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Item 1. Business

2022-03-10 compared with 2021-03-11 · 120 added, 302 removed, 337 unchanged (56% of the section changed)

Business Overview

We are a commercial stage medical device company with a proprietary non-invasive vagus nerve stimulation, or nVNS, therapy.

nVNS is a platform bioelectronic medical therapy that modulates neurotransmitters through its effects on both the peripheral and central nervous systems.

Our gammaCore treatment is the first FDA-cleared, prescription-only nVNS therapy.

Historically, vagus nerve stimulation, or VNS, required an invasive surgical procedure to permanently implant a costly medical device.

This limitation has generally prevented VNS from being used, other than by the most severe patients.

Our lead product, gammaCore Sapphire, is a proprietary, simple-to-use handheld delivery system intended for multi-year use.

Currently, it is largely prescribed on a timed basis in 31-day or 93-day increments, or with a predefined number of stimulations, in a Durable Medical Equipment, or DME, configuration and may be both rechargeable and reloadable.

gammaCore permits patients to self-administer doses of nVNS on an as-needed basis for acute treatment, and at regular intervals for prevention therapy.

Non-invasive delivery of VNS by our gammaCore Sapphire is enabled by a proprietary high-frequency burst waveform that safely and comfortably passes through the skin and stimulates therapeutically relevant fibers in the vagus nerve.

We are a commercial stage medical device company with a proprietary non-invasive vagus nerve stimulation, or nVNS, therapy, called gammaCore.

nVNS is a platform bioelectronic medical therapy that modulates neurotransmitters and immune function through its effects on both the peripheral and central nervous systems.

We are initially focused on utilizing gammaCore in the management and treatment of primary headache conditions, but we believe our nVNS therapy may be used in the future to effectively treat other medical conditions with studies ongoing in stroke, post-traumatic stress disorder, and opioid withdrawal among others.

gammaCore is the first prescription-only nVNS therapy cleared by the Food and Drug Administration ("FDA").

Historically, vagus nerve stimulation, or VNS, required an invasive surgical procedure to implant a costly medical device which presents an infection risk.

These limitations have generally limited VNS from being used by anyone other than the most severe patients.

Our lead product, gammaCore Sapphire, is a simple-to-use handheld device intended for regular or intermittent use over many years.

Our gammaCore Sapphire delivers non-invasive VNS through a proprietary high-frequency burst waveform that safely and comfortably passes through the skin and stimulates therapeutically relevant fibers in the vagus nerve.

Multiple published studies suggest that VNS works through a number of mechanistic pathways including the modulation of neurotransmitters and has a measurable effect similar to several classes of commonly prescribed medications.

Over the past several years, we have sought regulatory approvals to market our novel product in the United States.

As we have obtained additional regulatory approvals, we have implemented commercial strategies to target an expanded base of potential patients.

Regulatory Process

We are initially focused on neurology and our therapy, gammaCore, is cleared by the FDA for use by adults for the following four neurological indications:

the acute treatment of pain associated with each of migraine headache and episodic cluster headache, or eCH, the preventive treatment of migraine headache and adjunctive use for the preventive treatment of cluster headache, or CH.

In February 2021, gammaCore was cleared by the FDA for the acute and preventive treatment of migraine in adolescents between 12 and 17 years of age.

In July 2020, the FDA granted us an EUA authorizing the use of the Company's gammaCore Sapphire CV nVNS therapy at home or in a healthcare setting to acutely treat adult patients with known or suspected COVID-19 who are experiencing exacerbation of asthma-related dyspnea and reduced airflow, and for whom approved drug therapies are not tolerated or provided insufficient symptom relief.

Since our inception, we have sought regulatory approvals to market our novel product in the United States and abroad.

As we have obtained initial and additional regulatory approvals, we have implemented commercial strategies to target an expanding base of potential patients.

Regulatory Clearances

gammaCore, is cleared by the FDA for use in the following indications:

the acute treatment of pain associated with each of migraine headache and episodic cluster headache in adults, or eCH;

the preventive treatment of migraine headache and adjunctive use for the preventive treatment of cluster headache in adults, or CH;

the acute and preventive treatment of migraine in adolescents between 12 and 17 years of age;

the treatment of Paroxysmal Hemicrania, or PH, and Hemicrania Continua, or HC, in adults.

We are also considering several additional indications for our nVNS technology which are being studied in a number of investigator-initiated trials, or IITs.

These indications include secondary headache, COVID-19 respiratory symptoms, stroke, post-traumatic headache, mild traumatic brain injury, post-traumatic stress disorder, opioid use disorders and post-operative ileus.

In April 2017, the FDA cleared gammaCore for the acute treatment of pain associated with eCH, and in November 2018, the FDA cleared gammaCore for adjunctive use for the prevention of CH.

CH is an extremely painful form of headache affecting approximately 400,000 people in the United States.

Prior to gammaCore, injectable sumatriptan was the only FDA-approved, commercially available acute CH treatment, and there was no FDA-approved therapy for the prevention of CH.

The FDA cleared our gammaCore therapy for the acute treatment of pain associated with migraine in adults in January 2018, and for preventive treatment of migraine headache in adult patients in March 2020.

Migraine is a debilitating primary headache condition that is estimated to affect approximately 12% of the global adult population and disproportionately affects women of child-bearing years.

Migraine is estimated to affect 39 million patients in the United States and indirect annual costs associated with migraine in the United States are estimated at $19.3 billion.

The FDA clearances of our gammaCore therapy to treat headache were facilitated by the FDA’s creation of a new regulatory category:

These indications include post-traumatic headache, stroke, mild traumatic brain injury, post-traumatic stress disorder, sub-arachnoid hemorrhage, opioid use disorders, symptoms of Parkinson's disease, post-operative ileus and gastroparesis.

The FDA clearances of our gammaCore therapy to treat headache were faci litated by the FDA’s creation of a new regulatory category:

External Vagus Nerve Stimulator for Headache (21 CFR 882-5892).

Based on this category’s description, we anticipate that some additional headache label expansions may be possible through the pathway under Section 510(k) of the Federal Drug and Cosmetic Act.

In January 2021, the Centers for Medicare and Medicaid Services, or CMS, published a Level II Healthcare Common Procedure Coding System, or HCPCS , code K1020 "non-invasive vagus nerve stimulator" that was established as part of CMS' second biannual 2020 Coding Cycle for non-drug and non-biological items and services.

The coding decision covers the Company’s gammaCore Sapphire D and is in response to the application submitted by the Company during CMS’ second biannual 2020 Coding Cycle for non-drug and non-biological items and services, and will go into effect on April 1, 2021.

We believe the unique HCPSC code is an important step in potentially providing patients with easier access to gammaCore therapy.

UK and European Regulatory Process

In September 2011, we received a CE Certificate of Conformity for gammaCore for the treatment of primary headache from the British Standards Institution, a European Union notified body.

This CE Certificate of Conformity allowed us to affix the CE Mark on gammaCore and to commercialize it in the European Economic Area and other countries that recognize the European CE Mark.

In addition to the CE Certificate of Conformity for primary headache, between September 2011 and October 2013 we received CE Certificates of Conformity on gammaCore covering four other specific indications for use, including reactive airway disease and gastric motility disorders.

In 2019, the National Institute for Health and Care Excellence, or NICE published a Medical Technology Guidance document recommending the use of gammaCore for CH within National Health Service, or NHS, England.

On January 2021, NHS Scotland adopted the NICE recommendation and recommended gammaCore for use in treatment of CHI in NHS Scotland.

NHS England awarded gammaCore a place on the Innovation Technology Payment Program, or ITPP, for treatment of patients with refractory cluster headache, a reimbursement pathway that opened in April 2019.

In October 2020, we announced that the ITPP was extended through March 2021.

Effective April 1, 2021, gammaCore Sapphire will be included in a new long-term reimbursement policy, the MedTech Funding Mandate Policy 2021/22, or MTFM.

In January 2021, NHS Scotland adopted the NICE recommendation and recommended gammaCore for use in treatment of CH in NHS Scotland.

