Myomo(MYO) - 2019 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q1 2019 was approximately $830,000, representing a 165% increase compared to Q1 2018 [18] - Gross margin improved to 79% in Q1 2019 from 65% in Q1 2018, driven by higher average selling prices and cost reductions [19] - Operating expenses increased by 28% year-over-year to approximately $3,337,000 [20] - Net loss for Q1 2019 was approximately $2,598,000, or $0.17 per share, compared to a net loss of $2,345,000, or $0.20 per share in Q1 2018 [20] - Cash on hand at March 31, 2019, was approximately $9,234,000, up from $6,541,000 at December 31, 2018 [22] Business Line Data and Key Metrics Changes - The company sold 35 units in Q1 2019, a 150% increase over the 14 units sold in Q1 2018 [18] - Direct billing accounted for 22% of Q1 2019 revenues, contributing to the higher average selling price [19] - The reimbursement pipeline grew to 354 units by March 31, 2019, up from 306 units at the end of 2018 [24] Market Data and Key Metrics Changes - The company expanded its U.S. distribution footprint by adding O&P channel partners in the top 50 Metropolitan Statistical Areas [13] - International expansion efforts included partnerships with O&P providers in Italy, Chile, and Australia, although revenue from international sales remains insignificant at this stage [15] Company Strategy and Development Direction - The company aims to become the worldwide standard of care for upper extremity paralysis by expanding its sales and marketing efforts [29] - The focus is on growing the reimbursement pipeline through direct-to-patient marketing and screening days [29] - The company is also working on launching a pediatric device later in the year, which is driving R&D expenses [36] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding Medicare coverage policies and the potential for significant revenue growth in 2019 [15][23] - The company expects operating leverage in 2019, with incremental gross profit dollars anticipated to exceed incremental operating expenses [23] - The cash burn rate in Q1 supports the expectation that available cash is sufficient to fund operations through the end of 2019 [26] Other Important Information - The company completed a follow-on public offering on February 12, 2019, generating net proceeds of approximately $5.6 million [22] - The company is actively following up with patients who exited the reimbursement pipeline to keep them engaged in the process [45] Q&A Session Summary Question: Can you talk about O&P centers and their billing preferences? - The preference varies among O&P providers; some prefer traditional billing while others favor a fee-for-service model [33] Question: Is the increase in R&D expenses related to headcount? - Yes, the increase is primarily headcount-driven as the company prepares to launch a pediatric device [36] Question: Have there been any communications with CMS regarding reimbursement? - Limited contact has occurred; the company is awaiting CMS's coverage policy decisions [38] Question: What proportion of submitted pre-authorizations are direct billing? - The company does not typically provide that level of detail regarding direct billing versus other O&P providers [41] Question: Is the first quarter typically slow for generating leads? - Yes, Q1 is usually slower due to year-end resets, but the company did not see a steep drop-off in leads this year [44]