BrainsWay (Nasdaq:BWAY) announced today that it closed an initial strategic investment of $5 million in Neurolief.
The $5 million convertible loan also accompanies an option to acquire the neuromodulation developer. BrainsWay believes the investment and potential future acquisition could expand its total addressable market.
Neurolief develops a wearable, non-invasive, multi-channel neuromodulation platform for use at home. It has demonstrated positive clinical outcomes and includes a proprietary therapy for treatment-resistant major depressive disorder (MDD) and migraine. If approved, it would become the first FDA-cleared MDD treatment deliverable outside the clinic, BrainsWay said.
The investment agreement also includes additional potential milestone payments.
“We are very excited with this strategic investment in Neurolief,” said Hadar Levy, BrainsWay CEO. “Upon an FDA approval, we believe this technology will significantly expand our addressable market, enabling care for patients who cannot easily access clinics and empowering medical professionals to extend treatment beyond traditional settings. This aligns with our strategic goal of accelerating access to and awareness of innovative mental health treatments, especially offerings that we believe are complementary to mental health professionals using our Deep TMS therapy.”
More about BrainsWay and the agreement
BrainsWay, meanwhile, develops its FDA-cleared Deep Transcranial Magnetic Stimulation (TMS) therapy.
With the new rotational field system under evaluation, two orthogonal TMS coils are placed perpendicular to one another. Operated with a time lag, they induce a circulatory rotating electric field. This results in uniform stimulation of neurons oriented along a wide variety of directions in the targeted brain region.
It all takes place within less than a millisecond.
“The BrainsWay team has rapidly expanded sales of the Deep TMS system, supported by scaling of our commercial platform and customer network,” Levy said. “We are excited by the opportunity to leverage our platform and explore potential synergies between our two companies, as Neurolief brings its at-home neuromodulation systems to the market through mental health professionals.”
Beyond the initial $5 million convertible loan, the agreement provides for potential additional milestone-based funding. That includes a second tranche of up to a $6 million convertible loan upon FDA approval of the Proliv Rx system for MDD treatment. A third tranche includes up to a $5 million equity investment upon Neurolief achieving an agreed-upon revenue milestone.
BrainsWay also included a “call option” to acquire all outstanding equity interests in Neurolief during clearly defined exercise windows. This option has a price based on the greater of a specified enterprise value or revenue multiple. Values vary depending on the timing of exercise.
“This strategic investment by BrainsWay is a strong validation of our science, our team, and our vision,” said Scott Drees, Neurolief CEO. “This partnership enhances our ability to reach the patients who need our therapy most. BrainsWay’s market presence, deep expertise, and established commercial platform can complement our innovation and momentum. Together, we aim to reshape the treatment landscape for depression and expand access to evidence-based, effective care.”
