Corinne Purtill | Los Angeles Times (TNS)

LOS ANGELES — Thomas VanCott compares his son Jake’s experience with autism to life on a tightrope. Upset the delicate balance and Jake, 18, plunges into frustration, slapping himself and twisting his neck in seemingly painful ways.

Like many families with children on the autism spectrum, Jake’s parents sought treatments beyond traditional speech and behavioral therapies.

One that seemed promising was magnetic e-resonance therapy, or MERT, a magnetic brain stimulation therapy trademarked in 2016 by a Newport Beach-based company called Wave Neuroscience.

The company licensed MERT to private clinics across the country that offered it as a therapy for conditions including depression, PTSD and autism.

Those clinics described MERT as a noninvasive innovation that could improve an autistic child’s sleep, social skills and — most attractive to the VanCott family — speech. Jake is minimally verbal.

It was expensive — $9,000 — and not covered by insurance. “It’s too much for most things,” VanCott said, “but not for the potential of my child speaking.”

After raising money through GoFundMe, VanCott met with a doctor at a New Jersey clinic who described how MERT would reorganize Jake’s brain waves. VanCott does not have a scientific background, and the technical details went over his head. What he had was a severely disabled son he was desperate to help.

The doctor “seemed pretty confident. And his confidence gave me confidence,” VanCott said. “It made me think, tomorrow Jake’s gonna wake up and say a sentence.”

Autism diagnoses in children have risen steadily since 2000, in part due to increased awareness and screening. As the number of people living with autism has grown, so have alternative therapies promising to alleviate or even reverse its associated behaviors.

“There’s also a lot of pressure put on parents,” said Zoe Gross, a director at the Autistic Self Advocacy Network, a nonprofit group run by and for autistic adults. “People will be saying things like, ‘Time’s ticking, your kid’s missing milestones … you have to fix it now.’”

One therapy that often surfaces in Google searches, social media groups and word of mouth discussions is MERT, which is based on a brain stimulation therapy approved by the Food and Drug Administration for depression and obsessive-compulsive disorders.

Clinics offering MERT sell it as a “safe and effective treatment for autism” that yields “ miraculous results” for kids on the spectrum.

MERT providers first use EEG, a common brain scan, to assess patients. Wave’s proprietary technology, photographed at a Newport Beach clinic, then determines which areas of the brain to target for treatment. (Jay L. Clendenin/Los Angeles Times/TNS)

Most compelling to many families is an oft-cited marketing claim that research has shown MERT to improve speech and eye contact in a majority of autistic patients, research that several clinics attributed to Wave.

The Times spoke to parents who said MERT caused positive, lasting changes in their autistic children’s sleep, communication and concentration.

Other parents told The Times they saw only minimal changes in their children’s behavior. Many, including Thomas VanCott, saw no changes at all. “It just did nothing,” VanCott said. And a few saw worrying behavioral regressions that persisted long after the therapy ended.

All remember being told by MERT providers that while results weren’t guaranteed, many patients saw positive results. When the dramatic changes they hoped for didn’t happen, these families left believing they were unlucky. Without quality data, it’s impossible to know if any of these outcomes are outliers or typical patient experiences.

Wave has not conducted any studies on whether its signature product works for autism. A Wave executive argued that the need for new autism therapies is strong enough to justify moving forward with commercial solutions before rock-solid evidence is available.

“Academics pointing towards insufficient evidence for clinical adoption may not represent a true reflection of clinical utility in a population where there are very few therapeutic options, great suffering, and a willingness of physicians and patients to seek innovative treatment choices with diligent clinical care and oversight,” said Erik Won, Wave’s chief medical officer.

For many parents, even a small possibility of a life-changing breakthrough is worth any price. Although some families have reported benefits from the treatment, no large scientific studies exist that show MERT is significantly better than a placebo, according to nine psychologists and neuroscientists with expertise in brain stimulation and autism.

MERT is Wave’s trademarked version of a therapy called transcranial magnetic stimulation. The product of decades of research, TMS is approved by the FDA to treat major depression, obsessive-compulsive disorder and cigarette addiction.

It is also used to treat conditions for which it is not FDA-approved, in what’s known as “off-label” prescribing. Off-label usage of drugs and devices is a common practice in medicine.

