Nexstim Plc (NXTMH) Earnings Call Transcript & Summary

Welcome to Nexstim's webinar for investors, analysts and media. In this webinar, Nexstim's CEO, Mikko Karvinen; and CFO, Joonas Juokslahti, will be giving a presentation and that will take about half an hour, followed by a Q&A session. The webinar will be recorded. [Operator Instructions] And now let's move on to the webinar. First presenting as Nexstim's CEO, Mikko Karvinen. Go ahead, Mikko.

Thank you, [ Essie ]. And welcome, everyone. My name is Mikko Karvinen. I'm the CEO of Nexstim Plc. I will be presenting today the Nexstim investor story, and I will be joined also by our CFO, Joonas Juokslahti. So I'm switching now to presentation mode, and we'll be presenting a few slides in the beginning, followed by a Q&A. So Nexstim, we're a company focusing on personalized depression treatment. The company shares are listed in Nasdaq First North Growth Market, lists both in Helsinki, Finland and Stockholm, Sweden. And there's some important information, especially about forward-looking statements that you should look into before investing into our shares. Today's presentation will be containing, first, an overview about Nexstim as a company and our technology. I will then go through our therapy indication, including major depressive disorder, MDD, and chronic neuropathic pain, after which I'll go through our diagnostic application, which is in presurgical mapping of the brain, both motor and speech functions of the cortices. And then finally, I will go through a business update focusing on our past year 2020 and also on some of our strategic objectives for this year. And also Joonas will be going through the rights issue in more detail. So to begin with, as a summary, we have a unique proprietary neuronavigation TMS technology, and we already deliver the best-in-class mapping and treatment for patients with brain diseases and disorders. We at Nexstim are well positioned to a disruptive shift in depression treatment and therapy delivery. And with our improving economics, driven by record revenue and increasing operational efficiencies, Nexstim is right now a unique investment opportunity. And I'll come back to this summary also at the end of this presentation. So the Nexstim system is visible on the right on the picture. We're an integrated TMS, Transcranial Magnetic Stimulation system. And what we call personalized in our TMS is that we have a SmartFocus technology with a highly sophisticated 3D navigation model of the brain, which gives us the possibility of navigating the actual electric field that gets induced into the brain when giving the TMS treatment. This is unique and it is also proprietary as a technology. And with this unique technology, we have both diagnostic and therapeutic applications already. We're a commercial stage company. Our system is FDA and CE marked for -- FDA-approved and CE marked for the usage of presurgical mapping of the brain, both motor and speech functions, and then also therapy indication, FDA and CE marked in the area of treating major depressive disorder. We have some world-leading centers already relying on our technology, and we have more than 180 systems already sold and installed globally within the diagnostic application, focusing on presurgical mapping of the brain. And these world-renowned customers include Mayo Clinic, MD Anderson from the U.S., Karolinska from Sweden, Charite Berlin from Germany as a few examples. We also have a competitive advantage in an attractive market and here, I'm referring to the depression -- TMS depression treatment. And our navigation technology has shown improved efficacy, and I'll come back to the patient registry results we've recently published that show that the navigation is giving a higher efficacy in treatment in comparison to multi-site studies public and also some other competitor patient registries. And an important thing on the commercial aspect is that TMS treatment of depression is covered by U.S. Medicare and is rapidly gaining traction as a treatment modality through this. And Nexstim is also well positioned for the future development. Our therapy system and IP already support the current 3-minute treatment of depression through a Theta Burst Protocol, iTBS. And here, I want to give some detail that a normal FDA-approved TMS treatment of depression could last as long as 37 minutes. And with our system, you can use it with a 3-minute treatment that is also FDA approved. And we're using this type of Theta Burst Protocol also when studying accelerated treatment protocols, and we have some early results -- encouraging results showing that with the usage of our system, we're able to treat patients in a faster manner and build efficacy levels that should in the future be as good as the 6-week treatment. So with the accelerated protocols, we are now testing in the pilots, giving multiple treatments a day for a 5-day period, and we're comparing that with the traditional TMS depression treatment, which is once a day for as long as 6 weeks. These pilots have been -- the first pilot has been completed in Kuopio University Hospital in Eastern Finland, and I will tell