Q3 2024 NeurAxis Inc Earnings Call
Good day, and thank you for standing by and welcome to the new Axis third quarter 'twenty 'twenty four financial results conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question during this session.
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Besides that today's conference is being recorded I would now like to turn the conference over to your first speaker today, Dan Champs Young with Lytham partners. Please go ahead.
Thank you and good morning, everyone. Thank you for joining us for neuro access third quarter 2024 financial results and corporate update conference call joining us today on today's call is Brian Kericho CEO of neuro access.
Hi, Joe.
CFO I've never axis.
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Today's event is being recorded and will be available for replay through the webcast information provided in the press release finally, I'd like to call your attention to the customary safe Harbor disclosures regarding forward looking information on the conference call today will contain certain forward looking statements, including statements regarding the.
Our goals strategies beliefs expectations and future potential operating results of near Axis. Although management believes these statements are reasonable based on estimates assumptions and projections as of today. These statements are not guarantees of future performance time sensitive information may no longer be.
Accurate at any any time of any findings or webcast replay actual results may differ materially as a result of risks uncertainties and other factors, including but not limited to the factors set forth in the Companys filings with the SEC.
<unk> undertakes no obligation to update or revise any of these forward looking statements with that said I would like to turn the call over to Brian <unk>, Chief Executive Officer of Neuro access Brian. Please proceed.
Thank you Ben good.
Good morning, and thank you for attending the third quarter 2024 earnings call.
During today's call I will highlight the many recent accomplishments and our commercialization strategy for IV stem, which is our Ibs neuromodulation technology and read our pending product for patients with evacuation disorder.
We will discuss the milestones and growth plans for the remaining months of 2024 and into 2025 as we come off another strong quarter of execution and continue the commercialization of our market leading <unk> technology.
Following my remarks, Tim Hendrix, our CFO will review our financial results for the third quarter of 2024.
Let's first review the recent achievements as I just mentioned, we're coming off a very strong quarter of year over year growth.
Our biggest milestone in the company's history, and a new FDA indication expansion.
To highlight the three big announcements, we grew 40% year over year in Q3.
We received notice of our category one permanent CPT billing code.
We received FDA clearance for an age expansion from 11% to 18% to 8% to 21 years of age nearly doubling our market opportunity.
I will speak in much more detail later in the call about all three announcements.
We're continuing to execute at a high level on our growth objectives rooted in the foundation that strong published data what would drive insurance expansion, leading to sustainable revenues and margins. We laid out these objectives in previous calls and continue to put the final pieces in place to allow blanket insurance coverage and in turn.
Scaling of the P in <unk> revenues.
In recent months, we have made significant achievements as we advance to hit milestones with a goal of cash flow breakeven.
Guarding IV stem, we're primarily focused on revenue trajectory and we had a significant change from Q1 to Q2 and even a larger positive year over year change in Q3 as children's hospitals get more comfortable with billing and coding.
We also saw the very beginning a new insurance policy coverage taken effect.
As such I am excited to share with you that our momentum in Q3 has continued into Q4 and thus far the quarter is off to a very good start.
I now want to focus on and highlight the catalyst for what we expect to be significant revenue growth in the coming quarters.
Perfect World the children's hospitals could access blanket insurance policy coverage and a category one CPT code.
As mentioned earlier the category one CPT code has been awarded by the American Medical Association CPT panel and will become effective January one of 2026.
Regarding blanket insurance policy coverage, we went from 4 million covered lives on January one to about 35 million covered lives today, and we continue to announce new policies regularly.
So what does it take to earn the remaining payers <unk>.
As we all know the scientific community has accepted our flagship technology, but has been hindered by a lack of written insurance policy covers.
The largest payers have been waiting on the academic society to published guidelines for Ibs.
Ibs.
Most important recognition any medical technology can receive as independent guidelines by the academic society. Because this is an independent review of the literature and a graded aside which the payers except at the standard.
We announced on our last call that a systematic review by the academic Society Nast again was released at a conference in late May showing our technology has the highest grade certainty level and the largest magnitude of effect.
