NeurAxis VA Ramp
MCO Update - A market penetration framework for Federal Supply Schedule revenue
NeurAxis (NRXS) secured a Veterans Affairs Federal Supply Schedule contract effective December 1, 2025. The Q1 2026 earnings call revealed that VA adoption is running ahead of management’s initial expectations, but no analyst has yet modeled VA revenue into their forward revenue forecasts for NRXS. We quantify the opportunity using market penetration by comparison to previous medical device initial VA sales.
VA Addressable Market
7M VA Patients per yr × 3% Functional Dyspepsia Rate = 210K Addressable VA Patients
210K Patients x $4K treatment per Patient = Full-TAM Annual Revenue: $840M theoretical ceiling
Each treatment course consists of four IB-Stim devices. At a VA Federal Supply Schedule price estimated at approximately $1,000 per device (a 10–25% discount to the commercial list of $1,195), revenue per treated veteran is approximately $4,000. The theoretical full-TAM annual revenue is $840 million. noting that, in reality, ramps do not approach full TAM realization in the initial rollout years.
The Comp Set: electroCore Quell
electroCore (ECOR) is a small-cap neuromodulation medtech selling through the VA Federal Supply Schedule. Its May 2025 Quell launch provides four contemporaneous quarters of ramp data for benchmarking.
Quarter Quell VA Revenue Q/Q Growth
Q2 2025 $114,000
Q3 2025 $485,000 +325%
Q4 2025 $900,000 +85%
Q1 2026 $1,000,000 +11%
Cumulative (4 quarters)~$2.5M
electroCore initiated sales of its gammaCore device to the VA in 2019. It took seven years to reach 2.5% penetration of its VA addressable market. NRXS hitting 0.26% in year one is in line with typical ranges for new VA launches.
Year 1 (0.1% to 0.5% Penetration): Focuses on initial clinical adoption by early-adopting medical centers, navigating VHA evaluations, and securing inclusion on regional formularies.
Years 2–3 (1% to 5% Penetration): The product begins to scale to larger regional health systems and standardizes across key facility networks.
Years 4–5 (5%+ Penetration): Widespread acceptance in standard community hospitals and standard protocols.
NRXS Economics Beat Quell
Quell reached approximately $1M in a single quarter after four quarters of VA activity. This device is an at-home treatment with a purchase price and disposables costing about $500 per year. $1M in sales implies 2,000 device sales. If NeurAxis treats the same number of veterans per quarter at its FSS pricing, revenue would scale at 8× the Quell trajectory. The other difference, favoring IB-Stim, faster scaling, is that Quell has direct competition, while IB-Stim has none. We must also account for the fact that electroCore employs a much larger sales team than NeurAxis, which slightly offsets NeurAxis’s monopoly advantage.
Year 2 Is the Inflection
The 2026 → 2027 year-1 transition is the most important year-over-year change. Low revenue, lots of relationship-building, and individual facility commitments. Year 2 is when those commitments compound as procurement contracts shift from one-time to recurring.
Noteworthy factors to watch:
Federal channel revenue is structurally lumpy. VA revenue is lumpy and unpredictable due to VA budget cycles, contract administration delays, and facility-level purchasing patterns. Quarterly figures will not be smooth.
Functional dyspepsia prevalence assumption. The 3% figure is from CEO Carrico’s Q1 call and may be conservative. Broader functional GI conditions, including IBS, post-infectious dyspepsia, and PTSD-associated GI symptoms, likely affect a higher percentage of the VA population. If the actual addressable population is closer to 5%, penetration points to proportionally higher revenue.
The Bottom Line
NeurAxis only needs to penetrate 0.25% of the addressable VA population in 2026 to add $2M+ in revenue that no analyst model currently includes. By 2028, even modest penetration of 1–2% produces VA revenue of $8M–$17M annually.
The structural reasons NRXS should outpace electroCore’s Quell trajectory in dollar terms are unambiguous: 10× higher revenue per treated patient, and zero direct competition.
The VA is the channel most likely to surprise the market in 2026 because expectations are zero. The Q2 earnings call in August is the next catalyst. Disclosed VA revenue would validate the ramp trajectory modeled above and likely trigger a Craig-Hallum price target revision.
Disclosure/disclaimer: All figures sourced from NeurAxis SEC filings, the Q1 2026 earnings call transcript, electroCore quarterly filings and earnings call commentary, and publicly available market data. Scenarios are illustrative, not formal forecasts. This publication is for informational purposes only and does not constitute investment advice. Do your own due diligence.