Xvivo Perfusion AB (publ)

Good morning and good afternoon and welcome to Xvivo's earnings call for the first quarter of 2025. As stated earlier, the presenters today are me, Christopher Rosenblad, CEO for Xvivo and Christopher Nordstrom, CFO. And with that, we can go over to the second slide, Q1 financial at a glance. And I'm proud and happy to report that Q1 shows improvement on top line as well as EBITDA compared to the same quarter last year. Q1 shows again that Xvivo has a scalable business model with improving margins with scale, even though we have continued to invest heavily into the organization for future growth. The quarter was very strong from a North American regulatory perspective with many milestones passed. For example, the liver ID was approved and we can now start our trial in the United States. The heart cap was approved and the heart trial clinics now have access to the live changing heart technology in the US for limited amount of patients. And lastly, Health Canada approved our liver and kidney technology, which opened up that market for our abdominal portfolio. If you look at the slide sales came in at 290 million SEC, the gross margin are continuing to show strength and we have a scalable production setup. We plan to improve the abdominal gross margin to 70% at the latest in 2027 or earlier when we reach economies of scale in production. The EBITDA shows an improvement to 21% and Christopher Nordstrom, our CFO, will later get into the details on sales, gross margin and EBITDA. The growth showed a mixed picture during the quarter in thorax. We see the highest ever interest to start an EBITDA program, but sales growth came in lower than we expected. Of course, the lack of heart cells, both in the US trial and from the European hamper the growth. The good heart news is that besides that the cap is now approved in the US, we also see that heart in Australia is growing very fast with Australian growth of 60% Q1. The penetration last year was approximately 30% for Australia heart and we saw a slight increase during Q1. The high interest and the Australian experience once again show that the heart technology has the potential to change the paradigm of heart transplantation and we get more and more customer testimony that that is the case. The abdominal sales showed strength during the quarter. In the US, cat disposables grew 100% albeit from low levels and in Europe, both liver and kidney showed strong growth based on excellent clinical and hospital economic data. We are not pleased with the progress in our US service business. We have initiated a strategic review of our service efforts that will be finished in June this year. At a first glance, the Italian model with perfusion is works very well and we will spearhead a perfusionist model initiative in the US already in Q2 this year. We acknowledge that the service business is crucial for the heart launch and when the strategic review is finished, we will come back with a plan forward for the US services business. Lastly and most important to mention is that the projects are progressing according to plan. The heart project is still on time and budget albeit we didn't expect a long review from the EMA and the Swedish Medical Agency due to high workload at the two European agencies. The production capacity project where we invest in scale up volumes times 10 up to day volumes for disposables are running in line with communicated timeline. The full scale production of disposables for heart liver and kidney will be extremely important to capture the future growth potential for all three product groups. And with that we can go to slide three, which is that. The highlights of Q1 the picture in front of us remind us all while we're here and that is to make sure that no one dies waiting for an organ. Alex on this picture is one of the 400 patients that got the opportunity to heart transplant thanks to our innovative heart technology. We start with regulatory highlights so we can quickly go actually to slide five and. The. Progress on the US Heart Preserve Trial. We are pleased that the continuous access protocol now is approved and that we can give access to the heart technology to the limited number of patients in the trial sites. Besides that the continuous access protocol will strengthen the clinical file with more patient data in the US. The heart technology so far has surprised us positively every time it has been used and more data will be key to build a solid clinical file. And again I want to remind us all that the 13 month enrollment was a record time for clinical trial five months ahead of schedule and it showed the enthusiasm we've seen in Australia and Europe has also been seen in the United States. With that we can go over to slide six and our liver trial the deliver trial. The ID or investigation device exemption was approved during the quarter for liver key takeaways are at one the liver technology is the market leading Europe and. More than 20 clinical papers just during the last 12 months showed superiority in graph survival for both short and long term hospital economics where the liver assist saves more than. 25,000 euro per transplant due to lower cost of aftercare and lastly by using the liver assist surgical teams now can not only see better patient survival and hospital economics but also improved work life balance with morning surgery. The liver growth in Europe is partly driven by that 2024 Cochrane review and the 1200 patient real world data. The Cochrane review supports the implementation of hope with liver assist as a routine practice for liver transplantation. To with the ID approved we can now start a clinical trial in the US that will form the basis for our PMA application with the FDA. The trial will enroll 215 patients at the maximum of 20 clinics the inclusion criteria for the trial is extended criteria liverist IE very similar to the heart trial we just concluded in terms of patient inclusion. The work with CMS for site reimbursement and the hospital for both ethical approval and site contract is underway. We know from experience that this work takes some time and the plan for first patient in is during Q3 this year. In conclusion, we are very excited that the liver technology has changed the life for many patients in Europe now can be accessible for American transplant clinics under the trial. And with that we can go over to the. Last. Regulatory highlight and it's on slide seven, which is the regulatory highlight from Canada. We during the quarter we got MD SAP approval and Subcontinental Health Canada approval for our liver and kidney products and we have hired our first employee to facilitate our launch there in Canada. We have a full abdominal team in the US that will support the launch of kidney assist transport and liver assist. Canada is an interesting market due to the similar geography to Australia in terms of large distances between hospital. Canada is also interesting from US perspective where surgeons very often cooperate over the Canadian border. Which will be helpful also for the later US launch. So we know that learnings in Canada can be deployed from a surgeon to surgeon basis into the US as well. Lastly, the heart launch in Canada will depend on that we first get a C mark and based on the C mark health Canada will make their own judgment based. On on the file and the C mark. So we have to wait for for heart in Canada, but we are very pleased that we now can start working with the abdominal products in. Canada, where we know there has been an ask for getting our products approved. And with that we go to slide 8, which is the overview of where we have regulatory status and the status is that we are yet are working for approvals for heart in all core markets. And liver in the US with the recent good news in Canada, it will be considered core market as of now, but this slide hasn't yet been updated to reflect that. And with that we can go to slide 9, which is the timeline and the progress of regulatory