With CEO Dave Rosa and CFO Ron McClurg of NeuroOne Medical Technologies Corporation, ticker NMTC. During the presentation, please feel welcome to submit questions using the Zoom Q&A interface at the bottom of your screen. After the presentation, we'll open to your questions. With that, Dave, I'll turn it over to you.
All right. Thanks, Alex. Good afternoon, everyone. My name is Dave Rosa, and I'm the CEO of NeuroOne Medical Technologies Corporation. As Alex mentioned, we're a publicly traded company on the NASDAQ under the symbol NMTC. Given that we're a public company, I'm going to put up our forward-looking statements, which I know you have a lot of experience looking at. Let's talk about NeuroOne. NeuroOne is a company that develops and manufactures thin film electrode technology. What we're trying to accomplish is to create a paradigm shift in the diagnosis and treatment of neurological disorders. Disorders I'm referring to are ones that you've probably heard of, such as epilepsy, Parkinson's disease. We've also publicly stated that we have programs in lower back pain and drug delivery as well. We have three different business segments that I like to refer to as brain, pain, and drug delivery.
To date, the company has four FDA-cleared products, multiple patents that are either granted or pending, and two high-profile exclusive partnerships. Technology improvements in this space have really been stagnant for years. We firmly believe that our next-generation electrode platform is a major advancement in the space. How is it different? First, our thin film design allows for less invasive placement, which includes percutaneous placement. The technology also is designed to be able to perform multiple functions that cover both diagnostic and therapeutic functions using the same device, therapeutic functions being things like stimulation and ablation. I mentioned earlier that we have two exclusive partnerships. The first one that I've listed here is with the Mayo Clinic. The Mayo Clinic has really been a close partner since the company formed back in 2017.
They've worked with us on most of our technologies and actually most recently completed testing of our drug delivery system. They're also currently an investor in the company. The other partnership that we have is with Zimmer Biomet. This relationship began back in 2020. To date, they've invested $8.5 million for licensing rights to commercialize our diagnostic and ablation system for just use in the brain. Zimmer has a leading robotic platform that's used to place our sEEG electrodes in a very precise fashion. Also, in addition to licensing fees, our agreement with them includes minimum purchases as part of this agreement. There's a number of different markets that we are attempting to play in. In addition to epilepsy, which I mentioned, other markets we're pursuing are Parkinson’s disease, low back pain, pain in general, and drug delivery. Let's talk about the technology platform.
This slide here shows our product portfolio. When you look at the top four products that are listed on this table, those products all have FDA clearance. The first three are actually marketed by Zimmer Biomet under the agreement that I just mentioned. All those products are used to diagnose and treat patients that have epilepsy. The fourth product that we have listed there, that's called the OneRF ablation system for facial pain, was just cleared by the FDA for treating facial pain by ablating the trigeminal nerve. We also have a percutaneously placed electrode for lower back pain that's in development. The last one on this slide is actually the drug delivery device as well. I mentioned earlier that what we have is a platform technology. All of these devices are based off that same platform. Let's talk about our Evo sEEG and cortical electrodes.
These product lines were primarily used just for diagnostic purposes only. Neurosurgeons would place these in the brain, and the whole purpose was to find the areas in the brain that were triggering seizures in these patients. Then those devices would be removed. A patient would be sent home. They would return for a follow-up surgery to remove that tissue. Now, these devices, for the most part, have been replaced by our OneRF ablation system, given that it can provide both the diagnostic and therapeutic functions using the same device. There's not really a need to use a diagnostic-only product because neurosurgeons have the intention to treat these patients, which typically involves an ablation or some sort of resection. Speaking of OneRF ablation system, this is the only FDA-cleared system for both diagnostic and therapeutic treatment.
Because it actually reduces the current procedure that I just mentioned that requires two separate surgeries and two separate hospitalizations, we're able to combine all this into one hospitalization, one surgery, using the same device. You could probably see that it's got the capability to save time, money, and improve patient outcomes. Most patients are very nervous about coming in for one surgery, let alone two. We really believe that this is a game changer in the field. You might be wondering about clinical results that we've been experiencing. We've actually been extremely pleased with the results to date, as the majority of the patients that we've treated already are either seizure-free or greatly improved. If you also look at our website, we have a story of a young lady that was treated with our device who was experiencing 8 to 10 seizures a day.
