Good morning and welcome to the BrainsWay virtual KOL event. At this time, all attendees are in a listen-only mode. A question-and-answer session will follow the formal presentations. As a reminder, this call is being recorded, and a replay will be made available on the BrainsWay website following the conclusion of the event. I'd now like to turn the call over to Hadar Levy, Chief Executive Officer at BrainsWay. Please go ahead, Hadar.
Thank you, Tara. Hello everyone, and thank you for joining us. My name is Hadar Levy, CEO of BrainsWay. I've spent over 25 years in med tech, and my focus has always been the same: take real innovation and turn it into scalable business that's changed patients' lives. Before I jump into the slide, I want to thank two partners who bring the clinical and operational day-to-day reality of our work into life. We're joined by Dr. Owen Muir Co-founder and Chief Medical Officer of Radial. Dr. Muir is a leading clinician who sees the unmet need in mental health every day. He's also been a key driver of the accelerated protocol in the U.S. and helped shape how we think about delivering faster relief to patients. We're also joined by Michael Gershenzon, CEO of Stella, one of the fastest-growing mental health networks.
Michael, or Gersh, will share what it looks like to scale care delivery with BrainsWay, especially since our strategic minority investment in Stella. For both of you, thank you for being here and for helping shape the future of mental health. All right. Just to remind everyone, what do we do? BrainsWay is a global leader in noninvasive brain stimulation. Our FDA-cleared Deep TMS technology delivers target neural stimulation to treat major mental health conditions. Today, we are the global leader in TMS. We have more than 1,600 systems installed and over 7 million treatments delivered. That scale and impact are unmatched in our field. Let me start with the headline of this slide about the third quarter. Q3 was a quarter of strong growth and real profitability, proof that our strategy is working in the field.
Revenue was $13.5 million, up 29% year- over- year. Gross margin stayed strong at 75%, and that's translated into earnings. Adjusted EBITDA of $2 million, up 81%, and net profit of $1.6 million, up 137%. We are growing, and we're doing it profitably. Now, let's talk about momentum in our business. Remaining performance obligation reached $65 million, up 37% year- over- year. That's future revenue already signed and visible. We shipped 90 systems, up 43%. Remember, every system out there is clinic-treating patients, generating recurring revenue and strengthening our clinical footprint. About 70% of new deals are multi-year leases. That's a big shift towards stability and predictability. On the clinical side, we hit a milestone that changed the playing field: FDA clearance for the accelerated protocol for MDD. This isn't incremental. It's a new way of delivering treatment faster with the potential to reshape access across clinics.
Dr. Muir will expand on that as part of his presentation. We also announced that the VA Palo Alto secured a $2.5 million NIH grant supporting deep TMS for alcohol use disorder. That's not just funding. It's a validation from one of the highest scientific bars in the world and another step forward in our expansion into the addiction space. Finally, we continue to build an ecosystem, not just a product company. We now have four strategic minority investments. Just to summarize, the story for Q3 is simple: more systems, more contracts, more clinical momentum, more recurring revenue on top of profitability and cash strength. Looking ahead, it comes down to execution. The numbers show we are delivering with discipline. Revenue growth has been steady across 11 straight quarters. Our 2025 guidance of $52 million remains fully supported by pipeline and recurring base.
On the visibility front, as I said before, $65 million in remaining performance obligation, 70% of new engagement are multi-year leases. Customer retention rate is 93%. Book-to-bill ratio is 1.3x, carrying momentum into 2026. Profitability continued to scale: 75% gross margin, $7 million annualized EBITDA run rate, 10 consecutive quarters of positive free cash flow. We are doing it from a position of strength: $71 million in cash, no debts. I want to capture a second with you on one of the most important shifts on our evolution. We moved from a one-time sale model into a true ARR business model. Recurring revenue grew 34% year- over- year, faster than non-recurring at 23%. In simple words, BrainsWay now behaves like a platform company which provides more visibility, more scalability, and more predictability. That is a key driver for long-term value.
With the new shift in our business model, you can see the mix shifting towards recurring revenue, growing from $10 million in 2023 to $18.4 million in 2025. Non-recurring grows as well, but slower. The mix keeps improving. That upgrade creates operating leverage. Revenue has been growing above 25% while we keep OpEx growth under 15%. From 2023 to 2025 guidance, revenue increases by about $25 million, while OpEx increases by less than $8 million. Simple takeaway: we are going faster than cost, so profitability expands naturally. Let's talk about scale. How can we triple the new signed backlog? We're already at $65 million remaining performance obligation. We are profitable, and we are growing. The real question is execution. How do we deploy the $71 million with precision, turning capital into capacity, capacity into momentum, and momentum into accelerated growth?
Today, I'm going to share with you the roadmap that's already in motion. Let's review the growth driver for the next chapter of BrainsWay. Organic growth remains the base. Demand is growing due to the accelerated protocol, due to the OCD, due to the vast majority of approved indication. Utilization is climbing. Recurring revenue is compounding. The next step is to make strategic equity investment in mental health clinics. By partnering with leading clinics that already have scale, strong patient flow, and experienced management, we're able to expand access, increase utilization, and create a long-term recurring revenue stream with minimal incremental OpEx. From there, we're going to move into new care settings and new territories like home use settings with the last investment that we made at Neuralif, addiction, rehabilitation, and international markets.
