Xvivo Perfusion AB (publ)

Thank you so much. Good morning and good afternoon, everyone, and welcome to Exvivo's earnings call for the second quarter of 2026. To get started, we go to slide two, and today's presenters are me, Christoffer Rosenblad, CEO, calling in from Gothenburg, Sweden, and Christoffer Nordstrom, CFO, calling in from Denver in Colorado. And with that, we can go over to slide three, which is the Q2 financials at the glance. The Q2 shows the sales amount in line with the previous quarter, Q1, and with a 36% organic top line growth compared to the same quarter last year. EBITDA was kept at the healthy level, resulting in a good operating cash flow. For the third consecutive quarter, the total cash flow was neutral and hence the cash position stable. Christoffer Nordstrom, our CFO, will get into the details on sales, gross margin, cash flow and EBITDA later in this presentation. If we look into the segments, both the thoracic and abdominal segments are growing rapidly in both regions, North America and Europe. The lung market trend from Q4 last year continued to 2026 with a good lung market growth. I'm also very pleased with the strong kidney cells in the quarter fueled by larger sales footprint in Europe and a growing sales force and most importantly growing interest from clinicians in the United States. We will come back later in the presentation on the progress for the service segment, the actions taken and how we will execute to become the preferred partner in the transplant process. And with that we can go over to the next slide, which is slide number four, which is the same picture but for the first six months of the year. and it shows a similar picture as the quarter. Good stable overall growth comes from strong thoracic growth and healthy abdominal growth. During this year we have continued to invest mainly in sales force, scalable production structures as well as regulatory approval. Sales came in at 480 million Swedish kronor with a 29% organic growth. If we look into the segments, we can see that for heart, the main hurdle is regulatory approval. Once the heart assist is used, the feedback is overwhelmingly positive. We continue to build evidence and more than 600 patients now have been successfully transplanted with the heart assist. The best testament to success is Australia where the heart penetration year one was approximately 30%, year two it increased to 40% of DBD hearts in 2025. This year we already see an increase to approximately 50% penetration of all transplanted hearts in Australia. I also want to mention that our projects are progressing according to plan. Regulatory timelines are hard to predict, but clinical trials, submission file and the development progress are progressing according to timelines we have previously agreed internally. The full-scale production of disposables for heart, liver and kidney will be extremely important to capture future growth potential for all three products. With that project coming to an end, we will now focus on reducing cost per disposable, setting up dual production where deemed necessary, as well as improving our machine production setup. This project will also include our lung portfolio. Lastly, and most important to mention, is that this quarter again shows that the business model is scalable. So with increased sales, we see that turn into an improved EBITDA and an improved underlying cash flow. So with that we can go over to slide five and we will come back later to the financial numbers in that section and we can go into the Q2 highlights on slide five and those we will see on the slides six and seven so we can go straight to number six. One key is that we definitely start to see that with a larger sales force we meet more customers and we see an increase in adoption of our technologies across the line. Number two, we mentioned before that the lung market is back and we very importantly are running an OPO EVL-P hub pilot that is successfully now up and running and that explains partly the increased lung sales during the quarter. So far the progress is in line we plan and we have identified 45 OPOs in the rollout pipeline where of the third OPO was on board last week. We are continuously investing in more feet on the ground in the US to enable closer customer relations with a growing number of EVLP partners. If we look three into heart, As I just stated, in Australia we saw a fast pickup of usage early on and it increases year by year. Now we see a similar interest in Europe and it translated into usage under derogation or compassionate use. We hear more and more testimonies from customers who say that the ex vivo heart disease changed not only the ability to transplant more patients with a higher patient survival rate, but it also reduced stress level in the transplant team and increased the confidence in heart transplantation. In the US, the interest in our ex vivo heart technology is equally high and we have recently submitted the extension of the CAP or continuous access protocol to the FDA. I mentioned in the last quarterly call, but I will mention again after spending time at the ICCT 2026 in Toronto, it's clear that ex vivo is by far the innovation leader in the field of both lung and heart transplantation. If we look into number four, we saw increased sales from the Kinesis Transport and we also see an increased interest and momentum from customers using the Kinesis Transport. This is based on more and more clinical evidence being available to the clinicians that support the use of Kinesis Transport, as well as a larger commercial footprint in both regions, Europe and the US. In parallel, we are working hard to develop the product to meet U.S. opioid needs as well as lowering the cost per disposable to increase margins over time. And with that we continue on highlights and slide number seven. Point five, what is very encouraging is to see that where we put commercial capabilities and increase our sales