Bactiguard Holding AB (publ)

Thank you, Operator, and welcome to the presentation of Backyard's Q1 2024 report. This is Thomas Van Karch speaking, the former CEO. I want to share a brief reflection before I hand over to our new CEO, Christine Lind, and Patrick Bach, Backyard's CFO. They'll go through the quarterly presentation and will be available for questions on the reports afterwards. Friday, two weeks ago, I formally handed over the CEO role to Christine, concluding an 11-month tenure leading back the guard. It's been a very intense and disruptive period where the strategic shift to focus on the license business was the most central change and going from being a production-based business to specialist and knowledge organization. When I assumed the role last summer, Little did I know what was about to come. We now have set the right strategy and inspiring vision to become the global standard of care in preventing device-related infections. Under the leadership of Christine and her team, I'm confident that Bacterial will become an instrumental company in the fight to protect patients from dangerous, uncoated medical device products that today causes half of all hospital-acquired infections. I would like to express a big and warm thank you to the entire back to guard team. You're all chipped in a very dedicated way, despite tough decisions and actions. You're such a high caliber team once again. Thank you. And on a personal note, being operational responsible for back to guard has been very tough. You're separated from a lot of good and qualified people, which has not been fun whatsoever. With that said, though, it's been necessary when implementing our new vision and focused license strategy. I will do my utmost to support Christine and team in my upcoming capacity as chairman of the board, obviously subject to the upcoming shareholders meeting electing me. I'm humble, but I'm upbeat about our future. With that, I'm handing over the show to Christine.

Thank you, Thomas. It is great to be here and thank you all for dialing in to what is my very first Back to Guard quarterly report delivered on my second Thursday as the CEO. As I stated in the CEO comments, I am looking forward to working with our sophisticated board of directors, including with Thomas as the incoming chairman, as well as Christian Kink in his new role as senior advisor. It is so valuable to have this full support. For those of you to whom I am new, my quick background. I have spent more than 25 years in and around the life sciences sector, including in CEO and business development and strategy positions, as well as in investment banking at Merrill Lynch in New York, advising biotech and pharma companies. I am an American, hence my very American accent. I have lived in Sweden since 2015, and yes, I do speak Swedish. Turning more importantly to the Q1 2024 report, The key message that we want to relay is that the strategic transformation has been concluded, and I would like to provide more details on that. If you have followed back to guard for a while, you will recognize this slide. We first showed it in connection with the announcement of the sharpened license focus strategy in Q3, and I would like to go through it one last time to showcase what we have achieved in terms of the transformation and restructuring of the company. Let us review these achievements by the articulated focus area starting with licensing. First, we have strengthened the organization both in terms of capabilities and ways of working. We are now working in a project-based manner with a partner relationship in focus with the aim to continue to strengthen long-term collaborations through teamwork and accountability for results so that Back to Guard is recognized as a true partner rather than being seen solely as a solution provider or a contract manufacturer. Second, we have already enhanced the relationships with our current partners, in particular with BD, but also with Zimmer Biomet. I will come back to this a little bit later in the presentation. Third, we are intensely engaged in dialogue with new potential partners. However, given the new way we will report revenues, we will not provide more information on these new partners until we enter exclusivity partnerships. In other words, we will announce once we are closer to starting to generate revenues, which we believe is more relevant from a financial perspective. Later in the presentation, Patrick will elaborate further on the framework for the reporting of our various partnership stages. The next focus area is R&D and our coding technology. We have further institutionalized the entire R&D organization, processes, and structure. We have kicked off the Billy Cerval Academy, although this is still in very early days, so I will not formally tick that off yet. Lastly, work is well underway on the production and laboratory facility in Markerid, and we hope to have it up and running sometime during Q2. Going forward, all coding materials production and development activities will take place in Sweden, in one of our two facilities in Tullinge or Markerid. Turning to the BIP portfolio, Importantly, we licensed out the folies to BD, and the handover process of these additional markets is making great progress. We're in the final stages of winding down sales of own medical devices. For the CBCs and ETTs, we are in conversations with potential partners, but it is still too early to report on, and it is important to note that we expect these activities to have very limited impact in 2024. To summarize the financial impact of the strategic transformation, we are on track to deliver cost savings of more than $25 million sec on a yearly basis. Separate from the