Hello and welcome back to our next company webcast featuring Beyond Air, which trades under the NASDAQ ticker symbol XAIR. For today's discussion, Steve Lisi, Chairman and CEO at the company, will be taking us through their slide presentation, followed by a brief Q&A. Steve, I'll turn the floor over to you.
Thanks, Roger. Appreciate it. Happy New Year and thanks for having us. So I'll walk you guys through the Beyond Air story. Legal disclaimer, as usual. And so we are a commercial stage medical device company targeting the hospital-based nitric oxide, or NO, market.
So our technology, which is pictured here, is novel and disruptive, as in it provides the hospital overall cost savings a safe environment for patients and hospital staff. It saves space and time, and it has environmental benefits by eliminating nitric oxide, or NO, gas cylinders. So I'll get into this a little bit more I i know nitric oxide is probably a new concept for some people, but it is a medical gas. So bear with me as we go through this. This U.S. nitric oxide market is about $350 million, n itric oxide has been around for 25 years, treating an indication in the U.S. for newborn babies.
The global market is about $700 million and growing. Right now, the most amount of usage of nitric oxide comes from large, bulky cylinders, and these impose significant logistical burdens on hospitals. Current technology is restricted to the intensive care unit.
Our technology will expand into the entire hospital and eventually into the home settings n ot with the machine you see here, but a different system, which I'll show on another slide. So right now, we've been on the market for over two years, and we've solidified our reputation for customer service and our system itself. And right now, our sales are ramping significantly s o, we are excited about this moment in time.
So here are our systems. First system, not just FDA approved, but also approved in the European Union. We have our other systems The LungFit Pro, LungFit is the name of our base system, but LungFit Pro and Go are used exclusively for respiratory infections in the hospital and in the home setting. Our initial approved system is again used at a lower dose for something called hypoxic respiratory failure in newborn babies, and outside of the United States, it's also used for cardiac surgery for this condition.
So again, our system is special because of what you see here, so the LungFit generates nitric oxide gas from the air we breathe. So we can generate gas as long as there's air. So we have an unlimited supply of nitric oxide as long as we can breathe, so what happens here, and you'll see there's two chambers inside of our system. One is a backup, so we never lose nitric oxide going to the critical care patient in the ICU.
So what happens is, very simply, we use a compressor to bring air into this chamber w e force it through. And as you can see, there's a little pink line there representing electric pulses. So it's a plasma pulse of electricity. And all the power we need is the same amount of power you use for a 60-watt light bulb. So you can plug it in anywhere, and our system will work.
So what happens is, as the air passes through this electrical arc, you have nitrogen and oxygen combining into nitric oxide. Unfortunately, nitric oxide will convert into nitrogen dioxide, or NO2, which is a toxic gas. But we fortunately have our NO2 Smart Filter. So that takes out the toxic gas y ou're getting pure nitric oxide to the patient. These patients are ventilated.
So again, FDA approved and CE marked in both regions for term and near-term neonates with hypoxic respiratory failure. We call this PPHN, so I may refer to that as PPHN later. In the European Union, it's also approved for peri- and post-operative pulmonary hypertension in conjunction to heart surgery o kay? So that indication does not exist in the United States yet.
So again, I mentioned the market is $350 million in the U.S., roughly $700 million globally. I just want to mention that this is not a capital equipment market. So no one's buying the capital equipment i t's a monthly fee for service. Contracts range between one and four years in the U.S., and they may differ around the world. So again, I mentioned the potential label expansion in the United States.
I want to be clear that in the United States, it is standard of care for cardiac surgery i t's just off-label usage. So it would be nice if we were able to get this on label w e expect an FDA decision on whether this will be on label for our product sometime this calendar year, preferably in the first half, but we'll see FDA timing is tough to judge.
So if we are granted this approval, we would be the only nitric oxide product on the market with cardiac surgery on label. Again, it would be more of a market share shift towards our product rather than an expansion of market volume.
