What the Flow Halo acquisition means for mental health medtech
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What Flow’s Halo acquisition means for medtech and mental health

By Chloe Kent 10 Feb 2021

Flow Neuroscience, developer of a brain stimulation device designed to treat depression, has acquired the assets of Halo Neuroscience, another company developing brain stimulating technology. What does this deal mean for the field of neuromodulation?

What Flow’s Halo acquisition means for medtech and mental health
Flow aims to use Halo’s research to enhance its tDCS depression headset. Credit: Flow

On 5 February, Flow Neuroscience announced that it had acquired the technology, R&D and patents of fellow brain stimulation tech developer Halo Neuroscience for an undisclosed sum.

While both companies use transcranial direct current stimulation (tDCS) in their products, they have had slightly different focuses up until this point. Flow, headquarted in Malmö, Sweden, has created a medically-approved brain stimulation device designed to treat depression, while US-based Halo has been developing neuromodulation technology to improve movement, cognitive performance and wellbeing.

tDCS involves sending a constant, very weak current into the brain via electrodes on the head.

Flow aims to use Halo’s research to enhance its tDCS depression headset and expand treatment to include mental health issues that are commonly comorbid with depression, as well as collaborating with clinicians to address other pressing medical needs such as rehabilitation and motor impairment.

Halo co-founder and CEO Brett Wingeier will now be supporting Flow as an advisor.

How do the two technologies work?

People with depression have been found to have lower neural activity in the left frontal lobe, the area of the brain associated with cognitive skills and emotional expression.

Flow’s tDCS headset aims to remedy this by delivering a constant, low direct current via electrodes to stimulate neurons in this area. The headset is used in conjunction with Flow’s depression app, which guides users through a series of personalised exercises informed by behavioural therapy techniques.

Halo’s headset stimulates a different part of the brain – the motor cortex, an area involved with planning, control and the execution of voluntary movements. It’s built into a pair of over-ear headphones, which users are encouraged to wear during exercise.

The company has been working with leading researchers including the at the City College of New York and the Air Force Research Laboratory in Ohio to further develop its neuromodulation technology.

Like many consumer-focused companies, Halo appears to have struggled during the Covid-19 pandemic. Its website currently states that due to ‘current circumstances’ its product line has been discontinued.

Flow co-founder and chief technology officer Erik Rehn said: “We are building on the technology Halo applied for the improvement of performance and well-being, which will revolutionise the application of tDCS for mental health disorders. By combining different neuromodulation techniques, we will be able to personalise treatments further to target brain regions with more precision. This will allow us to innovate treatments which are patient-specific and even more efficient and reliable.”

How will Flow use Halo’s arsenal?

As well as incorporating Halo’s work into its own research, Flow has the opportunity to branch out from depression treatment and enter the consumer and wellness market. It could opt to begin marketing the Halo Sport product line as-is, or release an upgraded product which is still ultimately intended for use during exercise.

However, there’s no indication of this just yet, and the company may instead choose to stay in the medical area.

The Covid-19 pandemic has been dubbed the greatest threat to mental health since the Second World War, with an additional ten million people thought to need new or additional mental health support as a result of the crisis. To compound this, the NHS and other health systems around the world have found themselves at full capacity, leaving many people unable to access traditional mental health care.

There’s also the impact of so-called ‘long Covid’ to consider – post-viral symptoms that continue after an acute Covid-19 infection has passed. These can include fatigue, headache, breathlessness, continuous cough, hearing and eyesight problems, headaches and loss of smell and taste. Flow has said it wants to focus on tDCS for rehabilitation, and long Covid recovery could fit neatly into this.

In a statement, Flow co-founder and CEO Daniel Mansson described Halo’s technology and academic research as complementing Flow’s in an “almost magical” way. With more and more neurostimulation devices hitting the market, Flow is definitely one to watch over the coming months.

Verdict deals analysis methodology

This analysis considers only announced and completed deals from the GlobalData financial deals database and excludes all terminated and rumoured deals. Country and industry are defined according to the headquarters and dominant industry of the target firm. The term ‘acquisition’ refers to both completed deals and those in the bidding stage.

GlobalData tracks real-time data concerning all merger and acquisition, private equity/venture capital and asset transaction activity around the world from thousands of company websites and other reliable sources.

More in-depth reports and analysis on all reported deals are available for subscribers to GlobalData’s deals database.