Why An Insider Just Made a Huge Purchase of NeurAxis Shares

We have featured several bullish articles and updates on NeurAxis (NRXS) in Microcap Opportunities. We continue to dig and find more to like about this investment opportunity, and we are not the only ones. Last week, an investor paid $800K to increase his position from 7% to 12% of the outstanding shares.

The company has gained FDA approval for its flagship device, secured a Category One reimbursement code, and the device is now included in pediatric guidelines. Everything is in place to capture a massive market opportunity, as we previously described, except for insurance reimbursement coverage from the five largest health insurance companies. We will provide a brief recap and present new information on capturing insurance coverage.

Brief Recap

NeurAxis is a neuromodulation medical technology company offering therapy based on its proprietary Percutaneous Electrical Nerve Field Stimulation ("PENS") technology. The company's device, the IB-Stim, is the only FDA- approved medical device for associated functional abdominal pain ("FAP") with irritable bowel syndrome ("IBS") and for treating Functional Dyspepsia ("FD") and FD-related nausea symptoms in children 8-21 years old.

Management has stated that inclusion in the North American Society for Pediatric Gastroenterology, Hepatology, and Nutrition (NASPGHAN) guidelines is a key factor for securing insurance coverage, and announced last month that the device has been included in the NASPGHAN guidelines.

The number of covered lives had increased from just 4 million a year ago to 51 million. Management is forecasting 100 million covered lives by the end of this year. This guidance was provided before the company had an established reimbursement code. With the IB-Stim device now having a Category 1 insurance reimbursement code, effective January 2026, the number of lives covered is expected to increase dramatically.

Insurance Coverage Outlook

The five largest health insurance companies by revenue are UnitedHealth Group, Anthem, Kaiser Permanente, Centene, and Humana. They account for approximately half of the total market share in the health insurance industry. It is encouraging that these companies are familiar with and offer coverage for PENS as a treatment for pain in their plans. For example, this is from the Aetna website:

“Aetna considers percutaneous electrical nerve stimulation (PENS) medically necessary DME for treatment of members with diabetic neuropathy or neuropathic pain who failed to adequately respond to conventional treatments, including three or more of the following groups of agents: anti-convulsant (e.g., pregabalin), anti-depressants (e.g., amitriptyline and duloxetine), opioids (e.g., morphine sulphate and tramadol), and other pharmacological agents (e.g., capsaicin and isosorbide dinitrate spray).”

IBS is considered neuropathic pain, and the use of PENS after a lack of response from other treatments outlined in the Aetna coverage is consistent with the pediatric guidelines.

Centers of Excellence

NeurAxis is further along in establishing the IB-Stim than you might think. The company has established IB-Stim Centers of Excellence in Cincinnati Children’s Hospital, Nicklaus Children’s Hospital, and CHOC Children’s Hospital of Orange County. The company does not provide details on what qualifies as a Center of Excellence; however, the benefits include establishing clinics with staff knowledgeable about IB-Stim and offering specialized programs, such as the Mobility and Functional Gastrointestinal Disorders Center at Boston Children’s Hospital.

Establishing these centers helps to validate IB-Stim to insurance providers and promote the device to other pediatric hospitals. It also provides a framework for how NeurAxis will scale. I would not be surprised if Boston Children’s Hospital becomes the next IB-Stim Center of Excellence.

Cost Savings

“Percutaneous Electrical Nerve Field Stimulation Saves Cost to Parents and Insurers of Adolescents with Irritable Bowel Syndrome” is an independent study by the University of Michigan. The study demonstrated that the use of IB-Stim reduced health insurance reimbursement by 60% and increased patients’ healthy days by 50%.

Conclusion

We are encouraged by the large insider purchase of the stock last week. The IB-Stim is in the early stages of commercialization, but it has established a firm foothold at key medical centers. The remaining obstacle to overcome for NeurAxis’s success is coverage for the flagship device from the major insurance companies. The language in the insurance coverage details is consistent with the pediatric guidelines regarding IB-Stim.

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