Interim Report Q1 – January – March, 2024 Redsense Medical AB (publ.)

  

January – March 2024

• Net sales amounted to kSEK 1,711 (6,824)

 

• Operating loss, EBIT amounted to kSEK 2,656 (104).

 

• Result after tax amounted to kSEK -2,640 (413).

 

• Earnings per share were SEK -0.19 (0.03).

 

Significant events during the period

• On January 8, Eva Walde was appointed new Chairman of the Board at Redsense Medical AB (publ.)

 

• On January 9, Redsense announced a change in the Nomination Committee for the 2024 Annual General Meeting.

 

• On February 6, the largest owner Seventh Sense Adventures Holdings AB announced the continuation as a long-term investor after the change in ownership, following the passing of Patrik Byhmer.

 

• On February 15, Redsense announced that American Association of Kidney Patients (AAKP) supports the Home Dialysis Risk Prevention Act.

 

• On March 14, Redsense announced that the Home Dialysis Risk Prevention Act was addressed in the House Committee on Ways and Means Hearing.

 

 

Significant events after the period

• On April 24, The Board of Directors in Redsense resolved to carry out a directed share issue of approximately MSEK 9.8.

 

 

Comment from the CEO

Increased end-user sales in the us and well stocked distributor

The home hemodialysis segment in the US is currently our main market where the Redsense alarm system has a unique position being the only FDA cleared blood leakage system for hemodialysis. Home hemodialysis is the fastest growing treatment method driven by improved clinical outcomes, increased convenience, and quality of life for the patient as well as cost effectiveness. Around 12,000 patients in the US are currently treated in home settings with hemodialysis and this modality is supported both by dialysis caregivers and political initiatives. Home hemodialyis treatments are performed in three ways, with partner assistance, solo or nocturnal (during the night). One of the most used home hemodialyis machine requires a Venous Needle Dislodgment (VND) device for solo and nocturnal. In addition, the Redsense alarm is also used for part of the patients dialyzing with a care partner. Since treatment with a care partner is most common, we have opportunities to expand the usage of the Redsense alarm within this segment.

 

Market expansion but US distributor stock levels impact our sales the first quarter

The growth of the home hemodialysis market is clearly reflected in the sales from our distributors to the end-users, i.e. the dialysis providers. During the first quarter of 2024 there was a solid increase in sales versus the same period last year, especially for the alarm system. The uptake in sales of alarm systems is promising for future sensor usage once these alarm systems will be in operation in home hemodialysis settings. Speaking of sensors, in beginning of the second quarter we received an order from one of our US distributors for sensors. Given our US business model and value chain with two distributors supplying the dialysis providers, we experience variations in their order size and frequency. Therefore, our sales may fluctuate between the quarters. Our sales in the first quarter in 2024 was negatively impacted by the stock-keeping levels at our major US distributor. During 2023 we had very strong sales to this distributor which resulted in the distributor being relatively well stocked entering 2024. Net sales for the first quarter 2024 amounted to kSEK 1,711 (6,824) with the main driver being the US market. The US market continues to be the foundation of our business with 98 (98) % of our net sales during the first quarter 2024. Given the positive development of the home hemodialysis segment in the US and the increased demand for Redsense products, we remain convinced that this will be reflected in our sales to our US distributors during the rest of the year.

 

Interest in the Home Dialysis Risk Prevention

The enactment of the Home Dialysis Risk Prevention Act is a possible growth driver and an opportunity to increase market access in the US. If this legislation is implemented, Medicare coverage will follow for a device to monitor and alarm in case of VND. This would be an important incentive for the dialysis providers to expand the usage of the Redsense alarm system for home hemodialysis. Home hemodialysis brings many advantages to enhance patient care and quality of life. This topic was included in a hearing in the House of Representatives in March, in the House Committee on Ways and Means. The title was “Enhancing Access to Care at Home in Rural and Underserved Communities.” Rep. Adrian Smith, who introduced the Home Dialysis Risk Prevention Act, participated in the hearing. He emphasized that lack of adequate Medicare coverage often can create roadblocks to adoption of new technologies that expand safe home access to care. That was the reason he introduced the Home Dialysis Risk Prevention Act to reduce the risk home hemodialysis patients face of serious complications from VND. During the quarter, The American Association of Kidney Patients (AAKP), the largest independent kidney patient-led organization in the US announced the endorsement of the Home Dialysis Risk Prevention Act.

 

Redsense Clamp closer to the market

The Redsense Clamp usability study in Canada is ongoing with full speed and all patients have been recruited. As previously communicated, this study is needed to finalize the CE-mark for the Redsense Clamp. While the study is ongoing, we utilize the time to plan and prepare for the launch this year. We will also take the opportunity to showcase the Redsense Clamp already at the European Renal Association (ERA) in Stockholm in end of May. ERA is the largest annual nephrology conference in Europe.

 

With the Redsense Clamp we have good opportunities to gain new customers as well as open new markets and thereby increase our sales outside the US. Together with the Redsense alarm, we will offer an attractive combo, especially for home hemodialysis settings to enhance patient safety. The initial focus markets for the launch will be Canada, Australia, and selected countries in Europe.

 

Focus ahead on growth opportunities

We look forward to the rest of the year and to continue the execution of our goals for 2024. This includes taking leverage of our strong position in the US home hemodialysis segment to further grow in this area. In addition, the CE mark for the Redsense Clamp and subsequent launch is a prioritized activity. The submission of the 510(k) application to FDA is also on the agenda as well as promotion of the Home Dialysis Risk Prevention Act in the US to pave the way for possible increased market access.

 

The commitment from ShapeQ to increase the investment in Redsense Medical is a sign of strength for which I am happy about. This capital injection will be helpful to realize some of the growth initiatives and thereby accelerate the growth of Redsense Medical.

 

Pontus Nobréus

CEO, Redsense Medical

 

 

This information is information that Redsense Medical AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication, through the agency of the contact person specified above, on May 8, 2024, at 08:30 CET.