BrainsWay Ltd.

Greetings and welcome to the BrainsWay third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bob Yeted of LifeSci Advisors. Thank you.

Thank you, Gerald, and thank you all for joining us this morning, and welcome to Brain's Ways Third Quarter 2020 Earnings Conference Call. With us today are the company's president and chief executive officer, Chris Vaniaco, and chief financial officer, Judy Huger. The format for today's call will be a discussion of third quarter trends and business updates from Chris, followed by detailed discussion of financials from Judy. Then we will open up the call for your questions. Earlier today, Branchway released financial results for the third quarter and it's September 30th, 2020. A copy of the press release is available on the company's investor relations website. Before I turn the call over to Chris and Judy, I would like to remind you that this conference call, including management's prepared remarks and the question and answer session, may contain projections or other forward-looking statements regarding future events or the future performance of Brainsway, including but not limited to statements regarding commercial plans or activities, financial projections, clinical studies, R&D plans, and or anticipated timeline. These statements are only predictions, and Brainsway cannot guarantee that they will, in fact, occur. The company does not assume any obligation to update that information. Investors are cautioned that all forward-looking statements involve risks and uncertainties, which may cause actual results to differ from those anticipated by Bransway at this time. Additional risks concerning factors that could cause actual events, results, or achievements that materially differ from those contained in the forward-looking statements can be found in the company's registration statement on Form F, and its other filings with the Securities and Exchange Commission. With those prepared remarks, it's my pleasure to turn the call over to Chris Vaniaco, CEO.

