Sedana Medical AB (publ)

Hello and welcome to today's Finwire presentation with Sedana Medical. After the presentation, there will be a question and answer session. So if you have any questions, you can submit them in English using the form on the right. With that said, I'll hand the floor to you. Please go ahead.

Thank you for the introduction. Warm welcome to our Q2 report 2026. I'm here with our new CFO, Michael Haag, who will introduce himself and speak about our financials in just a few minutes. Peter Sackey, our Chief Medical Officer, who's usually with us, is not here today as he's traveling in the U.S. onboarding the next large hospital into our Early Access Program. So let's talk about the second quarter. What stands out, of course, is the NDA submission in June, a huge milestone after years of work on our U.S. clinical and regulatory program. So our biggest growth opportunity, the United States has moved another step closer. At the same time, we managed to further improve profitability, even though sales on the group level were flat versus a very strong Q2 last year. So let's jump right into the highlights on page three. Thank you. Structured around our three priorities. So growing sales in our core markets, reaching profitability and our exciting US journey. Q2 net sales were 49 million SEK, which is flat compared to last year at constant exchange rates. If we look only at the core business, so excluding the contract manufacturing sales from our factory in Malaysia, sales were slightly up by 1%. We had a delayed shipment to our contract manufacturing customer that shifted from June into July. So it's actually the contract manufacturing business that pulls us down just slightly on the group level, but that's a pure timing effect. Still, this flattish development looks a bit underwhelming probably at first glance, but we need to remember that we are comparing against a very strong Q2 last year when we had organic growth of 21%. Having said that, it is very clear where we have to improve. Germany had another very soft quarter, but the good news is that every other market outside Germany showed really good growth and also accelerated growth compared to the first quarter. I'll go through each region in a bit more detail in a moment. Another very positive outcome of this quarter is that we, despite the flat sales, again improved our profitability. Both our ex-US and group EBITDA are up. Ex-US EBITDA reached 2% in the quarter from zero a year ago and 6% year-to-date up from three. And at the group level, EBITDA improved to minus four in the quarter up from minus eight. As always, we have a bit of seasonality here. And we now stand at breakeven year-to-date, up from minus 4 last year. Also, the gross margins improved nicely to 73% in the quarter, up from 70% last year, helped a little bit by the lower share of contract manufacturing revenue in the quarter, but more importantly, significantly lower cost of goods of our main device following the innovative Sikal acquisition. We ended the quarter with 52 million SEC in cash. Cash burn was a bit higher in the quarter due to the final spurt towards the submission and also affected by some temporary working capital effects. But now the work with the submission is done. So we expect the US CapEx to decrease further. So we continue to believe that we are financed to execute on our plan and actually as an extra safety buffer given the cost uncertainty that sometimes comes with an FDA review. We have also put in place a new loan facility with a local bank, giving us access to 50 million SEK in additional funds should it be needed. So we're not drawing down the amount at this point, but it is there in case we will need it. That in itself, I think, is good news as our profitable core business is now allowing us to be creditworthy with local banks and get access to this kind of a facility. And then of course, the big one in June, we submitted our new drug application to the FDA, slightly ahead of our public guidance. And together with the fast track designation, the positive pre NDA meeting the early access program that is now treating patients at several hospitals, we are step by step moving closer to our big goal of US approval. The review clock has now formally started, and we expect to hear from the FDA in August or September with a decision on whether they will accept the file. If they accept the file, they will set up a DUFA date, so the date by which the FDA commits to completing the review and deciding on approval, and also give us a decision on our request for priority review. If you then move to the next page, page four, please, you see the same picture that we've shown you before of our multi-year turnaround now extended by one more data point for the first half of 2026. Just to recap the story coming out of COVID, we made it a priority to reach profitability outside the US before launching there. and we ran a really disciplined turnaround program cutting significantly into everything non-customer facing. So our Swedish headquarters today runs with less than half of the people it used to have while reinvesting part of that freed up cash into the frontline. We've also become much more disciplined and differentiated in how we invest across countries, doubling down where we see profitable growth and pulling back where we don't see that. We also acquired our main supplier in Malaysia, as you know, and as a consequence managed to reduce cost of goods of our main device, Silaconda ACD, quite significantly. And you can see the result on this slide, a consistent multi-year improvement in the bottom line that has actually outpaced the sales growth, meaning we've always found ways to do more with less. Page five, next page shows where this puts us against our financial targets for the year. We guided for a mid to high single digit EBITDA margin outside the US and year to date we stand at six, up from three in the first half of last year. And we guided that we would approach group level EBITDA breakeven and year to date we are actually exactly there at 0% up from minus four last year. As always, there will be some seasonality quarter to quarter, as we've also seen it between Q1 and Q2 here, but we're confident in delivering on our full year financial guidance. Before I go region by region, I want to spend a moment on the next page, on page six, to give you some context on how we are comparing ourselves against last year, which maybe helps calibrating the performance in the first half of 2026. Last year we closed at an all-time high of 200 million SEC in sales, but the shape of the year was quite unusual. So we sold 107 million in the first half and 93 in the second. So the first half was 15% higher than the second half of the year. And then Germany specifically, that