Company announcement, Helsinki, 28 February 2020 at 9:00 am
Nexstim Plc (NXTMH:HEX, NXTMS:STO) ("Nexstim" or "Company"), today provides its financial statements for the full year 2019 (1 January–31 December 2019) and H2 2019 (1 July-31 December 2019).
Highlights, July – December 2019
- The NBT® system active commercial installed base grew to a total of 23 systems at end of December 2019, of which the US NBT® system installed base was a total of 10 systems and in Europe and rest of the world a total of 13 NBT® systems.
- Nexstim received a medical device license from Health Canada, which allows Nexstim to start marketing and commercial distribution of the NBT® system for the treatment of Major Depressive Disorder (MDD) in Canada
- H2 revenues amounted to EUR 2.1 million (2018: EUR 1.6 million), an increase of 33.8 percent year-on-year.
- H2 NBT revenues amounted to EUR 0.9 million (2018: EUR 0.4 million), an increase of 110.4 percent year-on-year.
- On 11 February 2020, the Company announced that Martin Jamieson left his positions as the CEO of the Company and as a member of the Board of Directors of Nexstim. Nexstim's Board of Directors appointed Mikko Karvinen as interim CEO and Joonas Juokslahti as interim CFO with immediate effect.
Nexstim is a neuromodulation company developing and marketing pioneering navigated non-invasive brain stimulation systems for both therapeutic (NBT® system) and diagnostic (NBS system) applications.
The Company developed its NBT® device based on its NBS technology platform; commercialisation of the NBT® system is currently Nexstim’s key strategic focus.
- Nexstim’s NBT® platform is based on its unique navigated Transcranial Magnetic Stimulation (nTMS) technology which allows for personalized, accurate, reproducible and non-invasive brain stimulation
- In May 2018, Nexstim launched its Navigated Brain Therapy (NBT®) system in the US for the treatment of MDD following FDA clearance in November 2017
- MDD affects more than 300 million people worldwide with 20-40% of patients not responding to current treatment options. As a result, MDD is the key focus for Nexstim’s sales and marketing activities for its NBT® system
- The NBT® system is CE marked for the treatment of depression and chronic pain
- Active commercial installed base of 23 therapy treatment systems across three continents
- Nexstim’s NBS system is the only CE-marked and FDA-cleared non-invasive solution for pre-surgical mapping of the motor cortex in brain cancer. Clinical data has been generated demonstrating the value of Nexstim’s unique navigation system for pre-surgical mapping with regard to patient outcomes
- The NBS system allows surgeons to be better prepared and more aggressive with tumor resection, due to their confidence in the location of the motor and speech cortex because of pre-surgical mapping. The non-invasive device has demonstrated a 46% increase in progression free survival in low grade gliomas versus the current gold standard
- The NBS system has been sold to approximately 170 research universities and leading hospitals across the world
CEO Mikko Karvinen’s review
In my first report as the new interim CEO of Nexstim, I am happy to report the important progress that Nexstim has made during the second half of 2019 and full year of executing its strategy, which is focused on driving the sales of its NBT® system for the treatment of MDD.
During 2019, we have delivered and installed a total of 17 new NBT® systems - 9 in the US and 8 in Europe (Austria, Finland, Germany, Italy and Sweden) - for the treatment of MDD. As a result, there are now a total of 23 NBT® Systems installed for the treatment of depression and chronic neuropathic pain, globally.
We are confident that by continuing to highlight the NBT® system's unique navigational capabilities, we will be able to gain further market share, by clearly differentiating it from the non-navigational TMS devices currently on the market. It’s probable that the need for navigational capabilities will increase in the future technology to treat patients with severe depression, who are hospitalised and may have suicidal ideation. This could open an exciting new TMS market for Nexstim in treatment resistant depression (TRD), which is distinct from the current market.
The NBT business net sales for 2019 grew strongly by 131 percent to EUR 1.5 million, compared to EUR 0.7 million in 2018. Sales of the NBS system were lower during 2019 due to the focus of the commercial organization shifting more towards the faster growing NBT business. This led to the Company’s net sales total increasing by 25 percent to EUR 3.3 million in 2019, compared to EUR 2.7 million in 2018.
In addition to the progress with our NBT® system, we are continuing to see an improvement in our sales mix with a growing contribution from high margin after sales, including revenue from services, support, spare parts and consumable head trackers. As more of Nexstim’s revenue is generated from NBT® therapy business, the portion of recurring revenue is growing. Recurring revenue (total therapy sales less NBT® capital system sales) was about 66 percent of the total therapy revenue during year 2019. Nexstim targets an annual revenue of approximately EUR 100 thousand per NBT® system a year in active established customer sites. During 2019 Nexstim reached an average therapy revenue per NBT® system of EUR 85 thousand.
