Helius Medical Technologies, Inc. (Nasdaq:HSDT) (TSX:HSM) (“Helius”
or the “Company”), a neurotech company focused on neurological
wellness, today reported financial results for the quarter ended
March 31, 2021.
First Quarter Business Updates
- Its wholly owned subsidiary, Helius
Medical, Inc., received marketing authorization from the U.S. Food
and Drug Administration (“FDA”) for the Portable Neuromodulation
Stimulator (PoNS™) device.
- The PoNS device is indicated for
use as a short term treatment of gait deficit due to
mild-to-moderate symptoms from multiple sclerosis (“MS”) and is to
be used as an adjunct to a supervised therapeutic exercise program
in patients 22 years of age and over by prescription only.
- The Company closed an underwritten
public offering of common stock and warrants for net proceeds of
approximately $9.6 million.
- The Company received written notice
from The Nasdaq Stock Market LLC in January 2021 that the Company’s
minimum bid price deficiency has been cured and Helius was in
compliance with all applicable listing standards.
- The Centers for Medicare &
Medicaid Services (“CMS”) announced that it is finalizing a new
coverage pathway, Medicare Coverage for Innovative Technology, or
“MCIT,” for FDA-designated breakthrough medical devices cleared by
FDA.
- The MCIT rule will provide national
Medicare coverage as early as the same day as FDA market
authorization for breakthrough devices and coverage would last up
to four years.
- On May 14, 2021, CMS delayed the
effective date of the final rule until December 15, 2021. The
Company is still evaluating the recent announcement and its
implications for Helius’ reimbursement strategy.
- The Company expanded its Board of
Directors with the appointment of Sherrie Perkins, effective March
15, 2021.
First Quarter 2021 Financial Summary
- Revenue of $84 thousand, compared to revenue of $207 thousand
in first quarter of 2020.
- Operating loss of $3.5 million,
compared to operating loss of $4.0 million in first quarter of
2020.
- Net loss of $3.4 million, compared
to net loss of $4.8 million in first quarter of 2020.
- As of March 31, 2021, the
Company had cash of $11.4 million, compared to $3.3 million at
December 31, 2020. The Company had no debt outstanding as of
March 31, 2021.
“We made strong progress on our U.S. regulatory
strategy during the first quarter and were ultimately proud to
secure U.S. marketing authorization of our PoNS device for MS in
March, approximately one year since we first announced our
strategic focus on pursuing this indication,” said Dane Andreeff,
Interim President and Chief Executive Officer of Helius. “Obtaining
U.S. marketing authorization is the most important milestone in our
Company’s history, one that reflects both the safety and efficacy
profile of our innovative PoNS technology as well as the
capabilities of our regulatory and clinical affairs team. In
addition to our regulatory progress, we raised $11 million in net
proceeds through our February Public Offering and the exercise of
warrants to strengthen our balance sheet and support our operations
while continuing to control our discretionary expenses. In Canada,
while our commercialization efforts continued to be impacted by the
recent spike in COVID-19 cases and its effects on clinics and
patients, our commercial team expanded our network of authorized
PoNS clinics to a total of 33 locations as of March 31, 2021,
leaving us incrementally better positioned to drive adoption once
the environment normalizes.”
Mr. Andreeff continued: “Looking ahead to the
rest of the year, we are intently focused on preparing to
commercialize our PoNS Treatment in the U.S., which we expect to
begin in the first quarter of 2022. As part of our U.S.
pre-commercial activities, we are securing our state distribution
licenses, establishing the dedicated team to lead our
commercialization efforts and building relationships to target and
educate neurorehabilitation centers focused on the treatment of MS
patients. While we expect our initial U.S. customers to be cash
pay, we remain focused on working with CMS to obtain Medicare
coverage as part of our reimbursement strategy. Given our rapid
pace of progress in recent months, we remain convinced that we are
pursuing the most effective and efficient strategy to facilitate
the widespread adoption of our PoNS technology, bring relief to
patients in need and create value for our shareholders.”
First Quarter 2021 Financial Results
Total revenue for the first quarter of 2021 was
$84 thousand, compared to $207 thousand in the first quarter of
2020. Product sales represented approximately 92% of total revenue
in the first quarter of 2021 consistent with the prior year period.
Product sales in both periods were generated through sales of the
PoNS device pursuant to supply agreements with PoNS Authorized
clinic locations in Canada. License and fee revenue represented 8%
of sales in the first quarter of 2021, consistent with the prior
year period.
