NeuroOne Medical (TASE:PMCN) Technologies Corp (NMTC) saw its stock price jump by 28.21% following its Q4 2024 earnings call, reflecting investor optimism around the company's recent innovations and strategic partnerships. While the company reported a net loss of $12.3 million for the fiscal year, its product revenue showed a significant year-over-year increase, and the launch of its new FDA-cleared RF ablation system has been a focal point for future growth.
Key Takeaways
- NeuroOne's product revenue increased by 77% year-over-year, reaching $3.5 million.
- The company launched the first FDA-cleared RF ablation system for brain procedures.
- Stock price surged by 28.21% in response to the earnings call.
- NeuroOne expanded its partnership with Zimmer Biomet, further solidifying its market position.
- Despite a net loss increase, the company projects substantial revenue growth for FY 2025.
Company Performance
NeuroOne's overall performance in FY 2024 was marked by significant product revenue growth, despite a widened net loss. The company's strategic focus on innovation and partnerships has positioned it well within the neurological medical device market. The launch of the RF ablation system and expansion into new indications like trigeminal neuralgia and spinal cord stimulation are expected to drive future growth.
Financial Highlights
- Product revenue: $3.5 million, a 77% increase from FY 2023.
- Q4 product revenue: $300,000, down from $700,000 in the prior year.
- Net loss: $12.3 million, a slight increase from $11.9 million in FY 2023.
- Cash and cash equivalents: $1.5 million as of September 30, 2024.
Earnings vs. Forecast
The earnings per share (EPS) forecast was -$0.09, but actual EPS figures were not disclosed, making it difficult to assess the company's performance against expectations. Revenue forecasts were not specified either.
Market Reaction
The stock price increased by 28.21%, reflecting strong investor confidence in the company's recent product launches and strategic partnerships. This price movement is significant, given the stock's 52-week range of $0.551 to $1.72, indicating a positive market sentiment despite financial losses.
Company Outlook
NeuroOne projects FY 2025 revenue between $8 million and $10 million, representing a growth of 132% to 190%. The company plans to submit its RF ablation system for trigeminal neuralgia to the FDA in the first half of 2025, alongside exploring partnerships for its spinal cord stimulation technology.
Executive Commentary
CEO Dave Rosa highlighted the unique position of the RF ablation system, stating, "We are proud that the 1 RF ablation system is the first and only FDA cleared system with an intended use for both reporting electrical activity and ablation of nervous tissue utilizing the same device." He also noted increased interest from epilepsy centers, saying, "To date, 24 epilepsy centers have requested proposals to acquire the technology, which doubled from last quarter."
Q&A
The earnings call transcript did not include a specific Q&A section, leaving some analyst questions and concerns unaddressed.
Risks and Challenges
- Limited cash reserves at $1.5 million could constrain future operations.
- The decrease in Q4 product revenue may indicate potential market challenges.
- Increasing net losses could impact long-term financial stability.
- Regulatory hurdles for new product approvals remain a potential risk.
- Market competition in the neurological device sector could affect growth prospects.
Full transcript - Neuroone Medical Technologies Corp (NMTC) Q4 2024:
Conference Operator: Good day, ladies and gentlemen. Welcome to the NeuroOne 4th Quarter and Fiscal Year End 2024 Earnings Call. Today's call will be conducted by the company's Chief Executive Officer, Dave Rosa and Ron McClurg, the company's Chief Financial Officer. Chris Volker, the company's Chief Operating Officer, will also be in attendance. Before I turn the call over to Mr.
Rosa, I'd like to remind you that this conference call will include forward looking statements within the meaning of U. S. Federal Securities Laws with respect to future operations, financial results, events, trends and performance, which are based on management's beliefs and assumptions as of today's call or other specified date. Forward looking statements may involve known and unknown risks, uncertainties and other factors, which may cause actual results to differ materially from those expressed or implied by such statements. See nora1's financial results press release and SEC filings for information regarding specific risks and uncertainties that could cause actual results to differ.
Except as required by law, nora1 undertakes no obligation to update such forward looking statements. With that, I will turn the call over to Mr. Dave Rosa, CEO of NeuroOne. Please go ahead, sir.
