Q4 2020 Brainsway Ltd Earnings Call
Greetings and welcome to the brands why fourth quarter and full year 2020 earnings conference call.
At this time all participants are in a listen only mode.
Question and answer session will follow the formal presentation.
Friday once you require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
It's now my pleasure to introduce chase the Oswald of lifestyle Pfizer's. Thank you Chase you may begin.
Thank you all and welcome to brains weighted fourth quarter and full year 2020 earnings conference call with US today, our brains, Vice President and Chief Executive Officer, Christopher von JAKO.
And senior Vice President and General manager of North America, and interim Chief Financial Officer Hadar Levy the.
The format for today's call will be a discussion of fourth quarter trends and business updates the cros.
All of them buy a detailed discussion of financials from the door.
Then we will open up the call for your questions.
Yesterday, <unk> released financial results for the fourth quarter and full year ended December 31, 2020, a copy of the press release is available on the company of Investor Relations website.
Before I turn the call it of Chris in the door I would like to remind you that this conference call, including both management's prepared remarks, and the question and answer session may contain projections or other forward looking statements regarding future events or the future performance of Brian do you want <unk>.
But not limited to any statements relating to the commercial plans or activities financial projections clinical studies, R&D plans and or anticipated timelines. These statements are only predictions and range of I cannot guarantee that they will in fact the car.
<unk> does not assume any obligation to update that information investors are cautioned that all forward looking statements involve risks and uncertainties, especially the reliance on third parties and shifting market conditions, particularly due to COVID-19.
<unk>, which may cause actual results to differ from those anticipated by <unk> at this time.
Additional risks concerning factors that could cause actual events results or achievements to materially differ from those contained in the forward looking statements can be found in the company's registration statement on form 20-F and in its other filings with the Securities and Exchange Commission I would like now I would like to now turn the call over to Chris.
Thank you Chase the welcome everyone and thank you for joining us today I'd like to begin by thanking the investors who participated in our recent successfully completed follow on offering that generated approximately 45 million of gross proceeds for brain's way.
We were grateful to have the support of many high quality health care focused institutional investors in this transaction, which.
Which we truly believe provides an important validation of brains weighted innovative technology and growing business.
And we achieved record quarterly revenues in the fourth quarter of 'twenty 'twenty of seven 1 billion, representing a strong 17% increase all of our third quarter and a 12% increase over the same period of last year, which of course was prior to the onset of COVID-19.
We're thrilled that our business is now getting back to what we believe will be of significant growth trajectory as it was prior to COVID-19.
As you May recall, we generated a robust growth of 41% and the full year 2019 over 2018.
I would like to highlight that we generated excellent top tier results, while also achieving positive cash flow from operations in the fourth quarter.
While we are pleased with the our performance of the fourth quarter and are confident that we could continue to operate on the cash flow positive basis going forward. We believe it's critical to continue investing in our business in order to drive further market penetration and accelerate growth.
Therefore, we intend to utilize the proceeds from the financing primarily to expand our sales force and to invest in various commercialization and marketing initiatives.
I will review our specific objectives in the critical areas of sales and marketing shortly.
First though I'd like to provide a brief update on the current operating environment.
In the fourth quarter of significant majority of clinics operated at or near normal levels with some of you been experiencing patient treatment volumes above pre COVID-19 levels.
Importantly business conditions have remained stable as these at these levels during the early box of 2021 though.
So not all clinics are operating at pre COVID-19 levels yet.
Of course, we will continue to monitor the impact of the pandemic on our operations in 2021.
With that said based on the current operating environment, the ongoing vaccine rollout and a general outlook for the year, we anticipate the steady progression of our business in the second half of 2021.
While the pandemic continues to be of ball and unfortunately persist depress you Didnt OCD trends are likely to continue to increase as well.
Accordingly.
According to a recent the journal article one in three adults has been affected by the pandemic related to the crusher anxiety.
This was a comprehensive study in which researchers performed a meta analysis of 68 studies conducted during the pandemic and included 288000 participants from 19 countries.
Moreover, in the recent Jama open survey of over 6500 patients before and after the pandemic.
Patients with depression symptoms more than tripled from eight 5% with depression symptoms before COVID-19, compared to 27, eight having depression symptoms during the pandemic.
