Nexstim expands its network of partner clinics

Translation: Original published in Finnish on 10/15/2024 at 7:16 am EEST.

Nexstim has issued a press release announcing a new strategic investment in a US-based TMS clinic management services organization (MSO). We estimate that this investment is moderate in size and represents Nexstim's third consecutive investment in its clinic network. The minority investment in the MSO gives Nexstim a share in the value creation of the company and also gives Nexstim access to, for example, anonymous treatment data, which will help in the development and marketing of the company's services.

Receiving a portion of the TMS clinic's value creation through the MSO

The announced collaboration is with Rapid Recovery TMS Clinic and its management services organization (MSO) in North Carolina, USA. Nexstim's US subsidiary has signed into a strategic partnership agreement and a minority investment in the MSO. The MSO provides a range of administrative and professional services to the TMS clinic for a fee. As a result, Nexstim will receive a portion of the value created by the clinic through its investment in the MSO. The collaboration will also provide Nexstim with, for example, anonymized treatment data that the company can use to enhance its patient registry. According to the release, the TMS clinic ordered Nexstim's new NBS 6 system as soon as it became available in 2023 and has been an active user of the system ever since.

Expanding clinic network part of Nexstim's strategy

The press release did not specify the size of the investment, but some indication is given by the first similar investment of 0.5 MEUR in a Californian clinic management services organization in late 2021. We understand that this is the third investment in an MSO, with the previous one announced in January 2024. We estimate that these investments will generate a moderate amount of recurring revenue for Nexstim and provide direct data on the customer interface and treatment effectiveness. This will contribute to the company's ability to develop its products and services over time. Our forecasts for recurring revenue include growth from multiple sources in the coming years. We estimate the newly announced collaboration to be minor in size and therefore see no need to change our forecast at this time.