A few years back, I wrote about Helius Medical Technologies (HSM.T), which I heard about from Fabrice Taylor, and liked a lot as a long term biotech play.

At the time, it was all new and unproven, with the faint whiff of big upside. But almost from the outset, HSM has struggled to catch the sort of market waves it deserves, which was most recently seen when it sold off massively, from $5.75 to $2.80, on clinical trial news that sounded bad to the layman.

The news wasn’t bad, we thought, and so did others, but the market didn’t get it and a lot of big money simply lost patience, and so now it sits around $3.

We think that’s dumb oversold territory, but before we tell you why, let’s lay down some basis for Helius’ tech.

The story, which is much cooler than most in the junior space, starts with the US Navy Seals and a training problem they were noticing.

Basically, when the Seals are doing long term underwater dive training, which they do a lot – these guys need to be able to swim in total darkness, underwater, for a lengthy amount of time. But finding your way in black water, without popping up to the surface (where your head might get shot off) was tough. Someone came up with a plan to use an electrified mouthpiece that would give a small electric charge to the Seals’ tongue when they would go off course, which worked okay but had a side effect nobody expected.

Usually, after these long dives into blackness, it would take some time for the Seals to be able to function properly. Walking and talking and getting your senses about you is fairly important if you’re venturing into enemy territory, so the lengthy amount of time to reacclimatize upon surfacing was a problem.

But those training with the electrified mouthpiece didn’t have the same issues. It seemed the electric charge was keeping the brain more focused, because users were back into fighting shape much faster.

As happens with things like this so often, the unintended consequence of the experiment was less about figuring out swimming directions, and more about what was going on with the brain when it was ‘awakened’ by that small charge.

Could this have use in therapy situations, when brain injuries require folks to relearn basic functions? Could it help rewire the brain of folks who have had traumatic injury? Could it be used to improve alertness in non-patients? Could it be used in education even?

So this was the Helius challenge. They knew the technology worked, but didn’t know how well it worked, at least to a clinical level. And in order to properly employ it as a product, that’s what they needed to do.

Well here’s what they said when the excrement hit the oscillator, in a news release headlined “Helius Medical Technologies Announces Positive Results from its Registrational Clinical Trial for Traumatic Brain Injury (TBI)“:

The multi-center registrational trial titled, A double-blind, randomized, sham-controlled study of the safety and effectiveness of the Portable Neuromodulation Stimulator (PoNS™) 4.0 device for cranial nerve noninvasive neuromodulation (CN-NINM) training in subjects with a chronic balance deficit due to mild-to-moderate traumatic brain injury (TBI), evaluated a total of 122 randomized subjects (61 active and 61 control). Subjects, age 18 to 65, received 5 weeks of treatment (2 weeks in-clinic and 3 weeks at-home) consisting of physical therapy and either a high-frequency PoNS™ device (active) or a low-frequency PoNS™ device (control).

Endpoints for effectiveness were assessed using the Sensory Organization Test (SOT), measuring balance using computerized dynamic posturography. A responder rate analysis was used for the primary endpoint. A responder was defined as a subject with an improvement of at least 15 points on the composite SOT score compared to baseline after 5 weeks of PoNS™ Therapy.

Secondary effectiveness endpoints were contingent on the outcome of the primary endpoint and determining the clinical effectiveness of the low-frequency device. As the low-frequency device demonstrated, on average, statistically significant improvements on composite SOT scores compared to baseline (p<0.025) – the secondary effectiveness endpoints evaluated for the study were the mean change in composite SOT score from baseline at 2 and 5 weeks, for both arms combined.

Are you with me still? Okay, so layman time.

They’re testing the device with a high frequency option, which is what they want to be the end product, ideally. A low frequency device is used as the ‘control’ option, to compare against the high frequency device.

Here’s where it got sticky:

Study results highlights:

  • Primary effectiveness endpoint demonstrated a trend toward a higher responder rate in the high frequency PoNS™ Therapy group (75.4%) than in the low frequency PoNS™ Therapy group (60.7%), p<0.081
  • Primary effectiveness endpoint was not reached because low frequency pulse treatment had a significant therapeutic effect

And on that, the market freaked out and crashed Helius.

As I understand it, what you want in these studies is to show you have the best possible frequency for your device so you can rocket to market. But when your control group shows it’s actually beneficial to the patient too, you can’t show that. So you go back and make some changes.

Downside: Delay in getting to market.

Upside? The thing WORKS, even in small doses.

