Mainstay on track to announce trial results as revenues rise

Mainstay Medical expects results from a critical trial for its Reactiv8 device for people who suffer disabling chronic lower back pain by the end of the year.

Assuming they confirm previous findings, Mainstay intends to apply to the US regulator, the FDA, for a licence to market the device in the United States.

Reactiv8 is a device, which is implanted in the back, and stimulates nerves with electrical impulses to strengthen muscles in the lower back.

It is seen as a breakthrough device in the treatment of chronic lower back pain, a common but debilitating condition, among patients who are not suitable for spinal surgery. Mainstay has previously estimated the market as worth up to $30 billion.

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Barring a setback, Mainstay hopes to be in a position to start selling its device in the US in mid-2020.

A positive data set would also accelerate the company’s application to enter the Australian market with the device, which is currently approved only in Europe. Australian regulators deferred a decision on Reactiv8 pending this latest trial. The company now hopes to get approval there sometime next year.

Chief executive Jason Hannon also said Mainstay had refocused its sales business in Germany which, along with Ireland and, shortly, Switzerland, are the only markets in which it is actively selling at the moment.

The retuned sales force is more aligned to selling new technology that more traditional health sector sales forces. The company is also more carefully targeting surgical centres that have a record of being early adopters of news technology.

Mainstay, which recently raised $30 million in a share placing, said it was burning through its cash at a rate of around $3 million a month. At that rate, the company has more than enough to get it to the trial endpoint, though not to bring it to commercial markets in the US..

Any fundraising on the back of positive data and a US filing would be a very different exercise for the group, which is listed in Dublin and Paris, than anything it has undertaken so far.

The company also said on Friday that it is on track to meet its target of having 10 or more physician partners performing multiple implants by the end of 2018.

“We believe this momentum will set us up for more meaningful commercial expansion in 2019 as more customers begin to adopt and get comfortable with selecting the appropriate patients for the therapy,” chief executive Jason Hannon said.

He was speaking as the company announced first-half results which show it recorded revenues of $400,000, as commercialisation increased.

Operating expenses rose to $15.8 million from $12.3 million in the first-half due to increased commercialisation efforts.

The group moved to Dublin in 2012 from the US following a $20 million funding round that was led by Dublin-based life sciences venture capital group, Fountain Healthcare Partners.