Nuwellis partners with KDI for manufacturing efficiency

MINNEAPOLIS - Nuwellis, Inc. (NASDAQ: NUWE), a medical device company specializing in fluid management technology, has announced a strategic outsourcing agreement with KDI Precision Manufacturing. The partnership, effective as of Monday, aims to enhance Nuwellis’ operational efficiency and reduce costs while maintaining the quality of its Aquadex product line. According to InvestingPro data, the company maintains a healthy current ratio of 3.46, though it faces challenges with rapid cash burn and negative EBITDA of $10.53 million in the last twelve months.

Under the terms of the agreement, KDI will take over the manufacturing and assembly of key components for the Aquadex SmartFlow® Console, AquaFlexFlow® Blood Circuits, and dELC® Catheters. KDI, an experienced medical manufacturer since 1982, is ISO 13485 certified and FDA registered, indicating its compliance with international quality standards. With annual revenue of $8.74 million and a robust gross margin of 66.66%, this strategic move could help optimize Nuwellis’ operational structure. InvestingPro subscribers can access detailed analysis of the company’s financial health metrics and growth potential in the comprehensive Pro Research Report.

To protect product expertise and ensure a smooth transition, Nuwellis assembly employees will be offered positions at KDI. Nuwellis will retain control over sales, customer service, product design, and post-market surveillance.

John Erb, Interim CEO of Nuwellis, expressed confidence in KDI’s capabilities, citing their operational rigor and familiarity with the Aquadex system as key factors in the decision. Vitaliy Epshteyn, CEO of KDI and former Nuwellis executive, reaffirmed KDI’s commitment to supporting Nuwellis’ growth and maintaining the trust of healthcare providers and patients.

The Aquadex SmartFlow® system, a product of Nuwellis, is designed for ultrafiltration therapy to treat patients with fluid overload. It is indicated for use in both adult and pediatric patients who do not respond to medical management, including diuretics.

This collaboration marks a significant step for Nuwellis in its pursuit of cost-effective operations without compromising product quality. The transition activities are set to commence soon to support the company’s next growth phase. Based on InvestingPro Fair Value analysis, the stock currently appears undervalued, though investors should note the company’s challenging financial metrics and significant stock price decline over the past year. Additional insights and 8 more ProTips are available for subscribers.

The information in this article is based on a press release statement from Nuwellis, Inc.

In other recent news, Nuwellis Inc. reported its fourth-quarter 2024 financial results, revealing significant improvements in operational metrics despite a decline in revenue. The company’s gross margin rose to 58.4% from 54.4% the previous year, and the operating loss was reduced to $2.4 million from $3.6 million. However, revenue saw a 9% year-over-year decrease, totaling $2.3 million, which has been a point of concern for investors. Nuwellis is focusing on expanding its market presence in outpatient services, supported by improved reimbursement rates for its Aquadex Ultrafiltration system. The company is also preparing for clinical trials, REVERSE HF and VIVIAN, to further bolster its clinical evidence. Analysts at firms such as Roth and Maxim Group have shown interest in the company’s strategic initiatives, particularly in the outpatient setting. Nuwellis has no debt and holds $5.1 million in cash and cash equivalents, reflecting a stable financial position. Despite these positive developments, the company faces challenges, including competition in the heart failure treatment market and the need for successful clinical trial outcomes.

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