Brainsway Ltd. (TASE:BRIN), which has developed the non-invasive Deep TMS (transcranial magnetic stimulation) for the treatment of depression and other neurological disorders, today announced that it will not meet its sales target for the first year following marketing approval in the US. The share price fell 7.3% by mid-afternoon.
In August, Brainsway predicted that it would sell 100 Deep TMS devices (which resemble a helmet placed over the head) worldwide. In late September, it had installed 50 systems, and reaffirmed its target.
However, today, a month before the end of the year, Brainsway announced that it will miss its target, and that it cannot estimate how many devices it will sell in the remainder of the year. In addition to the 50 devices installed, the company has orders for four devices, which have not yet been installed, and is in talks for the sale of 44 devices.
Brainsway attributes the missed target to longer sales procedures. It claims that most of the delay is not in the filling of orders for devices, but in the time between the order and the installation at a clinic. The installation time is critical for estimated income flow, which is based on the number of patients treated. Income from closing an order is less important.
Brainsway used to report a general figure of the number of devices in "advanced negotiations for an order, orders, and installations." In October, the Israel Securities Authority ordered the company to clarify the breakdown of devices in each of these stages.
Brainsway should be pleased that it is not traded on Wall Street, where ability to predict i future performance is a key variable investors use to assess a company. The company sought a Nasdaq listing two years ago, when the primary market window for life sciences companies was narrow, but failed to achieve the company value it wanted. The Israeli market is more tolerant of pioneering companies that fail to meet their sales targets.
Brainsway posted NIS 2.2 million in sales in January-September, half of which was in the third quarter. Its loss widened to NIS 25 million in January-September from NIS 13 million in the corresponding period of 2012, and it had NIS 23 million in cash at the end of September.
Published by Globes [online], Israel business news - www.globes-online.com - on November 27, 2013
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