Xvivo Perfusion AB (publ)

Welcome to Exvivo's earning call for the fourth quarter of 2024 and the full year 2024 as well. I want to start this meeting with Exvivo's purpose and vision that nobody should die waiting for an organ. And you see one of our patients here on the front page, Alex from Australia. And during 2024, we estimate that Exvivo's products and services have contributed to more than 12,000 transplants globally. And that means that 12,000 patients got the chance to prolong life and a better life quality. And I want to take the moment, end of the year, to also thank all of you who invested in Exvivo for financing development of the groundbreaking technology that we now take to market and that enable all of those 12,000 patients to be saved every year. And I hope in the future there will be many, many more. So with that, we turn to the first slide of the presentation, which is today's presenter. And they are me and Kristoff Rosenblatt. I'm the CEO of the company. And we have also Kristoffer Nordström, CFO of the company. And we can jump straight to slide two, which is Q4, financial at the glance. I'm proud and happy to report that Q4 shows improvement in top line as well as EBITDA compared to same quarter last year. Q4 shows again that XViva has a scalable business model with improving margins with scale, even though we have continued and I press on this to invest in the organization for future growth. We are a growth company, so we continue to invest. Sales came in at 228 million SEK. Gross margin continued to show strength. We plan to improve abdominal margins to 70% at the latest in 2027 or earlier when we reach economies of scale in production. The EBITDA shows an improvement to 23%, but more on the details will be given by Christoffer Nordström, our CFO. I also want to point out here that the growth for thorax is continuously picking up and mainly coming from higher XPS activity during the quarter. Another growth driver during the quarter has been the US heart trial, which was included in the record 13 months. And we have seen an unprecedented high interest in both joining the trial and also to use the heart device while in the trial. We know and we always thought and we hope that this technology has the potential to change the paradigm of heart transplantation and to be used in all hearts. We now get more and more customer testimonials that that could actually be the case. So with that, we go to the next slide, which is the year, the Y2D financials also at the glance. We see a similar picture in the Y2D numbers. And the key takeaway here is what I actually said in the previous calls during the year, that Growth is mainly coming from increased activity in existing customers and a stronger market, especially in the lung. We see very, very high interest to start both heart and lung programs with our new technology, especially after ISHRT in April 2024. And with an increasing number of feet on the ground, we can gradually convert this interest to new sales and new customers. And of course, for heart, we are still limited due to lack of approved products, but the interest is as big or even greater than we see in London. We can also conclude that sales from product is picking up faster than sales from services, even though we believe we have a fantastic service offering with a very, very good quality, which is something we measure every month in the quality metrics and share with our customers. We will come back later in the call to the strategic importance of both service and digital efforts. a few points here also even though we invest heavily in mainly commercial and field force we we see that we have a scalable revenue if we look on year on year and and we can convert that increased sales into very gross margins and very ebita margins lastly and most important to mention on this picture is what we don't see and and which explains why the numbers looks like they do and and that's that the pro projects we are running are progressing according to plan um i mean the hot project is on time and budget will be it we we didn't expect the long review time from uh ima and the swedish medical agency but they have stated that they have a high workload um the production capacity project where we invest to scale up volumes times 10 of today volumes for disposables are running in line with communicated timelines um And this project will be extremely important for the future. And we can already see during 2024 that it has improved sales. Also, we see an increasing interest in starting XPS programs for lungs, and we are currently suffering from shortages on machines. We are in the process of scaling up XPS machine production capacity and deem that we will meet the full market demand during the summer, or let's say Q3. So with that introduction, we go into the highlights and go over to... to slide four, and we can actually go straight to slide five, where we see 2024 highlight summary. It's a snapshot of key events during 2024. And after this, we will have more two deep dive slides But I think that the first three I want to mention is in relation to heart. And one is that we did run and it was presented the first randomized control trial with a superiority design in heart and lung transplantation. This is unprecedented, a huge step for both us and the transplant community, and also It was easier since we got great results to present this, of course. But it's also testimony to the belief all transplant surgeons in the world have on this new technology. They believe it is far better than anything they've seen before, which is a great testimony to the technology. We need to mention the first cross-Atlantic heart transplant. It's completely unprecedented. And I think this is also testimony to what this technology can bring to the future, that when we can take a flight on a commercial carrier in economy class, we will reduce the cost burden on the transplant community and enable more transplants to be made. Three, we also know that an increasing number of transplants are coming from DCDs and we also want to prove this technology for DCD hearts and we have now commenced that work and we are running a European trial for DCD and we now can state that there is definitely a new hope for hearts. When we come to point number four on this slide, liver, it was hard to summarize it because they've been more or less an avalanche of positive studies coming out in 2024. For example, we have superior short and long term graft survivals in multiple studies, cost benefits has been proven and the ability to schedule transplant in a cost efficient way have been proven through the year. I will come into that later actually. So this is the product that is now market leader in Europe for liver and where we handed in our ID recently in the United States. And our goal is that also American patients and transplant centers should get the ability to reap the benefit of this fantastic product. Point number five, I think in highlights is that The increasing interest and demand for XPS and Stain solution to make more lungs available for transplantation. We have seen a high increase in the US in 2024 and I must say we now start to see the same interest spread into Europe, which is great. The last point on this slide is the Flowhawk acquisition. where we think that is key for the future to increase efficiency in transplant process in a HIPAA compliant way. The acquisition of FlowHawk has that exact aim. In recent studies, it has been shown that transplant centers improve efficiency in organ allocation process and communication, and they can increase their ability to get reimbursed by using FlowHawk. This is still early stage. It has a high strategic impact which we will come back to but it's i think it's important important milestone still to mention even though we don't see huge sales coming from it 2024. with that we're going to deep dive a little bit into the clinical results and turn to slide six in the slide deck and that's a deep dive into heart and lung clinical trials and And we start with heart. We always knew that the heart problem was good, but we are