Gradientech: Interim report January–September 2024

Gradientech AB (publ) interim report for Q3 2024 is now available on the company's website www.gradientech.se.

Third quarter 2024

• Net sales amounted to SEK 829 thousand (53).
• Net profit/loss amounted to SEK -13,399 thousand (-10,968).
• Earnings per share before and after dilution were SEK -0.51 (-0.62).
• Cash flow from operating activities amounted to SEK -13,906 thousand (-14,435).
• Cash and cash equivalents amounted to SEK 13,142 thousand (25,873) as of September 30, 2024.
• Equity amounted to SEK 21,699 thousand (40,894) as of September 30, 2024.
• In July Gradientech announced the continued collaboration with Oxford-based Momentum Bioscience Ltd in the ground-breaking project to demonstrate the potential for a next-generation diagnostic workflow for patients with sepsis, together providing the fastest solution to precise phenotypic AST results directly from blood.
• The directed issue of shares to a limited number of existing shareholders, in which the subscription period ended on July 4, 2024, was registered with the Swedish Companies Registration Office in July. As a result of the issue, the number of shares increased by 3,109,849 to a total of 27,070,602 shares and the share capital increased by SEK 310,984.90 to a total of SEK 2,707,060.20. Through the Issue, Gradientech received proceeds of approximately SEK 22.1 million before deduction of issue costs.
• In August Gradientech announced that Dr Nathan A. Ledeboer, specialist within the Froedtert & Medical College of Wisconsin network, joined as new member of the company’s prominent international Scientific Advisory Board.
• Gradientech received in August a Notice of Allowance in Japan for its QuickMIC® cassette, the single-use test device in the QuickMIC® diagnostic system for ultra-rapid antibiotic susceptibility testing (AST).
• In September Gradientech announced a new scientific publication of the QuickMIC® system by Dr. Balmis University General Hospital demonstrating an impressive concordance of 99% between QuickMIC and the reference methods in use.
• In early September, Gradientech started the 510(k) clinical study for the QuickMIC® system. The study, which is conducted at well-renowned hospitals in the US, includes antibiotic susceptibility testing results for gram-negative bacteria, both directly from positive blood cultures as well as from bacterial isolated colonies.

January-September 2024 period

• Net sales amounted to SEK 3,263 thousand (1,574).
• Net profit/loss amounted to SEK -46,954 thousand (-45,868).
• Earnings per share before and after dilution were SEK -1.92 (-2.63).
• Cash flow from operating activities amounted to SEK -43,305 thousand (-45,901).
• In January 2024 Gradientech successfully 1ompleted its pre-clinical testing of the QuickMIC® system in the US. The pre-clinical testing of the QuickMIC system has included about a hundred clinical patient samples and was performed at two reputable US clinical laboratories.
• The rights issue, whose subscription period ended on December 6, 2023, was registered together with the shares from the conversion of the convertible instruments issued in July 2023, with the Swedish Companies Registration Office on three occasions: 3 January 2024, 12 February 2024 and 15 February 2024. As a result of the two issues, the number of shares increased by 6,165,503 to a total of 23,960,753 shares and the share capital increased by SEK 616,550.30 to a total of SEK 2,396,075.30.
• Gradientech announced in the beginning of February that six QuickMIC® abstracts will be presented at the 34th European Congress of Clinical Microbiology & Infectious Diseases (ESCMID Global) in Barcelona, Spain 27-30 April 2024.
• In March 2024 Gradientech announced that its assigned distributor for Sweden, Triolab AB, will start its first commercial evaluation of the QuickMIC® system at the Kalmar County Hospital. Further, Gradientech has started a new prospective and observational QuickMIC® study that will investigate the clinical utility of a new rapid workflow for prediction of optimal antibiotic treatment for patients with urosepsis. The study is conducted in collaboration with Assoc. Prof. Martin Sundqvist at Örebro University Hospital.
• In April 2024 Gradientech announced that AnnaLotta Schiller Vestergren has been appointed as the company’s Chief Commercial Officer and part of the management team. AnnaLotta has extensive experience with international commercial organisations, with nearly 30 years of leading positions in life science and diagnostics.
• In May Gradientech reports having received a notification to Grant Patent Rights in China for its cassette, the single-use test device in the QuickMIC® diagnostic system for ultra-rapid antibiotic susceptibility testing (AST).
• In May Gradientech announced that its distributor Biomedica Medizinprodukte GmbH has installed QuickMIC® at a university hospital in central Eastern Europe, which is now the first customer to implement the QuickMIC® system for ultra-rapid antibiotic susceptibility testing (AST) in clinical routine.
• Data from the successfully completed US pre-clinical evaluation of QuickMIC® at Medical College of Wisconsin and University of North Carolina in USA was presented at the ASM Microbe conference in Atlanta, Georgia, June 13th-17th 2024.