The company saw this as compelling and good news, as is evidenced by the news release title, and the following statement from the Chief Medical Officer:

“We are very pleased with the findings from our registrational trial that demonstrate that PoNS Therapy, deployed independently across our seven study sites, produced statistically significant improvements in balance from baseline, on average over three times the clinically significant amount,” said Helius’ Chief Medical Officer, Dr. Jonathan Sackier. “Achieving the safety endpoints and further growing a positive safety profile continues to build confidence in our technology. With an underserved patient population waiting for improved treatment opportunities, we are eager to move forward with our applications for clearance with the U.S. Food and Drug Administration (FDA) and other foreign regulatory bodies.”

To be sure, there has been a lot of big and long term money in Helius that was no doubt looking for an exit, especially with so many other sectors on the boom right now. So a delay? That’s a trigger for folks to remove a million or two, which others took as a trigger to sell sell sell.

But we’re looking at Helius and thinking… “What?”

So I called upon someone I know who has deep sector knowledge in biotech to look at the technology, the trial, the news, and tell me what she thought. Here’s the report we got back:

Helius Medical Technologies is a medical company which has presented a non-invasive wearable medical device designed to amplify the brains ability to heal after mild to moderate traumatic brain injury (mTBI) as well as neurological symptoms caused by disease. This device, which is labeled the Portable Neuromodulation Stimulator (PoNS) in conjunction with physical therapy, claims to help the subject regain balance deficits due to injury or disease.

In the late 1990’s, the late professor Paul Bach-Y-Rita founded the company Tactile Communications and NeuroRehabilitation Laboratory (TCNL) at the university of Wisconsin-Madison.  Kurt Kaczmarek, Mitchell Tyler and Yuri Danilov joined TCNL. This team then went on to organize Advanced NeuroRehabilitation LLC (ANR) to manage TCNL.

By the late 2000’s, TCNL analyzed the first pilot data to support cranial nerve noninvasive neuromodulation (CN-NINM) and founded the whole-tongue electotactile stimulation without sensory substitution which significantly improves the effectiveness of therapeutic exercises in people with vestibular disorders.  With these results, the team built the PoNS.

In 2013, ANR and MPJ Healthcare formed a joint venture called NeuroHabilitation to develop and commercialize the PoNS device. Through the Department of Defence, NeuroHabilitation signed a Collaborative Research and Development Agreement (CRADA) to develop and manage clinical and regulatory activities for the PoNS device and this team focused their research in the area of neuroplasticity and expanded into the development of sensory substitution devices. Their Tongue Display unit was the first instrument platform for tongue tactile display research. It is being used by numerous US and international clinical collaborators. After this benchmark, Philippe Deschamps came aboard to be CEO of NeuroHabilitation Corp.

2014, Dr. Johnathan Sackier joined Helius to be their Chief Medical Officer.  With him aboard, comes 30 years of experience in the healthcare field as well as Dr. Sackier being a trained surgeon. As well, in 2014, a reverse merger took place. Helius acquired NeuroHabilitation as a wholly owned division and started publicly trading in Canada on the Toronto stock exchange (HSM.T).

The Claim

– [ ] The mission statement from Helius is that they want to develop, license or acquire treatments to help patients with affects from neurological symptoms from trauma or disease and all their treatments are “vetted through scientific methods and supported by strong clinical evidence, which is steered through the correct pathway to most effectively help patients.”

The team tested 100 units with positive data from the US and International pilot projects, case studies and randomized controlled trials to further study the device to determine application to neurological conditions as earlier stated from mTBI and disease. They have published their trial titled ‘A double-blind, randomized sham-controlled study of the safety and effectiveness of the Portable Neuromodulation Stimulator (PoNS) 4.0 device for Cranial Nerve Noninvasive Neuromodulation (CN-NINM) training subjects with a chronic balance deficit due to mild-to-moderate traumatic brain injury (mTBI).

Evaluation was done on a points system.  A patient with a score of 100 points indicates perfect stability; a patient with a 0 indicated zero stability.  A responder rate to the PoNS device was analyzed and used for the primary endpoint.  A responder was defined as a subject with an improvement of at least 15 points on the Sensory Organization Teat- (SOT) compared to baseline after 5 weeks of PoNS therapy.

– [ ] Helius has reported “We are very pleased with the findings from our registrations trial that demonstrate that the PoNS therapy deployed independently across our seven study sites, produced statistically significant improvements in balance from baseline, on average over three times the clinically significant amount,” this was said by Chef Medical Officer Dr. Sackier.

