An essential company now announces painful job cuts due to “disappointing sales” and a “lack of progress on profitability”.
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.
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 (FDA) 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, reports MedTech Dive.
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.
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Other Economy News Today
Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.
First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.
Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.
That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.
The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.
US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.
Still, hiring remains strong. Although the unemployment rate ticked up to 3.9% last month, it’s the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.
Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.
“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”
“Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.
The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.
While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”
Ian Shepherdson at Pantheon Economics said in a note Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”
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Also Read: A Giant Company Now Announces Unexpected Layoffs in Virginia
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