ReActiv8-B study results received; pre-PMA submission meeting with FDA expected during the second quarter
European commercialization continues to advance
Cash on hand of $15.5m at 31 December 2018
Dublin,Ireland – Mainstay Medical International plc (“Mainstay” or the “Company”, Euronext Paris: MSTY.PA and Euronext Growth operated by Euronext Dublin (MSTY.IE), a medical device company focused on bringing to market ReActiv8, an implantable restorative neurostimulation system to treat disabling Chronic Low Back Pain, today provides a company update and announces the publication of its 2018 Full Year results and Annual Report.
Jason Hannon, CEO of Mainstay, said: “I believe fully in ReActiv8 as a therapeutic option for patients suffering from disabling Chronic Low Back Pain, and I believe that the value we can deliver to both our physician customers and their patients, as well as the investing market, will be demonstrated in the months and years to come. The primary endpoint of our ReActiv8-B clinical trial was not achieved due to a higher response (at 120 days) in the control (active sham) patient group than was expected. However, we believe the overall results from the trial represent solid evidence of the efficacy and safety of ReActiv8. This belief is based on, among other things:
A pre-specified analysis of the primary endpoint where we adjusted for patients who increased their pain medications for reasons unrelated to their back pain. As a reminder, to be considered a “Responder” in the clinical trial, a patient must have reported 30% or greater pain relief on the VAS scale and not increased their pain medications leading up to the 120 day measurement point;
Statistically significant differences between the treatment and control groups on key secondary efficacy endpoints at 120 days;
A responder rate of 72% in the patients in the treatment and control groups combined that have reached one year since implantation; and
A significant reduction in the use of pain medications (including opioids) by patients at one year.
We believe these results will support sales growth in Germany and other markets under our existing CE Mark, as well as our plan to file a Pre-Market Approval Application with the U.S. Food and Drug Administration. We plan to submit a PMA to the FDA in mid-2019, with a decision on approval expected in late 2020.”
Business Update
In November 2018, Mainstay announced top line results from the ReActiv8-B clinical study, its international, multi-center, prospective, randomized, active sham-controlled, blinded trial with one-way cross-over, conducted under an Investigational Device Exemption (IDE) from the U.S. Food & Drug Administration (FDA). A total of 204 patients with chronic low back pain refractory to physical therapy were implanted with ReActiv8 at leading clinical sites in the U.S., Europe and Australia and randomized 1:1 to therapy or control. The average duration of symptoms was 14 years. In the treatment group, the ReActiv8 pulse generator was programmed to deliver electrical stimulation expected to elicit contractions of the multifidus muscle. In the control group, the ReActiv8 device was programmed to provide a low level of electrical stimulation. Following assessment of the primary endpoint at 120 days, patients in the control group crossed-over to receive levels of electrical stimulation similar to those in the treatment group. A summary of the clinical trial results is as follows:
The primary efficacy endpoint of the study was a comparison of responder rates between the treatment and control groups as measured on the visual analog scale (VAS) of pain, with responders defined as having a 30% or greater improvement on this measure between baseline and 120 days after randomization, without any increase in pain medication and/or muscle relaxants taken in the two weeks prior to the primary endpoint assessment visit. In the treatment group the responder rate at 120 days was 57%, compared to 47% in the control group, resulting in a difference that is not statistically significant.
Statistically significant differences on a number of key secondary endpoints were observed in the treatment group as compared to the control group at 120 days, including change from baseline in disability measured by the Oswestry Disability Index (ODI), change from baseline in quality of life measured by the European Quality of Life Score on Five Dimensions (EQ-5D), percent pain relief (PPR) compared to baseline and subject global impression of global change (SGIC).
Improvements in the percentage of patients reporting pain reduction continued beyond the 120-day assessment through one year for both groups. The percentage of the 116 patients in the treatment group and control groups that had completed the one-year assessment having a 30% or greater reduction in low back pain VAS at that assessment without a significant increase in pain medication was 72%. These data are subject to change as the remaining patients reach the one-year assessment.
The protocol permitted patients to adjust their back pain medication usage after the 120-day assessment point. At one year, 44% of the 50 patients in both groups combined who were on opioids at baseline had voluntarily eliminated (28%) or significantly reduced (16%) their use of opioids. These results are subject to change as the remaining patients reach the one-year assessment.
The incidence and type of adverse events (AEs), including serious AEs, were comparable to AEs in clinical trials reported for other neurostimulation devices, with no unanticipated AEs related to the device, procedure or stimulation.
Mainstay is preparing to submit a PMA application to the FDA based upon the totality of its clinical data for ReActiv8. The Company expects to have a pre-PMA submission meeting with the FDA during the second quarter to obtain feedback on its filing content and strategy. A PMA application filing is expected in mid-2019 after that meeting, with a decision on approval expected in late 2020. The FDA’s review of the PMA may result in the FDA not agreeing with Mainstay’s interpretation of its clinical data, including whether statistical significance was achieved for one or more endpoints.