processes. We see a constant progress as I think you one is a testament to that there is progress in each process, but the key message is the same as last time we met. So I will partly repeat what I said in January 2025. The heart trial is, as you know, fully included record time. Next milestone is the 12 months patient follow up. In parallel, we will prepare the technical and preclinical file for submission, as well as building the clinical file larger with the help of CAP data or continuous access protocol data. After the 12 months follow up time and some time for database lock, we can start preparing the clinical file for submission as well. As mentioned before in Europe, we have handed in our technical documentation for review according to our time plan in dialogue with our notified body. We understood that the heart box is already approved. This enabled us to talk to clinics about the heart box. The insecurity we still face is how fast EMA, which is the European Medical Agency and the Swedish MPA can handle their review time. They are under a lot of stress due to MDR. So we have we have not yet full insight into their time today. However, we are ready to launch when the product is approved. So the launch plan is ready. Staff is recruited and interest from clinics in Europe is very, very high for the heart product. As I stated earlier in earlier on this call in Australia and New Zealand, we have seen high usage of the product. The regulatory approval will be pending the C mark in Europe and the same will apply for Canada. We have initiated DCD data collection in United States as part of the trial in Europe as part of a 40 patient trial. And we will initiate the same type of data and data application and trial in Australia as well to get DCD data in Australia to have full usage of the heart box once approved. Lastly, deliver. We have gone over that one, but we have been granted breakthrough device designation by the FDA. And we didn't approve the idea. We are working hard to get the trial started in Q3 this year. So with that, we can go to the next slide with is the ICT 2025 and the expected highlights, which the ICT would be next week in Boston. It's a key event for lung and heart transplant surgeons during the year. We will have five days of meetings and excellent presentation of new data. The most important speech during conference we deem will be the one year follow up of the trial data. Last year, Professor Rega presented a 76% risk reduction of severe PDD, which is the leading cause of early and late mortality after heart transplant. This year, he will present how well the patients are doing after one year. We are all eagerly looking forward to that presentation. We are also looking forward to the Nobel trial presentation by Dr. Sanchez and to our two industry symposia. Last year, they were packed to the brink of the room and people had to stand up, lining the walls. The general view was also that the symposia we led had a higher scientific level than most of the ordinary program, which is a great testament to our marketing team and clinical team who prepared those two symposia. We aim to repeat that 2024 success also in 2025 in Boston. So we will, you will hear more of this when we meet next time in July. And with that, we can go over to the business operation on slide 11 and we can go straight into slide 12, where we start with the surrounding world. And the key message is that we will continue to invest to make sure that no one dies waiting for an organ. If we start with trade policies, we see a constant change in environment and we have plans for each scenario. In today, we have production in the United States for the XPS and part of the lung kit, while we produce heart, liver and kidney products, as well as disposable and sterile products in Europe. We know, for example, for Perfect X that account for somewhere between 0.2 and 0.3 percent of the total cost for lung transplant in the US, that a price increase will not affect the number of heart transplants in the US. So it would be important to keep patient safety always first. And it's better for the patient if we have a stable production of sterile product with good goods that make sure that they will survive lung transplants than if the price is 10 percent higher than it was today. For machines that are not sterile, we aim to set up dual production. In other words, we will in the future have one production site in the United States and one in Europe. In terms of investment into the organization, we will continue to invest heavily into the US organization and we soon open a new R&D and Academy in Denver, Colorado. In parallel, we continue to invest in commercial R&D and regulatory capabilities in the United States. If we turn to the next slide, we go in more to segment updates and Norshøn will give you more of the details and I will give a more an overview of where we are and what actions we will take. As stated earlier, Heart is performing very well where we are allowed to sell the product, which now is Australia. We are preparing for year launch. For lungs, we have seen a very good last year, a softer Q1 with an extremely high interest to start an EVLP program. The new commercial force we put in place in Q4 2023 have now been up and running for approximately a year and the key learnings are that one, we will invest in more clinical reps close to the customer. Two, many customers need on-site support with profusionist and hence we will try the Italian model, which has been working very well in Italy with on-site profusion. And three, we know the hub models works. We have to encourage more clinics in the US to do what they do in Paris, which is that one clinic or one OPO evaluate lungs for more clinics. The good example we see is that we see a lot higher usage of EVLP lungs around the two lung bioengineering hubs in the United States, which is a testament that hub models works. I also want to highlight that during the quarter, two great publications were released around EVLP and lungs. One showing that lungs on EVLP should good patient survival for high risk patients and high risk recipients. Also, Exviva came out significantly better than competing product during that trial. The second publication is very encouraging showing that an EVLP program is economically beneficial for clinics if they perform more than three EVLP lung transplants per year. If we go into the abdominal business, it's showing good progress in Europe. Liver is the gross driver by interest for kidneys picking up. Key for the US market is to run the liver trial and to develop the kidney product, including acquired clinical data to have true success for our dominant portfolio. So now we are hitting clinical doors in or hospital doors in the US, while the majority of kidney perfusions are done in the OPs. But that will take another couple of four to six quarters before we have the right product and the right clinical data to really see good performance on CAT in the US. And we can go to the slide 14, which is the last before we go before our CFO takes over and we look at the US organ recovery service. In short, it can be said there is a large need for organ recovery services in the United States, especially if they're paired with perfusionary services. So the combined service of an organ recovery service is a very important one. The other thing that we can conclude is that we are not pleased with the current performance and are currently conducting a full strategic review of our US services business. We will come back when that one is finished in June. We are continuing to invest into Flowhawk. So there are in few clinics in the US, but where the Flowhawk software is, we are continuing to invest in the US. And with this, it's very well appreciated and adds value to the clinics. So we will continue to invest into that integration. And with that, I say thank you for this part of the presentation and we can turn over to slide 15 and actually you will take over, Kristoffer,

