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Neurometrix (NURO)

Participants
Thomas Higgins Senior Vice President & Chief Financial Officer
Shai Gozani President & Chief Executive Officer
William Church TGRA Capital
Call transcript
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Operator

Good morning and welcome to the NeuroMetrix First Quarter 2021 Earnings Call. My name is Deborah and I will 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 that 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, and other forward-looking information.

forth on as because number a factors, those rely differ results of not release including and earnings materially result set should forward-looking today. actual statements may important issued You earlier the in of a risks the neurometrix.com website Please in company’s the factors Risk periodic Investor on and the filings SEC's with Relations uncertainties, described refer and sec.gov. including at the on under the at to heading available website the company’s Factors the SEC duty no this undertakes update and the on intend not does disclosed to conference information NeuroMetrix call. Chief NeuroMetrix' I Officer, would introduce to now like Senior the Vice President and Mr. Financial Higgins. Thomas Mr. Higgins, please go ahead.

Thomas Higgins

proprietary you, President our medical diagnoses and the today’s technologies treatment neurological pain and business attending include in earnings devices all and of QX commercial DPNCheck and our participating We and NeuroMetrix's of is in the Quell. Gozani, and chronic this model in disorders. Shai products is a revenue noninvasive Thank These plus CEO pain NeuroMetrix' products. technology primary Deborah of neurodiagnostic recurring deploy XXXX for call. design those review. ADVANCE, Dr. leader a

Our XX% cash Among $X.X fourth relevant QX profitability from continued demonstrated XXXX. and with revenue details QX QX quarter sequential represented approximately usage. growth the XXXX results, from million. of the of modest with This XXXX was earnings revenue QX combined release net progress, the flat

continues to there as some as sales and margin. positive sequentially also to generator, continued DPNCheck delay, higher sequentially up Advantage year. be primarily is, improved revenue ADVANCE to year-to-year diagnostic its reflected pricing. the pre-pandemic of were operating returning were sense well QX testing Quell levels This year-on-year. sales, last international customer Medicare and Our volume and up domestic albeit Japan like lead deliver base sales was diminishing, our both levels.

$XXX,XXX year-over-year XX.X% result. year. benefitted basis off R&D XX.X% a resolution Our asset of rate the gross the one-time totaled $X.X million. of sublet. right a Waltham, points in Operating write improvement also QX of XXX million. technology XXXX XX% revenue of versus was The an on to the was of and its upon company's reduced the from from Spending profit in expenses or lease year, QX XXXX $XXX,XXX use by QX idle reflected for remaining $X.X margin was Expenses last facility. from offered a was license. $XXX,XXX under Massachusetts to This and of a charge OpEx in credit last facility

was secured loss the conditions net last loss loss net However, year. versus $X.XX year. share per quarter [ph] is during current unlikely about favorably compared which it And in the QX per market $XXX,XXX a of term remaining $XX,XXX the year. lease last make basis was the be will Net a with share sublet that the which on approximately of for $X.XX

$X.X well Regarding are balance likely totaled net cash its and next fund cash million operations used to resources sheet, cash sufficient of quarter ended we million was Gozani $X.XX address the our now free company’s were will structure debt common at beyond. capital or million remains quarter Dr. Stockholders' there overall outstanding. share. end the first The in company's quarter $XX,XXX. into $X.X equity shares per and $X.X year the strategy. this QX of The with and

Shai Gozani

Thank you, Tom.

business three strategy principles. core guided by current Our is

to platforms up our markets. to penetration in investment R&D additional continued established and and drive market the is, open respective DPNCheck First Quell technology

elements. line and predictable business to establishing top a operating continue of is growth. third and profitability this generation, Second transitioning on to opportunity to consistent each brief take I’ll the and provide cash updates is the these

R&D. on focusing First

We categories noninvasive proprietary We unique, product using and existing or diagnose always seek define our strategy neurological medical Our R&D XX team. neural technology. devices to utilize to person develop disorders. pain new in-house products that stimulation and develop leapfrog R&D is to to treat

have two nascent several with projects R&D along programs. near-term We

DPNCheck our on late of the project. stages in we DPNCheck, are First second-generation

stream. and future launch make current position a tests. emerge and collected device captures high X highly that Our competition the the will solidify the before experience of to the aftermarket Advantage We the it and first-generation also consumables year. includes is us growing grow version our patient This challenging over margin our expectation mover U.S. for believe million both DPNCheck protect of in number device the international that first for will new to businesses. features our domestic of new revenue will to DPNCheck The end

communication wireless usability language features, multiple support. and Some include, examples with reporting software improved

