NeurAxis, Inc. (“NeurAxis,” or the “Company”) (NYSE American:
NRXS), a medical technology company commercializing neuromodulation
therapies for chronic and debilitating conditions in children and
adults, today announced results for the second quarter period ended
June 30, 2024.
Recent Operational
Highlights
- Expanded total
covered lives to approximately 22.5 million covered lives compared
to 4.5 million covered lives as of May 1, 2023. Recent medical
policy coverages include:
- BCBS licensee in
Florida covering over 6 million lives.
- BCBS licensee in
North Dakota covering over 310,000 people.
- BCBS plan in the
mid-Atlantic region, providing coverage for approximately 7 million
covered lives.
- Medical Policy
with a BCBS licensee covering approximately 1 million covered
lives
- BCBS plan in
the mid-Atlantic with approximately 3.5 million covered lives.
- One of the
nation’s largest not for profit health plans, serving over 12
million members, has committed to provide formal coverage beginning
October 1st, 2024. Once this policy is in the public domain, the
covered lives will be over 35 million.
- Submitted to
the FDA its innovative rectal expulsion device (RED) product, which
was licensed from the University of Michigan. RED’s innovative
design simplifies anorectal function testing and can be used
without interrupting clinical workflow. FDA clearance is expected
in the fourth quarter of 2024.
- Announced a
submission to the FDA for the expansion of IB-Stim label to allow
for a larger patient population beyond the current 11-18 years of
age to 8-21 years.
- The Company
remains committed to clinical research in the pediatric space, with
16 peer-reviewed publications. All studies were carried out in US
children’s hospitals using NeurAxis’ PENFS technology. This level
of evidence puts NeurAxis in a great position to continue expanding
payor coverage and increasing adoption of the technology.
-
Announced the results of the largest multicenter, prospective
registry in pediatric DGBIs. It evaluated outcomes of pediatric
patients (8-18 years) following a 4-week course of IB-Stim in a
real‐world clinical setting. Seven large tertiary care centers
enrolled patients with pain-associated DGBIs. Patients were asked
to fill out validated pediatric questionnaires, including the
abdominal pain index (API). Data was collected weekly during
therapy and then every 3 months up to 1 year. Compared to baseline
scores, there were significant improvements in abdominal pain (API)
after 4 weeks of IB-Stim treatment at every time point, including 6
months (p<0.001) and 12 months (p<0.001).
- Announced the
results of a retrospective study led by the Cincinnati Children’s
Hospital Medical Center comparing and reviewing the records of 101
adolescent patients with DGBIs treated with IB-Stim™ therapy or
standard-of-care medications, amitriptyline (tricyclic
antidepressant) or cyproheptadine (antihistamine). The comparative
analysis noted:
- At follow-up,
IB-Stim™ therapy showed improvements in abdominal pain (p=0.001)
and functional disability (p=0.048) compared to baseline, while
amitriptyline showed improvements in abdominal pain (p=0.034).
- In a comparison
of outcomes between groups, IB-Stim™ was more effective than
cyproheptadine in improving abdominal pain (p=0.04) and did not
differ from amitriptyline (p=0.64). Nausea scores did not differ
between groups (p>0.05); and
- Disability
scores between groups were only more effective for amitriptyline
vs. cyproheptadine (p=0.03). Disability scores did not differ from
amitriptyline compared with IB-Stim™ (p=0.21).
- In addition to
closing $6.1 million in committed financing from various investors,
including affiliates of Inspire Health Alliance, in the first
quarter of 2024, the Company secured an additional $3.0 million of
funding in May 2024 with identical terms from a reputable
healthcare-focused fund. The remainder of the financing is expected
to be paid monthly through 2025.
Management Commentary
Brian Carrico, Chief Executive Officer of
NeurAxis, commented, “We are excited about another strong quarter
of continued execution, bringing us much closer to having the
complete foundation in place to scale revenues. Our
commercialization strategy for IB-Stim™, based on strong data
publication leading to insurance coverage, is beginning to bear
fruit. We now have 22.5 million lives under insurance coverage with
many pending decisions, a significant increase from 4.5 million a
year ago. While revenues in 2Q24 declined 5.3% on a year-over-year
basis, this is a significant improvement compared to year-over-year
declines of 19.7% and 13.3% in 1Q24 and 4Q23, respectively. Most
importantly, the revenue we lost in the previous quarters is not
due to lost accounts but rather accounts receiving
“no-authorization required” responses from payers, which means the
claim will likely not be paid. These accounts are set up and ready
to begin treating again once the larger payers have a policy in
place. The fact that we are alleviating the losses without these
accounts shows we are adding accounts, and current accounts are
treating more and more children as their insurance coverage
increases. The demand for our product is at record levels and
continues to increase. In the second half of 2024, we expect to
roughly double our lives under insurance coverage to 50 million,
setting the stage for growth acceleration in late 2024 and into
2025. In recent weeks, we received a commitment from our largest
payer to date with over 12 million covered lives, with launch
expected on October 1st.”
