Biovica International AB (publ)

and welcome to the BioVica webcast for the second quarter of our fiscal year 24-25. Today, it's going to be me, Anders Rylander, presenting together with my colleagues Hector Tamburini, Head of US Operations, and Henrik Winter, our SVP Business Development. And I will cover for Anders Morén, who is not participating to date. The agenda is first a short introduction to By Weekend or Productivitum. We'll go through the highlights during the second quarter. I'll do the financial update before handing over to Hector, who will do the update for US, and Henrik will do the update for Pharma Services. And lastly, I'll do a summaries and we will open up for a Q&A session. the Q&A session will be performed as we usually do it. We will let our equity analysts into the call to ask questions, and then after these questions are asked, we'll take questions from the chat so you have the ability to use the function Ask the Moderator. and you can submit it and I will ask, we will answer as many as we can. We will limit the call to an hour. And if we're not able to answer all the questions, we will ask them in writing and put them as an appendix to this presentation that will be put on our webpage. So if we go over to a very short introduction of what BioVica is and Divitum does, This is a schematic illustration of how the product works. The product divitum measures an enzyme which correlates to cell proliferation. And cell proliferation is something very essential when it comes to cancer, of course. That's how cancer grows. And with DIVITUM, we've shown that we can provide very important information both during and both before and during the treatment. Before the treatment, we can give an indication of how aggressive the disease is and also during treatment to provide feedback if the treatment is effective or not, if you should change dosing or change treatment. This is very important, first and foremost, for the patient, of course, making sure that the patient gets the best possible treatment. But it's also important for healthcare providers and payers as treatments within this area has a health economic benefit. They're very costly, up to $15,000 per month and patient or more. So you want to make sure that the treatment also is effective. So these claims that I just made is backed up with solid clinical data. To date, we have more than 30 published and peer-reviewed articles. The majority of this data is in the breast cancer area. Breast cancer is our initial application and our focus area initially. If you could summarize the data, you could say that especially in use with a common treatment within breast cancer called CDK416 inhibitor, we show that we are a strong biomarker that's complementary and can assess response. These collaborations also have been made with some of the leading key opinion leaders or ecologists in the world, some of them that are presenting here at San Antonio where we currently are, which is of course a very important way for us to get the message out. Talking about San Antonio, we're in the middle of this conference and currently we have seven clinical trials being presented here at the conference. So this list of studies will be extended with seven more and around 1500 patients. So this is evolving over time and is strengthening our clinical data. The clinical data is essential for us. It's the foundation for commercializing the product. This is what has led us to where we are now with all the milestones that we have passed, including the 510K clearance in the US, being included in the Medicare system with a price for Medicare that we can claim and get paid for. and also the commercial agreements and the revenues. It's also been essential for building the portfolio of pharma collaborations that Henrik will talk a little bit more about. So clinical data is essential to drive revenues eventually. Talk about revenues and market potential. If we focus only on our initial application, that's the breast cancer area, So far we've been focusing on the metastatic setting for patients with hormone positive breast cancer given CDK4-6 inhibitors and other types of targeted treatment or endocrine treatment. We've been focusing on the markets US initially and now we're also active in Europe through partners. And the market potential is estimated based on the number of patients living with the disease, times the treatment schedule, times the price for the test. Number of patients is, the source is of course Globocan, and the treatment schedule is following a patient once per month, because that's the treatment schedule within this area. initially and then over time quarterly until the patient progress when you go back to more monthly follow-up. With the data that we are now presenting at San Antonio, we show that we have a strong value proposition also in the adjuvant setting in early breast cancer when the patient is receiving adjuvant treatment. which is opening up a new application for us where we estimate the market potential to be five times the size of the metastatic setting. And so the total breast cancer area would then be six times as big. So this is a great development for us. This is something we talked about and it's now happening. It's also happening so we present the data also at the same time as the CDK4-6 inhibitors are expanding into this area. So the timing here is excellent. And on these price levels, we still maintain very good gross margins over 85%. So if I should move in a little bit to our second quarter that we are reporting now and the highlights for that quarter, I'd like to start with the San Antonio conference. It's the number one conference in breast cancer held every year here in San Antonio, Texas, this year with over 11,000 participants. And we have a strong BioVica team here on site also. In the opening of the conference, as I said just in the middle of it, there were two key topics that was in focus. The first one was that there is now since like a month and a half two months ago two CDK4-6 inhibitors approved in the early breast cancer setting for what is called an adjuvant treatment. You see the results from that. The positive thing here is for the patients that by going through three years of such treatment after you have done surgery, you will get a benefit of about 3% when it comes to disease-free survival. The 3% more will avoid recurrence basically over those three years. So that is, of course, excellent. It goes from 87 to 90 percent. At the same time, it comes with a cost at around $15,000 per patient and month that I just said. previously at over 36 months for a big patient group. About roughly 25 to 30 percent of the patients in this group would then be eligible for this treatment according to the guidelines If you can't point out the high risk patient that really benefits from the treatment, then just treat them all. So this is the ongoing discussion at the conference. How can you do this? Because not only to avoid cost, because the other side of that coin is that you get adverse events or side effects from the treatment that you also want to avoid. if you don't have to accept them because of that you need a more aggressive treatment. This is an important topic and it was the topic that opened up the conference this year. And it's also timed very well with our adjuvant data. The other thing that was a