Q1 2024 electroCore, Inc. Earnings Call

Participants

Daniel Goldberger; Chief Executive Officer, Director; electroCore, Inc.

Brian Posner; Chief Financial Officer; electroCore, Inc.

Jeffrey Cohen; Analyst; Ladenburg Thalmann & Co, Inc

Bruce Jackson; Analyst; The Benchmark Company, LLC

Swayampakula Ramakanth; Analyst; H.C. Wainwright & Co

Walter Schenker; Analyst; MAZ Partners

Nicholas Sherwood; Analyst; Maxim Group LLC

Presentation

Operator

Greetings and welcome to the electroCore First Quarter 2024 earnings conference call. At this time, all participants are on a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Dan Goldberger. Thank you, sir. You may begin.

Daniel Goldberger

Thank you all for participating in today's electroCore Earnings Call. My name is Dan Goldberger. I'm the Chief Executive Officer of electroCore, and I'm also a member of the Board of Directors.
Joining me today is Brian Posner, Chief Financial Officer. Earlier today, electroCore published results for the first quarter ended March 31, 2024 for a copy of the press releases available on the company's website.
Before we begin, I'd like to remind you that management will make statements during the call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward looking statements are forward-looking statements, including, without limitation, any guidance, outlook for future financial expectations or operational activities and performances. Our mix are based upon the Company's current estimates and various assumptions.
These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements for a list of the risks and uncertainties associated with the Company's business, please see the Company's filings with the Securities and Exchange Commission. Electrocore disclaims any intention or obligation, except as required by law to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise.
This conference call contains time-sensitive information that is accurate only as of the live broadcast today, May 8, 2024. Electrocore was founded in 2005 to commercialize the use of our proprietary non-invasive vagus nerve stimulation for medical and general wellness applications. The vagus nerve is the longest cranial nerve in the body, bringing information from the visceral organs to the brain. Stimulating the vagus nerve affects many important autonomic functions in the brain and in the body, including neurotransmitter levels, inflammation levels and metabolism. Surgically implanted vagus nerve stimulators have been available from other companies for more than 40 years for chronic conditions like epilepsy and depression. So a large and growing database confirms the safety and efficacy of the technique. Building on that science, electroCore pioneered noninvasive vagus nerve stimulation and our products are now available by prescription for certain headache conditions and without a prescription for general wellness and human performance. Our pipeline of potential future indications and products continues to grow as clinicians, researchers and wellness advocates conduct investigator-initiated trials to become more familiar with the benefits of noninvasive vagus nerve stimulation.
We are thrilled to report a six consecutive record revenue quarter of $5.4 million for the three months ended March 31, 2024 a 96% increase over the prior year. That's a five year compound annual growth rate from Q1 2019 through Q1 of 2024 of greater than 67%.
Moreover, this growth has been accomplished with 84% gross margin. Brian will discuss the financials in more detail later on. We launched our U.S. prescription headache business in 2017, selling primarily to specialty pharmacies. Since then, our prescription headache business has grown worldwide, including sales that are covered by national health systems such as the VA hospital system in the United States and the National Health Service in the United Kingdom, cash pay sales and to certain managed care systems in the United States. We launched two new nonprescription general wellness product lines last year.
Vega is a direct to consumer health and wellness brand and tax them is our brand for human performance for active duty military personnel. Both new brands exceeded our expectations in their first full year of sales and continue driving excitement about the future. The VA hospital system continues to be our largest revenue channel. You'll recall that our gammaCore prescription therapy is free to patients covered by Veterans Administration benefits, representing about 9 million covered lives across approximately 1,300 health care facilities. Sales in the VA channel grew 127% to $3.9 million in the first quarter of 2024 from $1.7 million during the first quarter of 2023, 151 VA facilities have purchased prescription gammaCore products through March 31, 2024, as compared to 124 through March 31, 2023.
The VA hospital administration, headache centers of excellence or HCOE. estimates. Approximately 600,000 patients are being treated for headache in the VA hospital system. Since we've dispensed approximately 5,300 gammaCore devices to veterans since 2022, we believe that represents less than 1% of the total addressable market within the VA system, we use several contracting mechanisms to support sales to individual VA facilities, including open market access, our SaaS or federal supply services contract and our nonexclusive distribution agreement with level government services level is a service-disabled veteran-owned small business or SDVOSB offering medical and pharmaceutical goods and services to federal health care providers during first quarter of 2024, sales through level accounted for approximately 13% of our VA sales. Vega is currently positioned as a direct-to-consumer general wellness product for stress relaxation, sleep and mental acuity for the first quarter of 2024 through Vega net sales were approximately $385,000 as compared to $147,000 during the first quarter of 2023.
