Dive Brief:
- Beyond Air said Monday it has cut more than 20% of its employees since Jan. 1 as part of a push to decrease spending.
- The company, which sells a device to help newborns on ventilators, lowered its revenue guidance for its 2025 financial year from a range of from $12 million to $16 million to “greater than $10 million.” Beyond Air has paused development programs to extend its cash runway to at least July 2025.
- BTIG analysts said in a note to investors that they are “pleased to see management undertake serious efforts to reduce burn.” However, the analysts said the company’s near-term cash needs, “disappointing sales results and lack of progress on profitability metrics” are concerning.
Dive Insight:
Beyond Air sells Lungfit PH, a device that makes nitric oxide gas from room air. Lungfit PH delivers the nitric oxide to mechanical ventilators that are supporting the breathing of newborns. The Food and Drug Administration approved the device in June 2022. However, Beyond Air then needed to make the device compatible with more ventilators and implement improvements to address customer feedback.
The FDA approved a software update that made Lungfit PH compatible with another ventilator and improved the nitric oxide sensors in the fall of 2023, CEO Steven Lisi said on an earnings call Monday. Since then, Beyond Air has worked to implement the updated software. Lisi added that the process took longer than planned and, as such, the company secured fewer new customers than expected.
Having implemented the upgrades, Beyond Air is now “in the market with a more optimized product,” Lisi said. Still, the company’s cash, cash equivalents and marketable securities fell to $34.5 million by the end of March, compared with nearly $46 million at the end of March 2023. The situation led the company to cut costs to give David Webster, who is set to start as chief commercial officer in July, time to grow sales.
Beyond Air is aiming to reduce its operating costs by more than 15% year on year, CFO Douglas Larson said on the earnings call. Layoffs are part of the plan. Beyond Air ended March with 107 employees. The company has cut its headcount by more than 20% since the start of 2024. Lisi said most of the moves happened in the first quarter of Beyond Air’s financial year, which runs from April through June.
The company has put studies on hold of Lungfit PRO in viral community-acquired pneumonia and Lungfit Go in nontuberculous mycobacteria chronic obstructive pulmonary disease. Beyond Air is bringing the design and development of Lungfit Go in-house, which Lisi said has delayed the start of the next clinical trial until 2026.
By reducing costs and growing sales, the company expects to achieve cash flow breakeven in the fourth fiscal quarter of 2026. The quarter is after the end of Beyond Air’s currently forecast cash runway. Lisi said the $10 million tranche of a debt financing deal is no longer available, but the company may be able to access the $12.5 million tranche.
The company is seeking monetary damages of $50 million from Airgas Therapeutics. Beyond Air filed a lawsuit against Airgas for breach of contract in June. The company alleged Airgas agreed to be the exclusive supplier of certain cylinders of nitric oxide gas but breached the agreement. Airgas has not yet appeared in the action.