pattern was even more pronounced with the first half 22% higher than the second half. and that compares with a typical post-COVID split of roughly 49% in the first half and 51% in the second, so quite even. So this traces back to the shape of last year's flu season where we had a very long and severe wave of ICU admissions early in the year, but then that faded out from around May onwards and since then has quite consistently been below the levels of the previous year. And the practical consequence of that when we look at the performance this year is simply that we've been running against a quite unusually high comparator in the first half of this year, simply because the first half of last year was stronger than usual. If we then move to the next page, on page seven, let's turn to Germany, which faced another difficult quarter. Sales declined 22% at constant exchange rates against AQ2 last year when we had grown 19%. Year to date, we stand at 18% decline at constant exchange rates. And as I'll show you on the next page, the majority of this effect is explained by quite a lot fewer patients in German intensive care units than we had a year ago. That said, we are, of course, not just waiting for the market to turn back in our favor, but we're fully focused on what we can control on the execution side. More than half of German intensive care units are already customers today, representing over two thirds of the addressable market. So our biggest growth opportunity is deepening penetration within existing accounts rather than opening new ones. And to capture that, we have now installed new sales leadership during the quarter. We are restructuring Territory so we can sharpen the focus on high potential accounts even more we increasing visit frequency and in high potential accounts We are becoming even better at using data and analytics to steer our activities towards the highest potential opportunities and we are rolling out sales training even more consistently to the effectiveness of our key account managers on page 8 That shows you the data behind the market headwind I've talked about. This is Robert Koch Institute data on weekly hospital admissions with severe acute respiratory infections, so a quite relevant group for us. You can see that this year's flu season, which is what you see in the dark blue, is running consistently below the prior season in light blue. Year-to-date hospitalizations were down 11%. And that's also very much in line with what the German National Intensive Care Registry reports. The share of free ICU beds is up 12% without the total number of beds changing. The capacity for invasive ventilation is up. And also the number of ICUs who report that they cannot, that they don't have enough staff to deal with the patient volumes has dropped by 20% compared to last year. So all of this is evidence for lower patient volumes in German ICUs this year. So what does all of that mean? As a consequence, if there's less patients that require our products, customers will reorder a bit later and they will also order smaller volumes. And that's what we've seen now for as long as we had lower patient volumes. But again, that should not distract us from our focus on execution. Even in this somewhat contracted market situation, which is hopefully temporary, there are still enough patients for us to go after, and that's what we need to be focused on. We then move to the next page, page nine, on to some more good news. All of our other direct markets in which Spain, France, UK are the most important ones, accelerated broadly in the quarter. All of them were growing in the quarter in total 41% at constant exchange rates. And as I said, every single one of them improved versus the first quarter. So that's really good to see. Year to date, these markets are now up 22% at constant exchange rates. In Spain, the A nationwide doctor strikes that had started in January are still ongoing, so there's still no agreement between the unions and the Ministry of Health. There's still five-day strikes roughly once a month, so one week a month. But despite that, our growth has reaccelerated quite sharply in the quarter. Our team has simply gotten better at working around the strikes, so they're better at reaching the stakeholders even during the strike weeks. And we are also opening new doors in patient populations where we haven't traditionally been very strong, such as neurocritical care, where there's been an investigator-led study, pilot study, published called NeuroConda, which is now helping start conversations with neurocritical ICUs. That was a study that looked at mechanically ventilated neurocritical patients, and specifically those without intracranial hypertension, so those that didn't have too high pressure in the brain, And what that showed was that early sedation with isoflurane is feasible and achieved reliable deep sedation without causing problems to the brain by affecting its blood supply or pressure. So a really good study for us and that has helped in Spain and will help beyond Spain with neurocritical patients. Also, France delivered solid growth this quarter. The APHP network of 38 university hospitals in and around Paris that we've been talking about where our pharmaceutical had been blocked until this year is now live and we've already opened eight new hospitals account there. We're still in the process of restructuring the French organization and we expect a new country manager to be in place in the fall. In the UK performance also improved versus Q1 even though it's a little bit from a low base. One issue we had to fix in the UK is that historically there was maybe a little too much focus on accounts that are easy to convert. Those are oftentimes smaller hospitals but that don't have enough long-term growth opportunities and we've prioritized our reprioritized our account focus towards higher potential accounts now, and we're seeing early encouraging signs that that is working, even though it usually takes a bit of time to fully play out. So if I take all of these markets together, our other direct markets now represent more than 40% of our core business, which I find a quite remarkable shift from just a few years ago when we essentially had just Germany and nothing else. Page 10, the next page shows our distributor markets, which continued their solid trajectory, growing 26% at constant exchange rates in the quarter and 22% year to date. That is mostly driven by strong orders from Saudi and from South America. So this progress really builds nicely on the groundwork that has been laid last year, which was about sharpening the focus on select few prioritized partners, and at the same time also terminating distributors that weren't contributing meaningfully enough. As always, this business is a bit more volatile