from

here.

I will, Kristoffer. Thank you. Yes. So let's move on to the financial section here and starting with the net sales and curators for the quarter. This was a quarter where sales performance varied a bit amongst our three business areas, and I will shed some light on each area later on. Overall, the underlying trends for our current businesses are positive for both thoracic and abdominal as we see as we increase our customer base and we continue to see a growing demand for technologies. On the services side, as Kristoffer mentioned, we have work to do in order to accelerate these businesses. Worth highlighting is that this was a quarter where we lacked some revenue that we had last year. So, for example, revenue from trials in the US. And as a comparison, last year we had 7 million in revenue from our heart trial. We expect revenue from the CAP trial to start gradually here in Q1 already, followed by additional revenue from our liver trial in Q3. But so to the numbers, net sales were 218 million SEC and organic growth was 14%. If we look at the rolling 12 months, as we prefer to do, the organic growth was 33%. Overall, gross margin was in line with last year, 73%. Adjusted EBIT increased 50%, that's a lot, in SEC and reached a margin of 14% strengthened from 11 last year. And finally, EBITDA was 21%, an improvement over the 20% last year. We did not see any major effects on our P&L from the weakened US dollar in Q1. As you know, we have a high portion of our business in the US. And I will provide some comment on this topic in a few slides when we dig down a little bit on the EBITDA. But moving over to the thoracic business area, total sales in Q1 amounted to 142 million SEC, which is an organic growth of 16%. The rolling 12 months organic growth is 39%. After a strong sales quarter in Q4, from a pure sales number perspective, this quarter was weaker. But A, EVOP is not always a quarterly stable business. We need to live with that as we grow bigger, but longer trends provide better understanding of the trajectory we're on. And B, I will provide some useful insight by digging into some details here. So for Lungs, sales grew 18% in local currencies. That's softer growth than the previous quarters. However, we truly want to emphasize that the underlying health of our EVOP business is stronger than this number suggests. Last year's comparative numbers were to some extent inflated by some research sales. And this Q1, we could not onboard our new XPS customers until the very last weeks of the quarter, which led to some reduced growth to our own forecasts. But however, the quarter finished strongly and four XPS devices were sold in the last weeks, right? So two in the US and two in Europe, to France and to UK, by the way. And the XPS interest remains very high. And we truly believe that 2025, it can really be a record year for us in terms of XPS programs started. As we mentioned in the report, we will still face some limitations on the XPS production capacity in the next two quarters. And we forecast that we can be able to produce around three XPS machines per quarter for the year. But still, I mean, if we manage to do that and sell those, it will be a record year. Gross margin, stable, 82%, one percentage unit better than last year. When it comes to hearts, it's interesting and exciting. So sales were eight million SEC this quarter versus 12 last year. However, we had around seven million SEC worth of US heart trial last year. So it means that, you know, set aside the US heart trial, we grow quite nicely here. What sticks out and what we're extremely proud of is the development we see in Australia. So this quarter, they brought in six million SEC of revenue with a growth of 61%, as Christopher mentioned. And it really demonstrates the huge enthusiasm that they have for our technology in that region. So to conclude, Thoracic, I mean, heart shows an improved momentum in Australia and also Europe. We have some compassionate use cases there as well. And we're waiting to see Mark, as you know, Lang had a little bit of a softer quarter, but the underlying health is good. And we will remain being the partner of choice based on the order books that we see for the XPS devices globally for all the customers who want to set up an EVP program in 2025. Abdominal. Net sales Q1 came in at 57 million and organic growth was 28%, very much in line with the rolling 12 growth that we see on 31%. So I would say it's a business as usual quarter, but in a positive way because we continue to grow in Europe on a main market. Liver stood for 75% of abdominal sales and kidney 25. Liver sales grew 25% in local currencies and kidney sales grew 51%. So here we start to see now some growth on both in the US, but also in Europe on the kidney disease transport, although still from small numbers. We know that, but we're getting there. As an example, in the US, the disposable sales of kidney disease transport grew 108%. We doubled the sales there. Gross margin disposables decreased from 68% last year to 63. I think we need to live with some fluctuations here on abdominal in the next, you know, one, two years until we get some economics on scale. But the primary reason this year was a higher portion of distribution sales and some higher research sales from last year with higher margins. But a solid quarter for abdominal, in my opinion. Last business area, moving over to services. Sales amounted to 20 million organically. Sales from organ recovery decreased by 19% due to a lower activity volume. While the acquisition of Flowhawk contributed positively with an acquired growth of 13%. So all in all, a negative 6% decrease versus last year. On a positive note, we signed a new recovery service