KORU Medical (KRMD) Q3 2026 Earnings Call Transcript

DATE

Tuesday, Nov. 10, 2026

CALL PARTICIPANTS

• President and Chief Executive Officer - Adam Kalbermatten
• Chief Financial Officer - Tom Adams
• Investor Relations - Louisa Smith

TAKEAWAYS

• Net Revenues -- $11.6 million, increasing 11.2% year over year driven by recurring patient base growth and specialty pharmacy sales.
• Gross Margin -- 65.2%, expanding 500 basis points due to manufacturing efficiencies, lower tariff costs, and a favorable geographic customer mix.
• Net Income -- $218,000, representing the second consecutive quarter of profitability compared to a net loss of $778,000 in the prior year period.
• Adjusted EBITDA -- $1.3 million, increasing from $89,000 in the third quarter of 2025.
• Domestic Core Revenue -- $8.1 million, growing 31.6% on a reported basis and 10.1% on a normalized basis after adjusting for prior year distributor impacts.
• International Core Revenue -- $3.1 million, which was a 16.5% decrease on a reported basis and a 23.2% increase on a normalized basis reflecting new patient starts in existing markets.
• Pharma Services and Clinical Trials Revenue -- $424,000, declining 27.4% due to variable customer timing for clinical trial programs.
• Full Year Revenue Guidance -- $48 million to $48.5 million, representing expected annual growth of 17% to 18%.
• Full Year Gross Margin Guidance -- 63% to 64%, raised from the previous range of 62% to 64% due to manufacturing efficiencies.
• Year-End Cash Guidance -- Greater than $8 million, increased from the prior target of $7.5 million.
• Operating Expenses -- $7.4 million, representing 64% of sales compared to 70.2% in the prior year period.
• Non-GAAP Adjusted Diluted EPS -- $0.02 for the quarter, compared to $0.00 in the third quarter of 2025.
• Non-GAAP Adjusted Diluted EPS (Year-to-Date) -- $0.04, improving from a loss of $0.01 in the prior year period.
• Year-to-Date Adjusted EBITDA -- $2.2 million, representing an 18-fold increase over the $121,000 reported in the first nine months of 2025.
• Cash and Cash Equivalents -- $7.4 million at quarter end, with $900,000 in cash usage during the quarter driven by working capital for inventory.
• Nine-Month Cash Usage -- $1.5 million, which includes approximately $1 million for a technology asset acquisition completed in the second quarter.
• Patient Base -- Approximately 60,000 chronic recurring immunoglobulin patients, providing a durable recurring revenue stream.
• Specialty Pharmacy Channel -- Three U.S. specialty pharmacies now dispensing KORU products to support home administration of RYSTIGGO.
• Takeda PST Trial Result -- A facilitated subcutaneous therapy trial met its primary endpoint, delivering the same dose in half the volume with a 40% reduction in infusion time.
• Enzyme Replacement Therapy Pipeline -- A Phase III trial is currently dosing patients with the Freedom Infusion System for a market of approximately 5,000 patients.
• Nephrology Asset Pipeline -- Execution of a follow-on statement of work to support international trials for a 10,000-patient population.
• Inventory -- $4.7 million at quarter end, increasing from $3.7 million at the start of the year to support expected fourth-quarter acceleration.
• Accounts Receivable -- $6.4 million at quarter end, compared to $6.0 million at the end of 2025.

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RISKS

• Adams stated that the pharma services and clinical trials segment is "a small unpredictable part of the business and is inherently variable based on our customer's timing of their drug programs."
• Kalbermatten noted that international sales "slowed slightly as we navigated our launch into a competitive distributor-based market," reflecting temporary headwinds in certain geographic regions.

SUMMARY

KORU Medical Systems, Inc. (NASDAQ:KRMD) reported 11.2% revenue growth and its second consecutive quarter of positive net income. Management updated full-year guidance upward across revenue, gross margin, and cash targets, citing manufacturing efficiencies and accelerating demand in core domestic and international markets. The company secured new distribution partnerships in Europe and Africa to expand its global footprint while advancing its pharmaceutical pipeline in subcutaneous therapies and oncology.

