10-Q: Beyond Air Narrows Q1 Loss, Boosts Revenue Amid Global Push
Quarterly Report
Beyond Air, Inc. reported a significant reduction in net loss and increased revenue for the quarter ended June 30, 2025, driven by LungFit PH commercialization and international expansion, despite ongoing liquidity concerns.
Summary
- Beyond Air, Inc. reported a net loss of $8.1 million for the three months ended June 30, 2025, a significant improvement from the $13.1 million net loss in the same period last year.
- Revenue increased to $1.8 million for the quarter ended June 30, 2025, up from $0.7 million in the prior year period, primarily due to expanding hospital contracts and international sales of LungFit PH.
- The company achieved a gross profit of $0.2 million for the quarter, reversing a gross loss of $0.3 million in the comparable prior year period.
- Operating expenses decreased to $7.8 million from $13.2 million year-over-year, driven by reductions in research and development and selling, general, and administrative costs.
- Net cash used in operating activities significantly decreased to $4.5 million for the three months ended June 30, 2025, compared to $10.2 million in the prior year.
- Beyond Air received European CE mark approval for its LungFit PH system in November 2024, expanding its market to include periand post-operative pulmonary hypertension in various age groups.
- The company secured $2.4 million in net proceeds from its At-The-Market (ATM) equity offering and an additional $2.0 million in advanced financing from a related party during the quarter.
- As of June 30, 2025, cash, cash equivalents, and marketable securities totaled $6.5 million, with an accumulated deficit of $294.0 million.
- Management has expressed substantial doubt about the company's ability to meet its obligations with cash on hand and anticipates requiring additional funding within one year.
Sentiment
Score: 6
Explanation: The sentiment is cautiously positive. While the company demonstrated significant improvements in revenue growth, gross profit, and reduced operating losses and cash burn, it continues to operate at a substantial net loss and has an explicit 'going concern' warning, indicating a critical reliance on future capital raises for continued operations and clinical pipeline advancement. The progress in commercialization and clinical programs is promising, but the financial stability remains a key concern.
Positives
- Revenue increased by 157.7% to $1.8 million for the three months ended June 30, 2025, compared to $0.7 million in the prior year period.
- Gross profit improved to $0.2 million from a gross loss of $0.3 million in the same quarter last year, driven by sales growth.
- Net loss significantly narrowed to $8.1 million from $13.1 million year-over-year.
- Operating loss decreased to $7.6 million from $13.6 million in the prior year period.
- Research and development expenses decreased by $2.9 million to $3.1 million, reflecting reduced spend in salaries, stock-based compensation, and clinical/pre-clinical studies.
- Selling, general and administrative expenses decreased by $2.5 million to $4.7 million, primarily due to lower salaries, stock-based compensation, marketing, and legal fees.
- Net cash used in operating activities decreased by 55.6% to $4.5 million, indicating improved operational efficiency in cash management.
- Received European CE mark approval for LungFit PH in November 2024, expanding its market indications and geographic reach.
- Secured new distribution agreements for LungFit PH in France, India, Italy, Japan, Morocco, Saudi Arabia, and Turkey.
- Beyond Cancer's ultra-high concentration nitric oxide (UNO) program for solid tumors is in Phase 1 human clinical trial, with positive preclinical data and a Phase 1b trial protocol approved in Israel.
- NeuroNOS, the majority-owned affiliate for neurological conditions, raised $2.0 million in a private placement and expects to progress to a Phase 1 clinical trial by the end of 2026.
Negatives
- The company continues to incur net losses, with an accumulated deficit attributable to stockholders of $294.0 million as of June 30, 2025.
- Management believes factors raise substantial doubt about the company's ability to meet its obligations with cash on hand and will require additional funding within one year.
- The U.S. clinical trial for LungFit PRO (viral lung infections) has been paused pending future funding.
- Pivotal clinical trials for Bronchiolitis and NTM lung infection are anticipated to commence in calendar year 2026, pending funding.
- The COPD program remains in the preclinical stage and will only move forward subject to obtaining additional financing.
- Total stockholders' equity decreased to $10.4 million as of June 30, 2025, from $14.3 million as of March 31, 2025.
- Marketable securities decreased to $1.5 million as of June 30, 2025, from $2.3 million as of March 31, 2025.
Risks
- Substantial doubt exists about the company's ability to meet its obligations with cash on hand, requiring additional funding within one year.
- Future capital needs and the adequacy of available funds depend on the success and costs of commercialization, preclinical studies, and clinical trials.
- Financing may not be available on acceptable terms, or at all, which could materially adversely affect strategic objectives, results of operations, and financial condition.
- The company is dependent on third-party suppliers, and in some cases, single-source suppliers, for materials for its devices and consumables.
- There is no assurance that products beyond LungFit PH in the U.S. will receive required regulatory approvals or clearances in foreign jurisdictions.