In the OCD and article published last September in the journal of Psychiatry research examined the difference in the gold standard OCD, scoring scale among adult patients with the mean age of 43.
The results of the studies showed substantial worsening among OCD patients with just the place significant changes in the severity of total OCD symptoms obsession and compulsion when comparing the pre quarantine period versus during quarantine.
Staying with OCD, our second major indication, we remain focused on securing reimbursement in this high value area.
After the publication of the clinical Tms Society of coverage guidance for OCD in late January of 'twenty 'twenty. One we have made considerable progress with our OCD per communications.
Since that time of market access and medical Affairs leadership team has made presentations to a number of the largest health care plans in the country.
Putting their behavioral health medical directors as well as the majority of the Medicare administrative contractors or Macs. In addition, we've sent a significant number of OCD coverage requests letters containing the important clinical publications to commercial and Medicare payers, including many of the nations large.
Private plants.
Our clinical evidence includes post marketing clinical data on 219, OCD patients at 22 deep Tms sites.
Which was published in the peer reviewed journal of psychiatric research.
As a reminder of the study showed that 73% of patients reached initial response at an early stage of deep Tms treatment.
Which was administered as an adjunct form of therapy.
The data also revealed that the therapeutic effect can be maintained or sort of weeks after the treatment.
We hope to begin securing OCD reimbursement coverage over the coming months. So I should add that already about one third of our total installed base have opted to offer our OCD treatment.
Generally through an add on helmet to their existing system the.
This is a clear cut reflection that even without reimbursement our customers strongly believe and the benefit of deep Tms for OCD.
Regarding the depression with wrote a robust U S reimbursement in place our technology allows for easily understood and more importantly, an excellent return on investment for our customers, which includes the physician offices clinics networks of Tms providers and hospitals.
Importantly, 20, each one of the 2020 saw several large payers relaxed their requirements for deep Tms reimbursement.
This is significant trend as it increases the already sizeable total addressable market for depression.
At the end of 2020 deep Tms for depression was covered by over 60 commercial insurers and all seven backs providing nationwide Medicare coverage. These payers collectively represent more than 275 million covered lives.
Also our customers continued to enjoy steady reimbursement for deep Tms treatments of depression, which we view as a positive indicator for our business.
Beyond seeking to secure reimbursement in the OCD and continued favorable reimbursement trends in depression, an important catalyst for us as I noted earlier.
And the rationale for our recent successful capital raise is the desire to expand our sales and marketing efforts.
Last month, we appointed Frank Hackett, as Vice President of North American sales.
He brings more than 30 years of health care focused sales experienced business development and executive leadership, the brain's way.
Over the course of 2021, Mr. Hackett will lead our plans of increase the number of the U S sales territories. We cover from 13 to 18, a planned increase of nearly 40%.
This sales force expansion will be especially critical as we execute on our controlled marker of lease of deep Tms for smoking addiction, which began recently we intend to introduce this new commercial offering the first of its kind up to 12 customers initially.
Several of these sites are already operating deep Tms for smoking addiction patients and I'm pleased to report today that the first patients have now.
Been treated.
You will recall that smoking addiction represents our third FDA cleared indications for deep Tms, making us the most of work style Tms platform by far.
As a reminder, we received FDA clearance based on the data from our double blind Multicenter trial with 262 smokers they.
These smokers were highly addicted to cigarettes with the long history of of smoking and with 70% of them, having sales Korea more attempts to quit.
All of their participants who completed a full course of deep Tms treatment, 28% achieved four consecutive weeks of absence from smoking.
These data have us very excited about the large market opportunity among the 34 billion of adult smokers in the U S and the potential impact of deep Tms for smoking addiction can have on our business and revenues over time.
As the controlled market release in smoking addiction continues we also remain focused on increasing market penetration for deep Tms in depression, and OCD and we intend to expand our digital marketing strategy and other critical initiatives that will be supported by our recent financing.
Specifically, we plan to execute campaigns aimed at enhancing website content search engine optimization, increasing total social media advertising and enhancing the utilization of social media.
Influencer networks.
An excellent example of this is our digital efforts around OCD and awareness week, which took place in October.
