Onward Medical N.V. (ONWRY) Q1 2026 Earnings Call Transcript

Good morning, good afternoon, everyone, and welcome to Onward's webcast following the publication of our results for Q1 earlier today. Before we get started, as usual, please take a moment to read our disclaimer. This presentation includes forward-looking statements which should be considered with the appropriate level of caution as outlined on this page. This deck and a recording of the webcast will be made available after our call. Today, I'm joined with three members of Onward's leadership team, Dave, our CEO, Sean Chiara, our Chief Commercial Officer, and Ali Kiboro, Chief Financial Officer. As always, we will present the results and key highlights from Q1 before opening the floor for questions. You may submit your questions orally or via the Q&A module of the platform.

So with that, I'll hand over to Dave. Thank you, Seb. We had another successful quarter and off to a very good start for the year. We could continue to accelerate the launch of Archiex, achieving 2 million euros in revenue in the first quarter. That was comprised of 70 Archiex systems, supply for use in clinics and homes. That means that Archiex systems are now available in over 100 clinics across the U.S. Europe as of the end of the first quarter. We also continued in our execution of the Empower BP pivotal trial for AHRQ-IM to address blood pressure instability. In fact, the first participant was enrolled and implanted in the first quarter, and as we sit here today, we've now activated 12 sites within that study. We also advanced our pipeline, successfully implanting one additional patient in the parkinson's disease blood pressure trial that's an early feasibility study and we initiated a new mobility feasibility study called igra in which we aim to enroll 12 subacute and chronic spinal cord injury patients we also last month raised over 40 million euros in new equity capital supported by a 25 million euro investment from eqt life sciences extending our cash runway into Q1 of 2028. So now let's talk a bit more about the commercial traction with Archiex. Those of you who are new to the company, this is Archiex, pictured in the presentation. This is an external stimulator. It stimulates the spinal cord through the skin to restore strength and sensation lost after spinal cord injury. Now I'd like to turn it over to Sean Chiara, our Chief Commercial Officer.

That's fantastic. Thank you, Dave. Well, in Q1, we crossed over one year of commercial availability in the United States. And you can see the run rate that we're on from a unit perspective. And in one year of real-world use, we've established, as you mentioned, presence in over 100 clinics. And we've had many thousands of uses with the technology and with multiple healthcare providers in most of the clinics we're in. We have many hundreds of healthcare providers using Archiex technology to care for their patients with spinal cord injury. And in this first year, it's been exciting to see the product performing as well as it is, and it's been really exciting to see real-world use where the technology is living up to the expectations that were set in the clinical trials. At the end of this, at the end of Q1, we estimate that we're in approximately 30% of the clinics in the United States that are caring for people with spinal cord injury. That's across your tier one institutions, as well as some of the smaller activity-based centers across the United States that care for patients. And starting in Q1, we have technologies available, the ARCHEX technology available now not just in the clinic, but also in the home. One of our bigger focuses on the year is the United States Veteran Affairs administration. And in the VA, we've exited Q1 in roughly one half of the hubs that take care of spinal cord injury patients in the VA and have a number of them now actively prescribing for home use. In Europe, our commercial journey is just beginning as the CE mark came late in the year last year, but we've now launched clinics in over five countries across Europe. And our strategy as can be seen on the slide, is a combination of both direct and indirect sales. This puts us in a position, I believe, to partner tightly with clinicians in the commercialization of this new therapy in Europe, leveraging a lot of the experiences that we've built in the United States. In the United States, these relationships, like in the United States, these relationships in Europe will be important for commercial efforts, not just for Archex, but they lay the foundation for ArcIM and ArcBCI to follow. In Q1 in Europe, we hired and onboarded direct hires for our key markets. We've identified distribution partners for key markets and in early April held a distributor workshop to begin the process of onboarding key distribution partners. So we're very excited about the speed of progress that we've had across the first quarter. And back to you, Dave.

