Q-linea AB (publ)

Welcome to Kylian's Q1 report for 2025. Appreciate everyone joining. We'll run this in the usual format. Quick disclaimer for everyone before we move on. And the topics we'll focus on today, I'll give some comments on our commercial progress that we're seeing through the quarter and some outlook for the remainder of the year and how we think about the market developing beyond that. Then I'll turn it over to Krister, who will give us a financial update and will allow for some more time this time, hopefully for questions, since the last conversation was quite engaged, which was great. We'll try to keep the upfront comments a little shorter and more emphasis on the Q&A at the end. So with that, let's jump in. The main highlight messages I'd like for everyone to take away from this quarter. Firstly, we're very pleased with the commercial progress in the quarter. It was a record one for us with five new customer contracts during the quarter. That figure surpasses, in fact, the total for the full year of 2024. So we're pleased to see that that momentum is continuing. The installations coming out of that have proceeded very smoothly. So three of those are already installed in the quarter. The remaining two are planned and will go into place shortly. And this raises the total ASTARs now in routine clinical use to seven. So the installed base continues to expand. That will in turn also drive the recurring revenues that Christa will speak to later. Overall, we're meeting the plan, both in terms of those revenues and the cost development. We now see the 20% year-on-year reduction in our operating costs. That is derived from the cost saving program last year. And that's net of some of the investments we've made into the commercial side of the organization and making sure we have capacity for growth. At the same time, our production and operations team is planning against further efficiencies in the production of our consumables, especially as we go through the year. So we're able to scale and derive those benefits as we keep pulling through. So I'll give some more detail on this shortly, but overall the message is that the 2025 outlook remains very strong. We see progress in all the dimensions that we spoke about last time, on the clinical side, on the commercial side, and on the financial side. More of that to come shortly. Just a quick note for anyone who is new to the Q-Linear presentation. We are in the rapid antimicrobial susceptibility testing space. Three key numbers to keep in mind. We deliver a test in six hours compared to current standard of care, which is typically more than 48 hours. This time savings and save lives for sepsis patients, saves money for hospitals, and reduces the amount of clinical effort in the hospital. It is an extremely easy to use platform with two minutes or less of hands-on time per test, which is very impressive in our sector. And it is the number one platform in our field as a fully automated random access platform with a very comprehensive menu and a very high reliability in the field. So we're now seeing from our routine clinical instruments that are now installed. So with that, a little bit more color here. As mentioned, Q1 has really been one of converting the pipeline that we've been talking a lot about. The team in the field has worked very diligently since FDA clearance this time last year. pretty much exactly a year ago. So we were able to start our commercial activities in the U.S. market. We're very pleased to see that that pipeline has expanded quickly, and we're already seeing those contracts coming through. So typically we would expect a 12, 15-month cycle time to have some contracts signed in less than a year since launch, I think speaks to the latent demand and the clarity of the proposition for ASTAR. We are especially proud and excited about the master service agreement that was announced with one of the US's largest reference lab networks. These are institutions that typically follow their hospital customers. They supply the tests to hospitals and they're typically outsourcing those volumes from the hospital into them. So for a player here to take a lead in the space and help us to bring this out to what will ultimately be many hospitals in their service network, I think, again, just speaks to the clarity of the proposition. And we'll be working very carefully with this partner now over the coming months to plan that rollout. And we'll be sharing news as we get it. The rest of the world hasn't stood still. We did announce the first tender win in the Benelux region that was anticipated and completed. This puts the first instrument into that region in clinical use. To my knowledge, at least, it's the first rapid AC system, again, in routine use. So another region activated, and this is the type of area where local adoption and the local leadership from clinicians spreads within the networks, and we anticipate that that will facilitate the second, third, and beyond adoption. In fact, we see that in Italy now. We had another tender win in Italy and we see the momentum continuing to grow in Italy, where we'll expect a pretty steady drumbeat now going through this year of further placements in Italy, where we're seeing that network effect really happening. Last time we spoke, I mentioned the first walk-in customers coming to us. and asking for proposals that facilitates. Obviously, the process cuts a lot of the time out and commercial effort in going out and finding customers. And we expect to be able to sign some of those very shortly. We're also very excited about our continued work with Amico in the Gulf region. We announced the shipment of the first instrument into the region for evaluation. We expect or hope that will stay in place and move into clinical use. And I'd be very surprised if we're not shipping one or more through the next quarter. As we know, that team is lining up a series of evaluation evaluations with sizable customers in the region that are aware of the need for rapid AST, which is very high in the region, and the proposition of ASTAR, which is quite unique. So overall message, of course, in the quarter, we've now sort of doubled the number of ASTARs. contracted. And it's now about continuing that momentum. So we've shared this picture of the pipeline previously, the steps that we go through. There's still a very large number of customers coming into that first gray box there, many of which we've identified as priority customers. This includes all the large US hospitals, IDNs, reference labs, etc. most of the large European institute in the Gulf as well, where we're making outreach. But now it also includes for increasing the customers that are coming to us. And then, you know, the key thing for us in the process is when it moves into