We do have one partner so far. It's Getz Healthcare. They're recognized as a leading distributor of medical equipment in Southeast Asia, outside of Japan. We have 10 countries partnered with Getz, and they are underway, now that we have CE marked, to getting registrations in these countries, and we anticipate shipping product to them over the next couple of months.
We expect other XUS partnerships to occur over the next 24 months a nd in that period, we expect to have partners in most of the world. So we do have a second-generation system that's in development we'll be submitting that to the FDA by the end of this calendar quarter. And what this system does is it's a smaller system than the current one that we have i t's kind of shrunk. And it also facilitates what we call ground and air transportation. So there are critical care patients that need to be transported via ambulance or helicopter and even fixed wing as well.
Our current system, which I showed you a picture of earlier, is not approved for that purpose, and this next-generation system will allow for that, so we'll not need any more cylinders inside of the ambulance or the aircraft, which is a big win for the industry, so our current patents expire in 2033, and we have pending patents which will expire in 2044, and they will cover our second-generation LungFit PH, so it's very exciting.
So let's size up the competition, so you see us on the left. We weigh 75 pounds on a cart, and 44 pounds, we can come off the cart o ur competitors don't come off the cart, and you can see the various weights they're kind of heavy, especially those cylinder-based guys, so there are three cylinder-based players. You can see the big cylinders in the back of their systems there.
There's one that's a non-cylinder player, but they do not generate nitric oxide from room air like we do. They start with a toxic gas of N2O4. That's a chemical symbol for dinitrogen tetroxide. And it converts into the NO2 that I mentioned earlier as another toxic gas. And then it eventually converts into nitric oxide. So again, these are the players in the market today in the United States.
The N2O4 converter system is not approved outside the United States to date. So why do we win? You can see for our system, we have a filter which filters out the nitrogen dioxide I mentioned. Our nitric oxide supply is unlimited.
Our competitors have about 2,000 liters of gas in the cylinders, and about 200 liters of gas can be made with the competitor cassette system. You can imagine that the need to change the cylinder or the cassette varies based on how you're using the product. With us, it's 12 hours y ou swap a filter out every 12 hours, no matter what s o certainty and predictability for the user. This is important. We have no storage requirements w e don't store anything. We don't store nitric oxide. So our competitors do have those, and they're logistically challenging and take up a lot of space.
There's some of the other things here o ne of the more important ones is speed to treatment w e can get to treatment very quickly t hese are critical care patients, so we want to treat them as quickly as possible. And when you shut down our system, you can turn it on and off like a light switch, so no big deal. And our competitors have other issues. So again, these are just a few of the benefits of our system.
So we talk about this cassette-based system t hey've been on the market three years longer than we have, and we have to give them some credit t hey've done a very good job of taking share. And we think the reason they've been able to do so well is that there is a hatred for cylinders t hey are a logistical challenge. They are a safety hazard.
And this company with the cylinder, with the cassettes, has done a good job to this point to take some share t hey're greater than 10% market share w e don't know the exact share, but they're doing quite well. But this is very comforting for us since we know people don't want cylinders, and our system is superior to their system at this point in time. So moving forward.
Again, summarize our system in the United States, LungFit PH. We use our plasma pulse technology, which is patented. We generate nitric oxide instantly, within seconds. So we don't need to source nitric oxide from cylinders or cassettes. We can deliver the set dose, initiate inhaled nitric oxide therapy in less than a minute.
We're significantly simpler and faster than the competition. Okay? We have enhanced efficiency. Hospitals have more time for patient care w e're in the ICU. There's very limited time for these healthcare workers, and they are looking at all the time that they can save, and we help them significantly with that. We have no hazardous materials. Our safety burden is reduced. Significant time saved on pre-use checkout maintenance. And again, I want to mention again the certainty of having to change every 12 hours, no matter what the settings are. It's very important.
