Bactiguard Holding AB (publ)

Thank you, Operator, and welcome to the presentation of Back to Guard's fourth quarter as well as the full year 2025. Our CFO, Patrick Buck, and I will go through the presentation together, and at the end, there will be time for your questions. Let's start with some high-level comments on the quarter and summarize 2025. Patrick will go into more details on the financials later in the presentation. we closed the year with a great Q4. Total revenues increased by more than 4% when excluding the negative effect of currency. Given our substantial US dollar exposure within the licensed business, the weaker dollar does continue to impact our revenues negatively. The main driver for both the fourth quarter and full year on revenues and EBITDA was the updated agreement with Zimmer Biomet in December. I will come back to how this new agreement reflects the solidified collaboration between Back2Guard and Zimmer Biomet a bit later. The strong finish resulted in stable license revenue for the full year, again, excluding the currency impact. We achieved this despite the fact that the 2024 comparison year included exclusivity revenues from the now terminated agreement. Total revenue decreased in 2025, but thanks to our new cost base and continued cost discipline, EBITDA continued to improve in the year. As we close out 2025, I would like to reflect on the strategic steps we have been taking throughout the year to advance our transition and shape the back to guard we are becoming. We are now a more focused and better aligned organization with our operations increasingly structured to support our new business model. That said, we do remain in the midst of our transformation and meaningful changes take time. Let's review our progress in line with our strategic pillars. To advance in licensed partnership, we have further strengthened our existing partnerships with both BD and Zimmer Biomet. We have refined our joint approach to collaboration and aligned our ways of working accordingly. I will explain more about each of these partnerships in more detail later. Development of new partnerships plays a key role in executing on our strategy. Our efforts have generated encouraging signals, and we have seen solid progress across an expanding range of early stage initiatives. We have continued to invest in our key knowledge areas with a particular focus on regulatory expertise related to the coding technology, as well as evaluation of new materials and applications. Continued data generation with back-to-guard technology is critical for market validation, and clinical studies in collaboration with our partners are proceeding according to plan. In the wound management portfolio, our strategic focus has been on hydrous and aqua, where we have strong growth. We see customer demand across the total portfolio and therefore include investments such as MDR regulatory transitions that will allow us to continue to drive stronger growth across product categories going forwards. In our licensed business, we focus on therapeutic areas with meaningful infection rates, creating a critical unmet need for effective infection prevention solutions. Our selected strategic areas, orthopedics, cardiology, neurology, urology, and vascular access are associated with infections that can lead to poor patient outcomes, severe complications, and in some cases, death. while also driving significant costs for healthcare. These areas offer the strongest potential for both enhanced and future licensing partnerships. I previously highlighted our progress in business development, and I want to emphasize our broad pipeline of potential new licensing partners, now including, as of this past year, two additional therapeutic areas of cardiology and neurology. At conferences that are new and highly relevant to us, we have found great interest from companies with applications at risk for infection in these areas. For example, we recently attended NUNS, the North American Neuromodulation Society Conference, and earlier TCT, a conference for interventional cardiology. While our discussions are still in an early stage, we have confirmed shared views of infection prevention relevance in key application areas across all of our therapeutic areas. Even though we are very encouraged by the early stage testing currently underway, it is important to emphasize that bringing MedTech innovations to market is a long-term process typically taking several years from initial testing to commercialization. These initial advances reinforce our confidence in the future value that can be created by leveraging our technology. If we dive into our commercial stage partnership with BD, the collaboration has advanced steadily throughout the year. We continue to support the market transition throughout the value chain, for example, through technology training for distributors and joint participation in conferences and sales activities. This particular photo with both back to guard and BD representatives was taken at the Swedish Urology Conference of the Swedish Urological Association and the National Association for Urology Nurses in early October. In India, where we have previously marketed our own catheters, BD launched its back to guard coded catheters earlier this year. The Indian market offers significant potential due to major challenges with healthcare associated infections. and we continue to support market penetration there. At the same time, we are preparing for other upcoming market transitions. At the end of last year, BD received its CE mark that enables additional launches, including in the European market. We remain fully aligned with BD on jointly driving growth of the back-to-guard coded Foley catheters business. As stated before, our extraordinary Q4 results were primarily driven by the updated trauma license agreement with Zimmer Biomed. The update signed in December reflects the mutual understanding to align our contracts around the ZNN back to guard coded trauma nail system and to reflect the ongoing or imminent market activities, the current scope of our collaboration. I want to emphasize that this does not preclude our ability to collaborate outside the areas covered by the revised contract. However, advancing to a later stage in such processes will require additional agreements. The updated license agreement now covers non-exclusive rights to Europe, selected markets in the Middle East and Africa, and Japan. BactiGuard regained the remaining global rights and now has the ability to form future orthopedic trauma partnerships, either with Zimmer or other companies. Under our newly re-cemented partnership, the commercialization of ZNM BactiGuard continues across Europe and in Middle East markets. Today, we have a strong relationship with Zimmer Biomet supported by ways of working that foster our long-term collaboration. The ZNN back-to-guard infection prevention solution remains a part of Zimmer Biomet's infection management strategic pillar. And we continue to work jointly on post-market clinical trials and regulatory transitions from MDD to MDR to drive future growth. Switching over to wound management. Through sales efforts and onboarding of new distributors in multiple markets, Hydreson continued to show double-digit growth across the product lines. During 2025, this expansion was largely offset by a drop in revenues in sutures in specific markets. Looking ahead, we see customer demand across the total wound management portfolio, which means that we expect to drive stronger growth in all product categories within wound management going forward and in line with our longer term strategic targets. Here as well, MDD to MDR regulatory transitions and investments are underway to be able to scale the portfolio to meet the demand. With that, I will hand over to you, Patrick, to review our Q4 and full year financial outcomes in more detail.

