Executive Summary / Key Takeaways

• Nyxoah SA ($NYXH) has achieved a pivotal milestone with FDA PMA approval for its Genio system in August 2025, initiating commercialization in the vast U.S. obstructive sleep apnea (OSA) market.
• The Genio system stands out with its differentiated bilateral neurostimulation technology, offering a battery-free, single-incision implant, full-body MRI compatibility, and proven efficacy across all sleep positions, including supine, as demonstrated by its pivotal DREAM study.
• Financial performance in Q2 2025 showcased robust revenue growth of 73.8% year-over-year to $1.58 million, reflecting early U.S. launch momentum, though operating losses are expanding due to strategic investments in commercial infrastructure.
• The company is executing a focused and scalable U.S. launch strategy, targeting high-volume implanting centers and building strong referral networks, with a long-term goal of achieving profitability at approximately $250 million in U.S. sales.
• Key investment considerations include ongoing patent litigation with competitor Inspire Medical Systems, the potential for GLP-1 drugs to expand the eligible patient population, and the future label expansion for Complete Concentric Collapse (CCC) patients.

Introduction: Setting the Scene for Sleep Apnea Innovation

Obstructive Sleep Apnea (OSA) remains a significant global health challenge, affecting millions and carrying substantial risks for cardiovascular comorbidities and increased mortality. For decades, continuous positive airway pressure (CPAP) therapy has been the standard, yet patient adherence often proves challenging. This unmet need has paved the way for innovative solutions like hypoglossal neurostimulation (HGNS), a rapidly evolving segment within medical technology. Nyxoah SA, a Belgian medical technology company, has emerged as a compelling player in this space with its Genio system, a differentiated HGNS therapy designed to address critical limitations of existing treatments.

Nyxoah's overarching strategy is patient-centric, aiming to simplify sleep for OSA sufferers through innovative technology and a focused market entry. The company's journey, marked by its European CE Mark in 2019 and successful IPOs in 2020 and 2021, culminated in the transformative FDA approval of Genio in August 2025. This approval positions Nyxoah as a direct competitor to established players, particularly Inspire Medical Systems , in the lucrative U.S. market. The broader industry landscape is also influenced by emerging trends, such as the potential impact of GLP-1 medications, which Nyxoah views as an opportunity to expand the overall HGNS patient funnel.

Genio System: A Technological Leap in OSA Treatment

At the heart of Nyxoah's investment thesis is the Genio system's distinctive technology. Unlike traditional pacemaker-based HGNS devices, Genio employs a leadless, battery-free design, requiring only a single incision for implantation under the chin. The neurostimulator is powered and controlled by an external wearable component, eliminating the need for subsequent surgeries to replace implanted batteries. This less invasive approach is a significant differentiator, addressing a key concern for many patients hesitant about permanent implanted hardware. Independent surveys indicate that over 20% of U.S. HGNS candidates decline existing technologies due to concerns about invasiveness and implanted batteries, highlighting Genio's potential to expand the market.

The Genio system is the first and only bilateral HGNS approved in the U.S., a crucial technological advantage. This bilateral stimulation ensures consistent therapy regardless of the patient's sleep position, a benefit validated by the pivotal DREAM study. The DREAM study, published in the Journal of Clinical Sleep Medicine, demonstrated a robust AHI responder rate of 63.5% and an ODI responder rate of 71.3% at 12 months. Critically, the study showed a median AHI reduction of 70.8% overall, with a 66.6% median AHI reduction specifically while sleeping in a supine position, despite published data indicating that OSA severity can double in this position. This consistent efficacy across sleep positions is a unique selling proposition. Furthermore, 82% of DREAM subjects achieved AHI scores below 15, classifying them as "super responders" and potentially returning their mortality and cardiovascular risk to levels comparable to individuals without OSA. The device also boasts high patient satisfaction (90%) and compliance (85.9%), underscoring its patient-centric design.

