"Digital Therapy First Unit" Brain Moving Aurora IPO: The "Question Bank Business" of Cognitive Impairment

Whether true or false, the keyword "brain science + AI" is enough to shock the capital market. A few days ago, BrainAurora Medical Technology Limite (hereinafter referred to as "brain movement aurora") submitted an IPO application to the Hong Kong Stock Exchange. The core product of brain movement aurora, "brain function information management platform software system", combined with the technology of "brain science + AI", can be used to evaluate and intervene in cognitive impairment caused by various diseases. Popular understanding, the product is to provide patients with cognitive impairment with large data support of dynamic training question bank, in order to facilitate medical institutions for such patients to provide more accurate assessment training. Although the "brain function information management platform software system" of brain movement aurora has entered the medical insurance reimbursement catalogue of 30 provinces in China, the performance scale is still relatively limited. Revenue in 2021 and 2022 was $0.002 billion and $0.011 billion, respectively, and net losses attributable to the parent could still reach $0.698 billion and $0.502 billion for the same period. Commercialization ability is still a difficult problem in front of brain movement aurora. ## Cognitive impairment "question bank" Cognitive impairment induced by diseases such as vascular, neurodegenerative and developmental defects in children has always lacked necessary drug treatment, and psychological intervention assessment is one of the mainstream treatment methods. However, due to the limited data, it is difficult to make dynamic adjustment according to the cognitive level of patients in the past. "Ordinary psychological training tasks are generally designed in advance, and sometimes it is impossible to detect the level of the patient at any time, so as to update the training tasks." A psychology researcher in Sichuan said to the trade wind (ID:TradeWind01). The number of patients with cognitive disorders is not small. According to Frost & Sullivan data, the number of patients with cognitive impairment caused by vascular, neurodegenerative, mental and childhood developmental defects in 2022 will be 0.447 billion, 0.154 billion, 0.346 billion and 0.758 billion, respectively. The "Brain Function Information Management Platform Software System" launched by Brain Motion Aurora combines brain science and AI technology to provide dynamic evaluation and intervention services for patients with cognitive impairment. "When applied to our intervention products, our AI-based task recommendation system uses information collected from patients, including their historical training performance scores and performance details in previous training tasks of different difficulty, to dynamically adjust the content of training courses to achieve personalized intervention." Aurora said, "The task recommendation system implements interventions by selecting millions of possible module combinations from our library of more than 300 training modules to design the best training courses, activate the appropriate brain regions, and obtain the best treatment results." Popular understanding, the essence of digital therapy system is "training question bank". "For example, a person with a poor memory will give him the task of memory training. The first chapter will record 10 points, and then the second chapter will record 10 points. After this repetition, as the number of training increases, the memory level may be Will improve." The aforementioned psychology researcher explained to Xinfeng (ID:TradeWind01), "However, the training of cognitive intervention in the past was relatively rigid. After the introduction of big data in digital therapy, the content and difficulty can be adjusted at any time in combination with the patient's own training process, making it more flexible." At present, the "brain function information management platform software system" of brain movement aurora has been approved for marketing, including cognitive impairment caused by vascular, aphasia, Alzheimer's disease, depression and other 8 diseases. At the same time, the research project of brain movement aurora also includes various indications such as amnestic mild cognitive impairment, Parkinson's disease, anxiety disorder, etc., which are all in the clinical trial stage and are expected to be commercialized as early as 2025. "We are the first company in China to combine brain science with advanced artificial intelligence (" AI ") technology to develop medical-grade digital therapy products for cognitive disorders." "Our core product (brain function information management platform software system) is the first digital therapy product for cognitive impairment to receive regulatory approval in China," Aurora said." At present, there are many digital therapy products related to cognitive impairment. Xinfeng (ID:TradeWind01) According to incomplete statistics from the Food and Drug Administration, no less than 44 products such as the "Cognitive Impairment Rehabilitation Evaluation Training System" of Hunan Shande Medical Equipment Co., Ltd., the "Cognitive Function Rehabilitation Software" of Hangzhou Yikang Medical Technology Co., Ltd., and the "Cognitive Function Detection and Processing System" of Shanghai Taiyige Rehabilitation Medical Technology Co., Ltd. all involve digital therapy for cognitive impairment. Even if the aura such as "brain science + AI" is added, whether the products of brain moving aurora have sufficient industry threshold is still an unsolved mystery.! ## Research seller Jost Sullivan predicts that the global market size of digital therapy for cognitive impairment will reach US $4.2 billion in 2025 and will increase to US $7 billion in 2030. During the same period, the size of the Chinese market can reach US $0.268 billion and US $1.311 billion respectively. Ideal plump, realistic skinny. Since the commercialization in June 2020, the revenue scale of Brain Motion Aurora is still relatively limited, with $0.002 billion and $0.011 billion in 2021 and 2022, respectively, and net losses of up to $0.698 billion and $0.502 billion in the same period. According to the classification of usage scenarios, the income sources of brain movement aurora are divided into three major sectors: hospital cognitive assessment and intervention, out-of-hospital cognitive training and research projects. The so-called hospital cognitive assessment and intervention is the brain movement aurora in the hospital to provide cognitive assessment and intervention services, so that the hospital can use the system to evaluate and intervene in patients with cognitive impairment. As of August 2023, the products of brain movement aurora have entered the medical insurance reimbursement catalogue of 30 provinces in China. "We get revenue from the hospital, which pays us based on the patient's in-hospital usage and the price determined by the provincial health insurance reimbursement catalog." Brain movement aurora representation. Although it has been successfully listed in the medical insurance catalogue, the sales of brain movement aurora in hospitals are not optimistic. In 2022, "hospital cognitive assessment and intervention" generated only 0.004 billion yuan, accounting for 36.10 percent. In contrast, providing systems, technology and operational services for universities, scientific research institutions and hospitals supports half of the income. In 2022, the "research project" income of brain movement aurora has reached 0.006 billion yuan, accounting for 53.10 percent. Aurora believes that the business of "research projects" can improve the market's understanding of its products. "We believe that by facilitating our clients' research projects and working closely with our clients' medical professionals, we can enhance our reputation in the medical community, educate professionals about the benefits of using our system to assess and intervene in a variety of cognitive disorders, and generally increase the acceptance of our system by hospitals and medical professionals across the country." Brain movement aurora representation. At the same time, the brain movement aurora is still actively promoting sales, with sales and distribution expenses of 0.011 billion yuan and 0.012 billion yuan respectively in 2021 and 2022. In the IPO fund-raising project, brain movement aurora plans to use part of the funds to expand the sales and distribution team, hold more academic conferences on digital therapy for cognitive impairment, and other activities to improve the hospital's awareness of its system. For brain-moving aurora, an IPO is imminent. In the first quarter of this year, the income and net loss of brain movement aurora were 0.011 billion yuan and 0.095 billion yuan respectively. However, as of the end of March this year, cash and cash equivalents were only 0.06 billion yuan. "No money to finance" is the norm for a number of HKEx companies this year with a 18A standard. Such as the biopharmaceutical company Sunho Biologics,Inc. The net loss in the first quarter of 2023 was 0.015 billion yuan, while cash and cash equivalents for the same period were only 175000 yuan. Compared with many 18A companies, having marketable products is still an important advantage of brain movement aurora, but with limited performance scale, how to confirm the commercialization ability is still a challenge.