Devyser Diagnostics AB (publ)

Good day and welcome to the Devicer Q4 2024 earnings call. I'm Fredrik Dahl and the acting CEO of Devicer and would like to thank you everyone for joining our call today. On the call today we have in addition to myself also our CFO Sabina Berlín and our Chief Commercial Officer Tais Kipling. Since this is my first earnings call for Devicer, I will start with a short introduction on who I am and my background. I will then review our updated strategy before handing over to Sabina for a review of our financial results in Q4 2024. And then to Tais for an update on our commercial activities. I have been a board member of Devicer since 2021 and is the acting CEO since January 16th. I have a PhD in molecular medicine from Uppsala University and carried out the postdoc at Stanford in DNA technology development. After my studies at Stanford, I worked in startup scene in Silicon Valley in next gen sequencing and have co-founded both Halo genomics and Vanadis diagnostics that we sold to Agilent and Perkin Elmer. I have a background from both startup companies as well from large international corporations in both the research tools and diagnostic space. And I will remain as a member of Devicer board of directors. During my first few weeks, my team and I have focused on updating our strategy and it was reconfirmed to me that Devicer has a great potential with a lot of commercial and scientific talent. An overall goal for us in the coming year is to make Devicer a more efficient organization and that goal starts with a clear and more focused strategy. With this updated strategy, we propose to focusing on two customer segments. The first is our customer group in clinical genetics labs. In these labs, both research and diagnostics of patients within the field of inherited diseases is carried out. Many of our current products belong to this research discipline, such as our inherited cancer products, cystic fibrosis and diagnostics of cardiovascular disease causing genetic variants. We have a well established commercial footprint in these labs with long and good relationships with the leading researchers, as well as recognized commercial brand. We strongly believe there are significant more unmet diagnostic need that we can address in a systematic approach, together with our customers and scientific collaborators. Our ambition here is to become the number one partner and the one stop shop for these laboratories. The second customer group we would like to focus on is the transplantation lab and their patients. The fast growing diagnostic field has been subjected for a paradigm shift with the introduction of cell free DNA as a sensitive diagnostic marker to measure transplant reaction. By detecting transplant reaction early, more organs and human lives can be saved. Devicer has developed a highly competitive product in CF DNA measurement for post transplant analysis with superior sensitivity compared to competition. We currently have a partnership with Thermo Fisher to allow for faster market entry and our longer strategy is to continue to expand our portfolio in this field to become the pioneering partner for decentralizing transplantation diagnostics. So what does decentralization mean in this field? Well, today, the great majority of all samples are being shipped to large central service labs. These samples are prepared and analyzed by the central lab and data finally sent back to the local transplant laboratory. This procedure is subjected to high cost and long turnaround times. With Devices' Radiant Kit, we have an opportunity to bring the test closer to the patient at the local hospitals, increase turnaround time without compromising on performance. With that, I would like to shift focus to the fourth quarter results for 2024. I'm very pleased to announce that we had our first profitable quarter as a public company. And the theme for 2025 is to leverage our recent investments and continue to focus on profitability. With that, I would like to hand over to Sabina to share more details on our financial results for Q4 2024.

