NeuroMetrix(NURO) - 2023 Q4 - Annual Results

Executive Summary & CEO Commentary NeuroMetrix's mission and product portfolio are presented, along with the CEO's Q4 2023 performance commentary on Quell's growth and DPNCheck's market pressures Company Mission and Overview NeuroMetrix, Inc. is a commercial-stage healthcare company focused on developing and commercializing neurotechnology devices to address chronic pain and diabetes, with key products being the Quell neuromodulation platform and DPNCheck for peripheral neuropathy screening - NeuroMetrix's mission is to reduce the impact of neurological disorders and pain syndromes through innovative non-invasive medical devices[1] - The company's commercial brands include Quell (wearable neuromodulation platform) and DPNCheck (point-of-care screening test for peripheral neuropathy)[8] CEO Commentary on Q4 2023 Performance and Outlook The CEO highlighted accelerated growth for Quell Fibromyalgia in Q4 2023 due to expanded sales and telemedicine capabilities, and the successful FDA 510(k) filing for Quell in chemotherapy-induced peripheral neuropathy (CIPN). Conversely, the DPNCheck market faces significant pressure from CMS reimbursement changes, including the discontinuation of compensation for patient screening in 2025 - Quell Fibromyalgia growth accelerated in Q4 2023, supported by the addition of field business development managers, optimized clinical messaging, direct-to-patient telemedicine, direct-to-physician sales, and reimbursement at select Veterans Administration (VA) facilities[2] - NeuroMetrix achieved its goal of filing a premarket notification (510(k)) with the FDA for Quell for chemotherapy-induced peripheral neuropathy (CIPN) during Q4 2023, following its FDA breakthrough device designation in January 2022[2] - The DPNCheck market, primarily Medicare Advantage (MA), is under pressure due to CMS risk adjustment changes implemented in 2023, with compensation for patient screening for peripheral neuropathy to be discontinued in 2025[2] Business Highlights This section covers Quell's strong Q4 2023 performance and development, along with corporate strategic initiatives such as a reverse stock split, capital raise, and a strategic options review Quell Product Performance and Development Quell Fibromyalgia demonstrated solid growth in Q4 2023, with substantial increases across key operating metrics such as unique prescribers, prescriptions written, and refill months. Additionally, encouraging results were reported from a pilot clinical trial of Quell for post-acute COVID-19 Syndrome (Long COVID) Quell Fibromyalgia Key Operating Metrics (Q4 2023 vs Q3 2023) | Metric | Q4 2023 | Q3 2023 | Change (%) | | :-------------------- | :------ | :------ | :--------- | | Unique Prescribers | 199 | - | +59% | | Prescriptions Written | 583 | - | +123% | | Refill Months | 525 | - | +73% | | Prescription Fill Rate | ~60% | - | - | - Encouraging results from a pilot clinical trial of Quell in post-acute COVID-19 Syndrome (Long COVID) were reported on December 12, 2023, conducted by the Baylor College of Medicine[4] Corporate and Strategic Initiatives NeuroMetrix executed a 1:8 reverse stock split to maintain Nasdaq listing compliance and raised approximately $1.9 million net through its ATM facility to support future operating expenses. The company also initiated a review of strategic options to enhance growth and shareholder value, engaging Ladenburg Thalmann as a financial advisor - A 1:8 reverse split of common stock was successfully executed on November 21, 2023, to increase the trading price and comply with Nasdaq minimum bid requirements[4] - Common stock sales under the ATM facility generated approximately $1.9 million (net) during Q4 2023, intended to offset future operating expenses, including potential expansion of Quell marketing efforts[4] - The company ended Q4 2023 with $18 million in cash and securities[4] - NeuroMetrix announced an initiative to review strategic options to promote growth and maximize shareholder value, retaining Ladenburg Thalmann as a financial advisor[4] Financial Results This section presents NeuroMetrix's Q4 and full year 2023 financial performance, detailing revenue declines, increased net losses, and the underlying factors impacting profitability Q4 2023 Financial Performance NeuroMetrix experienced a significant decline in Q4 2023 financial performance, with revenue decreasing by 29% year-over-year to $1.3 million, primarily due to reduced DPNCheck sales. Gross margin also declined, and operating expenses increased, resulting in a net loss of $1.6 million ($1.43 per share), a substantial increase from the prior year Q4 2023 Financial Performance (Year-over-Year) | Metric | Q4 2023 | Q4 2022 | Change ($) | Change (%) | | :-------------------- | :---------- | :---------- | :--------- | :--------- | | Revenue | $1.3 million | $1.8 million | -$0.5 million | -29% | | Gross Margin Rate | 64% | 67% | -3% pts | - | | Operating Expenses | $2.7 million | $2.1 million | +$0.6 million | +29% | | Net Loss | $1.6 million | $0.7 million | +$0.9 million | +129% | | Net Loss Per Share | $1.43 | $0.73 | +$0.70 | +96% | - The primary reason for the revenue decline was reduced sales volume for DPNCheck, attributed to CMS risk-adjustment reimbursement changes in the Medicare Advantage market[5] - Increased operating expenses were driven by outside engineering services for R&D, sales force expansion for Quell Fibromyalgia, and higher personnel costs due to inflation[5] Full Year 2023 