NeurAxis: A High-Growth Medical Tech Play with Clear Path to Profitability and Market Expansion

In the ever-evolving landscape of medical technology, companies that combine regulatory innovation with commercial execution often emerge as standout growth stories. NeurAxis, Inc. (NYSE American: NRXS) is one such name, leveraging a perfect storm of regulatory milestones, accelerating revenue growth, and strategic capital allocation to position itself as a compelling long-term investment. With a clear roadmap to profitability and near-term catalysts on the horizon, this stock deserves a closer look from investors seeking exposure to the neuromodulation sector.

Regulatory Milestones: Unlocking Market Access and Reimbursement

NeurAxis has made 2025 a banner year for regulatory progress, with each milestone directly tied to expanding its addressable market and reimbursement infrastructure. The most significant development was the FDA clearance to expand the IB-Stim™ indication to treat Pediatric Functional Dyspepsia (FD) and associated nausea in patients aged 8–21. This is the first FDA-cleared treatment for FD, a condition affecting millions of children and adolescents. By broadening eligibility from 11–18 to 8–21 years and allowing up to four devices per patient, NeurAxis has effectively doubled its pediatric market potential.

Equally transformative is the assignment of a new CPT Category I code for PENFS procedures, effective January 1, 2026. This code, approved by the American Medical Association (AMA), assigns procedural value and reimbursement rates to PENFS, making it easier for providers to bill insurers and for patients to access the therapy. The CPT code is a critical inflection point, as it aligns with the company's existing coverage expansions—now reaching 53 million lives across two insurers in Connecticut and Massachusetts. With national coverage expected to grow further, the CPT code will act as a catalyst for broader adoption, particularly in children's hospitals.

Commercial Momentum: Revenue Growth and Market Adoption

The regulatory tailwinds are already translating into commercial momentum. In Q1 2025, NeurAxis reported a 39% year-over-year revenue increase, with sales rising to $896,000 from $647,000 in Q1 2024. This growth was driven by a 46% rise in unit sales, fueled by expanded insurance coverage and a financial assistance program that subsidizes costs for patients without coverage. The company also expanded its total covered lives from 4 million to 51 million, a testament to its ability to secure payer partnerships and navigate the complex reimbursement landscape.

The launch of the Rectal Expulsion Device (RED), a 510(k)-cleared tool for anorectal function testing, adds another revenue stream. Expected to generate first meaningful revenues in Q2 2025, RED targets the $1.2 billion chronic constipation market, offering a non-invasive solution that integrates seamlessly into clinical workflows. This product diversification strengthens NeurAxis's long-term growth profile.

Strategic Capital Allocation: Fueling Growth Without Overleveraging

NeurAxis has been disciplined in its capital allocation, balancing reinvestment in R&D with financial prudence. In May 2025, the company closed a $5.0 million registered direct offering, bolstering its cash reserves to $2.0 million as of March 31, 2025. This infusion of capital supports ongoing clinical trials, commercialization of RED, and expansion of payer coverage. While the company reported an operating loss of $2.3 million in Q1 2025, this was largely due to a one-time legal settlement and increased R&D expenses. Excluding these items, operating expenses grew modestly, reflecting a focus on cost control amid rapid growth.

The CEO, Brian Carrico, has emphasized that the company is on track to achieve cash flow breakeven as the CPT code activates in early 2026 and insurance coverage expands. With gross margins currently at 84.4% (down slightly from 88.4% in Q1 2024 due to discounted sales), NeurAxis is well-positioned to scale profitably as reimbursement infrastructure solidifies.

Strategic Partnerships and Academic Validation

NeurAxis's partnerships with Lytham Partners for investor relations and its participation in high-profile investor conferences (e.g., the Lytham Partners Spring 2025 Investor Conference) have amplified its visibility among institutional investors. Meanwhile, the inclusion of PENFS in the Journal of Pediatric Gastroenterology & Nutrition (JPGN) guidelines as a recommended treatment for functional abdominal pain underscores its clinical credibility. Academic endorsements like these are critical for driving adoption among physicians and payers.

Investment Thesis: A Compelling Long-Term Play

NeurAxis checks all the boxes for a high-conviction growth investment. Its clear regulatory milestones (CPT code, expanded indications) create near-term catalysts, while its accelerating revenue growth and strategic capital allocation lay the groundwork for long-term profitability. The company's focus on pediatric and adult gastrointestinal conditions—a $10 billion market—positions it to capture significant value as PENFS becomes a standard of care.

For investors, the key inflection points to watch are:
1. January 1, 2026: Activation of the CPT code for PENFS, expected to drive reimbursement and adoption.
2. Q2 2025: Commercialization of the RED device, adding a new revenue stream.
3. Coverage expansions: Additional insurer decisions that could push total covered lives beyond 53 million.

Conclusion: Buy the Story, Not the Noise

NeurAxis is a textbook example of a company that has mastered the art of turning regulatory wins into commercial success. While its operating losses may raise eyebrows, the trajectory of its revenue growth, combined with its strategic positioning in a high-margin, high-demand sector, makes it a compelling long-term play. For investors willing to ride the wave of innovation in neuromodulation, NeurAxis offers a rare combination of near-term catalysts and durable growth potential.

Final Call to Action: With a market cap of just $50 million and a clear path to profitability, NeurAxis is a stock that deserves a spot in the portfolios of growth-oriented investors. The time to act is now—before the CPT code and expanded indications drive the next leg of its ascent.