Nyxoah's commitment to innovation extends to its R&D roadmap. The Genio 2.1 patient software upgrade, already launched internationally, allows for gradual stimulation increases to enhance patient comfort and provides patients with autonomy to adjust settings within physician-defined boundaries, thereby boosting compliance. Looking ahead, the Genio 3.1 generation is planned to feature ceramic encapsulation of the internal component, aiming for an "implant for life" concept, alongside an ergonomic activation chip designed to improve gross margins and eco-friendliness. This continuous technological evolution, coupled with full-body 1.5 and 3 Tesla MRI compatibility, strengthens Nyxoah's competitive moat and long-term growth strategy by offering a superior and adaptable solution.

Strategic U.S. Market Entry and Global Footprint

The FDA PMA approval in August 2025 marked a "historic moment" for Nyxoah, enabling the immediate commercial launch of the Genio system in the U.S. The company has deployed a focused, two-pronged launch strategy. First, it targets high-volume HGNS implanting centers, recognizing that approximately 300 to 350 accounts represent 75% to 80% of the total HGNS revenue in the U.S. Nyxoah commenced its U.S. operations with a commercial organization of over 50 highly talented professionals, including 25 territory managers, and plans to scale this team incrementally each quarter to cover these key accounts within 12 to 18 months. Second, the strategy emphasizes developing strong referral networks with sleep physicians who manage large populations of moderate to severe OSA patients, particularly those who have discontinued CPAP therapy.

Reimbursement is a critical component of market penetration. Nyxoah plans to utilize the established CPT code 64568 for the OSA indication, which is already recognized by commercial and government payers and is the same code used by its primary competitor. While acknowledging that this code may not offer the strongest physician fees, it provides an immediate pathway for reimbursement. The company anticipates securing initial pre-authorization approvals in the near term, with broader commercial payer coverage decisions expected in 2026. Nyxoah's dedicated market access team is actively engaging with payers and the American Academy of Otolaryngology to streamline this process.

Beyond the U.S., Nyxoah continues to expand its global footprint. Germany serves as a commercial proof of concept, where Genio has successfully captured market share, with 9 out of the top 10 implanting accounts using the system and at least 30% market share in 5 of those accounts after 24 months. The company also launched Genio in the United Kingdom in December 2024, benefiting from coverage under the NHS Specialized Service Device program, and expanded into the United Arab Emirates, performing the first HGNS implant in the Middle East in Q4 2024. These international learnings and successes provide valuable insights and validation for the U.S. launch strategy.

Financial Performance and Liquidity: Investing for Future Returns

Nyxoah's financial trajectory reflects a company in a significant growth and investment phase, particularly with the U.S. market entry. In the second quarter of 2025, the company reported revenue of $1.58 million, a substantial 73.8% increase compared to $0.8 million in Q2 2024. The gross margin remained solid at 63.4% in Q2 2025, essentially flat year-over-year. However, this growth comes with increased operational expenditures. The total operating loss for Q2 2025 was €19.9 million, up from €13.3 million in Q2 2024, primarily driven by accelerated commercial investments in the U.S. in preparation for the launch. Similarly, Q1 2025 saw an operating loss of €20.6 million.

For the full year 2024, recognized revenue was €4.5 million, with total revenue reaching €5.1 million when excluding €0.6 million of deferred revenue related to disposable patches, representing an 18% increase over 2023. The company's cash position, including cash, cash equivalents, and financial assets, stood at €43 million at June 30, 2025, down from €63 million at March 31, 2025. To support its ambitious U.S. launch and ongoing operations, Nyxoah has secured a robust liquidity position, including €27.5 million available under a term debt facility, extending its cash runway into mid-2026. Management anticipates a significant increase in operating expenses, with SG&A projected to nearly double in 2026 compared to 2025 levels, as the commercial organization expands. This aggressive investment is strategic, with the company targeting profitability at approximately $250 million in U.S. sales.

Competitive Landscape: A Differentiated Challenger

Nyxoah operates in a competitive landscape, with Inspire Medical Systems as its primary direct competitor in the HGNS market. Nyxoah's Genio system offers several key differentiators against Inspire's technology. Genio's bilateral stimulation contrasts with Inspire's unilateral approach, providing consistent efficacy regardless of sleep position. Furthermore, Genio is not contraindicated for patients with Complete Concentric Collapse (CCC), a patient population currently excluded by Inspire's therapy. Nyxoah's AHI range for Genio (15 to 65) is also broader than Inspire's (20 to 50), potentially expanding the eligible patient pool. The battery-free, single-incision design of Genio offers a less invasive alternative to Inspire's implanted pacemaker-like device, appealing to patients seeking reduced invasiveness and avoiding future battery replacement surgeries.

