Year-end report 2017
Fourth quarter, October – December 2017
- Net sales increased by 45% and amounted to SEK 13,140 T (9,090)
- Profit for the period amounted to SEK 3 947 T (3,735)
- Earnings per share amounted to SEK 0,98 (0.92)
Full Year, January - December 2017
- Net sales increased by 88% and amounted to SEK 35,645 T (19,004)
- Profit for the year amounted to SEK 8 361 T (2,394)
- Earnings per share amounted to SEK 2,07 (0.59)
- Cash at the end of the period amounted to SEK 16,989 T (9,338)
Significant events during the fourth quarter
Market and sales
SyntheticMRs net sales amounted to SEK 13.1 million, an increase of 45 percent on the previous year. The quarter's net sales is the highest since the company started.
A major study from the Cincinnati Children's Hospital Medical Center was published in the American Journal of Neuroradiology (AJNR), where they calculated normative curves of brain tissue in children. A future potential use is to more easily detect anomalies and pathologies in children.
Other significant events
Deloitte annually designates Sweden's fastest growing technology company in the ranking Sweden Technology Fast 50. SyntheticMR was ranked 10th in the 2017 ranking.
Significant events after the fourth quarter
Market and sales
SyntheticMR has received clearance from the FDA regarding its software SyMRI NEURO. Together with the FDA's clearance from August 2017, this means that SyMRI as a whole can now be offered to clinics and hospitals on the US market. SyMRI NEURO is also the first product on the market that includes volume calculation and segmentation of myelin. Quantification of myelin may be useful in, for example, monitoring of patients with neurodegenerative diseases such as multiple sclerosis and dementia.
Other significant events in 2017
Market and sales
SyntheticMR has received clearance from the American authority FDA for the company’s software SyMRI. The clearance concerns SyMRI IMAGE, which means that this product package can now be offered to new segments in hospitals and clinics on the US market.
SyntheticMR has signed an additional agreement regarding Siemens’ Digital Ecosystem. The agreement means that Siemens customers will be able to license a more integrated version of SyMRI than before. Revenues from the agreement is expected to the later part of 2018, when the system has been launched on the market.
SyntheticMR's function REMyDI, automatic volume determination of myelin in the brain, is CE-marked for clinical use in Europe. Being able to quantify myelin enables the physician to follow the myelination process in the brain in children as well as degeneration of myelin associated with neurodegenerative diseases in adults, such as multiple sclerosis (MS) and Parkinson's disease.
Another year of strong growth
I am pleased to summarize a successful quarter and a strong year 2017. We delivered significant sales growth and higher result compared to the corresponding period last year. Sales in the fourth quarter increased to SEK 13.1M, an improvement of 45 percent compared to the same period last year. Total sales in 2017 amounted to SEK 35.6M which represents an increase of 88 percent. While the company displays a growth in sales, the operating profit increased from SEK 3.2M to SEK 11.1M, which means an improvement in the operating margin from 17 to 31 per cent for the whole year of 2017.
We have capitalized development expenditure of SEK 3M during 2017, which is in line with the last two years. These investments are attributable to existing and new products. The depreciations of last year is in parity with our capitalized development expenditure, which means that together they have a minor effect on the cash flow.
SyntheticMR's business model, with sales of licenses through partners, is proven to work well. Net profit after tax have increased by approximately SEK 6M while liquid assets increased by about SEK 7.7M, which means we have a strong cash conversion.
The company's financial development and position confirm the market's increased demand for our products.
Sales of MAGiC through GE Healthcare has developed well in 2017. We are continuously working on developing our joint business and have this last period focused our cooperation on making the MAGiC functionality available in the reading-room where the radiologist views the images. We have now agreed on the terms and the first sales to this customer segment are expected in the latter part of 2018.
We still see some delays in our sales through Philips, and we continue to improve upon our shared processes. We have received a positive response to our efforts from all parties. My assessment is therefore that we will see increased interest from Philips’ customers in 2018.
Last summer we signed an additional agreement with Siemens prior to the launch of their Digital Ecosystem. Our product SyMRI will be available at launch via Siemens’ visualization tool, syngo.via OpenApps, which is part of the Digital Ecosystem. We are working intensely to achieve successful market introduction with initial sales in 2018, with successive revenue growth in the coming years.
A number of interesting studies have been published in well-known journals last year, which show how SyMRI can be applied in practice. One large study shows that the synthetic images in SyMRI have similar quality compared to conventional images, but are acquired in half the scan time. Another study uses the volume measurements in SyMRI to calculate normative curves of brain volume in children. Both studies display the great potential of the quantitative data in SyMRI.
A noticeable trend this last year is that the number of independent studies have increased. The number of independent studies is a good indication that SyMRI is achieving a stronger foothold on the market.
After the end of the year, SyMRI NEURO was cleared by the US authority FDA. The clearance covers our entire product package, including volume calculations and segmentation of myelin, for clinical use on the US market. This means we can now offer clinics in the United States a tool that supports a faster and more reliable diagnosis of their patients.
The aging population and the increased prevalence of age-related diseases is a global challenge. The society needs to increase the quality of healthcare and at the same time reduce the costs. We see two clear trends on the market: a drive toward increased efficiency and a demand for objective decision support with quantitative MRI. SyntheticMR’s products are well positioned to meet these needs by supporting shorter investigation times, more reliable diagnosis and improved treatment follow-up. This way we can contribute to increased efficiency at the clinic and greater patient satisfaction.
I'm looking forward to 2018 where we will continue to show the clinical benefit of SyMRI, deepen our partner collaborations and continue to establish SyMRI on markets around the world.
CEO SyntheticMR AB
For more information please contact Fredrik Jeppsson, CFO and Head of Investor Relations SyntheticMR AB +46 72 303 13 39 or Stefan Tell, CEO SyntheticMR AB, +46 73 373 40 90.
This information is information that SyntheticMR AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, on February 21st 2018.