Release Date: August 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Stereotaxis Inc (STXS, Financial) has made significant progress in its strategic transformation, particularly with the introduction of GenesisX, which has obtained CE mark approval in Europe and has a 510(k) application submitted to the FDA.
- The company has a strong backlog of Genesis orders and expects significantly higher revenue recognition and cash flow in the second half of the year.
- Stereotaxis Inc (STXS) has a robust late-stage sales pipeline in all three key geographies (US, Europe, and China) and expects additional purchase orders for Genesis systems in the coming months.
- The acquisition of Access Point Technologies (APT) is expected to create strong sales synergies and strategic value, particularly in-house catheter development and manufacturing expertise.
- The company expects to end the year with approximately $13 million in cash and no debt, indicating a strong financial position to support upcoming milestones and commercialization efforts.
Negative Points
- Stereotaxis Inc (STXS) reported disappointing financial results for the first half of the year, with revenue for the second quarter totaling $4.5 million compared to $7.9 million in the prior year second quarter.
- The company's system revenue for the second quarter was only $0.2 million, reflecting minimal revenue recognized on system installations due to elongated customer construction projects.
- Operating loss and net loss for the second quarter of 2024 were $6 million and $5.8 million, respectively, compared to $5.3 million and $5 million in the previous year.
- The financial statements for the second quarter do not reflect any consolidation or impact from the APT acquisition beyond legal expenses incurred during the acquisition process.
- There is a risk that hospitals may delay purchasing decisions to wait for the next-generation GenesisX system, potentially impacting short-term sales of the current Genesis system.
Q & A Highlights
Q: Can you provide more details on the regulatory progress and launch plans for the MAGiC catheter?
A: We have successfully completed the clinical and technical reviews for the MAGiC catheter in Europe and are awaiting microbiology questions. Once these are addressed, we will proceed with a full launch. We have about 35 hospital accounts in Europe aware of MAGiC's performance, and we plan to launch aggressively upon approval.
Q: What is the pricing and margin strategy for the GenesisX system, and what are the different selling models?
A: GenesisX will command a premium over Genesis due to its advanced features and reduced installation costs. We will offer three models: outright purchase, operating lease, and placement with disposable commitment. These models will help us capture the value of the robot while offering flexibility to hospitals.
Q: Can you share more about the MAGiC-FEST study and its implications for FDA approval?
A: The MAGiC-FEST study has shown promising results, and we are working with the FDA to determine the most useful data for regulatory approval. The ongoing enrollment in Europe is aligned with FDA feedback, and we are optimistic about leveraging this data for US approval.
Q: Are there plans to pursue high-power, short-duration energy delivery with the MAGiC catheter?
A: While MAGiC can handle high power up to 100 watts, our current regulatory submissions are for up to 50 watts. We may pursue higher power short duration post-approval, but the catheter already performs well at 50 watts.
Q: Will the introduction of GenesisX cause hospitals to delay purchases of the current Genesis system?
A: There may be some delays, but many customers, especially those upgrading from Niobe systems, will still find Genesis to be the best option. We have a strong pipeline of Genesis orders to carry us through the transition period.
Q: How does the current macroeconomic environment affect capital equipment purchasing patterns?
A: While there are macro headwinds, particularly in China, we are a small player in a large market and are focused on our own growth. The macro environment has been challenging since we restarted capital sales in 2020, but we continue to make progress.
Q: Can you provide more details on the manufacturing scale-up process for GenesisX?
A: We are confident in our ability to scale GenesisX manufacturing. Our new headquarters can handle the production of tens of systems per year, and GenesisX's design simplifies manufacturing and installation, allowing us to grow significantly from our current capacity.
Q: What are the expected timelines for the launch of GenesisX in Europe and the US?
A: We plan to launch GenesisX in 2025, following regulatory approvals for MAGiC in both Europe and the US. We will use the remainder of this year to prepare for a full launch, with major conferences next year serving as ideal settings for the introduction.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