The next major driver is new clinical indication in which we have built the strongest clinical platform in the category. We're pushing into PTSD, addiction, cognitive decline, and more. That's our strong performance turn into long-term momentum. Let's start based on the organic growth. Just to remind again to everyone, we changed the model from one-time sale into high-margin ARR powered by leasing and pay per use. With our new mixed list of fixed list or pay per use offering, clinics can start without major CapEx. Adoption is much faster, and volume rises. Recurring revenue increases. Now, we're widening the funnel with the accelerated protocol clearance, with the adolescents' MDD clearance, and our strength in OCD all will push demand higher, which means more patients, more referrals, and more sessions per system.
Let's jump into the strategic equity investment in mental health provides, just to give you some kind of sense of how it's going to look. Before that, I want just to touch base on one of our main shareholders that's called Valor Equity Partners. Valor Equity Partners is a roughly $20 billion technology-focused investment fund known for helping and building scale from iconic companies of the last decade. When they lean in, it's not passive capital. It's a signal. It matters for three reasons. One, they know how to scale. They helped build a global platform before. Two, they're active partners, not passive capital, supporting talent, operations, and expansion. Three, they validate the platform opportunity. Their investment says deep TMS technology is not just a product. It's a global platform.
We internally, and together with Valor, we try to think how to accelerate the growth. All right. Yes, we are growing organically. We're profitable. How can we really accelerate the growth into the future? We came to a conclusion that the best way is to invest minority stake in leading mental health networks clinics that already deliver care of scale. We identified more than 200 qualified clinics that can potentially be a good fit for this initiative. Each network adds 10-15 sites a year that's going to translate into machines. You know, if we're going to do a simple math, 10 clinics create a potential of $100 million-$150 million in new booking over the three years without additional OpEx.
Only 10 signed contracts with leading mental health clinics can yield between $100 million-$150 million in new booking in the next couple of years. How do we partner? This is a scalable partnership engine. There is the minority investment with preferred share into these leading mental health clinics, only in clinics with aligned DNA, which means clinical excellence, growth, profitability, and the right management team. Every dollar drives utilization, ARR, and brand strength. We have already done four investments this year, and we're just getting started. Let's think about the new care setting and territories. In general, Deep TMS starts in the clinic, but care cannot end there. Patient needs continuity at home. That is why Neuralif matters. We partnered and invested in Neuralif to develop a home use neuromodulation system for MDD. The vision is simple.
Treatment begins in the clinic and continues at home and vice versa under medical oversight. This is the first step toward BrainsWay 360, a connected mental health ecosystem built around deep TMS, next-generation rotational deep TMS 360, digital tools, diagnostics, and smart cloud platforms. We are building continuity of care and real-time data that improve outcome and scale impact. Very quickly, just to touch on the international growth opportunity. We have presence outside of the United States, and the momentum is real. The demand is growing. The distributors are pulling deep TMS faster. This is not a future option. It is already contributing, and it is a meaningful global runway in the next couple of years in Asia-Pacific, in Europe, in the Middle East, and in Latin America. Last but not least, I want just to touch based on some of the new care setting.
Deep TMS 360 is the future platform of BrainsWay. With the rotational field, we can stimulate more neurons in a much more effective way. We believe that we can meet shorter treatment with a better outcome and new indication. Clinical work is already underway in alcohol use disorder, post-stroke rehabilitation, and broader neurology indications. This is the bridge to the next chapter of the company. Just to give you some kind of taste of some upcoming milestones with the roadmap. You know we pretty check the box on kind of the near-term view for the next 12 months. Accelerated and adolescents' demand now is increasing. New alcohol use disorder trial has been launched already. We are planning to sign five enterprise deployments before the end of 2025. The data collection for the FDA comorbidity PTSD application together with MDD is underway.
We are targeting it for 2026. For the midterm, Neuralif home use device launch will be something that we're really, really looking for, just to conduct a pilot and see how it's going to move because we do think it's going to reshape the market. We're going to continue to have a broader enterprise rollout, up to 10 new investments, and wider call adoption with more payers' win. For the long run, bigger platform, neurology portfolio, global BrainsWay 360 launch, and some selective global expansion. If I need to just summarize this slide, in the near-term, demand and acceleration; in the midterm, scaling up the growth. For the long term, we are focusing on some very interesting indication outside of mental health as well. Let me close with a simple takeaway. We lead the category with our four FDA-cleared indications.
Our market is expanding through a new indication, home use and international growth. The business is recurring by design, 70% multi-year leases. We have a very strong visibility into 2026 and even beyond with a $65 million remaining performance obligation. We are consistently profitable, 10 straight quarters of positive free cash flow, and we are back to grow $71 million in cash and Valor as a scaling partner. Put it all together, we are in a real inflection point. 2025 was a record year for BrainsWay. 2026 will be the breakout year for the company. Now I'll turn the call to Gersh just to share his experience and view working with BrainsWay.
Absolutely. Thank you, Hadar. As Hadar mentioned, my name is Michael Gershenzon. I'm the CEO and co-founder of Stella Mental Health. I'll tell you a little bit more about what we do here shortly.
