Products that ASSESS, TRAIN and MONITOR the Brain
Brain Resource Limited (ASX: BRC, OTC: BRRZY)
Investor Presentation
November 2015
About Brain Resource
•
Brain Resource Limited was founded in 2000 based on decades of research by a global
multidisciplinary team including many Key Opinion Leaders.
•
Offices in San Francisco and Sydney, with majority of business and clients in the US.
•
Leading provider of online scientifically validated scalable products that Assess, Train and
Monitor the brain to increase brain health.
•
The MyBrainSolutions® products targets a large unmet need and current clients include more
than 40 brand name corporations and 92 addiction clinics.
•
Developing Depression and ADHD treatment prediction tests and has the world’s largest
standardised brain database that underpins all development and products.
•
600,000 have used a Brain Resource product to date and $50m has been spent on development.
•
Plans are progressing to list on NASDAQ to better align with business, currently listed on the
ASX.
1
Large untapped sector seeking solutions
•
Brain Health is a large untapped sector with strong new macro drivers:
• the market is now brain aware and seeking solutions.
• significant new healthcare reforms (Obamacare, Mental Health Parity).
•
MyBrainSolutions is currently used in 4 large US markets, a
$300million+ opportunity:
1) Employer: 18,000 US employers employ 61 million.
2) Addiction: 2.5 million patients treated in 14,000 clinics.
3) Depression: 85 million clinical visits pa.
4) Consumer: 20 million untreated addicts and general
consumer wellness.
•
MyBrainSolutions current client revenue model:
• Employers charged Per Employee Per month (av employer $40,000 pa multi year contracts).
• Addiction Clinics charged $70 per user (av clinic $15,000 pa).
2
Wide applicability of MyBrainSolutions.com
Benefits of using MyBrainSolutions, a highly versatile platform that applies to many user groups:
•
Employees / consumers: build employee resilience (stress management, ‘bouncebackability’) and
improved performance and drive productivity gains and health care cost savings for employer.
•
Addiction: improved patient care by clinicians informed by objective patient Assessment, Training
to aid patients create new brain habit of self control and circuit break cravings, and consilidate
gains through Monitoring outcomes.
3
1. Employer: Recurring per employee revenues
Escalating growth via distributor partnerships
Employer / Distributor
Contracts
40
35
27
16
9
JUN 12
JUNE 13
JUN 14
JUN 15
YTD 16
4
Employer revenues and prospects
• $100 million market opportunity.
• Revenues based on a Per Employee Per Month basis – FY15 largest client billed $135,000 with $26,000
av revenue for contributing clients. Uplift potential from third party verified ROI numbers.
• Strong distribution now in place (Aetna, Mercer, Kaiser, Humana etc) to escalate penetration of the
18,000 employers and 61 million employees beyond our current $1 million in contracts and 500,000
employees covered.
• $10 million initial target based on winning 300 av size clients worth $40,000 pa – big potential impact
from winning the 1,000 employ more than 10,000 eg our Boeing win worth > $500,000 pa.
• Annuity revenue but a longer sales cycle.
• Not lost one client to date and our strong differentiators in the market have allowed us to be the only
one to penetrate (key has been strong science underpinnings that have withstood multiple due
diligence).
5
2. Addiction: Per user revenues
New intiative with rapid uptake, Adding clinics at the rate of ~2 per week
Addiction contracted clinics
100
72
41
12
4
JUN13
JUN 14
DEC 14
JUN 15
YTD 16
6
Addiction revenues and prospects
• $200 million market opportunity for addicts treated in specialist care.
• Revenues based on $70 per user (with reimbursable CPT codes) - FY15 largest clinic billed $70,000 and
$5,000 av revenue for contributing clients.
• Rapid growth in contracted clinics now allowing us to target large providers eg Acadia Healthcare
potentially worth our $10 million target alone ($7 million from its 9,000 beds and $3 million from its
40,000 daily medication patients). Currently have 8 Acadia Healthcare clinics signed.
• $10 million initial target based on winning 500 centers/150,000 patients out of total market of 14,000
clinics ($15,000-$20,000 average).
• Annuity revenue from contracted clinics.
• Meeting large unmet need for objective assessment and evidence based tools to help recovery.
Context is that FY15 loss of $2.5 million could be transformed by one large deal.