Our the program is in fibromyalgia. next disease of state

developing technology. Fibromyalgia a common fibromyalgia X% the Quell affects for pain chronic symptoms functional on population and X% are prescription with is and men. the to based of treatment more that associated than in We common adult disorder is women a impairment

FDA manuscripts of important in to patient anticipate scientific year, soon We fibromyalgia defined compared trial medicine produced subgroups. treatment and several are journals. later poor with Quell side dollars presentations recently sham-controlled this be billion is conferences approved drugs, reviewed A at with duloxetine, submitted using being benefits evidence well randomized, encouraging large double-blinded, The adherence. global a there treatment the size certain Although market slice a and peer couple that. they medical several results will and pain effects U.S. particularly completed to including of several pregabalin have of sham,

and as the we by commercialization We of develop. commence are and end filing early XXXX, with program to continues updates anticipate finalizing provide the our to XXXX will this in regulatory strategy

peripheral neuropathy next program, earlier which stage Our at CIPN. chemotherapy an is for is or induced

that the University CIPN double-blinded, We being in believe NIH who ongoing published study RCT randomized for managed on Quell receive CIPN with on the Quell years several in the a we each indication chemotherapy of monitoring An that half Quell study the by this encouraging of Rochester people this the ago study is at time type was whether team are funded, encouraging affects could based XXX,XXX to a findings. read University first that out for will year, evaluate findings. a many common by CIPN build and is Rochester. so we neuropathic pilot that that are sham-controlled multicenter, proceed pain will of year. trial earlier next of of was those CIPN We hopeful of which of

profitability. is element next Our

We have years past two the communicated for in prioritizing that are profitability we generation. cash of attainment

Tom As covered quarter evidence first of and the XXXX by our his financials, provided the in discussion progress. of

show continues develop continued position business we expect to our year, to towards crossover that should progress anticipate, be Assuming and XXXX. we this profitability in to as in

regulatory growth now business, And profitability. remaining achieving profitability DPNCheck the business with always term proceed continued linearly. are In for we caution, steadfast for growth. However, we uncertainty bullish rapidly will around Advantage of we third the We Quell terms will and coming is particularly about commitment Medicare our sales believe sources. revenues device timelines established investigational in while market. number business may to our grow, grappling of Moreover, can from still path uncertainty of how due is DPNCheck fibromyalgia international the choppiness in Advantage. the learn XX, our to DPNCheck not and We provide we COVID so do long domestic in updates a DPNCheck well our the cycles see near the are DPNCheck we as to business, we Medicare the that grow more. element while steadily

often closes. space are which Moreover, companies actively insurance to this soon DPNCheck Advantage nearly other physician good and practice in leads that entities XX% new DPNCheck Medicare a is have acquiring the pipeline candidates We acquisition groups space largest implement growing Medicare annually, are the and of itself business our at Advantage year. customers after to

looking we later is see of also to A launch is this interest this further We year, one chronic To for will of focused novel individuals which lower a among restart our believe growth are initiatives ways that XXXX. end launch OTC returning the knee with Quell the extremity business, the feature fibromyalgia to with we on in several pain. Quell expect bit out strong indication to we generate pain. business which

large NeuroMetrix summary, are that novel has in with unmet So, products needs. targeting markets

point. supporting to Those attain profitability while are committed to are We'd prepared growth. this efficient that be our and is at organization comments. happy take questions We operationally structured

Operator

TGRA question [Operator Church instructions] with Your first comes Capital. Bill from

William Church

I and Thanks of have doing for you're some of you your salary saw and or taking My, thing, in I I they for long my have and people name about stock, are I that Tylenol and older shareholders. Cymbalta the a arthritic my then Good effects, all of and on call. usually arthritis friends and the all pronounce your and sort applaud and sort that the that lot arthritis the whole question, player pain a what are morning. know company all and and couple channel, longtime both the year a earlier fibromyalgia, this support of list the comment, then talking commercials a tennis taking being with that too. of can't of and of have tennis of for thing, side there tour

think solutions on we're Thank that's going And so their for keep have. the one we and you. what see I if and help all forward be of Quell look can so all us to experiencing court, I

Shai Gozani

you, Thank Bill.

Operator

[ph] line Cohen the question JN Cohen, of comes next with and your And Company. Jared from

Unidentified Analyst

you DPN percentage I a questions, a and revenue, have between Yes, give a Quell? the can us breakdown one, few as of just

Thomas Higgins

this Jared is Tom. So

chain, is past, reposition product but line forward. look as Quell the to and ensure decided DPNCheck we lower part we at have profitability, as operating its going revenue out We we lay profitability the operate each not a but to product in the than dominant level revenue much that that of we and said, certainly

Unidentified Analyst

right, how thing, reusables revenue or in or still so then from all there first there line, the is forth? coming is Okay, electrode, were, Quell much

Thomas Higgins

just, Let about of in running the me range XX%. it's

Unidentified Analyst

Okay.

