Irish medical device company Mainstay Medical cut its losses by more than a third last year, its annual report shows.
The company, which specialises in targeting chronic back pain, saw its losses for the year ended December 31st, 2019, cut to $22.4 million (€20.7 million) from $31 million the year before.
Revenue during the year was $1.1 million, which was almost double the $600,000 it earned in 2018.
Operating expenses for the year were $19.2 million, down from $29.6 million. The decrease was driven primarily by reduced costs relating to activities and headcount following the completion of the ReActiv8 B clinical trial.
ReActiv8 is an implantable restorative neurostimulation system designed to treat disabling chronic lower back pain.
Mainstay submitted a pre-market approval (PMA) application for ReActiv8 to the US Food and Drug Administration (FDA) during the year following a series of meetings with the US regulator. A decision is expected by the end of this year.
The company’s annual report also shows it had cash on hand of $17.4 million at the end of the year, which was up slightly on the $15.5 million it had at the end of 2018. The directors did not recommend the payment of a dividend to shareholders.
Cost of sales during the year increased from $359,000 in 2018 to $669,000 last year. Gross profit increased to $436,000 from $304,000 in 2018, while the company’s operating loss was $18.8 million last year as against $29.3 million the year before.
Mainstay Medical does most of its business in Germany but total revenue from Ireland last year was $58,000, which was almost half the $109,000 in 2018.
Mainstay Medical chief executive Jason Hannon said the company was making "significant progress" towards its key objectives.
“We have continued our interactions with the FDA regarding our PMA filing for ReActiv8, and we expect a decision regarding approval around the end of 2020,” he said.
“The PMA included one-year data from 160 patients from the ReActiv8 B clinical study.
“All of the remaining patients have completed their one-year assessments, and we are pleased to see that the data from the entire population is consistent with our previously-reported one-year results, adding to the strength of the long-term evidence supporting ReActiv8.”
Mr Hannon said the company has received regulatory approval for ReActiv8 in Australia, and is seeking inclusion on the “prostheses list” to secure reimbursement from all private health insurance funds in Australia.
The prostheses list is the list of surgically implanted prostheses, human tissue items and other medical devices that private health insurers must pay benefits for when they are provided to a patient with appropriate health insurance cover.
“We also continue to make progress working with key physicians in Germany who are incorporating ReActiv8 into their practices in order to validate commercial adoption, refine patient selection strategies and follow ongoing patient progress,” he added.
During 2019, Mainstay conducted financing activities that resulted in about $28 million of “cash runway extension”.
The company’s headcount dropped from 37 to 18, while the total payroll cost of employees was $9.3 million as against $11.1 million in 2018.
Total remuneration for non-executive directors, executive directors and senior management was $4.8 million, which was down from $6.9 million. For directors, the cost of remuneration was $2.8 million as against $3.4 million in 2018.