And was highlighted on our last call.
I would also like to note the impressive gains we have seen from the data we are tracking on our website use of volume and patient education initiatives. For example, our new website, which serves as both the patient and provider of resorts saw a mass of 70% increase in organic users from 2019 to <unk>.
2020.
Turning to Investor Relations I want to emphasize that we continue to remain dedicated to sharing brains ways compelling growth story with both institutional and retail investors.
We met with the number of high quality health care focused U S based institutional investors around our recent equity offering enjoy a very positive reception to the offering.
Moreover, we hosted a well attended key opinion leader.
Virtual Investor event last November.
This informative event featured Doctor Omeara of Brooklyn, minds, who discussed the current treatment landscape and the unmet medical need in treating patients with depression in the OCD.
In addition, we will be presenting at a number of healthcare investment conferences throughout 2021.
We plan to host additional K O all of that for investors and analysts this year.
To put of competitive position in the Tms marketplace with the perspective, our deep Tms system has been subject of no less than 32 completed randomized control clinical trials, which is more than any other company in our field. Furthermore, Brian's waist deep Tms has been utilized to treat over now.
95000 patients for depression, and OCD and this translates into over two and a half million individual treatment sessions.
As far as our positive safety profile.
As you May know our device does not associated with any systematic.
The effects.
I'm excited effects. However, brain's way has been diligently collecting comprehensive safety data to provide us with a better understanding of the risks of the treatment and recently published an analysis in the journal of brain stimulation.
Importantly, we now have the most comprehensive published clinical safety data by far of any Tms company and believe the suggests the safety profile that is second to none in the Tms industry.
Finally, and as always I want to express my gratitude to our hard working customers on the frontline of this mental health crisis until the entire brain wait team for their continued support and dedication and boldly advancing neuroscience to improve health and transform the lives.
These extraordinary efforts by our customers and employees produced a significant achievements of 2020.
Positioning us well to complete our recent equity financing and has us poised to leverage the many key catalysts ahead of us.
Thank you again for joining us today with that I will now pass the call. The hadar or is the review of our fourth quarter and full year 2020 financials.
Hi, Dara.
Thank you Chris.
Excited by the momentum of our business and believe we are well positioned for potential continued growth in the foreseeable future.
We generated fourth quarter revenue of $7 $1 million of 17% increase sequentially from the third quarter of plenty of 'twenty.
The 12% of them quick.
The fourth quarter of 2019.
This revenue growth was driven by the increased the direct sales.
The reoccurring revenue, primarily derived from leases with $3 $4 million consistent with the fourth quarter of 2019.
Revenue for full year, 2020 was $22 $1 million the.
<unk>, 5% when compared to total revenue of $4 19.
Primarily due to the impact of the pandemic on our customers and the lower level of in person patient visits.
As of December 31, 2020 grams of installed base totaled 629 deep Tms system.
Which reflect the quarter over quarter increase of 36 systems.
Over 2020, even taking into account the impact of COVID-19 through the fourth quarter of 2021.
As far as the installed install base.
I was increased by 99 systems compared to year end 2019 or so.
19%.
Gross profit for the fourth quarter of 2020 was $5 $5 million compared to $4 9 million during the prior year period.
Gross margin for the quarter was 78% as compared to 77% in the.
Fourth quarter was 40 of them too.
Gross margin for full year of 2020 was over 7% compared to 78% in 2019.
Research and development expenses for the fourth quarter were $1 6 million.
The one $8 million in the fourth quarter of 2019.
And primarily consisted of costs associated with the continued the telecom.
The pattern with the most technology.
The research and development expenses for full year of $2025 8 billion borne out of.
The 49 million.
The important one too.
And the expenses for the fourth quarter.
$4 $3 million compared to $5 million for the fourth quarter of 2019 the.
The criticism is inline with the company's effort to enhance efficiency.
It's one of those two lower operational expenses, given the the financial impact of the from them.
G&A expenses were $16 million for full year, 2020, as compared to $18 $6 million in 2019.
<unk> of 15%.
Total operating expenses for full photo were $5 9 million compared to $6 $8 million in the <unk>.
Same period last year.
Operating expenses for 2020, total $21 $8 million as compared to $26 5 million daus in the.
