Meet Envoy Medical: Fly exclusive interview with CEO Brent Lucas

In an exclusive interview with The Fly, Envoy Medical (COCH) CEO Brent Lucas talked about the company, a new Congressional bill, upcoming milestones, misconceptions, and much more.

HEARING DEVICE COMPANY: Envoy Medical describes itself as a hearing health company focused on providing innovative technologies across the hearing health spectrum. The company has pioneered fully implanted devices for hearing loss, including Esteem active middle ear implant available in the U.S. since 2010, and Acclaim cochlear implant, an investigational device.

“We are not a hearing aid company, but we are a hearing device company,” CEO Brent Lucas explained to The Fly in an exclusive interview. “We have two devices currently. One is FDA approved, the Esteem, and the other is an investigational device in clinical trials, and that’s called the Acclaim. Both are different from everything else on the market in that they are fully implanted A and B. They use the ear to pick up sound, not a microphone.”

SUBSTANTIAL ADVANCEMENT: Earlier this month, Envoy Medical announced the introduction of a new bipartisan Congressional bill, titled the Hearing Device Coverage Clarification Act. The bill seeks to clarify that fully implanted active middle ear hearing devices are prosthetics and not subject to the current Medicare hearing aid coverage exclusion. If approved, “this would be a substantial advancement for the industry as a whole. Specifically, Envoy Medical’s device Esteem would be able to be covered or become a coverable benefit under Medicare. And that would be a great thing for the business, but also for all the patients that we’ve talked to over the years who would like to have access to this device. Because it’s not covered by Medicare, they cannot financially afford it,” Lucas added.

UPCOMING MILESTONES: Looking to 2024, Envoy’s CEO expects “a lot of great things to happen.” “If we are able to progress as I think we will be able to, we should begin our pivotal study for the Acclaim device, which would be the first pivotal study in the U.S. for a fully implanted cochlear implant. We’re pretty excited about that. I’m also hoping that we will make progress with this (Congressional) bill, potentially getting a companion bill introduced in the Senate.,” he adds.

The executive also hopes “investors are paying attention to where we are with our early feasibility study at Mayo Clinic. We currently have three patients that have been implanted. That is the first U.S. trial that we’re aware of for a fully implanted cochlear implant. It’s an early feasibility study, so it’s kind of like a first in human. Those three patients have been through their 12-month follow-up visits. We will now, hopefully, transition to a pivotal study.”

UNDERAPPRECIATED: Late last year, two Wall Street analysts initiated coverage of Envoy Medical with Buy-equivalent ratings, with Lake Street saying at the time investors would be “rewarded for taking a longer-term view” as the company seeks FDA approval for its fully implantable cochlear implant around 2026. But Lucas believes Wall Street is still not fully appreciative of Envoy nor its potential.

“I think one of the things that I’ve come to learn since we have become a public company is the U.S. is that Wall Street does not understand the hearing loss marketplace. They don’t understand the differences between the technologies, and they don’t understand how Envoy Medical has a real opportunity to disrupt a multi-billion dollar industry. Our largest competitor right now is Cochlear Corporation based out of Australia. Their market cap is north of $10B. Our market cap is sub-50 as of today. We should be able to close that gap. And I think investors who have the foresight and the initiative to look at Envoy Medical and understand our products and technology, I think they’ll see that we have a lot of open space in front of us, and I hope that they will be rewarded.”

UNFAIR, UNWARRANTED TARNISH: Discussing potential misconceptions regarding the company, CEO Lucas noted that Envoy Medical “is a startup company that has been around for roughly 30 years. And I think when you have a company that’s had ups and downs over the course of its history, people might have misconceptions or might think differently about the company because of maybe how the company operated 20 years ago.”

“I also think people need to really understand that the hearing industry is massive. The total available market just in the U.S. alone, we’re talking 40 to 50 million patients with hearing loss, different types of hearing loss, different technologies,” the executive tells The Fly. Lucas also points out that there seems to be “an unfair and unwarranted tarnish on the company because we went public via a SPAC. I sometimes call this a ‘SPAC hangover.’ I think we are not getting the respect we deserve because SPACs have fallen out of favor with the investor market and apparently investors paint with broad strokes – something is all good or all bad… That will not matter as time goes on. What will matter is the foundation we have built to disrupt our competitors’ complacency.”

“Meet the Company” is The Fly’s recurring series of exclusive short interviews with Executive Officers to offer a deeper look inside the company.