Ondine Biomedical Reports Robust Growth in H1 2024

Unaudited results for the six months to 30 June 2024

VANCOUVER, CANADA / ACCESSWIRE / September 30, 2024 / Ondine Biomedical Inc. ("Ondine Biomedical", "Ondine" or the "Company") (AIM:OBI), a leading provider of light-activated antimicrobial technology to prevent and treat hospital infections, is pleased to announce strong operational results for the first half of 2024, highlighting significant progress and expansion in its commercial and clinical endeavors.

Financial figures throughout this interim report are in Canadian dollars unless otherwise specified.

Operational Highlights

· Commercial growth: Adoption of the Company's novel light-activated antimicrobial, Steriwave^®, increased by 190% to 29 hospitals by the end of H1 2024 (H1 2023: 16 Hospitals). Commenced commercial roll-out of the 2^nd generation Nasal Illuminator in Canada post-period.

· Strategic partnership: Following the end of H1 2024, the Company announced a strategic partnership with Mölnlycke Health Care, a world-leading MedTech company that specializes in innovative solutions for wound care and surgical procedures, to bring Ondine's Steriwave nasal decolonization technology to the UK, EU, and Middle Eastern markets.

· Clinical trial progress: In June, the Clinical trial agreement for the US Phase 3 trial was signed with HCA Healthcare (HCA). Ondine, HCA and the contract research organization are collaboratively finalizing the details and site selection for the trial.

· Advancing into ICU: As previously announced, the Company accelerated plans to pursue the large and critical ICU market, and has partnered with the Royal Columbian Hospital Foundation's Advancing Innovation in Medicine (AIM) division to study Steriwave in intensive care units (ICU).

Financial Highlights

· Revenue of $0.9 million, reflecting a 101% increase compared to $0.4 million in H1 2023.

· Gross margin at 62%, up 300 basis points from 59% in H1 2023.

· Loss from operations of $7.8 million (H1 2023: $8.0 million).

· Cash, cash equivalents and restricted cash of $1.4 million as at 30 June 2024 (31 December 2023: $3.1 million).

· Secured c.$11 million of capital in support of commercial growth and general operations comprised of $6 million in May 2024 and a post-period private placement of $5 million to be delivered on or before 8 November 2024.

· Financial support of $0.7 million from Founder and CEO Carolyn Cross was received on an interest free, unsecured basis along with commitment for continued working capital support on similar terms while the Company secures additional long-term finance.

Carolyn Cross, CEO:

"Our significant revenue growth and expanded hospital adoption of Steriwave are testaments to the technology's efficacy as well as the need for simple solutions to prevent complex hospital infections. The Mölnlycke partnership underscores the value we bring to healthcare systems and marks a new era of accelerated growth for Ondine as we pursue approval for the large US market and expansion into critical care settings. We are excited about the road ahead and continued momentum in the second half of 2024."

Live Presentation

Ondine will be hosting a presentation to all existing and potential shareholders at 16:30 BST (08:30 Pacific time) held via the Investor Meet Company platform. Questions can be submitted at any time during the live presentation.

Investors can sign up to Investor Meet Company for free and add to meet ONDINE BIOMEDICAL INC. via: https://www.investormeetcompany.com/ondine-biomedical-inc/register-investor

Investors who already follow ONDINE BIOMEDICAL INC. on the Investor Meet Company platform will automatically be invited.

Related Party Transaction

On 30 September Carolyn Cross provided a loan (the "Loan") of C$400,000 to the Company for additional working capital ahead of securing longer term financing. This is in addition to the C$285,000 loan provided on 11 September 2024. The Loan is deemed to constitute a related party transaction for the purpose of AIM Rule 13. The Company's Independent Directors, having consulted with Singer Capital Markets, the Company's nominated adviser, consider that the terms of the Loan are fair and reasonable insofar as Shareholders are concerned.

As previously announced, Carolyn and Robert Cross, who jointly own 49.5% of the Company, have indicated they will continue to support the Company with short term financing on similar favourable terms to extend the runway while the Company secures longer term financing.

Enquiries:

About Ondine Biomedical Inc.

Ondine Biomedical Inc. is a clinical Canadian life sciences company and leader in light-activated antimicrobial therapies (also known as 'photodisinfection'). Ondine has a pipeline of investigational products, based on its proprietary photodisinfection technology, in various stages of development.

Ondine's nasal photodisinfection system has a CE mark in Europe and the UK and is approved in Canada and several other countries under the name Steriwave^®. In the US, it has been granted Qualified Infectious Disease Product designation and Fast Track status by the FDA and is currently undergoing clinical trials for regulatory approval. Products beyond nasal photodisinfection include therapies for a variety of medical indications such as chronic sinusitis, ventilator-associated pneumonia, burns and other indications.

Chief Executive Officer's Statement

The first half of 2024 has been productive for Ondine, marked by robust growth and significant commercial advancements. Our continued progress is a direct reflection of the dedication and hard work of our team, our supporters and shareholders, as well as the trust placed in us by the healthcare professionals we serve.

Commercial Traction

Our recent commercial traction and rapid new hospital adoption rate have led to our strategic partnership with Mölnlycke Health Care, a global leader in the wound care and infection control industry, announced on 23 September 2024. This partnership will help to accelerate adoption of Steriwave in key markets, starting initially with the United Kingdom, which has a total addressable market of over 3 million major surgeries annually^[1] and over 200,000 annual intensive care unit (ICU) admissions.^[2]

Successful outcomes in initial hospital deployments continue to fuel adoption growth in our target markets of Canada and the UK. We grew the number of hospitals which are using, or have approved use of, Steriwave to 29 (190% increase year-over-year) and doubled our revenues compared to the same period last year. We are now deployed in five of Canada's 10 largest hospitals and aim to be in 9 of 10 of Canada's largest hospitals by the end of next year.

