Year-end report January - December 2021 S2Medical AB (publ)
SUMMARY OF THE INTERIM REPORT
During the fourth quarter, sales in regular wound healing products amounted to MSEK 1.4 (0.1) and increased on a full-year basis by 261% compared with 2020. The Group's Net sales during the quarter amounted to MSEK 1.6 (4.9). Net sales throughout the year amounted to MSEK 7.7 (25.6). During the fourth quarter of the previous year, the Company had increased turnover as a result of sales of medical consumables with the aim of preventing the spread of COVID-19.
DEVELOPMENT WITHIN THE GROUP, OCTOBER – DECEMBER 2021
- Net sales within the Company's regular wound healing products amounted to MSEK 1.4 (0.1)
- Total net sales amounted to MSEK 1.6 (4.9)
- Operating profit amounted to MSEK -6.3 (-5.5)
- Net profit/loss for the period amounted to MSEK -6.5 (-5.5)
- Earnings per share amounted to SEK -0.43 (-0.37)
DEVELOPMENT WITHIN THE GROUP, FULL YEAR JANUARY – DECEMBER 2021
- Net sales within the Company's regular wound healing products amounted to MSEK 4.6 (1.3)
- Total net sales amounted to MSEK 7.7 (25.6)
- Operating profit amounted to MSEK -19.8 (-15.1)
- Net profit/loss for the period amounted to MSEK -20.1 (-15.1)
- Earnings per share amounted to SEK -1.33 (-1.02)
FINANCIAL POSITION
The Company's cash and cash equivalents as of the balance sheet date amounted to MSEK 9.5, compared with MSEK 5.3 at the beginning of the period. Cash flow for the quarter amounted to MSEK +4.2 (+21.3) and to MSEK -15.8 (+9.4) in 2021.
The equity/assets ratio at the end of the period was 49 percent.
SIGNIFICANT EVENTS DURING THE PERIOD 1 OCTOBER – 30 DECEMBER 2021
On October 5, 2021, an exclusive distribution agreement was signed with Arabian Trade House (ATH) for the Saudi Arabian market. The agreement covers S2Medical AB's products in the EPIPROTECT® series, as well as ivaQ®, and entails initial orders totaling approximately SEK 250 000. The minimum volume for maintaining exclusivity for Saudi Arabia is set at MSEK 14 over the next three years. The new agreement is signed after the previous distribution agreement with Saudi Mais Company expired. Arabian Trade House has existed for over 40 years, and currently has more than 500 employees, with several major brands in medical technology, such as Pall, Abbott, BD, and Boston Scientific in its product portfolio.
On October 7, S2Medical AB received full market approval for the products EPIPROTECT® 2117 and Ulcer® in the United Arab Emirates. The approval simplifies the import of the products in the country, and creates increased opportunities to sell in greater volumes. Previously, smaller volumes of the products were imported with special permission from the Ministry of Health and Prevention. Due to the fact orders from customers in the country have increased, a complete registration has been carried out, which will make it easier, above all, for the logistics part of the distribution chain.
On October 28, S2Medical AB received confirmation from the certification body RISE that all deviations identified during the certification audit for ISO13485:2016, which the Company underwent in June, are now closed. On December 6, the Company was notified that a further independent review of the certification audit took place without deviations, and the certificate has thereby been issued. Certification according to ISO13485:2016 is a requirement for market approval in a number of different markets, which means that the Company can more easily register its products in countries outside the EU following the approved certification.
On October 29, S2Medical AB raised loan financing totaling MSEK 10. The term of the loan is until December 31, 2022, and is taken out with a set-up fee of 5.00% and a monthly interest rate of 1.00% (until the end of March 2022) and 1.50% (up to and including the end of December 2022). The Company has the possibility to repay the loans at any time without additional costs.
On October 29, the wholly owned subsidiary Curenc AB filed a patent application for a new group of peptides. The research group that S2Medical collaborated with in this project made great progress during the spring of 2021, which has now led to the discovery of a completely new group of peptides. The research group's tests of this peptide show that it is not only several times cheaper, but also more effective against bacteria than its predecessor. The peptide group is based on more than 15 years of research, and is the biggest breakthrough for the research group. The research group’s results have shown that the peptide has a powerful effect on bacteria without being combined with other preparations, but, like its predecessor, has a very strong synergistic effect on antibiotics, which enables both the use of a much lower dose of antibiotics with a sustained effect, but also for older generations of antibiotics, which no longer work, to be able to be used again to fight infections. The technology contains several different unique aspects, such as that bacteria do not seem to be able to develop resistance to the peptide, at the same time as the molecule is stable and does not break down as quickly in the body, and therefore has a more long-lasting effect. This allows the peptide to be used to prevent infections without any known risk of developing resistance.
On November 25, S2Medical AB signed an extension of the existing framework agreement with Region Halland for the delivery of wound healing materials. The existing agreement runs until the end of March 2022, but contains an extension option that has now been activated. With the extension, the agreement will run until the end of March 2023.
On December 3, S2Medical AB was informed that the Company had won a procurement of EPIPROTECT® in five Swedish regions, which together call themselves Femklövern. Femklövern consists of Region Uppsala, Region Dalarna, Region Örebro County, Region Västmanland and Region Södermanland. S2Medical already has a supplementary procurement that extends until February 28, 2022 but has now been allocated a spot in the regular procurement that takes effect on March 1, 2022 and is valid until February 29, 2024. The regions have jointly estimated the entire value of Epiprotect in the procurement at MSEK 13.
On December 30, an Extraordinary General Meeting was held in Linköping, where Miles Wright, Fredrik Skog, Chadi Asaad, Patrick Sheehan and Mårten Skog were elected to join the Board of Directors until the next Annual General Meeting. Fredrik Skog was elected Chair of the Board.
SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD
On February 16, S2Medical AB received confirmation from the Saudi authorities that the products in the new Epiprotect series are registered and approved for sale as class IIb in the country. Products in the Epiprotect series have been registered in the country previously, however, in line with the new classification announced by the Company in mid-2021, a new registration has now been completed. The company will make an investment in Saudi Arabia that will be initiated in 2022 and includes, among other things, that its own personnel will assist sales staff from the company's new distributor in the country, Arabian Trade House. As such, the registration is of strategic importance in order to increase the credibility of the company's products, as well as to ensure the products' availability on the market over the coming years. Saudi Arabia is one of the largest and most important markets in the region, and is expected to account for a significant part of the company's expansion in the region in the years to come.
This disclosure contains information that S2Medical AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014) and the Swedish Securities Markets Act (2007:528). The information was submitted for publication, through the agency of the contact person, on 18-02-2022 09:00 CET.
Contact Details
Petter Sivlér – CEO, S2Medical AB (publ)
Telephone: +46 (0)8-70 000 50
E-mail: petter.sivler@s2m.se
Certified Adviser
Vator Securities AB
Telephone +46 (0)8-580 065 99
Website: www.vatorsec.se
E-mail: ca@vatorsec.se
About S2Medical
S2Medical AB (publ) is a medical technology company that develops and sells innovative wound healing products for the entire wound healing process, with a focus on burns and chronic wounds. The company has developed eiratex®, a new cellulose-based material for healing severe burns and chronic wounds. The material heals wounds effectively and thereby reduces both suffering for patients and costs for health care.
Share's ticker: S2M
Share's ISIN-code: SE0011725084
To read the complete year-end report, visit https://www.s2m.se/sv/finansiella-rapporter