Helius Medical Technologies Inc (TSE:HSM) CEO on Treating Traumatic Brain Injuries with PoNS Device

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Helius Medical Technologies Inc (TSE:HSM) (NASDAQ:HSDT) (FRA:26H1) develops non-invasive platform technologies that support neurological wellness. CEO Phil Deschamps provides an introduction to the company and an overview of its breakthrough treatment for chronic symptoms of disease and brain trauma. Helius has developed a Portable Neuromodulation Stimulator (PoNS) device that stimulates the brain’s ability to heal from trauma, in conjunction with therapy, by enhancing neuroplasticity. Deschamps reveals this is the first treatment ever developed for this type of injury and Helius has advanced to the commercial stage of production. Deschamps points out that 1.5 million Canadians have chronic symptoms from traumatic brain injuries, which affect their quality of life and ability to work. Deschamps is hopeful that the PoNS device’s success rate will lead to work place insurers and workers compensation systems covering the cost of treatment.

Transcript:

Narrator: Helius Medical Technologies Inc. is a neurotech company focused on neurological wellness. The company’s focus is to develop, license and acquire unique and non-invasive platform technologies that amplify the brain’s ability to heal itself.

The company’s first product in development is the portable neuro-modulation simulator, used for the treatment of chronic balance deficit due to traumatic brain injury when used in conjunction with physical therapy.

The device is currently used in Canada and under review for clearance by the FDA and the EU Notified Body.

Helius Medical Technologies is listed on the NASDAQ under the ticker symbol HSDT, and on the TSX under the ticker symbol HSM.

James West:   And I’m joined now by Helius Medical Technologies CEO Phil Deschamps. Phil, welcome. How are you?

Phil Deschamps:    Hi, James. I’m feeling really good today.

James West:   Awesome. Is that because you’ve been using your Helius products? No.

Phil Deschamps:    No, it’s because we’ve marked such an incredible milestone for any development-stage company. We’ve now moved into the commercial stage, since we’ve been cleared in Canada.

James West:   Okay, great. So let’s start with an overview of exactly what is the business of Helius Medical, because most of my audience probably doesn’t know.

Phil Deschamps:    Sure. So Helius Medical Technologies is a company that was organized to develop a technology called the portable neuromodulation stimulator, or PONS for short. PONS is a device that stimulates the tongue, believe it or not, and the tongue is tied to your back of your brain with four major cranial nerves, one of which is called the trigeminal nerve. That nerve projects into the largest area of the brain, so when you stimulate and combine that stimulation with physical or cognitive therapy – so, thought therapy or physical exercise – it seems to put the brain into a plastic state, which means that the brain can actually reorganize itself to try and bypass what’s been damaged by disease or trauma.

So if you’ve had a traumatic brain injury that’s affected a particular part of your brain, you do the exercises with the stimulation, and that then allows the brain to reorganize itself to achieve what’s been damaged by disease or trauma, and the symptoms get better.

James West:   So it stimulates reorganization of the brain pathways physiologically?

Phil Deschamps:    Correct.

James West:   No kidding!

Phil Deschamps:    Absolutely. Let me be transparent: that is the best hypothesis, right? We’ve seen, we’ve done some MRI work, we know that it increases the blood flow to the areas of the brain that are being exercised, and we know that the trigeminal nerve does result in these kinds of things. So you know, you conjecture in figuring out exactly what works.

What clinical trials do is, they actually have you verify whether, not to verify how it actually works, but to verify that it actually creates the outcome that you’re looking for.

James West:   Interesting. So I see that Montel Williams in the accompanying videos, is using this device. Did he have a brain injury that needed dealing with?

Phil Deschamps:    No, Montel, in fact, he’s very instrumental in how the company was formed. Back in 2010, believe it or not, he was flying between Los Angeles and New York and read an American Way magazine, that bastion of scientific reporting, had the picture of the three scientists who developed this technology, and they were claiming to help people with neurological symptoms of MS and Parkinson’s and traumatic brain injury. And he picked up the magazine and said, Wow, this is a – who are these people? I’ve never met them. And he sort of always prided himself on being on the cutting edge of what was happening in the treatment space.

So he landed and called his assistant. Three days later, he was there 60 Minutes-style with a microphone saying What are you doing in raising the hopes of people, and doing this? And being good Midwestern people, they said, Well, Mr. Williams, we actually have a protocol that’s going on here in our hospital, and if you accept to do the protocol, we can see if this might help you.

And having MS, he went in, and lucky for all of us, he was a high responder. So within two weeks, he started to see some of his symptoms go away, so then he immediately went into the mode where Montel is famous for being a radio and talk show guy, but I think if he was sitting here, he would say that he was much more proud of his service to his country through 22 years of being in the Army. He would kill me – he was a Marine. [laughter]

James West:   Right, right, they’re touch about that.