In January 2022, the FDA granted gammaCore Sapphire ‘Breakthrough Device designation for the treatment of post-traumatic stress disorder or PTSD’.

PTSD is a highly prevalent and disabling disorder with limited approved treatment options.

UK and European Regulatory Clearances

We received a CE Certificate of Conformity for gammaCore for the treatment of primary headache from the British Standards Institution, a European Union notified body.

This CE Certificate of Conformity allowed us to affix the CE Mark on gammaCore and to commercialize it in the European Economic Area and other countries that recognize the CE Mark.

In addition, we received CE Certificates of Conformity on gammaCore covering four other indications for use, including reactive airway disease and gastric motility disorders.

In 2019, the National Institute for Health and Care Excellence, or NICE, published a Medical Technology Guidance document recommending the use of gammaCore for CH within National Health Service, or NHS, of England and Wales.

I n January 2021, NHS Scotland adopted the NICE recommendation and recommended gammaCore for use in treatment of CH in Scotland.

NHS England awarded gammaCore a place on the Innovation Technology Payment, or ITP, program for treatment of patients with refractory (severe) cluster headache, a reimbursement pathway that opened in April 2019.

In October 2020, we announced that the ITP was extended through March 2021.

Effective April 1, 2021, gammaCore Sapphire was included in a new long-term reimbursement policy, the MedTech Funding Mandate Policy 2021/22, or MTFM.

Background of VNS

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Modulating the firing rate of the fibers within the vagus nerve can trigger the release of neurotransmitters, both in the central and peripheral nervous systems, affecting how the brain and peripheral organs function.

In the central nervous system, VNS activates areas of the brainstem that release important biochemicals including norepinephrine, acetylcholine, serotonin, and gamma-Aminobutyric acid.

In the central nervous system, VNS activates areas of the brainstem that release important biochemicals including norepinephrine, cyclo-oxygenase, calcitonin gene-related peptide, acetylcholine, glutamate, serotonin, and gamma-Aminobutyric acid.

The release of these substances, which have been the targets of numerous pharmaceutical agents, have been identified as therapeutic for the treatment of multiple conditions, including epilepsy, depression and headache.

Over the past three decades, the body of scientific evidence in support of VNS in multiple medical conditions has been growing.

Prior to gammaCore , however, the cost and requirement for invasive surgery meant that VNS was only appropriate for the most refractory patients.

With the FDA clearances of gammaCore , this safe and effective therapy can now be noninvasively self-administered, at a fraction of the cost of a surgical implant, exponentially expanding its accessibility for the potential treatment of multiple medical conditions.

Over the past three decades, the body of scientific evidence in support of VNS in multiple medical conditions has grown.

Prior to gammaCore the cost and requirement for invasive surgery meant that VNS was only appropriate for the most severe patients.

With the FDA clearances and additional global regulatory approvals of gammaCore , this safe and effective therapy can now be noninvasively self-administered, at a fraction of the cost of a surgical implant, dramatically expanding its accessibility for the potential treatment of multiple medical conditions.

Our Therapy Delivery Platform

Our gammaCore therapy is prescription-only, and patients self-administer discrete doses using a handheld unit.

Our flagship model;

gammaCore Sapphire is a portable, reusable, rechargeable and reloadable option for patients, with the prescription being written by a health care provider and dispensed from a specialty pharmacy, through the patient’s healthcare system, or our facility in Rockaway, NJ.

After the initial prescription is filled, access to therapy can be refilled for certain of our gammaCore Sapphire products periodically through the input of a unique, prescription-only authorization code.

This code is currently delivered in the form of an RFID card (similar to a credit card or hotel keycard), dispensed by mail from a specialty pharmacy distribution partner, or by the Company directly to certain patients.

In the future, this refill may be dispensed directly using a Bluetooth-aware smartphone application.

gammaCore is also available in a DME configuration shipped directly from our facility.

Currently, gammaCore is largely prescribed on a timed basis in 31-day or 93-day increments, with a predefined number of stimulations, or in the DME configuration, and may be both rechargable and reloadable.

gammaCore permits patients to self-administer doses of nVNS on an as-needed basis for acute treatment, and at regular intervals for prevention therapy.

Our prior iteration of the gammaCore delivery device was not reloadable or rechargeable and was replaced by our introduction of the improved gammaCore Sapphire during the third quarter of 2018.

We continue to offer the non-reloadable, disposable version of our gammaCore products in certain markets and to deploy it for use in clinical studies where a rechargeable version is not necessary.

Our gammaCore therapy is prescription-only, with patients self-administering discrete doses using a handheld unit.

Our flagship model, gammaCore Sapphire is a portable, reusable, rechargeable and reloadable option for patients, with the prescription being written by a health care provider and dispensed from a specialty pharmacy, through the patient’s healthcare system, or fulfilled from our facility in Rockaway, NJ.

After the initial prescription is filled, access to additional therapy can be refilled for certain of our gammaCore Sapphire products periodically through the input of a prescription-only authorization code.

This code is currently delivered in the form of a radio-frequency identification, or RFID, card (similar to a credit card or hotel keycard), dispensed by mail from a specialty pharmacy distribution partner, or fulfilled by the Company directly to certain patients.

The Company also provides a validated cleaning and disinfection protocol allowing Sapphire devices to be used on multiple patients in a healthcare center or to recover and redeploy Sapphire devices in the field.

Competitive Strengths

We believe the competitive strengths of our company and our novel and proprietary self-administered nVNS therapy include:

We believe the competitive strengths of our company and nVNS therapy include:

Innovative bioelectronic medicine approach.

Our gammaCore therapy uses a proprietary electrical signal to safely deliver VNS, which can cause targeted changes in neurotransmitter pharmacology, without systemic exposure to exogenous chemicals, in a manner that has been shown to have minimal side effects through clinical studies encompassing thousands of patients.

Our gammaCore therapy uses a proprietary electrical signal to safely deliver non-invasive VNS, which can cause targeted changes in neurotransmitter expression in a manner that has been shown to have minimal side effects through clinical studies and commercial experience encompassing tens of thousands of patients.

Our non-invasive therapy unlocks the long-held potential of VNS.

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This eliminates the need for costly, invasive surgery that requires the implantation of an expensive medical device.

VNS therapy is no longer reserved for the most refractory patients.

We have generated significant scientific data supporting the safety and efficacy of gammaCore which has led to FDA clearances for use in multiple indications.

We believe our scientific data supporting the safety and efficacy of our therapy provides broader confidence in gammaCore and has resulted in its clearance in more indications than other neuromodulation therapies.

gammaCore is the only therapy the FDA has cleared for prevention and treatment of migraine and cluster headache in adults, as well as for prevention and treatment of migraine in adolescents.

VNS therapy is no longer reserved for the most severe patients.

We have generated significant scientific data supporting the safety and efficacy of gammaCore which has led to FDA clearances and additional global regulatory approvals for use in multiple indications.

We believe our scientific data supporting the safety and efficacy of our therapy provides broader confidence in gammaCore.

Commercial arrangements in the United States.

We expect that a substantial portion of our 2021 sales of gammaCore will be made pursuant to our qualifying contract under the Federal Supply Schedule, or FSS, which was secured by us in December 2018, and open market sales to individual facilities within government channels.

The FSS makes gammaCore available to patients managed within the Department of Veteran's Affairs or VA, Department of Defense or DoD, Bureau of Prisons, Indian Health Services and Public Health Services.

We expect that a majority of our 2022 sales of gammaCore will be made pursuant to our qualifying contract under the Federal Supply Schedule, or FSS, which was secured by us in December 2018, as well as open market sales to individual facilities within government channels.

The FSS makes gammaCore available to patients managed within FSS eligible entities such as the Department of Veteran's Affairs or VA, Department of Defense or DoD, Bureau of Prisons, Indian Health Services and Public Health Services.

Commercial arrangements outside the United States.

Our success in gaining regulatory approval and reimbursement in the UK is significant both in its potential for commercial penetration, but also its precedential value.

NHS England awarded gammaCore a place on the ITPP for treatment of patients with refractory cluster headache, a reimbursement pathway that opened in April 2019.

