Sequana Medical announces H1 2022 results and provides business update
Sequana Medical NV
17 min read
Sequana Medical NV
PRESS RELEASE REGULATED INFORMATION – INSIDE INFORMATION 8September 2022, 07:00 CET
alfapump® – strong interim data / on track to report primary endpoint data of North American pivotal POSEIDON study in Q4 2022
DSR®– clinical evidence of disease-modifying heart failure drug therapy/preparations ongoing to start US phase 1b/2a MOJAVE study in H1 2023
Total liquidity position of€23.8 million and cash runway into Q3 2023
Conference call with live webcast presentation today at 03:00pm CET / 09:00 am ET
Ghent, Belgium – 8 September 2022 – Sequana Medical NV (Euronext Brussels: SEQUA) (the "Company" or "SequanaMedical"), a pioneer in the treatment of drug-resistant fluid overload in liver disease, heart failure and cancer, today announces its business highlights and financial results for the six-month period ending 30 June 2022 and its outlook for the remainder of the year and beyond.
Ian Crosbie, Chief Executive Officer at Sequana Medical, commented: “We have made important progress with both our liver disease and heart failure programs during this reporting period. Our POSEIDON study for the alfapumpin patients with liver disease continues to report strong interim results,including 70% 12 month survival for the Roll-In cohort, and we look forward to reporting primary endpoint data for the Pivotal cohort by year end. We are excited to see the continued strong clinical evidence of a disease-modifying profile for our DSR program for diuretic-resistant heart failure patients. In addition to no congestion-related re-hospitalizations during their study follow-up, which is remarkable given that typically one in four of these patients is re-admittedwithin a month of discharge, the 75% reduction in predicted 12 month mortality is highly promising for this patient group in need of improved clinical options. The evidence from our proof-of-concept studies show the long-term clinical benefits delivered byShort Term DSR therapy and we look forward to further demonstrating DSR’s potentialin MOJAVE, our upcoming US phase 1b/2amulti-centred, randomized, controlled study with DSR 2.0, our second-generation DSR product.
“Finally, the two highly experienced US medtech executivesthat we have added to our Board bring important expertise as we prepare for US commercialization of the alfapump, and we are well capitalised into Q3 2023 having successfully raised additional finance.”
Operational Highlights – 2022 year to date
POSEIDON – North American pivotal study of alfapump in patients with recurrent and refractory ascites due to liver cirrhosis on track to report top-line data in Q4 2022
Completion of alfapump implantations in Roll-In and Pivotal cohorts.
A preliminary interim analysis1 of patient survival in the Roll-In cohort reported 70% survival at one year post-implantation, comparing favorably to published literature of only 50% survival for refractory ascites patients after one year.2
SAHARA – Phase 2a study of DSR therapy in decompensated heart failure patients reports strong interim data
Interim results from 10 patients treated with our first-generation DSR product (“DSR 1.0”) show safe, rapid and effective decongestion, clear improvements in cardio-renal health and a large and long-lasting reduction in the need for loop diuretic drugs.
Enrollment in SAHARA I3 with DSR 1.0 completed.
Study to be extended to treat a small number of patients with our second-generation DSR product (“DSR 2.0”) to support US IND4 filing.
Strong clinical observations from RED DESERT and SAHARA studies in diuretic-resistant heart failure patients support heart failure disease-modifying profile of DSR therapy
No heart failure congestion-related re-hospitalizations during study follow-up.
Clinical benefits result in a 75% reduction in predicted one-year mortality pre- vs. post-intensive DSR therapy based on the Seattle Heart Failure Model5.
An intensive treatment period of three to four weeks of DSR therapy delivers six to twelve months of important clinical benefits.
Focus on Short Term DSR therapy with proprietary DSR 2.0
As a result of the strong, durable clinical signals observed, the Company will focus the heart failure development program on Short Term DSR with its proprietary DSR 2.0 administered via a peritoneal catheter.
