IRRAS AB (Publ) INTERIM FINANCIAL REPORT JANUARY – JUNE 2018

Preparation for US launch ongoing, still waiting for updated catheter CE-mark

Second quarter, April - June 2018

• Net revenue totaled SEK 0.1 (0.0) million.
  
• Operating loss (EBIT) totaled SEK -32.1 (-19.1) million.
  
• The result after taxes totaled SEK -29.1 (-18.9) million.
  
• Result per share before and after dilution was SEK -1.23 (-1.10).

Period January - June 2018

• Net revenue totaled SEK 6.0 (0.0) million.
  
• Operating loss (EBIT) totaled SEK -53.2 (-30.6) million.
  
• The result after taxes totaled SEK -47.0 (-30.4) million.
  
• Result per share before and after dilution was SEK -1.99 (-1.77).

Important events during the quarter
Updated ISO and CE certificates for IRRAflow®, valid through 2021
In May 2018, IRRAS received an updated ISO 13485:2016 certificate and updated CE approvals for the control unit and the tube set in the IRRAflow system. These are valid through 2021. IRRAS expects to receive an updated CE approval also for the catheter in the near future, but as a result of the pending CE mark for the catheter, IRRAS was not able to sell any IRRAflow systems in Europe during the quarter.

Transition of Scientific founder Dr. Panotopoulos to advisory role
In June, the company’s scientific founder, Dr. Christos Panotopoulos, was appointed Special Advisor and member of the IRRAS Clinical Advisory Board transition from his prior role as Chief Scientific Officer and member of the company’s management group.

Annual shareholders’ meeting re-elected full Board and approved employee incentive program 
At the annual shareholders’ meeting on June 1, 2018 Anders P. Wiklund, Kleanthis G. Xanthopoulos, Ph.D., Marios Fotiadis, Saeid Esmaeilzadeh, Ph.D., and Anita Tollstadius were re-elected as members of the Board of Directors. Anders P. Wiklund was re-elected Chairman of the Board. In addition, the Board’s proposal for an incentive program for the employees of the company was approved.

Important events after the end of the quarter
FDA clearance of IRRAflow
In July, IRRAS received 510(k) clearance from the US Food and Drug Administration (FDA) for US registration of the company’s IRRAflow system and consumable products. The FDA decision means that the company now has the right to market and sell IRRAflow in the US. This allows IRRAS to move on to clinical validations in routine surgery and develop key reference centers.

Comments from the President and CEO

 IRRAS is pleased with the advancements made in the quarter and during the summer, highlighted by the FDA clearance for IRRAflow, and the updated ISO and CE certifications. Once we also receive an updated CE approval for the catheter the company will re-commence product sales in the EU.

The FDA clearance is a major milestone for the company - it has opened the door for our next phase in the US – to allow selected clinics to generate experience and establish the product clinically. It will also facilitate the recruitment of qualified employees in the US and accelerate the registration process in several new important markets. All told, this progress during the recent quarter underscore IRRAS’ mission to become a leading commercial-stage medical device company transforming the treatment of intracranial bleedings around the globe.

Sale and earnings

Due to the delayed CE mark for the catheter, IRRAS did not record any sales in the second quarter. IRRAS anticipates that the lack of this approval, which is the last remaining CE mark of the IRRAflow system, will also impact product sales in the third quarter. Currently, IRRAS is hopeful to receive the last CE mark in the very near future.

EBIT for the second quarter of 2018 totaled SEK -32.1 million (-19.1). The increased expenses are primarily attributable to the increase in headcounts with respect to marketing and sales, development, and quality and regulatory control. Preparations for a US launch later in the year, following the FDA clearance, have also contributed to increased planned expenses.

Our liquidity as of June 30, 2018 in cash and cash equivalents is SEK 217 million,

Building for IRRAS’ Future Growth

IRRAS made great advances in our efforts to build a global medical technology company in the second quarter. Due to the expansion of IRRAflow in the largest market in the world, the United States, IRRAS has added 3 new hires in key functional areas such as commercial and sales, increasing the headcount to 19 employees in Sweden, the US and Germany.

The second quarter of 2018 demonstrated IRRAS’ ability to execute well on our strategic goals. Looking ahead, we remain very hopeful to achieve new significant milestones. With a clear regulatory path in the EU, US and a global ongoing plan for registration to many countries around the world, we are excited about IRRAS’ future.  

President CEO Kleanthis G. Xanthopoulos, Ph.D.

The full interim report is enclosed.

This document is considered information that IRRAS is obliged to disclose pursuant to the EU Market Abuse Regulation. The information was released for public disclosure, through the agency of the contact person above, on August 27, 2018 at 08.00 a.m. (CET).

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