Comment on Fluicell’s Q4-22 Report

On February 24th, Fluicell published the company’s quarterly report for Q4-22.

Finishes the Year with Strong Sales Momentum 

During Q4-22, the revenue amounted to SEK 1.3m, compared to SEK 0.55m in Q4-21, which corresponds to a YoY increase of 140%. Compared to the previous quarter of Q3-22 where the revenue amounted to SEK 0.51m, the increase corresponded to 158%. The revenue was mainly driven by product sales, where Fluicell, for example, received purchase orders for Biopixlar AER and Biopen. For the full year of 2022, revenue amounted to SEK 3.3m (2.6), an increase of 25 % compared to year 2021. The total revenue, including other operating income, increased with 77% to SEK 7.0m (4.0) which is the largest total revenue the company has generated to this date. The top-line results were relatively in line with our expectations as we had forecasted approximately SEK 3.6m in net revenue, and SEK 7.5m in total revenue. The operating result during Q4-22 amounted to SEK -6.8m, compared to SEK -5.7m in Q4-21, where the increase in the loss was attributed to increased expenses related to R&D and the organization compared to the same period previous year. Overall, Analyst Group believes that Fluicell delivers results in line with expectations. On the positive side, the company has managed to gain traction in the product sales which was slowed down by the pandemic and the inability to travel since Fluicell has a global distributor network. Going forward, the company has already booked SEK 1.5m in revenues for Q1-23 and expects to initiate new services within microfabrication to companies and researchers which will become another source of revenue. Although Fluicell has a strong cash position, the cost base is higher than what we would like to see in relation to the revenue as Fluicell is spending in new areas to build assets and create growth for long-term deliverables, but given that Fluicell can keep up the momentum with the sales activities as well as leveraging the company’s IP portfolio to get into licensing deals, the cost base should become less of a concern over time.

Extended Collaboration with Roche regarding Heart Tissue Models for Drug Safety

In February 2023, Fluicell announced that the company has extended the collaboration with Roche involving Biopixlar. The project spans over ten months where the aim is to investigate optimization of bioprinted heart tissues for drug safety. The project is a continuation of the pilot project that was completed at the end of year 2022, where an important part of the continued project is to integrate the bioprinted tissues directly into already establish laboratory workflows. The project will be divided into several milestones where the estimated completion date is December 2023. The material expenses during the project are going to be financed by Roche (approximately SEK 0.5m) and Fluicell will perform testing and studies. The fact that the project is continued validates the great interest in Fluicells unique Biopixlar-technology. Analyst Group views this project as one of Fluicells main value driving activities, where in a successful scenario, the company will be able to out-license the IP portfolio which has the potential to create substantial revenue streams.

Cash Position and Burn Rate

At the end of Q4-22, Fluicells cash balance amounted to SEK 24.5m, compared to SEK 8.6m at the end of Q3-22, corresponding to a net change in cash of SEK 15.9m. The net increase in cash was mainly due to the recent rights issue in Q4-22 which provided the company approximately SEK 24.4m net of fees. Additionally, Fluicell has warrants outstanding of series TO 4 that are due to strike in June 2023 and have the potential to extend the cash runaway. The outstanding warrants are estimated to generate up to SEK 16.4m before expenses, which is estimated to 10%, given full subscription, and equals to approximately SEK 14.8 in net proceeds. The company’s burn rate per month during Q4-22 amounted to SEK -1.1m and SEK -1.9m on an LTM basis. Adjusted for changes in receivables of SEK 2.3m during Q4-22, the LTM burn rate per month corresponds to approximately SEK -2.0m, which Analyst Group believe is reasonable to assume going forward. Given the current cash position SEK 24.5m, assumed net proceeds of SEK 14.8 from TO4 warrants in June 2023, and an assumed burn rate of SEK -2.0m, Fluicell is estimated to be financed until the beginning of Q3-24, all else equal.

In conclusion, with a strengthened balance sheet, momentum in sales activities, and interesting high-value projects ongoing, Analyst Group believes that year 2023 has the potential to become a breakthrough year for Fluicell.

Analyst Group will publish an updated analysis.