Deltex Medical : Annual Report & Accounts 2021

2021 Annual Report & Accounts

Deltex Medical

A UK-headquartered international medical device company which develops, manufactures and distributes a clinically-proven haemodynamic monitoring technology that has been shown to:

• ▪ improve outcomes for patients; and

• ▪ reduce patient length-of-stay,

thereby increasing throughput and capacity for hospitals whilst lowering healthcare costs.

Real-time oesophageal Doppler haemodynamic monitoring: improves patient outcomes; increases hospital throughput

Deltex Medical at a glance

Our technology

Deltex Medical's TrueVue System uses proprietary haemodynamic monitoring technology to assist clinicians to improve outcomes for patients as well as increase throughput and capacity for hospitals.

Deltex Medical has invested over the long term to build a unique body of peer-reviewed, published evidence from a substantial number of trials carried out around the world. These studies demonstrate statistically significant improvements in clinical outcomes providing benefits both to patients and to the hospital systems by increasing patient throughput and expanding hospital capacity.

The Group's flagship, world-leading, ultrasound-based oesophageal Doppler monitoring ("ODM") is supported by 24 randomised controlled trials conducted on anaesthetised patients. As a result, the primary application for ODM is focussed on guiding therapy for patients undergoing elective surgery.

During 2021, Deltex Medical's engineers and scientists carried out successful research in conjunction with the UK's National Physical Laboratory ("NPL"), which has enabled the Group's 'gold standard' ODM technology to be extended and developed so that it can be used completely non-invasively. This will significantly expand the application of Deltex Medical's technology to non-sedated patients. This new technological enhancement will substantially increase the addressable market for the Group's haemodynamic monitoring technologies and is complementary to the long-established ODM evidence base.

Our new non-invasive technology has potential applications for use in a number of healthcare settings, including:

• ▪ Accident & Emergency for the rapid triage of patients, including the detection and diagnosis of sepsis, an important capability for patients presenting with COVID-19 symptoms;

• ▪ in general wards to help facilitate a real-time, data-driven treatment regime for patients whose condition might deteriorate rapidly; and

• ▪ in critical care units to allow regular monitoring of patients post-surgery who are no longer sedated or intubated.

One of the key opportunities for the Group in 2022 is positioning this new, non-invasive technology for use throughout the hospital. Our haemodynamic monitoring technologies provide clinicians with beat-to-beat real-time information on a patient's circulating blood volume and heart function. This information is critical to enable clinicians to optimise both fluid and drug delivery to patients.

Our business model is to drive the recurring revenues associated with the sale of single-use disposable ODM probes which are used in the TrueVue System and to complement these revenues with a new incremental revenue stream to be derived from our new non-invasive technology.

Both the existing single-use ODM probe and the new, non-invasive device connect to the same, next generation monitor which is due for launch in 2022. Monitors are sold or, due to hospitals' often protracted procurement times for capital items, loaned in order to encourage faster adoption of our technology.

Our customers

The principal users of our products are currently anaesthetists working in a hospital's operating theatre and intensivists working in ICUs. This customer profile will change as our new non-invasive technology is adopted by the market. In the UK we sell directly to the NHS. In the USA we sell directly to more than 30 major hospitals that appreciate the value of our evidence-based approach to haemodynamic management. We also sell through distributors in more than 40 countries in the European Union, Asia and the Americas.

Our objective

To see the adoption of our next generation TrueVue System, comprising both minimally invasive and non-invasive technologies, as the standard of care in haemodynamic monitoring for all patients from new-born to adult, awake or anaesthetised, across all hospital settings globally.

Visit us online for further information atwww.deltexmedical.com

HIGHLIGHTS

Financial

• ▪ revenues: £2.3 million (2020: £2.4 million)

• ▪ International division performed well in 2021 with growth of 40% to £0.9 million (2020: £0.7 million)

• ▪ gross margin up slightly to 70% (2020: 68%)

• ▪ overheads flat at £2.7 million (2020: £2.7 million, excluding exceptional items)

• ▪ adjusted EBITDA: £(0.5) million (2020: £(0.2) million)

• ▪ loss for the year: £(1.0) million (2020: £(0.8) million)

• ▪ cash at hand (31 December, 2021): £0.4 million (2020: £0.9 million), before £1.4 million (gross) fund raising announced on 8 February 2022

Business

• ▪ during 2021 many of Deltex Medical's principal markets were effectively closed as elective surgical procedures were cancelled around the world due to the pandemic. Elective surgery is now starting to resume globally

• ▪ many hospitals barred access to salespersons and clinical educators for a large proportion of the year, which compounded the sales challenges facing the Group

• ▪ post pandemic, there is now a substantial backlog in elective surgical procedures around the world which represents a significant commercial opportunity for Deltex Medical as its TrueVue Doppler technology has been shown to reduce patient length-of-stay and hence increase hospital throughput / capacity

• ▪ there are now encouraging signs of hospital access improving for our sales teams

• ▪ excellent progress was made in research and product development during 2021, both in the development of our new, next generation monitor which will be launched in 2022 and our new non-invasive Doppler-based haemodynamic monitoring technology which has broader applications within the hospital setting

• ▪ trading in 2022 has started positively including the announcement in January 2022 of a US$0.2 million order from the Americas

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