In October 2020, we announced that the ITPP was extended through March 2021.

Effective April 1, 2021, gammaCore Sapphire will be included in a new long-term reimbursement policy.

The new policy, the MTFM, supports the use of NICE-approved, clinically effective and cost-saving medical devices, diagnostics and digital technologies that will improve patient outcomes.

In December 2019, NICE had published a Medical Technology Guidance document recommending the use of gammaCore for CH within the NHS.

In January 2021, gammaCore was recommended for use in treatment of CH in NHS Scotland.

This approval was an adoption of the NICE recommendation.

Recently, we entered into distribution agreements in Eastern Europe, Canada and Australia.

Unique Level II Healthcare Common Procedure Coding System code for non-invasive vagus nerve simulator.

On January 15, 2021, CMS published its most recent Level II HCPCS decisions establishing a unique code for “non invasive vagus nerve stimulator”.

All final coding decisions for the second biannual 2020 Coding Cycle for non-drug and non-biological items and services will go into effect on April 1, 2021.

We have initiated discussions with Medicare Administrative Contractors and commercial insurance providers to establish reimbursement rates for gammaCore Sapphire D.

We believe our success in gaining regulatory approval and reimbursement in the UK is significant both in its potential for commercial penetration, but also its precedential value in potentially getting reimbursement in other geographic areas.

Effective April 1, 2021, gammaCore Sapphire was included in a new long-term reimbursement policy in the UK.

The UK MedTech Funding Mandate, or MTFM policy, supports the use of NICE-approved, clinically effective and cost-saving medical devices, diagnostics and digital technologies that will improve patient outcomes.

In December 2019, NICE published a Medical Technology Guidance document recommending the use of gammaCore for CH within the NHS of England and Wales.

Consequently, in January 2021, gammaCore was recommended for use in treatment of CH in NHS Scotland.

Recently, we have also announced agreements with distributors to make gammaCore Sapphire available in several countries beyond the U.S.

and United Kingdom.

Broad intellectual property protection.

Among our key issued patents, we have coverage on using our high-frequency burst electrical signal for treating certain medical conditions until 2031, the low-pass filtering of that signal to ensure safe and comfortable transmission through the skin until 2031, the non-invasive treatment of headache conditions until 2029, and the remote network-enabled communication for the delivery of neuromodulation therapy for a broad range of medical conditions until 2033.

We hold more than 195 patents and patent applications, including 112 issued U.S.

patents, 42 U.S.

patent applications, and 45 international patents and applications that, we believe, provide broad protection of key technologies, methods and applications of our products.

Highly experienced management team .

Our management team includes a diverse group of executives with significant experience in senior positions in the medical device and pharmaceutical industries.

Our management team includes a diverse group of executives with significant experience in senior positions in the medical device industry.

Our team’s experience in clinical development, regulatory affairs, reimbursement sales and marketing, and capital markets allow us to pursue our strategy and growth plans.

Our goal is to be a leader in non-invasive neuromodulation medicine by using our proprietary nVNS platform therapy to deliver better patient outcomes.

In 2019 and 2020, we implemented significant adjustments to the deployment of personnel and resources across our organization.

We reduced the size of our organization, including our field sales force and clinical operations in order to reduce expenses.

We are currently focusing our resources on channels that are currently generating revenue or may potentially generate revenue in the near-term, including the following:

Our qualifying contract on the FSS, which we secured in December 2019, and open market sales to individual VA facilities.

According to a presentation at the 2020 annual Scientific Meeting of the American Headache Society, approximately 400,000 patients saw a VA healthcare provider for headache in 2018 and VA's National Director of the Headache Center of Excellence program has stated that the VA has approximately 29,000 cluster headache sufferers.

We have generally focused most of our sales efforts in two channels, the U.S.

Department of Veterans Affairs and U.S.

Department of Defense, and the United Kingdom.

However, we believe there may be significant opportunities beyond these two markets.

Therefore, in 2022, we plan to invest in expanded commercial adoption of gammaCore with online stores and cash pay, physician dispense, telehealth, and direct-to-consumer approaches.

Key aspects of this strategy include;

Exploiting our qualifying contract on the FSS, which we secured in December 2018, and open market sales to individual VA facilities.

Veteran's Administration Headache Center of Excellence Annual Report, approximately 410,000 patients saw a VA healthcare provider for headache in 2020 and VA's National Director of the Headache Center of Excellence program has stated that the VA has approximately 29,000 cluster headache sufferers.

The VA and DoD have become our primary source of U.S.

revenue and, accordingly, we have redeployed substantially all of our sales function to generating sales from this channel.

In the United Kingdom, where NHS England has provided a reimbursement pathway since April 2019 by awarding gammaCore a place on the ITPP, for use in patients with refractory cluster headache.

In October 2020, we announced that the ITPP was extended through March 2021.

Effective April 1, 2021 gammaCore Sapphire will be included in a new long-term reimbursement policy, the MTFM, which supports commissioners and providers in the use of selected NICE-approved, clinically effective and cost-saving medical devices, diagnostics and digital technologies that will improve patient outcomes.

In December 2019, NICE published a Medical Technology Guidance document recommending the use of gammaCore for CH within the NHS, and in January 2021, NHS Scotland adopted the NICE recommendation and recommended gammaCore for use in treatment of CH in NHS Scotland.

In the United States we continue to make measured investments in our commercial channel, most notably through large insurers and pharmacy benefit managers for the purpose of expanding the population of gammaCore covered lives.

To further support our commercial efforts, we are working towards leveraging the unique HCPCS code K1020 "non-invasive vagus nerve stimulator" that was established as part of CMS' second biannual 2020 Coding Cycle for non-drug and non-biological items and services, and which we believe could streamline reimbursement for both government and commercial payers.

We are also exploring certain cash pay business models for headache patients.

Known or suspected COVID-19 patients with asthma exacerbations under an FDA Emergency Use Authorization.

The therapy is available by prescription through the VA or DoD , from Premier Specialty Pharmacy, and telehealth consults are available at www.getgammacore.com.

While the gammaCore Sapphire CV has not generated significant revenue, it leverages one of the earliest areas of research for us - reactive airway disease, or RAD.

Distribution partners to commercialize our gammaCore therapy in territories outside of the United States and United Kingdom.

In December 2020, electroCore announced that it entered into an exclusive agreement with Pro Medical Baltic, or PMB, whereby PMB will be the exclusive distributor of gammaCore to patients suffering from primary headache disorders in Eastern Europe, including Lithuania, Latvia, Belarus, Kazakhstan and Ukraine.

PMB is a leading distributor of medical technology in the region and has extensive experience in neuromodulation products.

In January 2021, we announced that we had entered into an agreement with RSK Medical Inc, whereby RSK Medical will serve as the exclusive distributor of the gammaCore Sapphire nVNS in Canada, supplying therapy to patients suffering with primary headache disorders.

In March 2021, we announced that we had entered into an exclusive agreement with Medistar2 PTY Limited, or Medistar, whereby Medistar will be the exclusive distributor of gammaCore to patients suffering from primary headache disorders in Australia.

The Company continues to evaluate opportunities for international distribution of nVNS technology and expects to announce additional international distribution agreements in the future.

Recent Clinical Evidence in Support of New Indications

In July 2020, Cephalalgia , the official journal of the International Headache Society (IHS) published “Non-invasive vagus nerve stimulation for primary headache:

a clinical update.”

The paper is a narrative review of recent scientific and clinical research into non-invasive vagus nerve stimulation (nVNS) for headache, including findings from mechanistic studies and their possible relationships to the clinical effects of nVNS.

The review concludes that scientific and clinical studies support the emergence of nVNS as an effective, safe, well-tolerated, and practical treatment for primary headache disorders and supports the consideration of nVNS as:

(1) a first-line treatment for both the acute and preventive treatment of cluster headache;

(2) an effective option for acute treatment of migraine;

and (3) a highly relevant, practical option for migraine preventive therapy.

The paper is available via open access at:

https://journals.sagepub.com/doi/full/10.1177/0333102420941864

In December 2020, the company reported positive topline results from the PREMIUM II study assessing gammaCore for the prevention of migraine.

