EDEN PRAIRIE, Minn. - NeuroOne Medical Technologies Corporation (NASDAQ:NMTC), specializing in neurological disorder treatments, has amended its distribution agreement with Zimmer Biomet. The revision grants Zimmer Biomet exclusive rights to distribute NeuroOne’s OneRF Ablation System in the U.S. and select markets outside the U.S. NeuroOne anticipates the deal, which includes an upfront $3 million payment and potential additional milestone payments, will significantly increase its revenue and profitability.
The OneRF Ablation System, which is FDA cleared for both diagnostic and therapeutic use, has been employed in brain surgeries since its limited release in April. The system is reported to have successfully identified and ablated brain tissue responsible for seizures, potentially reducing hospitalizations and adverse events. It also offers temperature control features to enhance patient safety.
NeuroOne’s CEO, Dave Rosa, expressed confidence that the partnership with Zimmer Biomet will leverage their leadership in robotic technology and distribution channels to boost the system's market presence. Brian Hatcher, President of SET and CMFT at Zimmer Biomet, echoed the sentiment, expressing enthusiasm for the expanded relationship.
NeuroOne, a developmental stage company, aims to provide minimally invasive and high-definition solutions for various neurological disorders. While the press release includes forward-looking statements regarding the potential benefits of the distribution agreement, it also acknowledges risks that could affect future results, including market acceptance and regulatory changes.
The information for this article is based on a press release statement from NeuroOne Medical Technologies Corporation.
In other recent news, NeuroOne Medical Technologies Corporation has seen significant developments. The company has amended the severance benefits of its top executives, intending to ensure executive retention and stability. This move comes alongside the limited commercial release of their OneRF ablation system, which has been implanted in 16 patients across four centers and has FDA's clearance for recording electrical activity and ablation.
Financially, NeuroOne has reported an increase in product revenue to $826,000, up from $630,000 in the same period last year, and a decrease in net loss to $2.8 million, down from $3.5 million. These figures reflect the company's strategic efforts, which include a $2.65 million private placement and a $3 million credit facility agreement.
Furthermore, NeuroOne has initiated sales discussions with 12 additional centers and transitioned its product line from Evo sEEG diagnostic electrodes to OneRF electrodes. The company has also signed a nonbinding term sheet with an undisclosed global medical technology company for distribution of the OneRF system.
Another notable stride for the company is the CMS approval of a new ICD-10-PCS code for the OneRF ablation procedure, effective from October 1, 2024. The company is also extending its technology to treat pain and is developing drug delivery and spinal cord stimulation systems.
InvestingPro Insights
The recent amendment to NeuroOne Medical Technologies Corporation's (NASDAQ:NMTC) distribution agreement with Zimmer Biomet comes at a crucial time for the company. According to InvestingPro data, NMTC's market capitalization stands at $29.27 million, reflecting its position as a small-cap player in the medical technology sector.
The company's financial health presents a mixed picture. An InvestingPro Tip highlights that NMTC is "quickly burning through cash," which underscores the importance of the $3 million upfront payment from the Zimmer Biomet deal. This cash infusion could provide a much-needed boost to the company's liquidity.
Another InvestingPro Tip indicates that NMTC "suffers from weak gross profit margins." This is corroborated by the InvestingPro data showing a negative gross profit margin of -117.24% for the last twelve months as of Q3 2023. The expanded distribution agreement for the OneRF Ablation System could potentially help improve these margins by increasing sales volume and leveraging Zimmer Biomet's established distribution channels.
Despite these challenges, NMTC has shown a strong return over the last three months, with a price total return of 31.33%. This recent performance might reflect market optimism about the company's strategic moves, including the amended distribution agreement.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. There are 6 more InvestingPro Tips available for NMTC, providing a deeper understanding of the company's financial position and market performance.
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