Equity Research is published in the framework of the Tel Aviv Stock Exchange (TASE) Analysis Program

Tel Aviv, 11 April, 2018 – TASE analysis project was launched in 2016 in order to raise the investors’ level of knowledge of TASE listed technology and life-science companies and the markets in which the companies operate, thus creating appropriate pricing and increasing the exposure of investors from Israel and abroad. Its goal is to encourage investments in these companies by removing the barrier of lacking understanding in the market.

In order to maintain professional, independent and unbiased analysis, the companies signed an agreement with the TASE to receive the analysis services for an obligatory period of two years. The companies cannot withdraw from the project during this period. The analysis is funded by the companies surveyed with funding from the Chief Scientist and the TASE.

Summary of Highlights

  • During the year 2017,the Company recorded revenues of $11.1 million, of which 60% were derived from rentals and 40% from sales; Sales grew each quarter in 2017; Sales for Q4-2017 amounted to approx. $3.6M, an increase of almost 60% on sales for Q1-2017 which stood at $2.1M.
  • On October 3, 2017, the Company announced positive final results in a multi-center trial for the treatment of Deep TMS in obsessive-compulsive disorder.
  • Brainsway submitted to the FDA, a request for the 510(k) De Novo route for approval of marketing and selling the Deep TMS, to treat OCD.
  • The Company continues to develop its clinical pipeline as planned, and as discussed in our Initiation of Coverage report dated August 6, 2017.
  • On December 11, 2017,the Company entered into a private placement agreement with leading investment parties in Israel led by HaPhoenix. The Company will allocate to investors 11.57% of issued share capital in exchange for NIS 15.55 per ordinary share. After completion of the allotment, HaPhoenix will hold about 7.3% of the Company’s issued share capital.
  • We estimate the value of the company at $129.5M (NIS 453M), corresponding to a target price ranging between NIS 26.3 and NIS 28.6; a mean of NIS 27.5.
  • The significant capital raised by the Company strengthens its financial stability and enables it to continue supporting clinical development and regulatory submissions, whilst also expanding its presence in the US by recruiting marketing and sales personnel to further establish the rental model.
  • The capital raising from the group of investors led by HaPhoenix reflects confidence from institutional investors in the company’s activity.
  • In view of all of these considerations, we affirm our expectation that the Company will increase turnover via the leasing model in 2018. In parallel, we assess that the capital raising deal mentioned above is likely to be approved. We therefore confidently retain our target price estimation

About the company – Brainsway Ltd. (Brainsway or “the Company”) is an Israeli medical device firm focused on the development and commercialization of an H-coil helmet device for Deep Transcranial Magnetic Stimulation (dTMS). dTMS enables non-invasive activation of deep brain structures that can cover a broad range of brain disorders. The company has FDA market approval for Major Depressive Disorder, and wide reimbursement coverage for this indication. The company has recently received positive results in Obsessive Compulsive Disorder (OCD) patients, and will apply for market approval in the US for this indication. Approximately 15,000 patients were treated to date with Brainsway’s device.

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