Hello, everyone, and thank you all for joining us during the Lytham Partners Fall 2024 Investor Conference. My name is Ben Shamsian, Vice President here at Lytham Partners. During the presentation and fireside chat webcast, I'm excited to welcome NeurAxis, ticker symbol N-R-X-S on the NYSE American. Joining us today is the company's Chief Executive Officer, Brian Carrico. Before we begin, I want to remind everyone that management is available for one-on-one meetings throughout the conference. If you've not already signed up and would like to schedule a one-on-one meeting, please send me an email at shamsian@lythampartners.com. That's S-H-A-M-S-I-A-N @lythampartners.com, or visit our website, and you can sign up through there. With that said, Brian, I know you have a few slides you want to go through before we go into questions.
I'll turn the floor over to you, and we'll jump into questions afterwards. Please proceed, Brian.
Good morning, Ben. Thank you. My name is Brian Carrico, CEO of NeurAxis, and I appreciate everyone joining this morning. I look forward to one-on-one meetings later today and over the coming weeks. So a little bit about the company, NeurAxis. We've been around for a little over 10 years. We are a pediatric med tech early growth stage company, and today we're gonna talk a little bit about where we've been, where we are, and where we're going. Want to touch on a few points on this cover slide here. First of all, I'd like to say that we have been public for just over a year. We have consistently executed. We're hitting milestones in a timely manner, and to date, we're doing what we said we would do.
On this slide, I want to point out, as a pediatric med tech company, we think it's extremely important and have built our company on this philosophy, that strong data or research equals strong policy coverage and reimbursement, and that equals strong revenue growth, and that's what we've continued to see. As I mentioned on our last earnings call, we're starting. We had a very nice start to Q3, and we'll be doing an earnings call in the coming weeks to talk about Q3 and elaborate a little farther on why those revenues are jumping. Obviously, because of the insurance coverage that's taken place. I'll get into that a little later. A little bit about the company. We have a $23 billion total addressable market. That includes the adult and the pediatric pipelines.
Right now, we have one FDA indication, pediatric functional abdominal pain associated with IBS, and that indication is part of our pediatric pipeline, which is $9 billion of our $23 billion total addressable market. We are first to market, which is excellent. The benefit of being first to market is you have a large runway of opportunity. The thing, if you want to say a downside about being first to market, you obviously need to get your own, do your own, all of your own research, your own FDA indication, your own coding, your own insurance coverage, et cetera, and we're on the tail end of those, which we'll talk about later today. As I said, we were first to market, which means we went through the FDA De Novo clearance process.
We have our own Category III CPT billing code, which is excellent. It gives the children's hospitals and the pediatricians a way to track the technology, and we will talk a little bit more about the Category I CPT permanent billing code, later today. We have major insurance payer coverage already initiated, and we'll talk about that today. The amount of data is, at this point, overwhelming. We've got strong academic society support, which speaks volumes to the amount of data that are in place. We've got a very experienced management team and board of directors that have gotten us to this position, and we have operations and infrastructure that are built to scale, and we've talked publicly about moving to break even and path to profitability from a cash flow standpoint, in the first half of 2025 .
From a total addressable market standpoint, we just touched on this. On the left wheel, you'll see $9 billion total addressable market. On the bottom of that wheel, you'll see $3 billion functional abdominal pain, IBS. We have that indication today. We're commercializing that indication today. We're in the process of submitting for functional dyspepsia, and then the other three indications were in the process of the double-blind, placebo-controlled trials to get those indications to market. On the right side, you'll see $12 billion for functional abdominal pain, IBS in adults. We are submitting to the FDA in 2025 for that market. We're looking forward to expanding this market from the pediatric space to also include the adult space, and then you'll see RED, rectal expulsion device, for $2 billion. That's a large market.
We'll talk a little bit more about RED later today. That's the only indication we have in the future that we look forward to that is not part of our flagship technology. We actually licensed this technology from the University of Michigan and are cautiously optimistic we'll have that through the FDA in December or January. Let's talk about the technology we have today that treats functional abdominal pain associated with IBS in children. We're talking about disorders of the gut-brain interaction or DGBIs. This is a large problem with an unmet need. There are currently no FDA-approved therapies for children with these conditions. These conditions negatively impact the quality of life, and most importantly, these kids have trouble attending school, they aren't playing sports, and they're not socializing with their friends.