• The company signed a distribution agreement with a pan-European partner that serves as a drug wholesaler, home care provider, and pharmacy.
• Management stated that internal discussions with partners for the new connected monitoring technology have yielded "enthusiastic and very positive" initial feedback.
• The Freedom360 next-generation pump regulatory submission remains on track for completion by the end of 2026.
• Management confirmed that specialty pharmacy sales of RYSTIGGO contributed to domestic core revenues, with 100,000 infusions projected over three to five years.
• Takeda presented trial data showing that a 20% subcutaneous therapy delivered the same dose as HYQVIA in half the volume with a 40% reduction in infusion time.
• Management reported receiving the first order under the new European distribution agreement in the third quarter and expects benefits to materialize in the fourth quarter.

INDUSTRY GLOSSARY

• 510(k): A premarket submission to the FDA to demonstrate that a medical device is safe and effective by being substantially equivalent to a legally marketed device.
• CMO: Contract Manufacturing Organization, a company that provides manufacturing services for medical device and pharmaceutical firms.
• Deferoxamine: An iron-chelating treatment used for patients suffering from chronic iron overload.
• PST: Facilitated subcutaneous therapy, a method that allows for larger volumes of medication to be administered under the skin.
• RYSTIGGO: A subcutaneous medication used for the treatment of generalized myasthenia gravis (gMG).
• SCIg: Subcutaneous Immunoglobulin, a therapy used to treat primary and secondary immunodeficiencies by delivering antibodies under the skin.
• Tender-based Market: A geographic region where health authorities or insurers use a competitive bidding process to select a primary pharmaceutical and device provider.

Full Conference Call Transcript

Operator: Greetings. Welcome to the KORU Medical Systems Third Quarter 2026 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Louisa Smith, Investor Relations. Thank you, Louisa. You may begin.

Louisa Smith: Thank you, operator and good afternoon, everyone. Joining me on the call today are Adam Kalbermatten, President and Chief Executive Officer of KORU Medical Systems; and Tom Adams, Chief Financial Officer. Earlier today, KORU released financial results for the third quarter ended September 30, 2026. A copy of the press release is available on the company's website. I encourage listeners to have our press release in front of them, which includes our financial results and commentary on the quarter. Additionally, we will use slides to support further commentary in today's call, which are also available on the Investor Relations section of our website. During this call, we will make certain forward-looking statements regarding our business plans and other matters.

These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to risks and uncertainties, including those mentioned in the associated press release and our most recent filings with the SEC. We assume no obligation to update any forward-looking statements. During the call, management will also discuss certain non-GAAP financial measures. You'll find additional disclosures, including reconciliations of these non-GAAP measures with comparable GAAP measures in our press release, the accompanying investor presentation and SEC filings. For the benefit of those listening to the replay, this call was held and recorded on Tuesday, November 10, 2026, at approximately 4:30 p.m. Eastern Time.

Since then, the company may have made additional comments related to the topics discussed. I'd now like to turn the call over to Adam Kalbermatten, CEO. Adam, please go ahead.

Adam Kalbermatten: Thank you, Louisa, and good afternoon, everyone. I'll first begin with commentary on this quarter's business highlights before handing the call over to Tom to discuss financial results and our updated guidance. Before diving into the results, I want to make several points. KORU has an incredible opportunity ahead of it and we are working hard to capture it. I don't want to get ahead of ourselves but I'd like to note the following. First, we are executing on the core business. As we guided in our Q2 call, our top line growth slowed in Q3 and we are on track to deliver high teens growth in Q4.

We continue to grow our recurrent patient base ahead of the market and have made business profitability improvements and are pleased with the results. New initiatives take time and we are working on some big things that could significantly expand our patient base. We are progressing the business along multiple strategic dimensions, opening new geographies, getting new drugs on label, addressing new indications and adding new technologies. If we execute on these strategic priorities, the business will inflect. I won't put a precise date on that today but in the meantime, you should expect us to run a healthy, profitable, growing business. Now I will dive into Q3. Revenue was $11.6 million, up 11% year-over-year with margins expanding to 65.2%.

Our top line this quarter reflects the timing we discussed last call. Our domestic core continued to perform well, while timing in international markets moderated our growth. What I want you to take away from this quarter is not the top line alone but the quality of the underlying results and the direction we are heading. We achieved our second consecutive quarter of positive net income and adjusted EBITDA, made tangible progress on every strategic pillar we previously outlined that will drive our next phase of growth. With our current recurring revenue scale, profitability profile and cash balance, we will fund the business while continuing to invest in growth.

