Bactiguard Holding AB (publ)

Thank you, Operator, and welcome to the presentation of Back to Guard's report for the second quarter 2025. Our CFO, Patrick Buck, and I will go through the presentation together, and we will have a Q&A session towards the end. As usual, I would like to share some highlights from the past quarter, and Patrick will go through the figures in more detail later in the presentation. First, we continue to deliver EBITDA profitability with this quarter totaling 4.4 million SEC. This is the fifth consecutive quarter with positive EBITDA for BactaGard in alignment with our promise to our investors during our strategic transformation. Revenues for Q2 came in at 52.1 million SEC, which was a decrease of 14.4% compared to last year. This is mainly explained by lower revenues from the BD partnership due to longer than expected timelines for new market registrations, as well as negative US dollar currency impact. Nevertheless, our collaboration with BD remains solid, and I will elaborate on this later in the presentation. We have also initiated early feasibility work relevant to cardiology under material transfer agreement. Cardiology is one of our newer key strategic therapeutic areas announced in the first quarter, and the applications for future potential licensing hold meaningful value. Our wound management portfolio had revenues of almost 14 million SEC. slightly lower than Q2 last year due to the slower sales of our suture products, but offset by strong growth in Hydrosyn Aqua. Our Hydrosyn brand now represents the majority of the revenues in the wound management portfolio. And notably, over the first six months of 2025, the total wound management portfolio delivered 21% growth compared to last year. As I stated in the CEO letter, infection prevention is our mission. It remains a critical global medical need, and the demand for effective solutions remains so long as there are challenges for healthcare practitioners to deliver care. I am sure you are already familiar with the data. Healthcare-associated infections are very common, affecting one in 10 patients worldwide, and it's estimated that 40 to 60 percent of all HAIs are caused by medical devices. the back-to-guard coding technology offers an elegant solution to this urgent medical challenge. This is further supported by a wealth of real-world evidence and robust data demonstrating our technology's safety and efficacy in reducing medical device-related infections. In the licensing business, we continue to build on our existing partnerships, such as our excellent collaboration with BD, and simultaneously seek new partnerships in additional application areas. Enhancing our specialist and knowledge expertise is another important area, and we continue to invest in capabilities and competencies such as business development, R&D, and regulatory that are critical for Back to Guard to be the best partner we can be to our current and future partners. Our initiation under MTA of early feasibility work relevant to applications within cardiology is a great example of how important these two pillars are to our success. Within our wound management portfolio, the focus is on continuing profitable growth and expanding into new markets. I would like to revisit our strategic therapeutic areas which we took the opportunity to refocus in connection with our new strategic and financial targets announced in March. Our focus areas are orthopedics, cardiology, neurology, urology, and vascular access. therapeutic areas where infection rates are relatively high and the need for effective solutions is urgent. Infections in these settings are linked to poor patient outcomes and in severe cases, even death, underscoring both the medical need and the market opportunity. Across these areas, we see clear applications suitable for our infection prevention technology, particularly in addressing the unmet need for reducing medical device-related infections. These areas also represent the strongest potential for both enhanced and future licensing partnerships, combining high clinical relevance with tangible commercial potential for back to guard. We have well-established partnerships in both the orthopedics and urology therapeutic areas. Orthopedics represents a significant opportunity with an addressable market of nearly $40 billion, covering a wide range of applications across various implants throughout the body. This area also involves a high volume of procedures and consequently a high incidence of device related infections. Infection rates can be particularly significant in fracture and trauma related procedures where they can reach up to 40%. In urology, the back to guard coated Foley catheter has already made a positive impact in preventing infections. BD has sold more than 245 million units so far with zero adverse events associated with R coding. Urology as a field continues to present strong growth potential, not only for FODIs, but also for other applications within the field. This quarter, I would also like to highlight cardiology in particular. Application areas within cardiology present great potential for back to guard with an addressable market of around $10 billion. The therapeutic area includes a variety of implantable devices that are susceptible to infections with reported infection rates of up to 7% for cardiac implantable electronic devices and up to 39% for ventricular assist devices, despite a well-appreciated respect for infection prevention within the cardiology field. These infections pose a major challenge, often leading to device failure that necessitates surgical intervention and places considerable strain on both patient recovery and healthcare resources. This is the licensed partnership snapshot that we introduced in conjunction with our strategic and financial targets. Across the top of the chart are our partnership stages against which we will communicate progress in our business development activities mapped against the relevant therapeutic area on the left. As mentioned earlier, during this quarter, we have initiated early feasibility work under material transfer agreement