Q2 2024 NeuroOne Medical Technologies Corp Earnings Call
Good day, ladies and gentlemen, welcome to the Neuro one medical Technologies Corporation second quarter of fiscal year 'twenty 'twenty four financial results conference call.
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 U.S. federal security 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 dates.
Today's call will be conducted by the company's Chief Executive Officer, Dave, Russia, Iran. Mcclurg, the Companys 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 U S. Federal securities laws with respect to future.
David A. Rosa: <unk> financial results events trends and performance, which are based on management's beliefs and assumptions as of today's call or other specified date.
unknown: 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.
She neuro: She neuro once financial results press release, and SEC filings for information regarding specific risks and uncertainties that could cause actual results to differ.
Speaker Change: Except as required by law neuro, one undertakes no obligation to update such forward looking statements with that I will turn the call over to Mr. Dave or S. S. CEO of neuro one. Please go ahead Sir.
Operator: 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 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 said, I will turn the call over to Mr. Dave Rosa, CEO of Neuroone. Please go ahead, sir.
Operator: Thanks, operator, and welcome everyone.
David A. Rosa: 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 our commercialization partner, Zimmer Biome. Zimmer continues to add new accounts.
Speaker Change: During the second quarter of fiscal 2024, we continued to make significant progress on our objectives relating to both commercialization and product development.
David A. Rosa: As previously discussed, we saw a corresponding increase in Evo SCEG sales and revenue. We still believe there is a significant opportunity for continued growth as Zimmer BioMed 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 1RF electrodes. As a reminder, the 1RF AblationSys First FDA-cleared system was intended for both recording electrical activity and ablation of nervous tissue utilizing the same device.
Speaker Change: First I would like to comment on the commercial progress with our Evo SCE G 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 sce's sales and revenue.
Speaker Change: We still believe there is a significant opportunity for continued growth at Zimmer biomet further expands into new centers.
Zimmer Biomet: We also expect to see improvements in our product margins as we transition the product offering from Evo S. E. G diagnostic electrodes to one RF electrodes.
Zimmer Biomet: As a reminder, the one RF ablation says first FDA cleared system with an intended use for both recording electrical activity and ablation of nervous tissue utilizing the same device.
David A. Rosa: 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.
Speaker Change: To date, we have implanted five patients at one center.
Speaker Change: And look forward to adding new centers this quarter for a limited commercial launch once we receive additional ablation generators, we will expand the launch more broadly.
company: We expect that to occur during the third calendar quarter as additional generators are deliberate are delivered to the company.
Speaker Change: Regarding device distribution. We are currently distributing the product directly but remain in discussions with potential strategic partners regarding the licensing of the technology.
David A. Rosa: Regarding device distribution, we are currently distributing the product directly, but we 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 and Medicaid Services, otherwise known as CMS, in March for the 1RF ablation procedure to 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.
Speaker Change: We also presented an ICD 10 P C Tcs hospital inpatient code application.
CMS: The centers for Medicare and Medicaid services, otherwise known as CMS in March for the one RF ablation procedure.
CMS: Support accurate data collection.
CMS: Assessing the reimbursement claims by hospitals for the procedure.
CMS: In addition, we plan to leverage the versatility of our ablation generator by targeting other indications to treat pain.
David A. Rosa: We are targeting the submission of a new application to the FDA by the end of this calendar year, and we'll 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 and clinical studies and eventually offer another tool for neurosurgeons.
CMS: We are targeting the submission of a new application to the FDA by the end of this calendar year and we'll provide further updates as we get closer to a submission date.
Speaker Change: We previously discussed our drug delivery program and the potential of our S. E. G platform technology to deliver pharmacologic therapies to the brain as well as monitor therapies impact.
neurosurgeons: We believe the technology could be helpful for drug development clinical studies and eventually offer another tool for neurosurgeons.
To treat a variety of neuro surgical complications during.
David A. Rosa: We treat a variety of neurosurgical complications. During the past quarter, we made progress on developing and testing accessories that were requested by potential strategic partners. 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. 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.
Speaker Change: During the past quarter, we made progress on developing and testing accessories that were requested by potential strategic partner.
Speaker Change: The company continued to show progress in the development of electrode for use in spinal cord stimulation to treat patients suffering with low back pain.
Speaker Change: 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.
David A. Rosa: 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.
Speaker Change: We expect AR to freeze the design of this technology by the end of this calendar year.