about those results during this presentation. So focusing first on Nexstim SmartFocus technology used in brain therapy. We're smart, we're focused, and importantly, we're drug free. If we look at the depression market, the -- of course, the major depressive disorder is a vast, vast disorder that affects a large portion of the population in the developed countries. We focus our efforts currently to the U.S. and EU, mainly. And we see that there is about a 6 million patient total addressable market in these areas -- geographical areas in total. So these are patients that don't get help from psychotherapy or the pharma drug treatments, or the responses are suboptimal. As mentioned, the TMS reimbursement is already available for depression treatment in the U.S. and we have some EU markets, such as Germany, where we're seeing more and more availability of reimbursement also for TMS treatments. Our revenue in this area was $2 million in 2020, and we saw a 28% growth despite the COVID environment. So very happy with the growth, and we'll talk more about the detail later on. The active installed base of our therapy systems at the end of year 2020 was 31 NBT systems in clinics and hospitals around the globe. Our current business focus is in the psychiatric clinic and hospitals and so-called TMS centers where the main business is giving TMS treatments to patients. There's about a 50-50 split between the U.S. clinics and hospitals in comparison to Europe in therapy. But through our accelerated treatment path, we hope to see that the pilot treatments will lead into more trials in the future, which would lead us into a situation where we're taking the NBT therapy systems to the inpatient psychiatric hospital environment to treat the most severely depressed patients that are hospitalized because of their depression symptoms. 10 out of 10 patients that we studied in Kuopio got relief for their symptoms by usage of this accelerated treatment protocol with the Nexstim System. And we look forward to future trials and pilots to follow where we could show also that the higher efficacy levels with the 5-day treatment in comparison to a normal 6-week treatment because the 5-day treatment fits the psychiatric hospital environment a lot better than the 6-week once-per-day treatment type. So let's go to the outcomes. We've shown very promising clinical outcomes recently. We published the first 159 patients from our Nexstim patient registry last week. So those were patients that had completed the full treatment therapy for major depressive disorder in U.S. clinics with the Nexstim system. 47% of the 159 patients completing the treatment achieved a clinical remission and 76% obtained a clinical response at the end of treatment. These are very high figures compared to the multisite study data that's out there, where typically a remission rate would be below 30% and response rates between 40% and 50%, but also in comparison to some competitive patient registry data that is public, where we see roughly 30% remission levels and up to 60% response rates. So very good results from our existing clinical sites using the Nexstim NBT System for the treatment of major depressive disorder. But also, we are seeing encouraging results from the accelerated therapy treatment pilots where we're using the protocol -- the shorter protocol of having multiple treatments a day for 5 days and showing progress in patients within that shortened period. And I won't go into too much detail about the protocol itself, but in Kuopio University Hospital, where we did the 10-patient first pilot around the accelerated treatment protocols, we had a treatment protocol that focused also, first of all, to the safety. So our per treatment length was more than 3 minutes. But we still have -- we have still things that we can enhance in the protocol. So add more minutes, more pulses into the treatment in the future pilots. And also the intensity levels, the actual electricity levels that gets induced into the brain, we're still not at the highest intensity level that we could probably use. So we're going to also adjust that. But we were already happy that 10 out of 10 patients showed improvement of symptoms when measured with the Hamilton depression rating scale. And the decrease from -- mean decrease from baseline was 37% when measured after the treatment. So very happy with the first results and outcomes, but we still have things that we can modify for the next upcoming pilots. And then our secondary therapy indication that we're progressing with is chronic neuropathic pain, and I want to touch this briefly because even though we were not FDA-approved in this area, we have a CE mark and we have systems already installed in Europe, out of which 3 systems in the university hospitals at use in Finland. And there's a vast population, we've estimated about 10 million patients in U.S. and Europe that are without effective pain relief, chronic neuropathic pain patients without effective pain relief, that could be a potential target for the usage of Nexstim NBT system for treating chronic neuropathic pain. The Walton Center in the U.K. has had -- has conducted some