Before that, I think these are probably statistics or directional things that do not need much discussion, but worth a reminder. 70% of U.S. adults have experienced one or multiple traumatic events in their life. That in a lot of people leads to debilitating afflictions, with every year, over 8 million people suffering from PTSD, upwards of 50 million people suffering from depression, with 18 million within that suffering from MDD or major depressive disorders, 28 million with moderate or severe anxiety. All to say that this is a massive and global problem that the folks on this call are trying to make our small little impact on. As we can appreciate, all that kind of comes with massive societal costs. Most importantly, maybe the human costs. People suffering from PTSD are 10x more likely to attempt suicide.
Obviously, self-harm has very expensive downstream ramifications for ED visits and kind of just the medical care ecosystem at large. With those suffering from mental health disorders, upwards of 4x more likely to end up in ED. Again, a lot of words to say that let's say there's a lot of people to help. The TAM is massive, and innovation like that, that BrainsWay and the rest of the market are pushing forward, provides some, let's say, silver lining to this kind of global epidemic. At Stella, who do we treat? We view ourselves through the lens of the indications and diagnoses we treat, not so much the treatments we offer necessarily. We are focused on depression, anxiety, and PTSD. Within that, we've kind of positioned ourselves with our referral bases and within our markets as treating the treatment-resistant conditions within each of those.
As you can see, the severity of the symptoms that our patients face kind of skew towards the severe symptoms. Over 50% suffer from severe depression, over 53% suffer from severe anxiety, and PTSD, more than half have PTSD, and a lot with kind of chronic and debilitating severe PTSD symptoms. Again, I touched on traumas. We're very focused on data outcomes collection. We spend a lot of time focused on what it is that led people to us. Within kind of the experienced traumas, it's an average of over three per person. Childhood traumas being, unfortunately, more than half experienced by our patients. Health, and frankly, there's a list and a long tail of others. All to say that we see, let's call it short of the inpatient cases, those on the severe side of these symptoms.
From a demographic perspective, that ranges from 18- 84, I think, is the oldest patient currently in our care ecosystem. 54% female, 45% male, 1% non-binary. Point being, these are afflictions that are universally felt, and we treat each and every day. What do we offer? Everything starts with a comprehensive psycho-biopsychosocial with a mental health provider, so either a psychiatric mental health nurse practitioner or a psychiatrist, to, again, assess what was on the previous slide. What is it that the patient is suffering from, and what do they need? We have a range of tools, including medication management and therapy, or what is called frontline treatments or general psychiatry treatments, as well as interventional treatments, which are kind of the fastest growing in the market and provide the best and breakthrough outcomes, which I'll share here shortly.
We offer insurance-reimbursed modalities such as ketamine and Deep TMS, which obviously we'll talk a little bit more about, as well as cash-pay ones, ketamine therapy, and a specialized procedure for PTSD. Our goal is really to offer all, or as many as we can, operationalized, evidence-based, outpatient, psychiatric, and psychological treatments under one roof that minimizes the coordination effort between referral sources. We know there's a lot of patient drop-off when you give someone a name to a therapist. There's a great likelihood that they're not going to act on that referral. Our goal is to build kind of a cohesive ecosystem internally. Unfortunately, these are largely chronic conditions, and patients need more than just one modality. Again, building kind of that internal engine and all outpatient evidence-based modalities under one roof provides, most importantly, the best outcomes. Let's talk about those outcomes.
What you're seeing here, I'll caveat with our internally collected patient-reported outcomes on clinical scales for depression, PHQ-9, for anxiety, GAD-7. These are from about 10,000 patients and I think 200,000 scale and survey completions. On the depression side, I'll stratify this into, let's say, general psychiatry. Therapy, medication management, and the combination of the two absolutely has an important place in psychiatry. I'll caveat I'm a non-clinician. Dr. Muir will shed a lot more light on these things in a more scientific realm. That is how oftentimes patients come to us seeking help. They've heard about therapy. They've heard about medication management. Frontline treatments are really important. However, we know that less than half of people find remission.
In our kind of internally collected outcomes here, a third or just barely over 40% are finding clinically significant improvement one to three months out from treatment, which is where the breakthrough or what's called interventional psychiatry treatments come in. IBIM, ketamine, Spravato, a combination of many interventions, and very importantly, Deep TMS have almost twice as good of outcomes. What's not presented here is durability, how long people stay better, which is also much more improved. Just the rapid-acting nature of these interventions provides you, again, breakthrough outcomes in a smaller window of time compared to maybe years of therapy or kind of a lifetime of medications. All that said, together, this integrated care model does yield the best outcomes.
Really mixing and matching these modalities that's right for the patient provides both the most effective in the moment outcome as well as keeping people better. A little bit more about how our care model has and continues to evolve. In 2024, we provided about 12,000 patient appointments. Now that we're towards the end of the year, I can more or less confidently say we'll end the year around 85,000-90,000 patient appointments. Next year, our budget is to deliver over 120,000 appointments. Within that, over a third of them are interventional in nature. Importantly, over 60% of the interventional bucket is our revenue generation. These, both from a business model and outcomes perspective or care model perspective, are kind of the superior modalities.
Where we're focusing kind of our effort and energy is to be market leaders in the markets where we are providing those interventional psychiatry modalities. Within the interventional bucket, for us, Deep TMS is by far the fastest growing modality. As a percentage of the interventional appointments, it was only 8% in 2024, 21%, so a tremendous amount of growth in 2025. We're expecting that to continue into 2026. Prior to our partnership with BrainsWay in Q2 to where we'll end up Q4, we'll have about 100% growth in appointments delivered and Deep TMS appointments delivered. Both by the nature of just continuing to expand, Deep TMS becoming just general awareness, more people know about the modality, the accelerated protocols, and just all the incredible work BrainsWay and Hadar are doing to get this into the marketplace, we're benefiting from those tailwinds and so are patients.
