Implantica AG

This is Peter Forssell speaking. And I will try to give you a little bit update of what is going on in Implantica. So let's see here. So I will start with a little campaign overview. It's for the new listeners. And it may be a little bit boring who those who have heard this before. But I will go quickly through. So myself, I'm a surgeon and I'm also inventor of most of the devices we have in Implantica. And this is the second business journey. We also developed a business with the Adios Burghastic band where we took 28% of the obesity market outside US. And Implantica has a very interesting developed e-health platform. And this is a platform where you'll be able to treat people from distance. And the focus will be from inside the body. So we will have very nice, miniaturized technology where you can control and replace different bodily functions of different kinds. And everything could be controlled from the hospitals and you can change the treatment from distance. And that's the absolutely key here, which then will enable us to replace and do many nice things in the body. So we have been sitting three years and gone through how could we now improve healthcare. And here you see 40 selected products that we believe we can do and improve and make healthcare better going forward. And this will save lots of costs for society. And as well as it will be making more advanced treatments for the patients. I have one example, people who has a stoma bag, they have a plastic bag, collect the fecal matter because they maybe have taken away their large intestine for some reason, some disease, ulcerative colitis or cancer or other things. And it's not so nice. You have two to three liter floating substance coming out in this bag and you need to change it. It's self-adhesive on the skin all the time, makes it red, irritated. It's very burdensome. And this is the product we get most requests from patients every day. Basically we have a request about this product. And in this case, we are then replacing this stoma bag and we are collecting the intestine down to anus. And we can create a reservoir, open and close function and people could get to more normal life. That's the intention with this product. We also have product for example now for people who can't urinate, they may be paraplegic, had an accident of some kind or multiple sclerosis. And they put in a catheter every time they should urinate, they put in a catheter in their own bladder, let's say five times per day. And that's quite burdensome life. We have a solution for that. So you can instead urinate with the remote control. This is just examples to show you that Implantica has a fantastic portfolio going forward. However, it's needed lots of resources for that. And we need to get going with the reflux stop to be able to continue with all these different nice products. But we have a very shy vision in this company. We should become the world leader of smart medical implants. And actually we have the products, we have the patents, we have the competence, it's just about the execution and funding. And it's interesting, fascinating journey, I can promise you. Just few words about reflux stop before we go over to the business update. So existing treatment for people who has acid coming up from their stomach into esophagus. The stomach has a special inner layer that you can tolerate acid, but not esophagus. And therefore you burn esophagus, you get small mini ulcers and it's very painful burdensome disease. And the normal surgical treatment so far has been focusing on that you should close, support the closing of the sphincter here between the stomach and esophagus. And the reason that people believe this was weak this winter. However, this is your food passageway. And that means if you try to compress here, you get swallowing problems. You can't get anything up, you can't belch or vomit. And you get all the gas, you swallow with your saliva and so on, it's accumulated and you get swollen and distemmed and so on. And people are not so happy with this type of surgery. So we instead find out that there's nothing wrong with this winter. This winter is perfect. It's all about how you create the correct anatomy in this region. So you need to restore the position, original position and keep it in that position. And you restore something called angle of his, that's the angle between the esophagus and the stomach. And our device is then sitting on the outside of the stomach to enable that you get the normal functional anatomy again. And basically we treat all the three components of the anti reflux barrier with this disease, not disease, with this device. And here you see how it looks, the instrument and the little device with two and a half centimeter large at the end here. And this works astonishingly well as you will see from this presentation here. And why is it now so important to treat this disease? The answer is you get cancer. So 48,000 people die from esophagal adenocarcinoma. And according to the literature, most of them is coming from acid reflux. And you can compare to breast cancer. They do anything to find a breast cancer. They do all these mammographies and programs and anything. Here 48,000 people just die and no one is doing anything. It's disastrous situation. And we believe we have the treatment that could in the long run change this. And it's 20% of the population we talk about. It's 17% of the population in Europe and 20% in United States, they have acid reflux. And if I took a gastroscope and endoscope and I just put down in the stomach of anyone who has this disease, I will find that 10 to 20% has pre-cancerous changes. That's instead of one to 2% if I do within the normal population. So this is not to play with this disease. Finally, business update. So, so far we have done more than 1000 surgeries in Europe. We have more than 35 hospitals and it's going very well for implantica, actually extremely well. And we have submitted our second module in our PMA to FDA to get approval for selling also in US. This is the most important of the three modules we are supplying because it includes all the clinical trial, all the effort we have done, all the results of all the hospitals doing these 1000 surgeries, everything, all the complications, everything is submitted to FDA. And I will give you a little short recap of the five year clinical results, which is the one that then be submitted to FDA. And you can see here that everybody took drugs before surgery, there's a drug called PPI who reduce the acid in your stomach. The problem with this drug is it has nasty complications long-term, so it's not pleasant to take this drug for the rest of your life. And if you compare before and after surgery, you can see we had one patient out of 50 who took PPI after surgery. At four year follow-up, we had 44 patients left. We had two people died from COVID, one disabled with long COVID bed bound and so on. But anyhow, one single patient taking need to take drugs, that's an absolutely extraordinary results. There is no literature, no treatment whatsoever who even come close to this type of treatment. And here you can see when we compare to standard of care, this is five year results and there is published a very, very comprehensive literature review of standard of care missed and full replication. And it's from Karolinska Institute, it's very, very seriously done. They have looked at all the randomized articles, the high quality articles, they found 63 randomized articles. And here you see the results of that and then you see in comparison our five year results. So this is like an indirect comparison, which is not super accepted when you do research and so on. That in this case, because it's such an extensive literature review, you can see this as the platform for this treatment missing here. And you can see this is like night and day, it's sort of no comparison in outcome here. And you see like 40% have difficulties, Belgian vomit for example, or 29% has swallowing difficulties after the other missing from the vacation for example. And if you compare to our main device competitor, this is now Lynx device who is on the market since a long time, since 2012. It's a magnetic band that you place around the suffragus and here you can see how we compare their FDA trial with our CMAR trial at one year. Because this is the most serious research done on Lynx is their FDA trial because that's rigorously controlled. And you can see it's