While Nyxoah aims to align pricing with Inspire by using the same CPT code 64568, its commercial strategy as a "smart follower" leverages the market education already performed by its competitor. The competitive dynamics recently intensified, with Nyxoah filing a patent infringement lawsuit against Inspire Medical Systems on September 15, 2025, alleging infringement of three U.S. patents by Inspire IV and Inspire V devices. This legal action underscores Nyxoah's commitment to defending its intellectual property. Concurrently, Inspire has faced its own challenges, including a securities fraud investigation and a downward revision of its 2025 revenue forecast from $940 million to a range of $900 million to $910 million, attributed to a sales slowdown during the transition to its new Inspire V system. Inspire reported Q2 2025 revenue of $217.1 million, an 11% increase from Q2 2024.

Indirect competitors include ResMed (RMD) and Philips (PHG), which offer broader sleep care solutions, primarily CPAP devices. ResMed, a leader in sleep and respiratory care, reported Q4 FY2025 earnings with an EPS of $2.55, exceeding forecasts, and revenue of $1.3 billion, slightly below expectations. Philips, a health technology giant, continues to focus on connected health ecosystems and recently renewed a strategic partnership with Masimo (MASI) for patient monitoring technologies. Nyxoah's competitive advantage lies in its specialized, innovative neurostimulation therapy, which directly addresses patient discomfort with traditional CPAP and offers a differentiated alternative in the evolving OSA treatment paradigm.

Risks and Future Outlook: A High-Reward Trajectory

Investing in Nyxoah carries inherent risks, particularly given its stage of growth and significant investment in market penetration. The ongoing patent litigation with Inspire Medical Systems (INSP) introduces legal and financial uncertainties, though Nyxoah has stated it will vigorously defend its intellectual property and that the lawsuit will not impact its U.S. commercial launch. The company's substantial operating losses are expected to continue as it scales its U.S. commercial infrastructure, requiring careful management of its cash runway. Intense competition in the HGNS market, particularly from an established player like Inspire, also poses a challenge to market share gains.

Despite these risks, Nyxoah's future outlook is characterized by significant opportunities. The company views the emergence of GLP-1 medications as a positive catalyst, believing they will expand the eligible HGNS patient population. By helping patients with high BMIs (e.g., 37 and above) reduce their weight to a level where Genio's efficacy is proven (below 32), GLP-1s could make a previously ineligible cohort candidates for Genio therapy. Furthermore, the strategic halt of the ACCCESS study is expected to yield data in Q2 2026, potentially leading to a PMA supplement submission and subsequent U.S. label expansion for CCC patients by late Q4 2026 or early Q1 2027. This would further broaden Genio's addressable market. Analyst sentiment reflects this optimistic outlook, with a consensus "Buy" or "Strong Buy" rating and average price targets ranging from $12.74 to $16.50, suggesting substantial potential upside from current levels.

Conclusion

Nyxoah SA stands at a pivotal juncture, having successfully secured FDA approval for its Genio system and commenced its U.S. commercial launch. The company's core investment thesis is firmly rooted in its technologically differentiated bilateral neurostimulation therapy, which offers a patient-centric, less invasive, and highly effective solution for moderate to severe OSA. This innovation, backed by strong clinical data demonstrating efficacy across all sleep positions and a high rate of "super responders," positions Genio as a compelling alternative in a market ripe for disruption.

While the path to profitability involves significant upfront investments in commercial infrastructure and navigating competitive challenges, including ongoing patent litigation, Nyxoah's strategic execution, robust liquidity, and the potential for market expansion through GLP-1s and future label indications present a high-reward trajectory. The remainder of 2025 is set to be a transformative period as Nyxoah establishes its presence in the U.S. market, aiming to fundamentally improve the quality of life for OSA patients and deliver long-term value to shareholders.