Q2 revenue of $6.0 million, including license
revenue
Nearly 1,000 prospective MyoPro® candidates
with known payers in the patient pipeline
Begins to build Medicare Part B patient
pipeline following publication of proposed rule by the Centers for
Medicare and Medicaid Services
Conference call begins at 4:30 p.m. Eastern
time today
Myomo, Inc. (NYSE American: MYO) (“Myomo” or the
“Company”), a wearable medical robotics company that offers
increased functionality for those suffering from neurological
disorders and upper-limb paralysis, today announced financial
results for the three and six months ended June 30, 2023.
Financial and operational highlights for the second quarter of
2023 include the following (all comparisons are with the second
quarter of 2022 unless otherwise indicated):
- Product revenue was $4.2 million, up 15%, with total revenue of
$6.0 million including receipt of the final joint venture license
fee payment;
- Revenue units were 97, up 21%;
- MyoPro® orders and insurance authorizations were received for
125 units, up 23%;
- Backlog, which represents insurance authorizations and orders
received but not yet converted to revenue, was 179 units, up
10%;
- 408 new candidates were added to the patient pipeline, up
28%;
- There were 969 MyoPro candidates in the patient pipeline as of
June 30, 2023, up 27%;
- Gross margin was 71.8%, up 650 basis points; and,
- Cost per pipeline add, which reflects only payers that have
previously reimbursed for the MyoPro, was $2,074, a reduction of
57%.
Management Commentary
“We continued our solid execution in the second quarter, with
year over year improvement in all of our key operational metrics,"
stated Paul R. Gudonis, Myomo's chairman and chief executive
officer. "Our focus for the rest of the year is to continue to grow
the business, while managing our operating expenses and building a
pipeline of Medicare Part B patients in anticipation of being able
to fit them with their own MyoPro, potentially within the next six
to 12 months. That effort began during the second quarter," added
Gudonis.
"Additionally, our Chinese joint venture partner is moving
quickly to launch its business development efforts, establish
manufacturing and build the supply chain. We received initial
orders from the JV company for MyoPro Control Units, which are a
core component of the MyoPro product line, and our MARK clinical
units for approximately $300,000 in total. The JV company is
getting ready to produce the clinical version of our product line,
which they expect to supply to rehab hospitals throughout
China."
Financial Results
For the Three Months Ended
June 30,
Period- to-Period
Change
For the Six Months Ended June
30,
Period- to-Period
Change
2023
2022
$
%
2023
2022
$
%
Product revenue
$
4,243,624
$
3,677,575
$
566,049
15
%
$
7,690,332
$
6,545,501
$
1,144,831
17
%
License revenue
1,714,920
-
1,714,920
N/M
1,714,920
1,000,000
714,920
71
%
Total revenue
5,958,544
3,677,575
2,280,969
62
%
9,405,252
7,545,501
1,859,751
25
%
Cost of revenue
1,677,488
1,276,444
401,044
31
%
2,816,594
2,567,149
249,445
10
%
Gross profit
$
4,281,056
$
2,401,131
$
1,879,925
78
%
$
6,588,658
$
4,978,352
$
1,610,306
32
%
Gross margin %
71.8
%
65.3
%
6.6
%
70.1
%
66.0
%
4.1
%
Revenue for the second quarter of 2023 was $6.0 million, up 62%
compared with the second quarter of 2022. Excluding the final
payment of the technology license fee in the second quarter of
2023, product revenue of $4.2 million increased 15% compared with
the same period a year ago. Growth in product revenue was driven by
a higher number of revenue units, offset by a lower average selling
price (ASP). Myomo recognized revenue on 97 MyoPro units in the
second quarter of 2023, up 21% over the same quarter a year ago.
Year-to-date revenues were $9.4 million, up 25% compared with the
same period a year ago.
Gross margin for the second quarter of 2023 was 71.8%, compared
with 65.3% for the second quarter of 2022. The increase was driven
primarily by the license fee payment offset by a lower average
selling price and higher inventory and warranty reserves.
Year-to-date gross margin was 70.1%, compared with 66.0% for the
same period a year ago.
Operating expenses for the second quarter of 2023 were $5.4
million, an increase of 2% compared with the second quarter of
2022. The increase was driven primarily by higher incentive
compensation accruals, offset by lower advertising expenses.
Advertising costs of $0.8 million decreased 18% compared with the
second quarter of 2022. Cost per pipeline add was $2,074, a
decrease of 57%, compared with the second quarter of 2022.
Year-to-date operating expenses were $10.4 million, a decrease of
2% compared with the same period a year ago.