She's been now seizure-free for over a year. I mentioned facial pain. Last month, we announced the FDA clearance for the OneRF ablation system for use in treating trigeminal neuralgia. Trigeminal neuralgia is the medical term for facial pain. We do expect to initiate a limited market evaluation beginning sometime in November when we get a final sterile product. With respect to that technology, we have not signed any strategic partnerships as yet, although we are having discussions with strategics about this. One of the devices I mentioned in development is our percutaneous paddle lead system. You can't see it on here, unfortunately, but this is a very thin film electrode.
If you can imagine placing this device inside of a 14-gauge needle, so a very small needle, by rolling it up and using a pretty innovative delivery system, you can see the obvious advantage of this in that there's no need for incisions. Because this is much larger than the wire-like electrodes that are typically used to treat these patients, you could probably understand that we're able to stimulate a much broader area, and we're able to do it using less energy consumption. One of the biggest issues for patients is having to recharge their batteries. There is a great advantage to technologies that don't require as much energy as the traditional wire-like electrodes. We've also said publicly that we're currently in discussions with strategic companies regarding their interest in this technology. You may remember from an earlier slide that I showed regarding the different markets.
Today, this market alone is generating $3 billion in revenue. It is the largest market that we're attempting to enter today. Next up is our sEEG-based drug delivery system. This system utilizes, again, the same sEEG electrode platform that we're using in other applications that I spoke about previously. What's really unique about this device is it's able to actually measure the impact of whatever cell or gene therapy that you're delivering with this due to its ability to record brain activity. We announced recently that we received an initial order from a large pharma company that is very well known for gene therapy development, specifically to treat epilepsy. In addition to the clinical devices that we intend to market, we also have smaller versions that are really more appropriate for testing in animals. This is a slide of our management team and Scientific Advisory Board.
We've got a great deal of management experience with the company. Most of our management team has worked in both small and larger companies, so most of us have a nice blend of experience in that. When you look at our Scientific Advisory Board, there's just a wealth of strong clinical expertise within this group. Two of the doctors, Worrell and Van Gompel, are part of the Mayo Clinic, and they actually have been working with us, again, since the company's inception. Let's talk about just briefly the financial overview. We provided guidance of $8 to $10 million in revenue for fiscal year 2025. Our fiscal year ends September 30, so at the end of this month. We also recently increased our guidance for product gross margins to a range of 50% to 53%. In terms of funding, we're funded at least through fiscal year 2026. We are still debt-free.
We also really believe there's upside to the plan and any number of milestones that we may achieve that are tied to revenue. It could be revenue associated with our trigeminal technology that I said we'll be doing a limited launch in mid-November, or it could be the result of a strategic relationship that we form, or really any of the other areas that I spoke about, whether it's trigeminal neuralgia, back pain, or drug delivery. In terms of upcoming potential catalysts, we've got a number in terms of just potential catalysts. We really expect to begin to generate revenue for facial pain later this year. There's also the potential for non-dilutive licensing agreement revenue for facial pain. I mentioned the potential partnerships with Strategics for some of our other technologies, both stimulation and ablation, and then the pharma company partnerships.
We also think there is an opportunity to see significant revenue increases for fiscal 2025. In summary, NeuroOne Medical Technologies Corporation has a true platform technology. This platform can treat a wide variety of neurological disorders that have the capability of providing both diagnostic and therapeutic functions. I mentioned earlier, we've got four product families that have gained FDA 510(k) clearance. We've got world-class partnerships with the Mayo Clinic and Zimmer Biomet. I firmly believe that we're also really well positioned for the future with our pain-related technology. That technology does not only have to apply to lower back pain; it can apply really to treat pain in any area of the body. Our drug delivery system, which I also think has great potential, has really garnered a lot of interest among the neurosurgeon community.
We're debt-free, well-capitalized, and as I mentioned a few slides ago, we've got upside to our plan. I want to thank you for your attention, and I think we can turn it over to Alex to open up for questions.
Great. Thank you very much, Dave, for sharing the story with us. Maybe we could start, building on something you mentioned, which is there's a lot of platform potential here. Could you give us a sense, for the standard of care in some of the different indications, how much better are the outcomes, or the potential sort of pricing and cost savings for the systems that might adopt you guys?
