Neuronetics Reports Record Second Quarter 2023 Financial and Operating Results
- Q2 2023 revenue increased 8% YoY
- U.S. treatment session revenue increased 9%
- Received 510(k) clearance for OCD MT cap technology
- Gross margin decreased to 72.5%
- Net loss for Q2 2023 was $(4.9) million
MALVERN, Pa., Aug. 08, 2023 (GLOBE NEWSWIRE) -- Neuronetics, Inc. (NASDAQ: STIM) (the “Company” or “Neuronetics”) a commercial stage medical technology company with a strategic vision of transforming the lives of patients whenever and wherever they need help with the best neurohealth therapies in the world, today announced its financial and operating results for the second quarter of 2023.
Second Quarter 2023 Highlights
- Second quarter 2023 revenue of
$17.6 million , an increase of8% over the second quarter of 2022 - U.S. treatment session revenue increased
9% over the second quarter of 2022 - Shipped 54 NeuroStar systems
Recent Operational Highlights
- BlueCross BlueShield (BCBS) of Michigan updated its healthcare policy, reducing the number of antidepressant medication attempts from four down to two prior to transcranial magnetic stimulation (TMS) treatment eligibility
- Aetna improved its healthcare policy to allow behavioral health nurse practitioners to prescribe TMS and remove a four-month psychotherapy trial before a patient becomes eligible for treatment
- Received 510(k) clearance for obsessive-compulsive disorder (OCD) motor threshold (MT) cap technology
- Transitioning to a more advanced contract manufacturer
Recent Marketing Highlights
- Achieved milestone of over 156,000 global patients treated with 5.6 million of our treatment sessions, another Company record
“We are pleased to report a solid second quarter, driven in part by a robust
Second Quarter 2023 Financial and Operating Results for the Three Months Ended June 30, 2023
| Revenues by Geography | |||||||||
| Three Months Ended June 30, | |||||||||
| 2023 | 2022 | ||||||||
| Amount | Amount | % Change | |||||||
| (in thousands, except percentages) | |||||||||
| U.S. | $ | 17,289 | $ | 16,132 | 7 | % | |||
| International | 321 | 197 | 63 | % | |||||
| Total revenues | $ | 17,610 | $ | 16,329 | 8 | % | |||
Total revenue for the three months ended June 30, 2023, was
| U.S. Revenues by Product Category | |||||||||
| Three Months Ended June 30, | |||||||||
| 2023 | 2022 | ||||||||
| Amount | Amount | % Change | |||||||
| (in thousands, except percentages) | |||||||||
| NeuroStar Advanced Therapy System | $ | 4,489 | $ | 4,382 | 2 | % | |||
| Treatment sessions | 12,314 | $ | 11,295 | 9 | % | ||||
| Other | 486 | $ | 455 | 7 | % | ||||
| Total U.S. revenues | $ | 17,289 | $ | 16,132 | 7 | % | |||
| U.S. NeuroStar Advanced Therapy System | |||||||||
| Revenues by Type | |||||||||
| Three Months Ended June 30, | |||||||||
| 2023 | 2022 | ||||||||
| Amount | Amount | % Change | |||||||
| (in thousands, except percentages) | |||||||||
| NeuroStar capital | $ | 4,301 | $ | 4,272 | 1 | % | |||
| Operating lease | 67 | 49 | 37 | % | |||||
| Other | 121 | 61 | 98 | % | |||||
| Total U.S. NeuroStar Advanced Therapy system revenues | $ | 4,489 | $ | 4,382 | 2 | % | |||
U.S. NeuroStar Advanced Therapy system revenue for the three months ended June 30, 2023, was
U.S. treatment session revenue for the three months ended June 30, 2023, was
In the second quarter of 2023, U.S. treatment session revenue per active site was approximately
Gross margin for the second quarter of 2023 was
Operating expenses during the second quarter of 2023 were
Net loss for the second quarter of 2023 was
EBITDA for the second quarter of 2023 was
Cash and cash equivalents were
BlueCross BlueShield of Michigan Reduces Prior Number of Antidepressant Medication Attempts
BlueCross BlueShield of Michigan expanded transcranial magnetic stimulation (“TMS”) treatment access for depression patients, reducing antidepressant medication attempts from four to two. As the largest payer in the state with over 5.6 million covered lives, BCBS of Michigan’s policy update reflects the momentum in the industry to expand TMS therapy coverage.
