Xvivo Perfusion AB (publ)

And welcome to Xvivo's earning call for the third quarter of 2024. On the first slide, today's presentation, sitting in the same room, Kristoffer Rosenblad, CEO, and besides me, Kristoffer Nordström, CFO of Xvivo Perfusion. And with that, we turn to slide two, the Q3 finances at a glance. And I'm proud and happy to report that Q3 shows improvement on top line as well as EBITDA. last year even though we continued and we will continue to invest in the organization for future growth. Sales came in at 191 million SEK which is a 41% organic growth and EBITDA shows an improvement to 21%. The growth for Thorax is mainly coming from higher XPS activity during the quarter. Another growth that we see in this quarter is the US Heart Trial, where we have seen very high interest to join the trial, as well as very high activity in the trial during the summer months. And Kristoffer Nordström, our CFO, will get into the details on sales, gross margin, EBITDA, and the numbers later in the presentation. So with that, we go to the next slide, which is slide three. And we see a similar picture in the Y2D numbers. Key takeaway from the first nine months are that growth is still mainly coming from an increased activity in existing customers and the stronger market. For hearts and lungs, we see a very high interest from new customers, especially after ISHRT in April, that we gradually start to see being converted to new sales from new customers. We can also conclude that sales from products is picking up faster than sales from services, even though we have a fantastic service offering with a very good quality. Regarding EBITDA, even though we have invested heavily in mainly commercial and field force, we can now see that the revenue model is scalable. In other words, sales is converted to economies of scale on gross margin as well as EBITDA level. Lastly and most important to mention is that the projects are progressing according to plan. The HART project is on time and budget. The production capacity project where we invest to scale up volumes times 10 of today's volume for disposables are running in line with communicated timelines. The first milestones for kidney assist transport and liver assist are completed, and we will have, and we have production volume to satisfy current market demand. As communicated earlier, the full scale of production of disposable for heart, liver, and kidney is estimated to be completed at the end of Q2 2025. But as I said, we have enough volumes for the need for the next year. And with that, we will go into the highlights of the quarter. So first, our business overview on slide four, which we can actually turn directly to slide five. And we will start with heart and news in heart. This slideshow is the summary of the heart trial. That was presented at the ISHCT conference in April in Prague this year. And I showed it before, but we start with those key takeaways. And the reason I show it again is that because it's very good data, we want to repeat it. And number one is that this is, to our knowledge, the first randomized controlled trial superiority design in heart and lung transplantation ever performed, which shows the confidence that clinicians have indexed with heart technology. Two, the HOPE group, in other words, pumped with the ex vivo technology, showed an improvement of PDD with 61% versus the control group, which is highly important, provided that PDD is the leading cause of early and late mortality in heart transplantation. Three, and also very, very important, is that all HOPE parts were deemed transplanted after perfusion. This is important to highlight since cold perfusion offers safety advantages during transportation. that we go over to slide six and the news during the quarter for for heart that was presented in NASA during quarter and we are now after this publication we are now more convinced than ever that this is this product has the ability to share the paradigm of heart transplantation and I want to highlight two key takeaways. And the first one is that when we just for minor difference between the 15 trial sites, we saw that the result was even better. We saw that the primary endpoint had a 49% risk reduction that was well within the statistical significance threshold. The other very interesting fact we see when we dig into the data is that During the seven analysis of PDD, we saw that severe PDD showed an even higher risk reduction with 76% for the hope group, i.e. pump with ex vivo technology versus the control group. And this is very important and very encouraging since severe PDD is highly linked to mortality of the transplantation. Some sources say that severe PDD is associated with nearly an eightfold increase in probability of one year mortality. It is obvious that we with this new knowledge look forward to the one-year follow-up of the data including the one-year survival data points that will be presented during ISHCT in Boston and that will take place in April in 2025. And with that we turn to slide seven. We have talked about DCD heart before, and now we will increase our efforts. To start with, we know that the portion of the donor pool that are coming from DCD is comparatively large in some countries and is growing fast. If you want to substantially increase the number of transplants, we need to prove that DCD hearts can be transplanted in a safe, cost-efficient, and practically feasible way with good patient outcomes. And the study we are now running in Benelux, Belgium and Netherlands is decided to show exactly that. The experience we have from liver and kidney hope shows very good clinical outcome. So the concept is proven. We have also seen in the preclinical settings on hearts that using the Xvivo heart technology and DCD drive procurement shows very good results. We have now reported the first three DCD cases and