Summary of the year 2021 at SDS Optic S.A. and announcement of the implementation of further milestones in 2022

June 1, 2022

SDS Optic S.A., a company developing its proprietary technological platform inPROBE for real-time medical diagnostics in cancer, infectious, viral, bacterial, and fungal diseases, has published its annual report for 2021. The past months have been marked by several groundbreaking events for the company's development and its product.

Summary of the year 2021 at SDS Optic S.A.

In 2021, the company conducted toxicology studies on animals, obtained a patent for its technology, successfully raised PLN 11 million in a pre-IPO offering, and began the process of entering the NewConnect market. The company's debut took place in March 2022. At the same time, SDS Optic was intensively preparing to launch clinical trials of its device targeting HER2-positive breast cancer and achieved the first milestone toward launching its own pilot production of inPROBE fiber-optic biosensors.

In 2021, we achieved many important milestones for the further development of the Company, and we are very pleased with the pace we have managed to maintain. Among the most significant events for us was the start of preparations for clinical trials, despite the ongoing COVID-19 pandemic. This included the selection of the first two clinical centers that will participate in the initial phase of the trials. Another major milestone for the Company was the recent funding round, during which we attracted reputable investors. We also began preparations for our debut on the NewConnect market. Finally, I would highlight the completion and successful outcome of toxicological studies of the inPROBE microsensor, conducted at a certified animal research facility, says Marcin Staniszewski, CEO of SDS Optic S.A.

Further applications of the inPROBE technology

The FiBioMed team is actively working on new application areas for our inPROBE biosensor. So far, we have adapted the probe in the technological domain, produced its essential components, as well as the biological elements necessary for the diagnostic process. We have prepared the first sensor prototypes. We have also designed and created a 3D model of the analyzer head, capable of simultaneously processing samples from 96 patients. We are currently working on control software, as we aim to make the entire diagnostic process as automated as possible says the company’s CEO.

Promotion of the Company on the International Stage

The company was also very active in promoting its technology, participating in several major industry events such as MEDICA2021 in Düsseldorf, Life Science Open Space 2021, and the European Innovation Council Summit 21. Participation in such events not only enables the company to showcase its product and technology to a broad market but also plays a key role in building business relationships and reaching potential end-users. The potential of the inPROBE technology was also recognized in Poland, where SDS Optic was featured in a publication highlighting the 115 most innovative medical entities: Top Disruptors in Healthcare 2021. Notably, the report’s partners included Google for Startups, AstraZeneca, EIT Health, and PZU Zdrowie.

Financial results

SDS Optic is currently in the stage of confirming the effectiveness of its developed biosensor for diagnosing HER2-positive breast cancer, as evidenced by its financial results recorded in 2021. Throughout 2021, the company generated over PLN 451,000 in sales revenue. Its other operating income amounted to PLN 2.66 million (compared to PLN 3.36 million in 2020), primarily from grants obtained in previous periods. Operating expenses reached PLN 3.97 million (compared to PLN 3.49 million in 2020), mainly due to ongoing research and development activities. At the end of 2021, the company held over PLN 8.3 million in cash, contributing to financial stability. This was a result of the share issues carried out in the first half of the year (Series C and D), which raised a total of PLN 11.3 million. Notably, the company has no loans, credits, or bond debt. As of the end of 2022, SDS Optic’s fixed assets totaled approximately PLN 1.2 million, compared to PLN 206,000 in the previous year.

At the current stage of the Company’s development, our financial model is largely based on grants and funding obtained from equity investors. We secure financing for specific stages of work or projects and diligently deliver on them. Our vision has already convinced many private and institutional investors, some of whom invested in the development of SDS Optic at the very early stages back in 2013. It is important to emphasize that our business model has been thoroughly thought out, and we are well-prepared to achieve further milestones. We maintain a very responsible cost policy, which allows us to preserve financial stability. We have no long-term liabilities and continue to receive successive tranches of grant funding, which demonstrates our ability to secure such demanding financial resources. One of our goals for the coming quarters is to increase the value of the Company’s assets, including fixed assets, and to carry out further stages of development work. Our overriding goal is the commercialization of the first application of inPROBE, which will enable the Company to generate its first significant revenue in the coming years, says Mateusz Sagan, Chief Operating and Business Development Officer of SDS Optic S.A.

