Annual
Report
2024
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Medical Annual Report 2024
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Financials
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Message from the
Chairman & CEO
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ONWARD at a Glance
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2024 Achievements
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2025 Outlook
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Overview
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Table of Contents
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Culture
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Privacy & Data Governance
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Sustainability
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Operational Review
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Financial Review
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Governance
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Risk Management
& Control
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Investor Relations
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Report of the Non-Executive
Directors
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In this Annual Report ‘ONWARD’, ‘the Company’, ‘the Group’, ‘we’,
‘us’ and ‘our’ are used interchangeably to refer to ONWARD
Medical N.V. and/or any of its subsidiaries, in general or
where no useful purpose is served by identifying the particular
company. ONWARD, ARC
EX
, ARC
IM
, ARC
BCI
, and the stylized
O-Logo are proprietary and registered trademarks of ONWARD
Medical. Unauthorized use is strictly prohibited.
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Board of Directors’
Statements
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Remuneration Report
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Consolidated Financial
Statements
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Notes to the Consolidated
Financial Statements
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Company Financial
Statements
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Other Information
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ONWARD
at a Glance
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Founded in 2015
Currently listed on Euronext Brussels, Amsterdam, and Paris (Euronext: ONWD)
~100 employees
1
Global presence:
•
HQ in the Netherlands
•
Science and Engineering Center in Switzerland
•
US-based field Clinical and Sales organizations
Technology:
3 purpose-built neuromodulation platforms that stimulate the spinal cord to restore
movement and other critical functions lost after spinal cord injury (SCI) and other
movement disabilities:
•
ARC
EX
System, an external platform that stimulates through the skin
•
ARC
IM
System, an investigational implanted neuromodulation platform
•
ARC
BCI
, an investigational implanted platform that combines the ARC
IM
System
with an implanted brain-computer interface (BCI) to restore thought-driven
movement via our wireless ONWARD DigitalBridge
TM
ONWARD
at a Glance
Innovation & IP:
10
FDA Breakthrough Device Designations and 150+ issued patents
1,2
Clinical validation:
•
Safety and effectiveness of ARC
EX
System for upper limb mobility
3
demonstrated in Up-LIFT clinical trial; results published in
Nature Medicine
,
May 2024
•
Positive interim results for ARC
IM
Therapy to improve blood pressure regulation
Market opportunity:
$17B+ / €15B+ total addressable market with limited competition
Commercialization:
ARC
EX
System received FDA De Novo classification and US market authorization
in December 2024 for use in the clinic setting; limited US launch planned in Q1
2025 followed by full launch in Q2 2025; plan to seek CE Mark certification to
commercialize in Europe in 2025.
1
As of 31 December 2024
2
Number excludes EP country validations; company has 290+ issued patents including EP country validations
3
Indication as per FDA authorization is to improve hand sensation and strength in individuals between 18 and 75 years old that present
with a chronic, non-progressive neurological deficit resulting from an incomplete spinal cord injury (C2-C8 inclusive)
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Forward-Looking
Information / Statements
This document contains certain forward-looking statements, beliefs and opinions with respect
to the financial condition, expected results of actual and planned operations, business and
objectives of ONWARD. In particular, the words “expect”, “anticipate”, “estimate”, “may”,
“should”, “could”, “would”, “believe”, “outlook”, “potential”, “will”, “plan”, “pipeline”, “seek”,
“intend”, “aim”, “explore”, and similar expressions are intended to identify forward-looking
statements. By their nature, forward-looking statements involve several risks, uncertainties
and assumptions because they relate to events and depend on circumstances that may or
may not occur in the future.
Actual results may differ, also materially, from those expressed in these forward-looking
statements, and you should not place undue reliance on them. For a discussion of factors
that could cause future results to differ from such forward-looking statements, see also the
Risk Management and Control section of this Annual Report. For this reason, we can offer
no assurances that the forward-looking statements published here will prove correct at a
future date, and ONWARD assumes no duty to update any such forward-looking statements.
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ONWARD at a Glance
Message from
the Chairman
& CEO
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Dear Shareholders, Colleagues, Partners, and Collaborators,
Our vision is both ambitious and essential: Empowered by independence, people with spinal
cord injury (SCI) will enjoy life in the ways that matter to them. In 2024, this vision became
a reality as we achieved US FDA approval and recorded our first commercial sales of the
ARC
EX
System — a breakthrough technology proven to enhance hand strength and sensation
for individuals with SCI.
SCI is a life-altering condition, not only for those directly affected but also for their loved
ones. For too long, individuals with SCI have been told nothing can be done to restore their
ability to move, feel, or improve their quality of life. Today, that narrative is changing and
with ~650,000 people living with SCI in the United States and Europe – 9 million worldwide
– the need for innovation has never been greater. The impact of our work is already being
recognized.
Upon learning of the FDA’s approval of the ARC
EX
System, Maggie Goldberg,
President & CEO of the Christopher & Dana Reeve Foundation, described it as a “watershed
moment for the SCI Community.”
2024 was an important and impactful year for ONWARD Medical and we expect to sustain
our positive momentum in 2025:
Message from the
Chairman & CEO
Key 2024 achievements
FDA approval & commercial launch
The US FDA’s De Novo authorization of our ARC
EX
System in December 2024 marked a pivotal
moment in our Company’s history. We promptly initiated commercial operations, achieving
our first sales to the University of Washington School of Medicine and the Next Steps Chicago
rehabilitation clinic. These initial clinics will serve as centers of excellence, helping to establish
ARC
EX
Therapy as a new standard of care for upper limb rehabilitation after SCI.
To support our commercial launch, we have hired a specialized sales team focused on
supporting leading rehabilitation centers across the United States. Initial feedback from
clinicians and patients has been very positive, reinforcing our confidence in this therapy’s
commercial potential.
Breakthroughs in implantable therapies and brain-computer interface (BCI) technology
We continued to advance our pipeline of future therapies, through clinical studies using our
ARC
IM
and ARC
BCI
Systems to explore the feasibility of these platforms to address a number
of indications (recovery targets) for people with SCI and Parkinson’s disease.
Our BCI program made strong advancements, with additional clinical study enrollments,
a grant from the Christopher & Dana Reeve Foundation, and an exclusive license to the
WIMAGINE® BCI technology. These developments position us to be first-to-market with a
BCI-enabled system to restore thought-driven movement after paralysis.
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Strengthening our financial position
We strengthened our financial position through strategic partnerships and capital raises,
including a EUR 50 million capital increase that brought in Ottobock SE & Co. as a strategic
investor. This partnership with a global leader in prosthetics and orthotics technology
provides both capital and strategic value as we scale our commercial operations and global
distribution capabilities.
Industry recognition
Our achievements have not gone unnoticed – TIME Magazine named our ARC
EX
System one
of the Best Inventions of 2024, and we received a silver medal from EcoVadis, placing us in
the top 15% of companies assessed for sustainability practices.
Building on 2024 momentum: our vision for 2025
We enter 2025 with strong momentum and clear objectives. Building on our initial success in
the clinic setting, we plan to expand the ARC
EX
System’s US regulatory label to include use
in the home setting, which would significantly increase our addressable market. We are also
pursuing CE Mark certification to allow commercialization in Europe and select other markets.
Our commercial strategy for 2025 includes:
•
Expanding our US field organization to cover additional rehabilitation centers, broadening
patient access to ARC
EX
Therapy
•
Establishing a network of centers of excellence to demonstrate the clinical and economic
benefits of the ARC
EX
System, encouraging its adoption as a new standard of care
•
Implementing comprehensive training programs for clinicians and rehabilitation specialists
to ensure best – in – class patient outcomes
•
Building relationships with US payers to ensure broad access to the ARC
EX
System
•
Preparing for commercial launch in Europe following expected CE Mark certification by
hiring leaders with direct and indirect sales management experience
Expanding our pipeline beyond ARC
EX
Beyond ARC
EX
, we plan to initiate the Empower BP global pivotal trial for our ARC
IM
System
to address blood pressure instability after SCI. Our research pipeline remains robust, with
planned studies in Parkinson’s disease supported by the Michael J. Fox Foundation, and
continued development of our ARC
BCI
System.
As your new Chairman and continuing CEO, we are honored to lead ONWARD during
this transformative period. We extend our heartfelt gratitude to our employees, research
collaborators, investors and business partners whose dedication make these achievements
possible. Most importantly, we thank the SCI Community for its trust and partnership in
pursuing our Mission.
We invite you to follow our progress through our website and social media channels as we
build sustainable value while positively impacting the lives of people with SCI and those who
care for them.
Warm regards,
Rob ten Hoedt, Chairman
Dave Marver, Chief Executive Officer
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Message from the Chairman & CEO
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2024 Achievements
Full Year 2024 and Year-to-Date 2025 Highlights
Clinical and Development
•
In January 2024, the Company announced the expansion of its HemON clinical feasibility
study with the addition of Sint Maartenskliniek in the Netherlands. This additional site
prepares the Company for the expected 1H 2025 initiation of a global pivotal trial called
Empower BP to assess the safety and efficacy of ARC
IM®
Therapy to improve blood
pressure stability.
•
In February 2024, the Company announced it has been awarded Breakthrough Device
Designation (BDD) by the US Food and Drug Administration (FDA) for the investigational
ARC
BCI®
System, which uses brain-computer interface (BCI) technology in conjunction with
its investigational ARC
IM
Therapy to restore thought- driven lower limb mobility after SCI,
creating the ONWARD DigitalBridge™. This is the Company’s tenth BDD.
•
In March 2024, ONWARD was accepted into the US FDA’s new Total Product Lifecycle
Advisory Program (TAP) for the development of its ARC
BCI
System, becoming only the
second BCI company to join the program.
•
In April 2024, the Company announced it had submitted a De Novo application to the US
FDA to obtain regulatory authorization to begin marketing its non-invasive ARC
EX
System
in the United States. Authorization was awarded in Q4 2024.
•
In May 2024, the Company announced the publication of its Up-LIFT pivotal trial results in
Nature Medicine
. The study achieved all primary and secondary safety and effectiveness
endpoints, and ARC
EX
Therapy demonstrated significant improvements in upper limb
strength, function, and sensation among people with chronic tetraplegia due to cervical SCI.
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•
In July 2024, the Company announced a publication in
Neuromodulation: Technology at the
Neural Interface
, summarizing effective stimulation parameters informed by the Up-LIFT
and LIFT Home studies, and a decision-making framework for clinical implementation of
ARC
EX
Therapy. summarizing effective stimulation parameters informed by the Up-LIFT
and LIFT Home studies, and a decision-making framework for clinical implementation of
ARC
EX
Therapy.
•
In September 2024, renowned neurosurgeon Dr. Jocelyne Bloch performed another
successful implant of the ARC
BCI
System at Centre Hospitalier Universitaire Vaudois
(CHUV) in Lausanne, Switzerland.
•
Also in September 2024, the Company announced a USD 1.1M grant from the Christopher
& Dana Reeve Foundation to expand an ongoing clinical feasibility study exploring the use
of ARC
BCI
Therapy to restore thought-driven use of the hands and arms after SCI. The grant
will support four additional study participants to be implanted with the ARC
BCI
System.
•
In October 2024, ONWARD signed an exclusive license with the French Alternative Energies
and Atomic Energy Commission (CEA) to develop and commercialize the investigational
WIMAGINE® BCI as part of the Company’s ARC
BCI
System. This exclusive license positions
the Company to be first to market with a BCI-enabled system to restore thought-driven
movement after paralysis.
•
In November 2024, the Company announced a grant from the European Innovation Council
(EIC) to study the use of ARC
BCI
Therapy to restore upper limb movement after stroke.
•
In December 2024, the Company’s De Novo application was granted by the US Food
and Drug Administration (FDA) and the Company received market authorization for its
ARC
EX
System.
•
In February 2025, results from the investigator-sponsored Pathfinder2 Study were
published in
Neuromodulation: Technology at Neural Interface
, highlighting the benefits
of sustained access (at least one year) to ARC
EX
Therapy.
•
In March 2025, the Company announced two new grants to support studies using its
ONWARD ARC
IM
System to help people with Parkinson’s disease: A USD 1M grant from
The Michael J. Fox Foundation for Parkinson’s Research to address mobility challenges
and a US Department of Defense grant of ~USD 1.5M to address blood pressure instability.
•
Also in March 2025, the Company announced the first-in-human use of its investigational
ARC
IM
Lumbar Lead, designed to be used as part of the ARC
IM
System to restore standing,
stepping, and lower limb mobility.
Intellectual Property
In 2024, ONWARD added 20 patents to its IP portfolio. It now has more than 150 issued patents,
excluding EP country validations. Including EP country validations, the Company exited 2024
with more than 290 issued patents, strengthening the Company’s first-mover advantage.
Commercial Developments and Industry Recognition
•
In October, the Company’s ARC
EX
System was named one of TIME Magazine’s Best
Inventions of 2024.
•
In December 2024, the Company earned the first commercial sales of its ARC
EX
System
to UW Medicine (University of Washington) and Next Steps Chicago, a community-based
rehabilitation clinic.
•
In January 2025, the Company’s ARC
EX
System was added to US Veterans Affairs (VA)
online procurement platforms, allowing the VA and other government agencies to purchase
the breakthrough technology. This is the first major benefit resulting from the Company’s
partnership with Lovell Government Services, a Service-Disabled Veteran-Owned Small
Business (SDVOSB).
Corporate
•
In February 2024, the Company announced that KBC Securities initiated research
coverage with a Buy rating.
•
In March 2024, the Company completed a EUR 20M equity financing that strengthened
its balance sheet to support investments in product development, clinical studies, and
operational and commercial capabilities.
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2024 Achievements
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In April 2024, the Company announced that Stifel, a US-based full-service investment
bank, had initiated research coverage with a Buy rating. The Company now has five banks
providing equity research coverage, each with Buy ratings.
•
In June 2024, the Company signed a debt financing agreement for up to EUR 52.5M with
US-based lender Runway Growth Capital.
•
In July 2024, the Company published its 2023 Annual Sustainability Summary, underscoring
its commitment to integrating responsible and sustainable practices into all aspects of
its business.
•
In September 2024, the Company added a Euronext Paris listing, highlighting the
Company’s strong French roots and significant ties to France, including its close
partnership with CEA (see Clinical and Development section above).
•
In October 2024, the Company announced medtech leader Rob ten Hoedt, former
Medtronic President and Executive Committee member and longtime Chairman of
MedTech Europe, joined its Board of Directors as incoming Chairman (he was elevated
to Chairman in December 2024).
•
Also in October 2024, the Company successfully raised EUR 50M including a cornerstone
investment from Ottobock SE & Co., a global leader in prosthetics, orthotics, and
exoskeleton technology. Ottobock acquired c.10% of ONWARD Medical N.V.’s share capital,
initiating a strategic relationship to support the Company’s commercialization of the
ARC
EX
System and other important development, clinical, and commercial activities.
•
In December 2024, the Company was awarded a silver medal by EcoVadis, the world’s
largest provider of business sustainability ratings. The award placed ONWARD in the top
15% of companies assessed by EcoVadis that year.
.
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2024 Achievements
2025
Outlook
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We expect to achieve several important milestones in 2025:
Engineering, Clinical, and Regulatory Developments
•
The Company has a robust pipeline of indications that can be pursued using one or more
of its technology platforms. These indications primarily target spinal cord injury, but
several also show promise in potentially addressing movement or functional challenges
resulting from Parkinson’s disease, stroke, and other movement disabilities. The Company
expects to announce major advancements in this pipeline, including first-inhuman use of
its technology for new indications and/or populations.
•
The Company plans to submit a 510K application to the US FDA to expand the ARC
EX
System label to include use in the home setting, building on the current authorization for
use in the clinic setting.
•
The Company expects to publish detailed results from ongoing clinical feasibility studies
exploring the use of the ARC
IM
System to stabilize blood pressure after spinal cord injury.
•
The Company anticipates receiving an Investigational Device Exemption (IDE) from FDA
so it can begin its global pivotal trial for the ARC
IM
System, called Empower BP.
•
The Company expects to submit an application for CE Mark certification so it can begin
commercializing the ARC
EX
System in Europe and other CE Mark countries.
•
The Company expects to initiate a clinical feasibility study involving first-in-human use of
the ARC
IM
System to explore its potential to restore bladder function in people with SCI.
•
The Company expects to advance its research pipeline with additional ARC
IM
System
implants with financial support from the Michael J. Fox Foundation for Parkinson’s Research
and US Department of Defense, and additional ARC
BCI
implants financially supported by
the European Innovation Council and the Christopher & Dana Reeve Foundation.
2025 Outlook
Commercial Developments
•
Pending FDA authorization and label expansion, the Company plans to expand US
marketing of the ARC
EX
System to the home setting, an expansion that would significantly
broaden access and treatment options for people with SCI.
•
Pending CE Mark certification, the Company plans to expand marketing of the ARC
EX
System in Europe and other select geographies.
•
The Company plans to expand its US field organization. It also plans to establish direct
and indirect sales channels outside the US.
Corporate Developments
The Company expects to explore advantageous engineering and commercial collaboration
activities with its new strategic investor, Ottobock, and other potential partners worldwide.
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Overview
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Overview
The Case for Innovative Therapies
Nine million people worldwide have a spinal cord injury (SCI)
1
, and the annual global incidence
of new injuries exceeds 750,000. In the US and Europe alone, approximately 650,000 people
live with SCI, and the annual incidence of new cases is approximately 30,000.
While most people associate SCI with paralysis and loss of sensation, there are often other
accompanying challenges such as infection, incontinence, pressure sores, poor blood pressure
regulation, and loss of sexual function. As a result, the quality of life following spinal cord injury
can be quite poor for the injured and their caregivers. SCI is also an expensive condition, with
high losses in productivity and healthcare expenditures. The average lifetime cost to support
a person with a severe SCI can exceed USD 5M
2
. Injuries to the spinal cord occur primarily as
a result of accidents and falls, and disproportionately affect young men.
While conventional rehabilitation provides important benefits, most people reach a plateau
in their progress after three to six months. Thereafter, many of those injured face decades of
continuing challenges, declining quality of life, and dependence on others. ONWARD seeks
to solve this unmet need by delivering durable therapies to improve strength, function, and
independence, including for those injured many years ago.
1
Liu et al. 2023 Spinal cord injury: global burden from 1990 to 2019 and projections up to 2030 using Bayesian age-period-cohort analysis.
2
NSCISC Traumatic Spinal Cord Injury Facts and Figures at a Glance (2023 SCI Data Sheet); estimated lifetime costs for a person aged
25 at the time of injury with injury severity AIS ABC; costs for a tetraplegic person calculated as the average cost for a person with high
tetraplegia and a person with low tetraplegia.
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A large unmet medical need
US & Europe
Prevalence
~650,000
1
1
2023 NSCISC Annual Statistical Report Complete Public Version and European prevalence calculated by annual
incidence* 30 years of additional lifetime expectancy: annual incidence considered using average across >25
papers on SCI incidence within Europe and European countries
2
2023 NSCISC Annual Statistical Report Complete Public Version and European annual incidence considered
using average across >25 papers on SCI incidence within Europe and European countries
Market
US & Europe
Prevalence
~30,000
2
Overview
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Damage to the spinal cord
resulting in loss of function
1
2023 NSCISC Annual Statistical Report Complete Public Version
•
Nearly half of the injuries occur
between the ages of 16 and 30 years
1
•
80% of new SCI cases are male
1
Profile of SCI Patient
SCI Causes
SCI Causes &
Patient Profile
17% Violence
10% Sports
42% Vehicular
3% Medical, Surgical
23% Falls
5% Other
Overview
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Opportunity to create new segment, stimulating the
spinal cord for movement and autonomic functions
1
Sources: Global News Wire – Vantage Market Research, 2024; Fortune Business Insights Spinal Cord Stimulation Market, 2025;
Harmsen, Irene E et al. “Trends in Clinical Trials for Spinal Cord Stimulation.” Stereotactic and functional neurosurgery vol. 99, no. 2, 2021,
pp. 123-134; Johnson, Rhaya L, and Christopher G Wilson. “A review of vagus nerve stimulation as a therapeutic intervention.” Journal of
inflammation research vol. 11, 2019, pp. 203-213; Mayo Clinic
2
The ARC
EX
System is intended to deliver programmed, transcutaneous electrical spinal cord stimulation in conjunction with functional
task practice in the clinic to improve hand sensation and strength in individuals between 18 and 75 years old that present with a chronic,
non-progressive neurological deficit resulting from an incomplete spinal cord injury (C2-C8 inclusive)
$4.1B
8.0%CAGR
Spinal cord stimulation is among the most well-developed current applications
(2027E)
(2020 - 2027)
Growth Trends:
•
Rising prevalence of neurological disorders
•
Increasing capital availability
•
Emergence of minimally invasive approaches
ONWARD is pioneering a new segment within neuromodulation, by stimulating the spinal cord
to restore mobility and autonomic functions in people with SCI, and potentially also those
with stroke and Parkinson’s disease.
$19.9B
10.9%CAGR
Neurostimulation has emerged as a dynamic field for treatment of a range of
clinical conditions
(2035E)
(2025 – 2035E)
1
1
Neurostimulation
Market
Deep Brain Stimulation
Addiction, Autism, Chronic
pain, Cluster headache,
Dementia, Depression (major),
Huntington’s disease, MS,
Stroke, Tourette syndrome,
Traumatic brain injury,
Sleep disorder
Emerging
Vagus Nerve Stimulation
Alzheimer’s, Anxiety,
Cardiovascular disease,
Diabetes, Lung injury, Obesity,
Pain management, Stroke
Spinal Cord Stimulation
Bladder and bowel control,
Blood pressure control,
Mobility, Sexual function,
Spasticity, Trunk control,
Upper limb function
Sacral Nerve Stimulation
Interstitial cystitis
ONWARD Focus
Deep Brain Stimulation
Depression, Dystonia,
Epilepsy, Essential tremor,
Obsessive-compulsive disorder,
Parkinson’s disease
FDA Approved
Hypoglossal Nerve Stimulation
Sleep apnea
Vagus Nerve Stimulation
Depression, Epilepsy
Spinal Cord Stimulation
Pain management
ONWARD Focus
Hand strength and sensation
2
Sacral Nerve Stimulation
Fecal incontinence,
Urinary incontinence
Overview
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Our Vision
Empowered by independence, people with spinal cord injury will enjoy life in the ways
that matter to them.
Our team is pursuing this vision with urgency and determination, developing ARC Therapy
with the intent to commercialize and make our solutions broadly available. We were pleased
to start this process following US FDA approval of the ARC
EX
System in the US in late 2024.
Our goal is to bring our innovative solutions to as many of the 9,000,000 people worldwide
with spinal cord injury (SCI) as possible.
The work to complete and commercialize our ARC Therapy platforms is aided by 10 FDA
Breakthrough Device Designation awards (the tenth was awarded for our ARC
BCI
System in
February of 2024). While many of these innovations were created by our R&D team, others
have been exclusively licensed from the top neuroscience research universities around the
world, underscoring ONWARD as a pioneer and a leader in our space.
We are supported in our pursuits by our many strong relationships with SCI advocacy groups
across the globe, such as the Christopher and Dana Reeve Foundation in the United States.
We are grateful for these partnerships and the insights they provide.
At ONWARD, our vision is to enable people with SCI to regain movement and other
bodily functions so they can enjoy life in the ways that matters to them. We develop and
commercialize therapies that address major challenges faced by people with SCI, leveraging
the Company’s ARC
IM
, ARC
EX
, and ARC
BCI
platforms to target a broad spectrum of injury
locations and severities. While our primary objective is to serve the needs of people with SCI,
we envision that our therapies may also benefit other populations with similar challenges,
such as people who have suffered a stroke or who have Parkinson’s disease. We also aim
to reward those who invest their capital, time, and ideas in ONWARD, while engaging in
sustainable, equitable, and inclusive business practices.
Our Strategy
Our objective is to build an enduring, impactful, and successful medical device company
that creates sustainable long-term value and makes a meaningful difference in the lives of
people with SCI and other movement disabilities, and in the lives of those who care for them.
We are focused on the following priorities as we pursue this objective:
•
Short term: Gain commercial traction with our external ARC
EX
System, starting with hand
strength and sensation as our first indication in the United States. Begin our first FDA
Investigational Device Exemption (IDE) study, Empower BP, to evaluate implantable ARC
IM
Therapy for stabilizing blood pressure after SCI.
•
Medium term: Commercially launch our implantable ARC
IM
System, addressing blood
pressure instability after SCI as our first indication.
•
Long term: Expand labeling (new indications and populations) and platforms, including
our ARC
BCI
System.
To execute our strategy;
•
We work with leading neuroscience researchers across the globe to identify breakthrough
therapies for people with SCI and other movement-related disorders for which our
therapies have shown promise.
•
We leverage our R&D, clinical, and regulatory capabilities to develop proprietary
technologies that are well suited to deliver our breakthrough therapies at scale, and we
protect these innovations with rigorous IP prosecution.
•
We commercialize these breakthrough therapies in our target markets, using direct
and indirect channels to SCI clinics with rehabilitation programs and hospitals with
neurosurgery expertise.
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Stages for the Execution of Our Strategy
ARC Therapy Product
Development
Clinical Trials & Regulatory
Clearance
Commercialization
Research &
Pre-Clinical Development
Advanced scientific and clinical research network
ONWARD has relationships with leading research centers around the world. This includes a
close relationship with the ONWARD co-founders and their highly productive laboratory at
.NeuroRestore, a research initiative of CHUV and EPFL. .NeuroRestore is led by Professor
Grégoire Courtine and neurosurgeon Dr. Jocelyne Bloch. In 2014, Professor Courtine and Dr.
Bloch co-founded ONWARD’s predecessor entity alongside other researchers in neuroscience
and neurosurgery. Professor Courtine and Dr. Bloch continue to provide counsel to the
Company as Science and Medical Advisors, respectively.
Through its network of advanced research facilities in Switzerland, .NeuroRestore’s
research activities span basic science, preclinical research, and human proof-of-concept
studies. Several projects with potential for commercialization have already progressed to
the human proof-of-concept stage. ONWARD selects the most promising of these projects
to develop and commercialize, based primarily on clinical results and commercial viability.
Our ARC Therapy platforms can be leveraged for each of the indications with software and
firmware modifications.
The .NeuroRestore team has published extensively in some of the most prestigious scientific
journals. In 2023, they published groundbreaking research on the use of a BCI paired with
ARC
IM
Therapy to enable a participant to walk with augmented control over his paralyzed
legs. Researchers at .NeuroRestore also published a pioneering study using ONWARD ARC
IM
Therapy to address gait challenges related to Parkinson’s disease.
ONWARD partnered with leading clinical research institutions for its Up-LIFT pivotal trial,
the results of which were published in Nature Medicine in 2024. The study met all primary
safety and effectiveness endpoints, with no serious device-related adverse events and a
majority (72%) of participants with chronic tetraplegia due to spinal cord injury achieving
clinically meaningful improvements in both strength and function. Participants also
achieved significant and clinically meaningful improvements in sensation following ARC
EX
Therapy. Building on this work, ONWARD also collaborated with experts to develop a clinical
programming framework for non-invasive transcutaneous spinal cord stimulation (tSCS)
to further support the successful clinical implementation of this novel technology. This
framework, published in Neuromodulation, outlines stimulation parameters demonstrated
to restore upper extremity function in ONWARD’s clinical trials and within the broader body
of literature. The programming framework was found to be safe, well tolerated, and offers a
practical foundation for the clinical use of tSCS in treating cervical spinal cord injury.
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Platform
Indication
FDA BDD
1
Pre-Clinical
Human PoC
Clinical Feasibility
2
Pivotal
Commercial
ARC
EX
Hand Sensation & Strength
ARC
EX
Mobility
ARC
IM
Blood Pressure
ARC
IM
Mobility / Second Indication
ARC
IM
Parkinson’s – Mobility
ARC
IM
Bladder
ARC
BCI
Mobility
ARC
BCI
Upper Limb
ARC
BCI
Stroke – Upper Limb
Short and medium term focus
Funded primarily through grants
and research partners
BDD
1
Granted
One commercial indication and 8 additional
indications under clinical or pre-clinical evaluation
Note: The company may modify the pipeline based on clinical progress and marketplace considerations
1
BDD = FDA Breakthrough Device Designation. ONWARD has been granted four additional BDDs for ARC
EX
Bladder, ARC
EX
Blood
Pressure, ARC
EX
Spasticity and ARC
IM
Spasticity
2
Includes both early feasibility (typically before device design finalized) and feasibility (near-final or final device design) studies
3
Funded by Christopher & Dana Reeve Foundation grant, conducted by EPFL
4
Funded by European Innovation Council grant
Human PoC expected in 2025
3
Human PoC expected in 2025
4
FDA IDE approval expected 1H 2025
Current Pipeline
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Limited competition with safeguards
against future competition
Potential Competition
Two companies with similar technology
•
None has received FDA approval
1
•
Intellectual property
controlled by
ONWARD Medical under exclusive
license from UCLA
•
Less institutionalized companies with
academic founder-led management
teams and limited
funding
raised to date
2
No Direct Competitors
•
Potential future competition from spinal
cord stimulators for pain and other
existing indications
•
Currently
supporting academic research
with existing technology
•
Several years
required to reach parity
with ONWARD Medical and market a
competing technology
•
Likely to
enter space via M&A
, leveraging
balance sheets
Note: ARC
IM
and ARC
BCI
are investigational devices, not available
for commercial use. The ARC
EX
System is intended to deliver
programmed, transcutaneous electrical spinal cord stimulation
in conjunction with functional task practice in the clinic to
improve hand sensation and strength in individuals between 18
and 75 years old that present with a chronic, non-progressive
neurological deficit resulting from an incomplete spinal cord
injury (C2-C8 inclusive).
1
One has announced CE Mark certification in April 2025
2
Less than $4M raised by Company A in private capital as of
March 2025 (source: PitchBook); Company B claims $30M+
raised to date although no material funding tracked by Pitchbook
3
Patent figures as of end of Q4 2024,
excluding EP country
validations; company has 290+ issued patents including EP
country validations
Competition
No Direct Competitors
•
Focus of other BCI companies is to record
brain signals to establish the capability to
control or communicate with computers
•
ONWARD Medical has
unique focus on
restoring movement
of the human body
and WIMAGINE BCI has been successfully
implanted in 3 humans for this purpose
•
WIMAGINE BCI is ideal current technology,
but our
ARC
BCI
System is agnostic and
flexible
, providing opportunity to partner
with others in the future
ONWARD Medical’s first-mover advantage
has provided path to large and formidable
IP position with 150+ patents
3
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ARC Therapy: a breakthrough in neuromodulation technology
ONWARD ARC Therapy applies targeted, programmed stimulation of the spinal cord to restore
movement, independence, and health in people with SCI. The stimulation can be delivered by
an implantable platform, called ARC
IM
, or an external, transcutaneous platform, called ARC
EX
.
Additionally, our ARC
BCI
platform pairs ARC
IM
with an implanted brain-computer interface to
restore thought-driven movement via our wireless ONWARD DigitalBridge
TM
.
Spinal cord injury disrupts the brain-body connection
When the spinal cord is injured, communication between the brain and the parts of the nervous
system located beneath the lesion is interrupted, either completely or partially. The person
may lose all feeling or movement
1
– or both – in these areas. Functions and organs controlled
by the autonomic nervous system may also be affected, leading to difficulty with breathing,
swallowing, stabilizing blood pressure, sexual arousal, and bowel and bladder function.
2,3
This disruption of the body-brain feedback loop can cause a host of debilitating conditions.
People with SCI at the thoracic or cervical level are most affected by this loss of function.
Nevertheless, even in cases of complete SCI, some neural pathways in the spinal cord remain
intact but hypoactive. Currently, rehabilitation approaches aim to mobilize these latent nerve
connections and promote regeneration through intensive physiotherapy. Unfortunately, these
activity-based therapies have limited benefits for people who cannot produce movements
voluntarily. Some symptoms and conditions can be managed with medication, such as
antispasmodics to reduce involuntary muscle contractions, or with devices, such as catheters
to facilitate urination. However, these solutions can be cumbersome and carry the risk of
harmful side effects.
There is an urgent need for more effective therapies that enable people with SCI to live more
independent, high-quality lives. This is where ONWARD ARC Therapy has the potential to
make a dramatic impact.
ARC Therapy activates intact nerve fibers with biomimetic stimulation
As detailed in the previous section, our ARC Therapy is based on pioneering research led by
Professor Courtine and Dr. Bloch over the last two decades to pinpoint the location of neurons
in the spinal cord responsible for triggering movement and function.
4
By delivering precisely timed and programmed electrical impulses to specific areas of the
spinal cord, ARC Therapy mimics the natural pattern of nerve signals sent by the brain. When
combined with voluntary efforts to move, this enables users to improve motor control in the
arms, legs,
5-7
or trunk,
8
making daily activities, like moving in and out of a wheelchair, much
easier. In addition, ARC Therapy has the potential to improve the management of internal
functions, such as regulation of blood pressure,
9
and improved bowel and bladder control.
Most participants in clinical trials using ARC Therapy regain some degree of independent
movement, even when stimulation is switched off. ARC Therapy stimulates intact nerve
fibers responsible for carrying messages from the body back to the spinal cord (afferent
nerves), and “retrains” them to perform a different function, demonstrating the plasticity of
the nervous system.
1
A. S. Burns, R. J. Marino, A. E. Flanders, and H. Flett, “Chapter 3 - Clinical diagnosis and prognosis following spinal cord injury,” in
Handbook of Clinical Neurology, vol. 109, J. Verhaagen and J. W. McDonald, Eds. Elsevier, 2012, pp. 47–62. doi: 10.1016/B978-0-444-52137-
8.00003-6.
2
M. W. G. Brinkhof et al., “Health conditions in people with spinal cord injury: Contemporary evidence from a population-based
community survey in Switzerland,” Journal of Rehabilitation Medicine, vol. 48, no. 2, pp. 197–209, Feb. 2016, doi: 10.2340/16501977-2039
3
M. Walter and A. V. Krassioukov, “Autonomic Nervous System in Paralympic Athletes with Spinal Cord Injury,” Phys Med Rehabil Clin N
Am, vol. 29, no. 2, pp. 245–266, May 2018, doi: 10.1016/j.pmr.2018.01.001.
4
Kathe, C., Skinnider, M.A., Hutson, T.H. et al. The neurons that restore walking after paralysis. Nature 611, 540–547 (2022).
https://doi.
org/10.1038/s41586-022-05385-7
5
F. B. Wagner et al., “Targeted neurotechnology restores walking in humans with spinal cord injury,” Nature, vol. 563, no. 7729, pp. 65–71,
Nov. 2018, doi: 10.1038/s41586-018-0649-2.
6
E. Formento et al., “Electrical spinal cord stimulation must preserve proprioception to enable locomotion in humans with spinal cord
injury.,” Nature neuroscience, pp. 1–49, 2018, doi: 10.1038/s41593-018-0262-6.
7
H. Lorach, G. Charvet, J. Bloch, and G. Courtine, “Brain–spine interfaces to reverse paralysis,” National Science Review, vol. 9, no. 10, p.
nwac009, Sep. 2022, doi: 10.1093/nsr/nwac009
8
A. Rowald et al., “Activity-dependent spinal cord neuromodulation rapidly restores trunk and leg motor functions after complete
paralysis,” Nat Med, pp. 1–12, Feb. 2022, doi: 10.1038/s41591-021-01663-5.
9
Squair, J.W., Gautier, M., Mahe, L. et al. Neuroprosthetic baroreflex controls haemodynamics after spinal cord injury. Nature 590,
308–314 (2021). https://doi.org/10.1038/s41586-020-03180-w
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Developing three platforms to deliver ARC Therapy
ONWARD has developed three technology platforms to deliver ARC Therapy: an implantable
system called ARC
IM
, an external system called ARC
EX
, and an implantable system called
ARC
BCI
, which adds an implantable brain-computer interface (BCI) to the ARC
IM
platform.
ARC
EX
, ARC
IM
, and ARC
BCI
have all been awarded FDA Breakthrough Device Designation for
a range of indications.
All three platforms contain the same basic elements: an electrical pulse generator and a
programmer that enables clinicians to set stimulation therapy parameters and users to control
their therapy within those parameters. The ARC
BCI
has an additional brain-recording component.
The three platforms share common components and have a similar user interface. This
optimizes our use of development resources while providing users with a consistent, easy-
to-use experience.
External ARC
EX
System
The ARC
EX
System is our FDA approved external stimulator that is intended to improve
sensation and strength of the hands following SCI. ONWARD is currently investigating how
ARC
EX
may be used to target additional indications, such as bowel control and lower limb
strength and function in the future.
The ARC
EX
System has three main components:
•
A Stimulator that delivers programmed electrical impulses through the skin to the
spinal cord.
•
Electrodes placed externally on the skin of the neck near the area of the spinal cord that
controls movement in the arms and hands.
•
Dedicated apps for efficiency and ease of use: the ARC
EX
PRO app, which connects wirelessly
to the Stimulator to program the therapy and adjust parameters, and the myARC
EX
app for
users to easily control the stimulation during personal use in the home setting.
Implantable ARC
IM
System
The ARC
IM
System is an implantable system currently being used to explore a series of
potential indications in clinical feasibility studies. The first target indication for ARC
IM
is
addressing blood pressure instability after SCI. We expect to start a global pivotal study for
this indication in 2025. Other potential indications may be explored in the future, including
SCI-related bladder and bowel control, spasticity reduction, improved sexual function, and
upper and lower limb mobility (standing and walking), each enabled by further development
of our proprietary lead portfolio and in some cases including a BCI.
The ARC
IM
System has four components:
1
•
A
Lead
implanted on the spinal cord in the area responsible for driving the movement or
function targeted by the therapy. We are currently developing a family of leads that are
optimized for precise placement in different areas of the spinal cord, varying in shape
and electrode configuration.
•
A
Neurostimulator
implanted under the skin and connected to the lead through a wire.
When switched on, this device delivers precisely sequenced and calibrated bursts of
electricity to specific electrodes in the Lead.
•
An external
Hub
that connects wirelessly to the Neurostimulator to turn therapy on or
off, set or update the frequency and intensity of the impulses, recharge the device, and
integrate external sensors via wireless connections and sensor-specific algorithms. The
Hub is worn on a belt around the waist.
•
Dedicated apps for efficiency and ease of use.
Apps are available for both clinicians and
users of ARC Therapy. Clinicians use the professional app to create and adjust stimulation
programs using a tablet connected wirelessly to the Hub, and users employ the personal
app to control their therapy within clinician-prescribed programming parameters. The
personal app is expected to be deployed on a mobile phone or smartwatch and enabled
by voice commands as well.
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ARC
EX
Therapy
Programmed transcutaneous electrical
stimulation to the spinal cord
ARC
EX
Stimulator
External system for non-invasive, programmed
stimulation of the spinal cord
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ARC
EX
PRO & myARC
EX
app
Via ARC
EX
Programmer
ARC
EX
Therapy
Individual stimulation parameters
can be optimized for each patient’s
unique needs
Note: The ARC
EX
System is intended to deliver programmed, transcutaneous electrical spinal cord stimulation in conjunction with
functional task practice in the clinic to improve hand sensation and strength in individuals between 18 and 75 years old that present
with a chronic, non-progressive neurological deficit resulting from an incomplete spinal cord injury (C2-C8 inclusive).
One of TIME Magazine’s
Best Inventions of 2024
External Platform
Overview
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Note: For investigational use only; IPG = Implantable Pulse Generator
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ARC
IM
Lead
Cervical Lead
Thoracic Lead
Lumbar 8-8 Lead
Lumbar 7-2-7 Lead
Sacral Lead
ARC
IM
Neurostimulator
ARC
IM
Hub
IPG and leads for direct, programmed
stimulation of the spinal cord
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ARC
IM
PRO app
Via ARC
IM
Programmer
myARC
IM
App
Via ARC
IM
Controller
Implantable Platform
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ARC
IM
Leads
ARC
IM
is currently targeted toward improving lower limb mobility and stabilizing blood pressure
after SCI. Other potential indications may be explored in the future, including SCI-related trunk
control, bladder and bowel control, spasticity reduction, improved sexual function, and upper
limb mobility, each enabled by further development of the ONWARD proprietary lead portfolio.
ARC
IM
Lead Placement
Arm & Hand Function
Blood Pressure & Trunk Control
Mobility (Walking & Standing)
Bladder & Bowel Control,
Sexual Function
C4
T1
T10
T12
L1
S1
L5
S4
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ARC
IM
Lead
Cervical Lead
Thoracic Lead
Lumbar 8-8 Lead
Lumbar 7-2-7 Lead
Sacral Lead
ARC
BCI
Brain Implant
Brain and spinal cord are reconnected by our ONWARD
DigitalBridge™ to restore thought-driven movement
ARC
BCI
Wearable Data Station
Lightweight cap with
embedded electronics and
battery wirelessly powers the
WIMAGINE brain implant. The
cap collects brain activity,
streamed wirelessly to the
ARC
BCI
programmer.
