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Operator: Greetings, and welcome to KORU Medical Systems First Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Louisa Smith, Investor Relations. Thank you, Ms. Smith. You may begin.

Louisa Smith: Thank you, and good afternoon, everyone. Joining me on the call today are Linda Tharby, President and CEO of KORU Medical Systems; and Thomas Adams, Chief Financial Officer. Earlier today, KORU released financial results for the first quarter ended March 31, 2025. A copy of the press release is available on the company’s website. I encourage listeners to have our press release in front of you, which includes our financial results as well as commentary on the quarter. Additionally, we will use slides to support further commentary in today’s call, which are also available on the Investor Relations section of our website. During this call, we will make certain forward-looking statements regarding our business plans and other matters.

These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to risks and uncertainties, including those mentioned in the associated press release and our most recent filings with the SEC. We assume no obligation to update any forward-looking statements. During the call, management will also discuss certain non-GAAP financial measures. You will find additional disclosures, including reconciliations of these non-GAAP measures with comparable GAAP measures in our press release, the company investor presentation and SEC filings. For the benefit of those listening to the replay, this call was held and recorded on Wednesday, May 7, 2025, at approximately 4:30 p.m. Eastern Time. Since then, the company may have made additional comments related to the topics discussed.

I’d now like to turn the call over to Linda Tharby, President and CEO. Linda, please go ahead.

Linda Tharby: Thank you, Louisa. Good afternoon, everyone, and thank you for joining us on today’s earnings call. I’ll begin today with an overview of our strategic progress and first quarter highlights. After that, Tom will walk you through our financial performance and updated 2025 guidance. We’ll then open the call for your questions. We had a great start to the year, delivering strong results and continued growth. Revenue for the quarter reached $9.6 million, a record for the company, representing an 18% increase over the prior year. This performance reflects the ongoing strength of our core business, which grew 21% in the quarter, driven by a solid base of recurring revenue, continued success in new patient starts, increased market share and deeper penetration into both new and existing geographies.

I’m also pleased to announce that we plan to submit two additional commercialized drugs for 510(k) clearance for use with the Freedom Infusion System by the end of 2025. This brings our total pipeline to five planned submissions in 2025, two for new devices and three for new drug indications. As we continue to focus on operational efficiencies, we reported gross margin of 62.8%, an improvement of 50 basis points compared to the same period last year. Given our strong first quarter performance and increased visibility into the remainder of the year, we are raising our 2025 guidance to a range of $38.5 million to $39.5 million, representing a 15% to 17% year-over-year growth. We are also reaffirming our full year gross margin target of 61% to 63%, which is inclusive of our most recent analysis of the current global tariff situation and its impact on our supply chain and cost of goods sold.

We are also reaffirming our expectation to generate positive cash flow from operations in 2025. Tom will provide further details on our financial performance and updated guidance later in the call. We’re off to a strong start in 2025 with solid execution across our strategic priorities. The strength of our core business, our expanding new drugs on label pipeline and our operational discipline continue to drive both growth and value creation. We’re well positioned to deliver on our commitments and advance our leadership in the market. Before I get into performance across each of our growth pillars, I want to touch on KORU’s strategic vision and our plans to evolve as a company. Today, we are the global leader in large-volume SCIg drug delivery, supporting the at-home infusion needs of approximately 45,000 chronic and recurring patients each year.

We’ve successfully built and continue to expand this base business as the overall SCIg market maintains robust underlying growth. Our leadership in SCIg has built a reliable, growing foundation, and we are equally focused on accelerating KORU’s growth through new opportunities. We’re actively expanding our platform to support subcutaneous delivery of additional large volume drugs. As more pharmaceutical companies shift formulations from IV to subcutaneous, we’re well positioned to be their partner of choice with our successful track record of bringing subcutaneous drugs to commercialization. We currently have nine active collaborations with new drug therapies and see a significant opportunity to expand further. These current and future collaborations will expand our addressable market and overall revenue potential.