These are three critical aspects of a child's life that are affected by these DGBIs. There is insufficient data to support the use of the most prescribed drugs, some with serious side effects, which we'll discuss, and a growing number of families and physicians and providers are seeking non-pharmacological alternatives for children. This slide talks a little bit about the data associated with the current pharmacotherapy in children that have been used for the last fifty years. Amitriptyline, SSRIs. These drugs have side effects. You're talking about increased risk of suicidal ideation. There are Black Box warnings from the FDA on these drugs. These drugs cause significant mood changes. They cause EKG disturbances.
There's new data showing long-term risk of dementia in adults, which, if it's doing that to adults, then what are we talking about, this doing to a developing brain in a child? And that is why you see a growing number of families seeking alternative therapies for pain in children. This slide shows on the left exactly how the neuromodulation works. So we've done multiple fMRI and animal studies showing that this is neuromodulation. We are affecting the brain and the central nervous system, and this device and technology, through neuromodulation, reduces the firing of the amygdala and therefore induces changes in brain pathways and connectivity, and it's why you'll see later we have long-term data showing the long-term results of this technology after four weeks. This slide shows our current device and exactly how this works.
The device itself is placed on a Monday, for example, and it runs for five days. These needles do break the skin, therefore, accessing the cranial nerves and the central nervous system. This device is taken off after five days, so it runs from a Monday to a Saturday, for example. The patient takes one or two days off and has a second device placed, and that device runs for five days, and this process is complete. It runs for three to four weeks, and at that point, the patient no longer needs to wear the technology. We have significant long-term data at twelve months now, showing statistically significant results at the twelve months. In short, four weeks of therapy is showing that we have long-term results with this technology at this point. This is a slide showing IB-Stim.
It's FDA indicated. It's a non-drug alternative, virtually no side effects, and we're actually targeting the root cause of the issue and correcting this in the brain-gut axis, whereas traditional care is not FDA approved. These pharmaceuticals often contain Black Box labels. The side effects are significant, as we just discussed, and it's a localized and peripheral delivery. On the right side, you'll see one example of an insurance policy coverage we have. This is a particular policy specific to IB-Stim, and with Blue Cross Blue Shield of Massachusetts. This slide speaks to the foundation of our company. As I spoke earlier, we have built this company on data. We know that if we have strong data, that allows us to get strong insurance policy coverage, and that allows us to grow revenues, so we currently have 16 publications.
These were all investigator-initiated trials, which means that eliminates it doesn't eliminate, but it virtually eliminates bias because we did not sponsor these studies. We've done 10 different types of studies. I'm not sure there's a type of study that we've not done. Placebo-controlled data, quality of life, we've gone head-to-head. We've done health economic research. These studies are very thorough, very robust, and that's why you see the insurance policy coverage taking effect that you see now. This slide speaks to the number needed to treat, the number of patients that need to be treated for one patient to get targeted improvement. So the number needed to treat for IB-Stim is three. If you look at IBS drugs in adults, like Lubiprostone, the number needed to treat ranges from six to 14.
This just speaks to the superiority of the data. This is our pipeline. A very important slide for us and for you to understand as investors. As you see on the top, functional abdominal pain and irritable bowel syndrome, we have that indication being commercialized now. The next box down, RED, that's the rectal expulsion device. This is a technology for to diagnose the best way to treat constipation patients. There are about eight million constipation visits a year, and these adult gastroenterologists are seeing this condition, and they don't exactly know how to treat, whether it's with a drug or whether to send them to physical therapy.
We licensed this technology, as I said, from the University of Michigan, and we expect to have this through the FDA in December or January and be able to commercialize this. The great news about this technology is it already has a Category I CPT code. It already has Medicare reimbursement and commercial insurance reimbursement. The next indications you'll see as we move down through here, functional dyspepsia, which we expect to have in 2025, functional abdominal pain and IBS in adults, which is the indication we have today. We're going to move that into adults. So as you can see, we have several indications in the next 12 months that we expect to run through the FDA, which will significantly increase the total addressable market, and we expect it to significantly increase the revenues associated with that.
This is a little bit about the RED, the rectal expulsion device, that I spoke to earlier. This was a 510(k) submission was submitted for June, and we expect clearance late this year. This slide's important because it talks about the key publications, but most importantly, I wanna highlight that we have strong academic society support. NASPGHAN, or the Pediatric Gastroenterology Society, has written strong support, including academic society guidelines, which we've seen presented in poster form this summer, listing IB-Stim or PENFS as the highest grade of evidence for this condition. That's quite a step. Guidelines are extremely important to payers, and that is because they are independent and published by the academic society. We are expecting publication sometime later this year, with-...
