ECOR: Commercial Strength Drives 4Q
NASDAQ:ECOR
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New Year Update
Following the report of third quarter results, electroCore Inc. (NASDAQ:ECOR) has provided investors with several updates including the issuance of a product code number in Belgium, award of new patents, launch of new product and a preliminary announcement of stronger than expected 4Q revenues. The company also prepared its proxy for the February 13, 2023 special meeting to obtain shareholder approval for a reverse stock split.
4Q:22 Update
On January 17th, electroCore announced preliminary 4Q:22 revenues of $2.5 million, which is ahead of our $2.2 million expectation. For 2022, revenues were $8.5 million, a 57% increase over 2021 levels. Strength in government channels, which produced a 56% increase were surpassed in percentage terms by growth in commercial which saw a 158% year over year rise. electroCore also saw contributions from new programs and products including TAC-STIM, and Truvaga. International sales were up a modest 7%, which includes license fees from the Teijin Limited agreement. Based on last year’s fourth quarter report timing, we expect to see full FY:22 results filed in the second week of March along with a management conference call.
Truvaga
electroCore’s strategy over the last several years has been to expand its revenue sources into new geographical, government and product verticals. The latest initiative is Truvaga™ which is a device similar to gammaCore Sapphire which activates the vagus nerve. Truvaga reduces stress by activating the vagus nerve at the primary source in the neck.1 There is a broad body of research demonstrating that vagus nerve stimulation can influence the body’s stress response, which in turn increases serotonin and norepinephrine. Serotonin is involved in regulating mood, appetite, and sleep, among other functions and is associated with feelings of happiness and well-being. Norepinephrine acts as a neurotransmitter and hormone, playing a role in regulating attention and alertness, as well as regulating the body's sympathetic nervous system response in times of stress. Norepinephrine is also involved in regulating blood pressure and heart rate. See footnotes for additional research on vagus nerve stimulation and stress.2,3
The product sells for $299 online and claims to reduce stress, improve sleep, induce calmness and boost thinking. Support for the product is available with both online video and written instruction as well as a customer support line. Training sessions are also offered during the week. electroCore reported that sales from Truvaga were recognized in the fourth quarter.
Third quarter 2022 financial and operational results were provided in a press release and Form 10-Q filed with the SEC on November 2nd. A conference call with investors and analysts was held immediately following the release. Third quarter revenues of $2.0 million matched revised company guidance and produced a net loss per share of ($0.08) compared to our estimates of ($0.06). 4Q:22 guidance anticipates revenues of $2.2 to $2.3 million.
New Patents
The US Patent Office granted two new patents to electroCore for disorders in general and gastrointestinal disorders specifically. The patents strengthen electroCore’s portfolio that is expected to expand into a number of new conditions beyond migraines and cluster headaches.
Patent titles:
o Patent number 11,511,109
o Device uses methods involving the transmission of impulses of energy non-invasively to selected nerve fibers, particularly those in a vagus nerve.
➢ Non-invasive vagal nerve stimulation to treat disorders
o Patent number 11,517,742
o Disorders mentioned include asthma, COPD, depression, anxiety, epilepsy and fibromyalgia.
These patents build on the previous set of patents that were announced in 2022 related to using a mobile phone for vagus nerve stimulation in dementia, use of devices for remote therapy, treatment of a broad group of gastrointestinal disorders and use of a stimulator with a mobile device.
Belgian Product Code
In mid-November, electroCore was issued a National Code Number in Belgium which allows product recognition throughout the Belgian pharmaceutical network. The coding and recognition of gammaCore Sapphire by the system will improve the ease of prescribing the therapy and enhance the reimbursement process.
Department of Defense BOOST Program
electroCore was selected to participate in the Department of Defense’s (DoD) Biotech Optimized for Operational Solutions and Tactics (BOOST) Program which is in part funded by the Defense Advanced Research Projects Agency (DARPA). The program seeks to improve training in the intelligence, surveillance, and reconnaissance (ISR) training environment. Investigations conducted using gammaCore have quantified a 20% acceleration in training and a 35% improvement in memory retention during intelligence, surveillance, and reconnaissance (ISR) training. The same participants also exhibited a 25% improvement in attention and mood. If further study confirms the initial findings, electroCore will be expected to provide field ready devices to the US Air Force by 2H:23. The company has signed an agreement with the contractor for the first purchase commitment for this nVNS product which will be called the Tac-Stim5 for human performance. electroCore is working to expand use of the product to all branches of the US Armed Services.
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1. The vagus nerve runs from the brainstem, down the neck and into the thorax and abdomen. It can be found in the neck near the pharynx, larynx, trachea and esophagus.
2. Bremner, J.D., et al. Application of Noninvasive Vagal Nerve Stimulation to Stress-Related Psychiatric Disorders. J Pers Med. 2020 Sep; 10(3): 119.
3. Breit, S., et al. Vagus Nerve as Modulator of the Brain–Gut Axis in Psychiatric and Inflammatory Disorders. Front. Psychiatry, 13 March 2018.
4. Source: electroCore’s Truvaga website. Accessed February 2023.
5. Tactical Stimulation (Tac-Stim). If it’s the military, you’ve got to have an acronym.
6. Source: electroCore Corporate Presentation November 2022