This dual focus of our strategy on strengthening the core and growing through new drugs on label supports our long-term vision. With that, I will now move on to our 3-pillar strategy and our progress this quarter. Starting with our domestic core, our business grew 16% year-on-year, marking our sixth quarter of sequential growth and share gains. The SCIg market overall grew approximately 10% in Q1, and we continue to expand our recurring revenue base through both new diagnosis and conversion of accounts. Internationally, we achieved 36% growth, driven by both patient growth and new distributor relationships in the Middle East and North Africa. We also expanded our presence within established EU markets through a key prefilled syringe tender win with a major pharmaceutical partner in the region.

The win is a milestone for the company as we are selective for the business in what is historically an e pump dominated market. We anticipate further opportunities as we continue to collaborate with the pharma partner on their OUS prefill conversion program. Moving to new drugs on label through our PST platform, we have 15 collaborations in our pipeline that have the potential to be added to the Freedom system in the near to long term. As I mentioned on the last slide, we are pleased to announce that we are planning to submit for 510(k) clearance on two already commercialized drugs, one for iron chelation and antibiotic by the end of the year. Working with our specialty pharmacy customers, our team identified that both of these drugs, while not in our label, were being used with the Freedom system by healthcare professionals for at-home administration.

We will be pursuing on-label clearance, which we believe has the potential to have a 2026 full year impact on revenue. These additions bring our total drugs that will be submitted for clearance this year to three as the two new drugs join the rare disease biologic that we announced earlier in the year. With the addition of these two drugs, we now have nine commercial opportunities spanning the end of 2025 to the end of 2026 in our pipeline. We continue to execute on both our robust core business strategy and the many new drug catalysts on the horizon. As we discussed on our last call, 75% of our revenues are recurring from a chronic SCIg patient base. Today, that base is 45,000-plus patients with over two million annual infusions, growing about 15% per year as we continue to gain share.

We are confident in this demand as an underlying source of growth given the market has consistently expanded over the last two years and again this quarter. We remain very positive about this core base of revenue and its potential given the chronic nature of immunodeficiency diagnosis and resilient market growth even in the face of macroeconomic uncertainty for our patient base. On the next slide, you’ll see that our international business continues to outperform expectations and grow rapidly as we expand into key markets outside the U.S. The total international SCIg TAM is estimated at $60 million, with KORU currently holding approximately a 10% share. Our goal is to grow our share to 30% to 40% over the next several years by deepening our presence and capitalizing on emerging opportunities.

Between ’23 and ’24, we achieved 32% growth, and we expect to maintain that momentum through 2025. This confidence is driven by several strategic initiatives, including expanding into top 10 markets where our presence is currently limited, but the upside potential is high, growing our addressable market through strategic device partnerships, for example, with our new pump technology, expanding our consumable usage with electronic pumps and capitalizing on the growing trend to prefilled syringes as we have successfully done here in the U.S. While this is a multiyear growth strategy, we are already leveraging our IG Pharma partnerships to accelerate market entry and share capture abroad. We believe this will support sustained growth across our international business.

Now turning to our pipeline slide for new drugs. It’s more robust than ever with 17 total opportunities, including 15 active collaborations with pharmaceutical partners. The two additional opportunities come from the prior mentioned iron chelation and antibiotic drug programs, which we are pursuing independently without a pharma partner for inclusion on our label. Of the 17 total opportunities, nine have commercial potential by 2026, which is shaping up to be a pivotal year for our pipeline strategy. Let me highlight the five key pipeline developments you see on the slide. First, we recently received clearance for our FREEDOM 60 system with all IG drugs in Japan. As one of the top 10 global markets, this represents a meaningful opportunity to expand our international footprint.

We’ve already established distribution and are actively working with our pharma partners on a market entry and growth plan. Second, we saw the successful completion of a Phase 3 trial within our nephrology collaboration. This program involves an expanded indication for a drug already approved for use with the Freedom system. Upon FDA approval, it will be eligible for immediate use with our pumps. While the addressable patient populations and number of annual infusions are smaller compared to other programs in our pipeline, we’re enthusiastic about this additional shot on goal in our new drug strategy. Third, we have made very good progress with our planned entry into the oncology infusion clinic market. We’ve established a U.S. advisory board with leaders from major oncology infusion centers.

