Waiting to Exhale: Will Beyond Air Breathe Easier in FY2025?Waiting to Exhale: Will Beyond Air Breathe Easier in FY2025?

A disappointing commercial ramp, a reduced revenue outlook, and shallow cash reserves draw concern.

Amanda Pedersen

July 2, 2024

2 Min Read
3D photo illustration of the human respiratory system
Image credit: nopparit / iStock via Getty Images

Beyond Air has taken bold measures this year to preserve capital, including reducing its headcount by more than 20%. The company revealed the workforce cuts during the same earnings call in which it lowered its fiscal year 2025 revenue outlook.

Some analysts, including BTIG, downgraded Beyond Air last week, citing concerns about the company's commercial ramp, reduced revenue outlook, lack of progress on profitability metrics, and near-term cash needs.

"While [Beyond Air] has demonstrated some initial traction with LungFit — the system has been used in more than 50 hospitals (including trialing) across 10 states to treat over 1,100 patients — the commercial rollout has continued to be slower than expected," BTIG's Marie Thibault wrote in a recent report.

The company previously expected its fiscal year 2025 revenue to fall between $12 million and $16 million. Now, the company is projecting revenue closer to $10 million.

In fiscal year 2024, Beyond Air reported an adjusted cash burn of $46.2 million, ending the year with just about $34.5 million in cash, equivalents, and marketable securities — hence the 20%+ workforce reduction. The company also acknowledged it has paused several R&D initiatives including the LungFit Pro viral community-acquired penumonia program and trials for LungFit Go in nontuberculosis mycobacteria and chronic obstructive pulmonary disease (COPD).

Beyond Air now expects to see cash burn drop below $30 million over the next two years.

"We are pleased to see management undertake serious efforts to reduce burn, but we think the company's near-term cash needs, combined with disappointing sales results and lack of progress on profitability metrics, are concerning," Thibault wrote. "...We remain fans of the LungFit PH technology and think [Beyond Air] does have opportunities to accelerate adoption, including the Innovative Technology contract awarded by Vizient in October 2023."

Beyond Air CEO Steve Lisi said the company made the decision to make sure that what it was upgrading got tested out with its current customers before new customers.

"So, that process took a little longer," Lisi told Thibault and other analysts on the earnings call last week in an effort to explain the disappointing revenue growth between the fiscal third and fiscal fourth quarters.

Lisi did say the current quarter is going better than last quarter in terms of revenue growth.

"Not just a little bit, but the growth rate will be significantly better," he said.

Given the number of medtech companies that have suddenly gone under over the past two years, and the number of layoffs across the industry, it is easy to understand analysts' concerns on Beyond Air. But time will tell if the company's cash preservation efforts and incoming chief commercial officer will allow investors to breathe easier anytime soon.

About the Author

Amanda Pedersen

Amanda Pedersen is a veteran journalist and award-winning columnist with a passion for helping medical device professionals connect the dots between the medtech news of the day and the bigger picture. She has been covering the medtech industry since 2006.

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