– [ ] Dr. Alain Ptito, director of the Department of Psychology of the McGill University Health Centre and Coordinating Principal Investigator for the study stated “We are pleased to be on the forefront of research that brings this novel and exciting therapy to patients in need.”  “The investigators and research teams from Montreal Neurofeedback Center, Orlando Regional Medical Center, Oregon Health and Science University, Health Tech Connex Inc, Virginia Commonwealth-Madison are pleased with the execution of this study and look forward to further analysis and publication of the results.”

– [ ] Conclusion 

– [ ] Helius has impressively demonstrated a transparency that is needed to consider the validity of their claims and technology. Furthermore, the data, research and documentation is retrievable and is accurate to their to date claim. The technology of the PoNS device is demonstrating through the trials to be significant in the treatment and therapy of patients suffering from mTBI.

Furthermore, with the FDA as the next step once evidence and trials are submitted and further verification and validation is made, along with the impressive list of institutions and the medical and clinical minds working in collaboration for product design improvements and manufacturing included in their regulatory application, this could be a technology that could be beneficial to the millions of patients worldwide who suffer by disease or trauma that has long been considered untreatable.

Now, this report doesn’t say ‘go invest in the stock, it’s a gimme,’ and we didn’t ask for it to. We wanted to know if the tech works (it does), if it can move forward in the FDA process (it can), and if the results that caused the big sell off warranted a big sell off (they didn’t).

Meanwhile, the company was also a bit befuddled at the negative reception and put out a clarification news release that revealed the company to be all in on FDA marketing approval soon.

  • SOT Composite Score is a 0 to 100-point scale where zero means the patient cannot balance unaided and 100 implies perfect balance.
  • An average SOT score for a neurologically intact adult is 70 – 80 and a change in score of 8 points is considered clinically significant. The mean baseline score for subjects in the trials was about 40, representing a population with a profound loss of balance.
  • According to medical literature, subjects with chronic balance disorders caused by mild to moderate TBI have historically demonstrated limited response to physical therapy alone, with typical increases in SOT scores of 8-13 points over a 6-9 month period of time.

How’d it do?

The response rates in this study showed that 75.4% (HFP) and 60.7% (LFP) of participants had at least a 15-point change in SOT, having previously plateaued on PT alone.

There was a trend to higher response rate in the HFP group when compared to the LFP group, but as between the groups, both groups showed a strong response.

Of note, the increase in SOT score in each group, 27.6 for HFP and 23.6 for LFP are markedly above what has been established for PT alone (8 – 13 points), a therapy all participants had previously undergone with no further benefit.

Given this outcome, the next step of our statistical analysis plan was to combine the results for the two groups to ascertain if the mean change in the combined group would be significantly different from zero at the end of two weeks and five weeks of treatment. This would statistically assess whether the interventions in the HFP and LFP groups were positively therapeutic or not.

The mean change was +18.3 at the two-week measurement point and +24.6 at week 5.  Both measurements were statistically significant, p value <0.0005.

With all of this in mind, we’re compelled to call Helius an opportunity that should be seriously considered. The only concern we have is a delay in moving to market while the FDA does it’s business. On that:

FDA will evaluate the probable benefit to health from the use of the device against any probable injury based upon a reasonable assurance of safety and effectiveness.  There is a reasonable assurance that a device is effective when it can be determined by FDA, based upon valid scientific evidence, that in a significant portion of the target population, the intended use of the device will provide clinically significant results.  We believe we have met this standard in the results of the two clinical trials reported on in this communication in participants that had significant balance disorder associated with their mild to moderate TBI.

Considering the results of the trial show significant improvement with the use of the PONS device, we can’t imagine a scenario where this doesn’t move forward, and where long holders won’t be repaid for their patience.

— Chris Parry

FULL DISCLOSURE: There is no commercial arrangement with Helius and Equity.Guru, nor does the author own stock at the time of writing, though this may change in the future. 






Written By:

Chris Parry

A multi-Webster Award winner for excellence in BC journalism, Parry is the founder and publisher of Equity.Guru, which he built with the specific plan to blend old school reporting with stock promotion, in a way that puts the emphasis on truth, high standards, and ethics. Parry is a veteran of TV, radio, and print, and consults with public companies to help them figure out their storylines, lay down achievable milestones, and improve their communication with shareholders, while also posting regular deep dive analysis of companies in the public spotlight.

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