Nuwellis, Inc. Announces Fourth Quarter and Full Year 2023 Financial Results
- Strong financial performance with record revenue and expanding margins.
- Significant growth in pediatric sales and new hospital accounts.
- Introduction of new products and FDA approval for Quelimmune.
- Successful symposium presentation showcasing clinical trials.
- Overcame challenges in the first half of 2023 to achieve revenue growth in the second half.
- Strategic growth initiatives in place for 2024, including key milestones and product launches.
- Decrease in gross margin from 56.9% to 54.4% due to product and sales mix.
- Operating loss of $3.6 million in Q4 2023 compared to $4.5 million in the prior year.
- Net loss attributable to common shareholders increased to $7.9 million in Q4 2023.
- Need to raise capital in 2024 due to operating losses and strategic growth plans.
Insights
The reported increase in revenue for Nuwellis, Inc. indicates a positive trajectory, with a 9% increase in quarterly revenue and a 4% increase in annual revenue. This suggests the company is effectively expanding its market share, particularly in the pediatric segment, which saw a significant 35% growth in revenue. The introduction of new products, such as the 12 cm dELC catheter and the Quelimmune™ SCD pediatric device, may contribute to future revenue streams and diversification of the company's product portfolio.
Despite the revenue growth, the decline in gross margin by 250 basis points in the fourth quarter is a concern that investors should monitor. It could indicate increased costs or changes in sales mix that may impact profitability. Nuwellis has also reported a reduction in SG&A expenses due to cost-saving measures, which is a positive indicator of the company's ability to manage expenses and could lead to improved net income margins if revenue growth is sustained.
However, the reported net loss of $7.9 million for the fourth quarter and the significant 'Other Expense' and deemed dividend related to financing activities, highlight the company's ongoing need for capital and the associated dilution risk for current shareholders. The company's statement about anticipating tougher capital market conditions and a 40% reduction in monthly cash burn rate suggests strategic financial planning, but also underscores the importance of monitoring liquidity and capital raising activities.
The FDA HDE approval for Quelimmune and the introduction of a new catheter are significant milestones for Nuwellis, reflecting the company's commitment to innovation and addressing unmet medical needs. The pediatric market is a key growth driver and FDA approvals can enhance the company's credibility and facilitate market adoption.
The application of the Aquadex® system in end-stage liver disease and the presentation of clinical case series and real-world data are crucial for establishing the clinical value of the company's products. The ability of Aquadex to reduce cirrhosis-related frailty and enhance patients' eligibility for liver transplants could open new therapeutic areas and drive adoption in new patient populations.
Furthermore, the proprietary hematocrit sensor within the Aquadex system represents a technological advantage that could differentiate Nuwellis's offerings in a competitive market. The generation of real-world clinical data is essential for demonstrating efficacy and safety, which can influence purchasing decisions by hospitals and impact the company's market share.
The pediatric health care market is a specialized and growing segment and Nuwellis's focus on this area through product development and strategic initiatives like the DaVita Pilot phase and the IDE submission for the Vivian device could position the company favorably within this niche. The company's ability to overcome challenges such as hospital budgetary constraints and nursing shortages indicates resilience and adaptability, which are important factors for potential investors and partners to consider.
Additionally, the company's proactive approach to reducing its cash burn rate and preparing for a more challenging capital market environment for microcap companies demonstrates a strategic understanding of the broader economic context. Nuwellis's efforts to balance growth with financial sustainability could be a key factor in its long-term success and should be closely watched by investors interested in the medical technology sector.
Strengthens Its Foundation for Growth, Strong Pediatric Sales, Expanding Margins and Increases Number of New Hospital Accounts
MINNEAPOLIS, March 05, 2024 (GLOBE NEWSWIRE) -- Nuwellis, Inc. (Nasdaq: NUWE), a medical technology company focused on transforming the lives of people with fluid overload, today reported financial results for the fourth quarter and full year ended December 31, 2023.
