Focussing on strategic priorities

Update | 2 March 2020

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Nexstim’s strategic focus is firmly on fully exploiting the commercial potential of its SmartFocus NBT system in major depressive disorder (MDD), by leveraging its unique navigation capabilities and the positive impact on patient outcomes and health economics. Significant strides were made in 2019, the first year of strategic implementation: FY19 revenue grew 25% to €3.3m, with continued sales momentum in the NBT Therapy business (+131% to €1.5m). Alongside a stronger balance sheet and board and management changes, Nexstim is now undergoing a strategic review and update. This aims to refine its long-term outlook and financial objectives across the Therapy (NBT) and Diagnostics (NBS) businesses and includes evaluating various funding options and strategic alternatives. The review is expected to conclude in the spring; ahead of this, we maintain our €31.4m (€0.50/share) valuation.

Year-end: December 31201820192020E2021E
Sales (€m)
Adj. PBT (€m)(6.2)(6.8)(5.8)(3.8)
Net Income (€m)(6.2)(6.8)(5.7)(3.7)
EPS (€)(1.93)(0.25)(0.09)(0.06)
Cash* (€m)
EBITDA (€m)(5.9)(6.0)(4.7)(2.5)
Source: Trinity Delta. Note: *Our cash forecast assumes additional raises of €10m in FY20 and €5 in FY21
  • Commercial strategy delivering  Investment into NBT commercialisation has translated into increased traction, with operational leverage (especially in the US) expected to come through in FY20. During 2019, 17 new NBT systems were sold (nine new systems in the US and eight new placements in Europe), with an active installed base of 23 at end-2019. 66% of Therapy revenues were recurring (related to high margin after sales services/consumables not capital system sales). Average revenue is already €85k/system vs a €100k longer-term target for established sites.
  • Increasing adoption and expanding horizons  Core NBT use in MDD is in out-patient psychiatric clinics/TMS centres. Growing usage is increasing patient registry data and this clinical evidence, to be published in white papers and journals during 2020, will support marketing efforts and could further drive adoption. Collaboration discussions are ongoing in connection with potentially entering a distinct new in-patient TMS market: treating hospitalised severe MDD patients who may have suicidal ideation. No TMS system is approved for this indication, and NBT is well suited given intensive treatment protocols and the need for accurate targeting.
  • Securing the future  Nexstim raised €6.6m in new funds in 2019. End-FY19 cash of €4.3m (including c €2m Kreos loan) provides working capital through Q220. FY20 will be loss making, despite higher revenue expectation, as investment is needed to support growth. Objectives of the strategic review include securing funding through 2020-21 and evaluating options for the NBS Diagnostic division.
  • Valuation maintained at €0.50/share Our DCF-based rNPV model ascribes a value of €31.4m or €0.50/share to Nexstim, with material room for upside from strategic execution such as growth or expansion of the MDD market opportunity for NBT.


2 March 2020

Market Cap€4.8m
Enterprise Value€0.5m
Shares in issue62.8m
12 month range€0.08-0.50
Free float39.5%
Primary exchangeHelsinki
Other exchangesStockholm
Corporate clientYes

Company description

Nexstim is a targeted neuro-modulation company that has developed a proprietary navigated rTMS platform for use in diagnostics (NBS) and therapeutics (NBT). NBS is used in planning brain surgery while NBT is focused on depression and chronic pain. FDA approval for depression was given in 2017, and the focus is on commercial roll out in the US, Europe and Asia.


Lala Gregorek
+44 (0) 20 3637 5043

Franc Gregori
+44 (0) 20 3637 5041

Exhibit 1: Summary of financials


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