Xvivo Perfusion

Research note


Xvivo Perfusion Q2: Return to profitability

Net sales in Q2 came in slightly lower than our forecast. However, lower than expected operating expenses and no sales of durable goods resulted in a significantly higher profitability than what we had anticipated. We have a positive view of the report, but believe that a surge in sales related to warm perfusion will happen slightly later than what we had previously accounted for.

Net sales in Q2 amounted to SEK 37 million, corresponding to a growth of 13 percent in local currencies. We expected a slightly higher number, forecasting net sales of SEK 39.5 million. Both sales related to warm perfusion and durable goods failed to meet our expectations, but sales related to cold preservation showed signs of continued strength, easing potential worries after the previous weaker quarter. We maintain our belief in a progressive slowdown in sales growth for Perfadex, seeing that the product holds a dominant position in the market and that the room for expansion is limited.

With the results in hand, we also believe that a surge in sales for the products related to warm perfusion will occur slightly later in the forecast period than previously accounted for, predicting strong growth in 2018. The delay of a soaring sales is mainly thought to be the result of a slow reimbursement process. We do, however, believe that the completion of the NOVEL study, where revenues were lost from evaluations performed within the study, will contribute to a small uptick in sales in the second half of the year.

The EBITDA outperformed our estimates and came in at SEK 5.7 million. Going forward, we believe that the company will see strong margin expansion, driven mainly by increasing sales related to warm perfusion. We do not expect to see a significant decrease in the cost base, considering that PrimECC is nearing market launch and that the heart project likely will enter clinical phase in the near future.

Overall, we keep a positive view of the report, focusing on the maintained low cost base and beneficial conditions for margin expansion. We will not do any major adjustments in our forecast going forward and maintain our fair value of SEK 105 per share.


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