Aetna to Allow Behavioral Health Nurse Practitioners to Prescribe TMS
Aetna announced a healthcare policy update that improves access to NeuroStar. The update allows behavioral health nurse practitioners to order and conduct TMS treatment for patients with major depressive disorder and removes the four-month psychotherapy trial requirement before starting TMS treatment. This change aims to reduce access barriers and provide earlier mental health treatment for patients in need.
Received 510(k) Clearance for Obsessive-Compulsive Disorder (“OCD”) Motor Threshold (“MT”) Cap Technology
The Company received U.S. Food and Drug Administration (“FDA”) clearance for OCD MT cap technology. The OCD MT cap simplifies initial coil placement, shortening treatment time and reducing steps, while offering the same advantages as the current MDD MT cap, including compatibility with Fast MT™ for up to
Business Outlook
For the full year 2023, the Company now expects total revenue to be between
For the full year 2023, the Company now expects total operating expenses to be between
For the third quarter of 2023, the Company expects total revenue between
Webcast and Conference Call Information
Neuronetics’ management team will host a conference call on August 8, 2023, beginning at 8:30 a.m. Eastern Time.
The conference call will be broadcast live in listen-only mode via webcast at https://edge.media-server.com/mmc/p/papp9yri. To listen to the conference call on your telephone, participants may register for the call here. While it is not required, it is recommended you join 10 minutes prior to the event start.
About Neuronetics
Neuronetics, Inc. believes that mental health is as important as physical health. As a global leader in neuroscience and the largest TMS company in the industry, Neuronetics is redefining patient and physician expectations by designing and developing products that improve the quality of life for people suffering from psychiatric disorders. An FDA-cleared, non-drug, noninvasive treatment for people with depression, Neuronetics’ NeuroStar® Advanced Therapy system is today’s leading TMS treatment for MDD with over 4.8 million treatments delivered. NeuroStar is widely researched and backed by the largest clinical data set of any TMS system for depression, including the world’s largest depression outcomes registry. Our NeuroStar® Advanced Therapy system is also FDA-cleared to treat people suffering from obsessive-compulsive disorder, as well as for the treatment of comorbid anxiety symptoms (“anxious depression”) for adults with MDD suffering from anxiety symptoms. Neuronetics is committed to transforming lives by offering an exceptional treatment option that produces extraordinary results. For safety information and indications for use, visit NeuroStar.com.
“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995:
Statements in the press release regarding the Company that are not historical facts constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terms such as “outlook,” “potential,” “believe,” “expect,” “plan,” “anticipate,” “predict,” “may,” “will,” “could,” “would” and “should” as well as the negative of these terms and similar expressions. These statements include those relating to the Company’s business outlook and current expectations for upcoming quarters and fiscal year 2023, including with respect to revenue, expenses, growth, and any statements of assumptions underlying any of the foregoing items. These statements are subject to significant risks and uncertainties and actual results could differ materially from those projected. The Company cautions investors not to place undue reliance on the forward-looking statements contained in this release. These risks and uncertainties include, without limitation, risks and uncertainties related to: the impact of public health crises on the Company’s operations, manufacturing and supply chain interruptions or delays; the Company’s ability to execute its business strategy; the Company’s ability to achieve or sustain profitable operations due to its history of losses; the Company’s reliance on the sale and use of its NeuroStar Advanced Therapy system to generate revenues; the scale and efficacy of the Company’s salesforce; the Company’s ability to retain talent; availability of coverage and reimbursement from third-party payors for treatments using the Company’s products; physician and patient demand for treatments using the Company’s products; developments in competing technologies and therapies for the indications that the Company’s products treat; product defects; the Company’s ability to obtain and maintain intellectual property protection for its technology; developments in clinical trials or regulatory review of NeuroStar Advanced Therapy system for additional indications; and developments in regulation in the U.S. and other applicable jurisdictions. For a discussion of these and other related risks, please refer to the Company’s recent filings with the U.S. Securities and Exchange Commission (the “SEC”), which are available on the SEC’s website at www.sec.gov. These forward-looking statements are based on the Company’s expectations and assumptions as of the date of this press release. Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this press release as a result of new information, future events, or changes in the Company’s expectations.