We are also considering the potential for several additional indications for our nVNS technology.

These additional indications are being studied in a number of investigator-initiated trails.

These indications include the potential utility of nVNS in certain COVID-19 symptoms, secondary headache, stroke, mild traumatic brain injury, or mTBI , Post-Traumatic Stress Disorder, or PTSD, post-operative ileus, and opioid use disorders.

Several recent developments in potential additional indications include:

In August 2020, a paper entitled “Non-invasive vagal nerve stimulation decreases brain activity during trauma scripts” was published in the journal Brain Stimulation.

The paper reported on a double-blind sham-controlled study of nineteen participants who had experienced trauma but did not have the diagnosis of PTSD and highlighted the ability of nVNS to decrease the fear associated with emotional stress.

In September 2020, the VA agreed to sponsor a quadruple blind, randomized, sham-controlled clinical trial of nVNS in mTBI and PTSD.

As outlined in the study protocol, the conflicts in Afghanistan and Iraq have resulted in a large number of veterans with both mTBI and PTSD, making these conditions important concerns of the VA.

In December 2020, gammaCore was selected for evaluation in a randomized controlled study for the treatment of opioid use disorders run at Emory University in collaboration with the Georgia Institute of Technology and the City University of New York and supported by the National Institute on Drug Abuse.

The use of nVNS during the opioid withdrawal period represents a potential new innovation versus current treatments that rely on medication and counseling, widely acknowledged to have limitations during the withdrawal period.

In February 2021, we announced the achievement of full enrollment for the TR-VENUS study of nVNS for the acute treatment of stroke.

TR-VENUS is a double blind, randomized, sham-controlled, multi-center clinical trial, conducted at nine major medical centers across Turkey, supported by the Turkish Neurological Society and partially funded through an unrestricted research grant from electroCore .

In February 2021, a peer reviewed paper, entitled “Non-invasive vagus nerve stimulation to reduce ileus after major colorectal surgery:

Early development study” was published in the journal Colorectal Disease.

The paper reports on the results of a parallel group, randomized controlled trial conducted at St.

James’s University Hospital in Leeds, England.

The study was funded by the Bowel Research UK supported by the National Institute for Health Research Surgical MedTech Co-operative.

The study demonstrated the safety and practicality of treating ileus with nVNS , which could represent an important new way to improve outcomes for patients undergoing major colorectal surgery.

In February 2021, the completion of patient enrollment in SAVIOR-1, a prospective, randomized, controlled study evaluating vagus nerve stimulation in patients who exhibit respiratory symptoms due to COVID-19 was achieved.

This study is being conducted at the Hospital Clínico Universitario de Valencia, Spain.

The SAVIOR-1 study enrolled 110 patients over 18 years of age with respiratory failure secondary to SARS- CoV -2 infection.

The study is designed to evaluate the incidence of relevant clinical events in patients with active SARS- CoV -2 infection.

Study subjects were randomized to either the study group receiving gammaCore Sapphire nVNS together with conventional treatment, or the control group receiving conventional treatment alone.

The study is also evaluating the safety of gammaCore Sapphire in patients hospitalized for COVID-19, in addition to the blood levels of proinflammatory cytokines in these patients.

Preliminary results will be reported once available and full results will be published in a peer-reviewed scientific journal later this year.

revenue and, accordingly, we have redeployed most of our sales function to generating sales from this channel.

Expanding our direct-to-consumer promotion, including the opening of telemedicine portal and online stores in the United States and United Kingdom to reach patients and their health care advisors for the prevention and treatment of primary headache disorders.

Expanding call points from the traditional neurology headache specialists to include the wide range of medical providers who manage patients' headache conditions.

Those specialties include prescribers in primary care, women's health, pain management, functional and integrative medicine, as well as chiropractors, and PharmDs (Doctors of Pharmacy).

In the United Kingdom, continued expansion under the MTFM program for cluster headache and cash pay product offerings via the online store.

Working towards leveraging the unique HCPCS code K1020 "non-invasive vagus nerve stimulator" that was established as part of CMS' second biannual 2020 Coding Cycle for non-drug and non-biological items and services, and which we believe could streamline reimbursement for both government and commercial payers.

Utilizing selected distribution partners to commercialize our gammaCore therapy in territories outside of the United States and United Kingdom.

Developing future iterations of our therapy delivery platform, including the use of our intellectual property around the delivery of smartphone-integrated and smartphone-connected non-invasive therapies.

The clearance by FDA on April 14, 2017 of our de novo submission resulted in a new Class II regulatory category:

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In January 2018, gammaCore was cleared by the FDA, through a 510(k) review, for commercial sale in the United States as an acute treatment for pain associated with migraine in adults.

Our FDA clearance for the acute treatment of migraine in adults is principally supported by our pivotal trial, PRESTO.

The primary endpoint of PRESTO was pain-freedom at 120 minutes.

While this trial did not reach statistical significance with respect to its primary endpoint at two hours, statistical significance was achieved for pain freedom at 30 minutes (12.7%;

p =0.01), and maintained at 60 minutes (21.0%;

p =0.02), and under a repeated-measures analysis, through the full 120-minute period (30.4%;

In March 2020, gammaCore was cleared by the FDA, through a 510(k) review for commercial sale in the United States as a preventive treatment of migraine headache in adults.

Our FDA clearance for preventive treatment of migraine in adults is principally supported by our PREMIUM I and Event studies.

The PREMIUM I study was a prospective, randomized, double-blind, sham-controlled, multicenter study in patients with episodic migraine conducted at 22 European sites from June 2015-November 2017.

It consisted of a 4-week run-in period of no study treatment, which was followed by a 12-week double blind phase of randomly assigned preventive treatment with a sham device and a 24-week open-label phase which all participants received nVNS therapy.

Post hoc analysis of the modified intent-to treat population showed significant difference between groups in favor of the study’s primary endpoint, mean reduction in the number of migraine days per month (therapeutic gain, 0.74;

P=0.043), as well as for headache days per month (therapeutic gain, 0.86;

P=0.045) and a reduction in acute medication days per month (therapeutic gain, 0.80;

In February 2021, gammaCore was cleared by the FDA, through a 510(k) review, for the acute and preventive treatment of migraine in adolescents between 12 and 17 years of age.

The label expansion was based on previously reported randomized controlled trials and studies of gammaCore for the acute and preventive treatment of migraine and was supported by a small study (n=9) in adolescents where 46.8% of all treated attacks were successfully aborted without the use of any acute rescue medication.

Migraine Market Factors and Competition

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In the United States and EU, research has found that the age of first diagnosis of migraine peaks in the early-to-mid teens and the disease continues to persist throughout adulthood for many of these sufferers, demonstrating that it is often a disorder of long duration.

The marketing landscape for the treatment and prevention of migraine is highly competitive.

Current Treatments for Prevention of Migraine and Their Limitations.

Most migraine patients manage their conditions with over-the-counter therapies.

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Among these specialists, many of whom also treat CH, are the approximately 1,100 physicians who are board-certified in the treatment of headache, many of whom practice in over 120 tertiary care centers in the United States.

The triptan drug class is the current standard of care for the acute treatment of migraine.

The triptan drug class is the current first line therapy for the acute treatment of migraine.

According to the U.S.

Pharmacist, a leading pharmacy publication, more than 60% of patients have reported dissatisfaction with, or have contraindications to, the current standard of care, such as triptan medications.

Current Treatments for Prevention of Migraine and Their Limitations.

Among the current treatments for prevention of migraine are blood pressure-lowering medications such as beta blockers and channel blockers, antidepressants, anti-seizure drugs.

Additional treatments for prevention of migraine include blood pressure-lowering medications such as beta blockers and channel blockers, antidepressants, and anti-seizure drugs.

BOTOX marketed by Allergan plc, is specifically approved for the prevention of chronic, but not episodic, migraine.

There are currently several antibodies to calcitonin gene-related peptide receptor, or CGRP, and its receptor, approved by FDA for the prevention of migraine including products sold by Teva Pharmaceutical Industries Ltd., Eli Lilly and Company, Amgen Inc., which is in a co-marketing partnership with Novartis International AG and H.