Again, I'll mention one more time, unlimited source of nitric oxide y ou never run out of it. Okay? So one last thing on our commercial device. So this is for safety purposes. We've been used in over 60 hospitals, over 1,850 patients treated, and over 130,000 hours of nitric oxide delivered to patients to date.
So we are proven, safe, effective, easy to use. And again, the customer service over the last two-plus years has been outstanding for my team and very proud of them. And I think the hospitals are responding to that. So it does take time for a new company to build a reputation, and we're at that point. So we're not just LungFit PH w e mentioned our other devices earlier, LungFit Pro and Go. So LungFit Pro is something used by professionals in the hospital LungFit Go would be used at home.
We have completed studies both in the hospital and at home. We treat patients in the home. We're using our system for 12 weeks, twice a day, treating for 40 minutes a day a nd, no issues with the system, no side effects, or no serious adverse events, I should say. And there was efficacy in the study that we ran. So I will do a little bit on this, and then we'll get to some Q&A.
So nitric oxide. I call this a medical device company, and we are, but there's a lot of biotechnology here. Nitric oxide is a complex molecule. So there are three isoforms in the human body: nitric oxide synthase, there's endothelial, inducible, and neuronal j ust to give you a quick background on this, what we're doing with endothelial is hypoxic respiratory failure or right ventricular dysfunction, which is what nitric oxide is approved for today.
Okay? There's inducible nitric oxide synthase. This is for respiratory infections or solid tumors, so again, we are using higher concentration nitric oxide to treat respiratory infections. Not approved, obviously, but in development, and we also have in development nitric oxide at ultra-high concentrations of nitric oxide, 25,000 parts per million and higher, to treat solid tumors, so just to be clear, endothelial, when we're treating there, it's 20 parts per million nitric oxide, which is what's approved.
Now we're using 250 parts per million to treat respiratory infection and 25,000 parts per million of nitric oxide or higher to treat solid tumors. Again, those respiratory infections, solid tumors are in development, just to be clear. We also have something targeting neuronal nitric oxide synthase, or nNOS. The first indication there is autism.
In that program, there's an overproduction of nitric oxide in the brain, and we have a compound that will limit production in the brain and reduce the autistic tendencies of the rodents w e've only treated rodents to date s o I don't want to say we're in patients.
So one thing I will mention on this slide as well is nitric oxide is made by the body. So when we make nitric oxide and deliver it to the body, whether it's from a cylinder or whether it's from ambient air, the body doesn't recognize the difference. Nitric oxide is nitric oxide is nitric oxide, right? Go back to your periodic table of the elements back in high school, I would guess. And a chemical structure is a chemical structure.
So either it is or it isn't s o the body doesn't know the difference, which is a good thing when we are treating these conditions. So for treating lung infections, we've done over 5,000 treatments, 170-plus patients treated in 12 different clinical settings, zero serious adverse events related to nitric oxide. So that's big safety for us. We do have efficacy as well.
And we're moving through the process with the regulatory authorities to get this respiratory infection program moving forward. So financial patent information. So we have $18.5 million pro forma cash on September 30th. Debt is $11.5 million i do want to mention that that debt has no payments until the first payment will be sometime in the December quarter of 2027, So there was two years of pause of any payments on that debt. So a very friendly structure for the company, giving us the ability to get to our cash flow break-even.
We have 15 issued patents expiring up to 2040, more up to 2044, which I mentioned earlier. Moving on. Simple pipeline. We have our autism, which we mentioned t here's a subsidiary called Neuronos, which does our autism programs. We do have other neurological disorders besides autism, but they're obviously in discovery phase.
We expect human data in 2026 from this program. Okay? It's exciting. We don't really think there's anything like our program, which is treating the underlying cause of autism. We have Beyond Cancer. Beyond Cancer is a little bit further advanced than Neuronos. So Beyond Cancer has completed a phase 1A study at 25,000 parts per million of nitric oxide.