Clinics offering cash-pay TMS for a variety of off-label conditions, including autism, have proliferated in recent years. MERT in particular has become especially popular among families with autistic children.

Autism spectrum disorder is a complex neurological and developmental condition that manifests differently in nearly every individual who has it. Symptoms cluster around difficulties in communication, social interaction and sensory processing.

Many autistic people need minimal support to live, work and thrive independently, while others require intense daily care and are unable to express themselves verbally. There are few evidence-based interventions to alleviate its most profoundly disabling traits.

A MERT patient first sits for a 10-minute quantitative electroencephalogram, a noninvasive test that measures the brain’s electrical activity, and an electrocardiogram, which gauges electrical activity in the heart.

Results are then analyzed by Wave’s proprietary software. If its algorithm identifies “areas of the brain that are not functioning properly,” clinic providers will recommend a protocol of TMS-style treatments. In these sessions, the provider places a magnetic coil against the patient’s scalp that emits a gentle electromagnetic pulse. Sessions typically last about 30 minutes and are administered five days a week, for two to six weeks.

MERT providers first use EEG, a common brain scan, to assess patients. Wave’s proprietary technology, photographed at a Newport Beach clinic, then determines which areas of the brain to target for treatment. (Jay L. Clendenin/Los Angeles Times/TNS)

Won, Wave’s president and chief medical officer, said the goal is “to help the brain function most efficiently as an organ. And the hypothesis was, if we improve the metabolic efficiency of the brain, would we see some changes in a variety of different medical conditions?

“As we sort of tested this, there was a realization: Wow, we can do something pretty special for autism,” he said.

A six-week course of MERT — the standard protocol Wave recommends for autistic patients — typically costs $9,000 to $12,000, families and clinic owners said, and is not covered by insurance.

MERT was originally developed as a therapy for post-traumatic stress disorder and traumatic brain injury. Since its inception in 2019, Wave has described military veterans as its primary patient demographic.

Wave is in Phase II of a clinical trial to test MERT for PTSD, Won said. The company has not conducted any clinical trials on autism.

“The strategic decision to focus on PTSD was largely dictated by market factors,” Won said. He added that his company is dedicated to helping those with autism and is working to obtain funding “for further studies and ultimately an FDA indication.”

Dr. Andrew Leuchter is the director of UCLA’s TMS Clinical and Research Service, which has provided FDA-approved and off-label treatments to more than 1,000 patients.

Given its solid safety profile and effectiveness at treating other complex brain-based disorders, Leuchter said that he and many other TMS clinicians believe the therapy could have benefits for conditions other than the few for which it is FDA-approved.

When a patient approaches the clinic seeking treatment for an off-label condition Leuchter believes could be helped by TMS, the psychiatrist reviews the case with his colleagues. If they decide to proceed, he explains to the patient that the efficacy of TMS for their condition isn’t proven, though there is reason to believe it is safe and effective.

But when parents call asking whether he can treat autistic characteristics such as sensory challenges, minimal speech or lack of eye contact, Leuchter says no.

“Off-label treatment can be just fine so long as there’s data to support this and the risks are low,” he said. For autism, he said, “the evidence base is not very strong. … And I don’t think that there is sufficient evidence to recommend the use of TMS for the treatment specifically of autism.”

Multiple researchers are currently examining whether TMS could improve certain symptoms of autism. But eight researchers interviewed for this article said there isn’t yet enough evidence to recommend TMS as an autism therapy, or to say with confidence that it works for that condition.

Lindsay Oberman, director of the Neurostimulation Research Program at the National Institute of Mental Health, published a paper last year summarizing the current state of research on TMS and autistic children. Nearly all published studies on the treatment to date have been very small, open-label (meaning both patients and providers knew what treatment they were receiving) or focused on a very specific subgroup, she and her co-authors wrote.

Without large, randomized controlled trials — the gold standard in medicine — “broad off-label use of these techniques in this population is not supported by currently available evidence,” the paper concluded.

Won acknowledged that the company has so far not pursued such research on MERT and autism.