Significant events after the end of the period

• In the beginning of October Gradientech announced a new scientific publication of the QuickMIC® system. The article is published in the top-tier Journal of Clinical Microbiology. The article describes data from the performance evaluation of the QuickMIC system shows that QuickMIC is highly accurate compared to the reference testing method for AST. QuickMIC provides 95.6% agreement with the reference MIC values (Minimum Inhibitory Concentration) and over two times higher precision compared to broth microdilution. The mean analysis time was 3h and 13 min.
• Gradientech announced in early October the exclusive partnership with Hardy Diagnostics for the commercialization of its QuickMIC® system in the United States and Canada. Alongside this partnership, Hardy Diagnostics has decided to invest in Gradientech, becoming one of the company’s largest shareholders. The directed issue of shares was registered with the Swedish Companies Registration Office October 17. As a result of the issue, the Company’s shares increased by 1,796,571 shares to 28,867,173 shares and the share capital with SEK 179,657.10 to a total of SEK 2,886,717.30. Through the Issue, Gradientech received proceeds of approximately SEK 31.4 million before deduction of issue costs.

CEO statement

In October, we announced the news that Hardy Diagnostics and Gradientech have entered into a commercial agreement for the US and Canadian markets, for future distribution of the QuickMIC® system. In addition to a commercial distribution agreement, Hardy Diagnostics has also decided to invest in Gradientech and is today one of our major shareholders. I see it as very positive that we have distributors who are also shareholders of Gradientech, it is a statement of trust in us as a company. Since before, also our distributor in Italy, a.d.a. is one of our major shareholders.

Italy is often stated as Europe's strongest market within our area of clinical microbiology and innovative diagnostics, and I fully agree based on the activity we are seeing. The primary reason is the country's problem with a high incidence of antibiotic resistance, combined with the intensive and dedicated work of a.d.a., our commercial partner in Italy. We are of course proud to have recently received a decision from the first hospital in northern Italy to now implement QuickMIC® in its routine diagnostics.

The U.S. accounts for almost half the world market for products within antibiotic susceptibility testing. The fact that we now have a commercial partner in place before an FDA approval is of course very valuable for us and our future launch in North America. But who are Hardy Diagnostics? The company was founded in the 1980s by microbiologist Jay Hardy, who is still active as President. Hardy Diagnostics is today a well-known player in clinical microbiology with its own production of approximately 2,700 products and more than 10,000 laboratory customers. Their sales is done via direct sales which is supplemented by global distribution. The majority of Hardy Diagnostics' products are currently consumables for manual handling, but today, for example, they also distribute larger systems for bacterial identification and are in addition internally working with instrument development projects. With their long experience in applying to the US Food and Drug Administration (FDA) for product clearances, Hardy Diagnostics will also be a great help in our own application process. Over the past month, we have visited Hardy Diagnostics' management at the head office in Santa Maria, California, and have also had the pleasure of meeting here in Uppsala. Within the coming weeks, a service- and application team from Hardy Diagnostics will also come to Uppsala for education and training on the QuickMIC® system to be able to install and train users for studies and other market preparation activities in the U.S. even before a regulatory clearance in the US.

Hardy Diagnostics has a larger sales team consisting of sales specialists and microbiologists, based across the U.S. to be close to their customers. All their sales staff meet for an annual sales meeting for several days and are introduced to new products. We will attend their next annual meeting in Dallas in January 2025 and kick off the first training of the Hardy Diagnostics’ sales team. In parallel, the clinical studies that form the basis for the FDA application of QuickMIC® are ongoing with testing both at Gradientech and at clinical sites in the U.S.

Sara Thorslund, CEO Gradientech

Uppsala, November 14, 2024

For further information, please contact:

Sara Thorslund, CEO  
sara.thorslund@gradientech.se    
Tel: +46 (0) 18 418 67 00

Urban Adolfsson, CFO
urban.adolfsson@gradientech.se

Ann Charlotte Svensson, IR
ir@gradientech.se