studies that have been very interesting. And 44% of patients undergoing an NBT therapy reported a clinical meaningful pain relief of at least 3 weeks' duration, and we have follow-up studies that are focusing on continuing from these results. And a meaningful thing that we are doing for the long strategic ranges that we've started piloting with the accelerated treatment protocols. So similar to Kuopio University, where we did the pilot for severe depression treatment. In Helsinki University Hospital in Finland, we're doing a pilot now for treating treatment-resistant chronic neuropathic pain patients with an accelerated protocol. So multiple treatments a day for as many as 5 days in a row. And we're awaiting these treatments for this pilot to end during the first half of 2021 so we would be able to likely publish some results during the summer. So this is an interesting area for the future, and we look forward to doing more studies in this area to progress with our commercialization plans. And then finally, as an indication, I want to present you with the Nexstim SmartFocus TMS used in the diagnostic area, and this is an area where we've been the longest, so we've come to the business of using our navigated TMS through presurgical mapping of the brain. It's a proprietary technology which enables substantial increase in progression-free survival in brain cancer surgery, and we're commercially validated. So we're the only available technology on the market today that does TMS presurgical mapping of the brain. And we can significantly improve the clinical outcomes in neurosurgery, and this is because we help the surgeons better prepare and to be more aggressive with their tumor resection. And multiple studies, but one example here about a German study where they saw a 46% increase in progression-free survival in low-grade gliomas when using a Nexstim NBS System in combination with direct cortical stimulation. So that's -- we can clearly see that there is a benefit for the surgeons to use this type of a mapping, mapping the motor and speech areas of the brain prior to surgery. And we have more than 180 systems sold and installed globally. And on the right, there's a few examples, including Boston Children's Hospital, UCSF in San Francisco, MD Anderson, Mayo Clinic, Great Ormond Street from the U.K. So a lot of especially pediatric hospitals that benefit from this type of a mapping that can be done also to quite young children in comparison to other forms of mapping, brain scanning or mapping that are less likely to be used with, with small children, as an example. Okay. Then I want to move on into our quick business update before I hand over to Joonas for updating on the financials and on the rights issue details. So we published our 2020 results at the end of February, on the 26th of February. As you can read from the report, and as everyone knows, the COVID-19 pandemic was, of course, affecting our year. We focused on minimizing the effects as well as generating profitable revenue growth. And as an example of minimizing the effect, we had to go through quite a bit of cost savings in spring of 2020, but we also renewed our strategy during the spring and summer time. So we utilized some of the time of the COVID pandemic that we wanted to refocus us strategically, and I'll talk about a bit more about those objectives for '21 later on. But most importantly, even though we had a difficult business environment, we saw excellent progress with 13 new NBS systems sold, 6 in the U.S. and 7 in Europe. So it was a growth year in NBS business area, presurgical mapping, and then also a total of 8 new NBT therapy systems installed to clinics in the U.S. and Europe across multiple sites for the treatment of major depressive disorder. Now I'll note here that presurgical mapping was less affected by the pandemic at first. So we saw a very healthy amount of NBS systems sold despite the pandemic, and we're happy about the hospitals being able to purchase and allow us to install and train those systems despite the pandemic. But also on the therapy side, even though we had to make changes to our organization and some of them affected also the commercial organization, specifically in the U.S. and Germany, we were able to still install new NBT systems in sites in the U.S. and Europe. And this is important because of the recurring nature of our business, installing new systems usually tends to lead into more revenue increase in the recurring manner for the following years also. 2020 was a record net sales year for Nexstim. We did a total net sales of EUR 4.1 million. That was up from EUR 3.3 million in 2019, so a very healthy growth of 23%. And importantly, by focusing on the most profitable revenue growth and having these cost-saving programs as part of our restructuring for 2020, we saw a large decrease in the operating loss and we did minus 1 -- minus EUR 3.3 million of operating loss in 2020 in comparison to minus EUR 6.5 million in 2019. So we managed to get a meaningful decrease -- almost 50% decrease in operating loss during this dramatic pandemic year, and I'm very happy about that progress in our profitability. NBS