Nuwellis, Inc., a Delaware-incorporated company trading on the Nasdaq Capital Market under the symbol NASDAQ:NUWE, has initiated a voluntary recall of specific lots of its AquaFlexFlow UF 500 Plus extracorporeal blood circuit, used with the Aquadex Smartflow® or Aquadex FlexFlow® System. The company, with a market capitalization of $4.35 million and trailing twelve-month revenue of $8.97 million, has seen its stock decline nearly 12% in the past week.
According to InvestingPro analysis, despite recent challenges, the company maintains a healthy gross profit margin of 63.65%. This recall, which was communicated to affected customers on December 11, 2024, is due to a malfunction causing an excess of mismatch alarms, potentially leading to Acute Volume Depletion in patients.
The company has reported five instances of product failure, with three cases resulting in patient dehydration necessitating the administration of fluids. The recall is currently being conducted with the knowledge of the U.S. Food and Drug Administration (FDA), which has yet to determine the classification of the recall.
Nuwellis, with its principal executive offices in Eden Prairie, MN, and formerly known as CHF Solutions, Inc., and Sunshine Heart, Inc., is addressing these failures which may trigger "Ultrafiltrate Weight Mismatch" or "Excessive Weight Mismatch" alarms during the use of the blood circuits. If these alarms are not properly managed, there is a risk of excessive fluid removal from patients.
In the 8-K filing, Nuwellis included forward-looking statements regarding the recall and any potential future recalls of the AquaFlexFlow UF 500 Plus blood circuit, as well as any possible adverse events related to the recalls. These statements contain typical forward-looking terminology such as "expect," "anticipate," "intend," and similar expressions. The company cautions investors not to place undue reliance on these forward-looking statements, which are valid only as of the date of the report.
The filing also outlines the risks and uncertainties that may cause actual results to differ materially from those projected in the forward-looking statements and directs readers to the company's filings with the SEC for a more complete understanding of these factors. InvestingPro analysis reveals that while Nuwellis holds more cash than debt on its balance sheet, it is currently experiencing rapid cash burn.
Investors seeking deeper insights into Nuwellis's financial health and future prospects can access comprehensive analysis through InvestingPro's detailed research reports, which cover over 1,400 US stocks.
This news is based on the latest 8-K filing by Nuwellis, Inc. with the U.S. Securities and Exchange Commission. The company's President and Chief Executive Officer, Nestor Jaramillo, Jr., has signed off on the report, marking its official release as of Monday, December 16, 2024.
In other recent news, Nuwellis Inc (NASDAQ:NUWE). reported mixed financial results for the third quarter of 2024. The company experienced a slight decline in year-over-year revenue, with revenues at $2.4 million, down 2% year-over-year but up 8% from Q2. However, growth was seen in the pediatric segment, which saw a revenue increase of 28%, and gross margins improved significantly to 70% from 57.3% the previous year.
Despite revenue declines in the adult critical care and heart failure services, a study endorsing the effectiveness of its Aquadex system and an upcoming increase in reimbursement rates for ultrafiltration therapy are expected to positively impact the company's financial position.
Notably, the company raised $5.1 million through warrant exercises, indicating investor confidence. Nuwellis also successfully settled a distribution agreement dispute with SeaStar Medical (TASE:PMCN), receiving $500,000. These are among the recent developments for the company.
Looking ahead, Nuwellis is preparing for a new outpatient reimbursement code that could substantially increase ultrafiltration therapy reimbursement rates by 297%, effective January 1, 2025. The company anticipates this will enhance patient care and quality of life through reduced hospital admissions. Furthermore, Nuwellis plans to initiate a clinical study of its Vivian product by the end of 2025. These developments reflect the ongoing efforts of Nuwellis to establish Aquadex as the standard of care for fluid removal when diuretics are not effective.
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