Move
The ONWARD ARC
IM®
System
precisely stimulates the spinal
cord to produce intended
movement.
Think
An intention to move
originates in the brain.
ARC
BCI
Hub
Wirelessly charges
and communicates
with neurostimulator.
ARC
BCI
Neurostimulator
Generates precise
stimulation delivered
through ARC
BCI
Lead.
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ARC
BCI™
Programmer
Decode
An AI algorithm translates
that intention into instructions
for the neurostimulator.
Implantable Platform
Powered
Externally
by AI
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The ARC
BCI
System
The ARC
BCI
System is an implantable system currently being investigated to enable thought-
driven movement of the legs and upper extremities. This research is supported by grants
from the European Innovation Council and the Christopher and Dana Reeve Foundation. The
system consists of an implanted brain-computer interface (BCI) developed by CEA-Clinatec,
Grenoble, France, which the Company exclusively licensed in 2024. The BCI is placed on top
of the motor cortex, where it records brain signals that indicate the intention to move. The
ARC
BCI
System then uses artificial intelligence to decode those signals and translate them into
instructions for our ARC
IM
Neurostimulator, which sends electrical impulses to our ARC
IM
Lead.
Those electrical impulses are applied to the spinal cord, enabling thought-driven movement.
Two Priority Indications to Improve Quality of Life after SCI
Hand strength and sensation (initial ARC
EX
focus)
Since 2015, 60% of new SCIs in the US have resulted in some form of tetraplegia.
1
Injuries at
the cervical level of the spine (C1-C7) can result in loss of sensory and motor connections to
all areas below the neck, including the arms and legs. Without the use of our hands, most
activities of daily life (such as grooming and eating) become extremely challenging. Better
hand strength and sensation is therefore an important rehabilitation goal for a majority of
people with SCI, consistently ranked ahead of walking or sexual function.
2
Blood pressure instability (initial ARC
IM
focus)
Hemodynamic instability, including the inability to regulate blood pressure following an SCI,
has profound consequences in both the acute and chronic stages and affects nearly 40%
3
of
people with SCI.
4
Immediately after injury, blood rushes to the lesion area and causes swelling,
which starves the nerve cells of oxygen, compounding the initial damage. The outcome for
many patients could be vastly improved if clinicians were able to intervene immediately to
prevent inflammation by controlling blood pressure, blood flow, and oxygenation.
At the chronic stage, after the injury has healed, fluctuations in blood pressure drastically
impact quality of life, especially for people with tetraplegia. It can cause a range of debilitating
conditions, including stroke, fatigue, and hemodynamic instability which involves chronic
hypotension, and a life-threatening form of hypertension known as autonomic dysreflexia.
5
Chronic hypotension affects a person’s ability to perform everyday movements like sitting up
or leaning over, and can inhibit their ability to engage in activity-based rehabilitation.
In 2022, we reported positive interim clinical outcomes from the first 10 people treated
with implantable ARC Therapy to regulate blood pressure. ARC
IM
Therapy immediately
improved blood pressure levels in all study participants, who also reported fewer episodes
of hypotension, improved quality of life, increased energy and vitality, and reduced dizziness.
Based on these promising interim outcomes,
6
our clinical feasibility study was extended to
the Netherlands with the first implant performed in Q3 of 2023.
We expect additional results from our clinical feasibility studies for blood pressure instability
to be published in a peer-reviewed journal in 2025.
1
National Spinal Cord Injury Statistical Center (NSCISC), Facts and Figures at a Glance, Birmingham, AL: University of Alabama at
Birmingham, 2021
2
Candy Tefertiller, PT, DPT, PhD, NCS, Executive Director of Research, Craig Hospital, presented at Unite2Fight Paralysis Conference,
2020. Adapted from Anderson (2004). Targeting Recovery: Priorities of the Spinal Cord-Injured Population. J Neurotrauma. 21(10): 1371-
83
3
Company data, epidemiology data from 2023 NSCISC Annual Statistical Report Complete Public Version
4
Krassioukov A., Claydon V.E. The clinical problems in cardiovascular control following spinal cord injury: an overview. Prog Brain Res.
2006;152:223-9. doi: 10.1016/S0079-6123(05)52014-4. PMID: 16198703
5
Carlozzi, N. E., Fyffe, D., Morin, K. G., Byrne, R., Tulsky, D. S., Victorson, D., Lai, J.-S., & Wecht, J. M. (2013). Impact of blood pressure
dysregulation on health-related quality of life in persons with spinal cord injury: Development of a conceptual model. Archives of
Physical Medicine and Rehabilitation, 94(9), 1721–1730. https://doi.org/10.1016/j.apmr.2013.02.024 Wecht, J. M. (2022). Management of
blood pressure disorders in individuals with spinal cord injury. Current Opinion in Pharmacology, 62, 60–63. https://doi.org/10.1016/j.
coph.2021.10.003
6
ONWARD press release issued 8 December 2023 - ONWARD Reports Interim Clinical Outcomes for Implantable ARC Therapy
Demonstrating Potential to Improve Blood Pressure Regulation after Spinal Cord Injury
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Additional indications with significant potential
ONWARD ARC
IM
Therapy to restore mobility in people after SCI
We plan to further investigate the use of ARC
IM
to restore the ability to stand and/or walk
after SCI by restoring movement in the lower limbs. This will build on the success of STIMO, a
clinical feasibility study that determined the preliminary feasibility of ARC Therapy to restore
walking in individuals with chronic SCI resulting in complete or partial paraplegia.
Starting in 2016, the nine participants in this study received high-intensity neurorehabilitation
that combined precisely timed epidural stimulation with over-ground, robot-assisted
rehabilitation training. After completing the STIMO program, all participants reported
improvements in mobility and substantial neurological recovery. Several were able to walk
on a treadmill without using their hands for support and to stand and walk at will, even while
the stimulation was inactive.
While walking may seem like an ambitious goal for many people with SCI, even modest gains
in lower limb function can make a big difference. Incorporating ARC
IM
Therapy in post-acute
clinical rehabilitation programs has the potential to vastly improve long-term outcomes for
the recently injured by promoting neurological recovery. Additionally, we envision that ARC
IM
stimulation may someday be used “on the go” to enable a variety of everyday movements,
including standing and movement of the lower limbs, as part of a person’s therapy and
daily activities.
ONWARD ARC
IM
Therapy paired with brain-computer interface (BCI) to restore
augmented mobility after SCI
In May 2023, an article in
Nature Medicine
1
reported that a wireless BCI can record a person’s
intention to move to control ARC
IM
Therapy. Researchers reported that when paired with ARC
IM
Therapy, an implanted BCI allowed an individual to gain augmented control over when and
how he moved his paralyzed legs. The published data are part of an ongoing clinical feasibility
study investigating the safety and preliminary effectiveness of brain-controlled spinal cord
stimulation after SCI. The study is being coordinated by .NeuroRestore co-directors Professor
Grégoire Courtine and Dr. Jocelyne Bloch, a neurosurgeon at Lausanne University Hospital
(CHUV), in collaboration with Guillaume Charvet, Head of the Medical Device Development
Lab at CEA-Leti/Clinatec.
ONWARD ARC
IM
Therapy to restore mobility in people with Parkinson’s disease
In November 2023, an article in
Nature Medicine
2
highlighted the potential for ONWARD ARC
Therapy to address gait challenges related to Parkinson’s disease. The study participant
described in the article has been living with Parkinson’s disease for nearly three decades.
He has a severe gait disorder that has not responded to conventional therapies. After the
introduction of ARC Therapy, followed by several weeks of rehabilitation, the participant was
able to walk without the previously noticeable gait interruptions.
.NeuroRestore was awarded a USD 1 million grant from The Michael J. Fox Foundation for
Parkinson’s Research (MJFF) to implant the ARC
IM
System in six additional participants with
Parkinson’s disease to investigate the effect of ARC Therapy. This study will assist ONWARD
in determining whether to conduct additional clinical trials with a view to commercialize ARC
Therapy in the future for those living with Parkinson’s disease. The study is underway with
the first participant implanted in late 2024.
Clinical trials and regulatory activity
The development, manufacture, and marketing of ONWARD’s ARC Therapies and associated
technologies is subject to government regulation in the United States, the European Union,
the United Kingdom, and other countries. To apply for regulatory clearance or approval to
market our new devices in any of these jurisdictions, we must complete extensive human
clinical trials that demonstrate their safety and effectiveness.
1
Non-invasive spinal cord electrical stimulation for arm and hand function in chronic tetraplegia: a safety and efficacy trial | Nature
Medicine
2
A spinal cord neuroprosthesis for locomotor deficits due to Parkinson’s disease | Nature Medicine
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Call Points
US
Tier 1 and Tier 2 specialist rehab centers
Initial Focus:
~75 Tier 1 accounts including
VA SCI hub centers, Up-LIFT investigational
sites and other US flagship SCI clinics
Sales force deployment:
Expect to start
with 6 Sales Reps
Build enduring relationships with priority target
customers; high customer concentration
Geographical Focus
US and select European markets with
sophisticated neurorehabilitation
infrastructure, clinical partnerships,
and/or favorable reimbursement for
medical innovation
~500
~450
Targeting &
Channel Strategy
Europe
Germany (DE)
Netherlands (NL)
Specialist rehab centers
Initial Focus:
~30 accounts including DMGP
member paraplegia centers in Germany,
chiefly BG SCI Kliniks
Sales force deployment:
Expect to start
with 2-5 Sales Reps in Europe and UK
France (FR)
United Kingdom (UK)
Switzerland
~80
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Medical devices are regulated according to their risk level and require extensive supporting
safety and effectiveness data to demonstrate their risk to benefit ratio for global regulatory
authority consideration prior to market approval. ARC
EX
is generally designated as a lower risk
device (Class II) and ARC
IM
is expected to designate a higher risk device (Class III), requiring
different levels of supporting clinical evidence. ONWARD continues to partner with regulatory
authorities globally to ensure that clinical trials are designed and executed in accordance
with the requirements for these different medical device classifications.
Commercialization
The Company’s commercialization strategy is to deliver on its mission to empower
independence and enable people with spinal cord injury (SCI) to enjoy life in the ways that
matter to them. It intends to lead the development of a USD 17 billion market opportunity and
address the significant unmet needs of the SCI population. The key tenets of the company’s
commercial strategy that will drive success are as follows:
•
Deliver Robust science, differentiated technology and compelling evidence to substantiate
the effectiveness and safety of its products and enable timely
regulatory approvals and
reimbursement coverage in key geographies
•
Drive market access in the US and European markets and opportunistically pursue
other geographies
•
Develop technologies and indications in a sequenced manner, always in close partnership
with the SCI community and aligned with the needs and priorities of people with SCI
•
Bring a partnership mindset to the way we build our sales and marketing organization, hiring
a team with rehabilitation, trauma and neuroscience expertise and people-centric values
•
Target initially the top rehabilitation and SCI centers of excellence in the US and Europe.
ARC
EX
Just days after the US Food and Drug Administration (FDA) granted de novo classification
for the ARC
EX
System on December 19, 2024, ONWARD announced the first commercial sales
of its ARC
EX
System in the United States.
The ARC
EX
System is currently authorized for clinic
use in the United States, and the Company anticipates authorization for home use in 2025.
ONWARD Medical plans to seek CE Mark certification in early 2025, with commercial launch
in Europe expected in 2H 2025.
ARC
IM
As described in prior sections, our initial focus for ARC
IM
is blood pressure instabilty. Our
pivotal trial for the ARC
IM
System, Empower BP, is expected to start in the first half of 2025.
Empower BP will focus on the safety and effectiveness of ARC
IM
Therapy for management
of blood pressure instability in patients after SCI. We expect to commercialize ARC
IM
after
successful completion of the Empower BP pivotal trial and subsequent FDA PMA approval.
Geographical focus and commercial objectives
Our plans depend on our ability to demonstrate the safety and effectiveness of our products
to regulatory authorities.
The initial commercial focus is the US and Europe, where most people with SCI are cared
for by a limited number of trauma and rehabilitation centers that can be served by a direct
field organization. In the short to medium term, the Company may also opportunistically
explore geographic expansion into countries where FDA approvals and CE Mark certification
are accepted or where the regulatory burden is low. The Company will use direct or indirect
channels, as may be appropriate.
Rehabilitation clinics
Our marketing efforts will focus on clinicians managing SCI patients in rehabilitation clinics.
These include rehabilitation physicians such as physical medicine and rehabilitation (PM&R)
physicians – also called physiatrists – as well as physical and occupational therapists who
provide post-injury rehabilitation training and ongoing support to those who are chronically
injured. The latter constitutes the largest pool of SCI patients globally.
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Specific customer targets at
each stage in patient journey
Injury
Decompression
Surgery
24 hours
Intensive
Care
~7 days
Acute Phase
Sub-Acute Phase
Trauma
Centers
Neurosurgeons, ortho/
spine surgeons
Clinician Customers
in Patient Journey
Rehabilitation
3-6 months
Plateau
12+ months
Intermediate Phase
Chronic Phase
SCI
Rehabilitation
Clinics
Rehabilitation physicians
(physiatrists), therapists
(PTs/OTs), and
neurologists
Patients and caregivers
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Current focus are SCI rehabilitation
clinics which are at the core of ONWARD’s
commercialization strategy
Note: ARC
IM
and ARC
BCI
are investigational devices, not available for commercial use. The ARC
EX
System is intended to deliver
programmed, transcutaneous electrical spinal cord stimulation in conjunction with functional task practice in the clinic to
improve hand sensation and strength in individuals between 18 and 75 years old that present with a chronic, non-progressive
neurological deficit resulting from an incomplete spinal cord injury (C2-C8 inclusive).
Clinic
Expected in 2027
Home
Expected in 2025
SCI Clinic
Rehabilitation
Clinic Importance
•
Clinics to
purchase ARC
EX
devices
as capital equipment for in-clinic use
and bill for
therapy sessions
•
Opportunity to re-engage chronic patients not currently undergoing care
•
Reimbursement: No new reimbursement code required for clinic sales
•
Clinics to
prescribe home use
of ARC
EX
for
new patients
or
chronic
patients
not currently undergoing care
•
Clinics can bill for
evaluation, set-up, and training
•
Reimbursement:
30% of patients in US
expected to have
access
to home
use without a new code
•
Clinics to
refer patients to neurosurgeons and ortho/spine surgeons
for
ARC
IM
implants
•
Patients will return to clinics for ongoing care and therapy adjustments
•
Reimbursement: Apply for
new codes in US
and
leverage procedural
codes
in largest
European market
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Physicians will prescribe ARC
EX
for home use and
refer patients for ARC
IM
implants
•
Order clinic use
•
Prescribe home use
Referral to functional
neurosurgeon for implant
surgery (likely <2hr)
Decision–Maker
Neurologists &
Rehabilitation Clinicians
Referral Pathway
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We expect clinicians to use our therapies as follows:
•
Use ARC
EX
in clinics during therapy sessions
•
Prescribe ARC
EX
for use at home
•
Refer patients to neurosurgeons and orthopedic spine surgeons for implantation of ARC
IM
and ARC
BCI
; patients will then return to clinics for ongoing care
Specialty rehabilitation clinics are the referral base for ONWARD’s therapies. As there are a
limited number of specialty rehabilitation clinics in our selected markets, they provide a robust,
focused and fertile market. In the United States, there are approximately 450 specialized
rehabilitation clinics. Our initial focus will be on approximately 75 accounts including Veterans
Affairs (VA) SCI hub centers, Up-LIFT investigational sites, and other US flagship SCI clinics.
In Europe, there are approximately 80 specialized rehabilitation clinics in major markets.
Reimbursement & Market Access strategy
ONWARD is executing a region-specific reimbursement strategy to ensure timely and
sustainable market access for ARC Therapy across the United States and key European
markets. Our approach targets all relevant payer channels — public and private — while also
leveraging partnerships and alternative funding opportunities to ensure broad patient access.
United States
In the U.S., ONWARD has taken significant steps to establish early market access for ARC
EX
following its FDA authorization in December 2024. Through our strategic partnership with
Lovell Government Services, a service-disabled veteran-owned small business (SDVOSB),
ARC
EX
was successfully added to the VA Federal Supply Schedule (FSS) and GSA Advantage
— two key procurement platforms for federal healthcare providers. These listings enable
streamlined purchasing by Veterans Affairs (VA) hospitals, Department of Defense (DoD)
facilities, and other federal buyers.
Lovell continues to support our expansion within federal channels, with pending applications
for the DAPA (Distribution and Pricing Agreement) and ECAT (Electronic Catalog) systems.
These platforms grant access to a large population of individuals living with SCI — particularly
veterans — and support the generation of early invoicing and claims data, which are critical
for building the evidence base required for broader reimbursement submissions.
Our U.S. reimbursement roadmap includes:
•
Category III CPT code application for ARC
IM
to enable early access post-FDA approval.
•
New HCPCS code submission for ARC
EX
to support Medicare and commercial DME coverage.
•
Potential New Technology Add-on Payment (NTAP) and Transitional Pass-Through (TPT)
applications to bridge reimbursement gaps in both inpatient and outpatient settings.
•
Feasibility assessment of CMS’s Transitional Coverage for Emerging Technologies (TCET)
pathway and Coverage with Evidence Development (CED), both of which may be applicable
given ARC
IM
’s Breakthrough Device Designation and expected clinical impact.
ONWARD is engaging with a full spectrum of payer stakeholders, including Medicare,
Medicaid, commercial insurers, workers’ compensation payers, auto and accident insurers,
the VA, etc.. In parallel, we are leveraging alternative funding sources such as SCI-focused
foundations, military insurance, and dedicated government and private programs to support
access for underserved populations.
Germany
Germany is expected to be the first European market to adopt both ARC
EX
and ARC
IM
, given
its advanced SCI rehabilitation infrastructure and comprehensive reimbursement framework.
ARC
EX
is anticipated to be immediately reimbursed for in-clinic use following CE mark
approval. For home use, ONWARD is preparing for registration in the Hilfsmittelverzeichnis
(HMV) — the official list of durable medical equipment reimbursable by public insurers — and
anticipates a 2–4 year pathway pending evaluation by the G-BA.
ARC
IM
is expected to be reimbursed under Germany’s DRG-based inpatient payment system,
with additional support from supplemental payments (Zusatzentgelte) to reflect the cost and
complexity of the implant procedure. These pathways are well established e.g. in BG Clinics,
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which specialize in spinal trauma and rehabilitation and are experienced in negotiating
reimbursement for advanced technologies.
Alternative funding options in Germany include workers’ compensation (DGUV), private health
insurance, disability insurance, and support from SCI-specific charitable foundations. These
mechanisms may accelerate access while formal reimbursement reviews are underway.
Europe (Beyond Germany)
Across other major European markets, ONWARD is pursuing country-specific reimbursement
strategies based on the respective national frameworks. While Europe lacks a unified
reimbursement model, we are building targeted access plans that focus on:
•
Public health insurers
•
Private payers
•
Workplace and accident insurance funds
•
Disability and long-term care insurers
•
Military and veteran health systems
•
Charities and SCI foundations that provide financial assistance
These efforts began in 2022 and will continue through 2025 and beyond, with each market
approached based on its readiness and strategic alignment with ONWARD’s commercial goals.
Looking ahead
ONWARD has already achieved key milestones in building a sustainable reimbursement
foundation, including government procurement access in the U.S., clinical market entry for
ARC
EX
, and advanced planning for broad-based reimbursement across Europe. Our strategies
are tailored to each region’s regulatory and payment realities and aligned with the clinical
value of our innovations.
We are actively collaborating with the full ecosystem of reimbursement stakeholders —
from public insurers and private payers to specialty clinics, SCI organizations, and federal
healthcare providers — to ensure ARC Therapy is accessible to those who need it. At the same
time, we are generating real-world evidence, including patient-reported outcomes, to meet
growing demands for value-based reimbursement.
Our goal is to enable broad, equitable access to ARC
EX
and ARC
IM
while ensuring ONWARD
is compensated fairly for delivering transformative outcomes for people living with spinal
cord injury.
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Culture
At ONWARD, we aim to attract talented and ambitious individuals who bring creativity
to everything they do by offering a compelling vision, groundbreaking technology, and
competitive rewards. Our team reflects a rich diversity, with 20 nationalities represented.
We strive to position ONWARD as an employer of choice by fostering a positive culture rooted in
the principles of the ONWARD Code. This code emphasizes continuous learning, constructive
feedback, and professional development while providing the tools and opportunities for
employees to enhance their skills and grow their careers.
As part of our culture, the ONWARD Code is used to recognize employees whose behaviors
and actions exemplify one or more of its tenets. The Code is introduced during onboarding and
reaffirmed in our monthly company-wide meetings. It serves as a foundation for fostering an
open and transparent work environment where employees feel confident expressing concerns
in good faith, knowing these will be addressed confidentially, seriously, fairly, and without fear
of retaliation.
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We are OPEN
We seek great ideas from any source. We are hungry for feedback.
We accept criticism with humility.
We are TRUSTING
We assume positive intent. We count on each other to deliver.
We speak truth to our leaders and teammates.
We are COLLABORATIVE
We are a team. We find ways to work well together.
We value our external partnerships.
We are PASSIONATE
We admire the courage of those we serve.
We are driven to fulfill our Vision. We will not fail.
We are EMPOWERED
We encourage ideas. We allow mistakes.
Everyone is accountable.
We are COMMITTED
We pursue a noble cause. We are never distracted nor
deterred. We are grateful for the responsibility we shoulder.
We are PRAGMATIC
We find a way. We surmount obstacles. We find
fulfillment in overcoming.
We are INNOVATIVE
We dream big. Limits do not contain us.
Our imagination defines the possible.
The ONWARD Code
Culture
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The Culture Club, a team-driven initiative, reinforces our cultural values, fosters collaboration, and
strengthens shared understanding. It also supports charitable SCI-focused events in partnership
with organizations such as Wings for Life and the Christopher & Dana Reeve Foundation.
Competitive hiring
At ONWARD, we recruit from a global talent pool and we strive to attract top talent—individuals
inspired by our vision and driven by the opportunity to achieve true breakthroughs rather than
incremental progress.
Our recruitment capabilities enable us to maintain full control over the hiring process,
leveraging our professional networks and partnerships with leading academic institutions
to identify and secure the best candidates available.
We also recognize the value of employee networks through our referral program, which
incentivizes employees to recommend candidates who align well with our organizational
culture and values.
To attract and retain exceptional talent, we offer competitive compensation and benefits
packages. As part of our remuneration philosophy, we provide long-term incentives to senior
management and key contributors. Additionally, we promote employee share ownership
through a stock-option plan, ensuring alignment between our long-term objectives and
incentives. Grants under this program are contingent upon continued employment until
vesting, reinforcing a commitment to shared success.
A great place to work
ONWARD places a strong emphasis on employee engagement and the continuous
improvement of the employee experience. In 2024, we introduced several initiatives to gather
feedback and foster a positive work environment such as bi-yearly pulse surveys with results
analysis done by dedicated workgroups that propose actionable recommendations, a new
biweekly initiative gathering quick insights to monitor employee sentiment more frequently,
an anonymous platform allowing employees to share ideas and suggestions freely.
These efforts complement our ongoing improvements to the employee lifecycle experience
that includes a check-in survey for new hires at key milestones: the end of first week, after one
month, and after three months, as well as employee journey interviews and comprehensive
offboarding interviews. These measures ensure valuable feedback is collected at every stage
of employment, enabling us to refine our practices and enhance organizational performance.
Employee well-being
In 2024, we launched several initiatives to enhance employee well-being and support a healthy
work-life balance. These efforts included the establishment of a Zen Zone in our Lausanne
office, providing employees with a dedicated space for relaxation and mindfulness.
We also continued to offer flexible hybrid working arrangements where possible, enabling
employees to better balance their personal and professional commitments.
Additionally, we introduced a variety of activities and programs to promote well-being, such as
well-being challenges, sports events in support of the SCI community, and the dissemination
of educational resources during special months and weeks dedicated to mental health
awareness and work-life balance. These initiatives reflect our commitment to fostering a
positive and supportive work environment for all team members.
Culture
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Governance
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ONWARD is committed to ensuring that cybersecurity and privacy are built into our products
and processes. The personal data we process in the course of our operations – including
health and medical information – pertains to our suppliers and business contacts, applicants,
visitors and website visitors, employees, and customers. When we collect patient health data,
we do so with the sole purpose of assessing and continually improving the efficiency and
safety of our existing and investigational therapies.
We are subject to various regional, national, and state laws that protect the confidentiality
and security of patient health information, including patient medical records and other
forms of personal information. We are committed to applying the two most rigorous privacy
regulations to our global operations, namely the United States’ Health Insurance Portability
and Accountability Act (HIPAA) and the European Union’s General Data Protection Regulation
((EU) 2016/679; GDPR). This legislation includes the data subject’s right to access or amend
certain records containing protected health information or to request that their use or
disclosure be restricted.
Privacy & Data
Governance
Instead, we have appointed an external Data Protection Officer. This service is provided by
DPO Consulting, a firm with extensive experience in Data Protection Regulations provides
this service. In addition, we have established a Data Privacy Committee and a Global Data
Protection Policy complemented through a series of implementing procedures, mechanisms
and employee training to ensure compliance with GDPR and HIPAA, as applicable.
Through the position of VP of Legal, we have strengthened the integration of legal and privacy
assessments across the organization in collaboration with the Data Protection Officer.
We have also strengthened the compliance of our products with cybersecurity and data
protection requirements under GDPR and HIPAA. We have established traceability in
accordance with relevant standards and built evidence that our products are compliant with
the regulations. We continue improving our processes for compliance with GDPR and HIPAA
requirements, creating a robust data privacy platform which supports the commercial launch
of ARC
EX
in the US in late 2024. We are strengthening our data management and processes,
we regularly train our staff on security and privacy issues and employ best practices for the
administration of our systems and infrastructure.
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Additional details regarding ONWARD’s sustainability priorities, approach and performance
can be found in a separate sustainability summary available on ONWARD’s investor website.
ONWARD is committed to being a responsible organization that creates sustainable long-
term value for all stakeholders. Sustainability principles are integral to how we do business.
They are captured in the ONWARD Code, Articles of Association (AOA), Code of Conduct
(COC),
and the Company’s culture, business practices, operations, and supplier agreements.
Sustainability Principles
ONWARD’s sustainability strategy rests on five core principles:
•
Innovating for the underserved.
There is no cure for SCI. ONWARD therapies are among
the first to offer the potential to help people with SCI regain movement and other functions,
improving quality of life for a large, underserved group of people. The Company’s products
also have potential to benefit large populations of stroke sufferers and Parkinson’s disease
patients . Underscoring the innovative nature of its work, ONWARD has been granted
10 Breakthrough Device Designations (BDD) by the US FDA (as of February 2024) and
has
nearly 290+ issued patents worldwide (including EP validations). The Company
continuously innovates and strives to get such designations for other indications to be
able to make a difference in the lives of even more people.
•
Partnering with patient groups.
ONWARD enjoys excellent relationships with the
world’s leading patient advocacy groups for people SCI. The Christopher and Dana
Reeve Foundation, the world’s largest such organization, is an investor in ONWARD. The
Company also collaborates with Wings for Life in Europe, the Praxis Foundation in Canada,
and International Spinal Research Trust in the UK. By collaborating with these groups,
ONWARD is able to innovate in ways that make the greatest difference for people with SCI.
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•
Attracting and retaining the best talent.
To deliver on its vision, ONWARD is committed
to creating an unrivaled and inclusive environment for employees. The Company cares
deeply about the well-being and continuous development of its staff as evidenced by
the various programs that it has put in place, such as its well-being program. Having a
highly motivated and engaged workforce enables the Company to retain and attract top
talent. It also engages with people with SCI as consultants, enabling staff to have a better
understanding of the challenges that they face. ONWARD recognizes and welcomes the
value of diversity with respect to age, gender, race, ethnicity, nationality, sexual orientation,
and other important cultural differences.
•
Minimizing our environmental footprint.
In its operations, the Company strives to
reduce its carbon footprint by replacing air travel with videoconferencing except for the
most pressing business needs, and by encouraging a hybrid workplace, thus reducing
employees’ commute. Additionally, ONWARD works with suppliers to minimize waste in the
manufacturing process, consume electricity generated almost exclusively from renewable
sources, and implement recycling programs in its offices.
•
Maintaining high ethical standards.
ONWARD strives to act with openness and integrity.
The Company is committed to high ethical standards in dealing with business partners
as outlined in the Code of Conduct, which covers anti-bribery and anti-money laundering,
government relations and political affairs, and international business practices. The Code
of Conduct ensures that employees understand what is expected of them when acting on
behalf of the Company. ONWARD aims to comply with all applicable anti-bribery laws,
including the US Foreign Corrupt Practices Act. The highest quality and safety standards
are applied to all ONWARD’s activities, and the Company ensures strong labor practices
in our supply chain. ONWARD also works hard to secure key personal data and comply
with GDPR (General Data Protection Regulations) and HIPAA, uphold human rights, and
operate in geographies with a strong track record on this area.
In 2024, ONWARD Medical was awarded a silver medal by EcoVadis, the world’s largest
provider of business sustainability ratings. The award places the Company in the top 15%
globally of companies assessed by EcoVadis in the past 12 months. The EcoVadis assessment
evaluates 20+ sustainability criteria across four core themes: Environment, Labor & Human
Rights, Ethics, and Sustainable Procurement. More than 130,000 companies globally have
been rated by EcoVadis.
8
Sustainability
Operational
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Science and Intellectual Property
As the pioneer in its space, ONWARD has forged relationships and exclusively licensed
important intellectual property from many of the world’s leading neuroscience research
laboratories, such as Caltech US, University of California at Los Angeles US, University of
Louisville US, and University of British Columbia (Canada).
The Company’s primary research partnership is with .NeuroRestore, a joint research initiative
of EPFL and CHUV in Lausanne, Switzerland. In 2021, the Company signed a framework
agreement with .NeuroRestore governing future research initiatives, as well as contracts
covering existing and ongoing research on blood pressure, mobility, BCI and brain controlled
spinal cord stimulation. In addition, ONWARD supported .NeuroRestore research on upper
limb mobility and incontinence.
Benefitting from these research collaborations, and combined with its own innovations,
the Company’s formidable IP portfolio totals 290+ issued patents, including EP country
validations, further reinforcing the Company’s pioneering science and first-mover advantage.
Research and Development
In 2024, ONWARD’s engineering team made advancements across several development initiatives:
•
ARC
EX
System development: Development was
completed in 2024. Design verification and
validation activities, including user-centric summative studies, were completed, and the
design transfer to manufacturing was executed. This included preparation of production
materials and supply-chain activities. Work continues to enable scaling production
volumes in anticipation of robust market demand. Additionally, a digital platform for
collecting, storing, and analyzing data is under development and will continue in 2025.
Operational Review
This platform will serve as a foundation for delivering an enhanced user experience and
improved customer support capabilities.
•
ARC
IM
System development: The ARC
IM
platform has continued to evolve and mature with
completion of several technological updates, including enhancements supporting clinical
research activities, user experience, system performance, and incorporation of features
informed by insights gained from field use. The technology is expected to advance in early
2025 to the stage at which it can support inclusion in the Empower BP pivotal study, which
is scheduled to commence in 2025.
•
ARC
BCI
development: The company has signed an exclusive agreement with CEA to develop
and commercialize the investigational WIMAGINE
®
BCI technology. Technology transfer
and development activities are planned to begin in 2025.
•
Engineering Operations: The R&D department has undergone adjustments to better
align cross-functional teams across all levels of the organization. These updates aim
to optimize the product lifecycle, clarify roles and responsibilities within functions, and
strengthen collaborations among various stakeholders, while fostering the progression of
our development and research initiatives. Our commitment to continuous improvement
will continue to drive organizational maturity throughout 2025.
ONWARD is also engaged in several joint research activities, with significant milestones
achieved throughout 2024:
•
Brain controlled locomotion: The first study participant was successfully implanted in
the Think2Go clinical feasibility trial, marking a key step in evaluating the potential of
ARC
BCI
Therapy to restore thought-driven lower limb function in individuals with spinal
cord injuries.
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•
Brain controlled upper limbs and partnership with the Christopher and Dana Reeve
Foundation: The first study participant was enrolled in the UP2 clinical feasibility trial
completing the clinical protocol and marking a key step in evaluating the potential of
ARC
BCI
Therapy to restore upper limb function in individuals with spinal cord injuries. The
Christopher and Dana Reeve Foundation provided funding enabling the inclusion of a total
of 7 participants in this trial.
•
Spinal cord stimulation to facilitate locomotion in individuals living with Parkinson’s disease
and partnership with the Michael J. Fox Foundation: ONWARD received ethical approval for
the SPARKL study, a clinical feasibility study which aims to test the effectiveness of ARC
IM
Therapy in addressing locomotor deficits in individuals with Parkinson’s disease. This
milestone was underscored by the successful implantation of the study’s first participant
last year.
•
Spinal cord stimulation for blood pressure regulation in individuals living with Parkinson’s
disease and partnership with the US Department of Defense (DoD): ONWARD secured
funding from the US DoD to initiate a clinical feasibility study in late 2024 exploring
the use of ARC
IM
Therapy to address blood pressure instability in individuals living with
Parkinson’s disease, reflecting the potential of our therapies to address a range of critical
health challenges.
•
Brain controlled spinal cord stimulation after stroke and funding from the European
Innovation Council (EIC) and from Switzerland State Secretariat for Education, Research
and Innovation (SERI): The Company was awarded a highly competitive grant to support a
pioneering project that will evaluate the use of ARC
BCI
Therapy in a clinical feasibility study
for improving upper and lower limb functions in individuals living with subcortical stroke.
Clinical and Regulatory
ONWARD’s clinical and regulatory team had a productive 2024, ending the year with the FDA
De Novo authorization to market the ARC
EX
System in the United States. Additionally, the
team advanced the Company’s clinical understanding of ARC
IM
in addressing hemodynamic
instability in preparation for the IDE submission and commencement of Empower BP in 2025.
We were awarded our 10
th
BDD in Q1 2024 for ARC
BCI
therapy. These BDD awards us priority
FDA review and the opportunity to interact with FDA experts regarding our therapies
throughout the premarket review phase prior to commercialization.
The Company is engaging in discussions with the FDA and EU-MDR in preparation for a
series of 2025 submissions pertaining to home-use for ARC
EX
in the US, market authorization
in Europe for ARC
EX
, and commencement of the Empower BP pivotal study.
Quality
ONWARD has a global quality system that encompasses activities in the United States,
the Netherlands, and Switzerland and complies with applicable regulations and standards
related to the medical devices industry (MDR and QSR, respectively, for EU and US). In 2018,
the Company obtained ISO 13485 certification for design and development. In 2022, the
certification scope was expanded to include clinical applications targeted by ARC
EX
Therapy
and new activities to support the manufacturing and distribution of ARC
EX
devices.
The most recent ISO audit was conducted and passed in late 2024 by TÜV SÜD, a respected
notified body with global reach for neuromodulation devices.
Commercial operations
Just days after the US FDA granted De Novo classification for the ARC
EX
System on December
19, 2024, ONWARD announced the first commercial sales of the ARC
EX
System in the United
States. The ARC
EX
System is currently authorized for clinic use in the United States, and the
Company anticipates authorization for home use in 2025. ONWARD Medical plans to seek
CE Mark certification in 2025, with commercial launch in Europe expected in the second
half of 2025.
Assuming positive clinical results from our Empower BP global pivotal trial and subsequent
regulatory approvals, ONWARD aims to launch ARC
IM
commercially in the United States
in 2027 and select European markets thereafter to restore hemodynamic stability after
SCI. Additionally, the Company will continue to investigate the use of ARC
IM
and ARC
BCI
for
additional indications, for instance, to improve mobility by restoring movement in the legs
and feet, with the goal of bringing these therapies to market in the near future.
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The Company plans to deploy its own direct sales and service organization in the United
States and select European markets, and use distribution partners in most other geographies.
Supply Chain / Manufacturing
The company has forged relationships with leading, medtech-focused contract manufacturing
organizations (CMOs) to assist with the manufacture of products and product components.
Selected CMOs undergo a rigorous screening and selection process and are subject to robust
quality and performance monitoring. ONWARD conducts regular supplier audits and will
continue its supplier vigilance programs in 2025. The Company maintains market surveillance
of components to monitor quality and supply issues, and explores alternative sourcing options,
paying particular attention to costs and delivery timelines. There are no critical supplier
changes expected in 2025 and no known shortages of components or materials.
Financing
To pursue its strategy and operational goals, ONWARD will invest in R&D, conduct clinical
trials, and drive commercialization of the recently FDA-approved ARC
EX
System. The Company
successfully completed two equity financing rounds in 2024, raising a total of €70 million.
Net cash on the balance sheet at the end of 2024 was €60 million net cash (please refer to
Non-IFRS financial measure included in
Other Information
for the definition of net cash). As
part of the October 2024 equity financing, ONWARD added Ottobock SE & Co. KGaA as a
strategic investor.
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This financial review should be read with the operational review and the Company’s
consolidated financial statements in this Annual Report, which have been prepared in
accordance with International Financial Reporting Standards (IFRS) as published by the
International Accounting Standards Board and as adopted by the European Union and with
Part 9 of Book 2 of the Dutch Civil Code.
EUR’ Million
2024
2023
Total Revenues & Other Income
1.7
0.5
Total Operating Expenses
Research & Development Expenses
Clinical & Regulatory Expenses
Marketing & Market Access Expenses
Patent Fees & Related Expenses
Quality Assurance Expenses
General & Administrative Expenses
(36.6)
(12.4)
(4.8)
(3.4)
(1.4)
(2.0)
(12.6)
(36.0)
(13.8)
(4.9)
(2.9)
(1.5)
(1.5)
(11.3)
Operating Loss for the Period
Net Finance Expense
Income Tax
(34.9)
(0.9)
0.0
(35.5)
(0.6)
(0.1)
Net Loss for the Period
(35.7)
(36.2)
At
EUR’ Million
31 December
2024
31 December
2023
Net Cash Position at the end of the Period
Interest-bearing Loans
Equity
60.0
(14.0)
48.1
29.8
(15.3)
17.9
Financial Review
Total Revenues & Other Income
In 2024 the Company successfully negotiated an amendment with the European Innovation
Council to reflect the origin of the activities performed, and was able to secure replacement
funding from the Swiss State Agency (SERI) for activities conducted in Switzerland. As a
result, grant income has been recognized in 2024 to reflect progress on the Reverse Paralysis
grant from inception through the end of 2024. This represents approximately €1M of the 2024
income. Additionally, following FDA clearance on 19 December, the Company realized the
sale of two ARC
EX
devices, generating €77k in revenue. This marks an important milestone
in the Company’s transition to commercial operations.
Research & Development Expenses
Research and development (R&D) expenses decreased by 10%, from €13.8M in 2023 to
€12.4M in 2024. The decrease is due to a reduction in external costs while employee costs
remained relatively stable. The shift reflects a greater allocation of internal resources to
R&D activities, resulting in lower reliance on external expenditures..
R&D expenses consist of product development, engineering to develop and support our
products, testing, consulting services, and other costs directly attributable to the ARC
technology platforms and related therapies. These expenses primarily include salaries for
R&D staff and related expenses, including expenses for share-based compensation, and
outsourced development expenses. These expenses do not meet the criteria for capitalization
given the status of development activities.
R&D expenses also include the costs of sponsored research activities undertaken by
universities with which ONWARD collaborates. This includes the close working relationship
with one of the founders, Grégoire Courtine, Science Advisor, Director at .NeuroRestore and
Professor at EPFL.
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Clinical & Regulatory Expenses
Clinical expenses decreased by 3%, from €4.9 million in 2023 to €4.8M in 2024. In 2024, clinical
expenses were primarily driven by efforts to support the FDA submission for ARC
EX
, reflecting
its priority within our overall strategy. Additional costs were incurred for ongoing clinical
activities, including consulting services and study-related expenses, as well as preparations
for our pivotal Empower BP study. These expenses comprise employee salaries and related
expenses, including share-based compensation, clinical trial management and monitoring,
payments to clinical investigators, data management, and travel expenses to the various
clinical trial locations.
Marketing & Market Access Expenses
Marketing and market access expenses increased by 14%, from €2.9M in 2023 to €3.4M
in 2024, reflecting the activities necessary to prepare for regulatory clearance and ensure
marketing readiness to support commercialization. This includes participation in leading
industry forums to increase awareness and engagement around ONWARD ARC Therapies
in the SCI community. Employee costs increased as the company expanded its marketing
capabilities and began hiring sales representatives to facilitate ARC
EX
sales.
