Nexstim reported results on the use of accelerated iTBS protocol

Translation: Original comment published in Finnish on 6/9/2023 at 7:03 am.

On Thursday, Nexstim reported results from a pilot study on the use of accelerated iTBS protocol in treatment of severe depression with Nexstim NBT® System on 20 patients. At the end of the 12-week follow-up period, 25% of patients benefited significantly (remission) from the treatment. We do not think one can draw far-reaching conclusions from a narrow study, but the figure is equal to or lowish compared to results from other similar studies. We do not believe the success of Nexstim relies on the results of this pilot study, so the reported information does not affect our view of the share.

The pilot study examined the benefits of the accelerated TMS protocol

The study was carried out at Kuopio University Hospital with 20 patients suffering from severe depression. Accelerated protocols have been thought to increase demand for TMS treatments due to better accessibility of a shorter treatment period. Patients were treated for five days with Nextsim’s NBT (transcranial magnetic stimulation TMS) device instead of the normal treatment period of about 4-6 weeks. At the end of the 12-week follow-up period, 25% of patients were in clinical remission. We believe the leader of accelerated treatments is Nexstim's partner Magnus Medical, whose SAINT protocolclearly helped over 50% to remission in a double-blind randomized controlled trial. According to a high-quality multisite study, long protocols have achieved approximately 27-29% remission. According to Nextsim’s own patient register, the remission of patients treated is around 50%. The results now seen are therefore in line with the average long protocol TMS results but below the results of Magnus Medical's accelerated SAINT protocol. We interpret that the results are not encouraging enough to justify significant investments in future development of the company's own protocol.

Development will continue to be based on strategic partnerships

The company commented on the results itself by stating that the accelerated protocol does not seem to offer clear benefits for using the accelerated protocol, if compared to the conventional protocol, other than the smaller number of patient treatment days in total. The company said that it continues to develop the future use of accelerated iTBS protocols mainly through strategic partnerships. We estimate that this refers mainly to Magnus Medical, who is introducing its own device partly based on the licensing of Nexstim’s technology and its accelerated SAINT protocol to the market in the near future. Nexstim will receive license fees for 5 years once device sales begin.

The study now reported has little importance for Nexstim’s equity story

We believe that the value creation of Nexstim in accelerated protocols has been based mainly on the Magnus Medical partnership and the company's resources for developing its own protocols are quite limited. In our opinion, this academic study had a value as a small positive option if the results had been particularly promising. We believe Nexstim's comments do not indicate that the company will invest in the development of own short protocols in the future. However, the company's equity story will in future be clearly based on device sales and recurring revenue, licensing income and clinic partnerships.