Operating loss for the second quarter of 2023 was $1.1 million,
compared with an operating loss of $2.9 million for the second
quarter of 2022. Net loss for the second quarter of 2023 was $1.0
million, or $0.04 per share, compared with a net loss of $2.9
million, or $0.42 per share, for the second quarter of 2022.
Year-to-date operating loss was $3.8 million, compared with an
operating loss of $5.6 million for the same period a year ago.
Year-to-date net loss was $3.7 million, or $0.14 per share,
compared with a net loss of $5.7 million, or $0.83 per share, for
the same period a year ago.
Adjusted EBITDA for the second quarter of 2023 was $(0.8)
million, compared with $(2.5) million for the second quarter of
2022. Year-to-date Adjusted EBITDA was $(3.2) million, compared
with $(4.9) million for the same period a year ago. A
reconciliation of GAAP net loss to this non-GAAP financial measure
appears below.
Operations Update
The patient pipeline was 969 patients as of June 30, 2023.
Beginning in 2023, the pipeline only represents patients with
insurance payers, Veterans Administration hospitals or orthotics
and prosthetics suppliers that have previously paid for a MyoPro.
The comparable patient pipeline as of June 30, 2022 was 761
patients, representing an increase of 27% year over year. There
were 408 patients added to the pipeline in the second quarter of
2023, an increase of 57% compared with 319 patients with previous
payers in the same period a year ago.
Centers for Medicare and Medicaid Services Update
On June 30, 2023, the Centers for Medicare and Medicaid Services
("CMS") issued a proposed rule that expands the previous definition
of a brace to include products such as a MyoPro that will both
support and help move a patient's arm. There is a 60-day public
comment period before the proposed rule can be finalized. If the
proposed rule is adopted, and should there be no change to how
braces are reimbursed, we expect the MyoPro to be reimbursed on a
lump sum basis, similar to all other payers currently reimbursing
for the MyoPro. In addition, CMS stated that it intends to publish
a fee for the MyoPro billing codes, L8701 and L8702, at an upcoming
public meeting. The next such public meeting has not been
scheduled, but is expected to be held in late 2023.
The Company has filed claims with CMS' regional billing
contractors, known as the DME MAC's, for six MyoPros provided to
Medicare Part B patients. These claims are in process, with review
of the medical documentation underway as required for individual
consideration. "With the proposed new rule now announced by CMS, we
will inform Medicare Part B patients about their opportunity to
obtain a MyoPro while we await a decision on the pending claims,
finalization of the proposed rule and the publication of a fee,"
stated Mr. Gudonis. The Company reports that more than 30 patients
are currently in the Medicare pipeline, which is separate from the
main patient pipeline, with additional patients expected to be
added during the third quarter.
Business Outlook
“The backlog entering the third quarter is slightly higher than
the backlog entering the second quarter, but given the order mix in
the second quarter, the ASP in the backlog is slightly lower, "
added Mr. Gudonis. "As a result, we expect to achieve modest
year-over-year revenue growth in the third quarter, while
sequential revenue growth will depend on the number of new orders
during the third quarter that can be delivered for revenue given
the anticipated ASP. Meeting our target for full year product
revenue growth of 20% to 30% will depend on the number of insurance
authorizations we receive in the next few months."
Cash Position
Cash, cash equivalents and short-term investments as of June 30,
2023 were $9.0 million. Cash used in operating activities was $0.3
million for the second quarter of 2023, compared with $2.6 million
for the second quarter of 2022.
Conference Call and Webcast
Myomo will hold a conference call today at 4:30 p.m. Eastern
time to discuss these results and answer questions. Participants
are encouraged to pre-register for the call at this link. Callers
who pre-register will be given a conference passcode and unique PIN
to gain immediate access to the call and bypass the live operator.
Participants may pre-register at any time including up to and after
the start of the call. Those unable to pre-register may participate
by dialing 844-707-6932 (U.S.) or 412-317-9250 (International). A
webcast of the call will also be available at Myomo’s Investor
Relations page at http://ir.myomo.com/.
A replay of the webcast will be available beginning
approximately one hour after the completion of the live conference
call at http://ir.myomo.com/. A dial-in replay of the call will be
available until August 23, 2023 at 877-344-7529 (U.S. toll-free),
855-669-9658 (Canada toll-free) or 412-317-0088 (International),
with passcode 3960786.
Non-GAAP Financial Measures
Myomo is providing financial information that has not been
prepared in accordance with generally accepted accounting
principles in the United States, or GAAP. This information includes
Adjusted EBITDA. This non-GAAP financial measure is not in
accordance with, or an alternative for, GAAP and may be different
from similar non-GAAP financial measures used by other companies.
