- For 1/3 of epilepsy patients, drugs won't control their seizures. Surgery may be an option (curative for some patients) but figuring out on what part of the brain to operate may require major brain surgery first: costly and invasive.
- We've uncovered NeuroOne (NMTC) as a small, recently public company that could quickly transform this medical field, and the company is about to file their first product for an approval decision later in 2018. This kind of event could put a lot of eyeballs on NMTC, and the stock has room to run as it goes through its first price discovery period.
NEW YORK, NY / ACCESSWIRE / May 29, 2018 / Despite a compelling technology and a strong investment backing by one of the U.S.' most prestigious healthcare systems, The Mayo Clinic, the newly public NeuroOne Medical Technologies Corporation (NMTC) has gone completely overlooked by investors since going public months ago. That could change in 2018 as the company seeks Food and Drug Administration (FDA) approval for their first medical product, which could be on the market later this year.
NeuroOne's core technology has already been used for research purposes at The Mayo Clinic, which also owns 10% of the company's outstanding common stock. The company's first thin-film neurologic diagnostic product could be approved by the end of this year, and the addressable market in the U.S. is estimated at over $100 million - they could take the whole thing with this new tech.
But, further down the pipeline are some major technology advancements, as well as a Cleveland-clinic partnered diagnostic/treatment combination device, which could be the real homerun in the next 12-24 months, with a >$5 billion total addressable market. 2018 could be a breakout year for this undiscovered name, especially as the CNS subsector sees increased investment and public market participation. Just look at recent moves from companies like Vistagen (VTGN) and Marinus Pharmaceuticals (MRNS), which have rallied on some basic price discovery from Wall Street. NMTC could see a similar move this year as investors realize the market and upside potential from this small company.
Epilepsy Drugs Only Help Two Thirds Of Patients, So What About The Rest?
Epilepsy affects about 3 million people in the United States, or 1% of the global population.
For 2/3 of these patients, their seizures can be controlled by one or a combination of multiple anti-epilepsy drugs. Most of these have been around for years, and few new options have landed in the last ten years.
For the other 1/3 of patients, doctors begin to consider alternative treatments. For some, this may include surgically removing the portion of the brain that is CAUSING the seizures, called a surgical resection. This can actually cure patients in about 50% of cases where it is attempted, but that's IF the "epileptogenic zone" where the seizures are originating, can be located and pinpointed.
To do this, doctors must record electrical activity in the brain to look for abnormal behavior. They use electrodes placed across a patient's scalp, directly on the brain, or deeper into the brain tissue in a diagnostic procedure called an electroencephalography (EEG).
When doctors have to apply the electrodes to the brain, this is done by removing a portion of the skull to access the brain directly, where they implant strips and grids of electrodes. The patient stays in the hospital for days or weeks afterward with wires coming out of their skull while doctors monitor the electrical activity in their brain before, during, and after their seizures.
This process is a horrible experience for patients. It's invasive, time-consuming, and expensive, and it doesn't always lead to a final diagnosis or surgical resection.
Pending FDA Clearance, NMTC's Tech Poised to Become Standard of Care?
Doctors and patients want better options. A shorter, simpler diagnostic process would significantly increase the number of eligible patients who elect to undergo the resection process, and it could result in more patients being cured, in many cases, of their epileptic seizures.
NeuroOne is developing a proprietary thin-film electrode technology with a more brain-friendly material that can reduce inflammation and improve electrical signal clarity for better diagnosis. This offers high-resolution EEG recording to increase the accuracy of diagnostics, improving resection planning and outcomes - it's like comparing the high-definition television displays of today to older tube technology of the 70's. Essentially, this can result in faster, easier diagnoses.
The technology was pioneered in part in The Mayo Clinic's neurology department, and Mayo owns 10.3% of NeuroOne, demonstrating how committed they are to seeing this technology through.
The first product they're bringing to market - the low-hanging fruit, per se - is a thin-film cortical electrode for use in intracranial EEGs. The company will file for clearance from the U.S. FDA through a 510(k) application process in the coming months, which could result in an approval decision within 60-90 days setting up a major catalyst in the fourth quarter of 2018.
But this is just the first application of this technology, and a host of products will be hot on its heels, including a depth electrode, minimally invasive implantation techniques, and a combination depth electrode/ablation device.
This combination diagnostic/therapeutic, combining the company's proprietary depth electrode with an ablation technology to "resect" the offending tissue at the site. This single-stage procedure could revolutionize the resection diagnosis and surgery process further, taking it from a 2-3 month process to a 1-week or shorter and substantially opening up the number of eligible patients opting for treatment.
Combined, these could transform the diagnosis AND treatment of drug-resistant epileptic patients.
Stock Could Rise 300%+ Into FDA Clearance Event and First Sales in 2019
Companies in the medical instruments and supplies segment trade at high valuations, with Price/Sales multiples in the 3-5X range. NYU Stern lists an average multiple of their sales of 4.35X for healthcare product companies.
This is why even tiny penetration of their first ~$115 million market opportunity in the next 24 months or so could be huge for NMTC. Just 10-20% of this addressable market with their first product could rapidly justify a higher valuation of $90 to $150 million for the company. That would be a stock price of $12 or more, and this doesn't even consider the true market opportunity of their planned portfolio.
NeuroOne is new to the public markets and will need to access capital to further their business which is a risk to any investment in this company. NeuroOne needs to execute well to bring all of these products to market. As with most micro-caps, this is a high-reward and high-risk opportunity that could be worth nothing, and investors should be aware of the headwinds facing the company, including medical device competition from larger companies.
NeuroOne has gone completely overlooked since going public in 2017, meaning that those who spot this name early could be in a good spot, especially as the company prepares to a possible FDA approval later this year!
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