quarter by quarter than maybe our direct markets, but the underlying trend is very, very encouraging. So let's switch gears then and come to the US on page 11. As you know, this is our largest growth opportunity comparing the addressable markets in our direct markets today with the US makes it very clear we estimate the US market potential for our products at roughly a billion dollars or 10 to 12 billion SEC roughly three times the Potential in our current direct markets so that the day we hopefully receive us approval our addressable market would essentially quadruple over overnight and that's higher potential in the US comes from a larger number of ventilator beds. It comes from a medical practice that favors intubation and mechanical ventilation more in in Europe. And there's actually also a generally higher price level, even though we haven't factored that into this addressable market number yet so that there could be additional upsides if we managed to get a higher price than in Europe. And that's quite easy to see, I guess, how the US market entry could change the shape of this company completely if we were to achieve market penetration levels that are at the level of where Germany is today, for instance, in the US, then we'd be looking at sales of one and a half billion SEC, again, without any pricing upside. On the next page, page 12, that walks you through where we stand on the path to US approval. So the big event of the quarter, as I mentioned, was submitting our new drug application in June, just a little bit before our public guidance. This follows two successful pivotal phase three trials, which have both met their primary endpoint with no new safety findings. A productive pre-NDA meeting we had with the FDA in the fall last year, where we got good alignment on the content and formats and expectations for the submission. So now the file is in the FDA's hands. We are in the so-called validation period. And when that validation period is over, we expect to hear from the agency which is likely going to be in August or September both on whether they will accept our file if they accept the file we will also get the PDUFA date so the date by which the FDA commits to give us a decision and at the same time we will also hear back on our request for priority review and if that were to happen that would shorten the review time to six months otherwise the standard that we are working against is 10 months. We've, of course, done a lot of preparatory work already to prepare for the FDA review. For instance, we've performed several mock audits where we have brought in former FDA inspectors inspecting our manufacturing sites, our quality systems, our clinical trial oversight and documentation, select suppliers. So the areas that we know tend to draw the most FDA scrutiny. On page 13, a brief reminder of our launch strategy. So we continue to believe we will create the most value by launching in the US ourselves, keeping control of our assets, capturing more of the upside, while also keeping the option open to over time bring in a partner later if that were to create even more value. And this works because despite its size, the US market is fairly concentrated. So there's less than 5,000 hospitals with ICUs overall. and even less with meaningful sizes, so we can pursue a very targeted launch built around the network of key opinion leaders and trial sites that we've already established. On the next page, page 14, there's a lot of detail on the slides, but I'll go through it quickly. So it shows some of the secondary endpoint results from our pivotal trials, which we believe offer meaningful differentiation subject, of course, to FDA review and labor decisions. We firstly saw, and that's very important, a substantially greater reduction in opioid use compared with propofol, roughly 31 and 37%. which matters because opioids drive real clinical problems in the ICU from constipation to respiratory depression to delirium and of course also because opioid exposure during ventilation is linked to opioid use after discharge and the related addiction risks. We also saw fast return to wakefulness typically within an hour of stopping treatment which supports more predictable extubation and avoids the complications that come with long unpredictable wake-up times on IV sedatives. On mortality, we saw a numerical advantage for isoflurane of four to five percentage points, 30 days in both studies, not statistically significant, but reassuring nonetheless. And we also saw more ICU-free days for isoflurane patients, which is consistent with the findings we had in the European studies as well. And that's very meaningful for hospitals because every ICU day that you save, saves the hospital up to $11,000. And finally, another true differentiator, isoflurane is eliminated almost entirely through exhalation. So there's minimal metabolism, which is a real difference actually with IV sedation where you need functioning liver and kidneys to deal with the metabolization. Now in an ICU, half of the patients present with some kind of an organ failure. So there's lots of patients in the ICU with liver or kidney problems. So that is an attractive target segment for an AIDS sedation as well. Then on page 15 shows the network of clinical trial sites behind our two pivotal studies, 30 leading academic medical centers across the US, many of them very well known names. So you will see Cleveland Clinic, Mayo Clinic, Vanderbilt, and a lot of others that you will recognize. And these centers are already forming the foundation of our emerging KOL network in the US and will of course be very, very valuable to count on their support after approval and during launch. Page 16, just a brief update on our early access program, which allows difficult to sedate patients, those who cannot achieve target sedation on IV sedatives to access our therapy ahead of full approval already. The program started as we communicated with Vanderbilt earlier this year. We've now expanded to three hospitals step-by-step that are actively treating patients. We have another four lined up that are in the final stages of being onboarded. As we move closer to launch step-by-step, we will onboard more hospitals beyond the direct patient benefit, which I guess is obvious, so patients that have an alternative to something that doesn't work today. This is also valuable for us commercially, so it means that hospitals and key opinion leaders are building real hands-on proficiency with our therapy well ahead of launch, and we're learning a great deal about implementation processes, training, supply chain, and so forth, which we think can apply once we launch for real in the US. Then if we move on to the financial section, I'll hand it over to Mikael to take you through the details here.