getting more and more convinced every day that this can really change how we see heart transplantation. And the first point here is the Lancet publication where we see a 61% risk reduction in PDD, which is highly clinically significant. um we are really looking forward now to the one year follow-up data including one year survival data points it will be presented during ishtt in boston in april 2025 so that's going to be the next milestone for for hearts the the second point on heart is that we know that the portion of the donor pool that comes from dcd is comparatively large in some countries and it's growing very fast and If we want to substantially increase the number of transplants, we need to also prove that this technology works for DCD sort. And we need to improve that we can do it in a safe, cost-efficient, and practically feasible way with good patient outcome. And that is how we designed this study to show that. And we're now enrolling patients into that study. If we go over to the lung side, The key takeaway is that based on good clinical studies in the past, we now see that the usage of XPS and steel solution is taking off. And together with clinics, we continue to improve decision making for lungs. This is one example where we together with Cleveland did the research and we developed a product where we look at real time lung weight analysis to make a better judgment of a go or no go for a lung. I also want to mention that we want to do our outmost and spend a lot of resources in getting the best product approved at the right indication. And we now can confirm that Perfect Plus that has a 2 to 8 degree centigrade usage is now confirmed effective for preservation up to 10 degrees. uh this is uh old news we knew that the preservation temperature should be between 8 to 14 degrees but to enable 10 we are hitting that sweet spot in a better better way to secure that we can continue to be the gold standard of transplantation and Let's go to the next slide, seven on my deck, where we go into deep dives into liver and kidney. And there, I said it's hard to choose all the fantastic news and the new data points we got in 2024, but to mention a few. Both we see the Cochrane review and we also had a study of 1,200 patient real-world setting trial. It now brings, I would say, the liver assist into ideal D stage 4, which means that HENS is proved in a real-world setting and not only in clinical trials, but actually in real usage. And this supports the implementation of this technology as a routine practice for liver transplantation. Another study that shows the same and have the same aim that it should be a clinical practice using the liver assist in any setting is the second study there. So that also came out in 2024 that the cost savings year one after using liver assist is approximately 26,000 Euro per patient that we can obtain by the use of And that is that the aftercare is lower, so you have less biliary implications, etc. For kidney, we also had a Cochrane review summary of evidence for HOPE. And kidney cyst transport is the only transporter device that has a HOPE technology approved today. Cochrane is, just to mention, it's a freestanding nonprofit that has a reputable metal of evaluating new technology in the market. And hence, it carries a lot of clinical believability within the field of transplantation. So this is, when we say Cochrane Review, it's not us who said anything about our technology. It's actually a third party nonprofit, et cetera. So we get very good reviews when we see this other institute actually evaluating our technology as well. And with that, we will leave the highlights of the year and we will take a brief look into the clinical pipeline, which is the next slide. And we could actually jump straight into the slide number, I think it's number 10, which is clinical trial status and timelines, which is a regulatory review. Very few things have changed since last time we met, so I will mainly repeat what I said in October 2024. But one thing that has changed is that the heart trial is now fully included in record time. The next milestone will be the 12-month patient follow-up. In parallel, we will prepare our technical and also our preclinical files for submission to the FDA. And after the 12 months follow-up period, we can also start preparing the clinical file for submission to the FDA. As mentioned before, in Europe, we have handed in our technical documentation for review according to our time plan. The launch will be a bit staged due to different regulatory entities in Europe. And in dialogue with our notified body, we understood that the heart box is more or less ready to be approved. This will enable us to talk to clinics about the heart box and start installing it. The insecurity we still face is how fast EMA or the European Medical Agency and the Swedish MPA, which is the Swedish Medical Product Agency, can hand you their review of the heart solution or the heart liquid and the additive to the heart solution. They are under high workload. We fully understand that. We are trying to do our best to answer all the questions in due time. Key here to remember is that we are ready to launch when the products are approved. The launch plans are ready. Everyone is trained. Staff is recruited. And again, the interest is extremely high to start using the product from all clinics in Europe. In Australia and New Zealand, we have high usage of the product already. Approximately a third of all hearts are on the heart device. The regulatory approval is still pending a C-mark in Europe. So we come back to that when we have a C-mark. For liver, we have reported that the liver assist has been granted breakthrough device designation by the FDA and this means we will get a faster route through the FDA PMA process compared to non-breakthrough device designation. It's also quality stamped that the products are innovative and fulfilling need on the market. I will go a little bit deeper into both heart and liver in the next two slides. I turn to slide 11 for an update on the heart preserve trial recap. As you know it was a study which had enrolled or patient ahead of schedule. It was 141 patients at 14 trial sites. We had approval of getting more trial sites into the trial but unfortunately they could not because the ones in the trial enrolled so fast. The next steps is we have the one year patient follow-up period and then of course we have a regulatory review by the FDA after that. Also we have The last point there is that we have handed in our safety data for continuous access protocol. So this is now at the FDA and we're waiting for their review and they will come back with a decision or feedback. And this will, if approved by the FDA, enable the users in the trial to continue to use the product for a limited number of transplants and patients. prior to we have a real PMA approval. So it's very important. And we have a high pressure from TransplantKlinik that they want to use it. And they state that they lose a lot of hearts right now because they cannot use our technology. And with that, we turn into the next slide. And that's an update on the liver PMA process. And we have now handed in our ID application. and is currently under review by the FDA. The study proposal is D-HOPE or a dual hypothermic oxygenated perfusion study. It's a 215 patient single arm design where we will ask for a maximum of 20 clinics participating into the study. The primary endpoint is the seven-day early allograft dysfunction after transplantation, and safety and also primary endpoint is the 180-day post-operative endpoint, which is patient survival with a functioning liver, which of course will be key for this product. And what we have seen so far in Europe by reducing this product, very well in both those endpoints. And with that, we will leave the, let's say, clinical and regulatory update, and I will move to the next slide, 12, and hand over to our CFO, Kristoffer Nordström, who will present the financial performance and dig a little bit more into the details, into the numbers. But thank you. I will come back later in the presentation.