agreements with three clinics in Q1. And we look forward to start receiving, start serving these clinics here in Q2. Gross margin increased 38% versus 36. This margin is expected to strengthen gradually as the recovery volumes increased, but most notably when sales of Flowhawk increase, which is a SaaS product with margins similar to a lung portfolio, actually. If not even better. In Q1, we had integration costs here. We continue to build this offering right and integrate. So we had integration costs of three million SEC as we continue to further build and integrate Flowhawk into the service offering. In order to further develop and define our service offering, a strategic review, as Christoffer mentioned, will take place here in the next few months. A project we have also started to work on is to look at how Flowhawk could be connected also with our various perfusion devices over time here in the future. Two more slides before I'll hand over to Christoffer again. EBITDA profitability. EBITDA came in at 21% in Q1, 1% unit better than last year and at rolling 12 months we're at 22%. Yeah, something like a broker record, but we've stated before our ambition is to continue to improve EBITDA year on year, but we want to do that in a controlled way. So we maintain a healthy relationship between sales growth and a sustainable profitability development. As I stated in my introduction here, Q1 was not negatively impacted by the weakened US dollar against SEC in the P&L. Most likely we will see a fairly large impact in our numbers during the rest of the year though. And to provide some guidance, we could look in the past, right? So if we look at last year's numbers in terms of sales, approximately 60% of our sales were in US dollars. And we have most of our cogs in Euros and SEC. And if the USD against the SEC in 2024 was 10.5 roughly, a decrease to 9.5 as we see now in 2024 would have led to a decrease in SEC net sales last year of 45 million SEC. And that in turn would result in a decrease of EBITDA of approximately 20 million SEC or 1% unit on the EBITDA margin last year. So I hope that provides some guidance here on what we can expect for the future. Final slide, cash flow and financial position. Q1 operating cash flow was minus 15 million SEC. No concerns there on my side, primarily due to a payment of our annual employee bonuses for 2024. If we wouldn't have that, we would have been positive on the operating cash flow. We continue to invest. Investments amounted to 59 million SEC. As always, that's primarily spent on the US clinical trials, but also the production project, Bili. We ended the year with a solid cash position of 316 million after exchange rate effects on cash of 22 million SEC. And finally, as we announced in the last call, we have entered into a revolving credit facility of 20 million Euros here in January, which currently remains unutilized. And with that, I will give the word over to you again, Christopher, for the outlook. Thank you.

Thank you so much. Yes, we will look into as usual first what to expect during the year. And I think the first thing is that we see a very high interest on starting an Xv or ULP program. We will invest to capture that one, both in terms of head counts and possible profusionary services. We have stated that we have a scarcity of XPS machines right now, and we do see that we have a more XPS machine in the second half of year than the first. So we come back when we see that production picking up. For heart, we will continue to prepare for the launch in Europe and Australia. We will continue to build the US regulatory and clinical file for heart. For liver, the extent clinical data published, we will invest in commercial capabilities in Europe to capture the growth opportunity we see here. And we aim to start our clinical PMA trial during Q3 this year. So those are the milestones from regulatory viewpoints. Lastly, I also want to stress that we see great investment potential during 2025 with return investment of approximately one year, and we will invest into those opportunities. Key commercial investments are the EU heart launch, strengthening the kidney US launch, strengthening the US lung business, as well as the abdominal launch in Canada. We will continue to invest in supply chain and quality department regulatory department to capture the increasing customer demand for products. And I also want to stress that we are building up our inventory levers. We have taken a revolving credit to do that. So we will see increasing inventory lever during this year. That is a planned action we do for making sure that we can always delivering products to the customers. And if we look into the little bit longer term outlook, which is the important one and the reason why we were here, we see that the demand for transplant is still 10 times higher than the supply according to WHO. The sales value of machine perfusion is approximately times 10 versus that of cold perfusion. Which is typically a cooler type of box with ice and the solution. Machine perfusion and our service model have proven to increase the number of organs to be used for transplantation, especially in the fast growing DCD organ pool. The main growth drivers are superior clinical results from machine perfusion and the fact that service model reduce complexity and time for the transplant clinic. Hence, machine perfusion and service model on normal and DCD graphs will continue to drive growth in the near future and the long future. Xliva has a unique and proven product platform to one day accomplish that no one will die waiting for an organ. And with that, I turn to the next page 24. Thank you for listening today. And with that, we open up the lines for questions.

