Helius Medical Technologies, the company behind the innovative PoNS therapy for gait deficit in MS patients, just held their Q1 2024 earnings call. While the headline news focused on securing widespread reimbursement and achieving FDA approval for stroke treatment, a subtle shift in their strategy may have gone unnoticed – a shift that could unlock tremendous growth potential and reshape the company's trajectory.

The company's leadership, particularly CEO Dane Andreeff, repeatedly emphasized their focus on establishing "leverageable areas" in their business model. This signifies a departure from the traditional, resource-intensive model of building large sales teams and relying solely on major insurance approvals for revenue generation. Instead, Helius is cleverly assembling a network of partnerships and strategic initiatives that will allow them to efficiently scale up as reimbursement hurdles clear.

Leveraging the VA Partnership for Network Effect

One such area of leverage lies in the VA partnership with Global Government Services. While securing a contract with the VA is significant in itself, Helius is taking it a step further. They're strategically targeting the VA's MS Centers of Excellence – four pivotal hubs within a vast network of 250+ VA hospitals. These Centers of Excellence are not just treatment centers, they're also sources of knowledge dissemination and best practice adoption within the VA system. By focusing on these key influencers, Helius can achieve a ripple effect, amplifying PoNS adoption throughout the VA network.

The Potential Revenue from VA Alone is Significant

Here's where the hypothesis gets interesting. Consider this: 28,000 MS cases are reported to the VA annually. If Helius successfully penetrates even a fraction of this population, let's say a conservative 5%, that's 1,400 potential PoNS users. At a list price of $25,700 per device, this translates to $35,980,000 in potential revenue. This is just from the VA alone, and doesn't even account for the broader MS market, let alone the potential stroke market.

Canadian Government's Proactive Stance - A Blueprint for US Payers?

The numbers get even more compelling when considering the Canadian government's proactive stance. Their purchase of 30 PoNS devices for stroke treatment, combined with the ongoing initiative to establish five treatment sites across five administrative regions, paints a picture of a government actively embracing PoNS as a viable solution. This not only fuels near-term growth in Canada, but also builds a compelling case for U.S. payers considering coverage.

Streamlined Regulatory Submission and the TCET Pathway - A Winning Combination?

The final piece of this potential growth engine lies in Helius's streamlined approach to regulatory submission for stroke treatment. By leveraging existing data from the MUSC study, the open-label study, and real-world evidence from Canada, they're aiming for a leaner and faster approval process. This significantly reduces their development costs and allows them to hit the ground running once approval is secured, potentially as early as late 2025.

It's also worth noting that Helius is uniquely positioned to benefit from the proposed Transitional Coverage of Emerging Technologies (TCET) pathway, which aims to fast-track Medicare coverage for breakthrough devices. With an estimated 90% of U.S. stroke patients covered by Medicare, this pathway could be a game-changer for PoNS adoption.

Hypothetical PoNS User Growth Based on VA Adoption

This chart illustrates the potential growth in PoNS users assuming a conservative 5% adoption rate among MS patients reported to the VA.

Conclusion

Helius Medical Technologies is laying the groundwork for what could be a period of explosive growth. They're not simply waiting for reimbursement and approval – they're actively building a leverageable ecosystem that will enable them to rapidly scale as these milestones are achieved. This subtle, yet powerful shift in their strategy may have flown under the radar of many analysts, but it represents a compelling investment thesis for those seeking exposure to a company with substantial upside potential.

"Fun Fact: Did you know that the idea for PoNS therapy originated from research on the remarkable ability of astronauts to regain balance and coordination after returning from space? This research highlighted the brain's plasticity and its ability to adapt through targeted stimulation, ultimately leading to the development of PoNS."