Helius Medical Technologies Inc (OTCMKTS:HSDT): Buy The Dip

Helius Medical Technologies Inc (OTCMKTS:HSDT) is one to watch right now in the biotechnology space. The company is up more than 40% over the last 30 days and close to 150% year to date.A dip over the last few days, however, has brought it to trade at an around 15% discount to its most recent swing high and we think this might be a nice entry point for anyone looking to gain exposure to the overarching upside trend. HSDT Daily ChartHere's our take on what's causing the upside revaluation and what we're looking out for next as supportive of the suggestion that there's further upside to come.As mentioned, this one is a biotechnology stock and it's focused (primarily) on a proprietary technology called PoNS Therapy. The PoNS abbreviation here stands for Portable Neuromodulation Stimulator and it's a sort of electronic wave therapy that attempts to harness electricity to fix issues associated with (right now, and as a primary indication) damage to the brain. It's a non-invasive device that's designed to deliver neurostimulation through, of all things, the tongue. A patient straps it to their head, sticks a conductive pad to the tongue and electrical waves are delivered through the pad.There is plenty of evidence to suggest that this sort of neurostimulation can have a long-term beneficial impact on cranial nerves and, by going through the tongue, the device is able to stimulate two of the most important of said nerves – the trigeminal (the nerve responsible for sensations in the face, biting and chewing) and the facial (the nerve responsible for motor control of most of the muscles of facial expression).As part of a collaboration with the US government, and specifically the US Army Medical Research and Materiel Command (USAMRMC), Helius is currently investigating the technology as a potential treatment for what is called chronic balance disorder in patients with mild to moderate traumatic brain injury. As its name suggests, chronic balance disorder is a condition that results in a patient struggling to balance (and, with it, to do the things that balance is required for like walking and running, etc.) and there is essentially no effective treatment on the market available right now in this indication.The collaboration with the USAMRMC is long-standing and the company just announced an extension through to December 31, 2021, by which commercialization is expected.So what's next?There is an ongoing study in TBI for which, at this point, all study subjects have completed their treatment. When the data from this study hits press, it's going to dictate sentiment in Helius for the foreseeable future, meaning it's a major catalyst to keep an eye on. Management expects the trial to wrap up at some point between now and the first quarter of next year, and, on the back of this trial, expects to submit for approval in the US pretty much immediately.This serves up the potential for the PoNS device hitting shelves at some point during mid-2018 which, again, is a potentially major catalyst for Helius and its shareholders, giving us two key events to watch over the coming 12 months.Cash on hand at the end of September came in at a little over $9 million, which suggests that there is no immediate dilution concern. With that said, however, and especially if the upcoming PoNS data hits press as positive (and, in turn, supportive of commercialization), there is a good chance that we will see the company issue to raise cash in advance of rolling out the product in question.As such, while it's not a near-term risk, it should be considered ahead of picking up exposure to any future growth.Here's our previous coverage of this one. We will be updating our subscribers as soon as we know more. For the latest updates on HSDT, sign up below!Image courtesy of Jared Tarbell via FlickrDisclosure: We have no position in HSDT and have not been compensated for this article.