presurgical mapping net sales grew by 19%, so a healthy growth percent for the full year, reaching EUR 2.2 million. And the NBT therapy net sales grew by 28%, so a higher growth level -- a relative growth level to EUR 2.0 million. So even though the presurgical mapping part was less affected by the pandemic and is still more than 50% of our business, we're happy that the therapy revenue grew at a higher rate and also that the -- despite the lockdowns, despite the -- not all the patients being able to get to their depression treatments because of mobility restrictions, because of fear of being treated, we saw revenue growth, and we saw it mainly on the recurring revenue side. And Joonas will talk about -- more about that pretty soon about how important the recurring revenue is for us as a company. And then finally, we also started 2 new pilot studies with the accelerated iTBS therapy treatment protocols using our NBT System. This is strategically important. For severe depression treatment, we completed the trial recently, but we started in 2020 at Kuopio University Hospital, where we treated severely depressed patients, 10 in this first pilot. And then we also started a treatment for chronic neuropathic pain patients at the Helsinki University Hospital using accelerated therapy treatment protocols. And this is an important new trial in a sense that I don't know of any other TMS companies that are using or doing trials at the moment in this area using accelerated treatment protocols for treatment of chronic neuropathic pain. So it's really interesting to see what type of results we're able to get from these pain treatments, specifically using multiple treatments a day for a 5-day period, and we'll be reporting some results from those likely in summer of this year '21. So with these -- with this business update, I now ask Joonas to go through some financials and details for the rights issue. Please, Joonas.

Thank you, Mikko, and hello, everybody. So in addition to what Mikko just said about the highlights and key financials for the full year, I would like to show you few graphs of the development of our current existing business, the NBT and NBS business, through recent years. So in the top graph, we can see the total revenue growing each year. And that in 2020, we've been showing record revenue throughout the year and landing at EUR 4.1 million for the full year revenue. Now closely related to the revenue growth, below that, we can see a recurring revenue development graph. Recurring revenue in Nexstim means revenue generated from the installed base and the utilization of our systems. Now as we see in the graph, the growth pace has been really good, and actually, it's been quicker than our total revenue growth, which means that the portion of recurring revenue has been growing in the sales mix. Now this is really good development in more than one way. First of all, as this is generated from our installed base, as long as we keep up the customer satisfaction and take care of our installed base, this recurring revenue will also contribute to the future years as well. And in addition to that, this is really high margin. So if we take a look at, for example, the therapy revenue and the recurring revenue in therapy business, the gross margins can be as high as 95% of the recurring revenue. And last year, in 2020, already 86% of the total therapy revenue was recurring. And we can also see the positive impact also on our total gross margin, where the gross margin ratio improved from 69% to 76% in 2020. And as a company, we are aiming for profitable growth backed by the recurring revenue growth. Now let's move on to the rights issue. So this is a right issue where our existing shareholders have the right to subscribe for new shares based on their existing ownership. The maximum number of shares available is a bit shy of 220 million in this share issue. And technically, it happens so that with 1 old share owned on the record date of 10th of March, the shareholder is granted with 1 subscription right. And with 2 rights, you can purchase 1 offer share at a price of EUR 0.03 per share. So basically, with 2 old shares, you can subscribe for 1 new offer share. Now this all rose up to a maximum gross proceeds of this rights issue of EUR 6.6 million. Now approximately EUR 3.15 million worth subscription commitments were already with the company before going out with this rights issue, and that represents about 48% of the -- all of the available shares in this rights issue. Subscription period started yesterday on the 15th of March, and it runs through the last of March -- 31st of March in Finland and it ends a little bit -- 2 days earlier in Sweden. So that means 29th of March. So during that period, you can -- the shareholders can subscribe for the offer shares, and that goes through their own banks. So basically, a shareholder's bank should be in contact with the shareholder regarding this rights issue, and that can happen in more than one way, either in, for example, a paper form for subscriptions or a notification in the Internet bank. So keep an eye out for those. So also, you can trade the