BrainCool AB (publ) - Financial Report for Q2 2024

Group
The period in brief

Jon Berg, CEO comments

BrainCool has continued to develop its operations in the second quarter in a positive way. The various measures to strengthen BrainCool´s long-term development are proceeding according to plan.

We delivered 30 BrainCool™ Systems during the second quarter. This resulted in an increase by sales of 42 per cent* equal to SEK 10,45 million including deliveries of consumables.

In the second quarter BrainCool also announced an expanded cooperation with ZOLL® by signing a distribution agreement for the marketing and sale of BrainCool™ System on the Japanese market. At the same time BrainCool received a minimum order of 90 systems with a value of SEK 20 million to be delivered after the approval of the BrainCool™ System in Japan. The approval process is currently proceeding according to plan. 

BrainCool™ System was granted market approval in Thailand in April. This means that ZOLL® can now market and sell the BrainCool ™ System in Thailand.

The cost reduction program, primarily focusing on improving margins on consumables, is progressing according to plan. The automation process was half way complete by the end of the second quarter as 50 per cent of the process of glueing pads has been transformed to automated glueing. The automation process will be in place before the end of the year, which will reduce the cost per produced pad significantly with full effect during 2025.

We are also focusing on trimming overall costs which requires one-off charges. A reduction in the US organization incurred a one-off charge of SEK 2 million in the second quarter. The saving will be around SEK 4 million on an annual basis. Our long-term plan is to close the US office as the distribution agreement with ZOLL® continues and the need for our own staff in the US decreases.

We have established a new subsidiary, BeneChill AB, in order to have a more efficient organization in the long term by moving all RhinoChill operations to BeneChill AB. IQool Technologies AB is responsible for the operations of the BrainCool™ System and CoolPrevent manages the operations of the Cooral® System. BrainCool AB will manage overhead functions such as administration and finance. This reorganization will take place next year.

Medtech companies are subject to various audits of their operations, quality systems and products. Every third year there is a larger certification audit conducted by the German notified body TÜV SÜD. This was performed during the second quarter with no deviation. The audit confirmed that our CE-marked medical devices meet approved safety and performance requirements as well as component-level specifications to finished products at all times.

BrainCool´s two important clinical studies - COTTIS 2 and PRINCESS 2 - have now enrolled patients which marks two important milestones for the company. In early July we announced that the first patient in the pivotal COTTIS 2 study had been enrolled and treated with RhinoChill® System and BrainCool™ System during a thrombectomy treatment. In late March, the PRINCESS 2 study enrolled its first patient under the leadership of Karolinska Institutet/University Hospital. The study uses RhinoChill® System for treating patients who have suffered sudden cardiac arrest.

I would like to take the opportunity to thank all the shareholders for demonstrating their confidence in BrainCool in connection with the rights issue in May. The rights issue was oversubscribed by more than 170 per cent and strengthened the company´s cash position by SEK 86 million before transaction costs. BrainCool´s management is fully dedicated to fulfill the expectations and intend on making BrainCool a leading global player within medical cooling.

*compared to same quarter last year