XAIR.NASDAQBeyond Air, INC
10-Q: Beyond Air Reports Q3 2025 Results: Revenue Increases but Losses Persist Amid Strategic Shifts
Sentiment:
Quarterly Report
Beyond Air's Q3 2025 results show increased revenue but continued net losses as the company focuses on commercialization and strategic adjustments.
Delay expectedThe company has made the decision to pause this study pending future funding.We anticipate commencing a pivotal clinical trial in calendar year 2026 following discussions with the FDA.
Capital raiseWe may be required to raise additional funds through sale of equity or debt securities or through strategic collaborations and/or licensing agreements in order to fund operations until we are able to generate enough product or royalty revenues, if any.Financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could have a material adverse effect on our strategic objectives, results of operations and financial condition.
Worse than expectedThe company continues to experience net losses, indicating that it is not yet profitable.
Summary
- Beyond Air, Inc. reported its financial results for the third quarter of fiscal year 2025, ending December 31, 2024.
- Revenue increased to $1.1 million, compared to $0.4 million in the same quarter of the previous year.
- However, the company experienced a gross loss of $0.2 million, and a net loss of $13.3 million, or $0.15 per share.
- This compares to a net loss of $17.3 million, or $0.50 per share, in Q3 2024.
- For the nine-month period, revenue reached $2.6 million, up from $0.7 million in the prior year.
- The net loss for the nine months was $40.4 million, or $0.64 per share, compared to $49.7 million, or $1.46 per share, in the same period last year.
- The company is focusing on commercializing its LungFit PH system and making strategic adjustments to increase revenue and decrease expenditures.
- Beyond Air has signed agreements with TrillaMed, Healthcare Links, and Business Asia Consultants to expand market access.
- A capital conservation strategy has been implemented, including reducing staffing levels and placing the VCAP study on hold.
- The company had cash, cash equivalents, and marketable securities of $10.9 million as of December 31, 2024.
- Beyond Air is also developing ultra-high concentration nitric oxide (UNO) therapies for solid tumors through its affiliate, Beyond Cancer, Ltd.
- A Phase 1b trial has been approved by the Israeli Ministry of Health (IMOH) for UNO + anti-PD-1 combination therapy.
Sentiment
Score: 5
Explanation: The sentiment is neutral. While revenue is increasing and losses are decreasing, the company is still not profitable and faces challenges in securing funding. The strategic adjustments and potential of the Beyond Cancer program offer some optimism.
Positives
- Revenue increased significantly in both the three and nine-month periods, indicating growing market traction.
- Net losses decreased compared to the previous year, suggesting improved cost management.
- Strategic agreements with TrillaMed, Healthcare Links, and Business Asia Consultants are expected to drive increased revenues.
- The company has implemented a capital conservation strategy to reduce expenditures.
- A Phase 1b trial has been approved for the UNO + anti-PD-1 combination therapy, advancing the Beyond Cancer program.
Negatives
- The company continues to experience net losses, indicating that it is not yet profitable.
- Cost of revenue exceeded revenue primarily due to one-time costs required to upgrade our existing fleet of devices, provisions for excess inventory and depreciation of devices purchased but not yet deployed.
- There is substantial doubt about the company's ability to meet its obligations with cash on hand.
Risks
- The company's ability to continue operating is dependent on the successful commercial launch of LungFit PH and raising additional funds.
- There are risks and uncertainties associated with the development of the NO delivery system.
- The company may not be successful in obtaining adequate financing for the development and commercialization of its other product candidates.
- The company is subject to risks common to development and early-stage medical device companies including, but not limited to, new technological innovations, certifications or regulatory approval, dependence on key personnel, protection of proprietary technology, compliance with government regulations, product liability, uncertainty of market acceptance of approved products and the potential need to obtain additional financing.
- The Company is also dependent on third-party suppliers and, in some cases, single-source suppliers.
Future Outlook
The company plans to continue focusing on commercializing its LungFit PH system, expanding market access through strategic agreements, and managing expenditures to achieve profitability. A pivotal clinical trial is anticipated in calendar year 2026 following discussions with the FDA. The company expects the program to progress into a phase 1 first-in-human clinical trial prior to the end of calendar year 2026.