again like night and day, if you compare pH, so you measure pH in lower suffragus over 24 hours, which is the most objective measurement we have for this disease, you see that 36% still fail this test with our competitor. And you see that 68% had swallowing difficulties called dysphagia. So it's again, we are presenting a revolution in the treatment of acid reflux. We are then starting to do some market entry preparation in United States because we hope that it will not be too far away until we can enter the US market. And here you see a little bit, we have already have a great interest from surgeons, we go to exhibitions, we have had the cadaver training in US, so we had 10, 20 centers and we have already a fantastic interest in United States. We have more or less done all our marketing we need to do to select 20, 30 leading centers in US to start directly after launch, which is also fantastic. And we have actually decided to develop United States in six region, we are preparing for how we should do this if we now get the FDA approval, you need to be very careful what you say here because FDA really don't want us to talk about any commercial activities before we actually are approved. But here you can see the comparison, I have Great Britain and Germany here as sizes just to compare how huge you actually, the market is here in United States. And we have also very heavily investigated how our medical devices have succeeded in United States, how they have done it, how it has gone for them. And if we take our main device competitor, they have so far sold 50,000 devices of their device. We have another device here, it's Inspire, it's a device for snoring, it's like a little mini pacemaker you put in so you stimulate, so you don't snore anymore. And here you can see how they are developed, it took quite some time, they were a small company, it took some time, but they have expanded like crazy, they have today a market value of 8 billion US. So it's really going well for them, even if it took some time in this case. Here I have another example, this is Ionix, another device. And here you see the expansion went much faster and we have of course studied very carefully how they have done their market launch. And you see that they sold for 100 million within two years. The third year, and they have today a market value of 3.6 billion in the United States. This is examples of success stories. And I'm not telling you of course, that we will become such a success story, that's beyond my right to do, but I'm just showing you how it could go if you're successful in the United States. We are also doing lots of other activities in the United States. Here you see the American Foregold Society. So foregold stands for this region where you have reflux and it's a meeting with like 600, 700,000 doctors from the United States at this meeting. And here you see some people listening to the reflux stop session here. And we have a fantastic, I say it's incredible interest from the US audience. And that's of course, pretending on these fantastic results, because it's not only these results from the C study now have been made available for the public. It's also lots of different centers from Europe are presenting the result one after another. And this create, they have the same fantastic results basically, every center. And that's why the US, they are eagerly eagerly waiting for this product. Here you can see our user meeting, the third global annual reflux of user meeting. And here you can see it's more than 100 surgeons are spending one day extra for us. They come and spend one day, they get full day of training, all the different centers present the results. There is lots of discussion, interaction, and of course a nice dinner. And this day they spend here with us just because they are so eagerly interested in this device. We also have, they will see on this slide before, oh, sorry. On this slide you see here also to the right, we have developed a new very advanced training program. And this is professor Seten who is presenting a bit the lock-on bottom surgery we are making here in this. I just wanted to show you how we then have developed a really advanced training program. So we are really prepared for training all these surgeons. So this will be an online system and lots of videos and other interesting stuff for the surgeons. So I talked about the other clinical data and that's also what is making it so fantastic with reflux stop that is not only the very controlled CEO or FDA study, it's also all the other centers who present. And we are then visiting all the big congresses and the different surgeons are presenting their results. And we have so far this year 75 conference abstracts presented at these congresses. We have more than 15 published manuscripts. So and lots of things in the pipeline. It's like a snowball effect. You put a little snowball on top of the mountain and it's warm weather. That's the little bit the effect we have here with all the research, all the articles coming up for this product and it's all fantastic results. We have published our four year results of course. The five years of our only supply to FDA that is presented at the congresses. So if you're interested, you can go in and read about the four year results in endoscopic endosurgery. This has been published and it's lots of very, very high renowned art or magazines, you know, high reputation. Sorry for my English. It's very highly regarded magazines. So you have Swiss medical weekly, for example, that where Dr. Nissen published his results 1956. Could you imagine? This magazine has been since 1956 and it's very regarded magazine. Nature the same, the scientific is sports have very high ranked article and so on. So it's lots of stuff coming up all from independent hospital centers who present their own result independent from implantica. We also have our studies ongoing. So, you know, we are doing our randomized trials. We have a book pan-American or pan-European registered study we are doing. And we have yet the committee supplied and approved in many, many different countries now. And it's all, we are step by step, so to say working in one direction to prove this is by far the best you can get. So the randomized trial between Nissen and Rieflackstop will of course be very, very interesting because if we can in the randomized trial could prove that we are the better treatment, that's of course will open many doors for payers and reimbursement and so on. So this is professor Choppan in Vienna who's doing this study. He's the central hospital. And then it's of course many other hospitals joining. So if we then look at cost-effectiveness today's world economy is also very important. Also here we have been extremely successful. So we have made individual analysis of the cost benefit in all these different countries. You see the map here and we have published it and it got published in highly respected magazines as well. So we have proven now that we are, we save so much re-operation and so much complications so it's worthwhile to invest in a Rieflackstop treatment. That's basically what you can say. It's even more cost-effective than drugs. All of the drugs cost very little money because it's so much side effects with the drugs. And that's of course very, very important. Then we talk about the market expansion. I will give you some example how fantastic the interest for this product is. So we started one and a half year ago in Italy and we invited people to come to a user meeting and take one day off and only spend it with us. And 21 surgeons came to this meeting. We have in Spain, 23 surgeons from 17 hospitals, one and a half year after launch and they spent two days with us, Friday and Saturday. And Saturday it was live surgeries going on and they could see the operation live. Incredible. So it's absolutely incredible interest for this new treatment. Also, as I showed you last time, we have made really some nice marketing campaigns in UK and Italy. Here is example from Spain, Madrid. And it's one out of five person have this disease. Imagine one out of five. So when you manage like this to get press and radio and magazines and all these things, writing about this, it's so many patients who contacts the hospitals. It's just incredible. Also, it's can imagine one out of five have this disease. So the conclusion of all this is that reflux stop is unstoppable. And I will then give the world word to Andreas, our CFO.