Patent Fees & Related Expenses
Patent fees and related expenses remained in line with prior year from an external cost
perspective. These expenses consist primarily of costs associated with obtaining and
maintaining patents and other intellectual property included in ONWARD’s growing portfolio,
including the newly acquired exclusive rights to Clinatec’s WIMAGINE® Brain-Computer
Interface (BCI) Technology.
Quality Assurance Expenses
Quality assurance expenses increased by 38% from € 1.5M in 2023 to € 2M in 2024. Quality
assurance expenses are related to efforts to strengthen ONWARD’s capability to meet
quality and regulatory requirements in support of regulatory submissions and manufacturing
of the ARC
EX
system that received clearance for clinic use in the US in December 2024.
These expenses include employee salaries and related expenses, including share-based
compensation, consulting, testing, and travel related to quality and risk assurance activities.
General & Administrative Expenses
General and administrative expenses increased by 11%, from €11.3M in 2023 to €12.6M
in 2024.
As ONWARD transitions to a commercial organization, the Company has made
significant investments to establish its manufacturing capabilities. This includes scaling
production processes, securing supply chain resources, and ensuring operational readiness
to support the launch of ARC
EX
. Additionally, the Company continued investing in technology
systems and expanded its overall operational infrastructure, including internal licensing
and legal compliance, to support commercialization. Employee costs include one-off bonus
compensation in recognition of the fundraising efforts in 2024.
Net Finance Expense
The net financial expense increased by 48%, from €0.6M in 2023 to €0.9M in 2024. Interest
expense is divided between the innovation loan from the RVO NL that was repaid in July and
replaced with a debt facility from Runway Growth. The Company continued to invest excess
cash in short-term deposits with reputable banks yielding interest income.
Income Tax
In 2024, the Company recorded a tax benefit compared to the tax expense in 2023. This
shift was primarily driven by the correction of income taxes in the U.S. for 2023, along with
the recognition of the 2024 tax expense in both the U.S. and Switzerland.This is offset by
the increase in deferred tax asset balance reflecting the recognition of deferred tax assets
on state tax losses in the US. Another factor contributing to the increase in the deferred tax
asset balance is the rise in the post-employment benefit liability in Switzerland. The 2023
tax expense was mainly driven by the activities of the Swiss subsidiary.
Cash Position
The Company ended the year with a positive net cash balance of € 60M (2023: € 29.8M). The
full amount comprises cash and cash equivalents since none of the short-term fixed deposits
exceeds a period of 3 months.
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The table below summarizes the Company’s cash flows for the years 2024 and 2023.
EUR’ Million
2024
2023
Net cash generated / (used) from operating activities
Net cash (used) / generated from investing activities
Net cash generated / (used) from financing activities
Effect of exchange rates on cash and cash equivalent
(31.8)
(0.2)
62.6
(0.4)
(32.2)
19.6
0.8
(0.1)
Cash outflow from operating activities decreased from € 32.2M in 2023 to € 31.8M in 2024.
The decrease in operating cash flows is primarily attributable to changes in working capital,
specifically an increase in trade and other payables.
Cash flow from investing activities in 2024 reflects
the acquisition of property, plant,
and equipment.
The cash inflow in 2024 is attributable to the two rounds of equity financing raised net of
transaction costs. The Company also repaid the innovation loan from RVO NL and replaced
this with the debt facility from Runway Growth.
The impact of exchange rates amounted to € 373k for 2024. This is mainly due to the
strengthening of the Swiss Franc.
Interest-bearing Loans
Interest-bearing loans decreased by 6%, from €15.3M in 2023 to 14M in 2024. The innovation
loan from RVO NL (Dutch government) was repaid in July and replaced with debt financing from
Runway Growth. The new facility is structured in multiple tranches, with funding availability
tied to the achievement of specific milestones. Warrants were also issued to Runway Growth
amounting to €0.4M. The costs of the warrants was set off against the loan.
As of the end of
2024, the first tranche has been drawn, and the second tranche has been unlocked following
the achievement of the FDA clearance milestone.
Equity
The Company’s equity at the end of 2024 increased with €30.1M closing with a positive
balance of €48.1M. The movement reflects a net increase primarily driven by the successful
equity fundraising rounds, which contributed €64M net of transaction costs. This was partially
offset by the net loss for the period of €35.7M. Additionally, share-based compensation of
€2.7M contributed to the increase, while the remeasurement of post-employment benefits
and currency translation differences resulted in a net decrease of €1.2M
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General
ONWARD is a public limited liability company established under the laws of the Netherlands,
with common shares listed on Euronext Brussels, Amsterdam and Paris. The Group is
composed of ONWARD Medical N.V. (incorporated as a private limited liability company
(B.V.) on 20 November 2015) and its wholly owned subsidiaries:
•
ONWARD Medical S.A. (Swiss subsidiary established on 12 December 2014)
•
ONWARD Medical Inc. (US subsidiary established on 13 September 2013)
The Company and its subsidiaries act as one company.
ONWARD’s corporate governance is guided by the rules and principles set out in the Dutch
Corporate Governance Code (the DCGC), the Company’s Articles of Association (AOA) and
Dutch law. The AOA are available on the ONWARD website (onwd.com) under the Investors/
Governance tab.
ONWARD maintains a Code of Conduct in order to promote a culture of good governance,
excellence, and consistency that applies to all directors, officers, and employees. A copy of
the Code of Conduct is available on the ONWARD website (onwd.com) under the Investors/
Governance tab. The Code of Conduct outlines our commitment to be a responsible social
partner and the way in which we attempt to interact with our stakeholders, including
shareholders, suppliers, customers, employees, and SCI community. The Code of Conduct
expresses our dedication to an economically, socially, and ethically sustainable way of working.
The Board has received no indications that the Code is not effective or of any non-compliance.
Governance
Governance framework
The Company’s overall governance framework and key governance elements at each level
are the following:
•
For shareholders: the Articles of Association and Shareholder Dialogue Policy
•
For the Board: the Board Rules, the Charter of the Audit Committee, the Charter of the
Compensation Committee, and the Charter of the Nomination Committee
Board of Directors
ONWARD has a one-tier board consisting of one or more Executive Directors (uitvoerend
bestuurders) and one or more Non-Executive Directors (niet-uitvoerend bestuurders), all of
whom are individuals. Our CEO, as Executive Director, with the support of the Management
Team, is charged primarily with the Company’s day-to-day business and operations and
the implementation of the Company’s strategy. The non-executive Directors are primarily
responsible for supervising the performance of the Executive Director.
In a one-tier governance structure such as that adopted by ONWARD, Non-Executive Directors
and Executive Directors share responsibility for managing the company for those tasks and
duties that are not delegated to one or more other specific Directors by virtue of Dutch law,
the Articles of Association, or any other arrangement catered for therein (e.g., the Rules of
the Board). It is therefore important that the Board ensure sufficient independent supervision
by Non-Executive Directors.
In accordance with the DCGC, the Board’s role is to provide leadership and supervision to the
Company on matters of strategy, risk management, and policies. It has overall responsibility
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for the management and control of the Company and is authorized to take all actions it deems
necessary to achieve the Company’s purpose.
In performing their duties, Directors must be guided by the best interests of the Company
and its stakeholders, including business partners, employees, and shareholders. The Board
has drawn up Rules concerning its organization, decision-making, and other internal
matters. These Rules are available on the ONWARD website (onwd.com) under the Investors/
Governance tab.
The composition of the Board aims to ensure a broad diversity of experience, knowledge, and
skills. The directors are appointed by the Company’s Annual General Meeting of shareholders
upon nomination by the Board. The general meeting may dismiss a Director at any time by
a two-thirds majority vote if less than half of the issued share capital is represented at the
General Meeting, unless the resolution for dismissal is passed at the Board’s proposal.
Dutch law does not set a limit on the maximum number of consecutive terms that a Director
may serve. According to the DCGC, Non-Executive Directors may be elected for a maximum
of two consecutive four-year terms and, subsequently, for a maximum of two consecutive
two-year terms.
The Board meets as often as any Director considers necessary or appropriate. Resolutions
are passed by a simple majority of votes cast. In the case of a tie in the vote of the Board, the
resolution is not passed. Any resolutions concerning a material change to the character or
identity of the Company or its business must be submitted to the Annual General Meeting
for approval.
a: Interim Chairman and Director (expected to be nominated for appointment at our 2025 Annual General Meeting). Rob succeeds
former Chairman Jan Ohrstrom that resigned from the Board of directors effective 6 December 2024
b: Interim Director (expected to be nominated for appointment at our 2025 Annual General Meeting)
Name
Year of Birth
Nationality
Gender
Position
Year of
First
Appointed
End of Term
Rob ten Hoedt
1960
Dutch
Male
Independent
Non-Executive
Director &
Chairperson
a
a
Dave
Marver
1968
American
Male
Executive
Director & CEO
2020
Annual General
Meeting of 2025
Grégoire
Courtine
1975
French
Male
Non-Executive
Director &
Science Advisor
2016
Annual General
Meeting of 2027
Ian Curtis
1968
British
Male
Independent
Non-Executive
Director &
Vice-Chair
2019
Annual General
Meeting of 2025
John
de Koning
1968
Dutch
Male
Non-Executive
Director
2016
Annual General
Meeting of 2027
Kristina
Dziekan
1968
German,
Swiss
Female
Independent
Non-Executive
Director
2022
Annual General
Meeting of 2026
Vivian
Riefberg
1960
American
Female
Independent
Non-Executive
Director
2023
Annual General
Meeting of 2027
Rahma Samoa
1979
German
Female
Independent
Non-Executive
Director
b
b
Composition of the Board of Directors
The Company has a one-tier Board consisting of 8 members.
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Board Members’ Biographies
Rob ten Hoedt
as a former Executive Committee Member at Medtronic, Rob brings an
impressive track record in technology development and business-model innovation. He was
previously Executive Vice President & President of Global Regions at Medtronic, overseeing
the Americas, EMEA, and Asia Pacific. Rob was Chairman of the Board of MedTech Europe,
the industry association for medical technology in Europe; he is the current Chairman of
Medmix in Switzerland, and serves on the boards of Fagron International and NLC Health. Rob
holds a degree in Commercial Economy from H.E.A.O., and a Master’s in Marketing from NIMA
Business School in the Netherlands. Rob is the Board Chair, a Member of the Compensation
Committee and the Nomination and Corporate Governance Committee.
Dave Marver
(CEO) is an accomplished chief executive and director with 30 years’
international experience in public, private, and emerging companies. He combines expertise in
medical and consumer technology, wearables, and health monitoring. Previously, Dave spent
almost 15 years with Medtronic, holding a variety of leadership positions in the US and Europe,
including vice-president roles in sales, marketing, strategy, and business development. He
then joined Nasdaq-listed Cardiac Science Corporation as CEO before co-founding two
startups. He holds a BA in psychology from Duke University and an MBA from University of
California, Los Angeles.
Grégoire Courtine
is a full-time professor of neuroscience and neurotechnology at EPFL and
Director of .NeuroRestore, a research center at EPFL and CHUV that develops innovative
therapies using neurostimulation and other approaches. His ground breaking research
in neuroscience has been recognized by prestigious prizes including the Rolex Award,
Schellenberg Research Prize, and Chancellor’s Award of the University of California. He holds
a PhD in neurosciences from INSERM, Paris, and a PhD in medicine from the University of
Pavia, Italy. As a founding Board member, Grégoire serves as a non-executive Director in
addition to his role as Science Advisor. Gregoire was reappointed for a second term at the
Annual General Meeting in 2023.
Ian Curtis
is a director of SCI Ventures, a venture capital firm that invests in companies
focused on treatments for paralysis. He is a member of the board of the Christopher & Dana
Reeve Foundation and the International Spinal Research Trust. Ian is also the chairman of
HPC plc, a UK-based engineering company. He is a graduate of Durham University, a fellow
of the Institute of Chartered Accountants in England and Wales, and a former partner with
PwC. Ian is the Board Vice-Chair and Chair of the Audit Committee.
John de Koning
is a General Partner at EQT Group (formerly LSP), one of the largest
European investment firms providing financing for life sciences and healthcare companies.
Since joining EQT Group in 2006, John has led some of its most successful investments
and served on the board of several companies, including argenx, Merus, and Prosensa. He
holds an MS in molecular biology from the University of Utrecht and a PhD in oncology from
the Erasmus University Rotterdam. John is a Member of the Nomination and Corporate
Governance Committee.
Kristina Dziekan
is a senior advisor in market access, market development, and policy
for life sciences companies. She previously served in leadership roles as Head of Market
Access, Government Affairs, and Tendering for Alcon’s Surgical Division in Europe, Senior
Global Reimbursement and Health Economics Director for Medtronic Neuromodulation, and
Health Outcomes Manager for GlaxoSmithKline in the UK and parts of Asia. She earned
an MSc in health policy, planning, and financing from the London School of Economics, an
MA in international economics and European Studies from Johns Hopkins University, a BA
in philosophy, politics, and economics from Oxford University, and a Vordiplom in business
administration and economics from Georg August University. Kristina is a Member of the
Audit Committee.
Vivian Riefberg
is currently the David C. Walentas Jefferson Scholars Chair Professor of
Practice at the Darden School of Business at the University of Virginia and serves on the
boards Waystar (WAY:Nasdaq), K Health, Accompany Health and Lightrock, an impact
investing firm, as well as the boards of the Public Broadcasting System (PBS), Johns Hopkins
Medicine, and the National Education Equity Lab. She is also an advisory board member for
the Smithsonian’s planned American Women’s History Museum. She retired from McKinsey
& Company in 2020 after 31 years, having served as co-leader of the US healthcare practice,
leader of the public sector practice in the Americas, and on McKinsey’s global board of
directors. She previously served on the US National Institutes of Health (NIH) Clinical Center
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Board of Governors and the NIH Advisory Board for Clinical Research. She holds a BA, magna
cum laude in history from Harvard-Radcliffe College and an MBA with distinction from Harvard
Business School. Vivian is Chair of the Compensation Committee and Chair of the Nomination
and Corporate Governance Committee.
Rahma Samow
is currently President and CEO of ClearChoice Dental Implant Centers, a
US-based provider of dental implant therapy and tooth replacement services with over 2,000
employees. Prior to ClearChoice, she served on the Executive Management Board of the
Swiss-based Straumann Group. She also had a 15-year career with Siemens Healthineers,
where she held various roles in sales, marketing, and communications in their digital health
business, with geographic responsibilities spanning the US, Germany, Middle East, and
Africa. Ms. Samow holds a Diploma in Medical Radiology, Radiation Therapy, and Nuclear
Medicine Technology from the Medical University of Bonn, Germany. Rahma is a Member of
the Audit Committee.
Director independence
In accordance with best practice provision 2.1.7 of the DCGC, the majority of the Non-Executive
Directors must be independent; at most, one Non-Executive Director does not have to meet
the independence criteria. A Board member is considered “not independent” if he or she,
a spouse, partner, or close family member (related by blood or marriage up to the second
degree) meet any of the conditions listed below:
•
Has been an employee or member of the management board of the Company, including
associated companies (as referred to in Section 5:48 of the Financial Supervision Act
Wet
op het financieel toezicht/ Wft
) in the five years prior to their appointment.
•
Receives personal financial compensation from the Company, or an associated company,
other than the compensation received for the work performed as a Board member.
•
Has had an important business relationship with the Company or an associated company
in the year prior to the appointment.
•
Is an executive of a company in which a member of the management board of the company
which he supervises is a non-executive Board member.
•
Has temporarily performed management duties during the previous twelve months in the
absence or incapacity of a member of the management board.
•
Has a shareholding in the Company of at least 10%.
•
Is a member of the management board or supervisory board, or a representative in some
other way, of a legal entity that holds at least 10% of the shares in the company, unless the
entity is a group company.
At the date of this Annual Report, the Board consists of eight members, of whom seven
are Non-Executive Directors. Two of these Non-Executive Directors are deemed “not
independent” based on meeting certain of the conditions above. Prof. Courtine, one of the
Company’s founders, is considered “not independent” as he is the Science Advisor of the
Company and receives personal compensation for such a role. John de Koning is considered
“not independent” as he is a representative of a major shareholder in the Company (EQT
Group (formerly LSP)). The requirements for independence as per best practice provision
2.1.7 of the DCGC are met.
Committees within the Board of Directors
The Board has established the following three committees:
•
the Audit Committee
•
the Compensation Committee
•
the Nomination and Corporate Governance Committee
Non-Executive Directors are appointed to committees by the Board. The committees report
their findings to the Board, which is ultimately responsible for all decision-making. The role,
responsibility, and functioning of each committee is summarized below.
Audit Committee
The Audit Committee comprises three members: Ian Curtis (Chair), Kristina Dziekan and
Rahma Samow.
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In accordance with its charter, the Audit Committee is charged with the following matters:
a.
Monitoring the Board with respect to:
•
relations with the internal audit function and the external auditor, as well as
compliance with recommendations and follow-up of comments
•
the Company’s funding
•
the application of information and communication technology by the Company,
including risks relating to cybersecurity
•
the Company’s tax policy
b.
Issuing recommendations concerning the appointment and the dismissal of the head of
the internal audit function, as relevant, and reviewing and discussing the performance of
the internal audit function.
ONWARD has not yet established a separate internal audit function and the related
responsibilities as per the charter do not apply.
c.
Reviewing and discussing the Company’s audit plan, including with the internal audit
function and the external auditor.
d.
Reviewing and discussing the essence of the audit results, also with the internal audit
function, including:
•
flaws in the effectiveness of the Company’s internal risk management and control
systems (“Internal Controls”)
•
findings and observations with a material impact on the Company’s risk profile
•
failings in the follow-up of recommendations made previously by the internal
audit function
e.
Monitoring the audit of the Company’s annual accounts, annual report, and financial
reporting processes, and making proposals to safeguard the integrity of these processes.
f.
Reviewing and discussing the effectiveness of the design and operation of the Internal
Controls with the Board, the CEO, and the CFO, including identified material failings
in the Internal Controls and material changes made to, and material improvements
planned for, the Internal Controls.
g.
Reviewing and monitoring the independence of the external auditor, also considering
any non-audit services rendered by the external auditor.
h.
Submitting proposals to the Board concerning the external auditor’s engagement
to audit the Company’s financial statements, including the scope of the audit, the
materiality standard to be applied, and the external auditor’s fees.
The members of the Audit Committee are appointed and dismissed by the Board. More
than half of all its members, including the chairperson, must be independent within the
meaning of the DCGC and at least one committee member must have competence in
accounting and/or auditing.
The Audit Committee shall meet as often as it determines is appropriate to carry out its
responsibilities and each meeting shall be presided over by the chairperson and, in the
absence of the chairperson, one of the other members shall be designated as the acting
chairperson of the meeting.
Compensation Committee
The Compensation Committee comprises three members: Vivian Riefberg (Chair), Ian
Curtis, and Rob ten Hoedt. .
In accordance with its charter, the Compensation Committee is charged with the
following matters:
a.
Submitting proposals to the Board concerning changes to the Company’s
compensation policy.
b.
Submitting proposals to the Board concerning the compensation of individual
Directors, covering:
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•
compensation structure
•
amount of the fixed and variable compensation components
•
applicable performance criteria
•
scenario analyses that have been carried out
•
pay ratios within the Company’s group
•
views of the Director concerned regarding the amount and structure of his or her
own compensation
c.
The preparation of the Company’s compensation report for the Board.
Nomination and Corporate Governance Committee
The Nomination and Corporate Governance Committee comprises three directors: Vivian
Riefberg (Chair), Ian Curtis, and Rob ten Hoedt.
In accordance with its charter, the Nomination and Governance Committee is charged with
the following matters:
a.
Drawing up selection criteria and appointment procedures for the Directors.
b.
Reviewing the size and composition of the Board and submitting proposals for the
composition profile of the Board.
c.
Reviewing the functioning of individual directors and reporting on such reviews to the Board.
d.
Drawing up a plan for the succession of directors.
e.
Submitting proposals for (re)appointment of directors.
f.
Supervising the policy of the Board regarding the selection criteria and appointment
procedures for the Company’s senior management and executive officers
Management Team
The Management Team is responsible for running the Company in accordance with the
strategies, policies, and budgets determined by the Board. It has all powers except for those
reserved for the Board and the General Meeting of shareholders by law and by the Company’s
Articles of Association.
The members of the Management Team commit to carrying out their duties in accordance
with the highest business, ethical, moral, and legal standards laid out in the Company’s Code
of Business Conduct and Ethics (see onwd.com, Investors/Governance). They strive to lead by
example by embodying the ONWARD code of values in everything they do. The Management
Team meets at least once a week.
Name
Position
Member Since
Dave Marver
Chief Executive Officer
2020
Erika Ross Ellison
VP Clinical & Regulatory
2023
Robert Odell
VP Operations
2023
Julien Camisani
VP Engineering
2024
Lorenzo Fanti
VP Legal
2024
Amori Fraser
Senior Finance Director
2024
Julie Crom
Director: People & Culture
2024
Alexandre Casteau
Head of Strategy & Corporate
Development
2024
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Biographies of the Management Team
Dave Marver
(see biography
p.
125
).
Erika Ross Ellison
joined ONWARD from Abbott Neuromodulation, where she was Director,
Global Clinical & Applied Research. Previously, as Neuroscience Director at Cala Health,
she managed the scientific research program that led to de novo clearance and launch of
the company’s neurostimulation technology. Erika also served as Deputy Director, Medical
Device Innovation Accelerator, Department of Surgery and Assistant Professor, Department
of Neurologic Surgery at Mayo Clinic. She is the current President of IEEE EMBS, the world’s
largest international society of biomedical engineers. Erika holds a BSc in Biology and Business
and an MSc in Molecular Biology from the University of Denver, and a PhD in Neuroscience
from Mayo Clinic.
Robert Odell
brings to ONWARD decades of technology and leadership experience in the
medical device industry. Prior to joining ONWARD, Robert was President and Chief Operating
Officer of Cardiac Insight, Inc., a successful startup that created and introduced disruptive
cardiac monitoring technology. Prior to Cardiac Insight, he served as COO for Cardiac Science,
a publicly traded manufacturer of Class II and Class III devices. Robert has held executive
assignments in Operations, Engineering, Marketing, Business Development, Information
Technology, and QA/RA with such notables as GE Healthcare, Siemens Medical Solutions,
Philips Medical Systems, Medtronic, and Analogic. The foundation for his career is a degree
in electrical engineering from Syracuse University.
Julien Camisani
brings more than twenty years of experience, fifteen of which are in the life
sciences industry, where he has been instrumental in inventing, developing, marketing, and
sustaining advanced laboratory, medical and bio-manufacturing technologies. Prior to joining
ONWARD Medical, Julien led diverse and global teams, and managed large-scale projects
with proven leadership across research and development, manufacturing, intellectual property
and product management for companies like Cytiva, GE Healthcare and Biosafe. He holds
dual master’s degrees in Embedded Systems from the University of Lugano, collaborating
with ETH Zurich and Politecnico di Milano, complemented by an MBA from the University of
Cumbria and a professional certificate in Technology Road mapping and Strategic Innovation
from MIT.
Lorenzo Fanti
is a dual-qualified US and English attorney with nearly 15 years of experience
specializing in pharmaceuticals and medtech. Prior to joining ONWARD Medical, Lorenzo
served as worldwide Legal Head, Ophthalmology ad interim at Novartis Pharmaceuticals,
and, prior to that, he was Country Legal Head for Chile ad interim for the Novartis group of
companies. He has held various roles with increasing responsibility at Novartis, including
in the Neuroscience franchise, where he contributed to the launch of innovative migraine
treatments. Early in his career, he was a Trademark Paralegal with Sandoz, and he trained
with Allen & Overy LLP in London. He holds an LL.B. from the University of Wales.
Amori Fraser
serves as the Finance Director at ONWARD Medical, leveraging over 18 years
of experience in both finance and auditing. Prior to her current role, she worked as a Senior
Manager at EY, specializing in financial reporting, regulatory compliance, financial analysis
and internal controls serving multi-national listed groups. Amori’s experience in auditing and
finance enables her to drive efficient financial operations and support the company’s growth
initiatives. Amori holds a BComHons degree in Accounting Sciences from the University of
Pretoria and is a qualified Chartered Accountant (CA) with the South African Institute of
Chartered Accountants (SAICA).
Julie Crom
has more than 10 years of experience in Human Resources in the medical devices
industry. Prior to joining ONWARD Medical, Julie served as Healthcare & Life Sciences Practice
Lead at Michael Page, a leading recruitment company in Europe. In her role, she supported
middle-to-large medical device companies in recruitment and organizational strategy. Julie
holds an MSc in International Business Management from INSEEC business school.
Alexandre Casteau
brings extensive healthcare corporate strategy expertise. A former
management consultant with McKinsey & Company, Alexandre spent several years advising
global life science businesses on growth strategy and large-scale transformations. He
also launched and led the McKinsey Switzerland startup/scaleup service line, providing a
differentiated strategy consulting offering to help early-stage, fast-growing companies scale.
Earlier in his career, Alexandre held a variety of roles at Endeavor, Rocket Internet SE and
Société Générale Corporate & Investment Banking. He holds an MBA from INSEAD and an
MSc from MIT.
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Uniqueness and opportunity
We believe that unique life experiences and viewpoints strengthen decision-making, so we aim
to build a Board and Management Team made up of individuals with varied backgrounds and
perspectives. Although the current policy does not set specific targets, the ambition remains
for both the Board and Management Team to include at least one-third female members, while
also maintaining a balanced mix of backgrounds, professional expertise, and age profiles.
This policy is available on our
website.
1
ONWARD’s Board consists of 5 male directors (1 being
an executive director) and 3 female directors (all Non-Executive Directors). The Management
team consists of 6 male members and 3 female members. ONWARD’s continued efforts to
recruit independent Directors and management team members contributed to the Company
achieving its ambitions for independence and broad representation. In deviation from best
practice provision 2.1.6 of the DCGC, the Company’s existing policy does not include specific
objectives related to the composition of the Board. ONWARD values the collaborative and
transparent culture it has cultivated, guided by the principles set out in the ONWARD Code.
It is a culture that encourages mutual respect, professionalism, and fairness, where all
employees are supported in contributing to the Company’s success. In deviation from best
practice provision 2.1.5 of the DCGC, ONWARD’s approach to fostering this culture has not
yet been formally documented within a policy framework.
Stakeholder dialogue
The Company has drawn up an outline policy for effective dialogue with stakeholders. The
company is prepared to engage in a dialogue and will facilitate this dialogue unless, in the
opinion of the Board and Management Team, this is not in the interests of the Company and
its affiliated enterprise. This policy is available on our
website
.
1
Conflicts of Interest
According to principle 2.7.4 of the DCGC, the Company must report on directors’ conflicts of
interest in transactions in its management report where the conflict of interest is of material
significance to the Company or to the relevant director. Directors and members of management
are expected to arrange their personal affairs so as to avoid conflict of interest. Any potential
conflict of interest must be brought to the attention of the Board.
Certain directors and members of the Management Team have a direct or indirect beneficial
interest in ONWARD’s share capital or serve as a representative of a legal entity that is a major
shareholder. In their capacity as non-executive directors, their primary duty is to supervise the
performance of the executive directors and the management of the Company and its business.
A conflict of interest may arise if a decision aimed at contributing to the Company’s long-term
and sustainable success negatively impacts its share price in the short term, thereby reducing
the value of the shareholding of which the non-executive director is a representative.
As of 31 December 2024, the potential conflicts of interests between the duties to the Company
of each of the directors and members of the Management Team and their private interests or
other professional duties were as follows:
a.
Grégoire Courtine is the Science Advisor and a Non-Executive Director of the Company.
b.
John de Koning represents EQT, a major shareholder of the Company and Non-Executive
Director of the Company.
No transactions that would result in a conflict of interest were reported to the Board in 2024.
Related Party Transactions
While ONWARD’s related party transaction policy is to
comply with the recommendations
of the Dutch Civil Code (DCC) in this respect.
The Dutch act to implement the EU Shareholder Rights Directive II
(Bevordering van de
langetermijnbetrokkenheid van aandeelhouders, “Dutch SRD Act”)
, which entered into force
on 1 December 2019, added new rules on related party transactions to the DCC. These rules
stipulate that “material transactions” with “related parties” that are not entered into within
the ordinary course of business or not concluded on normal market terms must be approved
by the Board and be publicly announced at the time of or before the transaction takes place.
The Board is required to establish an internal procedure to periodically assess whether
transactions with related parties are concluded in the ordinary course of business and on
normal market terms.
1
https://ir.onwd.com/corporate-governance
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In particular, all transactions between ONWARD and a shareholder holding 10% or more of
issued share capital should be agreed on customary terms. Decisions to enter into such
a transaction that is of material significance to the Company and/or to the shareholder
concerned should be approved by the Board. Any such transaction should be disclosed in the
Company’s Board report, together with an affirmative statement that these recommendations
of the Code have been complied with.
No related party transactions with a shareholder holding 10% or more of the issued share
capital were reported to the Board in 2024.
General Meeting
The main powers of the General Meeting relate to:
•
the issuance of shares or rights to shares, restriction, or exclusion of pre-emptive rights
of shareholders, repurchase of shares, and reduction of the issued share capital
•
the amendment of the Articles of Association
•
the appointment, suspension, and dismissal of members of the Board
•
decisions of the Board involving a significant change in the Company’s identity of character
•
the approval of the remuneration policy of the Board
•
the adoption of the financial statements and declaration of dividends
•
the appointment of the Company’s external auditor
The Annual General Meeting is held within six months after the end of the financial year to
discuss and, if applicable, approve, the Annual Report, the Annual Accounts, and any of the
other topics mentioned above.
The Annual General Meeting and, if necessary, other General Meetings, are convened by the
Board. The agenda and explanatory notes are published on the Company website.
The last Annual General Meeting was held on 13 June 2024. The agenda, explanatory notes
and minutes are published on the Company website. The next Annual General Meeting is
scheduled for 11 June 2025.
Deviations from the Best Practices Provisions of the Dutch Corporate Governance Code
ONWARD acknowledges the importance of good governance and is committed to adhering
to the best practices of the DCGC as much as possible. As of the date of this Annual Report,
we report the following deviations from the DCGC:
•
Best practice provision 2.1.5. and 2.1.6
The DCGC provides that the diversity policy
should include appropriate targets for inclusion and the creation of psychological safety.
While ONWARD fosters a collaborative and respectful work environment, this approach
has not yet been formally documented within the current policy framework. The DCGC
recommends that such a policy include clearly defined objectives and an implementation
plan. The Company’s existing policy does not yet contain these elements. ONWARD intends
to update its policy to better reflect its values and practices, including the establishment
of measurable goals and a structured plan to support continued progress in this area.
•
Best practice provision 3.1.2 v
The DCGC recommends that variable remuneration
should be linked to measurable performance criteria determined in advance. To align the
employees’ interest with the interests of the shareholders and to allow the participation
in the long-term growth of the Company, options were granted to the Management Team
(including the Executive Director). There is no specific performance conditions associated
to these options, only a service condition. However, considering that the value of the option
is linked to the share price of ONWARD, it includes an inherent performance criterion.
Furthermore, the size of the stock option is linked to the position and job grade of the
individual and is contingent on the performance of the individual. We will consider if more
clear measurable performance criteria should be added to future grants.
•
Best practice provision 3.3.3.
The DCGC recommends that shares held by a non-
executive director in the company on whose Board of Directors they serve should be held
as a long-term investment. The Company’s Compensation Policy does not include such
a requirement.
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•
Best practice provision 4.3.3.
The DCGC recommends that the General Meeting should be
capable of passing a resolution cancelling the binding nature of a nomination or dismissal
by simple majority, representing no more than one-third of the issued share capital.
Under the Articles of Association, directors can only be appointed or dismissed by the
General Meeting by simple majority of votes cast, provided that the Board proposes the
appointment or dismissal. In other cases, the General Meeting can only pass a resolution
to appoint or dismiss a director by a two-thirds majority representing more than half of
the issued share capital. The Company deems this appropriate considering the remaining
shareholdings and involvement of the Company’s current significant shareholders.
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Risk Management
& Control
Effectively identifying, assessing, and managing internal and external risks is critical to
achieving our strategic objectives, ensuring the reliability of our financial reporting, and
maintaining compliance with all applicable laws and regulations. Our primary risk areas
remain focused on the research and development of ARC Therapies, securing regulatory
approvals, protecting intellectual property, and ensuring the Company’s financial stability
in the mid- to long-term.
The Management Team is responsible for developing, implementing, and maintaining
robust risk-management and internal control systems, while the Board provides oversight
of these processes. These systems are continuously reviewed and refined based on internal
evaluations, discussions with the Board and Audit Committee, and external audits.
The findings from our 2024 annual risk review are reflected in this report. Over the past
year, we successfully implemented our internal control framework and conducted a self-
assessment to evaluate its effectiveness. This assessment highlighted areas where further
refinement is needed, which we aim to address in 2025. Additionally, we plan to explore an
independent assessment to validate compliance with the framework. As we move forward,
the framework will also be updated to reflect new processes following FDA clearance and
the commercialization of our first product.
Since ONWARD does not have a dedicated internal audit function, the Board conducts an
annual review to determine whether alternative measures are sufficient. Based on the Audit
Committee’s recommendations, Directors may evaluate the necessity of establishing an
internal audit function. In 2024, no material deficiencies in our risk-management and control
systems were identified.
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While these systems strengthen our ability to achieve strategic goals and regulatory
compliance, they cannot provide absolute assurance against all risks, misstatements, or
instances of non-compliance. We remain committed to continuously enhancing our approach
to risk management and internal controls to support the long-term success of the Company.
Risk Control Matters
The Company has implemented a risk detection, evaluation, and management system tailored
to its size, operations, and growth stage. The Board and Management Team continuously
assess potential risks, evaluate their financial impact and likelihood, and take proactive
measures to mitigate them. Risk assessments are regularly updated in response to evolving
internal and external conditions.
The Board and Management Team meet regularly to review developments, set strategic
objectives, and track progress toward key milestones. These meetings also include
assessments of ONWARD’s financial position, as well as the presentation and review of
budgets and cash flow forecasts, which are continuously monitored and adjusted as needed.
The Management Team remains vigilant in identifying and addressing emerging risks,
adapting strategies, and implementing necessary countermeasures as required.
To effectively manage business risks, we leverage a combination of highly experienced
internal experts and external consultants for research and clinical studies. Study results
are closely and systematically monitored, allowing for timely responses to new findings and
adjustments to preclinical and clinical activities as needed. Regular internal budgeting and
financial monitoring enable early detection of deviations from financial plans, allowing for
swift corrective actions.
Given our reliance on third parties to meet regulatory requirements and uphold quality
standards, we apply a rigorous selection process when engaging contractors. The
Management Team carefully evaluates and selects major clinical trial and component service
providers based on their quality and expertise. We continuously review the performance of
these partners to ensure alignment with our operational and compliance expectations.
To protect and monitor our intellectual property (IP), we collaborate exclusively with highly
specialized consultants and legal experts. The Management Team also conducts ongoing
reviews of patent protections and potential conflicts to safeguard our innovations.
In our financial reporting process, our risk-management and internal control systems are
designed to ensure the accuracy and integrity of our financial data. These systems provide
reasonable assurance that transactions are recorded correctly, financial reporting complies
with legal and regulatory standards, and published financial statements are free from material
misstatements. Additionally, controls are in place to ensure that receipts and expenditures
are authorized and that assets are adequately safeguarded.
To manage risks related to valuation uncertainties, we engage specialists with the necessary
expertise to support financial reporting valuations, including the assessment of defined
benefit obligations and the fair value of options granted.
As part of our internal control framework, we have adopted various policies and procedures,
including standard operating procedures, a dual-control principle, spot checks, automated
expense reimbursement tools, internal contract approval processes, and clearly defined
signatory rules. These measures help reinforce financial discipline and ensure compliance
with governance standards.
Risk Appetite
Our risk appetite differs according to the various risk categories ONWARD is exposed to, namely:
•
Risks related to our business, strategy and industry
include adverse, unexpected
developments resulting from internal processes, people, and systems or from our external
research partners and external events, which are linked to the operation of the business.
We are prepared to take moderate risks to achieve our ambitions and to balance risk and
long-term reward.
•
Risks related to legal and government regulation
relate to unanticipated failures to
comply with applicable laws and regulations. We aim to minimize these risks by aiming
to comply fully with these laws and regulations.
•
Risks related to intellectual property.
We aim to minimize these risks, only accepting a
low level, to ensure that intellectual property is protected.
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•
Risks related to our financial position, need for additional capital, and taxation
occur
in connection with funding, treasury, tax, accounting, and reporting. ONWARD is prudent
with respect to these financial risks, with the aim of maintaining long-term solvency. We
are committed to transparent and truthful accounting and reporting that allow users
of financial statements to make decisions considering these risks. We currently do not
engage in any hedging activities. Our financial risk management is set out in note 4.3 of
our consolidated financial statements.
Description of the principal risks associated with the company’s activities
A primary risk the Company faces is the timely attainment of regulatory approvals, including
FDA clearance in the U.S and CE Mark certification in the EU, for its platforms across different
indications. With FDA clearance now obtained for one of our products, new risks have
emerged related to commercial acceptance and manufacturing scalability. The success of
our commercialization efforts will depend on market adoption, reimbursement coverage, and
the ability to scale production efficiently while maintaining quality standards.
To proactively manage regulatory risks, ONWARD relies on a dedicated and skilled regulatory
team, maintains continuous engagement with regulatory bodies, and works closely with third-
party suppliers to mitigate potential quality issues.
The following section outlines the primary risks and uncertainties that we consider significant
threats to achieving our objectives. These risks may impact the Company’s future operational
and financial performance, as well as the value of an investment in the Company’s securities.
Additional risks and uncertainties, including those not currently known or considered
immaterial at this time, could also adversely affect our business, financial condition, results of
operations, and growth prospects. If any of these risks materialize, the price of the Company’s
securities may decline, potentially resulting in partial or total investment loss.
While this list highlights key risk factors, it is not exhaustive, as unforeseen contingencies
may arise that could further impact our business
Risks related to the company’s business, strategy & industry
The Company partially depends on the success of two investigational devices, the ARC
IM
and ARC
BCI
platforms. Even if the Company completes clinical development and obtains
favorable clinical results for the initial indications it is pursuing, it may not be able to
obtain regulatory clearance or approval for, or successfully commercialize, its ARC
IM
and
ARC
BCI
platforms.
ONWARD currently has two investigational devices in clinical development — the ARC
IM
and ARC
BCI
platforms — and our business depends almost entirely on the successful clinical
development, regulatory clearance or approval, and commercialization of these investigational
devices, which may never occur. We currently have one product available for sale, that will
generate revenues from sales of products, but this is our first product to commercialize and
subject to risks of market acceptance, manufacturing as included in this report.
Our ARC
IM
platform will require substantial additional clinical development, testing,
manufacturing process development, and regulatory clearance or approval before we are
permitted to commence their commercialization. For example, before obtaining Premarket
Approval Application (PMA) approval from the FDA for our ARC
IM
platform, we must show,
among other things, that the product is safe and effective for use in each target indication,
a process that can take many years.
Of the substantial number of medical devices in development in the US, only a small percentage
successfully complete the regulatory clearance or approval process required by the FDA
and become commercialized. Similarly, many medical devices currently in development
will ultimately not obtain the certificate of conformity required for commercialization in the
European Economic Area (EEA). Therefore, even if we obtain the requisite capital to continue
funding our development and clinical programs, we may be unable to successfully develop or
commercialize our ARC
IM
and ARC
BCI
platforms or any other product candidate.
Enrollment and retention of patients in clinical trials is an expensive and time-consuming
process and could be made more difficult, or rendered impossible, by multiple factors
outside the Company’s control. This could significantly delay the completion of such trials
or may cause the Company to abandon one or more clinical trials.
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ONWARD may encounter delays or difficulties in enrolling — or may be unable to enroll — a
sufficient number of patients to complete any of its clinical trials on its current timelines, or
at all. Even once candidates are enrolled, the Company may be unable to retain a sufficient
number of patients to complete any of its trials.
Patient enrollment in clinical trials, and completion of patient follow-up, depend on many
factors, including the size of the patient population, the nature of the trial protocol, the
proximity of patients to clinical sites, eligibility criteria for the clinical trial, patient compliance,
competing clinical trials, and clinicians’ and patients’ perceptions as to the potential
advantages of the product being studied in relation to other available therapies, including
any new treatments that may be cleared or approved for the indications we are investigating.