Thank you, Sean. Also wanted to update those of you on the call on our progress with Empower VP. Again, this is the global pivotal study to gather the evidence required to submit for regulatory approval for ARC-IM blood pressure instability indication. We announced our first enrollment and first implant in the study in Q1. That was at Craig Hospital in Denver, Colorado, USA. And as of this call, we have activated 12 U.S. sites in the study and more to come. We also initiated the Iger Feasibility Study, and this is for mobility. Many of you have asked, hey, when is the company going to get back to mobility? What's going to come after blood pressure instability? We've done a lot of early feasibility work in mobility dating back to when the company was founded in 2015. Some of that work was done with highly modified pain stimulators just as proof of concept. Here, we're going to use the purpose-built Arc-IM neurostimulator, and we're doing this study specifically to identify the most viable patient population and to inform the design of an eventual pivotal study that will occur globally. So, again, it's called IGER. We're enrolling 12 patients, six of them with chronic SCI and six with subacute SCI, so those that have been injured less than six weeks. The notion is that if we can implant these folks and help them with mobility before their muscles have atrophied a lot following their injury, that they might have a better prognosis. This study is being done in collaboration with the SHUV, the local hospital in Lausanne, with NeuroRestore, of course, and with the paraplegic center up in Europe called Notil, which is a leading center globally. And then lastly, the big news, we had a very successful equity financing last month, raising 40 million euros, supported by a 25 million euro investment from EQT Life Sciences and a number of other very high quality investors. There were 30 investors who participated, many of them high-quality, long-only sector specialists. In fact, our top two investors are now EQT and AutoVox, so that underscores the quality of our cap table and really validates the company and our future prospects. Our cash runway now extends into Q1 2028, so very strong. I think that's as much runway as we've ever had here, at least since I've joined in 2020, and it allows us to very much focus on now executing the business, not having so many investor meetings. So that's one of our operating philosophies, is making sure that we raise money before we get too tight, keep a very high-quality cap table, and focus on running the business.

Now, I'd like to turn it over to Ali to tell us more about the results. thanks Dave next slide revenue for the quarter was 2 million euros of which 1.3 million of that was product revenue sales as you've heard from Dave are restricted our balance sheet right after the end of the quarter so at the end of Q1 our cash available was fifty three point four million euros post the raise of capital in early April our cash balance at the end of April was 89.8 million euros which allows us to execute on our near-term plan and has

run way through the first quarter of 2028 back to you Dave for the mic thanks Thank You Ali next slide so as usual we expect a lot of news flow here we've completed a lot of major milestones but many await so with Archiex We still expect to announce first commercial home use sale in Europe and the first commercial clinic sale in the rest of the world. With Arc-IM, we expect to announce additional implants in mobility, particularly around the IGER trial that I just described, also first in human use of Arc-IM to address bladder challenges following spinal cord injury. And then next spring, we expect to announce the interim analysis, the top-line results from the Empower BP pivotal study. Again, that's for blood pressure. And we're continuing to support implants with our brain-computer interface-enabled system called ARC-BCI, both for upper limb and we also have a grant-funded study using ARC-BCI in stroke. So a lot going on as usual. And thank you for those of you who support the company. And let's roll into the Q&A, Seth and Sharon.

Into the Q&A. Maybe, Sharon, you want to remind people how to submit questions first.

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Yeah, Sharon, I think before we take any questions, we did get some questions that were submitted in writing from Ed Hall, the analyst at Stiefel. The first question was the split of units placed, U.S. versus Europe and clinic versus home. So as you would expect, the great majority of units were supplied in the U.S. We did penetrate five different European countries thus far, and so we're building out a nice foundation of clinics using the device in Europe, taking advantage of the direct and indirect field organization that we're currently putting in place. We're not going to share the exact numbers around U.S. versus OUS or clinic versus home, but I will tell you that for the first time, as you might expect, we sold more personal or home units than clinic units, and that's certainly a trend we would expect to continue going forward. Another question from Ed while we wait is just to describe the current VA clinic penetration. So, Sean, could you take that one? How are we doing with the VA currently?

Sure.

The progress in the VA has been really fantastic.