Now, the last thing I'll end on is our kind of three-year growth plan. As we talked about, we've had a tremendous amount of growth through 2025. We'll have 12, and actually, we have three sites under LOI. We might end the year with 15 sites. Our goal is to get to 40 within a three-year span. We are in the LA area, Salt Lake City, Chicago, and Boston. Frankly, within those markets, there's room to build 50, 60, 100 locations. Our kind of first step is to densify our market positioning in each of those large MSAs, which we'll do throughout 2026. In 2027 and 2028, we'll continue to explore maybe one to two additional markets, again, with the goal of entering those with a bit of density and continuing to build on that market positioning through de novos and organic growth.
Frankly, the biggest lever for our business, both from a revenue profitability and kind of patient-centric outcomes approach, is continuing to further our interventional adoption. As maybe we could all appreciate, the great majority of people have heard of therapy. They've heard of medication management or SSRIs. Most people still haven't heard of Spravato or Deep TMS or interventional modalities. As those continue to progress in just general awareness, we're already seeing people coming to us for Deep TMS, already educated on what that modality can offer. Those are all tailwinds that benefit people's outcomes, but also kind of our business model. Growing our, let's call it, internal cross-referral of our gen psych patient from under 15% today to 25% will yield incredible revenue growth for us.
Also, just within Deep TMS, which is still kind of our largest growth lever within interventional, as general awareness grows, and maybe most excitingly, the accelerated protocols become more known and reimbursable, that is when we expect to see a tremendous amount of continued growth and exponential growth in Deep TMS. With that, I will pass it to Dr. Muir to tell us more about these exciting innovations.
Thank you so much. I think I get to do the slide advance. Hey, everybody. Welcome, investors, analysts, friends, colleagues, and readers of my newsletter or viewers of my TikTok channel. To give you a sense of the amount of product-market fit, I have 8 million views on TikTok in the last year on videos I have made, largely around conversations around insurance coverage of accelerated transcranial magnetic stimulation, which I am going to focus on. I am the Chief Medical Officer of two companies.
One is Radial, at which I'm a co-founder. That team includes our team members who were previously at Amazon Pharmacy, a little company you may have heard of, and the former Chief Medical Officer of Osmind at Carleen McMillan, who's another investigator on this accelerated trial I'll be presenting data from. I'm also the CMO for Neuralif, the other strategic investment BrainsWay made earlier this year in an at-home treatment for treatment-resistant depression. The mental health crisis has a solution. That solution is to use better and more scalable treatments. I'm going to tell the story of how big this market is and how much suffering there is. For every person who dies by suicide, and this number is tragically going up every single year in the past several years, we also have four people who have hospitalizations for suicide attempts.
Of that number, we have another eight who have emergency department visits related to suicide attempts or suicidality, 27 self-reported suicide attempts that never received medical care in a hospital setting, and 275 people are walking around seriously considering suicide. This is a crisis by any definition. The pills that we have to address it, I'm going to be really frank, don't work. There was a historical thinking in the field of medicine. If you do nothing, a third of people get better, a third of people stay the same, and a third of people die. That was from the era of the ancient Greeks. If you saw the numbers Gersh presented from their general psychiatry data, patients, about a third are reporting they do better when we give them pills. That's not good enough.
We need something that can work dramatically better to keep up with the scale of need. That was just in suicidality, which, of course, is not just depression or trauma or anxiety, but all of those contribute to that most severe outcome, which is really only the tip of the iceberg of the suffering and disability from these disorders. The data on those medicines we know from a reanalysis of the largest NIH-funded trial called STAR*D in 2023 is overstated. That is about 30%. Again, a third will get to remission with that first medication we try. After that, it is really a dog's dinner. We had a large-scale trial just in the past year called ASCERTAIN TRD published by our colleagues and Martin Aarons et al. They found that switch of oral medication or augmentation with aripiprazole in TRD just did not change the needle.
It wasn't statistically significant, but TMS was. This is the kind of old-school version of once-daily TMS done over 36 days, which is an effective treatment, but it's not an accessible or necessarily scalable treatment. Is there a more scalable version of this technology? I would argue deep transcranial magnetic stimulation may be that tool that gets us to scale fastest. We looked at data from over 1,700 patients treated in the real world. You're going to notice that 20 sessions patients did better. At 30 sessions, patients were in remission more than half the time. This is a huge deal. It looks even better on clinician-rated scales like the Hamilton Rating Scale for Depression, the HDRS, and the self-reported PHQ-9, initially introduced by Pfizer to sell antidepressants. It looks a little bit lower.
That really is just an outcome of the scale. All of these numbers are better than 30%, right? Quickly, how quickly can this go? We looked at a pooling of data from real-world accelerated treatment. We saw that response, getting 50% or more better, was happening in 80% of people. Remission was happening in 50% of patients in 111 patients in the real world. Dr. Tendler looked at this data. Colleen Hamlin looked at this data. We said, "Let's pick. What are we going to do the FDA pivotal trial with?" We chose the 5x a day because it is a half-day of treatment, more scalable for clinics, more easy to deploy, and honestly, just a little bit easier for patients to do because 10 treatments in a day, like we see with St.
