Cellnovo confident despite decreased sales

Cellnovo Group has published its financial results for the half year ending June 30th 2017, and provided an update on production.

Sophie Baratte, Chief Executive Officer of Cellnovo, said “Cellnovo remains well placed to capitalise on the potential of its unique diabetes management system. Progress towards industrial production is ongoing, we have a strong international distribution network in place, and a healthy cash position to support our drive towards large-scale commercialisation. As reported in July, the decrease in year on year sales is in line with the Company’s decision to limit sales of systems for new patients until the full ramp-up of insulin cartridge production takes place. In July, we bolstered our financial resources raising €17.5m through a private placement and signing a loan agreement for up to €20 million from the European Investment Bank. Our strong cash position will enable us to deliver sales growth, finance our new production line and advance our artificial pancreas programmes. The ramp-up of insulin cartridge production with our partner Flex is still ongoing and we are working closely together to expedite several actions needed to reach the required production targets. We currently expect that sales in the second half of 2017 will be impacted and we will adjust our cash burn accordingly. We are confident that the expertise and proven methodology of our partner and of our team will enable us to reach our objectives.”

Over the first half of 2017 Cellnovo reported a decrease in sales against the previous year with revenues of €473,300. This decrease reflects the company’s decision to limit the number of new patients equipped with its system. As a result, the number of devices shipped in H1 2017 was limited to one hundred and seven, bringing the total number of systems sold since launch to seven hundred and thirty six.

Operating expenses increased €8.9m compared with €8.2m in 2016 to prepare for large scale commercialisation. Production costs decreased to €2.9m compared to €3.4m for the same period in 2016. This is the result of a decrease in sales and in investments related to the production transfer to Flex. R&D costs for the period increased to €1.6m, attributable to the company’s ongoing product development roadmap, including artificial pancreas projects and next generation systems. Sales and marketing expenses in this period totalled €1.5m compared to €0.5m for the same period in 2016, reflecting an increase in the company’s activities in preparation for large scale commercialisation. Administrative and overhead costs totalled €3m over the first half of 2017, compared to €3.3m over the same period in 2016.

The net result for the first half of 2017 decreased to -€8.7m compared with -€7.2m in the first half of 2016. At June 30th 2017, the company had a cash and cash equivalent position of €7m.

Cellnovo’s headcount was one hundred and thirteen employees on June 30th 2017.

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