subscription rights. So for example, if you want to purchase more subscription rights, that can happen in the markets until the 24th of March. And on 7th of April, it is estimated that we will announce the outcome of the offering. And roughly 1 week from that, on the 13th of April, the new temporary shares should be combined with the existing old shares, and they all should be traded on the market as one share class. So here is a list of use of proceeds sorted in the order of importance. So the first 2 bullets are related to the previous slides where I talked about the growth of our existing NBT and NBS businesses. After that, there is the clinical trials path, where our main -- we're mainly concentrating on the treatment of severe depression with the accelerated treatment protocol, but also evaluating new clinical trials in the area of chronic neuropathic pain. So one part -- some part of the proceeds will also go towards repayment of existing loans in accordance with agreed timetables and also general corporate purposes. And we also have ongoing R&D projects with finance needs. So some of the proceeds will go also towards that. So this is a summarized list of use of proceeds, and I recommend everybody to go and take a look at the prospectus published which is -- which can be found on our website. I think it's the best introductory to Nexstim to date. So it's a good information package. And if you're a shareholder or just someone who is interested in the company, it's highly recommended to take a look at that document, and that can be found on our website under the rights issue 2021 link. And before going into the Q&A session, I would like to hand the floor back to Mikko for a while. Thank you.

Thank you, Joonas. And as a final item before the Q&A, I want to go through some of the key strategic objectives for the year 2021. I mentioned in my presentation earlier that Nexstim did a strategic review. And during the spring and summer time of 2020, after which we published our renewed strategy in August of 2020 and we also, at the same time, published some strategic objectives for the year 2020. Those were followed up all the way until our financial statements were published in end of February. And as part of the financial statements that we published, we also published a key strategic objective for the current year, 2021. And we want to keep following these publicly in a sense that when we reach a milestone or when we progress in this path, we want to come up with news flow showing that we're progressing in our strategic path that has now been visioned until 2024. So the first and most important part of our strategic objective for the year 2021 is to keep focusing on achieving profitable revenue growth and strict management of operating expenses. So at the end of our strategy path, of course, we're working hard to get a company business to progress so that we have a profitable business, meaning that the whole company is profitable and cash flow positive. We're not expecting 2021 yet to be a profitable year, but we want to focus ourselves in growing in a manner that each and every NBS presurgical mapping or NBT Therapy System service consumable or deal that we do is profitable for the company, but also in the long run. And then by strict management of operating expenses I referred to, we don't have a savings program or such at the moment that we're following in that would include dramatic things. But we've learned quite a bit from the COVID-19 environment, and we're going to apply some of those things like the virtual sales and demo meetings. It's meaning that there's going to be less travel, less travel to sites. But at the same time, customers may visit our virtual demo room, which works very well. We can also do a lot of trainings and webinars and things in the sales process that we used to have to do on-site at the customer site with our systems shipped there and a lot of logistics and everything. So there is quite a bit that we can also progress within that area. Number two is focusing on the clinical path that we have selected, which is around the accelerated therapy treatment protocols and specifically, getting more pilots in the area of severe depression. So we have the Kuopio results public already in March. But we look forward to progressing, hopefully, in Kuopio with future pilots, but also with other pilot sites -- possible pilot sites in the area of severe depression. And we await the first results from Helsinki University Hospital on the treatment of treatment-resistant chronic neuropathic pain patients after we will then review our clinical path within that area. So very exciting part of our strategy. And this end result is aiming to having the Nexstim NBT System used, especially for treating severely depressed patients that are in inpatient psychiatric hospital care. And the third objective that we have is to deepen our relationship with the key valued partners in the therapy markets. And here, to give a bit more light into this, it means that some of the therapy clinics that are either already working with us or some future clinics that we are seeking towards working together with, we