Q1 2025 Summary
Published Feb 12, 2025, 4:26 PM UTC- The company's OneRF ablation system is performing exceptionally well, with patients experiencing significant seizure reduction and even being seizure-free for over 9 months following the procedure. Using the same device for both diagnostic and therapeutic purposes reduces hospitalization time and may improve outcomes, potentially driving rapid adoption.
- Product gross margins are expected to be sustainable between 47% and 51%, indicating strong profitability. The company is confident in maintaining these margins due to improved transfer prices from the expanded partnership with Zimmer Biomet.
- The company is on track to submit a 510(k) application for their trigeminal nerve RF ablation system in the first half of calendar year 2025, targeting patients with trigeminal neuralgia, a chronic facial pain condition affecting over 150,000 patients annually in the U.S. This represents a significant growth opportunity not currently included in revenue guidance.
- Potential delays in FDA approval for NeuroOne's trigeminal nerve RF ablation system could impact revenue projections, as CEO David Rosa admits that the review time is uncertain and "not a guarantee," despite previous submissions taking about five months.
- NeuroOne's high gross margin of almost 60% in Q1 is not sustainable long-term; future margins are expected to decline to 47%-51%, potentially impacting profitability due to the partnership with Zimmer Biomet.
- The company's clinical success in epilepsy treatment is still uncertain, as the longest-treated patient has only been seizure-free for over 9 months, while the standard benchmark for success is one year, raising questions about long-term efficacy.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue/Product Revenue | FY 2025 | $8 million to $10 million | $8 million to $10 million | no change |
Gross Margins/Product Gross Margin | FY 2025 | 47% to 51% | 47% to 51% | no change |
Sequential Product Revenue | Q2 2025 | no prior guidance | Decline sequentially in Q2 2025; ramp up through end of FY 2025 | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue | Q1 2025 | $8 million to $10 million | $6.27 million | Missed |
Gross Margins | Q1 2025 | 47% to 51% | 78.6% (calculated from revenue of 6.27MMinus COGS of 1.35M) / 6.27M ≈ 78.6% | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
OneRF ablation system | Q2 2024: First FDA-cleared system for diagnostic and therapeutic use, implanted in 5 patients. Q3 2024: 16 patients implanted across 4 centers, over 50 ablations on 3 patients. Q4 2024: 12 patients, all with seizure-free or reduced seizures. | Q1 2025: Expanded adoption and strong clinical outcomes, nearly all patients seizure-free. | Continuing momentum with broadened distribution and strong clinical results. |
Trigeminal nerve RF system & 510(k) | Q2 2024 & Q3 2024: No mention. Q4 2024: Application planned for first half of 2025 to address trigeminal neuralgia (150,000 patients diagnosed annually in the U.S.). | Q1 2025: Still on track for 510(k) submission in first half of 2025, potential revenue in 2025 not in guidance. | New product focus with large unmet need, could drive future revenue. |
Gross margin targets (47%-51%) | Q2 2024 & Q3 2024: No mention. Q4 2024: Guidance of 47%-51% for fiscal 2025, up from 31% in 2024. | Q1 2025: Achieved 58.9% but reiterates 47%-51% range as sustainable. | Consistent guidance on margin expansion. |
Zimmer Biomet partnership & milestone | Q2 2024: Partner driving new accounts; no milestone revenue recognized in first six months. Q3 2024: No mention of expansion, but collaboration revenue recognized in prior period. Q4 2024: Expanded partnership with $3M upfront, additional milestone potential. | Q1 2025: Upfront $3M license payment received, further milestone possible, expected to drive profitability. | Continued strengthening of partnership and revenue impact. |
Ongoing net losses & liquidity concerns | Q2 2024: Net loss of $2.9M, declining cash balance. Q3 2024: Net loss of $2.8M, fundraising via ATM and private placement. Q4 2024: Net loss of $3.3M for Q4, $12.3M for FY2024, ended with $1.5M in cash. | Q1 2025: Net income of $1.8M (compared to prior net losses), improved working capital, no explicit liquidity concerns. | Shift to profitability reduces near-term liquidity risks. |
Nasdaq listing compliance issues | Q2 2024 & Q3 2024: No mention. Q4 2024: Monitoring share price to meet minimum bid requirement. | Q1 2025: Regained compliance with Nasdaq listing standards. | Resolved compliance issue. |
Strong revenue growth & product adoption | Q2 2024: Product rev. of $1.377M, adoption supported by Zimmer Biomet. Q3 2024: Revenue up to $826K in the quarter, 16 implants. Q4 2024: FY2024 product rev. grew 77% to $3.5M, guiding $8-10M for FY2025. | Q1 2025: Record $3.3M product rev., 235% increase, aided by Zimmer Biomet’s distribution. | Continued robust growth and expanding OneRF usage. |
Potential large addressable market (TN) | Q2 2024 & Q3 2024: No mention. Q4 2024: 150,000 trigeminal neuralgia patients annually in U.S., 510(k) could benefit 2025 revenue. | Q1 2025: Renewed emphasis on the trigeminal neuralgia solution, potential 2025 revenue not yet in guidance. | Emerging new market with high patient need. |
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Margin Sustainability
Q: Are the strong gross margins sustainable long term?
A: Management is confident that product gross margins of 47% to 51% are sustainable. The higher margin of almost 60% in Q1 was due to NeuroOne commercializing technology directly before finalizing the agreement with Zimmer Biomet. They expect margins to remain within the guidance range provided. -
FDA Submission Timeline
Q: When will NeuroOne submit the 510(k) application for facial pain, and how long is the expected FDA review?
A: NeuroOne plans to submit the application in the first half of calendar 2025 and is still on track. Remaining tasks include sterilization and packaging testing required for the submission. Based on prior experience, clearance may take about 5 months, but this is not guaranteed. -
Positive Results and Clinical Success in Epilepsy
Q: Why have results been so positive, and what measures clinical success for epilepsy?
A: The success is due to using the same device for both diagnosis and therapy, enabling treatment within one hospitalization. Ablation technology is preferred for patients resistant to pharmacologic therapy. Clinical success is typically measured one year post-surgery by being seizure-free or having a dramatic reduction in seizures. The longest-treated patient is currently beyond 9 months, and future outcomes look promising.