BrainsWay Ltd.

Greetings and welcome to BrainsWay fourth quarter and full year 2021 earnings conference call. At this time, all participants are in a listen only mode. A 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. I would now like to turn the conference over to your host, Bob Yedit of LifeSci Advisors. Please go ahead.

Thank you, Brock, and thank you all, and welcome to BrainsWay's fourth quarter and full year 2021 earnings conference call. With us today are BrainsWay's President and Chief Executive Officer, Christopher Vaniaco, and Chief Financial Officer, Scott Arreglato. The format for today's call will be a discussion of recent trends and business updates from Chris, followed by a detailed discussion of the financials from Scott. Then we will open up the call for your questions. Earlier this morning, Friendsway released financial results for the three months and 12 months ended December 31, 2021. A copy of the press release is available on the company's investor relations website. Before I turn the call over to Chris and Scott, I'd like to remind you that this conference call, including both management's prepared remarks and the Q&A session, may contain projections or other forward-looking statements regarding, among other topics, brands' ways anticipated, future operating and financial performance, business plans and prospects, and expectations for its products and pipeline, which are all subject to risks and uncertainties, including shifting market conditions resulting from the COVID-19 pandemic, the global supply chain crisis, as well as the use of non-GAAP financial information. Additional information regarding these and other risks are available in the company's earnings release and its other filings with the SEC, including the risk factors section contained in Bransway's Form 20-F. With those prepared remarks, it's my pleasure to turn the call over to Christopher Bagnaco, CEO. Chris?

Thank you, Bob. Welcome, everyone, and thank you for joining us today. We're extremely pleased with the continued strong momentum throughout our business. We expect that the current positive operating trends that drove our robust performance in 2021, highlighted by achievements on the commercial, clinical, regulatory, and reimbursement fronts, will lead to further growth for Brainsway in 2022 and beyond. While I will review our future prospects in greater detail shortly, First, I will provide a brief summary of our full year 2021 accomplishments and an overview of our key fourth quarter financial results. In 2021, we overcame a number of challenges, primarily driven by COVID and the overall operating environment and continued advancing our business. We achieved year over year growth in each quarter during 2021, and have now demonstrated year-over-year growth in six consecutive quarters. Our full year 2020 run revenue of $29.7 million represents growth of 34% over 2020. From a regulatory perspective, we were proud to receive two significant FDA clearances during 2021 and three over the past 18 months. Other key commercial highlights in 2021 included the expansion of our sales force from 12 to 18 professionals and the successful launch of our deep TMS system in anxious depression and smoking addiction. Our substantial reimbursement accomplishments included establishing positive payer coverage policies in 2021 for OCD. with the number of covered lives at approximately 50 million, a number that recently increased even further. This is a topic that we'll cover shortly. Looking at the fourth quarter specifically, demand for our deep TMS system remains strong in multiple indications, despite various challenges posed by Omicron to many industries, including ours. Importantly, this demand was driven by both depression and anxious depression, as well as OCD. We generated $8.5 million in revenue for the fourth quarter of 2021, which represents both a quarterly record and a substantial 20% increase over our fourth quarter 2020. With that, I'd like to discuss our key, our 2022 key priorities with plan to carry that out within the broader context of the five-year plan which we began executing in 2021. A strategic plan is based on four core pillars. The first of these pillars is becoming the market leader in the non-invasive brain stimulation market. Brains with strong revenue growth in 2021 demonstrates that we are leading the way and we are taking steps that we believe will allow us to continue this trend. To achieve this revenue growth, we have assembled a best-in-class commercial team. In 2022, we are building out our infrastructure by going from two regions with 18 territory sales managers to three regions with 21 territory sales managers. Collectively, these sales professionals are focused on broadening our US customer base. Our territory sales managers are complemented and supported by skilled teams of practice development consultants and field clinical engineers. These highly knowledgeable professionals have in the past and will continue to be laser focused on achieving customer success, cultivating our expanding customer base, and delivering on our overall mandate to provide superior support to our customers. The expansions in the commercial team are made possible by our strong balance sheet, differentiated deep TMS technology, expanding number of indications, and superior clinical evidence. Another aspect of the strategic pillar is increasing market