DSR 2.0 is expected to have an improved therapeutic and favourable safety profile.
Preparations for US IND filing continue, including good progress in product development and GLP6 animal studies.
European MDR certification
Medical Device Regulation (MDR) certification received, confirming that the Company’s quality management system (QMS) and alfapump are compliant with the latest regulatory standards required for medical devices in Europe. alfapump was one of the first novel Class III active implantable medical devices to be certified. In 2021, the Company also received Medical Device Single Audit Program (MDSAP) certification, thereby expanding its QMS towards the US and Canada.
Expanding the Board of Directors with seasoned US medtech executives
The Company appointed two highly experienced medtech leaders from the US as independent Non-Executive Directors. Doug Kohrs brings more than 40 years’ experience from his many roles as a founder and executive of leading medical technology companies. Alexandra Clyde brings more than 30 years’ experience and has an exceptional understanding and track record of successfully navigating health economics and reimbursement in the medical device industry.
Erik Amble announced to step down as a member of the Board after the September board meeting but will remain involved as a Board observer in a non-voting capacity. Mr. Amble has contributed tremendously to the Company’s development activities for more than 15 years and is happy to now pass the torch to new expertise to help guide the Company’s commercial readiness activities.
FinancialHighlights
H1 2022
Raised €28.4 million in gross proceeds by means of an equity placement via an accelerated book building offering from a new investor, Partners in Equity V B.V. and existing shareholders.
Total liquidity position of €23.8 million at the end of June 2022 compared to €9.6 million at the end of December 2021.
Post period:
Secured €10 million loan facility with Kreos Capital, a leading growth debt provider for life sciences and healthcare companies. The loan facility is available for drawdown until 30 September 2022 and extends the Company’s cash runway into Q3 2023.
Outlook for the remainder of 2022and beyond
Towards approval of alfapump in North America
Reporting primary endpoint data from POSEIDON Pivotal cohort planned for Q4 2022.
Submission of the Premarket Approval (PMA) to the US FDA expected in H2 2023.
DSR heart failure drug development
Reporting top-line data from SAHARA, using DSR 1.0 and 2.0, expected by year end.
Start of MOJAVE, a phase 1b/2a multi-centre, randomised, controlled study in the US in decompensated heart failure patients using DSR 2.0, following approval of the US IND, expected in H1 2023.
Financial review – Six months ended 30 June 2022
in Thousand Euros
HY 2022
HY 2021
Variance
Revenue
464
23
N.M.
Cost of goods sold
(103)
(4)
N.M.
Gross margin
361
18
N.M.
Sales & Marketing
(1,149)
(1,069)
7%
Clinical
(4,279)
(3,652)
17%
Quality & Regulatory
(1,660)
(1,558)
7%
Supply Chain
(1,478)
(1,107)
34%
Engineering
(1,761)
(1,539)
14%
General & Administration
(3,538)
(2,593)
36%
Other income
217
17
N.M.
Total operating expenses
(13,648)
(11,501)
19%
Earnings before interest and taxes (EBIT)7
(13,287)
(11,483)
16%
Finance income
113
156
(27%)
Finance cost
(1,425)
(434)
N.M.
Total net finance expense
(1,311)
(278)
N.M.
Income tax expense
(257)
(129)
99%
Net loss for the period
(14,855)
(11,890)
25%
Basic Loss Per Share
(0.68)
(0.66)
3%
Cash position* at 30 June
23,802
21,772
9%
N.M.: Not Meaningful (percentage greater than 150%) * Cash position only includes highly liquid cash and cash equivalents.
Condensed Consolidated Income Statement
Revenue
Revenue increased from €0.02 million in H1 2021 to €0.46 million in H1 2022 as a result of resumed commercial activity in Europe as the impact of COVID declines.
Cost of goods sold
Cost of goods sold increased from €0.00 million in H1 2021 to €0.10 million in H1 2022 in line with the increase in revenue.
