NeuroMetrix, Inc. (NASDAQ:NURO) Q3 2023 Earnings Call Transcript
NeuroMetrix, Inc. (NASDAQ:NURO) Q3 2023 Earnings Call Transcript October 27, 2023
Operator: Good morning, and welcome to NeuroMetrix Third Quarter 2023 Business and Financial Highlights Update. My name is Norma, and I'll be your moderator on the call. On this call, the company may make statements which are not historical facts and are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Statements are predictive in nature that depend upon or refer to future events or conditions are forward-looking statements. Any forward-looking statements reflect current views of NeuroMetrix about future results of operations or other forward-looking information. You should not rely on forward-looking statements because actual results may differ materially as a result of a number of important factors, including those set forth in the earnings release issued earlier today.
Please refer to the risks and uncertainties, including the factors described under the heading Risk Factors in the company's periodic filings with the SEC available on the company's Investor Relations website at neurometrix.com on the SEC's website at sec.gov. NeuroMetrix does not intend and undertake no duty to update the information disclosed on this conference call. I'd now like to introduce NeuroMetrix' Senior Vice President and Chief Financial Officer, Mr. Thomas Higgins. Mr. Higgins?
Thomas Higgins: Thank you, Norma, and welcome to all of you who have joined our CEO, Dr. Shai Gozani and myself for today's Q3 2023 update. By way of background, NeuroMetrix is a commercial stage medical device company, addressing unmet needs in chronic pain and diabetes. Our products are noninvasive. They have no direct competition and offer worldwide opportunities. Our business model is razor-razorblade with aftermarket revenue as the primary financial objective. Our principal technologies are Quell, which is a wearable neuromodulation platform, which we have transitioned from over-the-counter to a prescription platform, and DPNCheck, a screening technology for peripheral neuropathy, particularly in neuropathy related to diabetes.
We have a solid balance sheet with $17.6 million in liquid assets. Our capital structure is simple and debt-free. There are approximately 8.6 million common shares outstanding and 800,000 employee equity grants, which are stock options and RSUs. Today, we reported Q3 revenue of $1.2 million, which was down 39% compared with $2 million in Q3 of last year. The reduction reflects the contraction in Medicare Advantage patient screening which followed the substantial reimbursement changes adopted by CMS, Centers for Medicare and Medicaid, in Q1 of this year. Patient risk adjustment rules were modified with a 3-year phase-in affecting a range of patient screening procedures, including neuropathy often performed with DPNCheck. We've discussed this in the prior quarters of this year.
A scientist in a laboratory researching a neurological disease.
There's been no update or modification to the new CMS rules. Our DPNCheck business experienced a net revenue reduction of $512,000 or 35% in the third quarter of this year versus last year. In the 9 months year-to-date, DPNCheck revenue is down a cumulative $1.1 million or 23% versus 2022. Q3 revenue also reflects the strategic transition of our Quell Neuromod technology from chronic pain -- for chronic pain from over-the-counter sales to prescription indications. This was initiated in late 2022 and continues through a strategic commercial launch. At the end of Q3 last year, we discontinued marketing Quell over-the-counter. And in Q4 of last year, we initiated our prescription sales of Quell fibromyalgia. While sales of Quell fibromyalgia have been growing this year, they have not yet reached the level of Quell over-the-counter sales in the prior year.
See also US Alcohol Exports by Country: Top 15 and 30 Most Influential Scientists of All Time.
To continue reading the Q&A session, please click here.
