Company announcement, Helsinki 27 February 2025 at 9 am (EET)
NEXSTIM PLC'S FINANCIAL STATEMENTS BULLETIN 2024
NEXSTIM CONTINUED PROFITABLE GROWTH AND SIGNED SIGNIFICANT PARTNERSHIPS
July-December 2024
- The company's net sales were EUR 5.6 million (4.7), with an increase of 17.2%. All net sales were comparable.
- EBITDA was EUR 0.8 million (0.6)
- The operating result was EUR 0.3 million (0.2)
- The profit for the period was EUR 0.1 million (0.1)
- Cash flow from operating activities was EUR 1.2 million (-0.9)
- System sales were EUR 3.6 million (3.0), with an increase of 19.5%. Recurring net sales were EUR 2.0 million (1.8), with an increase of 13.3%
- Nexstim and Brainlab AG signed a development and distribution cooperation agreement. The collaboration concerns the development of solutions for the non-invasive mapping of specific parts of the brain and Brainlab's role as distributor for certain Nexstim products.
- At the end of the year Brainlab subscribed for Nexstim shares for EUR 1.1 million. In addition, Brainlab has the right to subscribe for new Nexstim shares based on special rights for a total amount of EUR 4.0 million until 31 March 2027.
January-December 2024
- The company's net sales increased by 20.5% to EUR 8.7 million (7.2). All net sales were comparable.
- EBITDA was EUR 0.3 million (-0.5)
- The operating result was EUR -0.5 million (-1.2)
- The profit for the period was EUR -0.9 million (-1.3)
- Cash flow from operating activities was EUR 1.9 million (-2.3)
- System sales were EUR 4.8 million (4.1), with an increase of 17.3%. Recurring net sales were EUR 3.9 million (3.2), with an increase of 24,7%
- The net sales of the Diagnostics Business increased by 5.9%, to EUR 4.5 million (4.3).
- The net sales of the Therapy Business increased by 41.8%, to EUR 4.2 million (3.0).
Key events after the 2024 financial year
On January 15 2025, Nexstim Plc and Sinaptica Therapeutics, Inc. announced initiation of co-development of the SinaptiStim® precision neuromodulation system to treat Alzheimer's disease.
Business overview
Nexstim is a Finnish medical technology company operating in international markets. Its proprietary navigated Transcranial Magnetic Stimulation (nTMS) technology allows for personalized treatment and diagnostics for patients with challenging brain diseases and disorders. Nexstim provides solutions for non-invasive brain stimulation through diagnostic and therapy applications.
Key performance indicators
| (EUR thousand) | 7-12/2024 6 months | 7-12/2023 6 months | Change, % | 1-12/2024 12 months | 1-12/2023 12 months | Change, % |
| Net sales | 5,559 | 4,743 | 17.2 % | 8,735 | 7,246 | 20.5 % |
| Gross margin | 4,298 | 3,653 | 17.7 % | 6,901 | 5,645 | 22.3 % |
| Gross margin, % | 77.3 % | 77.0 % | - | 79.0 % | 77.9 % | - |
| Adjusted comparable gross margin* | 4,298 | 3,653 | 17.7 % | 6,901 | 5,645 | 22.3 % |
| Adjusted comparable gross margin, % | 77.3 % | 77.0 % | - | 79.0 % | 77.9 % | - |
| Personnel expenses | -2,502 | -2,164 | 15.6 % | -4,784 | -4,429 | 8.0 % |
| Other operating expenses | -1,784 | -1,608 | 11.0 % | -3,347 | -3,092 | 8.2 % |
| Operating result | 329 | 159 | 106.4 % | -535 | -1,228 | -56.4 % |
| Profit for the period | 56 | 115 | -51.4 % | -892 | -1,328 | -32.8 % |
| Earnings per share** | 0.01 | 0.02 | -51.9 % | -0.13 | -0.20 | - |
| Diluted earnings per share (EUR)** | 0.01 | 0.01 | -54.0 % | -0.11 | -0.17 | - |
| Cash flow from operating activities | 1,181 | 914 | - | 1,881 | -2,269 | -100.0 % |
| Cash in hand and at bank | 3,864 | 1,455 | 165.7 % | 3,864 | 1,455 | 165.7 % |
| Total equity | 3,700 | 2,836 | 30.4 % | 3,700 | 2,836 | 30.4 % |
| Equity ratio (%) | 31.2 % | 31.5 % | - | 31.2 % | 31.5 % | - |
Future outlook for year 2025
The company estimates its net sales to grow and operating result to improve.