Thank you so much. Yes, hi everyone. As Kristoffer has already commented, we ended the year on a high note. Very thankful for that. We were delivering a record quarter in terms of sales, EBITDA and also operating cash flow, which was very strong. Net sales came in at 228 million SEK, which translates to an organic growth of 44%. Overall gross margin 77%, that's 2% units better than last year due to product mix and a strong growth in thoracic specifically. Adjusted EBIT in Q4 was 7%, strengthened from 1% last year, so a big jump up there. Adjusted EBITDA in Q4 was 23% versus 14% last year, mainly driven by increased sales and strong gross margins. For the full year, sales amounted to 822 million SEK and organic growth of 39%, adjusted EBIT 11% and adjusted EBIT at 22%, both significantly outperforming last year. EBIT more than doubled versus last year, 95 million SEK versus 43 million SEK and EBIT improved by 5% units from 17% to 22%. Summarizing 2024, we are very happy that we continue to grow our top line and at the same time strengthen our profitability. Especially since we are continuously investing in and expanding our organization, as Christopher mentioned, to gear up for continued growth across all organs. For 2025, we foresee continued sales growth, absolutely. It will be a year where we will continue to invest in building an organization that should be able to grasp significantly larger opportunities than today. Our target for 2025 is to continue improving our profitability. We always do that, but it will be weighted. It will always be weighted against investment opportunities with both short and long-term ROIs. With that, we'll move over to the business areas, starting with Thoracic, which has been the growth train in 2024. Yet another solid growth quarter. Sales in Q4 came in at 152 million SEK. Organic growth for disposables was strong again, 50%, and the main driver was EVLP in the US specifically. You've heard that before. in the previous quarter this year. In the US, we saw EVLP sales volumes grow 90% versus Q4 last year. Gross margin on disposables in Q4 was 87% and that was an improvement from last year with 2% units. So we're very grateful for that. In summary, EVLP adoption grew confidently in 2024 as a full year. The ex vivo EVLP business in the US grew 75% in the full year in terms of units sold. We continue to see a growing interest in EVLP globally, so not only in the US. A couple of new installments are planned of the XPS device in the US in near term. And we see our revitalized interest in Europe as well, that we believe will materialize into XPS deliveries in the second half of 2025. That said, we will continue to develop and strengthen our global leading position in EVLP in 2025. When it comes to HART, sales were 16 million SEK in Q4, primarily from revenue under the US HART trial. In the full year, hard sales amounted to 65 million SEKs, where 45 million SEKs were in the US and 20 million SEKs in the Pacific and Europe. For 2025, we expect the hard sales contribution from the US to decrease. This we have communicated before, and the reason for that is that the preserved trial has ended. We will follow up with a CAP, a continued access protocol trial, but that will include somewhat less patients. So this means that the growth in heart in 2025 is expected to come from sales in Europe and Australia after regulatory approvals are obtained, and also from market entry in Canada. That was it for thoracic, moving over to abdominal. NatSales Q4 came in at 50 million sec, organic growth of indisposables was 35%. Liver stood for 71% of abdominal sales and keep need 29%. Gross margin disposables came in at 67% versus 69% last year, a minor decrease due to product mix. For the full year 2024, abdominal sales were 179 million sec and growth in disposable sales were 32%. uh for the full year the kidney disposables globally grew 50 and liver disposables grew 25 as mentioned during the q3 call focus for 2025 uh is to scale up the commercial organization and to start acquiring clinical data on u.s patients to continue build clinical evidence supporting hope hypothermic oxygenized perfusion on the u.s market and in general to further building would say in general to further building clinical evidence will be important to reach a high market penetration and to establish reimbursement on the various geographies moving over to services our third business area so sales in q4 were 26 million sec we have seen an increased activity in our recovery business in both q3 and q4 which is delightful 23 million sec was related to organ recovery and 3 million sec was related to Foboq. I wanted to provide some insights to the organ recovery program and kind of the momentum there. So the Exvivo organ recovery program served 20 transplant clinics in 2024 and went out on 470 recovery cases. and went to 40 different states in the US. So we start to gradually expand this service model also regionally. We partnered with more than five aviation companies using a flexible, transparent business model where our customers, the transplant clinics, always decide the mean of transportation with no markup from Exvivo. So we have a very transportable, sorry, a very transparent and flexible business model. The organ recovery business grew 7% in 2024. We expect to return to double digit growth in 2025 with a clinical program that stands out in the United States when it comes to establishing high quality standards and transparent communication. We also expect to see synergies from the Flowhawk integration. It's a great team that we now have onboarded, and it's a true integration going on where we are uniting the two commercial organizations. Moving over to EBITDA profitability. So yep, came in on 23% for the quarter and 22% for the full year. As you can see here in the middle, the rolling 12 month trend is developing nicely. Short comment, I've said it before, but our ambition is to continue to improve EBITDA year on year, step by step, and to maintain a healthy relationship between sales growth and market opportunities and profitability. Final slide on my side before I turn the mic over to Mr. Ostenblad again. Financial position and cash flow. Q4 delivered a record high operating cash flow, 62 million SEK. Main reason has been the strong sales growth in Q3 and Q4. Investments amounted to 111 million SEK, and we primarily spent funds on the US clinical trials, 38 million SEK, and also the acquisition of Flowhawk, 51 million SEK, that we paid with our own cash. This led to a total cash flow of minus 52 million. We ended the year with a solid cash position of 416 million SEK. Despite this solid cash position and a good underlying profitable growth, we entered into a revolving credit facility with a Nordic bank here in January. reason is simply to provide you know further financial flexibility if needed and to finance a growing working capital if needed when we are building for further growth so it's a 20 million euro facility with a three-year term that was all for me christopher i will now hand the mic over to you again thank you

