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Regulatory focus for Neola Medical

Regulatory focus for Neola Medical

Regulatory focus for Neola Medical

14 November, 2022

Lund-based Neola Medical can look back on an eventful period when reporting the third quarter of 2022. Positive study results and a successful capital raise provide a stable foundation for the future, where the focus will be on the regulatory work ahead of the market launch. BioStock contacted Neola Medical’s CEO Hanna Sjöström to find out more about her view of the third quarter and what she sees ahead of her for 2023.

Medtech company Neola Medical has developed Neola, a medical device for continuous monitoring of premature babies’ lungs. The system has been developed to better and faster detect lung complications, so that more children can survive and have a life without serious disabilities. The hope is that Neola will also be able to free up important time for the healthcare staff, especially the nurse who today supervises the child visually.

Positive study results strengthen the project

The company is currently busy preparing the product for market launch, where the initial focus will be the US market. Perhaps the most important activity is to gather clinical evidence for the benefit that the system is believed to provide to healthcare system. Recently, the large investigator-initiated clinical study was completed at the University Hospital in Cork, Ireland. The study has been running during 2022 and the technology was tested on 100 newborn babies.

The results show that the technology works well to measure the condition of newborn babies’ lungs, and results from the first participating 50 children were presented earlier in 2022 at TICA Biophotonic Congress: Biomedical Optics in Florida, USA.

During the quarter, a scientific article was also published in the highly regarded scientific journal Pediatric Research where the technology behind the Neola system was discussed. Read more about it in BioStock’s article here.

Strengthens the team ahead of launch

Another important part of preparing for the launch will be to introduce Neola to various key opinion leaders in the area, an activity that sits on the top on the company’s priority list. Therefore, the team has now been strengthened with Tetiana Kovtiukh, a doctor in neonatology who, in addition to her experience in the field, also has a background from the pharmaceutical industry, for example as a medical advisor at AbbVie.

Studies lay the foundation for market applications

Going forward, Neola Medical will place much focus on the regulatory processes. Technical verification studies and clinical validation studies need to be carried out to lay the foundation for the market applications required for launch in the US and Europe.

The company recently announced that it has received a grant from Vinnova totalling 164,000 SEK, which will be used to initiate biological evaluation and testing of the Neola system. The tests are done to show that the probes attached to the baby’s chest are safe and over time do not affect the skin or the breathing.

“We are now starting evaluation and testing of biocompatibility according to plan, which is of great importance for the upcoming market launch. Demonstrating the safety of the product and meeting standards and regulations is necessary before both CE marking and market approval in the US.”, Neola Medical’s CEO Hanna Sjöström states in a press release.

Capital injection finances the way forward

Perhaps the most important milestone during the quarter was the rights issue approved by the Extraordinary General Meeting at the end of the quarter. The rights issue was carried out in order to continue the project according to plan. In total, the company raised 44 MSEK, before issue costs, which was approximately 80 per cent of the proceeds aimed for. The outcome is seen by the company as positive, given the cool climate that currently prevails on the world’s financial markets.

In connection with the issue, the guarantor LMK Forward AB entered as a new major shareholder in Neola Medical. In addition, two of the four guarantors in the issue have chosen to receive guarantee compensation in the form of newly issued shares in the company, with a total value of 1.1 MSEK.

Comments from the CEO

BioStock contacted Neola Medical’s CEO Hanna Sjöström to find out more about her view of the past quarter and what she envisions going forward.

Hanna Sjöström, CEO Neola Medical
Hanna Sjöström, CEO Neola Medical

First of all, how would you describe the development during the third quarter?

– During the quarter, we have achieved some important milestones and we are really in an exciting phase. First of all, the clinical study on 100 newborn babies in Ireland has been completed, which means that the largest study with the Neola technology to date has been conducted. The study shows positive results, which strengthens our perception of Neola’s potential for upgrading the care of premature babies.

– We have also been granted a patent in Sweden for a technical method and equipment that provides improved accuracy in the continuous measurement with Neola, also an important part of continuing to strengthen our IP portfolio.

–The rights issue initiated by the Board of Directors during the quarter has now been completed. The rights issue was subscribed to approximately 80 per cent and thus provided the company with approximately 44 MSEK before issue costs, which is a sign of strength in this tough economic climate. We are grateful for the trust from our existing and new shareholders, and also welcome LMK Forward AB as one of the three largest owners in the company.

– Thanks to the successful rights issue, we have secured financing that enables us to continue to develop, validate and commercialise Neola.

The positive results of the Irish study will be important in the marketing of Neola. What are the plans going forward to further strengthen the evidence around the system?

– We are currently in the final phase of the development of Neola and we are continuing the planning for the implementation of technical verification studies and clinical validation studies in 2023. This is an extensive work that lays the foundation for our upcoming applications for market approval in the EU and the US and continues to strengthen the evidence for our technology and product.

LMK Forward AB is a new shareholder since the rights issue. What are your thoughts on their entry into the company?

– We are very pleased with the trust that has been placed in us in this rights issue, both from existing and new shareholders. LMK is a strong player in Swedish industry that invests in companies that are energetic and have a strong vision, and it is with great pleasure that we welcome them as the third largest owner in the company with an ownership stake of approximately 10 per cent.

Looking ahead, what activities will be most important for you during autumn and winter?

–In the next phase, a lot of focus will be placed on the regulatory work and planning for technical and clinical studies. We continue to prepare for the commercialisation and market introduction of Neola and building contacts with key opinion leaders in neonatology is therefore an important part of our work going forward.

You can learn more about Neola Medical here.

The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.

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