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ECOR: 1Q:21 Results

·17 min read

By John Vandermosten, CFA



First Quarter 2021 Financial and Operational Results

On May 6, 2021, electroCore Inc. (NASDAQ:ECOR) presented its first quarter 2021 financial and operational results in a press release and Form 10-Q filed with the SEC. The first quarter was eventful for electroCore, and the company achieved a multitude of regulatory, distribution and clinical milestones, continuing its momentum from 2020. 

Highlights for the first quarter 2021 ended March 31st and to-date include: 

 ➢ Establishment of unique Level II HCPCS Code for nVNS - January 2021

 ➢ SHTG recommendation for gammaCore use in NHS Scotland CH patients - January 2021

 ➢ Exclusive distribution agreement with RSK Medical in Canada - January 2021

 ➢ Inclusion of gammaCore in new NHS England and NHS MTFM Policy - January 2021

 ➢ Full enrollment of TR-VENUS study in acute treatment of stroke - February 2021

 ➢ 510(k) label expansion to treat adolescent migraine - February 2021

 ➢ Two-year extension of gammaCore listing in NHS Supply Chain Catalogue - February 2021

 ➢ Exclusive distribution agreement with Medistar in Australia - February 2021

 ➢ Exclusive distribution agreement with Silvert Medical for Western Europe - March 2021

 ➢ Regulatory approval in Canada - April 2021

 ➢ Topline results from SAVIOR-1 - April 2021

 ➢ Exclusive distribution agreement with East Agency in Qatar - April 2021

 ➢ Initiation of Johns Hopkins University School of Medicine study in gastroparesis - April 2021

 ➢ Initiation of US Department of Veteran Affairs study in PTH - April 2021

In the financial realm, revenues for the quarter were $1.2 million, a 64% increase over the $0.7 million generated in the prior year period. Net loss was ($5.38) million versus ($7.96) million in 1Q:20, or ($0.11) and ($0.27) per share loss, respectively.   

For the three months ending March 31, 2021 and versus the three months ending March 31, 2020: 

 ➢ Net sales increased 64% to $1.2 million from $0.7 million due to increased sales across all major channels including commercial, VA, and UK; 

 ➢ Gross profit increased 93% from $0.4 million to $0.8 million with margins increasing to 70% from 59%, due primarily to better absorption of overhead, and product mix;

 ➢ Research & development expenses totaled $0.5 million, decreasing 67% from $1.5 million, on reduction in R&D investment, including early termination of the Premium II clinical trial;

 ➢ Selling, general & administrative expenses decreased 13% to $5.7 million from $6.6 million, driven primarily by restructuring of the commercial channel, as per cost reduction plans enacted during 2019 and 2020;  

 ➢ Restructuring and severance related charges were absent versus $365,000 on personnel changes in the Chief Medical Officer position;  

 ➢ Net loss was ($5.4) million, or ($0.11) per share, compared to ($8.0) million, or ($0.27) per share;  

As of March 31, 2021, cash, equivalents and marketable securities on the balance sheet totaled $25.4 million. Cash burn for the quarter was approximately $4.2 million. 

Regulatory Developments

510(k) Label Expansion for Adolescent Migraine

electroCore issued a press release on February 16th, 2021 declaring that it had received 510(k) clearance the prior week from the FDA for gammaCore to treat migraine in adolescents. Migraines can disrupt schoolwork and social life during an important stage of development. electroCore had applied for label expansion for their vagus nerve stimulation device to include acute and prophylactic treatment of migraineurs between 12 and 17 years of age. Upon receiving approval, gammaCore is now indicated in acute and prophylactic treatment of migraine in adolescents and adults as well as acute and preventative treatment of cluster headache in adults.

National Health Service (NHS)

On January 27, 2021, electroCore announced that gammaCore Sapphire had been included in a new long-term reimbursement policy. The policy was launched by Matthew Whitty, Director of Innovation Research and Life Sciences and Chief Executive of the Accelerated Access Collaborative, for and on behalf of NHS England and NHS Improvement.  

