Nuwellis, Inc. Announces Third Quarter 2023 Financial Results
November 07 2023 - 8:00AM
Nuwellis, Inc. (Nasdaq: NUWE), a medical technology company
dedicated to transforming the lives of people with fluid overload,
today reported financial results for the third quarter ended
September 30, 2023.
- Revenue of $2.4 million for the
third quarter 2023, increased 16% over the prior quarter and
increased 17% over the prior-year period.
- Therapy utilization, or the number
of circuits per placed console, increased 26% over the prior year,
reflecting continued increases in the number of patients treated
with the Aquadex® therapy.
- By customer category, third quarter
2023 revenue in Heart Failure increased 27% over the same period
last year, Critical Care and Pediatrics increased 16% and 9%,
respectively.
- Despite continuing hospital capital
budget constraints, our installed console base increased. In the
third quarter, we sold 20 consoles, an increase of 11 units vs
prior quarter.
“Our 17% annual revenue growth in the third
quarter was driven by steady progress on our key strategic
initiatives, including leveraging our growing body of clinical
evidence to increase the number of patients treated with the
Aquadex Ultrafiltration System. We believe these efforts drove both
adoption and growth, with a 26% increase in therapy utilization and
continued revenue growth across all customer categories,” said
Nestor Jaramillo, Jr., President and CEO of Nuwellis. “In addition
to the strong sales results, we are very excited with our two
strategic collaborations with SeaStar and DaVita. We congratulate
SeaStar on its recent receipt of an Approvable Letter from the FDA
for its Pediatric SCD device, as to which we have exclusive U.S.
distribution rights. We continue to make progress in the pilot
phase of our Supply and Collaboration Agreement with DaVita. With
focused execution across multiple growth levers, our team is
committed to make Aquadex ultrafiltration therapy the new standard
of care for fluid overload patients resistant to diuretics,”
concluded Mr. Jaramillo.
Third Quarter 2023 Financial
Results
Revenue for the third quarter of 2023 was $2.4
million, a 17% growth over the prior-year period. Results in the
quarter were driven by a 26% increase in circuit sales.
Gross margin was 57.3% for the third quarter of
2023, compared to 61.0% in the prior-year period. The decline in
gross margin was primarily driven by lower console manufacturing
volumes. US disposable product margins are 74.0% which are in-line
with medical technology industry standards.
Selling, general and administrative expenses for
the third quarter of 2023 were $3.4 million, compared to $4.2
million in the prior-year period. The $800,000 decrease was
primarily due to reduced headcount and related compensation
expense.
Third quarter research and development expenses
were $1.1 million, compared to $928 thousand in the third quarter
of 2022, reflecting a modest increase in spend related to the final
phases of the development of our new pediatric dedicated CRRT
device as we approach IDE submission.
Total operating expense of $4.5 million was down
12% year over year and down 26% sequentially; due to cost saving
measures implemented early in Q3.
Net loss for the third quarter of 2023 was $3.4
million, or a loss of $1.81 per share, compared to a net loss of
$3.9 million, or a loss of $36.72 per common share, in the
prior-year period. The decrease in net loss per share is due to an
increase in sales, lower spend, and an increase in weighted average
share count.
At September 30, 2023, the Company had no debt
and cash and cash equivalents of $4.9 million, with approximately
1.9 million common shares outstanding. On October 17, Nuwellis
closed an underwritten public offering with gross proceeds of $2.25
million before deducting underwriting discounts and commissions
related to the offering.
Webcast and Conference Call
InformationThe Company will host a conference call and
webcast at 9:00 AM ET today to discuss its financial results and
provide an update on the company’s performance.
To access the live webcast, please visit the
Investors page of the Nuwellis website at https://ir.nuwellis.com.
Alternatively, you may access the live conference call by dialing
1-833-816-1404 (U.S) or 1-412-317-0497 (international) and using
the conference ID: 10182705. An audio archive of the webcast will
be available following the call on the Investors page at
https://ir.nuwellis.com.
About NuwellisNuwellis,
Inc. (Nasdaq: NUWE) is a medical technology company dedicated
to transforming the lives of patients suffering from fluid overload
through science, collaboration, and innovation. The Company is
focused on commercializing the Aquadex SmartFlow® system for
ultrafiltration therapy. Nuwellis is headquartered
in Minneapolis, Minnesota with a wholly owned subsidiary in
Ireland. For more information visit www.nuwellis.com or visit us on
LinkedIn.
