ClearPoint Neuro reports Q4 and full-year 2023 results

ClearPoint Neuro, Inc. announced financial results for its fourth quarter and full-year ended December 31, 2023.

Business outlook
“We are pleased to confirm our fourth quarter 2023 performance which included record revenue of $6.8 million, over 30% topline growth, and a reduction in our quarterly cash burn to only $1.2 million, our lowest since 2020,” commented Joe Burnett, President and CEO at ClearPoint Neuro. “In just the first two months of 2024 we have already achieved some key strategic milestones including multiple FDA clearances and first-in-human procedures, first shipments to EU countries from our new Carlsbad facility and under EU-MDR certification, publication of key validation papers in peer-reviewed journals supporting both our navigation software and laser therapy system, and activation of more new clinical customers in the first quarter than in all of 2023.

“As a result,” continued Burnett, “we have been able to complete an important equity offering of approximately $15 million which solidifies our balance sheet for our pharma partners and will allow us to retire our entire outstanding debt in the next 12 months. It was very encouraging to perform this capital raise alongside many other biotech companies in the past few weeks, highlighting renewed investment into this important and exciting gene and cell therapy space. We continue to look with confidence at 2024 and reaffirm our 2024 revenue guidance to be in the range of $28.0 million – $32.0 million.”

Financial results – Year ended December 31, 2023
Total revenue was $24.0 million and $20.6 million for the years ended December 31, 2023 and 2022, respectively.

Biologics and drug delivery revenue, which include sales of disposable products and services related to customer-sponsored preclinical and clinical trials utilizing our products, increased 49% to $13.6 million for the year ended December 31, 2023, from $9.1 million for the same period in 2022. This increase is attributable to a $6.0 million increase in service revenue related to new preclinical studies and services entered into with our partners for the year ended December 31, 2023, compared to the same period in 2022, partially offset by a $1.5 million decrease in product revenue.

Functional neurosurgery navigation and therapy revenue which primarily consists of disposable product commercial sales related to cases utilizing the ClearPoint system, decreased 7% to $8.5 million during the year ended December 31, 2023, from $9.1 million for the same period in 2022. The decrease is driven by lower service revenue of $0.6 million as a result of pausing a co-development program with one of our Brain Computer Interface partners for the year ended December 31, 2023, compared to the same period in 2022.

Capital equipment and software revenue, consisting of sales of ClearPoint reusable hardware and software, and of related services, decreased 21% to $1.8 million for the year ended December 31, 2023, from $2.3 million for the same period in 2022, due primarily to a decrease in the placements of ClearPoint capital and software.

The Company achieved a gross margin of 57% on its sales for 2023, compared to a gross margin of 66% for 2022. This decrease in gross margin was primarily due to an increase in biologics and drug delivery preclinical services, which, to date, have had a lower margin than in prior years, as we launch new services and increase our presence in this space. Increased costs related to the transition to the new manufacturing facility also contributed to the decrease in gross margin compared to the prior year.

Operating expenses were $36.1 million for the full year 2023, compared with $29.9 million for 2022. The increase was mainly driven by an increase in personnel-related expenses, including share-based compensation, as we increased headcount to fund the expansion of the research and development, clinical, and support organizations, as well as an increase in the allowance for credit losses.

Financial results – Quarter ended December 31, 2023
Total revenue was $6.8 million for the three months ended December 31, 2023, and $5.2 million for the three months ended December 31, 2022, which represents an increase of $1.6 million, or 32%.

Biologics and drug delivery revenue, which includes sales of disposable products and services related to customer-sponsored preclinical and clinical trials utilizing our products, increased 76% to $4.1 million for the three months ended December 31, 2023, from $2.3 million for the same period in 2022. This increase is attributable to a $1.8 million increase in service revenue, partially offset by a slight decrease in product revenue.

Functional neurosurgery navigation and therapy revenue decreased 11% to $2.0 million for the three months ended December 31, 2023, from $2.3 million for the same period in 2022. The decrease was driven by lower service revenue.

Capital equipment and software revenue, consisting of sales of ClearPoint reusable hardware and software, and of related services, increased 23% to $0.7 million for the three months ended December 31, 2023, from $0.6 million for the same period in 2022.

Gross margin for the three months ended December 31, 2023, was 59%, as compared to a gross margin of 64% for the three months ended December 31, 2022. The decrease in gross margin was due primarily to an increase in biologics and drug delivery preclinical services, which, to date, have had a lower margin than in prior years, as we launch new services and increase our presence in this space.

Operating expenses for the fourth quarter of 2023 were $8.7 million, compared to $7.8 million for the fourth quarter of 2022. The increase was mainly driven by the increase in headcount across the organization and share-based compensation as well as an increase in the allowance for credit losses.

At December 31, 2023, the Company had cash and cash equivalents and short-term investments totaling $23.1 million compared to $37.5 million at December 31, 2022, with the decrease resulting primarily from the use of cash in operating activities of $13.7 million.
MB Bureau