Zacks Initiates Coverage of NeurAxis With Neutral Recommendation

Core Viewpoint - Zacks Investment Research has initiated coverage of NeurAxis, Inc. (NRXS) with a "Neutral" recommendation, reflecting a mixed outlook for the company despite its advancements in neuromodulation therapies [1] Company Overview - NeurAxis, headquartered in Carmel, IN, focuses on developing neuromodulation therapies for chronic conditions, particularly in pediatric populations. Its flagship product, IB-Stim, is an FDA-cleared device for treating functional abdominal pain related to irritable bowel syndrome in adolescents aged 11-18 years [2] Financial Performance - NeurAxis reported a 16% year-over-year increase in unit sales in Q2 2024 and secured $9.1 million in funding, enhancing its financial position [3] - The company experienced an operating loss of$2.2 million in Q2 2024, nearly doubling from the previous year, with a cash reserve of $1.8 million as of June 30, 2024, and a monthly burn rate of$400,000 to $500,000 [4] Market Expansion - The coverage of NeurAxis' IB-Stim device has expanded from 4.5 million lives in May 2023 to approximately 22.5 million in June 2024, with expectations to exceed 50 million by year-end [3] - The anticipated commercialization of the Rectal Expulsion Device for pelvic floor dysfunction by late 2024 and the planned expansion of IB-Stim's label to a broader age range are expected to significantly enhance market opportunities [5] Growth Drivers - Key factors driving future growth include the rapid expansion of insurance coverage for the IB-Stim device, which is crucial for revenue growth, and the expected acceleration in revenue in the latter half of 2024 and into 2025 [5] Competitive Landscape - NeurAxis' stock has underperformed compared to industry peers and the broader market over the past year, indicating potential risks if the company fails to meet market expectations [7]