This quarter, we delivered proof points that will continue to fuel our growth. We signed new distribution partnerships in both Europe and Africa. 3 U.S. specialty pharmacies are now dispensing KORU products to support the home administration of RYSTIGGO and our new drug pipeline advanced across SCIg and oncology. KORU continues to be the global leader in large-volume subcutaneous drug delivery, supporting the ongoing shift toward patient-administered therapies and home-based care in health care systems around the world. The Ig market continues to grow in the high single digits annually and our strategic priorities remain focused on bringing more drugs onto our label and capturing even larger markets, including patients with secondary immunodeficiencies, oncology and rare disease indications.

Let me discuss each in turn. We consistently deliver above-market growth domestically and this quarter was no exception with $8.1 million in domestic core revenues. KORU remains the market-leading solution in the United States and we continue to see new patient starts in existing accounts while also onboarding new accounts. A strong underlying recurrent patient profile and our ability to win new patient starts in an expanding Ig market, all contribute to our consistently strong top line results. Specialty pharmacy sales of RYSTIGGO contributed to the increase in domestic core revenues.

In the quarter, 3 U.S. specialty pharmacies started dispensing KORU products for the home care of the drug, 2 of which use the complete KORU system and one using just our needle set. We expect RYSTIGGO to drive growth within the specialty pharmacy channel as new patient starts increase. We see the total RYSTIGGO market potential growing to around 100,000 infusions over the next 3 to 5 years. Internationally, our geographic expansion strategy continues to gain traction and I am very excited about what we have accomplished this quarter. We signed a new sales and distribution agreement with a partner in one of Europe's largest markets to further support new patient starts across multiple countries with large patient populations.

We received our first order under that newly signed sales and distribution agreement and expect to start seeing the benefits in the fourth quarter. This partnership is especially beneficial because of their position as a wholesaler, home care provider and pharmacy within the health care system. All these components together create an integrated service network that will now use the KORU Freedom Infusion System. This positions us for continued scalable growth focusing on new patient starts. In another exciting international milestone, we signed a sales and distribution agreement with a new partner in Africa and shipped our initial order this quarter.

This is a meaningful step in broadening our global footprint and bringing subcutaneous infusion therapy to an entirely new patient population. Each new market we enter strengthens our foundation for long-term international growth. And the momentum we are building is exactly what we hope to see. As a reminder, international markets differ in how the device supplier is chosen for the health system. In tender-based markets, pharmaceutical companies bid to supply their pharmaceutical asset. And as part of that tender, they select which device will be used to deliver it. Winning the pharma relationship effectively wins the device volumes as well.

This differs from distributor-based markets where there is no central tender, home care companies and hospitals drive the device decision independently, which means growth comes account by account rather than through a single tender win. KORU is active in both models. As anticipated, while our international slows -- sales slowed slightly as we navigated our launch into a competitive distributor-based market, the opportunity for growth in underpenetrated international markets remain intact. With the help of our new relationships, we will continue to build our revenues in OUS markets. We expect fourth quarter international performance to be strong. Partnerships like the additions in Europe and Africa are laying the foundations to strategically unlock these markets abroad and efficiently.

We will continue with that same disciplined approach to the international markets and we'll keep looking for additional partnership opportunities that will drive enhanced market access internationally. Turning to our pipeline. You can think of our strategy here as focused on 3 elements: first, bringing additional drugs onto our label; second, enhancing our existing technology; and three, building the foundation for connected health. I'll walk through where each of these stands today, starting with new drugs and novel therapies. As it relates to new drugs on label, as mentioned before, I want to make sure we manage expectations as these are closely tied to our pharmaceutical partnerships.

We continue to make progress with existing commercial and additional pharma development partners and the opportunities that we're working on are highly sensitive and proprietary to those partners. Many involve multibillion-dollar drug assets and these opportunities are highly competitive. As a result, I will only share further detail when our pharma partners are prepared to disclose more information publicly or when we have launched a commercial partnership. We do have specific updates to share on one partnership across facilitated subcutaneous therapies. As many of you might have seen, detailed results from a pivotal II/III trial of an investigational facilitated subcutaneous immunoglobulin 20% therapy were presented by Takeda at ESID last month.