The new policy, called MedTech Funding Mandate Policy 2021/22 (MTFM), will go into effect on April 1, 2021. It supports the use of medical devices, diagnostics and digital technologies that will improve patient outcomes. The new policy allows gammaCore to transition away from the Innovation and Technology Payment (ITP) program that we had reported on previously, which required periodic renewal. The MTFM policy will allow sustained regional reimbursement arrangements across England, providing more certainty of long term revenues from this program. Inclusion in MTFM validates gammaCore’s efficacy, affordability and cost savings and is projected to save the NHS as much as £4.6 million over the next five years. 

electroCore reported that gammaCore received a two year extension of its listing in the NHS supply chain catalog. Previously, the device was expected to be listed until June 3, 2021 and will now be extended for an additional two years through June 3, 2023. Availability in the catalog will ensure that gammaCore Sapphire is available to hospitals and listing as an e-Direct product will allow for easier and more cost effective direct delivery of gammaCore from the supplier.  

Scottish Health Technology Group Recommendation for Use of gammaCore

Based on 2019 guidance by NICE, Health Improvement Scotland (HIS) published a Scottish Health Technology Group (SHTG) adaptation including gammaCore for cluster headache, announced January 21, 2021. The NICE guidance states that gammaCore plus standard of care can reduce frequency and intensity of cluster headache attacks and improve quality of life while saving costs through reduction of rescue medication use. The SHTG publication recommends gammaCore be available for a three month trial to NHS Scotland cluster headache patients. The SHTG adaptation is now being disseminated across NHS Scotland health boards by HIS.  

Establishment of Unique Level II HCPCS Code for nVNS

In the US, electroCore announced on January 19, 2021 that the CMS had published its most recent decisions regarding Level II Healthcare Common Procedure Coding System (HCPCS) on January 15, 2021. The decisions included the establishment of a unique code, K1020, for non-invasive vagus nerve stimulator, which covers gammaCore Sapphire. electroCore had submitted an application during CMS’ second biannual 2020 Coding Cycle for non-drug and non-biological items and services. The application focused on the clinical and economic benefits of gammaCore therapy. Final coding decisions will go into effect on April 1, 2021, a major milestone in obtaining additional coverage within the US medical benefits space. The availability of the code simplifies negotiations with payors due to the nVNS-specific designator in contrast to the previous regime where a miscellaneous code would be used. The old code was commonly used for transcutaneous electrical nerve stimulation (TENS) devices, which have a lower reimbursement level than gammaCore, complicating negotiations. The availability of the code will also allow for a more rapid reimbursement process and patients will be able to access therapy sooner.  

Recent Distribution Deals

Exclusive Distribution Agreement with East Agency in Qatar

electroCore announced on April 20, 2021 an exclusive distribution agreement with East Agency for distribution of gammaCore Sapphire in Qatar. East Agency is a privately-held healthcare company, founded in 1997 to bring innovation to the Qatari market. The initial term of the agreement is three years and includes minimum purchase commitments. 

Exclusive Distribution Agreement with Silvert Medical for Western Europe

On March 23, 2021, electroCore issued an announcement that it had entered into an exclusive distribution agreement with Silvert Medical for Western Europe. European territories will include Belgium, Luxembourg, the Netherlands and France, with an initial term agreement for three years including minimum purchase commitments. Silvert was founded in 1987 and has been a distributor in the aforementioned territories, focusing on medical equipment and devices for emergency healthcare facilities.  

Exclusive Distribution Agreement with Medistar in Australia

An agreement was signed between electroCore and Medistar on February 28 for the latter to serve as the exclusive distributor of the gammaCore Sapphire non-invasive vagus nerve stimulator in Australia. Approval for the device to be marketed on the continent was recently granted by the Australian Therapeutic Goods Administration (TGA). The term of the agreement is for three years and includes minimum purchase commitments. Official launch of the device will be in mid-March at the ANZHS Headache Annual Scientific Meeting.  

