Xvivo Perfusion AB (publ)

Thank you so much for that and welcome to Exvivo's earnings call for the fourth quarter of 2023 as well as the full year 2023. Today's presenters are me, Christopher Rosenblad. I'm currently at the headquarter in Gothenburg and our CFO, Christopher Nordström, who is in Philadelphia and living in the US currently. And with that, we go to the next slide, slide three, which is a glance on the Q4 financials and I'm happy to report the improvement in all three business areas. The adjusted EBITDA was slightly lower than expected and our CFO will get into the details later in the presentation. For sales it came in at a record 156 million Swedish kronor. The gross margins are continuously improving also in Q4. I'm especially proud of the abdominal gross margin where we are closing into the 2027 strategic goal of 70% gross margin already now and show 69% during the quarter and 66% during the year. But for avoidance of doubt, the abdominal growth is hampered by production capacity. It's still growing and growing expected. However, that thorax growth or the line growth is lower than expected during Q4. And this is mainly explained with XP having two feet, few feet on the ground in the US due to the reorganization of the US sales team to enable a product service model. To some extent, a few orders stand up on the wrong side of the new year this year versus last year. But that is not the main reason. We are also pleased to report that the integration of our latest three acquisitions has progressed according to plan and now significantly contributes to the growth we see in the quarter and the year. And as I said, the abdominal portfolio continues to grow as fast as it can during the quarter, plus 22%. Key here is that we see a higher growth in Q4 versus Q3, which means that we have enabled higher quantities for production in Q4. So sequentially, we are growing. And we can see that the main limiting factor, of course, is production. And for really high growth in abdominal, we need to get into the US market, which I will come into later in the presentation. And with that, we go to the full year picture. A key takeaway here is that a quarter can stick out, but the importance is the annual progress we can see. And we see growth in all segments and improving gross margins. That has led to an EBITDA amount being almost double of that in 2022 in amounts. So we posted 103 million adjusted EBITDA 23 versus 56 last year. So we see progress year on year. When we look back at 23, we can conclude that not only the numbers in our current lung business are pointing in the right direction, but also have passed many important milestones. I mean, for example, the heart usage in Australia, the US study includes DCD, and it has started with good inclusion of patients. has cost recovery. Also, the two recent acquisitions in services has been integrated and has been a very good integration, which we are both proud and happy about. And lastly, the overwhelmingly positive feedback from our liver and kidney customers, both in terms of clinical results and in terms of user experience. and you will hear more from our CFO on the numbers later so I will skip into more into the highlights on and we will look into organ by organ highlights 23 and what to expect 24 for clarity and we will start with heart on slide number six and accomplishment 23. And it has been a truly fantastic year for the Krivo heart technology. And I especially want to mention that we finished the EU heart trial. We now look forward to the presentation of data. The US trial has started, and it's including patients according to plan. And the study is unique in the sense that it includes both DBD and DCD hearts in one study. And I mentioned before and mentioned again that the opportunity to include DCD into trial design was very important. The DCD portion of the donor pool in the US was approximately one third last year and DCD is growing very fast. So having the opportunity to perfuse also DCD hearts prior to transplantation will be key to save more hearts in the US and hence give the opportunity to more patients with end-stage heart disease a chance to longer and healthier life. And it's hard to not mention Australia and the compassionate use we see there. It continued at the high level through the year. We see that approximately 30% of all heart transplants in Australia and New Zealand are with our heart box. And we can only use it for DBD right now and there we actually are up to 37% of all DBD hearts in Australia. And I think this is a testament for what the heart technology can do in the future also in other market. And the reason for this and the last point is that the data published from Australia was just fantastic. It was presented during ICT in April last year, and we see that the 30-day mortality was zero, even though we more than doubled the out-of-body time from the generally accepted four hours. And the testament which the doctors in Australia say is that, yeah, if it is not we don't do donation transplantation within the same city we think it's unethical to not use the heart box. So that brings us into the slide number seven and what we will focus on during this year 24. The key milestone for this year is obviously the presentation during ISHT in April this year in Prague from the European randomized controls trial. The next key milestone then will be the subsequent regulatory approval in Europe. The status right now is that we have handed in all our technical and clinical documentation to be approved by notified body. We have had very good response times. We are on plan for Also, the Swedish MPA who has to prove some of the pharmaceutical substances have shown responsive. What we see now is that the European agency that has to review one pharmaceutical substance might push the timeline from Q2 approval to somewhere during late Q3, early Q4, and then a subsequent launch in Q4. This is under investigation if we can do something about it but this is the current status of EU