- Uncertainty of market acceptance of approved products and the ability to develop or manufacture future products at an acceptable cost and performance.
- The company is subject to risks common to development and early-stage medical device companies, including new technological innovations and product liability.
- The number of shares that can be sold under the 2025 ATM offering is limited by SEC baby shelf rules if the public float is less than $75.0 million.
Future Outlook
The company expects to incur net losses and have significant cash outflows for at least the next year, including substantial investments in research and development. It anticipates progressing the NeuroNOS program from preclinical to a Phase 1 first-in-human clinical trial by the end of 2026. Pivotal clinical trials for bronchiolitis and NTM lung disease are expected to commence in calendar year 2026, pending funding. The Phase 1b trial for Beyond Cancer's UNO therapy, combining it with anti-PD-1, has an approved protocol, with timing of initiation under review. The COPD program's advancement is contingent on additional financing. The company's ability to continue operating beyond the third fiscal quarter of 2026 is largely dependent on the successful commercial launch of LungFit PH, securing international partners, and raising additional funds.
Management Comments
- Management is confident that efforts to arrange financing, while not assured, will enable the company to meet its obligations.
- The company aims to equip its commercial organization to become the market leader in the U.S. for LungFit PH in a few years.
- Significant contribution to revenues is anticipated in fiscal 2026 and beyond from new international partnerships.
Industry Context
Beyond Air operates in the medical device and biopharmaceutical sectors, focusing on nitric oxide (NO) generation and delivery. Its LungFit PH system competes in the persistent pulmonary hypertension of the newborn (PPHN) market, where Mallinckrodt Pharmaceuticals is a significant player with 2024 U.S. NO sales of $261.4 million. Beyond Air is also targeting high unmet medical needs in severe lung infections (viral pneumonia, bronchiolitis, NTM) and oncology (solid tumors), where current treatments are limited or non-existent. The company's strategy involves leveraging its patented plasma pulse technology to generate NO from ambient air, offering competitive advantages over traditional cylinder-based systems.
Comparison to Industry Standards
- Mallinckrodt Pharmaceuticals reported NO sales of $261.4 million in 2024 for the United States, Canada, Japan, Mexico, and Australia, with approximately 90% from the U.S., indicating a substantial existing market for NO therapy.
- Beyond Air believes the U.S. sales potential of LungFit PH for PPHN is approximately $350 million and worldwide sales potential is approximately $700 million or greater, suggesting a significant growth opportunity relative to current market participants.
- For broader annual viral pneumonia hospitalizations, Beyond Air estimates the U.S. market potential to be greater than $1.5 billion and worldwide market potential greater than $3 billion, highlighting a large, underserved market for LungFit PRO.
- The U.S. market potential for bronchiolitis is estimated to be greater than $500 million and worldwide potential greater than $1.2 billion, indicating a substantial opportunity given the lack of approved treatments.
- For NTM lung infection, the U.S. sales potential is believed to be greater than $1 billion and worldwide sales potential greater than $2.5 billion, positioning the company to address a growing and costly disease area.
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Equity Incentive Plan Amendment | The Seventh Amended and Restated 2013 Beyond Air Equity Incentive Plan was amended to increase the number of authorized shares by 150,000 and to provide the Board authority to modify exercise/grant prices, cancel options for other awards, or take actions treated as repricing. This amendment was approved by stockholders on November 22, 2024. | 2024-11-22 | Increases flexibility for equity compensation and potential for repricing, which could impact shareholder value through dilution or changes in incentive alignment. |
| Equity Incentive Plan Share Reservation | The Board of Directors approved to reserve for issuance 1,525,000 shares of common stock under the 2023 NeuroNos Ltd. Equity Incentive Plan. | 2025-04-16 | Provides equity incentives for NeuroNOS personnel, aligning their interests with the subsidiary's performance, but contributes to potential future dilution for Beyond Air shareholders. |
Related Party Transactions
- On November 1, 2024, the company entered into a Loan and Security Agreement for a secured loan of $11.5 million with certain lenders, including its Chief Executive Officer Steven Lisi and director Robert Carey.
- On June 2, 2025, the company received $2.0 million of advanced financing from a director of the company who is also an existing lender under its Loan Agreement.
Stakeholder Impact
- Shareholders face potential dilution from the At-The-Market (ATM) equity offering and future capital raises, as well as the impact of the 1:20 reverse stock split.
- Employees and consultants benefit from stock-based compensation plans (2013 BA Plan, 2021 BC Plan, 2023 NNOS Plan), aligning their incentives with company performance.
- Customers of LungFit PH benefit from continued commercialization, international expansion, and potential label expansions for cardiac surgeries.
- Patients with PPHN, viral lung infections, bronchiolitis, NTM, and solid tumors could benefit from the development and potential approval of the company's product candidates.
- Creditors under the Loan Agreement receive 15% annual interest (partially paid-in-kind) and an 8% royalty interest on net sales from July 2026.
