Interim Report Q2 – April – June, 2022 Redsense Medical AB (publ)

April – June 2022

• Net sales amounted to kSEK 1,927 (1,479), an increase by 30.3 percent.
• Operating loss, EBIT amounted to kSEK 2,428 (2,874).
• Result after tax amounted to kSEK -2,137 (-3,221).
• Earnings per share was SEK -0.15 (-0.23) before and after dilution.

January – June 2022

• Net sales amounted to kSEK 5,054 (2,164), an increase by 134 percent.
• Operating loss, EBIT amounted to kSEK 4,503 (6,024).
• Result after tax amounted to kSEK -3,687 (-4,710).
• Earnings per share was SEK -0.26 (-034) before and after dilution.
• Net cash at June 30 was kSEK 16,528 (26,900).
• Cash and cash equivalents amounted to kSEK 6,133 (4,983).
• Cash flow from operating activities amounted to kSEK -1,347 (3,415).

Significant events during the period

• On May 2, the Annual General Meeting resolved to elect Patrik Byhmer, current CEO at the time, as new Chairman of the Board.
• On May 2, Redsense Medical announced the appointment of the experienced global life science leader Pontus Nobréus as new CEO, the date of his commencement to be determined.
• On May 19-22, Redsense Medical exhibited on the 59th ERA Congress in Paris, showcasing and promoting the Redsense Clamp.

Significant events after the end of the period

• On July 6, it was announced that newly appointed CEO Pontus Nobréus will take over the helm as of August 1, 2022. Outgoing CEO Patrik Byhmer takes position as Chairman of the Board as of the same date, while outgoing Chairman Bo Unéus retains his seat on the board with a special focus on business development, investors and international business relationships.

Closing word from the founder and outgoing CEO

Ever since founding Redsense as a born-global startup 16 years ago, I have served as the company’s CEO. It has been an educational journey for me, an intense and fruitful experience for the company, and – as the technology we developed found its way into an ever growing number of treatment sessions – a rewarding opportunity to make a real difference for the hemodialysis community worldwide. We have consolidated our unique market position, and as the launch of the Redsense Clamp approaches, we now stand ready to scale up our international expansion and conquer new markets.

This means that the time is right for a leadership transition. I will continue to devote my time to building Redsense stronger, but as chairman, my focus will naturally shift towards the strategic perspective and the value creation in the longer term. Meanwhile, the day-to-day operations are in the best of hands, as Pontus assumes responsibility for the management of operations and of the team.

I look forward to tackling the future together with Pontus, and I have no doubt that his skills and fresh and eager outlook will revitalize Redsense with the resilience and energy it needs to reach the next step in its development.

Patrik Byhmer

Founder and new Chairman of the Board

Redsense Medical

Redsense welcomes Pontus Nobréus

As of August 1, 2022, Pontus Nobréus took over the helm of Redsense Medical as the company’s newly appointed CEO. He succeeded former CEO and co-founder Patrik Byhmer, who was elected new Chairman of the Board by the general meeting of shareholders in May and subsequently stepped down as CEO to focus on that role.

With a range of leading business positions behind him, most recently as CEO of Pro Health Pharma Sweden AB, Nobréus brings extensive and long-standing experience in diagnostics, medtech, and international business development and sales strategy to Redsense, combined with resolve and determination. Drawing on first-hand experience of the US healthcare market and with an eye for innovation, marketing and growth factors, his priority will be to accelerate Redsense’s ongoing journey of growth.

Comment from the CEO

With 30 percent growth, the gap is closing

In the second quarter, Redsense continues to perform at a higher level than last year, reaching a revenue of kSEK 1,927 (1,479) for 30 percent growth.

Looking at the first six months of the year, net sales amounted to KSEK 5,054, compared with kSEK 2,164 in the corresponding period last year and kSEK 10,202 the year before. In other words: while the first half of 2021 saw a year-on-year decline of 78 percent, the first half of 2022 partially recuperated that downturn, showing year-on-year growth of 134 percent.