approval. I want to mention that in the meantime we have applied for compassionate use also in Europe at a few targeted countries in Europe. The third key thing to look out for is of course the US trial. It has very good momentum. Right now, we have already, as of Monday this week, included 15 patients. There are four DCDs. On Monday, we will initiate the fifth site. So we can see that the first five sites perform approximately 500 heart transplants per year in the US, which represent 11% of the total use volumes in 23. Hence, this study will give us a very good footprint the day we will launch the product in the US. And with that, we will move over to the next organ, which is lung and accomplishment during this year. We can see that the hub model has proven to be successful in the US for lung EVP, and we have established two hubs in Europe this year. This is something we will continue to grow. We are the market leader, and we want to be perceived as the thought leader in lung, so we have master classes. They're very appreciated by the lung transplant community, and I must say a lot of good ideas how to use the XPS for new indications are shared and presented during those meetings. Of course, regulatory hurdles will be there, but we hopefully see the fruit of those new indications in approximately four to five years if everything goes well. And lastly, even though it's not a key strategic initiative, we are focusing on hub models. There is a high interest for the XPS at many clinics. And we have actually seven XPS installations through the year 2023. And now the key is, of course, to train them. and as fast as possible get them up to approximately 12 EVLPs per year, which we deem is the hurdle for having a successful EVLP program. And with that, we look into 24 and what we plan to do. And in short, we plan to have three main initiatives in 24. The first one is we want to continue to be perceived as the thought leader. in lung transplants. So to accomplish that, we will increase efforts in EVLP training and collaboration between clinics. Two, we continue to expand the hub concept both in EU and the US. It shows successful so far. And with more feet on the ground in the US, we think that we will be having a very successful 24 in this regard. We also have a pipeline of clinics which show high interest So now it's time to execute on that interest. And three, we haven't talked about this before, I think, but three, we have demonstrated now that if we increase flushing volume for Perferex Plus, it has proven to be beneficial for the lung, both the donated lung and the patient. So this is something we will drive to demonstrate at clinics to drive above market market volume growth next year and also to drive better patient outcome in lung transplantation. And from lung we will go over to the next slide which is kidney and our kidney assist transport product you see on a picture there and we are now on slide 10. And it's been, even though we don't see it in sales right now, it's been a fantastic year for the kidney assist transport. We have all DCDs in the Netherlands of perfusory kidney based obviously on the very good Lancet study results where we had 97% one-year survivor versus standard of care 90%. said it before said again production of disposable kits has hampered the launch and we are investing as fast and as much as possible we can to solve this issue so that's one of you mentioned to date we have fully launched the kidneys is transferred in that lesson Italy in q4 23. Next fully launched market is the US. There has been a selective launch of the kidney assist transport to learn more from the market in the US, in Australia, in Sweden and Spain, a few of our smaller countries. And so far we have got very good initial response from the customers and the response is one confirming that the clinical results we have seen published in Lancet that it holds. And two, confirming that it's easy to use, which is very important for getting a large uptake of the product. And with that, we go to the slide 11 and looking forward to 24, where key is ramping up production so we get more kits. We are gradually ramping it up, so we see that we got more kits in Q4 versus Q3, and I expect to see a further ramp up in Q1 versus Q3 23. The next key milestone though to alleviate the key hurdle of quantities is that we will have our components automated manufacturing. We have a deadline for 30 June 2024, so this year. And that will enable a full launch in the U.S. approximately after holiday, then in Q3, if we follow this plan. And as I said, I still expect that we will see gradually more and more quantities and gradually improving sales then. In parallel to improving production, we will expand the U.S. abdominal field force to enable meeting more customers and especially opioids. And in the opioses where the majority of kidney perfusions are made. We see a very high interest in the US and we need enough sales and clinical staff on the field to meet this high interest we have. And with increasing disposable volumes, we will launch the kidney assist transport in country by country in Europe as well, but we will focus on the US first. And with that, we go over to the next organ and next product, which brings us into liver. Liver has been a key growth driver for Forex Vivo in 2023. And it's also impressive how many milestones have been passed through this year. And just to mention a few, we integrated Avionord in approximately one month after we acquired them. we sent the press release that they have just accomplished that they perfused their 1200th liver and we can also see that this service product model works very well and in Italy the ABU Nord now ex vivo perfusion services they perfuse almost 25% of all livers in Italy now which is a far higher penetration ratio than we've seen in any other country. And it's actually only beat about what we've seen in the heart in Australia in terms of fast uptake in the market. I also want to mention that, as I said before, I'm very proud