Patients may be discouraged from enrolling in ONWARD’s clinical trials if the trial protocol
requires them to undergo extensive post-treatment procedures or follow-up to assess the
safety and effectiveness of a product candidate, or they may be persuaded to participate in
contemporaneous clinical trials of a competitor’s product candidate. Patients participating
in our clinical trials may drop out before completion of the trial or experience adverse medical
events unrelated to the products. Delays in patient enrollment, or failure of patients to continue
participating in a clinical trial, may delay commencement or completion of the clinical trial,
increase in the costs of the clinical trial, or result in failure of the clinical trial.
Since some of the indications that our investigational devices are intended to treat are
limited, ONWARD expects only a subset of patients with spinal cord injury (SCI) to be eligible
for its clinical trials. The protocols for our clinical trials generally mandate that a patient
cannot be involved in more than one clinical trial for the same indication. Therefore, subjects
who participate in ongoing clinical trials for products that compete with our investigational
devices are not eligible to participate in our clinical trials. ONWARD cannot guarantee
that any of its programs will identify a sufficient number of patients to complete clinical
development, pursue regulatory clearance or approval, or market its investigational devices,
if cleared or approved.
An inability to recruit and enroll a sufficient number of patients for any of its current or
future clinical trials would result in significant project delays, or may require us to abandon
one or more clinical trials altogether, which could impact ONWARD’s ability to develop its
investigational devices and may have a material adverse effect on its business, results of
operations, and financial condition.
The ARC
EX
system and, if approved, the ARC
IM
and ARC
BCI
systems, will require market
acceptance to be successful. Failure to gain market acceptance would impact the
Company’s revenues and may materially impair its ability to continue its business.
Even after receiving regulatory clearances or approvals (like for ARC
EX
), the commercial
success of our products will depend in part on their acceptance by critical stakeholders as
a therapeutic and cost-effective alternative to competing products and treatments for people
with SCI. Critical stakeholder to adopt our therapies include medical professionals working in
the rehabilitation clinic setting ( such as physicians, physical therapies, occupational therapies,
neurologists, and physiatrists), functional neurosurgeons, patients, third-party payors such
as health insurance companies, and other members of the medical community. There can be
no assurance that medical professionals, hospitals, and rehabilitation clinics will adopt the
use of ARC
EX
and ARC
IM
and establish training and procedures to implement them. Market
acceptance of, and demand for, any product we may develop and commercialize will depend
on many factors, both within and outside of our control. Payors may view new or recently
launched products, or products where limited clinical data is available, as investigational,
unproven, or experimental, and on that basis may deny coverage of procedures involving use
of these products or require additional clinical trials and data before providing coverage. If
our investigational devices fail to gain market acceptance, ONWARD may be unable to earn
sufficient revenue to continue our business.
Despite the Company obtaining clearance or approval for its products, the commercial
success will depend in part on the level of reimbursement it receives from third parties
for the cost of its products to users.
In most markets, third parties such as health insurers, government-managed healthcare
schemes, or managed care organizations decide which treatments they will cover and how
much of the cost they will reimburse. These reimbursement systems vary widely, meaning
that approval for reimbursement must be obtained on a country-by-country basis. ONWARD’s
business could be adversely affected if hospitals or other users are not able to obtain and
maintain coverage and adequate reimbursement for procedures using our devices.
Additionally, third-party payors, especially in the US, are increasingly examining not only
product safety and effectiveness but also their cost-effectiveness when making coverage
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and payment decisions. It is uncertain whether ONWARD’s current products, or any planned
or future products, will be viewed as sufficiently cost-effective to warrant coverage and
adequate reimbursement levels in any given jurisdiction.
The Company relies on a limited number of third-party suppliers and contract
manufacturers to produce and assemble its products. Loss or degradation in performance
of these suppliers and contract manufacturers could have a material adverse effect on
the Company’s business, financial condition, and results of operations.
Reliance on a
limited number of third-party suppliers and in some cases single-source suppliers, makes
the Company vulnerable to supply shortages and problems and price fluctuations, which
could further harm our business.
We rely on a limited number of third parties, some of whom are sole suppliers, to purchase
materials and components, and/or to manufacture and assemble our ARC
EX
and ARC
IM
platforms. Our ability to supply our products for clinical trials and, ultimately, to market
them and to develop future products, depends on the availability of sufficient quantities of
materials, components, and manufacturing services that meet regulatory requirements.
While we seek to maintain sufficient levels of inventory at all times, this may not fully protect
us from supply interruptions.
Our suppliers and contract manufacturers have generally met our demand for their products
and services on a timely basis. However, relationships with suppliers may be disrupted due to
a number of factors, such as unforeseen events that delay production or a decision by either
party to terminate the relationship.
If that occurs, we are confident that we will find alternative suppliers to meet all our needs.
However, due to the relatively low volume of orders and the bespoke nature of our requirements,
establishing new relationships would be a time-consuming and expensive process. We would
need to verify that the new supplier or third-party manufacturer maintains their facilities,
procedures, and operations in accordance with ONWARD’s quality standards and all applicable
regulatory requirements. In addition, our contract manufacturers could require that we move
production to a different facility or use alternative materials or components. Any of these
events could require us to modify the designs or specifications of our products, and to secure
new regulatory approval before implementing the change, which could result in further delay
or a refusal to grant clearance.
The Company’s operations and reputation may be impaired if its information technology
systems fail to perform adequately or if it is the subject of a data breach or cyberaack.
Our information technology (IT) systems are essential to the successful operation of our
business. We seek to allocate and manage the necessary resources to build, maintain, and
protect our IT systems and infrastructure, as well as oversee third-party service providers.
Any failure of our IT systems to perform as anticipated could disrupt our operations and result
in transaction or reporting errors that could harm our business.
Our IT systems may be vulnerable to cyberattacks or other security incidents, service
disruptions, or other system or process failures. Such incidents could result in unauthorized
access to vendor, consumer, or other types of confidential data, as well as disruptions to
operations. While we have experienced such incidents in the past, none have been material
to date.
We rely on third-party vendors for some of our IT processes and data management needs,
which makes our operations vulnerable to a failure by any one of these vendors to perform
adequately or to maintain effective internal controls.
To address these risks, we maintain an information security program that includes updating
technology, developing security policies and procedures, implementing and assessing the
effectiveness of controls, conducting risk assessments of third-party service providers, and
adopting business processes designed to mitigate the risk of security breaches. However,
there can be no assurance that these measures will prevent or limit the negative impact of a
future incident on our operations or business reputation.
A pandemic, epidemic, or outbreak of an infectious disease in Europe, the US, or worldwide,
including the outbreak of the novel strain of coronavirus disease (COVID-19), could
adversely affect the Company’s business.
A future wide-scale outbreak of infectious disease similar to COVID-19 could negatively affect
our business in numerous ways. Our sales representatives, clinical specialists, and other
personnel may be unable to travel and access customers for training and case support. Our
production schedule may be affected if suppliers cannot manufacture or deliver parts and
components on time. Pandemic-related restrictions could lead to, inventory shortages or
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obsolescence; delays in approval of our devices by regulatory authorities; delays in decisions
by insurance companies regarding coverage of our products; delays in clinical trials; delays
in growing our sales organization; adjustments or disruptions to the business of third parties
we work with, including suppliers, medical institutions, and clinical investigators; decreases
in collectability of our account receivables due to the adverse impact of the pandemic on
our clients’ cash flows; and reduced capacity of our suppliers to advance our investigational
devices through clinical trials.
While it is difficult to predict the potential economic impact and duration of a future outbreak,
the current pandemic has resulted in significant disruption of global financial markets,
reducing our ability to access capital, which could in the future negatively affect our liquidity.
In addition, a recession or market correction could have an adverse effect on our long-term
business as hospitals reduce capital spending.
To the extent that a pandemic adversely affects our business and financial results, it may also
heighten many other risks described in this section, including those relating to incurring future
operating losses, advance of the ARC
EX
and ARC
IM
platforms through regulatory pathways, and,
if cleared or approved, successful commercialization, supply chain, and distribution channels.
The Company’s success depends on its ability to retain its management, consultants and
other key personnel.
ONWARD depends on its senior management as well as key scientific personnel. In 2020,
Dave Marver was appointed as Chief Executive Officer. ONWARD’s Science Advisor, Prof.
Courtine, has been on the team since inception, in 2015, and currently serves as a consultant.
The loss of any members of senior management or key scientific personnel could harm our
business and significantly delay or prevent the achievement of research, development, or
business objectives.
Our future success also depends on our ability to attract, hire, train, and retain other highly
skilled scientific, technical, marketing, managerial, and financial personnel, as well as sales
personnel once commercialization begins. Although we will make every effort to hire and retain
qualified employees whose experience and abilities meet our needs, there is no assurance
that we will succeed. Competition for personnel in the medical technology industry is intense,
and any failure to attract and retain the necessary personnel would have a material adverse
effect on our business.
The Company may face substantial competition, which may result in others discovering,
developing, or commercializing products before or more successfully than it does.
Currently, ARC
IM
does not have any direct commercial competitors. However, several large
medical technology companies market spinal cord stimulation platforms for different
indications, such as pain management. Though we believe our IP rights would prevent
competitors from being able to commercialize similar devices utilizing ONWARD’s IP-protected
waveform, there can be no guarantee that we will be able to enforce our IP rights. The outcome
of any potential IP dispute to protect our rights is hard to predict, and an adverse result could
negatively impact our position in the competitive landscape of SCI therapies.
Current therapeutic options and technological approaches for people with SCI include
exoskeletons, functional electrical stimulation FES, epidural electrical stimulation EES,
peripheric nerve stimulation PNS, scaffolds, and stem cells. Additionally, there are numerous
pharmacological treatments available for people with SCI to address symptoms of associated
comorbidities such as spasticity, blood pressure, and mood disorders.
In general, the medical device industry is subject to intense competition and rapid and
significant technological change. ONWARD has many potential competitors, including
specialized biotechnology firms, academic institutions, government agencies, and private
and public research institutions. These competitors may have significantly greater financial
and technical resources than ONWARD, and superior experience and expertise in research
and development, pre-clinical testing, design and implementation of clinical trials, regulatory
processes and approval for products, production and manufacturing, and sales and marketing
of approved products. Smaller or early-stage companies and research institutions may prove
to be significant competitors, particularly if they have collaborative arrangements with larger
and more established medical device companies.
The Company’s business involves the use of hazardous materials such as lithium baeries
and the Company and its third-party manufacturers must comply with environmental laws
and regulations, which may be expensive and restrict how it does business.
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ONWARD’s activities and those of our third-party manufacturers’ may involve the controlled
storage, use, and disposal of hazardous materials. For example, our ARC
IM
(investigational
device) and ARC
EX
we use lithium batteries. ONWARD and our third-party manufacturers are
subject to federal, state, local, and foreign laws and regulations governing the use, generation,
manufacture, storage, handling, and disposal of these hazardous materials. The Company
currently carries no insurance specifically covering environmental claims relating to the
use of hazardous materials. Despite the safety procedures put in place by ONWARD and its
manufacturers for handling and disposing of these materials and waste, we cannot eliminate
the risk of accidental injury or contamination from the use, storage, handling, or disposal
of hazardous materials. In the event of an accident, state or federal or other competent
authorities may curtail ONWARD’s or its manufacturers’ use of these materials and interrupt
their business operations, which could adversely affect our business.
Healthcare reform initiatives and other administrative and legislative proposals in the
United States may adversely affect the Company’s business, financial condition, results
of operations and cash flows in one of its key markets.
There have been and continue to be proposals by the federal government, state governments,
regulators and third-party payors to control or manage the increased costs of healthcare and,
more generally, to reform the US healthcare system. Certain proposals could limit the prices
we are able to charge for our products, or the coverage and reimbursement available for our
products, and could limit the acceptance and availability of our product candidates. The
adoption of proposals to control costs, such as the Patient Protection and Affordable Care
Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively,
the “Affordable Care Act”), could have a material adverse effect on ONWARD’s business,
financial condition, and results of operations. There is no certainty that the Affordable Care
Act, as currently enacted or as amended in the future, will not harm our business and financial
results, and it is not possible to predict how future federal or state legislative or administrative
changes relating to healthcare reform will affect our business.
There likely will continue to be legislative and regulatory proposals at the federal and state
levels directed at containing or lowering the cost of healthcare. It is not possible to predict
the initiatives that may be adopted in the future or their full impact. The continuing efforts
of the government, insurance companies, managed care organizations, and other payors of
healthcare services to contain or reduce costs of healthcare may harm:
•
ONWARD’s ability to set a price that it believes is fair for its products
•
ONWARD’s ability to generate revenue and achieve or maintain profitability
•
The availability of capital
Further, there has recently been heightened governmental scrutiny over the manner in which
manufacturers set prices for their marketed products, which has resulted in several US
Congressional inquiries, as well as proposed and enacted federal legislation designed to bring
transparency to product pricing and reduce the cost of products and services under government
healthcare programs. Adoption of price controls and other cost-containment measures, and
adoption of more restrictive policies in jurisdictions with existing controls and measures, may
prevent or limit the ONWARD’s ability to generate revenue and attain profitability.
In the European Union, there are currently no concrete legislative proposals in this regard.
However, the cost-effectiveness of healthcare is part of the EU agenda on effective, accessible,
and resilient health systems. This does not exclude that legislation on maximum pricing for
medical devices (e.g., in terms of their reimbursement) may be applied or developed at the
national level.
Interruption or distress in the supply chain due to geopolitical, climate-related, and other
uncertainties beyond the Company’s control.
Geopolitical uncertainties and other business threats could damage or disrupt ONWARD’s
operations and those of our suppliers, partners, or collaborators. Interruptions to our
operations could adversely affect the anticipated timing, completion, and/or results of clinical
trials, and potential future commercialization efforts. Geopolitical tensions could lead to
sharply rising energy prices, which would have a negative impact on raw materials of our
products. Uncertainty in global markets may have a wide impact on the availability and price
of various materials and services and may also sustainably affect global financial markets.
Cost inflation may negatively impact our cash reach, while capital markets disruptions may
adversely affect our future financing possibilities. All these changes may materially affect
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ONWARD’S business and negatively affect its liquidity and financial position. Climate change
presents risks to our operations, including the potential for additional regulatory requirements
and associated costs. The potential for more frequent and severe weather events and water
availability challenges could impact our facilities and those of our suppliers. We cannot
provide assurance that physical risks to our facilities or supply chain due to climate change
will not occur in the future. We have assessed the impact of climate-related risks on our
Financial Statements and conclude that the effects of climate-related risks do not have a
material impact on accounts and disclosures, including judgements and estimates in the
Financial Statements.
Failures by third parties may lead to higher development costs, delays in obtaining
regulatory approvals or certifications, and setbacks or obstacles in commercialization.
We rely—and may continue to rely—on third parties for critical aspects of our business,
including conducting clinical trials, data collection and analysis, marketing, manufacturing,
regulatory support, and other essential services. The success of our ARC Therapies depends
on these partnerships, and any failure by third parties to meet their contractual obligations
or regulatory requirements could lead to delays, suspensions, or even terminations of
development activities or clinical trials.
Potential risks include insufficient time or effort dedicated to our projects, failure to adhere
to clinical protocols or regulatory standards, compromised data quality or loss, financial
instability of the third party, or the need to replace a provider. While we strive to ensure strong
partnerships, we do not always have direct control over third party performance, and our
agreements often allow them to terminate their commitments with notice. If a third party
fails to fulfill its obligations or if an agreement is terminated, finding a suitable replacement
on commercially acceptable terms may prove difficult, potentially leading to increased costs,
regulatory delays, and setbacks in the commercialization of ARC Therapies.
Additionally, many of our third-party agreements include limitations on liability, which
may restrict our ability to recover losses resulting from their performance failures. These
factors could adversely impact our development timelines, regulatory approvals, and overall
business operations.
Our results of operations could be materially harmed if we are unable to accurately
forecast customer demand for our ARC
EX
system and manage our inventory.
To ensure adequate inventory supply of the ARC
EX
system in general and its components,
we must forecast inventory needs and place orders with our suppliers based on our
estimates of future demand for the ARC
EX
system and its components. To date, we have only
sold two ARC
EX
systems. Our ability to accurately forecast demand for our ARC
EX
system
could be negatively affected by many factors, including failure to accurately manage our
commercialization strategy, an increase or decrease in customer demand for the ARC
EX
system, failure to accurately predict customer acceptance of new products, unanticipated
changes in general market conditions or regulatory matters, and weakening of economic
conditions or consumer confidence in future economic conditions. Inventory levels in excess
of customer demand may result in inventory write-downs or write-offs, which would cause
our gross margin to be adversely affected and could impair the strength of the ARC Therapy
brand. Conversely, if we underestimate customer demand for the ARC
EX
system, our third-
party contract manufacturers may not be able to deliver products to meet our requirements,
and this could result in damage to our reputation and customer relationships. In addition,
if we experience a significant increase in demand, additional supplies of raw materials or
additional manufacturing capacity may not be available when required on terms that are
acceptable to us, or at all, or suppliers or third-party manufacturers might not be able to
allocate sufficient capacity in order to meet our increased requirements, which could have
an adverse effect on our ability to meet customer demand for the ARC
EX
system.
We intend to maintain sufficient levels of inventory in order to protect ourselves from supply
interruptions. As a result, we will be subject to the risk that a portion of our inventory may
become obsolete or expire, which could affect our earnings and cash flows due to the
resulting costs associated with the inventory impairment charges and costs required to
replace such inventory.
Non-Compliance with Manufacturing Regulations Could Disrupt Our Business and Impact
Product Availability
We rely on third-party suppliers for the manufacturing and supply of the ARC
EX
system, and
both our own and our suppliers’ manufacturing practices are subject to extensive regulatory
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oversight. In the United States, medical device manufacturing must comply with the FDA’s
Quality System Regulation (QSR), a stringent framework governing design, testing, production,
quality assurance, labeling, packaging, storage, and distribution. Additionally, we must
ensure that our suppliers maintain operations that meet both our internal quality standards
and applicable regulatory requirements. The FDA enforces compliance through periodic
inspections, which may be announced or unannounced, including audits of subcontractor
facilities. Similar regulatory requirements exist in other jurisdictions, adding further complexity
to compliance obligations.
Failure by us or our third-party suppliers to adhere to these regulations—including maintaining
an adequate, up-to-date quality management system—could result in delays in the commercial
availability of the ARC
EX
system, interruptions to clinical trials, or setbacks in obtaining or
maintaining regulatory approvals. Non-compliance could also lead to regulatory actions,
product supply disruptions, increased costs, loss of customer trust, and exposure to potential
product liability claims, ultimately impacting sales and overall business performance.
Dependence on suppliers for ARC
EX
system components and services poses operational
and financial risks.
The ARC
EX
system relies on specialized components and services, many of which are sourced
from a limited number of suppliers. Any disruption in the supply of these critical elements—
whether due to supplier decisions, capacity constraints, quality issues, or regulatory
challenges—could negatively impact our business, financial condition, and operational results.
A number of ARC
EX
system components are currently sourced from single suppliers, and
while we are working to qualify additional vendors, transitioning to new suppliers requires
extensive evaluation, testing, and regulatory approval. This process can be time-consuming
and costly, making it difficult to mitigate risks associated with supplier dependency. If a
supplier is unable or unwilling to meet our demand, investigator-initiated studies, clinical
trials for future indications, or commercialization efforts could be delayed or halted.
If we need to switch to an alternative supplier, we may face challenges such as extended
lead times, higher costs, or regulatory requirements that delay market availability. Changes
in supplier manufacturing processes or product design modifications may require new
regulatory approvals or certifications, further complicating supply continuity. Additionally,
suppliers may discontinue key components or services before the ARC
EX
system reaches
the end of its product life cycle, potentially forcing us to secure costly last-time buys, source
alternatives at premium prices, or even halt product availability temporarily.
Any of these supply chain disruptions could result in production delays, increased costs, and
reduced inventory availability, ultimately affecting our ability to meet market demand and
achieve profitability.
Global: Geopolitical and macroeconomic challenges
The Company is also exposed to global economic and political risks, including U.S.-EU trade
relations, geopolitical instability, and foreign exchange fluctuations.
•
Geopolitical uncertainty: Conflicts and diplomatic tensions may disrupt global markets
and supply chains. The Company remains flexible in sourcing and prepared to adapt
procurement strategies if needed.
•
U.S.-EU trade relations: Deteriorating diplomatic relations could lead to economic policies
that impact operations. While no immediate disruptions are expected, the Company is
evaluating diversification strategies to reduce reliance on any single market.
The Company closely monitors these evolving risks and engages with relevant stakeholders
to anticipate impacts and adjust strategies, aiming to preserve stability and support
continued growth.
Risks related to legal & government regulation
The Company must obtain FDA clearance or approval before it can sell any of its products
in the US, and CE Certification before it can sell any of its products in the European
Union (EU). Approval of similar regulatory authorities in countries outside the US and
the EU is required before it can sell its products in countries that do not accept FDA
clearance or approval or CE Certification. The Company may incur additional costs or
experience delays in completing, or ultimately be unable to complete, the development
and commercialization of its products if such clearance or approval is denied or delayed.
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ONWARD received De Novo classification clearance from the FDA to market ARC
EX
for use in
clinics in the US . We intend to pursue additional regulatory clearances, including for at-home
use. ARC
IM
is a Class III device that will require PMA approval to be marketed in the US. In
Europe, under the MDR, ARC
EX
is expected to be designated as a Class IIa device and ARC
IM
as Class III.
The development, manufacture, and commercialization of our products are subject to
government regulation. In the US, Europe, and most other countries, ONWARD must
complete rigorous pre-clinical testing and extensive clinical trials that exhibit the safety
and effectiveness of our devices before we can apply for regulatory clearance or approval to
market them. Regulatory bodies such as the FDA may limit approval to specific indications,
restrict the distribution of a device, or refuse to grant clearance for additional or expanded
indications, which could limit our potential revenues.
The road to regulatory approval of a new medical device is long, expensive, and uncertain.
The FDA and other regulatory authorities can delay, limit, or deny approval, grant of a De Novo
classification, or clearance of a device for many reasons, including:
•
Inability to show that the products are safe or effective for their intended uses (or, for a
510(k) device, that they are substantially equivalent to the predicate)
•
Disagreement with the design or implementation of clinical trials or the interpretation
of data
•
Serious and unexpected adverse device effects experienced by participants in clinical trials
•
Insufficiently supportive data from pre-clinical studies and clinical trials
•
Inability to show that the clinical and other benefits of the device outweigh the risks
•
Failure of manufacturing process or facilities in meeting applicable requirements
•
Changes in policies or regulations that increase cost of compliance or render clinical data
and filings insufficient for approval or clearance
Despite the time, effort, and cost invested, our investigational devices may not pass these
stringent regulatory hurdles, which could harm our business. In addition, regulatory authorities
may place restrictions on the indicated uses of the device, limiting its market size. If the FDA
requires us to go through a longer, more rigorous process than expected for future products,
or for modifications to existing products, their introduction could be delayed or cancelled,
which could adversely affect our ability to grow our business.
In the EEA, compliance with the requirements of the Council Directive 93/42/EEC (EU Medical
Devices Directive) is a prerequisite to be able to affix the Conformité Européenne (CE) mark
to our products, without which they cannot be sold or marketed in the EEA. The EU Medical
Devices Directive is being replaced by a new Medical Devices Regulation (MDR) in the EEA
(Regulation (EU) 2017/745). The MDR, which became fully applicable on 26 May 2021, imposes
the same basic requirements as the EU Medical Devices Directive (MDD), but is generally more
stringent, especially in terms of risk classes and the oversight provided by notified bodies
that perform conformity assessments of devices.
Following its departure from the EU, on 31 January 2020, the UK continued to follow the same
regulations as the EU during a transitional period, which ended on 31 December 2020. Since
then, all medical devices must be registered with the Medicines and Healthcare products
Regulatory Agency (MHRA) before being sold on the UK market.
European CE marks continued to be recognized in UK until 30 June 2023, after which a UK
Conformity Assessed (UKCA) mark has been required for a medical device to be marketed
in the UK. Since the new MDR will not automatically apply in the UK, regulation of medical
devices in the UK may diverge from EU regulations in the future. On 28 November, 2022, the
Swiss Parliament reached a key decision by instructing the Swiss Federal Council to adapt
national laws to enable Switzerland to accept medical devices with FDA approval.
In general, if ONWARD fails to remain compliant with all applicable European laws and
regulations, we would be unable to continue to affix the CE mark to our products, which
would prevent us from selling them within the EEA, adversely affecting our business. Similarly,
our ability to market our products in the UK could be affected by any failure to maintain
compliance with UK regulations.
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The clinical development process required to obtain regulatory clearances or approvals
is lengthy and expensive, with uncertain outcomes. Data generated in clinical trials is
subject to interpretation by EU regulators, the FDA, and foreign regulatory authorities.
If clinical trials of the current ARC
IM
platform and future products (for ARC
IM
and ARC
EX
)
do not produce the results necessary to support regulatory clearance or approval, De
Novo classification, or clearance in the US or with respect to the Company’s current or
future products elsewhere, it will be unable to commercialize these products. It therefore
may incur additional costs or experience delays in completing, or ultimately be unable to
complete and commercialize those products.
Significant setbacks or failure can occur at any time during the clinical development
process, adversely affecting the cost, timing, or successful completion of trials. The following
circumstances could harm our ability to complete development or commercialize our products:
•
The FDA may reject our investigational device exemption (IDE) application and notify us
that we may not begin investigational human clinical trials
•
Regulatory authorities may disagree as to the design or implementation of our clinical trials
•
Regulators and/or institutional review boards (IRBs) may not authorize us or our research
partners to begin or continue a clinical trial at a particular site
•
We may be unable to agree on acceptable terms with prospective contract research
organizations (CRO) and clinical trial sites, the terms of which can vary significantly and
require long negotiations
•
Clinical trials may produce negative or inconclusive results, or we may not agree with
regulatory authorities on the interpretation of these results; consequently, we may
decide, or be required by regulators, to conduct additional clinical trials or abandon the
development of a product
•
The number of subjects or patients required for clinical trials may be larger than we
anticipated, enrollment in these trials may be insufficient or slow, and/or the number of
trials being conducted at any given time may be high, resulting in fewer available patients
for our clinical trial, or patients may drop out at a higher than expected rate
•
Our third-party contractors may fail to comply with regulatory requirements or meet their
contractual obligations in a timely manner, or at all
•
We may have to suspend or terminate clinical trials for various reasons, including a finding
that the subjects are being exposed to unacceptable health risks
•
We may have to amend clinical trial protocols or conduct additional studies to reflect
changes in regulatory requirements or guidance
•
We may be required to terminate clinical research for various reasons, including safety
issues or non-compliance with regulatory requirements
•
The cost of clinical trials may be greater than anticipated
•
Clinical sites may not adhere to the clinical protocol or may drop out of a trial
•
We may be unable to recruit a sufficient number of trial sites or trial subjects
•
Regulators, IRBs, or other reviewing bodies may fail to approve or subsequently find fault
with our manufacturing processes; the supply of devices or other materials necessary to
conduct clinical trials may be insufficient, inadequate, or not available at an acceptable cost
•
Approval policies or regulations may change in a manner that renders our clinical data
insufficient for approval
•
Our current or future products may have undesirable side effects or other unexpected
characteristics
We depend on CROs to conduct clinical trials in a timely manner and in compliance with good
clinical practice (GCP) requirements. If a CRO fails to comply fully with GCP standards or
experiences delays in conducting the trial, this could result in increased costs and/or program
delays. In addition, conducting clinical trials in countries outside the US and Europe may entail
additional delays, shipment costs, or regulatory requirements, as well as risks associated with
clinical investigators who are unknown to the FDA, or with different standards of diagnosis,
screening, and medical care. Any of these occurrences could adversely affect our business,
financial condition, and results of operations.
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We may from time to time publicly announce the date at which we expect to reach various
clinical, regulatory, or product development milestones. These could include the submission
of an IDE application to the FDA to begin a clinical trial, the enrollment of patients in a trial,
or the release of data from clinical trials. However, the actual timing of these milestones may
vary dramatically compared to our estimates, in some cases for reasons beyond our control,
potentially delaying the commercialization of our products or causing our share price to decline.
Failure to comply with post-marketing regulatory requirements could subject the Company
to enforcement actions, including substantial penalties, and might require the Company
to recall or withdraw a product from the market.
If we receive regulatory clearance or approval for our investigational devices (like we have for
ARC
EX
clinical use in December 2024), we will be subject to ongoing and pervasive regulatory
requirements governing, among other things, their manufacture, marketing, labeling,
packaging, advertising, medical device reporting, sale, promotion, registration, storage,
distribution, and listing. For example, ONWARD must submit periodic reports to the FDA as a
condition of PMA approval. These reports include safety and effectiveness information about
the device after its approval. Failure to submit such reports or to do so in a timely manner
could result in enforcement action by the FDA. Following its review of the periodic reports,
the FDA might ask for additional information or initiate further investigation.
In addition, the PMA approval for ARC
IM
Therapy may be subject to several conditions of
approval, including a post-market extended follow-up of the premarket study cohort. Any
failure to comply with the conditions of approval could result in the withdrawal of PMA
approval and the inability to continue to market the device. Adverse outcomes in these studies
could also be grounds for withdrawal of approval of the PMA.
The regulations to which ONWARD is subject are complex and have become more stringent
over time. Regulatory changes could result in restrictions on our ability to continue or
expand our operations, higher than anticipated costs, or lower than anticipated sales. Even
after the proper regulatory authorization to market a device has been obtained, we have
ongoing responsibilities under FDA and EU regulations and applicable laws and regulations
of other countries.
Any failure to comply with applicable regulatory requirements could result in enforcement
action by the FDA, state, EU or national regulatory authorities. Sanctions could include
warning letters, fines, injunctions, consent decrees or civil penalties; recalls, termination
of distribution, administrative detention, or seizure of products; suspension of one or more
clinical studies; customer notifications, repair, replacement or refunds; restriction, partial
suspension or total shutdown of production; delays in or refusal to grant requests for future
regulatory approvals of new products, uses, or modifications to existing products; withdrawals
or suspensions of current regulatory approvals; prohibitions on sales, imports, or exports of
our products; FDA refusal to issue certificates to foreign governments needed to export our
products for sale in other countries; and criminal prosecution.
Any of these sanctions could result in higher than anticipated costs or lower than anticipated
sales and have a material adverse effect on our reputation, business, financial condition, and
operating results.
Even if, and aſter being, cleared or approved by regulatory authorities, the Company’s
products may cause or contribute to adverse medical events or be subject to failures
or malfunctions that the Company is required to report to the FDA. If it fails to do so,
the Company would be subject to sanctions that could harm its reputation, business,
financial condition, and results of operations. The discovery of serious safety issues with
its products, or a recall of its products, either voluntarily or at the direction of the FDA
or another governmental authority, could have a negative impact on the Company. In
the course of conducting our business, the Company must adequately address quality
issues that may arise with the ARC
EX
and ARC
IM
systems, including defects in third-
party components included in our products. Additionally, even if free of quality issues,
our products may not meet the expectations of physicians or patients with respect to
achieving desired results.
The internal procedures designed to minimize risks that may arise from quality issues may
not sufficiently eliminate or mitigate occurrences of these issues and associated liabilities.
Moreover, even in the absence of quality issues, we may be subject to claims and liability if
our products’ performance does not meet physicians’ or patients’ expectations.
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In the event that we receive clearance or approval by regulatory authorities, we will be subject
to the FDA’s medical device reporting regulations and similar foreign regulations. This will
require us to report to the FDA when we become aware of information that reasonably
suggests that our products may have caused or contributed to a death or serious injury or
malfunctioned in a way that, if it were to recur, could cause or contribute to a death or serious
injury. The timing of this obligation to report is triggered by the date we become aware of
the adverse event, as well as the nature of the event. We may inadvertently fail to report
adverse events within the prescribed timeframe. We may also fail to recognize that we have
become aware of a reportable adverse event, especially if it is not reported to us as such,
or if the adverse event is unexpected or removed in time from the use of our products. If we
fail to comply with our reporting obligations, the FDA could take action, including warning
letters, untitled letters, administrative actions, criminal prosecution, civil monetary penalties,
revocation of device approvals, seizure of our products, or delay in clearance or approval of
modifications to our products.
The FDA and foreign regulatory authorities have the power to require the recall of
commercialized products in the event of material deficiencies or defects in design or
manufacture of a product, or in the event that a product poses an unacceptable risk to health.
The FDA’s authority to require a recall of our products must be based on a finding that there
is reasonable probability that they may cause serious injury or death. We may also choose
to voluntarily recall products if any material deficiency is found. A government-mandated
or voluntary recall could occur as a result of an unacceptable risk to health, component
failures, malfunctions, manufacturing defects, labeling or design deficiencies, packaging
defects, or other deficiencies or failures to comply with applicable regulations. Depending
on the corrective action that we take to redress deficiencies or defects that may occur in
the future, the FDA may require, or we may decide, that we need to obtain new approvals for
our products before marketing or distributing the corrected device. Seeking such approvals
may delay our ability to replace the recalled devices in a timely manner. Moreover, if we
fail to adequately address problems associated with our products, we may face additional
regulatory enforcement action.
Companies are required to maintain certain records of recalls and corrections, even if they
are not reportable to the FDA. In the future, ONWARD may initiate voluntary withdrawals or
corrections to our products that we may determine do not require notification of the FDA.
If the FDA disagrees with our determinations, it could require us to report those actions as
recalls and subject us to enforcement action. Such a recall announcement could harm our
reputation with customers, potentially lead to product liability claims, and negatively affect
sales. Any lawsuit or corrective action, whether voluntary or involuntary, would require the
dedication of considerable time and capital, possibly impacting our financial results.
Additionally, the identification of undesirable side effects or other previously unknown
problems caused by our products could lead to a number of negative consequences. Among
others, regulatory authorities might withdraw approvals; impose product recalls; require us to
add warnings, contraindications, or narrower indications in the product labeling, or to issue
of field alerts to physicians and pharmacies; require us to create a guide outlining the risks
of such side effects for distribution to patients; impose limitations on how we promote our
products; require us to change the way the product is administered or modify the product;
and/or require additional clinical trials or costly post-marketing testing and surveillance to
monitor the safety or efficacy of the product. Any of these requirements could prevent us from
achieving or maintaining market acceptance of our products, substantially increase the costs
of commercializing our products, or impacts our sales. The demand for our products could
also be negatively impacted by any adverse effects of a competitor’s product or treatment.
If the Company or its suppliers fail to comply with FDA regulatory requirements, or if
it experiences unanticipated problems with any cleared or approved products, these
products could be subject to restrictions or withdrawal from the market.
Any product for which we obtain regulatory clearance or approval, as well as the manufacturing
processes, reporting requirements, post-approval clinical data, and promotional activities
for such a product, will be subject to continued regulatory review and oversight by the
FDA. In particular, ONWARD and its third-party suppliers will be required to comply with
the FDA’s Quality System Regulations (QSR). These FDA regulations cover the methods
and documentation of the design, testing, production, control, quality assurance, labeling,
packaging, sterilization, storage, and shipping of products. Compliance with applicable
regulatory requirements is subject to continual review and is monitored rigorously through
periodic inspections by the FDA. If we, or our manufacturers, fail to adhere to QSR requirements,
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this could delay production of our products and lead to fines, difficulties in obtaining regulatory
clearances and approvals, recalls, enforcement actions, including injunctive relief or consent
decrees, or other consequences, which could, in turn, have a material adverse effect on our
financial condition and results of operations.
In addition, ONWARD and its suppliers are required to comply with Good Manufacturing
Practices for the manufacture of our products, and other regulations which cover the methods
and documentation of the design, testing, production, control, quality assurance, labeling,
packaging, storage, and shipping of any product for which we obtain clearance or approval.
The FDA audits compliance with the QSR and other similar regulatory requirements through
periodic announced and unannounced inspections of manufacturing and other facilities.
If ONWARD or one of its suppliers fail to comply with applicable statutes and regulations
administered by the FDA, or the fail to timely and adequately respond to any adverse
inspectional observations or product safety issues, this could result in any of the following
enforcement actions:
•
Untitled letters, warning letters, fines, injunctions, consent decrees, and civil penalties
•
Unanticipated expenditures to address or defend such actions
•
Customer notifications or repair, replacement, refunds, recall, detention, or seizure of
our products
•
Operating restrictions or partial suspension or total shutdown of production
•
Refusing or delaying our requests for premarket approval of new products or modified products
•
Withdrawing PMAs that have already been granted
•
Refusal to grant export approval for our products
•
Criminal prosecution
Any of these sanctions could have a material adverse effect on our reputation, business,
results of operations, and financial condition.
U.S.: Regulatory, tariff, and economic uncertainty
The Company faces risks from evolving U.S. policies, including potential tariffs on European
goods, reductions in federal healthcare and research funding, and economic uncertainties
affecting market conditions.
•
Tariff Risks: The Company believes that its products may qualify for an exemption from
U.S. import duties under the Nairobi Protocol and is actively seeking clarification from U.S.
Customs and Border Protection to confirm eligibility. Currently, products imported from the
Netherlands are subject to a 10% tariff. The Company is still assessing the potential impact
of this tariff but does not expect a significant impact.
•
Federal spending cuts: Potential reductions in NIH and DoD funding could affect grants
and clinical research. The Company is diversifying funding sources, including European
grants, to mitigate this risk.
•
U.S. regulatory environment: Recent developments, including policy discussions under
Project 2025, may significantly alter the structure and functioning of U.S. federal agencies
such as the FDA. This raises uncertainty around regulatory timelines, product clearances,
and reimbursement. Potential federal budget constraints may also impact agency
responsiveness, increasing risk for companies in the medtech sector. The Company
continues proactive engagement with regulatory authorities to manage submission
timelines effectively.
While these factors introduce uncertainty, the Company is actively mitigating risks through
strategic planning, advocacy efforts, and financial diversification.
Risks related to the company’s intellectual property (IP)
Patent terms may be inadequate to protect the Company’s competitive position on its
future products for an adequate amount of time.
In both the US and Europe, a patent’s lifespan is generally 20 years from its earliest filing date.
Various extensions may be available, but the life of a patent, and the protection it affords, is
limited. Even if patents covering the Company’s future products are obtained, once the patent
has expired, it may be open to competition.
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ONWARD’s current patent portfolio will begin to naturally expire in 2031. However, given
the amount of time required for the development, testing, and regulatory review of new
products, certain patents protecting our future products may expire before or shortly after
commercialization begins. As a result, our patent portfolio may not provide the Company
with sufficient rights to exclude others from commercializing similar or identical products
for a sufficient amount of time.
The Company licenses certain technology underlying the development of its investigational
devices and the loss of the license would result in a material adverse effect on its business,
financial position, and operating results and cause the market value of its Ordinary Shares
to decline.
The Company licenses technology from EPFL, UCLA, California Institute for Technology
(“Caltech”), University of Louisville, University of Minnesota, University of Calgary and
University of British Columbia that is integrated into its company portfolio under five licenses,
each exclusive in the Company’s Field of Uses. Under the different license agreements, the
Company has agreed to milestone payments and/or to meet certain reporting obligations.
In the event that the Company were to breach any of the obligations under the agreement
and fail to cure timely, EPFL, UCLA, Caltech, would have the right to terminate the agreement
upon notice. In addition, EPFL, UCLA and Caltech have the right to terminate its license upon
the bankruptcy or receivership of the Company. If the Company is unable to continue to use
or license this technology on reasonable terms, or if this technology fails to operate properly,
it may not be able to secure alternatives in a timely manner and its ability to develop its
products could be harmed.
Risks Related to the Company’s financial position, need for additional capital & taxation
The Company has incurred significant operating losses since inception, expects to incur
operating losses in future, and it may not be able to achieve or sustain profitability.
ONWARD is a medical technology company with no commercial operating history. To date, we
have substantially invested all of our efforts in the research and development of, and in seeking
regulatory clearance or approval for, our ARC technology platforms. We are not profitable,
have incurred losses each year since beginning operations in 2014, and have no commercial
operating history upon which to evaluate our business and prospects. Any predictions of future
success, performance, or viability may not be as accurate as they could be if the Company
had a longer operating history or commercial revenues.
Despite receiving FDA clearance to commercialise its first product (ARC
EX
for clinical use),
deriving sufficient revenues to support operations are not imminent, as our activities continue
to consist of developing our technology, conducting pre-clinical studies and clinical trials.
As of 31 December 2024, the loss for the period amounted to € 35.7M. These losses have
resulted primarily from costs incurred in the development of the ARC
EX
and ARC
IM
platforms,
costs relating to the DeNovo submission of ARC
EX
for FDA clearance in 2024, preparing for
manufacturing of ARC
EX
following FDA clearance and from general and administrative costs
associated with operations.
The current or future clinical trials of any current or future investigational devices are, and the
manufacturing and marketing of any such investigational devices will be, subject to extensive
and rigorous review and regulation by the FDA and other government authorities in the US
and in other countries where the Company intends to test and, if cleared or approved, market
such investigational devices. We expect our operating expenses to continue to increase as we;
1.