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 Ulrich Trattner from Carnegie. Please go ahead.

Thank you very much and hi, Christopher and Christopher. And a few questions on my end. Starting off with this Canada opportunity that have emerged and you already have stayed long on the market in Canada. And now expanding that into the cat product as well as for the liver product. And just if you can give us kind of a scope of how many sort of addressable organs there are and how the dynamic looks like. And are you facing the same type of competition in Canada as you do in the US, i.e. that transmedics is the leading product provider for liver and more legacy products for kidneys. And I think that's a good question for me as well as the follow up question to that is, do they experience the same type of limitation on the cat product in Canada in terms of the dual vaccination ducts to the arteries as well as being larger kidneys that needs to be tweaked in terms of the consumable. That would be my first question.

Okay, thank you, Rick. To start off with your first part of the question, Canada is a size in terms of market opportunity compared to a big European market like France, etc. So it's definitely a core market for us. Canada is also could also act as a bridge into United States due to close relationship between surgeons between Canada and the US across the border. So that's why it's important. The market dynamics is more similar to Europe than the United States in terms of competition and and and need in terms of the kidney product. We have to see how some some of the needs are similar, like the dual or triple or triphat shoulder that that is will be the same in the US and Canada. So but but the system with a clinician going out recovering is more similar to Europe than than the United States where the majority is pumped in opioles. So it's a it will be a mix of US and Canada. We hope we can learn a lot from Canada, both in terms of of meeting European leaders, learning from them. Learning more getting required more clinical data that will be not totally applicable to the US, but still reasonably applicable. What was the second part of your question? I forgot that when I asked the first part.

I think you answered most of it is just more on how big of the market is. Well, if yeah, and similarities to that of the US, I think you answered all of it. But and this is our full question on that would be what is sort of the planned ramp up here? I did note that you mentioned that you have hired your first rep into that market. How should we view the sort of step up here throughout twenty five?

So your line is a bit broken. Can you try to repeat?

We have hired our first. Yeah, yeah, yeah. First, I'm Christopher. So how do you expand the organization timeline for that in Canada?

OK, great. Yeah, we have our first employee and we will in the beginning we will support from the US abdominal team and we will come back somewhere during Q4 with a ramp up plan, depending on on how it's going. But it's geographically, it's a big market. Absolutely. But in number of clinics, it's it's it's smaller, so to say. So we are. We don't foresee having a huge self-force in Canada, if that answers the question.

OK, yeah,

sure.

And if we were to stick to to the cat product and sort of tweaking and updating of the product as well as acquiring clinical data, it sounds like for your statement that we should expect that to be resolved closer to into twenty six rather than end of this year, which sounds like a bit of a delay from from previous statement. Is that a fair assumption?

Yeah, that is a fair assumption. Part of it will be solved during the year when it comes to to do with patch holders insights. The larger reservoir will probably go into twenty six. Clinical data will be acquired gradually through this year and next year. But as we know, it takes time to gather clinical data and also publish it so that that we probably have to think more for to six quarters than anything else before we can go full full head into the appeals.

Yeah, right. As well as you mentioned, I'm not sure if I got this right, that you're expanding your service offering similar to that of Italy from Q2. If you could just remind me what you said and potentially clarify on how that is planned to be expanded throughout twenty five.

Yeah, we will try it during Q2. We have always believed but not being very successful so far in the Italian model in the US. So we will now spearhead a project in one to three location, depending on on on how how long time it takes to get through in the in the hospital administration where we pair an evil piece service with the profusionist. We know that the need I would say that probably the biggest hurdle for you will be grossed now is resources. That's my judgment. And this would be one way of of reducing that hurdle and getting more of your piece done in in the United States.

Great. And one sort of broader question relating to to NRP and we're seeing I guess we're all seeing the same type of publications coming out and news that the NRP is gradually gaining traction mainly in hearts and liver. But can you remind us how it fits into your product portfolio and correct me if I'm wrong. My understanding is that it's mainly uses a complementary method to to your portfolio.