key topic in the opening up of the conference is the FDA Project Optimus. This has been going on now for some time. And the objective for the Project Optimus is that we should go from a maximum tolerated dose to a minimal effective dose. You want to use as little as possible to ensure that the treatment is effective. The reason and rationale behind this is of course that you want to minimize the side effects for the patient while maintaining the efficacy of the treatment. So in theory, this is all good and the patient is benefiting from that. The challenge here is to find efficacy biomarkers that can help you perform this and do this treatment, perform this process. so i think for us it's inspiring to to see uh that both these uh initiatives or or events are driving demand for for divitum because we have a value proposition that is strong in both these areas and the product optimus the optimal dosing is something you would like to do both in the adjuvant setting and as well as in the metastatic setting so Our conclusion here is that we're really, really well positioned in some areas that are very much top of mind and in focus within the breast cancer area currently, for good reasons. If we move into, by weekend, our highlights, if we start with the US, it's positive that our sales are continuing to grow. so so we're happy with that we had even higher ambitions than the 12 it was higher last quarter so we're working hard to to establish that growth and the way our focus area is to work with companies that have a strong economic incentive to use our products And we were able to sign an agreement with such an IDN, integrated delivery network, which we call here, it's also a healthcare giant. So that's a very, very important milestone for us in order to continue develop the US market. Another important milestone that took place was that our CLIA lab now got the last certification in the US required to be able to serve the entire country, all states. And that was the New York approval that took place after they did an audit at the lab in San Diego, where we passed without any remarks. So a great achievement from the US team. When it comes to the pharma services, we continue to take work orders. This one was the largest so far. And that, of course, will lead to revenues going forward. So that's possible. We also signed two new master's agreements. It's like a frame agreement that you will then have work orders within that frame agreement. So both these events will drive revenues going forward. And Henrik will talk a little bit more about this later in the presentation. When it comes to the clinical, I already mentioned the San Antonio conference that we currently are at. We had seven posters presented at this conference and that includes not only the adjuvant and early breast cancer data that I talked about, we also had one trial from Italy where we compared against ctDNA and we performed very well and they could act as complementary or even as an alternative to ctDNA which is really, really important for us to prove that our product performs very strongly. And then also strengthening of the metastatic cancer area. We got additional data that was important for setting cut-offs, etc. with the unit that we have for the assay, so that was also Very, very strong data on that area as well. And then the financials, we include our cash flow, but with a little bit more, seven millions compared to the same quarter last year. And our accumulated sales was around four million Swedish kronor. for the first two quarters, which is in line with the same period last year. A few words about the adjuvant data and how it's going to be applied. So it was actually not one, but two trials that has now was presented yesterday, these two. at the San Antonio conference. One was done with the German breast cancer group. The trial was called Penelope B. It's a very, very large trial with over 1,000 patients and several blood draws and then dividend tests per patient. So it provides very, very solid data. And the second one was one performed by Roswell Park in New York. a smaller trial with both metastatic and early breast cancer for adjuvant treatment. But there are consistent results that Divitin provides value both before with a baseline test and also during the adjuvant treatment that you can monitor how effective the advent treatment and before treatment you can identify the patients with the highest risk to get recurrence in the coming future. So this is really, really strong data that opens up a new opportunity for us. And the timing with the approval of CDK inhibitors within this early setting and the need for better biomarkers that that creates is fantastic. So super, super grateful and happy for that. And here's just an explanation so you understand this process. We have so far up until now been active in the metastatic setting, where we have performed monitoring over several lines of treatment, typically for these type of patients around three or could be even more. We have assumed three years in our market estimates because during the first three years, that's typically where you get these type of treatments that we are complementary and that DIVITAM are being used. We assume around eight tests per year for this patient population. That's behind our market potential estimates so far. Now we are adding adjuvant therapy. So that's the therapy that you do after the surgery. And then you follow the patient, you do select treatment, you do the adjuvant treatment, you monitor that, and you follow up. And that's the new TK or divitum utility that was part of the trial that I've talked about on the previous slide and where we had such excellent data. Adding the adjuvant also has helped us in the commercial discussion. One example is the agreement with this healthcare giant where this part of our value proposition played an important role of securing that agreement. Let me then go into the financial update. so our sales uh for for this quarter and and if you look at the first two quarters both are uh in line or actually slightly below uh the sales uh from from previous year something that uh of course we're not satisfied with and working hard to improve If you look what's behind the figures, if you break down the different areas, you can see that we are actually growing in three out of four areas. We have growth in US and also starting up sales in Europe. And within the pharma services area, the actual service sales is growing also. and where we have had poor progress with the selling of dividend kits, where we sell through CROs and we don't have the same insight into the sales process and forecasting. So the IVD side of the business was up 54% and the services business was up even more actually. so we're we have a positive development in several areas but we want to accelerate even even more and if you look at the cash flow it's been improved even this quarter just as last quarter and it is because we're running our operations more effective and are managing our cash better and it's a consequence of that change we did six months ago or so when we changed our organization and has made it slimmer. We're currently behind plan to be cash flow positive. We had higher sales targets set for ourselves, but with the milestones that we now have taken, we're working to make up for that. And here's the cash position.