Continue research and development activities for our ARC
EX
, ARC
IM
and ARC
BCI
technology
platforms and related technologies
2.
Seek FDA regulatory clearances and approvals for the ARC
EX
(new indications), ARC
IM
and
ARC
BCI
platforms or other future investigational devices in the US, regulatory approvals in
Europe, and potentially other regulatory approvals in other jurisdictions
3.
Build our commercial infrastructure
As a result, ONWARD expects to continue to incur operating losses for the foreseeable
future. The expected future operating losses, combined with prior operating losses, may
adversely affect the market price of our Ordinary Shares and our ability to raise capital and
continue operations.
We expect sales of our ARC
EX
and ARC
IM
platforms to account for the majority of our future
revenue. While ARC
EX
has received regulatory clearance for use in the clinic setting, all other
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pending regulatory approvals remain critical. If the ARC
IM
platform does not obtain clearance
or approval, or if ARC
EX
sales do not generate sufficient revenue, the Company may face
challenges in achieving profitability.
Even if we do achieve profitability, we may not be able to sustain or increase profitability
in subsequent periods or on an ongoing basis. In this case, it will be more difficult for us to
finance our business and realize our strategic objectives, which would have a material and
adverse effect on our business, financial condition, and results of operations and would cause
the market price of our Ordinary Shares to decline.
The Company will require additional capital to finance its planned operations, which may
not be available to it on acceptable terms or at all. Raising additional capital may cause
dilution to our existing shareholders.
As of 31 December 2024, ONWARD had net cash of € 60M. Based on cash flow forecasts for
2025, this is expected to be sufficient to meet our capital requirements and fund our operations
to the end of 2026. We have based these estimates on assumptions that may prove to be
incorrect and could spend our available financial resources much faster than currently expected.
Our expenses will also increase substantially in connection with the commercialization
of ARC
EX
in the US, and potentially also in Europe after CE Mark certification is obtained,
including the hiring of qualified and sales personnel. Additional expenditures will include costs
associated with manufacturing and supply, expenses related to the deployment of a direct
sales and service organization, costs and expenses incidental to being a public company,
and general operations. In addition, other unanticipated costs may arise.
ONWARD’s present and future funding requirements will depend on many factors, including:
•
Continuing our research and development efforts, completing ongoing and planned clinical
trials, and applying for (i) 510(k) clearance for use of ARC
EX
in the home, and (ii) PMA
approval, which will be required for ARC
IM
•
Conducting additional clinical trials of our ARC
EX
and ARC
IM
platforms for future indications
•
Our ability to retain and compensate the highly qualified personnel necessary to execute
our plans
•
If cleared or approved, the costs associated with manufacturing, selling, and marketing
our products in Europe and the US, as well as other foreign jurisdictions, including
the cost and timing of implementing our sales and marketing plan and expanding
manufacturing capabilities
•
Our ability to effectively market and sell, and achieve sufficient market acceptance and
market share for our products
•
The costs to maintain, expand, and defend the scope of our IP portfolio, as well as any other
action required in connection with licensing, preparing, filing, prosecuting, defending, and
enforcing any patents or other IP rights
•
The emergence of competing technologies and other adverse market developments, and
the need to enhance our products and/or develop new products to maintain market share
•
Our ability to establish and maintain strategic licensing or other arrangements and the
financial terms of such agreements
•
Our need to implement additional internal systems and infrastructure, including financial
and reporting systems, incidental to being a public company
ONWARD will likely need to raise additional capital. If we do so through public or private
equity offerings, the ownership interest of existing shareholders will be diluted, and the terms
of these securities may include liquidation or other preferences that adversely affect these
shareholders’ rights. If the Company raises additional capital through debt financing, we may
have to provide new liens on our assets and be subject to covenants limiting or restricting
our ability to take specific actions, such as incurring additional debt or liens, making capital
expenditures, or declaring dividends. If we raise additional capital through marketing
and distribution arrangements or other collaborations, strategic alliances, or licensing
arrangements with third parties, we may have to relinquish certain valuable rights to our
ARC
EX
and ARC
IM
platforms, technologies, future revenue streams, or research programs,
or grant licenses on terms that may not be favorable to us. In addition, the exercise by our
employees of stock options under stock option plans within the scope of existing and/or
future management or employee participation would lead to a dilution of the shareholders.
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If we are unable to obtain adequate financing when needed, and on terms that are acceptable
to us, we may have to delay, reduce the scope of, or suspend the implementation of our sales
and marketing plan and our ongoing research and development efforts, which would have a
material adverse effect on our business, financial condition, and results of operations.
Part of the Company’s assets, including intellectual property is pledged to Runway Growth
Capital LLC, and the enforcement of such pledge could substantially harm the future
development and operations of the Company.
The Company has secured a €52.5 million loan from U.S.-based lender Runway Growth
Capital LLC (Runway). The facility is divided into five individual credit tranches. The first initial
credit tranche of €16.0 was available upon signing of the Loan Agreement and drawn down
immediately. Three subsequent credit tranches of €14.0 million, up to €5.0 million and up to
€7.5 million will be available to be drawn by the Company until March 31, 2025 and July 31,
2026 respectively, in each case subject to the Company’s achievement of certain milestones
under the Loan Agreement. The milestone for the second tranche was met in December 2024,
but the tranche has not been drawn yet. The fifth credit tranche of up to €10.0 million is
uncommitted and available in the first quarter of 2027 upon the sole discretion of the Lender.
The loan bears interest at a rate equal to Term Secured Overnight Financing Rate (SOFR) for
a three month interest period (currently at 6.00% and subject to a 4.25% floor), plus a margin
of 6.50%. The loan documents provide for a number of affirmative and negative covenants by
the Company customary for financings of this type, including financial covenants relating to
revenue, earnings before interest taxes, depreciation and amortization (EBITDA) and minimum
liquidity targets. The loans advanced under the Loan Agreement are secured by a security
interest in substantially all of the assets of ONWARD.
Should the Company default on the loan covenants, Runway could enforce its pledge on these
assets, which could substantially harm the future development and operations of the Company.
The Company’s operating results may vary significantly from period to period, which may
negatively impact the price of its Ordinary Shares in the future.
ONWARD’s financial and operating results may fluctuate from period to period due to,
among others:
•
The cost of obtaining and maintaining FDA and other regulatory clearances or approvals
for our ARC
EX
and ARC
IM
platforms, as well as any other future indication we may seek to
develop our investigational devices to address
•
Potential revenue generated by sales of our ARC
EX
and ARC
IM
platforms for cleared or
approved indications, if any
•
Expenses incurred in manufacturing and selling our ARC
EX
and ARC
IM
platforms, after
cleared or approved
•
Costs associated with scaling up and expanding our manufacturing capacity
•
Costs associated with building and expanding our sales and marketing efforts in the US,
Europe, and internationally
•
Costs associated with conducting research and development efforts for future
improvements to, or versions of, our ARC
EX
and ARC
IM
platforms
•
Cost of complying with regulatory requirements
•
Costs associated with capital expenditures
•
Costs associated with any future litigation
•
Costs and timing of preparing, filing, and prosecuting patent applications, maintaining
and enforcing our IP rights, and defending any IP-related claims
•
The severity, duration, and impact of a pandemic similar to COVID-19, which may adversely
impact our business and planned development and future commercialization of our ARC
EX
and ARC
IM
platforms
Due to these and other factors, it is likely that ONWARD will experience fluctuating revenues,
operating results, and cash flows. In that case, period-to-period comparisons of financial
results may not necessarily be meaningful, and results of operations in prior periods should
not be relied upon as an indication of future performance, as this will not meet investor
expectations or those of public market analysts. Unanticipated or new information may cause
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investors and analysts to revalue our business, which could cause a decline in the price of
our Ordinary Shares.
The Company’s ability to use its net operating losses and research and development credit
carryforwards to offset future taxable income may be subject to certain US federal income
tax and Dutch tax limitations.
In general, under Sections 382 and 383 of the US Internal Revenue Code of 1986, as amended,
a corporation that undergoes an “ownership change” — generally defined as a greater
than 50% change by value in its equity ownership over a three-year period — is subject to
limitations on its ability to use its pre-change net operating losses (NOL) and its research and
development credit carryforwards to offset future taxable income. The Company’s existing
NOLs and research and development credit carryforwards may be subject to limitations
arising from previous ownership changes, and if it undergoes an ownership change, our ability
to use NOLs and research and development credit carryforwards could be further limited by
Sections 382 and 383 of the Internal Revenue Code.
In addition, our ability to deduct net interest expense may be limited if the Company has
insufficient taxable income for the year during which the interest is incurred, and any
carryovers of such disallowed interest would be subject to the limitation rules similar to those
applicable to NOLs and other attributes. Future changes in share ownership, some of which
might be beyond our control, could result in an ownership change under Section 382 of the
Internal Revenue Code.
For these reasons, in the event that ONWARD experiences a change of control, we may not be
able to use a material portion of the NOLs, research and development credit carryforwards,
or disallowed interest expense carryovers, even if we attain profitability.
The Company’s results may be impacted by changes in foreign currency exchange rates.
Since the clearance of ARC
EX
by the FDA for use in clinics, we commenced commercial
operations, we will enter into a number of transactions denominated in USD (initially) but
also expanding to various currencies, which can expose the Company to changes in currency
exchange rates. We do not currently engage in any hedging transactions. If we are unable
to address these risks and challenges effectively, our international operations may not be
successful and our business could be harmed.
If the Company or a Group Company breaches an obligation under the Group’s existing
loan agreement, the Group may be required to repay the loan before it would ordinarily
become due and the administrative and collateral agent under the loan agreement may
dispose of the significant collateral the Group furnished to secure the loan.
The Group is subject to financial and non-financial covenants under its existing loan
agreement. A breach of any covenant or obligation could result in the lender exercising its
rights under the loan agreement, including demanding immediate repayment of outstanding
amounts before their scheduled maturity. In such a scenario, the Group may be required
to secure alternative financing under potentially unfavorable terms or may face liquidity
constraints that could impact its ability to fund operations and strategic initiatives.
Furthermore, the loan agreement is secured by significant collateral, and in the event of
default, the administrative and collateral agent may exercise its rights to enforce security
interests, which could materially impact the Group’s financial position and operations. The
Group actively monitors compliance with its loan covenants and engages with its lenders to
mitigate the risk of default. However, there can be no assurance that a breach will not occur in
the future, particularly in the context of evolving business conditions, financial performance,
or changes in the regulatory environment.
Additionally, the Group recently launched ARC
EX
, a novel product with no directly comparable
market data to substantiate sales projections. While Management has developed revenue
forecasts based on market research and initial customer interest, the absence of historical
sales data introduces a significant degree of uncertainty regarding revenue generation. This
uncertainty in cash flow forecasts is further compounded by the Group’s financing obligations,
relating to maintaining compliance with loan covenants.
While the Group has remained in compliance with its loan covenants to date, future financial
performance may impact continued compliance. Although the Group believes it has the
necessary resources to fund operations for the foreseeable future, the heightened uncertainty
surrounding revenue projections and financing obligations indicates the existence of material
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uncertainties, which may also cast significant doubt on the Group’s ability to continue as a
going concern. The financial statements have been prepared on a going concern basis, as
outlined in the Accounting Policies section of the consolidated financial statements.
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We engage in and maintain open dialogue with investors and analysts through several
communication channels, including the Annual General Meeting, roadshows, investor
conferences, presentations, and webcasts.
Up-to-date financial information about ONWARD is published on our Investor Relations
website
(ir.onwd.com)
. Investors and analysts are encouraged to visit the website regularly
for detailed coverage of the share price, shareholder meetings, half-year and annual results,
press releases, presentations, webcasts, and investor relations events.
Financial Calendar 2025
•
11 June: Annual General Meeting
•
16 September: Interim Report publication
Closed periods based on the 2025 financial calendar are:
•
30
March – 2
8
April 2025
•
17 August – 15 September 2025
Investor Relations
Dividend Policy
ONWARD has not declared or paid dividends on its shares in the past and does not currently
have the intention to pay dividends. Any declaration of dividends will be based on the
Company’s earnings, financial condition, capital requirements, and other factors considered
important by the Board.
Dutch law and ONWARD’s Articles of Association do not require the Company to declare
dividends. Currently, the Board expects to retain all earnings, if any, generated by ONWARD’s
operations for the development and growth of the business and does not anticipate paying
dividends to shareholders in the near future..
Capital Structure and Voting Rights
ONWARD’s authorized share capital (maatschappelijk kapitaal) amounts to € 18,000,000
divided into 75,000,000 Ordinary Shares and 75,000,000 Preferred Shares with a nominal
value of € 0.12 each. All of the issued Ordinary Shares are fully paid-up and represent capital
in the Company. Each shareholder of the Company is entitled to one vote per share. No
shareholders have any voting rights different from any other shareholder. At 31 December
2024, 44,628,832 Ordinary Shares represented all issued capital.
The Board is authorized by a resolution of the General Meeting to issue shares, or grant rights
to subscribe for shares, limited to 10% of the issued share capital. A separate resolution of
the General Meeting is not required for the issuance of shares under this authorization.
The Board remains of the view that it is in the company’s best interests to be able to react
promptly when business opportunities arise that require the issuance of Ordinary Shares.
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For this purpose the Board was also authorized to issue Ordinary Shares, or grant rights to
subscribe for shares, for an additional 50% of the Company’s issued share capital in connection
with one or more potential capital raises or for other strategic purposes. The authorization
was partially utilized for the capital transaction in October 2024. A separate resolution of the
General Meeting is not required for the issuance of shares under this authorization.
During the year the Company issued warrants to Runway growth Capital LLC under the
terms of the debt financing. No shareholders have any voting rights different from any other
shareholder, and no voting rights are limited in any manner.
ONWARD is not aware of any agreements that may result in a limitation of the transferability
of voting rights on shares in its capital.
Shareholder Structure
Pursuant to the Dutch Financial Supervision Act
(Wet op het financieel toezicht)
, substantial
holdings in the Company must be disclosed to the Netherlands Authority for Financial Markets
(Stichting Autoriteit Financiële Markten, AFM)
. According to the register kept by the AFM,
the following shareholders disclosed that they have a direct or indirect (potential) interest of
between 3% and 25% in the Company’s total issued share capital as of 31 December 2024:
•
Ottobock SE & Co. KGaA (10.08%)
•
LSP Advisory B.V. (8.41%)
•
INKEF Capital B.V. (8.19%)
•
Gimv (Private Equity) (7.17%)
•
Wellington Partners GmbH (4.22%)
Listing
Shares of ONWARD Medical N.V. trade on Euronext in Brussels (primary listing), Euronext
Amsterdam and Euronext Paris under the symbol “ONWD.”
Share Price
Analyst Coverage
ONWARD was covered by five brokers at the end of 2024.
Broker
Analysts
Stifel
Ed Hall, Dylan Van Haaften
Bryan, Garnier & Co
Maria Vara
KBC Securities
Thomas Vranken, Jacob Mekhael
Degroof Petercam
David Seynnaeve, PhD
Kepler Cheuvreux
Christophe Dombu
Investor Relations
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Report of the
Non-Executive
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Below is the report of the Non-Executive Directors of the Company for the financial year 2024,
as referred to in best practice provision 5.1.5 of the Corporate Governance Code (CGC).
Supervision by the Non-Executive Directors
The Board is responsible for ensuring that the Executive Director and Management Team
align their actions with the company’s strategic priorities and core values. The Non-Executive
Directors provide oversight of the policies implemented by leadership and monitor the overall
direction of the Company and its affiliated entities.
The Board has remained actively engaged in the Company’s strategy, particularly as it
advanced toward the De Novo application for FDA clearance of the ARC
EX
system. To maintain
effective oversight, the Non-Executive Directors regularly reviewed strategic initiatives
during Board meetings. These sessions provided updates on development progress, clinical
and commercial launch activities, and potential funding opportunities. The Board received
detailed insights into key achievements, challenges, and opportunities across all functional
areas, ensuring informed decision-making and continued alignment with the Company’s
long-term objectives.
The Board has allocated certain specific responsibilities to the Audit Committee, Compensation
Committee, and Nomination and Corporate Governance Committee. Further details on how
these Committees have carried out their duties are set forth in the sections below pertaining
to each committee. The Non-Executive Directors have been regularly informed by each
committee of the results and recommendations of these meetings in accordance with best
practice provision 2.3.5 of the CGC, and the conclusions of those committees were considered
when drafting this report of the Non-Executive Directors. The Non-Executive Directors were
able to review and evaluate the performance of each Committee. There is no need to amend
the size or composition of any of the above committees.
Report of the
Non-Executive Directors
Audit Committee
In 2024, the Audit Committee convened six times (see attendance details in the table below).
Throughout these meetings, the Committee reviewed and discussed key financial and
operational matters, including the financial reporting process, the full-year 2023 and half-
year 2024 results, internal control processes and ongoing enhancements, and the Company’s
funding and financing needs. The Audit Committee also evaluated the statements on internal
control and risk management included in the Annual Report and reviewed the Company’s
collaboration with its external auditor. The external auditor attended all meetings, providing
insights and presenting the audit plan for 2024.
The Audit Committee also evaluated the statements on internal control and risk management
included in the Annual Report and reviewed the Company’s collaboration with its external
auditor. The external auditor attended all meetings, providing insights and presenting the
audit plan for 2024. Regular reports were provided to the Board of Directors, including
recommendations and guidance for approval where necessary. The Committee worked
closely with the Management Team and finance department to ensure effective oversight
and implementation of key financial and governance initiatives.
Compensation Committee
In 2024, the Compensation Committee met three times (see attendance details in the table
below) the Committee reviewed and approved the achievement of the 2023 company goals
and the corresponding variable remuneration for the Executive Director. It also oversaw the
preparation of the Compensation Report, which was subsequently approved by the Board
and included in the 2023 Annual Report.
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The Committee established the 2024 company goals and objectives, monitoring progress
throughout the year. Additionally, it reviewed and discussed the remuneration policy, as well
as the individual compensation The Compensation Committee provided regular reports to
the Board of Directors, ensuring alignment and collaboration with the Board, Management
Team, and the People & Culture team as needed.
Nomination & Corporate Governance Committee
In 2024, the Nomination and Corporate Governance Committee met four times (see
attendance details in the table below). The Committee also discussed the Company’s HR
and operational strategy, as well as succession planning, ensuring alignment with long-term
objectives. Additionally, it supported the Board evaluation process.
The Nomination and Corporate Governance Committee provided regular updates to the
Board of Directors and collaborated closely with the Board, Management Team, and People
& Culture team as needed.
Evaluation
The Board is responsible for the quality of its own performance. Once per year, it discusses
its own performance and the performance of its individual members and committees.
Adhering to good governance, the Non-Executive Directors performed a Board effectiveness
assessment on a no-name basis in Q4 of 2024, facilitated by and external party, based on a
detailed questionnaire completed.
The assessment focused on five categories of Board governance:
1.
Information sharing between the Company and Board
2.
Chairing of the Board and Board culture
3.
Composition of the Board
4. Accountability
5. Standard of conduct
The outcomes were reviewed at the subsequent Board meeting, where key recommendations
for improvement were identified, and a clear set of next steps was established.
Overall, it was determined that both the Board and its committees function effectively and
operate efficiently.
Contrary to the requirement of best practice provision 2.2.6 of the CGC, the 2023 evaluation
was not performed under the supervision of an external expert. This will be considered for
future evaluations.
Internal Audit Function
Based on the recommendation of the Audit Committee, the Board determined that, given the
Company’s current size, establishing an internal audit function is not yet necessary. Instead,
the Board has evaluated whether sufficient alternative measures are in place and in making
this decision, the Board considered the existing management processes that support the
assessment and testing of the Company’s risk-management and control systems.
Independence of the Non-Executive Directors
Each Non-Executive Director is responsible for fulfilling their assigned duties with diligence
and acting in the best interests of the Company. In accordance with Dutch law, this corporate
interest encompasses the broader interests of all stakeholders, including shareholders,
creditors, and employees.
The Board confirms that the Non-Executive Directors meet the independence requirements
of the CGC. For details, refer to Director Independence included in the Governance section.
Report of the Non-Executive Directors
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Board of Directors
Audit Committee
Compensation Committee
Nomination & Corporate
Governance Committee
Member & Principal Position
Independent
according to DCGC
% of attendance at
meetings
Member
Attendance % at
meetings
Member
Attendance % at
meetings
Member
Attendance % at
meetings
Dave Marver
Executive Director & CEO
No
100%
Jan Øhrstrøm
Non-Executive
Director & Chairperson
Yes
100%
X
a
100%
X
a
100%
Grégoire Courtine
Non-Executive Director &
Science Advisor
No
100%
Ian Curtis
Non-Executive
Director & Vice-Chairperson
Yes
100%
X
a
100%
Fredericus Colen
Non-Executive Director
Yes
100%
X
100%
X
100%
John de Koning
Non-Executive Director
No
100%
X
100%
Kristina Dziekan
Non-Executive Director
Yes
100%
X
100%
Vivian Riefberg
a
Non-Executive Director
Yes
100%
X
100%
X
100%
Rob ten Hoedt
b
Non-Executive
Director & Chairperson
Yes
100%
X
a
100%
X
a
100%
Rahma Samow
c
Non-Executive Director
Yes
100%
Number of Meetings Held:
7
6
4
3
a: Chairperson of the respective committee. Jan stepped down as Chairman of the board and the respective board committees effective 6
December 2024. He is succeeded by Rob as Chairperson of the board and Vivian as Chairperson of the respective committees.
b: As Interim Chairman and Director (expected to be nominated for appointment at our 2025 Annual General Meeting), Rob has attended all
Board and committee meetings since October 2024.
c: As Interim Director (expected to be nominated for appointment at our 2025 Annual General Meeting), Rahma has attended all Board and
committee meetings since December 2024.
2024
Meetings of the
Board & Committees
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The Board of Directors’ Report (the Report), consisting of pages 4-185 inclusive and such
parts of the financial statements as referred to in the Report, comprise the
Bestuursverslag
,
as defined in Article 2:391 of the Dutch Civil Code (DCC).
In accordance with best practice provision 1.4.3 of the Dutch Corporate Governance Code
(CGC), the Board of Directors state that, to the best of its knowledge:
•
The report provides sufficient insights into any failings in the effectiveness of the internal
risk-management and control systems with regard to the risks as referred to in best
practice provision 1.2.1. In the 2024 financial year, no material failings have been detected
or reported;
•
The aforementioned systems provide reasonable assurance that the financial reporting
does not contain any material inaccuracies. Details are set out in the Risk Management
and Control section;
•
Based on the current state of affairs, it is justified that the financial reporting is prepared
on a going concern basis. This is based on the cash position and the expected cash flows
of the company, also considering the risks and opportunities.
•
The
report states the material risks, detailed in the Risk-Management and Control section,
as referred to in best practice provision 1.2.1, and the uncertain¬ties, to the extent that
they are relevant to the expectation of the company’s continuity for the period of twelve
months after the preparation of the report.
Board of Directors’
Statements
With reference to Section 5.25c, Paragraph 2c of the Financial Markets Supervision Act, the
Board states that, to the best of its knowledge:
•
The consolidated annual financial statements for the year ended 31 December 2024 —
which have been prepared in accordance with International Financial Reporting Standards
as adopted by the European Union and with Part 9 of Book 2 of the DCC – give a true
and fair view of the assets, liabilities, financial position, and loss of the Company and the
undertakings included in the consolidation taken as a whole.
•
The Report provides a fair view of the situation on the balance sheet date and of
developments during the financial year of the issuer and of its affiliated companies, whose
information has been included in its financial statements, together with a description of
the main risks the issuer faces.
Amsterdam, 2
8
April 2025
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Remuneration
Report
This report provides an overview of the remuneration of the Board in 2024 and explains
how this relates to the Company’s policy regarding the remuneration of its Non-Executive
and Executive Directors (the Compensation Policy), which was previously adopted at the
Company’s 2023 Annual General Meeting (AGM). The adoption of the 2023 compensation
policy and report was through an advisory vote with 85% of voting in favor of adoption.
The 2024 Remuneration Report has been prepared in line with Section 2:135b of the Dutch
Civil Code (DCC) and best practice provision 3.4.1 of the Corporate Governance Code (CGC).
This report will be submitted to the 2025 AGM for an advisory vote. The Company’s 2025
AGM is scheduled for 11 June.
The Compensation Policy is available on the ONWARD website
(onwd.com)
under the
Investors/Governance tab.
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Executive Director Remuneration
The annual remuneration of the Executive Director comprises the following two components:
•
Fixed remuneration, comprising an annual base salary and optional benefits, such
as medical insurance, life insurance, retirement benefits, travel expenses, and/or
representation allowances
•
Variable remuneration, comprising an annual performance-based compensation
(depending on the individual’s achievement and corporate objectives as defined on an
annual basis) and share-based remuneration
Fixed Remuneration
The amount of the fixed remuneration depends on the Executive Director’s function and
responsibilities and on typical compensation levels in the industry and the market, especially
in comparison to similar listed companies in the medical technology sector. The fixed
remuneration is paid out as a monthly salary.
Variable Remuneration
Short-term variable remuneration consists of annual performance-based compensation (a
bonus) defined on a yearly basis. The Company currently only considers corporate objectives.
Corporate objectives are centered around strategic clinical and development deliverables,
including key regulatory milestones, operational and commercial readiness, and people and
financing goals. These objectives are measured via a set of specific targets that help track
progress towards their completion.
Long-term variable remuneration consists of periodic grants of stock options that vest
monthly over a four-year vesting period. For more details, refer to Note 2.9 in the Consolidated
Financial Statements. Stock options create an ownership opportunity for executives linked to
the long-term performance of the Company’s share price, aligning their interests with those
of shareholders over the options’ 10-year term. If the share price does not increase from the
date of grant, no value is realized under the scheme.
Stock options are commonly leveraged as the primary equity vehicle among our industry
peer group in Europe and the US. Award sizes are determined at the point of grant in relation
to competitive award values and percentage of ownership delivered within our peer group.
The Company has implemented share-based remuneration as follows:
•
Share-based remuneration takes the form of options for shares
•
These options may not be transferred, pledged, or otherwise encumbered; subject to,
among others, the applicable yearly exercise periods, they may be exercised for up to 10
years after the grant date once vested
•
In cases of termination of an Executive Director’s management agreement (other than
termination by the Executive Director for good cause) who holds share options, or if that
Executive Director is dismissed, such options are subject to reverse vesting (and as such
will be forfeited) over a period of 36 months after their grant
•
This plan is not based on the achievement of specific performance-related Key
Performance Indicators (KPI’s); however, the size of the stock option grant is linked to
the position’s job grade and is contingent on an individual’s performance in the previous
calendar year
•
The plan is based on the premise that stock options contain an inherent performance
criterion for the recipient, who is invested in the successful performance of the Company,
thereby leading to an increase in the share price
There are no specific performance conditions associated with this plan, only a service
condition. This deviates from the requirements of best practice provision 3.1.2 v of the CGC.
In addition, refer to the section “Deviations from the Best Practices Provisions of the Dutch
Corporate Governance Code” of the Governance section for further information.
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The following awards have been granted to the Company’s Executive Director. The main
conditions for exercising these options are described above.
Executive
Director
Financial
Year
Grant
Date
Type of
Security
Options
Vested /
Unvested
Exercise
Price
Expiration
Date
Dave Marver
2021
15/12/2021
Stock
Options
Vested:
143,089
Unvested:
44,911
€ 9.70
15/12/2031
Dave Marver
2023
03/01/2023
Stock
Options
Vested:
191,965
Unvested:
193,035
€ 6.12
03/01/2033
Dave Marver
2024
15/01/2024
Stock
Options
Vested:
0
Unvested:
300,000
€ 2.94
15/01/2034
Dave Marver
2024
05/12/2024
Stock
Options
Vested:
0
Unvested:
330,000
€ 4.77
05/12/2034
Reduction or claw-back of variable remuneration
Pursuant to Dutch law, the variable remuneration of the Executive Director may be reduced,
or the Executive Director may be obliged to pay part of their variable remuneration to the
Company, if certain circumstances apply as follows:
•
Test of reasonableness and fairness: According to Dutch law, the Board may adjust
any variable remuneration payable to an Executive Director to an appropriate level if
payment of the variable remuneration is deemed unacceptable according to the criteria
of reasonableness and fairness
•
Claw-back: Under Dutch law, the Board has the authority to recover from an Executive
Director any variable remuneration paid based on incorrect financial or other data
Contribution to long-term performance & value creation
Remuneration of the Executive Director is consistent with and supports ONWARD’s strategy.
It also supports our ongoing efforts to improve our overall performance, facilitate growth and
sustainable success, and enhance our long-term value and interests.
As a result, our compensation packages are designed to enable us to compete in a global
market, including the challenging US labor market. We aim to attract top talent to execute
our long-term strategy and create sustainable value and growth in the best interest of the
Company and stakeholders. Executive compensation packages are reviewed annually
in
Q4, based on benchmarks provided by AON, an independent third party. No adjustment was
made to the executive compensation package for 2024.
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Executive Director’s Remuneration
A detailed breakdown of the Executive Director’s remuneration is presented in the table below:
EUR’000
Dave Marver CEO
2024
2023
Base salary
425
425
Pension benefits
72
64
Other benefits
47
78
Total fixed compensation
544
567
27%
34%
Annual performance-based compensation
489
200
Exceptional bonus
a
250
–
Share-based remuneration / stock options
757
916
Total variable compensation
1,496
1,116
73%
66%
Total compensation
2,040
1,683
a: In recognition of the CEO’s exceptional contribution to the Company’s successful fundraising efforts, the Board awarded a
discretionary bonus. This award reflects the critical role played in securing the necessary financing to support the Company’s strategic
objectives. The bonus was granted as a one-time payment and does not form part of the regular variable remuneration structure. The
decision was made in line with the Company’s remuneration policy and approved by the Board.
Scenario analyses
A scenario analysis of the possible outcomes of the variable components and the impact
on the annual performance-based compensation was discussed by the Compensation
Committee in 2024 to assess if there are any risks that the performance criteria could lead to
inappropriate outcomes. The Compensation Committee concluded that the range of potential
remuneration outcomes were reasonable considering the current maturity and activities.
The Compensation Committee makes recommendations to the Board, however, the final
decision regarding percentages based on achievements relating to executive compensation
will remain up to the discretion of the Board.
Performance assessment
The Board determines the Executive Director’s variable remuneration (whereby the Executive
Director has not taken part in the discussions and decision-making by the Board) based on an
annual performance assessment and professional judgment. Variable remuneration is linked
to the individual’s performance against a set of financial and non-financial goals that supports
and is consistent with the Company’s strategy and long-term interests.
These goals include, among other topics, performance, business development, strategy,
investor relations, and general management. Risk alignment is considered in target setting
to promote sound and effective risk management. Variable remuneration is paid out according
to how the Company’s business develops, the scope of the Executive Director’s achievement,
and the realization of the Company’s general objectives.
In 2024, the Board approved a set of company goals for our Executive Director, containing
both financial and non-financial KPIs:
Commercial launch
Successful regulatory submission and clearance of ARC-EX, including the development of a
digital solution for data analysis, advancing additional certification requirements, and the
first commercial sale.
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Strengthening balance sheet
Extending cash runway through successful funding initiatives, ensuring financial stability and
operational continuity.
Advancing pipeline
Advance the Empower BP pivotal clinical trial by completing technical documentation, securing
regulatory approval, and enrolling the first study participant, while simultaneously establishing
a strategic roadmap for ARC-BCI technology development.
Corporate
Enhance sustainability and organizational efficiency by conducting an external sustainability
assessment, implementing an improvement roadmap, and strengthening cross-functional
teamwork through structured project governance.
Performance criteria
functional area
Criteria
weight
On-target
performance
Actual
performance
Measured
performance
Commercial Launch
Strengthening balance sheet
Advancing pipeline
Corporate
30%
25%
35%
10%
100%
100%
100%
100%
100%
175%
81%
125%
30%
44%
29%
13%
Total
115%
Corresponding amount
(EUR’000)
489
After the conclusion of the financial year, the Board assesses to what extent the performance
criteria have been met and determines the measured performance percentage and
corresponding amount for the Executive Director. Bonus compensation is at the discretion
of the Compensation Committee and, ultimately, the Board.
Evaluating the Executive Director’s performance against the performance criteria set forth at
the beginning of 2024, the Remuneration Committee recommended, and the Board granted
the CEO a variable compensation payout of 115% of target for 2024.
Non-Executive Director Remuneration
It should be in the Non-Executive Directors’ interest to focus on the Company’s sustainable and
long-term successful development. As such, the Company believes that fixed remuneration for
the Non-Executive Directors is effective. Regardless of their remuneration, all Non-Executive
Directors are entitled to reimbursement for their travel expenses.
The fees are as follows:
EUR’000
Chairman
Member
Board of Directors
45
45
Audit Committee
12
6
Compensation Committee
10
5
Nomination and Corporate Governance Committee
8
4
There were no changes to the fees for 2024.
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Determination of Non-Executive Directors’ Remuneration
Non-Executive Director remuneration amounted to:
In EUR
Name
2024
2023
2022
2021
Jan Øhrstrøm
a
130,765
160,889
208,134
533,577
Gregoire Courtine
b
661,177
512,297
300,725
980,918
Fred Colen
c
73,210
66,149
59,839
96,820
Kristina Dziekan
51,000
51,000
26,538
–
Vivian Riefberg
d
92,910
95,414
25,275
–
Rob Ten Hoedt
e
18,024
–
–
–
Rahma Samow
f
16,068
–
–
–
a: Compensation includes cost of stock options EUR 26,421 (2023: EUR 49,314) and the reimbursement of travel expenses. Jan resigned
from the board effective 6 December 2024.
b: Compensation includes the remuneration paid in relation to his role as Science Advisor EUR 347,430 (2023: EUR 143,837), as well as
the vesting of stock options under the long-term incentive plan EUR 313,747 (2023: EUR 368,460).
c: Compensation includes the reimbursement of travel expenses. Fred resigned from the board effective 6 December 2024.
d: Compensation includes cost of stock options EUR 12,157 (2023: EUR 23,252) and the reimbursement of travel expenses.
e: Interim Director and Chairman (expected to be nominated for appointment as Director at our 2025 Annual General Meeting).
f: Interim Director (expected to be nominated for appointment as Director at our 2025 Annual General Meeting). Compensation includes
the reimbursement of travel expenses.
Liability Insurance (D&O) and Indemnity
The Company maintains D&O insurance covering the Executive Directors and all Non-
Executive Directors.
Pursuant to Article 23 of the Articles of Association, the Directors are indemnified, held
harmless, and reimbursed by the Company for all expenses, financial effects of judgments,
fines, and amounts paid in settlement actually and reasonably incurred by them in connection
with an action, suit, proceeding, or investigation against them in their capacity as Executive
or Non-Executive Director.
Historical Development
The table below provides an overview of the annual compensation of the Executive Director
and full-time equivalent (FTE) employees for the financial years 2024 and 2023. The amounts
mentioned in the table are gross amounts before the impact of social-security or income-
tax deductions.
Remuneration Report
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12
13
14
15
16
17
18
19
20
EUR’000
2024
2023
2022
2021
2020
Net loss of the period
35,725
36,181
32,772
34,314
20,014
Executive Director
2,040
1,683
1,430
3,331
1,008
a
Annual change
21%
18%
-57%
230%
a
Average FTEs
99.36
104.5
86.6
76,7
55
Annual change
-5%
21%
13%
-11%
Remuneration of FTEs
23,315
21,498
18,282
15,519
8,534
Annual change
6%
23%
18%
82%
Average remuneration per FTE
235
206
212
202
155
Annual change
12%
-3%
4%
104%
Pay Ratio
9
8
7
16
13
b
Annual change
5%
21%
-59%
62%
Non-Executive Directors
948
886
621
1,616
959
Annual change
7%
43%
-62%
69%
a: The CEO was appointed on 1 July 2020.
b: For a meaningful comparison, as the CEO was appointed on 1 July 2020, the 2020 pay ratio was calculated by extrapolating the CEO
remuneration in 2020 for 12 months (EUR 2,016 thousand).
Pay Ratio
Based on best practice provision 3.4.1 of the DCGC, the Company shall disclose the pay ratio
between the remuneration of the Executive Directors and that of a representative reference
group of Company employees and, if applicable, comment on any important variation in pay
ratios compared to the previous financial year.
The reference group includes the Company’s entire workforce expressed in the form of full-
time equivalent (FTE) employees. The FTE of each employee is calculated based on the
number of hours an employee works in each period, compared to the maximum number of
hours/periods allowed, as per the local law prevalent in the country of operation. As of 31
December 2024, there were 102.55 FTEs (2023: 99.2).
Pay ratios are calculated based on the average remuneration received by employees of the
reference group. The remuneration taken into account is the amount received during the year
concerned. If all or part of the remuneration was paid in a foreign currency, the exchange rate
used was the average exchange rate of the relevant currency into euros for the year ending
31 December 2024.
The Company used both fixed and variable remuneration components in determining the
pay ratio for a given year. The pay ratio disclosed by the Company reflects the previous
financial year. The average Executive Director-to-employee pay ratio stands at 9 in 2024,
compared with 8 in 2023. The variance from 2023 to 2024 is due to an increase in the cost per
FTE, and the exceptional bonus approved by the Board for the CEO following the successful
fundraising in October 2024. The variance from 2022 to 2023 is driven by the cost of stock
options awarded on 3 January 2023, this is a non-cash component of the CEO’s variable
compensation. The variance from 2020 to 2021 and 2021 to 2022 is due to the successful IPO
in October 2021 that positively impacted the performance-based remuneration and triggered
the accelerated vesting of the Employee Investment Plan.
Remuneration Report
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Financials
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Consolidated Statement
of Profit & Loss
For the Year Ended 31 December
All amounts in EUR ‘000
Notes
2024
2023
Revenue
2.1
Grants & Other Income
2.1
Cost of goods sold
(22 )
Gross Profit
Research & Development Expenses
2.2,2.8
(12,442 )
(13,841 )
Clinical & Regulatory Expenses
2.3,2.8
(4,754 )
(4,911 )
Marketing & Market Access Expenses
2.4,2.8
(3,350 )
(2,943 )
Patent fees & Related Expenses
2.5,2.8
(1,441 )
(1,509 )
Quality Assurance Expenses
2.6,2.8
(2,016 )
(1,464 )
General & Administrative Expenses
2.7,2.8
(12,576 )
(11,327 )
Total Operating Expenses
(36,579 )
(35,995 )
Operating Loss for the Period
(34,862 )
(35,463 )
Financial Income
4.5
Financial Expense
4.5
(2,068 )
(1,583 )
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Consolidated Financial Statements
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2
3
4
5
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8
9
10
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Net Finance Expense
(903 )
(611 )
Loss for the Period Before Taxes
(35,765 )
(36,074 )
Income Tax
2.10
(107 )
Net Loss for the Period
(35,725 )
(36,181 )
Attributable to:
Equity holders of the parent
(35,725 )
(36,181 )
Non-controlling interests
(35,725 )
(36,181 )
Earnings Per Share (EUR):
Basic earnings per share:
4.1
(0.80 )
(1.20 )
Diluted earnings per share:
4.1
(0.80 )
(1.20 )
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2
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8
9
10
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Consolidated Statement
of Comprehensive Income
For the Year Ended 31 December
All amounts in EUR ‘000
Notes
2024
2023
Net Loss for the Period
(35,725 )
(36,181 )
Remeasurement of post-employment benefits
5.0, 2.10
(1,565 )
(928 )
Other comprehensive income that will not be
reclassified to profit or loss in subsequent pe-
riods (net of tax)
(1,565 )
(928 )
Currency translation differences
(155 )
Other comprehensive income that will be
reclassified to profit or loss in subsequent
periods (net of tax)
(155 )
Total Comprehensive Result for the Year, Net of
(36,856 )
(37,264 )
Tax
Attributable to:
Equity holders of the parent
(36,856 )
(37,264 )
Non-controlling interests
(36,856 )
(37,264 )
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9
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Consolidated Statement
of Financial Position
For the Year Ended 31 December
All amounts in EUR ‘000
Notes
2024
2023
Assets
Non-Current Assets
Intangible assets
3.0
Property, plant & equipment
3.1
Right of use assets
3.2
Deferred tax assets
2.10
Current Assets
Inventories
3.3
Indirect tax receivables
3.4
Receivable from related parties
Other current assets
3.5
Cash and cash equivalents
3.6
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Consolidated Financial Statements
1
2
3
4
5
6
7
8
9
10
Equity & Liabilities
Equity & Reserves
Issued capital
4.0
Share premium
4.0
Other reserves*
4.0
Retained earnings
(181,845 )
(145,428 )
Total Equity Attributable to Shareholders
Non-Current Liabilities
Interest-bearing loans
4.2
Deferred tax liability
2.10
Lease liability
3.2
Post-employment benefits
5.0
Current Liabilities
3.2
3.7
4.2
Income tax liabilities
Lease liability
Trade payables
Other financial liabilities
Other payables
3.8
*Other reserves include the foreign currency translation reserve that qualifies as a legal reserve under Dutch Law.