It was a single injection or single delivery of gas to the tumor, and we've seen safety, and we've seen biomarkers responding to show efficacy. So we've just gotten approval very recently for another human study in combination with anti-PD-1 therapy s o anti-PD-1 for solid tumors, that'd be the largest drug in the world, Keytruda at this point.
There are other anti-PD-1 therapies as well. So we just got approval for this w e get the study underway in a couple of months and start recruiting patients. And we hope to have some data before the end of this year from that combination study.
So this will take us from a monotherapy study, which is already completed, to a combination with anti-PD-1 therapy showing synergy, safety, and of course, we should see efficacy w e'll be doing a little bit more than just biomarkers in this study. So we hope to have data for that, again, like I said, before the end of this year. So exciting times for the company. And that'll be it, Roger i think I might have been a little bit faster than expected, but I moved quickly. So move around with questions.
Not a problem, but let me hit you with a couple of questions.
Sure.
First one is, how confident are you with respect to meeting both the fiscal year 2025 and fiscal year 2026 Street consensus numbers for revenues?
Good question. Look, we're confident to hit those numbers. Fiscal 2026, fiscal 2025, excuse me, is coming up March 31st. So I think we'll be in the range of where the Street is. And then going out another year, it's a little bit further out, but things are looking well c onfidence comes from getting the CE Mark, which will give us a nice boost in fiscal 2026.
And we are making progress in the U.S. w e're doing a lot better in the last couple of months than we were a year ago s o, momentum is definitely building, and we feel very confident that we'll be able to hit the numbers that the Street has put out there for us.
Very good. I think during your presentation, you spoke a little bit about partnership in the Far East. Could you? elaborate a little bit more on your international opportunities, and especially now that you have the CE mark?
Yeah. Yeah, sure. So international is very interesting. I mean, we're finding that there are a lot of countries that don't really use a lot of nitric oxide at all. Logistically, it's difficult for some of these countries to get cylinder-based nitric oxide. It's cost-prohibitive in some instances, and it's also infrastructure-prohibitive in some areas. So there seems to be a lot of opportunity there.
That's why I think that the ex-US market will be growing quite a bit once we get our system out there. So with respect to Getz, once we got the CE Mark, that was the trigger t hey triggered a $1 million milestone, which we'll be receiving this quarter. And we started moving on getting regulatory approval in all of those countries so, we should have regulatory approval in all of the countries that we're working with Getz before the end of this calendar year.
With most of them probably getting done by the middle of this calendar year. So we anticipate shipping product to them soon. As for how quickly the uptake will be, we'll see. But again, we're moving. There are other partnerships in Europe and in South America and other parts of Asia that we're working on o bviously, once we got CE Mark, things picked up quite a bit.
In addition, our system, when we first got approval in the U.S., we had to make some upgrades to it, which is kind of normal for this type of a product, and with FDA, post-pandemic, it took a little bit longer than expected, so our upgraded system has been on the market since the spring of last year, and the feedback has been outstanding with all the upgrades that we've made.
Nothing major i mean, the biggest one was really software, just to deal with some of the newer ventilators that have come out since it took a very long time to get to FDA and get the approval of the original system, so that was really the major update, was the software change, which took much longer than anticipated.
So the confidence to go overseas and have this machine perform the way it's performing in the U.S. is very high for us. So we are pushing very hard outside the United States. And we expect it takes time, Roger y ou still have to get regulatory approval in each country that you go to. Even though we have CE Mark in the European Union, we have to go to each individual country, that will take a little bit of time.
But as we get rolling here, we anticipate some nice impact for fiscal 2026 from ex-U.S. revenues. But as we get into fiscal 2027, we should be rolling in most countries around the world and having contribution in our fiscal 2027. Again, I just want to mention our fiscal year ends March 31st. So that's fiscal 2027 is pretty close for us.