Which will go a long way with the payers. We also have strong support from the American Academy of Pediatrics. They actually submitted along with us for our Category I CPT code application, which, if you move to the right of this slide, you can see that we submitted our application in June, and we actually went to the CPT meeting in this past week, and the meeting went well. We won't know if we will have that Category I CPT code awarded to us for about thirty days. As soon as we know, we will let the public know, and if we were to be successful, that code would become effective January 1 of 2026 . The Category I CPT code is extremely important because it brings with it clarity for billing for children's hospitals and pediatricians.
It brings with it a permanent reimbursement amount, and it also brings with it RVUs, which are extremely helpful for physicians. This slide, the go-to-market strategy slide, I wanna highlight the left side of this. We talk about the fact that we now have 12 plans, about 24 million covered lives. We've also got another plan that is approving the technology internally. They've not released public coverage policy, but that's about 12 million covered lives, taking us to about 36 million covered lives, and we just received notice of another policy recently, and that policy we can announce in the coming weeks, which will increase that 36 million covered lives number.
On the right side, you'll see that we have the Category III CPT code now, as we discussed earlier, and our list price of almost $1,200, and because each patient receives four devices, that takes the reimbursement or the price to about $4,800 per patient to the company. And then the children's hospital or the pediatrician actually buys the technology from NeurAxis, and then the children's hospital or the pediatrician bills the insurance company, and the insurance company reimburses the children's hospital or the pediatrician. So, the go-to-market strategy is in place. The foundation is in place. Once again, we continue to execute these milestones, and we continue to grow insurance policy coverage, which is critical in the key to growing revenues and, most importantly, allowing access to the care to these children.
The IP portfolio, we have eleven issued and nine pending patents for both the device and method. The IP runs through two thousand thirty-nine as of now, and we're continuing to add to this IP on a monthly basis. We've got very strong device and method patents. Manufacturing, we have a contract manufacturer as of today for both IB-Stim, and we will have a contract manufacturer for RED, assuming that goes through the FDA. These manufacturers are both ISO certified, they're both FDA-registered, and they both do multiple FDA-approved products for other companies as well. Very strong manufacturing facilities. Our board of directors, I'll just touch base. Beth Keyser is the president of Blue Cross Blue Shield of Indiana. Mitch Watkins is a commercialization expert.
Mitch has been a part of starting through the exit of several med tech companies, and Kristin is on the board from a finance standpoint, along with Chris, who's a founder, Dr. Brown, who's a founder, then myself. Our management team, this is the management team that has gotten us from where we were to where we are. We've been extremely lean, but we've also executed while doing so to protect the cap table. Tim Henrichs is the only one who is relatively new. Tim joined us early this year. He came from the board to be the CFO of the company early in 2024 , and we are expecting to add to this management team in the coming months. So high level, from a company standpoint, that's where we were, where we are, and where we're going.
We've built an incredibly strong foundation of data. We have a significant amount of insurance policy coverage now taking place. We are cautiously optimistic that we're moving in the right direction towards a Category I CPT billing code, and we continue to execute, both from a milestone standpoint, and we're doing it in a timely manner. There's an extremely large total addressable market that needs addressed, and the fact that we're first to market with this data makes us very bullish on the revenue growth in the coming months and years ahead of us. So Ben, I'll stop there and take any questions that you may have or you may have received.
All right. Thanks, Ben. Some questions. Let's talk about the commercialization. This is, you know, at this point, highly dependent on insurance coverage. You've talked about your covered lives. How do you see that covered lives growing, and, you know, sort of what are the obstacles there, if any?
Yeah, great question, Ben. First of all, we see where we've picked up insurance policy coverage in the last nine months. A lot of that insurance policy coverage is now taking effect. So when I say that, a lot of insurances announce policy coverage, but it doesn't take effect for maybe three months until a patient can actually access it. So now that that's taking place, we're seeing revenue growth in those areas. But the most important aspect now is that the academic society guidelines, because of the nature of from a credibility standpoint, the big payers are waiting on those to be published. So the sooner those get published, the sooner the big payers like Anthem, UnitedHealthcare, Aetna, and Cigna are able to write policy coverage. They are very strict when it comes to writing policy coverage.
They want to see overwhelming evidence, which we have, but they also want to see academic society guidelines. So although we have insurance policy coverage in place, and we're increasing the covered lives, and we're seeing the revenue growth from that, which we'll really highlight on our Q3 call, we need to get the academic society guidelines published, which we have no control over. And once those are published, then we are, again, cautiously optimistic that the large payers will write policy coverage and allow these children in need, that are debilitated, and not going to school, and not socializing with their friends, and not playing sports, access to this important technology.
... Got it. Can you talk about the demand for the product that you're seeing and sort of what the insurance obstacles are doing to that at this point?