Year 2019 has been a time of investment to support our growth, particularly in our US commercial team as well as in Europe. As a result of this investment, operating cash burn amounted to EUR -6.7 million in 2019 compared to EUR -6.2 million in 2018.
In order to finance our growth strategy, we raised a total of EUR 6.6 million of new capital in share offerings in 2019. I wish to thank our investors for participating our share offers and I am delighted that we were able to attract new major anchor investors. This support reflects their confidence and strong commitment to Nexstim's future.
In the operational business we will focus on growing the active installed base of NBT® Systems used for treatment of MDD with the emphasis on the large US market. It is our priority to continue to raise the market awareness of our NBT® System. We are looking to achieve this by increasing the number of MDD patients treated with our NBT® System which will allow us to collect more clinical data showing the benefits that our unique system is able to deliver to the large number of patients with depression. This data will be used to support our marketing efforts which we are confident will increase the adoption of our NBT® system across the US. This clear therapy focused strategy means that we continue seeking a partner for our pre-surgical mapping business.
We also plan to continue to leverage our strong Key Opinion Leader network in the US and to utilize the patient registry data we are generating to publish a series of White Papers highlighting the advantages that our NBT® System delivers when used to treat MDD. We believe that these efforts will allow us to generate higher therapy sales as we leverage our existing organisation in commercial sales, marketing, and clinical resources.
As of 31 December 2019, Nexstim had a cash position of EUR 4.3 million, which includes the Kreos loan.
My first more extensive reform work as the interim CEO of Nexstim will be a strategy review and update in close cooperation with the Board and management team. The main purpose of this strategy work is to update the long-term business outlook and financial objectives for NBT and NBS businesses. We will at the same time evaluate a number of different funding options and strategic alternatives for our businesses.
Key performance indicators
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*The number of shares has been adjusted to take account the effect of the reverse share split on 26 November 2018, where the number of shares was decreased 30-fold.
Based on its business forecast, the Company expects NBT business revenue to grow during year 2020 and a loss for the period is expected for the financial year 2020.
Board of Directors’ Proposal on the Dividend
Since it was founded, the Company's operations have been unprofitable, and no dividend has been distributed. In the forthcoming years, the Company will focus on financing the growth and the development of its business and the Company will adhere to a very stringent dividend policy, tied to the Company's results and financial standing. The Company does not expect to be able to distribute dividends in the near future. In the event dividends are distributed, all Shares will be entitled to equal dividends.
At the end of the financial period of 2019, the distributable assets of the group’s parent company were EUR 12,268,771.99. The Board of Directors proposes that Nexstim Plc should not pay any dividend for the financial period of 2019.
Helsinki 28 February 2020
Board of Directors
Further information is available on the website www.nexstim.com, or by contacting:
Mikko Karvinen, CEO
+358 50 326 4101
Sisu Partners Oy (Certified Adviser)
+ 358 40 842 4479
Publication of financial information during year 2020
A conference call for analysts, investors and media will take place at 15:00 Finnish time (EET) on Friday 28 February 2020. The call will be hosted by Mikko Karvinen, CEO and Joonas Juokslahti, CFO, who 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) 9 2319 5437
Sweden: +46 (0) 8 50520 424
UK: +44 (0) 20 3003 2666
USA: +1 212 999 6659
Standard International: +44 (0) 20 3003 2666
The call password is Nexstim
Half-Yearly Report January-June 2020 (H1) will be published on Friday, August 14, 2020 Nexstim Annual Report 2019 (Report of the Board of Directors, the Financial Statements and Consolidated Financial Statements and the Auditor's Report) will be published on company web pages on Friday, March 6, 2020. The Annual General Meeting is tentatively scheduled to be held on Tuesday, March 31, 2020 at 10:00 am
About Nexstim Plc
Nexstim is a Finnish, globally operating medical technology company. Our mission is to enable personalized and effective therapies and diagnostics for challenging brain diseases and disorders.
Nexstim has developed a world-leading non-invasive brain stimulation technology called SmartFocus®. It is a navigated transcranial magnetic stimulation (nTMS) technology with highly sophisticated 3D navigation providing accurate and personalized targeting of the TMS to the specific area of the brain.
SmartFocus® technology is used in Nexstim’s proprietary Navigated Brain Therapy (NBT®) system, which is FDA cleared for marketing and commercial distribution for the treatment of major depressive disorder (MDD) in the United States. In Europe, the NBT® system is CE marked for the treatment of major depression and chronic neuropathic pain.
In addition, Nexstim is commercializing its SmartFocus® based Navigated Brain Stimulation (NBS) system for diagnostic applications. The NBS system is the only FDA cleared and CE marked navigated TMS system for pre-surgical mapping of the speech and motor cortices of the brain. Nexstim shares are listed on the Nasdaq First North Growth Market Finland and Nasdaq First North Growth Market Sweden.