force, we grow typically between 30 and 60%. And with future approvals expected and coming in as well as our product improvement, we will continue to see this leverage of commercial sales force turning into increased sales at the good return on investment. Even though I wish to have 0.6 here, even though I wish to have had great news, we have seen great progress in all our regulatory processes, as well as, as we have stated, we worked hard on the derogation and compassionate use here in Europe, we see take it up in Australia, and now we see that we have what I deem as good progress in the regulatory processes. I will shed more light on where we are on each approval in the next section of the call, the regulatory and clinical update. But I just want to conclude here that we are pleased with what we have seen so far. If we look at point seven, a very important point. To start with, we are very pleased with the growth and the cash flow we saw during the first half of the year. But we invest heavily in future growth. The majority of the investment, of course, goes into regulatory application for heart, global and liver in the US. But besides that, we continue to invest heavily in building commercial capability and the production scale up to enable Higher volumes than we have today. We are also investing in quality capabilities to support the growth we will see that we believe will be 10-10 in volume versus what we see today. and lastly number eight that capture I think the first half year is that we have a scalable business model we do invest to capture that opportunity. And we see increased sales turn into EBITDA that turn into an improved operating cash flow that we then can invest into regulatory approvals of our future sales drivers, which is heart, global and liver in the United States. And with that nice segue, we can go into the regulator update, slide number eight, but we can actually quickly go to slide number nine to go into the regulatory processes we have. And this is the usual overview that we show every quarter on slide nine. We now see more and more evidence for the heart disease globally. In Europe we ran the first randomized controlled trial with superior endpoint that was performed in the field of heart transplantation. The clinical outcome was great with an additional six lives saved per approximately 100 patients. It is also the first clinical trial to establish a link between preservation method, severe PDD reduction and reduced 1-year mortality. In the analysis of the trial data it was noted that the ex vivo group had a reduction of severe PDD by 76%, which is a lot. Incomparable number, the severe PDD was 20% in the control group, which is expected, but only 5% in the ex vivo group. It was further noted that the mortality of the severe PDD was approximately 40% in both groups, leading to an increased survival of 6 percentage points in the ex vivo group versus the control group. The US heart rate was fully included in record time. It showed the same picture. The severe PDD rate there was only 7.9%. and we are now finalizing the submission for the FDA for their review. So the team is working very hard. We are expected to hand in the submission file to the FDA during this quarter after we are waiting for some validation and product aging data before we can finally submit it. In Europe, the CE Mark Process for Europe is ongoing and at the late stage. Now is my best judgment. Stated earlier, the hardbox and disposable part of the product is already C-marked. The solution has passed EMA consultation and we're now waiting for consultation at the submedical agency for the one part of the product. During Q2, we received a few questions of We are now waiting for feedback on that additional information where we unfortunately don't have an exact timeline, but we expect feedback during this Q3. As we stated earlier, the uptake of heart assist is good in Europe under derogation and compassionate use. and we are ready to launch when the product is fully approved. As the launch plan is ready, we have staff recruited and they are meeting customers today under delegation to support them with everything they need. And the interest from Kleenex is very high in Europe as it is in the rest of the world. I still want to mention that even though the use under derogation of compassionate use is increasing and appreciated by our customer, we need to mention that the European heart clinics are suffering badly from lack of alternatives to the ex vivo heart assist. In both the United States and Canada, the regulatory approval will be pending the CMARC in Europe, so we are waiting for that one. until we will seek for approval in those two regions. The last point, liver in the United States, I will come back with an update on the next slide, slide 10. And liver cyst regulatory status in the United States. So we have previously reported that the liver assist has been granted breakthrough device designation by the FDA with an approved IDE and CMS funding approved we could have started a trial Q3 already last year at this point pretty much one year ago. We did decide to temporarily pause the activities for the liver PMA process to investigate alternative regulatory routes possible and we are preparing for the FDA Q-Sub meeting where the possible regulatory route will be decided by the FDA. We have recently opted to focus the majority of the resources we have on the heart U.S. submission. That being said, we have very high interest from U.S. clinics that are supporting the U.S. liver submission and we are in good dialogue with clinics to prepare ourselves for the Q-sub meeting with the FDA. We will inform All investors of the next steps in the US liver regulatory investigation latest in the Q3 report if we don't feel the need to do it before that. And with that I conclude the first section of the Q2 presentation and I will hand over to our CFO Christoffer Nordstrom who will present the financial performance.