Thank you so much. Then we go into Outlook. We start with 2025 to do a recap of what we look forward to in 2025. For lungs, the key is that we can cater to the high interest we see in EVLP to make more lungs available for transportation. And we work hard to both increase the feet on the ground to stay close to the customers, improve availability of XPS machines, et cetera. So, but we see a high interest and we need to make sure that we're there for the customers. That's the number one. key then we will we have seen good clinical results for hope or or hypothermic oxygenated perfusion for liver kidney and heart and we will continue to to build on that evidence and then for in terms of clinical milestones of course we have the the first and most important is the regulatory approval, and sequential launch of Heart in Europe and Pacific, which we think will be one of the biggest milestones in the company's history. Also, we hope to include the first patient in the PMA study for liver assist in the US, which has been said before, but we have a fantastic product where American patients and clinics don't have access to this now, so we want to make it available for them. And lastly, or we see more also in terms of investments, and we alluded to it before, we see that we have a large number of investments with really good return investments of approximately one year, and we want to capture those ideas. So we want to invest in strengthening the organization, definitely in terms of field force. Kidney launch in the US, which is ongoing, and we are continuously strengthening that department and that field force to meet more customers. We have, of course, the European Heart launch, which we have staffed up already. And we have a launch in Canada, which we are investing into in terms of commercial and regulatory capabilities. I also want to say we continue to invest in supply chain. and including also improving our quality department or having more staff there to capture the increased demand and the increased number of machines we have out on the market. So we definitely see that 2025 going to continue to see high investment and very good return investments on those investments. and we will before we go into the long-term view we will go into just a short recap of of the strategy in the last six months we have sharpened it the strategy it remains the same but we have sharpened it and want to emphasize on on a few things and the first thing is we're going to emphasize on patient need there is a true belief in the organization that only with satisfying uh dire patient need, we can have long-term success. So we will steer R&D money or research money into finding patient need that we can improve patient outcome after transplantation, or we can improve the number of transplantable organs, et cetera. We also want to emphasize on a desired position and a mission statement where our mission is to develop technology that saves organs in order for transplant surgeons to save lives. And we really want to emphasize that it's the transplant surgeons that we are there for them. We don't save lives as our company, but we give them the means to do that. And that means we continue to develop easy to use products that the clinics really wants to use and which give good clinical outcome. We will continue to develop products, services to ease the burden on the transplant society, both in terms of work-life balance and also in terms of lessened economic burden for the healthcare system. So we think we have a dual role to play here. And in terms of, we touched based on it before, in terms of developing our service and digital offering, we know it's still early days. We are still trying to find the best offering here. We know that high quality is definitely one of it. And we know that we need to satisfy demand of both the opioid system as well as clinics. And we are improving every day. So this is the new strategy we have and with that one or the same strategy but sharpened and with that one go into the long-term outlook which you have seen before but I still wanna end on this note because it's so important. And we see to start with the demand is approximately times 10 of today's supplies of organs and this is according to WHO. Also important to see is that, new type of products which brings higher value to the transplant system is approximately sales value of times 10 versus cold static storage. We also see that our machine perfusion and service model have proven to increase the number of organs used for transplantation. So we are on the way to improve outcome both for patients and also getting more patients the chance of actually having a transplant. And the last point, which is important, is that Exviva has a unique, innovative and world leading. We are by far the most innovative company within our field that is either on the market or in the R&D pipeline or in the regulatory slash clinical pipeline that will hopefully hit the market soon. And with that, we hope that we can do our part of the piece to enable a times 10 number of transplants. So I want to thank you all for listening today. We are all here to make sure that nobody should die waiting for an organ. And with that, I want to open up for questions. Thank you so much.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Jacob Lemke from SEB. Please go ahead.

