Bioretec Ltd’s Half Year Report 2022 (unaudited): Strong sales growth and RemeOs™ registrations on-going
Bioretec Ltd Company announcement 12 August 2022 at 9.30 a.m. EET
This is a summary of Bioretec Ltd’s half year report 2022. The complete half year report with tables is attached to this release and available at company web pages at https://bioretec.com/investors/investors-in-english/releases
January-June 2022 in brief
- Net sales increased by 35.9% and amounted to EUR 1,422 thousand (1-6/2021: EUR 1,047 thousand).
- Sales margin was EUR 1,018 (778) thousand or 71.6% (74.3%) of net sales, up by 30.8%.
- Net profit (loss) amounted to EUR -1,367 (-2,791) thousand. Net loss for the comparison period was affected by the costs related to the equity funding expenses in June 2021.
- Earnings per share (undiluted) were -0.10 (-0.26) euros.
Key events in January-June 2022
- In January 2022, Bioretec entered into a supply agreement with Meotec GmbH in Germany for magnesium alloy raw materials for bioresorbable RemeOsTM products.
- In May 2022, Bioretec announced having submitted a market authorization request for its bioresorbable RemeOs™ magnesium screw in the U.S. and specified the estimated timing of granting the market authorization. Bioretec estimates the market authorization in the United States to be granted during the second half of 2022.
- In May 2022, Bioretec entered into a distribution agreement with AMI Medical Technologies for bioresorbable Activa products in Israel.
This half-year report is unaudited. Full year 2021 figures are audited.
Key Figures
| EUR 1,000 | H1 2022 | H1 2021 | Change, % | Vuosi 2021 |
| Net sales | 1,422 | 1,047 | 35.9 % | 2,003 |
| Sales margin | 1,018 | 778 | 30.8 % | 1,376 |
| Sales margin, % | 71.6 % | 74.3 % | 68.7 % | |
| EBITDA | -1,196 | -1,157 | 3.4 % | -2,497 |
| EBIT | -1,285 | -1,227 | 4.7 % | -2,666 |
| Net profit (loss) | -1,367 | -2,791 | -51.0 % | -6,017 |
| R&D spend on total costs, % | 30.7 % | 39.0 % | 34.7 % | |
| Equity ratio, % | 52.5 % | 57.3 % | 50.6 % | |
| Cash and cash equivalents | 3,847 | 865 | 344.7 % | 6,621 |
| Earnings per share (undiluted) | -0.10 | -0.26 | -0.43 | |
| Earnings per share (diluted) | -0.07 | -0.15 | -0.31 | |
| Number of shares at the end of the period (undiluted) | 14,111,858 | 10,747,858 | 14,111,858 | |
| Number of shares at the end of the period (diluted) | 19,679,006 | 19,099,006 | 19,679,006 | |
| Personnel (at the end of the period) | 27 | 24 | 12.5 % | 26 |
Timo Lehtonen, Bioretec Oy:n toimitusjohtaja:
” In December 2021, we took the first significant step in the commercialization of the RemeOs™ trauma screws based on bioresorbable magnesium alloy by filing for the CE mark under the new Medical Device Regulation (MDR) for the market authorization in the European Union and we estimate to receive the market authorization in EU during this year. Submitting the De Novo request for market authorization for our new products in the United States was a strategic step for us, as the United States is the world's largest individual market for orthopedic trauma products. Our goal is to be the first to commercialize bioresorbable metal implants in the U.S. market. I believe there is demand in this growth market for our products that contribute to patient healing, safety, and cost-efficiency in clinical care. The De Novo request provides a registration pathway for novel medical device for which there is no predicate device available in the U.S market. Based on the past discussions under the Breakthrough Designation program we estimate to receive the approval of the market authorization in the United States during this year.