Our revenue return on advertising spend, what the industry calls a media efficiency ratio or MER was approximately $2.49 in the first quarter. In other words, we're spending $1 to generate $2.49 of revenue to Vega return rates, which we continue to monitor closely dropped slightly to approximately 8% of shipments. However, we model return rates at a more conservative 10% to 15%. Last month, we launched two Vega plus our second two Vega product offering to Vega plus a mobile app enabled general wellness product. The first few weeks of sales at trivago plus it again exceeded expectations and we are enthusiastic about the potential our new app enables product provides for future iterations of our technology and engagement with consumers. Since launching trivago plus, we sold approximately 300 units and customers that have conducted approximately 2,400 sessions using the product.
Our media efficiency ratio has expanded to 3.21 since launch, driven by higher pricing and early adoption of two data points, both to Vega products are available exclusively through our e-commerce platform, triple w. dot two Vegas.com, and we are carefully managing our two big advertising spend, return rates and sessions as we offer two unique Vega propositions for health and wellness. We believe that the true Vega business can scale nicely. If we maintain or improve these metrics, text him for human performance is being sold to select Air Force, Special Forces and Army Special Forces units for accelerated training, sustained attention, reduced fatigue and improved mood as defined by the Air Force Research Laboratory or AFRL. No prescription is required and more information is available at triple w. dot pacsun.com.
For the first quarter ended March 31, 2024, we recorded $301,000 of tax in sales as compared to $88,000 during the same period last year. The sales funnel for this product continues to grow as word spreads across active duty military units have the potential human performance benefits provided by tax. In parallel, we have developed a second generation product known internally as text in black in collaboration with AFRL., and we continue to build prototypes for evaluation by our government research partners. Even though we have an impressive sales funnel protection, we have stated before that revenue growth for this product line is likely to be lumpy as active-duty units purchased in bulk for pilot deployments.
And we expect revenues for tax in the second quarter of 2024 to be flat down sequentially due to the timing of such orders. Our prescription physician dispense cash pay channel, including GC. direct and Gconcierge recorded revenue of $424,000 during the first quarter of 2024, down slightly from $436,000 in the first quarter of 2023, we expect at least some of these customers to migrate to the true Vega brand as awareness grows. So we are modeling flat revenue from this category for the time being, there were 2,023 cumulative revenue generating cash pay prescribers as of March 31, 2024, up from 1,218 on March 31, 2023.
Last year, we announced a distribution agreement with Children's Healthcare LLC that we believe will add more than 12.5 million covered lives within a select managed care health system. The business model with turns is similar to how we work with the VA hospital system. Churns handles adjudications billing and collections for the electroCore shipped directly to patients and provides in servicing and patient support. Our field sales team is responsible for building awareness among clinicians within those managed care systems. We continue to work with Journeys on the implementation including the expansion into new geographic territories. And we recorded small recurring revenue from this relationship during the first quarter of 2024. Our field sales function is developing champions within the target managed care system. And we think Germany could be a source of revenue growth in the second half of 2024 and beyond.
Revenue from channels outside the United States increased by 10% in USD to $449,000 in the first quarter of 2024 as compared to $410,000 for the first quarter of 2023. Revenue from channels outside the US increased approximately 14% in local currency for the first quarter of 2024 as compared to the first quarter of 2023.
Most of our OUS revenue continues to be generated in the United Kingdom by prescription gammaCore sales funded by the National Health Service or NHS Now I'd like to turn to our clinical progress. On April 30, 2024, we announced the results of our most recent true Vega plus consumer study conducted earlier this year. For 39 subjects 30 day in home use tests conducted by an independent third party research firm demonstrated that trivago plus helped its users, improved sleep focus, stress energy and mood self assessment evaluations were reported after 730 days.
Most notably 82% of participants felt calmer and mentally healthier 74% of participants felt they slept better of which 72% reported. They received between 30 minutes to two hours more sleep. Each night after the study completed 87% of users said they will continue to use tobacco plus for ongoing OVERALL wellness benefits, two of our investigator-initiated trials, the acute stroke trial, Novus in Leiden, Netherlands and gait and mobility and Parkinson's disease in Newcastle, U.K. have been fully enrolled, and we expect to report top line data later this year. We'll continue to provide updates about our pipeline and other opportunities as they become available.
Now I'd like to turn the call over to Brian for a review of our financials and other guidance items. Brian?