Hi, and good afternoon or good morning if you're in the U.S. I have a few questions, and I'll take them one by one, starting with Lung and EZLP sales growth in 2025. I mean, you mentioned that you have some contribution from new accounts, but My question is on the potential you see from higher utilization. Can it continue to grow at the high level, given that growth seems to have been so strong in 2014?

Thank you for that question. Yes, we believe it can continue. A few of the reasons are that we now are on approximately a 10% market penetration. When we talk to leading clinics in the US and Europe, they believe that it could go up to 50%. of penetration, that's what they deem should be evaluated to enable more transplants. We also see that we are not present, especially in the US, for example, we're not present on the West Coast today. So there are also geographical footprint where we could continue to grow, where there are no XPS systems available today. So we see that there are still a large part of the growth potential is still there. for us to capture, and that will be more deemed on availability on XPS, how many feet we have on the ground and can support the clinics, etc. So it's more up to us than market conditions as of now.

And another question on lung. If we look at the overall lung transplant market in the US in 2084, it was quite strong growth. Do you anticipate it will remain at the high growth rate for 2025?

That's a million dollar question. We do believe it will. driven by UPTN has still high targets on lungs also for next year so we do believe that the this momentum will continue but again it's more speculation than knowledge but we plan for it okay sounds good then a question on heart if we look here in q4 it seems to be quite strong heart revenues despite the sort of early completion of the trial so

If you could give a breakdown of where the heart revenues came from. Is it Australia, other sources, or maybe the US?

Yes, you had 16 million SEK of heart revenue in Q4. 60% of that, I would approximate, was still in the US. of the final inclusion in the PRESERVE trial. The revenue in the Pacific, as Australia mentioned, was a bit boosted again. I think we mentioned in Q3 call that there was a gap a couple of months over the summer where we had reduced sales due to software updates on the device. So we started to see a growing momentum again in Pacific and the port.

Okay. Okay, and then a follow-up on the continued access protocol you're anticipating. If you can give a guide when you expect that to come out.

Great question. Pending FDA review time, of course. Still, when I talked to the team, they believe that somewhere during Q1 that we can get it approved based on... We're handling the safety data, which of course is what they want to see before they can do more. uh and and uh when i talk to my team they say it looks good so they don't see any show stoppers and therefore they deem yeah end of q1 uh for for for a cap to be be approved but again this is pending fda and and you never know if they have follow-up questions etc and then that would be a longer timeline um so so if it if it didn't happen we would still come back on on a new timeline in the next quarterly call But we still believe, when I talk to my team, they're positive.

Okay, sounds promising. Then on liver, I think sales growth seems to have been a bit lower here during the second half of 2024. And my question is, Dennis, is there any reason behind this and how should we think about 2025?

uh we still see a very high interest in in in our liver product uh we have uh have seen in especially in italy with a little bit lower lower growth from still from a high level um we have seen a little bit lower growth during during second half uh we are still positive towards 2025 we see especially when we talk to everyone we had our liver master class with I think 100 clinics and 100 surgeons and they are all very enthusiastic about technology given all the good data coming out in terms of cost savings, long preservation times and especially graft, graft the approval that you get actually better results. We need to still work hard. Many clinics in Europe want help with reimbursement support, better decision-making tools and more frequent visits from us. So that's something we're working on to get the growth rate up higher, so to say. But the interest is there to both start and enlarge the liver programs they have.

Okay, and just a final question on abdominal. It seems like sales from North America showed an all-time high level here in Q4 with quite substantial margin. Is that kidney sales in the U.S., or how should we read it?

Yes, it's mainly kidney sales. Kidney is transported in the U.S., and we now have better supply of the products. It's better. We can sell more when we have supply, basically.

Okay. Sounds promising. That's all from me. Thank you.

Thank you.

The next question comes from Ulrik Trattner from Carnegie. Please go ahead.

Thank you very much, Chris and Chris. I have a couple of questions. Potentially we could start off with some high-level topics. On heart or in general for the transportation market in the U.S., there is a lot of talk about NRP. We're seeing some leading clinics like Vanderbilt, among others, evaluating it. And in my book, it looks like a complementary product to yours. But is there any potential threats that is sort of luring from NRP?

Great questions. I mean, we see NRP growing and it has been doing for a couple of years. We don't see today, we don't see a threat. It's more complementary. One of the reasons is that it's mainly used if you take TANRP is mainly used for for hearts and hence the lungs still need evaluation. And in many cases, actually, we need more EVLP after an NRP. So it's actually almost positive for us. In terms of hearts, I would say, I mean, we optimize transportation with or without NRP. So I would say it has no positive impact for us. The same with kidney and liver that it's not, the devices we have now has better graft survival, better, basically improved graft function and cost saving. And that is with or without NRP, so to say. So we don't, today we don't see any, that, yeah, it's complimentary as far as we can judge today.