Myomo believes the use of this non-GAAP financial measure provides
supplementary information for investors to use in evaluating
operating performance and in comparing Myomo’s financial measures
with other companies in its industry, many of which present similar
non-GAAP financial measures. Adjusted EBITDA is EBITDA adjusted for
stock-based compensation expense and loss on equity investment.
This non-GAAP financial measure is not meant to be considered
superior to or a substitute for results of operations prepared in
accordance with GAAP, and should be viewed in conjunction with GAAP
financial measures. Investors are encouraged to review the
reconciliation of this non-GAAP measure to its most directly
comparable GAAP financial measure. A reconciliation of GAAP to the
non-GAAP financial measures has been provided in the tables
included as part of this press release.
About Myomo
Myomo, Inc. is a wearable medical robotics company that offers
improved arm and hand function for those suffering from
neurological disorders and upper-limb paralysis. Myomo develops and
markets the MyoPro product line. MyoPro is a powered upper-limb
orthosis designed to support the arm and restore function to the
weakened or paralyzed arms of certain patients suffering from CVA
stroke, brachial plexus injury, traumatic brain or spinal cord
injury, ALS or other neuromuscular disease or injury. It is
currently the only marketed device that, sensing a patient’s own
EMG signals through non-invasive sensors on the arm, can restore an
individual’s ability to perform activities of daily living,
including feeding themselves, carrying objects and doing household
tasks. Many are able to return to work, live independently and
reduce their cost of care. Myomo is headquartered in Boston,
Massachusetts, with sales and clinical professionals across the
U.S. and representatives internationally. For more information,
please visit www.myomo.com.
Forward-Looking Statements
This press release contains forward-looking statements regarding
the Company’s future business expectations, including expectations
for third quarter and full year 2023 revenue, as well as
expectations regarding the payment of claims by the DME MAC's and
finalization of the proposed rule and the publishing of a fee from
CMS, which are subject to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are only predictions and may differ materially from
actual results due to a variety of factors.
These factors include, among other things:
- We have a history of operating losses and our financial
statements for the period ended June 30, 2023 include disclosures
regarding there being substantial doubt about our ability to
continue as a going concern;
- our ability to achieve reimbursement from third-party payers
for our products, including CMS for Medicare Part B patients;
- our ability to continue to serve patients with Medicare
Advantage insurance plans CMS does not cover the MyoPro;
- our revenue concentration with a particular insurance payer as
a result of focusing our efforts on patients with insurers who have
previously reimbursed for the MyoPro;
- our ability to continue normal operations and patient
interactions without supply chain disruption in order to deliver
and fit our custom-fabricated device;
- our marketing and commercialization efforts;
- our dependence upon external sources for the financing of our
operations, to the extent that we do not achieve or maintain cash
flow breakeven;
- our ability to effectively execute our business plan and scale
up our operations;
- our expectations as to our product development programs,
and;
- general market, economic, environmental and social factors that
may affect the evaluation, fitting, delivery and sale of our
products to patients.
More information about these and other factors that potentially
could affect our financial results is included in Myomo’s filings
with the Securities and Exchange Commission, including those
contained in the risk factors section of the Company’s annual
report on Form 10-K, quarterly reports on Form 10-Q and other
filings with the Commission. The Company cautions readers not to
place undue reliance on any such forward-looking statements, which
speak only as of the date made. Although the forward-looking
statements in this release of financial information are based on
our beliefs, assumptions and expectations, taking into account all
information currently available to us, we cannot guarantee future
transactions, results, performance, achievements or outcomes. No
assurance can be made to any investor by anyone that the
expectations reflected in our forward-looking statements will be
attained, or that deviations from them will not be material or
adverse. The Company disclaims any obligation subsequently to
revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.
