OssDsign AB (publ)

growth strategy called scale to profit, and we raised almost 160 million, which means that the company is now sufficiently capitalized to put in place the resources necessary to execute our current growth plans and deliver positive cash flow. I'll now hand you over to Anders to walk you through the financial results for the quarter before I'll come back and spend some more time on our clinical programs and evidence, as well as our commercial progress and strategy going forward.

Thank you, Morten. As Morten mentioned, we continue to see high growth in the company during the quarter. Organic growth of 73% compared to the same period last year. So on an underlying basis, you might say. On a reported basis, the growth came in at 56%. And this was driven, as you know, by a strong US dollar foreign exchange headwind. We did see quite a lot of sales coming in the last day or two of the quarter. We always see some of that, but more so than usual this time, as there were some customers ordered slightly earlier than normal. So the numbers reported are slightly inflated as these sales would normally fall in the next quarter. Now, how to say exactly, but our estimation is that it's approximately 1.5 million sec or equivalent to approximately 5% growth we're talking about here. If we turn to the first six months, we show an organic growth of 66% and 60% on a reported basis. So not such a large spread. And this is because the dollar was still very strong for most of the first quarter. as we've also said before the growth will not necessarily be linear it will take more of a form of a staircase where we increase accounts and users in one quarter and then may slow down somewhat in the following quarter as we get the new customers up and running and and then we increase again and this quarter is a good example of a quarter that jumps with 16 growth compared to q1 and we're of course very pleased with this development We continue, however, to believe that the best way to look at the underlying momentum in the company is to look at the 12 month run rate, which we call LTM. And as you can see here for the first quarter, or second quarter, it's a strong trajectory continuing and LTM momentum is up 68% year over year. That's an excellent performance that we are highly satisfied with. Over to the gross margin. It remained very high in the quarter, 96.8%, which is up 360 basis points against Q2 24. And it's also slightly up on the previous quarter in 25. Now for the first six months, we show a gross margin of 96.6%, quite stable for the year. And it's up 320 basis points on the same period last year. So gross margin remains high, significantly above the guided level. And I will now hand you back to Morten.

