Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Myomo Inc (MYO, Financial) achieved a record revenue of $9.2 million in Q3 2024, marking an 83% increase over the same period in 2023.
- The company successfully added 645 medically qualified candidates to its patient pipeline, a 69% increase from the previous year.
- Myomo Inc (MYO) has entered into its first two contracts with Blue Cross Blue Shield of Massachusetts and Paradigm, representing 3 million covered lives.
- The company has expanded its manufacturing capacity and plans to move to a larger facility to accommodate expected growth.
- International operations, particularly in Germany, continue to perform well with a record $1.1 million in revenue for the quarter.
Negative Points
- Myomo Inc (MYO) faces challenges with some Medicare Advantage plans, which are making it difficult for patients and providers to get necessary care, leading to more initial denials and appeals.
- Operating expenses increased by 43% compared to the third quarter of 2023, driven by higher headcount and advertising costs.
- The company reported a net loss of $1 million for Q3 2024, although this was an improvement from the previous year.
- There is a potential for gross margin compression as the O&P channel grows, due to lower ASPs in this channel.
- The process of establishing contracts with payers for in-network status is expected to be a multi-year endeavor, potentially delaying revenue growth from this initiative.
Q & A Highlights
Q: What percentage of Medicare Part B patients have supplemental insurance, and how does this affect the average selling price (ASP)?
A: David Henry, CFO, explained that about 20% to 25% of patients have supplemental insurance, which allows Myomo to recognize additional revenue at delivery. The ASP of $52,700 reflects this, but future ASP growth will depend on the mix of patients with supplemental insurance. The O&P channel might lower ASP as it grows, but this is more of a 2025 issue.
Q: How quickly can O&P providers start generating revenue, and what are the expectations for this channel in 2025?
A: Paul Gudonis, CEO, stated that after initial training, it typically takes 3 to 4 months for O&P providers to start placing orders. The process involves patient evaluation, obtaining medical documentation, and fitting the MyoPro. Initial orders are expected in the first half of 2025, with growth anticipated as more clinics are onboarded.
Q: What is the current production capacity, and how will the new facility impact this?
A: Paul Gudonis mentioned that the current capacity exceeds 80 units per month. The new facility will allow for parallel production, with plans to double capacity over the next six months. The facility offers flexibility for further expansion, potentially adding more workstations or a second shift.
Q: What is the value of the current backlog, and when will it be recognized?
A: David Henry noted that the backlog of 316 units has a net value of over $10 million, considering a 20% dropout rate. Typically, 35% to 40% of the backlog converts to revenue one quarter out, with the remainder realized over the next 3 to 6 months.
Q: What are Myomo's international expansion plans, particularly in Germany and other markets?
A: Paul Gudonis stated that Myomo is focusing on expanding operations in Germany due to successful reimbursement and a strong network of O&P providers. Other markets like France and Italy are being considered, but expansion there is a 2 to 3-year process. The company is also awaiting regulatory approvals in China for future growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