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2
3
4
5
6
7
8
9
10
Consolidated Statement
of Changes in Equity
All amounts in EUR ‘000
Notes
Issued Capital
Share Premium
Other Reserves*
Retained Earnings
Total Equity
As at 1 January 2023
(108,319 )
Loss for the year 2023
(36,181 )
(36,181 )
Other comprehensive income
(155 )
(928 )
(1,083 )
Total comprehensive result
(155 )
(37,109 )
(37,264 )
Share-based payments: LTIP
2.9
As at 31 December 2023
4.0
(145,428 )
As at 1 January 2024
Loss for the year 2024
(35,725 )
(35,725 )
Other comprehensive income
(1,565 )
(1,131 )
Total comprehensive result
(37,290 )
(36,856 )
Issuance of share capital
4.0
Transaction costs related to issue of share capital
4.0
(5,742 )
(5,742 )
Share-based payments: LTIP
2.9, 4.0
As at 31 December 2024
4.0
(181,845 )
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* Other reserves include the foreign currency translation reserve that qualifies as a legal reserve under Dutch Law.
1
2
3
4
5
6
7
8
9
10
Consolidated Statement
of Cash Flows
For the Year Ended 31 December
All amounts in EUR ‘000
Notes
2024
2023
Cash Flows from Operating Activities
Loss for the Period Before Taxes
(35,765 )
(36,074 )
Adjusted for:
•
Depreciation and impairment of property, plant and
3.1, 3.2
equipment and right-of-use assets
•
Share-based payment transaction expense
2.9
•
Post-employment benefits
•
Net finance costs
•
Other non-cash items
Changes in working capital:
Increase (-) Decrease (+) in Trade and other receivables
(1,857 )
Increase (+) Decrease (-) in Trade and other payables
(1,654 )
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2
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8
9
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Interests received
Interests paid
(1,742 )
Income tax paid
(167 )
(106 )
Bank charges paid
4.5
(20 )
(17 )
Net cash(used)/generated
from operating activities
(31,763 )
(32,270 )
Cash flows from investing activities
Investments in fixed assets
3.1
(150 )
(422 )
Investments in intangible fixed assets
3.0
Investment in fixed term deposits
3.5
Withdrawal of term deposits
Net cash generated/(used) from investing activities
(150 )
Cash flows from financing activities
Proceeds from interest-bearing loans
4.2
Repayment of principal portion of interest-bearing loans
4.2
(15,255 )
Payment of principal portion of lease liabilities
3.2
(560 )
(479 )
Proceeds from issuance of shares
4.0
Transaction costs on issuance of shares
4.0
(5,741 )
Net cash generated/(used) from financing activities
Movement in cash and cash equivalents
Cash and cash equivalents at 1 January
Effect of exchange rates on cash and cash equivalents
(372 )
(113 )
Changes in cash and cash equivalents during the period
(11,879 )
Cash and cash equivalents at 31 December
3.6
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Consolidated Financial Statements
Notes to the
Consolidated
Financial
Statements
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Notes to the Consolidated
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General Information & Basis of Preparation
1.0 Corporate Information
General
vennootschap). The registered office is located at Schimmelt 2, Eindhoven, the Netherlands
ONWARD is registered in the Commercial Register of the Chamber of Commerce under
number 64598748.
therapies to enable functional recovery for people with Spinal Cord Injury (“SCI”). The
Company’s technology platforms are based on ONWARD ARC Therapy (“ARC Therapy”),
targeted, programmed electrical stimulation of the spinal cord designed to restore movement,
the
Board of Directors and were authorized for issue on 2
8
April 2025. The financial
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Notes to the Consolidated Financial Statements
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Medical Annual Report 2024
237
The consolidated financial statements of the Group include:
•
ONWARD Medical SA, Switzerland (holding 100%)
•
The consolidated financial statements of the Group have been prepared in accordance with
International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted
The consolidated financial statements have been prepared on a historical cost basis,
unless otherwise stated. Income and expenses are accounted for on an accrual basis.
The consolidated financial statements provide comparative information in respect of the
previous period.
The consolidated financial statements are presented in euros and all values are rounded to
the nearest thousand (EUR 000), except when otherwise indicated, and for the number of
The consolidated financial statements comprise the financial statements of the Group and
its subsidiaries as at 31 December 2024. Control is achieved when the Group is exposed,
or has rights, to variable returns from its involvement with the investee and has the ability
to affect those returns through its power over the investee. Specifically, the Group controls
an investee if and only if the Group has:
•
Power over the investee (i.e., existing rights that give it the current ability to direct the
relevant activities of the investee)
•
Exposure, or rights, to variable returns from its involvement with the investee, and
•
The ability to use its power over the investee to affect its returns
The Group reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control. Consolidation
of a subsidiary begins when the Group obtains control over the subsidiary and ceases when
the Group loses control of the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to
the equity holders of the parent of the Group. When necessary, adjustments are made to
the financial statements of subsidiaries to bring their accounting policies into line with the
Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses,
and cash flows relating to transactions between members of the Group are eliminated in
In preparing the financial statements for the year ended 31 December 2024, Management
assessed the Company’s ability to continue as a going concern, evaluating projected cash
flows over the next 12 months. This forecast includes significant expenditures related to the
Empower BP pivotal trial, ongoing research and development initiatives, the FDA submission
for home-use clearance of the ARC
EX
System, and CE mark certification for the ARC
EX
System in Europe. As of 31 December 2024, the Company held €60 million in cash and cash
equivalents, which, based on current forecasts, is expected to be sufficient to fund operations
and meet capital requirements for at least 12 months from the date of this Annual Report.
While the Company believes it has the necessary resources to fund operations for the
foreseeable future, the heightened uncertainty surrounding revenue projections and financing
obligations, as explained below, indicate the existence of material uncertainties, which may
also cast doubt about the Company’s ability to continue as a going concern.
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Notes to the Consolidated Financial Statements
The Company recently launched ARC
EX
, a novel product with no directly comparable market
data to substantiate sales projections. While Management has developed revenue forecasts
based on market research and initial customer interest, the absence of historical sales data
introduces a degree of uncertainty regarding revenue generation. The Company’s sales
projections include both clinic and home-use applications, but only the clinic setting received
FDA clearance in December 2024. The Company plans to submit a 510(k) application for
home-use authorization, with expectations for FDA clearance later in 2025. Given these
factors, actual sales may deviate from projections, affecting the Company’s cash flows and
liquidity position.
The uncertainty in cash flow forecasts is further compounded by the Company’s financing
obligations. While the Company has remained in compliance with its loan covenants,
future financial performance may impact continued compliance. While the Company has
demonstrated strong cost management capabilities, further reductions in spending to
maintain compliance may require operational trade-offs, including potential project delays
and a slower pace of clinical development.
To address potential risks, the Company is proactively engaging with investors to explore
additional fundraising options. Additionally, the Company maintains a strong working
relationship with its lender, which has demonstrated flexibility in modifying loan terms in
response to changing conditions. Management remains confident in its ability to successfully
navigate these challenges through a combination of disciplined cost management, strategic
financing, and ongoing engagement with stakeholders. The Board of Directors believes that
a combination of one or more of the foregoing measures—including cost management,
additional equity and/or debt financing, and renegotiation or refinancing of existing debt
facilities—will support the Company’s liquidity and funding structure. Efforts to secure
additional financing from existing and new investors are ongoing.
Based on these considerations, and despite a cumulative loss of €181.8 million as of 31
December 2024, they deem the preparation of the Consolidated Financial Statements on a
a) Current Versus Non-Current Classification
The Group presents assets and liabilities in the statement of financial position based on
current/non-current classification. An asset is current when it is:
•
Expected to be realized or intended to be sold or consumed in normal operating cycle
•
Held primarily for the purpose of trading
•
Expected to be realized within twelve months after the reporting period, or
•
Cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
•
It is expected to be settled in normal operating cycle
•
It is held primarily for the purpose of trading
•
It is due to be settled within twelve months after the reporting period, or
•
There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The Group’s consolidated financial statements are presented in euros, which is also the
parent company’s functional currency. For each entity, the Group determines the functional
currency and items included in the financial statements of each entity are measured using
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Notes to the Consolidated Financial Statements
Transactions & Balances
Transactions in foreign currencies are initially recorded by the Group entities at their respective
functional currency spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional
currency spot rate of exchange at the reporting date.
Differences arising on settlement or translation of monetary items are recognized in profit or loss
with the exception of monetary items that are designated as part of the hedge of the Group’s net
investment of a foreign operation. These are recognized in other comprehensive income until the
net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss.
Tax charges and credits attributable to exchange differences on those monetary items are also
recorded in other comprehensive income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates as at the dates of the initial transactions. Non-monetary
items measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value is determined. The gain or loss arising on translation of non-monetary
items measured at fair value is treated in line with the recognition of gain or loss on change in fair
value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in
other comprehensive income or profit or loss are also recognized in other comprehensive income
or profit or loss, respectively).
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to
the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and
liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.
Group Companies
On consolidation, the assets and liabilities of foreign operations are translated into euros
at the rate of exchange prevailing at the reporting date and their income statements are
translated at the monthly average exchange rates.
The exchange differences arising on translation for consolidation are recognized in
other comprehensive income. On disposal of a foreign operation, the component of other
comprehensive income relating to that particular foreign operation is recognized in profit
The preparation of the Group’s consolidated financial statements requires Management to
make judgments, estimates, and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the
reporting period. However, uncertainty about these assumptions and estimates could result
in outcomes that require a material adjustment to the carrying amount of the asset or liability
affected in future periods.
The Group based its assumptions and estimates on parameters available when the
consolidated financial statements were prepared. Existing circumstances and assumptions
about future developments, however, may change due to market changes or circumstances
arising beyond the control of the Group. Such changes are reflected in the assumptions when
they occur.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period in which the estimate is revised if the
revision affects only that period, or in the period of revision and the future periods if the
revision affects both current and future periods.
The key assumptions concerning the future and other key sources of estimation uncertainty
at the reporting date, that are most relevant to the carrying amounts of assets and liabilities
within the next financial year, are included in each of the respective notes as referenced below:
Research & Development | Note 2.2 |
Share-Based Payments | Note 2.9 |
Impairment of Intangible Assets | Note 3.0 |
Post-Employment Benefits | Note 5.0 |
Taxes | Note 2.10 |
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Medical Annual Report 2024
243
1.7.1 New and Amended Standards and Interpretations
Several amendments applied for the first time in 2024:
•
Classification of Liabilities as Current or Non-current - Amendments to IAS 1, effective 1
January 2024
•
Lease Liability in a Sale and Leaseback – Amendments to IFRS 16, effective 1 January 2024
•
Disclosures: Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7, effective
1 January 2024
None of these had a material impact on the consolidated financial statements of the Group
in 2024.
1.7.2 Standards Issued but Not Yet Effective
The new and amended standards and interpretations that are issued, but not yet effective,
up to the date of issuance of the Group’s financial statements are listed below. The Group
has not early adopted any standards, interpretations or amendments that have been issued
but are not yet effective. The Group intends to adopt these new and amended standards and
interpretations, if applicable, when they become effective.
•
Lack of exchangeability – Amendments to IAS 21, effective 1 January 2025
•
Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and
IFRS 7, effective 1 January 2026
•
IFRS 18 – Presentation and Disclosure in Financial Statements, effective date 1
January 2027
•
IFRS 19 - Subsidiaries without Public Accountability: Disclosures, effective date 1
January 2027
•
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture -
Amendments to IFRS 10 and IAS 28. In December 2015, the IASB postponed the effective
date of this amendment indefinitely pending the outcome of its research project on the
equity method of accounting.
With the exception of IFRS 18 which will require further assessment, based on the nature
and impact of the remaining new standards, amendments and/or interpretations, the Group
2. Results of The Year
Based on the organizational structure, as well as the nature of financial information available
and reviewed by the Company’s chief operating decision-makers to assess performance
and make decisions about resource allocations, the Company has concluded that its total
operations represent one reportable segment and that the consolidated disclosures address
the requirements.
2024 | 2023 | |
Non-current assets | ||
Netherlands | 105 | 118 |
Switzerland | 2,077 | 2,273 |
United States of America | 10,336 | 9,815 |
Non-current assets | 12,518 | 12,206 |
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Medical Annual Report 2024
245
The Company has started commercialization of its ARC
EX
system in the
US, targeting customers, primarily comprised of clinics. Revenue recognition aligns with the
satisfaction of performance obligations under contractual agreements, with contracts having
a single, short-term performance obligation. Performance obligation is deemed fulfilled at
a specific point in time when the customer gains control of the ARC
EX
system, upon product
delivery, per the terms outlined in contractual agreements. The ARC
EX
full system, delivered
EX
system for
general repairs of defects that existed at the time of sale. The assurance-type warranties
subsidy will be received, and all attached conditions will be complied with. When the
subsidy relates to an expense item, it is recognized as income on a systematic basis over
the periods that the related costs, for which it is intended to compensate, are expensed.
Any outstanding receivables related to these subsidies are recorded as grants receivable.
The government subsidies are presented on a gross basis except for the WBSO (“Wet
Bevordering Speur & Ontwikkeling”) that is presented on a net basis with the expensed
2024 | 2023 | |
Revenue from sale of devices | 77 | – |
Government subsidies (EU) | 1,510 | 464 |
Other income | 152 | 68 |
Total revenues and other income | 1,739 | 532 |
All the revenue from the sale of devices occurred in the United States of America.
Government subsidies have been received for the research and development of several
development projects. There are no unfulfilled conditions or contingencies attached to
these subsidies.
Recognized | Grant | ||||
Recognized | Recognized | as Grant | received in | ||
Grants | Total | as Grant | as Grant | Income | advance as |
Grant* | Income 2024 | Income 2023 | cumulative | per 31-12- | |
before 2023 | 2024 | ||||
BESTABLE | 100 | (16) | – | 100 | – |
SWISS LOCAL (one-offs)** | – | 22 | – | 150 | – |
PREP2GO | 362 | – | 15 | 347 | – |
DARPA | 3,004 | – | 419 | 2,585 | – |
ZonMW | 250 | – | 83 | 166 | – |
EISMEA – ReverseParalysis*** | 292 | 232 | (237) | 273 | – |
SERI-Reverse Paralysis | 997 | 970 | – | – | – |
EISMEA - NEMO BMI*** | 144 | – | (85) | 85 | (108) |
Eurostars Impulse | 500 | 150 | 160 | 14 | – |
Rewire | 360 | 50 | 56 | – | (112) |
SH-ARC | 500 | – | 53 | – | (210) |
MJFF SPARKL | 91 | 91 | – | – | – |
PD-HemoN project | 224 | 11 | – | – | (11) |
Other | – | – | – | (12) | – |
Total | 1,510 | 464 | 3,708 | (441) |
* Please refer to the terms and conditions of the subsidies included below.
** Except for the Swiss local grant received by ONWARD Medical SA (In Switzerland), all other grants were received by ONWARD Medical
N.V. (In the Netherlands).
*** Refer to EISMEA pending amendment note included below
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Terms & Conditions
BESTABLE
This Eurobench funding agreement with PKF ATTEST INNCOME S.L. and the Spanish National
Research Council CSIC for a total amount of EUR 100k started in September 2019 and ended
in December 2021. An amount equal to 85% of the grant is paid during the grant period in
tranches in 2019, 2020 and 2021. The remaining 15% of the total grant amount is payable after
evaluation of the final report. In this project, ONWARD is collaborating with the Technical
University of Delft and the University Rehabilitation Institute to develop a benchmarking
system for assessment of balance performance. The final 15% was not received by the end
of 2024 and the amount previously recognized was reversed.
PREP2GO
This Eurostars funding agreement was with the Netherlands enterprise agency RVO for a
total amount of EUR 348k started in April 2020 and ended in September 2022. An amount
equal to 90% of the grant is paid during the grant period in tranches in 2020, 2021, and 2022.
The remaining 10% of the grant was paid after evaluation of the final report. In this project,
ONWARD collaborated with Zurich Medtech A.G., IT’IS Foundation, Universitair Medisch
Centrum Utrecht and EPFL to automatize the simulation framework that was developed in
the RESTORE project, to facilitate the pre-operative planning for ARC Therapy for clinicians.
DARPA
The DARPA grant was a five-year project that started in October 2020. The award was divided
into 3 phases. The funding agreement for phase 1 and phase 2 was approved for a total
amount of EUR 3.172M (or USD 3.402M). ONWARD collaborated with a large consortium of
academic partners, companies, and consultants to develop a new clinical intervention to
modulate blood pressure and spinal cord perfusion and oxygenation in the hours following
SCI. ONWARD completed its contributions to the DARPA project in 2023 within the final
cumulative amount being recognized amounting to EUR 3.004M (or USD 3.307M). Phase3
of the DARPA project was cancelled late 2023.
ZonMW
This was a Dutch funding agreement with the Netherlands Organisation for Health Research
and Development for a total amount of EUR 250k that started in January 2021 and ended
in January 2024. An amount equal to 80% of the grant was paid during the grant period in
three equal tranches in 2021, 2022, and 2023. The remaining 20% of the grant was paid after
submission of the final report. In this project, ONWARD collaborated with the University of
Bordeaux, CHUV, and EPFL to develop a research interface for ARC
IM
and evaluate its use to
alleviate locomotor deficits in Parkinson’s disease.
Reverse Paralysis
The European Innovation Council and SMEs Executive Agency (EISMEA) awarded a
EUR
3.6 million grant to support the development of innovative Brain-Spine Interface technology
aimed at restoring mobility and upper limb function. ONWARD, along with research partners
EPFL, CEA-Clinatec, and Sint Maartenskliniek, is participating in this project, with ONWARD
allocated €1.3 million.
The project commenced on 1 May 2022, and is scheduled to conclude on 30 April 2025.
ONWARD has received 75% of its grant funding as pre-financing, with an additional 15%
payable 90 days after the first periodic reporting, and the final payment due 90 days after
the second periodic reporting.
Due to changes in ONWARD’s research footprint, a portion of the work originally planned in
the Netherlands has shifted to Switzerland, affecting the eligibility of certain costs under
the EISMEA framework. To address this, ONWARD successfully negotiated an amendment
with EISMEA to transfer activities and secured replacement funding from the Swiss State
Secretariat for Education, Research, and Innovation (SERI) to cover activities performed
in Switzerland.
EISMEA - NEMO BMI
The EISMEA also awarded a €3.8 million grant for the development of Motor Brain-Machine
Interfaces (BMIs). These interfaces translate brain neural signals into commands for external
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effectors, with the NEMO BMI project focusing on assistance-free, portable neuroprosthetics,
including a wireless neuronal activity recorder, a real-time neuronal decoder, and a spinal
cord stimulator.
The project, involving ONWARD and partners EPFL, CEA, and IICT, began on 1 October 2022,
and is expected to conclude on 30 September 2025. ONWARD’s share of the grant is EUR
1 million, with 75% received as pre-financing, 15% payable 90 days after the first periodic
reporting, and the final installment due 90 days after the second periodic reporting.
Following the relocation of certain R&D activities to Switzerland, ONWARD has submitted an
amendment request to EISMEA to reflect these changes in project execution. This amendment
remains under review.
EISMEA pending and approved amendment
ONWARD was awarded two grants from EISMEA—Reverse Paralysis and NEMO BMI—to
advance brain-computer interface technology for individuals with spinal cord injury. At the
time of application, ONWARD’s R&D activities were primarily conducted in the Netherlands.
However, the Company has since relocated certain research functions to Switzerland to be
closer to its key clinical partner, EPFL.
•
As Switzerland is not an EU member and is no longer associated with the Horizon Europe
framework, ONWARD Medical SA (eFor Reverse Paralysis, ONWARD has secured
replacement funding from SERI, covering the Swiss-based research efforts.
•
For NEMO BMI, the amendment submitted to EISMEA remains under review, and ONWARD
is engaging with SERI to explore potential Swiss funding once the amendment is approved.
ONWARD continues to collaborate with both EISMEA and SERI to ensure funding continuity
and compliance while advancing its groundbreaking research initiatives.
Eurostars Impulse
The Eurostars Independent Evaluation Panel has provided a subsidy for a total amount of EUR
500k that started 1 December 2022 and ends 30 November 2025, a duration of 36 months.
The Impulse project focuses on closed-loop control of blood pressure for people with SCI.
ReWIRE
ONWARD has joined other global neuroscience and rehabilitation stakeholders to create
ReWIRE, a groundbreaking initiative aimed at equipping next-generation scientists with
the skills to develop therapeutic solutions for patients with paralysis caused by SCI. ReWIRE
will build on recent technological breakthroughs by leveraging multiple PhD projects that
will drive effective combinatorial treatments for SCI. The project is funded by the European
Research Executive Agency (REA) as part of the Marie Skłodowska-Curie Actions (MSCA)
Doctoral Networks for an amount of EUR 360k and started in 1 January 2023 and ends 31
December 2026.
SH-ARC
The Eurostars Independent Evaluation Panel has provided a subsidy for a total amount of EUR
500k that started 1 April 2023 and ends 31 March 2026, a duration of 36 months. SH-ARC
works to integrate NUSHU sensorised shoes in a clinical-grade neuroprosthesis that will
utilize spinal cord stimulation to alleviate parkinsonian gait deficits.
PD-HemON
ONWARD Medical and its research partner, .NeuroRestore, have received approximately
EUR 1.5M from the US Department of Defense (DoD), Parkinson’s Research Program (PRP)
Investigator-Initiated Research Award (IIRA). This funding will support a clinical feasibility
study with 5 participants to explore the ability of the ONWARD ARC
IM
System to address
blood pressure instability in Parkinson’s disease. The project started on 30 September 2024
and will continue until 29 September 2027.
MJFF - SPARKL
ONWARD Medical and it’s partner NeuroRestore have received approximately EUR 900k
from the Michael J. Fox Foundation for Parkinson’s Research. This grant will support a
clinical feasibility study with 6 participants to explore the ability of the ONWARD ARC
IM
System to address mobility challenges in Parkinson’s disease. The study commenced on
01 January 2023, with the first participant implanted in late 2024, and the project will end
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Accounting Policy:
Research costs are expensed as incurred. Development expenditure on
an individual project are recognized as an intangible asset when the Group can demonstrate:
•
The technical feasibility of completing the intangible asset so that it will be available for
use or sale
•
Its intention to complete and its ability to use or sell the asset
•
How the asset will generate future economic benefits
•
The availability of resources to complete the asset
•
The ability to measure reliably the expenditure during development
•
The Group has evaluated the nature of the project research and
development costs and concluded that all expenses incurred were related to research and pre-
development of future products. Therefore, all costs have been expensed and are recognized
2024 | 2023 | |
Staff expenses | 9,260 | 9,200 |
Operating expenses | 3,182 | 4,641 |
12,442 | 13,841 |
The Company’s research and development expenses consist primarily of the cost of external
suppliers and third-party contractors involved in the design and development of the ARC
EX
and ARC
IM
systems, as well as employee-related expenses including salaries and benefits.
The decrease in 2024 is driven by advancements made on our ARC
EX
and ARC
IM
platforms
and preparing for FDA submission of ARC
EX
in 2024.
2.3 Clinical & Regulatory Expenses
2024 | 2023 | |
Staff expenses | 3,011 | 3,472 |
Operating expenses | 1,743 | 1,439 |
4,754 | 4,911 |
The Company’s clinical and regulatory expenses consist of the employee-related expenses
including salaries and benefits for employees working on clinical trials.
Clinical expenses in
2024 primarily relate to the preparation of ARC
EX
for FDA submission and related consulting
2.4 Marketing & Market Access Expenses
2024 | 2023 | |
Staff expenses | 2,101 | 1,830 |
Operating expenses | 1,249 | 1,113 |
3,350 | 2,943 |
The Company’s marketing and market access expenses include the ARC
EX
launch preparation
and activities towards awareness and engagement around ONWARD ARC Therapies in the
SCI community.
2024 | 2023 | |
Staff expenses | - | 373 |
Operating expenses | 1,441 | 1,136 |
1,441 | 1,509 |
The Company’s patent fees and related expenses include the cost for patent prosecution
applications, consulting fees for new innovative ideas, as well as annuity maintenance fees
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and license fees for existing ideas, Employee expenses, including salary and benefits in this
2.6 Quality Assurance Expenses
2024 | 2023 | |
Staff expenses | 1,693 | 1,204 |
Operating expenses | 323 | 260 |
2,016 | 1,464 |
Quality assurance expenses consist primarily of quality control and quality assurance
expenses. These expenses include employee expenses, including salary benefits for personnel,
consulting, testing, and travel expenses.
2024 | 2023 | |
Staff expenses | 7,249 | 5,419 |
Depreciation and amortization | 898 | 726 |
Other operating expenses | 4,429 | 5,182 |
12,576 | 11,327 |
The Company’s general and administrative expenses consist of employee expenses, including
salary and benefits for personnel and contractors in executive, finance, accounting, tax, and
Accounting Policy:
Short-Term Employee Benefits
Short-term employee benefits include salaries and social security contributions, social
taxes, paid vacation, and bonuses. They are recognized as expenses for the period in which
employees perform the corresponding services. Outstanding payments at the end of the
Post-Employment Benefits
Group companies operate various pension schemes. The schemes are funded through
payments to insurance companies or trustee-administered funds, determined by periodic
actuarial calculations. The Group has both defined benefit and defined contribution plans.
A defined contribution plan is a pension plan under which the Group pays fixed contributions
into a separate entity. The Group has no legal or constructive obligations to pay further
contributions if the fund does not hold sufficient assets to pay all benefits to employees
relating to employee services in the current and prior periods. For defined contribution plans,
the Group pays contributions to publicly or privately administered pension insurance plans on
a mandatory, contractual, or voluntary basis. The Group has no further payment obligations
once the contributions have been paid. The contributions are recognized as personnel
expenses in the consolidated income statement when due.
Contributions payable or prepaid contributions as at year-end are recognized under accruals
The Group operates a defined benefit pension plan in Switzerland, which requires contributions
to be made to a separately administered fund. The cost of providing benefits under the defined
benefit plan is determined using the projected unit credit method.
Remeasurements, comprising of actuarial gains and losses are recognized in the statement
of financial position with a corresponding debit or credit to retained earnings through OCI
in the period in which they occur. Remeasurements are not reclassified to profit or loss in
subsequent periods.
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•
The date of the plan amendment or curtailment, and
•
Net interest is calculated by applying the discount rate to the net defined benefit liability or
asset. The Group recognizes the changes in the net defined benefit obligation due to service
costs comprising current service costs, past-service costs, gains and losses on curtailments
and non-routine settlements as part of operating expenses, and the net interest expense or
The cost of the defined benefit pension plan and the present value
of the pension obligation are determined using actuarial valuations. An actuarial valuation
involves making various assumptions that may differ from actual developments in the future.
These include the determination of the discount rate, future salary increases, mortality rates,
and future pension increases. Due to the complexities involved in the valuation and its long-
term nature, a defined benefit obligation is sensitive to changes in these assumptions. All
2024 | 2023 | |
Wages and salaries | 17,330 | 15,356 |
Social security costs | 1,507 | 1,512 |
Pension costs – defined benefit plan | 771 | 720 |
Pension costs – other | 64 | 69 |
Share-based benefit expenses | 2,720 | 2,564 |
Other labor costs | 923 | 1,277 |
23,315 | 21,498 |
This shift in expertise aligns with the Company’s strategic goals. As at 31 December 2024, the
Group employed 102.6 full-time equivalents, including white-collar employees and contractors.
The following table presents a breakdown of the Company’s full-time equivalents as at 31
December 2024 and 2023:
2024 | 2023 | |
Research & Development | 40.0 | 50.0 |
Clinical & Regulatory | 14.0 | 14.6 |
Marketing & Market Access | 14.0 | 5.0 |
Patent Fees & related | – | 1.0 |
Quality Assurance | 8.6 | 8.8 |
General & Administrative | 26.0 | 19.8 |
102.6 | 99.2 |
As at 31 December 2024, the Company had 12.4 full-time equivalents located in the
Netherlands (2023: 11.9), 76.15 full-time equivalents located in Switzerland (2023: 75.3), and
Accounting Policy:
Employees (including senior executives) of the Group receive remuneration
in the form of share-based payments, whereby employees render services as consideration
for equity instruments (equity-settled transactions).
Equity-Settled Transactions
The cost of equity-settled transactions is determined by the fair value at the date when the
grant is made using an appropriate valuation model.
That cost is recognized, together with a corresponding increase in other reserves in equity,
over the period in which the performance and/or service conditions are fulfilled in employee
benefits expense. The cumulative expense recognized for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which the vesting period has expired
and the Group’s best estimate of the number of equity instruments that will ultimately vest.
The statement of profit or loss expense or credit for a period represents the movement in
cumulative expense recognized as at the beginning and end of that period and is recognized
in operating expenses.
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No expense is recognized for awards that do not ultimately vest, except for equity-settled
transactions for which vesting is conditional upon a market or non-vesting condition. These
are treated as vesting irrespective of whether or not the market or non-vesting condition is
satisfied, provided that all other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognized is
the expense had the terms not been modified, if the original terms of the award are met. An
additional expense is recognized for any modification that increases the total fair value of the
share-based payment transaction or is otherwise beneficial to the employee as measured
The Group measures the cost of equity-settled transactions with
employees by reference to the fair value of the equity instruments at the date at which they are
granted. Estimating fair value for share-based payment transactions requires determination
of the most appropriate valuation model, which is dependent on the terms and conditions
Long-Term Incentive Plan (LTIP)
The LTIP plan is aimed at aligning the employee’s interest with the interests of the Shareholders
and to allow the employee to participate in the long-term growth of the Company. The LTIP is
an omnibus plan with the flexibility to issue different types of equity incentives.
ONWARD awarded options over its Ordinary Shares to participants (referred to as the “Award”
or “Grant’) on the Grant Dates as specified in the table below. Each option represents the
right to receive one Ordinary Share of ONWARD against payment of the exercise price. The
options expire 10 years after the Grant Date and become exercisable on vesting. The Grant is
subject to continued provision of services to the Company under a graded vesting schedule,
with 25% of the Grant vesting on the first anniversary of the Grant Date, and the remaining
75% of the Grant vesting in equal, monthly tranches over the three years following the first
anniversary of the Grant Date (i.e., 2.083% per month). The number of options that will vest
and become unconditional is only subject to a continued service condition. All options granted
have the same conditions. Options do not settle automatically and are exercised at the option
of the participant.
Number | ||||||
Financial | Grant | Type of | of Options | Exercise | Expiration | Fair |
Year | Date | Security | Granted | Price | Date | Value |
2021 | 15/12/2021 | Stock | 612,000 | EUR 9.70 | 15/12/2031 | EUR 4.89 |
Options | ||||||
2022 | 1/4/2022 | Stock | 169,800 | EUR 7.64 | 1/4/2032 | EUR4.18 |
Options | ||||||
2022 | 26/9/2022 | Stock | 166,350 | EUR 5.70 | 26/9/2032 | EUR 3.19 |
Options | ||||||
2023 | 3/1/2023 | Stock | 978,050 | EUR 6.12 | 3/1/2033 | EUR 3.37 |
Options | ||||||
2023 | 28/2/2023 | Stock | 132,000 | EUR 4.95 | 28/2/2033 | EUR 2.73 |
Options | ||||||
2023 | 3/7/2023 | Stock | 308,175 | EUR 5.18 | 3/7/2033 | EUR 2.85 |
Options | ||||||
2024 | 15/1/2024 | Stock | 710,975 | EUR 2.94 | 15/1/2034 | EUR 1.60 |
Options | ||||||
2024 | 1/7/2024 | Stock | 460,688 | EUR 5.08 | 1/7/2034 | EUR 2.85 |
Options | ||||||
2024 | 5/12/2024 | Stock | 704,625 | EUR 4.77 | 4/12/2034 | EUR 2.68 |
Options |
This fair value per option has been applied to the options granted for the recognition of the
share-based payment expense recognized:
2024 | 2023 | |
Share-based payment expense | 2,720 | 2,564 |
2,720 | 2,564 |
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The table below summarizes the number and weighted average exercise prices (WAEP) of,
and movements in, share options during the year:
2024 | 2024 | 2023 | 2023 | |
Number | WAEP | Number | WAEP | |
Outstanding at 1 January | 1,828,650 | EUR 6.85 | 873,125 | EUR 7.41 |
Granted during the year | 1,876,288 | EUR 4.15 | 1,418,225 | EUR 5.81 |
Forfeited during the year | (151,332) | EUR 6.65 | (462,700) | EUR 6.90 |
Exercised during the year | – | – | – | – |
Outstanding at 31 December | 3,553,606 | EUR 5.43 | 1,828,650 | EUR 6.85 |
Number | WAEP | |
Exercisable at 31 December 2024 | 950,137 | EUR 7.22 |
Exercisable at 31 December 2023 | 298,961 | EUR 9.10 |
The weighted average remaining contractual life for the share options outstanding at 31
December 2024 was 8.69 years (2023: 8.79 years).
The weighted average fair value of options granted during the year was EUR 2.31 (2023: EUR
3.20).
The range of exercise prices for options outstanding at the end of the year was EUR 2.94 to
EUR 9.70 (2023: EUR 4.95 to EUR 9.70).
The fair value of the awarded options was determined by applying a Binomial Option Pricing
Model that allows for exercising of the option before the end of the option’s life.
As the options cannot be exercised between the Grant Date and the vesting date, the Hull-
White binomial formula, commonly used to value American options, was used. With the Hull-
White model the impact of a certain time-based event – such as a vesting period, or an early
exercise – can be taken into account.
Due to the different vesting dates for the different tranches in the option, we have calculated
the unique option values per tranche according to each vesting date. The total option value
per employee is then derived using a weighted average overall calculated option value for
each vesting date.
The following parameters were used in the option model for the calculation of the fair value
of the options as per each grant date:
2024–12 | 2024–07 | 2024–01 | 2023–07 | 2023–02 | 2023–01 | |
Fair value on date of | ||||||
measurement (EUR) | 2.68 | 2.85 | 1.60 | 2.85 | 2.73 | 3.37 |
Share price (EUR) | 4.77 | 5.08 | 2.94 | 5.18 | 4.97 | 6.12 |
Exercise price (EUR) | 4.77 | 5.08 | 2.94 | 5.18 | 4.95 | 6.12 |
Expected volatility | 61.4% | 59.1% | 57.0% | 56.10% | 57.20% | 57.80% |
Term of the option | 4 a | 4 a | 4 a | 4 a | 4 a | 4 a |
Expected dividend | – | – | – | – | – | – |
Risk-free interest rate | 2.11% | 2.61% | 2.23% | 2.44% | 2.65% | 2.38% |
Time to expiration | 10 | 10 | 10 | 10 | 10 | 10 |
Current Income Tax
Current income tax assets and liabilities for the current period are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted, at the
reporting date in the countries where the Group operates and generates taxable income.
Current income tax relating to items recognized directly in equity is recognized in equity and
not in the statement of profit or loss. Management periodically evaluates positions taken in
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the tax returns with respect to situations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.
Deferred tax is provided using the liability method on temporary differences between the tax
basis of assets and liabilities and their carrying amounts for financial reporting purposes at
the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
•
When the deferred tax liability arises from the initial recognition of goodwill or an asset
or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss
•
In respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint arrangements, when the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences
will not reverse in the foreseeable future
Deferred tax assets are recognized for all deductible temporary differences, the carry forward
of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the
extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry forward of unused tax credits and unused tax losses
can be utilized, except:
•
When the deferred tax asset relating to the deductible temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss
•
In respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred tax assets are recognized only to the
extent that it is probable that the temporary differences will reverse in the foreseeable
future and taxable profit will be available against which the temporary differences can
be utilized
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets
are reassessed at each reporting date and are recognized to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realized or the liability is settled, based on tax rates (and tax
The Group has losses before tax which arose in the Netherlands that are
available to offset against future profits of the Dutch entity in which the loss arose. However,
these losses may not be used to offset taxable income elsewhere in the Group. The Group
evaluated and judged that at this moment it is not sufficiently likely that future profits will be
generated in the Dutch entity that can offset a deferred tax asset.
All Switzerland operations have a cost-plus agreement. The taxable amounts are settled.
There are no NOL
’s. Last fiscal year settled is 2022. Due to expected profits based on the cost-
plus the Swiss deferred tax assets relating to temporary differences have been recognized.
NOL
’s in the US entity prior to 2018 can be carried forward for 20 years. NOL
’s after 2018
can be carried forward indefinitely, limited to 80% of taxable income. On the acquisition of
ONWARD Medical Inc. (formerly known as NeuroRecovery Technologies Inc) a deferred tax
liability was recognized for the intangible asset (in-process R&D) identified in the PPA and
on the capitalized license fee. The Company recognized a deferred tax asset in the US entity
that offsets the deferred tax liability as allowed under IAS 12, with no impact on previously
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2024 | 2023 | |
Current income tax | (294) | (148) |
Adjustments of current income tax of previous year | (45) | – |
Deferred income tax | 379 | 41 |
Total corporate income tax in profit and loss | 40 | (107) |
Current income Tax charge at tax rate of 25.8% | 9,227 | 9,307 |
Tax rate differences in foreign jurisdictions | (156) | 152 |
Adjustments of current income tax of previous year | (45) | – |
Non-deductible expenses | (553) | (662) |
Non-recognized deferred tax asset on temporary differences | – | 66 |
Non-recognized deferred tax asset on permanent differences | – | (203) |
Net operating losses not recognized | (8,960) | (8,709) |
Recognition of prior year deferred tax adjustments | 575 | – |
Other | (48) | (58) |
40 | (107) |
The effective tax rate was 0.4% in 2024 (2023: -0.3%), which is lower than the statutory
income tax rate of 25.8% (2023: 25.8%) in the Netherlands. The difference is primarily due to
the net operating losses and temporary differences for which no deferred tax asset can be
recognized. The uncertainty is based on insufficient evidence of future sources of income to
support the realization of a deferred tax asset due to the Company being loss-making with
limited tax planning opportunities.
Recognized Deferred Tax Assets & Liabilities
2024 | Assets | Liabilities | Net |
Intangible assets, including Goodwill | – | (1,786) | (1,786) |
Right of use assets | – | (148) | (148) |
Lease liability | 156 | – | 156 |
Post-employment benefits | 560 | – | 560 |
Losses available for offset against future | – | ||
Taxable income | 1,483 | 1,483 | |
Set-off of deferred tax | (1,631) | 1,631 | – |
Net deferred tax asset / (liability) | 568 | (303) | 265 |
2023 | Assets | Liabilities | Net |
Intangible assets, including Goodwill | – | (1,639) | (1,639) |
Right of use assets | – | (209) | (209) |
Lease liability | 228 | – | 228 |
Post-employment benefits | 291 | 291 | |
Losses available for offset against future | |||
Taxable income | 1,008 | – | 1,008 |
Set-off of deferred tax | (1,217) | 1,217 | – |
Net deferred tax asset / (liability) | 310 | (631) | (321) |
2024 | 2023 | |
Opening balance at January 1 | (321) | (507) |
Recognized in profit & loss | 379 | 41 |
Remeasurement (gain)/loss on actuarial gains and losses in OCI | 255 | 125 |
Foreign currency translation difference | (48) | 20 |
Net deferred tax asset /(liability) at December 31 | 265 | (321) |
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Notes to the Consolidated Financial Statements
Of the estimated amount of tax losses carried forward and available as at 31 December 2024,
a deferred tax asset of EUR 1,483k has been recognized to offset the reversal of temporary
differences in the US. For the remaining unused operating losses in the Netherlands of EUR
148M (2023: EUR 120M) and in the US of EUR 27M (2023: EUR 28.5M) no deferred tax is
recognized. These losses can be carried forward indefinitely subject to local tax rules, except
for approximately EUR 3.2M of losses in the US, which can be carried forward for 20 years
(ultimately by 2037).
No deferred tax liability has been recorded for the Swiss subsidiary due to the applicable tax
treaty between Switzerland and the Netherlands, which eliminates potential tax consequences
on undistributed earnings. Similarly, no deferred tax liability has been recognized for the U.S.
subsidiary, as it has negative retained earnings, and there are no undistributed profits that
could result in taxable temporary differences.
