20-F: BrainsWay Ltd. Files 2023 Annual Report on Form 20-F

BrainsWay Ltd. releases its 2023 annual report, detailing financial performance and strategic initiatives.

Summary

• BrainsWay Ltd. has released its 20-F filing for the fiscal year ended December 31, 2023.
• The report includes audited consolidated financial statements prepared in accordance with IFRS.
• The company is focused on Deep TMS technology for treating mental health disorders.
• BrainsWay has FDA clearances for MDD, OCD, and smoking addiction.
• The company's strategy includes increasing market penetration, developing new indications, and expanding reimbursement coverage.
• The company generated revenues of $31.8 million in 2023, an increase of 17% compared to 2022.
• The company incurred a net loss of $4.2 million for the year ended December 31, 2023.
• As of December 31, 2023, the company had cash, cash equivalents, restricted cash, and short-term deposits of $46.3 million.
• The company believes its existing cash resources will be sufficient to fund operations for at least the next 24 months.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While there's revenue growth and strategic focus, the net loss and risk factors temper the overall outlook.

Positives

• Revenue increased by 17% in 2023.
• The company has FDA clearances for three mental health disorders.
• The company is focused on Deep TMS technology for treating mental health disorders.
• The company believes its existing cash resources will be sufficient to fund operations for at least the next 24 months.

Negatives

• The company incurred a net loss of $4.2 million for the year ended December 31, 2023.
• The company has an accumulated deficit of $101.3 million as of December 31, 2023.

Risks

• The company's success depends on market perception and acceptance of TMS generally.
• The company operates in a very competitive environment.
• Failure to secure or maintain adequate coverage and reimbursement may affect sales.
• Clinical trials involve a lengthy and expensive process with an uncertain outcome.
• The company relies on third parties, including suppliers and distributors.
• The company's operations could be affected by geopolitical instability, war, or global pandemics.
• The company depends on its intellectual property and its ability to protect it.
• The company's manufacturing, assembly and other significant functions are located in Israel and, therefore, its business and operations may be adversely affected by political, economic and military conditions in Israel.

Future Outlook

The company expects its existing cash resources will be sufficient to fund operations for at least the next 24 months and anticipates that its operating losses will decrease as it implements measures designed to reduce operating expenses.

Industry Context

The report provides insight into BrainsWay's position within the competitive landscape of mental health treatment, specifically in the neuromodulation and TMS therapy sectors, highlighting its unique FDA clearances and strategic focus.

Comparison to Industry Standards

• The report mentions competitors like Neuronetics, Magventure, and Magstim, which are also involved in TMS therapy.
• BrainsWay distinguishes itself by being the only TMS company with FDA clearances for three separate mental health disorder indications based on clinically proven efficacy.
• The report notes that competing TMS therapy companies have developed or may develop treatments that have improved efficacy when compared to our products or that require a less significant investment of resources from physicians.
• The report also notes that competition varies based on the indication, and some of the indications we are advancing may face marketability challenges based on existing treatment options.

Management Changes

Corporate Governance

Legal Proceedings

• The company is named as a co-defendant in a lawsuit by a patient alleging hearing loss following his enrollment in one of our clinical studies and we are vigorously defending this matter.
• There are also various employment-related claims (brought by former employees) and collection matters (stemming from debt accrued by certain of our customers).

Related Party Transactions

• The company has entered into employment agreements with each member of its senior management.
• The company has a consultancy agreement with Prof. Avraham Zangen, a director and scientific founder of the Company.
• In 2021, the Company entered into an addendum to a July 2012 agreement with Ben Gurion Negev Technology and Applications Ltd. which operates a lab associated with Prof. Zangen, a director of the Company.

Stakeholder Impact

• Shareholders: The report provides information relevant to assessing the company's financial health and future prospects.
• Employees: The report outlines the company's workforce and compensation policies.
• Customers: The report details the company's product offerings and pricing models.
• Suppliers: The report discusses the company's reliance on third-party suppliers.
• Creditors: The report provides information about the company's debt obligations.

Next Steps

• The company intends to progress clinical trials in other areas, including neurological and/or addiction disorders.
• The company is working to expand its existing commercial footprint in Europe, Asia, Latin America, Australia, the broader Middle East, and to pursue commercialization in additional markets.
• The company plans to continue to develop innovative enhancements and features for its Deep TMS systems to expand the applicability of Deep TMS to additional indications and improve the capabilities of the systems for approved indications.

Key Dates

Keywords

Deep TMS, Transcranial Magnetic Stimulation, MDD, OCD, Smoking Addiction, Financial Report, FDA Clearance, Mental Health, Neurostimulation, BrainsWay