Yeah, I think if you just look at the RF ablation system for treating epilepsy patients, when you think about the cost for a hospitalization, it's in the thousands of dollars. I was recently in the hospital for a surgery that took no more than about 20, 25 minutes, and the operating room costs were, when you include physicians' fees and everything else, about $50,000. Now, if you can eliminate one of those surgeries and one of those hospitalizations, there's no question that the cost savings could be tremendous. I think it goes beyond that. I mentioned that the potential outcomes could be improved for patients that get treated. I'm just talking about one of our technologies.
If you think about it, if you're a patient and you have to go in for at least two surgeries, there's two chances that there could be some sort of adverse event, right, in the surgical procedure. If you're able to reduce that to one, then there's less of a likelihood. Also, if you can treat the patient while the devices are still in place, you've got to believe that the accuracy of the ablation has to be better than if you were to send that patient home, bring them back, have to redrill a hole to access that tissue. I think, across the board, whether it's a reduction in adverse events, better accuracy in the ablation, meaning the patient has a better chance of being seizure-free, or just reduced cost, this platform really has the ability to affect all three of those things.
Great context. Thank you. When a system would choose to adopt your platform, what are they buying exactly? Is there sort of capital equipment that's being used? How does that work in sort of a whole package?
Yeah, so when we first started marketing these devices, we were just selling the electrodes by themselves and no capital equipment. It was just a disposable sale. Once we introduced the OneRF ablation system for brain ablations, and this will hold true also for facial pain ablations or really any ablations, now what's being marketed is a piece of hardware, which is the RF generator, as well as additional disposables. It's a pretty traditional capital equipment sale. Since Zimmer Biomet is actually marketing it, I can't go into all the different programs that they have. One of the major advantages of having a strategic partner that size is they have other products that they can bundle that can enable getting the capital equipment placed. They've got a lot of experience doing that since their robotic platform is really the platform of choice to do these surgeries.
Makes sense. Maybe we can zoom out a little bit. I think we've spoken about the platform potential. We have a question from the audience in terms of how does the product pipeline and platform potential connect to any necessary clinical trials and approvals and actual penetration of the market?
It's a great question, and it's a different answer for every one of the platforms. Let's talk about the brain for right now. For what we have, and I'm going to include the facial pain ablation system as well, there were no clinical trials, no human trials that were required for that. Keep in mind all those devices are used in an acute setting. They're not implanted for months or years or anything like that. Typically, once the procedure is over, they're removed and disposed of. When you talk about drug delivery, the FDA has been very clear with companies pursuing applications like this. For every drug that you want to, in essence, market your technology with, there has to be a study done with that drug. You can't get a broad indication, at least not today, that says, my device can be used for any drug in development.
The strategy there is to partner with the pharma companies as they're developing the technology. Being able to provide them with devices that can be used in small animals and then large animals and then humans so that if and when the technology is approved by the FDA, your device gets approved along with that because it's part of the study. With respect to lower back pain, if we're talking about implanting the electrode with a pulse generator that does the stimulation, if we had to develop the hardware for that, I'm guessing that it would probably be five to seven years. There would be a clinical trial involved in that. Our strategy has been, and it's one of the reasons why I mentioned earlier that we're having discussions with strategic partners that are interested in the technology.
If we partner with a company that already has an approval, then the path to commercialization is much quicker and less daunting. We would not have to do a large clinical study. Obviously, we would be connecting to their equipment. Those companies would be able to simply file an amendment to their existing approval, showing that our device, there would be some clinical data that we would have to capture, at least showing safety. It's much, much smaller in numbers compared to if we were going this alone. It's really different for the different applications.
Okay, great. Thank you. Thank you for sharing. Could we also talk a little bit more? You've spoken about partnerships, and you've named some of them. Is it all sales through partners, or do you have any sort of direct sales and affiliates? How does that work?