About the Aquadex SmartFlow®
System The Aquadex SmartFlow system delivers
clinically proven therapy using a simple, flexible, and smart
method of removing excess fluid from patients suffering from
hypervolemia (fluid overload). The Aquadex SmartFlow system is
indicated for temporary (up to 8 hours) or extended (longer than 8
hours in patients who require hospitalization) use in adult and
pediatric patients weighing 20 kg. or more whose fluid overload is
unresponsive to medical management, including diuretics. All
treatments must be administered by a health care provider, within
an outpatient or inpatient clinical setting, under physician
prescription, both having received training in extracorporeal
therapies.
Forward-Looking
StatementsCertain statements in this release may be
considered forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including without
limitation, statements regarding the new market opportunities and
anticipated growth in 2023 and beyond. Forward-looking statements
are predictions, projections and other statements about future
events that are based on current expectations and assumptions and,
as a result, are subject to risks and uncertainties. Many factors
could cause actual future events to differ materially from the
forward-looking statements in this release, including, without
limitation, those risks associated with our ability to execute on
our commercialization strategy, the possibility that we may be
unable to raise sufficient funds necessary for our anticipated
operations, our post-market clinical data collection activities,
benefits of our products to patients, our expectations with respect
to product development and commercialization efforts, our ability
to increase market and physician acceptance of our products,
potentially competitive product offerings, intellectual property
protection, and other risks and uncertainties described in our
filings with the SEC. Forward-looking statements speak only as of
the date when made. Nuwellis does not assume any obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
CONTACTS
INVESTORS: Vivian CervantesGilmartin Group
ir@nuwellis.com
|
NUWELLIS, INC. AND SUBSIDIARYCondensed
Consolidated Balance Sheets(In thousands, except share and
per share amounts) |
|
|
|
September 30, 2023 |
|
|
December 31, 2022 |
ASSETS |
|
(unaudited) |
|
|
|
Current
assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
4,930 |
|
$ |
17,737 |
|
Marketable securities |
|
— |
|
|
569 |
|
Accounts receivable |
|
1,425 |
|
|
1,406 |
|
Inventories, net |
|
2,336 |
|
|
2,661 |
|
Other current assets |
|
947 |
|
|
396 |
|
Total current
assets |
|
9,638 |
|
|
22,769 |
|
Property, plant and equipment, net |
|
912 |
|
|
980 |
|
Operating lease right-of-use asset |
|
762 |
|
|
903 |
|
Other assets |
|
120 |
|
|
21 |
|
TOTAL
ASSETS |
$ |
11,432 |
|
$ |
24,673 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
1,707 |
|
$ |
2,245 |
|
Accrued compensation |
|
1,021 |
|
|
2,161 |
|
Current portion of operating lease liability |
|
211 |
|
|
196 |
|
Current portion of finance lease liability |
|
8 |
|
|
28 |
|
Other current liabilities |
|
45 |
|
|
58 |
|
Total current
liabilities |
|
2,992 |
|
|
4,688 |
|
Common stock warrant liability |
|
— |
|
|
6,868 |
|
Operating lease liability |
|
601 |
|
|
760 |
|
Total
liabilities |
|
3,593 |
|
|
12,316 |
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
Series A junior participating
preferred stock as of September 30, 2023 and December 31, 2022, par
value $0.0001 per share; authorized 30,000 shares, none
outstanding |
|
— |
|
|
— |
|
Series F convertible preferred
stock as of both September 30, 2023 and December 31, 2022, par
value $0.0001 per share; authorized 127 shares, issued and
outstanding 127 shares |
|
— |
|
|
— |
|
Series I convertible preferred
stock as of September 30, 2023 and December 31, 2022, par value
$0.0001; authorized 1,049,280, issued and outstanding none and
1,049,280, respectively Preferred stock as of both September 30,
2023 and December 31, 2022, par value$0.0001 per share; authorized
39,969,873 shares, none outstanding |
|
— |
|
|
— |
|
Common stock as of September
30, 2023 and December 31, 2022, par value$0.0001 per share;
authorized 100,000,000 shares, issued and outstanding 1,864,265 and
536,394 shares, respectively |
|
— |
