Release Date: January 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• NeuroOne Medical Technologies Corp (NASDAQ:NMTC) has three FDA 510(k) cleared electrode families, showcasing regulatory success.
• The company has exclusive partnerships with prestigious organizations like the Mayo Clinic and Zimmer Biomet, enhancing credibility and market reach.
• The one RF ablation system is the first combination diagnostic and therapeutic system cleared by the FDA, potentially reducing hospitalizations and procedures.
• Preliminary fiscal Q1 2025 revenues were reported at $6.2 million, with a significant portion from product revenues.
• The company has no outstanding debt, providing financial stability and flexibility for future growth.

Negative Points

• The full launch of the one RF system by Zimmer Biomet is still pending, with training expected to take another 3-4 months.
• There is uncertainty regarding the quarterly product demand from Zimmer, affecting revenue predictability.
• The company relies heavily on partnerships for commercialization, which may limit control over market penetration.
• The revenue guidance does not account for the $3 million collaboration revenue, potentially skewing financial expectations.
• The market for some of NeuroOne's target applications, like drug delivery, is still under development, posing future market entry risks.

Q & A Highlights

• Warning! GuruFocus has detected 2 Warning Signs with NMTC.

Q: Can you walk us through what needs to take place between now and the Zimmer full launch? A: Training is the main focus. Although not all Zimmer sales personnel have completed training, some have already performed unassisted ablations. The technology is more active than just placing an electrode, as representatives often operate the equipment during ablations. - David Rosa, CEO

Q: When is the full launch scheduled to take place? A: An exact date can't be provided as training is ongoing, with approximately 150 people to be trained over the next 3-4 months. The good news is that the device is familiar to reps, with the main difference being the ablation component. - David Rosa, CEO

Q: Can you give us a sense of how to think about the $3.2 million product revenue? A: It's early to determine, but the electrodes used for ablation differ from those for diagnostics. Neurosurgeons have indicated a preference for ablation-capable electrodes. Some revenue is for stocking, and some is for demand. There is pent-up demand, and once Zimmer's sales force is fully trained, systems will be placed in hospitals. - David Rosa, CEO

Q: What might linearity look like this year regarding product revenue? A: We expect to receive quarterly product demand from Zimmer soon, which will provide a clearer picture of quarter-to-quarter cadence. More details will be shared in future updates. - David Rosa, CEO

Q: Are there any additional milestone payments from the Zimmer deal? A: Yes, there is one additional milestone tied to Zimmer's revenue over 12 months, but the specifics have not been disclosed at Zimmer's request. - David Rosa, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.