Management Comments
- Management believes these factors raise substantial doubt about the Companys ability to meet its obligations with cash on hand, however, management believes this doubt is alleviated through plans for increased revenues and decreased expenditures, many of which have already been implemented, enabling increased cash flows.
- Management is confident that the efforts it has implemented to increase revenues and decrease expenditures, while not assured, will enable the Company to meet its obligations.
Industry Context
The report mentions that Mallinckrodt Pharmaceuticals reported sales of NO were $303.2 million in 2023, indicating a substantial market for inhaled nitric oxide therapies. Beyond Air aims to capture a portion of this market with its LungFit PH system, which has competitive advantages over existing cylinder-based systems. The company is also targeting other indications, such as viral lung infections and NTM, to expand its market opportunity.
Comparison to Industry Standards
- Mallinckrodt Pharmaceuticals, a key player in the nitric oxide market, reported NO sales of $303.2 million in 2023, providing a benchmark for the potential market size.
- The report estimates the addressable U.S. market for LungFit PH to be approximately $350 million and worldwide to be approximately $700 million.
- The company believes the U.S. market potential for bronchiolitis to be greater than $500 million and worldwide market potential to be greater than $1.2 billion.
- For the NTM indication, the company believes U.S. sales potential to be greater than $1 billion and worldwide sales potential to be greater than $2.5 billion.
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Equity Incentive Plan Amendment | The stockholders of the Company voted to approve the Companys Seventh Amended and Restated 2013 Equity Incentive Plan (the Amended 2013 Plan) to increase the number of shares of common stock reserved for issuance by an additional 3,000,000 shares, and to give the Board authority, without stockholder approval, to (i) modify the exercise or grant price of an option or stock appreciation right after it is granted, (ii) cancel an option or stock appreciation right at a time when its exercise or grant price exceeds the Fair Market Value of the underlying stock, in exchange for cash, another option or stock appreciation right, restricted stock, or other equity award, or (iii) take any other action that is treated as a repricing under generally accepted accounting principles. | 2024-11-22 | The additional shares authorized by the Certificate of Amendment has rights identical to the Companys currently outstanding common stock. |
| Stock Option Repricing | On November 22, 2024, the Board approved a one-time stock option repricing of 10,586,473 options (Option Repricing), effective November 22, 2024 (Effective Date). The repricing was undertaken in accordance with, and as permitted by, the Companys Amended 2013 Plan. Pursuant to the Option Repricing, all options granted pursuant to the Amended 2013 Plan that are held by Company Board members, officers, and employees expected to continue providing services to the Company were repriced, to the extent such options had an exercise price in excess of $ 0.54 , the closing price per share of the Common Stock as reported on The Nasdaq Stock Market on November 22, 2024. As of the Effective Date, all such options were repriced such that the exercise price per share was reduced to $ 0.54 . | 2024-11-22 | Stock compensation costs of $ 1.4 million have been recognized in relation to this share re-price. |
Related Party Transactions
- On September 27, 2024, Beyond Air entered into a binding term sheet for a secured loan with certain lenders including its Chief Executive Officer Steven Lisi and director Robert Carey.
- Members of the Board of Directors and certain executives of the Company are considered related parties to this offering.
Stakeholder Impact
- Shareholders: The company's stock price could be adversely affected if it is unable to maintain its listing on the Nasdaq Capital Market.
- Employees: The company has implemented a capital conservation strategy, reducing staffing levels by over 30% across the company.
- Customers: The company is focusing on commercializing its LungFit PH system, which has competitive advantages over existing cylinder-based systems.
- Creditors: The company's ability to continue operating is dependent on the successful commercial launch of LungFit PH and raising additional funds.
Next Steps
- Continue commercializing the LungFit PH system.
- Expand market access through strategic agreements.
- Manage expenditures to achieve profitability.
- Advance the Beyond Cancer program through clinical trials.
- Seek additional funding to support operations and development.