“Further contributing to our growth acceleration
in 2H24 will be the commercialization of RED, our licensed
innovative rectal expulsion device, a self-inflating balloon
expulsion test that allows for point-of-care testing to effectively
identify patients with an evacuation disorder, such as pelvic floor
dysfunction. We have made the submission to the FDA and expect the
device to receive FDA clearance late in the fourth quarter of 2024”
Mr. Carrico continued.
Mr. Carrico concluded, “We remain committed to
further commercializing our lead pediatric indication for
functional abdominal pain associated with IBS in children. We have
recently made an FDA submission to expand our label beyond the
current 11-18 year old patient population to the 8-21 year old
patient population and four devices. In addition, we are advancing
our development pipeline for a number of new indications leveraging
our unique neuromodulation therapy, including Functional Dyspepsia,
Cyclic Vomiting Syndrome, and more. As a result of recent
financings with long-term investors in the healthcare space, our
balance sheet is well positioned to execute our business plans for
the foreseeable future.”
Second Quarter 2024 Financial Results
Revenues in the second quarter of 2024 were
$611.5 thousand, down 5.3% compared to $646.0 thousand in the
second quarter of 2023. The decrease was primarily due to fewer
shipments to certain customers as they manage through the insurance
reimbursement process, partially offset by an increase in volume to
our patient assistance customers that receive devices at a
discount. While we have made great strides in recent months in
gaining coverage, a lag exists between insurance coverage and order
placement due to billing and coding implementation processes unique
to each of our customers. Given our recent success with new payor
coverage, we expect our revenue to increase in late 2024 and into
2025.
Gross profit in the second quarter of 2024 was
$538.0 thousand, a 6.9% decrease compared to $578.2 thousand in the
second quarter of 2023 due to the lower sales volume. The decline
in gross margin to 88.0% in the second quarter of 2024 from 89.5%
in the second quarter of 2023 was due to growth in deliveries from
our financial assistance programs that are discounted to patients
without insurance coverage.
Operating loss in the second quarter of 2024 was
$2.2 million, an increase of 97.5% compared to $1.1 million in the
second quarter of 2023. The increase was primarily due to (i) lower
sales volume, (ii) the build out of the market access and sales
teams, (iii) recurring costs of becoming a publicly-held company
including legal, insurance, investors relations, exchange listing
and board fees, (iv) advertising costs in order to expand market
access, (v) expenses related to the introduction of an annual
short-term incentive bonus program (vi) $435 thousand of
non-recurring severance and consulting costs, partly offset by
lower selling and research and development expenses.
The net loss in the second quarter of 2024 was
$2.9 million, an increase of 30.5% compared to $2.2 million in the
second quarter of 2023. The increase was primarily due to (i)
higher general and administrative costs and (ii) the non-cash
settlement of certain pre-IPO Series A Preferred Stock shareholder
claims, partly offset by the elimination of debt discount, issuance
costs, debt extinguishment and derivative fair valuation
charges.
Cash on hand as of June 30, 2024 was $1.8
million as compared to $51.4 thousand as of June 30, 2023. Although
the Company had no long-term debt as of June 30, 2024, short-term
debt, net of deferred financing fees, totaled $4.8 million due to
proceeds received from the issuance of notes payable during the six
months ended June 30, 2024.
Conference Call Details
Date and Time: Friday, August 9, 2024, at
9:00am ET
Live Webcast Information: Interested parties
can access the conference call via a live webcast, which is
available in the Investor Relations section of the Company's
website at https://ir.neuraxis.com/ or
https://edge.media-server.com/mmc/p/bettcvsw. For participants
listening through the webcast, questions can be sent in through the
portal using the “Ask a Question” link or by emailing questions to
NRXS@lythampartners.com.
Call-in Information: Interested parties can
also access the live conference call by initially registering at
the following link. Upon completion of the registration link,
call-in participants will receive the dial-in info and a unique PIN
to join the call as well as an email confirmation with the
details.
Replay: A webcast replay will be available in
the Investor Relations section of the Company's website at
https://edge.media-server.com/mmc/p/bettcvsw or
https://ir.neuraxis.com/.
About NeurAxis, Inc.NeurAxis,
Inc., is a medical technology company focused on neuromodulation
therapies to address chronic and debilitating conditions in
children and adults. NeurAxis is dedicated to advancing science and
leveraging evidence-based medicine to drive adoption of its
IB-Stim™ therapy, which is its proprietary Percutaneous Electrical
Nerve Field Stimulation (PENFS) technology, by the medical,
scientific, and patient communities. IB-Stim™ is FDA cleared for
functional abdominal pain associated with irritable bowel syndrome
(IBS) in adolescents 11-18 years old. Additional clinical trials of
PENFS in multiple pediatric and adult conditions with large unmet
healthcare needs are underway. For more information, please
visit http://neuraxis.com.