Brian Posner

Thank you, Dan. Net sales for the three months ended March 31, 2024 increased 96% as compared to the three months ended March 31, 2023. The increase of $2.7 million is due to an increase in net sales across major channels, including our prescription gammaCore medical devices sold in the US and the void and revenue from the sales of our non-prescription, general wellness and human performance, Vega and taxed in brands.
Gross profit increased by $2.2 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Gross margin was 84% for both periods. Total operating expenses in the first quarter ended March 31, 2024, were approximately $8.4 million as compared to $8.5 million for the quarter ended March 31, 2023.
Research and development expense in the first quarter of 2024 was $399,000 as compared to $1.8 million in the first quarter of 2023. This decrease was primarily due to a significant reduction in investments associated with Vega plus selling, general and administrative expense of $8 million for the three months ended March 31, 2024, increased by $1.3 million or 19% as compared to $6.7 million for the comparable period in 2023.
This increase was primarily due to our greater variable selling and marketing costs, consistent with our increase in sales. Gaap net loss for the first quarter of 2024 was $3.5 million or $0.53 per share as compared to the $5.9 million net loss or $1.24 per share for the first quarter of 2023. This significant improvement was primarily due to the increase in net sales to $5.4 million for the first quarter of 2024 compared to $2.8 million during the same period of 2023.
Adjusted EBITDA net loss in the first quarter of 2024 was $3.1 million as compared to adjusted EBITDA net loss of $5.1 million in the first quarter of 2023. These improved results are primarily due to the 96% increase in first quarter 2024 net sales over the first quarter of 2023. A reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net loss has been provided in the financial statement tables included in today's press release, cash, cash equivalents and restricted cash at March 31, 2024, sold approximately $8.1 million as compared to approximately $10.6 million as of December 31, 2023.
And now I'll turn the call back over to Dave Thank you, Brian.