“We owe the community some academically rigorous science,” he said. “This is not going to be a panacea. I don’t want to misrepresent anything to the parents who are making these difficult decisions. But for a subgroup, this is clearly something that’s leading to a response.”

Medical research moves far more slowly than most patients and their families would like, and many are willing to try experimental therapies long before researchers and regulators are ready to sign off on them.

“When you’re a parent of a child and you think that this can help, it’s like, FDA be damned, right?” VanCott said. “If I think it’s gonna help my kid, I want to do it.”

Wave’s provider directory now lists more than 60 U.S. licensees and an additional 18 internationally. More than 400,000 MERT sessions have been administered to more than 20,000 people, according to the company.

Won said Wave does not maintain comprehensive data on patients treated at licensee clinics. In an interview, he estimated that about half of these patients were seeking treatment for autism. He later said that 20% to 30% was a better estimate.

Although some clinic owners said they treat few autistic children, staffers at multiple facilities told The Times that most or all of their patients were autistic.

To pay for the procedure, families have used savings or turned to crowdfunding. Others placed the treatment on credit cards. Their experiences vary widely.

Though initially skeptical, Joo Flood booked a six-week course of treatment at a Dallas clinic in 2022 for her minimally verbal son Max, then almost 5. They returned for another round in May 2023.

Max now responds far more often to his name, makes regular eye contact and has an easier time following directions, his mother said.

“If I didn’t do the MERT, I’m not sure Max can be at this level,” she said.

Yestel Concepcion and her husband sought MERT for her stepson after hearing about it on a talk show.

The New Jersey couple scraped together savings and gratefully accepted donations from friends and family for the $10,000 cost. They spent nearly $5,000 more relocating the family to Maryland during the monthlong treatment.

Apart from an increase in the boy’s hyperactivity, the couple saw “no result whatsoever,” Concepcion said. The clinic suggested more sessions, at an additional cost. But their money and trust had run out.

Most parents who spoke to The Times about their children’s MERT treatments said the possibility of speech for their non- or minimally verbal children was the primary reason they pursued it, even if it meant taking on debt.

Until recently, more than a dozen MERT clinics around the country, under the headline “ Results that ‘Speak,’” cited an “internal double-blind randomized control trial” that had produced striking results: Two out of three patients with verbal and nonverbal communications difficulties “experienced improvement” after MERT. In the same trial, the ad copy read, 70% of patients who had trouble maintaining eye contact saw “improved eye contact behavior.”

Four clinics attributed those statistics to Wave.

According to Wave, the source of that claim is a small study of 28 patients that was conducted around 2017 by the Newport Brain Research Laboratory. It has not been published nor vetted by independent scientists. The study was among assets of the now-defunct laboratory that Wave purchased in 2019.

The only part of this work available to the public is an undated poster presentation that roughly outlines the study.

Wave declined to release details of the study or name its authors, but Won described the results. He said 71% of subjects in the group of 14 patients that received MERT instead of a placebo had positive changes in their visual response afterward, and 67% of subjects had positive changes in their verbal communication, according to their parents’ responses on the Childhood Autism Rating Scale (CARS).

“I never put much weight into the findings I see in a poster or talk, especially if it isn’t followed by a later peer-reviewed publication,” said Christine Conelea, an associate professor at the University of Minnesota Medical School who runs the university’s Non-Invasive Neuromodulation Laboratories.

“Small samples like this aren’t good for establishing the benefits of a treatment, conclusively showing safety, or demonstrating that an investigational treatment is better than placebo,” Conelea said.

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Statistics taken from the unpublished study have featured prominently on the websites of at least 17 MERT clinics, as well as the primary website for the Brain Treatment Center, a trademark owned by Wave under which many MERT clinics do business.

Won said he was not aware that so many clinics were using the study’s conclusions as a marketing tool. Shortly after The Times asked Wave about the statistics, almost all of those clinics took them down.

“I don’t feel good about it,” he said. “A lot of families benefited from it [MERT], and their children are doing better, and that’s wonderful. But I don’t want to misrepresent or overrepresent things. … I would always want there to be published, peer-reviewed, academically rigorous science to back up a claim.”

