Group
The period in brief

Jon Berg, CEO Comment

In the second quarter, our efforts to streamline operations and reduce operating costs have progressed according to plan, as evidenced by the substantial improvement in operating cash flow performance. The second quarter also marked the closing of our US office, which has contributed meaningfully to the reduction in operating costs. The impact of these initiatives is, however, not fully reflected in the quarter’s cash position, as they have been partially offset by orders with outstanding payments at the end of the quarter – a result of transition from air to sea shipping. The total value of these payments is SEK 16 million, resulting in a current adjusted cash position of SEK 26 million. Earlier this week, we took another major step as we announced an expanded collaboration with our subcontractor. This initiative is expected to support further annual net cost reductions of approximately SEK 4.2 million once fully implemented.

The number of systems sold in the second quarter remained at the same level as the previous quarter. Despite this, the quarter’s net sales, totaling SEK 6.6 million, represent a decrease compared to the previous quarter. The decline is largely attributed to a pronounced negative movement in the USD/SEK exchange rate combined with a one-off order of 10 BrainCool/IQool™ Tabletop Systems in the first quarter. Adjusted for these effects, the quarter-on-quarter decline in revenue was -18,7 percent. The order of systems from our US distribution partner was lower than anticipated, and we have intensified our contact with our distribution partner to gain insights into ongoing commercialization activities and provide further support where needed.

Encouragingly, feedback from hospitals that have purchased the BrainCool™ System indicates a steadily increasing level of usage. This is reflected in the increased number of cooling pads sold in the first half of 2025. At ZOLL’s request, two-thirds of the projected order for the first half-year was shipped and invoiced during the first quarter of 2025. Hence, sales in the second quarter should be viewed rather as part of a growth in sales in the first half of 2025, compared to the previous year, than as a decrease in demand. This trend is reflected in the current order book, showing a positive development for pads also in the third quarter.

We registered a decline in the quarter’s gross margin, compared to the previous quarter. This was mainly influenced by the weakened US dollar in combination with the positive offset impact in the first quarter seen from ZOLL’s one-off order of BrainCool/IQool™ Tabletop Systems – a high-margin product. Adjusting for these effects, the gross margin continued to improve on a quarter-over-quarter basis.

Our efforts to achieve improved long-term gross margins continue. As part of this aim, we recently announced an expanded collaboration with our subcontractor, which is expected to result in net savings of approximately SEK 4.2 million. This initiative includes a tech transfer, which is expected to be fully implemented by January 2026.

Alongside our efforts to establish BrainCool™ System in markets with attractive margins, we are continuing the development of RhinoChill® System, a state-of-the-art medical precision cooling system with considerably higher commercial potential.

We are actively advancing preparations for the commercialization of RhinoChill® System, supported by ongoing clinical validation, regulatory planning, and production readiness. Given the significant global need for effective neuroprotective solutions in both stroke and cardiac arrest, the commercial opportunity for RhinoChill® is substantial. Two pivotal studies are currently ongoing to confirm its potential to improve patient outcome in ischemic stroke and sudden cardiac arrest (SCA).

The COTTIS 2 study evaluates RhinoChill’s potential to significantly improve treatment outcomes in ischemic stroke patients that undergo mechanical thrombectomy (MT). In the US alone, 300,000 patients are treated using MT annually, translating to a total addressable market of roughly USD 3 billion.

In May, the COTTIS 2 study was paused due to deviations found in a routine study audit. The deviations were addressed, and a report was promptly submitted to the German Health Authority BfArM. The authority requested additional input, which triggered an extended review period during the summer, but the study was recently approved to resume initiating patients again.

Patient inclusion in our second pivotal study, PRINCESS 2, is advancing at a strong pace, demonstrating a high external interest in our technology and confidence in RhinoChill® System’s potential to improve outcomes for sudden cardiac arrest patients. Over 100 patients have been enrolled across five countries, with additional countries preparing to join the study.

In summary, our efforts to reduce operating costs and improve gross margins are progressing well. While net sales were lower than anticipated in the quarter, the underlying trend support long-term optimism for precision cooling and BrainCool’s role in the ongoing transformation of critical care following cardiovascular events.