We have actively engaged distributor partners. And this quarter, we are set to begin with five pilot sites where we will further validate the value proposition of increased efficiency using the FREEDOM Infusion System potential for positive economic outcomes, all while improving nursing and patient satisfaction. We look forward to continuing to update you on our pilot site progress. Finally, we’ve added two new programs, iron chelation and antibiotic therapies, which we’re advancing independently. As mentioned earlier, these additions were driven by strong demand from our specialty pharmacy partners who view them as ideal candidates for delivery via the Freedom platform. Both drugs are administered by nurses in the home setting. Because these clinicians are already familiar with our platform through IG therapies, adoption barriers are expected to be low.

While we’re still evaluating the full commercial potential of patient populations and underlying demand, early analysis suggests these drugs once on label could add an incremental $0.5 million to 2026 revenue potential. Overall, we’ve had a strong start to the year, demonstrating continued momentum in our core business, progress across all strategic fronts and exciting new milestones in our pipeline. With that, I’ll now turn the call over to Tom to walk you through the financials.

Tom Adams: Thanks, Linda. Starting with our first quarter results, we had a strong start to the year, delivering $9.6 million in revenues, representing 18% growth over the prior year period. Our domestic core revenues were $6.9 million, a 16% increase over the prior year as our growth continued to outpace the overall SCIg market. The performance was driven by new patient starts, continued market share gains and strong pump and consumable volumes. In the international core business, we delivered strong revenues of $2.4 million, representing growth of 36% over the prior year. Growth was driven by expansion into new geographies, a key tender win for use of prefilled syringes within our Freedom Infusion System and included in the quarter was approximately $400,000 of distributor stocking to support our expansion, which compared to last year’s first quarter distributor stocking order of about $300,000, which you may recall was related to the BSI regulatory issue that was successfully cleared.

From a year-on-year basis, this had about a 1% incremental impact on our 2025 growth. As we expand international, we are opening new markets with distributors, which makes the international quarterly revenues a bit uneven as distributors buy initial stocking inventory. We believe that this quarter’s stocking order will have an impact on our second quarter international numbers, and we will still be on a strong trajectory for approximately 30% growth on the full year. Pharma Services and Clinical Trials revenues were $300,000, representing a 39% decline over the prior year. This part of the business is nonrecurring and revenues are driven by customer time lines for services and clinical trial schedules. The decline in the period was due to lower clinical trial orders as orders were pushed from Q1 into Q2.

Moving on to gross margin performance. First quarter margins were 62.8%, a 50-basis point improvement over the prior year. Margin expansion was driven by favorable product mix during the quarter. We are continuing to implement operational excellence programs in our manufacturing that help offset the impact of lower average selling prices outside of the U.S. We are reiterating our margin guidance of 61% to 63% for the full year 2025, which is inclusive of any current and known supply chain tariff impacts on incoming raw material or sourcing that we may incur during the year. As a reminder, from a supply chain standpoint, we have low exposures to tariffs as the majority of our raw materials are of U.S. origin. We have evaluated the raw materials and value adds that are not of U.S. origin and included those potential impacts within our guidance range.

We are actively monitoring the changing policy environment, and we will continue to make the best efforts to take the necessary steps to mitigate any potential impacts. Turning to cash. We finished the quarter with an $8.7 million cash balance, representing cash usage of $800,000 during the first quarter. Our cash usage included a lower year-over-year net loss of $1.2 million, marking a 36% improvement over the prior year. The use of cash also included $400,000 of investments in equipment for our next-generation consumable production line and $200,000 in financing of insurance premiums. We had nearly flat working capital changes driven by higher inventory and accounts receivable, offset by higher accounts payable and accrued expenses. Finally, backing out the noncash items of $900,000 for stock compensation, depreciation and amortization brings us to the $8.7 million.