Thank you, Fredrik. Let me here give you a summary of the financials for the quarter. Revenue for the period October to December came in at 64.2 million SEC compared to 45.5 million SEC in the same quarter last year and 48.7 million SEC in Q3. A growth at .5% in the quarter brings us back to full year growth just below our target of 30% annual growth. All of our markets have performed well in the quarter and TICE will soon share more specific highlights from the commercial side. The trend over our historical quarters remains stable. Q4 showed the best quarterly revenue so far with a first time above 60 million SEC in a single quarter, catching up from the slightly softer Q3. We can expect some of the inventory buildup that we saw from Thermo Fisher in Q4 to impact their purchasing pattern in the early months of 2025 before partner sales pick back up again. Our EMEA region remains our biggest market and grow by 33% compared to last year during the quarter and just below 30% over the full year with our new and direct markets carrying the strongest growth. APAC has seen a small decline in growth but North and South America grew at about the same pace as Europe landing at a full year sales of 19 million SEC. During 2024, direct sales made up 65% of total revenue which is lower compared to the 77% of the sales last year as sales to Thermo Fisher has picked up. Distributors sales have almost doubled compared to 2023 for the same reason. The fact that direct sales being lower than the same quarter in 2023 is mainly due to the transfer of the last transplantation customers to Thermo Fisher in 2024. Outside of the agreement with Thermo Fisher, also our other distributors show a healthy growth during the year. Gross margins during the quarter is back close to 85% in October to December but remained just below 80% for the full year after the impact from our move to the new office and expanded production facility during Q2 and Q3. We were very proud of the first EBIT positive quarter since the company was listed. Even if EBIT was only 0.7 million SEC, it would have been a positive 6.9 million SEC without the provision for Italian payback that was made in the quarter. This payback fee was initiated several years ago when the Italian parliament imposed a law enforcing companies selling medical devices in Italy to make payments to the Italian state if medical device expenditures exceeded the regional maximum ceiling. During 2024, a decision in the Constitutional Court in Italy confirmed the law and the advisor decided to make a provision for the period of 2015 to 2024 and annual reservations for payback fee will be made going forward also. The positive EBIT result marks an important step in the path towards profitability which is under control and progressing on plan. As part of the journey, there will be quarters in H2 of this 2025 year that are less strong than H2. During the Q4, we also saw gains from the savings initiated in Q3 which impacted that quarter negatively. We close the year with 145 million SEC in cash and our liquid and I feel comfortable that our cash flow will turn over the foreseeable period as our focus on profitability continues. And with that, I hand over to Thijs.

Thank you Sabina. Q4 was indeed a great quarter in many ways as you just heard. We are continuing to make lots of great improvements across markets and especially within the US, including our partnerships with Thermo Fisher as well as CITED. During Q4, we received the expected order from Thermo Fisher, the largest in the history of our company. We are pleased to see the partnership continue to advance in the right direction. We recently had a joint leadership meeting with Thermo Fisher, including also our acting CEO, Frederick Dahl, who once again underlined the commitment on both sides to make this partnership a success. Both companies are ambitious and eager to build as large a market position as possible. Let me start with an update from our Clearlab in the US, where we during the past months have been working diligently to prepare for obtaining reimbursement for our CFDNA transplantation assay. We had a first pre-submission meeting with Multi-X and are on track to getting reimbursement during the second half of this year. Furthermore, we recently signed and extended the agreement with a UK-based oncology company, CITED, to continue through 2027 and with certain revenue commitments associated to the agreement. Just on this agreement alone, we will be doubling our revenues in 2025 versus 2024 within North America. Turning towards our momentum we have with RHD, we continue to be optimistic around the potential for this product within North America. Starting in Canada, I am pleased to see that Canadian Blood Services are expecting to reach clinical routine within a few months from now. Additionally, I am equally pleased to see that Hemo Quebec recently ordered their first set of RHD products to commence their validation. Within the US, we continue to be working with some large potential customers around RHD. If we win just one of these large opportunities, then we will be poking a sizable hole into the US market, which you will hear more about as we progress the year of 2025. Moving on to Europe, but staying with RHD, I am happy to mention also the recent Class D IVDR approval that we obtained late last year. Class D within the IVDR represents the highest risk classification within the framework and hence is also associated with the toughest data requirements. This is definitely a milestone for the company, as well as it's a clear differentiation within the market that I expect will help us with the continued expansion of RHD across Europe. Beyond this, I am equally reassured that managing the highest risk classification puts us in a solid spot for working with the FDA in the US to have products approved within the US market. We are committed to making the most of this momentum in Europe, and one of the next markets to adopt the testing first before giving the prophylactic treatment is our largest market, Italy. I expect to be able to share more good news within the next quarters around a first public hospital in Italy to take on our RHD assay as part of regional screening. The team in Italy continues to make impact, as you recently saw from our press release with the new tender for cystic fibrosis that we won for five years. And they are continuing to ride the wave that they have created for themselves, as well as the remaining Bivric markets are doing equally so. All in all, as you can see, the momentum is building, and I look forward to keeping you updated throughout the year. And with that, I pass the word over to you, Fredrik.