Could This Unknown $2 Stock Outperform Elon Musk?

Elon Musk, the world’s richest man, is famously pursuing ultra-high bandwidth brain chips to connect the human brain to computers. While it sounds sci-fi, much of the technology underlying this kind of brain-interface is already here, and NeuroOne Medical Technologies (NASDAQ: NTMC) is launching a unique suite of brain-interface tools and devices to diagnose and treat neurological conditions right now. Although NMTC has big partners and relatively deep pockets, they only recently listed on the Nasdaq and are relatively unknown to most large investors.

The neuro-monitoring market is expected to climb past $10 billion this year, and the electrodes in NeuroOne’s portfolio are manufactured to beat the standard of care through a thinner, more flexible, light, and less invasive polyimide implant than those currently available.

• 2022 could be packed with milestones. NeuroOne recently received FDA clearance for their first two neurological devices – the Evo® Cortical Electrode and Evo® sEEG Depth Electrode – and is pursuing a third clearance from the FDA for longer use (up to 30 days) of their second device in early 2022. This is a big catalyst and news of this FDA clearance could be coming any day.
• Their third medical device, an ablation/diagnostic therapeutic electrode is intended to treat conditions like epilepsy, Parkinson’s and essential tremor. The company is advancing quickly to get this device cleared by the FDA and launched in the next 15 months.
• This ablation/diagnostic device is a big deal. Medtronic, Inc. (NYSE: MDT) paid $105 million to acquire Visualase, Inc. a developer of surgical thermal ablation devices, and another $200 million that year to acquire Sapiens SBS for its development-stage brain stimulation technology. For NeuroOne, expansion with this ablation/diagnostic device would open their biggest opportunity yet in the treatment of neurodegenerative diseases.
• The new ablation/diagnostic device likely has NeuroOne’s current commercial partner Zimmer Biomet chomping at the bit, and strategic acquirers may even be paying attention considering the history of acquisitions. Zimmer an established, powerhouse medical device company, and NeuroOne has already received initial stocking orders for their newest electrode. Product shipment following their anticipated 30-day regulatory clearance, likely in the first quarter of 2022, would trigger a milestone payment from Zimmer. Zimmer is a $25 billion market cap medical device company, and the fact the NMTC was able to ink a partnership deal with Zimmer that came with a significant amount of cash is likely de-risking for investors and means the technology is real and should have big commercial potential.

Could this be a rare opportunity? Commercial stage small device companies often get forgotten, and NeuroOne shares have been abandoned along with the healthcare sector in the last year.

But investors have overlooked that NeuroOne is well-funded following a recent $13 million equity round, has an established commercial partner in Zimmer, and multiple possible market-moving events are anticipated in 2022. NMTC traded as high as $10 in 2021 (5X recent prices), and Medtronics’ recent $100 million and $200 million acquisitions suggest upside could be big in this space, over 3X and 6X NMTC’s recent market capitalization. Development milestones and launch progress this year could make NMTC a turnaround winner for savvy investors.