Good afternoon. We're back. This time it is with Dane Andreeff, the CEO of Helius Medical Technologies. So, Dane, I would like it if you would first discuss PoNS. It's not, you know, a typical therapy. Tell people how this could benefit patients, you know, with balance and gait deficiencies, and from what they have those balance and gait deficiencies.
Yeah. So thank you, Jonathan. So PoNS therapy is short for Portable Neuromodulation Stimulator, or PoNS device. It's a play off your Pons gland. And it is an orally applied non-implantable that goes on two-thirds of your tongue, and it is used in combination with physical therapy to treat one of the most common symptoms in neurological diseases, which is balance and gait deficit.
Okay. And so, you know, discuss the competitive environment for this device. You know, what's it fighting against today?
Sure.
'Cause it's on the market.
Sure. So right now, PoNS, it is in combination with physical therapy. So it's rehab in itself. Before PoNS, a patient would come in with MS, stroke, traumatic brain injury, a concussion, and they would go to their physical therapist, a rehab clinic, and be treated just with physical therapy. The other devices that are on the market are very much skin devices, and they're really for short-term treatments. They are TENS units that would go on your knee or on your leg, and they're very much short-term treatments. Once they stimulate, they do have some efficacy, but once you take the device off, the efficacy goes away.
Where's it approved, and in what indications?
So right now, in Canada, we first got approved for balance deficit due to a traumatic brain injury. That was in early 2018, and we started commercializing in early 2019 in Canada. And then during COVID, COVID was very difficult, because the Canadian government shut down most, if not all, rehab centers, physical therapy clinics, and so forth. But we also got gait deficit due to MS cleared in Canada, as well as early last year, we got stroke, balance and gait deficit due to a stroke, cleared and authorized by Health Canada, and also the reduction reducing the risk of falling. Now, in the United States, we've been commercializing in the United States for almost two years now for gait deficit due to multiple sclerosis. And that is a prescribed therapy. PoNS therapy is prescribed in the U.S. In Canada, we're in well over 81 clinics.
Basically, a patient in Canada would purchase the PoNS device at those rehab clinics.
And so, you know, be a little more detailed about how it's different from lower extremity devices and, you know, just straight-on physical therapy.
Sure. So our device, if you had the device in your mouth, you know, and it's twice a day for 20 minutes in combination with physical therapy, but if you just sat here with your device on your tongue, stimulating the two nerves in your tongue, the trigeminal and the facial nerve, you would be feeling 25 million impulses in that 20-minute session. And what happens from there is a neuromodulation effect to a neuroplastic effect. We did before and after functional MRIs on our MS patients, and what we saw was a dramatic increase in blood flow and blood oxygen to the brain. So basically, what we proved was we're able to rewire the brain by using just the PoNS device.
Now, when you add your balance and gait exercises, that's when you start improving on your daily activities, your balance, you're not dizzy anymore or lack a dizziness. You're able to go up and down stairs. You're potentially maybe even going back to work. I mean, all of your daily activities will start improving, but it also varies from patient to patient. Now, if you just use the localized leg stimulation devices, and if you're just sitting there without any balance and gait exercises, there is no neuroplastic effect to the brain because these are neurological conditions. MS is, stroke is, TBI, of course, Parkinson's, cerebral palsy, all of them are neurological conditions that are in and around your cerebellum. So that is what we're treating. We're going after the main effect, and we're creating new pathways and rewiring your brain, which is called neuroplasticity.
Right. And so, you know, fixing gait and balance would certainly imply that these patients aren't going to fall as easily. And, you know, from a patient and a payer perspective, you know, how significant is not falling?
It's dramatic. If you look at all the neurological conditions, the diseases like MS and stroke and traumatic brain injury, 70%-80% have balance and gait deficit. So if we're able to improve in, you know, and really increase the ability for people to gain their daily activities again, adversely, on an inverse basis, we should be reducing the risk of falling. If you're, you know, if you're not dizzy anymore, if you're able to walk a straight line, if you're able to go back to work, all of those are an increase in movement. And frankly, what we did in Canada, we were able to reduce the risk of falling by 29% in stroke using PoNS therapy. That is such a dramatic improvement versus just rehab. Physical therapy by itself is only 1%-3% effect.
So if you look at now at the U.S. data, basically of the 70%-80% of that have balancing gait deficit due to their neurological disease or trauma, almost 50% of them have fallen at least once. And right now in the United States, it's $65,000 on average per fall. That's the cost to the U.S. healthcare system. It's well over $50 billion now in cost when you fall. You know, you hurt your knee, you break a hip, your shoulder, your ribs, you do have a TBI. All those costs are well over $50 billion now. That's a whole new disease state like lung cancer. I mean, it's that dramatic. And we have the opportunity at Helius Medical using PoNS therapy, our neurostimulation device, to really help a lot of people and reduce the cost for healthcare.