Exclusive Distribution Agreement with RSK Medical Inc. in Canada

electroCore signed an agreement with RSK Medical Inc. to make RSK the exclusive distributor for gammaCore Sapphire in Canada. The agreement was announced January 26, 2021. The agreement marks a milestone for commercialization in Canada. RSK Medical is headquartered in Ontario and is a medical device supplier. On April 5, 2021, electroCore publicized that it had received regulatory approval from Health Canada to commercialize the gammaCore Sapphire family of products in Canada.  

Agreement with Pro Medical Baltic to be Exclusive Distributor for gammaCore Sapphire in Eastern Europe

electroCore’s agreement with Pro Medical Baltic was announced on December 21, 2020. Through the agreement, Pro Medical Baltic received exclusive distribution rights to gammaCore Sapphire for primary headache disorders in Lithuania, Latvia, Belarus, Kazakhstan and Ukraine. Pro Medical Baltic has experience with distributing another neuromodulation device, which is expected to help gammaCore accelerate its commercialization process.

We anticipate additional deals to be announced in the coming months. Some of the regions that we think are likely to be high on the priority list for electroCore include Asia, Latin America and other fill-in spots that are not covered by current agreements. Revenues from each of the above mentioned agreements should be recognized in 2021. These arrangements are particularly attractive to electroCore given the low capital requirements and minimum purchase requirements.

Clinical Developments

Initiation of US Department of Veteran Affairs study in Post-traumatic Headache

On May 4, 2021, electroCore announced that the US Department of Veteran Affairs was starting an investigator-initiated study of gammaCore Sapphire nVNS in post-traumatic headache (PTH). PTH accounts for approximately 4% of symptomatic headache disorders2 and is a common result of mild traumatic brain injury (mTBI).3 Up to 69 million people per year may experience traumatic brain injury worldwide. Anxiety and depression are often comorbid with traumatic brain injury. The VA study will be a randomized, multi-center, double-blind, parallel, sham-controlled trial targeting enrollment of up to 100 veterans. The study will be directed by the Veterans Health Administration’s Headache Center of Excellence (HCoE).  

Initiation of Johns Hopkins University School of Medicine Study in Gastroparesis

electroCore announced on April 26, 2021, that Johns Hopkins University School of Medicine was starting an investigator-initiated trial of electroCore’s nVNS technology to treat symptomatic exacerbation of nausea in patients with gastroparesis. Gastroparesis is the predominant gastrointestinal disorder and can cause nausea and vomiting. The disorder is characterized by slow emptying of the stomach, which in severe cases can require prolonged hospitalizations and interventions and can even be life-threatening. US estimates approach 6 million with more men affected than women.4 Other related conditions can produce nausea symptoms including chronic unexplained nausea and vomiting (CUNV), gastroparesis-like syndrome (GLS), functional vomiting, and vomiting of unexplained etiology (VUE). The percentage of the US population suffering from these conditions, which can be categorized as functional dyspepsia, may approach 10%.5

Topline Results from SAVIOR-1

On February 11th, electroCore announced that it had completed enrollment, and on April 8, 2021, topline results for its SAVIOR-1 trial of gammaCore CV. SAVIOR-1 was a prospective, randomized, controlled study evaluating the feasibility and safety of nVNS in COVID-19 patients, taking place between April 2020 and February 2021. Incidence of clinical events as well as changes in blood chemistry were also evaluated. SAVIOR-1 was conducted in Spain at the Hospital Clinico Universitario de Valencia, and enrolled 110 patients, with 97 patients providing baseline data. Patient clinical and biochemical endpoints were tracked over first five days of therapy and adjusted means were compared. The nVNS group showed modest but not significant improvement in oxygen saturation. Adjusted mean decrease in C-Reactive Protein (CRP) from baseline was significantly greater in treated vs nontreated at the 1% level. Although not statistically significant, decreases in procalcitonin and d-dimer were directionally favorable. nVNS was well tolerated with no device-related adverse events. Full study data will be submitted for publication in a peer-reviewed journal later this year.    