The trial met its primary endpoint and the data showed that compared with HYQVIA, the therapy delivered the same IgG dose in half the volume with infusion times shortened by more than 40% for a single infusion site while maintaining up to once monthly dosing. This is a compelling profile for patients and it reinforces the broader industry shift towards subcutaneous administration in the home setting, exactly the trend KORU is positioned to support. On the enzyme replacement therapy program in our pipeline, another promising milestone was reached. Patients are being dosed with the KORU Freedom Infusion System in our pharmaceutical partner's Phase III clinical trial for this investigational drug. It has an estimated patient population of approximately 5,000 patients.

Steady, consistent progress like this is exactly what we want to see as these programs advance. Another pharmaceutical partner is approaching a Phase III trial of their nephrology asset with the execution of a follow-on statement of work to support international clinical trials this quarter. The drug has an estimated patient population of approximately 10,000 patients and is a great signal of the growing scope and ambition of these collaborations. As a reminder, these collaborations are designed to navigate the multiyear pharmaceutical development pathway, while they often start with KORU providing clinical trial devices, we look at them as opportunities to serve as the engine fueling our long-term growth pipeline.

We have also initiated discussions and provided samples with several new pharmaceutical companies. The pipeline is building just as we envisioned. Our 510(k) application for deferoxamine is still under review with the FDA. As you may recall, this drug is an iron-chelating treatment and the current infusion of this drug is with the KORU pump, which has been used off label in the past. We are pursuing this label independent of a pharmaceutical partnership. We anticipate it will be a contributor in 2027 and beyond. We believe clearance could come in the near term, so timing rests with the agency and we remain fully committed to getting deferoxamine on label.

We are optimistic about where we stand and are excited about the next steps. Our conviction in oncology continues to be strong and we believe this market represents a long-term growth inflection opportunity for KORU. We are mindful that these drugs represent high-value strategic assets to our pharma partners. And while we're making progress, we cannot provide explicit commentary on the details. We plan to share further details in the first half of 2027. On secondary immunodeficiency, we continue to expect pivotal trial endpoints toward the end of 2027. Many of those trials use SCIg drugs already on our KORU label.

We are tracking them closely and speaking with pharma partners so that we are ready with the right channel and approach as U.S. indications come online. Our focus is on disciplined execution against each of these pharmaceutical programs and we plan to update you as we reach each milestone. As you can see, KORU has a robust pipeline backing an already strong and continuously growing recurring core business. On the internal product development front, there is a great deal to be excited about. We continue to make excellent progress on our Freedom360 next-generation pump and we are finishing the final touches on our regulatory submission, which remains firmly on track for the end of the year.

This is a significant milestone for the company and the team has done an outstanding job getting us to where we are today. We believe Freedom360 will be a great addition to the portfolio, especially for the patients who have doses requiring multiple prefilled syringes. Last quarter, we highlighted the acquisition of a connected monitoring technology asset. While it is still early, we now have functional prototypes that enable productive discussions with the pharmaceutical and specialty pharma companies. We are encouraged by these discussions and believe the technology will enhance the patient experience, deepen our value proposition and provide meaningful real-time data insights to our pharmaceutical and specialty pharmacy partners. Initial feedback from these partners is enthusiastic and very positive.

They are helping us shape our connected vision for the future. Stepping back, the story of this quarter is simple. A growing business that is above market growth with the second consecutive quarter of positive net income and EBITDA, a live specialty pharmacy channel for RYSTIGGO, a new distribution partnership unlocking Europe and another unlocking Africa and a pipeline spanning facilitated SCIg, oncology and connected health that widens our competitive moat every quarter. The foundation is built, the momentum is real and we are executing with discipline. I am proud of this team and more confident than ever in the path we are on. With that, I'll turn the call over to Tom to discuss financial results. Tom?