There are currently several antibodies to calcitonin gene-related peptide receptor, or CGRP, and its receptor, approved by FDA for the prevention of migraine including products sold by Teva Pharmaceuticals Industries Ltd., Eli Lilly and Company, Amgen Inc., which is in a co-marketing partnership with Novartis International AG and H.

Lundbeck A/S.

Medications for the prevention of migraine may have such side effects as dry mouth, nausea, dizziness, and depression.

There are a number of neuromodulation devices that have been marketed for the prevention of migraine, including Cefaly and Nerivio, or any other neuromodulation devices that may be marketed for use in treating pain associated with primary headache.

Cefaly was recently granted over the counter, or OTC, clearance allowing it to be sold without a prescription.

In addition, Cefaly and Nerivio recently received clearance for use in adolescents.

The impact of these clearances on the competitive landscape is uncertain.

Preventive CGRP monoclonal antibodies are large molecules, delivered once per month or per quarter as a subcutaneous injection or infusion.

Gepants, on the other hand, are small molecule CGRP receptor antagonists that were initially utilized as migraine abortives but have also been approved to prevent migraine.

Recently, there have been two oral Gepants that have received FDA approval for the prevention of migraine headache including Nurtec ODT (rimegepant), a Gepant sold by Biohaven Pharmaceuticals Inc.

There are a number of neuromodulation devices that have been marketed for the prevention of migraine and which may be marketed for use in treating pain associated with primary headache without a prescription.

In addition, Cefaly received clearance for use to treat migraine in adolescents.

Current Acute Migraine Treatments and Their Limitations .

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The FDA has approved two oral small molecule CGRP receptor antagonists for the acute treatment of migraine with or without aura in adults.

These products are marketed by Allergan and Biohaven Pharmaceuticals Inc.

These products are marketed by Allergan plc and Biohaven Pharmaceuticals Inc.

The FDA has also approved Eli Lilly’s lasmiditan for acute treatment of migraine in adults.

There are a number of neuromodulation devices that have been marketed for the treatment of migraine, including Cefaly, Nerivio, or any other neuromodulation devices that may be marketed for use in treating pain associated with primary headache.

There are a number of neuromodulation devices that have been marketed for the treatment of migraine, including Cefaly and, Nerivio (sold by Theranica Bioelectronics), as well as other neuromodulation devices that may be marketed for use in treating pain associated with primary headache.

Cefaly has been granted OTC clearance allowing it to be sold without a prescription and the impact of this clearance on the competitive landscape remains to be seen.

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DHE has been used for more than 50 years for the treatment of migraine, but modern physicians rarely prescribe it because of its significant side effects.

In 2021, a new DHE nasal spray was approved for the treatment of migraine.

More specifically, ergotamines and triptans are both vasoconstrictors with labels citing the risk of their use in migraine sufferers with risk factors for cardiovascular disease.

Opioids are often dispensed for migraine attacks in emergency departments;

however, in the treatment guidelines referenced by the National Institutes of Health, their use is not recommended for the acute treatment of migraine.

Opioid use for migraine is associated with increased disability and health care utilization.

Centers for Disease Control and Prevention has recognized the growing issue of opioid misuse, abuse and addiction and officially classified prescription opioid abuse as an epidemic.

Cluster Headache

As mentioned above, in April 2017, FDA granted our de novo submission , clearing our gammaCore for commercial sale in the United States for the acute treatment of pain associated with eCH in adults.

In April 2017, FDA granted our de novo submission , clearing our gammaCore for commercial sale in the United States for the acute treatment of pain associated with eCH in adults.

In December 2018, we were successful in receiving FDA clearance for gammaCore Sapphire as a prevention for CH, the first product in the United States or Europe to receive regulatory approval for this indication.

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Among CH patients, 85% to 90% experience eCH, with their cluster periods, or bouts, lasting from two to 12 weeks, followed by a remission period, often cycling into bouts twice per year.

Chronic CH, or cCH, patients experience no periods of remission or remission periods of less than three months in a 12-month period.

There is only one other FDA-approved commercially available pharmaceutical option for acute CH treatment, and gammaCore is the only FDA-cleared option for the prevention of all forms of CH.

Our first FDA clearance, received following the grant of our de novo submission, was for the acute treatment of eCH in adults, and is supported by two pivotal trials:

our ACT 1 trial and our ACT 2 trial.

The primary endpoints of these trials were pain reduction and pain-freedom within 15 minutes of the onset of the attack, respectively.

While neither trial reached statistical significance compared to a sham device with respect to its primary endpoint in the combined eCH and cCH populations, both trials reached statistical significance (ACT 1;

p <0.01 in each trial) on the primary endpoint in the eCH cohort.

Our FDA clearance for the prevention of CH in adults is principally supported by our pivotal trial, PREVA.

The primary endpoint of PREVA was the reduction in number of CH attacks experienced per week during a test period (weeks 3 and 4 after initiating 3x daily treatments with gammaCore), as compared with the number of attacks per week during a baseline comparison period prior to initiation of gammaCore therapy.

This trial met its primary endpoint with statistical significance compared to a sham device for the reduction in the number of cluster attacks (-5.9 vs.

Cluster Headache Market Factors-United States

Prevalence and market size .

The estimated prevalence of CH in the United States ranges from 0.1% to 0.2% of the total population, with consensus around 400,000 patients.

eCH patients average approximately four months per year in bouts.

The estimated prevalence of CH in the United States ranges from 0.1% to 0.2% of the total population, with an estimated 400,000 patients.

Economic Burden .

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Other Therapies for the Treatment and Prevention of Cluster Headache .

Other than gammaCore, there is only one FDA-approved commercially available therapy for acute treatment for CH, injectable sumatriptan (Imitrex).

The side effect profile and cost of Imitrex, however, typically limits patient access to only six to 10 doses per month, which usually enables patients to treat only a small fraction of their attacks each month.

Even at this limited access level, the monthly cost of Imitrex for CH patients and their insurance providers averages more than $700.

Imitrex use is also limited by the requirement for patients to subcutaneously self-inject, which may be particularly difficult to do while experiencing a CH attack.

Injectable sumatriptan (Imitrex) is an FDA-approved commercially available therapy for acute treatment for CH.

The side effect profile and cost of Imitrex, however, usually enables patients to treat only a small fraction of their attacks each month and use is also limited by the requirement for patients to subcutaneously self-inject, which may be particularly difficult to do while experiencing a CH attack.

The most frequently used acute treatments for CH attacks are subcutaneous sumatriptan and high flow rate inhaled oxygen.

Alternative treatments include intranasal triptans and intravenous dihydroergotamine, or DHE.

Only subcutaneous sumatriptan and intravenous DHE are approved in the United States for the acute treatment of CH, and Galcanezumab, a calcitonin gene-related peptide that is produced by Eli Lilly and Company was recently approved by the FDA for the treatment of eCH.

Approval and commercialization of additional therapies may be forthcoming.

Galcanezumab, a calcitonin gene-related peptide that is produced by Eli Lilly and Company was recently approved by the FDA for the treatment of eCH.

Additional medications that are used by patients off-label include verapamil , lithium, and valproate .

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The estimated prevalence of CH in the United Kingdom ranges from 0.1% to 0.2% of the total population, with approximately 66,000 affected patients.

We estimate that the total addressable market for the treatment of CH in the United Kingdom in 2021 will be approximately £100 million.

Economic Burden .

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the latter is rarely sufficient to achieve adequate control alone.

Standard prophylactic treatments for CH, such as nerve blocks, high dose verapamil and some anticonvulsants are used outside of their licensed indication and with limited evidence to support their prescription.

Lithium may also be tried but is a difficult therapy to initiate and monitor.

Verapamil requires careful cardiac monitoring during dose escalation, and dihydroergotamine requires infusion in an in-patient setting.

Nerve blocks are performed in the neurology clinic or on the hospital ward.

Acute treatments are given by a variety of routes.

