NEXSTIM PLC HALF-YEARLY REPORT H1 201716.08.2017 08:00:00 CET
Company announcement, Helsinki, 16 August 2017 at 9:00 am
Company Highlights, January - June 2017
Business Overview
Nexstim is a medical technology company developing and marketing pioneering navigated non-invasive brain stimulation systems for both therapeutic (NBT® system) and diagnostic (NBS system) applications.
NBT
NBS
CEO Martin Jamieson's review
I am delighted to report the important progress that Nexstim has made on multiple fronts during the first half of the year.
During the summer of 2016, Nexstim negotiated a long-term financing arrangement in the form of a joint deal with Bracknor Investment and The Finnish Innovation Fund, Sitra. The convertible bond and stand-by equity facility elements of this financing are now complete; the Company has raised a total of EUR 12.8 million in cash from share issues to date, including the first exercises of EUR 1.0 million in related warrants. As a result, at the end of H1 2017, Nexstim had a cash position of EUR 9.2 million. This compares very favourably to the cash position of EUR 1.8 million at the end of first H1 2016. The current cash balance, plus cash generated from sales, finance the Company until Q4 2018.
In March 2017, Nexstim began patient enrolment in the new 60patient E-FIT trial with its NBT® system in post-acute stroke therapy and after a slower than anticipated start to the study, we are encouraged by the recent rate of patient enrolment. The FDA has performed a full review of the technological and safety elements of the submission and we expect the E-FIT trial to be completed in Q2 2018, allowing us to file the clinical data needed for our de novo 510(k) filing. Clearance of this de novo 510(k) would be a significant milestone for Nexstim, as it would allow us to start marketing and selling the NBT® system for stroke rehabilitation in the US, the largest and most lucrative market for this device.
In late June, we announced the filing of a 510(k) submission with the US FDA for the NBT® system in the treatment of MDD. MDD is a recurrent and frequently chronic disorder that affects 2-5% of the population in developed countries, with current treatment options that are sub-optimal. Neuro-stimulation, by repetitive TMS has been shown to be effective in treating depression in patients who have failed pharmacologic treatment. This 510(k) submission is a major milestone for Nexstim in execution of our strategy, which is centred on building a significant business for our NBT® system in the US. We are looking forward to being in a position to market our NBT® system for depression, starting early in 2018.
Turning to the NBS system, we have been working on shifting to a distributor model for US sales to drive its use in pre-surgical mapping (PSM). This has resulted in changes to the current business organisation in both the US and Finland. We have signed five new independent sales representative agreements in the US covering key states. Importantly, we have now completed training the distributors' representatives, providing them with the knowledge and skills to sell the NBS system.
NBS net sales grew by 18.6% in H1 2017 to EUR 1.1 million, compared to EUR 0.9 million in H1 2016. We are also pleased that operating cash burn amounted to only EUR -2.8 million in H1 2017, mainly as a result of the implementation of organizational changes.
We estimate that the global sales pipeline will remain strong for the full financial year of 2017 and expect to see growth in sales of the NBS system, particularly in the US. In addition to our progress in the US, we continue to focus on building sales of the NBT® system in the larger EU markets.
Going forward, we believe that there is significant global sales growth potential for both our NBS and NBT® systems, particularly in the untapped and extensive Asian market, and we continue to look for new partnering opportunities there, as well as across Europe and the US.
Status of clinical development
In March 2017, Nexstim started patient enrolment in its 60 patient E-FIT trial (Electric Field Navigated 1Hz rTMS for Post-Stroke Motor Recovery Trial). In line with the FDA recommendation, data from this limited size trial will be combined with data from NICHE, the previous Phase III trial. The NICHE study showed a positive treatment effect for the NBT® system, however, there was also a positive treatment effect in the control group, who were treated using a sham coil. Nexstim has designed a new sham coil to address the active effect that was seen in the NICHE control group. The new sham coil has been deemed appropriate by the FDA for use in the E-FIT trial.
Throughout the trial, Nexstim will continue to communicate with the FDA to ensure efficient review of the submission, designed to supplement the existing de novo 510(k) submission. The de novo process provides a 120-day pathway to 510(k) clearance for novel Class II medical devices for which there is no legally marketed predicate device. The FDA has indicated that the de novo pathway is appropriate for Nexstim's NBT® system to receive marketing and sales clearance in the US.