Neuromodulation is a really long day for a patient and a family. I'll point out that I came to this honestly. I'm a psychiatrist, but I've also been treated with Deep Transcranial Magnetic Stimulation. That's how I know it works. That's how I knew it should be available to more people faster because when I was a fourth-year medical resident, I couldn't take a bunch of days off work. I had a limited number of days available to me, and that was seven. Less than that was what was necessary to kind of get me back to my life. Luckily, it worked. That's just a little view of me getting the treatment. It's safe. It's noninvasive. It is relatively comfortable, especially with repeated treatments. We saw that real-world data. We ran an FDA approval trial.
This is perhaps the best data ever submitted to FDA in the treatment of severe depression. We took people who had failed multiple prior medications. We enrolled them across multiple sites. By the way, the more sites you add to a trial, the less likely you're going to see a difference. The study design was crucial here. We compared patients getting once-daily H1 coil TMS to patients getting six days of half-a-day TMS, that accelerated line. They were basically the same. They were non-inferior. This is important because it means our trial didn't get stopped early. The St. trial was shut down at 15 active patients treated because it would have been unethical to continue to give human subjects sham treatment.
To get to the larger numbers necessary to convince any payer to pay for anything, we had to make sure this study would not get shut down early. Thus, we used a non-inferiority design as opposed to a double-blind sham control study design. That was in collaboration with our colleagues at FDA. It was clear. We have a 78% remission rate, which frankly stunned us all. This is even better than we were seeing in the real world. That is the opposite of the pattern you generally expect in that six-day accelerated treatment with a number of taper sessions thereafter, mostly to preserve the blind from my perspective, but perhaps helping with durability as well. This also similar data sets led to an adolescent label in depression. I want to highlight the market opportunity here.
There is only one other biological treatment that has any evidence, and frankly, it's scant for adolescent depression and it's Prozac. Every other drug you've ever heard of doesn't work for kids. I'm a child psychiatrist. This matters, but we have one safe and effective treatment that doesn't have an increased risk of suicidal thinking and it's TMS. And the Deep TMS product from BrainsWay is not identical to other TMS treatments. It is meaningfully different, and I would argue more scalable, harder to screw up at an individual variability level. It works. It works reliably. It works safely. I got to say, kids complain less about this treatment than adults do. Hats off to the young people who got these treatments. We're seeing multiple FDA labels in a single year, and there's more to come.
I want to highlight it's possible we may be able to get not just this remarkable in-clinic treatment, but actually into the home in the very near future, submitted to the FDA for pre-market authorization on a breakthrough status. This will be an FDA-approved, not cleared product. The Relivion—sorry, that's the migraine product we already have in the market—the Proliv RX device for depression. This is an external combined trigeminal and occipital afferent nerve stimulator. It worked. It's the best data ever presented to FDA for an adjuvant treatment for depression. All the original TMS trials were done using TMS as a monotherapy, not with the drug. This was done while patients didn't screw around with their drugs. They just kept taking whatever they were taking. It's harder to show a statistical difference.
This treatment had a sham response that was better than the active group in the original neurogenetics trial. We still showed a difference of, I think it was like 2.63 additional points on the Hamilton, which is a big number in an at-home treatment. My hope is we're going to be able to either start people on a treatment in this BrainsWay ecosystem. If they do not remit, we can get them to this more effective accelerated deep TMS treatment. Maybe they are so acute, they need deep TMS treatment first, but they cannot travel back and forth because maybe they live in North Dakota. We can keep them well at home with the Proliv treatment.
The most important thing about this may be that patient app you see in the upper right corner and the cloud database and analytics it allows because that is clinical insights, that is clinical visibility. It could be used to measure things that are not just the Proliv device in the future. These are all possibilities. Building that integrated, scalable data collecting infrastructure where we can map that, frankly, 7 trillion parameter space of TMS alone, that is a huge deal. I think the strategic investment BrainsWay made into Neuralif is one that is likely to pay off not just for the Neuralif product itself, but for the entire BrainsWay ecosystem and for our patients who need to be well, not just a little bit better.
That's the Proliv RX device, which we expect to hear back from the FDA by the end of the year or early next year. To give you a sense of how potent that is in the home setting, we're looking at response rates in the first eight weeks of the trial, especially gets better in the second eight weeks, which I'm not presenting here, of 31% remission, again, compared to sham of 21% in the first eight weeks, getting into the 30%+ , almost to 40% in the next eight weeks, and clinical improvement in most of the patients. This is wildly outperforming medications traditionally in a cohort who've already failed oral medication treatment and a small at-home battery-powered device that's using sensory nerve stimulation. It's a massive unlock in scale. When we put those things together, we have hope for our patients.
All of this is in this integrated ecosystem that Hadar and Gersh were describing, where we're getting many patients from treatments that don't work to treatments that do. Thank you so much for your time.
Great. Thank you, Dr. Muir. At this time, we'll be conducting a question-and-answer session with our speakers. Please hold for a brief moment while we pull for questions. Our first question comes from Jeff Cohen at Ladenburg. Please go ahead, Jeff.
