Neuronetics, Inc. (NASDAQ: STIM), a commercial stage medical
technology company focused on designing, developing and marketing
products that improve the quality of life for patients who suffer
from psychiatric disorders, today announced its financial and
operating results for the second quarter of 2021.
Second Quarter 2021 Highlights
- Second quarter 2021 revenue of
$14.2 million, an increase of 46% over second quarter 2020
primarily due to an increase in U.S. treatment session revenue
- Second quarter 2021 treatment
session revenue of $10.8 million comparable to second quarter 2019
revenue
- At the June Clinical TMS Society
meeting, Dr. Harold Sackeim, Ph.D. presented the outstanding, and
previously published, outcomes data of 83% response and 62%
remission rates from NeuroStar’s Outcomes Registry
- Over 50 prospective practices
attended the NeuroStar Summit in June
“We have had a very productive first half of the year capped off
by a strong second quarter. Given the early success with our new
commercial strategy and the positive response from customers and
patients, I am confident we are executing on the right
initiatives,” said Keith J. Sullivan, President and Chief Executive
Officer of Neuronetics. “Looking ahead to the rest of the year, we
expect our 5 Stars to Success and Precision Pulse Programs, in
conjunction with an experienced group of BDMs and NPCs, will
accelerate the adoption and utilization of NeuroStar Advanced
Therapy for Mental Health to treat patients suffering from mental
disorders.”
Second Quarter 2021 Financial and Operating Results for
the Three Months Ended June 30, 2021
|
|
|
|
|
|
|
|
|
|
Revenues by Geography |
|
|
Three Months Ended June 30, |
|
|
2021 |
|
2020 |
|
|
|
|
Amount |
|
Amount |
|
% Change |
|
|
(in thousands, except percentages) |
|
United States |
$ |
13,809 |
|
$ |
9,267 |
|
49 |
|
% |
International |
|
394 |
|
|
474 |
|
(17 |
) |
% |
Total revenues |
$ |
14,203 |
|
$ |
9,741 |
|
46 |
|
% |
Total revenue for the three months ended June 30, 2021 was $14.2
million, an increase of 46% compared to the three months ended June
30, 2020 revenue of $9.7 million. During the quarter, total U.S.
revenue increased by 49% and was driven by an increase in U.S.
treatment session revenue.
|
|
|
|
|
|
|
|
|
|
U.S. Revenues by Product Category |
|
|
Three Months Ended June 30, |
|
|
2021 |
|
2020 |
|
|
|
|
Amount |
|
Amount |
|
% Change |
|
|
(in thousands, except percentages) |
|
NeuroStar Advanced Therapy
System |
$ |
2,577 |
|
$ |
2,338 |
|
10 |
% |
Treatment sessions |
|
10,801 |
|
$ |
6,547 |
|
65 |
% |
Other |
|
431 |
|
$ |
382 |
|
13 |
% |
Total U.S. revenues |
$ |
13,809 |
|
$ |
9,267 |
|
49 |
% |
|
|
|
|
|
|
|
|
|
|
United States NeuroStar Advanced Therapy System |
|
|
Revenues by Type |
|
|
Three Months Ended June 30, |
|
|
2021 |
|
2020 |
|
|
|
|
Amount |
|
Amount |
|
% Change |
|
|
(in thousands, except percentages) |
|
NeuroStar Capital |
$ |
2,441 |
|
$ |
2,224 |
|
10 |
|
% |
Operating lease |
|
55 |
|
$ |
114 |
|
(51 |
) |
% |
Other |
|
81 |
|
$ |
— |
|
100 |
|
% |
Total United States NeuroStar Advanced Therapy System revenues |
$ |
2,577 |
|
$ |
2,338 |
|
10 |
|
% |
U.S. NeuroStar Advanced Therapy System revenue for the three
months ended June 30, 2021 was $2.6 million, an increase of 10%
compared to the three months ended June 30, 2020 revenue of $2.3
million. The increase was primarily driven by an increase in the
number of NeuroStar systems sold in the three months ended June 30,
2021 and an increase in the blended NeuroStar system average
selling price over the prior year quarter. For the three months
ended June 30, 2021 and 2020, the Company sold 37 and 35 systems,
respectively, during each period.