Gross profit for the first quarter of 2021 was
$69 thousand, compared to gross profit of $106 thousand in the
first quarter of 2020. Operating expenses for the first quarter of
2021 decreased $0.5 million, or 13% year-over-year, to $3.6
million, compared to $4.1 million in the first quarter of 2020.
Operating loss for the first quarter of 2021
decreased $0.5 million, or 13% year-over-year, to $3.5 million,
compared to $4.0 million in the first quarter of 2020.
Total other income for the first quarter of 2021
was $139 thousand, compared to total other expense of $755 thousand
in the first quarter of 2020.
Net loss for the first quarter of 2021 was $3.4
million, or $(1.65) per basic and diluted common share, compared to
a net loss of $4.8 million, or $(5.38) per basic and diluted common
share, in the first quarter of 2020. Weighted average shares used
to compute basic and diluted net loss per common share were 2.0
million and 0.9 million for the first quarter of 2021 and 2020,
respectively.
Net cash provided by financing activities during
the three months ended March 31, 2021 was $11.0 million.
As of March 31, 2021, the Company had cash
of $11.4 million, compared to $3.3 million at December 31,
2020. The Company had no debt outstanding at March 31,
2021.
Full Year 2021 Outlook
The Company is not providing a formal financial
outlook for the full year 2021 at this time, given the continued
uncertainty related to the duration and impact of the COVID-19
pandemic on its financial and operating results.
Conference Call
Management will host a conference call at 5:00
p.m. Eastern Time on May 17, 2021 to discuss the results of the
quarter and business outlook. Those who would like to participate
may dial 877-407-2988 (201-389-0923 for international callers) and
provide access code 13718676. A live webcast of the call will also
be provided on the Events section of the Company's investor
relations website at:
https://heliusmedical.com/index.php/investor-relations/events/upcoming-events.
For those unable to participate, a replay of the
call will be available for two weeks at 877-660-6853 (201-612-7415
for international callers); access code 13718676. The webcast will
be archived on the Events section of the Company’s investor
relations website.
About Helius Medical Technologies,
Inc.
Helius Medical Technologies is a neurotech
company focused on neurological wellness. The Company’s purpose is
to develop, license and acquire unique and non-invasive platform
technologies that amplify the brain’s ability to heal itself. The
Company’s first commercial product is the Portable Neuromodulation
Stimulator (PoNS™). For more information, visit
www.heliusmedical.com.
About the
PoNS™ Device and PoNS Treatment™
The Portable Neuromodulation Stimulator (PoNS™)
is an innovative non-surgical device, inclusive of a controller and
mouthpiece, which delivers electrical stimulation to the surface of
the tongue to provide treatment of gait deficit. The PoNS device is
indicated for use in the United States as a short term treatment of
gait deficit due to mild-to-moderate symptoms from multiple
sclerosis (“MS”) and is to be used as an adjunct to a supervised
therapeutic exercise program in patients 22 years of age and over
by prescription only. It is authorized for sale in Canada as a
class II, non-implantable, medical device intended as a short term
treatment (14 weeks) of gait deficit due to mild and moderate
symptoms from MS, and chronic balance deficit due to
mild-to-moderate traumatic brain injury (“mmTBI”) and is to be used
in conjunction with physical therapy. The PoNS™ is an
investigational medical device in the European Union (“EU”) and
Australia (“AUS”). It is currently under premarket review by the
AUS Therapeutic Goods Administration. Cautionary Disclaimer
Statement:
Certain statements in this news release are not
based on historical facts and constitute forward-looking statements
or forward-looking information within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995 and Canadian
securities laws. All statements other than statements of historical
fact included in this news release are forward-looking statements
that involve risks and uncertainties. Forward-looking statements
are often identified by terms such as “believe,” “continue,”
“expect,” “looking ahead,” “will” and similar expressions. Such
forward-looking statements include, among others, statements
regarding the COVID-19 pandemic, including its impact on the
Company, the Company’s future growth and operational progress,
including clinical and regulatory development plans for the PoNS
device, the Company’s expectations regarding the sufficiency of
funds for anticipated future operations, expected time to
commercialization, the Company’s ability to obtain four years of
Medicare coverage under the MCIT pathway, the Company’s ability to
secure state distribution licenses and build relationships with
target neurorehabilitation centers, the Company’s ability to
facilitate the widespread adoption of the PoNS technology, the
success of the Company’s business and commercialization initiatives
and objectives.