Thank you. My name is Mikael Haag. I'm the new CFO here. I've been here one month. The last eight years, I've been CFO of similar companies, listed and non-listed, tech-focused and growth-focused in Europe and USA. So the financial results, a bit of recap. Net sales amounted to 49.1 million SEK compared to 49.8 as a second quarter last year. It is a decline of 1% year over year, but flat excluding currency effects. Germany declined 23% or 22% excluding currency effects. But as you heard, it was driven by lower ICU occupancy rate compared to the same period last year impacting. the demand in our largest markets. In contrast, our other direct market delivered strong growth with 41% year over year, particularly strong performances in Spain and France, but also in the UK. Sales in our distributed to markers increased by 23% year over year and corresponding to 26% excluding currency effects, demonstrating continued momentum across several international markets. Finally, contract manufacturing amounted to 1.9 million, down a bit from 2.7, partly explained by timing effects where some of the shipments were late and will then come in July. Gross profit and gross margin. Gross profit was 35.8 million SEK compared to 34.9 in the second quarter. Gross margin improved to 73% up from 70%. The margin improvement was mainly driven by lower cost goods for our main products and Konda ACD, following our acquisition of a supplier in Malaysia. In addition, the lower proportion of contract manufacturing sales also contributed positively to the gross margin development. Moving on to profitability, EBTA improved to negative 1.9 million SEK compared to negative 4.1 million SEK in the second quarter. The EBTA margin improved to negative 4% compared to 8% one year ago. Excluding US operations, EVTA was positive for almost 1 million SEK compared to negative 0.2 million SEK last year, corresponding to an EVTA margin of 2% compared to 0% same period last year. Operating expenses were approximately 46 million SEK compared to 45 million SEK in second quarter of 2025. Despite continued market headwinds during the quarter, we're pleased to see that EBTA continued to improve, reflecting our focus on operational efficiency and profitability. Staff, at the end of the quarter, 2026, we had 132 employees and consultants compared to 131 last year. Including an innovative SECAL with the acquisition, the number of employees and consultants were 80 compared to 86 prior year period, reflecting a continued focus on maintaining lean and efficient organization. So to summarize, with overall sales flat excluding occurrence effects, Germany remained affected by lower ICU occupancy rates. There was strong growth in other direct markets and distributed markets and at the same time improved gross margins and continued cost discipline resulting in an improved year-over-year EBITDA. So cash and our financial position. At the end of the second quarter of 2026, cash and crash equivalents amounted to 52 million SEK compared to 81 million SEK at the beginning of the quarter. The quarter's change in cash was negative, 29.5 million SEK, primarily driven by intangible assets, investments of 20 million SEK, mainly related to the US program, as well as a negative change in working capital of 5 million SEK. On that, cash flow from operating activities amounted to negative 8 million compared to negative 12 million last year. Looking at working capital movements, operating liabilities had a negative impact of 13 million SEK on the quarter, while operating receivables contributed positively by 8 million. Inventory changes had a positive impact of 1 million SEK. So there are quite big swings on both sides of working capital. Going forward, we expect a bit less negative impact from working capital. And as you saw, we did have an uptick in investments to the FDA submission as well. So expected going forward, slightly less as mentioned before. The total cash flow for the quarter was 29.5 million SEK. That was 31.1 one year ago. In addition to our cash precision, we have secured a credit line with the local bank just recently for 50 million providing additional financial flexibility. This will provide an extra buffer for the review period. So based on our current plans and available financing, we expect to be fully funded to achieve the U.S. approval, which remains the most important value-creating milestone for the company.