The VA is a notoriously challenging challenging institution with a lot of highly regional and kind of localized policies instead of kind of one set of governance that governs the entire country. There are 25 hubs. So the VA for spinal cord care works on a hub and spoke model. There are 25 hubs. We're in approximately half of those with many of those that we're now in in the clinic beginning the process of prescriptions for home use so off to off to a really good start and you know our target goal is to is to be in all of the VA hubs by the end of the year okay thank you Sean and we do now Sharon have a some calls in the queue from our equity research analysts can we start with Clément from BMP Paribas of course opening your line is open command hello did you hear me yes go ahead okay so um just a few

questions the first one about the top line so you get two two millions but only one point three from the cells of archie x just wondering uh where you come from the 0.7 millions maybe that's ones and for which programs. Also, you display the delivery in Q1, but not the unit sold. So, I guess this is probably less than 70 units. And last question, could you please provide the order you received in Q1, not the sales, but just the order? Thank you.

Yeah, thank you, Claymore. So, first, I wouldn't say it's only 1.3 million. It's quite a few units. We continue to see accelerating demand, but I think one of the things you're probably getting to is about a third of the units were VA units, and those undergo a bit of a different process. So those veterans, military veterans, first have a two-month evaluation period, after which we expect a very high percentage to convert into sales. We think that process, even though it's a two-month evaluation, is probably going to take three months just in terms of the information gathering and and generation of the ipo so we have a lot of demand that we enjoyed in q1 some of it in in sales the 1.3 a lot of it is dry powder that you'll see result in sales next quarter and and we'll be reporting in this way going forward because of the importance of va and the way that they are purchasing the device and then i'm going turn over to Ali to talk about the grants the 700k in grants yeah so the grant income that we had here in the first quarter that's the 0.7 million that you saw us report primarily from two grants one is a grant around

Parkinson's which we essentially advanced that during the quarter and the second one is a grant around stroke and as you know we use these to fund our development of our pipeline and so as we discussed these could be quite lumpy throughout the course of the year but here in the first quarter given where we were in our development we were able to recognize about 0.7 million across a variety of grants most of it coming from those two grants that I've mentioned And caution, for those of you who build models, don't straight line that $700K, because as Ali said, it's likely to be lumpy, and we do not expect grant income to be, what, $2.8 to $3 million this year, significantly less than that.

Okay, thank you, Clément. Let's move on to Matthijs from KBC.

Can you hear me? Yes. all right stop yeah and a question on the also on the VA home use units so how many do you expect to be converted to real sales next quarter or what I understand understood was that it that it happens normally after two months that there is like a sort of periods where they are on a training and then secondly also on the home use again how many units did you already sell for self from the self-pay units or the workers compensation yeah that would be my questions yeah thank you very much so yeah indeed just to drill down a bit