Highlights:
- Record quarter revenue of
$2.6 million , a9% increase over prior-year period. Full year revenue of$8.9 million , a4% increase over 2022. - Fourth quarter pediatric revenue grew
35% year over year;28% increase in utilization and a49% increase in console sales. Four new pediatric accounts. - Fourth quarter gross margin of
54.4% . Full year 2023 gross margin of56.2% , a 56-basis point increase over full year 2022. - Added two products: The new 12 cm dELC catheter and the Quelimmune™ SCD pediatric device.
- New clinical case series expands the use of Aquadex® into end-stage liver disease.
- New real-world clinical data continues to show Aquadex clinical evidence benefits pediatric patients.
- Nuwellis hosted a symposium on March 4 at the Technology and Heart Failure Therapeutics (THT) conference, where two late breaking clinical trials and one lecture session will be presented on the Aquadex system.
“Nuwellis continues to execute on its strategic growth initiatives, with the highest total quarter of organic revenue in company history,” said Nestor Jaramillo, President and CEO of Nuwellis. “Led by Pediatrics, which saw steady increases in existing console utilization and new account openings expanded Aquadex market penetration. We expect our accelerating momentum to continue in 2024, with further support from our growing body of clinical evidence, paving the way for new Aquadex applications such as in end-stage liver disease, as well as new product introductions.”
Nuwellis announced the FDA HDE approval for Quelimmune, received by its exclusive U.S. license and distribution partner, SeaStar, further bolstering its pediatric portfolio for Nuwellis’ fast-growing customer category and foundation for growth. Additionally, the introduction of Nuwellis’ recently FDA cleared specialty dual lumen 12 cm catheter will provide clinicians with an additional venous access option to use the company’s Aquadex ultrafiltration system. The company also announced a new clinical case series featured in Clinical Transplantation demonstrating the use of Aquadex to safely and effectively remove fluid volume for end-stage liver disease patients, representing an additional clinical application for Aquadex already within its current FDA labeling. In this case series, Aquadex was shown to reduce cirrhosis-related frailty and enhanced patients’ ability to receive a life-saving liver transplant. Finally, the company announced new real-world data featured in Pediatric Nephrology that showed the proprietary hematocrit sensor within the Aquadex system facilitated guided therapy of fluid overloaded pediatric patients without hemodynamic instability or other complications.
“We overcame challenges like hospital budgetary constraints and nursing shortages in the first half of 2023, achieving
Fourth Quarter 2023 Financial Results
Revenue for the fourth quarter of 2023 was
Gross margin was
Selling, general and administrative expenses for the fourth quarter of 2023 were
Fourth quarter research and development expenses were
In the current year period, the company recorded a non-recurring expense reduction of approximately
Total operating expenses for the fourth quarter of 2023 were
Operating loss for the fourth quarter of 2023 was
Net loss attributable to common shareholders for the fourth quarter of 2023 was
At December 31, 2023, the Company had no debt, cash and cash equivalents of approximately
Webcast and Conference Call Information
The 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: 10185035. An audio archive of the webcast will be available following the call on the Investors page at https://ir.nuwellis.com.
About Nuwellis
Nuwellis, 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, with a wholly owned subsidiary in Ireland. For more information visit ir.nuwellis.com or visit us on LinkedIn or X.
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 Statements
Certain 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 2024 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, our ability to integrate acquired businesses, our expectations regarding anticipated synergies with and benefits from acquired businesses, 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 due to new information, future events or otherwise.
