Company announcement, Helsinki, 4 March 2019 at 9:00 am
Nexstim Plc (NXTMH:HEX, NXTMS:STO) ("Nexstim" or "Company"), the targeted neuromodulation company developing and marketing pioneering navigated personalised, non-invasive brain stimulation systems for the treatment of Major Depression Disorder (MDD), today provides its financial statements for the full year 2018 (1 January–31 December 2018) and H2 2018 (1 July-31 December 2018).
Highlights, July – December 2018
• Advancing its depression-led therapy strategy with a total of ten NBT® systems installed across multiple sites on three continents for the treatment of MDD
• In October, Nexstim signed a partnership agreement with Ampere Medical, a Hong Kong based distributor, to launch its presence in Asia
• H2 revenues amounted to EUR 1.6 million (2017: EUR 1.6 million)
Post-period Highlights
• In January 2019, Nexstim signed a distribution agreement with Canadian Health Solutions to bring its SmartFocus™ TMS system to the Canadian market. The system is expected to launch in Canada in the next few months.
• Nexstim has continued to strengthen its commercial organization in the US, which now consists of ten persons and plans to expand the team further in 2019. This investment is designed to support the Company’s depression-led therapy strategy, focusing on key regions in the US (Southeast and Northeast states, California and Texas).
Business Overview
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.
NBT®
• 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 installed base of ten depression treatment systems across three continents
NBS
• 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 160 research universities and leading hospitals across the world
CEO Martin Jamieson’s review
I am pleased to be able to update you on Nexstim’s business and financial results for 2018.
In September 2018, Nexstim reported data from the supplementary Phase III clinical trial, known as E-FIT ((Electric Field Navigated 1Hz rTMS for Post-Stroke Motor Recovery Trial), evaluating the use of Nexstim's NBT® system in upper extremity motor rehabilitation following stroke.
Unfortunately, the trial did not show a clinically significant difference between the active and sham treatment groups. Combining the results with the previously conducted NICHE study also did not show a clinically significant difference between the active and sham groups. The trial was conducted at five leading clinical centres in the US and recruited a planned total of 60 patients.
As a result of this disappointing outcome, Nexstim evolved its corporate strategy. This has led to us focusing the majority of our resources on marketing our NBT® System for the treatment of MDD, where stimulation of specific areas of the brain has been shown to be effective.
Since the successful US launch of our NBT® System for the treatment of MDD at the Clinical TMS Society Annual Meeting in May 2018, we have delivered and installed five systems in the US. We are confident that by highlighting the NBT® system's unique navigational capabilities, we will be able to differentiate it from the non-navigational TMS devices currently on the market. Including the US, Europe and the rest of the world there are now a total of ten NBT® Systems installed for the treatment of depression.
The net sales for the full year grew in 2018 to EUR 2.7 million, compared to EUR 2.6 million in 2017. Both the NBS and NBT® installed bases have grown and the pace of growth was record high in the US markets. We are also pleased to report that we have seen 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 this has been a year of investments, particularly to strengthen our commercial presence in the US as well as in Europe, the operating cash burn amounted to EUR -6.2 million in 2018 compared to EUR -5.4 million in 2017.
During 2019, 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 raise market awareness of our NBT® Systems: by increasing the number of MDD patients treated with our NBT® System, we will be able to collect more important clinical data which will further support our marketing message and increase the adoption of our NBT® System. We also plan 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. These efforts will involve investments in commercial sales, marketing, and clinical resources.
As of 31 December 2018, Nexstim had a cash position of EUR 7.2 million, which included the Kreos loan. The Company continues to carry out evaluation of different funding options and strategic alternatives for its businesses. These strategic alternatives may include divestment of its diagnostic business or even public-to-private transaction concerning the entire Company.
Key performance indicators
EUR in thousands | 7-12/2018 6 months | 7-12/2017 6 months | 1-12/2018 12 months | 1-12/2017 12 months |
Net sales | 1,592.8 | 1,587.0 | 2,672.1 | 2,645.3 |
Personnel expenses | -2,413.7 | -1,859.4 | -3,937.5 | -3,334.7 |
Depreciation and amortisation | -269.6 | -176.2 | -424.0 | -341.3 |
Other operating expenses | -2,184.7 | -2,359.2 | -3,985.9 | -4,118.1 |
Profit/ -Loss for the period | -3,713.8 | -3,894.1 | -6,154.3 | -7,327.9 |
Earnings per share (EUR)* | -1.14 | -1.16 | -1.93 | -2.77 |
Cash flows from operating activities | -3,069.4 | -2,611.7 | -6,192.5 | -5,402.9 |
Cash in hand and at banks | 7,175.2 | 8,473.6 | 7,175.2 | 8,473.6 |
Total equity | -294.3 | 5,520.8 | -294.3 | 5,520.8 |
Equity ratio (%) | -0.98 | 52.77 | -0.98 | 52.77 |
Number of shares in the end of the period (pcs)* | 3,253,751 | 3,105,786 | 3,253,751 | 3,105,786 |
Average number of shares during the period (pcs)* | 3,251,865 | 2,949,153 | 3,187,487 | 2,649,232 |
Diluted number of shares in the end of the period (pcs)* | 4,431,575 | 4,431,575 | 4,431,575 | 4,431,575 |
Diluted average number of shares during the period (pcs)* | 4,701,628 | 4,135,795 | 4,577,627 | 3,822,547 |
*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.
Future Outlook
Based on its business forecast, the Company expects therapy business revenue to grow during year 2019 and a loss for the period is expected for the financial year 2019.
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 2018, the distributable assets of the group’s parent company were EUR 12,213,958.02. The Board of Directors proposes that Nexstim Plc should not pay any dividend for the financial period of 2018.
Helsinki 4 March 2019
Nexstim Plc
Board of Directors
Further information is available on the website www.nexstim.com or by telephone:
Nexstim
Martin Jamieson, Chairman and CEO
+44 771 516 3942
martin.jamieson@nexstim.com
Sisu Partners Oy (Certified Adviser)
Jussi Majamaa
+ 358 40 842 4479
jussi.majamaa@sisupartners.com
Citigate Dewe Rogerson
David Dible/Shabnam Bashir/ Sylvie Berrebi
+44 (0)207 2822949
david.dible@citigatedewerogerson.com
Publication of financial information during year 2019
A conference call for analysts, investors and media will take place at 17:00 Finnish time (EET) on Monday 4 March 2019. The call will be hosted by Martin Jamieson, Chairman of the Board and CEO, and Mikko Karvinen, 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) 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
Half-Yearly Report January-June 2019 (H1) will be published on Friday, August 16, 2019
Nexstim Annual Report 2018 (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 Monday, March 4, 2019.
The Annual General Meeting will be held on Monday, March 25, 2019 beginning at 10:00 am.
About Nexstim Plc
Nexstim is a medical technology company focused on the development and commercialization of its world-leading SmartFocusTM TMS technology, a non-invasive brain stimulation system for the treatment of Major Depressive Disorder (MDD). The Company’s proprietary Navigated Brain Therapy (NBT®) system, a highly sophisticated 3D navigation, is the only personalised, navigated transcranial magnetic stimulation (TMS) approach providing accurate targeting of the TMS to the specific area of the brain associated with MDD.
Nexstim’s NBT® system has been launched in the US for the treatment of MDD following clearance from the FDA for marketing and commercial distribution for this indication. The NBT® system is CE marked in Europe for the treatment of major depression and chronic neuropathic pain.
In addition, Nexstim is commercialising its Navigated Brain Stimulation (NBS) system for diagnostic applications, based on the same technology. 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 Finland and Nasdaq First North Sweden.