Thank you. Good. If we then move to page 20 to wrap it up before we open it up for questions. I see three big reasons to believe in Sedana Medical's success. Number one, and the foundation of it all, is a therapy that makes a real difference for critically ill patients every day, helping them wake up faster, recover faster, leave the ICU sooner, and with meaningful cost benefits for hospitals too. Number two, we have a profitable core business in Europe. We reached breakeven Group EBITDA year-to-date, so we now have a solid financial platform. to fund our US launch. And number three, we're closer than ever to our biggest opportunity, the United States. With two successful pivotal trials, the FDA fast track designation, the positive pre-NDA meeting, the early access program that's underway, and now our NDA submitted to the FDA, we have a lot of positive momentum and we look forward to bringing in head sedation with isoflurane US patients in the very, very near future. So thank you very much for now for listening. And we will now open it up for your questions.

Thank you for your presentation. Now we open up for questions. As a reminder, if you are following the report at the phone, you can ask a question by dialing star nine on your telephone keypad to raise your hand and star six to lower it. But now we can start with some of written questions.

Yes, so we got written questions through the chat here from Matthias. So your question, are you willing to give some color as to why the capex increases quarter over quarter? What magnitude of capex is likely to remain coming quarters? Yes, and then there's another question. I'll take them one by one. So on the cash, as Michael has just laid out, We did have a bit higher cash out this quarter, mostly driven by higher expenses into U.S. capex. That reflects the final spurt we had with everything needed to come together for the U.S. submission. And then we also had some negative working capital effects. Those are temporary, so they will not look like this every quarter. And probably we will have some positive effects from working capital going forward also. If you zoom out a little bit from that, so we used to have the clinical trial as the biggest source of cash burn. So back then we had 50, 60 million sec cash burn by quarter. When that was done, the capex decreased quite significantly for putting together the dossier, so paying statisticians, Medical Writers and so forth. So you saw capex of maybe 10 to 20 million per quarter and now with a little bit of a mini peak in Q2 at the end of the submission period. So all else equal, the capex going forward should decrease further and it should decrease quite significantly So the cash burn should decrease. The unknown here is what will happen in the review period. So once the file is accepted and the FDA will start asking questions, some of that might drive extra work. They might ask for additional statistical analysis. They might have questions that cost a little bit of money to address. That's a bit of an unknown, so difficult for us to quantify. We've done an analysis of what we can foresee and I think can quite confidently say that the cash burn will come down compared to what you've seen now in the quarter. Then the next question is the post-COVID profile of the year with almost 50-50 revenue splits in the first half versus the second. Would you say based on the market factors that it would apply to 2026. And then there's a second part of the question, were there any particular orders that drive the improvement in other direct markets, or is it simply just better execution and penetration that is expected to be sustainable ahead? So on the shape of the revenue distribution 2026, of course, I don't have a crystal ball. What makes the comparator period to 2025 a little bit unusual is, as we said, that a lot of the sales were in the first half and much less in the second half. And that was a function of the flu seasons being very unequally distributed. So you always have a bit of seasonality. Last year, that was a bit more pronounced because the flu season was really strong first half of the year. And then this year, we had a much weaker one. So I would expect a more normal year this year, but of course it's always a bit difficult to predict. And also we need to make ourselves a little bit independent from these seasonal swings. What we need to be focused on is the execution, and that we are very much focused on. And we see good early signs of accelerations in our markets outside Germany. Also Germany, we have a plan in place to end the softness and return to better numbers again. And even in this, as I said, even in this market where we have less patients, there's still enough patients for us to grow. So even in Germany today, we have one in seven patients that receive our therapy. So that means there's still a lot of patients that we can go after. And then the last Last question. What's driving the improvement in other direct markets? I would almost say for Spain, it's a little bit of the return to normal. So Q1 was weaker because we got quite affected by the strikes. Now we have found ways to work around those. Things are more normal again. And we're also seeing better growth. And then UK and France have for a long time been lagging behind Spain a little bit. We've put measures in place to accelerate and those are showing effects. So there's no Like individual big orders that are affecting the results But hopefully we can sustain those those growth numbers and accelerate them further when it comes to to France and UK going forward Two more questions on the chat Could you share more details on the international expansion plans for SEDACONDA in the second half of 2026? I am a big believer in focus. We are very strict in where we invest and where we don't invest. We have defined our focus geography as Germany, Spain, France, UK, where we primarily invest and want to grow and there's still loads of growth opportunities. And then there's the US as the one that could change the shape of the company. There is a few candidates of countries where over time we could establish direct sales But since the question is specifically for the second half of 2026, our geographic focus will not change because we still have a lot to do and we still have a lot to grow in our existing geography.