Thank you very much. Indeed, our Q4 report show a strong quarter and finish to the year. In short, we deliver an EBITDA in Q4 of 25 million, driven by the updated agreement with CIMR, and 44 million for the full year, We do this despite the decrease in total revenues, driven by negative currency effects and discontinued business. Total revenue amounted to 66 million for the quarter and 229 million for the full year. We delivered net sales in the quarter of 63 million, an increase of 10% net of currency effects, On a full year basis, our net sales decreased primarily due to currency and discontinued business. Excluding the negative currency effects on the net sales of around 11 million, net sales was still down minus 6%. And again, removing discontinued business here as well, we see positive growth in our license business as well as our management business. Looking closer at our license business, we report total license revenue in Q4 at 49 million, again lifted by the update of agreement with Simo Biomed. And for the full year, 152 million. Looking closer at our wool management portfolio, we did see a decrease of revenues of 9% in Q4, while we see a full year growth of 4%, excluding currency effects. In wool management, we continue to see strong double digit growth for HydroSyn across all our product categories. While as mentioned before, this growth was partly offset by a larger than expected decline in sutures. Our expectation is still that our wound management portfolio combined will deliver double-digit growth going forward over this strategic period. Finally, on total revenues, as expected, we have no BIP revenues recorded in Q4. For the year-to-date period, this results in a negative top-line impact of around 15 million, reflecting the discontinuation of the BIP portfolio. In addition, other revenues for the quarter are down 3 million and in the full year, 7 million, driven by negative currency effects. So again, the full year revenue decrease is driven by negative currency effects and discontinued business. When we look closer at our core business, we see licensed partner revenues for the quarter at 49 million again driven by the update of agreement with CIMA, and 152 million for the full year. Excluding the negative currency effects, we see our licensed partner revenues growing at positive 5%. Over the full year, BD came in with revenues at 107 million, excluding negative currency effects on the dollar. This corresponds to about an 8% decline. As we discussed in our Q2 and Q3 reports, the decline was driven by regulatory delays of the new market launches. We are excited about the future launches in 2026 and remain confident in the strength and future growth from our BD partnership. On Simr Biomed, Q4 revenues amounted to 17.6 million and 34 million for the full year. Again, in December, we announced an updated agreement with Simr regarding our trauma nail system and hence all revenues under the previous agreement was finalized and recognized in Q4. Going forward, revenues will relate to the new agreement as stated in our December 19 press release. Overall, across our partnerships, we continue to see positive in market volume growth and demand from customers and clinicians for our technology. Looking closer on cost and OPEX, we continue to make progress on reducing cost and complexity across our business. In Q4, our total operating cost was just under 34 million. And for the full year, our total costs were down 54 million, reaching a base of 154 million for the full year. This is a decrease of more than 25%. and is driven by our efforts to reduce cost and complexity across our business following the transformation, as well as a reduction and reversal of provisions relating to the update of the agreement with CIMR in Q4. While reducing cost and complexity in the full year 2025, we have at the same time continued to invest in the business, including strengthening within our organization. We will continue to do so and to operate with a similar mindset going forward. As mentioned, despite a decline in revenues, we continue to deliver positive EBITDA with 25 million for the quarter and 44 million for the full year, more than doubling our EBITDA margin from 7 to 19%. Our operating result for Q4 was a positive 13 million and for the full year, a 3 million loss. However, an improvement of more than 25 million versus our operating loss in 2024. The quarter also delivered a positive net profit of 12.5 million, while our full year net result is negative 8 million, yet up 22 million versus our 24 result. Looking at our cash flows, we in Q4 delivered a total positive cash flow for the period, of almost 7 million, with cash flow from operating activities being positive at almost 12 million. For the full year period, we have total negative cash flows driven by the voluntary repayment of loans back in Q1 of 51 million. We have cash flows from operating activities almost being flat for the full year at minus 1.5 million. Please note the updated agreement with Simr, which impacted our revenue and result for Q4 and for the full year, has not yet impacted cash flow in Q4. All in all, total cash end of Q4 increased to 44 million net of repayments. With that, back to you, Christine.