Yeah. Fall can be a massive negative inflection.
It's terrible.
Have you ever seen anything remotely akin to a safety or tolerability issue with PoNS?
Yeah. It's a great question, Jonathan. Since we're a non-implanted device that goes in the body for 20 minutes, and it's a direct pathway to your cerebellum, we've actually had well over 225,000 sessions and no adverse effect due to the PoNS device. So it's a very safe device.
Market size for MS in the United States. I mean, you're approved here for that.
Yes.
You know, what is that total market, and what could you think you could possibly capture from that?
Sure. A great question, Jonathan. So right now it's 1 million and growing, MS patients. Unfortunately, two-thirds are women. They get diagnosed in their early 20s and 30s. Men get it later, late 40s, early 50s. 70% have gait deficit issues. And if you think of just how we could capture it, if you just look at Medicare, about 25%-30% are covered by Medicare. And if you take 1% of those, you know, that would, you know, potentially, allow us to grow to a, a break-even to a positive cash flow effort with reimbursement. So we're in this process right now. We're right in front of reimbursement, and we just received our HCPCS codes from CMS.
So then, to move on from that, in the U.S. for stroke, what is your regulatory, you know, your regulatory pathway for stroke?
Sure. Well, we've already announced our regulatory pathway. The FDA has been aligned with that pathway since we announced that in January. We actually started the trial in the Q4 with the Medical University of South Carolina. We've also added Brooks Rehabilitation, which is one of the largest stroke rehab centers in America. We'll be adding more sites as well, but we're up to 100 patients. It's an RCT, randomized control trial, but there's also an open-label part of the trial as well. And we look to have that data by the end of the year and apply for a regulatory submission sometime in early Q1 of 2025. We'll be using our second FDA breakthrough designation pathway. It's a de novo pathway. And we look forward to hopefully having approval by the FDA in late summer 2025.
We have a lot of milestones, at the moment, not only in stroke but also MS.
You know, apart from that in stroke, though, there seems to be a decent amount of buy-in. Other groups, up in Quebec and such, are signing up to use PoNS. Can you talk a little bit about those independent things that aren't necessarily an RCT for approval?
Sure. Once we got Health Canada to authorize it in Canada, we're seeing more and more of the provincial healthcare plans come to us and wanting to do payer trials. For example, the Quebec Ministry of Health had just already announced the intent to purchase 30 PoNS devices at for five or six sites. We'll be starting that trial with them probably late Q2 this year for data in the Q4 for them. Stroke is paid by governments. If you look at CMS right now, about 90% of strokes are covered by Medicare. And that is extremely important since we just got our HCPCS codes for MS for both the controller. We have one code for the controller and another for the mouthpiece.
Yeah. Give us a little more, some detail on that. You have this now. What's next? Is this more than just even a two-step process?
No. It refers, there's two steps and maybe a third step. But, you know, right now, we've got our HCPCS codes for both the controller, which is a smart device, and the mouthpiece. It goes effective April 1st, with those codes. So we can start filing claims. We're talking to payers already. We're also, you know, potentially going to the VA as well. We don't need the codes for that. But what the codes really mean in the next cycle, when can we expect the actual benefit class, the reimbursement? And we've been explained that the next steps are in this next public cycle with CMS that they will address the reimbursement for our PoNS device. So the dates look like potentially the next public meeting is end of May, June.
We might hear something from CMS then, and/or end of August, early September. That would be a definitive final decision for an effective date, October 1st of this year. We're looking hopefully for October 1st, get going with CMS Medicare reimbursement.
What kind of, you know, I don't know, what kind of sales ramp are you expecting that to trigger? 'Cause that's a significant gate opener.
Yeah. So we just are really unsure at the moment, how CMS is going to decide about the benefit class right now because we're one of a kind. We're not a skin device, like other neurostimulation devices. Our device actually goes in the mouth. It goes in the body. It goes on an organ, your tongue, and it is the direct pathway to the cerebellum. So, you know, we feel with balance and gait deficit, no one else can do this for one. And the way we set up PoNS therapy is highly unique, but it's also cost-effective to the healthcare system. Of the 14-week treatment, the first two weeks are done with your physical therapist, just like you're, you know, rehabbing your ACL or your hip, after hip surgery or soldier shoulder surgery. So basically the last 12 weeks are done at home.
About 90% of your PoNS therapy are done at home. That takes a tremendous amount of cost out of the system when you could do your balance and gait exercise, really improve your daily activities all in your home. You don't need any special devices or equipment. It's just PoNS therapy at home doing your balance and gait exercises.