Hey, good morning. Thank you all for your time and presentation. I guess a couple of questions from our end. Firstly, Michael, if you could comment on Spravato (esketamine) and as far as a Venn diagram, if it's being used before, after, or in conjunction to TMS for a percent of the population, give us a better sense of that use.
Yeah, it's a great question. Given some of the challenges with prior authorizations, today it's typically used not in conjunction with, and those are insurance prior auths, if I wasn't clear. It is used either before or for those that are non-responders on Deep TMS or TMS after. Let me know if that answers your question. I think there's a lot of exciting opportunity to use those in conjunction with one another right now, not done very often just for the practical nature of the hoops we jumped through with insurance carriers.
At the moment, the payers of some are reluctant to pay for two or three. The pushback is leaning toward which? Is your pushback saying TMS should be enough, or is your pushback saying some of the other treatments may be first line versus Deep TMS?
Yeah, sorry if I wasn't clear. Their pushback is not so far the right word. They want a trial of Deep TMS or a trial of Spravato, at the end of which, if the patient has not yet kind of seen the clinical results they're hoping for, you submit for a prior authorization for the other one. Getting them in conjunction with one another is more difficult and kind of less scalable. We'll prescribe one or the other, run the patient through the protocol, see how they're feeling. If they are a non-responder, submit, and most often go with the inverse treatment.
Okay, got it. As a follow-up for Dr. Muir, I wanted some commentary on Proliv, please. Congrats, hopefully, fingers crossed, on the pandemic breakthrough coming through in the coming months. Talk about the payers. Again, I hate to harp on the payers, but talk about the payers and how they are currently thinking about or how they may be thinking about Proliv and/or TMS and/or total reimbursement numbers.
I'm actually shocked at the positive response I've gotten from my payer colleagues. I was speaking to senior leadership just the other week at both Cigna and Aetna. I had outreach from my colleague at Tricare West. The outcomes, especially with accelerated TMS and the ability to get better patient adherence to a treatment course because that's already in the market, has the payers honestly salivating. I'm shocked to be saying that, but they are to get this in their formularies. The real blocker right now is the code set. The American Medical Association is, of course, the owner of the product that is current procedural terminology.
A new code set I would expect to be submitted in 2026. This has been a long-term effort. You may be familiar with the fact that the medically unlikely edit, a.k.a. how many TMS treatments can you do in a day, was updated in 2025, thanks to Carleen McMillan, the Insurance Committee Chair, also full disclosure, my wife and co-founder at Radial. The American Medical Association wants to see an update that pushes to CMS and to thus all other payers around how to reimburse technically in the back end for these services. A lot of the progress you've seen demonstrated, that real-world data had to do with my close relationship over many years with Cigna, which has allowed us to gather the data supporting the need to do that accelerated FDA trial. We had the real-world data first, which is actually very odd.
You can't do that in drugs. You can do that in devices. It's a safe way to proceed. That's what happened here. We had really good signal first. When it comes to the Neuralif device, Proliv RX, the price point for that is relatively aggressive in terms of coverage. We've gotten no pushback from any of the payers we've talked to on that price point. Obviously, we need an FDA approval before we can bring it to market. The margins are great on that product, even at that aggressive price point. I'd expect it to come in around what we're seeing for oral medication augmentation with drugs like brexpiprazole or Caplyta, which you saw previously. It's going to be competitively priced with other adjuvant treatments. The pushback around that price point has been zero in those initial conversations.
Maybe that means we're being a little too aggressive. We'll find out. The benefit, again, is these are platform technologies. You have Wegovy and Ozempic. They're the same drug, but they can have different product price points for those different indications. We can do similar things with the BrainsWay ecosystem of technologies because when you get a new indication, you can have a different branding, a different price point, etc. Is that helpful, Jeffrey?
Yeah, that's helpful. Would you expect the payers, let's say that Proliv is 10% or 20% of TMS treatment, would you expect that the payers would go for TMS plus Proliv afterwards, or would you expect the payers to go for Proliv prior to TMS, or would you expect for payers to push back and want Proliv instead of Deep TMS?
I would expect none of those. Keep in mind, Spravato is a $2 billion a year product on a tiny fraction of the total population of TRD patients. The thing they have to deal with is currently their network insufficiency and their lack of effective treatments. I do not expect them to have any opinion about any of the things you brought up in the beginning. They just want to know, are we including this in the formulary or not? Because we have a migraine device in the market at Neuralif already, we are already in the product catalog as a vendor for the VA system. We expect to essentially go hard at a cohort of individuals who desperately need treatment for their depression, but hate drugs, which is, frankly, most people are not enthusiastic about drugs. They have just heard of them.
We are working on the integrated delivery network, and those are groups like Kaiser Permanente or Hofstra Northwell, which own both a health plan and the care delivery services, Gunderson Health System in Wisconsin, for example. That is going to be our initial beachhead. The enthusiasm from the large commercial payers has been, frankly, surprising, and we look forward to pulling that thread and bringing that product to market for everybody who needs it. I do not see them even remotely trying to dictate or have an opinion on the sequencing of treatments. That is up to clinicians, and they like working with narrow networks more and more. The kind of groups like Stella and like Radial are, we hope, in the position to be those narrow, high-performing networks that are going to have preferred relationships with strategic payers.
Perfect. Thank you both for the talk and for taking our questions.
You are welcome.
Thank you.