Yes, thank you, Christoffer. Turning to the financial performance for the second quarter then. So this was another strong quarter for XBivo. The strong momentum we saw in the first quarter continued into Q2, as you have seen, and we delivered net sales of SEK 239 million, which corresponds to an organic growth of 36% in local currencies. Importantly, growth was broad-based across our portfolio and driven by continued adoption of our technologies in all major organ areas. At the same time, we continued to invest in commercial capabilities, Mark Reade, Christoffer Rosenblad, Johan Holmstrom, Ylva Vihoj, Magnus Nilsson Thoracic margins remain strong while gross margins in abdominal and services continue to impact the overall mix. And I will come back to that as well in a moment here. Going over to the next slide, which is the largest business area today for Xdevo, Thoracic. So Thoracic delivered a positive quarter with net sales of 158 million SEK and an organic growth of 53%. Adjusted for part trial revenue, we're still at 52% organic growth, so very good. The momentum in Lung continued to strengthen. EBLP disposable sales grew 60%. and the largest customer accounts. Activity remains strong, both among leading transplant centers, but also within our growing Opioid strategy. And during the quarter, as an example, two additional XPS systems were installed at Opioids in the United States and are expected to become operational in the second half of the year. Heart, Christoffer touched upon it. We're very pleased, very proud to see that we delivered a particularly strong We continue to see increasing use under compassionate use and derogation in wait for our regulatory approvals. With the approximately 600 hearts transplants with our technology, we continue to build both clinical experience and commercial momentum ahead of Abdominal Abdominal delivered another strong quarter and reported net sales of 65 million SEK, corresponding to 26% organic growth. Liber Sales grew 11% in local currencies while Kidney contributed and was the primary growth driver with a growth of 72%. We are particularly encouraged by the continued adoption of Kidney Assist Transport both in Europe and North America as more centers gain experience with the early adoption of this technology. Gross margin was 57% but less than 68% last year. The decrease was primarily driven by product mix, with kidney representing a larger share of sales, as well as pricing conditions in certain markets. While this impacts margins in the short term, we remained very confident in the long-term margin opportunity within abdominal. As adoption increases in the US, where pricing levels are structured Overall, we remain satisfied with the growth trajectory in abdominal and the increasing adoption of both our liver and kidney technologies. Turning to services, our third business area. Net sales were 15 million SEK, corresponding to negative growth of 25%. The development continues to be explained, mainly by lower organ recovery volumes, while FlowHawk delivers a and continues to gain traction among transplant programs across the United States. And we remain convinced that digital workflow solutions will become an increasingly important part of transplant infrastructure and customer integration for Exdeva over time. Within organ recovery, volumes remain below our expectations yet another quarter. However, following the investments we have made into the organization, the talent that we have attracted, we feel that we are getting closer to growing our customer base. And that's our, we have a firm focus on returning to growth here in the second half of the year. And I think we should still see some results, especially in the back end of the year. Gross margin was 10% and that's purely reflecting the lower or recovery volumes combined with our investments in capacity. As volumes recover, the margins should naturally improve. So switching gear from sales and going into EBITDA and profitability. So despite continued investments, as we talk a lot about, Ebitda remains strong at 19% in the quarter and 20% year-to-date. On a rolling 12-month basis, Ebitda has now improved to 21%. Many companies can deliver high growth and many companies can deliver profitability. We're thinking that delivering 29% organic growth during the first half year of the year while sustaining around 20% EBITDA margins and generating positive cash flow demonstrates the quality of our business model and this already at the very early phase of our growth journey, so we're very proud of that. in North America, but we will also maintain discipline and cost control across the organization. My final slide, cash flow. One of the most encouraging aspects of the quarter, we think, was the continued improvement in cash generation. Operating cash flow amounted to 63 million SEK in the quarter and 129 million SEK year to date. and this should be compared with a negative operating cash flow during the first half of the year last year. So this reflects both the stronger commercial performance and the continued focus on working capital management. Cash flow from investments amounted to minus 68 million SEK in the quarter and relates primarily to regulatory and product And what we think is particularly important is that over the past three quarters, we have demonstrated our ability to largely self-fund both our operating investments, but also our growth investments, our COPEX. So despite continued investments into future growth, total cash flow for the first half of the year was essentially break-even, and we ended the quarter with a strong cash position of 305 million SEK. So with those comments, I will hand it over to you again, Christoffer. Thank you.

