Biovica International AB (publ)

Hello everyone and welcome to the Bayer-Vika Q1 interim report. Today I'll be presenting, me being Anders Rylander, together with my CFO Anders Morén. And we will be presenting according to this agenda. First, a short introduction about the company and the product. We'll go through the highlights of Q1. And Anders will do a financial update before a summary, and then we open up for a Q&A session. And the Q&A session will be done that way that we will start with Johanna Nerus, our analyst from Redeye, who will ask questions. in the meeting and everyone else listening also has a chance to ask question by submitting them into the chat function and you can remain anonymous if you want to by checking that checkbox and we will answer as many as possible of the questions that we get during the meeting and also If we're not able to answer all of them, we typically answer them in writing and put them at the end of the presentation that will be published after the meeting. So a few words about our product DIVITUM. So with DIVITUM, we measure cell proliferation. And as you all know, cell proliferation is what defines cancer or at least uncontrolled cell proliferation. We do that through a simple blood test that has a lot of advantages, especially when we are monitoring with several blood tests over time to make sure that the patient is on an effective treatment. And if not, it could be switched to an alternative treatment or an alternative dose in order to get the best possible treatment outcome of its cancer treatment. These patients are typically monitored today using image diagnostics, and we have in clinical trials shown that we can provide several advantages compared to imaging, both more convenient, but also quicker feedback by using DIVITUM for monitoring. This has been shown in more than 30 clinical trials that have been performed by our partners and peer reviewed and published in scientific magazine and journals. The majority of the data is within breast cancer, which is the area, our focus area, where we have focus our commercial efforts where we have our 510K clearance from the FDA in the USA, in the breast cancer area, allowing us to market the product for clinical use in the US. There are several other important and interesting areas where we also have data, so there is potential to grow outside of the initial breast cancer area. Typically, the data shows that before start of treatment, that we can be both prognostic and predictive for how the disease will develop and how the patient will respond to the treatment. and during treatment to be an effective monitoring tool providing quick feedback to whether the treatment is effective or not so that the treating physician can act on the results of our test. The partners that we're working with are some of the most renowned institutes, both in US and in Europe, and also, especially in US, those are our first customers that are starting to use the test, the so-called NCI slash NCCN designated cancer centers being important cancer centers that others follow on the US market. We published really strong data from seven clinical trials in December last year at the world's biggest breast cancer conference, San Antonio. And I still highlight those even though more than a half a year later, we're still benefiting from these results that has opened up new accounts and new oncologists have started using the assay thanks to this data, and it contributes to the growth that we're seeing. If you look at the breast cancer area, the first of many to follow, we have a focus on the US, where we have launched the product, the biggest market, where we established a price level also through Medicare and with agreements with private hospitals and payers. Based on the price level we've been able to achieve, combined with the number of patients living with the disease and the testing frequency, that boils down to a very significant market potential. And with the data that shows that we can provide a very strong value in the early phases of breast cancer, where patients are being treated, so-called adjuvant treatment, and they can be using Divitum to monitor that treatment, it opens up an even bigger market as there are more patients in that earlier phases. With that price level, We have still a very attractive gross margin from the test as it is very straightforward and it's not so costly compared to the price levels to produce. Besides our breast cancer use for clinical use, we also have a pharma services business where we serve pharma that are developing new cancer therapies about to be brought to the market and we facilitate that in the clinical trial phase and even in the preclinical trial phase, more on that later. If we then move into the highlights that took place during our first quarter that starts in May and ends in July. One very important event was the rights issue that we performed that brought in 122 million Swedish kronor before cost for the transaction. And I'll go into the details on a separate slide. In US, we communicated an agreement with diagnostic company Tempus or Tempus AI to be specific is their name. that expands the commercial reach for Divitum with being able to get access to their large sales force. And we also have a growth in the US with about 30% in local currency for the second quarter in a row. And if you look at growth, we have nine consecutive quarters with growth. I'll go into the details and how we look upon that on a separate slide. Our pharma services, we also have had a good first quarter where we have signed several new tier one master services agreements. And we have also on top of that serves six new work orders. So in total, we have now a strong pipeline for the coming years, which is an important part of our revenues for this fiscal year and the next one. When it comes to the clinical data and patents, we also made progress. ASCO, probably the biggest conference within cancer in general, we had three abstracts and posters, or actually our collaborating partners presented data with DIVITUM within several cancer areas and also several treatment areas. There was more data in breast cancer and CDK4-6 inhibitors. There was data within immunotherapies and melanoma, which is a super interesting area with even a greater need, a bigger area than the CDK4-6 inhibitors in breast cancer. So it's an interesting opportunity for the future. We also presented data on chemotherapy and ovarian cancer and other big areas closely related to the breast cancer area. So the immunotherapy, we have submitted several patent applications and one of them was granted for Europe and