Even though our net sales were record high in 2021, the first half of the year brought double digit growth of 36 %, and the positive trend strengthened further in the challenging global conditions where the global orthopedic market is estimated in 2022 to remain largely on the same level as in 2021. According to the estimate, the trauma market is likely to sustain growth in the low 4% range under these conditions. The industry expectation is that the orthopedic market and revenue will stabilize in 2023. The orthopedic market is navigating a time of significant change. It has steadily adapted to the new market realities and societal shifts in the wake of the pandemic while also managing the acceleration of underlying trends like the value-based healthcare and shift to outpatient procedures. We have a golden opportunity to modernize the industry to avoid prominent and costly hardware removals as it prepares for a likely future with fewer resources and more patients.
Our long-term sales and marketing efforts in Asia in particular in China, started to bear fruit. In Europe, the growth was somewhat impeded by staffing shortages of healthcare personnel especially in Scandinavia lowering the number of elective surgeries. The hospital staffing shortages seem to be one of the biggest wildcards globally in orthopedics currently after the pandemic. We currently have sales in approximately 40 countries globally, and we keep identifying new market opportunities all the time. In May, we signed a distribution agreement with AMI Medical Technologies for bioresorbable Activa products in Israel. The world opening after two years of corona restrictions has made it possible for us to again participate in several conferences and trainings for medical personnel and to meet our existing and new customers.
Our sales margin for the first half also grew especially due to increased sales in Asia, while the sales margin percentage of net sales was slightly lower than in the comparison period, because raw material and logistics costs increased. Our supply chains have undergone an unprecedented stress test throughout the pandemic and lately also due to the global political situation. Therefore, we have co-operated closely with our suppliers and signed new supplier agreements such as the one with Meotec GmbH in January to manage this disruption, but the price and availability of raw materials may remain challenging. Logistics and freight costs are another item where we see significant increases. Strong sales and higher sales margin, on the other hand, contributed positively to the EBITDA, which was roughly on the same level as in the first half of 2021.
We are continuing to gather the clinical evidence and experience of our bioresorbable polymer based Activa products and to further expand the indication areas of those products. A post-market clinical follow-up study of bioresorbable intramedullary nail (Activa IM-Nail™) in pediatric diaphyseal forearm fractures continues on schedule, and the first interim results from 76 patients were published in the distinguished scientific journal Children in May with good clinical outcome. An investigator-initiated clinical trial to treat pediatric wrist fractures with Activa IM-Nail™ is also proceeding as planned, with 50% of patients treated at the end of June 2022. Additionally, good clinical results were reported from retrospective clinical studies of using the Activa Pin™ in fixation of children’s wrist fractures and elbow fractures.
I would like to thank the entire Bioretec team for their commitment to active sales and product development in the first half of the year, our distributors for their smooth co-operation, and our customers and investors for their trust in us. Together we will enable better care for orthopedic patients.”
Tampere, 12 August 2022
Board of Directors
Bioretec Ltd
For additional information about the report:
Timo Lehtonen Johanna Salko
toimitusjohtaja talousjohtaja
+358 50 433 8493 +358 40 754 8172
[email protected] [email protected]
Certified advisor:
Nordic Certified Adviser AB, p. +46 70 551 67 29
Information about Bioretec
Bioretec is a globally operating Finnish medical device company that continues to pioneer the application of bioresorbable orthopedic implants. The company has built unique competencies in the biological interface of active implants to enhance bone growth and accelerate fracture healing after orthopedic surgery. The products developed and manufactured by Bioretec are used worldwide in approximately 40 countries.
Bioretec is developing the new RemeOs™ product line based on a magnesium alloy and hybrid composite, introducing a new generation of strong bioresorbable materials for enhanced surgical outcomes. The RemeOs™ implants are resorbed and replaced by bone, which eliminates the need for removal surgery while facilitating fracture healing. The combination has the potential to make titanium implants redundant and help clinics reach their Value-Based Healthcare targets while focusing on value for patients through efficient healthcare. With the U.S. and EU market authorization for the first RemeOs™ product expected in 2022, Bioretec is positioning itself to enter the addressable USD 7 billion global orthopedic trauma market and become a game changer in surgical possibilities.
Better Healing – Better Life. www.bioretec.com
Appendix
Bioretec Ltd half year report January – June 2022 (PDF)