Full Enrollment of TR-VENUS Study

On February 2, 2021, electroCore announced that TR-VENUS study of nVNS in acute treatment of stroke was now fully enrolled. TR-VENUS is a Phase II, double-blind, randomized, sham-controlled, multi-center clinical trial that is being conducted at nine medical centers across Turkey. The study is supported by the Turkish Neurological Society and partially funded through a research grant from electroCore. TR-VENUS has enrolled 60 subjects with ischemic stroke and eight with hemorrhagic stroke. The objective of the study is to evaluate safety of nVNS in acute stroke by monitoring arterial blood pressure, bradycardia, neurological deficit progression and death. Feasibility is also being assessed via the number of doses administered versus available. Secondary efficacy is being evaluated via neurological deficits and infarct growth. Topline results are expected later in 2021.


Stroke occurs when blood supply to the brain is cut off, most often due to a clot or embolism occluding blood vessels in the brain, known as an ischemic stroke. Ischemic stroke can be temporary as well, known as transient ischemic attack (TIA). Stroke can also occur when blood-vessels rupture in the brain, known as a hemorrhagic stroke, which can be a result of hypertension, blood thinners or trauma. Without oxygen, brain cells begin to die. Symptoms of a stroke include trouble speaking, paralysis or numbness of the face, arm or leg, problems seeing, headache and difficulty walking.6 Risk factors for stroke include obesity, inactivity and heavy consumption of alcohol. Hypertension, high cholesterol, cigarette smoking, diabetes, sleep apnea and family history are also factors. Standard of care includes rapid reperfusion with intravenous thrombolysis and thrombectomy. 

nVNS in Stroke

As stroke implies ischemia, time is of the essence. The portability, ease of use and convenience of nVNS gives an opportunity to make a therapeutically meaningful intervention, and is the focus of the TR-VENUS study. nVNS has been evaluated preclinically in work done by Ilknur Ay’s lab at Massachusetts General Hospital, Harvard Medical School suggesting a protective effect of nVNS against ischemia-induced brain injury.7

nVNS to Reduce Ileus Post Colorectal Surgery

On February 9, 2021, electroCore announced that it had published a study evaluating nVNS in post colorectal surgery ileus. Ileus, or intestinal atony, is a condition where the intestine is unable to contract normally, leading to a buildup of food and intestinal obstruction. Symptoms of ileus include bloating, nausea, vomiting, constipation, lack of appetite, stomach cramps and watery stool.8 The condition prolongs hospital stays and increases risk of pneumonia and venous thrombo-embolic events and can augment patient costs by up to 71%.9 Postoperative ileus is common following colon or rectal surgery, with incidence estimated between 10%-30%.10

The study, led by Dr. Stephen Chapman, was a parallel group, randomized, controlled trial conducted at St. James’s University Hospital in Leeds, England, funded by the Bowel Research UK, supported by the National Institute for Health Research Surgical MedTech Co-operative. Bowel Research UK funds research in bowel cancer and other bowel diseases, with over £9 million directly invested. The National Institute for Health Research, established in 2006, is the UK’s largest funder of health and care research, funding research that benefits the NHS and its public health mandate. electroCore published the study in Colorectal Disease

  The study enrolled 40 subjects and explored the safety and feasibility of self-administered nVNS to treat post-operative ileus following major colorectal surgery. Preclinical models of ileus have shown that electrical stimulation of the vagus nerve can reduce intestinal inflammation and accelerate bowel function recovery. Results from the study established safety of self-administered nVNS in the population with infrequent and non-serious adverse events that were similar between the treatment and sham arms. The study was not intended to statistically differentiate efficacy; however, results were directionally favorable, especially in patients with right-sided surgery, with treated patients demonstrating improved time to first flatus, tolerance of solid diets and bowel function (GI-3) compared to those receiving sham treatment. The right-sided group also consumed less oral morphine equivalents in the three days following surgery. The latter finding is important in achieving the objective of reducing the use of opioids and reducing morphine’s related adverse effect of constipation, which can exacerbate ileus.