related to the cardiology therapeutic area. And this is represented with a new check in that box for us this quarter. We are very enthusiastic about this development as a positive indicator of the work we have done in transformation to focus on the licensing business model. Despite this, we recognize that commercialization of medical devices requires a long-term approach. With timelines from early feasibility under MTA through to marketed product that can vary based on device class, desired product claims, and the associated time required to deliver data demonstrating efficacy and safety, we know that bringing new or existing applications to market with the back-to-guard coding can take several years. It is important to reiterate that Back to Guard's efforts in business development and in partnerships established in the nearer term are expected to deliver operational leverage and scalability over time. We remain confident in our stepwise and diligent approach to focus on areas of high unmet need and target partnerships where the value of the Back to Guard coding is relevant. Our activities in the two earlier phases of application development and material transfer will be disclosed by therapeutic area, and we will not disclose more details around the companies or the number of active collaborations. The ambition is to provide transparency on Back to Guard's progress in business development while ensuring we protect the confidentiality of product development required during these early stages. Across the journey, partners can enter exclusivity with Back to Guard for a particular area, and this is the point at which we will announce who the partner is and what we are working on together. By the time of market approval and launch, we will update on the status of our specific partnerships on a regular basis, as we do with our existing license partnerships. With that background, and to come back to the Q2 snapshot specifically, To the far right, we have our licensed partnerships with Zimmer Biomet, BD, and Wellead in orthopedics and urology, respectively, with coded products in the market. We are also currently working in early feasibility and performance testing under material transfer agreements within the category of vascular access. And as I just described, we have initiated early feasibility work within cardiology. We may also do work outside of the strategic therapeutic areas, but only where we and our potential partners believe there is a clear need for infection prevention and that our technology has the potential in the application. And these will be represented in the other category. Turning to our existing license partnerships, the momentum in our collaboration with global med tech company BD continues to be strong. We work together across the entire value chain, and a key focus right now is on ensuring that we are well prepared to launch in additional markets, which includes having a ready supply of back to guard coated Foley catheters. Notably, in India, both latex and silicone coated Foley catheters are now duly registered and available for sale. In addition to the preparatory work for new markets, BD has also renewed efforts in the U.S. with the back-to-guard coded Foley catheter branded Bardex IC, including a recently launched product website. This dedicated online resource features a comprehensive information section that highlights the unique differentiators and clinical value of the coded Foley catheters. Healthcare professionals can access clear, evidence-based insights into how these catheters contribute to reducing catheter-associated infections. improving patient outcomes, and enhancing overall infection prevention protocols. We in BD are, however, experiencing delays in timelines to new market registrations. Despite longer than expected timelines, BD and BactiGuard are fully aligned in the process to enable the BactiGuard-coded Foley business to grow. Although the path to commercialization in each individual market may take more time than we like, BactiGard coated Foley catheters represent a strong long-term value for both BD and BactiGard. Next is our licensed partner within orthopedics, Zimmer Biomet. The focus continues on commercialization of the Xean and BactiGard trauma nail across the European market, including efforts related to the transition to the MDR regulatory requirements. A recent example of market-related activities was Zimmer Biomet's participation at the International Consensus Meeting on Infections in Istanbul in May, where the ZNN back-to-guard system was presented. Zimmer Biomet is a strong promoter and carries the banner for infection prevention. And the ZNN back-to-guard system is an integral part of the solution Zimmer Biomet offers to their customers. we are fully aligned on the ambition to improve patient outcomes through innovative and safe orthopedic medical devices. In addition, the post-market clinical trials in Europe with the ZNN-BacterGuard continue. Both the MDR registration and clinical trial work should be expected to continue for the next couple of years. Looking at our wound management portfolio, the Hydrosyn Aqua branded range of products continues to be the main driver of the revenues and now represents the majority of the wound management portfolio. Even though the second quarter of 2025 was somewhat weaker compared to Q2 2024, over the first six months of 2025, the wound management portfolio delivered 21% growth compared to last year. The strategy for wound management remains firm. We will continue to focus on profitable double digit growth. Quality is an important area for our customers. And we are also pleased to share that the most recent audit in our Malaysian production facilities resulted in zero findings. In addition, our Malaysian site received formal ISO 14001 certification for our environmental management system from the British Standards Institution in Q1. Together, these milestones reflect our strong commitment to high quality, responsible manufacturing and sustainable production practices. And now I will hand over to Patrick to review our Q2 financial outcomes in more detail.

