OCD is the leading clinical indication of Brainsway®. If the trial succeeds, it would be advisable to remember what happened to the share price at the completion of the depression study.
By Tomer Korenfeld
It’s no secret that I love Brainsway. I believe the change in business focus led by company CEO, Dr. Guy Ezekiel, was successful over the past year, and perhaps this trend will continue throughout the upcoming year. This article will focus on what is less familiar to investors – the true dream offered by the company to investors - which can change the widespread approach to the company’s value.
Nowadays, Brainsway is holding several multi center trials. Each one of the trials can provide Brainsway with an additional foothold in international activities. The present survey will focus on the most interesting trial of the four – OCD. I will try in this survey to explain what OCD actually is, what the structure of the trial is and when its results are expected. Please note – this is not an attempt to assess whether the trial will succeed or fail, as I’m no prophet. However, I will say that I truly hope Brainsway will not disappoint in the framework of the trial.
Just to clarify – the survey does not allude to the heart of the Brainsway’s activity – depression treatment – which is FDA cleared and has been clinically proven (for a company product) but only to the indication which is under development and in a clinical trial.
What is OCD?
OCD is an emotional disorder characterized by invasive and compulsive thoughts which cause anxiety. The patient performs ceremonial repetitive actions in order to eliminate the irrational thoughts and reduce anxiety. Actually, this is a chronic disorder accompanied by significant functional disorder.
Brainsway says that 2% of the world population will experience the disorder sometime in their lifetime. In the US, each year around 1% or 3.2 million patients suffer from the disorder. As of today, the treatment of the disorder is medication or psychotherapy. However, 40% of patients do not respond to these treatments sufficiently and 10% cannot be helped at all. Research assesses that the annual cost of treating patients in US alone is 5 billion USD.
The Deep TMS system developed by Brainsway was first developed for treating depression but was adapted to different stimulation areas relating to a large number of indications including OCD. Brainsway’s treatment is noninvasive and performed by an operator who undergoes brief training. The treatment is performed by putting a helmet on the head of the patient. At Brainsway, each treatment is 15-20 minutes, administered for 4 consecutive weeks, so that each patient receives 12-20 treatments.
Brainsway’s system has a number of advantages over other existing treatments. Compared to surface TMS, Brainsway can reach significantly deeper areas and effectively deal with the area of the brain associated with the condition. Also, you can simultaneously affect a network of brain areas related to the disorder. When compared with existing medication treatment, there are advantages – fewer side effects, no long term commitment to medication, possibly faster response time and more effective treatment with Deep TMS.
To prove the efficacy of the treatment, Brainsway is holding a multicenter trial according to a format approved by the FDA. The trial is limited to 98 participants only. The overall cost of the trial is also low, around a million USD. As of the publication date of the annual report, there are 42 patients, and the company estimates that the trial will be completed in 2016, depending on the recruitment pace.
Brainsway isn’t randomly betting on the OCD trial. Earlier clinical trials showed the treatment to be most promising. For instance, research results published in September 2014, including 41 participants, showed an improvement of 28% in the symptom severity in Treatment Resistant Depression patients who did not respond to long-term medication treatment. These results led the company to go for an OCD multicenter trial. If the company can repeat the clinical efficiency achieved in the earlier trial, the way to the desired clearance is clear. Even the authorities in Europe already confirmed the product for distribution in December 2014, but Brainsway prefers to focus on the US market.
Reminder – what happened when Brainsway published the results of the depression trial?
In April 2012, Brainsway published the results of the multi-center trial for treating depression. This was a wide-ranging study that included 200 patients in 21 medical centers. The significant clinical results led to a sharp rise in the share price. In January 2013, when the company received FDA clearance, the stock experienced another significant jump.
I believe that if Brainsway’s trial succeeds, the events of 2012-2013 could repeat themselves in two steps as before. Furthermore, Brainsway’s technology would be exposed to a new market - the United States. It should be noted that none of the surface TMS companies offer OCD patients a solution as of now.
Brainsway is currently active in the United States in the area of depression. It’s unlikely that the company will need a lot of sales manpower to market the system for the OCD indication. However, the way to marketing is still long. The Chinese philosopher Lao-Tzu said that even a thousand miles start with a small step. Brainsway’s journey for treatment of OCD patients has already been launched, but over the next year, we will see whether it ends successfully. Fingers Crossed.
Disclaimer – The above content is not a stock market recommendation. The writer does not hold company shares, nor does he engage in the stock market in the next three days.
To see the original article in Hebrew, click here.