CONTACTS
INVESTORS:
Vivian Cervantes
Gilmartin Group
ir@nuwellis.com
| NUWELLIS, INC. AND SUBSIDIARY Consolidated Balance Sheets (in thousands, except share and per share amounts) | |||||||
| December 31, 2023 | December 31, 2022 | ||||||
| ASSETS | (unaudited) | ||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 3,800 | $ | 17,737 | |||
| Marketable securities | — | 569 | |||||
| Accounts receivable | 1,951 | 1,406 | |||||
| Inventories, net | 1,997 | 2,661 | |||||
| Other current assets | 461 | 396 | |||||
| Total current assets | 8,209 | 22,769 | |||||
| Property, plant and equipment, net | 728 | 980 | |||||
| Operating lease right-of-use asset | 713 | 903 | |||||
| Other assets | 120 | 21 | |||||
| TOTAL ASSETS | $ | 9,770 | $ | 24,673 | |||
| LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities | |||||||
| Accounts payable and accrued liabilities | $ | 2,380 | $ | 2,245 | |||
| Accrued compensation | 525 | 2,161 | |||||
| Current portion of operating lease liability | 216 | 196 | |||||
| Current portion of finance lease liability | — | 28 | |||||
| Other current liabilities | 51 | 58 | |||||
| Total current liabilities | 3,172 | 4,688 | |||||
| Common stock warrant liability | 2,843 | 6,868 | |||||
| Operating lease liability | 544 | 760 | |||||
| Total liabilities | 6,559 | 12,316 | |||||
| Commitments and contingencies | |||||||
| Mezzanine Equity Series J Convertible Preferred Stock as of December 31, 2023 and December 31, 2022, par value | 221 | — | |||||
| Stockholders’ equity | |||||||
| Series A junior participating preferred stock as of December 31, 2023 and December 31, 2022, par value | — | — | |||||
| Series F convertible preferred stock as of December 31, 2023 and December 31, 2022, par value | — | — | |||||
| Series I convertible preferred stock as of December 31, 2023 and December 31, 2022, par value | — | — | |||||
| Preferred stock as of December 31, 2023 and December 31, 2022, par value | — | — | |||||
| Common stock as of December 31, 2023 and December 31, 2022, par value 5,682,461 and 536,394, respectively | 1 | — | |||||
| Additional paid-in capital | 290,646 | 279,736 | |||||
| Accumulated other comprehensive income: | |||||||
| Foreign currency translation adjustment | (31 | ) | (18 | ) | |||
| Unrealized gain on marketable securities | — | 56 | |||||
| Accumulated deficit | (287,626 | ) | (267,417 | ) | |||
| Total stockholders’ equity | 2,990 | 12,357 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 9,770 | $ | 24,673 | |||
See notes to the consolidated financial statements.
NUWELLIS, INC. AND SUBSIDIARY Condensed Consolidated Statements of Operations and Comprehensive Loss (In thousands, except weighted average shares outstanding and per share amounts) | ||||||||||||||
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||||
| Net sales | $ | 2,551 | $ | 2,339 | $ | 8,864 | $ | 8,543 | ||||||
| Cost of goods sold | 1,163 | 1,008 | 3,881 | 3,788 | ||||||||||
| Gross profit | 1,388 | 1,331 | 4,983 | 4,755 | ||||||||||
| Operating expenses: | ||||||||||||||
| Selling, general and administrative | 3,609 | 4,664 | 17,191 | 17,584 | ||||||||||
| Research and development | 1,372 | 1,201 | 5,422 | 4,342 | ||||||||||
| Total operating expenses | 4,981 | 5,865 | 22,613 | 21,926 | ||||||||||
| Loss from operations | (3,593 | ) | (4,534 | ) | (17,630 | ) | (17,171) | |||||||
| Other income (expense), net | ||||||||||||||
| Other income | 56 | 61 | 154 | 75 | ||||||||||
| Financing expense | (3,483) | (9,247) | (3,483 | ) | (9,247) | |||||||||
| Change in fair value of warrant liability | 1,513 | 11,827 | 758 | 11,827 | ||||||||||
| Loss before income taxes | (5,507 | ) | (1,893 | ) | (20,201 | ) | (14,516) | |||||||
| Income tax expense | (2 | ) | (3 | ) | (8 | ) | (9) | |||||||
| Net loss | (5,509 | ) | (1,896 | ) | (20,209 | ) | (14,525) | |||||||
| Deemed dividend attributable to Series J Convertible Preferred Stock | (2,297) | — | (2,297) | — | ||||||||||
| Dividend on Series J Convertible Preferred Stock | (121) | — | (121) | — | ||||||||||
| Net loss attributable to common stockholders | $ | (7,927) | $ | (1,896) | $ | (22,627) | $ | (14,525) | ||||||
| Basic and diluted loss per share | $ | (2.24) | $ | (5.00) | $ | (11.52) | $ | (83.55) | ||||||
| Weighted average shares outstanding – basic and diluted | 3,539,185 | 379,254 | 1,964,406 | 173,846 | ||||||||||
| Other comprehensive loss: | ||||||||||||||
| Net loss | $ | (5,509) | $ | (1,896) | $ | (20,209 | ) | $ | (14.525 | ) | ||||
| Unrealized gain (loss) on marketable securities | — | 6 | — | 80 | ||||||||||
| Foreign currency translation adjustments | (6) | (7) | (13) | (7 | ) | |||||||||
| Total comprehensive loss | $ | (5,515 | ) | $ | (1,897 | ) | $ | (22,222 | ) | $ | (14,452 | ) | ||
See notes to the consolidated financial statements.