the second stage where we're talking about a demo or an evaluation and an instrument gets installed. And that's really where the Commitment, let's say, starts to get made. You can, of course, still be in a situation the customer says no, but we expect more than 75, 80% conversion from evaluation as we go forward. So we're planning all those evaluations that we see more and more going into place. And that's what really feeds the contracts that we'll be announcing, continue to announce through the year. So the five that we announced in Q1 here, they're over that gray line into the install and go live, three of which are already now installed. So they're in routine use and have joined the four that we had coming off of last year. So we'll keep sharing updates on this one. But as you can see here with well over 100 instruments, both sides of the Atlantic in the pipeline now, we see a healthy supply of potential going forward. going forward to keep the commercial momentum. So a reminder of sort of the overall market that we're looking at and where this should be going. We are looking at building essentially a new segment out of the established standard of care testing, really focused on the high clinical urgency tests for rapid AST. So we see those as the five to seven million bloodstream infection patients, as well as another five to 10 plus million, depending on how uh institutions to find them you know critical infection infections in in non-blood uh tests uh and these will increasingly move over into rapid testing from the 48 72 hour uh current standard of care uh and in this green box will continue to grow and and we assess that to be a six to nine hundred million dollar market for for blood tests and you know uh up to two two x that or more for for the entirety of the opportunity uh so this is what we're we're seeing now emerging and and we aim to be and remain at the forefront of that market and i'm very happy to say that you know i've been now several days here at the eskmit conference in vienna We have a team down here and a sizable presence on the floor and can confirm their interest in Astar. We're seeing a lot of visitors from around the world, obviously customers coming up to learn more about Astar and distribution partners who are looking to bring it into their business. I would characterize maybe of particular interest for this year's conversations, we're seeing many more customers coming up with knowledge already of Qlinia and the system. They've done their homework. They're comparing it with other opportunities. And we've had a few already asking directly for evaluations. I'm happy to say we have a couple even in Austria here where we'll get those evaluations hopefully installed in the quarter in Q2. So customers are coming with, I would say, a prepared thought on Rapid AST and looking to move quickly, which is great. We are coupling our presence on the floor here with... with presentations on the research side. We've got a well-respected scientific team here that's presenting papers on some of the merits of our platform, including new data on the importance of controlled inoculum. It's one of the unique features of our platform that generates the very high quality and reliable testing results. It's not available on all platforms in our space. So some more data there that clinicians are keen to see. We've also published some results from deployment on our gram positive menu for ASTAR. showing that it works and that's again an exciting space for going forward as labs in particular will be looking for solutions that can continue to grow over the long term. Everyone's of course looking to address the critical needs in blood infections and gram negative bacteria, but they want to make sure that you've got a a pipeline in place for gram positive for non-blood infections and so on so we get a lot of interest here in positive reception to to the demonstrated performance and of course our lifetime study continues to release new data we've got a poster session on that and we'll continue to get that out in various channels. We're excited to see that data coming through, continuing to confirm, again, what we expected to see, which is patients moving onto optimal therapy and a significant reduction in the time on therapy. These are positive clinical indicators. So we'll continue to evolve that data analysis. The study is closed during the quarter. the last patient in during January. So working with our partners to get all the clinical evidence and present the full health economic picture throughout this year. So overall, you know, quick summary here, just pulling from the points mentioned in our last presentation, we'll keep coming back to these, you know, on the three main pillars here that we're looking at on the commercial side. We continue to see that pace, you know, quarter on quarter increase, you know, the first multi-site contract that we now have announced in the US, the regional tender that we announced as well during the quarter. And as I mentioned last time, we now got the first quarter walk-in customers well into the process here and would expect to see those first ones signed during this quarter. We're also looking now at some customers who are open to skipping the evaluation stage and just going straight into validation, which further shortens the pipeline. Again, good pacing here. Going forward, we'll give some more updates as these gets installed and The pull-through on the platforms is steady on a per-instrument basis. We can give some updates on that pull-through numbers. But from what we see in the pipeline, I'm still feeling good about the fleet average of 1,000 tests per instrument as we come off the year. um you know and will continue to span across the regions um new countries in in europe and in the middle east on the clinical side i mentioned the lifetimes data last patient is now complete our u.s partners are also completing the early access program research projects and those data are being pulled together now and we'll present it at various u.s conferences and hopefully in some journals as we go through the year, which will be very nice profiling for GULINI and for the Rapid AST space. And just as mentioned, of course, we had a successful AMCLI conference in Italy and are present now at ESCOMMIT. So we'll continue to make sure that we're seen as the thought leaders in the space. Well, we're pleased to say that the US clinical trial is ongoing for expanded US menu. We expect to complete the recruitment stage of that from patient during the first part of this year, first half of this year, and submit before the end of the year. So we're excited for that opportunity. And I'll now turn it over actually to Krister to speak more about the financial side and then come back around for questions.

