BrainCools partnership with American INCH which was launched this summer has in many ways come to define the rest of the year for the Lund-based medical technology company. The agreement covers some of the most important global medtech markets. Within the framework of the agreement, ZOLL is now responsible for marketing and sales of the BrainCool System, which is sold under the IQool System brand in the USA.
In a press release described the ZOLL IQool System as a “high-quality product for advanced controlled surface cooling with an intuitive user interface, precise calibration capabilities, and precise temperature control.”
Increased production capacity through Scanfil
Because the contract with ZOLL is so extensive, BrainCool has prioritized increasing capacity over the past six months. The solution was to sign a multi-year agreement with the Finnish subcontractor. Scan file who has now committed to manufacturing 500 BrainCool/IQool systems to meet the increased need.
Scanfil does not require advance payments for materials, which according to BrainCool initially reduces working capital requirements by up to SEK 25 million annually. Payment will now be made upon delivery, while the cost per unit is reduced. An order for 35 units will be delivered in Q4, 2023. However, this is just the beginning – within a few months the need will increase tenfold. The agreement with Scanfil secures the delivery requirement starting on April 1, 2024, within the framework of BrainCool's partner agreement with Zoll.
Global expansions
During Q3, BrainCool expanded its collaboration with ZOLL to include six new markets in Southeast Asia and Pakistan, and new orders were received from Zoll's operations in Singapore and the US. In parallel, BrainCool initiated a collaboration with Wallaby Medical with the goal of launching products for the stroke market in the country with a special focus on thrombectomy. Read an interview with the CEO Martin Waleij about the agreement with Wallaby Medical hereThe CEO also commented on the agreements with ZOLL and Wallaby in a studio interview that can be seen here.
Agreements with the three largest purchasing organizations in the US
In parallel and as a natural extension and complement to the agreement with ZOLL, BrainCool has also signed agreements with the two largest General Purchasing Organizations (GPOs) in the USA regarding the purchase of healthcare products in the USA, vicious and Premier Inc.. The distribution of BrainCool's IQool System products also takes place here within the framework of the agreement with ZOLL. BrainCool has had an agreement with the third largest purchasing organization since 2020 Health Trust in the USA. CEO Martin Waleij has commented on this here.
The EU-funded stroke study
In August, BrainCool signed an agreement with University of Maryland in the USA to participate in the EU-funded Cottis 2 study. The aim is to establish a new treatment for stroke patients by combining cooling with thrombectomy. The results of this new treatment based on the initial Cottis 1 study were published in Journal of Stroke & Vascular Neurology in August. Read the sea.
AMA approval
The next breakthrough came in October when American Medical Association (AMA) announced the approval of a new CPT (Current Procedural Terminology) code for cryotherapy – with the help of BrainCools Coral System – in patients undergoing chemotherapy. According to BrainCool, this opens up for reimbursement for the Cooral System from Medicare – The US public healthcare system. Reimbursement in this case does not require a US-based clinical trial and the company can now aim for a US launch next year instead of 2025/26. Read more.
Strengthened finances
It is clear that BrainCool has changed with the agreement with ZOLL. The company's stock has increased by over 200 percent this year and was sniffing at a billion-dollar valuation last week.
The company has nevertheless had a need to strengthen its cash position and in August it carried out a directed new share issue of SEK 60 million. The issue attracted both new shareholders and institutional investors, which according to the company confirms a well-founded confidence in BrainCool and its future potential.
Comments from the CEO
In a comment on the development of recent months and the Q3 report, the CEO says Martin Waleij:
– Collaboration with ZOLL shows that we are approaching a breakthrough. I would also like to clarify that the 35 systems mentioned in the report are attributable to the fourth quarter, which means that we are also showing significant growth this year. Of course, it can be seen as a dent in the record that we have closed down our own direct sales operations in the US, to transfer sales to a distributor that is a “big company”. However, we have built a solid foundation for very high growth in the next two years.
– We are continuing to work according to the new plan, where we are sticking to the ambition of a turnover for our first product to the market of over SEK 100 million. We have had some challenges in creating a good form with our producers, but I think we have succeeded well. I will not mention future joint information with Scanfil, but we have already built a production line that will be able to deliver 500 – 1 systems per year in the event that we really get the business going. In 000, we will further develop and simplify our reports and IR operations, including by more clearly showing order intake and delivery plans per quarter.