Company Overview

Helius Medical Technologies, Inc. (HSDT) is a neurotech company at the forefront of delivering a novel therapeutic neuromodulation approach for balance and gait deficits. With a commitment to improving the quality of life for individuals struggling with neurological conditions, Helius has carved out a unique position in the dynamic and rapidly evolving neurotech industry.

Established in 2013, Helius has steadily built a reputation as an innovator in the field of neurological wellness. The company's primary focus is on developing non-implantable technologies targeted at reducing symptoms of neurological disease or trauma. Its flagship product, the Portable Neuromodulation Stimulator (PoNS), is an innovative non-implantable medical device that delivers mild electrical stimulation to the surface of the tongue, providing treatment for gait deficit and chronic balance deficit.

Product and Market

PoNS received marketing clearance in the U.S. in 2022 for use as a short-term treatment of gait deficit due to mild-to-moderate symptoms of multiple sclerosis (MS). Around this time, Helius began accepting prescriptions for PoNS in the U.S. and commenced commercial sales. The device has been authorized for sale in Canada since 2019 for three indications: chronic balance deficit due to mild-to-moderate traumatic brain injury, gait deficit due to mild and moderate symptoms from MS, and gait deficit due to mild and moderate symptoms from stroke.

Recent Challenges

In 2023, Helius faced several challenges, including an impairment charge related to certain long-lived tangible assets as the company transitioned to a new contract manufacturing partner. The company also dealt with global economic conditions, including supply chain constraints, logistics challenges, and labor shortages, which impacted its operations and access to capital. To address its funding needs, Helius conducted several equity offerings in 2024, raising gross proceeds of over $6 million. This included a $5.5 million public offering completed in May 2024.

Financials

Helius' financial performance has been impacted by the challenges inherent in the commercialization of a novel medical device. For the most recent quarter (Q3 2024), the company reported revenue of $51,000, net income of -$3,686,000, operating cash flow of -$2,771,000, and free cash flow of -$2,771,000. The company saw a decrease in revenue and net income compared to the prior year quarter, primarily due to the termination of the Patient Therapy Access Program (PTAP) on June 30, 2023 and the temporary cash pay pricing in May 2024.

For the three months ended September 30, 2024, Helius Medical reported total revenue of $51,000, consisting of $40,000 in net product sales, primarily from Canada, and $11,000 in other revenue. For the nine months ended September 30, 2024, the company reported total revenue of $368,000, including $335,000 in net product sales and $33,000 in other revenue.

The company's gross loss for the three and nine months ended September 30, 2024 was $136,000 and $60,000, respectively. This decrease in gross profit was primarily due to lower sales compared to the prior year periods, as well as the impact of inventory adjustments.

In terms of geographic performance, the company currently only sells its PoNS device in the United States and Canada. In Q3 2024, 86% of product sales were from Canada and 14% were from the United States.

Reimbursement Progress

In the second quarter of 2024, Helius secured the first third-party reimbursement for the PoNS device from a major insurance carrier at $23,900, representing a significant milestone towards increasing PoNS accessibility. Additionally, the company received preliminary reimbursement payment determinations from the Centers for Medicare & Medicaid Services (CMS) for the PoNS Controller and Mouthpiece, paving the way for final price determination in the fourth quarter of 2024.

Strategic Partnerships

Helius has also made strategic partnerships to broaden the reach of PoNS. In the first quarter of 2024, the company partnered with Lovell Government Services, an SBA-certified Service-Disabled Veteran-Owned Small Business, to make the PoNS device available to federal healthcare systems. As a result, PoNS became available on the Veteran Affairs Federal Supply Schedule and General Services Administration Advantage Contracts in May 2024.

Research and Development

The company's research and development efforts have also been a key focus, as Helius has made progress in its registrational program for the use of PoNS in stroke. In the first quarter of 2024, the company reached alignment with the FDA on a registrational program to evaluate the therapeutic benefit of PoNS on gait and balance deficits in chronic stroke subjects. The program consists of a randomized controlled study and an open-label study, with the goal of obtaining FDA authorization for stroke in the United States.

Outlook

Despite the challenges faced by Helius, the company's commitment to innovation and its focus on improving the lives of individuals with neurological conditions have been unwavering. The recent achievements in reimbursement, partnerships, and clinical development have laid the foundation for Helius to continue navigating the complex neurotech landscape and driving meaningful change for patients.

Liquidity

To address its funding needs, Helius has conducted several equity offerings in 2024, raising gross proceeds of over $6 million. This included a $5.5 million public offering completed in May 2024. These capital-raising efforts have been crucial in supporting the company's ongoing operations and strategic initiatives.

As of the most recent financial report, Helius had a debt-to-equity ratio of 0.006054224795998947, indicating a low level of debt relative to equity. The company's cash and cash equivalents stood at $3,470,000. The current ratio of 3.6136363636363638 and quick ratio of 3.0962566844919786 suggest that the company has a strong ability to meet its short-term obligations.

Business Overview

Helius Medical Technologies remains focused on the commercialization of the PoNS device in the U.S. and Canada, as well as pursuing clinical development programs to expand the indications for the PoNS therapy. The company's ability to generate sufficient revenue to achieve profitability will depend heavily on the successful commercialization of the PoNS Therapy in these markets.

The company is not aware of any scandals, short seller reports, or CEO departures that could significantly impact its operations or reputation.

Conclusion

As Helius navigates the road ahead, the company's ability to successfully execute its commercial strategy, secure favorable reimbursement outcomes, and advance its research and development initiatives will be crucial in determining its long-term success. The recent progress in securing third-party reimbursement and expanding the availability of PoNS through strategic partnerships are positive steps. However, the company continues to face challenges in terms of revenue generation and profitability. Investors and stakeholders will closely monitor Helius' progress as it strives to unlock the full potential of its innovative PoNS technology and solidify its position as a leader in the neurotech industry.