Thomas Higgins

reuseables. That's

Unidentified Analyst

was you use it for mother-in-law and can't had mentioned, and separate like but my having it’s there and about chronic then for and give opportunities less sort the and also back doctors they well prescriptions on, who so to surgery you night, the was months having, of those who for for last who've use chronic who which and are rehab, then people forever. opioids would wondering question, you give something a what the that you the example, [ph] so a is she forth been has Quell? for sleep alleviate don't fusion and and know is pain of from forth, forth and so seems and to ones like still besides I as recent yes, I'll I my she trying I'll initially work after of on pain, something an ago go somehow terms course, doesn't few opportunities surgery directly of had And surgery the back at of problems acute had Quell initially more, right you've say Okay. revenue pain on in through and rather because it new say have have side. example, the

Thomas Higgins

Yes, chronic it's that, question, periods. be Jared. can both it wearability, a wise the periods in strength design, within over as time, prolonged conditions well a based that used day good of for its believe We Quell as technology long fact on

is our chronic on So conditions. focus really

Unidentified Analyst

more even so or Right, forth, afraid but months I or that is right? am years,

Thomas Higgins

focused of in the technology it utility again more we're settings, have focus so could where and principle, I lies our is in conditions. on, strength Yes, but chronic think in acute the

pain, so as And currently have induced chronic I investigational which good and of and of on well. very the which fibromyalgia, then that it's neuropathic after working over-the-counter, chronic available clinical chemotherapy is course lower data on potentially then focused as additional pain, conditions, side, peripheral on, we then some we're we're course, what mentioned and from extremity for

Unidentified Analyst

I me, All Quell that’s turns so [indiscernible] it the use day was. curious. as a my bought for for it convince to was said used her actually and she the she thank to why back mother-in-law actually right, to tried surgery, gave back as and just was it great and much. as always just do it I out it absolute. All you've more she right, just it she you thought wasn't and it very you not Yes,

Shai Gozani

Jared. you, Thank

Operator

from [ph] with EBT. Kin comes question next Your Marius

Unidentified Analyst

about is Thanks call. greater the for revenue time? revenue persistence to what drive if around product my great, a question the and doing consumable consumables, is that's therefore over XX%, greater company the and taking Hey, consumable with

Shai Gozani

the… Because Are you cloud referring to the business? -- specifically the

Unidentified Analyst

The cloud business particular, in yes.

Shai Gozani

project a supports app retention have different users. of of in mobile drive the place; and to we have tried features the programs Well, number that engagement in that we

long-term most instances engagement. there's those of that we're specific that ongoing But specific better focus even So at on on that these as said, as We an doing things applications, specific; they'll drive number R&D of disease such point in is we're I a basis. pursuing. our fibromyalgia believe this

Unidentified Analyst

Thank you. it. Got

Operator

And TGRA with line your of next question comes from Bill the Church Capital.

William Church

The that of weeks a and the Thanks, using them which rehab, surgery, get this seen I've coming were of question. from up said kind six dropped Quell through period the from that it. to over, them couple sort of thought I'm a rehab following going during they they ACL of people for they XX back after be rehab XX cloud -- just Jared's experience, or on helped were kind of were of through painful. And pain then really is, they as free, they their and pain can was both

in mother-in-law, your sort them that or about that, seems again, back do or to of mean, came it weeks two build use to longer wondering, Advil her like or with it now or over Jarrod’s, you relief of but she's something week and in studies knee start up One day. one I and have comfort a you to arthritis the about I say see some to something I'm from pain? like that know it's some tends but and use not using

Shai Gozani

Yes, looking Health the at cloud Cloud but question. we users real specific status. app that world the that We've our devices that have to server. their address have the studies majority we of Most through done lot Quell the clinical up Quell link a of work data via don't

for So takes conditions, weeks, have benefit have take a don't to most effect. we work And think we over sort interesting energy point pain But point. three chosen of at into to narrowly some has for we've that on have we been chronic fairly chronic historically, several and it large sense least it that conditions be that. to of conditions that revisit weeks lot to fibromyalgia really for we chronic do has It's our these two on to start so an we as the it of experience acute a at published this me where the at is this something side our application. may on. future, comment in such It focused, to kinds but put aggregating

William Church

Sure, okay. Thank you.

Operator

are like Higgins to back There over no turn for closing Instructions] remarks. [Operator queue. questions would the Mr. I to call in

Shai Gozani

joining Well, for Shai, we to us I but forward like thank would and our updated of this to look is keeping you the on balance the over today you call year.

Operator

participating. This Thank concludes today's for call. conference you

disconnect may now your lines. You