NanoVibronix Highlights Second Quarter Revenue Growth and Narrowing of Loss from Operations in Letter to Stockholders
ELMSFORD, N.Y.--(BUSINESS WIRE)--August 21, 2024--
NanoVibronix, Inc. $(NAOV)$, a medical device company that produces the UroShield$(R)$, PainShield(R) and WoundShield(R) Surface Acoustic Wave (SAW) Portable Ultrasonic Therapeutic Devices, today issued a letter to its stockholders from its Chief Executive Officer, Brian Murphy, providing a review of the second quarter financials and recent business developments.
To Our Shareholders:
We are committed to our strategic vision of developing, improving and commercializing our distinct and effective therapies, which we believe enable healthcare providers to treat patients in need, fill a void in the market and have the potential to increase stockholder value. We are focused on several areas that we believe will have a substantial impact on our growth and product adoption. Many of those areas of focus have begun showing positive results, as reflected in our most recent quarter's financial results for the quarter ended June 30, 2024. Our products continue to deliver impressive outcomes with high patient satisfaction, with no reportable adverse events. Moreover, we are investing in sales improvement and long-term opportunities with all of our products.
Q2 Financial Results
We recorded revenues of approximately $817,000 for the quarter ended June 30, 2024, which is the largest amount of revenues we have ever recorded in the second quarter of any fiscal year and more than 2.5 times the revenue we generated for the same period in 2023. Compared to the quarter ended June 30, 2023, the loss from operations was reduced by more than 30% to approximately ($674,000). We continue to generate increased revenues from the Veterans' Health System and Workers' Compensation market segments and our dealer network even as we continue to reduce operating costs. Our balance sheet remains strong, with approximately $2.2 million of cash and inventory of approximately $2.4 million as of June 30, 2024.
Domestic update
We continue to make progress in several channels of domestic sales and product adoption. Our Veterans' Affairs penetration continues to improve in terms of the number of facilities served, and we have added valuable sales resources in areas previously uncovered by our current sales partner, Delta Medical.
Delta Medical was awarded a GSA grant that we believe will provide for an accelerated uptick in product adoption within the Veterans' Health facilities. The GSA contract became effective on May 1, 2024, so we have yet to realize a full quarter impact. The GSA contract is expected to have a positive impact on both sales and adoption, as well as provide a significant competitive advantage, and we are optimistic that we will see the effects of the GSA in the second half of 2024. We are also optimistic about our future sales growth within this important business sector.
Additionally, we continue to make progress in the Workers' Compensation area of our business, from multiple sales channels. Our Durable Medical Equipment ("DME") exclusive distributor has been steadily delivering and expanding its reach through the addition of qualified and competent dealers, and we believe there is significant upside potential in this area. We are gratified to see the adoption of PainShield increase within both reimbursable market segments and become the accepted product of choice for the DME market. The PainShield product family is increasingly becoming a recognizable and acceptable standard for pain relief and the avoidance of opioids.
Reimbursement
Reimbursement is currently approved in the Veterans' Health System and several Workers' Compensation plans, Third Party Administrators and insurance companies. Our revenues in these markets have grown and continue to grow substantially. Through our strategic, exclusive distributor partners for select markets, and through our direct sales efforts, we are seeing growth every month. The sales growth follows the payer and patient testimonials of superior product efficacy, which is heavily scrutinized in these markets. It is truly gratifying to witness the product loyalty and increased adoption of PainShield.
Reimbursement for UroShield remains in effect for the Veterans' Administration segment.
International update
We continue to make progress and generate additional sales in the Australian and New Zealand markets. Full reimbursement for UroShield is being considered in both markets, although the timing is unknown at this point in time. If reimbursement is granted, we believe there could be a significant increase in demand for our urology products.
In the U.K., we continue to leverage our contract with the National Health Services ("NHS") Supply Chain and our supplies reimbursement through the NHS Prescription Services' Drug Tariff, which became effective on November 1, 2023. We continue to make progress with our UroShield product and have experienced more interest since then. Our U.K. distributor, Peak Medical Limited, continues to add to its inventory and is actively pursuing market opportunities throughout the country.
Relative to the broader market in Europe, we are continuing our evaluation with a significant urologic pharmaceutical company based in Germany. Our previous announcement of the evaluation with Apogepha Pharmaceutical, Inc. provides more detail, the link of which can be found here. The synergy between the companies will provide for a mutually beneficial opportunity. We expect to provide updates regarding this matter in the near future.
Research
The University of Michigan will begin facilitating a gold standard Randomized Control Trial $(RCT.AU)$ study on the efficacy and patient satisfaction of patients utilizing UroShield. The research, which is being led by the Center for Research and Innovations in Special Populations (CRIISP), an experienced and highly accomplished research team, will be conducted primarily with nursing home residents and is aimed at studying the impact UroShield may have on reducing urinary tract infections, catheter blockages and pain and improving the quality of life of the patients studied. The first phase of the study was originally expected to include a validation pilot of up to 30 patients in advance of the full study. The full study is expected to include more than 300 patients. Reevaluating the pilot with the University of Michigan team, we mutually believe we can achieve the desired results of the pilot with just 20 patients, and at this time, we have 15 patients enrolled. We look forward to receiving the researchers' conclusions on the pilot, and are hopeful of positive outcomes for patients in the broader study.
Product development
We have been working on several exciting improvements to the existing product portfolio as well as exploring new product opportunities. The goals of the product development are to improve the therapy, reduce costs and "future-proof" the componentry. The "kick-off" for the project began on time and the development process is progressing rapidly.
A look ahead
We remain focused on driving profitable growth by expanding and increasing our distribution and licensing channels, nurturing relationships with new and existing accounts and engaging consumers through a variety of creative mediums. Today, we have initial distribution agreements in place, a solid manufacturing partner and the necessary working capital to meet existing and anticipated near-term demand.
We continue to negotiate for sector-specific private label agreements. This strategy is intended to develop long-lasting, profitable, forecastable revenue. COVID-19 interrupted our momentum, but these discussions are moving forward.
In the near-term, we are primarily focused on achieving the following milestones:
-- Supplementing distribution to achieve broader geographic coverage in
both VA and Workers' Compensation channels
-- Selection of UroShield distribution to key markets
-- Adding market segment specific distribution for PainShield in the U.S.
-- Finalizing a private label partnership for PainShield in the U.S.
-- Expanding UroShield distribution throughout the world.
Thank you for your continued support. We remain optimistic and motivated to deliver improved results for 2024.
Kind regards,
Brian Murphy
Chief Executive Officer
About NanoVibronix, Inc.
NanoVibronix, Inc. (NASDAQ: NAOV) is a medical device company headquartered in Elmsford, New York, with research and development in Nesher, Israel, focused on developing medical devices utilizing its patented low intensity surface acoustic wave (SAW) technology. The proprietary technology allows for the creation of low-frequency ultrasound waves that can be utilized for a variety of medical applications, including for disruption of biofilms and bacterial colonization, as well as for pain relief. The devices can be administered at home without the assistance of medical professionals. The Company's primary products include PainShield(R) and UroShield(R), which are portable devices suitable for administration at home without assistance of medical professionals. Additional information about NanoVibronix is available at: www.nanovibronix.com.
Forward-looking Statements
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