Sumatriptan is given by subcutaneous or intranasal injection and high flow oxygen can be given via inhalation during acute attacks.

In practice, single or multiple nerve blocks, pharmacological therapies and high flow oxygen may be used adjunctively to try and manage CH.

Primary Headache Market-Potential Future Market Factors

While we believe that our proprietary gammaCore therapy provides us with competitive advantages, there is fierce competition, particularly in the migraine market, from many different sources, including pharmaceutical, biotechnology and other healthcare companies.

In addition, academic institutions, governmental agencies and public and private research institutions are actively conducting research in overlapping fields of interest.

Our gammaCore therapy competes and will compete with numerous existing therapies and therapies that may become available in the future.

We believe the key competitive factors affecting the potential success of our therapy are its safety, efficacy, convenience, price, the availability of generic drugs and the availability of coverage and reimbursement from government and certain other third-party payers.

There can be no assurance, however, given the competitive landscape in the markets in which gammaCore competes, that demand for our products may not be constrained, or face significant pricing pressure, or that the scope of coverage and reimbursement from third-party payers will expand or not be curtailed.

Many of the companies we are competing with now, or with which we may compete in the future, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, sales and marketing and obtaining third-party payer coverage for approved drugs than we do.

We believe the key competitive factors affecting the potential success of our therapy are safety, efficacy, side effect profile, convenience, price, the availability of generic drugs and the availability of coverage and reimbursement from government and certain other third-party payers.

Given the competitive landscape in the markets in which gammaCore competes, there can be no assurance that demand for our products may not be constrained, or face significant pricing pressure, or that the scope of coverage and reimbursement from third-party payers will expand or not be curtailed.

Many of the companies we are competing with now, or with which we may compete in the future, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, sales and marketing, market access, and regulatory affairs than we do.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies and healthcare related institutions.

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Given the size of the existing and potential primary headache markets in the United States and abroad, we expect that as we continue to seek to expand our commercial efforts, our current and future competitors will grow in number and take aggressive actions to grow, enhance and protect their market positions to our potential detriment.

We actively seek to protect the intellectual property and proprietary technology that we believe is important to our business, which includes seeking and maintaining patents covering our technology and products, proprietary processes and any other inventions that are commercially or strategically important to the development of our business.

We seek to protect the intellectual property and proprietary technology that we believe is important to our business, which includes seeking and maintaining patents covering our technology and products, proprietary processes and any other inventions that are commercially or strategically important to the development of our business.

We also rely upon trademarks to build and maintain the integrity of our brand, and we seek to protect the confidentiality of trade secrets that may be important to the development of our business.

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Emergency Use Authorization

In April 2020, we announced that we had submitted an EUA application to the FDA to facilitate the study and clinical use of our gammaCore Sapphire nVNS therapy for respiratory symptoms associated with COVID-19.

In July 2020, the FDA granted the Company an EUA authorizing the use the Company’s gammaCore Sapphire CV nVNS therapy at home or in a healthcare setting to acutely treat adult patients with known or suspected COVID-19 who are experiencing exacerbation of asthma-related dyspnea and reduced airflow, and for whom approved drug therapies are not tolerated or provide insufficient symptom relief.

The EUA is supported by the Secretary of Health and Human Service’s declaration that circumstances exist to justify the emergency use of medical devices during the COVID-19 pandemic.

This device has not undergone the same type of review as an FDA-approved or cleared device.

The FDA may issue an EUA when certain criteria are met, which includes that there are no adequate, approved, or available alternatives to the candidate product.

In addition, the FDA decision is based on the totality of scientific evidence available showing that it is reasonable to believe that the device meets certain criteria for safety, performance, and labeling, and that it may be effective in treating patients with COVID-19.

The EUA for the gammaCore Sapphire CV device is in effect for the duration of the COVID-19 pandemic justifying emergency use of these devices, unless terminated or revoked (after which the products may no longer be used).

An FDA approved or cleared device should be used instead of the gammaCore Sapphire CV under EUA, when applicable and available.

In the second quarter of 2020, two IITs of gammaCore Sapphire CV were launched to study patients with a confirmed diagnosis of, or presumed to be, COVID-19, one in Valencia, Spain (referred to as “SAVIOR-1”) and the other in Pittsburgh, Pennsylvania (referred to as “SAVIOR-2”).

The studies will measure the safety and efficacy of gammaCore Sapphire CV plus standard of care alone in patients hospitalized with COVID-19 across a broad range of clinical and laboratory endpoints.

Enrollment has been completed for SAVIOR-1 and continues for SAVIOR-2.

We expect to report data from these trials in 2021.

In September 2020, we entered into an agreement with UpScript, LLC pursuant to which UpScript serves as the exclusive online telehealth provider for gammaCore Sapphire CV.

In July 2020, the FDA granted the Company an Emergency Use Authorization ("EUA") authorizing the use the Company’s gammaCore Sapphire CV nVNS therapy at home or in a healthcare setting to acutely treat adult patients with known or suspected COVID-19 who are experiencing exacerbation of asthma-related dyspnea and reduced airflow, and for whom approved drug therapies are not tolerated or provide insufficient symptom relief.

We did not recognize material revenue from the sales of gammaCore Sapphire CV during the year ended December 31, 2021, and we do not expect to recognize material revenue from the sale of gammaCore Sapphire CV in general.

Manufacturing

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This quality process involves physical inspection and electrical performance testing.

After successful completion of this inspection, each gammaCore is configured to deliver our prescribed therapy, and a final test is performed on the unit to ensure it meets our performance specifications.

At the time of configuration, most units are programmed with a unique set of proprietary activation codes that will correspond to codes that are programmed onto RFID cards by our specialty pharmacies and delivered to the patient to activate and refill their therapy.

The unit is then packaged, along with appropriate labeling, instructions for use, an initial RFID card, and conductive gel, and shipped into our distribution network, or direct-to-end user.

The relocation of development and prototype shops, as well as manufacturing and related operations, including device assembly, inspection/testing, packaging, storage, and shipping to our facility in Rockaway, New Jersey was completed in March 2020 with an on-site audit of the facility by our EU Notified Body.

After successful completion of this inspection, each gammaCore unit is then packaged, along with appropriate labeling, instructions for use, important safety information, an initial RFID card (when the therapy is not preloaded), and conductive gel, and shipped into our distribution network, or direct-to-end user.

Additional RFID cards and conducive gels are sent at the time of prescription refills.

In order to protect against risk of supply chain disruption, we have qualified an approved secondary contract manufacturer.

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As of December 31, 2021, we had approximately $5.3 million of inventory.

Our inventory significantly exceeds current demand for the gammaCore therapy, which creates a risk of an adverse financial impact from inventory obsolescence.

The generation of our proprietary therapeutic signal does not require custom electronic components.

Therefore, we believe long-term manufacturing, supply and quality agreements with electronic component suppliers are not necessary, as all the electronic components used in our products are either high-volume, non-custom commodity components, or are readily available from multiple vendors.

Our inventory significantly exceeds forecasted demand for 2022, therefore, $3.9 million of inventory has been classified as long-term on our balance sheet as of December 31, 2021.

This amount of inventory creates a risk of an adverse financial impact from inventory obsolescence.

All the electronic components used in our products are either high-volume, non-custom commodity components, or are readily available from multiple vendors.

The majority of these components have multiple sources, and the few with single sources have been purchased with sufficient reserves to permit continued production while simple product design modifications can be made.

Patents and Patent Applications

As of February 1, 2021, we held more than 170 patents and patent applications, including more than 100 issued U.S.

patents, more than 30 U.S.

patent applications, and more than 40 international patents and applications.

As of February 1, 2022, we held more than 195 patents and patent applications, including 112 issued U.S.

patents, 42 U.S.

patent applications, and 45 international patents and applications.

All of our current issued patents are projected to expire between 2026 and 2034.

More specifically, our current therapy embodies a number of critical proprietary innovations, including a patented high-frequency burst signal that is capable of passing comfortably through the capacitance of the skin.

In addition, our therapy utilizes a patented low pass filtration that substantially eliminates high frequency harmonics that would otherwise activate pain receptors in the skin.