Dave Rosa, Chief Executive Officer, NeuroOne: Thanks, operator, and good morning to everyone. During our fiscal Q4 and through today, we have continued to execute our plan and accomplished key milestones regarding commercialization, product development and financial objectives. In 2024, our top priorities were to pursue a 510 clearance from the FDA to market our 1 RF ablation system and to secure a strategic partnership for distribution. While there was risk associated with the 510 given there were no other devices with such a clearance, we successfully achieved this objective as well as securing a strategic partnership to distribute the system. We are proud that the 1 RF ablation system is the first and only FDA cleared system with an intended use for both reporting electrical activity and ablation of nervous tissue utilizing the same device.
Our recent announcement regarding the extension of the partnership with Zimmer Biomet provides a broad distribution network for both the U. S. And certain OUS geographies. In addition, NeuroOne received an upfront license payment of $3,000,000 and the potential to earn an additional milestone payment if certain performance criteria are achieved. We expect the expanded partnership to boost NeuroOne sales and to drive improved profitability.
With that confidence, we are excited to provide guidance for fiscal year 2025 for revenue of $8,000,000 to $10,000,000 representing revenue growth of 132% to 190% over 2024. We are also projecting gross margins for fiscal year 2025 to range between 47% 51% compared to gross margins of 31% in 2024. We are very happy to be reporting strong annual revenue growth in fiscal 2024 and expect our revenue growth and margin improvement to accelerate in 2025. We have also been able to strengthen our balance sheet with a $3,000,000 license payment from Zimmer Biomet along with the improved product gross margins from the expanded Zimmer Biomet Partnership as well as the $2,650,000 private placement completed in August. Regarding the launch of the 1 RF ablation system, we have been working very closely with the Zimmer Biomet team to initiate commercialization activities, including initial product shipments and training of Zimmer Biomet personnel.
Physician interest has been very strong, including during the product exhibition at the American Epilepsy Society meeting last week. We are also very happy to report that 1RF ablation procedures have now been completed in 12 patients and to date all patients are either seizure free or have had a significant reduction in seizure occurrence and less severe seizures after the 1 RF ablation procedure. We continue to be overwhelmed with the initial results and have now performed more than 150 RF ablations on 12 patients in 5 centers during our initial limited launch. To date, 24 epilepsy centers have requested proposals to acquire the technology, which doubled from last quarter, and we continue to receive strong interest from neurosurgeons and neurologists regarding the technology. We are also happy to report that the new ICD-ten PCS code granted by CMS for the 1 RF ablation procedure became effective October 1, 2024 and will allow hospitals to report inpatient procedures that are performed using the 1 RF ablation system.
This will serve to support accurate data collection and processing of reimbursement claims by hospitals for the procedure. Turning to our product development programs, I am excited to announce that we are pursuing additional applications for RF ablation outside of the brain. Our next FDA submission will target patients with debilitating facial pain, also known as trigeminal neuralgia. The trigeminal nerve is located in the face with 1 nerve on each side of the face. Trigeminal neuralgia is also a chronic pain condition and is characterized by severe sudden and recurrent facial pain with over 150,000 patients diagnosed each year in the United States.
We expect to submit our 510 application to the FDA in the first half of calendar year twenty twenty five with the potential to contribute to revenue in calendar year 2025 that is not currently factored in to our 2025 revenue plan or revenue guidance. We remain convinced that the 1RF ablation system can serve as a platform technology for additional indications such as RF ablation for lower back pain and knee pain among others. We believe that having multiple indications for our 1RF ablation system provides competitive differentiation compared to a single function system and will offer added value to hospitals and physicians, which can be a consideration in hospital purchasing decisions. I would also like to provide updates on our product development programs, leveraging our Thintha electrode platform technology for spinal cord stimulation and drug delivery. With regard to our percutaneous paddle lead program for use in spinal cord stimulation, we have successfully optimized the percutaneous delivery of our PADDLE lead system by incorporating steerable capabilities for reliable deployment.
Preclinical studies performed by renowned pain specialists have confirmed that our electrode can be implanted percutaneously in less than 5 minutes. They also noted that our percutaneous paddle electrode has the benefits of being up to 20 times thinner while providing broad therapeutic coverage similar to what is provided by traditional electrodes, but without requiring more invasive surgical implant techniques. Based on the strong feedback from our advisory board, we initiated discussions with potential strategic partners under actively exploring partnerships for this technology. This technology is another great example of our novel thin film technology that can be applied for multiple indications, including not only back and neck pain, but also for other potential peripheral pain applications. We are also making significant progress with our SEEG based drug delivery program, which leverages the small size and easy implantation of our commercially available SEEG devices.
