NEXSTIM PLC FINANCIAL STATEMENT RELEASE 2016
28 February 2017
Company Highlights, July – December 2016
- Nexstim agreed a long-term financing arrangements in the form of a joint deal with Bracknor Investment and Sitra resulting in EUR 8.5 million in cash
- Nexstim received US Food and Drug Administration’s (FDA) approval to commence the E-FIT trial
- NBS revenues EUR 1.6 million (2015: EUR 1.9 million)
- Key technology patent granted in EU adding further global validation of pioneering fully integrated NBS and NBT® technology
Post period end highlight
- Nexstim signed three new independent sales representation agreements in the US
- Extraordinary General Meeting of shareholders held on 20 February 2017 approved the unauthorised direct issuance of shares, unauthorised issuances of special rights entitling to shares and authorised the Board of Directors to finalise the Bracknor and Sitra financing arrangement
- Nexstim plc is a revenue-generating, medical technology company with a pioneering navigated brain stimulation technology (nTMS) that can be used for treatment and diagnosis of vital motor and speech cortices in the brain.
- Nexstim’s Navigated Brain Treatment (NBT®) systemis the only TMS system focusing on the rehabilitation of hand and arm movement (upper limb motor disability).
- Upper limb motor disability affects approximately 50% of stroke victims, with an estimated EU and US annual market size of USD 1.8 billion.
- The NBT® system is CE marked for stroke rehabilitation and we anticipate filing for FDA clearance by end of April 2018.
- Nexstim’s NBS system is the only CE-marked and FDA-cleared non-invasive solution to pre-surgical mapping of the motor cortex in brain cancer.
- The device is non-invasive and has demonstrated a 46% increase in progression free survival in low grade gliomas versus the current invasive gold standard.
- The NBS system has been sold to approximately 140 research universities and leading hospitals in the world.
CEO Martin Jamieson’s review
I am delighted to report the progress that Nexstim has made on multiple fronts during this eventful year in which I took over as the CEO of the Company.
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. We ended the first half of 2016 with a cash position of EUR 1.8 million progressing to a healthy EUR 8.2 million as of the end of 2016, mainly due to the execution of the financing agreement.
Further to the EGM, the current cash plus cash generated from sales, and the remaining financing arrangements with Bracknor and Sitra are now estimated to finance the Company until Q4 2018. Therefore, we now estimate to have adequate financing to progress our NBT®system through to FDA clearance.
In February 2017, Nexstim commenced a new 60 patient trial of its NBT® system in post-acute stroke therapy following the approval of the supplementary protocol by the FDA in December 2016. This was received in line with the FDA’s recommendation that the data from the new trial will be combined with data from the previous Phase III trial which demonstrated clinical benefit in the patient and control group. The FDA has stated that Nexstim’s new sham coil design is appropriate for the new trial and we have worked hard to ensure the new design is able to mitigate the active affect that it had in the control group in the previous trial.
FDA has already performed their full review of the technological and safety elements of the submission and we are expecting limited size trial efficacy results in Q1 2018. We intend to file for clearance in April 2018. This de novo 510(k) clearance 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 USA, which is the largest and most lucrative market for this device.
Nexstim has been working on shifting its sales model for pre-surgical mapping (PSM) in the US to a distributor model, and has consequently implemented changes to the current business organisation in both the US and Finland. By early January 2017, we had signed three new independent sales representative agreements in the US.
Despite the major changes in the US distribution model for our NBS system, which resulted in a -15.6% decrease in revenues over the second half of 2016, we ended the full year with net sales at EUR 2.5 million.
We were also pleased that we achieved our H2 2016 target cash burn at EUR -2.0 million from our operating activities following the organizational changes implemented.
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 NBS systems in the US and also in our first sales of the NBT® system which we will launch in the largest EU markets.
We are also very excited about the future global growth potential for both our NBS and NBT® systems in the untapped and extensive Asian market.
Nexstim is continuing to focus on building futuregrowth platforms for its products through partnership agreements in the major geographic territories in Europe, the USA and Asia.
Status of clinical development
On December 21, 2016, Nexstim received the FDA’s response and comments to its limited size trial protocol (E-FIT; Electric Field Navigated 1Hz rTMS for Post-Stroke Motor Recovery Trial). The response was positive and provided Nexstim the possibility to start a new 60 patient trial in February 2017. In line with the FDA recommendation the data from the new trial will be combined with data from the previous Phase III trial. The new sham coil has been designed to address the previously active effect it had in the control group and has been deemed by the FDA to be appropriate for the new trial.
During the trial Nexstim will continue to communicate with the FDA to ensure efficient review of the subsequent submission that has been 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 sufficient for Nexstim’s NBT® system to receive marketing and sales clearance in the USA.
Nexstim estimates to receive efficacy results from the limited size trial in Q1 2018 which are anticipated to support de novo 510(k) response. De novo 510(k) clearance would allow Nexstim to start marketing and selling the NBT system for stroke rehabilitation in the USA.
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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.
Board of Directors’ Proposal on the Dividend
During its existence, 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. Further, the Company has reduced its share capital for loss coverage on 29 September 2014. Therefore, pursuant to the Finnish Companies Act, all distributions of unrestricted equity to the shareholders by the Company are subject to a three months’ public summons to the creditors until 3 October 2017. In the event dividends are distributed, all Shares entitle to equal dividends.
At the end of the financial period of 2016, the distributable assets of the group’s parent company were EUR 16,665,649.76. The Board of Directors proposes that Nexstim Plc should not pay any dividend for the financial period of 2016.
Helsinki 28 February 2017
Board of Directors
For further information please visit www.nexstim.com or contact:
Martin Jamieson, Chairman and CEO
|UB Securities Ltd (Certified Adviser)
|+358 9 2538 0246
|Citigate Dewe Rogerson
|+44 (0)207 2821066
Publication of financial information during year 2017
A conference call for analysts, investors and media will take place at 16:00 Finnish time (EET) on Tuesday 28 February 2017, 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.
Finland: +358 (0) 800914672
Sweden: +46 (0) 20 089 6388
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 2017 (H1) will be published on Wednesday, August 16, 2017.
Nexstim Annual Report 2016 (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 6, 2017.
The Annual General Meeting will be held on Tuesday, March 28, 2017 beginning at 10:00 am.
About Nexstim Plc
Nexstim is a medical technology company which has pioneered its technology in brain diagnostics with the Navigated Brain Stimulation (NBS) system as the first and only FDA-cleared and CE-marked navigated Transcranial Magnetic Stimulation (nTMS) system for pre-surgical mapping of the motor and speech cortices. Based on the same technology platform, the company has developed a system called Navigated Brain Therapy (NBT®) which is CE-marked for chronic neuropathic pain, major depression and stroke therapy. Nexstim’s shares are listed on Nasdaq First North Finland and Nasdaq First North Sweden. For more information please visit www.nexstim.com