Chordate Medical has developed Kinetic Oscillation Stimulation (KOS), a drug-free migraine treatment that stimulates the autonomic nervous system through mechanical vibrations in the nasal cavity. The company describes KOS as a simple and cost-effective treatment, without the side effect profile associated with migraine medications. The method has been CE marked since May 2021.
Market investments may bear fruit in 2023
In 2022, Chordate Medical began market introductions of its migraine treatment in the UK, Finland, Germany, Italy, Israel and Saudi Arabia. Accelerating market activities in these countries is high on the company's priority list for 2023.
The company's market partners are working to build a network of opinion-leading neurologists and establish public or private insurance reimbursements, which could benefit sales in their respective markets. The goal is to create measurable market shares to demonstrate the value of the technology and end-customer demand for the product ahead of a future exit.
Robust IP protection – an important part of the exit strategy
Chordate Medical has a clear goal of selling the company to a larger player who can take over the large-scale commercialization. The exit strategy consists of three parts: patent protection, scientific evidence and proof-of-concept in selected markets. The first two pillars are considered to be almost completed and the company is now working on building a clear market penetration in the above-mentioned markets.
The company has a solid patent portfolio with 71 granted patents in nine patent families in 26 markets, as well as three additional patent applications submitted. Eight of these patents are granted in China.
Preventive treatment effect proven in patient study
The goal of KOS treatment is to prevent severe headaches in people with chronic migraine, i.e. people who suffer from headaches more than 15 days per month.
The company has completed a patient study, PM007, which shows a statistically significant reduction in the number of headache days. Full results are expected to be published in a scientific journal in the spring of 2023.
Study results benefit ongoing activities
The results are valuable for Chordate Medical's ongoing marketing activities, but also for market approval in the US and China. Work on the company's FDA application is progressing according to plan and the ambition is to submit the application in the spring of 2023.
The company also has two ongoing studies: a follow-up study of 200 migraine patients in several countries, and an open-label pilot study with 25-30 patients with an inadequate response to treatment with CGRP inhibitors, which is an expensive last-resort option.
Targeting a huge but unsaturated market
Whole 14 percent of the world's population suffers from migraines, which entails large social costs in the form of lost production and healthcare costs.
The global pharmaceutical market for migraine treatment is expected to grow to USD 8,7 billion by 2026, with an annual growth rate of 10 percent. The pharmaceutical market mainly consists of over-the-counter painkillers, anti-inflammatory drugs and triptans for acute treatment, as well as beta-blockers, CGRP inhibitors and botox used as preventive treatment. What many of the options have in common is that they have insufficient efficacy or that the treatment effect decreases over time. Many of the patients are left undertreated or suffer from troublesome side effects such as fatigue and nausea.
Demand for drug-free treatments
There is thus a growing demand for treatment methods that are not drug-based – this is where medical technology alternatives come into the picture. A market report made by DelveInsights shows that the market for medical technology migraine treatments could grow to $46 million by 2026 in the seven largest markets.
Chordate Medical's treatment technology KOS has the potential to capture a significant share of this market. The treatment is a good alternative for migraine patients who do not want or cannot take medication due to, for example, illness or pregnancy.
Low-frequency vibrating nasal catheter that stimulates the nerves
The product system consists of a control unit and a catheter that is inserted into the patient's nasal cavity. On the catheter is a balloon that is inflated with air and vibrates at a specific frequency using the control unit. The treatment takes 25 minutes and is performed by a doctor or nurse.
The patient may experience some discomfort and increased tearing, as well as a slight numbness of the upper lip. Since the treatment does not cause any serious or long-term side effects, it can be given repeatedly. The treatment is considered minimally invasive because it is used in the nostrils.
Neurostimulation is a growing field
The vibrations in KOS treatment affect the autonomic nervous system, which is believed to be involved in migraines. Neurostimulation is a hot area and many major medtech and pharmaceutical companies are investing in the development of new methods, for example Abbott and GSKThe global market for neurostimulation products was valued at USD 6,8 billion in 2018 and is expected to grow to USD 13,8 billion by 2024. The majority of products target chronic pain, such as Chordate's migraine treatment.
Rhinitis – Chordate Medical's second indication
KOS can also be used to treat chronic nasal congestion (rhinitis), which is a common disease that causes breathing difficulties, sleep problems, dry mouth and reduced quality of life. KOS can eliminate these problems and avoid the use of nasal sprays or surgery. The company has already established a replacement solution for rhinitis treatment in Saudi Arabia.
Strong support in the rights issue
Chordate Medical is now conducting a rights issue of SEK 51,3 million to finance ongoing marketing activities, studies and approval processes. The proceeds are intended to be distributed according to the following priority:
- 20 percent is allocated to market registration and product releases.
- 25 percent is allocated to supporting clinical studies.
- 55 percent is allocated to market strategy activities and other working capital.
The rights issue is covered to approximately 45 percent by subscription commitments, subscription intentions and issue guarantees from the company's major shareholders, management, board of directors and Italian distributor. Wed.Tues.Sat.
The offer in summary
| Terms: | Each existing share entitles you to one subscription right. Twenty subscription rights entitle you to subscribe for thirteen shares in the company. The subscription price per share is SEK 0,50. |
| Issue volume: | SEK 51,3 million before issue costs |
| Subscription period: | Dec 22, 2022 – Jan 9, 2023 |
| Dilution: | Approximately 39,4 percent |