Phil Deschamps:    Yeah, very touchy about that stuff. So, I meant Army – Big A Army – Armed Forces. So his idea was, wow, if this can help me, I wonder if it might help soldiers coming back from Iraq and Afghanistan with traumatic brain injuries. And he, being Montel, went to the Secretary of the Army, Secretary McHugh at the time. And to his credit, Secretary McHugh, within two weeks, had us at the Pentagon. We reviewed the data that we had at that time and the Army said, we have nothing to help these kids; we’re going to spend some money and do the clinical trials.

So there was really born our first dollars into the company, and it allowed us to do our design/development and to start the clinical trials that have yielded where we are today, actually treating patients here in Canada.

James West:   Well, that’s fascinating. Have you perchance used the work of Dr. Raphael Mechoulem, who has found that certain elements, components, of the cannabis plant have an effect of inculcating recovery of function as a result of traumatic brain injury, as a treatment? So I’m just thinking this mixed with that might be even more effective. Something for you guys to explore, but I’m going to put that in front of you.

Phil Deschamps:    [laughter]

James West:   How many people in the world have a traumatic brain injury for whom this might be an appropriate approach?

Phil Deschamps:    So the world number sort of defies – it’s about 50 to 60 million people have a traumatic brain injury every year, and what I mean by traumatic brain injury is any blow to the head, bar fights, falls, car accidents, anything – sports concussive injuries, concussions, anything like that.

I think when we sort of get to a more manageable size, I can describe the US and Canada, and since we’re here in Toronto, I’ll describe Canada first. If you go to the Canadian Brain Injury Association, they will tell you that about 1.5 million Canadians have chronic symptoms of a traumatic brain injury that they live with every day.

We actually got our clearance for Health Canada for balance deficit tied to mild to moderate traumatic brain injury, so that’s a subset of those patients. So about 350,000 Canadians, and those of you watching out there, you know yourselves, have chronic balance deficit tied to this MMTBI. And so the number is huge, and really what, the way that it impacts people’s lives is that when you lose your sense of balance, you lose your sense of being able to walk properly and go into busy places.

So you have a sort of a social isolation component to this, and then the Association also describes that most people, 92 percent of people, in fact, who are affected by this, have some kind of reduced ability to work, in that they can’t do their job. And it’s not only because you have a balance disorder; sometimes it’s just because you’re cognitively affected by the, you can’t stare at a screen for as long as you would.

So we’re specific on the balance and gait, but it’s a complex story that not a lot of people have spoken about because there’s never really been a treatment. So you hear the NFL and you hear the concussions and CET and things like that, but nobody really talks of treatment, because this is really the first treatment ever been indicated for this particular disorder.

James West:   Wow, that’s amazing. So then, how do people pay for this? Through medical programs?

Phil Deschamps:    So right now, and most medical devices anywhere in the world, when you first get cleared, it’s a self-pay system. And so the system that’s been set up in Canada is, we’ve partnered and created with some partners of ours who actually did our clinical trial, to create the HEURO system. So Heuro.ca is where a patient affected by this could get information, and you click on Find A Clinic and then you’ll be able to get immediately channeled in to somebody who would be able to describe the treatment.

So self-pay, this is a 14-week treatment, so just under four months, has huge amount of comprehensive assessments, and you’re essentially monitored. You do two weeks in the clinic and then you do 12 weeks at home, where you can do your exercises at home, and the total program is about $30,000 to be able to do.

James West:   Okay.

Phil Deschamps:    And at first, what we’ve done is, we’ve hooked up with some third party financial organizations that can help defray the cost of that therapy over a five-year period, to make it essentially, we’re trying to make it about the size of a car payment for five years so we can give people access. And over time, since if you think about it, if people were injured at work, the Workers Compensation systems are pretty happy to have people rehabilitate. Because a clinical trial would say, James, that for people who were pretty profoundly disabled with a prognosis of a lifetime of that disability, 56 percent were normal in the normal range at the end of treatment.

So you can imagine that these people will be able to go back to work, will be able to be productive for themselves and/or for the employers that they have. So there’s a, we hope that everybody understands the huge value that can be provided for people to take the treatment and get better.

James West:   Yeah, that sounds incredible. Okay, so is this something that for Canadians, can they, does health care cover it?

Phil Deschamps:    So, not right now. Again, the usual process that happens is self-pay upfront, and then we will be talking to the Workers Compensation systems in every province; we will be talking to Health Canada in the different – or the, I’m sorry, the provinces in Canada for coverage of the treatment over time. That typically takes 18 to 24 months, in our experience, to get that, and what we’re trying to do is, we’re, every single patient that’s being treated in Canada, we’re gathering their data. So this will be a huge asset, completely de-personalized, and it’s gathered through the Cloud.

So we’re going to be one of the first organizations to be able to help the provincial medical systems to really understand what level of work people can return to, how has it impacted their lives through assessments that are scientifically gathered prospectively. So we look forward to working with the provincial systems to see if they feel this is worthwhile to cover, over time.

James West:   Wow, fantastic. Okay, well this is a story that we obviously need to stay on top of, because it’s so interesting. And we’re going to leave it there for now, though, Phil, have you back just as soon as we can. Thanks very much for coming and joining us today.

Phil Deschamps:    It’s my pleasure, James. All the best to you.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

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