Tom Adams: Thanks, Adam. During the third quarter, we delivered quarterly revenue of $11.6 million, representing 11% growth year-over-year. Starting with domestic core, our largest segment. Reported revenue grew 32% year-over-year and on a normalized basis, it grew 10%. That normalized growth was driven by higher pump and consumable volumes, new patient starts and market share gains, all supported by a strong underlying SCIg market. One thing to keep in mind, the prior year quarter was adversely affected by onetime distributor impacts of approximately $1.2 million, which is why the reported and normalized figures diverge. International core looks different depending on the lens.

On a reported basis, it decreased 17% year-over-year but that's entirely due to the same onetime distributor impacts in the prior year period. Normalized international growth increased 23%, driven by new patient starts within our existing markets. So the underlying trajectory here remains very healthy. Finally, pharma services and clinical trials declined 27% year-over-year, reflecting lower orders of products for use in our customer's clinical trial program. This is a small unpredictable part of the business and is inherently variable based on our customer's timing of their drug programs. So to summarize, $11.6 million in revenue this quarter and 11% in reported growth.

The temporary distributor purchasing activities between geographies last year had 0 net effect on the total core business, which is growing solidly in both geographies. And with that, let's move to the next slide. On gross margin, starting on the left side of the chart, we delivered 65.2% for the quarter versus 60.2% in the prior year period. That's a 500 basis point improvement over the prior year. And on the right, you can see we've been consistent in improving our gross margins this year. Three primary drivers of the improvement in gross margin include: first, lower manufacturing costs as we continue to improve production throughput efficiencies and we benefited from lower tariffs.

Second, we had higher average selling prices driven by a favorable geographical customer mix, not because we raised prices everywhere but more so, it's the mix of where we sold, shifting towards higher-priced markets. And third, which is longer term, we extended our supply agreement in the second quarter with our CMO, which secures our pricing and volume efficiencies as we continue to grow our business. Now let's look at cash. We exited the quarter with $7.4 million, reflecting cash usage of $900,000 in the quarter. We were net income positive of $200,000.

The usage was driven entirely by working capital for inventory purchases, supporting our fourth quarter acceleration of revenue, a higher accounts receivable balance, putting us in good shape to return to cash flow positivity in Q4. And finally, adding noncash items of $1.2 million, primarily stock compensation and depreciation, completes this bridge. We continue to have access to our unused $10 million debt facility, which provides additional financial flexibility for incremental opportunities and we expect to end the fourth quarter with positive cash flow. Before we close out the quarter-by-quarter detail, let me zoom out to the year-to-date picture because this table tells the story of 2026 in one view. Continued execution across every line of the P&L.

Year-to-date, revenue was $35.4 million versus $30.2 million last year. That's 17% growth. And as we saw earlier, that growth is coming from both of our core businesses. Gross margin is at 64% year-to-date, up 190 basis points from 62.1%. That reflects the manufacturing efficiencies, favorable geographic mix and the CMO supply agreement we walked through a moment ago. On the expense side, operating expenses as a percentage of sales improved from 70.2% down to 64%, a 620 basis point improvement. In plain terms, we're growing revenue 17% while holding spending well below that pace. That's operating leverage. The combination flows straight to the bottom line.

Net loss narrowed from $2.2 million to just $300,000, an 84% improvement and we've had positive net income for the past 2 quarters. Adjusted EBITDA grew from $100,000 to $2.2 million, roughly an 18x improvement year-over-year. We are now operating at or near breakeven on a net income basis. Cash usage year-to-date was $1.5 million versus $1.1 million last year. I'd flag one item there. This includes roughly $1 million for the technology acquisition and recurring expense we completed in Q2. So excluding that investment, our underlying cash consumption actually improved year-over-year. So the year-to-date summary delivers double-digit revenue growth, expanding margins, disciplined expenses and a near breakeven bottom line. With that context, let's move to the outlook.

We are updating our full year 2026 guidance across all 3 metrics: revenue, gross margin and profitability. Let me take them one at a time. First, revenue. We're raising the bottom end of our full year guidance to $48 million to $48.5 million, representing 17% to 18% growth for the year, up from the prior range of $47.5 million to $48.5 million. Three factors are driving it: continued U.S. and international share gains in our core business, PST revenue from both ongoing and new collaborations and revenue from new distribution agreements we signed in Europe and Africa.