we continue the process for other geographies. in order to protect, patent protect our slightly modified version of Divitum that's been used in these, producing the results within immuno-oncology. So that's very interesting for the future. Something that's very interesting here now is the ability to move into earlier phases of breast cancer. And we have launched a variant of our test as an LDT laboratory developed test from our lab in San Diego. That enables us to market the test for early breast cancer, in addition to the metastatic breast cancer that was earlier approved as a 510 clear test by FDA. If we dive in a little bit to the rights issue, I'm very, very grateful for the confidence that's been shown by the investors We had a structure for the capital raise that granted 80 million, which was required for us to be able to execute our business plan. And in the end, the outcome became more than 50% more than that. So 122 millions, that meant that we didn't have to use any of the bottom underwriters and no shares was allocated to them. And we had, you can see three big categories, the Dutch family office and a several Swedish investor with previous holding by Vika that was a part of the anchor investors that guarantee the transaction. And then there was a lot of private investors that took part in the transaction. And this of course puts us in a great position to achieve our long-term goal. It's actually not that long. It's not that far away. We are aiming to do so in our third quarter for next fiscal year. So that will be in the beginning of 2027. And of course, this extra capital that came out of the transaction, that provides us with an even better opportunity to do so. It improves the probability for success and reduces the risk as we have more room to maneuver with some additional capital. So I'm very grateful for the outcome and the confidence shown. If we move into the US area, where we offer our tests for clinical use within breast cancer. So far, we've been focused on the metastatic area, and recently we were able to launch our LDT and expand into the early phases of breast cancer. As you can see, we've had growth for nine consecutive quarters. still on fairly small amounts, low levels. But the last two quarters have picked up the growth rate. So, we have a 30% growth per quarter in the last two quarters, in local currency. And we are grateful for that, although our ambition is to increase that organic growth rate even further. And if we look at what the action is behind these numbers, I think with the agreement with Tempus AI, where we will have them target the community oncologists, which is the largest area of the US segment, then we can focus on the more high value customers, the NCI, NCCN designated cancer centers. And the IDNs, the IDNs are integrated delivery networks that typically both have a hospital chain where they provide care as well as an insurance leg in order to provide health insurance for their customers and patients. These are areas where we have a history of being able to enter this organization and get the usage of the assay. And now with the focus on this area, this is also where we see the biggest growth in volume. It is something that requires quite some time and persistence, but the reward is higher because we all have the potential to grow. And we can see that it's been a bit slow. We're not happy with the growth within several of these accounts. We see now that we are able to widen the use to more oncologists. and to open up more of the existing accounts, which I think I'm grateful for and very positive. There's a lot of potential to grow just on our existing accounts, as well as we have been able to attract some new large customers and large accounts that has the potential to be even bigger than the existing ones. One important factor here is also the early breast cancer and the new tests that we developed here. We just launched it earlier this week. We did a large campaign to get the word out. And we see here potential for growth on the existing accounts. because most of our oncologists are treating, our breast cancer oncologists that are treating both in early and in metastatic breast cancer. And the volumes within the early phases are significantly larger. So the explanation for the growth is that we have new data. We have the data both within early breast cancer and also new data That was presented on the metastatic breast cancer in December last year. Some of those oncologists have been very active promoting their results. That was very strong. That has also helped us convince new users to test out DIVITUM and that has been possible and continue using it. So that is a very important factor. And also we've invested time to understand. Sometimes it's simple problems like logistics, getting access to labs, the ordering process. We've sorted out that as well. So there's a lot of combined factor that explains growth. And we are looking to continue to learn from our actions and based on that feedback tailor our sales process to continue our growth our ambition is to increase from 30 the 30 quarter by quarter growth to even higher numbers going forward So the organic growth is important and it provides us a lot of feedback that we learn from, and we can tailor our messaging and we can develop our value proposition. But one big game changer, if we go from just a few sales reps to hundreds of reps and companies with resources that exceeds ours to a great extent. And that's why the Tempus AI agreement is so important because then we go to Salesforce with hundreds of reps that has integration to the EMR systems and can tailor patients that can benefit from our test. So that's very, very positive and have great potential. And that can be a game changer when also driving revenues for Divitum. I just came back from San Francisco, where I met with the Tempus team that is working on the implementation work here. And the positive thing is that they have actually a higher level of ambition than what we understood when we signed the agreement. It's not only offering Divitum as a standalone product, but in combination with their products within breast cancer, to target strategic areas. And that means that they will invest more resources than we expected, and that will pay off over time. So that's very, very positive. And we appreciate that. At the same time, it's added complexity and it introduced a delay. We were hoping to have enrolled the first patient already. That's going to take some additional time, but we're working hard together with the team to get it up and running as soon as possible. A little bit same story with