Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sedana Medical AB (FRA:7D2A, Financial) reported its highest Q3 net sales in history, reaching SEK 40 million, marking a 20% year-over-year growth excluding currency effects.
- The company raised its full-year sales guidance to 17% to 20%, up from the previous 14% to 18%, due to strong performance across all regions.
- Enrollment for both Phase III trials in the U.S. is completed, which is expected to significantly reduce cash burn in the coming year.
- Sedana Medical AB (FRA:7D2A) signed an agreement to acquire its main supplier, Innovatif Cekal, which is projected to add 2 percentage points to EBITDA over time.
- The company has a strong market potential in the U.S., estimated at SEK 10 billion to SEK 12 billion, with a favorable product-market fit and a supportive network of key opinion leaders.
Negative Points
- The integration of the European clinical trial into the U.S. submission will delay the timeline by approximately a year and add SEK 20 million to SEK 30 million in additional costs.
- Despite improved EBITDA margins, Sedana Medical AB (FRA:7D2A) remains in negative territory, with a group EBITDA of negative SEK 9 million for Q3 2024.
- The company's cash and cash equivalents decreased significantly from SEK 304 million to SEK 226 million this quarter, raising concerns about cash management.
- France experienced flat sales due to vacancies from sick leave, impacting promotional activities and sales growth.
- The U.S. FDA submission process carries inherent uncertainties, and any delays could impact revenue projections and market entry timing.
Q & A Highlights
Q: Why is the integration of the European trial into the U.S. submission happening now, and when can we expect the headline data from the studies?
A: The integration is a result of ongoing dialogue with the FDA, which recently recommended including the European trial in a pooled analysis with the U.S. trials. This recommendation was unexpected based on previous input. The headline data timeline remains unchanged, and the integration aims to strengthen the submission by adding 300 patients with favorable outcomes.
Q: How challenging is the feasibility work for pooling the European and U.S. trial data, and when will it be completed?
A: The feasibility assessment involves complex data mapping and statistical analysis, particularly for primary and secondary endpoints. This work is ongoing and expected to be completed by spring, determining which endpoints can be pooled effectively.
Q: What is the patent situation post-approval in the U.S., and how does the timeline shift affect it?
A: The patent protection for the device extends into the 2030s, and the timeline shift does not affect market protection or data exclusivity. The delay does not impact the competitive landscape significantly, as entering the market requires a device and clinical trials.
Q: How does the acquisition of Innovatif Cekal impact Sedana Medical strategically and financially?
A: The acquisition provides financial benefits by eliminating supplier margins, adding 2 percentage points to EBITDA. Strategically, it offers control over the supply chain, reducing vulnerability to disruptions and ensuring FDA audit readiness, crucial for the U.S. launch.
Q: With the raised sales guidance, what factors contribute to the confidence in achieving higher growth targets?
A: The confidence stems from a 19% year-to-date growth, exceeding the initial guidance range. Continued strong performance in direct markets like Spain and the U.K., alongside solid growth in Germany, supports the revised guidance of 17% to 20% growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
