Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Myomo Inc (MYO, Financial) reported a 9% increase in revenue over Q1 2023, reaching $3.8 million.
- The company has a record backlog of 275 units, up 56% year-over-year, indicating strong future revenue potential.
- Myomo Inc (MYO) added a record 493 patients to the pipeline in Q1, showing a 30% increase from the previous year.
- The reclassification of MyoPro into the brace category by CMS has significantly expanded market access, allowing the company to serve Medicare Part B patients.
- Myomo Inc (MYO) is expanding its workforce to increase clinical reimbursement and manufacturing capacity, aiming to double MyoPro output in the second half of the year.
Negative Points
- The company experienced lower than expected revenue due to delayed payments and lower payments from CMS on pre-April claims.
- Gross margin decreased to 61.2% from 67% in the previous year, driven by lower ASP and increased costs.
- Operating expenses increased by 24% due to higher headcount and other costs, contributing to a larger operating loss of $3.9 million compared to $2.7 million in Q1 2023.
- Net loss widened to $3.8 million in Q1 2024 from $2.6 million in Q1 2023, reflecting increased expenses ahead of expected revenue growth.
- There is uncertainty regarding the timely collection of payments from Medicare, which could affect financial performance in upcoming quarters.
Q & A Highlights
Q: How should we think about the pipeline growth number going forward? Is it sustainable?
A: Paul Gudonis, CEO of Myomo, responded that they expect the pipeline growth number to increase as they add more capacity by hiring intake coordinators and more people in their reimbursement and clinical staff. This increase is due to now being able to engage with Part B patients, who they previously had to turn away.
Q: With the CMS rate for reimbursement being strong relative to current prices, should we expect to see price increases long term?
A: David Henry, CFO of Myomo, explained that the allowable for their highest selling product is almost $66,000, and Medicare pays 80% of that. Since Medicare will be a larger part of their revenues going forward, this should result in a higher average selling price (ASP), potentially in the mid to high 40s.
Q: What is your manufacturing capacity, and do you have the ability to increase that capacity?
A: Paul Gudonis mentioned that they currently do about 40 to 50 units per month and plan to double that to 80 to 100 units by Q3 or Q4. They have been expanding their space for manufacturing and are looking at other sites to continue this expansion.
Q: How does the increased velocity from pipeline to authorization to delivery affect the pipeline quality?
A: Paul Gudonis noted that a shorter sales cycle reduces the chance for patients to drop out due to changes in insurance or additional medical issues. Moreover, with more Part B patients, who don't require pre-authorization, the success rate of turning pipeline adds into actual deliveries should increase.
Q: What proportion of device types are you seeing from Medicare patients, and has this changed?
A: Paul Gudonis confirmed that the mix hasn't changed significantly by Medicare or Medicare Advantage coverage, with about 90% to 95% being their Motion-G model.
Q: What are your expectations for gross margin going forward, especially with Medicare payments becoming more steady?
A: David Henry clarified that while there might be pressure on gross margins in the short term due to the timing of cost recognition versus revenue recognition, they expect this to stabilize and potentially reach gross margins in the 70% range in the longer term.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