U.S. treatment session revenue for the three months ended June
30, 2021 was $10.8 million, an increase of 65% compared to the
three months ended June 30, 2020 revenue of $6.5 million. The
revenue growth was primarily driven by an increase in per click
treatment session volume over the prior year quarter.
In the second quarter, U.S. treatment session revenue per active
site was $12,001 as compared to $7,406 during the second quarter of
2020.
Gross margin for the second quarter of 2021 was 80.6%, an
increase of approximately 440 basis points from the second quarter
of 2020 gross margin of 76.2%. The increase was primarily a result
of a higher mix of treatment session revenues compared to the prior
year quarter.
Operating expenses during the second quarter of 2021 were $18.0
million, an increase of $3.7 million compared to $14.3 million in
the second quarter of 2020. The increase was primarily driven by
higher marketing expenses and share based compensation expenses
compared to the prior year quarter.
Net loss for the second quarter of 2021 was $(7.5) million, or
$(0.29) per share, as compared to the second quarter 2020 net loss
of $(7.8) million, or $(0.41) per share. Net loss per share was
based on 25,902,591 and 18,747,257 weighted-average common shares
outstanding for the second quarters of 2021 and 2020,
respectively.
EBITDA for the second quarter of 2021 was $(6.3) million as
compared to the second quarter of 2020 EBITDA of $(6.5) million.
See the accompanying financial table that reconciles EBITDA, which
is a non-GAAP financial measure, to net loss.
Cash and cash equivalents were $115.8 million as of June
30, 2021. This compares to cash and cash equivalents of $49.0
million as of December 31, 2020 and $54.0 million as of June 30,
2020.
Clinical TMS Society
On June 10 – 13, 2021, the Clinical TMS Society was held in West
Palm Beach, FL and was attended by clinicians from around the
country. NeuroStar was a Platinum sponsor for the event with data
featured in seven different oral or poster presentations. NeuroStar
has collected the largest depression Outcomes Registry using its
TrakStar patient management software. Data from the Outcomes
Registry reported response and remission rates of 83% and 62%
respectively in real world clinical settings which demonstrate
NeuroStar’s continued commitment to achieve excellent patient
outcomes.
June NeuroStar Summit
In June in Austin, TX, the Company held a NeuroStar Summit event
designed to provide prospective customers with a comprehensive
understanding of the clinical and practice benefits of partnering
with NeuroStar. The Summit was an interactive event, and attendees
from more than 50 practices were able to experience the NeuroStar
Advanced Therapy System, interact with peers, and hear from
experts. Post survey results were extremely positive, and the
Company plans to hold more Summits during 2021.
Business Outlook
For the full year 2021, the Company continues to expect to
report total worldwide revenue between $59 million and $63
million.
For the full year 2021, the Company expects operating
expenses to be between $68 million and $72 million.
For the third quarter of 2021, the Company expects to report
total worldwide revenue of between $15 million and $16 million.
Webcast and Conference Call Information
Neuronetics’ management team will host a conference call on
August 3, 2021 beginning at 8:30 a.m. Eastern Time. Investors
interested in listening to the conference call on your telephone,
please dial (877) 472-8990 for United States callers or +1 (629)
228-0778 for international callers and reference confirmation code
8826628, approximately ten minutes prior to start time. To access
the live audio webcast or subsequent archived recording, visit the
Investor Relations section of Neuronetics’ website at
ir.neuronetics.com. The replay will be available on the Company’s
website for approximately 60 days.
About Neuronetics
Neuronetics, Inc. is a commercial-stage medical technology
company focused on designing, developing, and marketing products
that improve the quality of life for patients who suffer from
psychiatric disorders. Our first commercial product, the NeuroStar®
Advanced Therapy System, is a non-invasive and non-systemic
office-based treatment that uses transcranial magnetic stimulation,
or TMS, to create a pulsed, MRI-strength magnetic field that
induces electrical currents designed to stimulate specific areas of
the brain associated with mood. The system is cleared by the United
States Food and Drug Administration, or FDA, for the treatment of
major depressive disorder in adult patients who have failed to
achieve satisfactory improvement from prior antidepressant
medication in the current episode. NeuroStar is also available in
other parts of the world, including Japan, where it is listed under
Japan’s national health insurance. Additional information can be
found at www.neuronetics.com.