Thank you, Stuart. I'll take the more financial related part of the presentation here. And for the first quarter, I'll start off with the first quarter. And we are now in the commercial era and that it shows on the top line. We have a record high top line net sales of 3.7 million, which is actually already more than the total of 2024. We are happy about that. And obviously, when the installed base increases, the recurring income from consumers will increase. And that's what we anticipate and we see in all the installations and the pipeline we have, which is really positive. Development in line with our financial plan and it's the plan to break even during 2027 and we see that in the numbers in Q1 and we see that when we look in the pipeline going forward and also with the OPEX where we are on the expense side. I would say we have a good cost control. We have previously guided that the OPEX per month will be in between 14 and 50 million. I will go through more detail in the latest slide, but that's where we are and we will continue to be on this level going forward. On the financing, you're probably aware that we have concluded the first part of the financing in Q1, which is the rights issue. to 90.5% subscribe and gave us a gross of 204 million in equity. After netting on loans, repayment of bridge loans and some transaction costs, it brought us some 93 millions in net new equity. Looking a little bit more closely at the APEX development now, if you take the personal expenses and other external costs from Q1 2023 to the Q1 2025, you can see there is a reduction in line with what we have guided, and we are happy about that one. You see the really small number In Q3 2024, which is obviously positive, but it's also linked to the Swedish vacation period, which is then you normally have lower costs during that period every summer. But if you take that up a little bit, you see it's a clear line below the 15 million. It will be between the 14 and 15 going forward. Shifting a little bit to the events to come, just to guide you a little bit, you're probably aware of that one. We have the price setting period started already today for the warrant scheme, and that will last for two weeks about. And then in that period, we will also release the annual report of 2024. And then in May, we will have the subscription of shares with the support of warrants. it would be a subscription period of 14 days. And then in June, we will have the AGM, which is also in our financial calendar. In that meeting, there will be all the normal things you bring up on the agms but we will also address the uh the number of shares and we will have a reverse split which will be shared with you a bit later when we send out the material for the agm and obviously after the q2 we will have the q2 interim report beginning of july 10th of july Now, looking a little bit about the warrants, you're probably aware of these things, but the warrants, the amounts will depend on two things. It will depend on the subscription rate from zero to 100% and then on the share price. Those things will decide the amount in the issue in May. We have seen strong interest, high interest in the warrants, which is positive. But obviously we cannot guide on this. We are not the ones deciding this. It's the market that decides this. But these are the amounts of million Swedish kronor within the matrix that we will get from the warrants. So I would say we will probably be in the bottom right corner. That's probably where we will end up when you look at the share price today. But you never know. We have to wait and see. Now, looking ahead a little bit on the future financing. As you have seen, we have 68 million on our bank account in the group at the end of March. But obviously, we are not cash positive yet, so we are always looking for other sources of financing. The warrant scheme, as I've just addressed, is one of the things. And then we have obviously other ongoing activities, such as seeking non-diluted financing. And we are discussing licensing of technologies. Podler is one of the things we are discussing. Obviously, seeking loans. And we are working actively with our gross profit and OPEC savings, always. And use of funds 2025, we have guided before the 14 to 15 million per month on the OPEC side. Going a little bit closer to the year end, there will be some more investment in working capital when the volume go up, but we also have some more gross profit coming in. So all in all, it will be a slight increase towards the end of the year. low investments in fixed assets, and the board of directors looking at the situation where we are now. When we see good momentum and we have a clear sight ahead of us, they think the prospects are good for financing and financing Qlinia until breakeven 2027. All right, Stuart.

Thank you, Krister. I think with that, we'll take any Q&A.