Thank you, Nordstrom. We will round off this presentation with outlook for the rest of the year and then a little bit longer term outlook. We start with slide. and the outlook for 2026 and our focus areas. So we will continue to build Salesforce and build new partnerships in the US to enable OPO and other clinics to recover more lungs by EVLP adoption through a combination of service models and staying very close to customers. In parallel, we increase our service offering to better tailor customer needs, especially offering Flohawk and NRP from a hopefully increased footprint. We have an increased surgical footprint. We should also have an increased contract footprint. We will continue to work closely with our competent authorities in Europe with the aim of obtaining the C mark of heart, of course. We are aiming to submit the regulatory heart Thank you very much. Thank you very much. And if we turn from this year outlook to a little bit longer term, which I think is important to keep in mind while we're here, is that the demand for transplant is still 10 times higher than the supply of organs. We should also remember that the sales value for machine perfusion is approximately 10 times higher versus what is used today, to a large extent static cold storage. or a beer cooler box type with ice. 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 where the main growth drivers are superior clinical results from machine perfusion and the fact that we can reduce complexity and add time for the transplant clinic in order to reduce stress. So, in conclusion, we know that machine perfusion and good service models on normal and DCD graph will drive growth in the near and the long term future. Lastly, XVivos want to change the paradigm for transplantation by innovation. We are convinced and committed to increasing patient lives after transplantation, making sure that no one dies waiting for an organ, and making sure that we have rested transplant teams performing surgery at a lower cost than what we see today in the transplant chain. And we hope that you, dear listener, in the future when you fly, you might be seated near to an ex vivo heart box with a heart being transported to a patient whose life is about to change soon. And if you see that ex vivo heart device on your flight, you should know that it's not just a heart traveling. It's a hope for a new and a better life for the patient and his or her family. And I want to thank you for supporting us on this journey to change the transplant system forever through superior innovation. And with those last words, I also want to thank you for listening today. And with that, we will open up the lines for questions.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Simon Larsson from Danske Bank. Please go ahead.

Good afternoon, everyone. A few questions from me, and I would like to start on the strong heart print that you mentioned. Would it be fair to assume that sales in this quarter was maybe a bit boosted by a lot of new placement of the boxes or were revenues mainly stemming from existing clients already sort of using consumables and a basic run rate for the business or I mean just how we should think about the dynamics of the business model here in the beginning of the launch if you will and if we should extrapolate anything into second half.

Thank you, Simon. It's a great question. I mean, we are scaling up in Europe. There were limited hardbox sales both in Q1 and Q2. So the main sales coming from disposables. But we should remember that Once you get started, you have a few kits as safety stocks. So that has affected half year one to some extent. But we see definitely increasing uptake in Europe from using these.

Great, great. And the second question was on EVLP. So I believe you have three OPOs signed now soon online as well. It sounds like more also in the pipeline hopefully for the remainder of the year. So if you could help us understand the potential of these OPOs when it comes to revenue. I mean, I guess you have data on their current volumes and growth rates, etc. So just trying to understand what three to five OPOs can do for you in, let's say, next fiscal year. What type of, what's the magnitude you're talking about?

We are in pilot phase, so we do need to come back in probably six months to answer that question properly and with more exact data. But what we do see is that the opportunity to evaluate in lungs on the opioid side is vastly outnumbered the one on the clinical side due to the Their access to external criteria lungs is there. And also the fact that it simplified the whole process. So we have seen in one opioid, we saw a fairly fast uptake. We need to replicate that three to four times more to come back with exact numbers coming into next year. But so far it looks good. according to our own plans, it's according to those at least.