“Safe harbor” statement under the Private Securities
Litigation Reform Act of 1995:
Statements in the press release regarding Neuronetics, Inc.
(the “Company”) that are not historical facts constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements may be identified by terms such as “outlook,”
“potential,” “believe,” “expect,” “plan,” “anticipate,” “predict,”
“may,” “will,” “could,” “would” and “should” as well as the
negative of these terms and similar expressions. These statements
include those relating to: the Company’s business outlook and
current expectations for upcoming quarter and fiscal year
2021, including with respect to revenue, operating expense, growth,
and any statements of assumptions underlying any of the foregoing
items. These statements are subject to significant risks and
uncertainties and actual results could differ materially from those
projected. The Company cautions investors not to place undue
reliance on the forward-looking statements contained in this
release. These risks and uncertainties include, without limitation,
risks and uncertainties related to: the impact of COVID-19 on the
Company’s operational and budget plans as well as general political
and economic conditions, including as a result of efforts by
governmental authorities to mitigate COVID-19, such as travel bans,
shelter in place orders and third-party business closures and the
related impact on resource allocations, manufacturing and supply
chains and patient access to commercial products; the Company’s
ability to execute its business continuity; the Company’s ability
to achieve or sustain profitable operations due to its history of
losses; the Company’s reliance on the sale and usage of its
NeuroStar Advanced Therapy for Mental Health System to generate
revenues; the scale and efficacy of the Company’s salesforce;
availability of coverage and reimbursement from third-party payors
for treatments using the Company’s products; physician and patient
demand for treatments using the Company’s products; developments in
respect of competing technologies and therapies for the indications
that the Company’s products treat; product defects; the Company’s
ability to obtain and maintain intellectual property protection for
its technology; developments in clinical trials or regulatory
review of NeuroStar Advanced Therapy for Mental Health System for
additional indications; and developments in regulation in the
United States and other applicable jurisdictions. For a discussion
of these and other related risks, please refer to the Company’s
recent SEC filings which are available on the SEC’s website at
www.sec.gov. These forward-looking statements are based on the
Company’s expectations and assumptions as of the date of this press
release. Except as required by law, the Company undertakes no duty
or obligation to update any forward-looking statements contained in
this press release as a result of new information, future events,
or changes in the Company’s expectations.
Investor Contact:
Mark R. KlausnerWestwicke
Partners443-213-0501ir@neuronetics.com
Media Contact:
EvolveMKD646-517-4220NeuroStar@evolvemkd.com
NEURONETICS, INC.Statements of
Operations(Unaudited; In thousands, except per
share data)
|
Three Months ended |
|
Six months ended |
|
June 30, |
|
June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenues |
$ |
14,203 |
|
|
$ |
9,741 |
|
|
$ |
26,491 |
|
|
$ |
21,217 |
|
Cost of revenues |
|
2,750 |
|
|
|
2,323 |
|
|
|
4,971 |
