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Helius Medical: A Failed Clinical Trial, Redacted Data, And Questionable Leadership, Points To An Ineffective Device

White Diamond Research profile picture
White Diamond Research


  • Helius Medical is a reverse-merger, single-product, pre-revenue medical device company with a unique device that delivers stimulation to the tongue to treat a type of brain injury.
  • Evidence suggests the device is likely a placebo, and positive patient results were from the intense physical therapy treatment, not the device.
  • The founders, which include Montel Williams and the former CEO who is now a fugitive, have a history of questionable marketing practices.
  • The phase III trial missed its primary effectiveness endpoint, thus reducing the chances of FDA approval and reimbursement coverage.
  • The fact that Helius has redacted important trial info should cause investors concern about the potential effectiveness of the device.

We at White Diamond Research like shorting medical device companies with an inefficient product or products. Last year, we exposed Transenterix (TRXC) and Viveve Systems (OTC:VIVE) as each has a medical device that is fundamentally flawed.

Our next medical device stock short idea is Helius Medical Technologies (NASDAQ:HSDT). It is a pre-revenue, $200M+ market cap company claiming its only product, the Portable Neuromodulation Stimulator (PoNS) device, can treat a type of brain injury by functional electrical stimulation of the tongue. This device is based on a still unproven concept from the 1960s. Even after almost 30 years in development, most of the evidence for efficacy is anecdotal, with a scarce amount of clinical data.

Helius acquired the rights to the PoNS in 2013 and has conducted two clinical trials that failed. In both of the trials, the placebo, as well as the treatment device, showed statistically similar improvement effects. We believe the intense physical therapy treatment used in both studies is what caused the improvement, not the PoNS, which we believe is effectively a placebo.

We believe that the device doesn’t work, and this will show up in the sales results, which we predict will be miniscule. In our interviews with medical device experts, we have heard differing opinions on the odds of that it will get FDA approval. We don’t think it should get approved. We have a $5 price target on the share price this year, and, in our opinion, it will eventually go to zero after this year as sales fail to materialize, regardless of whether the PoNS receives FDA approval or not.

Source: Google Images

According to Helius, the PoNS device could potentially benefit patients with traumatic brain injury (TBI), multiple sclerosis (MS), cerebral palsy, stroke, and Parkinson's diseases. It is currently seeking FDA approval for the TBI indication. The company has recently received approval

This article was written by

White Diamond Research profile picture
We provide deep research and valuable information on small cap stocks to hedge funds and high net worth individuals. We specialize in the technology and healthcare sectors. We have an over 80% success rate, see our reports at whitediamondresearch.com. See the 3rd party verified return on each of our bearish reports over the last 24 months at: https://breakoutpoint.com/as-summary/white-diamond-gvmtg/To inquire about becoming a premium subscriber, send a PM here or email us at research@whitediamondresearch.com.Follow us on twitter @whiteresearch.

Analyst’s Disclosure: I am/we are short HSDT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional Disclaimer: http://whitediamondresearch.com/disclaimer/

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (42)

Leadership continues to hire men with shady backgrounds into management positions at helius. Food for thought as stocks plunge to 15 cents and yet everyone is getting paid through venture capitalist money.
Physical Therapy provides very little if any benefit to traumatic brain injury patients.
Adam Gefvert is clearly in violation of security laws and fraud.
White Diamond Research profile picture
You got owned, bro. Next time you might want to listen to us. The FDA said the exact same thing that we said in this article.


"The agency cited the lack of sufficient information to determine the relative contributions of the PoNS device and physical therapy in its clinical trials."
Brother, how can you say you fight for the innocent when these patients are grieving. There are over 500 patient testimonies of healing using the PONS device after giving up on PT only. Who are the innocent to you when you deceive many for personal gains? Do you have no shame? By the way, your letter to the FDA went to the wrong address. Was that your intention? I am praying for you to see the Light on your mistakes
White Diamond Research profile picture
Kudos to the FDA, for doing the right thing and rejecting this placebo device and filling these shysters' pockets off the backs of uniformed investors.
Tom Sandlow profile picture
15 Jul. 2022
@White Diamond Research it was recently approved by the FDA and has been approved in Canada for a while now. It’s a great device that enhances neuroplasticity and that’s something that physical therapy alone can’t do b
CFTC Ronin profile picture
I would encourage anyone interested from the short or long side to watch this recent presentation by Helius' Chief Medical Officer:

Glad there are some analysts (I mean competent ones) reviewing this stock. Thanks you for this information CFTC.
CFTC Ronin profile picture
Adam, why are you lying again on your February 15 twitter post?