7
Strong science underpinnings and platform for growth
•
All content is underpinned by the standardized Brain Resource International Database, the
largest of its kind in the world and developed with input from many Key Opinion Leaders.
•
300,000 datasets, 400 users accessing data (through Brainnet.net) and hundreds of
publications – also currently running iSPOT study, the largest of its kind in the world in
treatment prediction in depression and ADHD.
•
The Database informs about the underlying mechanisms which allows us to drive new report
and training content based on these insights. The standardisation of the database means we
can instantly compare new data to the relevant peer groups.
•
FDA 510k approval granted in 2005 for platform (K050192), patented components and
Information Security Management System ISO /IEC 27001:2005 certified.
•
Standardization, integration and scale are hard to implement and replicate, with the Data
analysis tools and the Data collection taking decades to get to this point.
8
3. Consumer: Brain Health Brain Training
What sets MyBrainSolutions apart from competition.
 Lumosity has softened the ground for competition in the Consumer market
 Coupling of emotional with cognitive training
 Use of a validated assessment
 A strong foundation built and used by researchers, clinicians and employers
 Underpinned by Brain Resource International Database
 Specific target market focus
The key distinctions of MyBrainSolutions are:
1. The scientific validation of the ASESSMENT (of key brain
capacities that direct Training new habits)
2. The focus of engaging tools for STRESS REDUCTION (Relaxation
Room), SHIFTING NEGATIVE to POSITIVE THINKING (Thought
Tamer) and POSITIVITY TRAINING (Happy Seeker) – in addition to
games that boost memory and focus
9
3. Consumer: Brain Health
Focus on partnering with established companies in the consumer sector.
•
•
Sharecare strategic alliance:
• First consumer partnering deal with Sharecare.
•
Sharecare, a health and wellness engagement platform that has 87 million registered users,
was founded by Jeff Arnold (WebMD) and Dr Oz in partnership with Harpo Productions
(Oprah Winfrey), Sony, Discovery Communications. It is partnered with AARP, American
Diabetes Association, American Heart Association.
•
Sharecare offering that includes MyBrainSolutions content expected to launch early 2016.
Untreated addicts:
• Next consumer offering will be to offer MyBrainSolutions
to an addressable segment of the 20 million untreated
addicts, to provide them with an online recovery aid.
• 1m untreated perceived a need for treatment
10
4. iSPOT study - Impacting psychiatry
•
“iSPOT-D is currently the largest personalized medicine research study in mental health”
Psychiatric News (American Psychiatric Association)
•
Addressing the need for objectivity in treatment decision, as opposed to current trial and error.
•
iSPOT is a $18m practical trial mirroring routine clinical practice, commenced 2007 – data
acquired from 1,800 depressed patients (plus 400 healthy controls) and 500 ADHD . Drugs
tested were Sertraline (Zoloft 40m prescriptions / 280m total market), Escitalopram (Lexapro
23m prescriptions), Venlafaxine (Effexor 18m prescriptions).
•
20 global acquisition sites including Stanford, Cornell, Miami, Sydney and KOL’s include Prof J
Rush from Duke the principal investigator on the NIMH STAR*D study, Prof A Schatzberg former
head of the APA and Dean of Psychiatry at Stanford, Dr Steve Koslow, former NIMH director and
head of the Human Brain Project.
•
20+ publications to date (including trial protocol) – iSPOT is the first study to publish outcomes
in each of the five key Depression study measures (Genetics, MRI, EEG, Cognition, Clinical -full
publication list www.brainrsource.com/research/ispot/ispotd.
•
Major expediture on data acquisition phase complete, numerous analyses underway to identify
new tests for Depression and ADHD.
11
Sertraline the first test to replicate and others in
development
•
The first test that has replicated is to predict who will not respond to Sertraline based on cognition
measures and will be submitted to FDA under ‘De Novo’ pathway. We will also be reporting our other
two drug results flagging further analysis that we intend to undertake.
•
We will be further develop and expand the cognitive tests by adding brain function and genomics
measures (either alone or in combination with cognition) using the data that has already been
collected as part of the iSPOT-D study.
•
Tests to be add ons to MyBrainSolutions platform (85 million Primary Care Physician visits pa with
existing reimbursement codes (eg: CPT 96120 pays $90 average).
