NEWTOWN, PA — Helius Medical Technologies, Inc. (Nasdaq: HSDT), a neurotech company, announced results for the quarter ended March 31, 2023.
First Quarter and Recent Business Updates
- Q1 2023 revenue of $111 thousand, compared to $190 thousand in Q1 2022, the decrease due to revenue of $120 thousand recognized in the prior year quarter resulting from a one-time delivery of Portable Neuromodulation Stimulator (PoNS®) systems under its previous Canadian distribution agreement, partially offset by an increase in product sales in the U.S., which commenced in April 2022
- Operating cash burn of $3.2 million during the quarter, a decrease of $1.5 million compared to Q1 2022, reflecting ongoing efforts to extend cash runway into 2024
- Introduced UpScriptHealth telehealth e-commerce site, allowing Americans with balance and gait deficits to access online health evaluations, fulfill PoNS Therapy™ prescriptions through a network of licensed providers, and order home delivery of PoNS devices
- Received authorization from Health Canada to market PoNS for the treatment of gait deficit due to mild and moderate symptoms from stroke
- Signed exclusive distribution agreement with HealthTech Connex Inc. (“HTC”), granting HTC the exclusive right to purchase, market, sell, and distribute PoNS throughout the metropolitan Vancouver and Fraser Valley regions of British Columbia, Canada
“One year ago, we launched PoNS Therapy in the United States, and our innovative product continues to resonate in the marketplace. Neurologists, physical therapists, and those suffering from MS are seeing how PoNS treatment can improve balance and gait and we’ve implemented several programs to eliminate barriers and delays to access, including our ponstherapy.com e-commerce site and an online training portal for therapists,” said Dane Andreeff, President and Chief Executive Officer of Helius.
“Although our quarterly revenue came in below expectations due primarily to a combination of timing differences, the transition to e-commerce, and cannibalization of sales by our Therapeutic Experience Program (PoNSTEP) at certain sites, we remain positive about our momentum both in the U.S. and in Canada, where the broadened set of authorizations and HTC distribution agreement have greatly expanded the total addressable market. With our strong cash position, reduced expenses, and foothold in the market, we are confident that we can achieve our 2023 goals.”
First Quarter 2023 Financial Results
Total revenue for the first quarter of 2023 was $111 thousand, a decrease of $79 thousand compared to $190 thousand in the first quarter of 2022, primarily attributable to lower Canada product sales, partially offset by increased net product sales in the United States. Commercial product sales in the United States commenced in April 2022. Canada product sales for the three months ended March 31, 2022 included approximately $120 thousand of revenue recognized in connection with the delivery of PoNS devices under its prior distribution agreement with HTC.
Cost of revenue was $122 thousand for the three months ended March 31, 2023, compared to $124 thousand for the comparable period in 2022, remaining relatively flat due to fixed overhead costs.
Operating expenses for the first quarter of 2023 decreased to $3.8 million, compared to $4.6 million in the first quarter of 2022. The decrease was driven primarily by a decrease in product development expenses and clinical trial activities as the Company transitioned its focus in the U.S. from product development and clinical trials to commercialization activities.
Operating loss for the first quarter of 2023 decreased $0.8 million to a loss of $3.8 million, compared to an operating loss of $4.6 million in the first quarter of 2022.
Net loss was $2.5 million for the first quarter of 2023, compared to a net loss of $4.3 million in the corresponding prior year period. The basic and diluted net loss per share for the first quarter was $0.09 per share, compared to a net loss of $1.15 per share for the first quarter of 2022.
Cash and Liquidity
Cash used in operating activities for the three months ended March 31, 2023, was $3.2 million compared to $4.7 million in the first quarter of 2022, reflecting the results of its focus on reducing cash burn and extending its cash runway beyond 2023.
As of March 31, 2023, the Company had cash of $11.3 million, compared to $14.5 million at December 31, 2022.
The Company had no debt outstanding as of March 31, 2023.
Second Quarter and Near-Term Guidance
The Company currently expects second quarter 2023 revenue to be above the prior year quarter and first quarter levels, factoring in potential delays for some portion of U.S. patients to pursue insurance coverage prior to filling their prescriptions. The Company also expects 2023 revenues to exceed prior year levels, though the Company may experience additional quarterly fluctuations as it makes refinements to the U.S. commercial roll-out of PoNS.
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