Financial Data and Key Metrics - Q2 2024 revenue was $612,000, a 5% decline year-over-year, but an improvement compared to the 20% and 13% declines in Q1 2024 and Q4 2023, respectively [21] - Gross profit for Q2 2024 was $538,000, with a gross margin of 88%, slightly down from 89.5% in Q2 2023 due to growth in the financial assistance program [23] - Operating loss in Q2 2024 was $2.2 million, up from $1.1 million in Q2 2023, driven by lower sales volume, increased payroll, public company costs, and non-recurring expenses [24] - Net loss for Q2 2024 was $2.9 million, compared to $2.2 million in Q2 2023, primarily due to higher general and administrative costs and non-cash settlements [25] - Cash on hand as of June 30, 2024, was $1.8 million, up from $51,000 in June 2023, supported by $4.9 million in financing during the first half of 2024 [25][26] Business Line Data and Key Metrics - IB-Stim revenue trajectory improved significantly from Q1 to Q2 2024, with year-over-year revenue declining by 5% and unit sales increasing by 16% [12] - The company has treated over 850 cases in the last 12 months, representing just over 0.1% of the 600,000 children in the U.S. suffering from IBS [12] - RED (Rectal Expulsion Device) submitted an FDA 510(k) in early August 2024, with commercialization expected in late 2024 [10][18] Market Data and Key Metrics - Written insurance policy coverage for IB-Stim is expected to increase covered lives from $22.5 million to $35.1 million once the policy becomes public [8] - Approximately 15 payers are in the review process, and the company expects to exceed $50 million covered lives by the end of 2024 [9] - The company has secured written confirmation from one of the nation's largest not-for-profit health plans, covering 12.6 million members, with policy expected to take effect around October 1, 2024 [8] Company Strategy and Industry Competition - The company's strategy focuses on leveraging strong peer-reviewed publications and academic society support to drive insurance coverage and revenue growth [14] - The submission for a Category 1 CPT code for IB-Stim and the FDA label expansion to include patients aged 8 to 21 are key initiatives to increase market access [9] - RED is expected to become a significant revenue driver, with a Category 1 CPT billing code already in place, enabling immediate reimbursement upon commercialization [18] Management Commentary on Operating Environment and Future Outlook - Management is optimistic about revenue growth in the second half of 2024 and into 2025, driven by increased insurance coverage and the commercialization of RED [20] - The company expects to reach profitability in Q1 2025, supported by strong gross margins and the anticipated ramp-up in IB-Stim and RED revenues [20][31] - The systematic review by NASPGHAN, showing the highest grade certainty level for IB-Stim, is expected to expedite insurance policy coverage and revenue growth [6][9] Other Important Information - The company has closed necessary financing with reputable healthcare funds, ensuring liquidity to reach profitability [11] - The internal prior authorization team, launched in 2023, has been successful in increasing access to care for pediatric patients [16] - The company has submitted an application for a Category 1 CPT code for IB-Stim, which is expected to streamline billing and reimbursement processes [16] Q&A Session Summary Question: Operating expenses and breakeven timeline - Operating expenses averaged $2.5 million per quarter, with $625,000 in non-recurring costs in Q2 2024. The company expects to reach profitability by Q1 2025 [31][32] - Cash burn is estimated at $400,000 to $500,000 per month, with $1.8 million cash on hand and $4.2 million in upcoming financing, providing a 12-month runway [33][34] Question: Feedback from doctors and patients using IB-Stim - Pediatric gastroenterologists have expressed strong support for IB-Stim, citing its efficacy and evidence base. Patient feedback has been overwhelmingly positive, with many families reporting life-changing results [35][36] Question: Timeline and revenue potential for RED - RED is expected to launch in late 2024, with a Category 1 CPT billing code already in place. Revenue predictions are not yet shared, but the product is anticipated to be a significant revenue driver [37] Question: Relationships with investors and potential future financing - The company has strong relationships with healthcare-focused investors and is cautiously optimistic about not needing additional financing before reaching profitability [34][35]
Neuraxis(NRXS) - 2024 Q2 - Earnings Call Transcript