Forward-Looking Statements
Certain statements in this press release are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements other than statements of
historical fact are forward-looking statements. Forward-looking
statements which include, but are not limited to, statements
regarding FDA clearance in the fourth quarter of 2024, the timing
of the receipt of financing proceeds, revenue growth, and wider
insurance acceptance of our products are based on management’s
current assumptions and expectations of future events and trends,
which affect or may affect the Company’s business, strategy,
operations or financial performance, and actual results and other
events may differ materially from those expressed or implied in
such statements due to numerous risks and uncertainties.
Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified.
There are a number of important factors that could cause actual
results, developments, business decisions or other events to differ
materially from those contemplated by the forward-looking
statements in this press release. These factors include, but are
not limited to,, the conditions in the U.S. and global economy, the
trading price and volatility of the Company’s stock, public health
issues or other events, the Company’s compliance with applicable
laws, the results of the Company’s clinical trials and perceptions
thereof, the results of submissions to the FDA, the timing of
decisions by insurance companies to provide coverage of our
products, the results of the shareholder vote to enable the
issuance of the Preferred Stock, and factors described in the Risk
Factors section of NeurAxis’s public filings with the Securities
and Exchange Commission (SEC). Because forward-looking statements
are inherently subject to risks and uncertainties, you should not
rely on these forward-looking statements as predictions of future
events. These forward-looking statements speak only as of the date
of this press release and, except to the extent required by
applicable law, the Company undertakes no obligation to update or
revise these statements, whether as a result of any new
information, future events and developments or otherwise.
This page discusses research activities with
percutaneous electrical nerve field stimulator (PENFS) technology.
Please note, the research being described includes information
about technology and intended uses of that technology which have
not been reviewed or approved/cleared by the U.S. FDA, and is being
provided for informational purposes only. NeurAxis does not
recommend or suggest the use of its PENFS™ IB-Stim™ device for uses
beyond those that are cleared by the U.S. FDA. See
https://ibstim.com/important-information/.
Contacts:
CompanyNeurAxis,
Inc.info@neuraxis.com
Investor Relations Lytham PartnersBen
Shamsian646-829-9701shamsian@lythampartners.com
NeurAxis, Inc.Condensed Statements of
Operations (Unaudited) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
Net sales |
$ |
611,500 |
|
|
$ |
646,021 |
|
|
$ |
1,258,135 |
|
|
$ |
1,451,131 |
|
Cost of goods sold |
|
73,458 |
|
|
|
67,813 |
|
|
|
148,539 |
|
|
|
163,713 |
|
Gross profit |
|
538,042 |
|
|
|
578,208 |
|
|
|
1,109,596 |
|
|
|
1,287,418 |
|
Selling expenses |
|
62,274 |
|
|
|
78,791 |
|
|
|
142,304 |
|
|
|
186,723 |
|
Research and development |
|
54,312 |
|
|
|
109,789 |
|
|
|
59,882 |
|
|
|
126,586 |
|
General and administrative |
|
2,628,288 |
|
|
|
1,507,169 |
|
|
|
4,946,362 |
|
|
|
2,987,923 |
|
Operating loss |
|
(2,206,832 |
) |
|
|
(1,117,541 |
) |
|
|
(4,038,952 |
) |
|
|
(2,013,814 |
) |
Other (expense) income: |
|
|
|
|
|
|
|
Financing charges |
|
- |
|
|
|
- |
|
|
|
(230,824 |
) |
|
|
(2,772 |
) |
Interest expense |
|
(80,697 |
) |
|
|
(194,690 |
) |
|
|
(107,257 |
) |
|
|
(356,378 |
) |
Change in fair value of warrant liability |
|
7,576 |
|
|
|
(36,050 |
) |
|
|
(1,708 |
) |
|
|
198,757 |
|
Change in fair value of derivative financial instruments |
|
- |
|
|
|
860 |
|
|
|
- |
|
|
|
192,157 |
|
Amortization of debt discount and issuance costs |
|
(63,817 |
) |
|
|
(887,937 |
) |
|
|
(85,500 |
) |
|
|
(3,550,592 |
) |
Extinguishment of debt liabilities |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,129,498 |
|
Other income |
|
2,961 |
|
|
|
2 |
|
|
|
2,961 |
|
|
|
1,552 |
|
Other expense |
|
(576,901 |
) |
|
|
(258 |
) |
|
|
(577,081 |
) |
|
|
(7,430 |
) |
Total other (expense) income, net |
|
(710,878 |
) |
|
|
(1,118,073 |
) |
|
|
(999,409 |
) |
|
|
(2,395,208 |
) |
Net loss |
$ |
(2,917,710 |
) |
|
$ |
(2,235,614 |
) |
|
$ |
(5,038,361 |
) |
|
$ |
(4,409,022 |
) |
|
|
|
|
|
|
|
|
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