The Company offsets tax assets and liabilities if it has a legally enforceable right to set off
current tax assets and current tax liabilities, and the deferred tax assets and deferred tax
3. Non-Current Asset & Working Capital
2024 | 2023 | |
Goodwill | 1,962 | 1,845 |
In-Process R&D | 6,059 | 5,698 |
License fees | 2,404 | 2,261 |
Net book value at 31 December | 10,425 | 9,804 |
Accounting Policy:
Goodwill is initially measured at cost, being the excess of the aggregate of
the consideration transferred and the amount recognized for non-controlling interests, and any
previous interest held, over the net identifiable assets acquired and liabilities assumed. If the
fair value of the net assets acquired is in excess of the aggregate consideration transferred,
the Group reassesses whether it has correctly identified all of the assets acquired and all
of the liabilities assumed, and reviews the procedures used to measure the amounts to be
recognized at the acquisition date. If the reassessment still results in an excess of the fair
value of net assets acquired over the aggregate consideration transferred, then the gain is
recognized in profit or loss.
losses. For the purpose of impairment testing, Goodwill acquired in a business combination
is, from the acquisition date, allocated to each of the Group’s cash-generating units that are
expected to benefit from the combination, irrespective of whether other assets or liabilities
Where Goodwill has been allocated to a cash-generating unit and part of the operation within
that unit is disposed of, the goodwill associated with the disposed operation is included in
the carrying amount of the operation when determining the gain or loss on disposal. Goodwill
disposed in these circumstances is measured based on the relative values of the disposed
2024 | 2023 | |
Cost | 1,845 | 1,902 |
Accumulated changes | – | – |
Net book value at 1 January | 1,845 | 1,902 |
Additions | – | |
Foreign currency translation difference | 117 | (57) |
Impairments | – | – |
Net change | 117 | (57) |
Cost | 1,962 | 1,845 |
Accumulated changes | – | – |
Net book value at 31 December | 1,962 | 1,845 |
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Accounting Policy:
The cost of in-process R&D acquired in a business combination is the
fair value at the date of acquisition.
at cost less any accumulated amortization and accumulated impairment losses. Amortization
of the asset begins when development is complete and the asset is available for use. It is
amortized over the period of expected future benefit. Amortization is recorded in operating
2024 | 2023 | |
Cost | 5,850 | 6,025 |
Accumulated changes | (152) | (152) |
Net book value at 1 January | 5,698 | 5,873 |
Foreign currency translation difference | 361 | (175) |
Additions | – | – |
Reclassification | – | – |
Amortization for the year | – | – |
Impairments | – | – |
Net change | 361 | (175) |
Cost | 6,211 | 5,850 |
Accumulated changes | (152) | (152) |
Net book value at 31 December | 6,059 | 5,698 |
Accounting Policy:
License fees for the exclusive right to certain patents, critical in the
development of the ARC Therapies, are capitalized and measured at cost on initial recognition.
accumulated amortization and accumulated impairment losses. Amortization of the asset
begins when development of the ARC Therapies (ONWARD R&D) is complete, and the asset
is available for use. It is amortized over the period of expected future benefit. Amortization
is recorded in operating expenses. During the period of development, the asset is tested for
2024 | 2023 | |
Cost | 2,261 | 2,383 |
Accumulated changes | – | – |
Net book value at 1 January | 2,261 | 2,383 |
Additions | – | – |
Foreign currency translation difference | 143 | (72) |
Reversals | – | (50) |
Amortization for the year | – | – |
Impairments | – | – |
Net change | 143 | (122) |
Cost | 2,404 | 2,261 |
Accumulated changes | – | – |
Net book value at 31 December | 2,404 | 2,261 |
The in-process R&D was acquired through the acquisition of GTX Medical SA (now ONWARD
Medical SA) and the business combination with NRT Inc. (now ONWARD Medical Inc.). The
value of the in-process R&D is contingent on the successful development and regulatory
approvals of the Group’s technologies across various platforms. In terms of the NRT acquisition
agreement, ONWARD also received and assumed responsibility for the exclusive license
agreements with the Regents of the University of California (“UCLA”) and the California
Institute of Technology (“Caltech”). In terms of these agreements, the occurrence of the IPO
triggered the change in ownership clauses and resulted in additional payments to be made.
These payments, as well as the annual license fee payments, are recognized as a separate
class of intangible assets.
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impairment annually. ONWARD performed its annual impairment test at year-end (consistent
Key assumptions used in the impairment test was the growth rate
and the rate for discounting the projected cash flows.
Cash flow projections: Cash flow forecasts are based on the expectation of regulatory
approvals in key markets. Revenue generation is anticipated to commence following
market clearance, with initial sales focusing on specific target segments, followed by
broader market expansion. FDA clearance of the first device (ARC
EX
) for use in the clinic
setting was obtained in December 2024. The forecasts includes the Group’s best estimate
of future revenues. Operating costs are expected to increase to support commercial
activities, ongoing product development, and clinical research. Based on current estimates,
EBITDA is not projected to be positive in the near term.
•
Cash generating unit: The Group has developed multiple neurostimulation platforms that
share key technological components, a unified development framework, and an aligned
user experience. These platforms incorporate common elements such as stimulation
generators, electrodes, and programming interfaces, reflecting a high degree of integration
in both design and functionality. While the Group has recently entered its commercial
phase, the business continues to operate with a significant shared cost structure across
research, development, and commercialization efforts. Given these interdependencies,
the Group is assessed as a single CGU. The ability to track revenue and cost of goods
sold (COGS) separately does not, in isolation, indicate the existence of distinct CGUs,
as substantial operational and financial integration remains across the organization.
Regulatory approvals and commercialization strategies vary across platforms, but these
factors do not alter the overall assessment of a single CGU at this stage.
•
Growth rate estimate: The applied growth rate is derived from industry benchmarks and
external market research.
•
Discount rate: The discount rate reflects the current market assessment of risks specific
to the Group. It is determined based on the weighted average cost of capital (WACC),
which accounts for expected returns required by both debt and equity investors, weighted
according to their respective contributions to the Group’s capital structure.
The cash flow projections were determined using management’s internal forecasts that
cover an initial period from 2025 to 2031, after which a terminal value was calculated. Using
projected cash flows covering a period of more than five years is not considered unusual for
pre-commercial lifescience companies. Due to long development timelines and regulatory
approval requirements, it is not atypical for Companies in the industry to use a period
that extends beyond five years. The values assigned to the key assumptions represent
management’s assessment of future expectations. ONWARD performed a sensitivity analysis
and noted that a reasonable change in either the discount rate (increasing with 5%) or terminal
growth rate (to 0%), or both the discount rate (increasing with 5%) and terminal growth rate
(to 0%), would not cause the carrying amount to exceed its recoverable amount.
2024 | 2023 | |
Discount rate | 11.9% | 13.4% |
Terminal value growth rate | 1.71% | 1.70% |
Accounting Policy:
Property, plant, and equipment is stated at cost, net of accumulated
depreciation and accumulated impairment losses, if any. Such costs includes the cost
of replacing part of the property, plant, and equipment and borrowing costs for long-term
construction projects if the recognition criteria are met. When significant parts of property,
plant and equipment are required to be replaced at intervals, the Group recognizes such parts
as individual assets with specific useful lives and depreciates them accordingly. Likewise,
when a major inspection is performed, its cost is recognized in the carrying amount of the
plant and equipment as a replacement if the recognition criteria are satisfied. All other repair
and maintenance costs are recognized in profit or loss as incurred.
as follows:
• | Office equipment – 3 years |
• | Leasehold improvements – 5 years |
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An item of property, plant, and equipment and any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from its use or
disposal. Any gain or loss arising from derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in the
income statement when the asset is derecognized.
The residual values, useful lives, and methods of depreciation of property, plant, and equipment
| Office | Leasehold | Total | |
Equipment | Improvements | ||
At 1 January 2023 | 923 | 265 | 1,188 |
Additions | 352 | 70 | 422 |
At 31 December 2023 | 1,275 | 335 | 1,610 |
Additions | 153 | – | 153 |
Disposals | – | – | – |
Foreign currency translation difference | 39 | 14 | 53 |
At 31 December 2024 | 1,467 | 349 | 1,816 |
Accumulated Depreciation
| Office | Leasehold | Total | |
Equipment | Improvements | ||
At 1 January 2023 | (747) | (26) | (773) |
Depreciation for the year | (141) | (87) | (228) |
At 31 December 2023 | (888) | (113) | (1,001) |
Depreciation for the year | (214) | (129) | (343) |
At 31 December 2024 | (1,102) | (242) | (1,344) |
Net Book Value
| Office | Leasehold | Total | |
Equipment | Improvements | ||
At 31 December 2023 | 387 | 222 | 609 |
At 31 December 2024 | 365 | 106 | 471 |
Accounting Policy:
The Group assesses at contract inception whether a contract is, or
contains, a lease. That is, if the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.
Group as a Lessee
The Group applies a single recognition and measurement approach for all leases,
except for short-term leases and leases of low-value assets. The Group recognizes lease
liabilities to make lease payments and right-of-use assets representing the right to use
the underlying assets.
The Group recognizes right-of-use assets at the commencement date of the lease (i.e., the
date the underlying asset is available for use). Right-of-use assets are measured at cost,
less any accumulated depreciation and accumulated impairment losses, and adjusted for
any remeasurement of lease liabilities. The cost of right-of-use assets includes the initial
measurement amount of lease liabilities recognized, initial direct costs incurred, and lease
payments made at or before the commencement date, less any lease incentives received.
and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation is calculated using the estimated
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Lease Liabilities
At the commencement date of the lease, the Group recognizes lease liabilities measured at
the present value of lease payments to be made over the lease term. The lease payments
include fixed payments (including in-substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and amounts expected
to be paid under residual value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by the Group and payments of
penalties for terminating the lease, if the lease term reflects the Group exercising the option
to terminate.
Variable lease payments that do not depend on an index or a rate are recognized as expenses
(unless they are incurred to produce inventories) in the period in which the event or condition
that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing
rate at the lease commencement date because the interest rate implicit in the lease is
not readily determinable. After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is remeasured if there is a modification, a
change in the lease term, a change in the lease payments (e.g., changes to future payments
resulting from a change in an index or rate used to determine such lease payments), or a
change in the assessment of an option to purchase the underlying asset. The Group’s lease
liabilities are included in lease liabilities.
Short-Term Leases & Leases of Low-Value Assets
The Group applies the short-term lease recognition exemption to its short-term leases of office
space (i.e., those leases that have a lease term of 12 months or less from the commencement
date and do not contain a purchase option). It also applies the lease of low-value assets
recognition exemption to leases of office equipment that are considered to be low value. Lease
payments on short-term leases and leases of low-value assets are recognized as expense on
The Group entered into a five-year lease for offices in Lausanne, Switzerland in November
2021. This lease is classified as a right-of-use asset. The office lease in Eindhoven was
extended in November 2024 for a period of one year (ending October 2025).
2024 | 2023 | |
Net book value at 1 January | 1,483 | 1,681 |
Additions | 82 | 299 |
Depreciation for the year | (560) | (497) |
Foreign currency translation impact | 49 | – |
Net book value at 31 December | 1,054 | 1,483 |
The office buildings are leased for office space. The lease in Lausanne includes an extension
option exercisable up to one year before the end of the non-cancellable lease term.
The
lease in Eindhoven includes an extension option for an additional one year; the extension was
included in the calculation of the right-of-use asset recognized over a full period of two years.
The additions represent the annual increase in lease payments under the lease contracts and
the additional one year extension.
Lease Liabilities
The maturity of the lease liability in relation to the office building is as follows:
2024 | 2023 | |
Less than one year | 597 | 568 |
One to five years | 518 | 1,051 |
More than five years | – | – |
Total lease liability | 1,115 | 1,619 |
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Movement of the lease liability:
2024 | 2023 | |
Balance as at 1 January | 1,619 | 1,721 |
Additions | 82 | 299 |
Interest accretion | 56 | 69 |
Repayments | (616) | (548) |
Foreign currency impact | (26) | 78 |
Total lease liability | 1,115 | 1,619 |
The incremental borrowing rate applied is 4% for the Lausanne office and is 7.4% for the
Eindhoven office.
Accounting Policy:
Inventories consist of raw materials, work-in-progress and finished goods
of the ARC
EX
System. Inventories are valued at the lower of cost and net realizable value. Costs
incurred in bringing each product to its present location and condition are accounted for as
follows: cost of direct materials and labor and a proportion of manufacturing overheads based
on the normal operating capacity, excluding borrowing costs. The cost is assigned using the
FIFO (“first-in-first-out”) method. Net realizable value is the estimated selling price in the
ordinary course of business, less estimated costs of completion and the estimated costs
2024 | 2023 | |
Raw Materials | 102 | – |
102 | – |
As at 31 December 2024, the Group had inventory of Raw materials amounting to EUR 102k.
The increase in stock of raw materials is directly attributable to start of production of ARC
EX
The tax receivables consist of refundable VAT amounting to EUR 125k (2023: EUR
117
k)
and
are collectable within 12 months. The increase in the receivable is a direct result of increase in
expenses during the year. The VAT returns are filed on a quarterly basis and claims received
2024 | 2023 | |
Advance payments | 2,137 | 936 |
Grants and other receivables | 714 | 260 |
Rental guarantee | 302 | 305 |
Trade receivables | 160 | - |
3,313 | 1,501 |
The Group provided a guarantee of EUR 302k (2023: EUR 305k) to fulfill collateral requirements
relating to the Lausanne office rental agreement. This guarantee places no restriction on
the cash position and is payable on demand if the Company fails to meet its commitments.
Advance payments mostly relate to prepaid D&O insurance and advance paid to suppliers
for production and components.
Trade receivables represent amounts due from customers, are non-interest bearing, and
Accounting Policy:
Cash and short-term deposits in the statement of financial position
comprise cash at banks and on hand, and short-term deposits with a maturity of three
months or less, that are readily convertible to a known amount of cash and subject to an
insignificant risk of change in value.
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For the purpose of the consolidated statement of cash flows, cash and cash equivalents
consist of cash and short-term deposits as defined above, net of outstanding bank overdrafts,
2024 | 2023 | |
Cash at bank | 12,043 | 3,568 |
Short-term deposits | 48,000 | 26,200 |
Cash and cash equivalents | 60,043 | 29,768 |
Cash and cash equivalents | 60,043 | 29,768 |
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term
deposits are made for varying periods of between one day and three months, depending on
the immediate cash requirements of the Group, and earn interest at the respective short-
term deposit rates.
As part of the loan agreement with Runway Growth Capital LLC, the Group has pledged
the majority of the bank and deposit accounts as collateral to secure its outstanding debt
obligations. This serves as security for compliance with the loan covenants outlined in the
agreement. In the event of a breach of these covenants, the lender may have the right to
enforce its security interest over these assets. Management actively monitors compliance
with all covenants to mitigate the risk of default.
As at 31 December 2024, there were no fixed term deposits for periods exceeding three months.
At 31 December 2024, the Group had no bank overdrafts. All cash is freely at the disposal of
Trade payables and accrued expenses are non-interest bearing and are normally settled on
30-90 day terms. The decrease in trade payables to EUR 1,269k (2023: EUR 1,369k) is a direct
result of ARC
EX
launch related activities and the timing of settlement.
The other payables can be broken down as follows:
2024 | 2023 | |
Wage tax and social security | 144 | 485 |
Grants received in advance | 441 | 473 |
Bonus | 3,095 | 1,243 |
Invoices to be received | 1,194 | 538 |
Other | 555 | 425 |
Grant-related payables | 1,359 | 1,358 |
6,788 | 4,522 |
The increase in Other Payables is due to increase in the bonus accrual and amounts that were
due to subcontractors (on grants). An accrual was raised in response to the pending grant
amendment with EISMEA, refer to Note 2.1 EISMA, and is the estimated amount the Company
4. Financing, Financial Risk Management & Financial Instruments
Share Capital & Share Premium
Accounting Policy:
Ordinary Shares are classified as
share capital
. Equity instruments are
recorded at the proceeds received, net of direct issue costs.
The
share premium
represents the amount by which the fair value of the consideration received
exceeds the nominal value of shares issued. Incremental costs directly attributable to the issue
The authorized share capital (“maatschappelijk kapitaal”) amounts to EUR 18,000,000 (2023:
EUR 12,225,000) divided into 75,000,000 (2023: 50,937,500) Ordinary Shares and 75,000,000
(2023: 50,937,500) Preferred Shares with a nominal value of EUR 0.12 each.
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In March 2024, the Company raised EUR 20 million (gross proceeds) by way of an accelerated
bookbuild offering and a public offering in France. A total of 4,444,444 new ordinary shares
were issued at the price of EUR 4.50 per share. Transaction costs of EUR 2,05 million was
recognised in Equity decreasing share premium.
In October 2024, the Company raised EUR 50 million (gross proceeds) in as part of a capital
raise. A total of 10,000,000 new ordinary shares were issued at the price of EUR 5 per share.
Transaction costs of EUR 3,69 million was recognised in Equity decreasing share premium.
At 31 December 2024, 44,628,834 Ordinary Shares were issued (31 December 2022:
30,184,388 shares). All of the issued Ordinary Shares are fully paid-up and represent capital
| Currency | Stock | Total Other | |
Translation | Compensation | Reserves | |
Differences | Reserve | ||
Balance at 1 January 2023 | 319 | 1,760 | 2,079 |
Share-based payment expense: LTIP | – | 2,564 | 2,564 |
Currency translation differences | (155) | – | (155) |
Balance at 31 December 2023 | 164 | 4,324 | 4,488 |
Share-based payment expense: LTIP | – | 2,720 | 2,720 |
Reclassification of the fair value of forfeited options | – | (873) | (873) |
Currency translation differences | 434 | – | 434 |
Balance at 31 December 2024 | 598 | 6,171 | 6,770 |
Currency Translation Reserve
Exchange gains and losses arising from the translation of the functional currency of foreign
operations to the reporting currency of the parent are accounted for in this legal reserve.
In the case of the sale of a participating interest, the associated accumulated translation
differences are transferred to the profit and loss account and presented therein as part of
the result on the sale.
Stock Compensation Reserve
The stock compensation reserve is used to recognize the value of equity-settled share-
based payments provided to employees, including key management personnel, as part of
Accounting Policy:
Basic EPS is calculated by dividing the profit for the year attributable
to ordinary equity holders of the parent by the weighted average number of Ordinary shares
outstanding during the year.
Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of the
parent (after adjusting for interest on the convertible Preference shares) by the weighted
average number of Ordinary shares outstanding during the year plus the weighted average
number of Ordinary shares that would be issued on conversion of all the dilutive potential
The objective of determining diluted EPS is to reflect the maximum possible dilutive
effect arising from potential Ordinary shares outstanding during the period. The Group is
currently loss-making and there are currently no anti-dilutive potential Ordinary shares to
be considered. Therefore, diluted EPS is disregarded for 2024. The share options granted
under the LTIP (refer to Note 2.9) could have a potential dilutive effect in the future but had
no impact in 2024.
There have been no other transactions involving Ordinary shares or potential Ordinary shares
between the reporting date and the date of authorization of these financial statements.
The following tables reflect the income and share data used in the EPS calculation:
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Profit (Loss) Attributable to Ordinary Shareholders
2024 | 2023 | |
Profit (loss) for the year, attributable to equity holders of the parent | (35,725) | (36,181) |
Weighted-Average Number of Ordinary Shares
2024 | 2023 | |
Thousands | Thousands | |
Weighted average number of ordinary shares for basic EPS | 44,629 | 30,184 |
Accounting Policy:
A financial instrument is any contract that gives rise to a financial asset of one entity and
a financial liability or equity instrument of another entity. Financial assets and financial
liabilities are initially recognized when the Company becomes a party to the contractual
Financial Liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate. A financial liability is classified as FVPL
if it is classified as held-for-trading, it is a derivative or it is designated as such on initial
recognition. Financial liabilities at FVPL are measured at fair value and net gains and losses,
including any interest expense, are recognized in profit or loss. Other financial liabilities
are subsequently measured at amortized cost using the effective interest method. Interest
expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or
loss on derecognition is also recognized in profit or loss
All financial liabilities are recognized initially at fair value and, in the case of liabilities at
amortized cost , net of directly attributable transaction costs.
The Group’s financial liabilities include trade payables, other payables, loans, and borrowings.
For purposes of subsequent measurement, financial liabilities are classified in two categories:
•
Financial liabilities at fair value through profit and loss
•
Financial liabilities at amortized cost
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value through
profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes derivative financial instruments
entered into by the Group that are not designated as hedging instruments in hedge
relationships as defined by IFRS 9. Separated embedded derivatives are also classified as
held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognized in the statement of profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied.
Financial Liabilities at Amortized Cost
This is the category most relevant to the Group. After initial recognition, interest-bearing loans
and borrowings are subsequently measured at amortized cost using the effective interest
rate (“EIR”) method. Gains and losses are recognized in the profit or loss when the liabilities
are derecognized, as well as through the EIR amortization process.
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Amortized cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortization is included as
finance costs in the statement of profit or loss.
A financial liability is derecognized when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability at fair value. The difference in the respective
Financial assets and financial liabilities are offset and the net amount is reported in the
consolidated statement of financial position if there is a currently enforceable legal right to
offset the recognized amounts and there is an intention to settle on a net basis, to realize the
2024 | 2023 | |
Current financial liabilities | 437 | – |
Warrants issued to Runway Growth | 437 | – |
Non-current financial liabilities | 13,972 | 15,255 |
Innovation loan | – | 15,255 |
Runway Growth loan | 13,972 | – |
Total financial liabilities | 14,409 | 15,255 |
Innovation Loan
On 5 February 2016, the Group was granted a loan from RVO NL (Dutch Government) of EUR
10M payable according to a set payment scheme. The loan is advanced in installments based
on progress. In 2023, two installments were received amounting to EUR 1.3M. This loan was
repaid in 2024 .
2024 | 2023 | |
Loan as per January 1 | 15,255 | 12,656 |
Loan amount received | – | 1,292 |
Interest accrued during the year | 767 | 1,307 |
Loan amount repaid during the year | (16,022) | |
Net book value at December 31 | – | 15,255 |
The loan carried interest at 10%.
Runway Growth Loan
On 28 June 2024 the Company and its subsidiaries, ONWARD Medical, Inc. and ONWARD
Medical S.A., signed a loan agreement in the amount of up to EUR 52.5 million (the “Loan
Agreement”) with U.S.-based lender Runway Growth Capital LLC (the “Lender”). The loan was
used to (i) repay all of the Company’s outstanding debt, (ii) fund the Company’s upcoming
commercial and clinical activities, and (iii) support for working capital and general corporate
purposes. The facility is divided into five individual credit tranches. The first initial credit
tranche of EUR 16.0 million was available upon signing of the Loan Agreement and was drawn
down immediately. Three subsequent credit tranches of EUR 14.0 million, up to EUR 5.0 million
and up to EUR 7.5 million will be available to be drawn by the Company until 31 March 2025
and 31 July 2026 respectively, in each case subject to the Company’s achievement of certain
milestones under the Loan Agreement. The fifth credit tranche of up to EUR 10.0 million is
uncommitted and available in the first quarter of 2027 upon the sole discretion of the Lender.
The loan bears interest at a rate equal to Term Secured Overnight Financing Rate (SOFR) for
a three-month interest period (currently at 6.00% and subject to a 4.25% floor), plus a margin
of 6.50%. The loans advanced under the Loan Agreement is secured by a security interest in
substantially all of the assets of the ONWARD Medical, N.V. and its subsidiaries.
The loan documents provide for a number of affirmative and negative covenants by the
Company customary for financings of this type, including financial covenants relating to
revenue, earnings before interest taxes, depreciation and amortization (EBITDA) and minimum
liquidity targets. In December 2024, an amendment was agreed upon stipulating that, for 2025,
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compliance with other covenants would not be required, provided the company maintains
the specified minimum cash-to-debt ratio.
As of the reporting date, the Company was in compliance with all covenants. Management
actively monitors covenant compliance to ensure ongoing adherence. The loan is classified
as non-current since earliest maturity date is 15 June 2028, provided that if the Extension
Milestone is satisfied, the maturity date shall automatically be extended to 15 June 2029.
The funds required for the repayment of the existing (RVO) loan, representing the first tranche,
were received on 2 July 2024, at which point the conditions for the recognition of the new loan
were satisfied. The RVO loan was also repaid on 2 July 2024. Certain Intellectual Property
(patents registered) have been pledged to Runway Growth in case of default of repayment
of the loan. These patents have not been capitalized as at 31 December 2024.
2024 | |
Loan opening balance | – |
Loan amount received | 14,116 |
Tx cost amortisation | 212 |
Interest accrued during the period | 944 |
Interest paid | (861) |
Warrants issued to Runway growth | (439) |
Closing balance | 13,972 |
On 28 June 2024 the Company and its subsidiaries, ONWARD Medical, Inc. and ONWARD
Medical S.A., signed a loan agreement in the amount of up to EUR 52.5 million (the “Loan
Agreement”) with U.S.-based lender Runway Growth Capital LLC (the “Lender”). In addition,
upon the signing of the debt financing the Company will issue to the Lender warrants which
will entitle the Lender to purchase ordinary shares in the capital of the Company at an exercise
price per newly issued share calculated on the basis of the lowest 30-day volume weighted
average price (VWAP) between 9 April 2024 and the signing of the debt financing. The number
of shares subject to the warrants are five percent (5.00%) of the drawn down principal amount
initially and upon each subsequent loan advance, divided by the exercise price of EUR 4.83.
Warrants may be exercised either by the warrant holder paying the total warrant price in cash
to the Company for the shares being purchased, or on a cashless basis, in which case the
Company will issue a number of shares based on the fair value of the warrants. The exercise
period is set at a period of ten (10) years from (and including) the date of expiry of the waiting
period, which is ninety (90) calendar days after the closing date. As the warrants can be
exercised 90 days after closing, the company does not have the right to defer the settlement
of the liability for at least twelve months after the reporting date. The Lender warrants is
therefore classified as current.
Issue | Type of | Number of | Exercise | Expiration | |
Financial Year | Date | Security | Warrants | Price | Date |
2024 | 2/7/2024 | Lender | 165,631 | EUR 4.83 | 2/7/2034 |
Warrants
The fair value of the awarded options was determined by applying a Binomial Option Pricing
Model that allows for exercising of the Lender Warrants before the end of the exercise period.
The Hull-White binomial formula was used. With the Hull-White model the impact of a certain
time-based event – such as a vesting period, or an early exercise – can be taken into account.
The following parameters were used in the option model for the calculation of the fair value
of the warrants:
2 Jul 2024 | 31 Dec 2024 | |
Fair value on date of measurement (EUR) | 2.65 | 2.64 |
Share price (EUR) | 5.12 | 5.18 |
Exercise price (EUR) | 4.83 | 4.83 |
Expected volatility | 59.1% | 61.2% |
Vesting period in years | 0.24 | 0.00 |
Expected dividend | – | – |
Risk-free interest rate | 2.60% | 2.40% |
Time to expiration | 10 | 9.7 |
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2024 | |
Lender warrants issued | 439 |
Fair value adjustment recognised in profit and loss | (2) |
Closing balance | 437 |
The Group’s principal financial liabilities comprise of loans and borrowings and trade and
other payables. The main purpose of these financial liabilities is to finance the Group’s
operations and to provide guarantees to support its operations.
The Group is responsible for implementing and evaluating policies which govern the funding,
investments, and any use of derivative financial instruments. The Group is exposed to various
Capital includes issued capital, share premium, and all other equity reserves attributable to
the equity holders of the parent. The primary objective of the Group’s capital management is
to continue as a going concern while maximizing shareholder value. The Group manages its
capital structure and will consider adjustments in light of changes in economic conditions. To
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows.
The Group’s objective is to maintain a balance between continuity of funding and flexibility
through the use of subsidies and grants, and sufficient progress towards regulatory approval,
which is related to future financing rounds.
Cash is invested in low-risk investments such as short-term bank deposits or savings
accounts. The Group mainly makes use of liquid investment in current accounts (in Euros) or
short-term deposit accounts. The ability of the Group to maintain adequate cash reserves to
support its activities in the medium term is highly dependent on the Group’s ability to raise
additional funds.
financial liabilities with agreed repayment periods, including both interest and principal
cash flows:
As at 31 December 2024:
| Less than | 1-3 Years | 3-5 Years | More than | Total | |
1 Year | 5 Years | ||||
Runway Growth loan | 1,972 | 3,944 | 18,820 | – | 24,736 |
Lease liability | 633 | 527 | – | – | 1,160 |
Warrants issued to Runway Growth | 437 | – | – | – | 437 |
Trade payable | 1,269 | – | – | – | 1,269 |
Total | 4,311 | 4,471 | 18,820 | – | 27,602 |
As at 31 December 2023:
| Less than | 1-3 Years | 3-5 Years | More than | Total | |
1 Year | 5 Years | ||||
Innovation loan | – | 6,500 | 14,295 | – | 20,795 |
Lease liability | 615 | 1,084 | – | – | 1,699 |
Trade payables | 1,369 | – | – | – | 1,369 |
Total | 1,984 | 7,584 | 14,295 | – | 23,863 |
Market risk is the risk that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in market prices. The Group’s activities may expose it to changes
in foreign currency exchange rates and interest rates. The Group is not exposed to any equity
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Since the Company has only recorded two sales to date, trade receivables remain limited and
are not yet considered a significant risk. As a result, credit risk for the current year primarily
relates to cash, cash equivalents, and deposits held with banks and financial institutions.. The
Group only works with international reputable commercial banks and financial institutions
when investing surplus funds. Short-and fixed-term deposits are subject to approval in line
with internal policy. The Group holds accounts with ING, Belfius, UBS, First American Bank,
Deutsche Bank, Banque Cantonale Vaudoise (BCV) and JP Morgan Chase. The number of
banks and financial institutions is to minimize concentration risk and therefore mitigate
The Group is exposed to currency risk for the activities in the US (accounting in US dollars)
and Switzerland (accounting in Swiss francs), whereas the functional currency of the Group
is the Euro. The risk is currently managed by replenishing the US and Swiss bank accounts at
regular intervals to account for both the positive and negative changes. The Company does
not hedge currently its operational FX risk and its risk on outstanding balances denominated
in another currency than its functional currency.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates. The Group’s exposure to the risk
of changes in market interest rates relates primarily to the Runway Growth long-term debt
obligation that bears interest at a rate equal to Term Secured Overnight Financing Rate
(SOFR) for a three-month interest period (currently at 6.00% and subject to a 4.25% floor),
Accounting Policy:
All assets and liabilities for which fair value is measured or disclosed in
the financial statements are categorized within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the fair value measurement as a whole:
•
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets
or liabilities
•
Level 2 — Valuation techniques for which the lowest level input that is significant to the
fair value measurement is directly or indirectly observable
•
Level 3 — Valuation techniques for which the lowest level input that is significant to the
including its fair value hierarchy:
2024 | Carrying | Estimated |
Amount | Fair Value | |
Financial liabilities | ||
Runway Growth loan (Level 2) | 13,972 | 16,818 |
Lender Warrants (Level 3) | 437 | 437 |
Total financial liabilities | 14,409 | 17,255 |
2023 | Carrying | Estimated |
Amount | Fair Value | |
Financial liabilities | ||
Innovation credit loan (Level 2) | 15,255 | 15,460 |
Total financial liabilities | 15,255 | 15,460 |
Management has assessed that the fair values of cash and cash equivalents, accounts
receivable and accounts payable approximate to their carrying amounts largely due to the
The fair values of the financial assets and liabilities are included at the amount at which the
instrument could be exchanged in a current transaction between willing parties, other than
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in a forced or liquidation sale. The following methods and assumptions were used to estimate
the fair values:
The fair value of the Runway Growth loan (2023: Innovation credit loan)
and due interest have
been calculated by discounting the expected future cash flows using rates currently available
for instruments with similar terms, credit risk and remaining maturities.
During the period, there were no transfers of fair value measurements between any levels
for either financial assets or financial liabilities. The Lender Warrants issued in 2024
are
considered to be level 3 in the fair value hierarchy.
The significant unobservable inputs used in the fair value measurement of the Lender
Warrants, categorized within level 3, together with a quantitative sensitivity analysis at 31
December 2024 is shown below. Any movement in the fair value of the Lender Warrants will
be recognized in profit and loss. Please refer to Note 4.2 for the detailed description of the
methodology applied for the fair value measurement of the Lender Warrants.
Please refer to Note 4.2 for the detailed description of the methodology applied for the fair
value measurement of the Lender Warrants
For the sensitivity analysis the exercise multiple is adjusted by steps of 0.2, and for the
volatility sensitivity we applied a range of 50.0% to 68.4%. The impact in profit and loss can
vary from a gain of EUR 44k to a loss of EUR 35k.
Volatility | |||
Exercise Multiple | 50.0% | 61.2% | 68.4% |
2.0 | 393 | 418 | 429 |
2.2 | 421 | 437* | 451 |
2.4 | 443 | 470 | 472 |
Interest income is recognized by applying the effective interest rate,
except for short-term receivables when the effect of discounting is immaterial. The
Company’s financial assets include cash and cash equivalents and other long term and
asset that necessarily takes a substantial period of time to get ready for its intended use or
sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed
in the period in which they occur. Borrowing costs consist of interest and other costs that an
2024 | 2023 | |
Interest income from deposits | 791 | 972 |
Interest on loans | (1,923) | (1,307) |
Interest post-employment benefits | (18) | – |
Interest banks | – | – |
Interest on lease liabilities | (56) | (69) |
Exchange losses | 372 | (190) |
Bank charges | (20) | (17) |
Fair value adjustment of Lender Warrants | 2 | – |
Transaction costs on lender warrants | (51) | – |
Net Finance expense | (903) | (611) |
5. Other Disclosures
Accounting Policy:
Group companies operate various pension schemes. The schemes
are funded through payments to insurance companies or trustee-administered funds,
determined by periodic actuarial calculations. The Group has both defined benefit and
defined contribution plans.
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Defined Benefit Plan
The Group operates a defined benefit pension plan in Switzerland, which requires contributions
to be made to a separately administered fund. The cost of providing benefits under the defined
benefit plan is determined using the projected unit credit method.
Remeasurements, comprising of actuarial gains and losses, are recognizsed in the statement
of financial position with a corresponding debit or credit to retained earnings through OCI
in the period in which they occur. Remeasurements are not reclassified to profit or loss in
subsequent periods.
Past service costs are recognized in profit or loss on the earlier of:
•
The date of the plan amendment or curtailment, and
•
The date that the Group recognizes related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or
asset. The Group recognizes the changes in the net defined benefit obligation due to service
costs comprising current service costs, past-service costs, gains and losses on curtailments
and non-routine settlements as part of operating expenses, and the net interest expense or
2024 | 2023 | |
Plan assets | 7,017 | 4,289 |
Obligation | (11,016) | (6,370) |
Net liability | 3,999 | 2,081 |
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically,
defined benefit plans specify an amount of pension benefit that an employee will receive
upon retirement, typically dependent on one or more factors such as age, years of service,
and compensation. The benefits paid to employees in Switzerland qualify as a defined
benefit plan.
The pension plan for Swiss employees (“the Pension Fund”) is a defined benefit plan. The
Pension Fund provides benefits for retirement, disability, and surviving dependents that meet
or exceed the minimum benefits required under the Federal Law on Occupational Retirement,
Survivors’ and Disability Insurance (“BVG”), including the legal coordination charge, which is
also insured. The monthly premium to fund the Pension Fund’s benefits is split equally between
the employer and the employees. Contributions, which vary by the age of the employees, range
from 6-13% of the covered salary and are credited to the employees’ individual retirement
savings accounts. The Pension Fund is responsible for capital investments and pursues an
investment strategy with a prescribed investment policy. The Group assumes an average
retirement age of 64 (female) and 65 (male), respectively. Upon retiring (including early and
partial retirement), insured persons are entitled to a lifelong retirement pension if employees
do not choose to withdraw the entire balance, or portion thereof, of their individual retirement
savings accounts in the form of a capital payment.
The Pension Fund is administered by Allianz Suisse, Switzerland, which is legally separate
from the Group and is governed by a foundation board. In addition, there is a pension fund
commission comprised of two employee and two employer representatives. The duties of
the foundation board, as well as the pension fund commission, are laid out in the BVG and
the specific pension fund rules. They are required by law to act in the best interest of the
participants and are responsible for setting certain policies (e.g. investment, contribution,
and indexation policies) for the Pension Fund. At least four times a year, the foundation
board, as well as the pension fund commission, meet to analyze consequences and decide
on adjustments in the investment strategy.
Pursuant to the BVG, additional employer and employee contributions may be imposed
whenever a significant funding deficit arises in accordance with the BVG. In addition to
investment risk, the Pension Fund is exposed to actuarial risk, longevity risk, currency risk,
and interest rate risk.
In addition to the pension plan for Swiss employees, a defined benefit plan for Swiss
management also provides retirement benefits and risk insurance for death and disability
for components of remuneration in excess of the maximum insurable amount of salary under
the plan described above.
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Movement of Net Defined-Benefit Liability
| 2024 | 2023 | |
Balance as at 1 January | 2,081 | 1,121 |
Service costs | 760 | 652 |
Admin costs | 47 | 45 |
Past service costs | (38) | 23 |
Employee benefit expenses | 769 | 720 |
Net interest costs/(income) | 18 | 15 |
Included in statement of profit and loss | 787 | 735 |
Actuarial gains/(losses) | ||
– Financial assumptions | 1,104 | 932 |
– Demographic assumptions | – | – |
– Experience adjustment | 441 | (449) |
– Return on assets excluding interest income | 274 | 321 |
1,819 | 804 | |
Exchange rate differences | (28) | 80 |
Included in statement of comprehensive income* | 1,792 | 884 |
Contributions by employer | (661) | (659) |
Balance as at 31 December | 3,999 | 2,081 |
*Excluding tax impact
for the plan are shown below:
2024 | 2023 | |
Discount rate | 0.95% | 1.35% |
Salary increase | 3.00% | 2.50% |
Interest credit rate | 1.00% | 1.00% |
Mortality base table | BVG2020 | BVG2020 |
Longevity improvement | CMI2018; 1.25% | CMI2018; 1.25% |
A quantitative sensitivity analysis for significant assumptions as at 31 December is
shown below:
2024 | 2023 | |
Discount rate | ||
+ 25bps | (605) | (271) |
- 25bps | 407 | 292 |
Salary increase | ||
+ 25bps | 89 | 119 |
- 25bps | (314) | (113) |
Interest credit rate | ||
+ 25bps | 61 | 101 |
- 25bps | (293) | (98) |
Mortality base table | ||
Life expectancy + 1 year | (19) | 44 |
Life expectancy - 1 year | (216) | (42) |
The sensitivity analyses have been determined based on a method that extrapolates the
impact on the defined benefit obligation as a result of reasonable changes in key assumptions
occurring at the end of the reporting period. The sensitivity analyses are based on a change
in a significant assumption, keeping all other assumptions constant. The sensitivity analyses
may not be representative of an actual change in the defined benefit obligation as it is unlikely
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The following are the expected payments or contributions to the defined benefit plan in
future years:
2024 | 2023 | |
Within the next 12 months | 627 | 350 |
Between 2 and 5 years | 2,476 | 1,702 |
Between 6 and 10 years | 3,503 | 3,172 |
Total expected payments | 6,606 | 5,224 |
The average duration of the defined benefit plan obligation at the end of the reporting period
is 18 years (2023: 18 years).
Plan Assets Allocation
The asset allocation in the Swiss pension plan at 31 December was as follows:
2024 | 2023 | |
Bonds | 4,553 | 2,709 |
Equities | - | – |
Loans | 149 | 93 |
Mortgages | 766 | 507 |
Real Estate | 1,441 | 922 |
Cash, derivatives and funds | 108 | 58 |
7,017 | 4,289 |
Plan assets in 2024 and 2023 do not include property occupied by or financial instruments
The Group has provided a guarantee to Wincasa for EUR 302k as collateral for the lease of
the office space in Lausanne and paid a deposit of EUR 8k to SPACES for the lease of the
Royalties
The Group has entered into three license agreements with EPFL that will pay out royalties
in case the Company is able to generate revenues in the future for products directly linked
to these licenses. The royalty scheme with EPFL is based on net sales. To date, no royalties
have been paid as there is no product generating revenue.
On 27 September 2019, Neurorecovery Technologies Inc. (now ONWARD Medical Inc.) entered
into a license agreement with the Regents of the University of California acting through
Technology Development Group UCLA campus granting an exclusive license on certain
patents in certain fields of neuromodulation and spinal cord stimulation, and a non-exclusive
license on certain other patent rights. Various revenue milestone payments are due under
the exclusive license and royalty payments are due under the non-exclusive license. The
agreement contains various milestone and diligence obligations ranging from USD 10k to
USD 50k payable upon entering a phase III clinical trial, regulatory approval, and/or first
commercial sale. For the milestones triggered by the FDA clearance received on 19 December
2024, accruals are included in Note 3.8 Other Payables (Invoices to be received) for an amount
of EUR 18k.
