electroCore Provides Business Update and Select Second Quarter 2021 Financial Guidance

Rhea-AI Summary

electroCore, Inc. (ECOR) expects approximately $1.3 million in revenue for Q2 2021, a 5% increase from Q1 2021 and a 69% growth year-over-year. The company reported a net cash usage of about $3.2 million for operations in the same period. As of June 30, 2021, cash and equivalents totaled approximately $23.7 million, which does not include $18.8 million raised in a recent offering. The company emphasizes ongoing operations and international expansion efforts.

Positive

• Second quarter revenue expected to increase by 5% quarter-over-quarter and 69% year-over-year, reaching approximately $1.3 million.
• Cash balance of approximately $23.7 million as of June 30, 2021, excluding $18.8 million raised in a recent follow-on offering.

Negative

• Net cash used for operations was approximately $3.2 million in Q2 2021.

• Second-Quarter 2021 revenue expected to be approximately $1.3 million
  
• Net cash used to fund operations in the second quarter 2021 of approximately $3.2 million
• Follow on offering subsequent to June 30, 2021 added $18.8 million to cash balance

ROCKAWAY, NJ, July 13, 2021 (GLOBE NEWSWIRE) -- electroCore, Inc. (Nasdaq: ECOR), a commercial-stage bioelectronic medicine company, today provided an operating and business update as well as select unaudited preliminary financial guidance for the second quarter of 2021.

“We are pleased to announce preliminary second quarter results, which were in line with our expectations,” stated Dan Goldberger, Chief Executive Officer of electroCore. “Revenue for the quarter ended June 30, 2021 is expected to be approximately $1.3 million. Our headache markets in the US and UK continue to emerge from the pandemic and we look forward to accelerating revenue in the future.”

Operational:
Government Channels: During the second quarter of 2021, the company expects to recognized revenue of approximately $779,000 pursuant to the Department of Veterans Affairs (“VA”) and Department of Defense (“DoD”) originating prescriptions, compared to $679,000 during the first quarter of 2021 and $415,000 second quarter of 2020. 85 VA and DoD military treatment facilities have purchased gammaCore products through June 30, 2021 as compared to 79 through the first quarter 2021 and 67 through the second quarter of 2020. 

Outside of the U.S.: During the second quarter of 2021, electroCore expects to recognize revenue of approximately $369,000 outside of the United States through direct channels, as compared to $335,000 during the first quarter of 2021 and $247,000 during the second quarter of 2020. These figures do not include new global stocking distributors which contributed revenues from Canada and Western Europe during the second quarter of 2021.

The company continues to expand its distributor relationships internationally. In April 2021, the company announced that East Agency will serve as the exclusive distributor of the gammaCore Sapphire™ non-invasive vagus nerve stimulator (“nVNS”) in Qatar. In June, the Company announced a distribution agreement with Kromax International Corporation to serve as the exclusive distributor of gammaCore Sapphire™ (nVNS) in Taiwan and China.  

Commercial: The company continues to make targeted investments in its Commercial channel. In January 2021, CMS published its Level II Healthcare Common Procedure Coding System, commonly known as HCPCS, including a unique code “K1020” for “Non-invasive vagus nerve stimulator,” which went into effect on April 1, 2021. During the second quarter, the company received a favorable coverage determination from a regional payor and continues to work on obtaining additional positive medical benefit coverage decisions.  

Research and Development: There were several important research and development advancements related to gammaCore during the second quarter of 2021. 

In April 2021, the company announced the publication of a paper, entitled, “Cluster headache pathophysiology — insights from current and emerging treatments,” by Drs. Diana Wei and Peter Goadsby in Nature Reviews: Neurology. The paper reviews data on existing and emerging treatments for the acute and preventive treatment of cluster headache. Among the emerging treatments, electroCore’s gammaCore is identified as the only therapy that has been shown to be effective in clinical trials for both the acute treatment of episodic cluster headache as well as the preventive treatment of cluster headache. 