<unk> is the North American Society for Pediatrics, Gastro, neurology, hepatology and nutrition and they are the academic society for pediatric Gastroenterology, where our technology resides.
This systematic review is in abstract form now, but we believe this information is the work being used to publish guidelines in the coming months.
We are told by the largest payers that this publication is an internal mandate for policy coverage. So we are eagerly waiting for this publication to get it to the Payors.
Sticking with insurance policy coverage I wont go into detail about the most important aspect of our growth.
As we stated late in 2023 and early in 2024.
Written policy covers the key to revenues significantly increased.
We also stated that once the insurance policy coverages written and in place the children's hospitals, who were not already utilizing IV stem take a minimum of 120 days to get the technology loaded their processes in place and begin ordering.
With all of that said I am happy to announce we have added additional payers, bringing our total covered lives through almost 30 to about 35 million covered lives. In addition to this announcement, we have countless payers in the review process, assuming even a few of those payers make positive decisions in Q4, we will exceed the 50 million covered lives.
<unk> number we projected early in 2024.
We have many children's hospitals that have been ordering for years, but for a variety of reasons. We have not received early insurance policy coverage in those specific areas.
Once insurance policy covered as written in those specific areas. The children's hospitals are expected to increase revenue very quickly because the product is already in their system. Therefore, not meeting the 120 days to get setup.
Turning data into insurance policy covers and then into revenue and the process that we believe is beginning to work well and the expected academic society guidelines will only expedite that process.
Earlier in the call I mentioned, we have achieved the company's most important milestone to date in the form of a category one CPT codes, which will allow for more seamless billing and reimbursement. This is a permanent billing code that will become effective on January one 2026.
The reason this code is so critical is that it brings a permanent code, making it much easier for revenue cycle teams to build a procedure.
We'll bring a permanent reimbursement amount and RV use which is how most physicians productivity is measured.
Moving to FDA expansions back in July we made a submission to the FDA for the expansion of our IV Stim label to include a patient population beyond the current 11% to 18 years old to eight to 21 years old nearly doubling the number of children, we can treat.
We recently heard from the FDA and this expanded indication was awarded on October 30th.
Regarding red or rectal expulsion device or point of care device that idea.
<unk> patients with public Florida function and provides immediately actionable test results in patients with chronic constipation licensed from the University of Michigan, We submitted a five 10-K in early August and we are optimistic we will begin commercialization in late 2024.
And finally, we have closed the necessary financings with reputable healthcare funds, ensuring we are well funded for the foreseeable future.
I want to focus on PFS class IV step I want to begin by highlighting the work we have done over the last five years to demonstrate and document the true efficacy of our therapies, which now includes 16 publications covering 10 different types of studies.
This has resulted in the highest level of evidence available for functional abdominal pain associated with Ibs.
We at <unk> are very proud of this and believe it validates our optimism and expectations for IV iron.
I am excited to say that the efforts we have put in are starting to bear fruit not only do we expect this abstract data to change the guidelines, but we also expect it to expand insurance coverage with the largest payers significantly.
We are beginning to see many of our team as reflected in the numbers. The number of treated cases has increased to about 900 patients in the last 12 months, which represents just over 110th of 1% of the 600000 debilitated children in the United States, who suffer from Ibs and are in strong need of IV step.
Now I would like to focus on how this translates to revenue growth and why we continue to be bullish on significant revenue growth as we move into 2025 and beyond.
I want to start by highlighting the sustained and increasing demand for IV step. If you recall revenue in Q1 was down 20% year over year and units were down 14% in the second quarter, we had a strong acceleration with year over year revenue decline by roughly 5% versus 20% in Q1 in total units.
Increasing by a robust 16%.
In the third quarter, we had a stronger acceleration with year over year revenue, increasing by roughly 40% and total unit increasing by approximately 50% deposit change here is due to several reasons, including the accounts getting more comfortable with billing and coding.
<unk> C. In the academic society guidelines poster, stating P/e NFS is the highest grade of evidence.
