Nexstim Q1'25 business review: New deliveries to Sinaptica

Translation: Original published in Finnish on 5/6/2025 at 7:15 am EEST.

Nexstim published its Q1’25 business review on Monday. The company reported that it delivered two diagnostic systems in the seasonally slow beginning of the year, as in the comparison period. Subsequent to the reporting period, the company has announced that it has agreed to supply several systems to its partner Sinaptica Therapeutics for its Alzheimer's trial, which is now commencing, supporting growth forecasts. Elsewhere, Nexstim's first few months of the year have included advancing the Brainlab collaboration established at the end of the year and progressing regulatory approvals for the NBS 6 diagnostics system, which will be launched this year.

Early-year system sales seasonally quiet

Nexstim reports its results on a semi-annual basis and supplements its performance with Q1 and Q3 business updates. The reviews do not report financial figures, but the company does report the number of system deliveries made during the period. The company reported that it delivered two diagnostics systems in the quarter, which is in line with the comparison period. H1 is a seasonally quieter period for the company, as hospital and research institution purchases are typically concentrated towards the end of the year. The backlog of undelivered systems at the end of the period was five, which is the same as at the end of 2024.

New sales incrementally increase the system base capable of therapy applications, and at the end of Q1'25 the system base stood at 109 units (Q1’24: 86 units). Of these, 41 were in the US and 68 outside the US – primarily in Europe. The system base provides Nexstim with recurring revenue through, for example, system rental and maintenance contracts, user licenses and sales of consumables. The company says it has sold 245 diagnostics systems. Sales of these products began at the end of the first decade of the 2000s. In the Diagnostics Business, recurring revenue plays a smaller role, so the size of the system base is a less important variable than in the Therapy Business.

NBS 6 with diagnostic capabilities to be released later this year

In the systems business, the company reaffirmed its plans to release the NBS 6 diagnostics system to the main markets during 2025. NBS 6 has already received US and European regulatory approvals for therapeutic use. Authorizations for diagnostic use are expected to be received this year. No specific information was provided on the status of authorizations, but in general CE marking processes have been prolonged by the implementation of the Medical Device Regulation (MDR). We expect sales of the NBS 6 to be boosted when the device is approved for use in both therapeutic and diagnostic applications.

New system deliveries as part of the Sinaptica collaboration

In June 2024, Nexstim announced a collaboration with Sinaptica Therapeutics for the treatment of Alzheimer's disease. If the letter of intent materializes, Nexstim will develop, manufacture and deliver the system for Sinaptica's Phase III clinical trial. The initial phase of the agreement would be worth 6 MEUR to Nexstim. In the long term, there is further potential for Nexstim in a possible commercialization after Phase III. In a new development, Nexstim announced that it had agreed in April to supply Sinaptica with multiple systems for a clinical trial that is about to start. The exact number was not disclosed in the review. Regarding the formalization of the letter of intent, Nexstim said that negotiations are still ongoing. The companies are now negotiating that the planned 10-year agreement will enter into force in stages. The phasing may be related to Sinaptica's financial situation, as we understand that the company is seeking additional funding for its operations and for its large Phase III trial.

Expecting a year of growth and profit

For 2025, Nexstim has given a guidance for revenue to increase (2024: 8.7 MEUR) and EBIT to improve (2024: -0.5 MEUR). We believe that this should be easily achievable, as the Brainlab collaboration will provide the company with a significant guaranteed coverage of at least 4 MEUR this year, which will increase the current year's revenue and earnings. In addition, the now reported system deliveries for Sinaptica and the continued upward revenue trend will support the achievement of the targets. Our revenue estimate for 2025 is 15.7 MEUR and EBIT is 3.4 MEUR. We note that the estimates include around 3 MEUR of high-margin revenue from the execution of the Sinaptica contract, the realization of which is subject to uncertainties.