- Innovation and US investment in 2023
- 1Q24 sales back to growth +6% globally, +23%
in the US
Regulatory News:
SpineGuard (FR0011464452 – ALSGD), an innovative company
that deploys its DSG (Dynamic Surgical Guidance) sensing technology
to secure and streamline the placement of bone implants, announced
today its full-year 2023 financial results, for the financial year
ending December 31, 2023, as approved by the Board of Directors on
April 17, 2024, and its first quarter 2024 sales.
Q1 2024 revenue
€ thousands – IFRS (unaudited)
2024
2023
Variance
First Quarter
1,351
1,271
+6.3%
2023 Financial Results
€ thousands – IFRS audited
2023
2022
Revenue
4,313
5,600
Gross Margin
3,379
4,715
Gross margin (% of revenue)
78.3 %
84.2 %
Sales, distribution & marketing
4,065
3,700
Administrative costs
1,800
1,640
Research & Development
1,434
901
Operating profit / (loss)
-3,919
-1,526
Non-recurring operating costs
-57
-135
Financial Result
-225
-427
Income Tax
18
-305
Net profit / (loss)
-4,183
-2,393
EBITDA
-3,544
-888
Pierre Jérôme, co-founder, Chairman and CEO of SpineGuard,
said: “Our return to global sales growth in the first quarter
of 2024 validates the choice we made to strengthen our US
commercial infrastructure and invest in R&D to develop three
new products embedding our DSG sensor: the Threaded PediGuard
adapted to the correction of scoliosis via anterior approach, the
Cannulated PediGuard designed for sacroiliac fusion and the DSG
Drill Bit compatible with power drills and surgical navigation in
the spine. This significant financial effort to address clearly
identified and quickly actionable opportunities, explains the
decrease of our net result in 2023. We are building our financial
strategy around our unique real time surgical guidance technology,
its broad spectrum of applications and its clinical relevance now
backed by more than 100,000 surgeries secured and 34 articles
published in peer-reviewed scientific journals. Our growth will
most likely accelerate in the coming quarters driven by the gradual
introduction of these three new products, the impact of our new
sales organization as well as our fruitful collaboration with Omnia
Medical in the United States and XinRong in China. In parallel, we
are in discussions with other potential strategic partners in
particular to deploy DSG in dental implantology and surgical
robotics.”
2023 EBITDA impacted by the strengthening of US investment
and innovation
As announced in January 2024, 2023 sales amounted to €4,313 K,
down -23% at actual exchange rate and -21% cc compared with
2022.
6,138 DSG units were sold in 2023 vs. 5,934 in 2022,
representing overall growth of +3%, which confirms the global
momentum for DSG technology despite the one-off drop in sales in
the United States, with 2,120 units sold in 2023, representing 35%
of all units sold.
In the United States, full-year 2023 sales fell by -29% to
€2,678 K from €3,785 K in 2022, due to the discontinuation of
WishBone Medical's business, related to financial difficulties of
its own, which had exclusive distribution of SpineGuard products in
US pediatric orthopedic hospitals. Nevertheless, the new US team
put in place by SpineGuard in fiscal 2023 has gradually taken over
direct distribution since November. This is reflected in sales,
which have grown sequentially over the last three quarters (on the
date of publication of this press release).
In the rest of the world, sales rose by +22% for products over
the full year, thanks to strong growth in Europe and Latin America,
and a major order in China from XinRong Medical Group, SpineGuard's
local partner.
Besides, overall sales were negatively impacted by the
discontinuation of royalty income relating to the dental project,
following the decision by the Adin Dental Implant Systems Group to
halt developments, for its own financial reasons, at the end of the
first quarter of 2023.
The gross margin rate for 2023 sets at 78.3%, compared with
84.2% in 2022. This decline is mainly due to the discontinuation of
royalty income from the dental project and the decline in US sales,
where gross margins are higher than in the rest of the world.
Current operating expenses rose by 16.9%, i.e. €1,058 K,
reflecting the financial impact of sales and marketing investments,
particularly in the United States, and ongoing R&D
innovation.
Non-current expenses amounted to €57 K at December 31, 2023,
compared with €135 K at December 31, 2022, and correspond mainly to
restructuring costs in the United States.