Mikko Karvinen, CEO of Nexstim:
The end of 2024 was in line with our expectations for Nexstim in terms of net sales growth and profit improvement. During the second half of 2024, we achieved record total net sales of EUR 5.6 (4.7) million with a 17.2% increase. Gross margin increased to EUR 4.3 (3.7) million, driven by the favorable development of our sales volumes and prices as well as the successful procurement of key system components. We were particularly pleased with the positive performance in both EBITDA and operating profit in the second half of the year. Net sales for the full year 2024 increased by 20.5% to EUR 8.7 (7.2) million. With the increase in net sales and gross margin, we also achieved a positive development in EBITDA for the full year, which was positive for the first time by EUR 0.3 (-0.5) million excluding non-recurring license income. The operating result for the full year also showed a trend in the right direction at EUR -0.5 (-1.2) million, with a result for the financial year of EUR -0.9 (-1.3) million. The result was burdened by non-recurring legal and administrative costs of EUR 0.2 million for the Brainlab/Sinaptica cooperation negotiations and non-recurring costs of EUR 0.2 million for financing the cooperation project. I would like to thank Nexstim's customers, employees, partners and investors for the continuation of this positive development.
In line with our main objective of Nexstim's strategy 2025-2028, we have continued to focus on profitable revenue growth and our sales forecast for 2025 looks promising. This growth is now supported by our strengthened global network of distributor partners following the Brainlab partnership agreement at the end of last year, which we are now seeking to capitalise on from the outset, particularly in the marketing and sales of diagnostic systems in the US and Europe. For the Diagnostics business, it will be increasingly crucial in the future that we develop and train our network of partners in close cooperation with Brainlab. This will enable us to deliver our sales and marketing message effectively and comprehensively to as many of Brainlab's more than 6 700 existing customers as possible. In addition to this collaboration, Nexstim's direct sales and marketing activities will have significant opportunities to develop our Therapeutics business, research and neuroscience customers and our network of clinical partners. We will continue to leverage our knowledgeable and efficient global team organization to ensure positive profitable growth. This was reflected in a modest 8% increase in operating expenses for the full year 2024, while enabling a 22% increase in gross margin. In our current therapeutic application areas (MDD, severe depression and chronic pain), we are already achieving clear clinical results with our unique technology and contributing to the profitability of our customers' operations. In the strategic period we will strengthen our competitiveness in these areas while actively seeking opportunities for new therapeutic indications. We are also continuing negotiations with our partner Sinaptica for a definitive agreement with the aim of enabling them to further explore Alzheimer's treatment and thereby potentially enter a long-term partnership to further scale up the use of our technology in care.
Diagnostics and Therapy business update
We have continued to grow our Diagnostics (NBS, Navigated Brain Stimulation) and Therapy (NBT®, Navigated Brain Therapy and NBS 6) businesses with new system sales in our key markets in the US and Europe. This growing portfolio of systems is generating a steady stream of recurring revenue, adding stability and predictability to our operations.
The Diagnostics business grew during 2024 with net sales of EUR 4.5 (4.3) million, an increase of 5.9%. We delivered a total of 13 new diagnostics systems during 2024. To date, more than 240 diagnostic system have been sold to research universities and leading hospitals around the world. We are pleased that more and more of our customers want to use the Nexstim system for both diagnostic and therapeutic purposes. The NBS System 5 configuration, NBS 5+, has enabled the use of diagnostic and therapeutic applications on the same system. This offering allows the US market to have all FDA 510(k) indications available on the same system. Most diagnostic systems delivered during 2024 have both diagnostic and therapeutic applications. We see the combination system as a clear competitive advantage and aim to launch the latest generation of NBS 6 combination systems in key markets through regulatory approvals during 2025.