2019.
Operating <unk> for the fourth quarter was $407000 compared with the loss of $2 million for the.
The same period in 20 of them too.
Operating loss for 2020, total $4 8 million on Golar as compared to eight 5 million in 2019.
For the fourth quarter ended December 31st one when we include the net loss of $267000 compared to a net loss of $1 $7 million in the fourth quarter of 2019 the.
The year over year improvement of $1 $5 million.
Net loss for full year, 2020 was five $4 million as compared to the most of the $10 $3 million.
In 2019, the year over year improvement of $4 $9 million.
As for the balance sheet, we ended the year with cash cash equivalents and short term deposit of.
The $17 2 million compared to $21 9 billion.
As of December 31st one 2011.
Cash used during plenty plenty of.
$4 7 million of rollout.
Our expectation of.
Of course this figure does not include $41 9 million ball all net proceeds the way.
All of the follow on offering closed in the March 'twenty one.
We believe that our strong balance sheet allows us to expand our sales and marketing efforts to drive additional the adoption of the deep Tms system.
The continued to invest in research and development all the to.
The new potential indication for innovative technology.
This concludes our prepared remarks I will now of the operator, please open up the call for questions operator.
Thank you we will now be conducting a question and answer session.
I'd like to ask a question. Please press star one on your telephone keypad.
A confirmation tone will indicate your line is in the question queue.
You May press Star two if you would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up of your handset before pressing the star keys, one moment. Please while we poll for your questions.
Yeah.
Our first questions come from the line of Jayson Bedford with Raymond James. Please proceed with your questions.
Good morning, and the hope everyone's well, so I guess, Chris just to jump off your comment around steady progression of the business in the second half can you just comment on first half trends.
Yeah, Good morning, Jason Thanks.
Well I think you know our first half well, we're now through the first quarter, obviously and we've seen I think.
Similar to the things that we saw in the fourth quarter as far as patients coming in and getting treated.
We anticipate that the our business will continue.
Continue to progress as we exit Covid and that we feel in the second half will be better than the first half of the year. That's our current that's our current thinking.
Okay.
I guess current business conditions.
Would you characterize it.
Similar to fourth quarter business conditions.
I think from the from you saw probably in the fourth quarter that we had a higher direct sales than we do from a leasing perspective that percentage.
That typically you know where we have some seasonality of the business where typically in the fourth quarter in the second quarter, we see of higher direct volume, but again our business typically is around that 60, 40% with when you're looking at least compared to direct so we're very pleased with how we finished the fourth quarter with our with the some of those direct say.
But as far as the business I think we see the similar trends as we saw in the fourth quarter.
Obviously, we're cautiously optimistic as we continue to.
The pandemic.
Okay.
Just on the fourth quarter of the 36.
Boxes of let's call them are sold in the quarter, how many went to existing users and what was the rough breakout between direct and in recurrent.
So I would say that the roughly around the 40% went to our existing.
Customers and the other.
The 61 of which the.
New customers.
Okay.
In terms of just.
Kind of of the 36 week.
How many went to the direct bucket versus the lease bucket roughly.
Yeah.
So it was roughly around the 50% between direct and the.
And then just maybe jumping over to OCD reimbursement.
I think you said you hope per payer coverage in the next several months just kind of what has there been any indication there I'm just trying to gauge your confidence level there.
Yes, Jason Thanks for the question.
So I think that my confidence level of has improved we've been having some really good meetings with a lot of the payers over the last couple of months and they've been very receptive.
Not only to these particular OCD patients.
Who as you may remember, it's a much more complex disorder and depression and they only had a limited the amount of alternatives with only five of medications.
I'm not getting any any guidance I'm feeling a lot better than I did a year ago about where we're heading with reimbursement.
Particularly because we're leveraging this new study of that got published last year.
And the payers have been very receptive.
And I think that in general I wouldn't be surprised that later this year that we started getting.
Some payers to actually cover.
Yes.
Okay.
Last question and I'll jump back in queue any commentary on Opex levels here in 'twenty one versus 'twenty.
Yeah.
We do anticipate the Opex to go high specifically on the sales and marketing line.
That should be our main focus for a.
For this year.