they had very good and encouraging results. This study together with the regulatory study in the US have decided to demonstrate safety and efficacy for DCD hearts. The company hopes and believes that we will have good evidence when the two studies are concluded. Besides this, I also want to mention the Pegasus in English, study by Professor Louboutin is progressing. The study is done with transatlantic flights on commercial airlines to show that more than 12 hours transport is safe and feasible in the practical setting. When this trial is concluded, we believe that it can revolutionize how heart transplant logistics are performed. And this is the first proof that our technology can enable both patient benefits and cost benefit for the healthcare systems around the world. With the body of evidence pointing towards the Xvivo heart technology to be gold standard in the future, the company works towards that goal. However, until further evidence is presented and accepted, the EU launch will still target approximately 50% of donated hearts that are either old model donors, typical long transportation times, or complicated implant procedures that will manage the longer out-of-body time for the donated heart. But that being said, that's the current hypothesis for the launch. But we believe over time that this has the ability to become gold standard. In other words, all heart should be transported on the Xvivo device. And going from heart, we go over to the next slide, which is slide eight, and we go into lung. strong body of evidence and is getting accepted as a tool to safely increase the number of lung transplants and decrease weightless mortality. So without going into details, we can now conclude that EVLP is a clinically proven accepted method to reduce weightless mortality with good clinical outcome. And with that, I go into the next slide, which is the slide nine. And this is to show that if we have good clinical evidence over time, it is translated to good performance on the market. So we see that the EVP growth is high, especially in the US, where we see doubling this Q3 versus last. And there are many factors behind the growth. We see, for example, the pressure from the American political system to increase the number of transplants has a positive impact on EVLP for lungs. We also see the hub models or centralized perfusion models help to drive growth. The other trend we see is that with a positive IHSDT and more feet on the ground, we see an increased interest for EVLP. And this interest is directly translated into increased number of lung EVPs, and hence more patients getting a chance of lung transplant. So key takeaway from the two lung slides are that innovative products with good clinical outcomes sooner or later translate into increased activity and shorter waiting lists for transplant patients in need of a new organ. And with that, we go to slide number 10 where we have even more exciting news and evidence and this is the liver product we have liver assist where we see the same level of evidence or or almost better and where we deem our liver assist hope technology is now clinically proven During the last year, we have seen more than 20 publications on the liver assist technology showing improved patient outcome on both DBD and DCD grafts after transplantation. I choose to highlight three of those publications, and they are listed on this slide. And the first one, or the top one, I would say is the most important, where we see 1,200 livers using HOPE in a real-world setting trial. And the results showing five-year graph survival at 91% in the hope group versus 81% in standard of care. In the publications will state that hope treatment now reach ideal D stage four, which means in more normal English that it's proven in a real world setting and not only in clinical trials. And this is the, let's say, the highest level of support. And this supports that implementation of liver assist and hope could be a routine practice for liver transplantation. And that's something we work with in liver to get to the gold standard position where we have regulatory approval for liver assist. Secondly, also very encouraging data on the second one, long-term data. We can conclude that the more marginal donated livers, the higher need for liver assist and hope published data on extended criteria dbd liver shows that five-year outcome of 87 percent organ survival which is very very strong in itself but if compared to for example the expected one in the in the publication above using standard care was only 81 percent for good livers but the result becomes evident when we compare the 7% graft survival in the liver cyst group, and we compared to the control group where the result was 52%. The last publication I want to highlight that is important if we want to become gold standard within liver transplantation is the recent Lancet publication that shows that liver safely can be perfused after 20 hours and eliminate the need of nighttime liver transplant. And this is again a great example where we can improve graph survival and also improve work-life balance for our customers. Lastly, I stated earlier the production scale up times 10 is progressing according to plan. We reached our first milestone and we deem we have enough production capacity to bridge the gap until next year, where we will have full-scale production running. And with that, we go to slide 11, which is the last slide on the quality business update. And that's the recent acquisition of Flowhawk, which is a unique communication platform for the transplant process. The background is that with an increased organ office in the US, the complexity for OPOs and transplant center has increased dramatically. Three-step burden, HIPAA compliant, easy to use, communication tool is needed and the best solution on the market is Flowhawk. Flowhawk is already