| NUWELLIS, INC. AND SUBSIDIARY Consolidated Statements of Cash Flows (in thousands) | |||||||||
| For the years ended December 31, | |||||||||
| 2023 | 2022 | ||||||||
| Operating Activities | (unaudited) | ||||||||
| Net loss | $ | (20,209 | ) | $ | (14,525 | ) | |||
| Adjustments to reconcile net loss to cash flows from operating activities: | |||||||||
| Depreciation and amortization | 362 | 372 | |||||||
| Stock-based compensation expense | 670 | 862 | |||||||
| Change in fair value of warrant liability …………………………………………………… | (758 | ) | (11,827 | ) | |||||
| Financing expense ………………………………………………………………………… | 3,483 | 9,247 | |||||||
| Net realized and unrealized gains on marketable securities ……………………………….. | (65 | ) | 124 | ||||||
| Changes in operating assets and liabilities: | |||||||||
| Accounts receivable | (545 | ) | (656 | ) | |||||
| Inventory | 697 | 140 | |||||||
| Other current assets | (65 | ) | (68 | ) | |||||
| Other assets and liabilities | (7 | ) | (96 | ) | |||||
| Accounts payable and accrued expenses | (1,500 | ) | 1,278 | ||||||
| Net cash used in operations | (17,937 | ) | (15,149 | ) | |||||
| Investing activities: | |||||||||
| Additions to intangible assets ……………………………………………………………... | (99 | ) | — | ||||||
| Proceeds from sales of marketable securities ……………………………………………... | 578 | 14,850 | |||||||
| Purchase of property and equipment ……………………………………………………… | (149 | ) | (122 | ) | |||||
| Net cash provided by investing activities | 330 | 14,728 | |||||||
| Financing activities: | |||||||||
| Proceeds from public stock offerings, net | 2,109 | 9,449 | |||||||
| Proceeds from Series J Preferred Stock and Warrants….………………………………….. | 1,482 | — | |||||||
| Proceeds from the exercise of warrants…………………………….. ..…………………… | 120 | — | |||||||
| Payments on finance lease liability | (28 | ) | (26 | ) | |||||
| Net cash provided by financing activities | 3,683 | 9,423 | |||||||
| Effect of exchange rate changes on cash | (13 | ) | (7 | ) | |||||
| Net increase in cash and cash equivalents | (13,937 | ) | 8,995 | ||||||
| Cash and cash equivalents—beginning of year | 17,737 | 8,742 | |||||||
| Cash and cash equivalents—end of year | $ | $ | 17,737 | ||||||
| Supplemental schedule of non-cash activities | |||||||||
| Inventory transferred to property, plant and equipment | $ | 41 | $ | 42 | |||||
| Issuance of Common Stock for exercise of Series I Warrants | $ | 7,623 | $ | — | |||||
| Issuance of Series J Preferred Stock for exercise of Warrants | $ | 2,927 | $ | — | |||||
| Deemed dividend on Series J Preferred Stock | $ | 2,297 | $ | — | |||||
| Series J Preferred Stock issued for payment in kind dividend | $ | 121 | $ | — | |||||
| Supplemental cash flow information | |||||||||
| Cash paid for income taxes | $ | 12 | $ | 9 | |||||
See notes to the consolidated financial statements.
FAQ
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