Operating expenses
Total operating expenses increased from €11.50 million in H1 2021 to €13.65 million in H1 2022 mainly due to i) the preparations of the submissions for marketing approval of the alfapump in the US and Canada, and ii) pre-clinical and clinical development work for Sequana Medical’s proprietary DSR therapy.
Sales and Marketing expenses increased from €1.07 million in H1 2021 to €1.15 million in H1 2022 due to the resumption of European commercial activities.
Clinical expenses increased from €3.65 million in H1 2021 to €4.28 million in H1 2022 mainly as a result of costs related to the North American pivotal POSEIDON study of the alfapump, the SAHARA DSR proof-of-concept study and pre-clinical and clinical development work for the Company’s proprietary DSR therapy.
Quality and Regulatory expenses increased from €1.56 million in H1 2021 to €1.66 million in H1 2022, mainly driven by external advice for the preparation of the submissions for marketing approval of the alfapump in the US and Canada.
Supply chain expenses increased from €1.11 million in H1 2021 to €1.48 million in H1 2022 largely driven by additional staffing for the preparation of the submissions for marketing approval of the alfapump in the US and Canada.
Engineering expenses increased from €1.54 million in H1 2021 to €1.76 million in H1 2022, largely driven by external advice and additional staffing for the preparations of the submissions for marketing approval of the alfapump in the US and Canada.
General and Administration expenses increased from €2.59 million in H1 2021 to €3.54 million in H1 2022 mainly due to costs relating to the equity placement in H1 2022 and additional staffing.
Other income increased from €0.02 million in H1 2021 to €0.22 million in H2 2022 largely driven by recognized income from Belgian Research & Development (R&D) incentives with regard to incurred R&D expenses.
EBIT8
As a result of the above, earnings before interest and taxes (EBIT) evolved from a loss of €11.48 million in H1 2021 to a loss of €13.29 million in H1 2022.
Total net finance expenses
Net finance cost increased from €0.28 million in H1 2021 to €1.31 million in H1 2022, mainly resulting from valuation of the Bootstrap Warrants (a non-cash item) issued at the extraordinary shareholders meeting of 27 May 2022.
Income tax expense
Income tax expense increased from €0.13 million in H1 2021 to €0.26 million in H1 2022 largely due to the increased activities in Switzerland.
Net loss for the period
As a result of the above, the net loss increased from €11.89 million in H1 2021 to €14.86 million in H1 2022.
Basic losses per share (LPS)
Basic losses per share increased from €0.66 in H1 2021 to €0.68 in H1 2022.
Condensed Consolidated Statement of Financial Position
Net debt
Net debt9 at 30 June 2022 improved by €13.63 million compared to 31 December 2021, mainly as a result of the proceeds from the March 2022 equity placement.
Working Capital
Working capital10 at 30 June 2022 increased by €0.22 million compared to 31 December 2021, mainly as a result of an increase in inventory partly compensated by trade payables and accrued liabilities.
Condensed Consolidated Statement of Cash Flows
Net cash outflow from operating activities was €13.66 million in H1 2022 compared to €11.87 million in H1 2021. The higher outflow was mainly driven by higher net loss of the period.
Cash flow from investing activities resulted in a net outflow of €0.44 million in H1 2022, compared to a net outflow of €0.07 million in H1 2021.
Cash flow from financing activities resulted in a net inflow of €28.22 million in H1 2022, mainly as a result of the proceeds from the March 2022 equity placement. In H1 2021, the net inflow of €22.63 million was mainly a result of the February 2021 equity placement.
The Company ended H1 2022 with a total liquidity position of €23.80 million (end 2021: €9.60 million).
Conference Call and Webcast
Sequana Medical will host a conference call with live webcast presentation today at 15:00 CET / 09:00 EST.
Registration conference call (only if you wish to participate in the Q&A): please click here. Once registered, you will receive dial-in numbers and a confirmation code.