Ronald W. McClurg: Product revenue was $1,377,000 in the second quarter of fiscal 24, compared to product revenue of only $466,000 in the second quarter of fiscal 2023. For the first six months of fiscal 24, 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. Vibration 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.
I would now like to turn the call over to Ron <unk> to provide a review of our quarter of our second quarter fiscal year 2024 financial results.
Ronald W. McClurg: Thank you Dave.
Ronald W. McClurg: Product revenue was 1.377 million in the second quarter of fiscal 'twenty four.
Ronald W. McClurg: Compared to product revenue of only 466000 in the second quarter of fiscal 2023.
Ronald W. McClurg: For the first six months of fiscal 'twenty four.
Ronald W. McClurg: Product revenue was 2.355 million compared to 581000 for the same period of fiscal 2023.
Speaker Change: The company had no collaboration revenue in the first six months of fiscal 2024 compared to collaboration revenue of 1.4 dollars 6 million in the first six months of fiscal 2023.
The company: <unk> revenue in 2023 was derived from the Zimmer development agreement and represents the portion of the exclusivity and milestone payments that were eligible for revenue recognition during the period.
The company: Total operating expenses in the second quarter of fiscal 'twenty 'twenty four were $3 3 million compared with $3 5 million in the same period of the prior fiscal year.
Ronald W. McClurg: 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. 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.
Speaker Change: Research and development expense in the second quarter of fiscal 'twenty, four was $1 3 million compared to $1 7 million in the second quarter of fiscal 2023.
Speaker Change: 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.
Ronald W. McClurg: For the first six months of fiscal 24, total operating expenses were 6.9 million, compared with 6.8 million in the same period of fiscal 23. R&D expenses in the first six months of fiscal 2024 were $2.8 million, compared with 3.3 million in the same period of fiscal 23. 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. That 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.
Speaker Change: For the first six months of fiscal 'twenty four total operating expenses were $6 9 million compared with $6 8 million in the same period of fiscal 'twenty three.
Speaker Change: 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 'twenty three.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Net loss for the first six months of fiscal 'twenty, four was $6 2 million compared with $5 3 million in the same period in fiscal 2023.
company: 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.
Ronald W. McClurg: 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 31, 2024, compared to working capital of $5.5 million as of September 30, 2023.
Speaker Change: 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.
Speaker Change: Company had working capital of $3 2 million as of March 31, 24 compared.
Speaker Change: Compared to working capital of $5 5 million as of September 32023.
Speaker Change: Company had no debt outstanding as of March 31st 2024.
company: Subsequent to the end of the quarter from April to May 10, 2024, the company sold additional common stock under the ATM program.
Ronald W. McClurg: The company had no debt outstanding as of March 31st, 2024. Subsequent to the end of the quarter, from April 1 to May 10, 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.
Speaker Change: An average price of $1 21, a share and received net proceeds of $1 3 million.
Ronald W. McClurg: With that I will turn it back to Dave.
Ronald W. McClurg: With that, I will turn it back to Dave.
Dave: Thanks, Ron.
David A. Rosa: Tron. Operator, I think we can open up for questions now if there are any questions. Certainly. The floor is now open to questions.
Dave: 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 1 on your phone at this time. We ask that while asking 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 poll for any questions. Again, if you have any questions, please press star 1 at this time to enter the queue. Please hold a moment while we poll for questions. There are no questions in queue at this time.
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 putting a question you. Please pickup your handset that's listening on a speaker phone to provide optimum sound quality. Please hold just a moment, while we poll for any questions.
Operator: Again, if you have any questions. Please press star one at this time to enter the queue. Please hold the moment, while we poll for questions.
Operator: There are no questions in queue at this time.
Speaker Change: Alright, well I would like to provide some closing remarks at this time.
David A. Rosa: All right. Well, I'd like to provide some closing remarks at this time. But first, I'd like to thank everyone again for attending the call.
Speaker Change: So first I'd like to thank everyone again for attending the call. This is the best position that neuro one has been in since the company's inception.
David A. Rosa: 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 Biomed and have prominent institutional investors supporting us. I firmly believe the best is yet to come.
Speaker Change: 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 breakeven status faster.
Speaker Change: We have excellent partnerships with the Mayo clinic, and Zimmer Biomet and have prominent institutional investors supporting us.
Speaker Change: I firmly believe the best is yet to come.
Speaker Change: Operator.
Speaker Change: 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.
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.