Here we're slightly better than we were last year. With that said, I'd like to hand it over to Hector.

Hector, so you can go through and update about the progress on our US business. Please, Hector.

Thank you, Anders. Good morning. Good afternoon. I'm Hector Tamarini, heading the U.S. operation based in San Diego, California. I'm going to share an overview of the second quarter of this fiscal year based on the U.S. operations. So, if we go to the next one, please. The dividend sales, as Anders mentioned, in the Q2 of the current fiscal year continued the growth even though as not as we plan or expected a bit slower. But it's remarkable we had a 12% increase over the previous quarter, but even more exciting is that it was a tenfold increase over the same quarter last year. So that shows the growth of the operations. The number of prescribers is also growing. We have about 11% growth, and this is due to our reaching more prescribers, more physicians, and more centers. But we definitely are looking into how to accelerate the growth to complete our goals. If we go to the next standards, please. The factors that we noticed as the more critical ones in terms of growth, one is the small sales force. As Anders mentioned, the adjustment in the company earlier this year left us with a small sales force, so we have limited resources to reach out to customers, which are spread out in a large geography and multiple institutions. And the other one is the test utility to physicians. One of the things we learn about Divitum talking to many prescribers is having the TKA result, the thymidine kinase activity result is the first part. The second part of the utility is what to do with it. So what's the actionable plan the doctors can make based on that result? So we see this as an opportunity. because we understand with all the clinical evidence that there is a potential for therapy optimization. We can find the minimal dose or the effective dose that also improves the patient's quality of life by reducing the toxic side effects of some of these treatments. And all of these factors ultimately will result in a benefit in health economics. Submitting a patient to an ineffective toxic treatment that cost a lot of money has a heavy weight on the healthcare system. And we understand that a big contribution to move the balance in our favor would be working with integrated delivery networks, which I'm going to explain a little bit more about what they do and how we plan to work with them. So we go to the next one, please. So these IDNs are organizations that manage end-to-end healthcare facilities, at least in the U.S., and some are in Europe as well. And they have multiple healthcare centers, typically are regional, but sometimes they have national reach. If we look at the institutions that are within this category, we identify over 500 IDNs in the U.S., And if you take the top 50 or the 10% of them combined, they produce over 500 billion would be US dollars in yearly revenue. So it's a huge, huge healthcare market or segment. Some of the familiar names of these institutions are in this slide, and we are working already with some of them, and we have several of them in our plan to expand are reached to these type of institutions. So the important part is what is the benefit that Divitum can provide to these institutions. So if we go to the next, please. In both indications, the metastatic breast cancer and the early breast cancer, so the adjuvant therapy, there are challenges that the physician has to face. One is, are they using the effective dose? Is the dose being effective? The other one is, is that dose producing too many toxic side effects to the patient, which we see in our daily dealings with clinical patients? And finally, what's the prognosis? Is the drug or the combination of drugs that are being used producing a benefit to that patient that will result in long-term control of the disease. So one of the things that Divitum can claim is that something, as Anders mentioned, we're hearing constantly here at Sandia and San Antonio, which is there are not enough biomarkers that produce a significant signal to the physician in the treatment. So right now, in many cases, the patient who's in an adjuvant therapy won't know and the doctor will not know whether the disease is progressing until there is a clinical symptom. So the patient has new symptoms that alert the doctor or they decide to go to an imaging study that also raise the alarms as the tumor is moving to the next stage. So a biomarker becomes a critical indicator It could help make early decisions in treatment changes when the treatment is no longer working. It will improve the quality of life of that patient because it can reduce significantly the side effects if the dose can be reduced. And we've seen this already in practice. And all of these benefits result in a significant cost savings in the management of the patient. These institutions, the IDNs, who manage the whole treatment alternatives are keenly looking at ways to improve the efficiency of where they spend their dollars or their money in these treatments and to be more effective for the patient. So that's an area that we're going to work really hard in the coming months to increase our presence in these institutions. So I'm going to jump to a completely different topic now, although it's related. So this is our regulatory situation. As Andres mentioned before, we are very proud that our laboratory in San Diego obtained what's called the out-of-state permit from the state of New York. That was the last license that we were waiting to have. We passed with flying colors, no findings of any sort. And this opens the door for a very exciting market potential. New York State has, of course, a large population, but also very reputable institutions, among them, Roswell Park Comprehensive Cancer Center, also the Memorial Sloan Kettering. We are already working with some of these institutions in New York on the research side, so their clinical trials, as Anders mentioned, Roswell Park, for instance. We worked in close collaboration and now our expectation is in the very near future be also applying Divitum to their clinical practice with their regular patients. So this completes our situation in terms of U.S. approvals. We are now officially offering the test in the 50 states and puerto rico as well and then the next slide is about the topic of the the month of the week at least which is the san antonio breast cancer symposium we are extremely proud as you may have noticed uh to have seven posters that were accepted this is a huge increase compared to last year and a very significant presence of uh divitum tka as a biomarker very, you know, well-credited institutions like the German Press Group, Emory Cancer Institute, and others have presented their clinical trials. And there's a clear mention of Divitum. So it's really exciting to see the presence and the increase of Divitum in the market. So that's all for my update. And I'm going to hand it over to my colleague, Henrik. So Henrik, please. Thank you.

