Axonics Modulation Technologies Inc. Chief Executive Ray Cohen is nothing if not confident about becoming the market leader in his urology device category, despite renewed competition from medtech giant Medtronic PLC.
“Physicians and patients alike have been delighted with our product,” Cohen told analysts after reporting the company’s second-quarter results.
Axonics last September received U.S. market approval for its sacral neuromodulation system, which sends electrical pulses to spinal nerves to treat patients with urinary and bowel dysfunctions.
Its r-SNM system includes an implantable device as small as two quarters and with a lifetime of 15 years in the body. It is also compatible with various MRI scans.
“Accounts that we have converted have been sticky and we are confident that more accounts will continue to come our way and we expect to be the market leader in this category in the not too distant future.”
The Irvine-based device firm reported $15.2 million in sales, compared to $1.5 million in the same period a year ago.
“Management commentary implies that AXNX now has [about] 43% domestic market share, which continues to increase at a rapid rate,” Needham & Co. wrote in a report.
Axonics counted 540 unique customer accounts in ambulatory centers and hospital systems, up from 375 centers at the end of the first quarter. Â
Rapid customer acquisition rates are “a testament to the fact that we’ve got a great product and we’ve got great people in the field,” Cohen said.
“But moreover, the word is out: We’ve got the goods, and patients are doing really well with our device.”
Cohen promised more growth, saying the company “will meet or exceed analyst consensus estimates [of $50 million in revenue] in the second half of the year,” resulting in some $90 million or more in 2020 revenue. Analysts on average expect $88.8 million in sales this year; Axonics reported $13.8 million in 2019.
After the second-quarter results were announced, its shares (Nasdaq: AXNX) were relatively unchanged at around $43 and a $1.7 billion market cap. Its shares have almost tripled since a 52-week low of $15.25 in mid-March.
More Funds
The company, which went public in 2018, raised an additional $140 million in an equity offering in early May bringing its cash balance to $288 million as of June 30.
It also added dozens of workers and reached a staff of more than 400.
Because of the pandemic, second-quarter sales were down about 40% compared to its first quarter, which netted $26.3 million in sales, most of which was in the U.S.
Clinical Victories
Axonics received two approvals in the second quarter that simplify the MRI process for its implanted patients; devices of this type would previously need to be removed from the body prior to a scan.
It also released two-year clinical results for its pivotal study on the r-SNM.
It demonstrated that 88% and 89% of implanted patients responded to therapy within two years and one year of treatment, respectively. About 37% of patients were completely dry and there were no adverse effects.Â
Axonics’ responder rate “continues to [show] the highest success rate” in sacral neuromodulation studies, Chief Medical Officer Karen Noblett said in a statement.Â
It shows, she said, “there is an easy to use, highly efficacious treatment available to those suffering from this condition.”
Competition Returns
Until Axonics came along with a smaller, longer-living sacral neuromodulation device, Medtronic dominated the sector with the only FDA-approved system.
Axonics has been involved in a patent infringement lawsuit with Medtronic since November. In August, Medtronic received federal clearance for its new InterStim Micro system, which it claims can also last up to 15 years in the body.
“We believe we’ve got a better product,” Cohen said. “We believe we will prevail in the end.”