And only the very slightest insurance policy coverage taken effect.
A key point to add here is that revenue loss from 2023 is from children's hospitals that need written written policy coverage from large payers, which is not yet in place. These are children's hospitals, who were treating patients. After a no authorization required during the prior authorization and then they were not paid so they are paused.
Greeting until they get written insurance policy covers therefore, there is significant revenue pause versus loss.
The fact that we are a levy alleviating those losses without these children's hospitals shows the growth in new and existing accounts.
Once larger payers right policy covers the children's hospitals that are on pause will begin ordering immediately adding significant revenue.
On average selling prices for patients receiving IV stem through financial assistance are roughly 65% lower list price <unk>.
Insurance barriers cognitive to leave significant dollars on the table as insurance coverage increases across the country. The percentage of sales through purchase orders will also increased significantly.
This is why our number one priority continues to be written insurance policy covered with.
The point of vaccine continues to be clear.
Strong peer reviewed publications and key society support from the likes of NASA and the American Academy of Pediatrics result in successful coverage from insurance companies, which results in strong revenues.
Our internal prior authorization team continues to be successful as it reduces the workload for clinic staff, which allows greater access for pediatric patients and ultimately assisting and acquiring.
A permanent billing code.
We believe that any time, most accounts will move their prior authorizations to interact this team.
We expect revenue growth to accelerate meaningfully as we move into 2025 towards cash flow breakeven based on two catalysts to continued gaining of coverage from insurance companies for IV stem and the commercialization of ret.
Regarding red for adult patients. We recently filed our FDA submission and are cautiously optimistic about FDA clearance and commercialization commencing in late Q4.
Let's speak a little bit more about red are the rectal expulsion device product, which we believe to be a great opportunity for <unk>. We have now officially licensed this product from the University of Michigan, where it was developed and we recently submitted a 500 10-K to the FDA and are optimistic that this product will be on the market late Q4.
If successful read as expected expected to bring great clinical benefits to patients and because the technology has a category one CPT billing code assigned to the procedure and strong national reimbursement, we believe that providers will be able to bring this clinically beneficial technology to their practice immediately.
Rather the self inflating balloon that is an easy to use office based point of care and erectile function tests through identified patients with chronic constipation due to pelvic floor dyssynergia and you are unlikely to improve with laxative used there.
The current and treatment involves much trial and error by the physician as to which treatment will work in red will allow the physician to streamline the diagnosis and choose the best treatment option. After the first visit which is a real win for the patient.
In summary, we are pleased with the continued and consistent execution of building. The foundation on strong data in academic Society support. This has resulted in significant early insurance adoption, which we expect to grow revenues exponentially moving us towards profitability and setting the stage for a prosperous 2025.
I will now turn the call over to our CFO, Tim <unk> to discuss financials. Tim. Please proceed.
Yes.
Thank you, Brian Let me add my welcome to everyone joining us on this call.
These financial results were included within our press release, which was issued earlier and we are also provided in more detail within our Q3 2004 10-Q filed this morning.
I'll add some color on key areas of our financial results as well as an outlook on certain areas.
The hard work that our team has put in the last few years are beginning to bear fruit.
All year, we talked about accelerated growth in the back half of 2024 and now we're seeing it is Brian.
Brian mentioned in the third quarter, we delivered strong acceleration in our revenues and units as a result of increased insurance coverage. The good news is we are only in the early innings of a ramp as we expect the number of covered lives that continue to grow.
In addition, we are optimistic with regards to the commercialization of <unk> in late 2024.
We expect revenue growth to continue in the fourth quarter of 2024 and into 2025.
Given our current cost structure, our goal of the company to reach cash flow breakeven is achievable on a function of our sales volume given our strong gross margins are.
Our recent successes in obtaining substantially more insurance coverage keeps us on that path.
Finally, we have strengthened our liquidity position for the remainder of 2024 and into 2025 with a $5 million investment from a dedicated life Sciences fund that will replace $3 $2 million in committed funding product current investor.
The transaction is expected to close mid November.