Thank you very much, Hector. And hello to everyone. I'm Henrik Winter and I'm heading up our business development and especially focusing on our collaborations with pharma and biotech. So I'm going to provide you with the results and also some highlights from our pharma business. So on the first slide here, I wanted to remind you on the different types of offerings we have for pharma. So number one is that we provide TKA testing services and kit sales and that that service comes out of our US CAPCLIA lab and also our Swedish facilities. We also provide or offer collaborations on companion assay developments and commercialization together with Pharma. And then finally, we also offer sales and sustaining of these commercialized companion assays. Right now, our primary focus is really on the TKA service testing. And that's only natural because pharma's way to a collaboration on developing a CDX goes through a very thorough evaluation analytically and also clinical of a new biomarker like TKA. So that is really where we put our emphasis right now is to onboard as many collaborators and work orders as possible to increase the likelihood of moving into this CDX collaboration. So if you look at Q2 results, we signed work orders for approximately 2.2 million Swedish. And we actually also are now negotiating another 2 million Swedish value work orders. We executed work orders in the surroundings of 750K. That is 90% up as compared to Q1. And if you compare to Q2 last year, the service activities, testing pharma samples is actually up 275% as compared to last year. So it's just showing that we have more and more pharma companies wishing to have these work orders performed and having their samples TKA tested. Yes, as mentioned by Anders, we did experience some challenges on the kit sales, and that's mainly due to two customers finalizing some major studies. preclinical studies and cell culture studies in their lab and they buy our kits for these purposes. Typically through CROs and we simply have less oversight of what the CROs are doing and that led to the less kit sales as compared to last year. We also assigned two MSAs and that brings us to a total of 16 master service agreements now with pharmaceutical companies. And we are now involved in roughly 15 clinical studies with pharma. And as I mentioned earlier, this is exactly what we want to do. We want to move into the clinical studies together with pharma because this is the way of documenting and convincing pharma that our assay is capable of being used as a companion assay, as a monitoring tool for the efficaciousness of the drug treatment. So on the CDX collaborations, I know this is a very often asked question, where are we? We continue the discussions with several of our pharma companies on moving into or taking the next step on more closely collaborating on customizing our TKASA for specific drug needs. But it is something that takes time simply because you need to have both the analytical and the clinical data ready. Currently, the discussions we have with pharma is focusing on CDKs and both mono and combo treatments.

Next slide, Anders.