The combined result is a mild sensation that activates the target fibers in the cervical vagus nerve.

The term of individual patents depends on the legal term for patents in the countries in which they are granted.

In most countries, including the United States, the patent term is generally 20 years from the earliest claimed filing date of a non-provisional patent application in the applicable country.

We cannot assure you that patents will be issued from any of our pending applications or that, if patents are issued, they will be of sufficient scope or strength to provide meaningful protection for our technology.

Notwithstanding the scope of the patent protection available to us, a competitor could develop treatment methods or devices that are not covered by our patents.

Furthermore, numerous U.S.

and foreign issued patents and patent applications owned by third parties exist in the fields in which we are developing products.

Because patent applications can take many years to issue, there may be applications unknown to us, which applications may later result in issued patents that our existing or future products or proprietary technologies may be alleged to infringe.

We also rely upon trademarks to build and maintain the integrity of our brand, and we seek to protect the confidentiality of trade secrets that may be important to the development of our business.

For more information, please see "Risk Factors-Risks Related to Intellectual Property."

There has been substantial litigation regarding patent and other intellectual property rights in the medical device industry.

In the future, we may need to engage in litigation to enforce our issued patents, to protect our trade secrets or know-how, to defend against claims of infringement of the rights of others or to determine the scope and validity of the proprietary rights of others.

Litigation could be costly and could divert our attention from other functions and responsibilities.

Adverse determinations in litigation could subject us to significant liabilities to third parties, could require us to seek licenses from third parties and could prevent us from manufacturing, selling or using our gammaCore products, any of which could severely harm our business.

Copyrights, Trademarks and Trade Secrets

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As of February 1, 2021, our trademark portfolio consisted of five US trademark registrations, including electroCore, gammaCore and gammaCore Sapphire, three international trademark registrations, and five pending international trademark applications.

As of February 1, 2022, our trademark portfolio consisted of six US trademark registrations, including electroCore, gammaCore and gammaCore Sapphire, twelve international trademark registrations, and seven pending US and international trademark applications.

We also rely upon trade secrets, know-how and continuing technological innovation, and may pursue licensing opportunities in the future, to develop and maintain our competitive position.

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Government Regulation

United States

Our products and operations are subject to extensive and rigorous regulation by the FDA under the Federal Food, Drug, and Cosmetic Act, or FFDCA, and its implementing regulations, guidance documentation, and standards.

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If the FDA determines that the device, or its intended use, is not substantially equivalent to a legally marketed device, the FDA will place the device, or the particular use of the device, into Class III, and the device sponsor must then fulfill much more rigorous premarketing requirements.

We believe that our products are or would be classified as either Class I or Class II devices.

Class III devices, consisting of devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices, or devices deemed not substantially equivalent to a predicate device.

The safety and effectiveness of Class III devices cannot be assured solely by general or special controls.

Submission and FDA approval of a premarket approval, or PMA, application is required before marketing of a Class III device can proceed.

As with 510(k) submissions, unless subject to an exemption, PMA submissions are subject to user fees.

The PMA process is much more demanding than the 510(k) premarket notification process.

A PMA application, which is intended to demonstrate that the device is safe and effective, must be supported by extensive data, typically including data from preclinical studies and human clinical trials.

We do not believe our products are or would be classified as Class III devices.

510(k) Clearance

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The manufacturer may also be subject to significant regulatory fines or penalties.

A PMA must be submitted to the FDA for any device that is classified in Class III or otherwise cannot be cleared through the 510(k) process (although the FDA has discretion to continue to allow certain pre-amendment Class III devices to use the 510(k) process).

PMA applications must be supported by, among other things, valid scientific evidence demonstrating the safety and effectiveness of the device, which typically requires extensive data, including technical, preclinical, clinical and manufacturing data.

The PMA must also contain a full description of the device and its components, a full description of the methods, facilities, and controls used for manufacturing, and proposed labeling.

Following receipt of a PMA application, once the FDA determines that the application is sufficiently complete to permit a substantive review, the FDA will formally accept the application for review.

The FDA, by statute and by regulation, has 180-days to review an “accepted” PMA application, although the review of an application more often occurs over a significantly longer period of time, and can take up to several years.

During the review period, the FDA will typically request additional information or clarification of the information already provided.

Also, an advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the approvability of the device.

The FDA may or may not accept the panel’s recommendation.

In addition, the FDA will generally conduct a pre-approval inspection of the manufacturing facility or facilities to ensure compliance with the QSR.

If the FDA evaluations of both the PMA application and the manufacturing facilities are favorable, the FDA will either issue an approval letter or an approvable letter, which usually contains a number of conditions that must be met in order to secure final approval of the PMA.

If the FDA’s evaluation of the PMA or manufacturing facilities is not favorable, the FDA will deny approval of the PMA or issue a not approvable letter.

A not approvable letter will outline the deficiencies in the application and, where practical, will identify what is necessary to make the PMA approvable.

The FDA may also determine that additional clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the trials are conducted.

Once granted, PMA approval may be withdrawn by the FDA if compliance with post-approval requirements, conditions of approval or other regulatory standards is not maintained, or problems are identified following initial marketing.

In approving a PMA, the FDA may also require some form of post-market surveillance when necessary to protect the public health or to provide additional safety and effectiveness data for the device.

In such cases, the manufacturer might be required to follow certain patient groups for a number of years and makes periodic reports to the FDA on the clinical status of those patients.

New PMAs or PMA supplements are required for modifications that affect the safety or effectiveness of a PMA-approved device, including, for example, certain types of modifications to the device’s indication for use, manufacturing process, labeling and design.

PMA supplements often require submission of the same type of information as a PMA, except that the supplement is limited to information needed to support any changes from the device covered by the original PMA and may not require as extensive clinical data or the convening of an advisory panel.

The Commissioner of the FDA, under delegated authority from the Secretary of the U.S.

Department of Health and Human Services, or DHHS, may, under certain circumstances, issue an EUA that would permit the use of an unapproved drug product or unapproved use of an approved drug product.

Before an EUA may be issued, the Secretary must declare an emergency based on one of the following grounds:

a determination by the Secretary of the Department of Homeland Security that there is a domestic emergency, or a significant potential for a domestic emergency, involving a heightened risk of attack with a specified biological, chemical, radiological, or nuclear agent or agents;

a determination by the Secretary of the DoD that there is a military emergency, or a significant potential for a military emergency, involving a heightened risk to U.S.

military forces of attack with a specified biological, chemical, radiological, or nuclear agent or agents;

a determination by the Secretary of the DHHS that a public health emergency that effects, or has the significant potential to effect, national security and that involves a specified biological, chemical, radiological, or nuclear agent or agents, or a specified disease or condition that may be attributable to such agent or agent.

In order to be the subject of an EUA, the FDA Commissioner must conclude that, based on the totality of scientific evidence available, it is reasonable to believe that the product may be effective in diagnosing, treating or preventing a disease attributable to the agents described above, that the product’s potential benefits outweigh its potential risks and that there is no adequate approved alternative to the product.

Although an EUA cannot be issued until after an emergency has been declared by the Secretary of DHHS, the FDA strongly encourages an entity with a possible candidate product, particularly one at an advanced stage of development, to contact the FDA center responsible for the candidate product before a determination of actual or potential emergency.

Such an entity may submit a request for consideration that includes data to demonstrate that, based on the totality of scientific evidence available, it is reasonable to believe that the product may be effective in diagnosing, treating, or preventing the serious or life-threatening disease or condition.

This is called a pre-EUA submission and its purpose is to allow FDA review considering that during an emergency, the time available for the submission and review of an EUA request may be severely limited.

De Novo Classification

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In addition, the FDA may reject the reclassification petition if it identifies a legally marketed predicate device that would be appropriate for a 510(k) or determines that the device is not low to moderate risk or that general controls would be inadequate to control the risks and special controls cannot be developed.

In March 2014 we filed a pre-submission package with the FDA requesting a meeting to discuss the viability of using the de novo pathway to gain authorization to commercialize our gammaCore product for an initial indication in CH.