In the context of this comparison, it is vital to keep in mind that we recorded a record Q2 2020, marking Redsense’s first net-profit half-year. Then, the impact of the pandemic on the demand and marketing environment in the healthcare sector was yet to appear. By contrast, a year thereafter, in Q2 2021, the market environment was in dire straits and Redsense had throughout the first half of the year felt the weight of the then prevailing standstill in the market and the mortality increase in the patient census.

At present, the global economy in general is burdened by a compounding impact of inflationary pressures, lingering supply chain disruptions, recent circulation of the easily spread BA.5 subvariant of COVID-19 and increased sociopolitical uncertainty emanating from the war in Ukraine, and it is against this backdrop the level of growth must be evaluated. Slow and steady wins the race, the saying goes, and while there is still some way to go to reach the pre-pandemic levels, it is gratifying to see that the gap is closing.

US slows down on inventory buildup, positive signs ahead

In our main market, the United States, an increase of inventory levels at our two distributors over the past year is now resulting in a slowdown in new orders. In addition, various sectors are currently experiencing constraints in the form of labor shortages, where the scarcity of skilled clinical staff and other healthcare workers is particularly prominent. On the flipside, this is prompting major dialysis operators such as DaVita and Fresenius to reiterate their ambition to reduce their cost base and drive growth in the less labor-intensive home dialysis segment. This adds to the demand increase in home hemodialysis arising from the

COVID-19 pandemic and the political initiatives to incentivize at-home treatment in strengthening the relevance of Redsense’s solution, especially in view of the Clamp’s added capability to intervene on its own.

Moreover, we are seeing promising reverberations from the US congress briefing about venous needle dislodgement in March, where Redsense participated alongside various stakeholders in the kidney care community. Medicare payments to service providers include

a potential payment adjustment for new and innovative renal dialysis equipment and supplies, and the key issue here from our perspective is the applicability of this reimbursement model to Redsense’s products. The briefing has sparked a productive discussion of reimbursement, and the sentiment is looking positive thus far.

Outside the United States, momentum is building

Looking to the European market, our long-standing discussions with a leading German dialysis provider, which operates a large chain of dialysis centers in Germany, are entering a more active stage. Following the deepened dialogue, we are planning to advance the evaluation with this provider in September, moving from general product validation to actual clinical testing in two clinics.

The introduction of Redsense Clamp remains central to the company’s outlook. The launch commenced with the team’s presentation of the device at the ERA Congress in Paris during the quarter, where it was met with positive acclaim, and we are now finalizing the details to perform the previously disclosed follow-up evaluation in Toronto, to date delayed by COVID-19 restrictions. All in all, we have a busy and exciting fall in front of us, which will also involve showcasing at several trade shows, meetings with selected stakeholders, and other activities, both in the United States and the EU.

Finally, the quarter also involved a CEO change. It is a great privilege to take the helm of Redsense at this pivotal time, as we are about to introduce a truly unique offering to the market with the Redsense Clamp. I want to thank all members of the team for their hard work in bringing us here. Let me also take this opportunity to pledge my commitment to the ideals on which Redsense was founded – to place patient safety above all – as I make it my dedication to relentlessly work for further growth and commercial success.

I invite you all to join the journey, as it has only just begun. Great opportunity lies before us!

Pontus Nobréus

CEO, Redsense Medical

 Contact information

For more information, please contact: 
Pontus Nobréus
CEO
Telephone: +46 72-171 1264
E-mail: pontus.nobreus@redsensemedical.com

Redsense Medical AB (publ), 556646-4862

This information is information that Redsense Medical AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons set out above, on August 29, 2022, at 08:45 CET. 

About Redsense Medical
Redsense Medical is a corporate group with operations mainly in Europe and the United States. The company has developed the Redsense System, an innovation used for monitoring and alarm in the case of blood leakage in connection with a hemodialysis treatment. Redsense Medical solves one of the most serious remaining safety problems within hemodialysis – to quickly detect Venous Needle Dislodgement and catheter leakage to minimizing blood leakage. The system consists of a patented fiber optic sensor, designed for either venous needle or central venous catheter, which is connected to an alarm unit. From the very start, the development of the company's technology has been based on the demands and safety requirements of healthcare providers in the dialysis sector.