NeuroOne Medical Technologies Q2 2024 Earnings Report

NeuroOne Medical Technologies EPS Results

• Actual EPS: -$0.66
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

NeuroOne Medical Technologies Revenue Results

• Actual Revenue: $1.38 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

NeuroOne Medical Technologies Announcement Details

• Quarter: Q2 2024
• Date: 5/14/2024
• Time: N/A
• Conference Call Date: Tuesday, May 14, 2024
• Conference Call Time: 4:30PM ET

NeuroOne Medical Technologies (NASDAQ:NMTC) Corp. is a medical device company focused on developing advanced neural interface technologies for diagnostic and therapeutic applications in neurosurgery and neurology. The company’s core mission is to improve patient outcomes through next-generation electrode systems that enable high-resolution neural recording and targeted stimulation. By leveraging proprietary thin-film microelectrode arrays, NeuroOne aims to offer clinicians unprecedented single-unit precision during brain mapping procedures.

The company’s flagship platform, the EVO™ system, integrates thin-film neural electrodes with intraoperative monitoring hardware and software. This system is designed to assist neurosurgeons in procedures such as epilepsy monitoring and deep brain stimulation planning by providing real-time, high-fidelity recordings of neuronal activity. NeuroOne also supports research partnerships with leading academic medical centers to explore applications of its technology in movement disorders and neurological disorders.

Founded as a spin-out of Mayo Clinic research, NeuroOne has advanced its technology through rigorous preclinical studies and regulatory review. In September 2023, the U.S. Food and Drug Administration granted 510(k) clearance for the EVO™ intraoperative neuromonitoring system. The company is headquartered in Eden Prairie, Minnesota, and operates a research and development facility in the same region to drive continuous innovation.

Under the leadership of President and CEO Rajendra S. Singh, MD, a neurosurgeon with extensive clinical experience, NeuroOne is executing a commercial rollout of its platform across North America. The company is actively engaging with key opinion leaders, surgical centers, and research institutions to establish its technology as a new standard for neural interface procedures. Looking ahead, NeuroOne aims to expand its geographic footprint and pursue additional regulatory approvals to broaden clinical access to its solutions.

NeuroOne Medical Technologies Q2 2024 Earnings Call Transcript

Key Takeaways

• Commercial partner Zimmer Biomet continues to add new accounts for the EVO SEEG electrode, driving a corresponding increase in sales and revenue with further growth opportunities as they expand into new centers.
• The 1RF ablation system—the first FDA-cleared device for both recording and ablation—has been implanted in five patients at one center, with a limited commercial launch and broader rollout expected in calendar Q3 as additional generators arrive.
• Product revenue more than doubled year-over-year to $1.377 million in Q2, helping narrow the net loss to $2.9 million compared to $3.5 million last year.
• Cash and cash equivalents declined to $2.4 million as of March 31, 2024, with working capital down to $3.2 million, reflecting continued cash burn despite recent ATM equity raises.
• The company is pursuing an ICD-10-PCS code for the 1RF procedure, plans an FDA submission for pain‐treatment indications by year-end, and expects to freeze the spinal cord stimulation electrode design before year-end.

Presentation

[Operator]

Good day, ladies and gentlemen. Welcome to the NeuroOne Medical Technologies Corporation second quarter of fiscal year 2024 financial results conference 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. 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 US 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.

[Operator]

See NeuroOne'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, NeuroOne 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, CEO at NeuroOne Medical Technologies Corporation]

Thanks, operator, and welcome, everyone. During the second quarter of fiscal 2024, we continued to make significant progress on our objectives relating to both commercialization and product development. First, I would like to comment on the commercial progress with our Evo sEEG electrode product line and commercialization partner, Zimmer Biomet. Zimmer continues to add new accounts, and as previously discussed, we saw a corresponding increase in Evo sEEG sales and revenue. We still believe there is a significant opportunity for continued growth as Zimmer Biomet further expands into new centers. We also expect to see improvements in our product margins as we transition the product offering from Evo sEEG diagnostic electrodes to OneRF electrodes. As a reminder, the OneRF ablation first FDA-cleared system with an intended use for both recording electrical activity and ablation of nervous tissue utilizing the same device.

[Dave Rosa, CEO at NeuroOne Medical Technologies Corporation]

To date, we have implanted five patients at one center and look forward to adding new centers this quarter for our limited commercial launch. Once we receive additional ablation generators, we will expand the launch more broadly. We expect that to occur during the third calendar quarter as additional generators are delivered to the company. Regarding device distribution, we are currently distributing the product directly but remain in discussions with potential strategic partners regarding the licensing of the technology. We also presented an ICD-10 PCS hospital inpatient code application to the Centers for Medicare & Medicaid Services, otherwise known as CMS, in March for the OneRF ablation procedure, support accurate data collection, and processing of reimbursement claims by hospitals for the procedure. In addition, we plan to leverage the versatility of our ablation generator by targeting other indications to treat pain.

