CEO comments

 
Continued positive development for SyMRI during a difficult quarter

SyntheticMR is a company with high growth ambitions, which have not been fulfilled during the quarter, so we are not satisfied with the overall development. This is despite the fact we note higher sales and better profitability compared with the previous quarter. The external situation means that some customers changed priorities and moved forward with other investment projects. Consequently, we have seen a negative effect on order intake. At the same time, we can positively state that we have no examples of cancelled projects. The current situation has had a negative effect on sales to GE Healthcare. It is important to note, however, that the number of orders from GE Healthcare increased during the period compared with the second quarter of the year. It is gratifying to see the increasing sales of SyMRI for the third quarter in a row. Sales growth in the quarter was approximately 200% and for the first nine months of the year a fivefold increase compared with the corresponding periods last year.

The continued increase in sales of SyMRI further validates the decision to invest in our own sales resources in selected markets. The largest share of sales is now generated by our organization in the United States. It is also the market that has most quickly found constructive ways to work during the pandemic. Other priority countries are contributing at an increasing rate. For example, we have received the first order in India where our customer solution is used in clinical routine. At the end of the quarter, we also sold a license in Japan as a result of SyMRI receiving the authorities' approval to be used in clinical activities. As before, all sales of SyMRI consist of time-limited licenses, which generate a customer base for recurring sales.

Sales during the third quarter amounted to SEK 10.5 million (12.0), which is a decrease of 12 percent compared with the corresponding period last year. The reason for the reduction is lower sales to GE Healthcare of the customized licenses that they market as MAGiC.Operating profit amounted to SEK -0.1 million (3.4) in the third quarter, which corresponds to a margin of -1 percent (29). The reduced result is due to lower sales and the increased investments in own sales resources. As before, costs are largely scalable and can be quickly reduced as needed. Since we have made this strategic decision, we have felt secure with the investment in the market organization. The increased sales of SyMRI we now see provide an additional source of revenue, which has proved to be important during the last two quarters.

Additional collaboration agreements with GE Healthcare and other partner developments

We have now taken an important step in the collaboration with GE Healthcare through the signing of an in-depth collaboration agreement that now covers our entire product solution. As part of the agreement, GE Healthcare will integrate SyMRI on its platform to deliver faster workflows, unique physiological information and objective decision support through quantification to its customers. GE Healthcare has been an important partner for SyntheticMR since the signing of the license agreement in 2014 and the new agreement expands our collaboration on a global level.

The collaboration with other existing partners also continues to develop. This contributes significantly to broadening the available market and increasing the resources needed to market and sell SyMRI. Initiatives were recently implemented that make SyMRI compatible with more cameras from Siemens, and the collaboration with Philips, which has included SyMRI in the price catalogue in the USA, shows a continued positive development. During the period, we reported an order from SimonMed Imaging in the USA. The implementation of SyMRI in their clinical activities is one of several examples of good collaboration with Philips. With new business partners, discussions continue, mainly with a focus on commercialization.

The right strategies for growth

Although the pandemic obscures the view, we feel that our marketing strategy works well. Our product development projects are also progressing according to plan. For example, the development of the product we sell today to also include examination of the musculoskeletal system. This includes, among other things, the knee joint and spine and accounts for a large proportion of all MR-examinations that are performed. This project, which is now approaching the launch planning phase, will significantly increase the sales potential for SyMRI. It is also positive that our industry is increasingly finding ways to work constructively in the world around us.