"New $HSDT SC 13G filings. Advanced Neuro Rehabbilitation Corp dumped 2 million shares"

Advance Neurorehab did not dump 2M shares. Advanced NeuroRehab was a holding company created by the founders. The shares from Jonathan Sackier and Mitch Tyler were split from the holding company and registered individually.

Adv NeuroRehab: -2.2M shares
Jonathan Sackier: +1.2M shares
Mitch Tyler: +1M shares
Learn to do basic arithmetic, idiot!
01 Feb. 2019
Hey Adam,

So just to be clear for everyone reading these comments: when you say "if you want to become a client" do you mean like...a paying client? or more of a free subscription type of deal?

Cause if it's a free printed newsletter delivered to my door I would consider your offer as I need some fire lighting paper for my fireplace. If its emailed to me, I'll decline your offer since I can't use an email to start a fire.

Anyways, hope you can answer my questions to help me make a decision on whether I would like to become a non-paying client of yours.

Pablo13 profile picture
Of course. This is the response I would expect from a guy who is in over your head. "a little back and forth", really? These guys completely debunked your whole FDA argument and you can't even defend yourself. I am guessing that you did not expect to have such well thought out rebuttals in from your report.

Why would I (or anyone) ever want to be a client of a guy who can't stand up against people who think and challenges them?

Maybe you could bring Montel up again as a reason not to invest. People really do care about him when investing in stocks.

How is it you are making the world a better place exactly?

Pablo13 profile picture
Dear Adam Gefvert,

There have been a lot of responses here to your article. It has been 24 hours since we have heard from you and you have not responded. Are you planning to address any of this. I would like to hear back from you as would all of the people that have been impacted by this article.

Also why is it that you wrote a letter to the FDA? That seems to be a conflict of interests?

Finally, you seem to be upset that HSDT did not respond to you. I am wondering why you would think why they would respond to one person (Adam Gefvert) who just wrote an article to the FDA advising them not to approve the device they created.

I welcome your responses!
White Diamond Research profile picture
Pablo, thanks for the inquiry but we're not obligated to respond. If you want to become a client, then I can give you some more information in private. I don't mind a little back and forth debate, which we did here, but eventually we have to get back to work on other reports. The important information we present is in this article. It's up to the reader to make up their own mind and do their own due diligence about the company and see if they agree with our thesis.
Pablo13 profile picture
Adam - any response?
30 Jan. 2019
The FDA amendments that you refer to clearly state (p. 86, middle of page):

Director of NIH shall ensure that clinical trial information for an applicable device clinical trial submitted in accordance with this paragraph is posted publicly
in the registry data bank—
‘‘(I) not earlier than the date of clearance under section 510(k) of the Federal Food, Drug,
and Cosmetic Act, or approval under section 515 or 520(m) of such Act, as applicable, for a device that was not previously cleared or approved, and not later than 30 days after such date''

Incidentally this also explains why Helius has removed the webcast from their website. I'm glad everyone can see that you're simply trying to smear a company with no facts to back it up.

You and your "report" are losing all credibility.
Adam Gefvert, have you ever thought of actually reading the BRIGHT RED NOTICE on the trial’s page? Looks like the “Food and Drug Administration Amendments Act of 2007” specifically forbids the details of this study to be available to the public. Oops… 

“This trial has been identified as being associated with a clinical device that has not been approved or cleared by the US Food and Drug Administration. Under the terms of US Public Law 110-85, Title VIII, Section 801, the details of this study are not available to the public.”

ClinicalTrials.gov Identifier: NCT02429167

First Posted: April 29, 2015
Last Update Posted: November 22, 2018
White Diamond Research profile picture
Yea, we didn't understand why the details of the study aren't available to the public? Helius didn't answer our questions that we post at the end of the article.

