Tivic Health CEO’s Letter to Shareholders
Tivic Health® Systems, Inc. (Nasdaq: TIVC), a health tech company pioneering bioelectronic medicine, has released its annual letter from the CEO to shareholders, highlighting key milestones in 2024 and setting the stage for exciting advancements in 2025.
Reflecting on 2024: Progress and Achievements
As we approach the end of 2024, I want to take a moment to reflect on the significant strides Tivic Health has made and share the exciting opportunities ahead. This year has been one of tremendous growth, marked by several key achievements across both our commercial business and clinical innovations.
Improvements in Commercial Business:
- ClearUP 2.0 Launch: Tivic Health introduced ClearUP 2.0, improving the customer experience and addressing technical issues that emerged in late 2023. This product upgrade significantly enhanced customer satisfaction and effectiveness.
- Strategic Partnerships: Our partnerships with McKesson and Cardinal Health saw substantial progress in the latter half of the year. These collaborations have accelerated Tivic Health’s market reach and helped build a strong foundation for growth.
- Customer Engagement and Reviews: With improvements in both product and customer engagement, ClearUP now boasts an impressive 4.4-star average customer rating, a significant improvement over previous years. Additionally, Tivic Health significantly reduced defect-related returns.
- Optimized Marketing and Supply Chain: Tivic Health has focused on optimizing marketing strategies and refining our supply chain. These efforts have led to a remarkable gross margin of over 65% for our direct-to-consumer (D2C) channels, a major leap from the under 28% margin reported in 2023.
The Future Focus: Vagus Nerve Stimulation (VNS)
While our commercial business continues to thrive, some of the most exciting developments at Tivic Health are taking place in the field of Vagus Nerve Stimulation (VNS), which we believe holds the potential to revolutionize treatments for various medical conditions.
VNS, primarily used with surgically implanted devices, is gaining significant attention in the medical world. Market research from Polaris Research suggests the VNS market will reach $21 billion in the next five years, growing at a compound annual growth rate (CAGR) of 10.6%. Implanted devices are already approved for conditions like depression, epilepsy, and chronic stroke rehabilitation. However, Tivic Health is taking a bold step forward with non-invasive VNS (ncVNS), offering a less invasive, more cost-effective pathway to achieving similar or better outcomes than traditional implants.
In May 2024, Tivic Health completed a successful pilot study with the Feinstein Institute of Bioelectronic Medicine, demonstrating that our ncVNS approach can induce significant, clinically meaningful changes in brain, heart, and nervous system activity—results that align with vagus nerve stimulation.
We are now progressing with a second collaborative study to fine-tune the parameters of ncVNS, including electrode positioning, frequency, and stimulation amplitude. Early results have been positive, fueling our confidence as we plan to move toward clinical trials with target patient populations in 2025. These studies have not only improved efficacy but also generated new intellectual property (IP), which Tivic Health is actively protecting on a global scale.
Expanding IP and Market Potential
Tivic Health’s innovation in ncVNS has led to a robust U.S. and international IP portfolio. We now hold 16 issued patents and 10 pending patents in the U.S., Europe, India, and China, with plans for continued expansion. Our ongoing IP strategy aims to protect and solidify our market position as we bring ncVNS into the broader healthcare landscape.
In-depth market research has uncovered a significant $30 billion opportunity for Tivic Health’s non-invasive VNS approach, providing further validation of our strategic direction.
Looking Ahead to 2025: Strategic Priorities
The progress we’ve made in 2024 has positioned Tivic Health for a promising future. Looking to 2025, we are focused on several key priorities:
- Expanding ClearUP: Tivic Health aims to explore new opportunities to increase cash flow from ClearUP, optimizing both its market presence and sales performance.
- Clinical Advancements in VNS: Tivic Health is committed to completing our current work with the Feinstein Institute of Bioelectronic Medicine and advancing our clinical trials in VNS. These trials will move us closer to securing regulatory approvals for transformative treatments in the years to come.
- Target Indications and Trials: Tivic Health is planning disease-specific clinical trials for VNS, which will bring us closer to providing life-changing solutions for patients in need. We look forward to sharing more details about these target indications as we move forward.
- Maximizing Shareholder Value: Tivic Health is actively exploring options to maximize shareholder returns, including actions to ensure Nasdaq listing compliance and drive long-term value.
As Tivic Health moves into 2025, we are excited about the future and confident that our continued innovation, strategic growth, and focus on delivering meaningful solutions will drive our success. Thank you for your continued support, and we look forward to sharing more updates with you as we move forward.
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