On the eve of the start of the inPROBE clinical trials

Since the beginning of 2022, the SDS Optic team has been intensively preparing for the launch of Phase I clinical trials of the inPROBE microsensor. In the first quarter, training sessions were conducted at carefully selected and contracted clinical centers for doctors and medical personnel who will participate in the trials. This provided them with the opportunity to submit their proposals for testing procedures. The company welcomed these submissions and, in agreement with a professional CRO (Contract Research Organization) advisor coordinating the trial process, decided to update the necessary documentation with the Office for Registration of Medicinal Products, Medical Devices, and Biocidal Products (URPL). Organizational procedures were also developed and tested to ensure the smooth execution of the trials.

We will be the first in the world to detect and measure the concentration of the cancer biomarker HER2 in the vicinity of a tumor without simultaneously acquiring diseased tissue from the tumor (biopsy). In clinical studies, we expect to confirm the information we obtained from animal model studies, and the knowledge gained will be of great importance in the further development of our inPROBE technology and the ability to precisely calibrate it to traditional methods of histopathological diagnosis – IHC or FISH methods. Currently, we are waiting for an update of the consent obtained at the end of 2021 to conduct the studies. We have decided to introduce and report changes to the research procedure to ensure the studies are even more reliable and provide the greatest value in the development process of the entire technology. We also have in mind the final report that will be created after completing this and the next phase of the research, which will be a crucial piece of evidence allowing the introduction of our solution to a wider market. We are also thinking about the commercialization process, and we are already taking care to ensure that the commercial value, as well as the clinical and regulatory documentation of our technology, are as high as possible, explains Dr. Magdalena Staniszewska, MD, PhD, Eng. (prof. KUL) – co-author of the technology and Scientific Director of SDS Optic S.A.

The budget for both phases of the clinical trial has been secured by the Company from funds obtained through the SME Instrument Horizon2020 program. The value of the financial expenditures related to the development of the inPROBE technology to date amounts to approximately 43 million PLN, of which about 7 million PLN will be allocated to clinical trials on patients. These funds were obtained from, among others, the SME Instrument Horizon2020 program run by the European Commission, the National Center for Research and Development, and capital investors. SDS Optic S.A. has developed an innovative and globally unique optical fiber microprobe, inPROBE. It is a biosensor with a high level of sensitivity and specificity, allowing for the biological measurement of the concentration of a specific biomarker or dedicated compound in the patient's body (in vivo testing) without the need for tissue sampling (biopsy). The primary field of application, which the Company is currently focusing on for development and commercialization, is diagnostics, as well as targeted treatment for HER2-positive breast cancer markers. The technology being developed by SDS Optic is an alternative diagnostic method to the more time-consuming and invasive traditional biopsy. Market reports indicate that the compound annual growth rate of the global HER2 molecular diagnostics market between 2019 and 2025 will be 12%, raising the market value to over $6.4 bn by 2025. In 2019, over 7.5 million tests were conducted in the field of HER2 molecular diagnostics, with a value exceeding $4.1 bn.

Announcement of the implementation of the next milestones

The second half of 2022 is epected to be equally busy for the Company. SDS Optic is completing preparations for clinical trials, divided into Phase I (safety) and Phase II (validation). By the end of the year, the Company plans to launch the pilot production line for its biosensors. At the same time, the Company will begin searching for a specialized advisor for the upcoming commercialization process of the biosensor for HER2-positive breast cancer diagnostics and is preparing to open its branch along with a research and development center in the US.