Following The Times’ questions, Won said that Wave contacted the study authors and requested that they expedite the preparation and submission of a research paper containing the study results to a peer-reviewed journal. The company has also asked the authors to release the manuscript on a preprint server, a website where scientists can post preliminary findings.

“We need to get that publication out so that people can make informed decisions,” he said. “It would be easier if it’s in the public domain, and other people can critique it and break it down and take it for what it’s worth.”

Manuel Casanova, a retired University of South Carolina professor who spent years studying TMS as a potential autism therapy, questioned why MERT providers had so little empirical data to share after administering the treatment to thousands of autistic patients — a gap, he said, that “raises a red flag as to the therapeutic benefits of the technique.”

MERT providers operate in an “ethical gray area,” said Anna Wexler, an assistant professor at the University of Pennsylvania who studies the ethics of emerging technologies.

Doctors can use approved therapies to treat any condition they deem appropriate, Wexler said. But if the condition being treated isn’t the same one for which the therapy has been cleared, providers must be “as transparent as possible” about the evidence they’re relying on, she said. If there is little to no evidence to support MERT’s efficacy for a given condition, she said, “it is unethical for providers to advertise that it is effective.”

“If someone opts for an experimental therapy, that in itself is not problematic,” Wexler said. “What is problematic is if they are making that decision based on erroneous or incorrect beliefs about efficacy.”

Won did not respond to a question about Wexler’s critique.

Nine psychologists and neurologists with expertise in transcranial magnetic stimulation say there is to date no evidence to suggest this kind of therapy can reliably prompt a nonverbal autistic child to develop speech, or to significantly alter an autistic child’s sensory and communication abilities.

“The plain English is that it’s not there yet, and I have not seen it working convincingly outside of a strong placebo effect,” said Dr. Alexander Rotenberg, a professor of neurology at Harvard Medical School and director of Boston Children’s Hospital’s Neuromodulation Program.

Peter Enticott, a psychologist at Australia’s Deakin University, is leading a multisite trial of TMS for autism funded by the Australian government. Enticott has spoken with families whose children received MERT from Wave licensees in Australia and were thrilled with the outcomes. But for a scientist, uplifting anecdotes are not a substitute for data.

“It’s too early,” he said. “And I think it’s particularly problematic given that they are charging large amounts of money for an unverified therapy.”

Criticisms of the treatment’s pricing were “not a reflection of Wave Neuroscience,” Won said. “The comments seem to be objecting to the realities of the health care market.”

Scientists consulted by The Times said they would encourage families interested in TMS and autism to look for a clinical trial that would provide the treatment free of charge in exchange for using the patient’s data in a study.

“I would consider this something that should be researched, but nobody should be paying $5,000 to $10,000 out of pocket for this,” said Alycia Halladay, chief science officer at the Autism Science Foundation, one of five autism advocacy groups The Times consulted that said there is not enough evidence for them to recommend MERT.

Despite his disappointment, VanCott does not regret his decision. Had he not pursued the treatment, he would always wonder whether he turned down something that could have helped his son — no matter how high the cost, no matter how slim the chance.

“I mean, being able to sleep at night?” he said. “What’s that worth?”

©2024 Los Angeles Times. Visit at latimes.com. Distributed by Tribune Content Agency, LLC.

James Royal, Ph.D. | Bankrate.com (TNS)

It’s the perennial question among stock investors: which is better — growth investing or value investing? Recently, there’s been little contest. Growth stocks, such as Apple and Nvidia, have handily outperformed value names. But it’s not always that way, and many investors think value will once again have its day — although they’ve been waiting on that day for quite some time.

Here’s what some top investing pros say about growth and value investing, and when we might see value investing begin to outperform again.

Differences between growth investing and value investing

Many see the distinction between growth and value as somewhat arbitrary, but it’s useful to lay out what might differ between the two approaches, even if it seems a bit like a stereotype.

Growth investing

Growth investors look for $100 stocks that could be worth $200 in a few years if the company continues to grow quickly. As such, the success of their investment relies on the expansion of the company and the market continuing to price growth stocks at a premium valuation, as measured by a P/E ratio maybe, in later years if the company continues to succeed.