a big healthcare giant. This is a company, a so-called IDN with revenues more than a hundred billion US dollars per year. So a real giant. I've also met with them at the same trip and it's very, very inspiring to see how they recognize the value that what this could bring to them and have an ambition to implement this as a standard of care. using one or actually several trials. So that's very, very positive. That will give us revenues and it will also provide important data for Byvika that can be used in order to enter guidelines and of course drive demand on a wider base. Here, I think we were expected to have this up and running in September. It's going to take some additional weeks here as well. And we have agreed with them that we should support them with additional resources to speed up the implementation. It's in our own interest. And so we're moving forward here as well. So still very positive discussions and we're moving forward, although a little bit bump in the road that we have delays on these two. One thing that is very, very rewarding, we have now more than 400 patients that has benefited from using Divitum and there's more and more stories. We get a lot of spontaneous feedback from patients that I wanted to share. I think this is very gratifying to see this and you get very touched by it. And this is what we also want to achieve. We would like to improve life for cancer patients and the outcome of their treatment. And it's great to see that we actually are doing that to a great extent already. And it's not only that they are communicating this right back to BioVica, they also are sharing it to other patients through patient forums on the internet. So the word has spread and this has led to us getting additional accounts and of course more patients being tested and the typical process is that they are contacting their oncologist and we can support them in that and start using Divitum and then uh sometimes you'll see results like this or or feedback like this which is heartwarming i must say um we in this process we have now been on the market with our kia lab for almost two years and we have patient that has been monitored since then for more than 20 tests and one of the patients here that discovered david She had been responding to CDK4-6 inhibitors for more than seven years actually. And having the feedback from Divitum that she continues to respond. And if she wouldn't, that will get an early signal that could do something to find a solution that would work is comforting for the patient. So very happy to see this. If we move into the pharma services business, I think it's fair to say that we've been able during the last year or so being able to revitalize our pharma services business after a somewhat slow fiscal year last year. We've been able to sign now several new tier one companies and sign master services agreements to be able to perform multiple projects together with them. This is a significant investment in time to go through their supplier enrollment process, which we've done. And now we're starting our projects with these tier one companies. you can see that also it is much quicker for us to scale up our business it's after signing a master services agreement with one of these customers we have received five work orders during the summer and in august and there's more to come and so after that patient enrollment process of course the supply enrollment process We've been able to grow it a lot quicker and it looks very promising for the years to come here. In total, when you summarize our services pipeline, it's now 27 million over the coming three years, 36 months. And on top of that, we also know that we will sell kit sales. Previously, the kit sales has been about 50% of the total volume. uh we believe that's going to be lower now and when we shift more and more into the services business but still we expect the kit sales to be significant and more or less all the big tier ones they do business they do clinical trials in china and then you need to buy kits and send it into china because you're not allowed to to export biological materials So the pharma services business has been developing very well lately. And another way we can see is more projects, but it's also larger projects. And the bigger companies provide a more stable project pipeline with better funded projects and CROs driving the projects. So very grateful for that. and we have our financial goal for the fiscal year on 50 million, and we are on track to reach that with these new agreements. This was my introduction, now Anders is going to go through the financial numbers before I come back and summarise the quarterly.

Okay, thank you very much.

Anders, a quick look at the financials. Growth versus Q1 last year, so that's 12 months growth, about 50%. If you exclude foreign exchange or compare dollars to dollars, because 95% of what we are invoicing is in dollars, or at least 90% are in dollars, it's about 70%. The biggest individual Contributor here is the IVD test on the US business. That's 72% growth versus last year. Research has grown about 40% in Swedish kronor, about 60% in dollars. We zoom into the US business. This is basically the same type of chart that Anders was growing just by quarter by quarter. So you see here that the growth versus prior year Q1 is about 90% and versus Q4 is about 27%. And as Anders said, it's a good achievement to reach over $100,000 in a quarter or a million Swedish kronor, but we're still not happy with or content with that growth. We are driving that to become a higher growth, both in absolute numbers and in percentages. Cash position, we closed in July with 16 million in our bank. We had this combination of rights and directed issue of 122 million that we got in August. which was extremely good outcomes. The plan was to get in 80 million, which was the guaranteed amount, 122 or 50% more, gives us a bit of headroom and also possibility to selectively invest in sales activities, driving sales growth continuously. Last slide on financials. Cash flow has improved 5 million versus same period last year. It's driven by sales and lower operating expenses. We are very careful with our expenses. If you compared net operating cash flow, so that includes change in working capital, that has improved 12 million versus last year, And that is, of course, then driven by the same things, sales, increased sales and lower operating expenses, but also last year in Q1, we paid out a lot of the restructuring expenses that we had accrued for in the Q4 close of 2023-24. So with that, I'll hand it back to Anders to open up for the summary and the Q&A.