The webcast and conference call will be conducted in English and a replay will be available on Sequana Medical’s website shortly after.
H1 2023Financial Calendar
9 February 2023 Publication Full Year Results 2022
25 April 2023 Online publication of Annual Report 2022
Sequana Medical NV is a pioneer in treating drug-resistant fluid overload, a serious and frequent clinical complication in patients with liver disease, heart failure and cancer. Fluid overload is a well-recognized problem in these growing diseases, causing severe problems for the large number of patients for whom current medicines are no longer effective. These patients can have up to 15 liters of extra fluid in their bodies, causing major medical issues including increased mortality, repeated hospitalizations, severe pain, difficult breathing and restricted mobility that severely impacts daily life.
alfapump® and DSR® are Sequana Medical’s proprietary platforms that work with the body to remove this excess fluid, delivering major clinical and quality of life benefits for patients and reducing costs for healthcare systems. Sequana Medical is listed on Euronext Brussels (Ticker: SEQUA.BR) and headquartered in Ghent, Belgium. For further information, please visit www.sequanamedical.com.
Important Regulatory Disclaimers
The alfapump® system is currently not approved in the United States or Canada. In the United States and Canada, the alfapump system is currently under clinical investigation (POSEIDON Study) and is being studied in adult patients with refractory or recurrent ascites due to cirrhosis. For more information regarding the POSEIDON clinical study see www.poseidonstudy.com. DSR® therapy is still in development and it should be noted that any statements regarding safety and efficacy arise from ongoing pre-clinical and clinical investigations which have yet to be completed. DSR therapy is currently not approved for clinical research in the United States or Canada. There is no link between DSR therapy and ongoing investigations with the alfapump system in Europe, the United States or Canada.
Note:alfapump® is a registered trademark. DSR® and alfapump DSR® are registered trademarks in the Benelux, China, the EU, United Kingdom, and Hong Kong.
Forward-looking statements
This press release may contain predictions, estimates or other information that might be considered forward-looking statements. Such forward-looking statements are not guarantees of future performance. These forward-looking statements represent the current judgment of Sequana Medical on what the future holds, and are subject to risks and uncertainties that could cause actual results to differ materially. Sequana Medical expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statements in this press release, except if specifically required to do so by law or regulation. You should not place undue reliance on forward-looking statements, which reflect the opinions of Sequana Medical only as of the date of this press release.
Financial information
The condensed consolidated financial statements have been prepared in accordance with IAS 34, as adopted by the EU. The financial information included in the press release is an extract from the Condensed Consolidated Financial Statements.
Condensed Consolidated Statement of Comprehensive Income
in Thousand Euros (if not stated otherwise)
Half Year ended 30 June
2022
2021
Net loss for the period
(14,855)
(11,890)
Components of other comprehensive income (OCI) items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans
-
-
Items that may be reclassified subsequently to profit or loss:
Currency translation adjustments
(559)
(9)
Total other comprehensive income/(loss)-net of tax
(559)
(9)
Total comprehensive income
(15,415)
(11,899)
Attributable to Sequana Medical shareholders
(15,415)
(11,899)
Condensed Consolidated Statement of Financial Position
in Thousand Euros
As at period ended
30 June 2022
31 December 2021
ASSETS
Property, plant and equipment
2,040
1,268
Financial Assets
88
82
Other non-current assets
584
464
Total non-current assets
2,712
1,815