So, to stick with reimbursement, tell us about Pacific Blue Cross and what that means to what you can do in Canada.
Yep. Late last year in the Q4 , Pacific Blue Cross announced their study. It was a back-to-work study for traumatic brain injury subjects that were on their long-term, long-term disability claims. And they had to be at least two years away from their event, like an automobile accident or an injury at work. Some of these folks were five years away from their traumatic brain injury event. And eight of the nine came back after 14 weeks of PoNS therapy, and came back and said balance and gait was, deficit was no longer an issue to going back to work. That meant 90% response rate and success for people to go back to work. I mean, that, that's, that's a number totally unheard of. And then five of them went back to work and saved Pacific Blue Cross.
On those five, they closed out all five long-term disability claims and saved Pacific Blue Cross $1.6 million. That's a dramatic health economic benefit. It's really a great feather to all the employees at Helius and, and for PoNS therapy.
PONSTEP trial has been going on for a little while. Can you help us understand, you know, enrollment and when full enrollment might allow us to see some data?
Yep. So we should be pretty close at the end of this month, March, to enrollment being completed. We should be seeing the data come out in the Q3 . PONSTEP was an open-label clinical study for balance, gait deficit due to MS at six of the key opinion leaders in MS in rehab in America, from the Shepherd Center to NYU Langone, MGH, Neurology Center of New England, Oregon Health & Science University, and Montefiore. So we had six great KOLs, and we just really look forward to that data for all of us. And we'll be able to use that within our reimbursement dossier. But really, it's getting the word out to have these six experts be able to use PoNS therapy in their rehab treatment of gait deficit was really just a wonderful thing for all of us and those patients.
Right. So as you're progressing towards, you know, what should definitely be more government reimbursement, how has the cash pay been going over the last, you know, say half a year or so? Is that kind of flat, or is there any growth there?
So, you know, every week, you know, we get just a number of inquiries from patients. You know, MS patients are the greatest advocacy for us. They are very, you know, in a lot of social groups on social media. They love to hear about new technology, new devices because of the chronic progressive nature of MS. But right now, you know, it's fairly flat because of cash pay. Our listed price is $25,700. And that is, that's, you know, really from a health economic study but also along a lot of our data as well. But at cash pay, we have a lesser price at $14,500, which allows for patients to really be able to access it, you know, on a number of prescriptions.
So, you know, we've seen, you know, patients, you know, take breaks from their therapy, but their caregiver comes back and says, "You know what? PoNS, PoNS did such a great work." You know, 3 months, 6 months, 9 months later, they come back and prescribe another mouthpiece.
And so, oh, I'm sorry.
No, no, that's it. Thanks.
Where do you see, you know, CMS shaking out for what they'll pay for the mouthpiece and the controller?
Boy, that's to be determined. You know, for the controller, again, you know, that list price is $17,900. The mouthpiece is $7,800. You know, we know that MS patients being chronic and progressive like to stay on the therapy. We've seen that in Canada, in the US. This is all on-label, as well. It's similar to a doctor prescribing a, you know, two more weeks of rehab or another week of antibiotics.
Right.
You know, but in our case, because of the chronic progressive nature of MS, you know, they know they're facing a declining curve in their gait deficit. So, you know, and again, it varies from patient to patient, but we see that trend to continue.
Okay. So while that's happening.
Yep.
Investors always do want to know how much gas is in your tank. What does your cash for how long does your cash position fund you?
Well, we've announced that we publicly announced we just used our ATM. We raised about $1.6 million gross at much higher prices than we are today. So that's very helpful and less dilutive to the shareholder. And that gets us into the Q3 of this year. But we've really taken our burn rate down. We're in the, you know, $10-11 million a year. And we really don't see that number going higher with even reimbursement coming to fruition for three reasons. We're able to scale manufacturing at the first onset of reimbursement. Second, we developed a hub service that is a telemedicine e-prescribing approach so that a patient we partner with UpScript doesn't have to wait three months for a prescription.
They could come in through the hub, fill out a questionnaire, and within 24-48 hours, have a telemedicine appointment with a neurologist. If they prescribe PoNS therapy for their gait deficit, they get an e-prescription. It gets filled out. Then the last leverage is, because of COVID, and we learned a lot, you know, pre-COVID and post-COVID, we modularized the PT training to be a registered PoNS therapist. So it takes three hours or less. A PT could come to us, send us an email, send their accreditation numbers. We give them access, and they do it on their own time. It's free. So we could really scale manufacturing, the hub services, the appointments, you know, and frankly, the PT training.
Right. Well, it's really it's really nice to see, you know, the reimbursement future clear up for something that really does look like it works.
Yes.
Thank you very much, Dane.
Thanks, Jonathan.
Nice to have you.
Thanks.