Dignitana publish interim financial report for Q3 2015


Interim Financial Report - Summary:

+--------------------------------------+------+------+-------+-------+--------+
|Key Ratios                            |      |      |       |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|                                      |      |      |       |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|Dignitana Group *                     |Q32015|Q32014|Q1     |Q1     |Full    |
|                                      |      |      |-Q32015|-Q32014|year2014|
|                                      |      |      |       |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|                                      |      |      |       |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|Net revenues, TSEK                    |529   |-     |4 472  |-      |-       |
+--------------------------------------+------+------+-------+-------+--------+
|Total revenues TSEK                   |601   |-     |5 070  |-      |-       |
+--------------------------------------+------+------+-------+-------+--------+
|Net profit after financial items, TSEK|-4 183|-     |-11    |-      |-       |
|                                      |      |      |306    |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|Cash and bank balances, TSEK          |29 734|-     |29 734 |-      |-       |
+--------------------------------------+------+------+-------+-------+--------+
|Earnings per share before and after   |-0,25 |-     |-0,76  |-      |-       |
|dilution, SEK                         |      |      |       |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|                                      |      |      |       |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|                                      |      |      |       |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|* No consolidated group report during |      |      |       |       |        |
|2014, read more on Financial comments,|      |      |       |       |        |
|page 4.                               |      |      |       |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|                                      |      |      |       |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|Dignitana AB                          |Q32015|Q32014|Q1     |Q1     |Full    |
|                                      |      |      |-Q32015|-Q32014|year2014|
|                                      |      |      |       |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|                                      |      |      |       |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|Net revenues, TSEK                    |529   |3 438 |4 472  |11 357 |20 334  |
+--------------------------------------+------+------+-------+-------+--------+
|Total revenues TSEK                   |601   |3 608 |5 070  |11 814 |21 220  |
+--------------------------------------+------+------+-------+-------+--------+
|Net profit after financial items, TSEK|-4 184|-2 455|-11    |-9 824 |-10 914 |
|                                      |      |      |307    |       |        |
+--------------------------------------+------+------+-------+-------+--------+
|Cash and bank balances, TSEK          |28 896|3 924 |28 896 |3 924  |1 094   |
+--------------------------------------+------+------+-------+-------+--------+

Significant events during the period

  · Net sales is lower than the corresponding period last year, due to the fact
that Sysmex changed their contractual volumes, and Konica Minolta has yet to
finalize the reimbursement processes in China.
  · In the beginning of July Dignitana performed a private placement of 2.5
million shares to a group of American investors. The total amount before
issuance costs was roughly 28 million SEK. The two largest investors were C3
Device Partners, of which Bill Cronin is the Managing Partner, and Green Park &
Golf Ventures, both based in Dallas, Texas.
  · Dignitana, Inc. is registered as a company in the State of Delaware in the
United States. Dignitana, Inc. is a wholly owned subsidiary of Dignitana AB and
the company will publish consolidated reports from this point forward.
  · An Extraordinary General Meeting was held in Lund on August 13. During this
meeting Bill Cronin was elected to the Board and the issuance of warrants to the
US management team was also approved.
  · The subscription period for the warrants expired in September and in total
82 000 warrants were subscribed for out of the 168 000 that were covered by the
resolution from the shareholders meeting. The price per warrant was SEK 2.03 and
each warrant entitles the holder to subscribe for shares in the company at a
price of 29.40 per share during June 2018.

Significant events after the period end

  · In November, TÜV SÜD, Dignitana´s Notified Body, successfully performed the
annual quality audit for keeping the CE certificate. No major nonconformities
were noted.
  · Dignitana received a US patent for the design of the labyrinth paths in its
cooling cap, DigniCap®. The patent extends to 2031. Previously, the same patent
has been granted in Europe, China, Korea and Japan.

Comments from Jan Richardsson, CEO, Dignitana AB (publ)

During the last quarter we have been fully focused on getting the approval from
the FDA (Food and Drug Administration) for our scalp cooling system, DigniCap®.
When the submission was converted from a PMA to a De Novo 510(k) we had hoped
for a faster process. The positive is that the slow handling has not been
because of Dignitana, but because of we have submitted an extensive submission
that has taken FDA some time to go through.

