electroCore, Inc. (NASDAQ:ECOR) Q2 2023 Earnings Call Transcript

Swayampakula Ramakanth: Thank you very much. A couple of questions. Starting over the high level. So you ended 6 months with $6.3 million revenue run and — obviously, the guidance is beyond what we can annualize from that 6.3 number. So just trying to understand the cadence of revenues in terms of where do you think the contribution is going to come from? Obviously, you added close to 800-plus thousand from the new businesses, the Truvaga and TAC-STIM. Is that growth — the additional growth that we are expecting, is that going to come from there? Or is it more as you’re opening up more point of contact at the VA? Just trying to understand where this business is meant to grow for the next 6 months.

Daniel Goldberger: Yes, that’s a great question, RK, and I appreciate it. So the good news is that from where we sit, all of our U.S. channels are really starting to accelerate through the current quarter, right? We’re 1/3 of the way or more through the current quarter. The VA hospital system is our largest customer that grew 75% in the second quarter. We see that growth pace continuing and maybe even accelerating just in the VA hospital as we go through the back half of the year, driven a little bit because we’re kind of at a tipping point now with sort of general acceptance that vagus nerve stimulation works very well in that population. And although we’re having more and more success recruiting great commission sales reps, what we call 1099 reps.

And so our network of feet on the street is growing very rapidly, and it’s growing in a scalable way. So that’s already our largest revenue line, and it’s growing by the largest percent. Our prescription commercial sales has flattened out a bit this year compared to last year, but the big opportunity in our commercial prescription sales is the Joerns relationship that gives us access to Kaiser. We haven’t reported any revenue from that channel. We will be reporting some small revenue in the current quarter. That’s 12 million, give or take, covered live that are going to have access to gammaCore prescription therapy for headache now that we’ve got that agreement in place, and we’ve worked out the back-office issues. So I see a lot of greenfield growth from that new medical benefit available to Kaiser patent.

Truvaga and TAC-STIM, both of those new products have really surprised us with their early adoption, still smaller numbers compared to our other channels, but a lot of room for growth. And we’ve said over and over again, that the TAC-STIM business could be very large in coming years, but it’s going to be lumpy because it comes in on TOs [ph] or significant numbers of devices at a time. So it’s hard for us to predict the timing, but the funnel for tax NPOs [ph] is large and growing.

Swayampakula Ramakanth: And then on the TAC-STIM on the military business itself, to me, it’s a little bit interesting in the sense you — it’s hardly 6 months since you started bringing in revenues. And you’re already trying to think of a second-generation product there. So — and I understand you can’t talk too much about what’s going on behind — on the boardroom. But in general, how should we think about the second-generation products coming in? And is this going to create a second wave of revenues — and what — and how — what will be the — would TAC-STIM be gobbled up with a second generation coming in? Or you can market, both the first generation and the second-generation over the next — at least over the next year, 1.5 years?