Thank you, Patrick. Before summarizing the presentation, I would like to revisit quickly our strategy and targets. We will continue to execute our strategy focusing on license partnership, supported by investments in key knowledge areas for our license business, as well as drive profitable growth in our wound management portfolio. We are on track towards our 2030 targets and reiterate our expected strategic target of more than 10 application areas in either exclusivity or license partnership phases. We also repeat our financial targets to deliver revenues of at least 600 million and EBITDA of at least 200 million by year end 2030. And now let me summarize 2025. We have reinforced partnerships through enhanced ways of working and achieved milestones together with our partners. We have also developed our early stage pipeline of new applications and potential partners across strategic therapeutic areas. Financially, we delivered a stable underlying licensed business in 2025, concluding with a strong Q4, and we continue to further improve our profitability. The overall takeaway is that back to guard now has a stronger foundation to deliver on our targets. And we look forward to demonstrating the commercial value of our coding technology in the years ahead. With these concluding remarks, I would like to open up for your questions and hand over to the operator.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Matthias Vadsten from SEB. Please go ahead.

Hi, Christine and Patrick. Thank you for taking my questions. I have a couple of questions today. The first one, In terms of the reduction of provisions related to the updated agreement with Zimmer that you had, what was the amount that it lowered other external expenses with in the quarter?

Yeah, hi Mathias, Patrick here. Thank you very much. In our provisions, in our non-current and current provisions in the balance sheet, the net difference from Q3 to Q4 is approximately 7 million. That represents the reduction in provisions that we had with the similar agreement. So we see a 7 million impact on the provisions into our other operating cost, i.e. a reduction of that.

Okay, thank you. And then the next question relates to the wound management business. if you can have any comment or any forecast as to when the year-over-year sutures drop will stop being there, basically. What was the patterns you saw in 2025? That's the next one.

Thanks, Matthias. As we have stated, we are excited about the growth of the wound management business fueled by the growth in our Hydrosyn portfolio. That is also what we saw throughout 2025. What we did see in 2025, especially in Q3 and Q4, was a drop in our sutures business. We are fully focused on having the combined portfolio delivering double-digit growth. We will do that primarily from having strong growth from the hydrogen business, but we do expect going forward that the suture business will also contribute positively to the growing business. HydroSyn is our, you can say, strategic focus in wound management and is also the portfolio that we want to scale and that we focus on but we do not expect the sutures business to contribute negatively in the same matter that we have seen in in this year going into next year okay thank you for that and my next one is if you could share a couple of more words on

to help sort of investor confidence that Zimmer Biomet remains a sort of committed partner in this respect and also maybe a discussion, a further discussion as to what makes you confident in reaching your set forth target for 2030. That would be my next question.

Hi, Mattias. This is Christine. Thank you for the questions. Regarding the Zimmer Biomed collaboration, we agreed to mutually update the agreement, obviously, and that means that we had decided together to solidify our current relationship around the current activities that were already ongoing even before we had signed the new agreement with each other. So the focus and the focus of the Zimmer Biomed team has been on continuing to support and drive commercialization of the back to guard coded trauma nail, both in the markets where it has already been launched, but also additional markets that are enabled by the regulatory clearances that we already have in place. So Zimmer's full focus continues there. I think we've maybe repeated Zimmer's messages in the past that Zimmer is the flag bearer for infection prevention. And as we see in the way that they launch and talk about the ZNN back to guard nail at their various conferences, which are aimed obviously at market practitioners, it is a core part of their offering within infection prevention. So we remain very confident in their support and growth there. We also collaborate very closely together on the ongoing clinical trials, which are still ongoing in Europe and are progressing according to plan, as well as in the regulatory transitions that do continue, obviously not just for Back to Guard and Zimmer, but for all products in the European markets that need to ensure MDR registration of their products. And we collaborate closely on ensuring that that is completed according to plan as well. All of these activities are in support of continued growth of the back to guard coated products in market. The change in the agreement, of course, reflects a slightly different financial situation. We hope that this will do two things. One, the fixed fees, which we announced in December, are expected to be no less than 50% of the minimum royalties that we received in the past. And secondly, on top of that, with the new agreement, we will receive royalties on sales of products in market. We hope that that will hope both from a consistency of reporting so that it is more clear where our revenues are coming from, as well as transparency on growth in market will be also more clear to the market going forward. But again, Zimmer is very dedicated to ensuring that the back to guard coded products are a success in markets.