There can be no assurance that such statements
will prove to be accurate and actual results and future events
could differ materially from those expressed or implied by such
statements. Important factors that could cause actual results to
differ materially from the Company’s expectations include
uncertainties associated with the Company’s capital requirements to
achieve its business objectives, the impact of the COVID-19
pandemic, the Company’s ability to train physical therapists in the
supervision of the use of the PoNS Treatment, the Company’s ability
to secure contracts with rehabilitation clinics, the Company’s
ability to obtain national Medicare coverage and to obtain a
reimbursement code so that the PoNS device is covered by Medicare
and Medicaid, the Company’s ability to build internal commercial
infrastructure, market awareness of the PoNS device, future
clinical trials and the clinical development process, manufacturing
and supply chain risks, potential changes to the MCIT program
resulting from the 60-day deferral of the program implementation,
the product development process and FDA regulatory submission
review and approval process, other development activities, ongoing
government regulation, and other risks detailed from time to time
in the “Risk Factors” section of the Company’s Annual Report on
Form 10-K for the year ended December 31, 2020, its Quarterly
Report on Form 10-Q for the quarter ended March 31, 2021 and
its other filings with the United States Securities and Exchange
Commission and the Canadian securities regulators, which can be
obtained from either at www.sec.gov or www.sedar.com.
The reader is cautioned not to place undue
reliance on any forward-looking statement. The forward-looking
statements contained in this news release are made as of the date
of this news release and the Company assumes no obligation to
update any forward-looking statement or to update the reasons why
actual results could differ from such statements except to the
extent required by law.
The Toronto Stock Exchange has not reviewed and
does not accept responsibility for the adequacy or accuracy of the
content of this news release.
Helius Medical Technologies,
Inc.Unaudited Consolidated Balance
Sheets(Except for share data, amounts in
thousands)
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
11,397 |
|
|
$ |
3,331 |
|
Accounts receivable, net |
|
|
49 |
|
|
|
74 |
|
Other receivables |
|
|
154 |
|
|
|
156 |
|
Inventory, net |
|
|
484 |
|
|
|
389 |
|
Prepaid expenses |
|
|
779 |
|
|
|
735 |
|
Total current assets |
|
|
12,863 |
|
|
|
4,685 |
|
Property and equipment,
net |
|
|
477 |
|
|
|
486 |
|
Other assets |
|
|
|
|
|
|
|
|
Goodwill |
|
|
769 |
|
|
|
759 |
|
Intangible assets, net |
|
|
479 |
|
|
|
527 |
|
Operating lease right-of-use asset, net |
|
|
76 |
|
|
|
90 |
|
Total other assets |
|
|
1,324 |
|
|
|
1,376 |
|
TOTAL
ASSETS |
|
$ |
14,664 |
|
|
$ |
6,547 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,093 |
|
|
$ |
747 |
|
Accrued liabilities |
|
|
1,096 |
|
|
|
1,337 |
|
Operating lease liability |
|
|
61 |
|
|
|
59 |
|
Deferred revenue |
|
|
284 |
|
|
|
281 |
|
Total current liabilities |
|
|
2,534 |
|
|
|
2,424 |
|
Non-current liabilities |
|
|
|
|
|
|
|
|
Operating lease liability |
|
|
16 |
|
|
|
32 |
|
Deferred revenue |
|
|
216 |
|
|
|
220 |
|
TOTAL
LIABILITIES |
|
|
2,766 |
|
|
|
2,676 |
|
STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no
shares issued and outstanding as of March 31, 2021 and December 31,
2020 |
|
|
— |
|
|
|
— |
|
Class A Common stock, $0.001 par value; 150,000,000 shares
authorized; 2,311,868 and 1,484,362 shares issued and outstanding
as of March 31, 2021 and December 31, 2020, respectively |
|
|
2 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
135,388 |
|
|
|
123,872 |
|
Accumulated other comprehensive loss |
|
|
(1,227 |
) |
|
|
(1,099 |
) |
Accumulated deficit |
|
|
(122,265 |
) |
|
|
(118,903 |
) |
TOTAL STOCKHOLDERS’
EQUITY |
|
|
11,898 |
|
|
|
