AI medtech specialist Firefly lists on Nasdaq after merger

Canada's Firefly Neuroscience has completed a listing on the Nasdaq via a $45 million reverse merger with IT group WaveDancer, opening up new financing routes for its artificial intelligence-powered platform for measuring brain function.

The combined company will operate under the Firefly Neuroscience banner and focus its efforts on commercialising the company's FDA-approved Brain Network Analytics (BNA) platform to neurologists in the US, and partner with pharma companies to use it for the development of new treatments for central nervous system disorders.

BNA is used to evaluate brain function by comparing patient electroencephalograms (EEGs) with a database of EEGs and behavioural data with the help of an AI algorithm. According to the company, it can be used for diagnosing mental illnesses and cognitive dysfunction, tracking patient compliance with therapy, and optimising treatment care pathways.

In a letter to shareholders sent after the merger closed, Firefly's chief executive Joe Olsen wrote: "Real-world use of BNA in the US has shown that, when BNA is part of a patient care plan, patients required fewer medication changes, recovered faster, and were more compliant with their treatment."

The technology – which has been approved by the FDA under the 510(k) pathway for medtech – is expected to be launched commercially next year. Firefly has previously said the market for this type of technology in the US is valued at around $1 billion a year.

On the pharma partnering front, BNA has been put through its paces by drugmakers including Novartis, Takeda, Purdue Pharma, and Stalicla, with three papers published on the work in the last few months.

"If BNA is integrated into the clinical strategy, we believe that the cost of CNS drug development can be dramatically reduced, can help de-risk critical decision making, and potentially expedite time to approval," said Olsen in the letter.

Swiss biotech Stalicla, for example, is using BNA to validate EEG biomarkers as part of its clinical assessment of lead drug STP1 for autism spectrum disorder (ASD), while Novartis deployed BNA in a study of its antidepressant candidate MIJ821 (onfasprodil). However, Novartis halted a phase 2 trial in major depressive disorder (MDD) last year and the drug no longer appears in its R&D pipeline.

Firefly is trading on the Nasdaq under the new ticker symbol "AIFF", replacing WaveDancer's "WAVD". Shares in the company lost around 10% of their value after the switchover.

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