In Germany, Mainstay’s initial European market, the commercial team was repositioned in order to better focus efforts on key physician targets. Commercialization efforts in line with this strategy began in earnest in late-2018. We are beginning to see the early fruits of these efforts as we regularly onboard new implanting physicians. We expect this early momentum to continue, leading to meaningful sales and revenue by the end of this year and the beginning of 2020.
Financial Update
Since the beginning of 2018, Mainstay has conducted significant financing activities:
On 18 April 2019, Mainstay and its subsidiary, Mainstay Medical Limited, entered into an amendment to its agreement with IPF Partners relating to their existing debt facility. Pursuant to the amendment:
The repayment schedule for the three existing tranches drawn under the debt facility was amended such that no principal or interest will be repaid until 2021, with the principal and accrued interest to be amortized over the period from January 1, 2021 through September 30, 2023.
A new tranche of €3.0 million (approximately $3.34 million) was made available to Mainstay, conditioned upon Mainstay raising at least $10 million in gross proceeds from one or more offerings of equity prior to June 30, 2019. The repayment schedule for the new tranche will be the same as the amended repayment schedule for the three existing tranches.
The interest rate for all tranches will be 8% per annum, with interest accruing but capitalized prior to January 1, 2021.
The 5% repayment fee applicable to each existing tranche was eliminated.
All principal and accrued interest from all tranches will automatically convert into ordinary shares of the Company at a price per share of €8 upon the earlier of (a) FDA approval of Mainstay’s PMA application for ReActiv8, (b) the date by which at least 900,000 ordinary shares of the Company are publicly sold on-market by non-affiliates of Mainstay since 18 April 2019 at a price per share of at least €8, or (c) IPF Partners’ election to undertake such conversion, in each case unless the Company elects to satisfy such obligation in whole or in part in cash.
The minimum cash covenant was amended so that Mainstay is required to hold cash at least equal to its projected cash expenditures for operations and debt repayment for the next three months, and the covenant relating to the achievement of commercial milestones was eliminated.
Mainstay issued to IPF Partners warrants to purchase 1.5 million of its ordinary shares at a price per share of €6 at any time prior to the 6th anniversary of the amendment date. Mainstay has issued further conditional warrants to IPF Partners that will become exercisable only to the extent Mainstay elects to repay the debt in cash rather than issue ordinary shares when a conversion of the debt is triggered. As such, the conditional warrants are intended to ensure that, notwithstanding any such election to repay in cash, IPF Partners retains the right to subscribe for ordinary shares of the Company on the terms and conditions that would otherwise have applied.
On 15 February 2018, the Company announced the completion of a €30.1 million financing (approximately $37.5 million) through a placement of 2,151,332 new ordinary shares to new and existing shareholders.
Revenue during the year ended 31 December 2018 was $0.7 million (2017: $0.3 million).
Operating expenses related to on-going activities were $29.6 million during the year ended 31 December 2018 (2017: $27.9 million).
Cash on hand as at 31 December 2018 was $15.5 million (2017: $10 million).
About Mainstay
Mainstay is a medical device company focused on commercializing an innovative implantable restorative neurostimulation system, ReActiv8®, for people with disabling Chronic Low Back Pain (CLBP). The Company is headquartered in Dublin, Ireland. It has subsidiaries operating in Ireland, the United States, Australia, Germany and the Netherlands, and is listed on the regulated market of Euronext Paris (MSTY.PA) and the ESM of Euronext Dublin (MSTY.IE).
About Chronic Low Back Pain
One of the root causes of CLBP is impaired control by the nervous system of the muscles that dynamically stabilize the spine. ReActiv8 is designed to electrically stimulate the nerves responsible for contracting these muscles to improve dynamic spine stability, allowing the body to recover from CLBP.
People with CLBP usually have a greatly reduced quality of life and score significantly higher on scales for pain, disability, depression, anxiety and sleep disorders. Their pain and disability can persist despite the best available medical treatments, and only a small percentage of cases result from an identified pathological condition or anatomical defect that may be correctable with spine surgery. Their ability to work or be productive is seriously affected by the condition and the resulting days lost from work, disability benefits and health resource utilization put a significant burden on individuals, families, communities, industry and governments.
Further information can be found at www.mainstay-medical.com
CAUTION – in the United States, ReActiv8 is limited by federal law to investigational use only.
PR and IR Enquiries:
Investor Relations:
LifeSci Advisors, LLC
Brian Ritchie
Tel: + 1 (212) 915-2578
Email: britchie@lifesciadvisors.com
Euronext Advisers:
Davy
Fergal Meegan or Barry Murphy
Tel: +353 1 679 6363
Email: fergal.meegan@davy.ie or barry.murphy2@davy.ie