XAIR

Beyond Air ($XAIR) Insiders Buy 9 Times Despite 87% Plunge: Risky Bet or Bottom Fishing?

07/23/2025 20:10

Medical device specialist Beyond Air ($XAIR) is drawing investor attention as insiders continue aggressive buying despite an 87% stock plunge. The company is a commercial-stage biopharmaceutical firm developing innovative nitric oxide (NO) therapies, establishing its presence in the neonatal pulmonary hypertension treatment market through its FDA-approved LungFit PH device. Most notably, company executives have been actively purchasing shares even as the stock price continues declining. From August 2024 through July 2025, insiders including CEO Steven Lisi executed nine separate purchase transactions, with zero sales – a remarkably bullish signal. The largest transaction occurred on September 26, 2024, when Director Robert Carey and CEO Lisi each purchased 1.47 million shares worth approximately $744,000. These insider purchases weren't merely investments but involved loan-linked warrant acquisitions. Carey obtained warrants to purchase 9.89 million shares as part of a $7.5 million loan agreement, while CEO Lisi secured warrants for 3.29 million shares connected to a $2.5 million loan. This suggests management has substantial confidence in the company's long-term growth prospects. Examining Beyond Air's business performance provides insight into this insider confidence. The company recorded $3.71 million in revenue for fiscal 2025, a 220% year-over-year increase, with fiscal 2026 guidance projecting $12-16 million in revenue. This represents a compound annual growth rate of approximately 38% over the next three years, significantly outpacing the 8.1% average forecast for the U.S. medical equipment industry. However, the reality is more complex. Despite revenue growth, the company continues recording substantial losses. Fiscal 2025 net loss reached $46.62 million with earnings per share of -$13.80. Cash holdings stand at just $6.92 million against $11.69 million in debt, raising financial stability concerns. While management indicates current cash provides approximately 18 months of operating runway, continuous fundraising remains necessary. Stock performance reflects these financial vulnerabilities. After plunging from $26.8 to $13 on June 25, 2024, shares continued declining to current levels around $3.4 – an 87% drop over one year. This compressed market capitalization to approximately $21.2 million, exemplifying typical small-cap risks. Nevertheless, analysts maintain optimistic outlooks. Consensus rating remains 'buy' with a $1.50 price target, suggesting significant upside potential from current levels. This reflects high regard for the company's innovative technology and market expansion possibilities. Key variables investors should monitor include FDA approval status for next-generation LungFit PH2 device. This smaller, lighter product could significantly enhance market penetration upon approval. Second is international market performance. The company secured CE Mark and market authorizations in Europe and Australia, with distribution agreements covering 18 countries representing over 2 billion people. International revenue contribution is expected to begin meaningfully in H2 2026. Clinical progress in Beyond Cancer and NeuroNos divisions represents another crucial variable. Beyond Cancer's UNO program is currently in Phase 1 trials, while NeuroNos received orphan drug designation for autism spectrum disorder treatments, planning first-in-human trials by late 2026. From a financial perspective, quarterly cash burn reduction and gross margin improvement are critical. The company plans to improve first-generation product gross margins to 60-65% by end 2025, projecting cash burn reduction by at least one-third in Q3 2026. In conclusion, Beyond Air presents a typical biotech investment proposition where innovative technology and rapid revenue growth potential coexist with continuous losses and financial vulnerabilities. While persistent insider buying provides positive signals, near-term stock direction will likely depend on successful fundraising and regulatory approval progress for key products. This may appeal to risk-tolerant investors, but substantial volatility and loss potential must be carefully considered.