Okay, okay, makes sense. And the final one was on sort of further recovering investments in Salesforce when we're approaching a hard launch both in Europe and in the US right into next year. So could you give us any like help or more park estimate on like how many more sales persons, support persons do you need to really cater and to meet the demand and to make it a successful launch here for the heart product. So what's the magnitude of investments basically that we should expect here in next year maybe?

Yeah. In Europe, we have invested. There will be add-on investments when the more customers come on, the more field force we need, so to say, ranging from customer support to technical support, to clinical support, to sales reps. So that is more of a scaling exercise. In the US, we will start to doing next year Scale up. We, depending on a little bit on the timing, but we do believe that we need an approximately 10 to 13 extra commercial headcounts ranging from sales reps again to customer support, technical support and increased clinical training slash support.

Okay, okay. That sounds fair. Thank you so much. I'll get back in line.

Thank you.

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

Yes, hi and good afternoon. My first question is on the Opio customer channel. I'm wondering, the first Opio that you won here earlier in the year, if you can elaborate on how that has that have developed and ramped up here in the first half of 2026.

I can go on that one, yeah. So, you're right, Jakob, we acquired that opioid at the back end of last year and they became active very early this year. And I would say they have a strong ambition at the Opioid, I mean the mutual ambition, This is a new method and we are three parties that needs to collaborate. So it's Vivo and it's PSI, our Perfusionist partner, and the OPO. So there are learnings in the making. But we believe that we have a proof of concept that provides more color. I think they are now close to, let's say, 20 real piece for the first half year. I know their addition is higher than that when they are fully up and running. and other opioles as well. I think you will see a variety of slightly lower volumes than this one, but also perhaps higher for other opioles as well. It's a good start.

And this, let's say 20 in the first half, is that a reasonable assumption for the second two you want now in Q2? for H2.26.

Yeah, so I think you will see, I think the ramp-up time could vary a little bit on these two bills. One is smaller and one is bigger. It's a little bit too early to say, I think. A lesson is that it takes at least a quarter, I think, to come up to speed for them.

Okay, that sounds fair. Dan, I have a question on the hard sales in Europe here in Q2, if you can elaborate on what countries are contributing to that.

Yeah, so, I mean, as Christoffer said, we're very, very happy now with the good feedback we have in Europe. Naturally, there is some background noise here. I'm not sure if it's you, Jakob, but naturally, these are sites that have participated in We talk about France as we send out the press release this year about the derogation. So they are contributors. You have the Benelux countries, Germany, Sweden, and Denmark, if I remember correctly. So we think that's a very good starting point here. Thank you.

Okay. And then on the CEU process for HART in Europe, I mean, I understand that it's Yeah, that's our best guess to make at this moment.

Based on where we are in, let's say, level of clarification. That being said, it's hard to predict regulatory timelines, especially during the summer. But yes, that's our best guess to me.

But it's still reasonable to expect it in 2026, perhaps?

Yeah, I certainly hope so.

Okay, it's tough I get it. Then a question on liver which had a bit slower growth here for the second quarter in a row and I'm wondering if there's something that has changed here or if it's only sort of abnormal fluctuations?

I think that we had a fairly strong liver quarter last year to start with, so we have fairly strong comparables. We do have a good liver pipeline still in Europe. We believe that the majority of market penetration from here and after will come from both increased sales in, let's say, newer European countries where we have, for example, really high penetration in Benelux. We can see an increased penetration in other countries, so Italy there. But we believe that a large part, besides new countries, will also come from improved service models here in Europe as well. So we are, if we look at the pipeline, it looks positive for liver as well.

Okay and on liver I know there is one competitor that is talking about expanding more into Europe and there is also another competitor that I know is growing a lot. You're not seeing any sort of increased competition from those in the short term.

We do see increased competition in Europe some extent, absolutely. But we believe we have a strong track record, very strong clinical proof, good customer relations, so to say. So we so far haven't seen that strong competition coming in. I believe that most of the Let's say that how successful we are lies in our hands and how successful we are to implement good service models. When I talk to customers in liver, that applies to all organs, but in liver especially, they are looking for support in reimbursement, but especially in service model due to shortage of staff. So if we can support them with that, I'm sure that we will become the preferred partner to a lot of clinics in Europe over time.

Okay, that's all from me. Thank you.