12
Key calendar year 2016 milestones
•
New clinical portal to help drive Addiction revenues
•
Expansion of Sharecare strategic alliance.
•
On-going growth in Employer and Addiction clinic contracts
•
Progress with Brain Tests and regulatory approvals
•
Build relationships with major players in the Addiction market
•
Increase traction with Employer distributor work forces
•
Launch of MyBrainSolutions to consumers starting with Untreated addicts
•
NASDAQ listing
13
MyBrainSolutions Personnel (Total = 25 FTE)
Evian Gordon, MD PhD is CEO, Chairman of the Board and founder of Brain Resource. He has more than 30
years experience in human brain research and is considered as one of the originators of the field of
integrative neuroscience. He has authored more than 300 peer reviewed publications.
Dan Segal BCom, MSc is COO/CFO, Executive Director and founder of Brain Resource. He was previously a
Director in the Equities Research Department at Citigroup. His science studies were in Physics and he has
been a member of the Institute of Chartered Accountants for close to 30 years.
Tom Clements, MBA is VP of Sales and leads a team of sales people spread across the US. With more than 15
years in sales experience in leading sales teams at web-based companies, his expertise lies in managing
corporate customer relations.
Donna Palmer, PhD is Chief Scientific Officer, overseeing all aspects of the Brain Resource International
Database and the scientific underpinnings of MyBrainSolutions products.
David Bogdonoff is VP of Technology and is responsible for development and operations of the
MyBrainSolutions platform. He was previously VP of Product Services at Tickets.com, and Project Technology
Director at WestEd.
Michael Kemper is Principal at Avant Experience. For almost 20 years, he has been producing award-winning
design and software solutions for companies ranging from Fortune 100 companies to startups. Kemper’s
team helps develop, maintain and support the MyBrainSolutions platform.
14
Brain Resource Limited Cap Table & Financials
•
•
Financials include legacy revenues with transition underway to annuity product revenues.
Importantly, major expenditures on study recruitment and platforms are now complete, with
spend now primarily on marketing and revenue generation.
2015
2014
Revenues:
MyBrainSolutions - Employer
MyBrainSolutions - Addiction
MyBrainSolutions - Assessments
MyBrainSolutions Total
692,499
309,270
173,693
1,175,462
498,552
113,392
125,955
737,899
Other clinical reports
Treatment Prediction Research (iSPOT)
Other revenues
Total
237,238
1,153,859
147,420
2,713,978
286,926
1,404,779
124,861
2,554,465
Expenses:
Salaries and consultancy fees
Other
Total Expenses
2,535,198
2,822,186
5,357,384
2,161,260
2,453,199
4,614,459
Loss before tax
2,643,406
2,059,994
Cash used in operations
Cash used in investing
3,131,834
2,765,494
1,428,954
2,314,163
Cash balance
4,335,282
1,992,611
Balance Sheet
Current Assets
Intangibles
Total Assets
Total Liabilities
Total Equity
5,491,425
28,483,939
38,051,296
15,630,090
22,421,206
2,408,272
26,693,111
32,666,458
15,438,614
17,227,845
ASX: BRC, OTC: BRRZY - ADR 5:1
39%
173%
38%
59%
Ordinary shares
IPO August 2001 (at 25.0 cents per share)
Total raised from 7 placements since IPO
Aug 14 Placement (25 cents per share)
Sep14 SPP (25 cents per share)
Total Equity Funds Raised to date ($)
5,003,006
13,518,472
7,027,500
1,031,000
26,579,978
Add: Och-Ziff Convertible equity (25cps)
Jun 11 Zero coupon Conv Bonds (exp Jun 16)
Dec 11 Exchangeable Convertible Pref Shares
10,000,000
4,000,000
Total Funds raised
16%
$
Summary of Share Register
Och Ziff Managed Funds
Spinite (High Net worth private)
Evian Gordon (Founder, Chairman & CEO)
Stuttgart (High Net worth private)
Dan Segal (Founder, Director & COO)
BRC Board members
Top 40 excluding the above
Other (around 440 small shareholders)
Total shares on issue (#)
Potential shares CB, ECPS
Total potential shares on issue (#)
$
40,579,978
# Ord Shares
25,072,526
16,711,311
11,456,249
9,339,735
6,359,264
2,002,239
70,941,324
37,995,753
25,011,377
133,948,454
56,000,000
189,948,454
Undiluted
Diluted
18.7%
12.5%
8.6%
7.0%
4.7%
1.5%
53.0%
28.4%
18.7%
100.0%
42.7%
8.8%
6.0%
4.9%
3.3%
1.1%
66.8%
20.0%
13.2%
100.0%
15
Follow up
Contact information
Evian Gordon CEO - [email protected]
Dan Segal COO - [email protected]
Try MyBrainSolutions for yourself at www.mybrainsolutions.com/try
to assess your strengths and limitations in 30 mins and select a new habit to train for 30 days
(10 minutes, three times a week, for 4 weeks): for example reduce stress or improve self regulation.