Therapy net sales increased by 41.8% in 2024 to EUR 4.2 (3.0) million, driven by the new NBS 6 therapy system, particularly in therapy system sales, which saw a 68.7% year-on-year increase. Increased service and maintenance contracts, disposable parts sales and system leases, driven by the growth in our therapy system portfolio, accounted for a 28.6% increase in recurring net sales. During 2024, we delivered a total of 17 therapy systems; 12 to North America and 5 to Europe and the rest of the world. At the end of 2024, there were a total of 107 Nexstim systems with therapy software installed worldwide (40 in the US and 67 in Europe and the rest of the world) for the treatment of depression and chronic neuropathic pain. This number includes both NBT® and NBS 6 devices and NBS devices with optional additional NBT software installed.
In addition to the already delivered systems mentioned above, we had an open backlog of 5 undelivered systems at the end of 2024.
In June 2024, we announced a disagreement regarding the licensing of the technology we licensed to the US-based medical technology company Magnus Medical, Inc. Nexstim received additional information from them regarding the launch of its first commercial product, which, based on further analysis by the Company and an external party, gave rise to a disagreement regarding the use of the licensed technology. Nexstim continues to gather additional information regarding Magnus Medical's commercial product and plans to take actions to defend its financial interests and intellectual property rights under a long-term agreement. The Company does not currently expect to receive royalty revenues from Magnus Medical during 2025 in its business forecasts. Nexstim does not currently provide an estimate of the total value or financial expectations for the royalty period due to ongoing discussions regarding the dispute.
As of December 31, 2024, Nexstim's cash and cash equivalents amounted to EUR 3.9 (1.5) million and the cash flow from operating activities was EUR 1.9 million (-2.3). The company strengthened its cash position at the end of the second half of the year through the subscription of EUR 1.1 million of Nexstim shares by Brainlab AG.
Strategy continues to focus on growth and profitability
In line with our strategy for 2025-2028, Nexstim will continue to enable patients to receive personalized and effective treatment and diagnostics for severe brain diseases and disorders. During 2024, we invested in a process of close interaction between Nexstim's Board of Directors, management team, staff and our clientele to update our strategy. The implementation of the strategy is already underway and more detailed plans and potential projects will follow in the new year 2025 alongside the promotion of the business. Our strategy will continue to rely on strong growth in both diagnostics and therapeutics. The company's first strategic objective for 2025 is to continue profitable net sales growth and improve the operating result for the financial year. The growth and profitability performance of both our Diagnostics and Therapy businesses will play a key role in our efforts to minimize our future capital requirements on our journey towards continuous profitability. As specific strategic customer groups, we want to continue to highlight research, neuroscience and our clinic partners as we promote new features, business models and indications for our future systems. Partnerships are also likely to become more important in future Therapy business as we leverage our unique expertise and technology in still emerging therapeutic areas.
Our other main strategic objective for 2025 is to successfully support the long-term collaboration between Nexstim and Brainlab and expand the network of other partners and clinics, primarily in the US. In late November 2024, we announced that Nexstim Plc and Brainlab AG started a collaboration by entering into a development and distribution collaboration agreement and agreeing to an equity investment of up to EUR 5,095,000 in Nexstim. This collaboration agreement is historic for Nexstim, and I strongly believe that the combination of Nexstim's technological know-how and first-class services with Brainlab's innovative products, which have significant business growth potential and fit with Nexstim's offering and customer base of leading global hospitals, will create maximum value for patients, neurosurgeons, hospitals and shareholders. The equity investment will help ensure that the interests of both parties are aligned in terms of growing the Diagnostics business and committing to common business objectives. Outside of Brainlab's exclusive rights, Nexstim will continue to independently develop, market, and sell its products and services in all markets for current and future neuroscience research solutions and therapeutic applications. This includes all neuromodulation therapies that are not administered in the context of neurosurgical intervention using transcranial magnetic stimulation non-invasively. Nexstim's own sales organization, in collaboration with other distributors and business partners, will continue to work in these areas. The parties have also agreed on some gross margin targets for payments received by Nexstim for sales of its products (including service contracts) in the Brainlab business area. The sales target for 2025 is EUR 4 million. If the gross margin target is not met, Brainlab is obliged to pay the difference to Nexstim.