Okay, great. And if we were to stick to heart and approval just sort of around the corner, we can talk about the expected reimbursement trend here over the next year and next years, as well as sort of your controlled commercial launch. I guess you would go off to France, a sort of initial market similar to that, what you did with the XPS system back in the day.

uh but if you can help us provide some some more thoughts around how we should view the commercial ramp up of heart in europe that's a great great question and and i think you answered half of it uh already that yes we will have a have selected markets where we know that there will be payments uh systems uh so we we can we will probably we do we don't have resources to go full launch into every single country in europe so we will select the Typically, the big ones are the ones with reimbursement system. France is always the number one. It's the quickest market in Europe to adapt. It has more similarities to US than other European medtech markets. So that's definitely number one. There is a couple of select markets in Europe that have also good reimbursement system and also, how do you say, high high level of adoption of new technology where there are markets who takes a little bit longer time. So we will state that launch in a couple of stages where we will attack the markets with reimbursement and high adaptability to innovation first, and then we will take them one by one after that.

Great. And on to abdominal and kidney, now that the production capacity issue is no longer an issue, what is left in order to take on larger opio contracts, as well as you're building data on hope in the U.S. Would you say that you're going out starting with the DPD organs, and can you later on expand into DCD, or would that impact pricing?

That's a great question. We still have a fair bit of work before we can hit any larger OPO with the kidney assist transport device. Mainly, I would say it's a twofold work we have to do. The first one is we need to acquire better clinical data on the DBD side. We have very convincing DCD data. albeit it is from Europe, but it's still convincing. So we need to complement with USDVD and DCD data to be truly convincing. And we also have to prove that by using this product, we can allocate more kidneys and we get better survival. So that's the proof points we want to do clinically. The other thing is that there are a couple of product slash user usability features we need to work on during 2025. So we will soon take decision on timelines, but there will be approximately one year also. So I would say this time next year, we will be in a better place to fit into the opioid system and being relevant for any opioid in the US. That's Dane.

Great. Great. Thank you. And Oliver, ID submitted, obviously very positive. And when can you start to deliver trial? And are you experiencing sort of very high interest already to participate in the study, especially what we've been seeing and hearing about transmedics and especially sort of the cost affiliated with your product? And as well, sort of an additional question to that is that would you expect to get the same type of reimbursement during the trial as you did with Heart?

Yeah, great questions, all of them. I would try to take them one by one. I would say we were fairly unknown in liver a year ago, but we see that we have a really steep increase in our product. I think that a lot of the studies has crossed Atlantic Ocean and they see that there are other technologies that are actually better than what's on the market today. And so to answer the question, yes, the interest is very high and I would say it increases every day. In terms of cost recovery by CMS during a trial, it's something we will be in a discussion. It's not our decision, so I need to come back to that when we have a firm answer by the CMS. It's nothing we know today. But in general, My feeling is that the US is mature for having real innovative technology coming to them and supporting them both with patient outcome in a cost efficient way and to make sure that they get the access to the best technology available. That's my feeling. And I heard sometimes when I talk about heart and kidney and lung and say that because that's where we're on a trial and that's what I can talk about. I very often get the question, yes, but what about your liver technology? When do we get it in the US? That's the one we're really interested in. So I would say from customers' testimonials, it's a bright future for that product.

Great, thank you. Last question on my end, but I promise I won't ask any more questions. You did a write-down of a development project. into for can you provide some more information on this?

Yeah, absolutely. It's I mean, it's natural with this type of business with a lot of innovation and pipeline. So it was it was about product development and early stage that we decided to to discontinue.

Okay. Well, thank you very much for taking all my questions, and I'll get back into the queue.

Thank you.

The next question comes from Maria Karlsson-Osipova from DMV. Please go ahead.

Hi, Christopher. Maria here from DMV. Firstly, congratulations on the strong finish to 2024. I have all my colleagues have asked very good questions here, so I have short and sweet ones left for you. Could you please clarify on your geographical footprint on the West Coast in the US? You mentioned low exposure and no exposure. I'm thinking the potential CAP for heart. What are the state of those relationships? What will you work on in 2025?

Yeah, great. I mean, yeah, that was actually a great question. I mean, in terms of Pertodex, of course, everywhere in the US, in terms of the heart trial, we had actually very high presence and interest from the West Coast with many of the high enrollers into the clinical trial came from the West Coast. My comment regarding the West Coast is that we have very low to no presence in terms of XPS and StainSolution and in terms of our organ recovery service. So we have, let's say, a geographic footprint journey to make to capture that part of the country, because I'm sure there are patients there as well who are eager to get a prolonged life with a transplant.

Yeah, great. Thanks for clarifying. And another question is, one of your last points was the outlook on short-term investing in supply chain and manufacturing. Could you provide a bit more details what needs to be done in 2025?

Yeah, in 2025, we'll continue the tail investments of the disposable times 10 investment. And with seeing that tail of that investment, coming to fruition, we will turn our eyes into machine manufacturing and to improve both design for producibility and cost per device and also production capacity. Because we know that the need for our devices could be very high at the short notice. So we need to prepare ourselves for that. And we saw that now with a high increase in XPS and we very fast run out of production capacity on that device. So that's something we will definitely turn our eyes or turn our attention to. In parallel to that, the more machines we have on the market, we will also invest in quality capabilities to make sure that they have always the highest quality possible on the market to satisfy customer needs.

Perfect, thank you. And the last one, how should we think about services going into 2025? You've also said it's early days for takeaways from Fallhawk integrations, but still, if you could just finish on the services note. Thank you.

