NEXSTIM PLC HALF-YEARLY REPORT 1 JANUARY – 30 JUNE 2016 (UNAUDITED)
Company announcement, Helsinki, 17 August 2016 at 9:00 am
Company Highlights, January – June 2016
- NBS revenues increased 38.8% to EUR 0.9 million (2015: EUR 0.6 million)
- Submission of FDA 510(k) De Novo documentation for Navigated Brain Therapy (NBT®) system for stroke rehabilitation, following halt of Phase III multi-centre trial
- CE mark registration for NBT® for treatment of chronic neuropathic pain
- Appointment of Rohan Hoare as a new member of the Board and Martin Jamieson as CEO
Post period end highlight
- Long-term financing arrangements in the form of a joint deal with Bracknor and Sitra
- Financing arrangements includes a convertible bond facility of EUR 5 million, stand-by equity facilities of EUR 5 million and EUR 1.5 million, a directed share issuance of EUR 500,000 and warrants
- Arrangements are subject to approval at Nexstim’s EGM on 18 August 2016 and receipt of required authorisations
- Update in strategy and future outlook
Status of clinical development
The Company has been building clinical evidence by conducting a Phase III multi-centre clinical trial to demonstrate the effectiveness of Nexstim’s Navigated Brain Therapy NBT® system in post-acute stroke therapy. On June 28, 2016 Nexstim announced the submission of 510(k) De Novo documentation to the US Food and Drug Administration (FDA) for its NBT® system for stroke rehabilitation as a next step towards securing marketing clearance in the United States.
Further to the Company’s announcement on 31 March 2016, the documentation submitted to the FDA on the NICHE (Navigated Inhibitory rTMS to Contralesional Hemisphere) study supports the hypothesis of a new mode of therapy. The submission includes full data from a total of 173 patients.
Analysis of the study data showed clinically meaningful responses and, surprisingly, significant improvement in both the active NBT® and sham trial groups. Upon detailed analysis of the data, the results of the study showed that 66 percent of subjects responded to treatment by gaining clinically important improvement of function. There was no statistically significant difference between the active and sham treatment arms. Patients in both study arms obtained greater functional benefits than those expected by experts and in published research. The submission includes the Company’s analysis of these findings which concludes that the control group was active, explaining the unexpected positive results.
Nexstim expects to have initial feedback on the 510(k) De Novo documentation from the FDA within 60 to 90 days of the submission, 28 June 2016. The NBT®system is already CE-marked for stroke rehabilitation.
CEO Martin Jamieson’s review
As Chairman of the Board since December 2015 and as the new CEO of Nexstim since April, I’m excited to see the real progress that the Company has made in multiple areas during first half of 2016.
Following the halt of the Phase III multi-centre trial, Nexstim has submitted FDA 510(k) De Novo documentation for the NBT® system for stroke rehabilitation. In addition to this important milestone, Nexstim has also broadened its strategic focus towards further therapeutic applications for NBT®. This will involve concentrating on growth, expanding our markets with partnerships as well as focusing on evaluating growth in already CE marked indications, primarily stroke but also depression and chronic pain.
As part of the strategic changes, Nexstim will shift its future sales model for pre-surgical mapping (PSM) in the US to a distributor model, with necessary changes to the current business organisation in both the US and Finland. Nexstim is also planning for preparing further market and patient data to support the commercialisation of NBT®.
Revenues in the first half of the year increased by 38.8% to EUR 0.9 million compared to the equivalent period in 2015 (EUR 0.6 million). Sales of NBS systems increased in the US compared to first half of 2015 and we estimate that the global sales pipeline will remain strong for the full financial year of 2016.
Nexstim negotiated a long-term financing arrangements in the form of a joint deal with Bracknor Investment and The Finnish Innovation Fund, Sitra. Nexstim ended the first half of 2016 with a cash position of EUR 1.8 million. The current cash and cash generated from sales, the financing arrangements with Bracknor and Sitra, combined with the strategic changes in the organisation, is estimated to finance the Company until beginning of financial year 2018.
Nexstim was pleased to announce the appointment of Rohan Hoare to the Board of Directors at its AGM in March. We welcome Rohan and the contribution his extensive experience of the neuromodulation industry will bring to the Board.
I look forward to continue managing Nexstim as CEO at least until the FDA 510(k) De Novo application process for NBT® has come to an end.
Key performance indicators
|EUR in thousands||1-6/2016
|Depreciation and amortisation||-168.8||-168.7||-386.0|
|Other operating expenses||-2,410.8||-3,422.9||-7,843.1|
|Profit/ -Loss for the period||-4,226.5||-4,555.0||-9,827.0|
|Earnings per share (EUR)||-0.53||-0.64||-1.37|
|Diluted earnings per share (EUR)||-0.47||-0.58||-1.24|
|Cash flows from operating activities||-5,240.7||-5,275.3||-9,608.6|
|Cash in hand and at banks||1,815.6||6,071.1||6,874.7|
|Equity ratio (%)||-3.24|
|Number of shares in the end of the period (pcs)||8,116,833||7,130,758||8,010,758|
|Average number of shares during the period (pcs)||8,031,740||7,130,758||7,154,868|
|Diluted number of shares in the end of the period (pcs)||9,497,698||7,917,698||8,797,698|
|Diluted average number of shares during the period (pcs)||8,936,160||7,917,698||7,941,808|
Due to the switch into distributor model in the US, the Company estimates that its net sales will decrease during financial year 2016. Due to lower level of operational expenses, loss for financial year 2016 is expected to be less than for the financial year 2015.
Helsinki 17 August 2016
Board of Directors
For further information please visit www.nexstim.com or contact:
+44 771 516 3942
Martin Jamieson, Chairman and CEO
UB Securities Ltd (Certified Adviser)
+358 9 2538 0246
Consilium Strategic Communications
+44 (0)20 3709 5700
Mary-Jane Elliott / Ivar Milligan / Laura Thornton
Publication of financial information
A conference call for media, investors and analysts will take place at 3.00 pm Finnish time on Wednesday 17 August 2016. 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 9 23195187
UK: +44 1452 555 566
US: +1 631 5107 498
The call ID number is: 58978731
Financial statements release for the year ending 31 December, 2016 will be published on or about 28 February 2017.
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 visitwww.nexstim.com