Memorandum

Cellnovo 4Q17 – €368,600 revenue up 2% YOY; 58 pumps shipped down 47% YOY; Flex manufacturing again delayed, now to 2Q18; ~$15M cash – March 13, 2018

Cellnovo reported 4Q17 financial results via press release in mid-January, with revenue of €368,600 (~$435,000) increasing 2% YOY on an easy comparison to 4% growth in 4Q16. Sequentially, sales increased 69%, albeit from a low base of just €218,408 (~$258,000) in 3Q17. Revenue for 2017 totaled €1.1 million (~$1.3 million), down 25% YOY from sales of €1.4 million (~$1.7 million) in 2016.

Just 58 pumps were shipped during 4Q17, down 47% YOY from just over 120 shipments in 4Q16. With 38 pumps shipped in 3Q17, Cellnovo didn’t break 100 in the back half of the year. In total, 832 systems in total have been shipped since launch in 2014.

As we’ve come to expect, the press release cited insulin cartridge production constraints as reason for the limited shipments and depressed sales – the line is now anticipated to be at full operational capacity by 2Q18. This process has been meaningfully delayed by more than 14 months: the initial expected completion date was end of year 2016. As of the 2Q17 update, full production was slated to occur by end of August 2017. We’re not sure if the holdup is on Flex or Cellnovo’s side, but it’s a reminder of how hard it is to scale manufacturing, especially for a patch pump.

Cellnovo ended the quarter and 2017 with €13.0 million in cash (~$15 million), down from €18.7 million at the end of last quarter (not including any drawdowns from the €20 million loan agreement made with the European Investment Bank in July 2017). The company previously projected that cash would last until mid-2019, though if the 4Q burn rate is sustained without additional funds coming in, just ~two or three quarters of cash remain. As a reminder, Cellnovo is involved in three potential AID systems (TypeZero, Diabeloop, and PEPPER), and expects FDA clearance sometime in 2018 (no update on this front).

  • Cellnovo recently presented real-world results at ATTD showing the Cellnovo System reduced the number of hypoglycemia events/week in 143 type 1 adults by 29% (3.4 to 2.4 events/week) over a median follow-up period of one year. A small number of adolescents (n=7) saw a 39% reduction (3.8 to 2.3 events/week) over the same time period. The study was published in European Endocrinology.

Quarterly Sales (3Q15-4Q17)

Annual Sales (2015-2017)

 

-- by Maeve Serino, Brian Levine, Adam Brown, and Kelly Close