We are confident that we can deliver a smaller device than competitors while providing a larger internal diameter that does not require the use of real time MRI for placement, which is very costly and time consuming. Going forward, we will be preparing a 510 application for SEEG based drug delivery, as well as developing a miniaturized device for use in preclinical research. We believe that NeuroOne's SEG based drug delivery technology with multi functionality is uniquely capable to provide physicians and researchers with neurological reporting data before, during and after directly delivering in the brain a therapeutic agent such as gene therapies, stem cell therapies and other biopharmaceutical therapies for the treatment of neurological disorders. Finally, we intend to continue actively monitoring the closing bid price for our common stock between now and January 7, 2025, and we'll consider all available options to resolve the deficiency and regain compliance with NASDAQ's minimum bid price requirement. I would now like to turn the call over to Ron McClurg to provide a review of our fiscal Q4 and full fiscal year 2024 financial results.
Ron McClurg, Chief Financial Officer, NeuroOne: Thanks, Dave. Product revenue was $300,000 in the Q4 of fiscal 2024 compared to $700,000 in the prior year Q4. The reduction in product revenue in the Q4 of fiscal 2024 was due to the company's cancellation of a Zimmer Biomet purchase order in order to transition our manufacturing to the new 1 RF product line. Product revenue increased 77 percent to $3,500,000 in fiscal year 2024 compared to $2,000,000 in fiscal year 2023. The company also had collaboration revenue of $1,500,000 in fiscal 2023, which was derived from the Zimmer Development Agreement and represents the portion of the exclusivity and milestone fee payments that were eligible for revenue recognition during fiscal year 2023.
Our total operating expenses decreased 12% to $3,000,000 in the Q4 of fiscal year 2024 compared with $3,400,000 in the prior year Q4. Total (EPA:TTEF) operating expenses decreased 6% to $13,000,000 in the full fiscal year 2024, compared to $13,900,000 in fiscal year 2023. R and D expense increased decreased, excuse me, 39 percent to $1,100,000 in the Q4 of fiscal 2024 compared to $1,800,000 in the prior year Q4. R and D expense decreased by 27% to $5,100,000 for the full fiscal year 2024 compared to $6,900,000 in fiscal year 2023. Selling, general and administrative expense or SG and A was $1,800,000 in the Q4 of fiscal 2024 compared to $1,600,000 in the prior year Q4.
SG and A expense was $7,900,000 in fiscal year 2024 compared to $6,900,000 for the full fiscal year 2023. Our net loss was $3,300,000 for the Q4 of fiscal 'twenty four compared to a net loss of $3,100,000 in the same period prior year Q4. Our net loss for the full fiscal year 2024 was $12,300,000 compared to a net loss of $11,900,000 in fiscal 2023. In the Q4 of fiscal 2024, the company completed a 2 point $5,000,000 private placement of its common stock and entered into a $3,000,000 standby secured credit facility agreement. As of September 30, 2024, the company had cash and cash equivalents of 1,500,000 dollars compared to $5,300,000 as of September 30, 2023.
The company had working capital of $2,400,000 as of September 30, 2024, compared to working capital of $5,500,000 as of September 30, 2023. Company had no debt outstanding as of September 30, 2024. Following receipt of the $3,000,000 payment from Zimmer Biomet in November of 2024, the company terminated the $3,000,000 standby secured credit facility agreement. Dave mentioned before, we are providing full fiscal year 2025 financial guidance. The company expects product revenue for fiscal year 2025 to range between $8,000,000 $10,000,000 representing an increase of between 132% 190% when compared to the product revenue of $3,500,000 in fiscal year 2024.
The company expects product gross margin in fiscal year 2025 to range between 47% 51% compared to product gross margins of 31% in fiscal year 2024. I would now like to turn the floor back to Dave Rosa for closing remarks.
Dave Rosa, Chief Executive Officer, NeuroOne: Thank you, Ron. In closing, we are very happy with the progress made in fiscal 2024 and are looking forward to driving accelerated revenue growth and margin improvement in 2025. We now have clear near term growth drivers as well as a strong product pipeline leveraging our novel platform technology. In the near term, we are well positioned to drive meaningful revenue growth and margin improvement, having just completed the first shipments to Zimmer Biomet of the 1 RF ablation system, the 1st and only FDA clear device for RF ablation in the brain. We also expect our trigeminal nerve indication to be commercialized potentially in calendar year 2025 and we are continuing to make progress on product development milestones and potential strategic partnerships for our drug delivery and spinal cord stimulation programs.
I would like to thank everyone for attending the call and look forward to updating you on our progress next quarter.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.