Key Dates
| Date | Description |
|---|---|
| 2015-04-28 | Beyond Air, Inc. was incorporated under Delaware law. |
| 2017-01-13 | BA Ltd. exercised the Option and paid $ 0.5 million to Pulmonox. |
| 2018-01-31 | The Company entered into an agreement (the NitricGen Agreement) with NitricGen, Inc. (NitricGen) to acquire a global, exclusive, transferable license and associated assets including intellectual property, know-how, trade secrets and confidential information from NitricGen related to the LungFit. |
| 2019-06-25 | The Company's name was changed to Beyond Air, Inc. from AIT Therapeutics, Inc. |
| 2021-05-25 | The Company and Circassia entered into a settlement agreement (the Settlement Agreement) resolving all claims by and between both parties and mutually terminating the Circassia Agreement. |
| 2021-11-04 | Beyond Air reorganized its oncology business into a new private company called Beyond Cancer. |
| 2022-06 | LungFit PH received premarket approval (PMA) from the FDA. |
| 2022-07 | The Company commenced marketing LungFit PH in the United States for PPHN as a medical device. |
| 2023-06-15 | The Company announced that it has entered into an agreement with Yissum Research Development Company of the Hebrew University of Jerusalem, LTD. (the University) to acquire the commercial rights for nNOS inhibitors being developed for the treatment of ASD and other neurological conditions. |
| 2023-06-15 | Beyond Air, Inc. and its wholly-owned subsidiary, Beyond Air Ltd., entered into a Loan and Security Agreement (the Loan and Security Agreement) with Avenue Capital Management II, L.P., as administrative agent and collateral agent (the Agent) and the Lenders. |
| 2024-01-10 | The Company's Board of Directors approved an amendment to the 2013 BA Plan to increase the number of shares in the 2013 BA Plan by 3,000,000. |
| 2024-03-20 | The Company, entered into a securities purchase agreement (the Securities Purchase Agreement) with certain institutional and accredited investors, including certain directors and officers of the Company. |
| 2024-03-22 | The offering closed on March 22, 2024. |
| 2024-06-21 | The Company, in return for extending the interest-only period for an additional 6 months on the Loan and Security Agreement with Avenue Capital, entered into an agreement to issue warrants to purchase up to 100,000 shares of common stock at an exercise price of $ 1.28 per share and an additional end of term payment of $ 87,500 plus legal and amendment fees. |
| 2024-09-26 | The Company, entered into a securities purchase agreement (the Securities Purchase Agreement II) with certain institutional and accredited investors, including certain directors and officers of the Company. |
| 2024-09-27 | The Company received $ 7.5 million as an advance payment of this loan. |
| 2024-09-30 | The private placement offering closed on September 30, 2024. |
| 2024-09-30 | Beyond Air and the Lenders reached an agreement to extinguish the Avenue Capital senior secured term loan for a one-time payment of $ 17.85 million. |
| 2024-10-04 | The final $ 12.85 million was paid on October 4, 2024. |
| 2024-11-01 | The Company finalized this loan and security agreement on November 1, 2024. |
| 2024-11-22 | The stockholders of the Company voted to, among other things, approve the Companys Second Amendment to the Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Companys common stock from 100,000,000 to 500,000,000 (the Certificate of Amendment). |
| 2024-11-22 | The stockholders of the Company voted to, among other things, approve the Companys Seventh Amended and Restated 2013 Equity Incentive Plan (the Amended 2013 Plan) to increase the number of shares of common stock reserved for issuance by an additional 3,000,000 shares. |
| 2024-11-22 | On November 22, 2024, the Board approved a one-time stock option repricing of 10,586,473 options (Option Repricing), effective November 22, 2024 (Effective Date). |
| 2024-11-26 | The company received European CE mark approval of the LungFit PH system. |
| 2024-12-02 | we received the CE mark under the Medical Device Regulation (MDR) in the EU. |
| 2024-12-31 | The offering closed on December 31, 2024. |
| 2025-02-04 | As the Company did not regain compliance with the Minimum Bid Price Requirement by February 4, 2025, the Company was afforded a second 180 calendar day period to regain compliance. |
| 2025-08-04 | If the Company does not regain compliance by August 4, 2025, Nasdaq will provide written notification to the Company that its common stock is subject to delisting. |
| 2026 | We expect this program to progress from preclinical to a phase 1 first-in-human clinical trial in 2026. |
| 2026 | We anticipate commencing a pivotal clinical trial in calendar year 2026 following discussions with the FDA. |
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