And Mathias, to your question regarding the financial targets, we want to iterate that as we've outlined before, two thirds of our financial targets is driven by our existing business, how we see that growing. That includes the existing and current business with Vidi and also the existing and current business with Simr. So no change to that. Also no change after the Q4 announcement and change of the agreement. So in addition to our existing business, we depend on about one third in our financial targets to be derived from new business. This is new business from existing partners, and it obviously is new business from new partners in the new therapeutic areas, where, as Christine mentioned, are experiencing good momentum and very good demand from potential new partners, be it in neuro or cardio, et cetera.

Okay. Thank you very much for that.

The next question comes from Christopher Liljeberg from Carnegie. Please go ahead.

Yeah, hi, good morning. A few questions. First, coming back to this, to the SIMR agreement, if this technology is so important for them, what could have been the rationale for them to scale down the contract, or has this changed the agreement and driven by back the guard and the fact that you wanted the opportunity to sign with another partner in Europe simultaneously.

Thank you, Christopher. Christine, I'll start by answering the question, and Patrick can compliment on some of the financial impact as well. So from a contract standpoint, our previous minimum royalties were meant to cover a global agreement, which of course included markets well beyond those that are within current approvals. And therefore the financial payments associated them were tied with full sort of global exclusive launches. So that is one change of the contract going forward that the financial agreement or the financial terms are centered around the markets where we have current commercialization activities. So that is the meaningful financial change into the market. We and Zimmer together mutually agreed that this was a good update of the collaboration to do two things. One was to adjust the financial structure to be able to reflect where the current focus of activities was between us. But also secondly, to ensure that back to guard has flexibility, either with Zimmer or with other potential partners, and especially for markets, not just within Europe, but in other markets as well, to be able to drive forward our technology in additional areas sort of fully across the orthopedic spectrum, including within trauma.

But are you in discussion right now with other potential partners for orthopedic or orthopedic trauma in Europe or other markets?

Thanks for that question as well. We are actively in discussions, actually across all of the therapeutic areas, but within orthopedics as well. As we may recall as well from last year, Back to Guard has the rights to sort of a full spectrum of orthopedic indications that includes trauma specifically now, but also includes hips and knees and other reconstructive procedures. And so we are in active dialogue across a full spectrum of orthopedic applications with multiple potential partners. That is, again, what we do across all of the therapeutic areas now. So orthopedics is one category, but certainly cardiology, neurology, and other areas as well are in active discussions.

Given that, of course, the rollout from CIMR has been slower than expected in Europe, I think you agree on this. So was it so that you maybe approached them to have this change in agreement, making it possible to sign another partner?

I think it's pretty clear that we both, we and Zimmer had a vested interest in ensuring that we had a different structure on our current collaboration and our current agreement. And I guess I'll call it more of a agreed structure on our current contract to reflect the current collaboration. Within the partnership itself and the partnership activities and our actual full collaboration, it's quite, it's quite a positive momentum in our partnership discussions since Back2Guard made the transformation to being a license-focused company. So this has been an active dialogue between Back2Guard and Zimmer over the last couple of years of how we would like to work going forward. Did that answer your question, Christopher?

Yeah, absolutely. Sorry, I was muted. I have another question here for BD. Have you had any meaningful sales from new markets such as India already in the fourth quarter? And do you think it's reasonable to assume the growth rate to pick up in 2026 when comparison gets easier and new markets should start having revenues? And maybe if you could say something on your expectation here for Europe in 2026 and into 2027 as well. Thank you.

Thank you, Gustaf. Have we received positive indications from new markets? Yes. As you may know, we have a very large existing business with BD, with US being the primary country. and being by far the largest market. So meaningful, positive indications from new market launches. Yes, I believe that we do see that. To what extent it will impact our numbers going forward, I think we have said before, it will still take time before new market launches become a sort of significant part of the BD portfolio. But we do expect, to your question, we do expect growth from BD going forward. And we do certainly expect obviously growth coming from the new market launches as well as we do expect growth from existing markets from BD.

