NeurAxis Announces New Submission to the FDA for the Expansion of its IB-Stim Label; Provides Compliance with NYSE Guidelines on Audit Disclosure

Rhea-AI Summary

NeurAxis announced a new submission to the FDA for expanding its IB-Stim label to include ages 8-21 and allow marketing of 4 devices per prescription. This expansion is backed by a systematic literature review showing the effectiveness of IB-Stim in a broader age range. Additionally, NeurAxis disclosed its compliance with NYSE guidelines regarding audit opinions, highlighting their current financial strategy, which includes securing $3.0 million and $3.1 million in convertible note financing and closing an additional $3.0 million in convertible notes to improve their financial position.

Positive

• FDA submission for expanding IB-Stim label to ages 8-21 could significantly increase market size.
• Systematic literature review supports the effectiveness of IB-Stim in patients outside the current age range.
• No serious adverse events reported in studies involving IB-Stim.
• Secured $3.0 million in convertible note financing from Inspire Health Alliance affiliates.
• Closed additional $3.1 million in committed financing with identical terms in Q1 2024.
• Further strengthened balance sheet with an additional $3.0 million in convertible notes from a healthcare-focused fund.

Negative

• Audit opinion includes an explanatory paragraph questioning the company’s ability to continue as a going concern.
• Expansion efforts could face delays or rejection from the FDA, impacting future financial performance.
• Ongoing reliance on convertible note financing may lead to shareholder dilution.

Medical Research Analyst

The expansion of the IB-Stim label to include a broader age range (8-21 years) and the allowance of 4 devices per prescription can substantially impact the company's market potential. Such an expansion means NeurAxis could address a larger patient population, which traditionally fell under 'off-label' usage. Clinical validation through multiple studies showing success in younger and older patients, along with the absence of serious adverse events, strengthens the likelihood of FDA approval. For patients, this could translate into improved access to treatment and better management of chronic abdominal pain. Long-term, this may position NeurAxis as a leading player in the pediatric neuromodulation space, enhancing their growth trajectory. However, the FDA's decision process can be uncertain and approval delays or rejections could negatively impact stock prices.

Financial Analyst

NeurAxis has shown a proactive approach in addressing financial stability by securing a total of $9.1 million in committed convertible note financing. These steps are important given the company's previous 'going concern' status disclosed in their audit opinion. While the financing improves liquidity, the management's ability to execute and utilize these funds efficiently will be pivotal. Investors should closely monitor the company's financial health and progress towards profitability. The label expansion, if approved, could potentially bring in significant revenue, mitigating some financial risks. However, the ongoing concern status remains a red flag, indicating potential financial instability in the future.

Market Research Analyst

If the FDA approves the label expansion for IB-Stim, NeurAxis could see a considerable increase in its market share within the neuromodulation therapy sector. The ability to market more devices per prescription aligns well with demand as demonstrated in clinical studies, potentially boosting product adoption. The healthcare market for chronic abdominal pain is substantial and expanding the age range enables NeurAxis to tap into a larger demographic. This development could attract more investors by showcasing growth potential. However, market adoption rates and competition from alternative therapies will play important roles in determining overall success.

CARMEL, Ind., June 07, 2024 (GLOBE NEWSWIRE) -- NeurAxis, Inc. (“NeurAxis,” or the “Company”) (NYSE American: NRXS), a medical technology company commercializing neuromodulation therapies addressing chronic and debilitating conditions in children and adults, today announced a submission to the FDA for expansion of its IB-Stim label. The new submission is significant as it would allow access to a larger patient population beyond 11-18 years of age and allow for marketing of 4 devices per prescription.

A systematic literature review demonstrated that at least 9 published studies that used the IB-Stim technology in children with chronic abdominal pain used a total of four devices over 4 consecutive weeks. The systematic literature review also demonstrated that many patients as young as 8 years and up to 21 years, which is outside of the current indication age range, have been successfully treated with IB-Stim. No study reported serious adverse events. These data were submitted to the FDA through a 510k application to expand the current label.

“We are excited about our new submission to the FDA to expand the label for IB-Stim which would include ages 8-21, and 4 devices over 4 weeks. IB-Stim is currently indicated for ages 11-18 years of age, using 3 devices not to exceed 4. This potential label expansion could impact many children who would otherwise fall into an “off-label” category and allow for them to receive the proper care that is supported by the scientific literature. We are cautiously optimistic that the FDA will grant the request for a label expansion,” said Brian Carrico, President and Chief Executive Officer of NeurAxis. “We continue to make progress on our robust pipeline of indications, as we have positioned NeurAxis to become a leader in the treatment of disorders of the gut-brain interactions,” Mr. Carrico concluded.

