans to to see what we can do to make gammaCore therapy covered on a wider range of their benefit plans.
Speaker 7
So on the on the regional max, just to clarify a little further, there's there's about 20 of them,
Speaker 9
if I recall.
Speaker 2
No. Four. There's only four of them.
Speaker 7
Oh, the regional ones. Right. Okay.
Speaker 2
Yeah.
Speaker 7
So there's four regionals. If
Speaker 8
if
Speaker 7
if you if you cover the four regionals, is is is that as as deep as you need to go? Or or is is there negotiations that have to go on within each regional MAC, or is the regional all you need?
Speaker 2
Our understanding is that the the four regional MACs would cover Medicare throughout the Continental United States. Now, you know, the devil's in the details. Right? Are are we going to be satisfied with the limitations that they're gonna try and put on the therapy? So it's it's really too early to tell how much of the Medicare population we're gonna have access to at a price that that we're comfortable with.
Speaker 3
Okay. Okay. And then and then if if we look next, and I know stroke is is is one one indication.
Speaker 7
Is that what you would think is next in line? And then if you could maybe if you or Peter could talk about sort of the pipeline, where do you believe gammaCore could be used in addition to migraines and stroke?
Speaker 2
So let me take the first half of that, and I'll hand it over to Peter. You know, actually, first of all, adolescents is a very big deal for us, and and we're thrilled that we were able to make that announcement here a few weeks ago. I I think you're next gonna see us look for label expansions into secondary headaches, so things like post traumatic headache. From there, as as Peter mentioned, there's work going on in other neurological conditions like traumatic brain injury and and ultimately PTSD. I I think you'll see us moving in in terms of commercialization, moving in those directions first.
Peter, do you wanna talk about the the pipeline in you know, more generally and longer term?
Speaker 3
Sure. Look. I think one of the the great advantages of this therapy is that it's a it's an almost untapped therapy. That's also one of the disadvantages that we have. And we've seeded studies in in the you know, initial studies in a variety of areas.
Some of the areas that I personally am most excited about is PTS or PTSD. And this is an area of great unmet medical need without, you know, much competition, and our, you know, our military folks and others desperately need, you know, a therapy here. Dan just mentioned post traumatic headache, and that's kind of, you know, feeds into CTE and other broad areas of interest for us that that is starting to get seeded. Opioid use disorder, I mentioned. Doug Bremner is doing some work there, and there's a lot of signal that that should work.
But one of the really very exciting things is we're again, we're gonna follow the data is our first TRV, it's our first stroke study. And when we see the data on can we modify the course of the disease, can we decrease the size of an infarct, I think that's gonna also help direct our path. It's not all a foregone conclusion of which way we're gonna go. It's really gonna take the data from the numerous IITs that are ongoing and then really, you know, double down and invest in the right areas. But the good news is, you know, we have a lot of different opportunities with a lot of data coming in, over the coming, months to year.
Speaker 7
Okay. Thank you. That's very helpful. I'll jump back in the queue. Thanks.
Speaker 0
Thank you. Our next question comes from the line of John Zander Mohsen with Zacks SCR. Please proceed with your question.
Speaker 9
Good afternoon, everyone, and congratulations distribution agreements and improvement in the penetration of NHS. As of I wanna ask about any possible further expansion in the in the British Isles. I guess Northern Ireland perhaps. Is that is that something you can expand into? I'm not sure how the NHS works, but that seems like, maybe another area you could go into.
Is that is that possible?
Speaker 2
Yeah. Absolutely. You're you'll see, you'll see Wales. You'll see Ireland, and you'll also see some other, European entities in in coming months. Okay.
Speaker 9
Great. And will will the distribution be with a partner for Western Europe? Because I I I feel like that's kind of the next place you're gonna go. Or will you will you run it through the the current the same the same channel as it goes to NHS?
Speaker 2
You know, so in The UK, we have a small direct organization. It's been very successful working with NHS to gain robust coverage that we have. But we really don't have the resources to go direct in any any any of the large European countries. So right now, we're leaning towards, more traditional stocking distributors, leveraging what we've learned, leveraging the health care economics, health care economic data that came in the NICE publication, last year, and and there's gonna be some new data coming out in the form of post market surveillance of our, our large cohort of UK patients. That's gonna be very compelling for other
Speaker 8
in in Okay.
Speaker 9
And also, you mentioned a bit about the, the distribution agreements, Canada, Australia, Eastern Europe. Should we see, contributions from all of these areas before the end of the year?
Speaker 2
Yes. Absolutely.
Speaker 7
Okay. And then, moving on to
Speaker 9
the studies, you you mentioned a bit about this. Just wanted to extend a little bit. So if we see some success in some of the VA studies or the the stroke or opioid abuse, do do you anticipate getting external money to fund those? Because it seems like there's a lot of external interest. Or do you think that's gonna have to be something that that's funded internally?
Speaker 2
You know, we'll we assess the the business case for each opportunity to extend the label separately. Some of them, like like post traumatic headache, secondary headache, those are initiatives that we believe we can fund ourselves and fit very, very nicely into our existing channels. Others like acute treatment of stroke, will have a more involved development process, may or may not require a pivotal trial, and so we may look for a commercialization partner for something like a chemo acute treatment of stroke. And so what I electrical is that we have this pipeline of clinicians, you know, platform therapy as as Pete mentioned. And so, you know, we have this great wealth of opportunities ahead of us.
And, but given limited resources, we we have to triage them appropriately.
Speaker 9
Great. Alright. Thank you, Dan.
Speaker 0
Thank you. Ladies and gentlemen, at this time, there are no further questions. I would like to turn the conference back to Dan Goldberger for closing comments.
Speaker 2
Thank you, operator, and thank you to all of you that spent the time to dial in. We've had a very challenging 2020 between restructuring our business and amid the pandemic. We're really very, very fortunate to have the support of the investment community, of our employees, and most importantly, of our, prescribing physicians and their patients. And so thank you all, and I hope to see you all again in a few months, for our first quarter call. Bye bye.
Speaker 0
Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.