CLS publishes half-year report January - June 2024

Comments from CEO Dan J. Mogren

The second quarter has been very exciting for CLS and tops off a dynamic first half of 2024 notable for revenue growth of approximately 400% compared to the same period last year. The decision by our US neurosurgery partner ClearPoint Neuro, Inc, to move to Full Market Release of the ClearPoint Prism 3T Neuro Laser Therapy System at the end of the quarter shows the benefit of our earlier decision to focus resources on commercialization of our neurosurgery segment. In the urology business area, we continue to consolidate our position in Europe with new distribution agreements and important clinical studies at the same time as we validate our go-to-market plan for starting our Asia Pacific business based in Singapore.

Significant revenue growth and implemented cost reduction program

Revenues in the second quarter were SEK 5.62 million, representing an increase of 450% versus the second quarter of 2023. Over the full first half of 2024, revenues grew to SEK 8.8 million, a four-fold increase when compared to the corresponding period last year.

The cost savings program we announced earlier in the year is an important part of achieving our goal of becoming cashflow positive in 2026. As part of the program, we are making structural changes, primarily within our urology business segment, to align with the decision to prioritize our neurosurgery business until the end of 2025.  With other elements now in place, we expect to see the initial benefits of our cost reduction efforts during the second half of the year.

Improved capital structure and rights issue following end of the quarter

With the aim of reducing volatility in share pricing and simplify share trading administration, an extraordinary general meeting held on 16 April 2024 approved a reverse share split under which existing shareholders received one CLS share for every 200 CLS shares held, regardless of the class of shares. The reverse share split was carried out with effect from 24 April 2024.

CLS concluded a rights issue in June to support our continued growth, now with an increased focus on our neurosurgery business. In spite challenging market conditions raising capital, the rights issue raised SEK 38 million before associated costs, representing a total subscription rate of approximately 65%. A portion of the proceeds were also used to repay a small bridging loan taken for the period of the rights issue, meaning CLS is once again debt free.

Full Market Release for ClearPoint Prism 3T Neuro Laser Therapy System

Potentially the most significant development during the first half of the year was the announcement in June by ClearPoint Neuro, Inc, of its Full Market Release (FMR) of the ClearPoint Prism 3T Neuro Laser Therapy System. This follows the extremely positive feedback from the Limited Market Release and the expansion of the joint ClearPoint Neuro and CLS offering, through the concurrent Full Market Release of the SmartFrame OR platform, to now reach more than 50% of the total addressable US market for NeuroLITT treatment in the brain.

This important development justifies our decision to focus resources on commercialization and realizing the potential in our neurosurgery business over the coming eighteen months. We believe that the neurosurgery segment carries less risk in the short term than our urology business and we have a strong partner in ClearPoint Neuro with whom we can collaborate over the long term. With the additional approval for the ClearPoint Prism Neuro Laser Therapy System for use on 1.5T MR scanners, anticipated in 2025 and with it the potential to access approximately 90% of the market for NeuroLITT treatment in the US, there is significantly more opportunity for CLS in this segment in the coming years.

Following the FMR announcement, CLS received a new order from ClearPoint Neuro for products for the Prism 3T System worth approximately SEK 7.5 million. With the Full Market Release and greater resources being deployed by ClearPoint Neuro behind the SmartFrame OR platform and ClearPoint Prism 3T Neuro Laser Therapy System, it is expected that there will be a pick-up in new installations and procedures over time.

While not an immediate focus, there are clearly opportunities for our neurosurgery business in Europe in the future. The sponsored study at the Skåne University Hospital, Sweden, on the use of MR-guided laser ablation to treat glioblastoma (an aggressive form of brain tumor) finished patient recruitment during the second quarter and results from this study will be used as part of obtaining CE marking in Europe.