On 8 October 2019, Neurorecovery Technologies Inc. (now ONWARD Medical Inc.) entered
into a license agreement with the California Institute of Technology (“Caltech”), the latter on
behalf of various intellectual property owners, including UCLA, University of Louisville, DEI
and USC, granting an exclusive license on certain technology in certain fields of epidural and
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transcutaneous neuromodulation and a non-exclusive license of certain other intellectual
property. Various revenue milestone payments, diligence obligations, and royalty payments
are due under the license. These payments range from USD 20k to USD 75k payable upon FDA
approval, CE Mark certification, and/or first commercial sale.
For the milestones triggered
by the FDA clearance received on 19 December 2024, accruals are included in Note 3.8 Other
Note 1.1 provides the information about the Group’s structure including the details of the
subsidiaries. Transactions between the Company and its subsidiaries have been eliminated
on consolidation and are not disclosed in the notes.
defined in IAS 24 ‘Related parties.’ Full details of the remuneration of the board (CEO and
non-executives) are included in the Remuneration report.
Salary, | ||||
bonuses | Pension | |||
and other | premiums | |||
(short-term | (post- | Share- | ||
employee | employment | based | ||
2024 | benefits) | benefits) | payment | Total |
Management Team, excluding CEO | 2,311 | 77 | 618 | 3,00 6 |
CEO | 1,211 | 72 | 757 | 2,040 |
Non-Executive Directors | 691 | – | 352 | 1,043 |
4,213 | 149 | 1,727 | 6,089 |
Salary, | ||||
Bonuses | Pension | |||
& Other | Premiums | |||
(Short-Term | (Post- | Share- | ||
Employee | Employment | Based | ||
2023 | Benefits) | Eenefits) | Payment | Total |
Management Team, excluding CEO | 2,827 | 98 | 643 | 3,568 |
CEO | 703 | 64 | 916 | 1,683 |
Non-Executive Directors | 445 | – | 441 | 886 |
3,975 | 162 | 2,000 | 6,137 |
Company
Financial
Statements
303
ONWARD
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Company
Statement of Income
For the Year Ended 31 December
All amounts in EUR ‘000
Notes
2024
2023
Revenue
B
48
–
Less: Cost of goods sold
(10)
–
Gross profit
38
–
Grants and other income
B
658
532
Operating expenses
C
(40,164)
(29,679)
Operating result for the period
(39,468)
(29,147)
Net finance expense
D
(1,916)
(392)
Result after tax
(41,384)
(29,539)
The notes on pages
309
to
319
are an integral part of these separate financial statements.
19
Company Financial Statements
305
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Company
Balance Sheet
(Before appropriation on result)
For the Year Ended 31 December
All amounts in EUR ‘000
Notes
2024
2023
Assets
Non-current assets
Tangible fixed assets
G
105
118
Financial fixed assets
H
2,372
807
2,477
925
Current assets
Trade and other receivables
I
6,392
26,748
Cash at bank and in hand
J
56,989
13,854
63,381
40,602
65,858
41,527
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Company Financial Statements
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Equity & Liabilities
Equity and reserves
K
Issued capital
5,355
3,622
Share premium
217,774
155,248
Other reserves
3,820
4,199
Legal reserve: Currency translation differences
625
165
Retained earnings
(143,795)
(109,122)
Result for the year
(35,725)
(36,181)
Total equity
48,054
17,931
L
Provisions
–
5,233
M
Non-current liabilities
14,016
15,297
N
Current liabilities
3,788
3,066
65,858
41,527
The notes on pages
309
to
319
are an integral part of these separate financial statements.
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Notes to the Company
Financial Statements
A. Presentation of Financial Statements and Recognition and Measurement Principles
The description of the activities of ONWARD Medical NV (the company) and the company
structure, as included in the notes to the consolidated financial statements, also applies to
the company financial statements.
The company is the sole shareholder of the following subsidiaries:
•
ONWARD Medical SA, based in Switzerland
•
ONWARD Medical Inc, based in the United States of America
These separate financial statements have been prepared in accordance with Title 9, Book
2 of the Dutch Civil Code. For setting the principles for the recognition and measurement
of assets and liabilities and determination of results for its separate financial statements,
the Company makes use of the option provided in section 2:362(8) of the Dutch Civil Code.
This means that the principles for the recognition and measurement of assets and liabilities
and determination of the result (hereinafter referred to as principles for recognition and
measurement) of the separate financial statements of the Company are the same as those
applied for the consolidated EU-IFRS financial statements. These principles also include the
classification and presentation of financial instruments, being equity instruments or financial
liabilities. In case no other principles are mentioned, refer to the accounting principles as
described in the consolidated financial statements. For an appropriate interpretation of
these statutory financial statements, the separate financial statements should be read in
conjunction with the consolidated financial statements.
Information on the use of financial instruments and on related risks for the group is provided
in the notes to the consolidated financial statements of the group.
B. Revenue & Other Income
Operating income relates to grant and other income received. Government subsidies have
been received for the research and development of several development projects. There are
no unfulfilled conditions or contingencies attached to these subsidies.
2024
2023
Revenue (net of cost of goods sold)
38
–
Government subsidies (EU)
507
464
Other income
151
68
Total revenues and other income
696
532
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(In EUR 000)
Recognized
Grant
Recognized
Recognized
as Grant
received in
as Grant
as Grant
Grants
Total Grant*
Income
advance as
Income
Income
cumulative
per 31-12-
2024
2023
before 2023
2024
BESTABLE
100
(16)
–
100
–
PREP2GO
362
–
15
347
–
DARPA
3,004
–
419
2,585
–
ZonMW
250
–
83
166
–
EISMEA - ReverseParalysis***
292
232
(237)
273
–
EISMEA - NEMO BMI***
144
–
(85)
85
(108)
Eurostars Impulse
500
150
160
14
–
Rewire
360
50
56
–
(112)
SH-ARC
500
–
53
–
(210)
MJFF SPARKL
91
91
–
–
–
Other
–
–
–
(12)
–
Total
507
464
3,558
(430)
C. Operating Expenses
Operating expenses by nature are as follows:
2024
2023
Wages and salaries
(1,212)
(1,242)
Social security costs (includes WBSO benefit)
(58)
54
Pension costs – other
(64)
(69)
Share-based benefit expenses
(370)
(148)
Other labor costs
(617)
(724)
Other operating expenses
(37,773)
(27,492)
Depreciation and amortization
(70)
(58)
(40,164)
(29,679)
The increase in Other operating expenses is driven by Research and Development expenses
due to advancements made on our ARC
EX
and ARC
IM
platforms (mainly in Switzerland) which
increased the charge from Switzerland to the Netherlands under the existing agreement.
As at 31 December 2024, the Company had 12.4 full-time equivalents located in the
Netherlands (2023: 11.9), 76.15 full-time equivalents located in Switzerland (2023: 75.3), and
14 (2023: 12) full-time equivalents located in the United States.
D. Net Finance Expense
2024
2023
Interest income
550
891
Interest on loans
(1,710)
(1,307)
Interest banks
–
–
Interest on lease liabilities
(6)
(5)
Amortisation of transaction costs on loan
(212)
–
Exchange losses
(523)
35
Bank charges
(15)
(6)
Net Finance expense
(1,916)
(392)
The increase is the result of interest expense on Runway Growth loan and corresponding
transaction cost.
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E. Income Tax Expense
2024
2023
Current income tax
–
–
Deferred income tax
–
–
Total corporate income tax in profit and loss
–
–
Current income tax charge at tax rate of 25.8%
10,624
7,621
Non-deductible expenses
(1,664)
(38)
Permanent difference: Prior year adjustment
–
66
Non-recognized deferred tax asset on permanent differences
–
(203)
Net operating losses not recognized
(8,960)
(7,446)
–
–
The effective tax rate was 0% in 2024 (2023: 0%), which is lower than the statutory income
tax rate of 25.8% (2023: 25.8%) in the Netherlands. The difference is primarily due to non-
deductible expenses relating to share-based compensation and the net operating losses
for which no deferred tax asset can be recognized. In 2024, the correction of intercompany
charges with the U.S. subsidiary relating to 2023, gives rise to the permanent difference.
The uncertainty is based on insufficient evidence of future sources of income to support the
realization of a deferred tax asset due to the Company being loss-making with limited tax
planning opportunities.
For the unused operating losses of EUR 120M (2022: EUR 91M) no deferred tax is recognized.
These losses can be carried forward indefinitely subject to local tax rules.
F. Share in Results from Participating Interests
An amount of EUR 5.45M (2023: EUR 6.64M) of share in results from participating interests
relates to Group companies.
G. Tangible Fixed Assets
Cost
Office
Right-of-
Total
Equipment
use-asset
At 1 January 2023
716
–
716
Additions
18
97
114
Disposal
–
–
–
At 31 December 2023
734
97
830
Additions
4
51
55
Disposal
–
–
–
At 31 December 2024
738
148
885
Accumulated Depreciation
Office
Right-of-
Total
Equipment
use-asset
At 1 January 2023
(655)
–
(655)
Depreciation for the year
(49)
(9)
(58)
Disposal
–
–
–
At 31 December 2023
(704)
(9)
(713)
Depreciation for the year
(21)
(49)
(70)
Disposal
–
–
At 31 December 2022
(725)
(58)
(783)
Net Book Value
Office
Right-of-
Total
Equipment
use-asset
At 31 December 2023
30
88
118
At 31 December 2024
14
91
105
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H. Financial Fixed Assets
Financial fixed assets consist of participating interests in Group companies. Financial fixed
assets are accounted for in the Company financial statements at net asset value. They are
tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognized for the amount by which
the asset’s carrying amount exceeds its recoverable amount.
2024
2023
Cost
807
1,139
Accumulated impairments
–
–
Net book value at 1 January
807
1,139
Revaluations through OCI
(1,820)
(928)
Exchange differences
609
(155)
Group share-based payment scheme
2,350
2,416
Share in result of participating interests
5,659
(6,642)
Addition: license fees paid on behalf of subsidiary
–
–
Provision: negative participating interest
(5,233)
4,977
Net change
1,362
(332)
Cost
2,372
807
Accumulated impairments
–
Net book value at 31 December
2,372
807
The Company has the firm intention to support its subsidiary, ONWARD Medical Inc, to meet
its obligations to third parties. A provision has been recognized for the negative value of the
investment to the amount of EUR 4,977k (2022: 42k).
I. Trade & Other Receivables
Amounts due from Group companies are recognized initially at fair value and subsequently at
amortized cost. Amortized cost is determined using the effective interest rate. The Company
recognizes a credit loss for financial assets (such as a loan) based on an expected credit loss
(ECL), which will occur in the coming twelve months or – after a significant decrease in credit
quality or when the simplified model can be used – based on the entire remaining loan term.
For intercompany receivables, the ECL would be applicable as well, however this could cause
differences between equity in the consolidated and separate financial statements. For this
reason, the Company elected to eliminate these differences through the respective receivable
account in the separate financial statements.
2024
2023
Indirect tax receivable
80
76
Receivables from related parties – group companies
5,124
25,596
Receivables from related parties – other
36
37
Other
362
239
Advance payments made
790
800
6,392
26,748
The Company funds subsidiary operations, and the decrease in the receivable reflects the
appropriation of cost allocations relating to the U.S. operations.
J. Cash at Bank, in Hand & Fixed Term Deposits
2024
2023
Cash at bank
8,989
2,654
Short-term deposits
48,000
11,200
Cash at bank and in hand
56,989
13,854
Cash at bank, in hand, and fixed term deposits
56,989
13,854
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term
deposits are made for varying periods of between one day and three months, depending on
the immediate cash requirements of the Group, and earn interest at the respective short-term
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deposit rates. At 31 December2024, the Group had no fixed term deposits or bank overdrafts.
All cash is freely at the disposal of the company.
K. Shareholders’ Equity
For the statement of changes in equity for the year ended 31 December 2024, please refer
to consolidated statement of changes in equity in the consolidated financial statements.
Additional information on the shareholders’ equity is disclosed in note 4.0 of the consolidated
financial statements.
L. Provisions
2024
2023
Opening balance as at 1 January
5,233
256
Negative participating interest
–
4,977
Reversal of provision for negative participating interest
(5,233)
–
Balance as at 31 December
–
5,233
The prior year provision of EUR 5,233k relating to the negative participating interest was
reversed in the current year due to correction of intercompany recharge with the U.S. subsidiary.
M. Non-Current Liabilities
2024
2023
Balance as at 31 December
14,015
15,297
2024
2024
2024
Runway
Innovation
Others
Growth
Loan
Loan as at 1 January
–
15,255
Loan amount received
14,116
–
Interest/cumulative dividend accrued during the year
944
767
Transaction cost amortization
212
–
Loan amount repaid during the year
–
(16,022)
Interest paid during the year
(861)
–
Warrants issued to lender
(439)
–
Long term lease liability and others
43
–
Net book value as 31 December
43
13,972
–
N. Current Liabilities
Amounts due to Group companies recognized as financial liabilities at amortized cost as per
the policy in the consolidated financial statements.
2024
2023
Trade payables
471
734
Tax liabilities
31
4
Payables from related parties
–
–
Other payables
2,419
970
Grant-related payables
430
1,358
Warrants issued to lender
437
–
3,788
3,066
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O. Compensation of the Board Of Directors
The members of the Board and the Management Team are considered key management
personnel as defined in IAS 24 ‘Related party disclosures.’ For details on their remuneration,
reference is made to note 5.2 of the consolidated financial statements. Full details of the
remuneration of the board (CEO and non-executives) are included in the Remuneration report.
P. Fees for Audit & Other Services
In accordance with article 382.a of Part 9, Book 2, of the Netherlands Civil Code, the total
audit cost can be specified as follows:
EY Accountants B.V
2024
2023
Audit of financial statements
362
259
Other assurance services
10
–
372
259
Q. Subsequent Events
For subsequent events, please refer to Note 5.3 of the Consolidated Financial Statements.
R. Proposed Appropriation of Result
The Board of Directors proposes to deduct the net loss in full to the retained earnings.
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Independent auditor’s report
To: the shareholders and board of directors of ONWARD Medical N.V.
Report on the audit of the financial statements 2024 included in the annual report
Our opinion
We have audited the accompanying financial statements for the financial year ended 31
December 2024 of ONWARD Medical N.V. based in Amsterdam, the Netherlands.
The financial statements comprise the consolidated financial statements and the company
financial statements.
In our opinion:
•
The consolidated financial statements give a true and fair view of the financial position
of ONWARD Medical N.V. as at 31 December 2024 and of its result and its cash flows for
2024 in accordance with International Financial Reporting Standards as adopted in the
European Union (EU-IFRSs) and with Part 9 of Book 2 of the Dutch Civil Code
•
The company financial statements give a true and fair view of the financial position of
ONWARD Medical N.V. as at 31 December 2024 and of its result for 2024 in accordance
with Part 9 of Book 2 of the Dutch Civil Code
Other
Information
The consolidated financial statements comprise:
•
The consolidated statement of financial position as at 31 December 2024
•
The following statements for the year ended 31 December 2024: the consolidated
statements of profit and loss, comprehensive income, changes in equity and cash flows
•
The notes comprising material accounting policy information and other explanatory information
The company financial statements comprise:
•
The company balance sheet as at 31 December 2024
•
The company statement of income for the year ended 31 December 2024
•
The notes comprising a summary of the accounting policies and other explanatory information
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Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards
on Auditing. Our responsibilities under those standards are further described in the Our
responsibilities for the audit of the financial statements section of our report.
We are independent of ONWARD Medical N.V. in accordance with the EU Regulation on
specific requirements regarding statutory audit of public-interest entities, the Wet toezicht
accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for
Professional Accountants, a regulation with respect to independence) and other relevant
independence regulations in the Netherlands. Furthermore, we have complied with the
Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics for
professional accountants).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Material uncertainty related to going concern
We draw attention to the Going concern paragraph in the notes in section 1.4 of the financial
statements which indicates that while ONWARD Medical N.V. believes it has the necessary
resources to fund operations for the foreseeable future, there is heightened uncertainty
surrounding it’s revenue projections and financial obligations. These conditions indicate the
existence of a material uncertainty which may cast significant doubt about the company’s
ability to continue as a going concern. We refer to the section Our audit response related to
going concern that describes how the going concern assumption and the relevant events and
conditions that may cast significant doubt on the company’s ability to continue as a going
concern were addressed in our audit. Our opinion is not modified in respect of this matter.
Information in support of our opinion
We designed our audit procedures in the context of our audit of the financial statements as a
whole and in forming our opinion thereon. The following information in support of our opinion
and any findings were addressed in this context, and we do not provide a separate opinion
or conclusion on these matters.
Our understanding of the business
ONWARD Medical N.V. (“the company” and, together with its consolidated subsidiaries, the
“group”) is developing and commercializing innovative therapies to enable functional recovery
for people with spinal cord injury. We paid specific attention in our audit to a number of areas
driven by the operations of the group and our risk assessment.
We determined materiality and identified and assessed the risks of material misstatement
of the financial statements, whether due to fraud or error in order to design audit procedures
responsive to those risks and to obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion.
Materiality
Materiality
€1.1 million (2023: € 1.1 million)
Benchmark applied
3% of operating expenses for the year ended 31 December 2024
(2023: 3%)
Explanation
R&D companies such as ONWARD Medical N.V. which are
in the start-up phase, report no or modest revenues and the
stakeholders expect the company to operate at a loss. The value
that owners or others generally attribute to these companies is
primarily based on the promise of future success of the products.
Based on these factors we deem operating expenses to be a
suitable benchmark, as it is one of the most important measures
for the level of cash used in operating activities to support the
advancement of the development and commercialization of the
company’s products.
We have also taken into account misstatements and/or possible misstatements that in our
opinion are material for the users of the financial statements for qualitative reasons.
We agreed with the audit committee of the board of directors that misstatements in excess of
€52,500, which are identified during the audit, would be reported to them, as well as smaller
misstatements that in our view must be reported on qualitative grounds.
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Scope of the group audit
ONWARD Medical N.V. is at the head of a group of entities that consists of the headquarters
in the Netherlands, ONWARD Medical S.A., the science and engineering center in Switzerland
and ONWARD Medical Inc., the US-based field clinical and sales organization. The financial
information of this group is included in the financial statements.
We are responsible for planning and performing the group audit to obtain sufficient appropriate
audit evidence regarding the financial information of the entities or business units within the
group as a basis for forming an opinion on the financial statements. We are also responsible
for the direction, supervision, review and evaluation of the audit work performed for purposes
of the group audit. We bear the full responsibility for the auditor’s report.
Based on our understanding of the group and its environment, the applicable financial
framework and the group’s system of internal control, we identified and assessed risks
of material misstatement of the financial statements and the significant accounts and
disclosures. Based on this risk assessment, we determined the nature, timing and extent of
audit work performed, including the entities or business units within the group (components)
at which to perform audit work. For this determination we considered the nature of the
relevant events and conditions underlying the identified risks of material misstatements for
the financial statements, the association of these risks to components and the materiality
or financial size of the components relative to the group.
As the processes of the group are highly centralized and all transactions are initiated,
recorded, processed and reported on central level, we performed the audit work centrally
ourselves for all three components of the group.
This resulted in a coverage of 100% of the net loss for the period, 100% of total operating
expenses and 100% of total assets.
By performing the audit work mentioned above for the entities or business units within the
group, together with additional work at group level, we have been able to obtain sufficient
and appropriate audit evidence about the group’s financial information to provide an opinion
on the financial statements.
Teaming and use of specialists
We ensured that the audit team included the appropriate skills and competences which are
needed for the audit of a listed client in the medical technology industry. We included turnaround
and restructuring specialists, actuaries and specialists in the areas of IT audit, forensics, share
based payments, valuation of intangible assets and derivatives and income tax.
Our audit response related to going concern
We refer to the section ‘Material uncertainty related to going concern’ above. Based on our
procedures performed, we concluded that a material uncertainty exists which may cast
significant doubt about the company’s ability to continue as a going concern. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause a company to cease to continue as a going concern.
The board of directors evaluated the expected cash flows and made a specific assessment
of the company’s ability to continue as a going concern and to continue its operations for
the foreseeable future. As disclosed in Note 1.4 ‘Going Concern’ to the consolidated financial
statements, the forecast includes significant expenditures relating to the development and
commercialization of the company’s products. The board notes heightened uncertainty
surrounding it’s revenue projections and finance obligations, which may impact continued
compliance with loan covenants. This indicates the existence of material uncertainties about
the company’s ability to continue as a going concern. The company explores additional
fundraising options.
We further refer to Section ‘Risk-Management and Control’ of the annual report that includes
the detailed description of the ‘Risks related to the Company’s financial position, need for
additional capital and taxation’. The financial statements have been prepared on a going
concern basis.
We discussed and evaluated the specific assessment with the board of directors exercising
professional judgment and maintaining professional skepticism. We involved our Turnaround
and Restructuring Specialists and specifically focused on, among other things, the impact of
the events and conditions that are relevant for the company’s ability to continue as a going
concern and mitigating factors, significant assumptions, the process followed by the board
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of directors to make the specific assessment and management bias that could represent a
risk of material misstatement.
We considered whether the board of directors’ going concern assessment, based on our
knowledge and understanding obtained through our audit of the financial statements or
otherwise, contains all relevant events or conditions that may cast significant doubt on the
company’s ability to continue as a going concern. Furthermore, we evaluated the forecasted
cash flows and the substantiation for significant assumptions, with a focus on whether
the company will have sufficient liquidity to continue to meet its obligations as they fall
due and will continue to comply with loan covenants in the next twelve months and the
foreseeable future. We have specifically assessed the potential impact of non-compliance
on the cashflow forecast. Furthermore, we have performed sensitivity analyses on revenue
projections to assess the impact on the cashflow forecasts and continued compliance with
loan covenants. Finally, we evaluated relevant disclosures and considered whether relevant
events and conditions, mitigating factors and significant assumptions related to going
concern have been disclosed and particularly whether these disclosures adequately convey
the degree of uncertainty.
Our focus on fraud and non-compliance with laws and regulations
Our responsibility
Although we are not responsible for preventing fraud or non-compliance and we cannot
be expected to detect non-compliance with all laws and regulations, it is our responsibility
to obtain reasonable assurance that the financial statements, taken as a whole, are free
from material misstatement, whether caused by fraud or error. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Our audit response related to fraud risks
We identified and assessed the risks of material misstatements of the financial statements due
to fraud. During our audit we obtained an understanding of the company and its environment
and the components of the system of internal control, including the risk assessment process
and the board of directors’ process for responding to the risks of fraud and monitoring the
system of internal control, as well as the outcomes.
We refer to Section ‘Risk-Management and Control” of the annual report for the board of
directors’ risk assessment after consideration of potential fraud risks.
We evaluated the design and relevant aspects of the system of internal control and in
particular the fraud risk assessment, as well as the code of conduct, whistle blower procedures
and incident registration. We evaluated the design and the implementation of internal controls
designed to mitigate fraud risks.
As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect
to financial reporting fraud, misappropriation of assets and bribery and corruption, in close
co-operation with our forensic specialists. We evaluated whether these factors indicate that
a risk of material misstatement due to fraud is present.
We incorporated elements of unpredictability in our audit. We also considered the outcome
of our other audit procedures and evaluated whether any findings were indicative of fraud
or non-compliance.
We addressed the risks related to management override of controls, as this risk is present
in all organizations. For these risks we have among other things performed procedures
to evaluate key accounting estimates for management bias that may represent a risk of
material misstatement due to fraud, in particular relating to important judgment areas and
significant accounting estimates as disclosed in Note 1.6 “Significant Accounting Judgments,
Estimates and Assumptions” to the consolidated financial statements, including research
& development, share-based payments, impairment of intangible assets, post-employment
benefits and taxes. We have also used data analysis to identify and address high-risk journal
entries and evaluated the business rationale (or the lack thereof) of significant extraordinary
transactions, including those with related parties.
We did not identify a risk of fraud in revenue recognition, other than the risks related to
management override of controls.
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We considered available information and made enquiries of relevant executives, directors,
legal, and human resources.
The fraud risk we identified, enquiries and other available information did not lead to specific
indications for fraud or suspected fraud potentially materially impacting the view of the
financial statements.
Our audit response related to risks of non-compliance with laws and regulations
We performed appropriate audit procedures regarding compliance with the provisions of
those laws and regulations that have a direct effect on the determination of material amounts
and disclosures in the financial statements. Furthermore, we assessed factors related to the
risks of non-compliance with laws and regulations that could reasonably be expected to have
a material effect on the financial statements from our general industry experience, through
discussions with the board of directors, reading minutes, and performing substantive tests
of details of classes of transactions, account balances or disclosures.
We received a confirmation that there were no legal cases. We inspected the correspondence
with regulatory authorities and remained alert to any indication of (suspected) non-compliance
throughout the audit. Finally, we obtained written representations that all known instances
of non-compliance with laws and regulations have been disclosed to us.
Our key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements. We have communicated the key audit
matters to the board of directors. The key audit matters are not a comprehensive reflection
of all matters discussed.
In addition to the matters described in the ‘Material uncertainty related to going concern’
section, we identified the following key audit matter. The nature of this key audit matter did
not change in comparison with previous year.
Valuation of intangible fixed assets
Note 3.0 intangible assets
Risk
At year-end 2024, ONWARD Medical N.V. carried an intangible
assets balance of € 10.4 million, consisting of goodwill (€ 2
million), in-process R&D (€ 6.1 million) and license fees (€ 2.4
million). The goodwill as well as the in-process R&D and license
fees relate to the acquisition of ONWARD Medical Inc. in 2019.
As disclosed in Note 3.0 ‘Intangible Assets’ to the consolidated
financial statements, pursuant to IAS 36 ‘Impairment of
Assets’, the company is required to perform an impairment
test on an annual basis. The impairment test is significant
to our audit because the assessment process is complex,
requires management judgement and is based on assumptions
that are affected by expected future market conditions. Key
assumptions used in the impairment test are the cashflow
forecast based on the expectation of regulatory approvals of
the company’s products, the growth rate and discount rate.
The value of the in-process R&D is contingent on the success
of the US Food and Drug Association (FDA) approval and CE
mark of the company’s products, as well as successfulness of
bringing the products to the market.
Moreover, as discussed in Section ‘Risk-Management and Control”
of the annual report, sub-section ‘Risks related to the Company’s
financial position, need for additional capital and taxation’,
substantially all of the assets of the company are pledged to
Runway Growth LLC. Should the Company default on the loan
covenants, Runway could enforce its pledge on these assets.
For these reasons, we consider this a key audit matter.
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Our audit approach
We evaluated the appropriateness of the company’s accounting
policies relating to the valuation and impairment testing of
intangible assets in accordance with IAS 36 and whether the
methods for making estimates are appropriate and have been
applied consistently or whether changes, if any, are appropriate
in the circumstances.
As part of our audit procedures, we audited the assumptions
and methodologies used by the company to prepare the
cashflow forecast, as well as the robustness of the
company’s
forecasts. We specifically focused on the risk of not achieving
regulatory approvals and whether a reasonable possible change
in the assumptions could trigger an impairment.
In order to assess the reasonability of the valuation model and
input data, including the growth rate and discount rate, we
have among others performed the following procedures with
assistance of specialists:
•
verified the appropriateness and consistent application of
the impairment model and related inputs;
•
compared the data with external data such as expected
inflation rate, external market growth expectations and
market capitalization of the Company;
•
analyzed the sensitivities in the company’s impairment
testing model.
We also evaluated the adequacy of the company’s disclosure,
including disclosures regarding assumptions and sensitivities
as well as consistency between the going concern forecasts as
disclosed in Note 1.4 to the consolidated financial statements
and the inputs in the company’s impairment testing model.
Key observations
We have evaluated management’s key assumptions and
estimates to be within an acceptable range. We agree with
management’s conclusion that no impairment of intangible
assets is required as at 31 December 2024.
Report on other information included in the annual report
The annual report contains other information in addition to the financial statements and our
auditor’s report thereon.
Based on the following procedures performed, we conclude that the other information:
•
Is consistent with the financial statements and does not contain material misstatements
•
Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the
management report and the other information as required by Part 9 of Book 2 of the Dutch
Civil Code and as required by Sections 2:135b and 2:145 sub section 2 of the Dutch Civil
Code for the remuneration report.
We have read the other information. Based on our knowledge and understanding obtained
through our audit of the financial statements or otherwise, we have considered whether the
other information contains material misstatements. By performing these procedures, we
comply with the requirements of Part 9 of Book 2 and Section 2:135b sub-Section 7 of the
Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is
substantially less than the scope of those performed in our audit of the financial statements.
The board of directors is responsible for the preparation of the other information, including
the management report in accordance with Part 9 of Book 2 of the Dutch Civil Code and other
information required by Part 9 of Book 2 of the Dutch Civil Code. The board of directors is
responsible for ensuring that the remuneration report is drawn up and published in accordance
with Sections 2:135b and 2:145 sub section 2 of the Dutch Civil Code.
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Report on other legal and regulatory requirements and ESEF
Engagement
We were engaged by the general meeting as auditor of ONWARD Medical N.V. on 11 October
2021, as of the audit for the year 2021 and have operated as statutory auditor ever since
that date.
No prohibited non-audit services
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU
Regulation on specific requirements regarding statutory audit of public-interest entities.
European Single Electronic Reporting Format (ESEF)
ONWARD Medical N.V. has prepared the annual report in ESEF. The requirements for this
are set out in the Delegated Regulation (EU) 2019/815 with regard to regulatory technical
standards on the specification of a single electronic reporting format (hereinafter: the RTS
on ESEF).
In our opinion the annual report prepared in the XHTML format, including the (partially)
marked-up consolidated financial statements as included in the reporting package by
ONWARD Medical N.V. complies in all material respects with the RTS on ESEF.
The board of directors is responsible for preparing the annual report, including the financial
statements, in accordance with the RTS on ESEF, whereby the board of directors combines
the various components into a single reporting package.
Our responsibility is to obtain reasonable assurance for our opinion whether the [annual
report] in this reporting package complies with the RTS on ESEF.
We performed our examination in accordance with Dutch law, including Dutch Standard
3950N, ”Assurance-opdrachten inzake het voldoen aan de criteria voor het opstellen van een
digitaal verantwoordingsdocument” (assurance engagements relating to compliance with
criteria for digital reporting). Our examination included amongst others:
•
Obtaining an understanding of the company’s financial reporting process, including the
preparation of the reporting package
•
Identifying and assessing the risks that the annual report does not comply in all material
respects with the RTS on ESEF and designing and performing further assurance procedures
responsive to those risks to provide a basis for our opinion, including:
•
Obtaining the reporting package and performing validations to determine whether the
reporting package containing the Inline XBRL instance document and the XBRL extension
taxonomy files, has been prepared in accordance with the technical specifications as
included in the RTS on ESEF
•
Examining the information related to the consolidated financial statements in the reporting
package to determine whether all required mark-ups have been applied and whether these
are in accordance with the RTS on ESEF.
Description of responsibilities regarding the financial statements
Responsibilities of the board of directors for the financial statements
The board of directors is responsible for the preparation and fair presentation of the financial
statements in accordance with EU-IFRSs and Part 9 of Book 2 of the Dutch Civil Code.
Furthermore, the board of directors is responsible for such internal control as the board of
directors determines is necessary to enable the preparation of the financial statements that
are free from material misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, the board of directors is responsible
for assessing the company’s ability to continue as a going concern. Based on the financial
reporting framework mentioned, the board of directors should prepare the financial statements
using the going concern basis of accounting unless the board of directors either intends to
liquidate the company or to cease operations, or has no realistic alternative but to do so. The
board of directors should disclose events and circumstances that may cast significant doubt
on the company’s ability to continue as a going concern in the financial statements.
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Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to
obtain sufficient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means
we may not detect all material misstatements, whether due to fraud or error during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements. The materiality affects the nature,
timing and extent of our audit procedures and the evaluation of the effect of identified
misstatements on our opinion.
We have exercised professional judgment and have maintained professional skepticism
throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements
and independence requirements. The Information in support of our opinion section above
includes an informative summary of our responsibilities and the work performed as the basis
for our opinion.
Our audit further included among others:
•
Performing audit procedures responsive to the risks identified, and obtaining audit
evidence that is sufficient and appropriate to provide a basis for our opinion
•
Obtaining an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the company’s internal control
•
Evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the board of directors
•
Evaluating the overall presentation, structure and content of the financial statements,
including the disclosures
•
Evaluating whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation
Communication
We communicate with the audit committee of the board of directors regarding, among other
matters, the planned scope and timing of the audit and significant audit findings, including
any significant findings in internal control that we identify during our audit.
In this respect we also submit an additional report to the audit committee of the board of
directors in accordance with Article 11 of the EU Regulation on specific requirements regarding
statutory audit of public-interest entities. The information included in this additional report
is consistent with our audit opinion in this auditor’s report.
We provide the audit committee of the board of directors with a statement that we have
complied with relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with the audit committee of the board of directors, we
determine the key audit matters: those matters that were of most significance in the audit
of the financial statements. We describe these matters in our auditor’s report unless law
or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, not communicating the matter is in the public interest.
Eindhoven, 2
8
April 2025
EY Accountants B.V.
Signed by J.C.F. Lemmens
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Profit Appropriation
Pursuant to the Articles of Association, the profits shown in the Company’s annual accounts in
respect of a financial year shall be appropriated as follows, and in the following order of priority:
•
to the extent that any preferred shares have been cancelled without full repayment as
described in the articles of association and without any such deficit subsequently having
been paid in full, an amount equal to any such (remaining) deficit shall be distributed to those
who held those preferred shares at the moment of such cancellation becoming effective;
•
to the extent that any Preferred Distribution (or part thereof) in relation to previous
financial years has not yet been paid in full as described in the articles of association, an
amount equal to any such (remaining) deficit shall be distributed on the preferred shares;
•
the Preferred Distribution shall be distributed on the preferred shares in respect of the
financial year to which the annual accounts pertain;
•
the Board shall determine which part of the remaining profits shall be added to the
Company’s reserves; and
•
subject to a proposal by the board of directors to that effect, the remaining profits shall
be at the disposal of the General Meeting for distribution on the ordinary shares.
Special Statutory Voting Rights
There are no special statutory voting rights.
Shares Carrying Limited Economic Entitlement
The preferred shares in the Company’s capital carry a limited entitlement to the Company’s
profit and reserves. As at 31 December 2024, no preferred shares in the Company’s capital
were issued.
Branches
The Company has no branches. The statutory list of all subsidiaries and affiliated companies,
prepared in accordance with the relevant legal requirements (Netherlands Civil Code, Part 9 of
Book 2, Sections 379 and 414), forms part of the notes to the consolidated financial statements.
Non-IFRS Financial Measure
This Annual Report contains a financial measure that is not a measure of liquidity under IFRS.
This is commonly referred to as non-IFRS financial measure.
Although the non-IFRS financial measure presented is not a measure of liquidity under IFRS,
the company uses this measure to monitor the underlying performance of its business and
operations. This measure has not been audited or reviewed by the company’s external auditor.
Furthermore, the measures may not be indicative of the company’s historical operating results,
nor is this measure meant to be predictive of the company’s future results. This measure is
presented in this Annual Report because the company considers it an important supplemental
measure for evaluating the company’s liquidity.
Net Cash
The company discloses the following as net cash for the measurement and explanation of
liquidity: Amounts in EUR ‘000
2024
2023
Cash at bank
Short-term deposits
60,043
–
3,568
26,200
Cash and cash equivalents
60,043
29,768
Fixed term deposits
–
–
–
–
Net cash
60,043
29,768
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Definitions and Abbreviations
The following definitions are used in this report:
510(k)
Clearance under Section 510(k) of the FDCA
(US)
AGM
Annual General Meeting
ASC
Ambulatory surgery centers
BG
Berufsgenossenschaft
BDD
Breakthrough Device Designation -
Designation given by the FDA to allow a
timely access to devices providing a more
effective treatment or diagnosis of life-
threatening diseases by speeding-up their
development, assessment, and review
Brain – Computer Interface (BCI)
Electrical signal produced by the brain is
recorded by a device and is then translated
into a signal allowing the stimulation of
the spinal cord, enabling thought-driven
restoration of movement
Caltech
California Institute for Technology
Cardiovascular
Relating to the heart and blood vessels
CARF
Commission of Accredited Rehabilitation
Facilities
CE
Conformité Européene (European medical
device certification)
Cervical
Relating to the neck or located around the
neck area
CEO
Chief Executive Officer
DCGC
The Dutch corporate governance code
issued on 8 December 2016
Chairperson
The Chairperson of the Board
CHUV
Centre Hospitalier Universitaire Vaudois
CRO
Contract research organizations
DAPA
Distribution and Pricing Agreement
DARPA
The US Department of Defense Advanced
Research Projects Agency
DCC
Dutch Civil Code
DoD
U.S. Department of Defense
DME
Durable Medical Equipment
EBITDA
Earnings before interest, tax, depreciation
and amortization
ECAT
Electronic Catalog Contract
EEA
European Economic Area
EPFL
École Polytechnique Fédérale de Lausanne
Epidural
Placed or administered outside the dura
mater
ESEF
European Single Electronic Reporting
Format
EU
European Union
FDA
U.S. Food and Drug Administration
FDCA
U.S. Federal Food, Drug, and Cosmetic Act
FSS
U.S. Federal Supply Schedule
FTE
Full time equivalent personnel
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GCP
Good Clinical Practice
GDPR
General Data Protection Regulation
GKV
Gesetzliche Krankenversicherung or GKV
System (Public System)
GSA
General Services Administration
HCPCS
Healthcare Common Procedures Coding
System
HDE
Hilfsmittelverzeichnis
HIPAA
Health Insurance Portability and
Accountability Act
HMV
Humanitarian Device Exemption
hr
Hours
Hypertension
Higher blood pressure than normal range
Hypotension
Lower blood pressure than normal range
IAS
International Accounting Standards
ICD
International Classification of Diseases
IFRS
International Financial Reporting Standards
IFRIC
IFRS Interpretations Committee
IPG
Implantable pulse generator
k
Thousands
KPI
Key performance indicator
Lesion
A damaged region in the body
LTIP
Long-Term Incentive Plan
Lumbar
Relating to the lumbar region of the back
M
Millions
MDR
Medical Device Regulation
Medical Devices Regulation
Regulation (EU) 2017/745
MHRA
Medicines and Healthcare products
Regulatory Agency (UK)
Neurodegenerative
Characterized by the degeneration of
the nervous system
Neuromodulation
Field of bioengineering implicating
technologies impacting neural interfaces
Neuroprosthetic
Device used to restore function in the
body via the interface of electrodes and
the nervous system
Neurostimulation
Application of an electrical stimulation
inducing modulation or activation of the
nervous system for a therapeutic effect
Neurorehabilitation
Training to restore function after an
injury or neurological disorder
NHS
National Health Service (UK)
OPS
Procedure codes
Orthostatic hypotension
Hypotension tied to posture or postural
changes
Paraplegic
Someone affected by paralysis (partial
or complete) of the lower half of the
body due to an injury or disease of the
spinal cord
PBS
Public Broadcasting System (U.S.)
Perfusion
Passage of a fluid (blood, water)
through blood vessels, tissue or organ
PMA
U.S. FDA Pre-market approval
QSR
Quality System Regulations
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Reeve Foundation
Christopher and Dana Reeve Foundation
RVO
Rijksdienst voor Ondernemend Nederland
Scaffold (cellular)
Scaffolds engineered to induce cellular
interactions contributing to the formation
of new functional tissues
SCI
Spinal Cord Injury – damage to the nerves in
the spine that circulate signals from the brain
to and from the body. It can be caused by a
trauma or a disease. This damage can lead
to temporary or permanent dysfunctions
SCS
Spinal cord stimulation
SDVOSB
Service-disabled veteran-owned small
business
Spasticity
Abnormal increase in muscle tone usually
caused by nerve damage and can be
associated with pain
STIMO
STImulation Movement Overground (title of
clinical study)
Tetraplegic (Quadraplegic)
Someone affected by paralysis (partial or
complete) of upper and lower limbs due to
injury or disease of the spinal cord
Thoracic
Related to the thoracic region of the back
Transcutaneous
Penetrating through the skin. For example:
transcutaneous stimulation is stimulation
delivered through the skin via electrodes
placed on the skin
UCLA
University of California, Los Angeles
Up-LIFT
Pivotal study to evaluate the Company’s
ARC
EX
Therapy
US
United States
USD
US Dollar
Vascular
Relating to blood vessels
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2025
onwd.com