of both cost improvement on the production side and price improvements on the sales side. And we see better gross margins. We always said that we expect 70% during the strategy period, 2027. But we now see that that goal is in reach a lot faster than that. And when we accomplish the goal, we come back with new goals, of course. A lot of studies has come out also during 2023, and it has really showed the product leadership, both in terms of clinical results, as well as convenience for the transplant team. So, for example, the liver cyst shows significant high graft survival compared to static cold storage. Also, the recent press release, I think it was maybe yesterday, of long-term perfusion is showing that we can enable plannable surgery to some extent, and that study has attracted a lot of interest. Lastly I want to mention a very important MDR approval which enabled 24-hour perfusion. This together with the study will open up liver cysts not only for improving liver transplant outcome which is an indication but it will also open up for logistical use and daytime surgery. If you read the study or the press release we see that we can reduce two-hour surgery time if we move it to daytime versus nighttime which is of course will enable more livers in the future. And with that talking about the future we go to the next slide 13 and we talk about what we're going to accomplish this year and what are the key milestones to Lord. I said it before we have two key bottlenecks for increased liver growth and they are one production capacity and two lack of EU's approval. So of course we will focus on that this year. And we hope that we can submit an idea at the end of this year. Also to mention in terms of production capacity Kidney has the priority number one right now in our production scale up project. Liver has number two where we see that the number of kits produced are too low at the moment. We are continuously and gradually increasing volumes until the end of this year when we believe that our full scale production will be fully up and running. Also, being the European market leader, we want to be perceived as the thought leader as well. So during 2024, we'll host a masterclass to spread living knowledge in the community, similar to what we have done on lungs. This will hopefully drive new indication, planned daytime surgery, et cetera. Also the launch of the new MDR device with remote monitoring so both enabling 24 hours on label and remote monitoring will support usability and daytime surgery. And with that we go over to the last segment which is the organ recovery service and to start with I must say I'm truly truly impressed by the organ recovery team and the progress made during 2023. They've done a fantastic job. They have literally improved on all parameters as well as pilot the NRP service and established scalable partnership for ground and air transportation during 2023. So in 2023, we have laid a foundation that will enable a control, high quality and scalable growth path for organ recovery in the US. Where we can also start with to pilot the product and service revenue model that we believe that a lot of our clinics want to have. So with that we can go over to the 2024 plan for organ recovery service business. The demand for organ recovery is very high in the US. And to meet the demand short term, we will expand our clinical roster. And we will also expand geographically in the US. We are now on the East Coast in the US. And we believe that there we have a good coverage with approximately 10% of all hearts and lung recovered. But we want to spread to other geographic areas in the US. For mid-term, we will expand offering to include NRP. It's a fast-growing indication and showing very good clinical results. And as I said, establish a product service offering. The goal with the product service offering is to support the clinics with the first 25 hours of the transplant process in order for them to, one, sleep more during the night and enable them to do more transplants. And with that, we can go over to slide 16, which is the divider slide, and jump to slide 17 for our clinical pipeline. And as a company, we will, of course, focus on the current business. And right now, we are hitting the market with approximately one and a half product or 1.3 products of the four possible, that being lungs globally and liver in Europe. So to enable a full global footprint, we are also focusing on the kidney launch and the regulatory approvals for heart globally and liver in the US. So in the US, as I said, the heart trial is progressing according to plan, and they're working very hard to include all clinics as soon as possible. But I'm glad to see that we have a clinical trial really on plan, because that gives good confidence for the future. I have mentioned the situation in Europe. We are according to plan for regulatory approval in Europe. The part which we can't really affect right now is the EMA or the European Medical Agency, where we will get back when we have more information. But if they use their full 210 days, we might push the commercial launch into Q4 2024. And in Australia and New Zealand, it's less of an issue since the product is used in 37% of all GBDs right now. And the regulatory group will be repending the C mark. So we'll come back to that. For the liver, we have previously reported that we have been granted breakthrough device designation by the FDA. This will mean we get a faster route through the FDA PMA process. It's also quality stamps that the price are innovative and fulfill a need on the market for both US clinicians and patients. We have started both the process of documenting the ID application. We have started to invest in the organization both to run the study and to pile their documentation. The aim is that we hand in all this documentation for an ID application during this year. And with that, I will hand over to our CFO. That is actually also in the picture here on slide 17. And I hand over the control to you, Kristoffer.