We are in an intensive contact with FDA at the moment and we feel that FDA is
doing everything they can in order to speed up the handling process. It has been
a long process, but I am confident that we shall receive the FDA approval
shortly. We have used this time to build out our sales and support team in the
US so that once our system is cleared for use we will be able to be in a
position to commercialize DigniCap® quickly.

There are several reasons why the US will be our most important market in the
future. First it is by far the largest medical device market in the world,
secondly the frequency of breast cancer is high and increasing (230 000 new
breast cancer cases per year).

The payment model (pay-per-treatment) that we will use in the US will eventually
create consistent profitability. The new business model is based on the fact
that our systems shall be used at high frequency and therefore our employees
need to be active educating and informing the hospitals. To maintain control and
ensure over the adoption and usage process we have decided to have our own staff
on the field that focus only on our product instead of going through a
distributor. We have succeeded in attracting staff who previously worked with
scalp cooling and they will become employees of Dignitana, Inc. as soon as FDA
has given us their clearance. Dignitana, Inc. will be headquartered in Dallas
with personnel across the United States in key regional markets.

Sales to end customers continue to increase for Sysmex in 2015, but they still
believe that their stock is too large. Sysmex has a team of 5 people who works
exclusively with the sale of our scalp cooling system, DigniCap®. An interesting
development is that Sysmex has started receiving orders sponsored by charity
organizations. As mentioned in the previous report, we have agreed with Sysmex
that they may forego the agreed volumes this year in order to work through
existing inventory and put themselves in a better position for future growth
opportunities.

Konica Minolta is continuing with its efforts to obtain reimbursement in China.
For the Chinese State to determine which reimbursement it will allow, Konica
Minolta have to conduct clinical trials in each state they want to sell in. At
the same time they are preparing to submit an application for market approval in
Japan. They will initiate the PMDA application upon FDA clearance.

Financial Comments

  · As of this Q3 report Dignitana AB reports consolidated group financials,
including the subsidiary Dignitana, Inc. Costs related to the subsidiary
starting September 1, are now being paid by Dignitana, Inc. FDA-related costs
will continue to be capitalized in the Parent Company. The Company reports no
comparative figures for the Group as it did not exist during 2014.
  · Own work capitalized in the income statement amounts to 66 TSEK during Q3
and refers to the time Dignitana staff has put into the FDA project. Along with
the other costs of the clinical study and FDA project these costs are
capitalized as intangible assets. The total amount of intangible assets amounted
to SEK 12.6 million SEK. DigniCap® system including accessories used in the
clinical study are capitalized as tangible assets and depreciated over five
years. The value of these amounts to 1.1 million SEK.
  · Dignitana AB costs in the United States to set up the subsidiary and prepare
for the launch cannot be capitalized as assets. These costs are included in the
external costs, amounting to about 1.7 million SEK for Q3 and accumulated to 3.5
million SEK for the whole year.
  · During the start-up of the subsidiary in the US, Dignitana AB provided a
shareholder contribution and a long-term loan to the subsidiary.
  · Inventory in stock is higher than the corresponding period last year, as the
company manufactured and built inventory ready to be delivered upon clearance
from the FDA.

The complete report will be found on our webpage http://www.dignitana.se/eng
Media Contact:

Jan Richardsson

CEO, Dignitana AB (publ)

Ph  46 (0)46 16 30 92

E jan.richardsson@dignitana.com
About Dignitana AB (publ)
Dignitana is a Swedish public company, based in Lund, and manufacturer of the
medical cooling device DigniCap®. Dignitana is continuously researching and
developing new uses for DigniCap®. Dignitana AB is listed on the OMX Nasdaq
First North stock exchange and has appointed Erik Penser Bankaktiebolag as
Certified Advisor. For more information visit www.dignitana.com

About the scalp cooling system DigniCap®
Dignitana’s core product - DigniCap® - is a patented scalp-cooling system that
offers cancer patients the ability to keep their hair during chemotherapy.
DigniCap® is developed to provide continuous cooling with high efficacy, safety
and acceptable patient comfort.

Attachments

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