want to find a model where we would not only be the provider of our TMS -- navigated TMS system for their therapy use and -- but we would rather have more services provided, be part of almost like a joint venture in the area of treating depression patients. We want to do this in a manner that is both, of course, regulatory-wise in a stable path, but also in a path where we get to share more value of treating, also financial value of treating the patients and then having a more profitable future within this area. So that's the amount of information I can give right now. And we have multiple discussions going on with some partners in this area. And I await that we could publish partnerships during year '21 to show that we're progressing in this important area of developing our therapy market. And this is also going to serve as a platform for possible accelerated treatment protocols. So even though they're not FDA-approved yet for treating severe depression, but in the future, if we get access to the 650-plus psychiatric hospitals in the U.S. as an example of a potential market for the accelerated treatment protocols used for psychiatric hospital use, there would be a maintenance part of that business that could be treated in outpatient environment. So being part of the clinics business, is also strategically valid in the long run because not all patients would be treated within hospitals, but rather quite a bit of the treatments would be done as outpatient treatments anyway. So it's a very valid part of the business to be part of those clinics -- outpatient clinics also now and in the future. The patient registry is now 159-plus patients. We want to expand it to over 200 during this year, and we feel comfortable that even in the COVID-19 environment, we managed to get that amount of treatments completed in those sites that participate in the patient registry. We want to publish more white papers also outside of this registry data. And of course, we look forward to providing more information in our news flow about our registry. And then finally, the final point is that we, of course, need to secure funding to progress further in our company strategic vision. And one example right now is through the capital markets, which is this rights issue that is open. And of course, Joonas has provided already quite a bit of information. But it started yesterday, and it's going to be ongoing during the remaining part of March. So of course, this is a good possibility for existing or new shareholders to be becoming part of the Nexstim investment story. And this is our first step in '21 to secure funding in order to be able to execute our strategic vision during this year and, of course, expanding to year '22 also in this path. So that is, in a nutshell, what we want to do in executing the strategy during '21. And actually, it's my final point before the question and answer. So I want to summarize as in the beginning that Nexstim, we have a unique proprietary neuro-navigated TMS technology. We already delivered the best-in-class mapping and treatment for patients with brain diseases and disorders. We're very well positioned to a disruptive shift in depression treatment and therapy delivery. And with our improving economics driven by record revenue and increasing operational efficiencies, Nexstim is right now a unique investment opportunity. So I'll leave it there before any possible questions, and I thank you for your participation already at this point.

So let's see if there's any questions or anyone if you want to post some questions now would be the time for that. We can take a few questions at the end of this event. And there should be a chat available for you to type any possible questions. And of course, myself and our CFO, Joonas are available later on if you want to send us questions in e-mail or want to pick up the phone and give us a call, we can arrange a discussion moment. It seems like there are no questions from the Q&A at this point. So I, once again, thank you for participating. We await for news flow, of course, very soon on the rights issue and our progress with that. That's our natural next news flow, but we'll keep you updated on everything else also. I wish everyone a good springtime. And see if there was -- okay. There was 1 question, so I'll give my thank you at the end. There's a question about the Kuopio protocol that were there total of 10 or 20 patients, i.e., control group included. There were -- actually, that's a good question. Thank you. There were 10 patients now in the accelerated treatment protocol pilot. So basically, all 10 patients were treated with the accelerated treatment protocol, and they're now doing the comparison group. They're doing the normal 6-week treatment comparison group treatments right now. So not all of those treatments have been completed. So we published the early results after the 10 patients who received the accelerated treatment protocol have been treated. And we have still yet to follow the comparison group which will be treated within those 6-week periods to follow. And there will be -- later on, there will be an actual scientific publication that