Consolidating distributor relationships and clinical data supporting urology segment

As a consequence of our decision to focus on commercializing our neurosurgery segment, CLS operations within the urology business area are aimed at ensuring that existing negotiations, agreements, and clinical collaborations in the US and European markets are completed. Following the announcement of two new distribution agreements for the Tranberg Thermal Therapy System in Italy and France respectively, we are now consolidating the distributor relationships we currently have in Europe. We will not be investing resources in pursuing new distributor agreements before 2026, although there are some possible agreements in the pipeline which we hope to finalize this year. One of the investments we are making in the relationships we have is a distributor and partner conference in Q3, where business development activities and further training will be provided related to our Tranberg System and ProstateFLA.

The continued commercialization of the Tranberg System is dependent on having published data from the clinical trials that are already underway. Positive data was presented during the second quarter from the investigator-initiated study at the Radboud University Medical Center, Nijmegen, the Netherlands. The University Hospital Magdeburg, Germany, has extended its study by a further fifteen patients at no cost to CLS following presentation of the first clinical data in June.

In the US, we continue serving our customers our strong collaboration with the National Institutes of Health (NIH) as part of their evaluation of the Tranberg Thermal Therapy System. An additional order by the NIH in April for Tranberg single-use sterile instruments shows they remain committed to the evaluation of the Tranberg System.

On track to achieve our goals

The first half of 2024, and the second quarter in particular, have been both important and exciting for CLS, with continued revenue growth, important developments in the neurology business area, and the transition from our MDD certificate to MDR on schedule. These developments, as well as the creation of a more efficient operation, mean we remain on plan for achieving our goals. In the short term, an important objective is to achieve a full exercise of TO 7 warrants at the highest price in November, as that would put us in the position of not requiring additional capital to achieve the objective of a positive operating result in 2026.

CLS vision in neurosurgery is to lead the future of NeuroLITT

In a business that has proven to be as dynamic as ours, it is important that we continue refining our operation and ensure that our shareholders understand and are part of our exciting journey.

As we see it, neurosurgery is poised for significant growth, driven by current advances in imaging technology, artificial intelligence, minimally invasive surgical techniques, rising incidences of neurological disorders and reimbursement worldwide. Image-guided neurosurgery is not only enhancing surgical accuracy but also reducing recovery times and improving overall patient safety.

CLS vision in neurosurgery is to lead the future of MR-guided laser interstitial thermal therapy (NeuroLITT) through our synergistic partnership with ClearPoint Neuro, combining our cutting-edge laser ablation technology with their precise neuro-navigation systems with integrated AI-driven predictive modelling and analytics. Through our collaboration, we deliver transformative, minimally invasive solutions that empower clinicians to safely and effectively target and eliminate diseased or disease-generating tissue, ultimately improving patient lives and setting a new global standard in neurosurgical care.

The commitment of our shareholders is instrumental in our progress and in driving our mission to revolutionize the surgical treatment with image-guided precision laser technology. We believe our journey forward will not only advance medical care but also create significant value for our shareholders.

Thank you for your continued support, and we look forward to your active participation in the exciting developments to come.

Dan J. Mogren

CEO, Clinical Laserthermia Systems AB

For more information, please contact:

Dan J. Mogren, CEO Clinical Laserthermia Systems AB (publ)

Phone: +46 (0)705 90 11 40
E-mail: dan.mogren@clinicallaser.com

About CLS

Clinical Laserthermia Systems AB (publ), develops and sells TRANBERG®|Thermal Therapy System and ClearPoint Prism Neuro Laser Therapy System with sterile disposables, for minimally invasive treatment of cancer tumors and drug-resistant epilepsy. The products are marketed and sold directly or through partners for image-guided laser ablation and are used in studies for treatment with imILT®, the company's interstitial laser thermotherapy for immune stimulating ablation with potential abscopal treatment effect. CLS is headquartered in Lund, Sweden, with subsidiaries in Germany, the United States and a marketing company in Singapore. CLS is listed on Nasdaq First North Growth Market under the symbol CLS B. Certified adviser (CA) is FNCA Sweden AB.

For more information about CLS, please visit the Company's website: www.clinicallaser.se

This disclosure contains information that CLS is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 23-08-2024 08:51 CET.