|
|
— |
|
Additional paid-in
capital |
|
289,980 |
|
|
279,736 |
|
Accumulated other
comprehensive income: |
|
|
|
|
|
|
Foreign currency translation adjustment |
|
(24 |
) |
|
(18 |
) |
Unrealized gain on marketable securities |
|
— |
|
|
56 |
|
Accumulated deficit |
|
(282,117 |
) |
|
(267,417 |
) |
Total stockholders’
equity |
|
7,839 |
|
|
12,357 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
11,432 |
|
$ |
24,673 |
|
See notes to the condensed consolidated financial statements. |
|
NUWELLIS, INC. AND SUBSIDIARYCondensed
Consolidated Statements of Operations and Comprehensive
Loss (Unaudited)(In thousands, except per
share amounts) |
|
|
|
Three months endedSeptember
30 |
Nine months endedSeptember
30 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net sales |
$ |
2,412 |
|
$ |
2,065 |
|
$ |
6,313 |
|
$ |
6,204 |
|
Cost of goods sold |
|
1,031 |
|
|
806 |
|
|
2,718 |
|
|
2,780 |
|
Gross profit |
|
1,381 |
|
|
1,259 |
|
|
3,595 |
|
|
3,424 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
3,428 |
|
|
4,251 |
|
|
13,582 |
|
|
12,920 |
|
Research and development |
|
1,117 |
|
|
928 |
|
|
4,050 |
|
|
3,141 |
|
Total operating expenses |
|
4,545 |
|
|
5,179 |
|
|
17,632 |
|
|
16,061 |
|
Loss from operations |
|
(3,164 |
) |
|
(3,920 |
) |
|
(14,037 |
) |
|
(12,637 |
) |
Other income (expense),
net |
|
(204 |
) |
|
52 |
|
|
98 |
|
|
14 |
|
Change in fair value of
warrant liability |
|
— |
|
|
— |
|
|
(755 |
) |
|
— |
|
Loss before income taxes |
|
(3,368 |
) |
|
(3,868 |
) |
|
(14,694 |
) |
|
(12,623 |
) |
Income tax expense |
|
(2 |
) |
|
(2 |
) |
|
(6 |
) |
|
(6 |
) |
Net loss |
$ |
(3,370 |
) |
$ |
(3,870 |
) |
$ |
(14,700 |
) |
$ |
(12,629 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
$ |
(1.81 |
) |
$ |
(36.72 |
) |
$ |
(10.21 |
) |
$ |
(119.85 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted |
|
1,864 |
|
|
105 |
|
|
1,439 |
|
|
105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
$ |
— |
|
$ |
2 |
|
$ |
(6 |
) |
$ |
1 |
|
Total comprehensive
loss |
$ |
(3,370 |
) |
$ |
(3,868 |
) |
$ |
(14,706 |
) |
$ |
(12,628 |
) |
See notes to the condensed consolidated financial statements. |
|
NUWELLIS, INC. AND SUBSIDIARYCondensed
Consolidated Statements of Cash
Flows(Unaudited)(in thousands) |
|
|
|
Nine months endedSeptember
30 |
|
|
2023 |
|
|
2022 |
|
Operating Activities: |
|
|
|
|
|
|
Net loss |
$ |
(14,700 |
) |
$ |
(12,629 |
) |
Adjustments to reconcile net loss to cash flows used in operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
253 |
|
|
301 |
|
Stock-based compensation expense, net |
|
513 |
|
|
697 |
|
Change in fair value of warrant liability |
|
755 |
|
|
— |
|
Net realized gain on marketable securities |
|
(65 |
) |
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
(19 |
) |
|
(350 |
) |
Inventory, net |
|
325 |
|
|
(113 |
) |
Other current assets |
|
(551 |
) |
|
(40 |
) |
Other assets and liabilities |
|
(16 |
) |
|
(142 |
) |
Accounts payable and accrued expenses |
|
(1,678 |
) |
|
254 |
|
Net cash used in operating activities |
|
(15,183 |
) |
|
(12,022 |
) |
|
|
|
|
|
|
|
Investing Activities: |
|
|
|
|
|
|
Proceeds from sale of marketable securities |
|
578 |
|
|
— |
|
Additions to intangible assets |
|
(99 |
) |
|
— |
|
Purchases of property and equipment |
|
(185 |
) |
|
(103 |
) |
Net cash provided by (used in) investing
activities |
|
294 |
|
|
(103 |
) |
|
|
|
|
|
|
|
Financing Activities: |
|
|
|
|
|
|
Proceeds from ATM stock offerings, net |
|
2,108 |
|
|
— |
|
Payments on finance lease liability |
|
(20 |
) |
|
(28 |
) |
Net cash provided by (used in) financing
activities |
|
2,088 |
|
|
(28 |
) |
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
(6 |
) |
|
1 |
|
Net decrease in cash and cash equivalents |
|
(12,807 |
) |
|
(12,152 |
) |
Cash and cash equivalents - beginning of period |
|
17,737 |
|
|
24,205 |
|
Cash and cash equivalents - end of period |
$ |
4,930 |
|
$ |
12,053 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information |
|
|
|
|
|
|
Inventory
transferred to property, plant and equipment |
$ |
— |
|
$ |
37 |
|
Non-cash impact of
conversion of warrants to common stock (see Note 3) |
$ |
6,868 |
|
$ |
— |
|
|
|
|
|
|
|
|
See notes to the condensed consolidated financial statements. |
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