There was one more.

And then there's one more. Could you provide more details on the expected timeline for regulatory approval in the coming quarters? So I'm assuming that refers to the US. So again, we are we've submitted the file mid June, we are now in what's called the validation period. Typically, you'll hear back after two or two and a half months from from the FDA. So that's the next milestone, which is probably August, September, we will hear whether the file is accepted, we will hear what the data is, and we will hear the outcome on the priority review request that we have put in. And depending on that decision, we're looking at an overall review time of 10 months as a standard and six months if we get priority review. So in a best-best-best case scenario, we could be looking at approval around the turn of the year. The base case assumption is that It would be after 10 months, so somewhere in the first half of next year. But again, FDA review always has uncertainties, and it's not in our hands, it's in the FDA hands. We've done everything we could to prepare, but that's the textbook timelines.

Yeah, if you don't have any other written question, we can finish with questions that we have here at the phone with the number finishing with 771. Please unmute yourself.

Hi, this is Philip from Pareto. Can you hear me?

Yes, I'm Philip.

Hi, hi. So I've got a few questions today. I'll take the first on Germany here. So it seems like the impact of lower hospitalization incidents was larger in Q1 than it was now in Q2, but now we had a bigger sales decline in this quarter. So I'm just wondering if there was anything else that also affected the growth rate now in Q2 other than the market situation with the lower hospitalization.

Yeah, so the one thing to be said about these data is they are not perfect in the sense that our target patient is mechanically ventilated patients that are sedated in the ICU. And there's no external data that tracks exactly that patient population. um what you saw in the data in the graph that we've shown was hospital admissions with respiratory infections so um it's not a given that these patients end up in the ICU and it's also not um not um and there's other patients in ICU as well beyond beyond respiratory patients and and one effect that you see during the summer quarters is that the share of respiratory patients in ICU is lower simply because you have less pneumonia, you have less COVID, you have less flu. So that's why in the summer months those respiratory infections are a little less good predictor than in the winter months where they represent a bigger share of the patients. What also plays a role is that you have a little bit of a lag. So if I have less patients in the ICU today, that translates into lower orders usually in a few weeks, so not immediately. So it's true that the delta in patients in that statistic was larger in Q1, but then with the caveats of data quality, as I said, uh the patient number is still still the biggest explanation for for the lower sales as well. So there's no big other effect that we're seeing. But internally, as I've repeatedly said, we don't spend a lot of time staring at these graphs and feeling sorry about ourselves that the market is declining because there's still enough market to be captured. And that we need to do by focusing on the execution. We've put new leadership in place. We are doubling down on the high growth opportunities and have good early signs that that is starting to work, but it will take some time to fully play out.