And this investment will top off our 2024 capital raise activity at $11 $2 million.
With that I will go through the financial highlights in detail.
2024 third quarter revenues were $667000 compared to $477000 for the same period in 2023.
Presenting a strong 40% year over year revenue growth.
Demand remains strong as our unit sales were up approximately 50% in the quarter year over year.
It is also worth noting that our September year to date revenue is now relatively flat to prior year, which emphasizes our strong third quarter, given our revenue was down 20% and 5% in the first and second quarters of 2024, respectively compared to 2023.
Such trends give us confidence for revenue growth going forward is this kind of financial assistant assistance orders turn into full reimbursement dollars with policy coverage.
As mentioned before we remain highly focused on expanding our insurance coverage. Despite the inherent lag from insurance coverage device orders, which we have spoken about before recent performance indicates strong demand and as soon as he is on the part of health care providers and demand patients for our product.
Gross profit for the third quarter of 2024 grew to $570000 compared to $410000 in the third quarter of 2023 due to sales volume.
Gross margin in the third quarter decreased 50 basis points year over year to 85, 4%.
Although we saw a significant increase and full reimbursement units quarter over quarter.
Discounted financial assistance units outpaced the growth of the full reimbursement units, resulting in a decline in gross margin.
Notwithstanding the company maintains a very healthy gross margin.
Our operating loss for the third quarter of 2024 was $1 $7 million compared to $3 million in the third quarter of 2023 with.
The sharp improvement in the operating loss quarter over quarter was due to a number of factors first higher sales volume and higher asps.
And at higher gross profit.
Second 2023 included nonrecurring post IPO consulting services and incentive bonuses.
Benefits were partially offset by incremental head count.
In 2024 and to build out the market access sales and finance teams.
Expenses related to the introduction of an annual short term incentive bonus plan and higher advertising costs to expand market awareness.
Our net loss in the third quarter of 2024 was $1 8 million versus $8 $6 million net loss in the third quarter of 2023.
Primarily due to full amortization of the debt discount and issuance costs and the extinguishment of debt in 2023 from the IPO last year, partially offset by a lower general and administrative costs that I previously discussed.
From a liquidity perspective.
Our cash on hand as of September 32024 was $261000.
But to shore up our liquidity, we recently secured a $5 million investment from our life Sciences focused fund that is expected to close mid November.
Placing $3 $2 million in committed funding from an existing investor.
Our cash used in operations was $4 $3 million.
And $4 $1 billion for the nine months ended September 32024, and 2023, respectively.
The increase in cash utilization was primarily due to new public company costs in 2024.
Such as legal insurance.
In stock exchange listing fees that were not incurred prior to the IPO August of 2023.
The company held no long term debt as of September 32024. However, we did have $148000 short term debt related to the financing of our annual business insurance premiums.
That.
Let me turn the call back over to Brian.
Thank you Tim.
In summary, we are early in what we see as strong top and bottom line growth over the next few quarters.
Consistent execution of our commercialization strategy is beginning to bear early fruits as we see from the growth acceleration in the past three quarters. We are also achieving milestones that will enable continued growth, including receiving our category one CPT code and.
And the expansion of our five 10-K clearance. Furthermore, we remain excited about our opportunity with Red, which we expect to become commercial in late 2024.
The potential to drive significant revenues.
With that operator, we'd be happy to take any questions. As a reminder, you can ask a question on the webcast by typing in ask a question box.
<unk> dialed in we would like to ask a question follow the operators instructions.
Thank you.
Thank you.
You mentioned at this time, we will now conduct the question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again please.
Please standby about re compile our Q&A roster.
Hey, Brian while we're ready for some questions. We have some that were sent to us.
First can you talk about the significance of receiving the category one code as well as the <unk>.
<unk> 10-K extension.
Sure Ben first a category one code is the culmination of 567 years of work that requires an overwhelming amount of evidence and data and it requires a significant amount of utilization.
Criteria are strict and the bar is high but the reason for that is a category one essentially.
Cement the technology.
