Sedana Medical AB Interim report January-March 2022
First patient enrolled in US clinical program
First quarter 2022
- Net sales totalled MSEK 34 (45), equivalent to a decrease of 25% compared to the first quarter of 2021. At constant exchange rates, sales decreased by 28%. The development is a consequence of a significant decline in ventilated patients in intensive care units.
- Gross profit was MSEK 23 (29), equivalent to a margin of 68% (64%). The improved margin is principally due to lower transportation costs and to some extent to a positive market mix.
- Earnings before interest, taxes, depreciation and amortisation (EBITDA) totalled MSEK -16 (-8), equivalent to an EBITDA margin of -49% (-18%).
- Operating income (EBIT) totalled MSEK -22 (-10) equivalent to an EBIT margin of -66% (-23%).
- Net profit for the quarter was MSEK -19 (-9), and earnings per share before and after dilution was SEK -0.19 (-0.10).
- Cash flow from operating activities totalled MSEK -28 (-13).
- Cash flow from investing activities totalled MSEK -32 (-21).
- Total cash flow was MSEK -61 (-33).
- Cash and cash equivalents at the end of the quarter totalled MSEK 779, compared to MSEK 836 at the start of the quarter.
First patient enrolled in US clinical program, sales impacted by significant decline in ventilated patients
During the first quarter of 2022, we have continued to make progress on both of our main priorities: we have launched Sedaconda (isoflurane) in Europe and are excited to initiate our clinical program in the United States. On the business side, our sales were affected by a significant decline of ventilated patients and restricted operations in intensive care units, however, sales still clearly exceed pre-Covid levels as more clinics are now equipped to use inhaled sedation.
Sales in the quarter amounted to SEK 34 million, a decline of 25% versus last year. The decline is explained by lower sales in Germany and in South America, while our other markets showed solid growth.
In Germany, our sales decreased by 22%. The primary reason is that we saw a significant decline of ventilated patients in German ICUs but restricted operations at ICU’s also contributed:
- The number of Covid-19 patients alone decreased by 42% compared to Q1 2021, a decline of more than 80,000 ventilator days in the first quarter. Today (end of April), the number of ventilated Covid-19 patients is 75-80% lower than last year. While no statistics are publicly available for ventilated patients with other indications, we saw those patient groups decline as well.
- Like most parts of society, hospitals were heavily hit by high levels of staff absence in Q1, on top of the generally high turn-over and burn-out rates among nursing staff. Consequently, two thirds of German ICUs reported restricted or partly restricted operations in Q1, leading to reduced capacity, less surgeries and access restrictions to ICUs. Furthermore, the continued hygiene measures like the use of face masks helped avoid respiratory infections.
In our other direct markets, we saw similar effects including less ventilated ICU patients and restricted access to hospitals. However, the underlying growth, in particular in Spain, France and the UK, together with the comparably low sales levels last year, resulted in a 12% sales increase versus last year.
The reasons for the decline in South America are twofold: Firstly, we saw artificially high sales in Q1 last year due to the propofol shortage in the region at the time. Secondly, we saw a stock-up in Q4 in anticipation of another Covid-19 wave that did not materialize and therefore no orders were received in January and February. Orders have to some extent picked up again and we received approval for Sedaconda ACD in Brazil, so I am looking forward to the continued development of this important region. During Q1, we have also obtained marketing approval for Sedaconda ACD in Indonesia. With 26,000 and 30,000 ICU beds respectively, Brazil and Indonesia represent sizeable potential markets.
With the launch of Sedaconda (isoflurane) in Germany during the quarter, we can now offer the first and only on-label therapy for inhaled sedation in the ICU. The team is working on switching accounts from off-label generics to our approved product. While initial customer reactions have been promising, we continue to expect a gradual ramp-up over time as we are working through our customers’ purchasing processes. Since April, the drug is also available in Sweden and the Netherlands and we will add more countries throughout the year.
On the US side, the focus in the first quarter has been on preparing the clinical program. Following the IND approval in December, we could start working with the individual trial sites to ensure all necessary approvals, finalize contracts and start training. I am very pleased to report that the first patient has been included in the clinical trial in April, in line with our ambitious time plan. Assuming rapid recruitment and a successful trial, we continue to expect the NDA submission in 2024 and a launch in early 2025.
Of course, we are following the terrible events in Ukraine. The short-term impact on Sedana Medical is however manageable. We have no presence in Ukraine and minimal (distributor) sales in Russia. The more relevant business implication is that our gas monitor is being manufactured by a Russian engineering company. While the sales contribution is fairly small, gas monitors are an important enabler for our therapy. In the short-term, we have sufficient stock available to meet our customers’ demand. In anticipation of longer-term trade restrictions, we have however started a project to ensure availability of alternative gas monitors going forward.
Overall, I am pleased with the progress we have made during the quarter. Short term, we are facing some uncertainty regarding what the “new normal” after Covid-19 will look like, when access restrictions will be lifted, for how long ICU operations will be constrained and to what extent ICU capacities will continue to be scaled back after the pandemic. This short-term uncertainty does of course not change our belief in the long-term potential of inhaled sedation, and we remain fully focused on executing our strategy. Based on convincing clinical data and strong health economic arguments, we will continue to work on our vision to make inhaled sedation the standard of care in ICUs.
Johannes Doll, President and CEO
Please find the full report at: sedanamedical.com
This document has been prepared in a Swedish and English version. In the event of any deviations, the Swedish version shall prevail.
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Sedana Medical is listed on Nasdaq First North Growth Market in Stockholm. The company's Certified Adviser is Erik Penser Bank, +46 8 463 83 00, firstname.lastname@example.org.
About Sedana Medical
Sedana Medical AB (publ) is a pioneer medtech and pharmaceutical company focused on inhaled sedation to improve the patient’s life during and beyond sedation. Through the combined strengths of the medical device Sedaconda ACD and the pharmaceutical Sedaconda (isoflurane), Sedana Medical provides inhaled sedation for mechanically ventilated patients in intensive care.
Sedana Medical has direct sales in Benelux, France, Germany, Great Britain, the Nordic, and Spain. In other parts of Europe as well as in Asia, Australia, Canada, and South- and Central America, the company works with external distributors.
Sedana Medical was founded in 2005, is listed on Nasdaq First North Growth Market (SEDANA) and headquartered in Stockholm, Sweden.