NEWTOWN, PA — Helius Medical Technologies, Inc. (Nasdaq: HSDT) recently announced results for the quarter ended September 30, 2023.
Third Quarter and Recent Business Updates
- Q3 2023 revenue of $143 thousand, compared to $196 thousand in Q3 2022, the decrease due to the expiration of the Patient Therapy Access Program (“PTAP”) on June 30, 2023.
- Operating cash burn of $2.5 million in Q3 2023, a decrease of $1.4 million compared to Q3 2022, reflecting continued focus on cash management.
- Ended the quarter with $7.0 million of cash, cash equivalents, and proceeds receivable from warrant exercises, extending the Company’s cash runway into Q2 2024.
- Received universal product code (“UPC”) numbers from Wolters Kluwer Health – Medi-Span® (“Medi-Span”) for the Portable Neuromodulation Stimulator (“PoNS®”) system and mouthpiece. Together with the previously announced Durable Medical Equipment, Prosthetics, Orthotics and Supplies (“DMEPOS”) accreditation, the UPC numbers allow for dual paths of reimbursement.
- Received a letter of intent (“LOI”) from the Québec Ministry of Health and Social Services (“MSSS”) for the purchase of up to 30 PoNS systems across multiple sites to be used to evaluate the benefit of PoNS TherapyTM and determine reimbursement opportunities for stroke patients.
- Received an order for 10 PoNS Systems from the School of Rehabilitation at the Université de Montréal (“UdeM”) to be used to evaluate the benefit and health economic value of PoNS Therapy in the treatment of stroke patients.
- Added sixth Center of Excellence to the PoNS Therapeutic Experience Program (“PoNSTEP”), a multi-center, company-sponsored, open label observational interventional trial designed to evaluate the impact of adherence to PoNS Therapy in patients with multiple sclerosis (“MS”).
- Announced the release of a white paper published by Pacific Blue Cross (“PBC”) and HealthTech Connex (“HTC”) demonstrating that PoNS TherapyTM can drastically decrease disability and improve the likelihood of returning to work for patients suffering from traumatic brain injury (“TBI”).
“We are pleased with the tremendous progress we made in the third quarter and recent weeks,” said Dane Andreeff, President and Chief Executive Officer of Helius. “We began the third quarter with the successful conclusion of our Patient Therapy Access Program, which expired on June 30. Through PTAP, we sold PoNS to qualifying patients at a significant discount, thereby reducing a major barrier to access while allowing us to add to our ongoing MS patient registry. The registry collects important health economic evidence to establish the value of PoNS on key clinical and therapeutic outcomes, which is critical for third party reimbursement. In September, we opened a second path toward reimbursement in the U.S. by receiving UPC numbers for both the PoNS system and mouthpiece and having the codes listed in the Medi-Span database, as we also continue to pursue HCPCS codes for reimbursement under our DMEPOS accreditation. As a result, we are now in the position to begin negotiating with payers using the UPC codes specific to the PoNS systems and mouthpieces with the listed prices of $25,700 and $7,900, respectively.
We also developed relationships with two important Canadian Healthcare providers, receiving an order for ten PoNS systems from the School of Rehabilitation at the Université de Montréal as well as a letter of intent from the Québec Ministry of Health and Social Services to purchase thirty PoNS systems to treat gait and/or balance deficit in stroke patients. We believe that evidence from the treatment outcome will support the health economic benefit and cost effectiveness of incorporating PoNS Therapy as a first line treatment for stroke patients. Furthermore, this evidence should provide a valuable benchmark for other Canadian healthcare providers and private payers as they evaluate reimbursement of PoNS Therapy. The data from these clinical application trials will also provide supporting evidence of PoNS Therapy’s therapeutic benefit that can strengthen the registrational program for stroke currently ongoing in the U.S.”
Andreeff continued, “Finally, we were thrilled by the study results from the white paper recently published by Pacific Blue Cross and HealthTech Connex demonstrating that PoNS Therapy can drastically decrease disability in 89% of patients suffering from long-term disability due to chronic TBI and promote a sustainable return to work outcome for approximately 50% of these patients. We believe that these findings will significantly strengthen our reimbursement efforts with Canadian insurance companies and healthcare providers while highlighting the health economic benefit and cost effectiveness of PoNS Therapy as we negotiate coverage with U.S. payers.”
“With what we’ve set in motion during 2023, and a cash runway that will take us into the second quarter of next year, we are excited about the road ahead, and the chance to help more people with MS, TBI, and stroke who suffer from balance and gait impairment,” concluded Andreeff.
Third Quarter 2023 Financial Results
Total revenue for the third quarter of 2023 was $143 thousand, a decrease of $53 thousand compared to $196 thousand in the third quarter of 2022, primarily attributable to decreased unit sales of PoNS systems in the U.S. following the termination of the PTAP on June 30, 2023, partially offset by increased net product sales in Canada.
Cost of revenue increased to $187 thousand for the three months ended September 30, 2023, compared to $101 thousand for the comparable period in 2022, due to fixed overhead costs, which are primarily comprised of salaries and benefits of employees involved in management of the supply chain and certain production costs.
Selling, general and administrative expenses for the third quarter of 2023 were $2.2 million, a decrease of $1.2 million compared to $3.4 million in the third quarter of 2022, primarily the result of a decrease in performance-based stock-based compensation.
Research and development expenses for the third quarter of 2023 decreased slightly to $722 thousand, compared to $751 thousand in the third quarter of 2022.
Total operating expenses for the third quarter of 2023 decreased to $3.1 million, compared to $4.9 million in the third quarter of 2022.
Operating loss for the third quarter of 2023 decreased $1.7 million to a loss of $3.2 million, compared to an operating loss of $4.9 million in the third quarter of 2022.
Net loss was $3.7 million for the third quarter of 2023, compared to a net loss of $1.0 million in the corresponding prior year period. The basic and diluted net loss per share for the third quarter was $5.49 per share, compared to a net loss of $2.90 per share for the third quarter of 2022.
Cash and Liquidity
Cash used in operating activities for the three months ended September 30, 2023 was $2.5 million, a decrease of $1.4 million compared to the third quarter of 2022, reflecting the results of our continued focus on managing cash burn.
As of September 30, 2023, the Company had cash of $6.6 million, compared to $14.5 million as of December 31, 2022. The Company also had $0.4 million in proceeds receivable from warrant exercises as of September 30, 2023, and now estimates its cash runway extends into the second quarter of 2024.
The Company had no debt outstanding as of September 30, 2023.
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