NeuroMetrix, Inc. (NASDAQ:NURO) reported a year-on-year decrease in Q3 2023 revenues during its earnings call, attributing the decline to changes in Medicare Advantage patient screening rules and a strategic transition in its Quell Neuromodulation technology.
Key takeaways from the call include:
- Q3 2023 revenue came in at $1.2 million, down 39% compared to $2 million in Q3 2022.
- The company's DPNCheck business, a screening technology for peripheral neuropathy, experienced a net revenue reduction of $512,000 or 35% in Q3 2023 compared to the same period last year.
- The Quell Neuromodulation technology transition from over-the-counter sales to prescription indications has not yet reached the level of over-the-counter sales in the prior year.
- NeuroMetrix holds $17.6 million in liquid assets and has a debt-free capital structure.
- The company's common stock is currently trading between $0.65 and $0.70 per share.
NeuroMetrix, a commercial stage medical device company, reported a significant decrease in its Q3 2023 revenues, primarily due to the changes adopted by Centers for Medicare and Medicaid (CMS) in Q1 2023. These changes have affected a range of patient screening procedures, including neuropathy often performed with DPNCheck, the company's screening technology for peripheral neuropathy.
The company's CFO, Thomas Higgins, also highlighted the strategic transition of the Quell Neuromodulation technology from over-the-counter sales to prescription indications, which has yet to match the prior year's over-the-counter sales levels. Despite the revenue decline, NeuroMetrix maintains a solid financial position with $17.6 million in liquid assets and a simple, debt-free capital structure.
The company's CEO, Dr. Shai Gozani, outlined the company's growth strategy, which includes establishing and growing the Quell fibromyalgia indication in the U.S. market, advancing the Quell Neurotherapeutics program for additional indications, and revising the DPNCheck business strategy to account for the recent changes in Medicare Advantage.
Despite receiving a delisting notice for noncompliance with the NASDAQ minimum bid price rules of $1 per share, NeuroMetrix has been given a 180-day grace period until early February next year to regain compliance. The company's stockholders have authorized a reverse split of the common stock if the Board of Directors deems it necessary to address the minimum bid price issue.
InvestingPro Insights
In light of the recent earnings call, it's crucial to consider some key metrics and insights from InvestingPro. As of Q3 2023, NeuroMetrix (NURO) holds a market cap of 4.51M USD and a negative P/E ratio of -0.81, indicative of its unprofitability over the last twelve months. The company's revenue has declined by 21.85% over the last twelve months, aligning with the reported decrease in Q3 2023 revenues.
Two InvestingPro Tips that are particularly relevant are that NeuroMetrix holds more cash than debt on its balance sheet, which is confirmed by the reported $17.6 million in liquid assets and a debt-free capital structure. Also, the company is not profitable over the last twelve months, which is reflected in the negative P/E ratio and aligns with the reported revenue decline.
For more detailed metrics and tips, consider subscribing to InvestingPro's services, which include additional tips specific to NeuroMetrix and other companies. You can access this through the InvestingPro pricing page.
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