Year-end report 1 January – 31 December 2022
Year-end report 1 January – 31 December 2022
IMPLEMENTING THE NEW MARKET STRATEGY
Fourth quarter: 1 October – 31 December 2022
• Net sales amounted to SEK 0 million (3.9).
• The operating result totalled SEK -59.6 million (-51.2).
• The result for the period amounted to SEK -63.7 million (-51.1).
• Earnings per share before and after dilution amounted to SEK -2.18 (-1.75).
• Cash flow from operating activities totalled SEK -79.7 million (-89.4).
Full year: 1 January – 31 December 2022
• Net sales amounted to SEK 12.8 million (9.3).
• The operating result totalled SEK -262.2 million (-232.0).
• The result for the year amounted to SEK -268.7 million (-231.4).
• Earnings per share before and after dilution amounted to SEK -9.20 (-8.20).
• Cash flow from operating activities totalled SEK -250.9 million (-249.2).
• As of 31 December 2022, the Company had a total of SEK 72.9 million (347.8) in available funds.
In the fourth quarter of 2022
• Q-linea AB founded a subsidiary in the US in December 2022. Q-linea is thus a group of companies and is submitting consolidated financial statements in accordance with IFRS for the first time in this year-end report, along with the Parent Company’s annual report. This change has also entailed the restatement of previous periods’ financial statements according to IFRS regulations, which are presented in Note 2 under “Accounting policies and notes” below.
• Q-linea was offered an interest-free loan of SEK 100 million by the Company’s principal owner Nexttobe. The aim is to convert the loan to shares at the prevailing share price if Q-linea issues new shares in the future. The loan had not been utilised at year end.
after the end of the period
• Q-linea has signed a distribution partnership for ASTar Instrument and consumables for the UK market with Pro-Lab Diagnostics.
• The Company has received certification according to the new and more comprehensive EU regulation for in-vitro diagnostic medical devices, IVDR.
• Q-linea starts additional testing for US 510(k) application following feedback from the FDA.
• Q-linea presented the updated commercialisation strategy and Nexttobe, Q-lineas majority owner, expand the current loan offering from SEK 100 million to SEK 200 million.
The fourth quarter of the year was truly a quarter of transformation. We are now in the driver’s seat when it comes to our commercialisation strategy, and we are pleased with the high degree of interest in ASTar that we saw over the past year.
When we entered the partnership with Thermo Fisher in 2020, we did so with a great sense of optimism. Our organisations had the same view when it came to the future of infection diagnostics. When Thermo Fisher pivoted and made the strategic choice to focus on its core business, we both saw that this partnership was no longer a good fit for either of our organisations.
We conducted numerous handover activities together with Thermo Fisher during the quarter in order to conclude the distribution agreement. This took a great deal of time since we visited every site to ensure that the handover of customers, potential customers, studies and other evaluations would be as smooth as possible. We completed all of the handovers by the end of the quarter.
Thanks to the interest in ASTar during its initial launch period in Europe, we feel confident about our updated commercialisation strategy. We are expanding our internal sales force in the EU and the US, but we will also work with distributors to expand our reach. We are hiring selectively in Europe in order to strengthen the sales force in selected markets and intend to form subsidiaries in a small number of selected key geographic regions during 2023. We are entering the US with a more focused sales force in our own subsidiary.
The plan is to gain traction in key geographic regions through our own operations and to support this with distributors in other markets. We are being extremely selective about the distributors we want to work with in order to ensure that we are given priority in their product range and that they possess strong market knowledge. After the end of the quarter, we were pleased to announce that we had entered into distribution agreement with Pro-Lab Diagnostics for ASTar in the UK, in line with our new strategy. We will continue to make methodical progress when it comes to finding the best commercialisation solution for each market.
Overall, we see a high degree of interest among the hospitals that had evaluated ASTar, and we have begun work to convert this interest into commercial contracts in 2023.
One thing we learned during the year is that Europe is a more immature market than the US in terms of rapid AST. Hospitals and laboratories are not as accustomed to rapid susceptibility determination, and we therefore believe that thorough health economics studies, more scientific evidence, and comparative studies with other rapid AST systems will be needed for customers to see the differences in the systems.
We are participating in a comparative study that began at the end of the quarter in order to meet this need. The study compares the advantages of three different phenotypic rapid susceptibility determination systems with the current standard of care when it comes to diagnostic performance, workflow adjustment and reduction of the time until optimal antibiotic treatment is administered. A total of 240 patients will be included in the study. Considering the breadth of ASTar’s antibiotic panel and the short time it takes to get a result, we assess that ASTar will perform extremely well in the comparison. Since the study is being conducted by an independent hospital, we are currently unable to provide information about when it is expected to be completed, but we estimate that the results will be presented in the first half of 2023.
Another important piece of news during the quarter was the promise of an interest-free loan of SEK 100 million that we received from our principal owner Nexttobe. This promise reflects our principal owner’s confidence in our work. The intent is to convert the loan, which was offered with no time limit, to shares at the prevailing share price if Q-linea were to issue new shares in the future. This support from our owners is extremely important at this stage.
At the moment, Q-linea is both a development company and a commercial organisation at the same time. We will continue to focus on development, but our development costs and costs for the regulatory activities in Europe and the US will decrease. Meanwhile, these costs are being replaced by commercialisation costs.
The fourth quarter was a time of transformation when we took our development into our own hands. This transformation with the new commercialization strategy will continue into 2023, and I am confident about our future based on the interest we’ve seen in ASTar. However, 2023 is expected to be a year of transformation and sales are realistically likely to remain at a similar level as in 2022, but our goal is to see a clear positive sales trend in 2024.
Uppsala, 15 February 2023, Jonas Jarvius, President
This report has been reviewed by the Company’s auditors. The report has been prepared in a Swedish original and an English translation. In the event of any discrepancies between the two, the Swedish version is to apply.
Q-linea invites investors, analysts and the media to an audiocast and teleconference (in English) today, 16 February 2023 from 1:00 to 2:00 p.m. (CET). President Jonas Jarvius and CFO Anders Lundin will present Q-linea, comment on the year-end report for the 2022 financial year and respond to questions.
To participate via webcast, please visit the following link: https://ir.financialhearings.com/q-linea-q4-2022
There will be an opportunity to ask questions in writing at the webcast.
If you would like to ask questions verbally via conference call, please register at the following link:
You will receive a telephone number and a meeting ID to log into the conference call after registering. There will be an opportunity to ask questions verbally during the conference call.