Trade receivables
96
82
Other receivables and prepaid expenses
1,201
1,069
Inventory
2,885
2,139
Cash and cash equivalents
23,802
9,600
Total current assets
27,983
12,891
Total assets
30,696
14,705
EQUITY AND LIABILITIES
Share capital
2,460
1,925
Share premium
170,324
142,433
Reserves
(3,025)
(2,669)
Loss brought forward
(157,551)
(142,695)
Cumulative translation adjustment
779
220
Total equity
12,988
(787)
Long term financial debts
7,582
7,325
Long term lease debts
756
477
Retirement benefit obligation
665
510
Total non-current liabilities
9,002
8,312
Short term financial debts
-
-
Short term lease debts
318
283
Other current financial liabilities
824
Trade payables and contract liabilities
2,783
2,367
Other payables
1,715
1,925
Accrued liabilities and provisions
3,067
2,605
Total current liabilities
8,706
7,180
Total equity and liabilities
30,696
14,705
Condensed Consolidated Statement of Cash Flows
in Thousand Euros
Half Year ended 30 June
2022
2021
Net loss for the period
(14,855)
(11,890)
Income tax expense
257
129
Financial result
1,184
299
Depreciation
100
52
Change in defined benefit plan
156
73
Share-based compensation
379
350
Changes in trade and other receivables
(146)
(271)
Changes in inventories
(746)
(492)
Changes in trade and other payables/provisions
200
(31)
Taxes paid
(188)
(85)
Cash flow used in operating activities
(13,659)
(11,866)
Investments in tangible fixed assets
(455)
(56)
Investments in financial assets
13
(13)
Cash flow used in investing activities
(442)
(69)
Proceeds from capital increase
28,427
22,768
(Repayments)/Proceeds from leasing debts
(203)
(138)
(Repayments)/Proceeds from financial debts
-
-
Interest paid
-
-
Cash flow from financing activities
28,224
22,630
Net change in cash and cash equivalents
14,124
10,695
Cash and cash equivalents at the beginning of the period
9,600
11,016
Net effect of currency translation on cash and cash equivalents
77
60
Cash and cash equivalents at the end of the period
23,802
21,772
Condensed Consolidated Statement of Changes in Equity
in Thousand Euros
Share capital
Share premium
Reserves
Loss brought forward
Currency translation differences
Total shareholder equity
Balance at 1 January 2021
1,635
119,333
(2,250)
(119,080)
476
113
Net loss for the period
(23,615)
(23,615)
Other comprehensive income
96
(256)
(160)
February 2021 Equity Placement
274
22,226
22,500
Capital increase Share Options
6
265
271
Capital increase convertible loan to shares
10
609
619
Transaction costs for equity instruments
(1,051)
(1,051)
Share-based compensation
536
536
Balance at 31 December 2021
1,925
142,433
(2,669)
(142,695)
220
(787)
Balance at 1 January 2022
1,925
142,433
(2,669)
(142,695)
220
(787)
Net loss for the period
(14,855)
(14,855)
Other comprehensive income
559
559
March 2022 Equity Placement
535
27,885
28,420
Capital increase Share Options
0
7
7
Transaction costs for equity instruments
(735)
(735)
Share-based compensation
379
379
Balance at 30 June 2022
2.460
170,324
(3,025)
(157,551)
779
12,988
1 Date of analysis 25 March 2022, as part of a general safety assessment 2 Biggins et al., Hepatology, Vol. 74, No. 2, 2021, AASLD Practice Guidance; Moreau R et al., Liver International 2004: 24: 457-464 3 SAHARA I: SAHARA study using DSR 1.0 4 IND: Investigational New Drug 5 Predicted one-year survival analysis using Seattle Heart Failure Model of seven patients from RED DESERT and eight patients from SAHARA pre- and post-intensive DSR therapy. Analysis includes physician-assessed data collected post hoc 6 GLP: Good Laboratory Practice 7 EBIT is defined as Revenue less Cost of goods sold and Operating Expenses. 8 EBIT is defined as Revenue less Cost of goods sold and Operating Expenses. 9 Net debt is calculated by adding short-term, long-term financial and lease debt and deducting cash and cash equivalents. 10 The components of working capital are inventories plus trade receivables and other receivables minus trade payables (including contract liabilities) and other payables, and accrued liabilities. 11 EBIT is defined as Revenue less Cost of goods sold and Operating Expenses.