Chris? Thank you, Bob. Welcome, everyone, and thank you for joining us today. Today, we're extremely pleased to report third quarter 2020 revenues of $6 million, representing a significant 25% increase over our second quarter of 2020. and even a small increase over the same period last year, which of course was prior to the onset of COVID-19. These results were driven by a multitude of positive catalysts in our business and the industry overall. First, I'd like to provide a brief update on the current operating environment. Importantly, the large majority of clinics are now operating at or near normal levels, with some even experiencing patient treatment volumes above pre-COVID levels. This provides us with optimism as we head into the final months of 2020, but we have continued our judicious approach of implementing expense reductions without sacrificing our long-term growth objectives. Of course, business conditions during COVID continue to evolve, and we will continue to monitor the impact of the pandemic on the fourth quarter operations, especially with the latest spike in cases across the U.S. With that said, according to the information from IQVIA, total patient visit metrics, both in-person and telehealth, continue to improve in the US. We view patient visit data as a leading indicator of treatment volume, and these metrics help provide us with confidence in the outlook of our business. To this end, patient visits to psychiatrists are up almost 60% versus pre-COVID levels. These trends are very likely to continue as depression rate in the U.S. adults has tripled since the onset of COVID. Because DTMS has a clear patient impact and customer economic benefit, we believe that Brain's Way has a critical role to serve in treating patients suffering from both depression and OCD. Importantly, Brain's Way and our innovative DTMS therapy are highly differentiated by superior science, robust clinical evidence, and industry-leading customer support. We have a vast clinical and commercial experience with our deep TMS system, which has been subject to no less than 32 completed randomized clinical trials, which is more than any other company in our field. Furthermore, Brain's Way's deep TMS has been utilized to treat over 95,000 patients for depression and OCD, and this translates into over 2.5 million individual treatment sessions. Moreover, our flexible business model allows customers to either lease or purchase our system, which continues to help grow the demand for our technology. In addition, favorable reimbursement trends for deep TMS depression treatment continue to be an important tailwind for our business. We continue to see reductions in reimbursement requirements from four prior antidepressant treatment failures to two prior failures. This significantly reduces the hurdles patients must overcome in order to access a life-changing treatment. Just in the last six months, reimbursement requirements have been eased by Blue Cross Blue Shield in five states, as well as by Cigna and Aetna. As of the end of the third quarter, DTMS for depression was covered by over 60 commercial insurers. and all seven Medicare administrative contractors. These payers collectively represent more than 275 million covered lives. In general, we continue our efforts to leverage these favorable trends in depression reimbursement. This together with our efforts to obtain further clearances and seek expanded coverage for these indications will help us expand our total addressable market. In this regard, we are highly focused on securing reimbursement in OCD, our second major indication, which is a critical priority for Brainsway. To further support our continued efforts, we recently expanded our reimbursement and market access team, including the addition of a professional with over 20 years of relevant experience to lead our initiatives in this important area. I would like now to emphasize the ways in which Brainsway has adopted a systematic, wide-scale effort to utilize a meticulous, data-driven approach towards commercial success. This ranges from significantly increasing our data for OCD to further bolstering the data around our positive safety profile and to tracking our marketing efforts and reach. In terms of OCD, we collected new post-marketing clinical data on 219 patients at 22 clinical DTMS sites. which was published in the peer-reviewed Journal of Psychiatric Research. Our analysis of this real-world information resulted in several interesting findings within various subgroups. For example, the study showed that 73% of patients reached initial response at an early stage of DTMS treatment, which was administered as an adjunct form of therapy. The data also revealed that the therapeutic effect can be maintained for weeks after treatment. We intend to leverage this new data with insurance companies as we continue our efforts to obtain reimbursement. As far as our safety profile, as many of you may know, our device is not associated with any systematic side effects. However, Brain's Way has diligently collected comprehensive safety data to give us a better understanding of the risks of treatment, and recently published its analysis in the Journal of Brain Stimulation. These findings indicate a marked decrease in the risks associated with our device. We now have the most comprehensive published clinical safety data by far of any TMS company, and we believe that it suggests a safety profile that is second to none in the TMS industry. It's also worth noting some impressive gains from our data we now track to better measure our website user volume and patient education initiatives. From April through October, approximately 3,200 registrants participated in 57 webinars hosted by Brainsway. In the third quarter alone, organic user volume of our recently launched website increased by a robust 30%. To mark OCD Awareness Week, which took place in October, we teamed up with social media influencers and two OCD patients treated with CTMS to launch a social media campaign called Hashtag the real OCD. We yielded about 400,000 impressions from this campaign. And it was picked up by over 80 media outlets with a cumulative potential reach of 244 million. As I mentioned, we believe these metrics, initiatives, and achievements all clearly demonstrate a persistent commitment to a data-driven commercialization approach. Moving on, since becoming CEO of Brainsway in January, I've spent a considerable amount of time working to strengthen our commercial structure into an industry-leading team. In order to further expand our sales efforts over the course of 2021, we intend to increase the number of U.S. sales territories we cover from the beginning of this year at 12 to 16. We also continue to see significant progress and opportunities for our business outside the U.S. Even amidst the pandemic, we have seen a ramp in sales efforts from some of our distribution partners and agents. In Japan, we received regulatory approval for DTMS to treat depression. We continue to work through our distribution partner towards securing reimbursement in our steady contact with the relevant governmental authorities. Our commercial team is also actively working on developing various synergistic opportunities in other new territories around the globe. As I stated, expanding the marketing indications for deep TMS is a key to our growth strategy. To this end, we were thrilled to announce in the third quarter that we received the third FDA-cleared indication for deep TMS for smoking addiction. We view this milestone as further validation of our scientific leadership position, and this represents the first FDA clearance in the addiction space for any TMS device. Smoking is one of the leading causes of death in the U.S. and also leads to other serious conditions such as lung cancer and heart disease. Approximately 34 million U.S. adults smoke cigarettes and nearly 500,000 die from smoking each year. Further, only around 6% of those who try to quit each year are successful. While other therapies are currently available, a substantial medical need continues to exist for treatments that can assist smokers in quitting. Brainsway received FDA clearance on this indication based on data from a pivotal study of 262 patients. These patients were highly addicted to cigarettes with a long history of smoking and with 70% having failed three or more attempts to quit. Of those patients who completed a full course of DTMS treatment, 28% achieved four consecutive weeks of abstinence from smoking. In addition, the average number of cigarettes smoked per week dropped from 127 at baseline to 32 by week six. These compelling data have been submitted to a peer-reviewed journal for publication. As I mentioned on the previous earnings call, we are excited about this new indication and we're gearing up for a control market release during the first quarter of 2021. Our focus will be gathering post-marketing data and refining our broader launch strategy. Turning to investor relations, I want to emphasize that Judy and I remain highly active in sharing Brainsway's compelling growth story with both institutional and retail investors. We recently participated in several virtual investor conferences sponsored by Cantor Fitzgerald, Oppenheimer, H.C. Wainwright, and others. and have multiple other investor events on our calendar over the next few months. Moreover, I'm pleased to share with you today that we will be hosting a key opinion leader virtual investor event this coming Monday, November 23rd, at 10 a.m. Eastern Time. This exciting event will feature Dr. Owen Weir of Brooklyn Minds, who will discuss the current treatment landscape and unmet medical need in treating patients with depression, and OCD. Before turning the call over to Judy, I want to acknowledge my gratitude to our hardworking customers on the front line of this mental health crisis and to the entire Brainsway team for their continued support and dedication, which has produced significant achievements during the first nine months of this year. Thank you again for joining us today. With that, I will now pass the call to Judy for her review of our third quarter financial results.