Looking ahead, we are increasing our revenue guidance to $38.5 million to $39.5 million, representing 15% to 17% growth, an increase from the prior range of $38 million to $39 million. Key drivers behind these estimates include sustained global SCIg market growth in the 8% to 10% range, continued domestic and international share gains, our flow controller product line expansion, Japanese market entry in the first half of the year and the addition of three new collaborations to our Novel Therapies pipeline. As I mentioned, we are reiterating our gross margins in the range of 61% to 63%. Our gross margins will be affected this year by onetime product line costs associated with our manufacturing ramp-up in the second half in preparation for our new consumables launch.

The impact due to higher mix of sales in international markets and supply chain inflationary and current tariff-related pressures. Moving to cash. We are reiterating that we expect positive cash flow from operations for the full year 2025. We anticipate operating expenses exclusive of stock compensation in the range of $26 million to $27 million, while we stay on course on continuing to improve our operating leverage. Our operating expenses will be weighted more heavily in the first half of the year, driven by higher R&D costs associated with project work completion. Additionally, we expect there to be under $2 million of investments in capital equipment, driven primarily by the production lines we are setting up for our next-generation products.

I’ll now pass the call back to Linda to review our 2025 milestones, our pathway to sustained growth and some closing remarks.

Linda Tharby: Thanks, Tom. I’d like to take a moment to highlight the key milestones we are targeting for 2025. We are right on track in adding new drugs to our label, while we’ve added the two new commercialized drugs that we expect to submit for clearance this year. As you can see by our performance in international, we are on pace with our plans there, and we continue to make progress with our new product platforms. There’s strong momentum behind us and with several exciting milestones ahead, we’re energized by our first quarter performance and look forward to sharing further milestone updates on our second quarter call. I’d like to take a moment to reinforce our long-term vision and the path we’re on to achieve sustainable 20-plus percent revenue growth.

The chart on this slide outlines the key drivers that we’ve previously discussed that are powering our strategy across all three of growth pillars. First, we continue to benefit from a strong SCIg market and are consistently gaining share. This is fueling the recurring revenue engine of our core business. Second, our upcoming next-generation infusion system, including pump and consumables and flow controller launches are expected to unlock further market share and accelerate our entry into previously untapped markets. Third, international expansion. We’re currently only about 10% penetrated globally, and we see a clear opportunity to reach 30% to 40% by expanding into key SCIg markets like Japan, Canada and Western Europe. Fourth, our pipeline continues to advance with promising new on-label drug opportunities, all with the potential to contribute commercial revenue as early as 2026.

And finally, we’re actively exploring new business development opportunities in adjacent markets that align with our strategy and will help push us well beyond the 20% growth threshold. We’re excited by the progress we’ve made, the momentum we built and the opportunity ahead to scale KORU meaningfully. To wrap up, as we move into the Q&A portion, we’ll leave on screen the key opportunities we highlighted today, elements that we believe make for a compelling growth story at KORU. These include strong macro tailwinds, accelerating the shift towards subcutaneous infusion, solid growth in our core business with approximately 75% of recurring revenue and meaningful expansion potential through new drugs on label and entry into infusion clinics. With the momentum from a strong first quarter, a raised revenue outlook, disciplined operations and positive cash flow from operations, an important milestone for KORU, we’re confident in the path ahead.

Operator, we’re now ready to take questions.

Operator: [Operator Instructions] The first question comes from the line of Frank Takkinen with Lake Street Capital Markets. Please go ahead.

Frank Takkinen: Great. Thank you for taking the questions and congrats on a really strong start to the year. I was hoping to start with a little bit bigger picture one, Linda, I think you have kind of started to maybe think about adding new drugs that you don’t have current partnerships with from a pharma standpoint. I think this might be the first two that you’re talking about actively. Great to see that. Maybe a bigger picture, how do you think about kind of the strategy longer term? Is there a number of different drugs that you can kind of pursue the same structure? How does this affect kind of timing to market, capital requirements to do it this way? And maybe just kind of thought process around the strategy going forward?