Daniel Goldberger

I'm very pleased with the continued momentum in our prescription headache and general wellness businesses. Our operating metrics, especially revenue and gross margin, continue to beat internal expectations and I'm very enthusiastic about the Company's long-term prospects across all brands and product lines for launch of Truvada plus was received favorably by the market. The brand continues to show tons of potential as a direct to consumer general wellness offering. And we will continue selling true Vega products for our e-commerce site. Triple w. dot draeger.com will explore additional channels and product offerings to increase the lifetime value of each customer as we go forward.
Pipeline of interest from different branches of our active duty military continues to develop for our textile products sales of detached and brand continue to be irregular as active duty units purchased in bulk for pilot deployment. Longer term, we also believe that there may be civilian crossover as first responders, lead athletes, transportation workers, traders and E gamers become aware of the human performance benefits published so far, demand for our prescription gammaCore therapy in the VA channel continues to grow based on clinical performance and our increased presence in the field.
We have approximately 35 straight commission sales agents, representing about 90 to 99 reps in the field managed by our small team territory business managers and supported by our customer experience team. This hybrid structure is very scalable as we deploy prescription gammaCore around the country during the first quarter of 2024.
Our sales and marketing expense increased by approximately $1.4 million over the first quarter of 2023, while sales grew by $2.7 million, signaling real leverage opportunities in the P&L. Further out, we are working towards establishing additional indications for prescription gammaCore to treat post-traumatic stress disorder, opioid use disorder and other clinical opportunities. We had $8.1 million of cash at March 31, 2024. We have dramatically reduced our R&D expense and we intend to maintain discipline around fixed operating expenses. We expect that commissions and media spend will scale with revenues and will remain at approximately 30% of related sales on a blended basis. Therefore, we expect that our cash used in operations will continue to decline sequentially as revenue increases.
In summary, I believe the business is demonstrating operating leverage and that we will have a variety of strategic levers to pull to continue growing and or operating the business until we can generate positive cash flow from operations.
As we continue through 2024 and beyond, we will focus on strategic initiatives, including number one, continued growth in our U.S. prescription headache business in both the VA and commercial channels. Number two, growth of our direct to consumer wellness business through sales of both our two Vega 350, true Vega plus products for general wellness stress, mental acuity and sleep, driven by ongoing consumer marketing investments. Three, further development of the tax in brand and launch of tax them black later this year for human performance in the active duty military and potential civilian crossover.
Number four, our revenues through our distribution agreement, which earns health care for the sale of prescription gammaCore within select managed care health system and number five prescription gammaCore label extensions for a variety of indications over time.
At this time, I'll turn the call over to the operator. Operator, please open the line for questions.

Question and Answer Session

Operator

Thank you. At this time we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two, if you'd like to remove your question from the queue. Unless there's significant using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please while we poll for questions. Our first question comes from Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your question.

Jeffrey Cohen

Hi, Jim and Brian, how are you said Jacob, so on I guess, firstly, could you talk about that you talked about the channels and the mix that you anticipated on true background know that you've placed a couple of hundred units thus far. How do you expect that to fall down as far as on one versus the other.

Daniel Goldberger

And that's a great question that today get 350 is offered at a significantly lower price than the true Vega plus and that mix. It's early, right? It's we've only been offering the new product to date, a plus for three, four weeks now on and it's been a surprisingly successful. It's roughly a 50/50 product mix for that three weeks. But I wouldn't are we're not I wouldn't tried to draw any conclusions from the first three weeks.

Jeffrey Cohen

Got it. Okay. And then could you talk about the OpEx and the components.
I know that R&D was down tremendously product which identified just through the plus development concluding, but kind of follow up on R&D and where should we see that for second quarter and beyond full year, then SG&A as well, you said a flattish from that increase from last year ago continued to increase sequentially from that of $8 million in the first quarter.

Daniel Goldberger

So for R&D internally, we're going to we're going to keep a lid on it for this year. We've got lots and lots of great product ideas and label extensions, but but we want to drive to getting to cash positive and profitability. So we're modeling R&D at sort of $8.5 million for I'm sorry, now I misspoke, $2.5 million for the full year, right?
Less than less than half of some of last year. On G&A. We expect it to be somewhat down from last year. We're continuing to look for opportunities to reduce expenses, but our marketing spend, either commissions in our prescription business or advertising spend in our consumer business are going to be scaling. And in our in our prepared remarks, we internally we model our variable sales and marketing expenses about 30% on a blended basis.

Brian Posner

To what Dan said is the G&A part is seasonally high in the first quarter because of audit related costs, the auditors, the lawyers, Sarbanes-Oxley, all the other requirements of a public company.
So the G&A part, which should be down in the remaining quarters.

Daniel Goldberger

So to be clear, I misspoke, I wanted to be clear that we're modeling R&D at roughly $2.5 million this year not that higher number. I don't know why that popped in my head.
I apologize, protocol.

Jeffrey Cohen

And then just lastly, maybe we'll talk about inventories currently and how they've been and how you expect that to play out over this year. I'm sure you're building up some inventory into vehicle plus and perhaps touch them block and reducing inventory on U.S. commercial?

Brian Posner

Yes. So I'll start and bottom line is we've worked down a lot of inventory over the years for the first quarter since I think Dan and I have been with the Company. We don't have the caption long term inventory anymore, which is a function of a revenue rate and forecasted revenue. So we're very optimistic about the future. Dan, I don't know if you want to add anything about the supply chain for the new products or.