Nexstim expects the E-FIT trial to be completed in Q2 2018, generating data which we anticipate will support our de novo 510(k) filing. De novo 510(k) clearance would allow Nexstim to market and sell the NBT system for stroke rehabilitation in the US.
Key performance indicators
| EUR in thousands | 1-6/2017 6 months | 1-6/2016 6 months | 1-12/2016 12 months |
| Net sales | 1,058.4 | 892.5 | 2,482.6 |
| Personnel expenses | -1,475.3 | -2,214.6 | -4,253.2 |
| Depreciation and amortisation | -165.1 | -168.8 | -372.3 |
| Other operating expenses | -1,759.0 | -2,410.8 | -3,907.6 |
| Profit/ -Loss for the period | -3,433.9 | -4,226.5 | -6,732.7 |
| Earnings per share (EUR) | -0.05 | -0.53 | -0.56 |
| Cash flows from operating activities | -2,791.2 | -5,240.7 | -7,225.3 |
| Cash in hand and at banks | 9,239.3 | 1,815.6 | 8,156.4 |
| Total equity | 7,089.2 | -588.1 | 4,478.5 |
| Equity ratio (%) | 65.19 | -3.24 | 55.12 |
| Number of shares in the end of the period (pcs) | 86,053,694 | 8,116,833 | 47,087,749 |
| Average number of shares during the period (pcs) | 70,330,185 | 8,031,740 | 11,950,664 |
| Diluted number of shares in the end of the period (pcs) | 118,903,768 | 9,497,698 | 78,830,446 |
| Diluted average number of shares during the period (pcs) | 105,089,658 | 8,936,160 | 15,762,543 |
Future Outlook
Based on its business forecast the Company estimates its net sales to grow during financial year 2017 and a loss is expected for the financial year.
Helsinki 16 August 2017
Nexstim Plc
Board of Directors
For further information please visit www.nexstim.com or contact:
Nexstim +44 771 516 3942
Martin Jamieson, Chairman and CEO martin.jamieson@nexstim.com
UB Securities Ltd (Certified Adviser) +358 9 2538 0246
Citigate Dewe Rogerson +44 (0)207 2822949
David Dible/Isabelle Andrews/Shabnam Bashir david.dible@citigatedr.co.uk
Publication of financial information
A conference call for media, investors and analysts will take place at 4:00 pm Finnish time on Wednesday 16 August 2017. Martin Jamieson, Chairman and CEO, and Mikko Karvinen, CFO, will present the financial and operational results followed by a Q&A session.
The dial-in numbers for the conference call are:
Finland: +358 (0) 800 914672
Sweden: +46 (0) 20 089 6377
UK: +44 (0) 20 3003 2666
US: + 1 866 966 5335
Standard International: +44 (0) 20 3003 2666
The call Password is Nexstim.
Financial statements release for the year ending 31 December 2017 will be published on or about 28 February 2018.
About Nexstim Plc
Nexstim is a medical technology company developing and marketing pioneering navigated non-invasive brain stimulation systems for both therapeutic (NBT® system) and diagnostic (NBS system) applications. Nexstim's NBS system is the only FDA cleared and CE marked system based on navigated Transcranial Magnetic Stimulation (nTMS) for the pre-surgical mapping of the speech and motor cortices of the brain.
Based on the same technology platform, the Company has developed the Navigated Brain Therapy (NBT®) which is CE marked in Europe for the treatment of stroke, major depression and chronic neuropathic pain.
Nexstim recently filed a 510(k) submission with FDA for NBT® system for the treatment of Major Depressive Disorder (MDD). Nexstim looks forward to introducing the NBT® system for this important indication in early 2018. The NBT® system is currently in a supplemental Phase III study, E-FIT trial, which will recruit 60 patients. The trial is expected to complete in Q2 2018, allowing Nexstim to file for FDA clearance. FDA clearance would allow Nexstim to start marketing and selling its NBT® system for stroke rehabilitation in the USA.
Nexstim shares are listed on the Nasdaq First North Finland and Nasdaq First North Sweden. For more information please visit www.nexstim.com