[Dave Rosa, CEO at NeuroOne Medical Technologies Corporation]

We are targeting the submission of a new application to the FDA by the end of this calendar year and will provide further updates as we get closer to a submission date. We previously discussed our drug delivery program and the potential of our sEEG platform technology to deliver pharmacologic therapies to the brain as well as monitor the therapy's impact. We believe the technology could be helpful for drug development, clinical studies, and eventually offer another tool for neurosurgeons to treat a variety of neurosurgical complications. During the past quarter, we made progress on developing and testing accessories that were requested by a potential strategic partner. The company continued to show progress in the development of an electrode for use in spinal cord stimulation to treat patients suffering with low back pain.

[Dave Rosa, CEO at NeuroOne Medical Technologies Corporation]

Members of our physician advisory board were able to successfully place a paddle electrode in five minutes or less using our proprietary percutaneous delivery system. We expect to freeze the design of this technology by the end of this calendar year. I would now like to turn the call over to Ron McClurg to provide a review of our second quarter fiscal year 2024 financial results.

[Ron McClurg, CFO at NeuroOne Medical Technologies Corporation]

Thank you, Dave. Product revenue was $1,377,000 in the second quarter of fiscal 2024 compared to product revenue of only $466,000 in the second quarter of fiscal 2023. For the first six months of fiscal 2024, product revenue was $2,355,000 compared to $581,000 for the same period of fiscal 2023. The company had no collaboration revenue in the first six months of fiscal 2024 compared to collaboration revenue of $1.46 million in the first six months of fiscal 2023. Collaboration revenue in 2023 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 the period. Total operating expenses in the second quarter of fiscal 2024 were $3.3 million compared with $3.5 million in the same period of the prior fiscal year.

[Ron McClurg, CFO at NeuroOne Medical Technologies Corporation]

Research and development expense in the second quarter of fiscal 2024 was $1.3 million compared to $1.7 million in the second quarter of fiscal 2023. Selling, general, and administrative expense in the second quarter of fiscal 2024 was $2 million compared with $1.8 million in the prior year period. For the first six months of fiscal 2024, total operating expenses were $6.9 million compared with $6.8 million in the same period of fiscal 2023. R&D expense in the first six months of fiscal 2024 was $2.8 million compared with $3.3 million in the same period of fiscal 2023. SG&A expense in the first six months of fiscal 2024 was $4.2 million compared with $3.5 million in the prior year period. Net loss was $2.9 million for the second quarter of fiscal 2024 compared to a net loss of $3.5 million in the second quarter of 2023.

[Ron McClurg, CFO at NeuroOne Medical Technologies Corporation]

Net loss for the first six months of fiscal 2024 was $6.2 million compared with $5.3 million in the same period of fiscal 2023. During the second quarter of fiscal 2024, the company sold common stock under the ATM program at an average price of $1.43 per share from which the company received net proceeds of $2 million. As of March 31st, 2024, the company had cash and cash equivalents of $2.4 million compared to $5.3 million as of September 30th, 2023. The company had working capital of $3.2 million as of March 31st, 2024 compared to working capital of $5.5 million as of September 30th, 2023. The company had no debt outstanding as of March 31st, 2024.

[Ron McClurg, CFO at NeuroOne Medical Technologies Corporation]

Subsequent to the end of the quarter, from April 1st to May 10th, 2024, the company sold additional common stock under the ATM program at an average price of $1.21 a share and received net proceeds of $1.3 million. With that, I will turn it back to Dave.

[Dave Rosa, CEO at NeuroOne Medical Technologies Corporation]

Thanks, Ron. Operator, I think we can open up for questions now if there are any questions.

[Operator]

Certainly. The floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold just a moment while we pull for any questions. Again, if you have any questions, please press star one at this time to enter the queue. Please hold a moment while we pull for questions. There are no questions in queue at this time.

[Dave Rosa, CEO at NeuroOne Medical Technologies Corporation]

All right. Well, I'd like to provide some closing remarks at this time. So first, I'd like to thank everyone again for attending the call. This is the best position that NeuroOne has been in since the company's inception. Our revenues are growing, and we are adding to the current product lines to allow for faster revenue growth and improved margins. In addition, we have other near-term product revenue opportunities with the devices in development which will assist in helping us to get to break-even status faster. We have excellent partnerships with the Mayo Clinic and Zimmer Biomet and have prominent institutional investors supporting us. I firmly believe the best is yet to come. Operator?

[Operator]

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.

Participants

Executives

• Dave Rosa, CEO
• Ron McClurg, CFO