RLS released its Q2 2023 report. The net sales came in at SEK0.2m (SEK0.4m), and operating expenses amounted (including other operating income) to SEK-7.3m (SEK-5.8m) compared to our OPEX estimate of SEK-7.7m. Moreover, EBIT came in at SEK-7.5m (SEK-5.8m), which was a bit lower than our estimate of SEK-7.2m. The difference between our estimate vs the actual EBIT is mainly the sales, where we anticipated minor sales of SEK1.1m during the quarter.

The communication from the company is still limited in our view, which creates concerns about the outlook for the company. We expect small sales during the second half of the year; however, we are uncertain how much focus ConvaTec has on ChloraSolv. The CEO message shows no indication of when sales are expected to rise. We learn there are planned launches in further countries during the latter part of 2023; however, we do not expect any major sales.

We have made some sales estimate changes in relation to the report. Furthermore, we update the cash position and our capital raising assumptions (update our estimated subscription price to current share price levels with a 30% discount and increase our estimate from SEK20m to SEK25m). These changes do render in an updated fair value range with a base case of SEK5.5 (7), bull case of SEK8 (10), and bear case of SEK1 (2).