will be published in -- with the full information. But we went out -- as soon as we had the first 10 patients from the accelerated treatment protocol treated, we went out with those results. And you can read them read from our website at the Press Releases section. So thank you for that question. Okay. What is the time frame for full data publication from Kuopio? Well, we haven't got an exact indication yet from Kuopio on that, but we do know that they are -- they've started the comparison group treatments right after they went through the active accelerated treatment protocol group. So there will be -- it will be during the upcoming months and it's in the hand of the Kuopio staff. It's -- there's quite a bit as it as an investigator initiated trial that is in their hands, but I'm sure that they'll be prudently publishing when possible. The Kuopio accelerated protocol difference is asked here and how to develop this. And I can answer that we didn't use the -- let's say, the maximum amount of pulses that we were planning to as a maximum. Because of the safety reasons, we wanted to start out with a bit smaller amount. So we did use more than 3 minutes, which is the normal treatment. So in Kuopio, they typically have used once-a-day 3-minute Theta Burst Treatment for as long as 6 weeks. Now we used a multiple of that 3 minutes and multiple times a day and for 5 days. So we did quite a bit more than what would have been done in 1 day, and we did it for a 5-day period, not 6 weeks. So that's what we did. The accelerated protocol compares to Stanford, in a sense, I can say that the pulses still delivered in this first pilot were quite a bit smaller. So because of those safety reasons, we didn't go with -- Stanford used 9 minutes, as an example. They used 9 minutes Theta Burst Treatment, and we didn't use as much yet. And then the other thing that we will be also exploring for the future pilot is to whether we can also intensify the actual electricity volts that -- per meter that gets induced into the brain during the treatment. So we have both pulses and the intensity that we can still modify. And we expect that these modifications will take us closer to the Stanford protocol in that sense and also should be showing this in the higher efficacy levels of the future pilots. That's what we're awaiting for. Let's see, there's a question about what resources are needed to get into these 650 hospitals in the U.S. It's a very good question. So quite a bit of resources, and we have a business model that goes quite far in the commercial path, like, let's say, they're quite theoretical now, of course, in the models yet because they're years ahead in the path, we still have to do trial work and FDA approval tracks and all that. But there is a significant amount of resources that would be needed in addition to what we right now have. But the amounts and the volumes of business that could be in the target group of having 650 psychiatric hospitals only in the U.S. to begin with as a potential market are vast. So it would be worth, let's say, that the investment calculations show that it would be worth the effort. And definitely, it would be in multiples of what we do in business right now. And I would just say that it's -- the present value of that business is huge. So there's a -- in those models where we would enter in having even a share of having systems in those 650 hospitals, you can multiply each and every one the systems yourself. But if we have 31 systems of NBT therapy right now as an installed base, if you compare 31 systems to 650 psychiatric hospitals, of course, we could see a lot more. And -- so there's a big market out there. There is also the comparatives of what's competing right now, such as ketamine treatment or ECT treatment. They are treatments that have huge side effects, are not always easy to manage to deliver like ECT. So there are -- if there would be a treatment available such as NBT therapy treatment for severe depression in a psychiatric hospital environment that would deliver the efficacy rates we're looking for in a 5-day period. There definitely should be a demand also for it. So I'll just leave it there. And I hope that we can share more market data when we progress in our trial paths and we get more results. But of course, right now, we've done 1 pilot in the area of severe depression. Even though encouraging, but it's still a 10-patient pilot right now that we've completed. So let's see -- how long will this new capital support continuing operations? What will be the total of capital within the company, assuming that the offering is fully subscribed? Very good question. And maybe, Joonas, if you could jump in and comment on the cash runway and the...

Sure. So on the date of the prospectus, our runway was sufficient until mid-June. And as we say in the prospectus, these proceeds will grant us additional runway of at least 12 months from mid-June. And if you were referring to net proceeds with your question in relation to gross proceeds, I would say that we are -- if this is fully subscribed, we would be looking at something like EUR 6.4 million of net proceeds in this round.