today used by leading transplant clinics and with combined forces we will strengthen the extreme offer to clinics and OPOs in the future. We will also over time integrate our product remote monitoring system into Flowhawk for a seamless customer experience. So we believe this is a very important strategic step for xvivo to be a provider to of easy to use products for our customers in the future and with that we're going to our clinical pipeline And we go to slide 12, and then we can skip right away to slide 13 for regulatory review. And again, I would say nothing has changed since last time we met. I will repeat what I said in July. In the US, the heart trial is progressing according to plan, and our clinical team in the US is working very hard to include all clinics into the trial. The interest is very high, I would say extremely high, to be part of the trial. And we are doing our utmost to make sure that we can meet that interest from US clinics. We have approval for up to 26 sites. We have activated 13 sites and 12 are, as we speak, including patients into the trial. As also mentioned before, in Europe, we have handed in our technical documentation for review according to our time plan. We are aiming for a CMARC in Europe end of this year. Important to mention, is that we can't fully affect that review timeline. The good news is that we have a notified body lined up and they've been very responsive, even though they have a very high workload under MDR. The security in the time now we still face is how fast EMA, European Maker Agency, and the Swedish MPA can handle the review. We have really done what we can to hand in our files on time and both when it comes to product and clinical files with very good quality but i want to highlight that that's slightly out of our hands uh in australia new zealand we have as mentioned before high usage of the product the regulator approval will be pending the c mark in europe so That is. Then we go over to liver. We have previously reported a liver system regretting breakthrough device designation by the FDA. And this means that we get a faster route through the FDA PMA process. I also want to say it's a quality of stamp that the products are innovative and fulfill a need on the market. We have invested in organization to run the study and prepare the FDA documentation. We are in close contact with the FDA for the final ID application that we aim to do before the end of this quarter. And with the clinical and regulatory review, we go over to, I hand over to my CFO, Christopher Nordstrom, who will present the financial performance during the quarter and the year so far. Yes, thank you, Christopher.

Yes, so been presented Q3 was yet another solid quarter for Exvivo. Net sales came in at 198 million SEC representing an organic growth of 41%. Overall gross margin 75%, that's 2% units better than last year due to product mix. Continued improvements on EBIT and EBITDA, so EBIT in Q3 adjusted for M&A costs of 5 million SEC was 13% versus 10% last year, mainly driven by increased sales and strong gross margins from our thoracic business area. Adjusted EBITDA in Q3, similar adjustments, M&A costs was 21% versus 19% last year. Looking at the year-to-date numbers, we are close to 600 million SEK in sales, representing a growth of 36% in local currencies, and a nice trend on EBIT and EBIT as well, so EBIT 13% and EBIT 22%. We'll look in a little bit deeper on each business area, so next slide here, starting with Thoracic. Yet another good quarter with sales coming in at 141 million SEK, the same number as the previous quarter actually on the dot, which means that Thoracic kept the train rolling, so to say, also during the summer months. Organic growth for disposables in Q3 was strong, 54%. Main drivers, Christopher mentioned before, EVLP in the US specifically, where we saw EVLP sales grow 110% in value versus last year. So the momentum for EVLP sales during the whole 2024 has been very tangible. Year to date, we have grown our EVLP business in the US, as an example, 80% in terms of sold units versus last year. During the year we have activated new transplant clinics and now most recently in the third quarter in the US, a very prominent OPO, which we are very excited for. We also had one XPS sale in Germany in the quarter. um on the sales side also great to share that we continue to see um good sales from heart 19 million sec in q3 and this is primarily from the revenue under our u.s trial where we have cms reimbursement in place gross margin on disposables in q2 very good at 85 and in line with the previous years moving over to abdominal Net sales 39 million SEK, which is 8 million SEK less than sales in Q2. As communicated during the Q2 earnings call, we expected somewhat weaker transplant activities over the summer months, especially in Europe, which is still the home turf for our abdominal business area. And the weaker sales in abdominal can primarily be explained by the summer effect, so to say. Organic growth in disposables was 13%. The mix between liver and kidney, we recognize that ratio from previous quarters as well. So about one third of our sales are kidney related and two thirds are liver. Kidney sales, kidney transport came in again above 10 million SEK and we're up to 35 million SEK year to date. Kristoffer mentioned it, but I will emphasize. So in terms of supply on kidney assist transport, we are now in a position where we can meet current customer demand, but also start approaching new customers. Focus for Q4 and Q5 is to continue to scale up the commercial organization and also to start acquiring clinical data on US patients and donors to continue to build clinical evidence supporting hope in the US. In 2024, for example, we've had a good start where there has been presentations by physicians at two transplant conferences and both presentations