awareness, which will remain a key priority for us in 2022. Our recently overhauled website has been enhanced for search engine optimization to make deep TMS therapy more visible for all in need. I'm pleased to report that our organic website traffic increased substantially in 2021 as compared to 2022, up 93% year over year. Our new website chat robot aptly named H-Coil logged 13,000 engagements with individuals from September through December 2021. Importantly, Approximately 10% of these online chats led to live discussions, many with prospective patients. Moreover, a meaningful number of sales meetings with psychiatrists and clinics have also been booked via this new innovative tool. You may recall our recent patient awareness initiatives included posting a patient story each week via our social media channels. Each patient detailed their experience with DTMS. and we held a live moderated Q&A session for prospective interested patients in the fourth quarter. We also continued to develop patient testimonials through the usage of mobile apps, and these stories are being used as a strong advocacy tool by our clinics to help promote their practices. Collectively, the goal of these initiatives is to reach any patient seeking an alternative to traditional medical management of their mental health. We believe that increased website engagement and greater use of social media channels will ultimately lead to more patient engagement and awareness of our breakthrough technology. We also have a number of other exciting market awareness related initiatives planned for 2022 that we look forward to sharing with you in the coming months. Where and whenever possible, we continue to leverage critical in-person interactions. As was the case with many other companies, our sales professionals in-person access to customers was impacted by Omicron in the fourth quarter, making our strong performance during the period that much more impressive. Our return to live in-person conferences, which began in the second quarter, continued this past quarter as well. In December, Professor Abraham Zangen of Ben-Gurion University and a scientific consultant for the company recently spoke about addiction, including the results of our alcohol and smoking addiction studies at the Fourth International Brain Stimulation Conference in Charleston, South Carolina. Also at this conference, we displayed a future version of the platform that will serve as the basis for our fourth generation deep CMS system. And we hosted a key opinion event with several leading industry psychiatrists and researchers. I'll now turn to the progress of DTMS for the treatment of OCD, which is another aspect of our first strategic pillar. As a reminder, Brainsway is the first TMS company to achieve FDA clearance for this hard-to-treat condition and remains the only TMS company to have received this clearance based on pivotal sham-controlled data conducted on its own device. During the fourth quarter, we shipped 22 add-on helmets for OCD, increasing the total number to 302. We're pleased that 40% of our total install base now includes OCD treatment capability. We view this progress as a testament to our customers' strong belief in the benefits of deep TMS treatment for OCD and within the broader context of our emerging reimbursement in this area. Most recently, in January, of this year, we received a final local coverage determination providing coverage applicable to DTMS for the treatment of OCD. The final LCD was issued by Palmetto, a Medicare Administrative Contractor, or MAC, which covers 9 million Medicare patients in Alabama, Georgia, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia. The formal policy issued by Palmetto, one of seven MACs in the U.S., brings the total number of covered lives now eligible for OCD coverage to approximately 60 million. The Palmetto LCD also positively impacted those using deep TMS to treat depression and anxious depression by moving from a requirement of four failed medications to two failed medications. Further expansion of OCD reimbursement is an ongoing area of focus for Brain's Way. The collective OCD developments achieved to date, both in terms of customer adoption and reimbursement, are indicative of the significant traction we're seeing with this key indication. In order to further accelerate customer adoption and additional reimbursement progress, we continue to publish compelling data in support of the use of deep TMS and OCD. To this end, we were excited to have an important research data recently published in two leading peer-reviewed journals highlighting the durability and the cost effectiveness of DTMS and OCD. First, a study published in Brain Stimulation shows the durability of DTMS and the significant reduction in functional disability. Secondly, positive data recently published in the Journal of Psychiatric Research supports the cost effectiveness of DTMS relative to other available OCD treatment options. Moving on, the second key pillar in our strategic plan is to lead through superior science and evidence. To further advance on this front, we added two highly experienced individuals to our scientific advisory board over the past five months. Professors Jeff Deskalakis and Marcus Heilig Professor Deskalakis is a chair of the Department of Psychiatry at UCSD School of Medicine. His research is focused on developing a better understanding of neurophysiology of severe