Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NeuroOne Medical Technologies Corp (NMTC, Financial) completed a $2.65 million private placement and entered into a $3 million secured credit facility agreement, improving their balance sheet.
- The OneRF ablation system has been successfully implanted in 16 patients across four centers, with over 50 RF ablations performed on three patients.
- The company has initiated the sales quotation process with an additional 12 centers, indicating growing interest in their product.
- CMS approved a new ICD-10-PCS code for the OneRF ablation procedure, effective October 1, 2024, which will support accurate data collection and reimbursement claims.
- Product revenue increased to $826,000 in Q3 2024 from $630,000 in Q3 2023, and to $3.2 million for the first nine months of fiscal 2024 from $1.2 million in the same period of fiscal 2023.
Negative Points
- The company reported a net loss of $2.8 million for Q3 2024, although this is an improvement from a net loss of $3.5 million in Q3 2023.
- Total operating expenses for the first nine months of fiscal 2024 were $10 million, only a slight decrease from $10.5 million in the same period of fiscal 2023.
- Cash and cash equivalents decreased to $1.6 million as of June 30, 2024, from $5.3 million as of September 30, 2023.
- The company had no collaboration revenue in the first nine months of fiscal 2024, compared to $1.46 million in the same period of fiscal 2023.
- SG&A expenses increased to $6.1 million for the first nine months of fiscal 2024 from $5.3 million in the same period of fiscal 2023.
Q & A Highlights
Q: Can you provide an update on the recent capital raise and how it will be utilized?
A: (David Rosa, CEO) We completed a $2.65 million private placement and entered into a $3 million secured credit facility agreement. This funding will support the expansion of the OneRF limited commercial launch, complete product development for a new ablation indication, and finalize the diligence process with a potential strategic distribution partner for the OneRF ablation system.
Q: What progress has been made with the OneRF ablation system's limited commercial release?
A: (David Rosa, CEO) We have implanted 16 patients across four centers and performed over 50 RF ablations on three patients. Additionally, we have initiated the sales quotation process with 12 more centers. The manufacturing transition from Evo sEEG diagnostic electrodes to OneRF electrodes has been completed, which is expected to improve product margins and reduce monthly cash burn.
Q: Can you elaborate on the new ICD-10-PCS code for the OneRF ablation procedure?
A: (David Rosa, CEO) CMS approved and granted a new ICD-10-PCS code for the OneRF ablation procedure, effective October 1, 2024. This code will allow hospitals to report inpatient procedures performed using the OneRF ablation system, facilitating accurate data collection and reimbursement claims processing.
Q: What are the future plans for the OneRF ablation system beyond brain applications?
A: (David Rosa, CEO) We plan to leverage our ablation generator for other indications to treat pain, targeting our next FDA application in early 2025. Having multiple indications for the OneRF ablation system will enhance its value to hospitals and support purchasing decisions.
Q: How is the company progressing with its sEEG based drug delivery system?
A: (David Rosa, CEO) We are excited about the potential for our sEEG based drug delivery system, which can deliver pharmacologic therapies to the brain while monitoring their impact. We are in discussions with multiple strategic partners and believe this technology could accelerate drug development timelines and reduce costs.
Q: What are the financial highlights for the third quarter of fiscal year 2024?
A: (Ron McClurg, CFO) Product revenue was $826,000, up from $630,000 in the same quarter last year. For the first nine months, product revenue was $3.2 million, compared to $1.2 million in the same period last year. Total operating expenses were $3.1 million, down from $3.8 million in the prior year. The net loss for the quarter was $2.8 million, compared to $3.5 million last year.
Q: What is the current cash position and working capital of the company?
A: (Ron McClurg, CFO) As of June 30, 2024, the company had cash and cash equivalents of $1.6 million and working capital of $2.2 million. Following the end of the quarter, we completed a $2.65 million private placement and entered into a $3 million secured credit facility agreement.
Q: Are there any updates on strategic partnerships for the OneRF ablation system?
A: (David Rosa, CEO) We have signed a nonbinding term sheet with an undisclosed global medical technology company to distribute our OneRF ablation system. The partnership is subject to the negotiation and execution of definitive documentation, due diligence, and other customary closing conditions.
Q: What advancements have been made in the percutaneous paddle lead program for spinal cord stimulation?
A: (David Rosa, CEO) We are making substantial progress with our percutaneous paddle lead program for spinal cord stimulation, aimed at treating back and neck pain. We expect to finalize the product design by the end of the calendar year and plan to initiate discussions with potential strategic partners for further development and commercialization.
Q: How is the company addressing its financial objectives and cash burn?
A: (David Rosa, CEO) The transition to OneRF electrodes and the completion of the RF generator development are expected to drive improvements in product margins and reduce monthly cash burn. We are well-positioned with both near-term and longer-term growth drivers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