So if I dive more deeply into some of the highlights with pharma during Q2, I mentioned, you know, we signed two MSAs and this was actually with pharma biotech companies in US and also in UK. We have press released both of these and in both cases it was around CDK inhibitors that were going to be monitored by help of our assay. So it is in phase one, phase two trials here. We also initiated discussions or negotiations on two additional MSAs. And in this case, it is with Tier 1 and Tier 2 pharma companies. And again, it's CDKs. And Tier 1 and Tier 2 pharma companies also exactly where we want to be, because those are the obvious candidates for moving into a companion diagnostic collaboration. They have the right size and the right focus, and also the power to move into these kinds of collaborations. Anders mentioned that we signed the single highest work order during our Q2, and We press released also that in September, it was a work order, you know, above the two million Swedish. Then also very important, we passed the vendor security risk assessment at a tier one pharma company. And this is important because it opens the door for BioVica and our TKA test to move into a regular provider of service testing to this big company. And we are now in discussions on placing our assay into clinical studies that are running in both US and China. So during the end of Q2, when looking at the total number of work orders running and work orders, you know, the same as projects, we actually increased that number by 50%, also earlier I mentioned. Then lastly, I just want to mention that we also, during our second quarter, filed national patent applications for Divitum as a monitoring tool within immune checkpoint inhibitors, and we have now filed in US, Europe, Japan, and China. And next step is obviously to having these patents granted. And that will take some time, but it's a very important step for our company also. I think that was the highlights for the pharma business currently. So back to you, Anders, and the summary.

Thank you very much, Henrik and Hector.

summarize the quarter and also where we are. So we have a lot of progress and some challenges.

When it comes to the IVD sales, it's positive that we're growing in these areas. And if you look at like a year ago, it's exceptional growth. But if you look over the last quarter, it's below our expectations. So the delay of those milestones is also partly explaining that. The good thing now is that we've been able to get this one very important agreement in place that we've been working for for quite some time, which is also we expect to be able to drive sales on a totally different level as they are willing to roll this out in their organization to capture the economic benefits that they get from using our test. So we are currently in those discussions in order to agree on how to roll it out, both within the metastatic era and the early breast cancer adjuvant area. And we always continue working into refining our business model and business plans to address gaps. So we've been doing that. We started with focusing on the IDNs for quite some time. We've worked with our organization. We're constantly looking to learn from the ongoing business and also to find ways to accelerate growth through partnership and other things. That work is constantly going on. I think the key achievement during this quarter must highlight the agreement with the major healthcare provider, the IDN, that we talked about several times here. That the new pharma services agreements keep coming in and work orders that will lay a foundation for growth going forward. The adjuvant data, is something that just the market potential for that area alone is five times making the entire breast cancer area, six times the metastatic only. That's a huge, huge milestone. And it's also a strong contributor that we were able to, when we got that data, we were able to quickly close the agreement that we were discussing. One thing that we didn't talk so much about has been the data that was shown against CTDNA. We've shown that in the past, but yet another trial with more focus on the benefits of using DIVITUM was now presented at San Antonio. That is good, great for us in many ways, both in the clinical setting for use with pharma, etc. And maybe on this list, I think also the New York approval that will open up business in one very important territory where we all already now have partners that we collaborate with. Roswell Park, for instance, they were presenting data from their clinical trials here at San Antonio. So they are already up and running with the assay and now they have uh the possibility to be used clinically for their patients market driver yeah external events that happened was the the approval of the second cdk46 inhibitor within the early setting creating a demand for a biomarker that is able to identify patients with high risk and also monitor the advent treatment and the same thing with project optimus that is is being discussed more and more on this type of conference and fda are requiring pharma companies to consider this when developing new therapies within the cancer area, which will also drive the demand and are already driving the demand for Divitum within pharma services, increasing the possibility for us to launch new products as complementary or companion diagnostics, driving revenues for Divitum over time. so we believe that we're taking great steps this quarter and looking forward we look very very positive uh on the future and uh with that i would like to open up for the q a session i guess let's go by the list here let's start with uh you wanna nearest from red eye So if you can let Johan into the call and see here, Johan, what questions you have for us today. Yes.

Can you hear me?

Perfectly.

Excellent. Okay. Let's start with the question then. Obviously, sales in Q2 are modest and somewhat disappointing, as you alluded to earlier. You are halfway into Q3 and have How confident are you in improving recurring revenues during the rest of your year, by the end of April 2025?

Yes. Well, if you look at the remaining year until the end of April, I'm confident that we will improve sales. I think On the ongoing sales that we have clinically, we are constantly growing. And with the new commercial agreement, you will see the effects of that during the maintenance of the fiscal year. And also, as Henrik said, that we have increased the number of master services agreement and work orders that will translate into sales sometimes we see delay a month or so that could make the revenue come in the next quarter but over six months I'm confident that that will also contribute to growth so yes.

Very good and the process then in this latest signing with the IDM partner So you do expect some traction already during this period from this side?