This year Ondine made significant inroads into the UK's National Health Service (NHS), in addition to our existing sales into the HCA UK network. In June, Steriwave became the first light-activated antimicrobial therapy to be listed on the NHS Supply Chain, the online procurement system which simplifies the purchasing process for NHS hospitals and clinics across England and Wales.

Following a successful initial pilot program, Ondine signed its first commercial contract with Mid Yorkshire Teaching NHS Trust - the first of the NHS Trusts to officially adopt universal nasal decolonization for presurgical patients. Mid Yorkshire Teaching NHS Trust accelerated its adoption of Steriwave into 2 hospitals, Pinderfields and Pontefract Hospitals, as standard of care. In a collaboration with Health Innovation Yorkshire & Humber and the York Health Economics Consortium (YHEC), data from the Mid Yorkshire hospitals is being used to conduct a health economic analysis of Steriwave. The findings, expected in the fourth quarter, should help to support further adoption into hospitals across the NHS Trusts in light of the NHS long term goals of innovative solutions to address antimicrobial resistance, reduced costs and improved patient outcomes.

Clinical Advancements

With the clinical trial and CRO agreements signed, and work progressing on site selections and finalizing details with principal investigators, we are poised to initiate our US Phase 3 trial with HCA Healthcare once the necessary funding is obtained, a key steppingstone to access the large US market. This trial, to be conducted at 14 HCA hospitals, will compare standard-of-care infection prevention practices with, and without, Steriwave nasal decolonization. The primary endpoint of this 5,000-patient trial is the reduction of surgical site infections, one of the most prevalent healthcare-associated infections (HAI) that costs US healthcare billions of dollars annually. We are very pleased to have esteemed Dr. Ed Septimus - Professor of Internal Medicine, Texas A&M College of Medicine and Senior Lecturer at Harvard Medical School - as Co-Medical Monitor for this large US clinical study.

Another major application for Steriwave is in intensive care units (ICU), where 12-13% of patients suffer from hospital-acquired infections, significantly increasing length of stay, mortality, and costly burden to overstretched healthcare resources. Preventing these infections is a priority for hospitals and nasal decolonization for these high-risk patients is recommended in multiple guidelines, including from the Centers for Disease Control and Prevention (CDC), the World Health Organization (WHO), the Society for Healthcare Epidemiology of America (SHEA) and Infectious Diseases Society of America (IDSA), and the European Guidelines (ESCMID). We are, therefore, very pleased with our recently announced research collaboration with the Royal Columbian Hospital Foundation & Advancing Innovation in Medicine (AIM) division led by Dr Steven Reynolds in support of Steriwave's intensive care unit application. This collaboration sets the stage to unlock the expansive global ICU market, where nasal decolonization (using topical antibiotic ointments over 5 days) is already recognized as a key infection prevention strategy.

The purpose of this strategic initiative is to integrate Ondine's Steriwave into ICU infection control and workflow protocols to determine the impact of rapid broad spectrum nasal decolonization on ICU infection rates, length of stay and mortality rates. Commencing with a four-month feasibility phase with a minimum of 320 ICU patients at Royal Columbian Hospital (RCH), the initial research is aimed at optimizing workflow protocols and collecting vital data on enrolment rates and baseline infection metrics. Results from this initial phase will inform a larger multicenter study involving up to 2,000 ICU patients to assess pharmacoeconomics, infection prevention, and patient outcomes in critical care settings. The $855,000 pilot study, supported by the RCH Foundation, will be funded by Ondine through the issuance of equity, over four milestones.

Financial Performance

On the financial front, we are pleased that revenues more than doubled year-on-year while holding operating costs steady, offsetting increased costs related to Phase 3 clinical trial preparations with strategic cost-saving measures. Cost of goods sold continued to fall, further increasing gross margins to 62%, up 300 basis points from 59% in H1 2023.

We raised circa $11 million, including a successful financing of over $6 million in May and $5 million post-period in a private placement financing. Furthermore, Ondine has the working capital support of founders and substantial shareholders while currently exploring longer term funding options with our advisors, and we are confident in the ability to secure longer-term growth capital.

Outlook

2024 is proving to be a pivotal year for the Company with significant progress made on the commercial and clinical development fronts. Looking ahead, we have an exciting and challenging chapter before us, one that will very much define us in the years to come. We are ready.

On behalf of the Board and all the Ondine employees, we would like to thank our numerous supporters and shareholders for the many contributions that pave the way for our continued success.

Carolyn Cross
Chief Executive Officer
30 September 2024

Ondine Biomedical Inc.
Unaudited condensed consolidated interim statements of financial position
(In thousands of Canadian dollars)

Going concern - Note 1; Commitments and contingencies - Note 14; Subsequent events - Note 22

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

Ondine Biomedical Inc.
Unaudited condensed consolidated interim statements of loss and comprehensive loss
(In thousands of Canadian dollars, except share and per share amounts)

(1) May be reclassified to profit or loss in subsequent periods.

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

Ondine Biomedical Inc.
Unaudited condensed consolidated interim statements of changes in equity
(In thousands of Canadian dollars, except share amounts)