DENVER, CO - SeaStar Medical Holding Corporation (NASDAQ:ICU), a medical device company specializing in surgical and medical instruments, has reached a settlement with Nuwellis, Inc., resolving a dispute regarding a distribution agreement for its pediatric SCD product. According to the information disclosed in a recent SEC filing, SeaStar Medical will pay Nuwellis $900,000 in three installments by December 31, 2024.
The conflict originated when SeaStar Medical notified Nuwellis of a breach in their exclusive distribution agreement in May 2024, leading to the agreement's termination effective August 18, 2024. Nuwellis contested the termination's validity, culminating in the settlement agreement on Sunday, October 20, 2024.
The pediatric SCD product, which is at the center of this dispute, is part of SeaStar Medical's portfolio aimed at improving patient outcomes in critical care. The settlement will not only conclude the legal disagreement but also remove the uncertainty regarding the product's distribution in the United States.
SeaStar Medical, previously known as LMF Acquisition Opportunities Inc. before a name change on November 9, 2020, operates out of Denver, Colorado, and is incorporated in Delaware. The company's common stock and warrants are traded on The Nasdaq Stock Market under the symbols ICU and ICUCW, respectively.
This settlement is detailed in SeaStar Medical's Form 8-K filed with the SEC on Tuesday, October 22, 2024. The company, led by Chief Executive Officer Eric Schlorff, has not disclosed further details of the settlement beyond the financial terms and payment schedule.
The announcement of this settlement comes at a time when the healthcare industry is closely monitoring partnerships and distribution strategies for medical products, especially those aimed at pediatric care. SeaStar Medical's settlement with Nuwellis marks the end of this particular legal chapter, allowing both companies to move forward with their respective business operations.
In other recent news, SeaStar Medical has achieved a significant milestone in its NEUTRALIZE-AKI trial, surpassing the halfway mark with 51 participants enrolled out of the 100-subject interim analysis goal. The trial assesses the safety and efficacy of SeaStar's Selective Cytopheretic Device (SCD) in adult patients with acute kidney injury.
The company has also reported the full retirement of its long-term debt, previously over $9 million, marking a crucial financial milestone.
Further developments include the expansion of trial sites with the inclusion of Brooke Army Medical Center and the United States Army Institute of Surgical Research, bringing the total number of clinical sites to 11. The company is also shipping QUELIMMUNE, a device for pediatric patients with acute kidney injury and sepsis, following FDA approval.
SeaStar Medical has also announced a $10 million stock and warrant sale, expected to generate funds for general corporate purposes. However, the company faces a shareholder class action lawsuit alleging material misstatements and omitted information about its business operations and regulatory approvals.
Lastly, SeaStar Medical has seen significant board changes with the appointment of Jennifer A. Baird, Bernadette N. Vincent, and John Neuman. These are some of the recent developments at SeaStar Medical.
InvestingPro Insights
SeaStar Medical's recent settlement with Nuwellis comes amid challenging financial circumstances for the company. According to InvestingPro data, SeaStar Medical's market capitalization stands at a modest $16.89 million, reflecting its current position in the medical device sector. The company's stock price has experienced significant declines, with a one-year price total return of -84.12% as of the latest data.
InvestingPro Tips highlight that SeaStar Medical is not profitable over the last twelve months and suffers from weak gross profit margins. This financial strain is evident in the company's adjusted operating income of -$14.3 million for the last twelve months as of Q2 2024. These factors may have influenced the company's decision to settle the distribution dispute and structure the $900,000 payment over an extended period.
The settlement's impact on SeaStar Medical's future operations remains to be seen, especially considering that InvestingPro Tips indicate the company's short-term obligations exceed its liquid assets. This financial position could make the settlement payments challenging, although the installment structure may help manage cash flow.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for SeaStar Medical, providing deeper insights into the company's financial health and market position.
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