on U.S. data. And both presentations indicate improved labor function on extended criteria donors using HOPE. versus cold static storage. So it will be important for us to continue to build clinical evidence also in the US. And this will lead us to high market penetration and to establish reimbursement over time. Gross margin 62% from disposable versus 61% last year. Moving over to services, our third business area. Sales in Q3, 18 million SEK from 96 recovery cases. This represents a decrease of sales actually, minus 7% versus last year. During 2024, if you take the bigger picture, we have reorganized our commercial organization in the US. As you know, which together with our significant growth within EVLP have stolen some focus from this business area. And moving into 2024, we need to start to organize ourselves better around services and in a more focused way. We have continued to strengthen our recovery quality program in 2024. We take a lot of pride in that and we get a lot of good customer feedback. And now we have an opportunity to integrate our Flowhawk platform into the customer offering, starting in Q4. And this will give us an even stronger service offering going into 2025, that's for sure. I also want to mention another initiative that we will look into, and that is to see if we can start to include our service, our organ recovery service model into our clinical trials so our heart centers and also eventually our upcoming liver trials so I mean there is a great there is a great interest of combining our products with our service model but of course we would like to have the sites trying that before that the product is commercially launched hence already within the trial so that is something Moving over to my two last slides. EBITDA, 21% in the quarter. I mean, we have a continued good positive trend in rolling 12. We're at 20%, so that trend develops nicely. We have stated it before. Our ambition is, of course, to continue to improve EBITDA year on year, but we will do that step by step. Of course, we also want to invest heavily in this organization so we can grasp the market opportunities, but still improve our profitability. I think that is it on that slide. Moving over to my last one. So cash flow and financial position. Q3, once again, cash positive from operating activities, plus 23 million SEK. Investments primarily in our U.S. clinical trials amounted to 41 million SEK. That leads us to a total cash flow of around minus 21 million. We ended this quarter with a solid cash position of 450 million SEK. And this was everything for me. I will hand the word over to Kristoffer again and look forward to Q&A when we wrap up.

Thank you so much. The last couple of slides are on the outlook. And as always, I will start with a long-term outlook because it's important to remember why we're here. The demand for transplant are 10 times higher than today's supplies. And that's the whole reason for Xvivo being a company and existing. It's also interesting to mention that the sales value of machine perfusion versus cold static storage is also around a time 10 value component. So we're looking at the market that will in the future be a lot bigger than the one we see today. Machine perfusion service model have proven to increase the number of organs used for transplantation. I think you've seen a lot of that proof today in this presentation. I also want to mention that Exviva has unique, innovative and world leading products on the market or in the R&D pipeline, which we want to take to market as soon as we can. With the recent acquisition of Flowhawk and superior clinical results for our product, we have also started a long term goal to be sustainable for the community as a whole. We aim to build a sustainable transplant process for patients. In other words, better access to organs at the highest survival rate. We want to offer our customer a sustainable work-life balance. That is not always the case right now. We also want to offer sustainable economics for the healthcare system. By reducing the use of private jets, we believe we can offer a sustainable future for the planet and environment as well. With that, we go over to a little bit shorter outlook, which is 2025 mainly. And the two first points are important that we will continue to invest in commercial capability and organization capability that can handle growth and high growth. Especially now when we have two product launches, Kinesis Transport India, United States and Europe currently ongoing. And then as soon as we have CMR product, we will have a launch of heart in Europe. If we look more to the detail per product line, it means that we have seen for lungs, there is a great interest from customers to start EVLP programs, and we will invest to capture that one, continue to do that. For HART, the 2025 guidance is that we will launch our products in Europe and Pacific. We will actually start to investigate if we can launch them in Canada as well. We will continue to build the U.S. regulatory and clinical file during next year based on the good data and the high interest we see from the clinical trial in the U.S. For liver, we can see that we have, and you've seen it today, excellent clinical data published, and we will invest in commercial capabilities to capture the opportunity. We will mainly invest in Europe, and we also aim to start a clinical trial in the U.S. next year, pending the ID approval by the FDA. Now with kidney production up and running, we will turn our focus to commercial capabilities and to build a US clinical file. And lastly, we will integrate FlowHawk into our offering and continue to improve the service offering that will be very important for our heart launch in the United States. So with that little bit shorter term outlook, we will say thank you for listening today. And we open up the line for questions.