Yes. Yes, we do. So the way we're thinking there is when it comes to the metastatic area, our ambition is for them to start using it more or less starting January. They have already used it in smaller volumes and so they have seen the benefits and have actually been acting on it when it comes to treatments decision. So they're familiar with it in the metastatic area and so we should see it start there starting January. When it comes to the adjuvant, which I think was a real eye-opener and a game-changer in this discussion, I think we will discuss more and also start a trial specifically about the adjuvant setting. That actually is something that we will appreciate because Then with a trial, you get committed volumes. But the downside of that, that will take a quarter or two to get through the ethical committee and start up the trial. But then that revenue will kick in as well. And that's very positive. They understand that for every patient that they enroll in the trial, it will be economic benefit to them as well as benefits for the patient. So that's also why there's a high motivation and incentive to both use it within adjuvant and in the metastatic setting.

Interesting. And out of clarification then, so it's your IDM partner that will initiate this trial then to support the committee?

Yes, yes. So that's typically is very few trials that we are always doing trials with partners that have the patient and also typically are publishing the data. And in this case, the trial for the adjuvant will benefit both parties. They will, during the trial already, adopt to using our test in the adjuvant setting, and that will give benefits already in the trial. And for us, the benefit will be, of course, revenues, but maybe the bigger benefit is when the data is published because that's the intention, it will be practice changing, not only for this account, but in the public domain, and we can use that in applying for NCCN guidelines to strengthen the use for our biomarker also in the earlier setting. So yeah, there are a lot of benefits, not only when it comes to revenues with this agreement.

Yes, and that's another question. Obviously, the data is very important. Will you be able to share any of that data before publication in discussion with other IDNs that you mentioned that there is a pipeline of other discussions as well?

um uh yes i think the way it typically works is uh first of all when when you initiate the trial uh it becomes public so i mean you can read about it in on on uh clinical trials there's a specific website for this so there you will see the the trial uh design and and and like the parameters around the trials And then typically what happens, so it's like on last year's San Antonio or Washington University, they gave an update on how the impact trial has progressed and it's progressed well. So you can kind of follow the trial progression on these conferences over time normally. Then of course when you complete the trial, you will then complete the data, you will typically present it on such a conference like San Antonio or ASCO and then it will be published. That's the normal way of communicating. Yeah, you're not sharing data. You want to share it in this public domain with these occasions, but you can do it during trial this way. Do you understand the somewhat complicated explanation? Yeah.

Yeah. And also related then... Also clarification, in this ABC market opportunity, are you certified to deliver kits into this market space and what about the label?

Yeah, that's an interesting and somewhat also complicated question. uh i i uh if i start with the reimbursement part of it maybe hector you can help me out with the regulatory side of things so when it comes to reimbursement especially for for medicare medicare it's very very important that you comply with their rules and and their codes And in our code for Medicare, the so-called PLA code, the scope for our assay is not limited to metastatic breast cancer. The code is defined as breast cancer. So this is something we had in mind when we applied for this. At the time, we already had data from the early setting that we could provide. so we were able to get that code so when it comes to the reimbursement uh and getting paid for for our assay uh we're covered as as it is uh already with with that setup and it's also with the agreements that we have the commercial agreements there's no limitation that it it's only metastatic it's it's breast cancer in general When it comes to the regulatory landscape, the 510 clearance and the CLIA lab, maybe, Hector, if you want to elaborate and say some words about that.

Yes, of course. Yes, of course. So in terms of the label, we don't need to make a change immediately. But in the long term, yes, we will. BioVica obtained clearance from FDA with Divitum for metastatic breast cancer initially, but the test could be offered also in adjuvant breast cancer as a modified 510K clear test or basically a laboratory-developed test as long as we have clinical supportive data, which we have, the publications are. And that puts a restriction of which laboratory can perform the test is the one that has that information. In this case, it would be BioVica. And the next step would be to gather all the clinical information and submit a 510 application that will allow to incorporate or expand the indication in the label. So at this moment, that's the plan. Very good.

Yeah. Simply put, yes, we can do this. We have a long-term, we will file a 510 and also because FDA wants to harmonize on 510 and by 28, LDT should be gone. But in that transition period, we were able to offer it through an LDT.

So you will be able to offer it as an LDT

Yeah, so we can already already now in we are offering a test service so that oncologists can utilize and there's not always we know the clinical status of the patient so it could be an early an adjuvant breast cancer patient already now, or actually a patient with another cancer, we offer this test service and we return the result. But the 510 clearance, what it actually, it doesn't forbid you for doing the test. It restricts what you can market. just so we're super clear. So we cannot market the adjuvant under the 510K. Then we need to be specific that we offer that as an entity just to get, do you understand the difference?

