Belluscura (BELL) said initial demand for X-PLO2R, the world's first modular portable oxygen concentrator, has been “strong” since the first units were distributed to customers last week.
In its half-year results for the six months to 30 June 2021, Belluscura said it has made ‘solid progress’ since its admission to AIM in May with the signing of four distribution agreements.
“To date we have received orders that meet this year's forecast unit sales and expect to exceed the forecast in the coming months,” said Bob Rauker, Belluscura’s Chief Executive.
"Receiving FDA 510(k) Clearance for the X-PLO2R™ was pivotal for the Group, followed by an oversubscribed placing and successful listing in May. To have brought the product to market so quickly is a tremendous achievement,” commented Chairman, Adam Reynolds.
The Company raised £17.5m ($24.5m) from investors in May when its shares were admitted to trading on AIM. Group net assets at the end of the period were US $28m (1H20: $5.0m; 2020 Full Year: $4.7m) with cash balances as at 30 June 2021 amounted to $22.65m.
In July, the Company said manufacturing had commenced in the United States for the first X-PLO2R™ units ahead of their planned distribution which had been on target for 3Q21.
The Company also highlighted that it has recently signed its fourth distribution agreement with a US Service-Disabled Veteran-Owned Small Business dealing exclusively with the US federal government in areas such as Veterans Affairs and The Department of Defense.
Addressing shareholders, the Company said this marked the next stage in establishing US-wide distribution coverage as part of the Company's commercialisation strategy.
The Group signed its first US distribution deal for its X-PLO2R™ portable oxygen concentrator portfolio in June 2021, its second in early July, and its third in mid-July.
In addition to the recent commercial launch of X-PLO2R™, the Group has developed follow-on products for this range of oxygen concentrators, the X-PLO2R CX and the X-PLO2R DX. Belluscura explained that these products will target the same oxygen markets. It added that it continues to work on other oxygen enrichment technologies in complementary markets.
"With the Research and Markets updated Portable Oxygen Concentrator Market research report now forecasting a compound annual growth rate ("CAGR") of 14.0% from 2019 to 2026, this is a very exciting time for Belluscura,” commented Rauker of the current market.
Reynolds added that the initial response from the market is “hugely positive” to date.
Belluscura highlighted to investors that it is ‘well positioned and financed to achieve its expectations’ as laid out in the admission document and that the Company has already met all of its key milestones since its shares started trading on AIM in May this year.
Looking ahead, the Company said its recently developed follow-on products, the X-PLO2R CX and X-PLO2R DX, are expected to be commercialised within the next 12 months.
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As described in the Company's original admission document, Belluscura's strategy is to appoint distributors in the United States to give US-wide coverage for the launch of the X-PLO2R; and this is expected to occur in the second half of 2021 and into 2022.
Belluscura’S X-PLO₂R weighs less than 1.5kg (3.25lbs) and the Directors believe it is the world's first modular portable oxygen concentrator and that it will generate more oxygen by weight than any other US Food & Drug Administration ("FDA") cleared POC in its class.
The X-PLO₂R can deliver up to 95% pure oxygen to patients 24 hours a day, 7 days a week to help improve the quality of life for millions of people who suffer from chronic lung diseases, such as Chronic Obstructive Pulmonary Disease and COVID-19 related respiratory distress.
Belluscura said it has confidence for 2021 and beyond after receiving early interest from distributors in the US, Europe, South America and Asia, wanting to supply the X-PLO2R™.
Rauker has described having the group’s X-PLO2R™ portable oxygen concentrator available through a Service-Disabled Veteran-Owned Small Business is “a tremendous opportunity.”
Belluscura was admitted to trading on the AIM market of the LSE in May 2021, raising £17.5 million at 45p through an oversubscribed fundraising following ‘strong support’ from investors.
The Group, which develops medical devices focused on lightweight and portable oxygen enrichment technology, is focused on commercialising its product portfolio in this space.
Following a US launch the Company intends, in due course, to pursue commercialisation across the UK, EU, Japan, South Asia, Australia, South America and Latin America.
As part of its commercialisation strategy for X-PLO₂R portfolio, the Directors of Bellascura have adopted a five-phase process which will commence with its initial launch in July 2021.
The global respiratory care devices market is estimated to be $23.4 billion in 2021 with the market expected to reach $28.6 billion by 2024, growing over $1.7 billion per year.
Within this wider market, the supplemental oxygen therapy devices market was forecast in 2018 to grow by 6% per year from $3.2bn in 2021 to $4.2 bn by 2026 and the impact of the COVID-19 pandemic has led to an increase in this growth forecast to 11% per annum.
As a result, the market is now forecast to reach $5.7bn by 2026, an increase of 66% over the next 5 years. In fact, to give a scope of this market, the World Health Organisation ("WHO") announced on 24 June 2020 that it would be purchasing 184,000 oxygen concentrators, valued at over $100 million, in order to address oxygen shortages across 120 countries.
Last week, the Group said new proposals from the US Centers for Medicare & Medicaid Services (CMS) could expand US health care services beyond the traditional inpatient hospital setting.
The CMS is proposing changes to two separate, but medically related, National Coverage Determinations relating to home oxygen therapy which, if approved, could grant Belluscura ‘another substantial market opportunity’ ahead of its X-PLO2R DX Model launch in 1H22.
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