Our second quarter has been intense with record sales, increased operating profit and a number of great achievements that will help drive the business forward. We have made important changes in the US organization, entered new markets, received a new reimbursement code for our connection device Axor II™, and initiated a strategic review process to accelerate growth. After the period ended, the FDA cleared a clinical study on below-knee amputation that will be fully funded by the US Department of Defense. Altogether, we see how years of strategic initiatives to build a profitable and growing company start to pay off.
Strong financial results in the second quarter
Revenues amounted to SEK 27.6 million during the second quarter, which corresponds to an increase of 36.2 percent in comparison to the corresponding quarter last year (32 percent in local currency). Excluding direct currency effects, the operating profit amounted to SEK 4.4 million. The increase in operating profit can be attributed to both the steep sales uptake and an improved operating cost structure.
Increased number of surgeries and strong momentum for Axor II™
Besides increased numbers of surgeries performed in the US, one contributing factor to the strong sales development in the period is increased sales of Integrum’s osseointegrated external prosthetic connection device Axor II™. In September, the company received a new reimbursement code for Axor II™ that will further help drive growth in the US. The new reimbursement code marks the start of a formalized reimbursement process for our prosthetics. A formalized process enables prosthetists to apply for reimbursement and reduces the potential risk associated with using products without a dedicated code, and I am convinced this will significantly improve our offering to the customers.
Sharpened team in the US
During the quarter, Integrum made a restructuring of the company´s sales and marketing organization to fully focus on executing growth in the US. In September we appointed Alex Winber as Vice President of Sales and Marketing, a great addition to our team. Alex is a highly experienced sales and marketing executive with an outstanding talent for recognizing business opportunities and we are very glad that he has accepted to join the US leadership team.
Entering new markets
The US market is still our top priority, but for our long-term goal to set a new global standard in the care of amputees, every new market entry in the rest of the world is a step in the right direction. At the end of October, Integrum signed a distribution agreement for the Turkish market which generated sales of 1.3 MSEK. The Turkish orthopedic healthcare system is strongly marked by the earthquake that occurred earlier this year and there is a great need for innovative orthopedic solutions. The business segment Rest of the World has developed in a positive direction during the period, partly supported by the establishment in Turkey. In September, I travelled to Kyiv to train Ukrainian orthopedic surgeons in advanced amputee care and to support the build-up of expanded trauma healthcare. The surgical training sessions were followed by a workshop on war-related amputee care attended by some of the world’s most prominent specialists and was supported by several ministries in Ukraine.
Paves the way for new indications
Following a pre-submission meeting with the US Food and Drug Administration, FDA, Integrum plans to submit a Pre-Market Approval, PMA, Application based on existing clinical data for the use of OPRATM in transhumeral amputations. Based on additional internal analysis and dialogue with the FDA, Integrum believes that existing data can be sufficient to qualify for a PMA in the new indication.
New clinical trial instrumental for additional indications
FDA has now cleared the start of a clinical study with OPRA™ Implant System on the below-knee amputation level. The study will include up to 30 patients, is fully funded by the US Department of Defense, and will be performed by the Walter Reed National Military Medical Center in Bethesda, Maryland. Integrum will supply OPRA™ Implant Systems to Walter Reed on commercial terms and once the study is finalized, we will be able to use the data in a future regulatory process. The results will be instrumental for a Pre-Market Approval application for use in below-knee amputations, and we are looking forward to the study being initiated.
Ongoing strategic review to boost future growth
To ensure that we fully leverage the positive results we now see both in business and operations, the board of directors has initiated a review and evaluation of strategic alternatives to further accelerate the global roll-out of Integrum´s unique OPRA™ Implant System. The strategic review aims to ensure that the global roll-out of Integrum's implant systems is conducted with the highest possible efficiency, in the interest of both patients and shareholders. We are encouraged by the development of our business over the last quarters, but our focus is on our future. As all our previous efforts start to pay off, it is now time to accelerate.
Mölndal, 4 December 2023
Chief Executive Officer
The interim report can be found here:
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