Linda Tharby: Sure. So, thanks for the comment, Frank. We’re also excited by our start to the year. And this opportunity to pursue drugs that are not in partnership with pharmaceutical companies essentially comes from the strong relationships we currently have with our specialty pharmacies where there are a number of drugs, in this case, antibiotics and iron chelation that nurses are administering in the home, began to use our product, and we started to see some pretty nice uptake in those SKUs. And yet, we also heard from a number of our customers that we really would like to see those on CORS label for us to feel comfortable using them more broadly. So, we know there’s a lot of upsides. So, as we look at that whole universe of opportunities, we’ll be doing a deeper dive into other drugs that may have been launched for — in these cases, they’ve been launched for plus three to five years.

And so, we’ll be looking at other drugs, though, as they come out of the hospital into the home. to add to that portfolio. Of course, oncology drugs is another example. Although with some of those, we are obviously working with pharma partners given the nature of those drugs. So, as we look at every one of these, we think about the revenue potential. And in this case, these are less than 1-year paybacks in terms of the investment required to get them on to our label. We’re currently cleared for healthcare professionals and patients use in the home. So, this is a pretty simple one for us to look at expanding new areas there. I think your last part of your question was the capital needs related to this. And given their in-year paybacks, we don’t see any need for that.

We, as a matter of fact, think that there are opportunities to grow both revenue and bottom line. So, we think perfect candidates, and we’re actively searching for more.

Frank Takkinen: Got it. That’s helpful. And then maybe just for my follow-up, I was hoping you could help with cadencing of revenue throughout the year. Obviously, a strong start, but there are the distributor stocking order OUS that was in that Q1 number. So maybe just help us kind of think about how revenues should flow in throughout the year.

Linda Tharby: Yes. So maybe just I’ll start with the obvious, which is we’re very happy to be raising guidance in the macroeconomic environment. That’s obviously driven by three factors. Number one and the biggest one is our international performance. Second is the further confidence in our U.S. growth number. And then we had some clinical orders firm up in our PST business. I’m going to turn it over to Tom for specifics on the quarterly and what we can expect.

Tom Adams: Yes, Frank. So, as we mentioned during the remarks, our international business, we’re still seeing a growth of around 30%. So, I mentioned the stocking, and you are correct to bring that out. So, we will see some impact of that stocking in the second quarter as those new distributors stocked up in advance for both that tender win and also opening up to new markets. So, you can expect to see about — from that Q2, you can expect to see it gradually increasing up until the end of the year to be around that 30% range. On the U.S. side of things, you can expect us to outpace that market. And we mentioned that, that market is right around the 10% growth rate. So, we can expect to see us outpace that market by a couple of points. And then on the Novel Therapy side, we’re pretty confident with our pipeline right now, and we feel pretty good within our range of around $2.5 million to $3 million on that side.

Frank Takkinen: Perfect. That’s helpful. Thanks for taking questions. Congrats again.

Tom Adams: Thank you.

Operator: Next question comes from the line of Caitlin Cronin with Canaccord Genuity. Please go ahead.

Caitlin Cronin: Hi, guys. Congrats on a great quarter. Maybe just to start off, I want to talk a little bit about the prefilled syringe opportunity OUS and in the U.S. Do you have any kind of updated numbers on the prefilled syringe penetration in the U.S.? And then just on the tender, any more color on that and where else you could see these tenders OUS going forward?

Linda Tharby: Thanks again for the congratulations. We’re excited by our start to the year. So, I think your first question was just on the penetration level in prefilled syringes in the U.S. That’s now just over 65%. So obviously, has done well and quite excited. So now that pharma partner is now pursuing active penetration outside the U.S. They have launched their platform into several markets. And so, we’re starting to see early uptick. And the big potential that we see here is that electronic pumps, which, as you know, are the standard of care in Europe, do not work with prefills. You can’t put a prefill directly into an electronic pump. You’ve got to transfer it into a specific syringe for use with that system. So, we see potential for further upside.

We don’t have numbers or visibility on that yet, but that is certainly part of what you see in our confidence in our total OUS expansion plan over the next several years. And obviously, maybe I’ll add one other comment, which is our new pump that we’re launching in the early part of next year, filing at the end of this year will be a big driver to that international expansion effort as well.