Yeah, it's pretty straightforward. When a device or a technology is nearly $5,000, and I will say it's still significantly less at that price point than the pharmaceuticals are in the same space. But at $5,000, nearly $5,000 per patient, insurance coverage is a necessity. And when you have no insurance written policy coverage, the children's hospitals are not able to take the risk of buying the technology until that there is written policy coverage and then approval. So written policy coverage is critical. The demand is overwhelming. We have... You know, I've talked publicly about we have a couple of children's hospitals, multiple at this point, that are on pace to do well over $500,000 in revenue this year.
Two things about that: number one, they're still only treating one of every four or five patients they want to treat; and number two, these are not big children's hospitals that we're talking about. So it speaks to the amount of patients that are in need of this technology and just absolutely don't have access right now because of insurance policy coverage.
All right. You have a lot of irons in the fire. In terms of milestones, I think there was a slide there showing some of those timelines. Can you, How can we think about the different milestones over the next 12 - 18 months?
Yeah, great question. So we want to stick to the GI space, number one. We want to stay laser-focused on the commercialization of IB-Stim, and these other indications are in process. You know, they're with the FDA, they're with a research standpoint, but we want to stay focused on IB-Stim. And then once RED is through the FDA, we want to stay focused on RED and IB-Stim. The good news about these two technologies is they are in the adult and the pediatric GI space, so it keeps our W-2 sales force laser-focused in that space, and we will continue to stay focused. As these other indications come, they are also in the GI space. So this allows us the synergy of staying just in the same space and making sure that we are not off in the weeds.
We're very focused first to market with these indications, and we fully expect to see the benefits of those as they come through in maintaining the W-2 sales force in those specific call points.
Okay, great. You haven't provided any official guidance, but can you speak about how you think about the path to profitability or, you know, becoming cash flow positive?
Yeah, we're-
Yeah, cost.
Great question, Ben. We fully expect the guidelines to be published by the end of this year, which will allow the larger payers to come into focus, and that will take place in the first half of 2025, and we know that getting to profit... cash flow profitability is not a big number. It seems like a big number today, but when you talk about the number of patients that need treated, there are 600,000 kids that are debilitated by this, and we've treated less than one-tenth of 1%. That's the current rate of treatment right now. We need to get this insurance policy coverage in place. The physicians are trained, the physicians want to treat, patients are there. This is strictly an insurance policy coverage standpoint. So once the guidelines-
... are published, we can get to this insurance policy coverage and start treating these patients. Second, and equally as important, is getting RED through the FDA. If we get that through in December or January, we know that because there's a Category I CPT code and insurance coverage already available, we should be able to recognize immediate revenue. So the combination of those two things, I... When you talk about guidance, I want to hit on guidance. We haven't given guidance, but in the first quarter, we talked about being cash flow positive by the end of that quarter on a monthly basis, which would be March.
If you look at our losses, that would tell you we're on pace to do about $2 million a quarter, and that would get us to. So just, you know, about triple what we did, a little more than triple what we did in Q2. And I think, when we announce Q3, everyone will see the traction starting to take place. So if we can get profitability by the end of Q1, that would put us on an $8 million, approaching a $10 million run rate, which would be approximately 200% growth over 2024. So without getting into guidance, I think you can start to see where we see this going and the timelines, and then this will escalate even more as we get more policy coverage in 2025.
And then, if we're able to get the Category I CPT code, it would escalate even more, beginning January first of 2026.
Okay, great. And I know you've gone into some transactions with some highly coveted funds in the healthcare space. Are you, from a balance sheet standpoint, comfortable to get you to profitability?
Yeah, I think that we have roughly $4.2 million still committed from investors. We're burning it right at $400-$425 thousand a month, which would tell you that. We don't have any debt. That would tell you we have about 10 months of runway, and that's if we didn't grow at all. We feel comfortable that we have the funding necessary to get to cash flow break even, cash flow profitability, and continue to expand. From there, we'll have to look at what's working and decide if we need to take on additional capital to scale from a speed standpoint.
But from a funding standpoint, we've got strong institutional and strategic investors on the balance sheet or on the cap table, and we expect with this committed funding, to be able to get us to cash flow break even, cash flow profitability.
All right. Well, thank you very much for your time today. Certainly found this informative, and I believe our audience will do the same. Before we wrap up, to anyone out there who's not signed up for a one-on-one, please, again, send me an email at shamsian@lythampartners.com, S-H-A-M-S-I-A-N @lythampartners.com, or visit our conference website. Lastly, we have a number of additional webcasts and fireside chats coming up today. Please visit the conference homepage and click on the presentations to view them. Brian, thank you once again, and we hope you have a great rest of the day.
Thanks, Ben.