Thank you, Christine. I will now present the financial details for the second quarter and the first six months of the year. In short, we are pleased to deliver continued EBITDA profitability for Q2, despite the decrease in total revenues across license and our rule management portfolio, including the negative currency effects. Total revenue decreased by 14% or 8.8 million to 52.1 million in Q2. Adjusted for the negative currency effects of 2.8 billion, our revenues decreased by 10%. In particular, we saw 10% lower revenues in our license business, yet none of the currency effects. This was in fact flat for the second quarter. In addition, we have in the base of last year our exclusivity revenues from the now discontinued recon agreement. For our wool management portfolio, we saw a total decrease in revenues of 5% for Q2, while our revenues for the first six months are growing at 21% net of currency effects. We see continued strong growth for Hydrosyn across regions, which now represents the majority of our wool management portfolio, and from which we do expect continued strong double-digit growth. the bib portfolio is as planned and announced phased out and its contribution for 2025 will not be significant looking closer at our core license business we saw q2 total license revenues of sec 34.1 million Adjusted for negative currency effects of 3.6 million for license revenues, we saw license partner revenues grow by 7.3%, in fact. So these are the in-market royalty generating application areas. In here, yes, we did see lower revenues from BD of 8 million down to 19.2 million in total for the quarter, which corresponds to about a 21% decrease adjusted for the negative currency effects. As Christine mentioned, we interpret this as an inventory effect in connection with delayed approvals for some of BD New Markets, and we remain positive about our partnership momentum in the coming periods. Revenue from SIMR this Q2 was 14.2 million versus the 10.2 million last year and pertains mainly to minimum royalties received from the trauma agreement. Please note the minimum royalty received in Q2 2025 represents a similar minimum royalty that we did receive in 2024 across the two quarters Q2 and Q3. For Q2 this year, we report no exclusivity revenues versus the 2.7 in the base of last year. And for application development revenues, we report zero, which is the same as the last year's Q2. For the first six month period, we see license partner revenue growth, i.e. our in-market royalty application areas, growing at 11% overall from BD and CIMR combined, adjusted for the negative currency effects. On costs, we continue to operate diligently, driving savings across our external expenses as well as personnel. In Q2, our total OPEX decreased by 14% to 40.9 million for the quarter or about a almost 7 million saving. Now on a rolling 12 months basis, we see our OPEX down at the 195 million level. And as we have mentioned before, while we are driving savings across our business, we continue to invest and strengthen our organization in key strategic areas. We also continue to see reduced cost of goods in our operation with a decrease of about 6 million or more than half of last year as a consequence of our transformation and strategic shift. As mentioned, we continue to improve our profitability with EBITDA at 4.4 million Swedish kronor for this Q2, an increase of more than 3 million. And we now see our six months EBITDA at almost 14 million and our rolling 12 months EBITDA at around 32 million. Finally, our Q2 operating loss amounted to 7.3 million, yet an improvement of 3.6 million for the quarter and a net loss for the period of 8.1 million versus the 14.3 million loss last year. On cash flow in Q2, we saw total cash flows for the period remaining overall flat. with a positive cash flow from operating activities at 1.7 million. When we look at the six months period, obviously, the total negative cash flow mainly pertain to the voluntary amortization of 51 million in connection with the refinancing with SEB. All in all, our cash position is now at 46.1 million at the end of Q2, net of all voluntary repayments. With that, thank you and back to Christine.

Thank you, Patrick. Time to conclude and share a few key takeaways. First, the positive profitability trend continued in Q2. This is very important and continues to ensure that we deliver on our promise to our investors. Second, momentum in the BD collaboration is strong. And despite the longer timelines to market approval and launch, we are fully aligned in the process to enable the back-to-guard coded Foley business to grow. Third, Zimmer Biomet continues the ZNN back-to-guard commercialization across Europe with their continued focus here. Our enhanced efforts within business development and R&D is making progress and is demonstrated in the start of our early feasibility work in cardiology. Last but certainly not least, Hydrosyn Aqua's strong growth was the main driver of the wound management portfolio revenues. Looking ahead, we remain focused on continuing to drive growth and profitability while maintaining discipline cross control. We will work on strengthening our existing partnerships and advancing new opportunities and early stage testing in our key strategic therapeutic areas. We also look forward to welcoming additional experts to Back to Guard joining us after the summer, and this will continue to strengthen our capabilities in the areas of business development, R&D, and quality and regulatory. We will continue to enhance our knowledge and specialist expertise to be and to become the very best partner to our partners. Together, we will reach more patients, prevent more infections, and achieve a positive outcome for both us and our partners. I would like to conclude Q2 in a similar manner as Q1. We are doing what we have set out to do and are delivering on our promise following the strategic shift in 2024. and continuing to deliver consistent results. With that, I would like to hand over to the operator to open up for questions.