Full Press Release Details
electroCore Announces
Second Quarter Financial Results
Received EUA and initiated gammaCore
Sapphire CV distribution process for certain known or suspected COVID-19 patients experiencing asthma exacerbations
Generated sequential increase in revenue
Further strengthened balance sheet and
reduced quarterly cash burn
Company to host conference call and webcast
today, August 13, 2020 at 4:30 pm ET
August 13, 2020 at 4:05 PM EST
BASKING RIDGE, N.J., August 13, 2020 --
electroCore, Inc. (Nasdaq: ECOR), a commercial-stage bioelectronic medicine company, today announced second quarter 2020 financial
results and provided an operational update.
Second Quarter 2020 and Recent Highlights
Dan Goldberger, Chief Executive Officer
of electroCore commented: "Following the FDA's recent issuance of an Emergency Use Authorization for the use of gammaCore
Sapphire CV for the acute treatment of asthma exacerbations in certain known or suspected COVID-19 patients, we established a streamlined
procurement process allowing hospitals and physicians to quickly and easily obtain the therapy. We are excited to play a role in
the fight against this pandemic, particularly since reactive airway disease was one of the first areas of research for our company,
and multiple pilot studies and publications strongly suggest that the therapy can provide a benefit to these patients.
Notwithstanding the impact of the pandemic
on our core operations during the second quarter, we were nonetheless able to generate a sequential increase in revenue, driven
largely by the replenishment order in the commercial channel, even while physicians, hospitals, and military treatment facilities
pivoted to treat COVID patients. Total paid months of therapy were down only single digit percentages, a testament to the unwavering
focus of the entire electroCore team who experienced unprecedented restrictions in their physician outreach efforts. We are encouraged
that our two most significant revenue channels, the U.S. Department of Veteran Affairs and Department of Defense, and the U.K.,
are showing early signs of potentially returning to pre-pandemic month run rates.
The redeployment and cost reduction plan
that we announced in May 2019 and have since implemented has transformed our company into a much leaner and nimbler organization.
During the second quarter, we used approximately $5.2 million to fund our operations, a substantial reduction from approximately
$11.3 million in the year ago period. Together with our strengthened balance sheet, we believe we have the resources necessary
to achieve meaningful upcoming clinical and commercial milestones," Mr. Goldberger concluded.
Second Quarter 2020 Financial Results
For the quarter ended June 30, 2020, electroCore
reported net sales of $753,000 compared to $623,000 in the same period of 2019, and slightly above the guidance range of $700,000
to $750,000 provided by management on July 14, 2020. The company continues to focus on the VA and DOD channels in the United States
and on sales in the United Kingdom.
Revenue from the VA and DOD decreased 9%
sequentially to $415,000 during the second quarter of 2020 from $454,000 in the first quarter of 2020 and $378,000 in the fourth
quarter of 2019. Paid months of therapy shipped to the VA and DOD decreased 9% sequentially to 988 during the second quarter of
2020 from 1,084 in the first quarter of 2020.
Revenue from outside the US decreased sequentially
to $247,000 in the second quarter of 2020 from $277,000 in the first quarter of 2020 and $294,000 in the fourth quarter of 2019.
Paid months of therapy shipped outside the US decreased 7% sequentially to 938 during the second quarter of 2020 from 1,008 in
the first quarter of 2020 and 961 in the fourth quarter of 2019.
During the quarter ended June 30, 2020,
electroCore restructured its commercial distribution channel and exhausted all of the inventory that had previously been placed
in that channel. As a result, the company recorded revenue of approximately $60,000 during the period for a small replenishment
order and expects to be able to report recurring revenue in the commercial channel in the future.
Total operating expenses for the second
quarter of 2020 were approximately $6.4 million, a reduction of approximately 50% as compared to $12.7 million for the comparable
SG&A expense declined approximately
44% to $5.3 million in the second quarter of 2020 from approximately $9.4 million for the comparable period in 2019, primarily
driven by a decrease in sales and marketing expenses consistent with the cost reduction plan first implemented in June 2019.
Research and development expense decreased
by approximately $1.5 million, or 60%, to $1.0 million for the second quarter of 2020 from $2.5 million for the comparable period
in 2019. This reduction is consistent with the company's strategy of reducing its near-term investment in research and development.
During the second quarter of 2020, electroCore
recorded a tax benefit of approximately $1.2 million in connection with the sales of some of its New Jersey net operating losses.
GAAP net loss for the second quarter of
2020 was $4.7 million as compared to a GAAP net loss of $12.1 million for the same period in 2019.
Adjusted EBITDA net loss for the second
quarter of 2020 was a loss of $4.3 million as compared to an adjusted EBITDA net loss of $10.8 million for the same period in 2019.
The company defines adjusted EBITDA net
loss as GAAP net loss, excluding income tax expense/benefit, stock-compensation expense, restructuring and other severance related
charges, legal fees associated with stockholders' litigation and total other income/expense. A
reconciliation of GAAP net loss to Non-GAAP adjusted EBITDA net loss has been provided in the financial statement tables
included in this press release.
Net cash used in operations for the quarter
ended June 30, 2020 was approximately $5.2 million, not including approximately $1.2 million received in connection with the sale
of New Jersey net operating losses. Net cash used in operations was $11.3 million in the second quarter of 2019.
Cash and cash equivalents and marketable
securities at June 30, 2020 totaled approximately $18.9 million, as compared to approximately $24.1 million at December 31, 2019.
Subsequent to the end of the second quarter of 2020, the company raised approximately $10.3 million through a partial draw down
of the agreement with Lincoln Park Capital, resulting in a pro forma cash and cash equivalents and marketable securities balance
of $29.2 million as of June 30, 2020.
Webcast and Conference Call Information
electroCore's management team will
host a conference call today August 13, 2020 beginning at 4:30 p.m. ET. Investors interested in listening to the conference call,
or webcast may do so by dialing 877-407-4018 for domestic callers or 201-689-8471 for international callers, using Conference
ID: 13706874, or by connecting to the Web: http://public.viavid.com/index.php?id=140717
An archived webcast of the event will be
available on the "Investors" section of the company's website at: www.electrocore.com.
About electroCore, Inc.
electroCore, Inc. is a commercial-stage
bioelectronic medicine company dedicated to improving patient outcomes through its platform non-invasive vagus nerve stimulation
therapy initially focused on the treatment of multiple conditions in neurology. The company's current indications are the
preventative treatment of cluster headache and migraine and acute treatment of migraine and episodic cluster headache.
For more information, visit www.electrocore.com.
(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 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, the acute treatment of pain associated with migraine headache in adult patients,
and the prevention of migraine in 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.