Daniel Goldberger

The inventories were still running heavy on inventory as a multiple of daily sales because we're not very good at predicting product mix, for example, like you touched on, Jeff, with how many of this three fifty's are we going to sell versus the pluses. So we're keeping more inventory. I have more days of inventory. But as we gain more understanding of the business and specifically the product mix, I think we're going to be able to steadily reduce inventory. As a result, we'll look at again sales. In other words, things should continue to generate cash from inventory.

Jeffrey Cohen

Got it. Okay.
That does for us.
Thanks for taking our questions.

Daniel Goldberger

Thank you.

Operator

Our next question comes from Bruce Jackson with The Benchmark Company. Please proceed with your question.

Bruce Jackson

Hi, good afternoon and thanks for taking my questions. I am going to start with the VA on how much of your VA revenue comes from the Centers of Excellence, DM headache centers of excellence?

Daniel Goldberger

Yes, that's a good question. And we don't we don't break that out in our public discourse data here out and Dr. David Siegel, who runs the headache centers of excellence. I believe there are 20 of them around the country right now. The newest guidelines, best practices for managing complex headache, I have and gammaCore as first line therapy, but we have not been breaking out by facility the revenue contributions

Bruce Jackson

So Canaccord's, the first high alternative for these for these centers, what do you think needs to arm to happen in order to get greater uptake from VA system?

Daniel Goldberger

So a great question. We think we're still less than 1% penetrated within the VA hospital system on every facility is different and has to be treated as a different customer. But in general we start off in neurology, which is where the complex headaches are treated. And our goal is to work through that facility to women's health to pain management on to Health & Wellness and ultimately to primary care. And so within each facility, we have a lot of opportunities to go deeper on headache is treated in the emergency room and is treated in primary care in greater numbers than by the specialist departments.

Bruce Jackson

Okay. And then on last questions on the on the study that's being conducted in Newcastle, is that for Parkinson's and from the release date for the data seems to have like moved out a bit on that just because of the standard on data analysis and you're working with physician after are very busy or is there some other factor involved there?

Daniel Goldberger

So we really don't know. I wish I knew more.
This is an investigator-initiated trial finance by the UK Ministry of Health and the European Union on the investigators or full-time clinicians. They had the last patient last visit in December, late December of 2023. And we're anxious to see the data and they will share the data with us when they share the data with it. So it's completely out of our control.

Bruce Jackson

Okay, got it.
Thank you very much for taking my questions.

Daniel Goldberger

Absolutely. Thanks for your interest.

Operator

Our next question comes from Ryan Blicker Ramakanth with H.C. Wainwright. Please proceed with your question.

Swayampakula Ramakanth

Thank you. This is RK from H.C. Wainwright. Just a couple of quick questions. So on in the VA channel continues to grow and continues to grow there at a very good clip on this this quarter. As you said, you did close to 130% growth year over year. Does the number of centers grown there in less than 30 centers in a compared to last year or so? I understand some parts of it is probably bad debt within certain centers. But how much you're not assuming that you're not going to add more centers are not not amended, not in big big amounts from here onwards.
And how sustainable is this growth on, you know, on are there places in the current centers where and you're not at all top and you're kind of asking your sales folks to go figure out what these additional centers were, you could commercialize chemicals?

Daniel Goldberger

Yes, in our, you're absolutely on the right track. It's on. It's far more efficient for us to go deeper into a facility where we have existing business for at least two reasons. The first is that the supply chain folks know us and have loaded us into their computer systems. And the second is that once our sales guy has identified a champion within that facility as a reason or she has a reason to be in that facility and can spend additional time calling on other prescribers within neurology, for example, but even more importantly, calling out and other departments within that facility.
So we're coaching our teams to go deeper within the facilities that are already opened up. And the other driver we have is just old-fashioned feet on the street. We are scaling the business with some with what I call [1099] reps, right? These are independent agents. They get paid straight commission. They probably have two or three or four other products in their bag that they are selling into the same into the same customer to the same facility. And as we have success that success breeds success and it's becoming more and more efficient for us to recruit additional new 1099 reps. So we can we can scale the business in that direction as well, just by having additional feet on the street.