more on the VA process so indeed the veterans do go on a paid two-month evaluation, but then I would build in another 30 days of buffer because the results of the evaluation need to be processed, the POs need to be generated. So we're counting on approximately 90-day sales cycle from the point at which the prescription for the veteran is written. We also expect a very high percentage of those to convert into device purchases in the subsequent quarter, by the way. Again, we're still early in this, so I don't want to give you a precise number. We'd rather do that based on actuals once we get further into the year. But again, based on what we're hearing and the feedback we're getting from the VAs, we expect a very high percentage of those to indeed convert. The last thing is, again, we're not going to provide during these quarterly updates granularity on numbers of units sold in the various categories, but we will share that in the first quarter, the home or personal units, the number of units did exceed the number of units sold in the clinics, and that's a trend we expect to continue and indeed accelerate because the home use market opportunity is so much bigger. Okay, what else do we have here? Let's go back to another of the questions that Ed Hall asked, which was the comment on future indications for ARC-EX and how we should think about that. Indeed, we got ARC-EX approved with an indication of addressing hand strength and sensation after spinal cord injury, but this is a versatile device, and we think that it can potentially help patients in a number of different ways. That is reflected. Ed, in fact, did a survey of 13 clinics that are using RKX in the United States, and he did find that there was a high percentage of off-label use. This is not something that we promote or encourage, but it nonetheless is happening, and we can learn from this real-world usage of RKX to help us inform the priorities for the next indications that we may pursue for regulatory approval and label expansion. In addition to that, we have an active program where we support and encourage investigator-initiated studies using the ArcheX device. There are a number of those studies that are ongoing or pending commencement, and those too will inform the most promising and the next indications that we might pursue for ArcheX. So it's a very rich and fertile ground, and we just want to be careful and prioritize and really do what is of most need, what the patient population finds the most important. So that's all TBD at this point, but we're monitoring off-label usage and we're monitoring the investigator-initiated studies. Okay, we have another question here from David, our analyst from DeGroove Peterkam, commenting a bit more on Iger. and okay yeah it's sort of saying why do Iger since we already have compelling clinical feasibility evidence from STEAMO for example and we're also obtaining evidence through box which those early trials were really proof of concept trials David they were really done they were more scientific than commercial Iger is very much a commercial early feasibility study where we're trying to use our device, not to see what's possible across the range of injury severities, but looking at the injury severities and the patient population that we think are most likely to be included in a pivotal study and labeling for our device when it's eventually commercialized. So you're seeing us go from the realm of scientific exploration and discovery, which was the case in 2015 through 2020, very much to getting onto a commercial pathway that would go from this study to a pivotal study to commercialization of a mobility label for Arc-IM to follow the blood pressure instability label. So those are the key differences, I would say. We're not at this point going to share readout timing or anything else. We're just focused on enrolling and learning and more to come.

A follow-up from Clement.

A follow-up from Clement from BNP Paribas. We sold, did you sell more home use than clinic use? Indeed, we did sell more devices for home use than clinic use in the first quarter, and that's a trend that we would expect to continue. We have another question from an investor named Nick. How do you interpret the share price performance over the past six months? Which milestones do we think might influence share price for the remainder of the year? Yeah, obviously, we're not happy that the share price is down over the last six months. But looking at the entire MedTech sector, it's down across the board. In fact, MedTech is trading at an historic low relative to the S&P 500. And onward, it's held up very well relative to our peers, despite the fact that our stock is down. I think that means that, or that is evidence that of the fact that the investor community recognizes that we're executing at a high level. They see the commercial traction that we have been achieving with RQX. They see the clinical traction, getting the IDE approved and the early progress with Empower BP. They see the quality of the equity financings that we're executing with a cap table led by EQT, followed by Autobach and with others like AXEN, BNP Paribas. So, this is the reason that our stock is holding up well. Certainly, we want it to start appreciating, but we also think there may be some sector rotation once AI maybe is not such a bright, shiny object. You know, we'll see. We just have to be a bit patient. And thank you for your patience as well. In terms of milestones and upcoming catalysts, I did discuss some of those earlier. We've got a big data readout, the interim data from Empower BP that we expect will occur less than a year from now. We expect continued commercial traction also to drive stock price. That's the way currently medtech companies are being valued by top line and top line growth. and we also expect continued announcements in the area of brain computer interfaces which is typically a catalyst for us and other companies thank you Nick for that question any other questions no more questions on the goal all right again I want to just thank all of you for participating and to summarize that we're very pleased with the quarter another quarter of strong commercial traction, 70 units, more than 100 clinics across the U.S. and Europe now using ArcheX. And in the first quarter, let's not take for granted, we expanded the use of ArcheX into the home, which is quite significant. That's a larger market segment than the clinic. And it also allows patients to be more independent, use the device in the privacy and convenience of their home. Also very pleased with the traction of Empower BP with first patient enrollment and implant occurring and 12 sites now activated. More to come. We reported ARC-BCI and use of ARC-IM in Parkinson's, which is a huge adjacent population in the first quarter. And we're very pleased with the capital raise in this geopolitical environment. Tough market for any company that's not in AI to raise money right now. And we raised 40 million euros. We've got a very strong balance sheet into Q1 of 2028. So very happy with the quarter. Thank you for your continued support. And thank you for the team here on the call and the team at Onward that is driving this execution. Talk to you in a quarter, everyone. Thank you.