Yeah. Yeah. And finally on my side, excuse me for a number of questions. Earlier you set out that if you stick to your sales plans, you, were confident to reach break even on current capital base by, I think it was end 25. Now you are clearly a bit behind sales. ambitions and plans and the capital situation is as a result more stretched. What opportunities do you see and do you see opportunities that are not necessarily diluting the number of shares?

Yes, we're looking into different options of both accelerating sales by partnership and thereby increasing our capacity. and with the milestones that we've just passed, I think this will strengthen our value proposition in that setting. So that work is ongoing and we're looking into means of strengthening our financial position as well. and also from that perspective i think the masters that we presented here is helping us and but i think the most important thing also going forward is to continue drive sales and although a delay i think with what we're presenting here we we also put ourselves in a better position for that so I think that's the level of detail I can say. So I think that will help us as well. But yeah, we have a delay. We were expected to sign the agreements a quarter or two earlier, and the result of that was in our forecast, which is now pushed forward. On the other hand, we get the adjuvant portion that we did not expect. Hopefully we can accelerate sales and we'll come back with more details regarding an updated business plan.

So the ABC opportunity, do you expect that to support ongoing discussion both on the pharma CDX side and on the commercial IBD sales partnering?

When it comes to, if I start with IVD, and maybe Henrik can comment on the pharma, when it comes to the IVD, definitely this opens up opportunity. One example is the agreement with IDN, that the adjuvant is an important factor. Also, our current customers that have been interested in using it in the adjuvant setting, most of them are treating both metastatic and adjuvant. treatments. So this will lower the threshold for them to start using it also in that setting. That will also increase revenues for us because there's more patients, more tests. So definitely so in the adjuvant setting, yes. Henrik, maybe you could comment how this will affect the pharma services side of things.

Yeah, absolutely, Anders. We can do that. So there's no doubt this is going to be perceived very positive by pharma. And at the San Antonio in meetings with pharma, these data are being presented. We haven't had a chance to present them before for several reasons, but they are certainly being presented now. If you think about it, what the data is really showing is that in the adjuvant setting, when you have actually removed the tumor. There's not supposed to be any tumor burden. But of course, I mean, there might be in some cases, there might be a little bit of a leftover of tumor mass But even in those conditions, our assay is capable of analytically and clinically to stratify and monitor patients. And that's super, super strong. That's a super strong message to pharma and something they find very, very attractive. So yes, it's certainly going to impact our sales and work with pharma in a positive direction.

Great. That's all from us.

And thanks for taking our questions.

So should we move on to Parieto? I think it's Chan who's on the call.

Hi, hi everyone. Good afternoon. So yeah, a few quick questions from me. You mentioned that the small Salesforce in the US is kind of a challenge. Would you consider partnership or will you continue expanding your Salesforce? Yeah.

Well, both alternatives would be beneficial. At this point, with our financial position, we're not going to increase costs, so short-term partnerships. And I think if we would like to expand our own organization, I think we need to increase the revenues organically first to be able to do that and also being able to finance it. So I think currently we're looking into partnership and we have some discussion that was initiated already last spring. And I think with this new data and new milestones, that will also be very positive.

Okay, thank you. And also, regarding the agreement you have signed with the US healthcare giant, could you maybe provide an estimate of how the sales potential of this agreement is and when do you expect the sales will start to pick up because of this?

Yeah. That's a good question. So, the agreement currently is a client bill agreement, which is very similar to the agreements that we've signed in the past. So far, that's where we stand, and it's also the price level is in line with what we have communicated previously. What we are now doing is, since this customer has the ambition to more aggressively roll it out in order to capture the financial and economic benefits as well as the benefits for the patient. We continue with these discussions on how that should be done. So this is the first milestone and we're continuing discussion how we can leverage this and the volumes to come. We have, of course, an understanding of what the volumes that this customer have. And for us, a successful rollout in their organization would take us very close to a break even or even a break even going forward. So it's a customer with great potential for us if we would be able to roll it out fully in their organization. And the steps that we're not taking, we're discussing both the metastatic area and the adjuvant area. And the metastatic area, we believe there's a lower threshold to just start using it because there's a lot of data and they've used it themselves. Others have used it and there are some challenges that you can address right away like dosing, et cetera, using the test. So that will generate revenues from the start. And then with the adjuvant setting, I think both we and the customer are looking to do a trial that will delay the start of the revenues, but it will generate more committed volumes because you have a scope for the trial, but it will also generate very valuable uh data from the outcome of the trial that will be useful not only for this but yeah for for all all customers for an entire market i hope that answers your question somewhat yes perfect that's clear uh thanks for taking my questions very good thank you all right is it luisa from kempen who's on the call hi yes uh can you hear me okay yeah

Okay, perfect. Thank you for taking my questions. I just have two quick questions, maybe first regarding financials. Until what point and what does it cover exactly the current cash runway? And of course, you've already spoken in terms of having to push forward the forecast. When do you expect more or less that you will be able to disclose the new business plan?