But not I wouldnt fixed.
Except to see some dramatic growth, but it will grow less.
Compared to a.
2020.
Jason.
Is there any way to just quantify the.
The spend in Opex from 'twenty one.
We're not providing any guidance.
<unk>.
But I.
I think that's you know we're going to go back to the similar Opex that we are the prior to Covid.
With the roughly burn rate of up.
Up to $2 million per quarter.
Okay. Thanks.
Thank you. Thanks, Jennifer next question so sorry.
Our our next questions come from the line of Kyle mix It with Cantor Fitzgerald. Please proceed with your questions.
Hi, guys. Thanks for taking the questions. Congrats on a nice year and all of these updates to I wanted to start with OCD reimbursement also I was wondering if you could just tell me what the.
The typical of demographic is of these OTT the patients like I'm thinking like eight.
Et cetera, and just as you think about the Max and the private payers coming on with reimbursement in the.
The near term next couple of months, hopefully, which of these groups could come first because obviously Medicare private commercial payers different reimbursement rates. So just.
Curious if you can provide some comments there thanks.
Yes. Thanks, Thanks kind of appreciate your comments about the year.
So with OCD and particular I mean, you can look at the the onset is typically in the early teens.
And most of the time these patients actually don't seek treatment until they get into the Thirty's forty's.
Which is which is obviously not of great. Thanks.
From a payer perspective.
We've actually met with.
Some of the largest payers already.
And we met with actually all of the Medicare Max.
With with the OCD depending on.
How severe the OCD is.
These patients.
Actually it could be disabled and they could be covered under Medicare.
Even if they are under the age of 65.
So I think for US we're right now we're out there of presenting too is many of the payers that we can set up meetings with them we're spending.
Tremendous amounts of coverage the quest letters out.
And then I just had been a lot of lot of these calls myself.
With our with our.
Head of market access as well as our.
Chief Medical officer, so the.
Comments that we're getting back the very receptive.
I'm quite hopeful as we continue through the year that will start.
Achieving.
Reimbursement from some of these payers.
Alright, Thanks, Chris that's helpful and.
Obviously, the the sales force expansion is the is positive it was proud of in the past, but you have to hear the.
And the spend will increase in that area in that bucket. In 2021 is it's great. So I guess the Dara can you just talk about the progression throughout the year in terms of.
The hiring of obviously.
I guess smoking cessation is going to kind of be.
The rollout of a little bit you did early on and then maybe pick up in the second half of it so I'm thinking that the cadence could be little bit stronger hiring in the second half of the year can you just confirm that and maybe talk about.
How do you kind of get to that 18 territory.
Level at this in this year. Thanks.
Yes, so our plan is to complete all of the recruitment on the missing territories by the end of.
By the end of Q3, so the main God, if we can do it even earlier the better but the.
It might take for the next two quarters just to Uh huh.
Higher the domestic position, but we are looking to hire in the net.
Next six months.
So.
And then sorry.
Did you of a specific question about smoking on the rollout with that as well.
I mean is part of that.
As part of that true.
Trajectory of the cadence going to be driven by smoking of kind of sounded like it would be.
<unk> remarks.
Yeah, No I mean, obviously, the the drive right now.
As for obviously expansion of the current.
Depression and OCD.
<unk>.
Okay. Yeah, no of course of course, thank you, yes and.
And I'm just looking at the amount of we are the least high ASP decline dramatically in 2020 I'm sure that was due to some of the pricing arrangements that we talked about in the past, but is the expectation in 'twenty, one going to beat the dead ASB creeps back up to where it was pre COVID-19 or could we see this.
Lower level.
Stick around for the next year or so.
I believe we're going to to keep the the ISP similar to the rates that we've seen.
In the in 2020, and we are of some good reason to believe that we're going to keep it that way, we see of very good momentum and good demand specifically.
With all of our OCD platform, So I believe that the we.
We will be able to keep the the margin in the ISP is similar to the day rate the twists and in the past.
Perfect. Thanks for the R J.
Just the last question for me just looking at the on the record revenues and price.
In the quarter was there any like pent up demand from the second or third quarters that converted to sales this quarter and I guess thinking about that like what was the man looking like exiting 2020 of in early 'twenty one here recently.