Yeah, today we do not. Zimmer Biomet has the exclusive rights to commercialize in the U.S. and then also has certain OUS territories. When you look at technology like spinal cord stimulation, the electrodes that we have for that, it's obviously much more advantageous for us to partner with a larger company so that we can get to the market in a much faster way. If we were to do that, obviously, then they would be selling the product. I think the one that's still open for discussion is drug delivery. I could see a separate sales force with that technology, but I think it's still too early for us to really know what makes the most sense, you know, whether or not we have a similar relationship that we do with a Zimmer or if we have a separate sales force.
I think that one probably lends itself to be the best suited for us to have our own commercialization force.
Makes sense. I'm just curious, given the very strong platform diagnostics and therapeutics potential, how have you seen the commercial reception been and any sort of conversations or evolution of the competitive landscape that you've seen as you guys have also reached development milestones? Tied to that, one person is asking specifically about InsightTech and how some of your technology might compare there.
Yeah, so I'm not as familiar with that technology. Our competitors are pretty well known in the diagnostic space, and I'm talking now just strictly about the brain. That's the only technology we're really commercial with. It's kind of interesting that when we started the company, all of our competitors had been in business for years, some 20 years or more. We were the first to really aggressively pursue developing the technology from just a pure diagnostic into something that can perform both diagnostics as well as therapeutics. No one has received a clearance from the FDA yet on using their technology, and there's a lot of reasons why it's a little bit trickier for them. Our technology really lends itself to these types of applications.
We haven't seen any new clearances by our competitors in the space, although we've heard from many sources that they are trying to catch up to us. My goal is to be one step ahead. Facial pain was the next frontier that we went after, and the next one's going to be back pain. We're in a phase where we're just trying to innovate as quickly as we can so that we can maintain a strong competitive advantage over these other companies.
Makes a lot of sense. Maybe we can tie that into the capitalization of the company and how you're aligned with those development goals and your current position, if you could sort of tie that together for us.
I think Ron's going to want to get in on the show, so I'll turn the financial questions over to him.
Thanks, Dave. Yeah, so we did raise some money in April of this year. We raised about $8.2 million in net proceeds. Based on our kind of worst-case modeling, as Dave said before, we have cash on hand through at least fiscal 2026. In our internal modeling, I said it's kind of a worst case. We only have Zimmer contract revenue built into that. We haven't added anything for trigeminal or facial pain ablation. We haven't added anything for any of the potential partnerships that Dave talked about. One of the other things that I don't know if he mentioned when he was talking about catalysts, he did mention that Zimmer has the rights to certain OUS countries for distribution of our ablation system. We've now taken the step to gain ISO 13485 certifications, which is kind of the first step to be able to sell OUS.
We will look to add some of those countries as it makes sense. We've gotten forecasts from Zimmer on some of those countries as well. I think that's a big upside that isn't built into our model either. Right now, we have no debt on the balance sheet. As of the end of June, we had about $8 million in cash on hand. With the amendment to our Zimmer agreement, we got, as Dave mentioned, $3 million in exclusivity licensing fee. We also got minimum purchase quantities, which he mentioned. We have got improved transfer pricing, so our margins have gone up about 20 plus basis points. I think in fiscal 2024, we had gross margins of about 31%. For this year, our guidance is that that's going to fall in the range of 50 to 53%.
Between those things, we're on a much stronger financial footing than we were even a year ago.
Great. Thank you. We are almost out of time. Maybe as a final question, if we could sum up the value proposition for investors who might be looking across, you know, diagnosis or treatment within neurology and some of those investment opportunities.
Yeah, I, of course, I'm biased, but I've got Ron smiling. I think it's a great investment opportunity. That's just my opinion. One of the reasons is, and you kind of hinted to this, it's really a technology that, unlike most of the technologies I've been involved with in small companies, they're usually, you know, one-trick ponies, right? One application, one indication. Here, we've been able to take a technology and actually leverage the advantages of it, the thinness of it, the ability to perform multiple functions. There's advantages in a number of different areas in neurology. I think we're in a great position and very well positioned in the future because we have multiple plays in this. I think they all, you know, have their own upside and potential.
It really kind of minimizes the risk, in my opinion, in the investment because it's not just, you know, one application, one indication, and one therapy. It really does cross a broad area of neurology.
Absolutely. With that, we are at time. I'd like to thank you, Dave and Ron, for sharing the NeuroOne story with us. I'd also like to thank everybody listening for spending time with us today. Thanks, Alex.
Thank you.
Thank you.