Yeah, yeah, that is correct. I mean, to start with, we are really we welcome NRP. It's an it's an additional to the to the transplant world and it adds more organs from the DCD donor pool. It's also very complementary to our product portfolio. If you look at it, it's obvious for heart, liver and and kidney where the kidney and heart are transported. So you would still need to transport them after NRP and liver is back to base where you do. Let's say you you pump the organ before transplantation to re oxygenate the organ. So if you do NRP or not, it doesn't change the equation. So to say if it's not a very short transport for lungs, you will be it is the WTS guidelines is that when you do abdominal NRP, which is the liver mainly and or and or kidney, then there is no problem taking the lungs because there would be no damage done to the lungs when you perform a T RTA NRP, which is a thoracic abdominal NRP and you include the lung and the heart. You do it for the purpose of evaluating and recovering the heart. The risk is that you damage the lungs. So we see that evil piece actually a tool to increase the number of lungs taking care of after TNRP where you do today. You do it for the heart and you very often have to discard the lung because of insecurity when you refuse the lung on too high pressure. So the WTS guideline is that you should be careful using lungs from TNRP, but we believe that we will be you can use those times as well. So that's why we view it as a great complement to to both the transplant world and to to our product portfolio.

Great. Thank you. Two more short questions. Part Australia Q1 sales looks to be really strong momentum. I remember it was a been one, two years ago when we had a similar situation in Australia and that follow up by a few week a quarter where there was some inventory buildup. Is this the case now or is there something different?

We see higher higher penetration this quarter versus last year full year. We it could it could always be quarter by quarter. Let's say stocking, de-stocking because there are few clinics and if they have one, two or three kids on the shelf will will affect our our growth rate. So I think we should look when we look at growth, we should rather look at 12 months rolling. It's just very encouraging to see that there is a high interest. It is an increasing penetration and we do see that we need better proof on DCD hearts both with or without NRP. I mean, you can do TNRP, which was included in our heart trial. You can do direct procurement, which we're now trialing Europe on 40 patients in better looks. And we will also trial in Australia soon. We are right now conducting preclinical trials on on DCD hearts in Australia. So we do see to to really get the usage up. We have to be able to use both DVD and DCD in Australia, Europe and United States.

Great. And last question, and it's a short one for Nordstrom. Net financials minus 41 million in Q1. What's the explanation behind this?

It's that's non-operational. It's primarily the the weak in US dollar and the effect on not only cash, but also our other other balance items.

OK, so mainly sort of reevaluation of redeemables.

Yeah. And and the since the biggest kind of wealth, we don't know, of course, but I think we had we had a big hit in Q1 because there was a big devaluation of the US dollar. And if that stabilizes, I think that effect should be less on the financial item side in the next quarters. But that's who am I to judge?

OK, great. That was all questions on my end. I'll get back into the queue. Thank you.

Thank you.

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

Hi, good afternoon. I've got a couple of questions here on on the XPS. So I delivered four new XPSs now in the end of the quarter. So I was just wondering if you could give some more details around the type of customers those are like high volume, low volume. What should you say about them?

Thank you, Philip. Very good question. We are definitely excited. There are high volume customers. They are the ones that show integrated interest of starting an EVP program. You need to do a certain amount of of lungs per year in order to sustain an EVP program. And one of them is very reputable type top 10 customer in the United States. That was included this quarter.

OK, OK, good to hear. And I guess they are up and running like immediate or is it any delay before they are? I guess they have to ramp up utilization. But is it a long time does it take?

Yeah, that's a great question. This is something we're working on. It takes too long time today and we are working on shortening that time frame. So once you deliver an experience, you then have a training and then you have a couple of cases, trial runs and then you go live. We have seen historically that from somebody sends a PO until they are running, it could be 69 months. But we are working actively to reduce that time to two to three months. But but today it is unfortunately takes some time, sometimes very practical reasons that you need a training lung and you don't know when there is a discarded human training lung that you can actually perform a training on. But we are running a project to reduce this, let's say, start up time dramatically from where it is today to where it should be in the future.

OK, thanks very clear. So graduate ramp up takes take some time, but it's going to increase right away after they have done this trial on them.

Yeah, so typically they are once they are fully trained, fully certified, then they ramp up pretty, pretty quickly. But it takes too long time to get them fully trained until ramp up today.

OK, thanks for that. And the other one on the experience around the production, I was just wondering if this is if there any new problem around the production constraints on the XPS machine or is it have you had the same production capacity for long? And it's just that the demand has increased now. How do you explain this?

Yeah, it's a combination. What happened was that last year we had a couple of obsolete products in the XPS that we needed to change. That change took longer than we expected to get the both get the right products in and get it approved so we could sell the XPS again. That one is that work is now finalized and we are slowly wrapping up. The other thing that happened is that there is a higher interest than we expected. So those those two in combination is not great. Of course, when you have a six months non delivery and then a greater interest than we ever seen before. So it's a combination of the two.

OK, thanks. But it also sounds like you're talking about how much you're going to produce for the remainder of the year, but you sound highly confident that you're going to be able to sell all of those. Is that correct?

Yes, that's correct. Yes, that is correct.