Investor Contact:
Mike Vallie or Mark Klausner
Westwicke Partners
443-213-0499
ir@neuronetics.com
Media Contact:
EvolveMKD
646-517-4220
NeuroStar@evolvemkd.com
| NEURONETICS, INC. Statements of Operations (In thousands, except per share data) | ||||||||||||||||
| Three Months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues | $ | 17,610 | $ | 16,329 | $ | 33,150 | $ | 30,510 | ||||||||
| Cost of revenues | 4,836 | 4,039 | 8,980 | 7,524 | ||||||||||||
| Gross Profit | 12,774 | 12,290 | 24,170 | 22,986 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 11,559 | 13,685 | 23,461 | 26,334 | ||||||||||||
| General and administrative | 6,200 | 6,356 | 12,812 | 12,734 | ||||||||||||
| Research and development | 2,364 | 2,045 | 5,154 | 3,849 | ||||||||||||
| Total operating expenses | 20,123 | 22,086 | 41,427 | 42,917 | ||||||||||||
| Loss from Operations | (7,349 | ) | (9,796 | ) | (17,257 | ) | (19,931 | ) | ||||||||
| Other (income) expense: | ||||||||||||||||
| Interest expense | 1,144 | 1,000 | 2,396 | 1,978 | ||||||||||||
| Other income, net | (3,592 | ) | (374 | ) | (4,232 | ) | (649 | ) | ||||||||
| Net Loss | $ | (4,901 | ) | $ | (10,422 | ) | $ | (15,421 | ) | $ | (21,260 | ) | ||||
| Net loss per share of common stock outstanding, basic and diluted | $ | (0.17 | ) | $ | (0.39 | ) | $ | (0.54 | ) | $ | (0.80 | ) | ||||
| Weighted-average common shares outstanding, basic and diluted | 28,590 | 26,787 | 28,316 | 26,692 | ||||||||||||
| NEURONETICS, INC. Balance Sheets (In thousands, except per share data) | ||||||||
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 45,905 | $ | 70,340 | ||||
| Accounts receivable, net | 13,145 | 13,591 | ||||||
| Inventory | 8,871 | 8,899 | ||||||
| Current portion of net investments in sales-type leases | 1,072 | 1,538 | ||||||
| Current portion of prepaid commission expense | 2,204 | 1,997 | ||||||
| Current portion of note receivables | 1,975 | 230 | ||||||
| Prepaid expenses and other current assets | 4,504 | 2,174 | ||||||
| Total current assets | 77,676 | 98,769 | ||||||
| Property and equipment, net | 2,108 | 1,991 | ||||||
| Operating lease right-of-use assets | 3,056 | 3,327 | ||||||
| Net investments in sales-type leases | 859 | 1,222 | ||||||
| Prepaid commission expense | 7,980 | 7,568 | ||||||
| Long-term notes receivable | 4,671 | 362 | ||||||
| Other assets | 4,042 | 3,645 | ||||||
| Total Assets | $ | 100,392 | $ | 116,884 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,143 | $ | 2,433 | ||||
| Accrued expenses | 8,375 | 14,837 | ||||||
| Deferred revenue | 1,674 | 1,980 | ||||||
| Current portion of operating lease liabilities | 834 | 824 | ||||||
| Current portion of long-term debt, net | — | 13,125 | ||||||
| Total current liabilities | 15,026 | 33,199 | ||||||
| Long-term debt, net | 36,713 | 22,829 | ||||||
| Deferred revenue | 513 | 829 | ||||||
| Operating lease liabilities | 2,663 | 2,967 | ||||||
| Total Liabilities | 54,915 | 59,824 | ||||||
| Commitments and contingencies (Note 17) | — | — | ||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, | 288 | 273 | ||||||
| Additional paid-in capital | 406,502 | 402,679 | ||||||
| Accumulated deficit | (361,313 | ) | (345,892 | ) | ||||
| Total Stockholders’ Equity | 45,477 | 57,060 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 100,392 | $ | 116,884 | ||||
