Myomo(MYO) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q2 2023 was $6 million, a 62% increase compared to the prior year quarter, driven by the final license payment from the joint venture in China [3][50] - Operating loss for Q2 2023 was $1.1 million, improved from a loss of $2.9 million in Q2 2022 [10] - Net loss for Q2 2023 was $1 million, or $0.04 per share, compared to a net loss of $2.9 million, or $0.42 per share for the same period last year [10] - Gross margin for Q2 2023 was 71.8%, up from 65.3% in the prior year quarter [29] - Adjusted EBITDA for Q2 2023 was a negative $0.8 million, an improvement from a negative $2.5 million in Q2 2022 [31] Business Line Data and Key Metrics Changes - The direct-to-consumer marketing strategy has been effective, adding over 400 medically qualified patients to the pipeline in Q2 [19] - The company received 125 authorizations and orders for MyoPros during Q2, a 23% increase from the prior year [51] - Operating expenses for Q2 2023 were $5.4 million, a 2% increase compared to Q2 2022, primarily due to higher incentive compensation [52] Market Data and Key Metrics Changes - International revenue represented 12% of product revenue in Q2 2023, indicating growth in international markets [28] - The patient pipeline increased to 969 candidates at the end of Q2 2023, a 27% increase from the previous year [51] - The company is focusing on the Chinese market, which represents a significant opportunity due to the large population of patients with paralyzed arms [44] Company Strategy and Development Direction - The company is preparing for the potential reclassification of MyoPro under Medicare Part B, which could significantly increase the addressable market [45][46] - The strategy includes focusing on payers with a history of reimbursing for MyoPro, resulting in a higher-quality pipeline [43] - The company is doubling down on its efforts in Germany, where it is making good progress on reimbursement with payers [94] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, particularly regarding the potential for Medicare Part B coverage, which could open up a large patient population [42][46] - The company anticipates that slight year-over-year revenue growth is attainable, but sequential growth may be challenging [55] - Management highlighted the importance of operational efficiencies and the ongoing contribution from the joint venture in China [110] Other Important Information - The company is on pace to spend approximately $1 million less on advertising in 2023 compared to 2022, as part of a broader cost-saving initiative [30] - Cash, cash equivalents, and short-term investments as of June 30, 2023, were $9 million, with cash used in operating activities significantly reduced compared to the prior year [73] Q&A Session Summary Question: What is the difference between L8701 and L8702? - L8701 is the MyoPro W, which includes just the elbow and wrist, while L8702 includes the elbow, wrist, and hand, which is reimbursed at a higher rate [83] Question: Can you provide comments on how your European business is doing? - The international business is growing, with 12% of revenues coming from international markets, particularly Germany, where reimbursement progress is being made [94] Question: What is the anticipated timeline for hearing back from the DME MACs regarding reimbursement? - The proposed rule was published at the end of June, with a 60-day comment period closing on August 29, and a final rule could be issued in the fall [107]