Many thanks, Peter. Good afternoon or good morning. Could we go to the next slide, Peter? Thank you. We reported net sales of 344,000 euro for the third quarter 2024. An increase of 41% compared to the same period last year. We currently only marked our lead product reflux stop to European key opinion leaders to build a strong reimbursement platform. The business consistently delivers exceptional gross margins. As discussed in earlier calls, this being explained by a combination of a simple product, delivering best in class patient outcomes as highlighted by the five year CE trial data that Peter outlined earlier in the call and being protected by a significant moat thanks to its strong IP. Adjusted gross margin for the third quarter amounted to 97%, up from 94% the same period last year. Our third quarter operating loss amounted to 5.3 million euro, a 7% year on year decrease. For the nine months, we experienced a 23% increase in our operating loss, primarily driven by costs related to the preparations of the FDA submission, including a usability trial. Cost relating to the e-help platform development has been managed down in a significant way over the year. Let us turn to the next slide. We have a solid financial position. End of September, we held 69.3 million euro cash and cash equivalents. We do not carry any interest bearing debt on our books. The quarterly operating cash outflow amounted to 4.8 million euro. Total net cash outflow for the period also equaled 4.8 million euro. Let us turn to the next slide. In addition to our CEO and main shareholder, Dr. Peter Fasel and other senior leaders in the organization, our investor base is dominated by Swedish and Swiss high quality institutions. We are grateful for the trust and support we are receiving to build a commercial platform to address a massive unmet patient need. Back to you, Peter.