We couldn't find anything on that from the FDA Amendments here:


Helius did remove the webcast on the trial from their website, and changed the endpoint of the trial after the results missed the primary effectiveness endpoint.
CFTC Ronin profile picture
Adam Gefvert, you claim to be a clinical trial expert, but failed to realize that redacting the details of a registrational trial of a device that is not approved or cleared by the U.S. FDA is NORMAL PRACTICE.

“Definition: If this is a Section 801 applicable clinical trial, indicate whether this trial includes a device NOT previously approved or cleared by the US FDA for any use, as specified in US Public Law 110-85, Title VIII, Section 801. Select Yes/No. If "Yes" is selected, full posting of the trial information on ClinicalTrials.gov will be delayed until after the device has been approved or cleared. At that time, it is the registrant's responsibility to change this selection to "No" and release the record for full publication.”

It took me less than five minutes to find all these recent trials that had their data redacted.














White Diamond Research profile picture
We fight for the innocent. Today, we have sent a letter to the FDA, along with this report, urging them to reject the PoNS device. Below is our letter:

Information-Medical Devices / Radiation Products
Division of Industry and Consumer Education
CDRH-Center for Devices and Radiological Health
Food and Drug Administration
10903 New Hampshire Avenue
Silver Spring, MD 20993


January 29, 2019

Re: Helius Medical Technologies, Inc. 510K Submission; DUNS Number 079853934

To Whom It May Concern:

We urge the FDA to reject the PoNS device 510(k) submission from Helius Medical Technologies (stock symbol: HSDT) that is currently going through an FDA review. The analysis from our attached report shows that the results of the clinical studies are significantly affected by a placebo effect and we believe the patient improvements are in actuality coming from the accompanying physical therapy sessions, not the device. We believe approving the PoNS would mislead people suffering from chronic balance deficit into using this ineffective and expensive device.

We hope that the information in our report will aid in your decision process of whether to approve or reject the marketing application of the PoNS device.


White Diamond Research

Head Analyst Adam Gefvert, CFA
CFTC Ronin profile picture
You do not fight for the innocent. You do not care about the millions of afflicted people. All you care about is making money by telling lies and deceiving investors.

The FDA will not even bother reading an e-mail from a low life like you. How do you want them and investors to take you seriously? You have a BA in Business Economics from UC Santa Barbara, yet you are so smart and knowledgeable that you claim to have uncovered something groundbreaking related to a trial (results of which you have not accessed) that neither the FDA or the dozens of independent scientists have been able to. Please give me a break, and go try an manipulate some other stock.

I look forward to the massive short squeeze that will have you and your minions regret even thinking about shorting Helius Medical.
CFTC Ronin profile picture
What is completely missing from this shady short report is the fact that the control arm of the study was not a placebo. A placebo in a drug trial is a sugar pill in contrast to a pill containing active ingredients. In the case of the mTBI study, the control group did not have a true placebo, but a low stimulation vs a high stimulation.

Helius Medical had no choice but to use the "low frequency stimulation" device from the control group as opposed to a "no frequency stimulation" device. Why? There was plenty of information available to potential trial patients regarding the effect of the PoNS and the sensation on the tongue. Therefore, had the patients in the control arm of the study been given no stimulation at all, they would have known in which arm of the trial they were, and the results of the study would be void. As such, when calibrating the two devices (low and high frequency) for the patients, the frequency of the low device was set as to the lowest frequency perceptible, while the high frequency was set as the maximum tolerable frequency (no serious discomfort). The placebo or sham is called as such in any trial, regardless whether it is truly a sham/placebo or not. Furthermore, Helius had anticipated this is had put a clause in their protocol.Therefore, for the trial to be accepted by the FDA, Helius did not have any other choice but to design it with both a high and a low frequency device.

While the efficacy of the LFP was possibly greater than expected (nothing in the press release states this), it did not caught management by surprise. They had prepared for this specific scenario before submitting the trial design to the FDA, and thus could not have been surprised by it. Please read the following paragraph from the press release:

"Our prospective statistical analysis plan contemplated the scenario where the LFP PoNS™ Therapy was observed to be therapeutically active in the trial which would make it more difficult to reach statistical significance in the between-group comparison for our primary endpoint. The statistical analysis plan also provided for combining the data for HFP and LFP into a single group to assess the secondary endpoints of mean increase in SOT scores from baseline to the score at 2- and 5-weeks post PoNS™ Therapy."