Swayampakula Ramakanth

Thanks for that. And then I'm talking about some of this new indications that you're looking at and also the recent data that you released. And Lew on PTSD. Then when you look at the VA centers currently, these are the places where you would see some additional indications are commercializing for additional indications as an opportunity. How much of this how much of the feedback that you get from the VA hospitals, are you kind of new to utilizing those to think about new indications in oh four, four for gammaCore and on just on the PTSD itself, I hope How soon do you think you can get that indication so that you can start commercializing for that as well?

Daniel Goldberger

I yes. So great question. I guess I'm very superstitious about the FDA process. So we're not going to speculate about the timing of getting the additional the label extension. We are aware that there is off-label prescription of gammaCore for PTSD. in the VA hospitals, but also in our cash-pay business in the VA hospital system, we we don't see the diagnosis. So we don't have we don't have a clear view as to what percentage of our prescriptions are for PTSD. or Parkinson's or or the other indications that we're working on. But we are aware that that there is at least some off-label prescribing going on.

Swayampakula Ramakanth

Okay, thanks for that. And on the tax stem business, and I know you said that the second quarter could be flat times I understand that, but I'm going into Q3 and September happens and to be there the fiscal year fiscal year for the government. So do you know, as you enter the next fiscal year, how are you thinking about growth? Can there be additional contracts coming through? Or is this is this a long drawn process on and it's really hard to read in terms of new contracts coming in in the next fiscal year? And I'm just trying to think about the cadence of I know you said it's very hard to predict the cadence of numbers. But at the same time, I'm just trying to get a feel for it. And yes, what is so what are the bases that can be push and pull on that number?

Daniel Goldberger

Yes, we are we're already getting some, I'll call them content contingent purchase orders and the contingency is around the DoD budget process. Things have settled down, but every time there was a continuing resolution in Congress. Our purchasing contracting process came to a full halt. So we do have a funnel of these contingent purchase orders, but I have no visibility as to the timing of those contingent purchase orders. And we're not going to trying to give any any revenue guidance around it until we know for sure that what the delivery and revenue recognition dates are going to be.

Swayampakula Ramakanth

Perfect. Thank you very much. Excellent quarter.

Daniel Goldberger

Yes, thank you.

Operator

As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please while we poll for questions. Our next question comes from Walter Schenker with AMZ. partners. Please proceed with your question.

Walter Schenker

Well, certainly way than I can ever ease of unrelated questions. And there is published data. This is on the military on learning and on improved learning and on improved performance by drone pilots, do you have any color that you can comment on on what type of areas in the military are buying this or is it still a lot for what type of units are just some sense.

Daniel Goldberger

Yes. So there's very little that we're allowed to say publicly, but on several several Army Special Forces, battalion ones have have acquired a significant number of handsets for pilot deployments, a similar number of Air Force, Special Forces units and then on AMC. Air Mobility Command, which are the very large show long-distance transport aircraft and that the Air Force deploys. Those are the three areas that are in pilot deployment at this point.

Walter Schenker

Are kind of totally unrelated questions. Um, you had briefly mentioned at some point, and I do apologize about my wife that one of the benefits, although there are many benefits, we've done some stuff on gastroparesis. Is that fair? So gammaCore may help or does help people with some systemic issues. You had mentioned some people might be using it off label in conjunction with the late rush drugs, which sometimes cause different systemic issues. Is that actually is there any material comments you can make on that or a couple of doctors have tried it or who knows?
It's always good to have something related to weight loss by the way in this morning.

Daniel Goldberger

I can certainly use something. But certainly what you're describing is anecdotal commentary that we've heard from several of our customers, especially in functional medicine, integrative medicine cash-pay practices where they're dealing with complicated patients and they are prescribing a lot of those on our new injectable weight loss drugs. Nothing that that I would describe as scientific certainly no prospective trials, but it's a lot of fun to hear the anecdotes that it's working as a combination therapy in weight loss and gastroparesis.