Thank you very much. Then I think it's time to go to the question and answer section.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Chien-Shen Lee from Pareto Securities. Please go ahead.

Hi, good afternoon and thanks for the update. So I see there is a dip in revenues compared to Q2. I guess it's because of summer months, but since you have shown great five years study result and you seem to get more and more traction among the top European surgeons. Just trying to understand, is there a potential hurdle you see for switching from Nissan's own application to reflux stop? And in other words, what do you plan to do as a next step? In order to further accelerate the self uptake in Europe. Thank you.

Well, so the answer to this is very simple. For the surgeons to do larger number of our device, they need to get paid. And today it's, we are starting to get reimbursement in some hospitals in Italy and Spain. And we have some part reimbursement in UK and we have an own code and the registration of the operation. So in Germany, but very limited money given. So that's what it's all about at the hospitals. They, most of these who do this now, they would only do reflux stop if it would be paid like a normal part of the healthcare system. And that's why we are doing all these research, all these studies, all these things. That's all to prove we should be part of the healthcare system and be fully paid for. And then we achieve that, it's likely that reflux will be dominating the whole market. And it will be a dramatic increase in sales. Now we are building more and more centers, more and more centers that want to do this. So when that reimbursement situation comes and people get paid, suddenly they can do much more per center.

Okay, thank you very much. And maybe a thought question. So since you are doing all this campaign and studies, so what is a critical factor you think for in order to get the reimbursement from these countries?

The most critical is the research we are doing, the studies, so more and more articles from more and more centers and our own high quality studies, the five year study. All these of course is very important. Then of course the pressure from the patient also affects. If you suddenly have in NHS, for example, the 20 hospitals doing this type of surgery, they need to reconsider. So this is, it's many aspects that you work on in parallel here. But the problem to do too much marketing with patients is that it gets like cause. You know, they, as I said in Italy, for example, they made a campaign who I think it was 9 million Italians that got this message basically. In the whole south of Italy, they are calling into this poor hospital there in Napoli and they need to employ a full time person just to handle all the requests. I see it's so many patients that you need to be a bit careful so you need to balance it. So we are building this step by step by step and off the COVID, you know, it takes a little bit longer time, but it's just a matter of time. It's a bureaucratic process, it takes time. Normally of course in a perfect working system, we would already be approved. Everybody should understand that this new treatment is needed and should be paid, but that's not how bureaucracy works, you know, it's an effort we need to do, but be sure it's just a matter of time.