We are seeing revenue acceleration in Q4, putting us back on track for a high teens growth in the fourth quarter and the full year. Second, gross margin. We're raising the bottom of our range to 63% to 64% from the prior 62% to 64%. The manufacturing efficiencies and step-up in margin we discussed earlier are now baked into the profile under our new supplier contract. The one variable to watch is geographic mix. As we enter new markets and channels, mix variability can move us within that range. Third, profitability. We expect positive adjusted EBITDA for the full year and we're raising our year-end cash balance target to above $8 million from the prior $7.5 million.

The drivers: accelerating revenue in Q4, full year cash usage coming in under $900,000 and anticipated positive cash flow of at least $600,000 in Q4 itself. I note that acquisition costs and related operating expenses for the technology assets of about $1 million in Q2 are absorbed within these targets. So the message on guidance, we're updating guidance positively across the board and the Q4 setup of inventory in place, revenue accelerating and positive cash flow expected supports these numbers. And with that, let me turn it back over to Adam for closing comments. Adam?

Adam Kalbermatten: Thanks, Tom. Before we open the call to questions, let me bring it together. Revenue growth of 11% was below where we wanted to be, though this is consistent with the trajectory we outlined last quarter. International growth slowed as anticipated and we are expecting to build back in the fourth quarter. As Tom described, the year -- prior year period comparison was affected by distributor timing items. Normalized for those, domestic core grew approximately 10% and international core grew 23%. And the progress we made on our initial nontender market arrangements gave us greater clarity as we head into the fourth quarter and we are seeing the momentum as indicated by our revised guidance.

The business foundation is a highly recurring revenue business, which is healthy. Gross margins expanded 500 basis points to 65.2% and we delivered back-to-back quarters of positive adjusted EBITDA. We ended the quarter with $7.4 million in cash and an undrawn $10 million credit facility. We expect cash flow to be positive in the fourth quarter and to finish the year with more than $8 million in cash, which gives us the flexibility to keep investing in growth. We also added building blocks for the next phase of growth.

We signed new distribution partners in Europe and Africa, 3 specialty pharmacies are now supporting home administration of RYSTIGGO and our pharma pipeline is advancing across facilitated SCIg, deferoxamine, enzyme replacement and nephrology alongside Freedom360 and connected health new product developments. All of this is anchored by approximately 60,000 chronic recurring immunoglobulin patients who rely on the Freedom system every single day. That durable recurrent revenue base is what allows us to invest in the future. Our long-term targets remain unchanged, $100 million in revenue, gross margins above 65% and EBITDA margins of 20% or greater. Our results this quarter with gross margin already at 65.2% and the second consecutive quarter of profitability show the model is working.

We are executing with discipline against each of our strategic pillars and we will keep you updated as we reach each milestone. With that, operator, please open the line for questions.

Operator: [Operator Instructions] Our first question is from Caitlin Roberts with Canaccord Genuity.

Michaela Smith: It's Michaela on for Caitlin. And congrats on a good quarter. Our first one is with the new sales and distribution agreements signed in Europe and Africa, can you provide some more color maybe on the cadence of 2027 international revenue?

Adam Kalbermatten: Michaela, it's Adam. Thanks for the question. We're really excited about the new sales and distribution agreement. As we think about it today, we look at it as we've done the work to execute that agreement. We've got the initial orders in place and we're going to start delivering those in Q4. It's actually part of the reason we are quite excited about our Q4 opportunities as we've resolved some of those challenges that we highlighted in Q3 with getting the new agreement in place. As we think about '27, this is certainly going to be something that we see new patient starts continuing to move forward there.

I wouldn't want to call out something specific related to this new agreement as we're still trying to work through our budgeting process for '27 and we'll comment a little bit more on that towards the end of the year when we release those results. But clearly, this is something that we've been excited about as it gets into the fourth quarter here and then continuing with that growth momentum into '27 as well.

Michaela Smith: That's great. And then maybe just a follow-up. Can you talk more about the SCIg market health this quarter and what you're seeing into the fourth quarter and maybe for both domestic and international?

Adam Kalbermatten: Yes, absolutely. We actually just got kind of a highlight in the last week of how the overall SCIg market is doing. We see continued growth there. Quarter-to-quarter, I think it was in the range of 1.8% to 2% quarter-on-quarter as we see it year-on-year continuing to grow kind of around that 8% to 10%. That's actually fairly consistent in the data that we've seen domestically. Internationally, we don't have as detailed of data but our understanding is it's quite similar internationally, still continuing to have that healthy growth that we see in both the domestic and international market overall, that 8% to 10% on the SCIg side.