In the literature, we observe a maximum change on the SOT score following physical therapy of 8-13 points, and this is usually progressively accomplished over a period of 6 to 9 months. Now, all of the patients entering the study had already gone through extensive physical therapy and thus their SOT scores would already have been incorporating the improvement from physical therapy. The baseline SOT score of the patient entering the study was 42. Two weeks into the trial, they saw on average a 21-point improvement. At that point, even if 8-13 of the improvement was due to physical therapy (which I explained cannot be the source), you are left with a 10-point improvement related to the PoNS device. Fast-forward to 14 weeks, and the improvement has now increased to 30 points or three times the maximum improvement one could achieve from physical therapy alone. Fast-forward to 26 weeks, after a 12-week washout period, and the improvement has now increased to 33 points, and it has been well documented that benefits from physical therapy mostly last as long as you continue the therapy. Essentially, patients that had serious balance and gait issues, on average came out of the trial with their SOT scores in the normal range. These results are impossible to achieve with physical therapy alone.

In the case of pivotal stage trials for therapeutic devices, the FDA’s statutory directive is to show valid scientific evidence to determine whether there is reasonable assurance that the device is safe and effective. Valid scientific evidence comes from:
- well controlled studies
- partially controlled studies
- objective trials without matched controls
- well documented case histories
- reports of significant human experience
From all the factors listed above, only once has the primary endpoint of the many studies Helius Medical has conducted over the last decade not reached statistical significance.

Several Class II devices that were approved by the FDA after not meeting their primary endpoint. The following is a list of the common factors between all these cases:

- In all those cases, the application was first reviewed by an “Advisory Committee” assembled from non-FDA industry experts and scientists.
- Purpose: “The Committee reviews and evaluates data concerning the safety and effectiveness of marketed and investigational devices for use in the neurological system and makes appropriate recommendations to the Commissioner of Food and Drugs.
- www.fda.gov/...
- www.fda.gov/...
- In all cases, the Committee agreed that the benefits of the device outweighed the risks for use in patients
- Note that a recommendation only requires a majority of the Committee members to vote in favor of the approval, and not a unanimous vote.
- Below you can find a number of direct quotes from company and regulatory press releases for devices that did not meet their primary endpoint and which were subsequently approved by the FDA:
- Described as “mostly positive review by the agency’s advisory committee”
- “Most panelists agreed that potential benefits of using the device outweigh any risks
and said that despite the lack of clear clinical benefit”
- “Advisors to the US Food and Drug Administration (FDA) agreed today that the device,
is safe and likely effective, paving the way for the approval of the first such device in
the United States. Most, despite concerns about the lack of clear clinical benefit, said
they themselves would want to have the device in place if they underwent such a
- “they believe the totality of the data suggests that it may be of benefit and they would
want it on the market. That’s despite the fact that the pivotal trial met its primary
safety endpoint but did not meet its primary efficacy endpoint”.
- “The panel recommended the device for approval based upon the totality of the data
from earlier trials and other information. The lone dissenting panel member said that
this lack of complete data and the fact that it technically did not meet its primary
endpoint were his reasons for voting against approval.”
- In many of these cases, serious adverse events reported in the clinical study included nausea, pain, vomiting and surgical complications.
- Recall, the PoNS device has proven to have no serious adverse events
- The devices were described as “transformative technology”
- The devices addressed an unmet need and a large population
- The FDA considered the clinical study and the Panel’s recommendations
- The FDA required a post approval study to be conducted over several years
White Diamond Research profile picture
Thanks for your input, but I believe you're not getting it.

"What is completely missing from this shady short report is the fact that the control arm of the study was not a placebo."

Sham, placebo, control, whatever you want to call that group.

"Our prospective statistical analysis plan contemplated the scenario where the LFP PoNS™ Therapy was observed to be therapeutically active in the trial which would make it more difficult to reach statistical significance in the between-group comparison for our primary endpoint."

Right, they predicted that would happen because we believe they knew the PoNS doesn't work.

"The statistical analysis plan also provided for combining the data for HFP and LFP into a single group to assess the secondary endpoints of mean increase in SOT scores from baseline to the score at 2- and 5-weeks post PoNS™ Therapy."