Caitlin Cronin: Great. And just a follow-up on that one. You will have to get the new pump approved everywhere OUS where you’re already distributing, correct?

Linda Tharby: Yes. But recall that our current pump does work with prefills. It just does not work with all of the prefilled range. Our new pump will work with all of the prefilled range.

Caitlin Cronin: Got it. Okay. And then just a quick one on tariffs. I believe, I think most of your production of consumables is OUS. And how did you factor that into the tariff kind of guidance?

Tom Adams: Yes. Thanks, Caitlin, for the question. So yes, as you know, most of our raw materials and components are U.S. origin. We do send them down to Nicaragua. There is some value added on to those products, and then we purchased those products back from Nicaragua. So, you have to net out the products of U.S. origin and that was part of our factor. We did a lot of analysis looking at our complete supply chain of any parts that were non-U.S. we calculated after doing all that analysis, we calculated just under 100 basis points on what we know today with tariffs.

Caitlin Cronin: Awesome. Thank you so much.

Operator: Next question comes from the line of Chase Knickerbocker with Craig-Hallum. Please go ahead.

Chase Knickerbocker: Hi, good afternoon. Thanks for taking the questions and congrats on the progress here. Just first from me, as we think about international markets, can you kind of give us an update on where you’re at with kind of the overall e-Pump opportunity? And any additional conversations and progress that you and your distributors have made in Q1? And is there any read-through to kind of obviously, the strong quarter in respect to distributor dynamics there, but any kind of read-through into them expecting some increased demand from that channel?

Linda Tharby: So, I think when you refer to the e-Pump opportunity, Chase, you’re referring to opportunity for increased volumes of our consumables with e-Pumps, which is certainly driving part of our first quarter in that we saw some demand from opening up new markets and share gains, which was a big part of it. But also, a big part had to do with our complete system, which was the prefilled win that we’re quite excited about because it’s got a lot of legs there. So, the total e-Pump opportunity we see as being — to date, our consumable share is very low associated with e-Pumps. And we have technical data that shows that our consumables work very well with all e-Pumps. And so, we’re riding that success in our partnership with our IG companies and our new consumables launch in early 2026, we think will help us gain even further share with use with e-Pumps.

Chase Knickerbocker: And as we’re looking at the oncology opportunity, good to hear about the pilot sites. What are you kind of waiting to hear there before it’s kind of all systems go? And can you speak to any other early work that you’ve done around, call it, the unique economics that are within the oncology clinic and kind of how that differs from how we’re used to thinking about your products?

Linda Tharby: So first and foremost, we’re going to think about safety and efficacy with use of our product in those clinics and centers. And thus far, with the work we’ve done so far, we feel very positive about that. When I speak about the positive economics, there are really two factors here. Number one is the strong feedback that we are receiving is that the workflow efficiency, i.e., I may be able to see more patients than one at a time because I’m not needing to manually push. I’m administering with a pump. I may be able to expand my efficiency and flow of patients through the center. The second thing that we see is there is a reimbursement code. If you do a manual push, it’s X dollars. If you do it with a pump, it’s Y dollars.

Y dollars are much higher than with manual push. So, we feel there could be an economic benefit for every infusion that the center also gets higher dollars. So overall, you’re seeing increased patients through the center and higher dollar revenue per patient you see through the center. The safety and efficacy, right, make sure that we do a lot of good in those centers on our value prop. And then second is just confirming out that economic value prop that I just discussed.

Chase Knickerbocker: And will it take some time to kind of prep a partner? Or will that be a pretty quick process once you do kind of make the, call it, all systems go kind of decision there?

Linda Tharby: Yes. So, part of the pilot sites is obviously seeding oncology centers now, and these are big name oncology centers that we have included in our pilot sites. So, we have a distribution partner already lined up and ready to go. They’ve been supporting us and working with us, and they do a lot of work in oncology infusion centers. So, we feel very good about that. And of course, we’ve had the pharmaceutical partner lined up and ready to support our efforts as well. And maybe the only other piece is, obviously, we want to publish on the data that we see out of these sites. We think that will be important for widespread adoption in the U.S. market.

