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ClearPoint Neuro, Inc. (NASDAQ:CLPT) - Diversified Growth Across Multiple Fronts Fuels Impressive Q1 2024 Results
Published on September 24, 2024 | Ticker: CLPT

ClearPoint Neuro, Inc. (NASDAQ:CLPT) is a commercial-stage medical device company that has developed innovative platforms for performing minimally invasive surgical procedures in the brain. The company has made significant strides in the first quarter of 2024, delivering impressive financial results and making progress across its four key growth pillars.

Financials

In the first quarter of 2024, ClearPoint Neuro reported total revenue of $7.6 million, representing a 41% increase compared to the same period in 2023. This strong performance was driven by growth across the company's three main revenue segments: Biologics and Drug Delivery, Functional Neurosurgery Navigation and Therapy, and Capital Equipment and Software.

Biologics and Drug Delivery

Biologics and Drug Delivery revenue, which includes sales of disposable products and services related to customer-sponsored preclinical and clinical trials, grew 61% to $4.3 million in the first quarter of 2024, up from $2.7 million in the same period last year. This growth was fueled by an expansion of the company's biologics and drug delivery offerings, including new preclinical services and capabilities that have allowed ClearPoint Neuro to achieve cash breakeven without relying solely on the commercialization of its partners' drugs.

Functional Neurosurgery Navigation and Therapy

Functional Neurosurgery Navigation and Therapy revenue, consisting of commercial sales of disposable products and services related to cases utilizing the ClearPoint system, declined 18% to $1.9 million in the first quarter of 2024. This decrease was primarily due to lower service revenue of $0.5 million as a result of pausing a co-development program with one of the company's Brain Computer Interface partners, partially offset by higher product revenue of $0.1 million.

Capital Equipment and Software

Capital Equipment and Software revenue, which includes sales of ClearPoint reusable hardware and software and related services, increased 255% to $1.4 million in the first quarter of 2024, up from $0.4 million in the same period last year. This significant growth was driven by multiple placements of ClearPoint navigation capital and software, as well as the ClearPoint Neuro PRISM laser units.

Other Financial Metrics

Gross margin for the first quarter of 2024 was 59%, in line with the same period in 2023. Research and development costs decreased by 13% to $2.6 million, primarily due to lower product development costs as a result of reprioritization of certain initiatives. Sales and marketing expenses increased by 12% to $3.3 million, reflecting additional personnel costs, including share-based compensation, and higher travel costs. General and administrative expenses decreased by 4% to $2.8 million, mainly due to lower bad debt expense.

For the full year 2023, ClearPoint Neuro reported annual revenue of $23.9 million and a net loss of $22.1 million. The company's annual operating cash flow was -$13.7 million, and its annual free cash flow was -$14.8 million.

Outlook

Looking ahead, ClearPoint Neuro expects all of its segments to contribute meaningful double-digit growth in 2024. The company continues to guide for full-year 2024 revenue in the range of $28 million to $32 million.

Business Overview

In the Biologics and Drug Delivery segment, the company's core ClearPoint Navigation system and software, as well as its SmartFlow cannulas, continue to be the leading guidance and infusion technology for gene and cell therapy. ClearPoint Neuro has more than 50 partners, including pharmaceutical and biotech companies, academic institutions, and contract research organizations, that are developing methods to deliver a wide variety of molecules, genes, or proteins to targeted brain tissue or structures.

One notable milestone in the first quarter was the BLA submission by one of ClearPoint Neuro's partners, PTC Therapeutics, for their AADC deficiency drug Upstaza. This represents the first-ever neuro gene therapy submission in the United States and could potentially lead to a first commercial gene therapy product in 2025. Additionally, the company's partner AviadoBio achieved the first-ever dosing of a human patient with their experimental treatment for frontotemporal lobe dementia.

In the Functional Neurosurgery Navigation segment, ClearPoint Neuro saw its highest demand ever for its traditional MRI-guided system, leading to the opening of 8 new customers and approximately $1.4 million in capital revenue, a new record. The company also released its 2.2 software that includes the optional Maestro Brain Model capability, which will be a key feature for future software releases supporting drug delivery, deep brain stimulation navigation, and laser ablation planning and prediction.

Additionally, ClearPoint Neuro achieved FDA clearance for its SmartFrame OR solution, which allows the company's navigation system to be used in the operating room, expanding its addressable market beyond the MRI suite. The company expects to move the SmartFrame OR out of limited market release and into full market release in the third quarter of 2024, with meaningful revenue traction in the second half of the year.

In the Therapy and Access Products segment, the company's PRISM Laser Therapy limited market release continues to progress, with multiple new users and new installations in the first quarter, including the first laser capital sale. Furthermore, ClearPoint Neuro recently announced FDA clearance for an important PRISM accessory that will enable the PRISM Laser Fibers to be placed with ClearPoint Navigation in the MRI suite, as well as with commonly available navigation and robotic systems in the operating room.

Regarding the company's global expansion efforts, ClearPoint Neuro's international installations continue to grow, and the company is working on regulatory submissions for new geographies on behalf of its pharmaceutical partners.

Conclusion

ClearPoint Neuro's strong financial position, with over $35 million in cash and cash equivalents as of March 31, 2024, and its focus on operational cash breakeven, position the company well to execute on its growth strategy and capitalize on the significant opportunities across its four key pillars. The company's diversified revenue streams, innovative product portfolio, and strategic partnerships in the biologics and drug delivery space provide a solid foundation for continued success in the years to come.

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