16
Disclaimer
This Presentation is being furnished solely for the purpose of enabling prospective investors to determine whether they wish to
proceed with further investigation of the Company. This Presentation is not intended to form the basis of any investment decision
and does not attempt to present all the information that prospective investors may require for purposes of making an investment
decision. The Company anticipates providing prospective investors with the opportunity to ask questions, receive answers, obtain
additional information and complete their own due diligence review concerning the Company prior to entering into any agreement
relating to the purchase of securities from the Company.
All information included in this Presentation is submitted to you on a strictly and permanently confidential basis. Any reproduction
or further distribution of this Presentation or any such information is prohibited. By accepting delivery of this Presentation, you
agree that neither you nor any of your employees, agents or advisors will use this Presentation or any such information for any
purpose other than evaluating the Company.
The Company shall not have any liability for any information included in this Presentation.
This Presentation speaks as of the date hereof. Nothing contained herein is, or should be relied upon as, a promise or
representation as to future performance. The Company does not undertake any obligation to update or revise the Presentation.
This Presentation is intended solely for the use of the prospective investor to whom this Presentation is initially provided. This
Presentation does not constitute an offer to sell to or solicitation of an offer to purchase from any investor or in any jurisdiction in
which such an offer or solicitation is not authorized, would be unlawful or would constitute an offer to the public pursuant to the
laws of such jurisdiction.
Any financial projections and other statements of anticipated future performance that are included in this Presentation are for
illustrative purposes only and are based on assumptions by the Company’s management that are subject to significant risks and
uncertainties and may prove to be incomplete or inaccurate. Actual results achieved may vary from our projections and the
variations may be material. Variations in the assumptions underlying our projections may also significantly affect projected results.
Appendix slides
Summary proof point examples
Addiction:
• Playing MyBrainSolutions Games for around
3.5 hours has a statistically significant impact
on Self Regulation Assessment scores and
reduces clinical symptoms.
Employer:
• Improvements based on employee surveys
and published data on improved scores from
game play
i
Macro US drivers
Major new legislation impacting demand:
• Mandatory for health plans to cover mental health
• Obamacare adds 30M+ added to the US health care system
• Healthplans must cover selected preventive services at no charge (Depression
screening and Alcohol misuse)
• Incentives (and penalties) for adopting electronic health records that have
‘meaningful use’ (ie decision support functionality)
# Respectively:
Mental Health Parity and Addiction Equity Act,
Patient Protection and Affordable Care Act
and Hitech Act
ii
Clinical Dashboard: Growth, scalability in Addiction
Tight integration with MyBrainSolutions
• Seamless experience for Clinicians and Clients.
Low-touch, high-volume solution
• Clinicians instantly create a MyBrainSolutions account.
• MBS services available directly via the Dashboard.
• Direct online payment
iii
Unprecedented Asset Platform and Sales Growth Potential
Brain Resource Assets
Development
Total usage to date
Users
Brain data acquisition and analysis
software (EEG, MRI, Cognition)
30 years
n/a
400 academic groups,
30 Pharma
Brain Resource International
Database, standardized platform
15 years
225,000 datasets
As above
iSPOT $18m study
9 years
5,200 acquisitions
Assessment
8 years
200,000 assessments
Training
5 years
9,500,000 game plays
10 Apps & Facebook games (iPad,
Android, Facebook)
4 years
420,000 downloads
ADHD portal
3 years
Pilot
Clinical portal
3 years
Version 3 recently
launched
Augmented therapy / User journeys
2 year
In development
140,000 users
pilot
iv