With the expansion of the network of collaborative clinics, Nexstim systems will be installed in neuroscience clinics and possible new investments will be made in clinic service companies in the wider US market. Our first joint venture, PNC Management Services, LLC, operates with our partner Dr. Kuluva and his clinic in California. During 2024, we worked on another strategic partner to launch a service business with Dr. Nadkarni's clinic in New Jersey, USA, and have also expanded to support the Rapid Recovery TMS clinic operated by Dr. Joshi in North Carolina. These partnerships allow us to work even closer to patients and gather accurate data on the patient interface to help inform our future development efforts. This information can lead to further development of the clinic business model or the promotion of new indications. During 2024, the service companies turned profitable and the minority investments made by the Company produced a positive result. Nexstim's private equity firm, Nexstim Investments, LLC, aims to expand Nexstim's network of partner clinics in the United States in collaboration with carefully selected top experts in the field. We will continue to develop a collaborative model with Dr. Kuluva, Dr. Nadkarni, Dr. Joshi, and other experts to enable Nexstim's TMS technology to treat more patients in the United States. During the strategic period we aim to increase the number of Nexstim systems and the number of treatments at our partner clinics.
Our third main strategic objective for 2025 is launching the new NBS 6 diagnostics system in key markets, enabling ease-of-use and future add-on modules in the same system. The development and launch of the new system generation will remain an essential part of Nexstim's strategy for the 2025-2028 period. NBS 6 is a new combination system built on Nexstim's unique, clinically established technology, with a modular system concept that makes it easy to add new features to existing systems. The new solution creates long-term value for Nexstim's customers and investors alike. The first launch in April-May 2023 was for therapy applications. Nexstim's NBS 6 system has FDA marketing and distribution approval for the treatment of major depression in the US and is CE-approved in Europe for use in the treatment of major depression and chronic neuropathic pain. The first NBS 6 systems were successfully delivered to customers in the US in late 2023 and we continued to successfully deliver additional systems in 2024 to the highly competitive therapy markets in the US and Europe. We will continue to finalize the development of the system and progress regulatory approvals during 2025 so that, in line with our strategic objective, we will also have diagnostic applications launched in the main markets as part of the new NBS 6 system.
Building future growth paths
Our system is clearly differentiated from other TMS system on the market today that does not have navigation capabilities. In the future, the need for navigation functionality is likely to become even more prominent in technology to treat brain diseases in an increasingly diverse range of ways. This could open up new markets for TMS treatments for Nexstim beyond severe depression and chronic neuropathic pain.
In June 2024, we announced a planned collaboration with Sinaptica Therapeutics, Inc. for the treatment of Alzheimer's disease. Nexstim announced that it has signed a non-binding letter of intent (LOI) related to a long-term 10-year collaboration agreement with Sinaptica to develop, manufacture and supply SinaptiStimTM-AD systems. The system would be based on the Nexstim NBS 6 medical TMS and neuronavigation systems and associated software, including integrated EEG software. The parties will continue to negotiate definitive agreements for a long-term 10-year collaboration. In January 2025, we also announced that co-development of the SinaptiStim® neuromodulation system is underway, with planned delivery of the first investigational system for validation testing and future clinical trials in March. Nexstim is developing the system to Sinaptica's specifications, integrating a high-resolution 64-channel brain waveform (EEG) analysis system from Bittium, enabling precision calibration of therapy for each Alzheimer's patient. Sinaptica will use the new research system in future clinical trials, several of which are planned to start in 2025.
The collaboration would enable the customized use of our new NBS 6 therapy system and our unique EEG visualization software in Sinaptica, a breakthrough treatment for Alzheimer's patients. Demand for our navigable TMS technology has been steady and growing in the field of TMS-EEG research, and we are excited to see our system being used in unprecedented solutions for new clinical indications. Nexstim's technology is leading the way in neuroscience research, collecting accurate diagnostic data and delivering reliable, precise and accurate treatment. We look forward to the opportunity to support Sinaptica, first with a development project and research systems, and later in the commercial phase, responding to the great need for safe and effective treatments for Alzheimer's disease.