licensing strategy, I would also like to emphasize our focus on growing the wound management business, consisting of both the wound healing offering of Hydrosyn Aqua and a wide range of surgical sutures, including specialist sutures for cardiovascular and ocular operations. In its totality, this Sharpen strategy is how we will be able to deliver on our vision to be the premier partner to leading med tech companies, joining forces to redefine infection prevention and improve health worldwide. This is the last time we will address this slide. Q1 will be the last quarter characterized by the transformation, but we expect continued activities stemming from the transformation during the remainder of 2024 as we fully transition to the new strategy. So let's dig into our business. Becton Dickinson, or BD, is one of the global market leaders within the urology therapeutic area. BD is our longest, strongest, and closest partnership. In fact, we have been partners with BD since 1995, and over the years, more than 230 million back-to-guard coated Foley catheters have been sold. No adverse events associated with the coating technology have been reported. and the product has generated more than three and a half billion US dollars in additional sales for BD. With BD, we share common values and a commitment to always put patients first and have the ambition to make the world a healthier place. As mentioned already in the Q4 presentation, the estimated market value of fully sold around the world is in excess of 1.5 billion US dollars annually and is estimated to grow by around 5% every year. In the category of strengthening existing partnerships, BD is a perfect example. Late December last year, we signed an interim agreement granting BD an exclusive global license, excluding China, for back-to-guard coded Foley catheters, and an expanded long-term license agreement is expected to be signed during the first half of 2024. So what have we accomplished in Q1? Back to Guard obtained MDR regulatory approval in Europe for the coated silicone Foley catheters. This marks an important milestone as it will support and accelerate BD's go-to-market strategy in Europe. It is also a good example of Back to Guard's capabilities as a specialist and knowledge organization where our ability to navigate the rather complex European regulatory landscape has provided great value to our partnerships. We also attended BD's Global Sales and Marketing Summit in the US where our BD project leader held a presentation on how our coding technology is differentiated and benefits their urology and critical care portfolios. This is really important to repeat as the strength of our offering to our licensed partners is that the coding technology differentiates their medical devices in the market. So please keep that in mind. Some 50 BD sales and marketing leaders from various markets listened in and engaged in a lively Q&A. A little fun fact, in the photo to the right is Micah Brinkley. This is BD's star salesman of back-to-guard coated catheters in the US. Clearly, we have a lot of ambassadors within BD, and they are also a crucial part of the future potential for back-to-guard. In connection with the license agreement announced in December 2024 for additional markets for back-to-guard coated Foley's, The transition is ongoing and making great progress. The transfer will continue throughout 2024, and during this period, either we or BD will ensure that the market demand is met. With the new agreement with BD, we believe our historically stable partnership is now strengthened and is a growing one. I'll start with a short recap of our partnership with Zimmer Biomass. Zimmer is a global leader in the orthopedic therapeutic area, and our partnership involves two categories. The first, signed in 2019, relates to Zimmer Biomet's orthopedic trauma implants, for which BactiGuard received CE marking for the coded version in 2021. Today, this trauma nail system is called ZNN BactiGuard. In 2022, the partnership with Zimmer Biomet was expanded to cover multiple product segments, such as implants for various types of reconstructive surgeries. I would also like to mention that in 2023, Zimmer Biomet had an overarching strategic theme called Let's Talk About Infections, used at conferences and in various conversations. And Back to Guard attended many of these, highlighting how our technology could prevent infections, a critical topic within orthopedic procedures. Looking at how the trauma collaboration specifically has developed in Q1, The demand for ZNN BactiGuard continues to increase following the launch across European markets in 2023. The uptake is, however, at a slower pace than we originally anticipated, but the interest and recognition among clinicians is strong, and the need for safe and effective infection prevention strategies is getting more and more attention. The next important event is the launch of ZNN BactiGuard in Japan, which is still planned at the end of Q2. Here again, we understand it will take some time before sales should be expected to ramp up. It is important to bear in mind that successful launch and sales of new technologies and products within our industry takes time and persistence. Together with Zimmer Biomet, we are continuously moving forward. Interestingly, once the ZNN back-to-guard is launched in Japan, Zimmer will offer back-to-guard coated products in markets representing around 50% of their trauma sales. We are confident that infection prevention is a very important issue to healthcare systems. Back-to-guard coded products have strong clinical evidence, and thus we know that our technology adds value. Now over to you, Patrick, to dig deeper into the financial results.