Thanks for the questions, Jeff. Our next question comes from Ram Selvaraju at H.C. Wainwright. Please go ahead, Ram.
Thanks so much for taking my questions. Firstly, a question from Michael. I think it would be helpful to understand in your experience at Stella how a product like Deep TMS 360 ultimately could be deployed. I think this kind of echoes a question that was discussed earlier, if it is going to be preferentially deployed in conjunction with specific genres of pharmacotherapeutic interventions or not. If it is likely to be deployed in conjunction with specific pharmacotherapies, what are those pharmacotherapies most likely to be? Are they going to be in the psychedelic category, for example, more traditional antidepressant or other neuropsychiatric medications or something else? That would be very helpful.
Also, for Dr. Miur, I just wanted to understand what you expect the timeline to be to obtain FDA licensure for the Neuralif device. Lastly, for Hadar, I wanted to see if you could opine on two things. One is the circumstances under which BrainsWay might acquire Neuralif, if you can disclose if that would be in a cash or a stock transaction or a combination of both, if that is at BrainsWay's discretion or if that's been predefined, what the circumstances of a potential transaction like that would look like. Also, if you can comment on, in terms of the international expansion and the evolution of the install base, how quickly you expect Deep TMS 360 to sort of percolate across the current customer base, and in particular in the United States versus internationally, what you expect the uptake curve to look like, specifically for the 360 system. Thank you.
Great. Gersh, maybe you can just jump first and then Dr. Muir, and I'll jump on my questions later.
Yeah, absolutely. I will answer it from the non-clinician ones. Dr. Muir is uniquely positioned to do that, and I'm uniquely positioned not to answer from that standpoint. I will say we will aggressively pursue, and our job is to be the delivery mechanism and infrastructure to the things that work best and that insurance companies reimburse and patients are excited to pursue. That is a non-answer to say anything that reduces the convenience barrier for a patient, which today is typically 36 sessions of D or RTMS spaced out over eight weeks, that is inconvenient for patients, generally speaking, that sucks in or reduces the catchment area of our sites and reduces our addressable market in our markets.
With kind of the rollout and evolution of these protocols that reduces the barrier on patients to get treatment, we have seen compared to some less frequent treatments that we offer, meaning more convenient in the way of getting to the center, it increases your catchment area. That's to say, I think some of these developments that Hadar will speak to and the 360 and the accelerated kind of protocols and infrastructure are going to reduce the barrier on the patients and help more people actually want to and be able to get into treatment. As far as how they interplay with other modalities, I think that's where, number one, that's a clinician-led conversation in a lot of ways. That's where the payers, at least from our standpoint, set the rules, and I'd say we play by them.
How that evolves is, to a certain extent, outside of our control. If I have to guess, just based on our internally collected data of kind of multi-modal treatment, relaxing those standards and mixing and matching, let's say, both general psych and that being therapy, medication management, and these interventions allows kind of clinicians to do what's best by the patients. That said, the payers kind of operate, let's say, with their own set of data and maybe agendas and we are order takers from that standpoint to a certain extent.
Ram, thanks for the layup. I appreciate you. As a longtime kind of author both in science and in popular press about this future, what we're seeing with these range of treatments is we're going to be putting general psychiatry to bed over the next couple of years, and we're not really going to need it because we have remarkably effective treatments in a short time frame. When you look at payer math, right, if you're on a Medicaid plan, the shortest time on plan in American healthcare, we're looking at 10.1 months on a health plan. If you do anything, it's got to have a financial impact that's positive within 10.1 months. Prozac isn't going to do that. Single-dose psilocybin might. Single-dose psilocybin isn't in the market yet. NMN-120 isn't in the market yet. The only condensed dosing treatments that exist are accelerated treatments like BrainsWay's accelerated protocol in six days.
That could possibly have an outcome that changes the cost curve for a payer. Practically, depression is the only condition that's been demonstrated to have treatment meaningfully change the cost curve. That's from data in the Oregon experiment in Medicaid populations, which I'm using as an example because it's the most challenging population in which to make a difference. Treating depression works in that Oregon data set from their kind of natural experiment where they essentially inadvertently randomized people getting Medicaid coverage a number of years back, and depression was the only condition where it mattered. The Neuralif product, we are on the FDA's timeline. There's some uncertainty with the government currently around those timelines, but we have under 90 days on the clock. They may come back with additional questions, but our work with them has been close and collaborative thanks to the breakthrough pathway.
I'd expect end of this year, early next year to be when we have that definitive decision. Again, I don't control what the FDA is doing. I do respect their hard work at all times, and they have been gracious and communicative throughout. Briefly, on the Deep TMS 360 product, the rotational field device, that I want to highlight is 800% more efficient at 40% lower motor threshold. So it's more comfortable and wildly effective. I've been waiting with bated breath for literally a decade for that product to come as far as it already has. We're looking at a game changer in a disorder, alcohol use disorder, which hasn't had any meaningfully effective treatments of any kind. Like you sit together in group therapy and you dry out in a detox, and we call that good enough, and it's not for people who are suffering.
Are there other indications like stroke, etc., where that may prove a meaningful treatment? By the way, that's on better rate cards in hospital settings. Please God, give me a neurosurgical rate card on which to fill these treatments with its multiplier. We're looking at an entire new area of total addressable market when we're getting into neurology settings, we're getting into hospital settings. At Radial, we're already working with hospital systems to bring these interventional treatments into inpatient, outpatient, residential, etc., levels of care. We look to not just set new standards in what could or should be covered, but to make it a fiduciary duty to cover only the most cost-effective and best outcomes in treatment with the lowest risk.