| NEURONETICS, INC. Statements of Cash Flows (In thousands) | ||||||||
| Six months ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | (15,421 | ) | $ | (21,260 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 1,004 | 657 | ||||||
| Allowance for credit losses | (266 | ) | 328 | |||||
| Share-based compensation | 3,838 | 4,455 | ||||||
| Non-cash interest expense | 322 | 340 | ||||||
| Cost of rental units purchased by customers | — | 92 | ||||||
| Changes in certain assets and liabilities: | ||||||||
| Accounts receivable, net | (5,456 | ) | (4,013 | ) | ||||
| Inventory | (7 | ) | (840 | ) | ||||
| Net investment in sales-type leases | 828 | 102 | ||||||
| Prepaid commission expense | (620 | ) | (610 | ) | ||||
| Prepaid expenses and other assets | (2,762 | ) | 1,517 | |||||
| Accounts payable | 1,577 | (2,256 | ) | |||||
| Accrued expenses | (6,462 | ) | 1,451 | |||||
| Deferred revenue | (622 | ) | (1,095 | ) | ||||
| Net Cash Used in Operating Activities | (24,047 | ) | (21,132 | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Purchases of property and equipment and capitalized software | (938 | ) | (2,040 | ) | ||||
| Repayment of notes receivable | 113 | — | ||||||
| Net Cash Used in Investing Activities | (825 | ) | (2,040 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Payments of debt issuance costs | (863 | ) | (90 | ) | ||||
| Proceeds from issuance of long-term debt | 2,500 | — | ||||||
| Repayment of long-term debt | (1,200 | ) | — | |||||
| Proceeds from exercises of stock options | — | 52 | ||||||
| Net Cash Provided by (Used in) Financing Activities | 437 | (38 | ) | |||||
| Net Decrease in Cash and Cash Equivalents | (24,435 | ) | (23,210 | ) | ||||
| Cash and Cash Equivalents, Beginning of Period | 70,340 | 94,141 | ||||||
| Cash and Cash Equivalents, End of Period | $ | 45,905 | $ | 70,931 | ||||
Non-GAAP Financial Measures (Unaudited)
EBITDA is not a measure of financial performance under generally accepted accounting principles in the U.S. (“GAAP”), and should not be construed as a substitute for, or superior to, GAAP net loss. However, management uses both the GAAP and non-GAAP financial measures internally to evaluate and manage the Company’s operations and to better understand its business. Further, management believes the addition of the non-GAAP financial measure provides meaningful supplementary information to, and facilitates analysis by, investors in evaluating the Company’s financial performance, results of operations and trends. The Company’s calculation of EBITDA may not be comparable to similarly designated measures reported by other companies, because companies and investors may differ as to what type of events warrant adjustment.
The following table reconciles reported net loss to EBITDA:
| Three Months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||
| Net loss | $ | (4,901 | ) | $ | (10,422 | ) | $ | (15,421 | ) | $ | (21,260 | ) | ||||
| Interest expense | 1,144 | 1,000 | 2,396 | 1,978 | ||||||||||||
| Income taxes | — | — | — | — | ||||||||||||
| Depreciation and amortization | 488 | 338 | 1,004 | 657 | ||||||||||||
| EBITDA | $ | (3,269 | ) | $ | (9,084 | ) | $ | (12,021 | ) | $ | (18,625 | ) | ||||