Operating profit before non-recurring items therefore came to
-€3,919 K, at December 31, 2023, compared with -€1,526 K at
December 31, 2022.
Net financial expense, at -€225 K, mainly reflects interest
payments on debts contracted with Norgine Venture, Harbert European
Growth and Bpifrance, and net foreign exchange losses of -€70 K,
offsetting income from investments (term accounts) of €45 K, as
well as changes in the derivative liability, with no impact on
cash, of €213 K.
After taking these items into account, net income would be
-€4,183 K in 2023, compared with -€2,393 K in 2022.
Operating working capital stood at €540 K at December 31, 2023,
compared with €452 K at December 31, 2022.
Cash and cash equivalents (shown under current financial assets)
at December 31, 2023 came to €3,893 K, compared with €4,115 K at
December 31, 2022. This change in cash and cash equivalents is
mainly due to:
- Cash flow from operations deteriorated to -€3,545 K in 2023
from -€889 K in 2022, and cash used to finance operations increased
by €2,247 K to -€3,649 K in 2023, versus -€1,402 K in 2022;
- The change in working capital requirements, which deteriorated
by €104 K in 2023, compared with a deterioration of €513 K in 2022,
mainly due to the increase in inventories linked to the reduction
in US sales, and the increase in prices linked to the unfavorable
USD/EURO exchange rate and the impact of the increase in the price
of electronic components;
- Partial repayment of principal on bonds taken out with Norgine
Venture and Harbert European Growth for €761 K;
- Repayment of principal on the Bpifrance loan in the amount of
€49 K;
- Payment of interest on bonds subscribed with Norgine Venture
and Harbert European Growth in the amount of €226 K; and
- Equity contributions following drawdowns on the equity
financing line (redeemable equity warrants – “BSAR”) for a total
gross amount of €3 M and the capital increases carried out in July
and December 2023 for a total gross amount of €2 M.
The Company benefits from a repayable advance under COFACE
contracts (prospecting insurance) for China. No repayments have
been made in respect of the fifth year of amortization of this
advance.
Cash position
On March 31, 2024, cash and cash equivalents were €2.5 M.
The Horizon equity line put in place on May 31, 2023 with Nice
& Green's for an amount of €7.5 M, remains undrawn and
suspended per the information given at the launch of the capital
increase with shareholders' preferential subscription rights of
€1.5 M in December 2023.
Considering these elements as well as its commercial and
financial projections, SpineGuard now has cash-flow horizon until
2026.
Significant progress with technology and regulatory
PediGuard Threaded for anterior surgery
The products specifically modified for a precise reading of the
drilling depth, and for compatibility with the main
instrumentations in the market, are available in the United States
and in the process of approval under the new MDR (Medical Device
Regulation) Directive in Europe.
Modified Cannulated PediGuard for the sacroiliac joint
fusion
Fruit of the collaboration with the US based company Omnia
Medical, the design is now completed and the regulatory phase has
started in order to obtain the clearance by the FDA (Food and Drug
Administration) in the United States.
DSG Universal Drill Bit
The design progressed significantly and SpineGuard is now
actively preparing the regulatory phase in the USA. The new range
of drill bits embedded with the DSG sensor is intended to be
compatible with the main power drills in the orthopedic market,
with the dominant surgical navigation system in the US market and
with the DSG Connect interface. It is the first step of a plan to
rollout commercial “smart” products directly derived from the
research programs for robotic application of DSG.
Clearance of the complete range of PediGuard models in
China
SpineGuard progresses well with the execution of its plan
established in collaboration with its partner XinRong Medical Group
and the Franco-Chinese regulatory consultant VVR. It consists in
the staged clearance of the PediGuard products that have not yet
been approved: Curved PediGuard, “XS” (miniaturized) PediGuard, as
well as the Cannulated and Threaded versions.
Smart DSG Pedicle Screw
The collaborative design with Omnia Medical is ongoing.
SpineGuard will provide the DSG components that will equip the
Screw system of Omnia Medical including the bone breach detector
for securing the implantation. This product will target the
American market.
MDR Migration towards the new MDR regulation
SpineGuard continues the work with the TÜV SÜD European notified
body to obtain its updated certificates in the course of 2024.