Walter Schenker

And lastly, now that trivago plus is at least as I would have a cleaner sale. You buy you've got to forever to keep recharging. No, you don't have to reload or anything have you thought about or where are you in possibly marketing through other channels are other people beyond just your limited exposure on the Internet? I mean, theoretically, again, it could be at a drug store. It could be it health nutrition stores that could be a QVC, you name it to lots of different places. So both what are your thoughts about expanding beyond just you in the Internet.

Daniel Goldberger

Yes, I really appreciate the opportunity to expand on it. And look, we think those are all very important. 2025 initiatives is the first new product launch that the Company has done in a long time with a new team of people, we wanted to keep a lid on it, so to speak. As for the first 30, 60 days right now, it's going very smoothly. We haven't had any significant product problems. And so if we run another 30 days, the way the first 30 days have gone, the return rates stay where they are then I think you'll see us looking to more aggressively expand into a variety of other direct to consumer distribution channels, both brick-and-mortar as well as Internet sales.

Walter Schenker

Okay. Thank you, Dan.

Daniel Goldberger

Thank you, Walter. Appreciate your interest.

Operator

Our next question is from Nicholas Sherwood with Maxim Group. Please proceed with your question.

Nicholas Sherwood

Hey, guys, congrats on the quarter. And my first question is do you have any update on your agreement with insurance healthcare?

Daniel Goldberger

So the update and I think what was some of that was in our prepared remarks on most of the work is now on our side to develop prescriber champions. The back office is in place. And by back office, I mean the ability to have a prescription accepted it churns adjudicated. They were fully loaded into their computer system. We have to we our field sales team has to generate the demand, and they're just getting started doing that. And frankly, having a lot of fun doing it. We're getting excellent reception. You don't see it in the revenue yet, but I think we will buy before the end of the year.

Nicholas Sherwood

Often thanks for that color. And then switching gears to to Vega, plus, do you see any sort of I guess it's not necessarily like SaaS revenue, but do you see sort of like recurring revenue coming from the app through in-app purchases or subscriptions?

Daniel Goldberger

Yes, that's in our product development pipeline for 2025 and 2026. It's absolutely the vision to do to take full advantage of the mobile app connectivity, not just for our products, but to interact with other health and wellness apps with Apple Health. And then the data can also become a value proposition. So but not this year.

Nicholas Sherwood

Absolutely. One more. And more of a high-level question. You had partnered with the NFL this last season. Have you received any further interest from them or any other sports leagues or athletes that you can speak about at this time.

Daniel Goldberger

And so a lot of interest, nothing that I can speak about publicly and specifically the NFL research program, they won't even tell us which teams are using it, which is very frustrating.
Is it as a football fan?

Nicholas Sherwood

Yes, maybe a DraftKings doesn't want you to find that either. But on gasoline looking at? And finally, just I think I may have missed this earlier, but what was the VA DoD prescribing facility count? And also the cash page prescriber accounts?

Daniel Goldberger

Yes, Bose, Andy, Brian, we're looking at new centers that we look at for our own numbers.
Yes, and 151 VA facilities from 124? Yes, prescription prescriber is 2023 from 1,200 ATMs.

Nicholas Sherwood

Awesome. Thank you so much, and thank you for answering all my questions. I'll return to the queue. Of course, thanks for your interest.

Operator

We have reached the end of the question and answer session. I'd now like to turn the call back over to Dan Goldberger for closing comments.

Daniel Goldberger

Thank you, operator. We appreciate everybody joining today's call. Our employees continue working tirelessly to deliver products and therapies that improve the health and wellness of patients and customers alike. The team's done a great job of staying nimble, scaling the business, responding to the needs of our customers, launching a new product. And all of that has resulted in the accelerating growth that we just reported. I also want to say thanks to the health care professionals and their patients for their loyal support of gammaCore therapy and to the growing number of consumers who have adopted to Vega products as a tool to improve their general wellness. You all have a great day.

Operator

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.