2020-05-26 Regulatory

NeoDynamics AB (publ) First Quarter 2020

Somewhat higher development cost, but mainly in line

First Quarter 2020

  • There were no sales in the period.
  • Revenue amounted to SEK 6.929 m (5.420 m) incl. capitalized costs of SEK 6.3030 m (5.418 m)
  • Loss after tax amounted to SEK -7.235 m (-4.134 m)
  • Loss per share amounted to SEK -0.41 (-0.27)
  • The solvency ratio was 78 per cent

Significant events during the quarter

  • The Extraordinary General Meeting on January 28, 2020 resolved on a rights issue of 15,303,520 shares, each share entitling to subscribe for a new share for SEK 3. The issue was oversubscribed and a large number of new shareholders were added. The Extraordinary General Meeting also resolved to change the conversion price per share for the Company's convertibles from SEK 4 to SEK 3, and authorized the Board to issue shares with or without preference for existing shareholders until the Annual General Meeting.
  • The company received notice from the Chinese patent authority about the patent granted for biopsy instruments, which is an important component of the NeoNavia® biopsy system.
  • An abstract from a clinical breast study conducted at the New Karolinska Hospital was approved for presentation at the American Breast Radiology, Congress Society of Breast Imagings (SBI) meeting in April in the United States. The congress was canceled due to the global pandemic, but the presentation of the study is planned to be carried out at a later date.
  • The impact of the Corona pandemic has been relatively limited so far. International scientific meetings where the company should have had the chance to meet customers have been canceled. The pandemic has also caused minor delays in production and material supply, which has resulted in the company's inventory of launch products not coming into place until September. The sales process at key clinics will be commencing before that.

Significant events after period-end

  • As a consequence of restrictions due to the pandemic, the company did not receive payment of approximately SEK 7.7 million for subscribed convertibles when the convertible bond issue, decided in the second half of 2019, was registered in March 2020. The investor instead subscribed for shares in a directed share issue with subscription price 3 SEK decided in April under mandate from the Extraordinary General Meeting.
  • In April, the Board of Directors decided to convert all outstanding convertibles into shares.
  • Following the resolutions on a directed issue and conversion, the share capital will, after the forthcoming registration of the directed issue and conversion, amount to SEK 3,600,695.10 divided into 36,006,951 shares.

CEO´s comments

NeoNavia closer to launch

As planned, NeoDynamics started the year by completing the development of the biopsy system NeoNavia. For the second half of the year, focus will shift to the launch of NeoNavia for use in breast cancer diagnostics.

The outbreak of covid-19 has negatively affected NeoDynamics alike many other companies, mainly by complicating the logistics of production, making visits to hospitals impossible and by delaying our ongoing clinical trials. Despite the prevailing situation, we have a clear advantage of having a very solid launch and sales strategy which is based on long-term contacts with study and reference clinics.

The most obvious consequence of the Corona pandemic is a minor delay in the production of our biopsy needles. We have now rectified this and currently assess that delivery of products will be possible straight after summer. In conjunction with the delay, the development costs have been somewhat higher than expected.

The second consequence is that studies conducted in Europe are delayed since there are fewer breast cancer patients in hospitals as clinics have been forced to prioritize resources and postpone planned studies. We are currently seeing a brightening with for example the British healthcare system, NHS, recently stating that cancer diagnostics and care should reopen at the end of June. The Swedish authorities followed suit with a similar message. An adequate diagnosis early in the course of the disease is commonly believed to save lives. Therefore, the cancer area is a priority when covid-19 closed activities are reopened.

Unlike studies in drug development, our clinical studies with NeoNavia are not necessary for the launch of the product. They are however important for building relationships and demonstrating the company's seriosity, as well as for creating customer knowledge and experience on how NeoNavia can be used in clinical practice.

Work on our US regulatory application is progressing, and the application will be submitted during the fall. As the US launch gets closer, work on the Chinese application is starting to take shape, and an FDA approval is likely to be a door opener with the Chinese regulatory authority.

As earlier mentioned, NeoDynamics is in very active dialogue with many clinics to prepare for the launch of NeoNavia in Europe during the fall. Despite not being able to visit them during the pandemic, we have several reference and training centers in place. These will serve as support for clinics that start using NeoNavia for the first time when the commercial product is launched. These reference clinics are already building up their knowledge about the product through participation in our study program. To become a reference center, they naturally also need our new biopsy system, which is why we initially will prioritize sales and deliveries to these clinics.

The financial position was strengthened during the quarter through a successful share issue raising SEK 45.9 million before issue costs. Since the issue was oversubscribed, the company did not need to call on the underwriters. We also increased the number of shareholders in connection with the share issue, which together with the oversubscription indicates a growing interest in the company.

We continue our work to commercialize the NeoNavia biopsy system and on our long-term objective to improve the diagnosis and treatment of breast cancer and other forms of cancer.

CEO Anna Eriksrud

For further information about NeoDynamics, please contact:                         
Anna Eriksrud, CEO NeoDynamics AB (publ), telephone: +46 708 444 966, e-mail: anna.eriksrud@neodynamics.com, or
Jörgen Vrenning, CFO/IR NeoDynamics AB (publ), Telephone: +46 708 519 648, email: jorgen.vrenning@neodynamics.com

This press release contains information that NeoDynamics AB (publ) is obligated to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication through the agency of the contact person set out above on May 26, 2020.

About NeoDynamics

NeoDynamics AB (publ) is a Swedish Medical Technology Company dedicated to advancing diagnosis and care of breast cancer. The company has an innovative biopsy system, NeoNavia®. The precision biopsy system is built on a patented micro-pulse technology, based on research at the Karolinska Institutet in Sweden. The system is designed to offer clinicians and patients accurate lesion targeting and high tissue yield for correct diagnosis and individualized treatment. NeoNavia® is evaluated at leading clinics in UK, Germany and Sweden. A commercial launch is expected in 2020.

About NeoNavia

NeoNavia is the brand name for the entire biopsy system intended to be used under ultrasound guidance. NeoNavia consists of a base unit, a handheld driver and three different types of biopsy needles. Each needle type is driven by the micro-pulses enabling high precision and control when inserting and positioning the biopsy needle in a suspicious lesion. The system is designed to offer accurate lesion targeting and high tissue yield for correct diagnosis and individualized treatment.

About the micro-pulse technology

The patented micro-pulse technology is based on a pneumatically driven mechanism that enables high precision and control when inserting and positioning the biopsy needle, independent of tissue type. The pneumatic driver that generates micro-pulses is placed in a handheld instrument. With power from the base-unit, the driver accelerates the needle with great control even over a short distance, enabling its distinct stepwise insertion without the risk of destroying surrounding tissue. This facilitates ease of access and flexibility in sampling, even in very small lesions in delicate and difficult locations.