Third quarter revenues were $5.9 million, up 38% over the same quarter in the prior year
JERUSALEM, Israel and HACKENSACK, N.J., Nov. 25, 2019 – BrainsWay Ltd. (NASDAQ & TASE: BWAY) (“BrainsWay” or the “Company”), a global leader in the advanced non-invasive treatment of brain disorders, today reported financial results for the quarter ended September 30, 2019, and provided an operational update.
“We are pleased with our solid performance in the third quarter of this year,” said Dr. David Zacut, Chairman, Interim CEO and a founder of BrainsWay. “These positive results reflect the continued increase in demand for our Deep Transcranial Magnetic Stimulation system (Deep TMS) and the sustained momentum of our business during the Company’s strategic transition to U.S.-based leadership, which began during the third quarter with the relocation of our Chief Financial Officer and Chief Operations Officer, Hadar Levy, to New Jersey. Our third quarter performance is further notable in light of the seasonality typically associated with this quarter. We look forward to continuing to implement our growth strategy through our focus on commercial excellence and scientific advancement.”
Financial Results for the Third Quarter Ended September 30, 2019
Quarterly record revenue of $5.9 million, an increase of 38% over the third quarter of 2018.
Recurring revenues of $3.4 million, an increase of 40% over the third quarter of 2018.
Since September 30, 2018, BrainsWay’s installed base has increased by 138, reaching an all-time high of 488 Deep TMS systems and reflecting a quarter-over- quarter increase of 32 systems.
As of September 30, 2019, the Company has shipped 132 OCD coils as add-on helmets to certain of BrainsWay’s new and existing systems since marketing clearance was obtained in August 2018.
Gross margin for the third quarter of 2019 was 81%, compared to 78% during the third quarter of 2018.
Research and development (R&D) expenses for the quarter were $1.9 million, compared to $1.4 million in the same period in 2018. The increase was due to the continued development of BrainsWay’s proprietary Deep TMS technology, including completion of the smoking cessation study and conducting clinical trials for the treatment of post-traumatic stress disorder and other brain disorders.
Sales and marketing expenses for the quarter were $3.5 million, compared to $2.0 million in the same period in 2018. The increase was primarily driven by an expansion of the sales force and enhanced marketing activities for both MDD and OCD.
General and administrative expenses for the quarter were $1.5 million, compared to $0.9 million for the same period in 2018. The increase was due to additional costs associated with BrainsWay being a public company in the U.S. and an increase in an allowance for doubtful accounts.
Operating expenses totaled $7.0 million, compared to $4.3 million in the third quarter of 2018. The increase was primarily driven by the enhanced sales and marketing activities, and the increase in R&D expenses, as well as the increased general and administrative costs incurred following BrainsWay’s IPO in the U.S.
Operating loss for the quarter was $2.2 million, compared to $0.9 million for the same period in 2018. The increase in operating loss is in-line with the Company’s strategy to accelerate growth by increasing the size of the sales force and enhancing marketing activities globally.
Net loss for the quarter was $2.6 million, compared to $1.5 million in the third quarter of 2018.
The basic and diluted net loss per ordinary share for the third quarter of 2019 was $0.12 per share, compared to $0.09 per share in the third quarter of 2018.
Cash used in operating activities for the three months ended September 30, 2019, was $2.1 million, compared to $0.3 million in the third quarter of 2018.
During the third quarter of 2019, the Company increased its net trade receivables by $0.6 million. Cash used in investing activities was $1.2 million, compared to $0.5 million in the third quarter of 2018. The increase was primarily driven by increased purchase of system components in order to meet the anticipated demand for the Company’s Deep TMS systems.
Financial Position
As of September 30, 2019, the Company had cash and short-term investments of approximately $23.9 million, compared to $27.6 million at June 30, 2019. BrainsWay has no debt (other than certain liabilities with respect to R&D grants).
Recent Corporate Highlights
Expanded commercialization efforts to increase adoption of Deep TMS, including hiring additional sales representatives in the U.S.
Completed enrollment necessary for interim analysis in multicenter post-traumatic stress disorder study; interim results anticipated by year-end 2019.
Completed planned protocol for opioid abuse study; the Company expects to submit an investigational new device application with the FDA and, if approved, begin the trial in Q1 2020.
Conference Call and Webcast
BrainsWay’s management will host a conference call on Monday, November 25, 2019, at 9:00 a.m. Eastern Time to discuss these results and answer questions.
Monday, November 25, at 9:00 AM Eastern Time:
Telephone conference Dial in information: Standard international: +44 (0) 2071 928000 Israel, Tel Aviv (Local): +972 3 721 7998 United States, New York (Local): +1 631-510-7495 Confirmation Code: 3672577 To listen to a live webcast, please visit the Investors section of the BrainsWay website at www.brainsway.com. The webcast replay will be available on the website for two weeks following the completion of the call.
About BrainsWay
BrainsWay is a commercial stage medical device company focused on the development and sale of non-invasive neuromodulation products using the Company’s proprietary Deep Transcranial Magnetic Stimulation (Deep TMS) technology for the treatment of major depressive disorder (MDD) and obsessive-compulsive disorder (OCD), for which BrainsWay received marketing authorization from the U.S. Food and Drug Administration (FDA) in 2013 (for MDD) and in August 2018 (for OCD). BrainsWay is currently conducting clinical trials of Deep TMS in other psychiatric, neurological and addiction disorders, including smoking cessation and post-traumatic stress disorder, and is planning trials for opioid addiction, fatigue in multiple sclerosis (MS) and post-stroke rehabilitation.
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