Interim report 2 (2016-05-01 – 2016-10-31)

IN SHORT

• For the second quarter, net sales amounted to 890 (610) TSEK, gross margin to 47 (37) % and operating result before depreciation to -1 447 (-1 744). The order value of planned deliveries amounted to 790 TSEK on the day of the report.
• Production has now moved to serial production, which has resulted in significantly increased production capacity and secured availability of motorized HoloMonitor units.
• Together with Malmö University and others the Company was recently awarded a €2.1 million EU grant for the development of a new generation of clinical methods to diagnose cancer.
• Since January 2016, 13 scientific articles with HoloMonitor-based results have been published, of which five were published during August – October.
• Since August additional HoloMonitor units have been delivered to University of Aberdeen, University of Bordeaux (2 units), China (2 units) and the Czech Republic.

CEO COMMENTARY

Centers of Excellence

The agreements we have signed with some of the finest cancer research institutions in the world aim to establish Centers of Excellence. Scientific excellence is achieved by exceptional research. Yet unpublished research results by these independent institutions show that Holo­Monitor provides both better and more detailed information than conventional methods. This newly won level of detail has for example resulted in scientific discoveries and insights which strengthen the notion that chemotherapy can trigger resistant cancer to become even more aggressive and difficult to treat.

Through the same selection process as bacteria develop resistance to antibiotics, cancer cells develop resistance to chemotherapy drugs. When chemotherapy fails to kill all cancer cells, the resistant cancer cells are singled out. Without competition from the non-resistant cells, the resistant cells are then given free rein to form tumors which are more difficult to treat. In the article “Cancer multidrug resistance” this frightening phenomenon is described in more detail.

Serial production

The newly won level of detail is made possible by HoloMonitor’s ability to operate inside the incubator where cells are cultured. The hot and soaking humidity inside an incubator has been a challenge. However, after extensive field-tests the motorized HoloMonitor M4.5 has also been successfully moved to serial production. This now gives us sufficient production capacity to reach our revised goal of having 300 HoloMonitor instruments in operation by 2018.

Cell analysis apps

In contrast to conventional methods, HoloMonitor measures several cell characteristics simultaneously by recording and computer processing time-lapse movies. These movies contain an enormous amount of information about the cells, which makes it possible to create a growing number of software application (apps) to measure various characteristics.

Strengthening the organization

The company organization has therefore mainly been strengthened to develop and market software applications. This to increase instrument sales, but also to create a significant aftermarket. Additional resources are now made available to the HoloMonitor M5 development, as HoloMonitor M4.5 now transition from product development to product maintenance and external manufacturing.

EU grant

According to Sweden’s innovation agency VINNOVA, Horizon 2020 is “EU’s program to transform scientific breakthroughs into innovative products and services which may lead to new business opportunities, jobs and which may improve people’s lives”. Together with Malmö University and others we were recently awarded a €2.1 million Horizon 2020 grant. The grant funds the development of a new generation of clinical methods to diagnose cancer. As Horizon 2020 grants aim to create commercial products, development projects funded by EU are required to include a commercialization plan. Besides providing HoloMonitor technology, it is the Company's explicit role and right in the project is to commercialize the results on commercial terms. For additional information regarding the project see  www.phiab.se/centers/malmoe.

On behalf of the Board of Directors
Peter Egelberg, CEO