About 16.2 million Americans have an episode of major depressive disorder each year, according to the National Institute of Mental Health. About 2.24 million have obsessive-compulsive disorder.

Brainsway is looking to shrink those figures, and it’s turning to the public markets to finance the cure.

The IPO

Brainsway will issue 2.5 million shares on the Nasdaq under ticker BWAY, according to the company’s F-1 filing. Priced at $11.94 per share, the offering represents about 23.1 percent of outstanding shares and is expected to bring in about $26.4 million. 

The underwriters include Cantor Fitzgerald, Raymond James, Oppenheimer and Ladenburg Thalmann.

The company qualifies as an emerging growth company and foreign private issuer, which exempts management from certain SEC disclosure requirements.

The Company

Headquartered in Jerusalem, the 16-year-old biotech develops and sells non-invasive neuromodulation products to treat brain disorders. The therapy relies on proprietary Deep Transcranial Magnetic Stimulation — Deep TMS — which stimulates neurons to modulate physiological brain activity.

In 2018, the U.S. represented 88 percent of Brainsway revenues. The Food and Drug Administration has approved Deep TMS for MDD and OCD, which present annual addressable market opportunities of $8 billion and $800 million, respectively.

While about 90 percent of privately insured adults are estimated to be eligible for reimbursement for MDD treatment, Deep TMS for OCD is not presently insured. Brainsway is working to obtain reimbursement coverage for OCD as it ramps commercialization.

Brainsway anticipates expanding its range of indications and has ongoing trials for smoking cessation and post-traumatic stress disorder. The company plans to launch studies for opioid addiction, fatigue in multiple sclerosis and post-smoke rehabilitation shortly.

The Finances

In 2018, Brainsway generated $16.4 million in revenues, which amounts to a 47-percent annual increase. Its net loss shrunk from $7.05 million to $6.48 million.

By the end of the first quarter of 2019, Brainsway notched between $4.9 million and $5.2 million compared to $3.6 million in the first quarter of 2018. Net losses also rose from $1 million to between $1.6 million and $2.1 million.

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