Chase Knickerbocker: Got it. Thank you.

Linda Tharby: Thank you.

Operator: Next question comes from the line of Jason Bednar with Piper Sandler. Please go ahead.

Jason Bednar: Good afternoon. Nice start to the year, everyone. I want to just have a couple of follow-ups from prior topics. On the international side, that was definitely the star of the quarter where a lot of the outperformance came. Really just going to rattle off a few here, I guess, just so we can maybe dial in the cadence for that segment here in the balance of the year. First, are you sizing that tender benefit? I don’t think I heard it in the first quarter or I think you said the second quarter, some contribution as well. And then, Tom, I think you mentioned in response to Frank’s question that revenue growth for international should trend around or at or above maybe a 30% level throughout the year. Maybe help me out there because you got some funky comps just from the prior year and trying to understand is that segment has and is performing well, just so we get it right as we move throughout the year?

And then final thing on international, just maybe how much we should be thinking about for incremental contributions in Japan?

Linda Tharby: So let me maybe start with sizing the tender benefit and the incremental on Japan, and then I’ll turn it to Tom to talk about how you might think about the quarterization and go over that international piece again. So overall, what we saw in the first quarter was the buy-in for the initial win on that prefilled syringe tender. We anticipate we are going to get another order in the back half of the year related to that tender win. And we hope, Jason, to be getting more wins in other areas related to prefills. We think we’re just getting started there. We think that is a multiyear opportunity. Second, on Japan, we have gotten full clearance now on our complete system. And we have got a distribution agreement in place with a new distributor in Japan.

And we anticipate that our sales will really start to uptick in quarter two of this year. And thus far, we’re not planning on any increment knowing it’s taken us a little bit longer to get the actual commercial volumes. If we got further sales in Japan this year, that would be upside to our current international plan. And then finally, on the quarterization on the international, I think the number was 30% on the full year that you can anticipate and that quarter two would be impacted a little bit in terms of that growth percentage given the dynamic of, we think, some pull forward due to the dynamics Tom discussed from Q2 into Q1. So, Tom, I’ll let you get more specific on that one.

Tom Adams: Yes. Just to get a little bit more specific. With respect to your question on comps also, Jason, last year, if you recall, too, we had this BSI regulatory issue, which does impact the comps where we saw some stocking in the first quarter, we saw some stocking in the second quarter. And that plays into some of the quarterly growth numbers. But what I would say is that we started off the year strong with the 2.4 million that you saw there. Certainly, that 400,000 of that, I would say, would be pull ahead for stocking of that tender market as well as some new markets that we’ve added. But after Q2, we expect this to gradually grow and really see some nice growth towards the end of the year in international as those new markets really start to annualize and we see the fruits of adding those new markets into the year. So, a little bit of a topsy there, but we expect to be at that 30% plus growth.

Linda Tharby: Yes. And maybe the only other comment I’d add to what Tom said is to be very clear, given last year’s distributor stocking and this year’s, there was no impact on our international growth in the quarter due to that stocking. We had the same stocking event last year if you read through the quarter one results. So, it’s really a quarter two impact that Tom was highlighting.

Jason Bednar: Okay. That’s helpful. And I’ll come back one more here, Tom, and maybe I’m just being difficult here. I’m trying to understand, you say gradually grow, and I’m trying to put that against really strong growth. Are you saying gradually grow sequentially on an absolute basis? Or I guess I’m just trying to understand like what you mean there? And then I’ve got one follow-up on tariffs.

Tom Adams: That’s exactly what I mean. It’s a sequential growth. So, we’ll see a drop in Q2, and then we’ll see sequential growth from there. And again, very similar pattern to last year, where we see a very strong first quarter and a very strong back end of the year.

Jason Bednar: Okay. All right. Fair enough. And then on the tariff side, it’s more of a clarification point. Tom, I think you said 100 basis point impact from tariffs. Is that a 100-basis point impact to 2025? Or is that an annualized number? I guess I’m trying to understand, would gross margin guidance have been raised by 100 basis points this year, if not for tariffs? Or is that — again, is it 100 basis points annualized, so we’re looking more like 50 basis points of lift this year, if not for tariffs?