Operator: Our next question is from Jason Bednar with Piper Sandler.

Andrea Irawan: This is Andrea on for Jason. As we look ahead to 2027, what elements of the strategy do you guys have the most confidence in? Is it the U.S. growing above the SCIg market, growth in establishing international markets, adding new international markets, it seems like or converting the novel therapies business into core?

Adam Kalbermatten: Andrea, thanks for the question. As we think about 2027, we're really relating it back to kind of the strategic pillars and growth plan that we have. We have a lot of really good things going well, not only in Ig but you're asking about some of the other PST and new drugs there. We talked a bit about RYSTIGGO earlier on the call. That's something going quite well for us. We mentioned deferoxamine that's still under agency review but we're hoping to get some positive news shortly there.

And then on the new product development side, we'll be launching our Freedom360 as we're expecting to do filing towards the end of this year and then have an approval next year as well. As we noted in the prepared remarks, we're not going to comment on oncology until kind of the first half of '27. So I'm going to hold off on that. High level on the P&L, we're doing really well on gross margin, second consecutive quarter. We're expecting that to continue into '27 as well. In terms of the budgeting process, we're still in that for '27 and trying to work through those details and we'll be issuing guidance when we report Q4 as we normally do.

But thanks for the question.

Andrea Irawan: Yes, I appreciate it. And then maybe just as a follow-up, are there any assumptions that can be made for the fourth quarter just regards to the split between the U.S. and international?

Tom Adams: Andrea, this is Tom. I'll take that question. Yes, as we look at the fourth quarter, as we mentioned, we anticipate reacceleration with high teens growth. As Q3, as we mentioned in the last call, was sort of our trough. We expected a lower quarter in Q3 but we're bouncing out of that. And we expect really to finish the year from a guidance perspective with the core revenue. I won't get into the specifics of the breakdown by business but we do expect the core revenue to be between 17% and 19% to finish up the year in growth.

Operator: Our next question is from Frank Takkinen with Lake Street Capital Market.

Frank Takkinen: And congrats on the quarter. Apologies if these got asked. I'm hopping between a few. Just wanted to think about OUS. Can you maybe just refresh us on the amount of new geographies you're thinking about launching into either between now and year-end or into 2027? And then give us a feel for if those are tender markets versus nontender markets, so we have an understanding on how to think about the ramp-up of those new geographies.

Adam Kalbermatten: Frank, I'll start by saying across the board, we continue to operate both in tender and competitive markets that operate on a nontender basis. We're overall seeing growth across all of those markets at a pretty high level, which is encouraging. When we were talking about some of the challenges that we were working through in Q3, we overcame those and that's behind us now, right? We mentioned earlier, we signed the distribution and sales agreement with a pan-European supplier. So that's going to be a partner we're working with across multiple different geographies in Europe, so different countries there.

We're expecting those new orders and new patient starts to start coming through in the fourth quarter here and carrying into '27. As we continue to look a bit further through this down kind of quarter we had in Q3, we expect that to continue going forward. We signed another distribution and sales agreement with a partner in Africa. So you can see we're also focused on expanding outside of Europe and moving into Africa as well. We're going to see how that one goes. I'd say that was one that really came up opportunistically that we're excited about.

We think there's probably going to be more opportunities for us to do this as we get into '27 but we're continuing to get our products out there, start new patients on our therapies and really look at where are all those opportunities for us to continue going. One other thing to note is, in the past we've largely been focused on, kind of, the prefilled syringe rollouts, creating that fertile ground. We're continuing to look into other areas where we could continue to expand as well, even where prefilled syringes may not be as adopted as they have in some countries.

So I'll kind of leave it at that but a lot of things to really be excited about internationally as we continue to grow in the fourth quarter and into '27.

Frank Takkinen: Got it. Very helpful. And maybe I'll take the initial shot at 2027, not expecting to get full clarity but I think we've thought about kind of U.S. core as in the neighborhood of a 10% to 15% grower. And then we've seen OUS even with some of the slowdown more recently, still in the kind of 20% to 30% range. Do you think that's a fair working assumption as we start to build out 2027 given some of the other newer indications are maybe kind of back half of the year into 2028, just steady as it goes as it relates to your core opportunities?