Growth stocks are sometimes also called momentum stocks, because their strong upward rise leads to more and more investors piling into them. Sometimes that movement occurs regardless of the company’s fundamentals, as investors build “pie in the sky” expectations around the company. When those expectations aren’t realized as quickly as some investors expect, a growth stock can plunge, though it may later rise with renewed optimism.

Value investing

In contrast, value investors look for $50 stocks that are actually worth $100 today, not in a few years, if the company continues its business plan. These investors are typically buying stocks that are out of favor now and therefore have a low valuation. They’re betting on the market’s opinion becoming more favorable, pushing up the stock price.

“Value investing is based on the premise that paying less for a set of future cash flows is associated with a higher expected return,” says Wes Crill, senior investment director at Dimensional Fund Advisors in Austin, Texas. “That’s one of the most fundamental tenets of investing.”

Many of America’s most famous investors have been value investors, including Warren Buffett, Charlie Munger and Ben Graham, among many others. Still, plenty of very wealthy individuals own growth stocks, including Amazon’s founder Jeff Bezos and hedge fund billionaire Bill Ackman, and even Buffett has shifted his approach to become more growth-oriented these days.

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But the difference between growth and value investors can sometimes be artificial, as many investors agree. There are times when growth stocks are undervalued and there are plenty of value stocks that grow.

Regardless of their style, investors are trying to buy a stock that’s worth more in the future than it is today. And both value companies and growth companies tend to expand at least a little over time and often significantly, making them some of the best long-term investments to buy. So the definitions of the terms are a bit slippery.

Typical investing wisdom might say that “when the markets are greedy, growth investors win and when they are fearful, value investors win,” says Blair Silverberg, CEO of Hum Capital, a funding company for early-stage firms based in New York City.

“The 2020s are a little different,” Silverberg says. “There are real tailwinds to technology companies and you can actually find value by buying great companies at fair prices.”

And sometimes the difference between the two investing styles may be largely psychological.

The market sometimes overlooks the “earnings growth potential in a company just because it has been bucketed as a value stock,” says Nathan Rex, chief investment officer at Eigenvector Capital in Stamford, Connecticut.

Which is better: Growth investing or value investing?

The question of which investing style is better depends on many factors, since each style can perform better in different economic climates. Growth stocks may do better when interest rates are low and expected to stay low, while many investors shift to value stocks as rates rise. Growth stocks have had a stronger run in the last decade and more, but value stocks have a good long-term record.

Growth stocks continue to outperform

Growth stocks have been having a nice go, with the last decade spent running up on the backs of large tech companies with massive opportunities. Tech stocks such as Meta Platforms, Alphabet, Amazon, Apple and Netflix — once named FAANG stocks — now dominate the market. As another trillion-dollar player, Microsoft has also been added to this mix.

The growth-y tech stocks — now rebranded as the Magnificent 7 — comprise a huge portion of key indexes such as the Standard & Poor’s 500 and the Nasdaq-100.

In the 10 years ending in April 2021, U.S. growth stocks outperformed U.S. value stocks by an average of 7.8% per year, according to Vanguard.

So what’s been driving growth stocks higher during this era?

“Investors have become so fearful of short-term events and a low-growth economy that they are willing to pay a higher premium for growth in future years,” says Rex.

“The driver for growth vs. value over the last decade has been the market’s grasp for anything that could demonstrate the ability to increase earnings in a low-growth, disinflationary environment,” says Jeff Weniger, head of equity strategy at WisdomTree Investments in Chicago.

Weniger points to tech and communications services stocks as winners on the growth side, while gesturing to energy and financials as stocks that struggle in this environment, “two sectors that tend to populate value indexes.” The pandemic exacerbated the disparity, as tech stocks may have thrived while old-line companies were hit harder, he says.

Low interest rates help make growth companies more attractive, too. Growth stocks tend to be less profitable, if they’re profitable at all, as the companies invest in operations. But in a low-rate environment investors overlook this lack of current profitability because the cost of money is low.

“The interest rate environment has been terrible for traditional banks,” says Norm Conley, CEO and CIO at JAG Capital Management in the St. Louis area, pointing to rates in the 2010s and early 2020s. A period with a flat yield curve in a low-rate environment crimped their earnings power, he says, and “the regulatory environment for banks has been anything but supportive since the Great Financial Crisis.”