In May 2021, the U.S. Department of Veterans Affairs announced an investigator-initiated study of the use of gammaCore Sapphire^TM (nVNS) for the treatment of post-traumatic headache (“PTH”). PTH accounts for approximately 4% of all symptomatic headache disorders and is one of the most common consequences of mild traumatic brain injury (mTBI), also known as concussion. 

In June 2021, the company announced publication of a peer-reviewed paper, entitled “Non-Invasive Vagus Nerve Stimulation Improves Clinical and Molecular Biomarkers of Parkinson’s Disease in Patients with Freezing of Gait” in the journal NPJ Parkinson’s Disease. The paper reports the results of a randomized, double-blind, sham-controlled crossover trial conducted at the Institute of Neurosciences in Kolkata, India in collaboration with the Faculty of Medical Sciences at Newcastle University in England using gammaCore Sapphire^TM. The study provides preliminary evidence supporting the safety and efficacy of nVNS in treating motor and non-motor symptoms of Parkinson’s Disease. Patients were reportedly satisfied with the treatment and the majority were able to self-administer nVNS. 

On June 10, 2021 the company announced the publication of a peer-reviewed paper entitled “Effects of Transcutaneous Vagal Nerve Stimulation (tVNS/nVNS) on Cognitive Performance under Sleep Deprivation Stress,” in the journal Communications Biology, a Nature publication. The paper reports the ability of gammaCore to reduce fatigue and increase performance in a randomized, double-blind, sham-controlled trial conducted at Wright-Patterson Air Force Base using gammaCore and sponsored by the United States Air Force Research Laboratories (USAFRL).

Financial Guidance: electroCore today announced the following preliminary unaudited financial guidance for the second quarter of 2021:

Second Quarter Revenue: electroCore anticipates that second quarter 2021 revenue will be approximately $1.3 million. This represents a 5% increase over first quarter 2021 revenue of $1.2 million and 69% growth over second quarter 2020 revenue of $753,000.

June 30, 2021 Cash: The company ended the second quarter of 2021 with approximately $23.7 million of cash, cash equivalents and marketable securities, compared to $25.5 million as of the end of the first quarter 2021. During the second quarter of 2021, the company received approximately $1.4 million in non-dilutive cash from the sale of New Jersey net operating loss tax benefits. The $1.4 million of cash proceeds were offset by net cash used of approximately $3.2 million to fund operations during the second quarter of 2021. The cash balance at June 30, 2021 excludes approximately $18.8 million raised in the recent public offering (after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company) which closed subsequent to the end of the quarter. 

The company intends to provide a detailed operational and financial update during its second quarter 2021 earnings call in August 2021.

Mr. Goldberger commented further, “We continue to be enthusiastic about the prospects of the business.  We have a strong balance sheet which will support our continued efforts to educate and improve physician and patient awareness, which we believe will ultimately lead to the successful adoption of gammaCore globally.” 

About electroCore, Inc.
electroCore, Inc. is a commercial stage bioelectronic medicine company dedicated to improving patient outcomes through its non-invasive vagus nerve stimulation therapy platform, initially focused on the treatment of multiple conditions in neurology. The company's current indications are the preventive treatment of cluster headache and migraine and the acute treatment of migraine and episodic cluster headache.
For more information, visit www.electrocore.com.

About gammaCore^TM
gammaCore^TM (nVNS) is the first non-invasive, hand-held medical therapy applied at the neck as an adjunctive therapy to treat migraine and cluster headache through the utilization of a mild electrical stimulation to the vagus nerve that passes through the skin. Designed as a portable, easy-to-use technology, gammaCore can be self-administered by patients, as needed, without the potential side effects associated with commonly prescribed drugs. When placed on a patient’s neck over the vagus nerve, gammaCore stimulates the nerve’s afferent fibers, which may lead to a reduction of pain in patients.