|
|
|
5,134 |
|
Gross Profit |
|
11,453 |
|
|
|
7,418 |
|
|
|
21,520 |
|
|
|
16,083 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
9,042 |
|
|
|
8,151 |
|
|
|
17,604 |
|
|
|
18,874 |
|
General and administrative |
|
6,681 |
|
|
|
4,010 |
|
|
|
12,785 |
|
|
|
9,298 |
|
Research and development |
|
2,294 |
|
|
|
2,116 |
|
|
|
4,604 |
|
|
|
5,137 |
|
Total operating expenses |
|
18,017 |
|
|
|
14,277 |
|
|
|
34,993 |
|
|
|
33,309 |
|
Loss from Operations |
|
(6,564 |
) |
|
|
(6,859 |
) |
|
|
(13,473 |
) |
|
|
(17,226 |
) |
Other (income) expense: |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
977 |
|
|
|
986 |
|
|
|
1,962 |
|
|
|
2,509 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
924 |
|
Other income, net |
|
(16 |
) |
|
|
(80 |
) |
|
|
(29 |
) |
|
|
(281 |
) |
Net Loss |
$ |
(7,525 |
) |
|
$ |
(7,765 |
) |
|
$ |
(15,406 |
) |
|
$ |
(20,378 |
) |
Net loss per share of common
stock outstanding, basic and diluted |
$ |
(0.29 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.63 |
) |
|
$ |
(1.09 |
) |
Weighted-average common shares
outstanding, basic and diluted |
|
25,903 |
|
|
|
18,747 |
|
|
|
24,608 |
|
|
|
18,714 |
|
NEURONETICS, INC.Balance
Sheets(Unaudited; In thousands, except per share
data)
|
June 30, |
|
December 31, |
|
2021 |
|
2020 |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
115,783 |
|
|
$ |
48,957 |
|
Accounts receivable, net |
|
9,002 |
|
|
|
7,166 |
|
Inventory |
|
5,393 |
|
|
|
3,720 |
|
Current portion of net investments in sales-type leases |
|
2,034 |
|
|
|
1,887 |
|
Current portion of prepaid commission expense |
|
1,219 |
|
|
|
1,096 |
|
Prepaid expenses and other current assets |
|
1,447 |
|
|
|
2,186 |
|
Total current assets |
|
134,878 |
|
|
|
65,012 |
|
Property and equipment,
net |
|
708 |
|
|
|
730 |
|
Operating lease right-of-use
assets |
|
3,228 |
|
|
|
3,418 |
|
Net investments in sales-type
leases |
|
1,854 |
|
|
|
2,331 |
|
Prepaid commission
expense |
|
5,454 |
|
|
|
5,300 |
|
Other assets |
|
1,976 |
|
|
|
1,866 |
|
Total Assets |
$ |
148,098 |
|
|
$ |
78,657 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
2,425 |
|
|
$ |
3,749 |
|
Accrued expenses |
|
6,604 |
|
|
|
7,319 |
|
Deferred revenue |
|
1,937 |
|
|
|
2,020 |
|
Current portion of operating lease liabilities |
|
612 |
|
|
|
594 |
|
Current portion of long-term debt, net |
|
— |
|
|
|
— |
|
Total current liabilities |
|
11,578 |
|
|
|
13,682 |
|
Long-term debt, net |
|
34,944 |
|
|
|
34,620 |
|
Deferred revenue |
|
1,488 |
|
|
|
1,741 |
|
Operating lease
liabilities |
|
2,922 |
|
|
|
3,121 |
|
Total Liabilities |
|
50,932 |
|
|
|
53,164 |
|
Commitments and contingencies (Note 16) |
|
— |
|
|
|
— |
|
Stockholders’ Equity: |
|
|
|
|
|
Preferred stock, $0.01 par value: 10,000 shares authorized; no
shares issued or |
|
|
|
|
|
outstanding at June 30, 2021 and
December 31, 2020 |
|
— |
|
|
|
— |
|
Common stock, $0.01 par value: 200,000 shares authorized; 26,167
and 19,114 |
|
|
|
|
|
shares issued and outstanding at June 30, 2021 and
December 31, 2020, respectively |
|
262 |
|
|
|
191 |
|
Additional paid-in capital |
|
389,850 |
|
|
|
302,842 |
|
Accumulated deficit |
|
(292,946 |
) |
|
|
(277,540 |
) |
Total Stockholders’ Equity |
|
97,166 |
|
|
|
25,493 |
|
Total Liabilities and Stockholders’ Equity |
$ |
148,098 |
|
|
$ |
78,657 |
|
NEURONETICS, INC.Statements of Cash
Flows(Unaudited; In thousands)
|
Six months ended June 30, |
|
2021 |
|
2020 |
Cash Flows from Operating
Activities: |
|
|
|