In June 2014, FDA met with us and confirmed that the de novo pathway would be appropriate for our submission.

In October 2014 we filed our initial de novo submission with FDA.

As is customary for many applications for commercial approval (Class II or Class III), FDA in a letter to us in May 2015 denied our initial application stating that our initial filing did not yet support a de novo clearance based on the information in the initial filing.

In June 2015 we participated in an in-person meeting with FDA representatives to discuss the issues raised by the FDA in its May 2015 denial letter.

In October 2015, based on our June 2015 meeting with FDA, we resubmitted our de novo submission with two proposed indications:

(i) acute treatment of eCH;

and (ii) prophylactic treatment of cCH.

In February 2016, we received a letter from FDA indicating that our de novo submission, with some further requested re-analysis, included sufficient data to support de novo classification and clearance of gammaCore for at least one indication.

We performed and submitted to the FDA the requested re-analysis in March 2016 and, following additional correspondence and meetings with FDA, in April 2017, FDA approved our de novo classification request and cleared our gammaCore therapy in the United States for the acute treatment of pain associated with eCH in adults.

In April 2017, FDA approved our de novo classification request and cleared our gammaCore therapy in the United States for the acute treatment of pain associated with eCH in adults.

Based on this approval of our de novo classification request, gammaCore has been down classified to Class II under a new Class II device regulatory category for non-invasive cervical vagus nerve stimulators for the treatment of headache.

The establishment of this category created a 510(k) regulatory pathway for the potential expansion of the gammaCore label to include acute treatment and/or prevention of pain associated with migraine and cCH, as well as acute treatment and/or prevention of other primary and secondary headaches.

In January 2018, the FDA cleared gammaCore for acute treatment of pain associated with migraine headaches in adult patients, and on March 26, 2020 the FDA cleared our gammaCore therapy for prevention of migraine in adult patients.

In February 2021, gammaCore received 510(k) clearance from the FDA for the acute and preventive treatment of migraine in adolescents between 12 and 17 years of age.

Additionally, we may consider utilizing the de novo classification process to obtain marketing authorization for our product candidates under development outside the headache field.

Clinical Studies

When FDA clearance or approval of a Class I, Class II or Class III device requires human clinical trials, and if the device presents a “significant risk” to human health, the device sponsor is required to file an IDE, or Investigational Device Exemption, application with the FDA and obtain IDE approval prior to commencing the human clinical trial.

If the device is considered a “non-significant risk,” IDE submission to FDA is not required.

Instead, only approval from the Institutional Review Board, or IRB, overseeing the investigation at each clinical trial site is required.

Human clinical studies are generally required in connection with approval of Class III devices and may be required for Class I and II devices.

The FDA or the IRB at each institution at which a clinical trial is being performed may suspend a clinical trial at any time for various reasons, including a belief that the subjects are being exposed to an unacceptable health risk.

Even if a trial is completed, the results of clinical testing may not adequately demonstrate the safety and efficacy of the device or may otherwise not be sufficient to obtain FDA clearance or approval to market the product in the United States.

Continuing Regulation

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notices of corrections or removals;

HIPAA compliance around patient information.

Advertising and promotion of medical devices, in addition to being regulated by the FDA, are also regulated by the Federal Trade Commission and by state regulatory and enforcement authorities.

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The regulatory review process varies from country to country and may in some cases require the submission of clinical data.

We received CE Certificate of Conformity in the European Economic Area (which is composed of all the EU member states and the UK, Norway, Iceland and Liechtenstein), or EEA, for our gammaCore therapy to treat, primary headache, including migraine, CH, and hemicrania continua, as well as medication overuse headache in adults.

In 2014, we received CE Certificate of Conformity in the European Economic Area, or EEA, for our gammaCore therapy to treat, primary headache, including migraine, CH, and hemicrania continua, as well as medication overuse headache in adults.

The CE Certificate of Conformity was extended to additional indications, including for the treatment or prevention of symptoms of reactive airway disease, which includes asthma, bronchoconstriction, exercise induced bronchospasm, and COPD in adults.

In the EEA, gammaCore must currently comply with the essential requirements laid down in Annex I to Directive 93/42/EEC on the approximation of the laws of the member states relating to medical devices or the EU Medical Devices Directive.

In the EEA and UK, gammaCore must currently comply with the essential requirements laid down in Annex I to Directive 93/42/EEC on the approximation of the laws of the member states relating to medical devices or the EU Medical Devices Directive.

Compliance with these requirements is a prerequisite to be able to affix the CE mark to gammaCore, without which they cannot be marketed or sold in the EEA.

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Given the lack of comparable precedent, it is unclear what Brexit’s financial, regulatory, and legal implications will be and how it will affect us.

However, potentially changing regulatory schemes and tariffs engendered by Brexit may add additional complexity, cost and delays to the operations of electroCore UK Ltd., and in marketing or selling our products in the United Kingdom.

Our revenue and profit, supply and demand for our products, and customer retention and acquisition in both the long term and short term could be adversely affected.

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Other Regulations

We are also subject to healthcare fraud and abuse regulation in the jurisdictions in which we will conduct our business.

We may also be subject to healthcare fraud and abuse regulation in the jurisdictions in which we will conduct our business.

These laws include, without limitation, applicable anti-kickback, false claims, transparency and patient privacy and security laws and regulations.

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The cost containment measures that payers and providers are instituting and the effect of any healthcare reform initiative implemented in the future could impact our revenue from the sale of our products.

The implementation of the Affordable Care Act in the United States, for example, has changed healthcare financing and delivery by both governmental and private insurers substantially, and affected medical device manufacturers significantly.

The Affordable Care Act, among other things, provided incentives to programs that increase the federal government’s comparative effectiveness research, and implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models.

Additionally, the Affordable Care Act has expanded eligibility criteria for Medicaid programs and created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

Certain aspects of the Affordable Care Act have been subject to judicial challenges as well as efforts to repeal or replace them or to alter their interpretation and implementation.

For example, the Tax Cuts and Jobs Act was enacted on December 22, 2017, which, among other things, eliminated the shared responsibility payment for individuals who fail to maintain minimal essential coverage under section 5000A of the Internal Revenue Code of 1986, commonly referred to as the individual mandate, as of January 1, 2019.

Additional legislative changes to and regulatory changes under the Affordable Care Act remain possible, but the nature and extent of such additional changes are uncertain at this time.

In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.

For example, the Budget Control Act of 2011, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals for spending reductions.

The Joint Select Committee did not achieve a targeted deficit reduction, which triggered the legislation’s automatic reductions.

In concert with the subsequent legislation, this has resulted in aggregate reductions to Medicare payments to providers of, on average, 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2029 unless additional Congressional action is taken.

Additionally, the American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

We expect additional state and federal healthcare reform measures to be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our products or additional pricing pressure.

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We are subject to contractual remedies as well as potential administrative, civil, and criminal sanctions for non-compliance.

Human Capital Resources

As of March 1, 2022, we employed 52 full-time employees.

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electroCore, Inc.

was founded in 2005 as a limited liability company.

electroCore, headquartered in New Jersey, has two wholly owned subsidiaries:

was founded in 2005 as a limited liability company, which converted into a Delaware corporation pursuant to a statutory conversion effective June 21, 2018.

The Company is headquartered in New Jersey, and has two wholly owned subsidiaries:

electroCore Germany GmbH, and electroCore UK Ltd.

The Company has ceased its operations in Germany, although sales to Germany are still supported by electroCore UK Ltd.

In addition, an affiliate, electroCore (Aust) Pty Limited, or electroCore Australia, is subject to electroCore’s control on a basis other than voting interests and is a variable interest entity, or VIE, for which electroCore is the primary beneficiary.

This VIE has been inactive since May 2017.

In addition, an affiliate, electroCore (Aust) Pty Limited, or electroCore Australia, was subject to electroCore’s control on a basis other than voting interests and is a variable interest entity, or VIE, for which electroCore was the primary beneficiary.

This VIE has been inactive since May 2017 and was terminated in 2021.

Our Internet website address is www.electrocore.com.

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business