gammaCore (nVNS) is FDA cleared in the United States for adjunctive use for the preventive treatment of cluster headache in adult patients, the acute treatment of pain associated with episodic cluster headache in adult patients, and the acute and preventive treatment of migraine in adolescent (ages 12 and older) and adult patients. gammaCore is CE-marked in the European Union for the acute and/or prophylactic treatment of primary headache (Migraine, Cluster Headache, Trigeminal Autonomic Cephalalgias and Hemicrania Continua) and Medication Overuse Headache in adults.

gammaCore is contraindicated for patients if they:

• Have an active implantable medical device, such as a pacemaker, hearing aid implant, or any implanted electronic device
• Have a metallic device, such as a stent, bone plate, or bone screw, implanted at or near the neck
• Are using another device at the same time (e.g., TENS Unit, muscle stimulator) or any portable electronic device (e.g., mobile phone)
  
  

Safety and efficacy of gammaCore have not been evaluated in the following patients:

• Patients diagnosed with narrowing of the arteries (carotid atherosclerosis)
• Patients who have had surgery to cut the vagus nerve in the neck (cervical vagotomy)
• Pediatric patients (less than 12 years)
• Pregnant women
• Patients with clinically significant hypertension, hypotension, bradycardia, or tachycardia
  
  

Please refer to the gammaCore Instructions for Use for all of the important warnings and precautions before using or prescribing this product.

The U.S. FDA has cleared the gammaCore Sapphire CV (nVNS) device under an emergency use authorization for acute use at home or in a healthcare setting to treat adult patients with known or suspected COVID-19 who are experiencing an exacerbation of asthma-related dyspnea and reduced airflow, and for whom approved pharmacologic therapies are not tolerated or provide insufficient symptom relief as assessed by their healthcare provider, using noninvasive vagus nerve stimulation (nVNS) on either side of the patient's neck.
gammaCore Sapphire CV has been authorized only for the duration of the statement that circumstances exist that warrant authorization of the emergency use of medical devices under section 564(b)(1) of the Act, 21 U.S.C. § 360bbbb-3(b)(1), until the authorization is terminated or revoked.

More information can be found at:
Letter of authorization: https://www.fda.gov/media/139967/download
Fact sheet for healthcare workers: https://www.fda.gov/media/139968/download
Patient information sheet: https://www.fda.gov/media/139969/download
Instructions for use of gammaCore: https://www.fda.gov/media/139970/download

Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements about electroCore’s expectations for revenue and cash used in operations during the second quarter of 2021, its expectations for future performance, as well as electroCore's business prospects and clinical and product development plans for 2021 and beyond, its pipeline or potential markets for its technologies, additional indications for gammaCore, the timing, outcome and impact of regulatory, clinical and commercial developments (including human trials for the study of headache, PTH, mTBI, Parkinson’s diseases and sleep deprivation stress and the business, operating or financial impact of such studies), further international expansion, and statements about anticipated distribution arrangements, government and payor funding arrangements (including those relating to Canada, Western Europe, Qatar, Taiwan, and China) and other statements that are not historical in nature, particularly those that utilize terminology such as "anticipates," "will," "expects," "believes," "intends," other words of similar meaning, derivations of such words and the use of future dates. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the ability to raise the additional funding needed to continue to pursue electroCore’s business and product development plans, the inherent uncertainties associated with developing new products or technologies, the ability to commercialize gammaCore™, competition in the industry in which electroCore operates and overall market conditions. Any forward-looking statements are made as of the date of this press release, and electroCore assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by law. Investors should consult all of the information set forth herein and should also refer to the risk factor disclosure set forth in the reports and other documents electroCore files with the SEC available at www.sec.gov.

FAQ

What is the expected revenue for electroCore (ECOR) in Q2 2021?

electroCore expects revenue of approximately $1.3 million for Q2 2021.

What was the net cash used for operations by electroCore in Q2 2021?

The net cash used to fund operations in Q2 2021 was approximately $3.2 million.

How much cash did electroCore have as of June 30, 2021?

As of June 30, 2021, electroCore had approximately $23.7 million in cash and equivalents.

What was the impact of the recent follow-on offering on electroCore's cash balance?

The recent follow-on offering added approximately $18.8 million to electroCore's cash balance.