Compliance with NYSE Guidelines on Audit Opinion

As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed on April 16, 2024 with the Securities and Exchange Commission, the audited financial statements contained an unqualified audit opinion from the Company’s independent registered public accounting firm that included an explanatory paragraph related to the Company’s ability to continue as a going concern. This announcement is being made solely to comply with Section 610(b) of the NYSE American LLC Company Guide, which requires public announcement of the receipt of an audit opinion containing a going concern paragraph. This announcement does not represent any change or amendment to the Company's audited financial statements or to its Annual Report on Form 10-K for the year ended December 31, 2023.

Management continues to improve the Company’s financial position to achieve its objectives. In addition to securing $3.0 million in committed convertible note financing from affiliates of Inspire Health Alliance on November 8, 2023, the Company also closed an additional $3.1 million in committed financing from various investors, including affiliates of Inspire Health Alliance, with identical terms in the first quarter of 2024, with the financing scheduled to be paid in monthly amounts through the first quarter of 2025. The Company further strengthened its balance sheet and liquidity position on May 21, 2024 as it closed on an additional $3.0 million in convertible notes with a healthcare focused fund managed by institutional accredited investors.

About NeurAxis, Inc.
NeurAxis, Inc., is a medical technology company focused on neuromodulation therapies to address chronic and debilitating conditions in children and adults. NeurAxis is dedicated to advancing science and leveraging evidence-based medicine to drive adoption of its IB-Stim™ therapy, which is its proprietary Percutaneous Electrical Nerve Field Stimulation (PENFS) technology, by the medical, scientific, and patient communities. IB-Stim™ is FDA cleared for functional abdominal pain associated with irritable bowel syndrome (IBS) in adolescents 11-18 years old. Additional clinical trials of PENFS in multiple pediatric and adult conditions with large unmet healthcare needs are underway. For more information, please visit http://neuraxis.com.

For Important Information about IB-Stim, please visit. http://ibstim.com/important-information/

Forward-Looking Statements
Certain statements in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are based on management’s current assumptions and expectations of future events and trends, which affect or may affect the Company’s business, strategy, operations or financial performance, and actual results and other events may differ materially from those expressed or implied in such statements due to numerous risks and uncertainties. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. There are a number of important factors that could cause actual results, developments, business decisions or other events to differ materially from those contemplated by the forward-looking statements in this press release. These factors include, among other things, the conditions in the U.S. and global economy, the trading price and volatility of the Company’s stock, public health issues or other events, the Company’s compliance with applicable laws, the results of the Company’s clinical trials and perceptions thereof, the results of submissions to the FDA, the results of the shareholder vote to enable the issuance of the Preferred Stock, and factors described in the Risk Factors section of NeurAxis’s public filings with the Securities and Exchange Commission (SEC). Because forward-looking statements are inherently subject to risks and uncertainties, you should not rely on these forward-looking statements as predictions of future events. These forward-looking statements speak only as of the date of this press release and, except to the extent required by applicable law, the Company undertakes no obligation to update or revise these statements, whether as a result of any new information, future events and developments or otherwise.

Contacts:

Company
NeurAxis, Inc.
info@neuraxis.com

Investor Relations
Lytham Partners
Ben Shamsian
646-829-9701
shamsian@lythampartners.com

FAQ

What is the significance of NeurAxis's FDA submission for IB-Stim?

The FDA submission aims to expand the IB-Stim label to include ages 8-21 and allow marketing of 4 devices per prescription, potentially increasing the market size.

How does the new FDA submission impact the market for IB-Stim?

If approved, the submission will broaden the age range for IB-Stim usage, increasing its market potential and allowing for 4 devices per prescription.

What financial measures has NeurAxis taken recently?

NeurAxis secured $3.0 million and $3.1 million in convertible note financing and closed an additional $3.0 million in convertible notes to strengthen its financial position.

What is the current IB-Stim label indication?

Currently, IB-Stim is indicated for ages 11-18 using 3 devices, not exceeding 4.

What compliance update did NeurAxis provide regarding NYSE guidelines?

NeurAxis announced compliance with NYSE guidelines, disclosing an audit opinion questioning its ability to continue as a going concern.

How was the effectiveness of IB-Stim in children evaluated?

A systematic literature review demonstrated IB-Stim's effectiveness in children as young as 8 and up to 21, with no serious adverse events reported.

What are the potential risks associated with NeurAxis's financial position?

The audit opinion raises concerns about the company's ability to continue as a going concern, and ongoing reliance on convertible note financing may result in shareholder dilution.