Qlucore

Second quarter, 1 August - 31 October 2023

• Net sales amounted to SEK 2,890k (3,022k).
• Operating result (EBIT) amounted to SEK -3,409k (-4,221k).
• Net result for the period amounted to SEK -3,256k (-4,149k).
• Earnings per share amounted to SEK -0.81 (-1.03). Earnings per share after dilution amounted to SEK -0.81 (-1.03).
• Cash flow from operating activities amounted to SEK -4,143k (-1,835k).
• Net cash flow amounted to SEK -11,560k (-5,854k).
• Prioritization and optimization, and the fact that development costs culminate this fiscal year (23/24), will facilitate significantly lower costs next fiscal year (24/25).

First half year, 1 May - 31 October 2023

• Net sales increased to SEK 6,317k (5,785k).
• Operating result (EBIT) amounted to SEK -8,821k (-9,093k).
• Net result for the period amounted to SEK -8,255k (-8,980k).
• Earnings per share amounted to -2.05 (-2.23) SEK. Earnings per share after dilution amounted to -2.05
  (-2.23) SEK.
• Cash flow from operating activities amounted to SEK -10,013k (-5,682k).
• Net cash flow amounted to SEK -23,930k (-12,791k).

During the quarter, we had stable sales in the data analysis area. Within the cancer diagnostics area, which we address with the products Qlucore Diagnostics and Qlucore Insights, development work continues to go well.

The work to prepare Qlucore Diagnostics for CE marking according to the IVDR regulations has developed well during the quarter. Our current focus remains on the most common form of cancer in children, acute lymphoblastic leukemia (BCP-ALL). We are now approaching the next phase in the development work when the product will be evaluated in a clinical environment.

CE marking according to the IVDR regulations for medical devices is a requirement for use in diagnostics in healthcare. Estimated time of regulatory approval (CE marking) for childhood acute lymphoblastic leukemia (BCP-ALL) is February 2025.
The work on the first generation of Qlucore Diagnostics includes three development subprojects. The Qlucore Diagnostics software, the specific model for acute lymphoblastic leukemia and the associated mandatory quality system. Work on all three subprojects culminates in the next quarter. For future CE markings for other diagnostics areas such as lung cancer we will be able to reuse the material we produce to a great extent. Together with prioritization and optimization, we expect significantly lower costs next fiscal year (24/25).

At the end of October, the Scientific Advisory Board of Qlucore met to discuss cancer diagnostics. The board is led by the undersigned and consists of two of Qlucore's founders, Magnus Fontes and Thoas Fioretos as well as Solange Peters, Albrecht Stenzinger and Aurélien de Reynies. All five are internationally recognized professors and are active at the absolute forefront of their specialist areas. All five cover the spectrum from research to clinical application and can thus provide us with essential insights. The discussions confirmed our strategy.
We have great confidence in our strategy. To conserve existing resources and compensate for the time delay previously communicated, we will focus on the four cancer types where we have progressed the most. These consist of childhood and adult leukemia, bladder cancer, and lung cancer.
 
As we approach a new phase in the development of Qlucore Diagnostics for childhood leukemia, we will in the near future be able to increase efforts on lung and bladder cancer, and leukemia for adults (AML). All forms of cancer represent strategically important therapeutic areas with a great medical need for improved diagnostics.
 
Net sales in the second quarter amounted to SEK 2,890k (3,022k), which is a decrease of 4%. Adjusted for currency effects, the decrease was 8%. We have differences between quarters depending on how renewal transactions are distributed. Overall, the positive trend continues and during the first six months, turnover increased to SEK 6,317k (5,785k), which corresponds to an increase of 9%. Adjusted for currency effects, the increase was 5%. The operating result for the second quarter amounted to SEK -3,409k (-4,221k) and for the first six months to SEK -8,821k (-9,093k). The cost situation is high because the execution of the business plan in cancer diagnostics continues.

Cancer diagnosis
Together with partners, we continue to develop and refine diagnostic tests (models) for lung cancer, bladder cancer and adult acute myeloid leukemia (AML). Models for childhood acute lymphoblastic leukemia (BCP-ALL) and the three other areas are available for use in the Qlucore Insights product. Qlucore Insights is licensed to customers for research use, and Qlucore Insights model for acute lymphoblastic leukemia has already been sold to several customers.
 
Global landscape
Global uncertainty with the deteriorating geopolitical situation combined with economic trends, such as rising inflation and the risk of recession, has not affected operations during the period, as far as we can judge. Furthermore, we have noted a growing trend for redundancies in the technology sector, in areas such as biotech, especially in the USA. We have not yet noticed any direct effect, but it is a sign of increased uncertainty.
 
In December 2021, the EU changed the timetable for how the IVDR[1] is to be introduced and we are experiencing a certain caution in the market regarding new technology. Some stakeholders also expect more changes.
 
I can happily state that our development work is going well, that we have moved to more appropriate premises and that I look to the future with great confidence.
 
 
Carl-Johan Ivarsson
CEO

[1] EU regulation 2017/746 on in vitro diagnostic medical devices (IVDR).