Thank you, Anders. As mentioned during the quarter, we had many important announcements. First in May, we reached the milestone of 10,000 patients treated with OsterSign Catalyst. The continuous and rapid increase in treated patients is a strong testament to how well OsterSign Catalyst has been received in the US market since launch. It's also a substantial increase from the 5,000 patients reported in May 24, highlighting the increasing interest we're seeing from surgeons and hospitals. Early in the quarter, we also announced the long-term follow-up results from the clinical study Tough Fusion, which was published in the peer-reviewed journal Biomedical Journal of Scientific and Technical Research. The results demonstrate 100% spinal fusion rate and improved quality of life outcomes and validate Osteoscience Catalyst's unique ability to form bridging bone consistently. These exceptional results strengthen our market position, of course, and reinforce Osteoscience Catalyst as a true game changer in spinal surgery. During the quarter, we also published a highly exciting new preclinical study where we compared bone formation potential of different silicate-containing calcium phosphate synthetic bone graft, and that was also published in a peer-reviewed scientific journal called Journal of Orthopaedic Surgery and Research. The research, which was led by esteemed professors from the University of Aberdeen as well as the University of New South Wales, compared various synthetic bone graft in a preclinical setting. And the results were quite striking. OsterSign Catalyst emerged as the first clinically available synthetic graft capable of generating robust functional bone in a very challenging avascular environment at early time points. The study employed an ovarian intramuscular defect model, which is a sophisticated method that mimics real world conditions. Over six and 12 weeks, researchers observed the performance of three commercially available synthetic bone graft substitutes. And the results were clear. Catalysts outperform its competitors, demonstrating significant functional bone bridging after just six weeks. And in just six weeks, it forms strong bridging bone where other starts to fall behind. And the rapid response is not merely a footnote. It is a pivotal advantage. Traditional grafts often rely on the presence of host bone to stimulate healing. Now, in contrast, Osteosyne Catalyst thrives in isolation, actively promoting bone formation, even in vascular conditions. This is therefore not just a scientific advancement. It is a very practical solution that could transform patient outcome. and the ability to stimulate new bone growth in challenging conditions also opens up doors to new treatment possibilities. Of course, the biggest announcement in the quarter was the publication of phenomenal one-year data on the first 108 patients in our proposed spine registry. As we also mentioned early July, this is a highly, highly complex cohort And I just want to reiterate the profile of that cohort. We had an average BMI of 31.9, meaning that the average patient is highly obese. We had 93.6% of patients that had at least one comorbidity, with 48% having three or more comorbidities. We had 50%. of the cohort that had previous spine fusion surgery performed with another almost 16% having decompression, which is a non-fusion spine surgery performed. So in total, two-thirds of the cohort had some kind of surgery performed before. We had 48% that were active of previous smokers. We had a little more than 20% of all procedures that involved three or more levels of the spine. We had another 12% suffer from diabetes and we had just about 6% with osteoporosis. So the results that were published has to be viewed through these lenses. These are very complex and very difficult to fuse patients who suffer from so many other things that hamper bone formation or where so complex procedures have to be performed that really you should not be expecting a high fusion rate in this goal. So as you know, we managed to achieve a fusion rate at 12 months of 88.4%, which is phenomenal. And the fact that we can achieve fusion rates in such a difficult real world population and then beating most of the randomized control studies and coming in significantly above the average in the industry is no other than remarkable and well beyond what you generally can expect. And I think what's even more remarkable is the fact that we achieved high fusion rate throughout all the known risk factors. And as you can see on the bar chart, it doesn't really matter if the patient was old, obese, smoking, diabetic, osteoporotic, had previous spine surgery, or even had a large multilevel construct performed on them. Throughout all of these groups of known hard-to-fuse patients, we achieved very high fusion rates. As also mentioned in our call in July, even the authors were blown away by the result. And what you see here is a quote from Dr. Stringer, who's one of the investigators and also the lead author on the paper. And I think he says it very clearly, and I quote, Typically, I would expect to see dramatically lower fusion rates for such a complex real-world patient population, with 48% of the patients in the study having three or more comorbidities, increasing their risk for potential nonunion. Most clinical studies exclude these difficult patients, which unfortunately represent the majority of patients in need of spinal fusion. The Osterstein catalyst fusion rate of 88.4% achieved in the PROPEL study significantly exceeded my expectations. End of quote. And I think this statement actually says it all about how doctors themselves view the results. So to sum up, despite only being active in the orthobiologic space for a little under four years, we have already built a very solid repository of evidence with now a total of 15 preclinical and clinical publications and white papers. And I just wanna draw attention to the fact that you may remember when we entered 24, we did not have a single piece of clinical evidence, but had commercialized solely on the preclinical evidence from the very early Bowden model. During the last 18 months or so, we've therefore generated more than 10 publications and white papers, which is something that I'm incredibly proud of and which is crucially important to the company, both now and also for the future. But of course, the most important thing is what the clinical evidence shows. And I apologize for this somewhat busy slide, but what you see here is a summary of the clinical studies we've published. And across all of these studies, we've consistently been reporting high fusion rates and fast bone formation with rapid progression to fusion. from the 100% fusion in our Bowden model to 100% again at two years in top fusion and now 88.4% in a highly complex real world population. And of course, in addition to what you see here, you can also add the many strong case reports as well, which have been published. So what is it we can conclude based on the data we've published to date? Well, the overarching conclusion is that all preclinical and clinical studies confirm the potency and differentiation of osteosin catalyst. And more specifically, we can see that firstly, we have shown now high fusion and fast fusion across all types of studies, preclinical, randomized controlled trial, and real-world registry patients. Secondly, we've also shown strong clinical outcomes in simple as well as very complex patient cohorts. Thirdly, as I mentioned, we can see that high fusion success rate is consistent throughout all well-known patient and surgical risk factors. And finally, as the authors themselves conclude in the OVINE study, Osteosine Catalyst is the first clinically available synthetic bone graft to successfully generate robust functional bone in challenging vascular environments at early time point. So all in all, it's a set of very strong data, which means that we are incredibly well positioned in the market. But of course, At the same time, all of these clinical publications, of course, have also helped us fuel commercialization. And we just want to give a quick update. I think the last time we updated was in November of 24. And we are now sitting with more than 200 what we call VAC approvals or hospital approvals in the U.S. We also continue to build and also strengthen within that distributor network And that network now counts approximately 120 distributors. We also, as you know, have full military access, both to active and veterans. And then we continue to execute on our premier GPO contract, which, as you know, represent a very large part of the entire US market. So what that also means is that we have actually hit the 10% access point. But as we've said before, that still means that we have 60% of the spine of the biologics market, which is untapped, and which therefore represents a significant growth opportunity for the future. And in addition to that, We can, as we also disclosed during the strategy update, go into adjacent orthopedic segments in the future based on our existing 510 clearance in the US. So as a result, in June, we launched our growth strategy to achieve positive cash flow, and we call that new strategy scale to profit. And the strategy has four very clear focus areas. The first is to accelerate access and coverage in the U.S. market. And in order to do this, we will double the U.S. sales force by 26 and also accelerate our marketing effort. And in addition to that, we will at some point during the strategy period also enter new adjacent orthopedic segment. The second priority is to expand our product portfolio and indication, and we expect to launch two new products, an MIS solution in 26 and a hydrophilic strip sometime between 27 and 28. And in addition to that, we're also aiming at obtaining minimum one new indication expansion. The third priority is to build a complete repository of clinical evidence. This means continue to build and publish data from our Propel registry, but equally important, we're going to initiate a large level one randomized control trial, which is expected to start during 26. And by investing in this level one randomized control trial, Ostercyan will become a top tier of a biologics company and one in only very few that can demonstrate such clinical evidence. The final priority is to scale production and increasingly also build a U.S. production footprint. Specifically, that means we'll be implementing a scalable, more cost efficient production process and over time also move to an increasingly bigger U.S. footprint. As part of the strategy, we also updated our financial ambition and these strategic measures are intended to increase us design sales to over 400 million by 28 and achieve a profitable operating result and cash flow in the second half of the strategy period. The quarter was also marked by a successful completion of a director share issue where we raised almost 160 million before transaction costs. And the overwhelming investor interest, which prompted us to increase the offering from 9 to 11.5 million shares, demonstrates strong market confidence in our strategy and in our performance. And this capital injection means that the company is now sufficiently capitalized to put in place the resources necessary to execute our current growth plans and deliver a positive cash flow. And with those final words, I want to thank you for listening to the presentation and hand back to the operator who will handle questions.