The technological leadership of our products, ease of use and scalability of additional modules create an attractive platform for growth through partnerships.
Building owner value in exceptional circumstances
Despite the tightening global political situation, our expectations for 2025 are in many ways positive. Our current business is heavily focused on the EU and the US, but with our new partners we will continue to expand Nexstim's technology more actively into the Asian market. Nexstim will continue its determined efforts to develop personalized and effective methods for the treatment and diagnosis of severe brain diseases and disorders. We strongly believe that our work will support long-term shareholder value growth through increasingly strong competitive advantages, rapid growth and improved financial results.
Nexstim's business areas
Diagnostics Business
- Nexstim's NBS 5 system is the only CE-marked and FDA-cleared non-invasive solution for pre-surgical mapping of the motor cortex in brain cancer. Clinical data has been generated demonstrating the value of Nexstim's unique navigation system for pre-surgical mapping with regard to patient outcomes.
- The system allows surgeons to be better prepared and more aggressive with tumor resection, due to their confidence in the location of the motor and speech cortex because of pre-surgical mapping.
- More than 240 Nexstim diagnostic systems have been sold to research universities and leading hospitals across the world.
Therapy Business
- Nexstim's NBT® and NBS 6 systems are based on its unique navigated Transcranial Magnetic Stimulation (nTMS) technology, which allows for personalized, accurate, reproducible, and non-invasive brain stimulation.
- In May 2018, Nexstim launched its Navigated Brain Therapy (NBT®) system in the United States for the treatment of MDD, following FDA clearance in November 2017.
- Nexstim launched the NBS 6 system for therapy use in 2024. The NBS 6 is a new generation Nexstim system with a modular system concept that makes it easy to add new features to existing systems.
- Both NBT® and NBS 6 systems are CE marked for the treatment of major depression and chronic pain and have FDA approval for the treatment of major depressive disorder (MDD).
- We have an active commercial installed base of 107 therapy systems across four continents (includes both NBT® and NBS 6 systems and NBS systems with optional NBT® add-on software installed).
Publication of financial information
The annual report for the financial year that ended on 31 December 2024 will be published on 6th March 2025. The company's half-year report January-June 2025 (H1) will be published on Friday 15th August 2025.
Results briefing on 27 February 2025
The company will hold two webinars for the media, analysts, and investors on Thursday 27th February 2025. Mikko Karvinen, CEO, and Joonas Juokslahti, CFO, will present the company's financial and operational results, and will answer questions.
The first live webinar will be in Finnish, starting at 10.30 am (EET). The second webinar will be held in English at 3 pm (EET).
Webinar details:
To attend the webinars, please register via the links below. Registered participants will receive more information via email.
Webinar in Finnish on 27 February 2025 at 10:30 am (EET): Sign up here >>
Webinar in English on 27 February 2025 at 3 pm (EET): Sign up here >>
Helsinki 27/02/2025
Nexstim Plc
Board of Directors
Further information is available on the website www.nexstim.com or by contacting:
Mikko Karvinen, CEO
+358 50 326 4101
mikko.karvinen@nexstim.com
The company's Certified Advisor is Carnegie Investment Bank AB (publ).
About Nexstim Plc
Nexstim is a Finnish, globally operating growth-oriented medical technology company. Our mission is to enable personalized and effective diagnostics and therapies for challenging brain diseases and disorders.
Nexstim has developed a world-leading non-invasive brain stimulation technology for navigated transcranial magnetic stimulation (nTMS) with highly sophisticated 3D navigation providing accurate and personalized targeting of the TMS to the specific area of the brain.
Nexstim's Diagnostics Business focuses on commercialization of the Navigated Brain Stimulation (NBS) system. The NBS System 5 is the only FDA cleared and CE marked navigated TMS system for pre-surgical mapping of the speech and motor cortices of the brain.
Nexstim's Therapy Business markets and sells the NBS System 6 which is FDA cleared for marketing and commercial distribution for the treatment of major depressive disorder (MDD) in the United States. In Europe, the NBS 6 system is CE marked for the treatment of major depression and chronic neuropathic pain.
Nexstim shares are listed on Nasdaq First North Growth Market Finland.
For more information, please visit www.nexstim.com