Tom Adams: Yes. So that’s already in our guidance. So, when I said, it’s actually under 100 basis points. So, within my guidance of the 61%, 63%, we can accommodate that. And again, we’re offsetting things with manufacturing efficiencies. We’re seeing nice mix in our products. So, we have a lot of things going on in margin with stronger sales outside of the U.S., we have tariffs, we have price increases, but we’re managing through all those things. So, I would say, to answer your question, Jason, all those things are inclusive in my 61% to 63% guidance. If had not been for the tariffs, sure, we could do better on that gross margin.

Jason Bednar: Okay. And that number would then be closer to — is it 200 basis points on an annualized basis?

Tom Adams: Yes, I would say just 150.

Jason Bednar: Very helpful. Thank you.

Operator: Next question comes from the line of Anderson Schock with B. Riley Securities. Please go ahead.

Anderson Schock: Hi. Congrats on the strong quarter and thank you for taking the questions. So first, with the two commercialized drugs, the iron chelation and antibiotic that you plan to submit for 510(k) clearance, could you just provide a little more color on the market opportunity for each?

Linda Tharby: Yes. Anderson, thank you for the note on the quarter, and good to hear your voice. So, on those two drugs, as I said, we’re still working through the total patient populations. We know that, for example, the iron chelation drug, the overall patient base, we feel is about 30,000 patients. We know the regimen is looking at a 1-week course of treatment that could be between five to seven infusions during the course of that week. We know that the antibiotic drug is over 300,000 patients, but we know that still the majority of those are in the hospital. So, we’re not sure how much we might see move into the home. And that course of treatment is anywhere between seven and 14 days, so between seven and 14 days overall with one to three infusions per day.

So overall, there are big numbers, particularly on the antibiotic, but we’re still looking at what the total numbers could look like. And as I mentioned in my prepared remarks, that we believe that the opportunity is probably around $0.5 million in 2026 is our current estimate.

Anderson Schock: Okay. Got it. That’s helpful. And then so developing these without a partner, how should we think about the size of the investment on your end?

Linda Tharby: Yes. Well, I’m not going to go to the specifics of exactly. We have developed a team that has gotten quite good at figuring out how to get new drugs on label. So, it’s some internal efforts. It’s buying that drug. And thankfully, these drugs are not expensive drugs. So, we’re able to purchase those. And then it’s just doing the necessary testing required here internally and some external testing for those drug candidates. What I would say overall at a high level is the payback is in far less than one year on those two candidates. So, it was kind of a no-brainer for us to get that done. Pretty quickly. So, we’re excited about that and anticipate that we’ll file hopefully by Q3.

Anderson Schock: Okay. Got it. And then on the e-Pump collaboration, so how many e-Pump companies are you currently working with? And how many countries? And are there any plans for expansion in new geographies with similar collaborations?

Linda Tharby: Yes. So, we would work with any of the e-Pump companies that are on the market. Today, that would be primarily three companies that we work with in that space. And none of those companies have subcutaneous infusion sets. So that works well for us and works well for them. And we anticipate that those three probably have greater than 80% of the global market. And so, we’re pursuing the ones that have the remaining 20%, but satisfied that with the numbers that are in our plan with our current technical relationships that will be good with the numbers that we’re projecting.

Anderson Schock: Okay, got it. Well, congrats again on the great start to the year and thank you for taking our questions.

Linda Tharby: Thank you.

Operator: Thank you. Ladies and gentlemen, we have reached the end of question-and-answer session. I would now like to turn the floor over to Linda Tharby for closing comments.

Linda Tharby: So, thank you all again for joining us this afternoon. We’re excited about our start to the year. I want to thank the entire KORU team for all of their exceptional efforts to start this year, and we look forward as a team to providing you with further updates on additional opportunities as we make progress towards our 2025 milestones. Have a great rest of your day.

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