They combined the sham and active group which had a physical therapy regimen and compared it to the patients at baseline before they did any of the physical therapy.
CFTC Ronin profile picture
So after decades of documented physical therapy, somehow in this specific trial, patients that had plateaued with their physical therapy (not able to achieved further improvements), were magically brought back to normal levels of balance and gait? With the average improvement being 3x what you can normally see from physical therapy alone, and this prior to any physical therapy (e.i. right after the accident). Do you know how ridiculous this sounds?
White Diamond Research profile picture
"With the average improvement being 3x what you can normally see from physical therapy alone, and this prior to any physical therapy (e.i. right after the accident)."

Interesting, we never saw anything regarding that. Do you have evidence of this?
this about the "fundamentally flawed" Senhance (TRXC)

Learn some German and read this instead of losing your time talking with wannabe experts (do they even exist ??).


especially this part

Das Grundtraining (Theorie) finde in Mailand statt. „Zur praktischen Ausbildung kommen die Kollegen aber häufig zu uns.“ Schnell habe ein regelrechter „Tourismus“ eingesetzt, erzählt Prof. Willeke. Über 150 Chirurgen von nationalen und internationalen Kliniken ließen sich in den vergangenen zwei Jahren von den Siegener Kollegen das Verfahren zeigen. In den USA sei „Senhance“ noch nicht so lange zugelassen wie in Deutschland – deshalb sei der Schulungsbedarf dort derzeit besonders hoch. „Mehrmals im Jahr fliege ich rüber, um den Kollegen das Verfahren zu zeigen.“ In letzter Zeit seien die amerikanischen Mediziner aber verstärkt nach Siegen gereist, was natürlich einen sehr hohen Aufwand bedeutet. Und das ist auch der Grund für die heutige erstmalige Live-Übertragung nach Florida: Die Kollegen können bequem per Bildschirm und Internet bei der Operation zuschauen und Fragen stellen, die von Prof. Stephan beantwortet werden. Er erklärt den Kollegen ganz detailliert jeden Schritt, während die Amerikaner die OP auf einem Bildschirm verfolgen. Um allen Beteiligten das Leben etwas zu erleichtern, sollen solche Live-Schalten laut Willeke und Stephan ab sofort öfter stattfinden.

Auch die Patienten gäben ein positives Feedback, weiß Chefarzt Willeke: „Rund 90 Prozent wollen mit Roboter-Assistenz operiert werden.“ Rund 1,8 Millionen Euro kostet so ein „Roboter“ in der Anschaffung – Willeke und Stephan sind der Meinung, dass sich diese Investition gelohnt hat: „Unsere Geschäftsführung war damals sehr mutig.“


Short translation for your convenience:

Chief surgeon Willeke at St. Marien hospital has had been successfully using Senhance system since 2017 and teaching hundreds of other surgeons. "The system is approved in the USA only since a short time, but I have been flying back and forth now to give several lessons to my US colleagues and more and more US doctors have been coming to St. Marien hospital to be shown how to use Senhance. There are even live video-transmission to the US of surgeries."

Patients are giving a positive feedback, 90% of patients want to have their surgery with the assistance of the robot. The Senhance costs 1.8 million. The surgeons say the investments has been worthwhile.
internetmillions profile picture
That’s not the device this article is about
I know. just want to warn other readers about the "credibility" of this contributor.
Preserve & Prosper profile picture
If a hedge fund starts buying the stock and the price starts to go up fast, investors who are short the stock will get margin calls and will be forced to buy to cover their short positions. The hedge fund simply unloads their stock into the wave of short-covering. It's happened before with hype-and-hope stocks like Helius with thin floats and moderate trading levels. Not a huge risk, but it is a risk, especially since there are fewer market makers since Dodd Frank and liquidity is not as deep.
Preserve & Prosper profile picture
Although your arguments are persuasive, and Helius is likely to flounder financially, there is a major risk shorting small caps like this. With a small float and heavy insider ownership, it's all too easy for hedge funds to step in and start a short squeeze.
internetmillions profile picture
Set up a short squeeze? They would need a reason for the stock to go up in my opinion. Maybe a catalyst. What event do you think a hedge fund is going to set up a short squeeze around for this stock? I don’t personally see it
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