Understood. One more question for you. Have you gotten any feedback from customers about your second-generation device and what are the key differences from the current device when you both talk to them and think about it?
Yeah. So we were fortunate enough to have our device ready to be displayed back in November at the American Academy of Respiratory Care, which is the big meeting for nitric oxide players every year s o, we showed it to, I don't know, 100 people, I guess, came up and saw it w e kind of had a little private viewing area, and people from all different hospitals would come in and see it.
The feedback was fantastic. Last year, we had done a customer feedback session at the same conference s o in 2023, we had these meetings with a lot of the customers asking them what they'd like to see in the next-generation system compared to the current system. We listened to the customers, and we put all that into our current product.
We showed it to them this year or this in 2024. They were very pleased. The biggest thing is obviously the ability to use it in transportation, in helicopters, airplanes, and ambulances t hat was probably the biggest thing that the customers were excited about i t's very small. It's lightweight compared to what the weight is for cylinders when you transport.
We do weigh a little bit less than the cylinder-based systems for transport, which is good. Plus, there are no cylinders. It certainly has a safety advantage, I would say. You can take our system off the ambulance with the patient, and it's the same system that rolls right into the ICU with them. We don't have to switch the patient from one system to another i t's not just the other players' transport systems can be different from the actual system in the ICU. So these are little things that may not make a big deal to investors, but to the hospital staff, it's very meaningful.
So they were very happy about this. Again, size, you're cutting down about 60% the size of the current machine. That's big for them i t's smaller, easier to use and taking it off the cart when it's going to be 24 lbs instead of 44 lbs, that's a big difference. Now they can use it how they want. We can hang it off a bed rail. We can use it however they want t hat was another thing they were very impressed with. And there were a couple of smaller other things in there that how we have our alarms, how we have lights on our machine, the presentation of it. We listened to our customers w e gave them that.
There were a couple of other things i won't go into too much detail n ow I'm getting into the nitty-gritty of respiratory therapy talk. I don't want to do that because I'll probably make a mistake, and my team will mock me. But those are the major benefits I think would be transportation, size, and the presentation of the system itself with the user interface and the alarms being much simpler and easier to use.
That was the main feedback from them. And it was really good w e had a lot of positive comments in terms of when is it going to be ready? When are we able to use this? We want it for this date or that date. And we'll be submitting it to FDA in the next couple of months here b efore the end of March, we'll have it done to FDA.
And then it's up to them a nd I want to emphasize one last thing on this point because I got this question from the customers. When they say, "How long do you think it'll take?" FDA, we have no idea w e really don't. But this is not a new product. It's not a PMA, a new PMA submission. And our product is a PMA, not a 510(k). It's going to be a PMA supplement to our original product. So it works the same way t he guts are the same t he chamber I explained to you earlier works the same way.
The filter is the same. So again, we're measuring the same gases e verything is basically the same w e've just miniaturized it and made it usable in the transportation setting. It's essentially the differences so, this should be a fairly simple and straightforward review from the FDA.
I'm still not going to guess exactly how long it will take just because I lose that battle every time. I think I have a better chance of winning the lottery than I do picking an FDA timeline s o, we have a lot of confidence that FDA will recognize that this is just a supplemental, a new generation of an existing improved product s o, looking forward to working with FDA and getting this through as quickly as possible b ut again, it's going to be on their timeline, not ours.
Understood. So the next thing we should be looking for is the submission of the next-gen product to the FDA.
Yes. Yep. It's a big milestone for us.
Sounds good w ell, I think, as I see, we're almost out of time here. So let me start by firstly thanking you for joining us today and also thanking everybody out there for watching us. And firstly, to those folks who are watching us, if you have any questions or would like to schedule a meeting with Beyond Air, please certainly send me an email at weiss@lithiumpartners.com. And also, please stay tuned. We have additional presentations and fireside chats coming up next. So stick around for some more. And thank you, and have a great rest of the day.
Thanks, Roger.
Thanks.