All right, so first question, the cash position, 62 million and with a conservative sales plan that we presented I think it's also in the report that we say that by third quarter 25 we will need cash injection we hope to of course improve revenues and prolong that and also come with more detailed guidance We will come with that guidance regarding the business plan during the first quarter of the next year. So within the coming three months.

Okay, perfect. And in terms of, of course, further partnership agreements, what can we expect in terms of news flow for the rest of this year?

When it comes to new agreements and partnerships within the clinical or the pharma?

Both, yes.

Yeah, both. Well, when it comes to the clinical side, we are discussing with several hospitals for additional client bill. And the opportunity that opens up right now is within New York. So we would like to close a client-bill agreement there. There are also hospitals that... One thing that has been a challenge for us is that we've been able to find earlier doctors that start using a test are super happy and satisfied and use it for most of their or if not all of their patients. But those other doctors are not, I don't know, interested or willing to act as sales reps for us. That has limited our growth. We have a few oncologists on most of our customers, but far from all. But there are hospitals that are looking to a more guideline approach within their hospitals. Everyone is using it the same way. So we are also looking to close the deal, but we are prioritizing that as well. Because that will also give a quicker uptake for our test. So that kind of client build. and also within the New York area is what we are looking at for the clinical side. When it comes to the pharma services side, I know you want to give guidance there. Yeah, sorry, we also have Europe before I hand over to Henrik. In Europe, we are also in discussion and you can expect us to close agreements to cover additional territories in the coming months. And then we have Henrik, if you want to comment on the pharma side as well, give some guidance on what we can expect in terms of upcoming agreements and so on.

Yeah, certainly, Anders, I can do that. So during the last calendar year, so 2024, we've signed five master service agreements. An expectation is to continue with that flow, continue both within the companies focusing on CDK inhibitors, but also moving into immune checkpoint inhibitors, signing master service agreements and work orders with pharma focusing on that drug type. And then certainly also benefiting from the new data within the adjuvant setting, but it's still within the CDK inhibitors that we talked there. But it just demonstrates the capabilities of the TKA assay to do amazing work when only having Yeah, very small tumor mass. So, I mean, expectations is, you know, to really continue signing more master service agreement, same level. So I'm expecting, you know, also five plus, you know, for the next calendar year. And I'm also expecting higher or bigger work orders because we are getting into bigger and bigger clinical studies with pharma.

Okay, perfect. Thank you so much. All right.

We have two questions also from the chat. And I think, Henrik, this is a little bit for you to sort out what we have communicated when it comes to the sales. It says, can you explain how to reconcile today's numbers when it comes to compared to Ernie's call? uh august uh uh was a good month when it comes to services uh uh approximately 300 percent uh yeah can it just give some background on on that yes

Correct. So August was a record month when it comes to the service testing piece. That was, you know, the highest month ever. September and October was, you know, decent, okay month, still better as compared to last year. And that's also why This quarter was at the same level as our former record quarter, the same level. I think what I also tried to explain was more the kid sales that really hit us and that kid sales is a little bit unpredictable in a way that it goes through the CROs and hence kid sales could come in later this year as compared to last year. This is unfortunately not We don't have the same predictability on that part of the business currently. But the service, just to underline that, our TKA testing service is significantly increasing during this fiscal year and continues to increase. I hope that was clear.

Thank you, Henrik. And then we have the last questions from the chat. Can we expect more IDN agreements in the near term and the Europe revenue, will that continue? And start with the first, we are continuing to target IDNs. The good thing with IDNs is that we believe they have a very big potential for us and we have a very strong value proposition because they will have the health economic benefits using our test. And the agreement that we just signed will act as an important reference in that process. The downside is that it also takes some time. So we'll continue. And over time, you can expect us to deliver more of those agreements. Yes. And when it comes to Europe, it's a little bit like the kit sales within pharma. We sell like a batch of kits at discrete time points. We know that with the agreements that we've signed, there are milestones that they need to purchase kits coming up. So we know that we will have some sales coming up. And I think the big potential also is to extend territories, which, as I previously said, is something you can expect will happen also in the coming months. Very good. Thank you all for this session and all the great questions and the interest in BayerWika. I think I'll flip back to the Christmas. This is how they celebrate Christmas in San Antonio. with a lot of color. It's not so much snow, but I think we'll say thank you and we will wish you happy holidays and a merry Christmas when that arrives in a few weeks. Thank you very much and over out from Byvika.