And if I can compliment that also by noting that India, of course, has only just been launched in mid 2025. So that is a new launch for BD, of course, with our support. And we expect them to continue to drive sales in India going forward. And then within Europe, they have only recently received again towards the end of 2025, the CE mark that is required to be in place for them to be able to enable those launches. So we do expect additional market launches going throughout 2026.

Do you expect this uptake in new markets to be faster than what you've seen for Simmer in Europe, if you take that as an example.

I think they're very difficult to compare with each other. They're quite different markets. So, you know, the urology market and certainly the different channels that are available for the Foley catheter. versus where the Zimmer trauma implant is used have very extremely different dynamics. So I think that would be a very difficult comparison to try to make. But we do have full confidence in BD strength as a commercial company, even within the European markets. And of course, the fact that back to guard has had our own bit Foley's in across markets in Europe as well, and especially within the Nordic region is a helpful fact.

Okay, thank you.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Matthias Vadsten from SEB. Please go ahead.

Yeah, hi, I have one more question if that's okay. You talked about the activities in cardiology and neurology. with new relationships. So I was just curious to hear when were those relationships initiated? And also maybe a little bit of discussion as to what it takes to carry a relationship to exclusivity partnership and eventually license partnership. And also to what extent it's reasonable to expect that those have an impact sort of before 2030. That's my last question. Thank you very much.

Thank you, Mathias. So within cardiology and neurology, those are two relatively new therapeutic areas for us, which we launched really fully in the second quarter of 2025 in conjunction with our new strategic and financial targets. We included these new therapeutic areas when we launched those strategic and financial targets. Concerted work within these areas, I would say, was really begun then. We do appreciate that in order to bring a product from early stages of testing all the way through market approvals, depending on what the product is, can take on average five to seven years. Of course, it's not a very specific guidance, but it is just a sense of an average timeline for medical device approvals, even within these categories. We see a lot of interest because of the high medical need in infections, especially within neuromodulation or other electrical impulse products that are implanted in the body and are intended to stay within the body for a very long period of time. So 5, 10 and 15 years in lifetime for these particular implants and therefore the ability to protect patients over the longer term is an incredibly important and differentiating feature. We also see that within these categories, there are not already a lot of available infection prevention solutions. And therefore, what we offer is our technology is very interesting to potential partners. So we are in active dialogue there. In the middle of last year as well, we, I guess, had announced our new checkbox, as we call it, in the pipeline within the cardiology category. And we are progressing according to plan there in terms of the early discussions and early evaluations that are ongoing within that category. And we would expect to be able to continue to add to that checkbox and that spectrum as we go forward.

Mathias, Patrick here, just to add a point to that. As we have commented before, we were very well aware the revenues and application development revenues that we do receive in the very early stages of these partnerships will of course not be significant in any way versus the rest of our business. But we have recorded revenues, application development revenues in Q4 and for the full year in relating to new therapeutic areas. So unlike some Previous relationships, not only are we in active discussions, we're building relationships, but we're actually also, let's say, getting paid for work we do with these partnerships, which I also think is a positive sign of their interest and the demand for technology.

Okay, and what does it mean to have those early relationships? Is it product testing going on now or what can you share about what's happening with those account parties right now?

We can absolutely answer that Mathias. Within the sort of early stages of testing, it's a little bit of feasibility and early evaluations of of what our partners would like to look at. So that can include things from effectiveness in microbiology tests to demonstrate that we have an effect on infections or potentially will have an effect on infections in the future. It is material testing to make sure that our coding is compatible with the particular underlying device. and other sorts of, I guess I will call them initial tests that give confidence and initial proof of concept that the technology is likely to work in a good timeframe with a particular partner. Those tend to be the tests that we do at the very early MTA phase, as we call it, material transfer agreements, where our partners or potential partners send samples to us to be able to test on their behalf. Once those are completed, and if a partner should decide that they want to move forward with us, that is when we would expect to put in place more full of scale agreements that enable actual product development. Then we are on a timeline that is very product dependent, obviously, depending on what the particular product is. And that's the point at which we would also expect to have structured agreements very much in line with our license collaborations, which could include milestones for different achievements throughout the lifecycle of the particular collaboration. And that eventually culminate in royalties when the products come to market.

Okay. That's all for me. Thank you.

Thank you. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions or closing comments.

And it seems that we have no further questions. Thank you everyone for listening in to our call today. I would like to thank you for your questions. Back to Guard stands stronger today than we have since we started our transformation. and we look forward to our next engagement opportunity. In the meantime, please do not hesitate to reach out to either Patrick or myself. Thank you.