Okay, thank you very much. I guess this random mass control trials will be part of the, it will be critical. So now you are expecting first patient to be enrolled in Q125. What is the reason of this delay and as how many patients do you plan to enroll in total and when can you expect the top-line result? Thank

you. We are involving 200 patients, 100 with Nissan and 100 with Reflex Stop and it's hard to say exactly how long time the enroll that will be. They will be followed. The first results will come half a year after everybody is enrolled and if that takes half a year, then it's one year. If it takes one year to enroll them, it's one and a half year, but it's not that far away. And that's of course will be a heavy study.

Okay, thank you very much and thanks for taking my question.

Thank you.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad.

I also have some nice written question here depending if no one else is calling.

There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions.

Yeah, so maybe I can start to look at some question here. Someone is asking here how it's going for Reflex Stop in Sweden and the answer is quite well. So in Esta, in Stockholm, they have operated the three first patients and they are now trying to get the resources so they can continue to operate and the interest among the Söder is high, they want to do this. It's just an economical question. So we have to wait how the, it's the administrative part who will decide how it goes. But hopefully they will soon start to operate more regularly and it will be more cost centers in Sweden who will follow. We have already a few more centers lined up to start. Then someone asked, can you go from a Nissan to Reflex Stop? And the answer is yes. You can redo a Nissan and place a Reflex Stop. It's always when you do a second surgery, a little bit more risk or side effects, but overall it's many procedures done and it has worked well. How big is the market in US once you get reimbursement? So the answer to that is that the number of surgeries today is not enormous. However, the market is enormous. And that's because when you have something that doesn't work so well and people go through lots of side effects, they don't operate. So the medical doctors doesn't send the patient for surgery. If you send the patient and it comes back and have so much wallowing problems that it's worse than the reflux before they made the surgery, when you get five such patients back, you don't send more patients and that's the little bit the situation. So the market itself is extremely large to answer that question. So how many reflux stop surgeries can the surgeons do per week? And the answer to that is that the larger centers, they do like 400 per year, maybe realistic. So something like in US, many centers do like 400 surgeries per year. Excuse me, what do we have more for question here? How is biggest the chances of the FDA approval? Oh, that's a dangerous question to answer. I mean, if I put it this way, I would be extremely surprised if now FDA has allowed us to submit this study here in Europe as in our PMA and the results is over any expectations. I think the chances must be seen as very, very large. And what have we more here? Regarding the US PMA, when do you think module three will be sent in, in three months later, can you send it in? Yes, I'm in, okay. So the timing schedule is three months as you say here. And then of course it could differ a little bit plus and minus, but I don't think we will supply the answer to module two together with module three. It depends if it's very easy to do that answer, but it took a little bit long to perform the answers here we had now this time. So it's a little bit depends, but hopefully we talk about the magnitude of these three months, but depends a little bit the strategy we select when we get the answer of module two. What, yeah, that's another question on module three. Are there any long-term plans for large medical technology company, Kruiger, Stake and Implantica? No, no such plans or we have no such plans. We are trying to be that large company to answer your question. We should be a new large med tech company. No sound that's about my competence to answer. Good luck. What are we here here? That's the same question about the module three. We have several such questions. I think I've answered them all now. Have I missed something? Have we? How is it going in France? I have a question here also. Yeah, so in France, they have a little bit strange system. So to get the reimbursement, you need to do another trial in US. So we are trying to integrate that together with our randomized trial to see how we can get the reimbursement in France. We have a few centers who have started in France and the interest is high. It's just how they get paid because they have a very rigorous DLG system. So they have no extra money or anything like they have in Spain. And Italy where it's a bit more flexible. I think thereby, if I have not missed anything, I hope I answered them all. And I thank you very, very much for listening. Sorry, it took a bit of time this time, but it's a very exciting period now for Implantica actually. It's going really well and we are really excited. Thank you very much. Bye bye.