Financial Data and Key Metrics Changes - In Q3 2024, the company reported revenues of $667,000, a 40% increase year-over-year compared to $477,000 in Q3 2023 [45] - Unit sales increased approximately 50% year-over-year in Q3 2024 [46] - Gross profit for Q3 2024 was $570,000, up from $410,000 in Q3 2023, with a gross margin of 85.4%, down 50 basis points year-over-year [48] - The operating loss improved to $1.7 million in Q3 2024 from $3 million in Q3 2023 [49] - The net loss for Q3 2024 was $1.8 million, significantly reduced from an $8.6 million net loss in Q3 2023 [51] Business Line Data and Key Metrics Changes - The company achieved a 40% year-over-year revenue growth in Q3, attributed to increased insurance coverage and improved billing practices [11][30] - The number of treated cases increased to about 900 patients in the last 12 months, representing just over 0.1% of the 600,000 children in the U.S. suffering from IBS [28] - The company expects significant revenue growth as more children's hospitals begin to order once insurance policy coverage is established [32] Market Data and Key Metrics Changes - The company expanded its covered lives from 4 million at the beginning of the year to approximately 35 million by Q3 2024 [15][20] - The company anticipates exceeding the projected 50 million covered lives by the end of 2024, contingent on positive decisions from payers [20][81] Company Strategy and Development Direction - The company is focused on achieving cash flow breakeven and expects to continue revenue growth into 2025, driven by increased insurance coverage and the commercialization of new products [43][36] - The receipt of a Category 1 CPT code is seen as a critical milestone that will facilitate easier billing and reimbursement processes [23][60] - The company is optimistic about the commercialization of the RED device, which is expected to launch in late 2024 and has a similar total addressable market (TAM) to IB-Stim [37][78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued growth trajectory, citing strong demand and enthusiasm from healthcare providers [47] - The company is optimistic about achieving profitability in 2025, supported by the expected publication of academic society guidelines that will enhance insurance coverage [83][85] - Management highlighted the importance of independent academic guidelines for increasing insurance coverage and driving revenue growth [18][84] Other Important Information - The company secured a $5 million investment to strengthen its liquidity position, which is expected to close in mid-November [44][52] - The company has no long-term debt as of September 30, 2024, but has $148,000 in short-term debt related to business insurance premiums [54] Q&A Session Summary Question: Significance of Category 1 code and 510(k) extension - The Category 1 code simplifies billing and reimbursement processes, making it easier for hospitals to adopt the technology [58][60] - The 510(k) extension increases the age range for treatment, allowing more patients to be treated under the new guidelines [63] Question: Impact of age extension on covered lives - While the age extension allows for more patients to be treated, written policy coverage from payers is still necessary to increase covered lives [65][66] Question: Evidence of cure versus treatment - The company does not use the term "cure" but has data showing significant long-term outcomes for patients [72][73] Question: Plans for adult indications - The company is working towards FDA approval for adult indications, aiming for late 2025 [75] Question: Market strategy for new product RED - The company plans to utilize its existing sales force to market the RED device, which has a strong reimbursement framework [79][80] Question: Target of 50 million covered lives and profitability - The company remains optimistic about reaching the target of 50 million covered lives by year-end and achieving cash flow profitability in 2025 [81][83]
Neuraxis(NRXS) - 2024 Q3 - Earnings Call Transcript