Into the medical foundation from the standpoint of the.
Commercial insurance companies.
And state Medicaid recognized category, one CPT codes, the billing of a category III code, which is what we currently have is more difficult many Medicaid or most Medicaid don't recognize the code, which makes the prior authorization and the billing very difficult.
The commercial payers when it comes to billing a category III code.
Requires.
Children's Hospital for example to itemize the device cost the physician time, the facility time and the supplies.
Just a longer process and much more difficult for a chief revenue officer to revenue cycle team to operate with so the category. One code brings a recognizable code that will have all those items included in the code and the reimbursement there will be a permanent reimbursement amounts. So number one it makes the code much easier.
Bill.
That's really what's causing the delay it once we get insurance policy coverage for accounts that have not brought the technology in before the time to get that category III code setup as significant as we've mentioned multiple times today.
So it brings a very clear path with.
With a category one code to billing.
Two it will bring a permanent reimbursement amount. So there is a set reimbursement amounts and number three and probably most importantly, it brings our views so RV use or how physicians time is measured. So for example, a physician is required earn so many our work. So many RV used throughout the course of the year.
And this will bring our views. So this motivates them currently if theyre doing this procedure, they're not receiving RV use so it doesn't go towards their workload for the year. So they are doing this on a clinical from a clinical benefit standpoint, but they are not receiving any compensation. If you will because they're not meeting those RV use. So this is extremely important when you talk about streamlining it.
Scaling the technology.
Regarding the 500 10-K extension, we're excited about the <unk> case.
Increases the age range to eight began at eight years of age up to the 21 year to date. So I can't tell you how many patients on a daily basis were contacted that are eight 910, and $19 20 or 21 years of age. So this is a significant improvement it was just an excellent quarter.
When it comes to a category one code and the 500 10-K extension.
Speaker Change: Thank you.
Our next question comes.
To the line of searching hyper with hyper research. Your line is now open.
Hi, guys congratulations on <unk>.
Keeping everything that you stated that you were going to achieve the code in and.
Speaker Change: In the age of extension I was wondering about.
Getting the clearance for the extending the age doesn't that increase the covered lives.
Speaker Change: Good morning, Sergio how are you.
It won't change it won't change we still need covered lives. So as expansion just allows more patients to be treated.
And actually be on label, but the policy coverage as separate we still need to get written policy coverage from payers.
Still have to write policy coverage to enable this I mean, there are still large payers for example, still cover this technology on a one off case by case basis, but to get written policy coverage, where it's an approved treatment for children, we still need to get written policy coverage with with all of the payers.
I understand but let me rephrase. The question so you have existing coverage.
With some insurance companies those same insurance companies have.
Patients.
In the new age group.
Yes.
So wouldn't that mean that you have more lives on the coverage.
Speaker Change: You are well.
Answers to that one most policies right now state that they will cover for example, let's just use Blue Cross Blue Shield, Massachusetts. As an example that policy states that they will treat patients 11 to 18 years of age. So our market access team has already gone back to those Payors and said.
Speaker Change: At this age.
Speaker Change: And that's happened those conversations with the payers are going very well and we expect in short order that they will expand those patients that age range within their policy from 11% to 18% to 8% to 21 now the second part of your question is are we do have more covered lives. The answer is yes in theory, but we will and.
Speaker Change: It's more covered lives because covered lives is.
As a standard.
A validated standard response to covered lives if a certain insurance company covers a product or a technology. We list all of those covered lives.
Kurt: As Kurt so.
Kurt: If you dive into this deeper which we could do for you. We know we know what our internal models. How many patients there are at each specific age range, but that's not how you report or we report covered lives covered lives as reported based on how many.
Kurt: Patients. There are for example, Blue Cross Blue Shield, Massachusetts has.
<unk> lives that cover and I forget the exact number is three or $4 million, but they cover a 1000 lives. We report 1000 lives now to your point, yes, there will be twice as nearly double the amount of covered lives within that payer that we can now treat that's true, but we do need to make sure that we get the payer to change the pollo.