OK, well, that sounds sounds encouraging. All right. Yeah. OK, that's all for me. I'll get back into the queue. Thanks.

Thank you.

The next question comes from Maria Vara from Bayan Garnier and Company. Please go ahead. Good afternoon. Thank you

for taking my questions. I was wanted to first follow up on the previous questions on the time it takes to to train the proficient as I'm using the machine, but more in relation to the hard technology. If I recall from your report, you said that of the basically initial interest are well trained, but I was wondering how long it takes to actually get trained for hard technology. Is it similar to the lung technology and how you foresee any other educational programs ahead of the lunch in Europe?

That's actually a great question. We have seen that the the the heart is a lot easier. So again and again, we've seen that a clinic can is can be up and running very fast. We're talking about one to three months for the heart technology and they are more or less fully sufficient using the heart technology after running only three, let's say, real cases. So there is a learning curve for heart, but it's very, very steep compared to the learning curve for lung, which is evaluating a lung is a little bit more complicated than than just perfusing a heart. So to say, so we don't foresee the same problem, but we have to be very humble in for the fact that there is a training period needed for the heart. And we know that they need to do three real cases before the fully up and running in Europe. We have 15 centers who are already up and running, so we don't foresee a great training phase here in Europe. But that is because we did we run the trial before.

OK, that's that's very helpful. And then I wanted to get a bit of color on on the liver trial. It's great news that you get the approval to start enrollment. I was wondering if you could share some details on the expected time for enrollment considering you're going to enroll about 200 patients. If we could consider a similar rate of enrollment compared to the US trial to get a sense a bit of, you know, when will the enrollment will be finalized and then potential more towards 2028 or earlier. Thank you.

Thank you. Yeah, we if you have similar enrollment rate as in the heart trial, it will since it's more patients, it will take somewhere between 24 to 26 months. And that is also what we're aiming. I would like to come back when we seen, let's say the few centers in to torture test that if we see a faster enrollment or slower. We know the interest is very high, so we hope for for a little bit faster. But if we do want one comparison, it's a rather 24 months, let's say timeline we're looking to then than. Then anything else.

OK, that's helpful in terms of sales that we could expect from the US trial and deliver. Is it going to be charged or at least you aim to charge a similar price to the US heart trial?

It will be similar, but slightly lower was the last I heard. So we still in negotiations. We don't know the final price. It will be slightly lower if I'm still correct from from the last correspondence with CMS.

All right. And then maybe a last question. It's great news that you got the continued access protocol for heart. However, I was wondering if this six months allowance for up to 60 patients means that you will only be able to do it for the coming six months. And then this continued access protocol will stop or does it mean that it reinitiate again, meaning that you could continue with the protocol until you get approval?

The correspondence we got from the FDA was that we it will be renewed based on on safety data. So they will have a quick review next time and look at the safety data to renew it until approval. That's the last thing we heard from the FDA.

OK, that's very helpful. Thank you very much.

Thank you.

The next question comes from Johan under us from Red Eye. Please go ahead.

Thank you for taking our questions. Some of them have actually been answered already. And yeah, to go back to some impact on tariffs, just the clarification, it seems to be rather modest impact on your part. You operate with a high margin, especially on the consumable side, and you operate through US subsidiary and presumably the tax will be based on price level closer to COX. And also historically, you have also been a very good position to be able to review your prices and your prices are still relatively modest compared to some of the competition. Is that a fair picture?

Yeah, no, that is a fair picture. So we are lower compared to competition. We have we have also unique products, which are in many cases a fraction of the total cost of transplant for organ. So we believe that there will be an ability to to recover the tariffs by price increases for for for those products. That being said, where we're running a trial and there is a CMS set reimbursement or cost recovery, we can't change the prices because it's set by the CMS. For example, the heart trial, we can't change prices or the future cost recovery for for liver will be fixed prices. So so so be clear there, there we can't. But that's a limited number of patients and limited, let's say, amount. And and we don't foresee that that would be a huge impact on our our profitability.

Thank you. That's useful. And also the experience has been explaining you that some review of earlier products together with higher demand than expected. And it will take some time for you to match the demand level, which is structurally positive, of course. And what about on the long side on the supply? There's been some clutches on that side as well. But what can we expect? When will you be fully operational or this is a small, small thing?

Now, we believe that in terms of experiences, we will be hopefully fully up and running and meet customer demand in Q4. We are certainly working very hard towards that. So we will we will do our utmost regarding that the disposables we don't foresee any any shortages there. We have enough production capacity for for the for the next two years. Over time, we will increase production capacity of disposables for for lungs. But for the next two years, we believe we can meet the demand.

Thank you. That's also useful. And also regarding the continuous, well, the compassionate use or continuous protocol. You got the clearance, the first patients expected by during this quarter. And you will be able to sort of activate some of these six patients during the first six month period. And then they will follow then the safety review and then another six months. This is, of course, very important and interesting in terms of gaining clinical experience and activate continue to activate clinics and centers, but limited impact on sales. But what can we along will take to to to activate all 60. And if this is that number, even if you extend the additional six month period.

