We have initiated coverage of
Brain Resource
(
BRRZY
). See below for access to our full 18-page report on the
company which includes our financial model and provides further
discussion about the company, their landmark iSPOT trial, current
brain health products, market opportunities and growth strategy.
Brain Resource is a San Francisco headquartered company focused on
improving brain health. The company has established the first
and largest standardized and integrated international human brain
database which it leverages to provide products for the consumer,
employer, and clinical markets. The company notes that their
products have benefitted more than 50k end-users and have been
utilized by more 30 multi-national corporate employers and hundreds
of clinicians and researchers since the company's founding over a
decade ago.
Brain Resource has two businesses anchored off the same proprietary
technology: Personalized Medicine Diagnostics and Brain Health
Solutions. They expect to be the first company to lodge a brain
biomarker based diagnostic with the FDA for personalized treatment
prediction and also are the first company to penetrate U.S.
corporates with a brain health offering.
The currently commercialized products include two web-based
products, WebNeuro and MyBrainSolutions. WebNeuro, currently
used by insurance providers and clinicians, offers objective
reports assessing cognitive strengths and weaknesses to help
physicians make more informed decisions regarding patient
care. Brain Resource notes that WebNeuro currently has more
than 250 users and generated almost 11k reports in fiscal 2011
(6/30/2011). MyBrainSolutions online brain training, chiefly
targeting the corporate employer market, aims to increase employee
performance and productivity. Per Brain Resource,
MyBrainSolutions has over 50k users and has been accessed more than
300k times. In the company's half-year report (ending
December 2011), they list key goals for 2012/2013 , including
increasing the user base of its products to 1 million users and a
five-fold increase of revenue from their web-products (excluding
licensing income, web-based revenue was ~$650k in 2011).
Brain Resource expects growth in MyBrainSolutions to come from an
increase in the number of channel partners and employer
clients. Meanwhile, WebNeuro's functionality is expected to
be substantially enhanced with the inclusion of biomarkers related
to depression and ADHD. This will be the catalyst to driving
growth of the personalized medicine business, Brain Resource's
major focus and the area that is expected to be the impetus to the
company's long-term revenue and earnings growth.
Findings from the iSPOT trial will be used to develop these
depression and ADHD biomarkers. iSPOT is the world's largest
clinical trial to predict treatment response in depression and
ADHD. iSPOT-D (for depression) has enrolled over 1,700
patients and analysis started on the first 1,000 patients.
Data from iSPOT-D was presented at two major U.S. medical
conferences during 2011, including an invitation-only presentation
at The American Conference of Neuropsychopharmacology in December
and more recently formed a panel of presentations at NCDEU in
Arizona. iSPOT-A (for ADHD), has enrolled approximately 500
patients to-date. Brain Resource is planning to submit study
outcomes to the FDA for approval (likely via PMA) of a depression
and an ADHD test in the near-to-mid term (discussions with the FDA
regarding the regulatory approval pathway are ongoing).
Aside from progress with iSPOT, other recent highlights include the
sale of $10MM in convertible bonds to a large institutional
investor, Och-Ziff Capital Management, the establishment of a
joint-venture for the ADHD product which included a $4MM equity
contribution from the JV partner (controlled by Och-Ziff), and an
agreement with Aetna whereby the insurer will distribute the
company's web-products.
Database Drives Product
Ideation…
Dr. Evian Gordon, Chairman and CEO of Brain Resource, as well as a
founder of company, was the visionary behind building a large,
robust and dynamic database of studies on the human brain.
Dr. Gordon has over 25 years of experience in brain research which
includes the establishment of the Brain Dynamics Center at Westmead
Hospital (Sydney, Australia) in 1986. He pioneered the field
of "integrative neuroscience" which uses standardized methods to
collect and aggregate information about the brain, body and patient
cognition. This information, including demographics, brain
function (measured by EEG/ERP), cognition, brain structure
(measured by MRI), and genomics (measured by lab testing of cheek
swab) is housed in the company's "Brain Resource International
Database" (BRID) and is the basis behind the algorithms powering
the company's brain products.
The uniqueness of the company's database has not only to do with it
being the largest human brain standardized data repository in the
world, but also that it is a perpetual work in progress and is
open-access to scientists throughout the world. In 2003 Brain
Resource helped to set up an indpendent 501c3 non-profit foundation
called "BRAINnet" (Brain Research And Integrative Neuroscience
Network) affording access (for non-commercial purposes) to
researchers which often use the datasets in studies and in
compiling manuscripts for independent publication. BRAINnet
(www.brainnet.net) currently has 317 participating researchers from
23 countries with over 250 outcomes published on various topics
including major depressive disorder (MDD), ADHD, schizophrenia, and
Alzheimer's, among others. The list of publications continues
to grow, at a rate of approximately one per week and includes some
of the most well-respected journals in brain research including The
Journal of Neuroscience, Neuropsychopharmacology, Molecular
Psychiatry, The American Journal of Psychiatry, and Biological
Psychiatry.
The open-access nature of the database has had desired effect of
facilitating more and more publications related to the data - and,
as publications are typically viewed as the litmus test for
credibility in medical science, additional publications should
continue to garner further support for the company's research
methodology and, ultimately, the effectiveness and utility of their
products.
However, development and commercialization of products for
mainstream consumer and clinical use was not at the forefront of
Brain Resource's strategy initially following the company's IPO in
2001. Instead, at that time the company was focused on
building its fledgling database through clinical data gathered at
its own and third-party laboratories and leveraging the related
findings to help pharmaceutical companies design better and more
efficient clinical trials of CNS drugs. The company's
pharmaceutical client list included some of the majors, namely
Pfizer (PFE), Eli Lilly (LLY), Glaxo (GSK) and Merck (MRK), among
others. It was during this period that Brain Resource's
initial product, IntegNeuro, was developed to help drug companies
determine whether development-stage drug candidates were showing
the desired effect and to aid in the go/no-go (i.e. - continue
development?) decision. Use included a large multi-center
study by AstraZeneca for schizophrenia (see
http://www.astrazeneca-us.com/about-astrazeneca-us/newsroom/4372268?itemId=4372268).
Brain Resource then shifted focus to the commercial marketplace,
expanding their product offerings and their target markets.
This included further optimization of IntegNeuro and involved
developing a web-based version called WebNeuro which is sold into
the clinical practice market and, most recently, the launch of
MyBrainSolutions for the corporate brain-health market.
Further commercialization of these two offerings, along with
development of products for companion diagnostics of CNS drugs
(initially depression and ADHD) using the iSPOT study data, is
Brain Resource's current focus.
Please visit Brian Marckx's coverage page at
scr.zacks.com
for a free copy of the reserach report.
(BRRZY): ETF Research Reports
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