Okay, thanks, very clear. And then on the seasonality in Germany also, Q3 tends to be lower sales than in Q2, so would you say it's reasonable to assume the same this year? And I'm now talking about absolute sales numbers rather than the growth percentage.

In most years of Sedana's history, yes. Q3 was the weakest quarter sales-wise simply because you reach the lowest patient volumes. So again, less Respiratory infections, then vacation also plays a role. So I, of course, don't have a crystal ball to foresee exactly the sales numbers in Q3. We're working on getting the best possible quarter in Q3. Of course, historically, you're right in saying that Q3 tends to be a bit weaker than Q2.

I'm just thinking if we are at the same level in Q3 as well, that would imply negative growth, but you're also talking about easier comps in H2, which should enable growth. Is there any other factors to take into account?

No, that's correct. I mean, yes, you're a very good analyst, so you will figure this out.

All right. Okay, then then perhaps a question on on stay on other direct sales here. I suppose it was Spain that had the biggest effect or, like, is it possible to quantify in any way it was how much was Spain and how much was an acceleration in France, UK, Benelux?

Yeah, so we're not kind of disclosing the individual growth rates per country. It is true and I think common knowledge that Spain is our largest market among those three. So also the growth is in absolute terms making the biggest contribution. What's more important for me is if I think a few years back when I started then the company was mostly Germany and not much else and we were talking about creating the next Germany. And that we managed to do with Spain, which is now really good underway. It will probably beat Germany penetration-wise in the near future. And now we need UK and France to also accelerate structurally. There's no reason why those countries would be smaller than Spain. In most medtech companies, you would see UK and France generating more sales than in Spain. And now it's about applying some of the recipes that have really worked well in Spain, also in these two other markets. And then hopefully over time, those markets will be the additional growth engines for the group growth.

Okay, thanks. Then just lastly, a couple of questions regarding cash flow and the cash position. You know, so it declined quite a lot more than it has in prior quarters. So I know you don't usually like to give an exact guidance around, you know, what the investments are going to decline to. And you've talked about them going down significantly. But there was 20 million in this quarter. Like, are we talking single digit millions already in Q3 or going forward? Or is it possible to give any sort of quantification on that?

Yeah, so the clinical trial cost is out of the system. So that's zero now. The submission preparation cost has stopped. There's going to be a few invoices paid in July that relate to work in June, but then that's also going to zero. So what is left is costs that will emerge during the FDA review. So, FDA questions that will cost money to address. And that is very difficult to predict. We've done a very thorough analysis of what questions can we foresee. That analysis points towards investment levels that are much lower than what you've seen so far, but there's some uncertainty related to every FDA review, so it would not be very professional I think to give you a concrete number because we haven't received any FDA questions yet. What we can say is we expect significantly lower cash out from all that we can see and then let's see what the FDA review brings and as we've also seen we've now put in place a loan facility just in case so we've taken advantage of the fact that the Profitable ex-US business now makes us credit worthy. So we have an additional 50 million if we need it. We're not planning to draw on it. But should there be something unforeseen in the FDA review that requires more cost than we have seen, then that facility is there. So that's how we're thinking about the cash position right now.

Okay, good. I think you kind of Answered my last question, but that was around the credit facility so so that's mainly due to like all unforeseen cost during the FDA review and not not because the actual approval might be delayed that you're taking. yeah I think if you understand my question.

We've submitted the file. We're in the validation period. We've not heard anything from the FDA yet, which is completely normal at this stage. Usually, the first meaningful feedback you get is in August, September. There's zero indications at all that the approval would be delayed, but the review period hasn't started yet or the substantive review hasn't started yet. That loan decision is completely independent from that. I'm assuming that the file will be accepted. I'm assuming that we are reasonably well prepared as well as you can be for an FDA review and then let's see what the FDA comes with. But this is not a defense move because we see something coming. This is just to be prudent that in a scenario where questions come up that we haven't foreseen or that cost more money than we have foreseen that we are ready for that.

Okay, yeah, maybe my question was a bit unclear, but I think you answered it anyway, so thanks.

So there are no more questions at this time, so I give the word to you for some closing remarks.

Thanks a lot for listening. Thanks a lot for the good questions. I know that a lot of you have taken time out of their vacation to be with us today. So thank you very much for that as well. And I wish you a very good weekend when it comes and a nice summer.