Nuwellis (NUWE) Q2 Earnings call transcript Aug 13, 2024

In the second quarter of 2024, Nuwellis reported a 6% year-over-year revenue growth, totaling $2.2 million, driven by a 30% increase in heart failure and critical care consumables utilization. This growth indicates a broader use of the Aquadex therapy for patients with fluid overload, beyond just heart failure patients. However, the pediatric business saw a 10% revenue decline due to a decrease in consumables utilization, which is primarily driven by the number of children born with kidney disease. Despite this decline, Nuwellis is expanding into pediatric patients at a large hospital network in Florida, signaling strong momentum for the pediatric business.

One of Nuwellis' significant milestones was the first commercial sale of QUELimmune to Cincinnati Children's Hospital, marking a significant advancement in pediatric critical care. This transformative solution for pediatric patients suffering from acute kidney injury due to sepsis or septic conditions on antibiotic therapy is expected to have a positive impact on the patient population it serves. Nuwellis has an exclusive U.S. license and distribution agreement for pediatric hospitals with SeaStar Medical, making QUELimmune accessible to more medical institutions.

Looking ahead, Nuwellis is developing a pediatric continuous kidney replacement therapy device, Vivian, which is expected to have a positive impact on survival and improve the quality of life for neonates and small children with limited or no kidney function. This device is complementary to QUELimmune and will add meaningful value to Nuwellis' growing portfolio of products for pediatric patients.

Nuwellis' financial results for the second quarter were marked by a 9% increase in consumables utilization and strong U.S. console ASPs. The critical care customer category led the way with a 28% growth, while heart failure saw a 9% growth year-over-year. However, pediatric results were down 10% due to a decrease in consumables utilization, primarily driven by census. Gross margin improved to 67.2% due to higher manufacturing volumes of consumables and lower fixed overhead manufacturing expenses. Selling, general and administrative expenses decreased by 31% due to efficiency initiatives.

Despite these positive developments, Nuwellis reported an operating loss of $2.3 million in the second quarter, reflecting ongoing efforts to improve operational efficiency and control costs. The company closed a registered direct offering of common stock and concurrent private placement of warrants to purchase common stock, raising approximately $2 million in gross proceeds.

Nuwellis' strategic initiatives, coupled with its financial performance, position the company well for continued growth in the second half of 2024. The company's focus on expanding its product offerings and entering new markets, particularly in pediatric care, will be key drivers of future success. With a strong focus on innovation and a commitment to improving patient outcomes, Nuwellis is well-positioned to make a significant impact on the healthcare industry.