Embattled HealthBeacon’s shares suspended as it burns through cash

Shares in HealthBeacon, which have plunged 95 per cent since it issued a sales warning in September, were suspended on Friday after the medtech company said it is burning through cash and only has enough money to trade until the last week of this month.

HealthBeacon said in a statement that its “short-term working capital position has deteriorated” since it stated on October 5th that it had €500,000 of net cash on the balance sheet, sufficient to keep it running until mid-to-late November. The company’s flagship product is a smart sharps bin to help patients stick to injection schedules at home.

“The board now believes the company is in a highly constrained financial position and requires additional financing urgently in order to continue as a going concern,” HealthBeacon said in a statement. “The company continues to explore all options to raise finance and otherwise to maximise the interests of creditors and other stakeholders.”

HealthBeacon, the last company to undergo an initial public offering in Dublin, has seen its market value collapse to €1.18 million from €98 million at the time of its flotation in December 2021.

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The company issued a warning in July last year, saying device sales targets were running behind schedule and that the 100,000 objective would not be met until March 2024 — as delays in securing computer chips temporarily held up production. The timeline was subsequently pushed out again.

On September 26th, HealthBeacon shocked the market by saying it now expects its annual recurring revenues (ARR) will be running at about €3.2 million in December, down from previous estimates of a “mid-teens” million-euro figure – and that the run-rate on its ARR at the end of 2024 was now expected to be €17 million. It previously forecast a run rate of €25 million by the middle of next year.

The embattled company’s co-founder and chief executive, Jim Joyce, quit his role on foot of the sales warning, with Rebecca Shanahan, an independent non-executive director of the company, assuming the top executive role on an interim basis.

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While the company has been successful in striking distribution deals with US speciality pharma groups, it has been caught out by the red tape involved in rolling them out. Its current timelines are running up to nine months behind previous estimates.

“Since the announcement on 5 October 2023, the company has explored various financing options to improve its short-term working capital position as well as longer-term funding requirements including discussions with key stakeholders and other providers of capital, and explored the potential sale of its business divisions,” it said on Friday. “These financing alternatives have not to date been concluded, however, the company continues to pursue funding solutions.”

The share suspension, on foot of a request from the company “pending clarification of its financial position”, came into effect at 2.30pm.