Nexstim received marketing authorization for its NBS6 product also in Europe

Translation: Original comment published in Finnish on 5/19/2023 at 6:10 am.

On Wednesday, Nexstim announced it had received MDR certification (Medical Device Regulation) for its NBS6 product and quality management system. This certification enables selling the new product generation NBS6 in the EU. The company already reported it had received FDA approval for the same product version for the treatment of Major Depressive Disorder. Regulatory approvals are expected positive news, which at this stage have no impact on our estimates. In the near term we expect a slightly livelier order intake from the company than in the quiet start of the year supported by new marketing authorizations.

The new product generation especially improves usability

We believe the NBS6 product mainly contains the same capabilities as the previous product generation. In other words, it can be applied to both diagnostic and therapy applications. However, the usability of NBS6 should be significantly improved, which we believe supports product sales to, e.g., hospitals where the personnel using the product may change frequently. NBS6 is a modular technology that customers can purchase, e.g., for diagnostic applications, and later extend to other applications with a software update. Thus, we believe the modularity opens up further sales opportunities for Nexstim. The authorizations now received are for therapy applications, i.e. for treatment of Major Depressive Disorder and chronic pain in the EU and for treatment of Major Depressive Disorder in the US. We also expect the product to be authorized for diagnostic applications later.

The authorization supports long-term demand

The news about the authorizations were expected, as the company announced it was expecting authorizations in connection with the financial statements. However, the fact that MDR certification was received at this stage was a positive surprise to us, as there have been long delays in application processing. Based on available information it seems that Nexstim’s system sales have been slightly slower than in the comparison period, but we expect the product version available now will boost sales in the future. For the time being, we do not see any need to change our estimates and view.

In addition to system sales, possible openings in expanding the network of partner clinics and license fees beginning act as share drivers this year. Nexstim’s partner Magnus Medical has said that sales of its system will begin this year, which should generate license fees for Nexstim. However, a more precise schedule or details are not yet known.