Comment on Fluicell’s Q2-22 Report

Today, 18th of August, Fluicell released its quarterly report for the second quarter 2022. Our thoughts about the development during the quarter is presented below:

Statement of Operations at a Glance

During the second quarter of 2022, the revenue amounted to SEK 0.49m (0.39), corresponding to a growth of 26% compared to the same quarter previous year. The revenue originated from both old and new customer orders of different products. The revenue is lower than we expected but it seems that the effect from the pandemic is still affecting the revenue, which is mentioned in the report, i.e., there is a lagging effect in which greater revenues should occur in the later quarters.

The operating result during the second quarter amounted to SEK -7.2m (5.9) which is an increase of 20%. The increase of the operating loss was a consequence of the pandemic as well as increases in staff costs and scaling up the development of the company’s services and products. Bear in mind, the Biopixlar AER was launched earlier this year, which is in line with our expectations as Fluicell is continuing to focus heavily on growing their sales activities as well as regenerative medicine projects for human and in-vitro tissue therapeutics.

Financial position and burn rate

At the end of Q2-22, Fluicells cash balance was SEK 15.8m, compared to SEK 14.8m the previous quarter at the end of March Q1-22, corresponding to a net change in cash of SEK 1m. The increase in cash was mainly due to increases in working capital (account payables), as well as the warrants (series TO2 and TO3) that brought in SEK 7.2m in May. The company’s burn rate per month amounted to SEK -1,9m. Given the present cash position and an assumed burn rate of SEK -1,9m, which is in line with the last 12 months, Fluicell is financed until the end of Q1-23, all else equal.

CEO Newsletter – Fluicell Advancing in Multiple Areas

On June 30th, Fluicell’s CEO newsletter was, released where CEO Victoire Viannay raised a couple of interesting points. What stood out to us was the following excerpt:

“In our work together with the leading pharmaceutical company in Switzerland, we have successfully completed all our milestones in dialogue with them and we hope to be able to present further updates later this year:”

The 23rd of September 2021, Fluicell announced that a deal was signed with Roche, which we assume could be the leading Swiss pharmaceutical company referred to in the quote. The deal included a project to evaluate how Biopixlar can be used to develop in-vitro bio composite heart tissue for drug safety studies where Fluicell conducted the studies and Roche reimbursed Fluicell for the material costs incurred. The project was spanning over six months according to the press release. The quote from the CEO newsletter suggests that updates about the results is about to come in the second half of the year if everything goes according to plan, and in today’s Q2-report it was mentioned again on page 7 in the paragraph regarding cardiovascular diseases. Analyst Group believes that the if the results are positive, this could potentially lead to new deals with substantial income from licensing/research services which will improve Fluicell’s operational and financial outlook.

In conclusion, we see that Fluicell is progressing well operatively where there is a great interest for their products and services. We believe that the discussions with the leading pharmaceutical company in Switzerland related to the tissue therapeutic program may yield news, potentially in H2-22, and is interesting for investors to keep an eye on.