From a 11 to 18 and move that to 8% to 21, which we're in process up and we don't see any.
Issue or a real delay in making that happen.
Thank you.
Kurt: Yes.
Hello, a lot of my investment friends about your company and everybody's impression that the.
Thing that debt.
<unk>.
The people that I speak to haven't really understood is that it's secure not a treatment.
And I was wondering if you have evidence that it's <unk>.
Sure.
Our <unk> studies.
Kurt: <unk>.
There is no recidivism of the disease.
Kurt: Okay.
That's a great question so.
So we don't use the word cure, although we have three great papers, showing long term data at 12 months that statistically significant.
There are patients there are some patients there are always a handful of patients that don't respond I believe that the anecdotally and that there are there's some registry data showing around 70% of patients.
We have strong strong responses have long term outcomes. There are always going nothing is 100% and there are always going to be some patients that don't respond and we've got some patients that long term at nine months or 12 months or 15 months.
Relapse, if you will and need another cycle of treatment. So it's not perfect. We don't use the word cure.
But it's really good.
Yes.
And then.
Another question I get asked is why isn't it available for adult so.
And will you be shooting at.
In that direction.
Kurt: Yes, that's another great question Sergio.
We're going to release, a new deck today that will be at our IR firm and we just haven't gotten to talk about that in our earnings call as yet, but we are.
Well on our way to approach the FDA for an adult indication expansion that would range for 'twenty one through all adults ages and I believe that we're aiming for late 2025 to earn that FDA indication, but that is in process. The adult demand the adult market sizes, obviously significantly.
Larger than the pediatric side and there is significant demand from the adult market. That's a great question. We've been working on this for a couple of years and we believe that roughly a year from now we're cautiously optimistic that we'll be able to earn that indication as well.
Speaker Change: And will you need clinical studies for that.
We do and we have what we believe the necessary research underway and completed.
Okay.
And then.
Does new product did you expect to get clearance from the FDA does that have a.
Similar Tam or a larger Tam.
And then the IV.
Speaker Change: It's got a similar Tam I believe it's around <unk>.
Just a little over $2 billion.
Market opportunity for the Tam.
And that.
That product.
The good news so just sorry to cut you off about that product is that it already has a category one CPT code. That's what we're so excited about IV stem that we've been working for so long and number two.
<unk> already has.
Reimbursed by <unk>.
Most if not all commercial payers and Medicare.
That's fantastic, so youll be able to marketed nationally much faster.
Speaker Change: We expect to hit the ground running immediately with this product from a revenue standpoint.
And how will you so.
We have an in house team.
Speaker Change: Our sales team more food distributors.
Speaker Change: So thats one reason.
We're using our W. Two salesforce Sergio and the reason Thats. One reason we took this product on it.
You look at our pipeline, which will be on our deck released later today on our IR site. The synergies between our product is all pediatric Gi adult Gi and children's hospitals that allows our <unk> sales force to have the synergy.
Laser focused synergy, who we call on and but to answer your question. It will be our W. Two salesforce will pick that product up they have the time to bandwidth and the ability to do so they have the gastro neurology expertise as we continue to build this company and the foundation on those principles I just mentioned this will fit in very nicely.
And then my last question is when you meet the target of 50 million covered lives by the end of the year and you still expect to reach profitability next year.
Twofold number one we set out beginning of the year to reach 50 million covered lives.
We also expect that the guidelines to already be published which we know there are countless payors.
We believe with policy coverage written that are weighted on the published guidelines to be released and now those published guidelines are not quite out yet.
We are cautiously optimistic those will be out in January and then those other policies will come through having that said there are many payers that we believe are on the cusp of announcing policy coverage and that could happen tomorrow or it can happen on January 2nd or sometime in between.
It's still very possible that we have those $50 million covered lives by the end of the year.
Regarding cash flow profitability at 2025, that's the trend that's the goal and we continue to work towards that yes.
So Brad you had said that you expected the publication in January because it.
It's.
Inherently better published in January then.
And the end of the year and I didn't understand that could you.