Thank you, Joonas. There's a question that has been raised. That is open still that says, how is your accelerated protocol compared to Stanford? I think I answered that, but I -- the Stanford protocol was using 9 minutes of Theta Burst Treatment 10 times a day for 5 days. I don't want to go into more detail about what we did in -- together with Kuopio, but we certainly used a lower amount of pulses per treatment day. And on the -- so we still have -- we have still things that we can do on the pulses and the intensity side. But I don't want to comment whether we're going to be -- how close we are with what Stanford did, but there's still some room to be a bit closer. How is recurring revenue earned? Question is a good one. Maybe, Joonas, that's a financial one. Maybe you want to comment on recurring revenue earnings?

Yes, definitely. So there might be different sources of recurring revenue. But basically, it's generated from our installed base, meaning the existing systems at customer locations. And that can be -- for example, in the NBS side, that could be our annual service agreements which would be fixed fee for the year or on the NBT side that could be fixed monthly lease or the use of the system or purchase of once per treatment head trackers for patients use on the NBT side for a system owned either by Nexstim or the customer. So there are different sources of recurring revenue, but it's all based on system usage and the installed base -- active installed base.

Thank you, Joonas. There's a question about any plans to revisit stroke again as an indication? No, no current plans on that. We've -- we're not -- we don't do anything currently in the area of business development or clinical path in the area of stroke. We do know that some hospitals or clinics that have purchased an NBT system in the past might be doing some research in that area or they might be doing some type of therapy treatment development in that area, but that is something that the clinics would do themselves or explore themselves and Nexstim as a company doesn't have an active program in the area of stroke anymore. There's a question about Kuopio patient numbers. Are the patients now being followed in control treatment, the same who got the intensive treatment? Is the total number of patients 10 or 20? The -- That's good questions. The total amount of patients will be 20 patients in the total. I mean, of course, Kuopio can modify their treatment plans, but we're looking to have more patients in the pilot. Are you planning to get approval for less severe treatment? Okay. So this would mean -- maybe I understand -- I think this could be that the accelerated treatment protocol, for example, could be used in less severe patient groups. That's a good question. We don't have the exact plan yet into what type of severity or what is the exact indication we would pursue. And this is a very delicate area, of course, in relationship to, let's say, an FDA approval. But I would say that the strategy gives us guidance in a sense that if we -- as we want to progress into having NBT Systems more in the psychiatric hospitals in the future, the trend, of course, then is that we're seeking more severe and severe patients. So at least in the form of severity, we're likely going up a bit. But what will happen to the major depressive disorder business or the less severely depressed patients once we progress with the accelerated treatment protocols is somewhat of an open question, yet, also in Nexstim. But of course, we will try to utilize the accelerated treatment protocols for as many patient groups as possible. But as an example, would it make sense for less severely depressed patients to go through multiple treatments a day for a 5-day period is also a financial question and how would that be reimbursed and so on. So there's a lot of questions that are not only company related. But a very good question for the strategic importance. Are there any existing distributor networks for these 650 hospitals? Likely there is. We haven't explored yet in detail about the distributor networks of the psychiatric hospitals in the U.S. But of course, it's a vast market. So when the commercial plan would evolve, possibly in the future in that area, we would need to look into that area in seeing that, is this a direct or a distributor approach. And if I didn't already mention in this presentation earlier, we do direct sales now mainly -- for our current FDA-approved business, we do direct sales in the U.S. and CE-marked business, we do direct sales in Germany. And all other markets in the world are mainly handled by distributor networks. So direct sales in the U.S. and in Germany, even the Nordics are currently handled by -- mainly by distributor and other markets such as countries in Asia or Middle East and so on, they're handled purely by distributor. So it's a very valid path that we would need to look into that. Anywhere we go, anywhere we expand our business, we always look at the distribution partners also to be part of that. Okay. I hope I've answered most of the questions, I thank you for the questions and that we had a possibility to discuss further after the presentation. I hope that as many of you as possible are able to participate in the upcoming or the ongoing rights issue. And we look forward to providing you more information about the rights issue and our news flow very soon. And I wish you all, despite the COVID, a healthy, a safe spring time and looking forward to giving you more news very soon. Thank you.