psychiatric disorders and the role of brain stimulation in treating these conditions. Professor Deskalakis has authored more than 450 peer-reviewed publications and serves on the editorial board of multiple journals. Professor Heilig is the founding director of the Center for Social and Effective Neuroscience of Linköping University in Sweden. His center focuses on the study of brain mechanisms behind addiction and anxiety disorders using translational approaches. Notably, from 2004 to 2015, Professor Heilig served as the director of clinical and translational research at the National Institute on Alcohol Abuse and Alcoholism, a division of the U.S. National Institutes of Health. We also completed multiple important feasibility studies in 2021, including one in adults with alcohol use disorder. This randomized placebo-controlled double-blind clinical trial in 46 subjects measured the reduction in the percentage of heavy drinking days over a 12-week period after deep TMS treatment. While subjects receiving a placebo treatment averaged 10.9 heavy drinking days during the follow-up period, subjects who had undergone a deep TMS therapy averaged only 2.9% of heavy drinking days. This is a clinically meaningful and statistically significant difference. We intend on continuing our real-world data collection efforts in all of our major indications, including depression, anxious depression, OCD, and smoking, with a focus on publications and presentations at key industry conferences. In addition, we also plan to initiate several new feasibility studies in 2022 in certain psychiatric, neurologic, and addiction indications. Finally, from an IP perspective, several new important patents for deep TMS were issued in 2021. We now have nearly 80 issued patents that extend protection on our technologies for up to another 10 years. The third and fourth pillars of our strategy are capitalizing on our platform and enhancing business development activities. These are both critical long-term drivers for us. While we prefer not to get into too much detail on these matters, I will generally reiterate Brainsway's ongoing commitment to continue pursuing new indications and new market opportunities in both the U.S. and internationally in a way that maximizes value for our stakeholders. With that, I'd like to now provide a brief update on a commercialization plan for the DTMS for smoking addiction. As a reminder, this offering, the first of its kind in the medical device space and our first addiction product, was launched in a phased rollout. We pursued this strategy in order to further cultivate our messaging, develop optimized business models for customers, refine ideal addressable populations, and build post-marketing data to develop a reimbursement strategy. We previously completed the first phase, which was a controlled market release, and more recently concluded our limited market release. We now have data on numerous commercial patients in our database. During the fourth quarter, we successfully held our second users group meeting to share best practices among practitioners. And our existing customer base has received materials educating them on how to integrate this offering within their practice. We recently transitioned to a full market release and we are looking forward to sharing additional details and updates with you in the future. I would also add that smoking trends are unfortunately rising, which underscores the need for smokers to have additional treatment options and may increase demand for smoking addiction treatment. Accordingly to a study published in October of 2021, cigarette sales across the country were up more than 14% from March 2020 to June 2021. This is in contrast to the long-term declining trend in cigarette sales from January 2007 to February 2020. While the need for solutions to address this addiction is thus clear, our ultimate commercial success in this market will be, of course, influenced by insurance landscape. And as you know, coverage does not yet exist for DTMS for smoking addiction. To facilitate our efforts in this regard, we're planning on conducting post-marketing research and data collection efforts in 2022. which we believe will serve us well in our commercialization efforts. Turning to investor relations. Following our well-attended KOL event for investors and analysts in the third quarter, which highlighted the OCD indication, we will be hosting another KOL event on March 22nd. This virtual event will feature Dr. Sean Siddiqui, a neuropsychiatrist at the Brigham Women's Hospital and instructor of psychiatry at Harvard Medical School. He will discuss the clinical and market importance of the recent expansion of our depression labeling to include anxious depression. We also presented at several healthcare investment conferences in recent months and conducted multiple institutional and high net worth focused virtual non-deal roadshows. Our proactive investor marketing efforts will continue throughout 2022. Finally, and as always, I would like to thank our valued partners and providers who battle the mental health crisis each and every day, as well as the entire Brainsway team for elevating their commitment to excellence in delivering on our mission of advancing neuroscience to improve health and transform lives. With that, I will pass the call to Scott for his review of our fourth quarter and full year 2021 financial results. Scott.