Next Steps
- Continue commercialization of LungFit PH in the U.S. to become the market leader.
- Secure additional international distribution partners for LungFit PH.
- Initiate pivotal clinical trials for bronchiolitis in calendar year 2026, pending funding.
- Initiate a pivotal clinical trial for NTM lung infection in calendar year 2026, pending funding.
- Progress the NeuroNOS program from preclinical to a Phase 1 first-in-human clinical trial by the end of 2026.
- Initiate the Phase 1b clinical trial for Beyond Cancer's UNO + anti-PD-1 combination, with timing under review.
- Obtain additional financing to fund operations and advance product candidates, including the COPD program.
Key Dates
| Date | Description |
|---|---|
| 2015-04-28 | Company incorporated under Delaware law. |
| 2017-01-13 | Beyond Air Ltd. exercised Option Agreement with Pulmonox Technologies Corporation. |
| 2018-01-31 | Company entered into the NitricGen Agreement to acquire a global, exclusive, transferable license related to the LungFit. |
| 2020-08-01 | Company entered into a supply agreement with an initial expiration date of December 31, 2024, with automatic three-year renewals. |
| 2021-11-04 | Beyond Air reorganized its oncology business into a new private company, Beyond Cancer, Ltd. |
| 2022-06-01 | LungFit PH received premarket approval (PMA) from the U.S. Food and Drug Administration (FDA). |
| 2022-07-01 | Company commenced marketing LungFit PH in the United States for PPHN. |
| 2022-08-23 | First patient treated in a first-in-human Phase 1 clinical trial for Ultra-High Concentration NO (UNO) therapy by Beyond Cancer. |
| 2022-11-03 | Board of Directors approved an amendment to the 2021 Beyond Cancer Ltd Equity Incentive Plan to reserve an additional 2,000,000 shares. |
| 2022-12-13 | Preclinical data on UNO therapy published in the peer-reviewed journal Cancer Cell International. |
| 2023-06-15 | Company announced agreement with Yissum Research Development Company of the Hebrew University of Jerusalem, LTD. to acquire commercial rights for nNOS inhibitors. |
| 2023-11-01 | PMA supplement submitted to the FDA for expansion of the LungFit PH label to include certain cardiac surgeries. |
| 2023-12-01 | Company's safety review committee completed review of the first 6 human subjects treated with UNO, allowing progression to the next concentration. |
| 2024-10-11 | Board of Directors approved an amendment to the 2013 Beyond Air Equity Incentive Plan to increase shares and provide authority for repricing/cancellation of options. |
| 2024-11-01 | Company entered into a Loan and Security Agreement for a secured loan of $11.5 million with certain lenders, including its CEO and a director. |
| 2024-11-22 | Amendment to the 2013 BA Plan approved by the Company's stockholders at the 2025 annual stockholder meeting. |
| 2024-11-26 | Company received European CE mark approval of the LungFit PH system. |
| 2024-12-01 | A Phase 1b trial protocol for Beyond Cancer was approved by the Israeli Ministry of Health (IMOH). |
| 2025-02-10 | Company entered into an At-The-Market Equity Offering Sales Agreement with BTIG, Inc. (the 2025 ATM). |
| 2025-03-24 | Beyond Air reorganized its neurology business into a new private company, NeuroNOS Limited. |
| 2025-04-16 | Board of Directors approved to reserve for issuance 1,525,000 shares of common stock under the 2023 NeuroNos Ltd. Equity Incentive Plan. |
| 2025-06-02 | Company received $2.0 million of advanced financing from a related party, a director of the Company and an existing lender. |
| 2025-06-30 | End of the quarterly reporting period. |
| 2025-07-14 | Company effectuated a one-for-twenty (1:20) reverse stock split; common stock began trading on a split-adjusted basis. |
| 2025-08-11 | Date as of which 5,226,213 shares of common stock were outstanding. |
| 2025-08-12 | Date of filing of the Form 10-Q. |
Recommendation
holdWhile Beyond Air demonstrated significant operational improvements, including substantial revenue growth, a shift to gross profit, and a notable reduction in net loss and cash burn from operations, the company explicitly states a 'going concern' risk and a need for additional funding within one year. The progress in LungFit PH commercialization and clinical programs for Beyond Cancer and NeuroNOS is positive, but the pausing of other clinical trials due to funding constraints highlights the precarious liquidity position. A 'hold' recommendation acknowledges the operational momentum and pipeline potential while emphasizing the high financial risk and the critical dependence on successful future capital raises to sustain operations and advance its promising, yet capital-intensive, development programs.
Keywords
Nitric Oxide, Medical Device, Biopharmaceutical, LungFit PH, PPHN, Oncology, Solid Tumors, NeuroNOS, ASD, Clinical Trials, FDA, CE Mark, NASDAQ, XAIR, Quarterly Report
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