Inhalation Sciences released its Q4 2023 report. The revenues came in at SEK5.5m (SEK4.1m), 24% lower than our revenue estimate of SEK7.2m. The gross margin came in at 85% (77%), higher than our gross margin estimate of 79%, and operating expenses amounted to SEK-5.4m (SEK-4.3m) compared to our OPEX estimate of SEK-3.8m. The main difference between the result and our estimates is that the revenues came in a bit lower than expected. Furthermore, OPEX was a bit higher on all line items. Moreover, adjusted EBITDA came in at SEK-0.5m (SEK-0.8m), and EBIT was SEK-0.7m (SEK-1.1m), which was lower than our estimates of SEK2.2m and SEK1.9m, respectively. Overall, the report came in a bit under our expectations. However, we still argue the results are solid as the company continues to grow and the demand for ISAB’s offering continues to increase.

We look forward to the upcoming clinical study data (during the next few months) and the study result from the FDA at the end of the year. We argue that these two events, together with increasing revenues and upcoming profitability as solid triggers for the share, that we argue could decrease the gap between the current share price and our base case.

We have made some estimate changes for our 2024e-2025e estimates, mainly decreasing our revenue estimates during the period. As a result, our base case decreases from SEK17 to SEK16.5. Furthermore, our bull and bear cases of SEK27 and SEK4 remain the same.