|
|
Net loss |
$ |
(15,406 |
) |
|
$ |
(20,378 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
Depreciation and amortization |
|
552 |
|
|
|
534 |
|
Share-based compensation |
|
4,205 |
|
|
|
1,842 |
|
Non-cash interest expense |
|
324 |
|
|
|
944 |
|
Cost of rental units purchased by customers |
|
137 |
|
|
|
122 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
622 |
|
Changes in certain assets and liabilities: |
|
|
|
|
|
Accounts receivable, net |
|
(1,835 |
) |
|
|
(66 |
) |
Inventory |
|
(1,673 |
) |
|
|
(557 |
) |
Net investment in sales-type leases |
|
330 |
|
|
|
(777 |
) |
Leasehold reimbursement |
|
— |
|
|
|
836 |
|
Prepaid commission expense |
|
(278 |
) |
|
|
(723 |
) |
Prepaid expenses and other assets |
|
1,120 |
|
|
|
356 |
|
Accounts payable |
|
(1,365 |
) |
|
|
(2,408 |
) |
Accrued expenses |
|
(715 |
) |
|
|
(3,492 |
) |
Deferred revenue |
|
(336 |
) |
|
|
14 |
|
Net Cash Used in Operating Activities |
|
(14,940 |
) |
|
|
(23,131 |
) |
|
|
|
|
|
|
Cash Flows from Investing
Activities: |
|
|
|
|
|
Purchases of property and equipment and capitalized software |
|
(1,108 |
) |
|
|
(484 |
) |
Net Cash Used in Investing Activities |
|
(1,108 |
) |
|
|
(484 |
) |
|
|
|
|
|
|
Cash Flows from Financing
Activities: |
|
|
|
|
|
Proceeds from issuance of long-term debt |
|
— |
|
|
|
41,360 |
|
Repayment of long-term debt |
|
— |
|
|
|
(38,860 |
) |
Payments of debt issuance costs |
|
— |
|
|
|
(721 |
) |
Proceeds from exercises of stock options |
|
2,303 |
|
|
|
124 |
|
Proceeds from common stock offering |
|
80,972 |
|
|
|
— |
|
Payments of common stock offering issuance costs |
|
(401 |
) |
|
|
— |
|
Net Cash Provided by Financing Activities |
|
82,874 |
|
|
|
1,903 |
|
Net Increase (Decrease) in Cash and Cash Equivalents |
|
66,826 |
|
|
|
(21,711 |
) |
Cash and Cash Equivalents, Beginning of Period |
|
48,957 |
|
|
|
75,708 |
|
Cash and Cash Equivalents, End of Period |
$ |
115,783 |
|
|
$ |
53,997 |
|
Non-GAAP Financial Measures (Unaudited)
EBITDA is not a measure of financial performance under generally
accepted accounting principles in the United States, or GAAP, and
should not be construed as a substitute for, or superior to, GAAP
net loss. However, management uses both the GAAP and non-GAAP
financial measures internally to evaluate and manage the Company’s
operations and to better understand its business. Further,
management believes the addition of the non-GAAP financial measure
provides meaningful supplementary information to, and facilitates
analysis by, investors in evaluating the Company’s financial
performance, results of operations and trends. The Company’s
calculation of EBITDA may not be comparable to similarly designated
measures reported by other companies, because companies and
investors may differ as to what type of events warrant
adjustment.
The following table reconciles reported net loss to EBITDA:
|
Three Months ended |
|
Six months ended |
|
June 30, |
|
June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
(in thousands) |
|
(in thousands) |
Net loss |
$ |
(7,525 |
) |
|
$ |
(7,765 |
) |
|
$ |
(15,406 |
) |
|
$ |
(20,378 |
) |
Interest expense |
|
977 |
|
|
|
986 |
|
|
|
1,962 |
|
|
|
2,509 |
|
Income taxes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Depreciation and
amortization |
|
271 |
|
|
|
233 |
|
|
|
552 |
|
|
|
534 |
|
EBITDA |
$ |
(6,277 |
) |
|
$ |
(6,546 |
) |
|
$ |
(12,892 |
) |
|
$ |
(17,335 |
) |
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