Yeah, absolutely. I was just meeting the US team earlier this month. And I mean, there is a high eagerness to grow this part of the business. One is strategic because we know when we hit the market with heart, we have to have a fully built out service offering, including digital offering. So we have a strategic implication of it. But there is also a... a belief in the whole team that this is a business where we could improve improve efficiency for the transplant teams quite drastically and hence improve sales from from our side but but the key is that we can with a good service offering the transplant team could focus more on the transplant procedure than than going out and recovering the organ etc so we will have a more rested team and we be within a better set up we will also improve efficiency of of our surgeons so to say so they should be less traveling on airplanes and more in the organ recovery theater and by doing that we can enable cost saving for the whole transplant system in the united states so i believe it's more strategic growth right now to make sure that we have the right type of offering in 2027 but there is a high enthusiasm in the team to actually sell this and and that comes from a high customer need actually thank you very much for all the answers that will be all for me thank you the next question comes from maria vara from brian garnier and co please go ahead hi good afternoon thank you very much for this uh

presentation of results, and congratulations for the strong performance. My colleagues asked a lot of questions, so I'll keep it short in two questions. I wanted to clarify a bit more about our technology and what we can expect in the U.S. in terms of sales for next year. So obviously, if you get the FDA Continuous Access Protocol, you know, we could expect some revenue coming perhaps from Q2 as you expect clearance in Q1. Maybe you could clarify a bit how this will work in terms of centers being able to use the device, what kind of volume it could be comparable to to the sales from last year. Thank you very much.

Thank you for the questions. I want to be very clear. It's it's I mean, we have a huge push from our customers to use this technology where they every day tell us that they lose hearts because they don't have access to it. It's something we do more out of let's say, compassionate use for patients and we really want to help our clinics then for, in this case, financial gain, because we will only get a limited number approved for by the FDA for a two-year period and it will be less than was in the trial and and we I mean we concluded the trial in approximately one year so so we know that that if we have a let's say the next two years we will have a limited number of of patients including but we hope to get 120 patients but this again it's really up to the FDA so so and it's something we We definitely do more because we know our surgeons need this technology to make sure that they can satisfy their patient needs.

Okay, yeah, that's very helpful.

It's not a huge gain, so to say, but there are other reasons to do it.

Yeah, makes sense. Thank you for that. Maybe just a last remark. You know, it's obvious that DVD donors is relevant as a pool in the heart technology, and that's why it's being added to the U.S. trial. I was just wondering why, for the European trial, that donor pool was not included, and why is it included now? And if you foresee any risk on safety or efficacy, considering the different nature of these donors and hearts?

Yeah, interesting. I mean, we have run, let's say, yeah, three types of trial in the world. In Australia, the long transport times. In Europe, the randomized control, superior at the end point. So that was just normal DBD hearts where we just took every second heart into control group and every second heart into the box group. And that showed a 61% PGD improvement, which should translate to better patient survival, of course, over time. um so that that is that that was the main name of it in the us we went for the extended criteria which has a could be numerous reason why it is extended criteria one one is dcd uh what we What we have seen in preclinical trials is that, and that means typically pig studies with the heart device, is that we have very good results on DCD. Either you do it after NRP with our heart box or direct with our heart box. So we are confident that we will see good results also on the DCD arm, both in the FDA, but also in the European force center trial we do right now. So what we aim right now is to, on request by the surgeons, is that they say that it would simplify their life a lot if we can do direct procurement, hence not doing an NLP. And they want to prove that that is safe and good patient outcome and economically viable. So that's what we try to prove now. But of course, the trial is running. It's not always that you get preclinical results and you can translate it into clinical results. But I would say very often that has been the case so far in my experience. So we have high hopes. What we have seen so far is that it works really good to uh under the right protocol take a dcd heart and just put it direct procurement into our box and then with peace of mind transport it no stress transport it to the clinic and there without stress open the the patient and then do the transplant so so so far very good results and very good customer testimonials from the cases we have That being said, it's a trial and we don't know the result until the trial is fully included and we have seen the publication, so to say.

Thank you very much.

The next question comes from Philip Wiberg from Pareto Securities. Please go ahead.

Hi, I just got a couple questions from my end here. First one on the margins. So gross margin was very strong at a level we haven't seen for a while. As you mentioned, product mix, but was it positively impacted by any other sort of one-off effects?

good question uh no it wasn't so i think this is a result of first of all uh the thoracic business area uh growing right but also our continuous drive to you know work diligently on improving our our asps um we have good cost controls on cogs overall uh also you know when um the heart revenue that we have had in the preserve trial came in at price levels you know in line more or less with EVLP sales so it was not diluting the margin which it could have since it's more or less cost recovery so no nothing spectacular there and I would like all right

Philip, there is a level of economies of scales in our COGS that I think one reason is not the only reason for abdominal. There is also a price level there, and we haven't launched in the US. But we do see that economies of scales is there is a set of fixed costs to have a supply chain, either you like it or not. And the more products you produce, the better gross margin in percentage.

Yeah of course but are you then expecting it to remain higher going forward like is this a new normal because it seems to have been like a record since a couple of years back now?

