Brain apps hit their stride as deals start to flow
Health & Biotech
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Getting traction has taken time. But for the likes of Cogstate (ASX:CGS) and Total Brain (ASX:TTB), which have developed online mental health programs, deals with partners boasting deep pockets have begun to flow.
This is giving management – and long-suffering shareholders – the vindication they sorely needed.
Big Japanese pharma outfit Eisai has agreed to market Cogstate’s cognitive assessment tool in the large Japan market under a 10-year licensing deal.
It will also pay $US1 million upfront and take part in a share placement, which will see the Japanese company emerge with close to a five per cent holding.
Eisai is working to develop a Japanese version of the Cogstate online program, which is administered via a non-psychologist to assess brain health, to make cognitive self-assessment more readily available for Japan’s ageing population.
This will be marketed with a 50:50 profit share.
And Total Brain inked a deal with global tech giant IBM, which has helped to revive interest in its shares.
“It’s had real validation from IBM,” said Finola Burke, analyst with the independent house RAAS Advisory.
“IBM was working on its own mental health program but ditched that to use Total Brain’s.
“It is offering the Total Brain online program to user populations in transition, initially veterans, but it is pointing to other user groups such as drug users, sporting codes and the like.
“IBM is rolling out the program, and Total Brain gets a slice of the income.”
On Burke’s numbers, the IBM deal translates to a valuation worth as much as 15c a share for Total Brain shares, assuming only a modest initial take-up.
Total Brain’s program is also used by Boeing Corp’s global workforce, giving its mental health and fitness program access to a potential user base of around 70,000 employees.
“Commercial success has been elusive,” RAAS’s Burke said of Total Brain’s efforts to achieve financial viability, pointing to the fact that Total Brain has, for example, been around 20 years.
Driving Total Brain’s more recent success has been the installation of a new chief executive, Louis Gagnon, two years ago. This was followed more recently by the appointment of a former Goldman Sachs banker David Torrible to the board.
Prior to joining the company, Gagnon was chief product and marketing officer at Amazon’s Audible unit.
‘’He is highly regarded, and has a passion for mental health,’’ RAAS’s Burke said.