Corporate Milestones

electroCore has multiple approved indications and is currently pursuing additional ones with active studies in respiratory symptoms in COVID patients, stroke, post-traumatic conditions, traumatic brain injury and others which are at varying stages of completion. Below we list recent milestones and anticipated future events.

 ➢ Complete enrollment for SAVIOR-1 – February 2021

 ➢ Clinical publications for PTSD, PTH & TBI – 2021

 ➢ Premium II data readout – December 2020

 ➢ Grant of HCPCS code – January 2021

 ➢ EU stroke data – 1Q:21/2Q:21

 ➢ Distribution partner announcements outside US – Ongoing


electroCore has impressed us with its broad array of opportunities that either the company or investigator-led activity is pursuing. A study in Turkey, examining the benefit of gammaCore in stroke patients, multiple studies by the VA, two studies in the United States and Spain investigating the benefits of gammaCore in COVID patients and other investigations that are reviewing efficacy of the stimulation device in opioid use disorder and to reduce ileus following colorectal surgery are all underway and funded by entities outside of electroCore. Success has also come in the British Isles with the Innovation Technology Program Award. This program is now transitioning to the more predictable MedTech Funding Mandate and a recommendation by Health Improvement Scotland for the NHS to use gammaCore for cluster headache in Scotland. Distribution is also advancing sales efforts with new arrangements signed with five partners spanning four continents with more expected to come.

Second quarter guidance calls for revenues of over $1.2 million and cash burn of ~$4.2 million. electroCore has many factors in its favor which are helping to expand its presence globally to support this growth. Additional indications are also longer-term opportunities such as those in respiratory distress, post-traumatic headache, mild traumatic brain injury, PTSD, stroke and inflammatory diseases. 

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1. Compiled by Zacks’ Analysts

2. Seifert, T. D. & Evans, R. W. Posttraumatic headache: a review. Curr. Pain Headache Rep. 14, 292–298 (2010).

3. Nampiaparampil, D. E. Prevalence of chronic pain after traumatic brain injury: a systematic review. JAMA. 300, 711–719 (2008).

4. Rey E, Choung RS, Schleck CD, Zinsmeister AR, Talley NJ, Locke GR III. Prevalence of hidden gastroparesis in the community: the gastroparesis“iceberg”. J Neurogastroenterol Motil. 2012;18:34–42.

5. Harer, K; Pasricha PJ. Chronic Unexplained Nausea and Vomiting or Gastric Neuromuscular Dysfunction (GND) An Update on Nomenclature, Pathophysiology and Treatment and Relationship to Gastroparesis. 2016 Dec; 14 (4): 410-419.

6. Stroke - Symptoms and causes - Mayo Clinic

7. Ay I, Nasser R, Simon B, Ay H. Transcutaneous Cervical Vagus Nerve Stimulation Ameliorates Acute Ischemic Injury in Rats. Brain Stimul. 2016 Mar-Apr;9(2):166-73. doi: 10.1016/j.brs.2015.11.008. Epub 2015 Dec 1. PMID: 26723020; PMCID: PMC4789082.

8. Ileus: Causes, Symptoms, Diagnosis, Treatment, & Outlook (webmd.com)

9. Mao H. Milne TGE. O'Grady G. Vather R. Edlin R. et al. Prolonged Postoperative Ileus Significantly Increases the Cost of Inpatient Stay for Patients Undergoing Elective Colorectal Surgery: Results of a Multivariate Analysis of Prospective Data at a Single Institution. Dis Colon Rectum. 2019;62:631-637. de Jonge WJ. van der Zanden EP. The FO. Bijlsma MF. van Westerloo DJ. et al. Stimulation of the vagus nerve attenuates macrophage activation by activating the Jak2-STAT3 signaling pathway. Nat Immunol 2005;6:844-851.

10. Harnsberger CR, Maykel JA, Alavi K. Postoperative Ileus. Clin Colon Rectal Surg. 2019 May;32(3):166-170. doi: 10.1055/s-0038-1677003. Epub 2019 Apr 2. PMID: 31061645; PMCID: PMC6494613.

11. electroCore Corporate Presentation March 2021