Thank you, Christine. I am very happy to present our Q1 financial results, which indeed highlight the end of our strategic transformation. and are in line with our expectations. Turning to the Q1 figures, we delivered total revenues of 58.8 million, EBITDA of minus 1.5 million, a net loss of minus 9.9, and cash flow from operating activities of minus 19.1 million SEK per quarter. Total revenue for the first quarter amounted to 58.8 million, as mentioned, a decrease of 2.4 million, corresponding to 4%. Adjusted for currency effects of 3 million, revenue decreased by 9%. EBITDA for the first quarter amounted to 1.5 million, an increase of 5 million, and the EBITDA margin was minus 2.6%. Net loss for the first quarter was 9.9 million plus versus 22 million last year cash flow from operations for the quarter amounted to minus 19.1 million and note that this is mainly due to change in accounts receivables of minus 16 million which are driven by outstanding amounts and not yet due in the quarter with our long-standing partners as for key events in the quarter first as we announced In our year-end report, we have agreed with Dentsu Placerona not to pursue the application development project further. Secondly, Hydrosyn Aqua received approval to start commercialization in India. And thirdly, Bexigard obtained MDR approval for our coated silicone Foley catheters, which will support BD's go-to-market strategy in Europe. As we are happy to report revenues this quarter in a new detail split, I would like to recap our business model, which we introduced in connection with our Q3 report and detailed in our year end and annual report. Our pre-partnership phase on the left hand side and the partnership phase on the right hand side follows a well-defined roadmap and shows in a more relevant and transparent way how we evolve our revenue revenue generating partnerships our revenues are generated across these three stages application development partners exclusivity partners and license partners an application development partner participates in a development project where we test the coding technology to different medical devices services and materials ActiGuard's coding development team works in close collaboration with the partner here some application development projects will not materialize, and this is a natural part of our business. An exclusivity partner gets an exclusive right to apply our coding technology to a certain medical device, but has no products in the market yet, for instance, due to pending regulatory approvals. Simo Biomed and their broader orthopedics portfolio is an example of an exclusivity. A licensed partner has the right to market and sell medical devices with the BactiGuard's coding technology in a certain region or globally. Most of our revenues are generated through partnerships at this stage. BD and Simul Biomed and their trauma implant CNN BactiGuard are examples of these licensed partner revenue streams. Please note, all partnerships will not follow all these three stages. and an agreement with a partner can generate revenues from the different phases and streams simultaneously. Now, turning to our new actual revenue split for Q1. Total license revenue amounted to 35.1 million, decrease of 4 million corresponding to 11% adjusted for currency debates. Revenues from BD amounted to 28 million, A decrease of 8 million, corresponding to 23 percent adjusted for currency. Worth noting is that Q1 2023 was another record year for BD, who was building up stock, which was subsequently downward adjusted during Q2 2023. Revenues from CIMA Biomed amounted to 3.2 million, an increase of 1.4 million. Revenues from the management portfolio amounted to twelve point seven million an increase of one point six million. Revenues from our portfolio amounted to six million. This is an increase of one million and the growth is primarily due to the portfolios end of life sales in connection with the discontinuation that we have announced in connection with the transformation. Other revenues amounted to 4.9 million, a decrease of 0.6 million. Currency effects in this quarter amounted to 2.8 million Swedish kroner. So total revenue for the first quarter amounted to 58.8 million, a decrease of 2.4 million. Adjusted for total currency effects of 3 million, our revenues decreased by 8.8%. Now turning to our operating costs and cash flows for Q1. Since Q3, we have focused on our strategic transformation and as communicated, we are on track to deliver cost savings exceeding 25 million on a yearly basis following the transformation. The costs for raw materials and consumables for the first quarter amounted to 11.5 million a decrease of 2.7 million, corresponding to 19%. Other external costs amounted to 18.8 million, a decrease of 4 million, corresponding to 19%. Personal costs amounted to 29 million, an increase of 2.9, corresponding to 9%. Other operating expenses related to currency exchange losses amounted to negative 0.7 million. In total, our operating expenses, or OPEX, amounted to 48.8 million, which is a decrease of 4.8 million, corresponding to 9%. Cash flow from our operating activities for the quarter amounted to minus 19.1 million. This is mainly due to changes in our accounts receivables of 16 million which is driven by outstanding amounts not yet due in the quarter with our long-standing projects. Cash flow from investing activities amounted to 6.2 million, and this is mainly attributable to investments in our new sites and in digital systems. Cash flow from financing activities for the quarter amounted to minus 6.3 million, which is mainly due to amortization of loans of 3.8 million. In total, cash flow for the quarter amounted to negative 31.6 million, and total cash and cash equivalents at the end of the period amounted to 95.8 million. With that, I'm happy to hand over to you, Christine.