Conley notes that many value indices are “heavily-weighted to ‘old economy,’ asset-intensive companies, during a period of massive technological growth and disruption.”

Of course, some of the growth vs. value dynamics shifted in 2022 and 2023, as the Federal Reserve rapidly raised interest rates to combat inflation. Higher interest rates led to investors fleeing growth stocks and becoming more welcoming to value stocks, at least for a while. But investors regained some of their risk appetite in late 2022 and then further as 2023 progressed with growth and tech stocks rebounding well into 2024.

Value investing tends to outperform over the long term

While growth stocks might win the short-term battle, value stocks are winning the long-term war, suggests Dr. Robert Johnson, finance professor at Creighton University and co-author of the book “Strategic Value Investing.”

“From 1927 through 2019, according to the data compiled by Nobel Prize laureate Eugene Fama and Dartmouth professor Kenneth French, over rolling 15-year time periods, value stocks have outperformed growth stocks 93% of the time,” he says.

But over a shorter period, value may outperform at a lower percentage. Johnson cites the same research showing that in annual periods value outperformed just 62% of the time.

But that’s not to say that value stocks as a whole will be winners when the market turns. It’s important to distinguish value stocks that have permanent problems from those that may be suffering temporary setbacks or those the market has soured on for the time being.

“Value investors have always run the risk of plowing capital into stocks that are cheap for a reason and ultimately continue to underperform,” says Conley.

Such stocks are called value traps, but the same phenomenon exists with growth stocks, and investors who buy into highly valued growth names may get burned, if the companies are unable to maintain the rapid expansion that Wall Street demands.

“Both value and growth investors run the risk of investing capital at prices that, in the fullness of time, will prove to have been too high,” says Conley.

When might value begin outperforming growth again?

The question that has been on the minds of many investors is when value stocks will outshine growth stocks. After a brief period of favor in 2022, value stocks are now less in favor again, as investors kissed and made up with growth stocks starting in late 2022. Experts point to a few factors to consider when thinking about how value again becomes the more favored approach.

One sign to watch out for: inflation. Weniger says that inflation helps value stocks more than it does growth stocks. Inflation reached its highest level in 40 years in 2022, though it’s been on the downswing since and sits at 2.9%, as of the July 2024 report.

Some traditional value sectors performed well as rising energy prices fueled inflation and increased investors’ expectations for higher interest rates. Those rises boosted energy and financial names in 2022, as investors priced in higher profits at these companies.

Value stocks are exactly where financial experts questioned in Bankrate’s fourth-quarter 2021 survey expected to see outperformance through December 2022 as interest rates rose. But Bankrate’s first-quarter 2023 survey saw them shift allegiance to growth stocks in the year ahead, as the Fed got some rein on inflation. And Bankrate’s second-quarter 2024 survey further reinforced the pros’ preference for growth stocks in the year ahead, as interest rates are moving lower.

Many investors point to long-term studies showing that eventually the market does re-rate value stocks.

“Our research shows that value investing continues to be a reliable way for investors to increase expected returns going forward,” says Crill. He suggests that the longer you stay invested, the more likely value is to outperform, since “history tells us value can show up in bunches.”

And a plain old “correction” in stocks or a bear market may return value stocks to favor. With lower expectations built into their prices, value stocks often don’t suffer the kind of downturn that higher-valued stocks do when the market sells off.

“Bull market leaders are often bear market laggards, so it could be that the market hitting a rough patch is what causes beleaguered value stocks to outperform, much as they did from 2000 to 2002, when that era’s go-go stocks came back to earth,” says Weniger.

Bottom line

The old debate of growth vs. value will live on, but the empirical evidence suggests that value stocks outperform over time, even if growth stocks steal the daily headlines. If they’re buying individual stocks, investors should stick to fundamental investing principles or otherwise consider buying a solid index fund that takes a lot of the risk out of individual stocks.

The best brokers for stock trading can help investors find the best funds with strong, long-term records of performance and low costs.

(Visit Bankrate online at bankrate.com.)

©2024 Bankrate.com. Distributed by Tribune Content Agency, LLC.