We are concluding yet another eventful quarter for Episurf Medical, and I would like to highlight the key events of the quarter, as well as provide you with a summary of the key milestones ahead of us. We are currently seeing high activity across various parts of our business, and I will focus on three specific areas; commercialisation, clinical development and product development. These are all of course closely related within a small organisation such as Episurf, but we are taking important steps within all these areas, and investors should look for important milestones within all of the three.
We have intensified our efforts to create a solid regulatory foundation to operate from. We have only been scratching the surface of the commercial opportunity in our target markets, however, we are now able to take the next steps and ensure increased market penetration in several markets. We have sold implants in 15 countries during 2021, and we are aiming at increasing volumes with each customer, as well as towards adding new customers in all our markets. This is a priority. During the first nine months of the year, our revenues are up by 46%, and we are aiming higher going forward.
During the quarter we experienced certain COVID-19 related effects that we cannot disregard. This was communicated to the market in a specific press release on October 14, 2021, and details are provided under the section Financial information in this report. We have seen an improving trend at the start of the fourth quarter, but I expected that we might have a bit more volatility ahead of us in the next weeks and months. However, overall, we are clearly taking steps in the right direction, and we are focusing on growth.
During the last years, we have consistently and patiently worked with a comprehensive clinical pipeline. Delivering on this pipeline has been a prerequisite for taking the next commercial step. What we have seen during the last, I would like to say 12 months, is that we have delivered according to our plan. During the third quarter, we achieved several important milestones, and the two most important ones included the publication of results from a study with 5-year follow-up data, as well as publication of results from the first comparative study on Episealer® patients.
The Episealer® technology represents a revolutionary treatment alternative. When we now summarise all the data that recently has been presented and published, we can conclude that we are moving from an experimental phase, to an evidence-based phase. We are now in a completely different position in our discussion with potential customers, patients, regulators, payors, and other counterparties, which significantly improves our position for the next steps of on our commercialisation strategy.
3. Product development
We have always looked for additional opportunities that could be developed based on our platform. Among the key criteria when reviewing such opportunities, is a relatively quick regulatory pathway to market. I am now pleased that we have broadened our strategy to include two products for which we are targeting 510(k)-processes for the US market: the Episealer® Patellofemoral System and the Episealer® MTP-system. Regarding the latter, this was communicated during the quarter, and this is highly exciting, and represents a significant commercial opportunity. This market is a market with significant unmet medical needs, and we have begun the product development phase for this product. We have set the target for filing a 510(k)-application to the US FDA for the Episealer® MTP system in late 2022 or the first half of 2023.
By developing 510(k)-products, we are entering established markets with existing customers, payment structures and where the basic technologies are well proven. We believe our individualised implant system will represent highly attractive alternatives for patients in those market segments.
4. Concluding remarks
The developments mentioned above, all lead to several key strategic actions:
- For the Episealer® Knee technology in Europe and certain other markets, we are now focusing on growth. If we can reach satisfactory market penetration in our current market, driven by strong data, successful reimbursement work and a compelling customer offering, we should target profitability in this part of the business.
- The EPIC-Knee study, our study aimed at supporting our future PMA application to the US FDA is ongoing. Now, we must ensure that patient recruitment gets started. We have changed the clinical protocol together with the FDA, we have recruited senior sales capabilities in the US, and we should see improvements in patient recruitment from an overall improved COVID-19 situation.
- The Episealer® Talus is being launched in Europe and certain other markets. We have capabilities to grow this product as we have experienced a great interest from surgeons, and we are also supporting several clinical trials that are ongoing in Europe for this product.
- The development project for the Episealer® Patellofemoral System runs with a targeted 510(k)-filing during Q4 2021, and we are also targeting a market launch in the US market mid-2022. The preparations for such a launch are ongoing.
- The development project for the Episealer® MTP-system has started, and we are currently reviewing design alternatives and confirming a target project timetable. Our ambition of submitting a 510(k)-application late 2022 – mid 2023 remains, and we look forward to providing investors with more details shortly.
Lastly, I would like to address the latest funding round that was executed at the beginning of October. We are very grateful for the support from our existing shareholders, and we are happy to welcome Ilija Batljan as a new shareholder of Episurf. Ilija is now our largest shareholder, holding about 13% of the share capital following a directed issue. In total, we raised SEK 159 million, of which Ilija accounted for the majority. We are committed to continue to create shareholder value, and our position was significantly strengthened by this share issue.
Stockholm, October 2021
 Stoddart et. al., The compartmental distribution of knee osteoarthritis – a systematic review and meta-analysis. Osteoarthritis Research Society International Journal. 2020, Vol. 29(4), pp. 445-455.
 Arthrodesis versus Arthroplasty of the First Metatarsophalangeal Joint in the Treatment of Hallux Rigidus – A Comparative Study of Appropriately Selected Patients (nih.gov)