NeuroOne Medical Technologies Corporation (NASDAQ:NMTC) Q4 2022 Earnings Call Transcript December 13, 2022
Operator: Ladies and gentlemen, thank you for standing by. And welcome to the NeuroOne Medical Technologies Corporation Corporate Update Conference Call. Today’s call will be conducted by the company’s Chief Executive Officer, Dave Rosa; and Chief Financial Officer, Ron McClurg. Before I turn the call over to Mr. Rosa, I’d like to remind you that this conference call will include forward-looking statements within the meaning of U.S. Federal securities laws with respect to future operations, financial results, events, trends, and performance, which are based on management’s beliefs and assumptions as of today’s call or other specified date. Forward-looking statements may involve known and unknown risks, uncertainties, and other factors, which may cause actual results to differ materially from those expressed or implied by such statements.
See NeuroOne’s corporate update press release and SEC filings for information regarding specific risks and uncertainties that could cause actual results to differ. Except as required by law, NeuroOne undertakes no obligation to update such forward-looking statements. With that said, I’ll turn the call over to Dave Rosa, CEO of NeuroOne. Please go ahead.
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Dave Rosa: Thanks, operator, and good afternoon, everyone. During our fiscal fourth quarter, we continued to make exciting strides towards commercializing our second diagnostic product line, the Evo sEEG Electrode. In addition, we made substantial development progress with our therapeutic technology, and we increased our financial runway as well. Let’s first discuss the progress with commercialization efforts regarding our Evo sEEG product line. We received clearance for less than 30 days use from the FDA in October 2022 for similar indications as our Evo Cortical product line, and now expect to begin the commercial launch with Zimmer Biomet in the first quarter of 2023. sEEG Electrodes represent the bulk of diagnostic procedures performed today due to their less invasive placement by neurosurgeons.
Many of these procedures currently utilize a robot to enhance precision during electrode placement. We expect the Evo sEEG Electrodes to be used with Zimmer’s ROSA robotic platform in the same manner. The company also recently shipped the initial Evo sEEG limited market release order to Zimmer Biomet and is ramping up manufacturing to meet additional orders for a future full product launch. Moving to our OneRF therapeutic ablation electrode system, we had previously reported that we were targeting completion of animal feasibility studies in the fourth calendar quarter, with the potential to complete the product development by the end of calendar year 2022. As a reminder, the system is being designed to both record brain activity and ablate brain tissue using the same electrode.
Currently, two separate hospital visits and surgeries, one for diagnostic and one for therapeutic, are required to treat patients that have seizures due to epilepsy. Combining both the diagnostic and therapeutic functions into one device is intended to save time, cost and contribute potentially to improve patient outcomes. We have also discussed our intent to market both the electrode and radiofrequency generator to offer a complete system to our customers. I also previously disclosed that we signed a partnership agreement with RBC Medical Innovations, a recognized leader in the development and manufacturing of electromechanical therapeutic devices, to develop and manufacture our radiofrequency generator. We have now completed the hardware and software prototypes for preliminary design verification tests on the generator.
We also successfully completed animal feasibility studies with the assistance of Dr. Robert Gross of Emory University in Atlanta, Georgia; and Dr. Jamie Van Gompel at the Mayo Clinic in Rochester, Minnesota. Now let’s discuss our efforts in developing electrodes that can be used for chronic stimulation and recording. We continue to make progress on the testing of these electrodes that are being designed for use in indications such as Parkinson’s disease, epilepsy, back pain due to failed back surgeries, and potentially mental health indications such as severe obsessive compulsive disorder, depression, peripheral pain, and other conditions requiring a permanently implanted electrode that can deliver both diagnostic and therapeutic functions.
Our initial focus is to target the spinal cord stimulation market, which currently represents over $3 billion of revenue in the U.S. market. We are designing our devices to utilize percutaneous delivery systems meaning nonsurgical placements, while targeting designs that require less battery energy with expanded coverage of the tissue as compared to current competitive electrodes placed percutaneously. We have also recruited key opinion leaders comprised of both pain specialists and neurosurgeons to help guide in the development of both the electrode and device delivery system. Another area of focus for the company has been the effort to generate pre and post market clinical data to support our technology. In the third and fourth fiscal quarters, the company presented at the Congress of Neurological Surgeons, the Society for Neuroscience, and American Epilepsy Society conferences.
We were also included as part of the National Institute of Health submissions with the University of Minnesota to develop a cortical electrode that would with potential assistance from Medtronic plugged directly into a Medtronic pulse generator that could provide both sensing and stimulation functionality built into one electrode. The intent would also be to place the electrode through a less invasive procedure that is typically required to place cortical electrodes. From a financial standpoint, we received an accelerated $3.5 million payment from Zimmer Biomet related to certain milestone events as part of an amendment to our distribution and development agreement. This strengthens the company’s financial position by providing greater runway, without having to approach the currently challenging financial markets.
I’ll now turn it over to Ron for a brief update on the status of our financial reporting. Ron?
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Ron McClurg: Thank you, Dave. We have not yet filed our annual report on Form 10-K for the fiscal year ended September 30, 2022. We will provide the full financial results, when our independent registered public accounting firm completes its audit procedures. As of September 30, 2022, the company had cash, cash equivalents and short-term investments of $11.1 million. We also had no debt outstanding as of September 30, 2022. That concludes my remarks. I’ll now pass it back to Dave. Dave?
Dave Rosa: Thanks, Ron. And looking at the past fiscal year, I’m very proud to highlight some of our accomplishments. We completed a public offering, raising gross proceeds of $13.35 million. We’ve received a $3.5 million accelerated payment from our distribution partner, Zimmer Biomet related to certain milestone events. We successfully completed feasibility testing of our OneRF ablation system, facilitated by Dr. Robert Gross of Emory University and Dr. Jamie Van Gompel at the Mayo Clinic in Rochester, Minnesota. We completed initial testing for our chronic use electrode platform. We received 510(k) clearance of our second product line, the Evo sEEG Electrode product family for less than 30 day use. We received and shipped the initial order from Zimmer Biomet for our Evo sEEG Electrodes, and we rang the NASDAQ Stock Market closing bell to commemorate our FDA clearance milestone for the Evo sEEG Electrode technology.
In closing, the company made great progress in fiscal 2022 in a wide variety of areas, including commercialization, development, and capital raises, which will allow us to continue to execute our plan, with the intent to introduce meaningful advances in electrode technology for a wide variety of neurological applications. I want to thank you for your time and attention. I want to wish you a wonderful holiday season, and I look forward to providing future updates on our progress.
Operator: