NeurAxis Reports Impressive Earnings Growth, Stock Climbs
Shares of NeurAxis, Inc. (NRXS) have surged 41.2% since the company released its earnings for the third quarter ending September 30, 2024. This positive trend stands in stark contrast to the S&P 500 index, which experienced a decline of 0.9% over the same period. Additionally, in the past month alone, NeurAxis stock has risen 17.7%, significantly outpacing the S&P 500’s gain of 2.1%.
Review of Financial Performance
In its third-quarter 2024 report, NeurAxis recorded revenues of $0.7 million, which is a 39.6% increase from $0.5 million in the same quarter last year. The company’s gross profit rose by 38.9% year-over-year to $0.6 million. Although gross margin fell slightly, down 50 basis points from 85.9% in the prior year to 85.4% this quarter, this shift is attributed to higher growth in financial assistance programs that provide discounts to uninsured patients compared to fully insured ones. Notably, the operating loss improved to $1.7 million from $3 million for the same period last year.
The net loss narrowed significantly to $1.8 million, compared to an $8.6 million loss in the third quarter of 2023. Loss per share also dropped to $0.25 from $2.38, largely due to increased sales and reductions in costs associated with the company’s IPO last year.
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Key Business Metrics Highlighted
During the quarter, unit sales of the IB-Stim device, which is the flagship product of NeurAxis, increased by 50%. This growth is attributed to expanded insurance coverage and improved patient access. Recent regulatory achievements, including FDA clearance to expand IB-Stim’s age demographic and device utilization limits, are anticipated to enhance future demand.
NeurAxis now covers approximately 35 million lives, a remarkable increase from 4.5 million in just one year. Significant additions include large insurers such as Florida Blue, covering 6 million lives, and various mid-Atlantic Blue Cross Blue Shield plans, covering a collective 10.5 million lives.
As of September 30, 2024, NeurAxis reported $0.3 million in cash with $147,688 in short-term debt. The company has also finalized a $5.0 million investment agreement to bolster liquidity, replacing an earlier commitment of $3.2 million.
Neuraxis, Inc. Price, Consensus and EPS Surprise
Neuraxis, Inc. price-consensus-eps-surprise-chart | Neuraxis, Inc. Quote
Insights from Management
CEO Brian Carrico highlighted the company’s significant operational advancements, noting a 40% growth in revenue year-over-year and the expanded insurance coverage now reaching around 35 million lives. He attributes this success to strong clinical evidence, regulatory progress, and effective commercialization strategies.
Factors Driving Financial Results
The revenue growth seen in the third quarter was driven by an increase in business from both new and existing fully insured customers, as well as from the financial assistance programs aimed at uninsured patients. The reduction in operating losses was due to the elimination of certain costs related to the company’s IPO, including consulting expenses and bonuses from the previous year, along with increased sales and gross profits in 2024.
Future Expectations
Management did not provide specific financial forecasts but expressed optimism about continuous operational growth. Recent FDA approvals and new insurance policies are expected to facilitate broader adoption of IB-Stim. Moreover, the introduction of a new CPT Category I code for PENFS procedures, effective January 1, 2026, positions NeurAxis favorably for enhanced reimbursement options.
Recent Developments
In the third quarter of 2024, NeurAxis received FDA clearance to broaden the IB-Stim target demographic, now including patients aged 8-21 years, and increased the number of devices allowed per patient to four each month. Additionally, the company has submitted its rectal expulsion device for FDA approval, with clearance anticipated by the end of 2024.
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