Nightingale H2: Commercialization progresses, no surprises in figures

Translation: Original comment published in Finnish on 15/09/2021 at 10:00

Nightingale, a provider of preventive healthcare technology, today released its financial statement report that was in line with our expectations. After its March listing, the company has actively worked on the commercialization of its technology, which in the big picture is still in the initial stages. Nightingale is currently working on many fronts, but in the light of the expanded short-term objectives, the company seems to have faith in a steady progress in commercialization also next year. At first glance, the report held no surprises.

As far as figures are concerned, the report was in line with our expectations. Revenue for the first half of the year was low as expected at EUR 1.1 million. This is based on the company being in the midst of building new business. Revenue in the period was still generated almost purely from research activities. Profitability was, as expected, well in red and profit before taxes was EUR -8.2 million. Costs in the early part of the year were raised by some EUR 7.6 million non-recurring costs related to the listing. Low profitability is naturally also explained by Nightingale’s growth strategy that is in an investment stage and income flow from the new business model will in our view be visible in small amounts only towards the end of the year. The company's fiscal year ended on June 30 and the periods in the table above therefore differ from the calendar year.

After listing in March, Nightingale has taken quick steps forward in the commercialization of its technology. In April, the company received a clinical laboratory certificate in Japan, signed a strategic cooperation agreement with Terveystalo and signed a sales contract for health and welfare services with Japanese Mitsui. In May, the company signed a strategic partnership with Reaktor to support scaling up the company's digital solutions. In June, Nightingale secured the availability of its home tests by partnering and making a minority investment in Weavr Health, whose blood collection device Nightingale has used to carry out the first steps of its home test pilot. In July, the company also accelerated the development of digital solutions through acquiring Yolife.

Nightingale is currently working on several fronts. Building operations in Finland and Japan, building digital solutions, the integration of after the business acquisition, expanding the home test pilot, continuing research and applying for FDA approval are all ongoing simultaneously. In addition, Nightingale issued new short-term objectives for the new fiscal year (July 1, 2021 to June 30, 2022) in connection with the report. By the end of the fiscal year, Nightingale aims at reaching an order book of EUR 5 million, expected to contain commitments from business partners as well as customers using a continuous subscription service. Nightingale also aims to launch a commercial service based on the at-home test and signing an international commercial partnership agreement. The objectives of FDA (U.S. Food and Drug Administration) approval and launching a new version of the company’s mobile application set during the IPO remain unchanged.

The company must proceed with discipline to keep all strategically important projects on the right track. The expanded targets do, however, give an indication of the company's belief in the potential for commercializing its technology, although we will only see the results over time. So far, the company has done, however, all the things it aimed at either on time or faster in the short term. At a first glance we found no concerns in the report related to commercialization progressing, which seems to be moving forward on track at this stage.