NeurAxis, Inc. (NYSE American: NRXS) is a medical technology company changing the treatment landscape for chronic and debilitating conditions in children and adults. In fact, the company's neuromodulation therapies are so potent in treating pediatric IBS and FAP that speculation is mounting for them to earn a front-line therapeutic designation. Optimistic in that potential, Brian Carrico, President and CEO of NeurAxis, provides insight into how and why he believes his company's innovative PENFS IB-Stim technology can be a game changer in treating debilitating pediatric indications.
Q. You scored a significant milestone last week, taking NeurAxis public, where it's now trading on the Nasdaq market. Can this listing help expedite your company's mission to bring to market better treatments for targeted indications?
A. Absolutely, it can. In addition to the capital raised, NeurAxis can now reach a much larger audience, not only on an investor level but from a medical and patient community needing better treatment options. We believe our pipeline, utilizing innovative IB-Stim technology, has the potential to change treatment landscapes for pediatric Functional Bowel Pain (FAB), Irritable Bowel Syndrome (IBS), and other indications. From a combined treatment opportunity perspective, we are better positioned than ever to target a growing pediatric care market valued at $9 billion. Data supports that optimism.
Q. Is part of the reason for your optimistic assessment the fact that your primary asset has earned reimbursement coverage from at least 4 major carriers, covering over five million lives?
A. Yes, that's a contributing factor. The initial ~5M covered lives are in place sooner than we expected, which shows we are ahead of where we had initially planned. Of course, we don't intend to stop there. Those approvals are a foundation to facilitate additional coverage, with that mission supported by our having robust clinical data that can withstand scrutiny to support its case for safety and efficacy.
Q. Your clients are actually the hospitals that sell the treatment to patients. Can that expedite getting your IB-Stim technology to patients?
A. Yes, it can. With our clients being pediatricians and children's hospitals, we are better positioned from a logistics standpoint to get the technology to the masses of children in need. From a sales and marketing perspective, serving this narrow channel can be more profitable by dealing with larger order volumes, allowing us to scale more efficiently.
Q. Considering that IB-Stim provides effective treatment without the harmful side effects of prescribed pharmaceuticals, including some prescribed off-label from Pfizer (NYSE: PFE), Johnson & Johnson (NYSE: (JNJ), and AbbVie (NYSE: ABBV), do you think your technology is on the path to becoming a front-line standard of care treatment?
A. We think so. IB-Stim is without question on track to be a first-line treatment after basic lifestyle and diet changes. In fact, we already see IB-Stim as a first-line treatment at major children's hospitals around the country and expect this to be the standard in the near term. In addition to the first-line treatment, we have strong written support from academic societies, including the American Academy of Pediatrics and NASPGHAN.
Q. That designation would position NeurAxis as the go-to treatment provider for millions of pediatric FAB and IBS cases annually. While scaling to meet that number would take time, is there a target number you expect to serve?
A. As a company, we must look at realistic revenue opportunities. There are 6M children in the US who suffer from FAP/IBS, and 10% of those, or 600,000, are debilitated, which means they are on a pharmaceutical and/or not playing with friends, not going to school, and not playing sports. We took that 600,000 number and cut it into 1/3 to get the 200,000 number. This is very real revenue and shows why our first goal of treating 20,000 patients in a year for $100M in revenue is so attainable.
Q. Part of that optimism is based on differences that are advantages. What are the primary ones that can expedite IB-Stim to become the treatment of choice?
A. So, earning front-line designation requires our treatments to be better and safer. In that respect, we check the right boxes. IB-Stim does not have black-box label warnings, and it does not lead to suicidal ideation, weight gain, or depression. Many drugs being used, sometimes off-label, cannot make similar claims.
Q. In addition to capitalizing on an opportunity to better serve pediatric patients who suffer from FAB and IBS, is there anything else in the pipeline?
A. Yes, we have proven through animal mechanistic research that we can treat particular pathophysiology, and that is how we chose our pipeline. Our pipeline indication targets include functional nausea in children, cyclic vomiting syndrome in children, and post-concussion syndrome in children, followed by specific adult indications. If we are successful, our candidates could fill unmet medical needs that can drive more revenues and, more importantly, provide children a better quality of life.
Q. Notably, there is information on the FDA website about your post-concussion treatment pediatric indications. Is that the next targeted milestone, and what's its revenue-generating potential?
A. It's definitely one of them. We have the potential to get another indication before post-concussion syndrome. Still, we are highly focused on post-concussion syndrome because of the need and the revenue opportunity. Conservatively, there are about 2M concussions each year, and 20% of those (400,000) have post-concussion syndrome, which presents a revenue opportunity of $2B annually. Each year, there are another 400,000. As you can see from the investor presentation, we were again very conservative with this opportunity and expect tremendous revenue from this indication, assuming the data turns out to be positive.
Q. Supportive to achieving ambitious goals is NeurAxis having collaborative contract manufacturing partners. Why is this meaningful?
A. It keeps us ahead of the demand curve. Instead of hurrying up and waiting, we have a proven manufacturing partner and spend significant time staying ahead of expected demand in the coming 12-24 months, meaning inventory will not be an issue. More specifically, we can be prepared months in advance for any new indication and the commercialization launch that comes with it.
Q. Based on what you've said, NeurAxis looks well-positioned, with the pieces in place, to penetrate a $9 billion pediatrics market faster than expected. Is that an accurate statement?
A. Yes, and by design. We are very well-positioned to enter the pediatric market faster than expected due to several factors, including the strength of our clinical and safety data, the synergy of the children's hospital call point for our current and near-term indications, and the overwhelming need for the treatment in a market where all current treatments are off-label and potentially harmful.
Q. Finally, topline growth is a welcome value driver, but profitability trumps everything. Is NeurAxis on the path toward near-term profitability?
A. That's our near-term intention. Like any business, profitability is a real focus. With our strong gross margins, we are on a more efficient, even expedited, path toward profitability. Of course, now acting as a publicly traded company, creating higher sustainable shareholder value is part of our objectives. We intend to deliver on that goal and remember that when we do, tens of thousands of children's lives will be saved and/or improved. Those results should also be appreciated.
Those wanting to learn more about NeurAxis and their treatment for FAB or IBS and those interested in its currently enrolling trials should visit the company website or contact the company directly.
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