I mean we will expect depending on product mix we will expect it to go a little bit up and down I mean a good quarter will definitely look like this we will depending on what the product mix looks like but it's we don't know exactly where where the gross margin is going to be in every quarter in the next let's say two to three years but we know that we we continue to improve cost structures in the supply chain for sure yeah okay that's fair um and and second one and last for my and this is just on the setup for the liver trial

So you went through it in the presentation here and it's a single arm trial then, so you're not comparing it to cold static storage?

Yes and no, but I mean we have to, we're not worse than standard care so to say, but it's in When you go into extended criteria organs, it's unethical to do randomized control. Because if you would take the control group on ice, you would expect worse result. And it's not really ethical to randomize a patient. expecting or almost knowing that you get a worse patient outcome hence that's why we do it single arm so it will look pretty much like the heart trial but it's it's more patients in this one but similar design in the way that you go for extended criteria and therefore you can't have a control arm all right but but will there be any sort of comparison to national averages or any sort of like those kinds of comparisons Typically, yes. I mean, if we look at the EVLP trial, we could prove that we could take extended criteria lungs, hence lungs that were initially denied for transplantation and turned down and would have been discarded. And if we actually evaluated them and the ones that fared good, they were transplanted and we could get a similar result to the national average. And there will be a similar both for, let's say, hearts and livers, similar designs that you compare yourself to what would be an outcome of a, let's say, really good organ. So it's a high bar to pass. It's fair. It's still fair because we need to add something to the transplant community, of course.

Okay, thanks a lot. That's all from my end.

Thank you.

The next question comes from Johan Unneris from Redye. Please go ahead.

Thanks for taking our questions and congratulations once again to Good Quarter. Initially, some follow-up and clarification on the continuous protocol process just confirm that there has been no questions from the FDA at this stage as I understand it.

Correct at this stage no questions so that's we're waiting for their feedback.

Exactly and the relevance then if you get the go ahead some of the 15 active centers will presumably continue to use your heart solution and what's the prospect of adding some you have up to 26 centers potentially is there scope to increase the number of centers beyond the 15 active not that it will be more than 15 in total but you see my point I see your point I mean yes to be very clear it's a decision that is partly in our hand and which we have not taken

So we know that there will be those patients we get approved from the FDA. They will be, of course, in high demand by the current sites that are already have enrolled patients. So it's a decision we need to take and it has not been taken so far. So I come back when that decision is taken.

That's useful. Thank you. And also the significance of these continuous use patients. Of course, it's not primarily about adding sales at this stage, but presumably it's a sort of adding clinical experience ahead of the launch and continue to activate active centers, presumably.

Yeah, exactly. I mean, every patient we include into continuous access protocol is another safety data point, which and another, let's say, where the users are getting more accustomed to the technology. So it has many, let's say, added benefits for us, for the FDA and for the transplant community. We will learn more. from every heart we do. Very good.

And then your capacity to manufacture especially disposables during 2025, should we understand it as a sort of continuous gradual step up in this capacity during 2025?

We have deemed that we have enough capacity for 2025 in terms of hard disposables and hard boxes. We have included hard into the times 10 production capacity project. So over time, we also deemed that that will satisfy the need from a hard market once we fully up and running on

The question also related to liver and kidney and lungs as well. Your general capacity to increase manufacturing.

In general we have capacity now for disposables and that's something we are um continue scaling up but where we had bought the next uh let's say before in terms of of um disposables were definitely kidney and liver which hampered growth and then also hearts where we could foresee that very soon it would hamper growth if we if we didn't set up large scale uh so that those projects are running and and according to time plan so i'm i i right now i don't foresee any shortages on on those

And what about OPEX? You obviously continue to expand supporting launches and commercial reach. Is it possible to leave any flavor on the level of expansion, presumably growth slightly under sales growth?

I mean, if we talk about margin expansion during the last two years, it had been quite fast. We do see that we have a number of projects with really good ROI in 2025. So it would be unwise to continue with that margin expansion and add another five points during 2025 because we see that we need to invest into the market for being ready for 2026 and think more growth in 2025 and then come back in 2026 more with more harvesting because we have selected a lot of investments with pretty much 12 months or a while. And I believe that's really the right thing to do during this point of time.

Very good. And finally, on the liver side, that will be an area where you will face transmedics, competitive-wise, more concrete. What's your take on your competitive situation vis-à-vis transmedics on the liver side?

I mean, right now we have very few competitors, so to say, because in lungs there are no viable option besides ours that is deemed viable by the customers at least. In hearts, we are not hitting the market really. So in liver, of course, in Europe, we don't see transmedics and we need to run a trial for in the US. It's a little bit early, but I mean, based on the good clinical results we have, I have high hopes that liver is going to be a great product. in the US that they see a need. And based on the questions I get from a lot of surgeons and let's say counterparties in the transplant community, including opioids and coordinators, they very often ask me about the liver, where it's the product I can't talk about really because we don't have an ID and we have no presence at all on liver in the US right now. It's the product where I normally don't talk about at all. And that's the product they ask for. So demand interest, I think that the chance of success is high. The future has to, yeah, we have to prove that in the future. Excellent. Thank you. Thank you so much. And with that, I see that we are actually 18 minutes.

There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Thank you so much for listening. I see that we are A little bit over time, 18 minutes, but it was a lot of great questions and thank you for asking them. I wish you a great continue of your day and looking forward to see you on April 24th. Then we will present the Q1 2025 results. Thank you so much for listening and asking questions.