KORU Medical Systems, Inc. (NASDAQ:KRMD) has reported a strong start to 2024, with record quarterly revenues and continued margin expansion. The company's strategy focuses on driving growth across its core domestic and international businesses while expanding its novel therapies pipeline.
Financials
In the first quarter of 2024, KORU Medical reported net revenues of $8.2 million, a 10.9% increase compared to the same period in 2023, marking the highest quarterly revenue in the company's history. The core business, including domestic and international sales, grew 14% year-over-year, driven by double-digit growth in consumables volumes and strong international performance.
Domestic core revenues increased 4% in Q1 2024 compared to the prior year period, while international core revenues surged 63% year-over-year. The novel therapies business declined 21.3% compared to the prior year period, which had included a significant milestone achievement.
Gross profit for the first quarter of 2024 was $5.1 million, an increase of 23.1% from the same period in 2023. Gross margin expanded to 62.3%, up from 56.1% in the prior year quarter, driven by manufacturing efficiencies and improved margins in the novel therapies business.
Operational Performance
KORU Medical reduced its cash burn to $0.7 million in Q1 2024, a significant improvement from the $5.2 million burn in the same period last year. The company ended the quarter with a cash balance of $10.8 million.
Outlook
KORU Medical is reaffirming its full-year 2024 guidance, expecting revenues of $31.2 million to $32.2 million, representing 9.5-13% growth. Gross margins are anticipated to be in the range of 59-61% for the full year. The company expects to achieve cash flow breakeven in the fourth quarter of 2024 and be cash flow positive for the full year of 2025.
Business Overview
Domestic Core Business
KORU Medical continues to see strong demand in its domestic core business, with double-digit growth in consumables volumes driven by new patient starts and market share gains. The company's 15-milliliter prefilled syringe, launched in the fourth quarter of 2023, is gaining traction as the fastest-growing segment in the subcutaneous immunoglobulin market.
International Core Business
The international core business grew 63% in the first quarter, benefiting from improved Ig supply, increased penetration in approved indications, and geographic expansion. KORU Medical successfully appealed a regulatory review by its European notified body, BSI, and is now proceeding with the routine assessment process. The company remains optimistic about receiving clearance for its FreedomEdge pump and consumables in Japan by the second or third quarter of 2024.
Novel Therapies Pipeline
KORU Medical's novel therapies pipeline continues to expand, with the addition of a new oncology collaboration in the first quarter. This represents the company's first entry into the oncology infusion center market, addressing a large and growing patient population of up to 500,000. KORU Medical now has a total of 16 collaborations, with 7 potential core FDA clearance opportunities within its Vision '26 timeline.
Liquidity
For the full year 2023, KORU Medical reported annual net revenues of $28.5 million, annual net loss of $13.7 million, annual operating cash flow of -$4.9 million, and annual free cash flow of -$5.7 million. The company's balance sheet remains healthy, with $10.8 million in cash as of March 31, 2024.
Conclusion
KORU Medical has delivered a solid start to 2024, demonstrating its ability to drive consistent growth and margin expansion across its core businesses, while making meaningful progress in its novel therapies pipeline. The company's reaffirmed guidance, focus on operational efficiency, and strategic initiatives position it well to achieve its long-term goals and create value for shareholders.