Strategic and Technology Development Projects
The SpineGuard R&D team is progressing innovative work. As
part of it, the DSG Robotic application advances the bone resection
topic, and the use of ultrasound to determine the pedicle drilling
entry point. The data collection for Bone Quality Measurement
continues, as well as the exploration of the dental application.
Along these progresses, SpineGuard systematically protects the new
concepts, and as a result the patent portfolio accounts as of today
for 14 families and a total of 75 patents and patent applications
in numerous countries.
Q1 2024 revenue
SpineGuard's consolidated sales were up 6% at actual exchange
rate (7% cc) in Q1 2024 compared with Q1 2023.
In the United States, first quarter 2024 sales rose by 23% in
dollar terms to $1,014 K, vs. $822 K in Q1 2023. This sharp
increase is due to the takeover of Wishbone accounts, a significant
order from Omnia Medical, and the fruits of the labor of the new
U.S. team put in place by SpineGuard last spring.
In the rest of the world, sales rose by +1% for products in the
first quarter of 2024. It should be noted that overall growth in Q1
2024 was affected by the absence of royalties (vs. €92 K in Q1
2023) relating to the dental project in collaboration with the Adin
company, which was discontinued in Q1 2023. This will be the last
quarter to suffer this negative comparative impact.
1,780 DSG units were sold in Q1 2024 vs. 1,621 units in Q1 2023,
representing overall growth of +10%.
706 units were sold in the United States, representing 40% of
all units sold.
SpineGuard Priorities
SpineGuard continues its sales drive, particularly in the United
States, and market rollout of three new products based on DSG
technology (the PediGuard Threaded adapted to scoliosis correction
via anterior approach, the PediGuard Canulated designed for
sacroiliac fusion, and the DSG Universal Drill Bit compatible with
power drills and surgical navigation in the spine) in order to
return to double-digit growth in 2024.
The Company is also working on clearing the entire PediGuard
range in China, as well as establishing strategic partnerships in
the dental implantology and surgical robotic fields.
Next events
General Shareholders Meeting on June 5, 2024 (and June 26, 2024,
if second summoning)
2024 half-year revenue on July 10, 2024
About SpineGuard®
Founded in 2009 in France and the USA by Pierre Jérôme and
Stéphane Bette, SpineGuard is an innovative company deploying its
proprietary radiation-free real time sensing technology DSG®
(Dynamic Surgical Guidance) to secure and streamline the placement
of implants in the skeleton. SpineGuard designs, develops and
markets medical devices embedding its technology. Over 100,000
surgical procedures have been secured worldwide thanks to DSG® and
34 studies published in peer-reviewed scientific journals have
demonstrated the multiple benefits DSG® offers to patients,
surgeons, surgical staff and hospitals. Building on these strong
fundamentals and several strategic partnerships, SpineGuard is
expanding the scope of its DSG® technology to the treatment of
scoliosis via anterior approach, sacroiliac joint fusion, dental
implantology and innovations such as the « smart » pedicle screw
and power drill or surgical robotics. DSG® was co-invented by
Maurice Bourlion, Ph.D., Ciaran Bolger, M.D., Ph.D., and Alain
Vanquaethem, Biomedical Engineer. SpineGuard has engaged in
multiple ESG initiatives.
For further information, visit www.spineguard.com
Disclaimer
The SpineGuard securities may not be offered or sold in the
United States as they have not been and will not be registered
under the Securities Act or any United States state securities
laws, and SpineGuard does not intend to make a public offer of its
securities in the United States. This is an announcement and not a
prospectus, and the information contained herein does and shall not
constitute an offer to sell or the solicitation of an offer to buy,
nor shall there be any sale of the securities referred to herein in
the United States in which such offer, solicitation or sale would
be unlawful prior to registration or exemption from
registration.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240417020893/en/
SpineGuard Pierre Jérôme CEO & Chairman Tel: +33 1 45
18 45 19 p.jerome@spineguard.com SpineGuard Anne-Charlotte
Millard CFO Tel.: +33 1 45 18 45 19 ac.millard@spineguard.com
NewCap Investor Relations & Financial Communication
Mathilde Bohin / Aurélie Manavarere Tel.: +33 1 44 71 94 94
spineguard@newcap.eu
Spineguard (EU:ALSGD)
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