Okay.
Yes, great question. So first we have the reason these guidelines are so important is because this is an independent review of the literature by the academic society, which means we have zero involvement from an ethical standpoint, our moral standpoint, we are not able to be involved and we don't want to be involved in this that's why the credibility is so high.
We were cautiously optimistic these guidelines would have been published in the fall and the fact that they're not here yet we believe that there'll be January and the reason for that is we are told that journals.
Want to publish academic journals warrant to published in January because they're judged internally based on citations and if they during a 12 month January to December calendar year.
So if they published in October or November or December they only get one or two months of citations were if they published in January, especially something as significant as the academic society guidelines for functional abdominal pain that gives them a full 12 months of citation, which is very beneficial to them again. This is not a conversation we've had directly with the journal this is <unk>.
Just somewhat common knowledge in the med tech space and in the academic space from a publication standpoint.
We're reading between the lines here.
Thank you that's all my questions keep on doing a great job and hopefully.
It will attract some shareholder attention you keep.
Coming up with Great news and the market Hasnt responded yet.
Speaker Change: We are cautiously optimistic that this announcement today at a 40% growth year over year combined with a category. One code. The increased insurance policy covers the expanded FDA indication and then upcoming launch of Red and then as I mentioned Sergio that Q4 is off to an excellent start. So the Q3 momentum has continued into Q.
Four and look at some point Sergio we keep stacking strong quarters on top of each other with these milestones the market will recognize.
I think so too I think so thank you very much for taking my questions and congratulations on the quarter and an excellent development.
Thanks, Serge I appreciate your time.
Yes.
Speaker Change: Alright.
<unk> has a question for you Tim.
Last call you spoke about expecting G&A expenses to settle in around $2 million a quarter.
I came in came in about $2 million in Q3.
We continue to expect this level in the near future.
Yes from a cash perspective, the answer to that is yes.
From a GAAP perspective.
We will have some incremental startup costs for red.
Into 2025, and then we also introduced our long term incentive plan for employees in the fourth quarter of 2024 and that will result in some incremental noncash expense, but our plan as we head into 2000 2025 years to be able to cover those expenses with the revenue growth that we're projecting.
Short answer from a cash yes from a GAAP perspective, we will see some increased expenses, but we expect to hold our run rate going into 2020, private especially with.
The revenue growth that we're seeing here in the third quarter that we're expecting in the fourth quarter and we think that will carry into 2025 to continue to reach our goal of cash flow breakeven in the future. Once our revenues continue to grow at the pace. They currently are.
Okay.
And we have one more question here for Brian can you talk about the timeline.
For the commercialization of Red and how do you think about the revenues.
Speaker Change: Over the next few quarters.
Yes, Ben So we're cautiously optimistic that we'll have this fire.
FDA indication by the end of Q4 and then we.
Once we're really close to the FDA indication will tee up manufacturing and we will launch this product very quickly whether that be the end of Q4, beginning of Q1 and then we'll plan what's traditionally from a soft launch standpoint will launch. So many accounts. The first 30 days so many accounts to <unk>.
60 days in so many accounts the first 90 days and make sure that.
Speaker Change: Everything is as planned and then we will open this up but as I mentioned earlier.
We expect.
Annual revenues out of this product in 2025, and assuming everything comes through the FDA and the soft launch goes as planned.
We've spent about a year and a half on this technology at this point since we began the discussions of licensing it from University of Michigan, and we're confident that.
That the FDA will come through that we will launch this product and we will see meaningful revenues in 2025 and cautiously optimistic in the first half of 2025.
Okay. Thank you.
At this point there are no more questions in the queue. Therefore, I'd like to turn the call back to Brian <unk> for closing remarks.
Thank you everyone I appreciate your time, we look forward to.
Brian <unk>: A great.
Q4 talk to you again in the spring everyone have a wonderful holiday season.
We'll talk soon thank you.
Thank you. This does conclude the program you may now disconnect.
Okay.
[music].
Okay.
Brian <unk>: Okay.
[music].