18 august 2020, Observe Medical reported their Q2 2020 figures as well as released their interim report for the first half year of 2020. The company continues the execution of their strategy and building a strong distribution network in Europa and own sales force the Nordics.
Observe Medical did not have revenues in the second quarter of 2020 as the company is still in launch stage and some of the sales activities have temporarily slowed down due to the Covid-19 and high pressure on hospitals. The EBITDA came in negative at NOK 6.3 million in Q2 2020, compared to negative NOK 2.8 in the corresponding period in 2019. The net result in the period ended at negative NOK 10.1 million (negative 4.4 million), as the result was affected by increased operating expenses due to increased headcount and increased other operating expenses as a standalone listed company.
The key focus area during the first half of 2020 has been to strengthen the basis for launching Sippi® in Europe, including securing additional financial resources for further acceleration. The company has during the first half year 2020 established systems and infrastructure to support efficient operations as a standalone listed company. This effort entails a higher level of operating expenses both in employee benefit expenses, mainly due to increased headcount, and other operating expenses.
“The mission of Observe Medical is to improve the clinical outcome for patients and enable a more efficient care system, with Sippi® system by means of improved urine monitoring. Hourly urine monitoring is the last essential process in the intensive care units at hospitals which is not yet digitized, and we expect to see strong demand for Sippi® in the years to come, driven by the clinical benefits Sippi® brings to patients and the care system,” says Björn Larsson, CEO of Observe Medical.
The first half of the year has been characterized by the covid-19 outbreak. Despite a slowdown in sales activities and customer development projects, the company operations have not been significantly affected.
Observe Medical has been fully operational throughout the Covid-19 pandemic, but reports that national and international travel restrictions, a healthcare system and healthcare providers occupied with handling of the pandemic, provides certain constraints to the launch efforts for Sippi®.
Björn Larsson, CEO of Observe Medical, further says; “At the same time, the experience from ICUs during Covid-19 underpins the market potential estimates for Sippi®. We expect ICU capacity to be increased, and we see the requirements for the clinical benefits enabled by automation and efficient operations will increase.”
Furthermore, Journal of Hospital Infection recently published an article demonstrating that the patented Sippcoat® technology, significantly reduces microbial biofilm formation in medical devices – a significant risk factor for infection. “We are excited to see the scientific evidence of the clinical benefits with Sippi® technology. This will certainly further drive and support the Sippi® value proposition,” says Björn Larsson, CEO of Observe Medical.
Observe Medical announced in June 2020 a fully guaranteed rights issue amounting to NOK 45 million, and the capital raise was successfully concluded in July.
Larsson further adds “With the rights issue of NOK 45 million successfully in place, Observe Medical is ready to take advantage of the vast market opportunity for Sippi®. Going forward, we will push ahead when it comes to strengthening our commercial organization. In the Nordics, we will focus on establishing a strong direct sales organization, whereas we in the rest of Europe we are currently further building our network of distributors.”
Observe Medical recently entered into an updated distribution agreement and enhanced partnership with SIM Italia S.r.l. Italy is an important European market with around 7,500 intensive care beds at hospitals and around 450,000 intensive care admissions every year- and Observe Medical commissioned market research suggest a strong growth onwards – accelerated by the Covid-19.