And then also if you could comment on the pipeline.
Maybe at the end of the year. We're currently I mean that that would be really helpful too.
So I think.
As I mentioned earlier, obviously Q4, we have some seasonality of the business Q4, and Q2, we tend to drive additional.
Direct revenue as opposed to lease revenue there.
Obviously, it has a dramatic effect on the business and that's for a number of different reasons, but that seasonality.
I think we had really great demand and that demand, sometimes slips down a little bit into the first quarter as we get into the first quarter. We're trying to tie up a lot of things at the end of.
Of the year.
But we feel very.
Strong about it.
<unk> about where we're heading right now.
Okay.
Okay, and crisp of the pipeline how does that help the pipeline at this point.
The the pipeline is extremely healthy and continues to grow.
That.
Obviously as we continue to exit the pandemic and things are coming back to normal we see obviously, it's very strongly with our our current businesses that are increasing their success and are looking to add either systems at the current locations or other locations.
But our salespeople are.
<unk>.
Every day, they're getting more and more face to face meetings, which is which is very strong for us.
Alright, perfect I appreciate that Chris Thanks, guys for the questions again.
Thanks, Tom.
Thank you. Our next question is coming from the line of Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your questions.
Christian or how are you.
Great how are you doing.
So.
A few questions you talked about the of the 12 shows with the the smoking gross can you walk us through the logistics there being that that is the.
Third helmet offering how are we shipping the fix to the actual unit.
Oh that's of Great question.
So we actually developed a independent stand for the customers that.
May already have two helmets already with their current system.
And in fact, the first several of systems that we deployed this quarter needed that third stand because those customers already had both a depression of coil as well as a or helmet as.
As well as a OCD the.
Great question.
So one would be detached for the the smoking from them to be attached.
No.
There is there is actually a <unk>.
Separate stand that holds an additional coil or additional helmet in essence that can be its mobile can be rolled around.
Okay interesting, okay I got it.
The door of any.
Read into lease versus purchase trends I know there was a previous question about the from a fourth quarter or generally speaking of any commentary on lease versus purchase going forward.
We have indicated in the past the thorough list to direct purchase fresh ore is in.
The year is about 60 or 60 40.
I believe that sort of theory.
For fall of growth.
So I believe it's going to remain the same day.
The share any any specific changes obviously, there is seasonality around it but I believe it might even increase a little bit tired of the towards the the leaf.
The direct purchase of fusion it comes from the on the fourth quarter, but.
I believe that you know most of our customers still prefer just to leave the.
The machines.
Other than to just the bitartrate.
Okay got it and then spark cash ensures it sounded like 17 to push 41 nine.
The 259, one in the.
Q1 approximately.
The good estimate.
Yeah, but before the burn.
We have looked at the.
We haven't looked at the number right.
It's in that ballpark, it's in the ballpark yes.
And then commentary of insurers are pleased for and <unk> as well as currently configured risk of estimates or.
I mean, we there's 11 share.
I don't think we know the number off hand to the US with you can you get back to you on that.
Okay got it and then alright.
I guess lastly from me, Chris could you comment a little bit on what you're seeing generally speaking from the macro environment on drugs versus the energy delivery and.
The treatment paradigms and the energy of getting earlier and dispersion of the you know historically of my commentary about true failures on drugs for Tms.
Yeah really good question so.
So as I mentioned I think of the prepared remarks last year, we saw.
We saw a number of the large.
The payers are relaxing their reimbursement and.
Where a majority of the payers still today continues to be at about four of medication failures, but we saw that relaxing down two from four down to some of those payers and even south.
I think the at least one Medicare Mac.
As one failure of another Medicare Mac has two failures.
We hope to see that trend continue.
I think that the.
The alternative for our technology, we're showing really great results with these patients that have it.
They are the most difficult patients right.
Because of their treatment resistance and if we can get them early in the paradigm. It's only it's only getting better for them because after the sale of that first medication it'll it becomes even more likely that they'll fill of second and a third.
The third a third medication. So I think the trends are.
Hopefully leaning towards bringing the Tms paradigm earlier in the.
And the treatment.
Okay got it and then lastly from me on seasonality of the urinary talks about back kind of being stronger relative to the front of house and <unk>.