3,871 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
$ |
14,664 |
|
|
$ |
6,547 |
|
|
|
|
|
|
|
|
|
|
Helius Medical Technologies,
Inc.Unaudited Consolidated Statements of
Operations and Comprehensive Loss (Amounts in
thousands except share and per share data)
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2021 |
|
|
2020 |
|
Revenue: |
|
|
|
|
|
|
|
|
Product sales |
|
$ |
77 |
|
|
$ |
191 |
|
Fee revenue |
|
|
— |
|
|
|
9 |
|
License revenue |
|
|
7 |
|
|
|
7 |
|
Total operating
revenue |
|
|
84 |
|
|
|
207 |
|
Cost of
sales: |
|
|
|
|
|
|
|
|
Cost of product sales |
|
|
15 |
|
|
|
101 |
|
Gross
profit |
|
|
69 |
|
|
|
106 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
1,316 |
|
|
|
1,120 |
|
Selling, general and administrative |
|
|
2,197 |
|
|
|
2,862 |
|
Amortization expense |
|
|
57 |
|
|
|
126 |
|
Total operating expenses |
|
|
3,570 |
|
|
|
4,108 |
|
Operating
loss |
|
|
(3,501 |
) |
|
|
(4,002 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
|
Other income |
|
|
— |
|
|
|
6 |
|
Change in fair value of derivative financial instruments |
|
|
— |
|
|
|
4 |
|
Foreign exchange gain (loss) |
|
|
139 |
|
|
|
(765 |
) |
Total other income
(expense) |
|
|
139 |
|
|
|
(755 |
) |
Net loss |
|
|
(3,362 |
) |
|
|
(4,757 |
) |
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
(128 |
) |
|
|
636 |
|
Comprehensive
loss |
|
$ |
(3,490 |
) |
|
$ |
(4,121 |
) |
Net loss per
share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(1.65 |
) |
|
$ |
(5.38 |
) |
Diluted |
|
$ |
(1.65 |
) |
|
$ |
(5.38 |
) |
Weighted average
shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
2,040,839 |
|
|
|
884,915 |
|
Diluted |
|
|
2,040,839 |
|
|
|
884,915 |
|
|
|
|
|
|
|
|
|
|
Helius Medical Technologies,
Inc.Unaudited Condensed Consolidated Statements of
Cash Flows(Amounts in thousands)
|
|
|
|
|
|
March 31, |
|
|
|
2021 |
|
|
2020 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(3,362 |
) |
|
$ |
(4,757 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Change in fair value of derivative financial instruments |
|
|
— |
|
|
|
(4 |
) |
Stock-based compensation expense |
|
|
527 |
|
|
|
842 |
|
Unrealized foreign exchange (gain) loss |
|
|
(132 |
) |
|
|
738 |
|
Depreciation expense |
|
|
28 |
|
|
|
37 |
|
Amortization expense |
|
|
57 |
|
|
|
126 |
|
(Recovery of) provision for doubtful accounts |
|
|
(11 |
) |
|
|
139 |
|
Amortization of ROU asset |
|
|
15 |
|
|
|
35 |
|
Intangible asset impairment |
|
|
— |
|
|
|
174 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
36 |
|
|
|
(39 |
) |
Other receivables |
|
|
2 |
|
|
|
240 |
|
Inventory |
|
|
(95 |
) |
|
|
4 |
|
Prepaid expenses |
|
|
(44 |
) |
|
|
(77 |
) |
Operating lease liability |
|
|
(15 |
) |
|
|
(40 |
) |
Accounts payable |
|
|
234 |
|
|
|
(626 |
) |
Accrued liabilities |
|
|
(160 |
) |
|
|
(459 |
) |
Deferred revenue |
|
|
(1 |
) |
|
|
(84 |
) |
Net cash used in
operating activities |
|
|
(2,921 |
) |
|
|
(3,751 |
) |
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Purchase of property and
equipment |
|
|
(19 |
) |
|
|
(3 |
) |
Internally developed
software |
|
|
(2 |
) |
|
|
(7 |
) |
Net cash used in
investing activities |
|
|
(21 |
) |
|
|
(10 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Proceeds from the issuance of
common stock and accompanying warrants |
|
|
11,037 |
|
|
|
2,992 |
|
Share issuance costs |
|
|
(1,331 |
) |
|
|
(340 |
) |
Proceeds from the exercise of
warrants |
|
|
1,314 |
|
|
|
— |
|
Net cash provided by
financing activities |
|
|
11,020 |
|
|
|
2,652 |
|
Effect of foreign
exchange rate changes on cash |
|
|
(12 |
) |
|
|
10 |
|
Net increase
(decrease) in cash |
|
|
8,066 |
|
|
|
(1,099 |
) |
Cash at beginning of
year |
|
|
3,331 |
|
|
|
5,459 |
|
Cash at end of
year |
|
$ |
11,397 |
|
|
$ |
4,360 |
|
Investor Relations Contact:
Westwicke Partners on behalf of Helius Medical Technologies, Inc.
Jack Powell, Vice President
investorrelations@heliusmedical.com
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