Yeah, that is a great question. I think in the beginning we will go very try to be very sharp and and talk to the ones who believe that they can't live without the heart box. We have a few clinics in the US who said now during the down period that they have patients dying on the waiting list because they don't have access to the heart box. And we will target those first because there is still this is viewed as a new clinical trial from each hospital site. So we have to renew IRB and we have to renew the contract. So, of course, they look exactly the same as the old one. I still have to go through an IRB and and clinical trial in the hospital, a clinical trial process in the hospital. So it is a bit of administrative work. So we will target a few clinics in the beginning and then reset and see how much resources we have. And if and or if we should target all of them or not, that decision has not been taken yet.

Thanks. That's also useful. And that touches on the services side. This is of course under review and it's sort of a mix where the current set up is more tailored towards heart, but which will be of course in use also during this clinical protocol stage. It's too early to stay in a specific about the services, but of course, it's a critical operation. It's important that you have the support of this. But it's also an issue of what sort of sales resources should we review your services business as more of a supporting business in this stage?

Yes, we heard from many heart transplant clinics that they say you have a fantastic product, but you need to pair it with a good organ recovery service business to capture all heart transplants in the US. So there is a bit of work to be done there for sure. So it is very strategically important for heart. So what we hope to do is to get the ability of during the continuous access protocol to get the ability to for our own recovery service to train on on the heart box together with clinics. So we are fully up and running when we launch the heart. So that is part of the strategic review we are doing now to get with third party to to make sure that we are ready when when we have approval of heart in in the United States.

And what about benefiting from the services side on on the lung business? Is that more of a challenge?

It is more of a challenge. The current organ recovery service we have is not 100% tailored towards the lung business. We need more of the Italian model, which is we have shown great progress on liver, for example, and that model works very well. So we need to. We need to have a two. Two faced approach here. First, we have to make sure that we have an organ recovery service that will be second to none in when we launch heart. And secondly, we need to have perfusionist slash organ recovery service for lung. So we have have we can build that organ recovery service until heart loss, so to say. So we don't have to start at work as his lung is the only thorax product. We have approved in the US that would be perfect to have a have a have a great service around the two of them. So we do see that we need to add more perfusionist to our service offering to be relevant in line, which we do acknowledge we not relevant right now. We have surgeons out there who recover hearts or lungs, and they very often recover hearts and they see those are really good lungs. So they if they would have a place to send those lungs, that would be with the perfusionist. That would be great to the so we use more lungs from the donor.

And presumably with the dynamics and the honor and our peace side that that need may even increase.

Yes, we believe so. That if we could have access to a perfusionist close to an NRP site, so we could send the lungs directly to TVP. This is what they do in France. They have a special protocol where they actually take the lung and then then they can do TNRP without damaging the lung with very good success rates. So that's something that that would be very good. But then we also need to pair our service offering with an NRP service. So that would be part of our review as well.

Yeah, and this will take some time to both decide and implement, of course.

True. I mean, when once we implement, we will act swiftly. But we first have to make sure that we do our homework.

Excellent. Thank you.

The next question comes from Jacob Lemke from SEB. Please go ahead.

Thank you. I know we're probably running over time, but I'll show you a quick question. On liver, it's a bit of a better quarter than recently. And I know that it seems like Italy, which is a key market for you in liver, in general, had sort of slower growth for liver last year. And given what you see now, do you see Italy improving and just in general the outlook for liver in Europe?

That's a great question. Liver is one of those organs where we have all prerequisites to to become gold standards over time, especially Europe, because all the clinical data shows that it's good for the liver, it's good for the patient. It also saves money to the hospital because you have less aftercare. So and lastly, they can actually start to plan surgery. What we have in Italy is that perfusionist model where we support them with pumping the organ as well. So we don't we don't put a restraint on the hospitals by having liver. So we definitely see that that model we need to spread into the rest of Europe. We see actually growth in more countries than Italy. So we see Italy is definitely back to a higher growth rate compared to last year. And but we have to look at it more again. Twelve months rolling, looking forward. Twelve months quarter by quarter could be jumpy, but we do foresee a pretty good growth in liver due to the good clinical results. But also we are nearing that phase in liver where it becomes almost like a general practice to have a liver device. Now we are between 14 to 25 percent market penetration country by country in Europe. And that is typically there. We go from being an investigation device to market practice. So we do see that we have all the prerequisites for growth. Now I think it's up to that we have a large enough sales force to actually capture that growth.

OK, sounds very promising. And you shortly did I interpret it correctly that you have gotten confirmation that you can get reimbursed for the cases in the liver trial?

Then we have not confirmations. We are in negotiation with the CMS regarding cost recovery in the US trial, if that's what you refer to. We have not yet got confirmed.

OK, that's all for me. Thank you very much.

Thank you. I think we are almost 50 minutes of a time. So with that, it concludes the meeting. And I hope to meet all of you on July 11th when we will report the Q2 results. Thank you very much and see you next time.