Q4, and Q2 are generally speaking being stronger versus our Q1 and Q3, but any read into.
The the reimbursement of the out of pockets do you expect this year the drug will have.
The greater or lesser severity on the on the first quarter.
Yes, I think I think generally with our business.
Like I said, we do have the seasonality because we have a lot more direct purchases like I said in Q4, adding Q2. So typically we will we'll see we'll see that as we go into Q1s. The direct purchase that will be a little bit less.
I don't think it has much of an effect on deductibles or co-pays of things like that.
For for the for the for.
Of the patients in particular on what the drive will be again, our customers would be opening up of a completely new.
A new a new offering within their office right at the operating deep Tms or for example, if.
The existing customer is expanding just because their business continues to expand and I think that.
With the pandemic.
<unk> roughly about a year ago, and Dara and I worked together on this call of about a year ago during that period, we're going to start seeing an increase of bolus of patients probably in the second half of the tier.
Specifically because it takes you know.
At least one year, if everything goes well to get up and down four of medication failures.
So.
Our customers.
Our current customers.
Understand this and they already know how to run the Tms business. So they've been they've been very bullish about the business itself.
Okay got it thanks for answering the questions and I appreciate the Christian Dorner and have a good day.
Yeah, you too Jeff Thanks.
Thank you. Our next question is come from the line of Steven Lichtman with Oppenheimer. Please proceed with your question.
Thank you good morning, guys.
Just building on the MVD when reimbursement wins last year I'm wondering how that's impacted conditions on the ground. So far are you seeing.
Increased interest from psychiatrist office is given the potential to use the Tms earlier in the in the treatment paradigm.
Yes.
Think that's it's definitely a.
Driver for Us and it's a great message when we're when we're speaking to psychiatrists that are in those regions or that take that specific insurance.
Take that specific insurance carrier.
I know having spoken to a number of our customers over the last six months.
That is really great for them I mean, if you may remember most of <unk>.
Patients that have an onset of the depression will get that primarily.
Price of medication coming from the general practitioner or maybe say in the OBG obgyn.
Related to post part of them.
But and now what Youre doing is youre getting those patients going to a psychiatrist after at least one failure if not too so they if they're now in the psychiatrist office with already two failures and they have the ability to now use Tms as opposed to try another medication, it's been really beneficial to those particular physicians.
That message I think is definitely resonating with our customers and our sales force is obviously using that message with the new potential customers as well.
Got it.
On smoking cessation should we expect a similar playbook in terms of data collection to support reimbursement are there plans for a post marketing study here in 2021.
Yeah. So that's what we're that's one of the aims of our controlled market release right now obviously.
The goal is to get these 12 centers up and running and treating patients.
Understanding the market and are working together with them on the particularly on the cash pay and trying to see what resonates.
And see how we can repeat this business in multiple places and Thats really the goal, but the other part of the goal that we're looking at for the control of at least is to ensure that we're collecting the data correctly.
So equally important on both of those things so and.
We as part of this obviously, we've already began collecting post marketing data.
Got it and then <unk>.
Lastly, the.
Of course, if you start thinking longer term and potential new indications.
The update you can provide on the next areas you think may be targets for for add on indications.
Yes sure.
So you know.
The pandemic had slowed down some of the work that we're doing around future indications. We have a number of clinical trials that are going on now most of them are pilot trials that are going on now.
And we were looking last year to launch a couple of new studies for new indications and we plan to do that later this year.
I'm, not giving any public guidance on what those indications would be but.
We have those listed obviously in our.
In our deck that shows that.
The likely be in addiction.
<unk> be one of the neurological indications probably MFS fatigue.
So hopefully starting one if not more.
Multiple of those later this year.
Okay, great. Thanks, Chris Thanks for the.
Thanks Steven.
Thank you there are no further questions at this time I would like to turn the call back over to management for any closing comments.
Thanks, so much in conclusion I would like to thank all of the investors in our participants for the interest in brain's way and look forward to keeping you up to date on our progress throughout the year with that please enjoy the rest of your day.
Thank you for your participation. This does conclude today's teleconference. You may disconnect. Your lines at this time of.
Great day.