IRRAS AB (PUBL) INTERIM REPORT JANUARY–SEPTEMBER 2018
Preparation for US launch of IRRAflow® ongoing, CE mark catheter re-certification now expected at YE 2018
Third quarter, July–September 2018
- Net revenue totaled SEK 0.0 million (11.3).
- Operating loss (EBIT) amounted to SEK -40.0 million (-7.2).
- Loss after tax totaled SEK -41.8 million (-7.3).
- Earnings per share before and after dilution amounted to SEK -1.75 (-0.42).
Full year to date January–September 2018
- Net revenue totaled SEK 6.0 million (11.3).
- Operating loss (EBIT) amounted to SEK -93.2 million (-37.8).
- Loss after tax totaled SEK -88.8 million (-37.7).
- Earnings per share before and after dilution amounted to SEK -3.74 (-2.19).
Important events during the third quarter
FDA clearance of IRRAflow
IRRAS received 510(k) clearance from the US Food and Drug Administration (FDA) for 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. Preparations for US launch are ongoing and include contacts with key neurosurgery centers in the US and numerous marketing activities that are planned through the end of the year.
Preparation launch in the US
IRRAS has started the sales preparations in the US and recruited four regional managers with significant experience bringing medical devices to large markets.
Important events after the end of the third quarter
New Board member
At an extraordinary general meeting on October 1, Eva Nilsagård was elected as a new Board member. Eva Nilsagård has a long and broad experience in finance and business development of listed companies.
Update on re-certification of catheter CE mark
LNE/G-MED, the company’s certification body expects that the re-certification process of the IRRAflow catheter to be completed by the end of the year.
Expanded management team
As of October 19, IRRAS’s executive management group consists of Kleanthis Xanthopoulos, Fredrik Alpsten, Will Martin, Lance Bolling and Kellie Fontes. The expanded management group also includes Adam Sampson, Dino De Cicco, Dessi Lyakov and Sabina Berlin.
Comments from the President and CEO
During the third quarter of 2018, IRRAS obtained its most significant milestone as a company to date – we were pleased to receive the FDA clearance for our innovative IRRAflow device, which we believe will become the new standard for safe, efficient, and controlled drainage of intracranial fluids. The United States is our most important market and we are hopeful to begin recording sales revenues in the US at year-end 2018.
To ensure we have a successful launch in the US, we have, during the third quarter, significantly enhanced our sales and commercial teams in the US with highly qualified individuals who have advanced numerous medical devices to large markets.
At the beginning of October, we participated, for the first time with an approved product, at the Congress of Neurological Surgeons (CNS) in Houston, Texas. The initial feedback on our product from physicians in the US has been very positive and we look forward to working within these networks to grow recognition and future use of IRRAflow.
While preparing for launch in the US, we also focused substantial efforts on the EU market during the third quarter. The catheter CE mark re-certification has been delayed due to notified body’s backlog and we now expect to receive the certificate by the end of the year and anticipate that sales can be resumed in EU in the beginning of 2019.
Third quarter financial overview
Due to the delay in the re-certification of the CE mark in the EU and pending launch in the US, no sales were reported during the third quarter of 2018.
EBIT for the third quarter of the year was SEK -40.0 million (-7.2). The increased costs are primarily attributable to the planned organizational expansion. The average number of employees in the third quarter of 2018 was 21, compared with 8 in the year-earlier period. The preparations for a launch in the US later this year also contributed to the increased costs. In addition, operating expenses in this period include one-time extra costs of SEK 11 million. The one-time costs mainly refer to extra costs in 2018 due to the delayed CE-mark of the catheter and remaining costs for the two product recalls in 2017.
Our available liquidity as of September 30, 2018 is SEK 190 million, including short- and long-term financial investments.
Building for future growth at IRRAS
At IRRAS, our mission is clear: to change the lives of millions by creating medical products that transform the current treatment of intracranial bleedings. We believe that IRRAflow will ultimately become the new standard of care in this field and we continue to make progress toward accomplishing this mission.
With the recent FDA clearance in the US and the anticipated re-certification of the CE mark in the EU, as well as registration of our product in additional countries, we believe the future of IRRAS is bright.
President and 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 November 8, 2018 at 8:00 a.m. (CET).