Nuwellis, Inc. (NASDAQ:NUWE), a medical device company, has terminated its Supply and Collaboration Agreement with DaVita (NYSE:DVA) Inc., as well as related agreements, effective immediately, the company disclosed in an 8-K filing with the Securities and Exchange Commission on Thursday.
The Eden Prairie, Minnesota-based company, which specializes in electromedical and electrotherapeutic apparatus, entered into a Termination Agreement with DaVita on Wednesday, ending a partnership that began on June 19, 2023. The termination also includes the cessation of a Common Stock Purchase Warrant and a Registration Rights Agreement, both dated from the start of their collaboration.
According to the filing, the termination was mutual, and the conditions that would have allowed the warrant to vest were never met. Consequently, no stock warrants were vested, and since the approval for Ultrafiltration Services was not achieved, registration rights were never in effect. All rented and unused products are to be returned to Nuwellis as per the termination conditions.
The original agreements with DaVita were intended to supply products and collaborate on services, but the specific reasons for the termination were not disclosed in the filing. The details of the DaVita Agreements were previously reported in Nuwellis's Form 8-K filings on June 20, 2023, and June 6, 2024.
Nuwellis, previously known as CHF Solutions and Sunshine Heart, has been incorporated in Delaware and is listed on the Nasdaq Capital Market. The company's President and Chief Executive Officer, Nestor Jaramillo, Jr., signed the SEC filing on behalf of Nuwellis.
In other recent news, Nuwellis, Inc. has reported a 6% increase in revenue, totaling $2.2 million for the second quarter of 2024, compared to the same period last year. This growth was largely driven by a 30% rise in the utilization of heart failure and critical care consumables.
Additionally, the company marked its first commercial sale of QUELIMMUNE to Cincinnati Children's Hospital, a significant development that is anticipated to enhance pediatric critical care standards. Further, Nuwellis has expanded its pediatric market reach with the addition of a new account, bringing the total to 41 pediatric accounts.
Recent developments also include some challenges. The collaboration with DaVita experienced delays due to contract amendments and the development of new protocols. Enrollment for the reverse HF trial has also been slower than expected during the summer months. Despite these setbacks, Nuwellis remains on track to complete site enrollment for the reverse HF trial by the end of 2024 and patient enrollment by Q3 2025.
Analysts highlight that Nuwellis anticipates continued positive momentum in 2024 due to increased awareness and adoption of therapies. The company is also targeting an expansion to 10 hospitals with the controlled launch of their product by year-end.
These are some of the key highlights from recent news on Nuwellis, Inc.
InvestingPro Insights
The recent termination of the agreement between Nuwellis, Inc. (NASDAQ:NUWE) and DaVita Inc . marks a notable shift in Nuwellis's business strategy, potentially impacting its financial outlook. In light of this development, InvestingPro data and tips provide a deeper understanding of the company's current position. Nuwellis holds a market capitalization of $2.53 million and a revenue of $9.01 million over the last twelve months as of Q2 2024, with a revenue growth of 8.54% during the same period. Despite this growth, the company's operating income margin was deeply negative at -185.81%, reflecting significant operational challenges.
InvestingPro Tips underscore the precarious financial health of Nuwellis. The company holds more cash than debt, which is a positive sign. However, it is rapidly burning through its cash reserves and has been trading at a low revenue valuation multiple. Additionally, analysts do not expect the company to be profitable this year, and the stock has experienced a substantial decline over the past week, with high price volatility being a consistent trait. For investors seeking more comprehensive analysis, there are over 15 additional InvestingPro Tips available for Nuwellis at Investing.com/pro/NUWE.
The company's financial metrics and market performance, including a 52-week low and a significant price drop over the past year, may influence investor sentiment and decision-making in the wake of the terminated agreements. Nuwellis's next earnings date is slated for November 8, 2024, which will likely provide further insights into the company's trajectory post-termination.
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