Belluscura makes 'considerable progress' in 2022
By Josh White
Date: Friday 13 Jan 2023
(Sharecast News) - Portable oxygen concentrator developer Belluscura described "considerable progress" in a trading update on Friday, reporting that since the launch of its first-generation 'X-PLOR' in September 2021, it was now distributing throughout the United States through multiple sales channels.
The AIM-traded company added that its collaboration agreement with the VGM Group had already resulted in 17 new distribution agreements in the last three months, including an agreement with a "leading durable medical equipment provider and distributor" in the US, announced in September, serving almost two million patients both online and through more than 1,000 locations.
In December, it also signed its first international distribution agreement with MedHealth Supplies in South Africa, which sells to "one of the world's leading" respiratory device suppliers.
Belluscura said it had already received orders for over 1,000 units, with their first shipment sold out within 48 hours.
In December, the company produced a record 536 units at its in-house facility, and with Innomax coming on-line in the first quarter, it said that would more-than-double the production of X-PLOR.
The board noted that even with the rapid increase in volume, the production quality of its in-house facility had been "outstanding", with no units returned due to defects.
By 31 December, the firm had shipped or received orders for 2,850 X-PLOR units with 1,226 units being shipped in 2022, up from 377 in 2021.
By year-end, the adjusted EBITDA loss was set to be in line with market expectations, with retained cash balances totalling $1.8m, which together with inventory and inventory deposits amounted to $11.9m.
The firm said its next generation X-PLOR, launched in September, had been "well-received" by the market based on its performance and reliability.
The first 'DISCOV-R' portable oxygen concentrators, meanwhile, were expected to be launched for pre-market evaluation in the first quarter of this year, with full commercialisation anticipated in the second quarter.
Belluscura described DISCOV-R as "the first ambulatory pulse-dose and two-litre continuous flow" portable oxygen concentrator globally.
In March, the firm signed a manufacturing master supply agreement with Innomax Medical Technology to manufacture the X-PLOR portable oxygen concentrator in China, more-than-doubling its manufacturing capacity in 2023 and enabling it to accelerate our international expansion by opening up markets in Asia and beyond.
Innomax was expected to directly source most of its own components from the second half of 2023, which would also result in a "significant" margin improvement and reduction in the company's inventory levels.
Given the strong demand, the group said it had decided to transfer its US manufacturing in-house, to increase production output at high-quality standards, and achieve a "significant" reduction in production costs.
That was successfully completed at the end of July, enabling the achievement of ISO13485 accreditation.
The board said the manufacturing facility was already demonstrating the required product quality to build a significant customer base and repeat orders.
Following that transition, and having achieved ISO13485 accreditation, the directors said they were "confident" in having both the quality of manufacturing facilities and the inventory levels to increase production commensurate with market demand, as it expanded its sales channels and was able to apply to distribute products internationally.
"During the year we have made considerable progress," said chief executive officer Robert Rauker.
"We have enhanced our production, quality accreditation and supply chain, positioning us well to deliver on the demand we are seeing for our devices, as we expand our distribution partners and geographical reach."
Rauker said market reception for the next generation X-PLOR and 'Nomad' app had been "extremely positive", with an "encouraging" level of forward orders.
"We are very excited about the upcoming launch of the DISCOV-R, which we believe will be a transformational product, and we look to the future with confidence."
At the close on Friday, shares in Belluscura were down 10.23% at 39.5p.
Reporting by Josh White for Sharecast.com.
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