Great. Dr. Muir, you basically stole my thunder on the Deep TMS 360.
I'm sorry. This is how long Hadar and I have been working together.
I'm going to touch on the international market. It's definitely going to generate demands. Since it's a new modality, it's a new modality and new space, right? Not only mental health, it's going into a new space like addiction, neurology that we're starting to see some good results. As Dr. Muir said, like 800% more efficient, I do foresee a significant demand. We are actively speaking with our distributors just to run some pilots in some rehabilitation centers that will definitely increase the appetite and the market demands outside of the United States. Big, big, big waiting for this technology. Again, it's not just a product. It's the whole ecosystem around this rotational, which is again, all the connectivity with the home care, with the data collection, with some personalized treatments. The market is really, really looking for this new modality.
With regards to Neuralif, as we published, we have options to acquire Neuralif based on meeting some certain milestones. The interest is definitely there. We just need to make sure, first of all, let's make sure that the company is receiving the FDA approval. Then they need to hit some milestones around growth and penetration into the market. If there is a good DNA that is aligned between the companies, there is definitely a big interest. I will not get into the details whether it's going to be a cash or stock deal. I think all the options are on the table, but there is definitely an interest. I do believe in this product. I do believe that it eventually will increase the total addressable market that some of it is not really existing to us today.
Most important is, as for a technology company, data collection. Being able to collect data online from patients into your clinics, into our labs, I think that will be worth a lot for shaping up the future of mental health and in the future some other conditions.
Thank you so much for those detailed answers to my questions. Very much appreciated.
Thank you, Ram.
Yes, thank you for the questions, Ram. Karl Burns at Northland Capital Markets submitted his questions. Have you seen changes in workflow attributable to the one accelerate protocol and two high remission rate from the study?
Dr. Muir, maybe you can jump on this.
Yes, we're building an entire company around it. At Radial, we really focus on these accelerated deployments of treatments. That is true with the BrainsWay treatment. We've been doing accelerated treatment since prior to this FDA label. We were a clinical trial site on it, but we built our business around deploying that. We'll be announcing more on the Series A funding of that probably later this week.
Yeah, maybe I can share just from our standpoint. From an infrastructure standpoint, it more or less requires us to have a minimum of two chairs in kind of two different rooms, given one room is more or less being utilized for a big part of the day. Another is turning patients over much more frequently. From our standpoint, and maybe I can speak on behalf of the rest of the market, it will require more of Hadar and BrainsWay's great technology.
Great. Thank you both. His final question, how do you see the accelerated protocol and data supporting great use and access?
The easiest number to answer that question is the average distance traveled to come see our clinicians. It's 600 mi. People are coming from all around the world just to get access to this treatment. That says there's product-market fit when you add a plane ticket and prior to broad insurance coverage. Imagine what that looks like when you have more local access, you have the ability based on that kind of telehealth infrastructure that we built out on the legal side over the course of the pandemic. Now you're deploying it to be able to do those initial evaluations where the patient is, get them to the nearest clinic. If there are not enough clinics near you, maybe there need to be more. I would imagine there are more BrainsWay devices that are going to be needed.
There's more monitoring technology that's going to be needed to make sure those patients get and stay well over time, to retreat them promptly. In your local hospital, this actually can get people well in the timeframe of an inpatient admission or even could get started in the emergency setting. Keep in mind, there are ERs for psychiatric patients. They're having patients just sit there in a bed, wasting time, money, and suffering for 23 days before they're transferred to an inpatient psychiatric setting. In the time they're sitting there, they could be well with this protocol. It is a step function improvement in what's possible with depression and other psychiatric disorders just by virtue of being so much faster than we ever imagined possible.
Can't add anything there. Just catchment area. Today, our average TMS patient travel is 14 minutes driving time. I think this increases that to at least an hour and just makes much more of the market available to every single clinic.
Great. Thank you. This concludes our Q&A session. I'll hand it back to Hadar for some quick closing remarks.
Yeah, great. First of all, I'm feeling blessed having partners like you guys. Thank you for sharing your view today. My takeaway from the session today, I think everybody can read the financials of BrainsWay. That's great. I think all of us are shaping the future of mental health that is evolving in front of our eyes. My takeaway from some of the comments that you mentioned today, market is growing, is definitely growing, and we want to be there with the best modalities and with the best product.
We're speaking about a huge total addressable market, whether it's alternative to pharma treatments or some other modalities. There is much more market awareness due to this minority investment that we're making through your channels. I'm very happy about that 100% increase in utilization since you launched the program with BrainsWay. Just to mention, by the way, Stella, before they switched to BrainsWay, used to work with the first-generation figure of eight technology. I'm really happy and feel proud to share that they continue to, they like the technology, they use the Deep TMS technology, and they see the benefits out of it. Accelerated protocol is here and is going to win. We are feeling, we're feeling the increased demand with all the great latest clearance that we received.
We are really, really looking for a very, very strong 2026 that is going to be a breakout year for BrainsWay in specific, but I think for the space also in general. With that, I want to thank all the investors for listening to us today. Enjoy the rest of your day. Thank you.