Dignitana

* Slow sales uptake in recent years, potentially impacting the company's ability to grow five-fold in a decade.
* Currently unprofitable with negative cash flow, although hovering around EBITDA profitability on a quarterly basis.
* High dependence on a single product line subject to FDA/EMA approvals, presenting a concentration risk.
* Regulatory interference potential, which could impact business operations and market dynamics.
* Limited revenue diversification, increasing vulnerability to market fluctuations and product-specific risks.

* Strong recurring revenue model with buy-and-bill approach, enhancing business stability and predictability.
* Significant growth potential in existing and new markets, with low market penetration of the estimated TAM.
* Asset-light business model allowing for efficient scaling without costly reinvestment.
* Benefiting from secular tailwinds in cancer treatment and increasing desire to mitigate chemotherapy side effects.
* Well-positioned in a market with few dominant players, protected by regulatory barriers and solid clinical data.

* Limited insider ownership, with management and board members holding less than 10% of the company's stock, potentially reducing alignment with shareholder interests.
* Recent CEO appointment, resulting in a senior management team with less than five years of collective tenure, which may impact stability and long-term strategic execution.
* Lack of founder involvement in the business, potentially missing out on the benefits of founder-led companies such as strong corporate culture and long-term focus.
* Unclear return on capital for investments, as the company is still loss-making and focused primarily on existing offerings.
* Absence of dividend payouts, though understandable given the company's current loss-making status, may be less attractive to income-focused investors.

* Strong leadership with CEO Fredrik Jonsson demonstrating a long-term outlook, industry expertise, and commitment to innovation, fostering a decentralized, business-oriented organization.
* Transparent and balanced investor communication, focusing on long-term business value and consistently presenting relevant metrics over time.
* Well-defined strategic plan with management delivering on promises and showing commitment to innovation, particularly in scalp cooling technology.
* Board of directors with diverse experience aligning with business strategy, promoting female representation, and maintaining high standards of corporate governance.
* Reasonable executive compensation structure with incentives tied to long-term value creation and sustainability performance.

Dignitana today announced that they have entered into a sales and marketing partnership with InfuSystem Holding Inc. to provide scalp cooling systems in the US. InfuSystem Holdings is a listed US company with a turnover above USD 109 million, as reported by 2022. They provide medical equipment and patient services in both the US and Canada. One of their focus areas is within Oncology, where they provide services for patients to receive chemotreatment at home.
We find this partnership exciting as it opens up a market that has not, to our knowledge, been explored earlier by Dignitana. This is a big step for Dignitana and a way to push sales in the critical US market. There is a need for Dignitana to increase its sales efforts in the US, and we see this as an excellent way to do it without overspending on its own sales resources in the US.
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There has been a lot of good news around the scalp cooling industry during the last 12 months; however, the market has been skeptical about the development, as seen by the share price development. The reimbursement process has steadily progressed, although this has not been evident to a large extent in the growth numbers. We expect this to happen towards the end of 2023e and into 2024e.
The move today to enter into this partnership shows that Dignitana is proactively looking for ways to increase sales in the US further, which is, in our view, encouraging.
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As of now, we are not making any changes to our estimates based on this partnership, and any potential changes will be made in connection with the Q3 report on 16 November.