Adam Kalbermatten: Yes. Great question overall. I mean you're on the right track there with how we see it, right? This is our second kind of consecutive quarter where we're seeing the domestic growth continuing. We largely see that a bit ahead market. So 10% to 15% is kind of how we see it. Sometimes it's lumpy depending on how we pick up competitive accounts or how we pick up new patient starts. Also a little bit dependent on kind of our distributors and how their inventory gets backfilled as they have their own targets that they manage as well. Internationally, that business continues to grow. I think we're going to continue to see above-market growth there as well.

I don't want to give a specific range there now as we're still trying to work through exactly what '27 looks like. But I think it's fair to say we're going to continue to capture those opportunities that are out there and see above-market growth.

Operator: Our next question is from Chase Knickerbocker with Craig-Hallum Capital Group.

Chase Knickerbocker: Congrats on the progress. First, Adam, maybe just wanted to start on trying to understand what you can sort of do to influence initial traction in some of these nontender markets in Europe. Is there any markets in which you're kind of doing markedly better in those nontender markets? I guess just kind of how international performance has kind of delineated by market, again, in those nontender markets? And then second, if you could just update us on where your current European market share is and how you see that progressing over the next couple of years?

Adam Kalbermatten: Great question. So I'll start with -- internationally, we still see ourselves having a pretty large opportunity there. If we were to guess our market share, we're probably in that 20% type range, give or take, that's an approximation. We're going to continue growing that into the future as we're picking up new patient starts in those markets, in those geographies.

Overall, we see ourselves performing well in the overall geographies where there's a focus on kind of the cost of overall care where we can go in and provide an economic solution that perhaps not only saves the health care system some money but also allows patients the convenience of using our products, which are a little bit easier for them to manipulate and self-administer their medications compared to some of the other standards out there, which are different market to market.

We're also very focused on some of the larger markets there where we see the ability to set up arrangements with companies that kind of span the drug wholesaler, the home care provider and the pharmacy, all in kind of one form. That was something that we really wanted to do with this partnership that we just talked about earlier for our pan-European partner. We see it as an opportunity where we could streamline a lot of the things that we're going to be working with them as they're also distributing the drug. They're also providing the home care experience to train the patients and support them.

So I think that's a key theme that we're going to try to look at as we continue to look at all of those individual markets and try to bring new patients with our products serving them.

Chase Knickerbocker: Got it. And then maybe just kind of upon launch, how we should think about Freedom360 being a driver for growth? Do you think of this as kind of allowing for kind of dominant share in patients on high volumes of SCIg and maybe already on the 50s? Or do you think it furthers share kind of across the patient continuum and allows you to kind of accelerate your share gains?

Adam Kalbermatten: Yes. Great question. Overall, the Freedom360, we're hearing a lot of positive feedback and excitement for it. Where we're really seeing the most interest is those patients that have volumes that go across multiple different syringe volumes. It's something where it allows them to kind of swap out different syringes and have a very quick changeover without having to go through reloading from a vial or anything else. So it really follows on the patient experience and trying to make it as seamless and easy for patients to administer their medications. As we're looking at it, it's really about launching into the U.S. where we're seeking our first approval.

That's something that standard 510(k) time lines are 90 to 180 days. Following that, each specialty pharmacy kind of has their own clinical evaluation protocols. The good news is we have a lot of those discussions ongoing with them but we can't formally start those processes with them until after we have that 510(k) approval. So looking at that as we're trying to get this in towards the end of this year, I think we're going to see some things in the back half of next year that will help bring some additional value out there to capture.

Operator: We have reached the end of the question-and-answer session. I would like to turn the floor back over to Adam Kalbermatten for closing comments.

Adam Kalbermatten: Thank you. So I just want to wrap up the quarter here. Very excited with our continued progress, signing new agreements, making continued progress across our domestic and international markets, a number of new activities to be excited across on our pipeline as well. We're looking forward to setting ourselves up for a very strong close in Q4 and looking forward to updating everybody with those results. Thank you, everybody.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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