Interim Report Q1 – January – March, 2022 Redsense Medical AB (publ)

January – March 2022

• Net sales amounted to kSEK 3,127 (685), an increase by 356 percent.
• Operating loss, EBIT amounted to kSEK 2,076 (3,150).
• Result after tax amounted to kSEK -1,549 (-1,489).
• Earnings per share was SEK -0.11(-0.11) before and after dilution.

Significant events during the period

• On March 14, Redsense Medical successfully participated in a virtual briefing about venous needle dislodgement (VND) for US congress together with multiple professional renal organizations and advocacy associations.
• On March 15, Redsense Medical announced that the company had won a standard setting procurement contract in Sweden together with dialysis machine manufacturer Physidia and distributor Nordic Medcom. The tender includes a safety requirement for an external alarm system capable of stopping the blood pump.
• On March 23, Redsense Medical announced that newly issued MHRA Guidance acknowledges the need to monitor for VND and recommends high risk patients to use external alarm devices.

Comment from the CEO

Substantial improvement over last year’s first quarter

A new year, and a repeat good performance for Redsense in line with recent quarters. The Group records net sales of kSEK 3,127 in the first quarter of 2022, vastly outperforming the corresponding quarter last year with a growth of 356 percent. As we then fully felt the impact of the pandemic – as did the operators in healthcare – this result further substantiates that the dialysis market has turned the corner on the time when the pandemic commanded the agenda.

At present, the war in Ukraine is cause of global concern and uncertainty. Although we, naturally, share the concern and follow events as they unfold, our business activities remain largely unaffected. As such, it is gratifying to be able to focus on the business development once again.

Enhanced focus on patient protection

During the period, we presented three interesting pieces of news that all can be read as chapters of the same story, indications of a sentiment that is becoming widespread in the dialysis market: that patient protection matters, and that the time has come to address the issue with capable methods.

In March, we had the opportunity to participate alongside major organizations for kidney patients, advocates, and professionals in a US congress briefing, where the aim was to raise awareness of the serious consequences of venous needle dislodgement. The successful event made it apparent that the entire community involved in dialysis care shares a universal concern with the matter.

The awareness of VND is not limited to the United States, either, as we a few days later could relay that the concerned UK regulatory agency, the MHRA, had updated its guidelines for dialysis care. The updated guide includes specific mention of venous needle dislodgement as a risk factor and emphasizes that the issue is beyond what the hemodialysis machine itself can detect and counter; external alarm devices are needed to ensure reliable monitoring.

Automated stop features stir interest

The third news item is perhaps an even stronger indication that a new way of looking at patient risk is taking hold among stakeholders: Redsense Medical, in tandem with dialysis machine manufacturer Physidia and our distributor Nordic Medcom, were during the period awarded a public procurement contract issued by Region Västra Götaland, a major operator within the Swedish public healthcare system servicing 1.7 million inhabitants. Most notably, the tender included automated stop of the blood flow in an emergency as an explicit requirement.

The significance of this requirement can hardly be overstated. It establishes a new standard for patient safety, as the tender signals that healthcare operators are looking to improve upon merely detecting the issue and relying on the on-site nurse to address it. In a landscape where tenders such as this become the norm, a system without capacity to provide a fully automated response will simply not be competitive. Our success with this bid clearly shows that Redsense is responding proactively to the demand in the market and innovating for the future.

The Clamp progresses as planned

The system that won the Region Västra Götaland contract comprises a Physidia dialysis machine, Redsense’s alarm, and a direct connection between them, which allows the Redsense device to automatically and immediately instruct the machine to stop its blood pump when blood leakage is detected.

With our soon-to-be-released accessory, the Redsense Clamp, we build upon that and take our system’s capacity to the next level; in addition to alarming to blood, the Redsense clamp will also clamp the bloodline to pause the blood flow. The ability to clamp the bloodline empowers the Redsense system to force any machine to a halt, irrespective of whether direct connection is supported or not – and in future tenders requiring an automated stop feature, we will be able to offer that.

During the quarter, the clinical validation of the Clamp has continued in accordance with plans. We are progressing towards the launch across our markets, and we look forward to announcing the next update of our roll-out preparations.

To conclude, I am proud of the team’s efforts and pleased that Redsense is gaining traction with its solutions. Market demand for patient risk mitigation is firm, and we are confident in our positive momentum.