Observe Medical ASA: Interim report second quarter and first half year 2020

Oslo, 18 August 2020 – Observe Medical ASA (OSE: OBSERV) today released its interim report for the second quarter and first half year of 2020.

The company’s initial product, Sippi, a unique and proprietary solution for digital automated urine monitoring in hospitals is in an early stage of commercialization. The company confirms its market estimate potential of 500,000 Sippi® base units and 30 million Sippi® disposable units per year.

“The mission of Observe Medical is to improve the clinical outcome for patients and enable a more efficient care system, with Sippi® system by means of improved urine monitoring. Hourly urine monitoring is the last essential process in the intensive care units at hospitals which is not yet digitized, and we expect to see strong demand for Sippi® in the years to come, driven by the clinical  benefits Sippi® brings to patients and the care system, Björn Larsson, CEO of Observe Medical says.

Observe Medical has been fully operational throughout the Covid-19 pandemic, but reports that national and international travel restrictions, a healthcare system and healthcare providers occupied with handling of the pandemic, provides certain constraints to the launch efforts for Sippi®.

“At the same time, the experience from ICUs during Covid-19 underpins the market potential estimates for Sippi®. We expect ICU capacity to be increased, and we see the requirements for the clinical benefits enabled by automation and efficient operations will increase, Björn Larsson says.

Furthermore, Journal of Hospital Infection recently published an article demonstrating that the patented Sippcoat® technology, significantly reduces microbial biofilm formation in medical devices - a significant risk factor for infection.

“We are excited to see the scientific evidence of the clinical benefits with Sippi® technology. This will certainly further drive and support the Sippi® value proposition,” Björn Larsson says.

Observe Medical announced in June 2020 a fully guaranteed rights issue amounting to NOK 45 million, and the capital raise was successfully concluded in July.

“With the rights issue of NOK 45 million successfully in place, Observe Medical is ready to take advantage of the vast market opportunity for Sippi®. Going forward, we will push ahead when it comes to strengthening our commercial organization. In the Nordics, we will focus on establishing a strong direct sales organization, whereas we in the rest of Europe we are currently further building our network of distributors,” Björn Larsson says.

Observe Medical recently entered into an updated distribution agreement and enhanced partnership with SIM Italia S.r.l. Italy is a important European market with around 7,500 intensive care beds at hospitals and around 450,000 intensive care admissions every year- and Observe Medical commissioned market research suggest a strong growth onwards – accelerated by the Covid-19

Observe Medical’s did not have revenues in the second quarter of 2020 as the company is still in launch stage and some of the sales activities has slowed down due to the Covid-19. The Company’s EBITDA was negative NOK 6.3 million (negative NOK 2.8 million in the same quarter in 2019). The net result in the period ended at negative NOK 10.1 million (negative 4.4 million), as the result was affected by increased operating expenses due to increased headcount and increased other operating expenses as a standalone listed company.

Observe Medical’s revenues in the first half year of 2020 came in at NOK 32,000. The company’s EBITDA was negative NOK 10.7 million (negative NOK 5.5 million in the same quarter in 2019).The net result in the period ended at negative NOK 10.6 million (negative 8.5 million), as the result was affected by increased operating expenses that more than offset the financial income due to exchange rate fluctuation in the period.

Observe Medical is hosting a presentation of the second quarter and first half year of 2020 financial results at Felix Konferansesenter, Aker Brygge, Oslo, Tuesday 18 August at 08.30 CET. The event will be webcasted live on www.observemedical.com – Investor relations and https://channel.royalcast.com/webcast/hegnarmedia/20200818_4/

EBITDA and other alternative performance measures (APMs) are defined and reconciled to the IFRS financial statements as a part of the APM section of the attached quarterly presentation.

For further information, please contact:
Björn Larsson, CEO.

Mobile: +46 76 620 17 25 E-mail: bjorn.larsson@observemedical.com

Per Arne Nygård, CFO
Mobile: +47 411 04 345 E-mail: 
perarne.nygard@observemedical.com

About Observe Medical ASA: Observe Medical develops and markets innovative hospital products that contribute to increased patient safety and a more efficient care system. The company's headquarter is in Oslo and its operations are based out of Sweden. Observe Medical's initial product was Sippi®, the only automated digital urine meter with wireless data transfer to the hospital patient data management systems, and hinders bacterial migration that can lead to urinary infections (Sippcoat®). Sippi® is CE marked and is currently being launched at selected hospitals in Europe

This information is subject to the disclosure requirements pursuant to section 5 -12 of the Norwegian Securities Trading Act.