Thank you, Kristoffer. This is an overview slide at the beginning. So first some short comments on sales as I will elaborate more on this area on the following slides as usual. Net sales in Q4 came in at 156 million SEK with an organic growth of 12%. And as we have already said, full year sales, 598 million SEK and an organic growth of 30%. Strong overall gross margin improvement. we achieved 75 percent in Q4 and 74 percent for the full year. We should spend some time on EBITDA and EBIT. So adjusted EBIT in Q4 was one million SEK meaning one percent. We want to clarify that adjusted EBIT in Q4 includes a few cost items impacting comparability. Firstly We had a retrospective full year amortization which we highlighted in the report of immaterial assets connected to the Avinod acquisition amounting to 6 million SEK. The following four years the yearly amortization of 6 million SEK will be recognized evenly each quarter with 1.5 million SEK. But in this year we had everything in the same quarter so to say 6 million. In Q4, we also had 6 million in extra cost provisions for employee bonuses for achieved milestones not previously provisioned for during the year. So this impacted Q4 in isolation for both EBIT and EBITDA. Excluding these cost items, EBIT in Q4 would have been 9% and EBITDA would have been 17%, which is more in line with our full year achievements. As you see in the numbers on the right, Year-on-year adjusted EBIT tripled versus last year and EBIT almost doubled. So we are definitely developing in the right direction. Moving over to business area thoracic, sales came in at 98 million SEK versus 88 last year. Organic growth disposables were 14% in the quarter and full year the growth was 28% year-on-year. On the gross margin side, we delivered yet a Another strong quarter, 85% gross margin, primarily a result of ASP development in both machine perfusion and static preservation over the year. Americas, as you can see, stood for 62% of sales. And that's our relation in line with previous quarters. Transplant volumes in the US came in flat in Q4 versus Q3. Kind of hard to compare specific quarters, but looking at the full year trend 2023, lung transplants in the US grew 12%, which is a strong development historically. Moving over to abdominal. On the abdominal side, we continue to grow quarter by quarter as a result of our solid position in Europe, mainly with a strong customer offering. Net sales amounted to 38 million SEK which is a new record quarter. The organic growth of disposables in Q4 was 22% and for the full year a very strong 54% organic growth. Liver stood for 80% of total sales in the quarter and also for the full year. Over the year we have gradually increased our Kinesis transport sales from a growing install base on the selective markets. I noticed there was a question in the chat here about CAT sales and we had in Q4 sales of 7 million SEK and year to date it was 22 million SEK and we have seen a gradual increase quarter by quarter fairly linear I would say and that Stepwise development is what we also expect for next year. Gross margin disposables came in at 69% in the quarter and 66% for the full year. And this is a significant increase. And we are, as Kristoffer mentioned before, planning our ambition to solidify these margins on a level over 70% during our strategy period. Moving over to business air services. So as previously communicated, 2023 has been a very good year for us where we have put high focus on strengthening our organization and partnerships in order to optimize the service offering and also to prepare for business integration. We are very proud that we today are involved in 10% of all thoracic organ recoveries in our active service area, which is primarily the East Coast. That's a significant number given the fact that this is a company that has not existed that many years and a great position to grow from. So number of cases in 2023 grew 14% to 562 cases. And we now move into 2024 with a scalable model, and we see growth potential in various dimensions over time. Q4 sales were 19 million and grew 19% versus last year. Full year sales were 79 million SEK and grew 57%. EBITDA and profitability. Adjusted EBITDA came in on 14% in Q4, which means that the good rolling 12-month trend temporarily weakened, as you've seen. This is, as previously explained, due to the increased costs primarily in the isolated quarter of Q4. Full year adjusted EBITDA was 17% and improvement from last year's 14%. As we said, our ambition is to continue to improve EBITDA, but we should do that in a balanced way so we also make the right decisions and the right investments in them in the big market opportunity and sales growth and growth strong growth margin improvements will be the engine My final slide here on the cash flow of financials we're happy over the development of our cash flow from operating Activities in q4 and also for the full year so plus 18 million second q4 and plus 46 million sec for the full year of 2023 and I also want to mention that our cash flow from operating activities also covers our current spend on investments in machine perfusion devices placed at the customers and the ambition is to continue to see that also in 2024 as our investments in these assets will of course increase. We ended the year with a strong cash position of 546 million SEK. And that was all from me for now. Kristoffer, over to you.

Thank you. Thank you, Nordström.