Financial Performance For the full year 2023, NeuroMetrix reported revenues of $5.9 million, a 29% decrease compared to 2022. The net loss for the year significantly increased to $6.5 million ($6.27 per share) from $4.4 million ($4.97 per share) in the prior year Full Year Financial Performance (Year-over-Year) | Metric | FY 2023 | FY 2022 | Change ($) | Change (%) | | :-------------------- | :---------- | :---------- | :--------- | :--------- | | Revenues | $5.9 million | $8.3 million | -$2.4 million | -29% | | Net Loss | $6.5 million | $4.4 million | +$2.1 million | +48% | | Net Loss Per Share | $6.27 | $4.97 | +$1.30 | +26% | Corporate Information This section provides details on NeuroMetrix's Q4 and full year 2023 earnings conference call, an overview of the company's business, and a safe harbor statement regarding forward-looking information Conference Call and Webcast NeuroMetrix hosted a conference call and webcast on February 22, 2024, to discuss its Q4 and full year 2023 results. Participants could register for live telephone access or view an audio-only webcast, with a replay available for one year on the company's investor relations website - NeuroMetrix hosted a conference call and webcast on February 22, 2024, at 8:00 a.m. Eastern[7] - Live telephone access required advance registration, while an audio-only webcast was available in the 'Investors Relations' section of the company's website[7] - A replay of the call will be available for one year on the company's website under the 'Investor Relations' tab[7] About NeuroMetrix NeuroMetrix is a commercial-stage healthcare company that develops and commercializes neurotechnology devices for chronic pain and diabetes. Its product portfolio includes wearable or hand-held medical devices supported by proprietary consumables and software solutions, marketed under the Quell and DPNCheck brands - NeuroMetrix is a commercial-stage healthcare company focused on developing and commercializing neurotechnology devices[8] - The company addresses unmet needs in the chronic pain and diabetes markets[8] - Products include wearable or hand-held medical devices enabled by proprietary consumables and software solutions, such as mobile apps, enterprise software, and cloud-based systems[8] Safe Harbor Statement This section serves as a cautionary statement regarding forward-looking statements within the press release, emphasizing that actual events or results may differ materially due to various risks and uncertainties. The company explicitly disclaims any obligation to update the information or revise any forward-looking statements - The press release contains forward-looking statements subject to risks, uncertainties, and other factors that could cause actual events or results to differ materially[9] - Such factors include estimates of future performance and the ability to successfully develop, receive regulatory clearance, commercialize, and achieve market acceptance for products[9] - The company provides information only as of the date of the press release and expressly disclaims any intent or obligation to update or revise any forward-looking statements[10] Unaudited Financial Statements This section presents NeuroMetrix's unaudited financial statements, including detailed Statements of Operations and Condensed Balance Sheets for Q4 and full year 2023, compared to the prior year Statements of Operations The unaudited Statements of Operations provide a detailed breakdown of NeuroMetrix's financial performance for the fourth quarter and full year ended December 31, 2023, compared to the corresponding periods in 2022, covering revenues, cost of revenues, gross profit, operating expenses, and net loss NeuroMetrix, Inc. Statements of Operations (Unaudited) | Metric | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :-------------------------- | :---------- | :---------- | :---------- | :---------- | | Revenues | $1,317,746 | $1,847,378 | $5,901,425 | $8,256,073 | | Cost of revenues | $469,772 | $617,267 | $1,954,012 | $2,505,833 | | Gross profit | $847,974 | $1,230,111 | $3,947,413 | $5,750,240 | | Research and development | $732,372 | $538,395 | $2,777,960 | $3,239,725 | | Sales and marketing | $860,635 | $629,969 | $3,365,265 | $2,865,615 | | General and administrative | $1,112,066 | $918,214 | $4,955,709 | $4,386,666 | | Total operating expenses | $2,705,073 | $2,086,578 | $11,098,934 | $10,492,006 | | Loss from operations | $(1,857,099) | $(856,467) | $(7,151,521) | $(4,741,766) | | Other income | $207,552 | $164,597 | $622,034 | $325,157 | | Net loss | $(1,649,547) | $(691,870) | $(6,529,487) | $(4,416,609) | Condensed Balance Sheets The unaudited Condensed Balance Sheets present NeuroMetrix's financial position as of December 31, 2023, and December 31, 2022, detailing assets including cash and securities, liabilities such as current liabilities and lease obligations, and stockholders' equity NeuroMetrix, Inc. Condensed Balance Sheets (Unaudited) | Metric | Dec 31, 2023 | Dec 31, 2022 | | :-------------------------------- | :----------- | :----------- | | Cash, cash equivalents and securities | $17,997,151 | $21,199,727 | | Other current assets | $2,857,291 | $2,907,260 | | Noncurrent assets | $569,999 | $562,628 | | Total assets | $21,424,441 | $24,669,615 | | Current liabilities | $1,240,639 | $1,106,412 | | Lease Obligation, net of current portion | $92,485 | $207,516 | | Stockholders' equity | $20,091,317 | $23,355,687 | | Total liabilities and stockholders' equity | $21,424,441 | $24,669,615 |