(Tables to follow)
MYOMO, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
For the Three Months
ended
For the Six Months
Ended
June 30,
June 30,
2023
2022
2023
2022
Revenue
Product revenue
$
4,243,624
$
3,677,575
$
7,690,332
$
6,545,501
License revenue
1,714,920
—
1,714,920
1,000,000
5,958,544
3,677,575
9,405,252
7,545,501
Cost of revenue
1,677,488
1,276,444
2,816,594
2,567,149
Gross profit
4,281,056
2,401,131
6,588,658
4,978,352
Operating expenses:
Research and development
564,235
632,872
1,041,225
1,292,408
Selling, general and administrative
4,819,827
4,664,088
9,321,435
9,320,505
5,384,062
5,296,960
10,362,660
10,612,913
Loss from operations
(1,103,006
)
(2,895,829
)
(3,774,002
)
(5,634,561
)
Other (income) expense, net
Interest income
(103,439
)
(13,845
)
(189,753
)
(14,026
)
Other (income) expense, net
5,631
165
5,631
293
Loss on equity investment
12,514
33,208
29,716
33,208
(85,294
)
19,528
(154,406
)
19,475
Loss before income taxes
(1,017,712
)
(2,915,357
)
(3,619,596
)
(5,654,036
)
Income tax expense (benefit)
(3,562
)
(6,435
)
38,849
69,820
Net loss
$
(1,014,150
)
$
(2,908,922
)
$
(3,658,445
)
$
(5,723,856
)
Weighted average number of common
shares outstanding:
Basic and diluted
27,992,928
6,923,799
26,000,216
6,904,966
Net loss per share attributable to
common stockholders
Basic and diluted
$
(0.04
)
$
(0.42
)
$
(0.14
)
$
(0.83
)
MYOMO, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
June 30,
December 31,
2023
2022
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$
6,006,283
$
5,345,967
Short-term investments
2,950,268
—
Accounts receivable, net
1,641,803
1,896,163
Inventories, net
1,337,353
1,399,865
Prepaid expenses and other current
assets
694,641
573,462
Total Current Assets
12,630,348
9,215,457
Operating lease assets with right of
use
299,118
508,743
Equipment, net
153,719
194,283
Investment in Jiangxi Myomo Medical
Assistive Appliance Co. Ltd.
102,773
132,489
Other assets
111,034
111,034
Total Assets
$
13,296,992
$
10,162,006
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current Liabilities:
Accounts payable and accrued expenses
3,977,460
3,086,932
Current operating lease liability
181,783
353,701
Income taxes payable
177,187
140,650
Deferred revenue
747
20,653
Total Current Liabilities
4,337,177
3,601,936
Non-current operating lease liability
139,657
200,207
Deferred revenue
126
498
Total Liabilities
4,476,960
3,802,641
Commitments and Contingencies
—
—
Stockholders’ Equity:
Preferred stock
—
—
Common stock
2,110
775
Additional paid-in capital
101,226,783
95,105,071
Accumulated other comprehensive income
39,292
43,227
Accumulated deficit
(92,441,689
)
(88,783,244
)
Treasury stock, at cost
(6,464
)
(6,464
)
Total Stockholders’ Equity
8,820,032
6,359,365
Total Liabilities and Stockholders’
Equity
$
13,296,992
$
10,162,006
MYOMO, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited)
For the Six Months Ended June
30,
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss
$
(3,658,445
)
$
(5,723,856
)
Adjustments to reconcile net loss to net
cash used in operations:
Depreciation
100,622
94,645
Stock-based compensation
451,088
611,493
Bad debt expense
13,000
26,075
Loss on equity investment
29,716
33,208
Amortization of right-of-use assets
209,625
162,638
Other non-cash charges
(10,786
)
69,521
Changes in operating assets and
liabilities:
Accounts receivable
235,877
602,033
Inventories
68,907
(496,529
)
Prepaid expenses and other current
assets
(212,438
)
345,470
Other assets
—
(15,704
)
Accounts payable and accrued expenses
888,594
(542,597
)
Income taxes payable
34,774
56,600
Operating lease liabilities
(232,467
)
(195,244
)
Deferred revenue
(20,280
)
1,650
Net cash used in operating activities
(2,102,213
)
(4,970,597
)
CASH USED IN INVESTING
ACTIVITIES
(3,008,692
)
(301,672
)
CASH PROVIDED BY FINANCING
ACTIVITIES
5,763,910
-
Effect of foreign exchange rate changes on
cash
7,311
(16,195
)
Net increase (decrease) in cash and cash
equivalents
660,316
(5,288,464
)
Cash and cash equivalents, beginning of
period
5,345,967
15,524,378
Cash and cash equivalents, end of
period
$
6,006,283
$
10,235,914
MYOMO, INC.
RECONCILIATION OF GAAP NET
LOSS TO ADJUSTED EBITDA
(unaudited)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2023
2022
2023
2022
GAAP net loss
$
(1,014,150
)
$
(2,908,922
)
$
(3,658,445
)
$
(5,723,856
)
Adjustments to reconcile to Adjusted
EBITDA:
Interest income
(103,439
)
(13,845
)
(189,753
)
(14,026
)
Depreciation expense
51,989
49,015
100,622
94,645
Stock-based compensation
280,061
345,223
451,088
611,493
Loss on investment in minority
interest
12,514
33,208
29,716
33,208
Income tax (benefit) expense
(3,562
)
(6,435
)
38,849
69,820
Adjusted EBITDA
$
(776,587
)
$
(2,501,756
)
$
(3,227,923
)
$
(4,928,716
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230809474055/en/
For Myomo: ir@myomo.com
Investor Relations: Kim Sutton Golodetz LHA Investor Relations
kgolodetz@lhai.com 212-838-3777
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