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

Hi, I've got a couple of questions, but I'll take them one by one, I think. So the first one is around the largest customer that you have in Lange. So you had another strong quarter here so I'm wondering what your expectations are now for the coming quarters and what kind of visibility that you have there. And also if your projections have changed at all following their own approval.

Thank you. In general we stay close to all our customers and especially the large ones. We are part of their approval and we will continue to see increasing quantities, we are convinced of that. The sales value will of course be smaller compared to today. We have visibility approximately six months, good visibility and for the six months it looks good. After that we have less visibility to say so and we are in a good dialogue to have a better understanding of how the future will be shaped together. So we need to come back on a more detailed answer to that question.

Okay, okay, thanks, but so I think in connection with the last report in Q1 you mentioned it was fair to assume that, you know, that was a new baseline for the IDLP numbers, and this seems to have been true in Q2, so it sounds like you still have confidence around that statement now, looking forward as well.

Yeah, we are confident for the next six months, so to say. We are also very confident that we together will increase the number of EVLP so we can make sure that nobody dies waiting for lung at one point, and that we will do together. So we are convinced and committed to increase the Volume and the number of EVLPs going forward. Exact how that will shape into US dollar is something we need to come back with if we look into 27, 28, 29.

That's all right, thank you. Then question on HART. So you now plan for the PMA submission after the summer. So now, how large would you say the uncertainty is around the exact timeline for that? Do you have all the clear steps that you need to take now going forward until that submission? And are you able to provide some more details around what that exactly is and what is remaining before you are ready for the submission?

The main, let's say, hurdle, bottleneck is that we have had some changes of components with the product that happens. So we need to verify all the product aging for, let's say, the final product. So that is what we're waiting for now. and Ylva Vihoj. Thank you very much.

Okay, very good. Lastly from me, around the cap in the US, you submitted it, I think you said earlier. So how long time does it take before the FDA can grant approval for that? And when can we expect transplants to start again in the US?

The straight answer is I don't know 100% sure, but it's a fairly easy turnaround, so to say, for the FDA to do. My best guesstimate would be approximately 30 days turnaround time. Hence, it should be able to start in somewhere here in Q3 if everything goes all right.

Okay, perfect. Thanks. That was all for me.

The next question comes from Ludwig Germunder from Handelsbanken. Please go ahead.

Thank you and good afternoon. So I have two questions I think. I want to start with going back to what was discussed earlier here with the investments in Salesforce. So when we think about OPEX and scalability going into next year, is the big driver of higher OPEX the investments in Salesforce or is there anything else we should also keep in mind?

Yeah, it's a great question. Thank you for asking that one. With a growing company and a growing machine fleet, you also need to scale up quality and technical product management, let's say the back end of the company to take care of the growing Thank you very much. But you are right, there are in general, you also need to scale up, let's say, the back end of the company in order to enable higher growth rates. In terms of production, we don't see that we need to scale up because we are relying on the majority on third-party manufacturing, etc. So that's more improvement projects, lowering cogs over time, efficient processes. But we have the right people on board doing a fantastic job, so I don't see a large scale up there. But definitely quality side, taking product management side, there is a need. But compared to commercial force, it's smaller and limited.

And just to follow up on that, I mean, is it fair to expect that to grow in line with sales growth?

In the beginning, it will be a larger, so to say, investment. Let's say approximately six months before launch and 12 months after launch. But once that has stabilized, growth will far outpace those type of investments.

Thank you for that. Yeah, great. And then a question on abdominal, I guess. You mentioned in the report that you had some pricing conditions in, I believe, undisclosed markets. Could you elaborate a bit on this, if possible, to say what kind of pricing conditions, what markets are affected, and is that for the entire abdominal segment, or is it more towards liver or kidney?

I can take that one. So, I mean, if you look at, this relates to you, There simply is not enough money in the systems and so pricing has to be lower and it's at those countries, those markets where we do see competition from competitors implementing lower prices and we will need to ask ourselves if those markets are at the moment attractive for us. If you look at the more important markets and what historically have been our main markets you don't see that pricing pressure and you see an increased utilization especially DCD and now looking into DPD as well and we see less of competition today but that might change but so I would say it's more we have last year we were very good at That's not where you will see the growth either for ex vivo going forward. So I'm not worried from that perspective. It's just an effect we have at the moment.

And just to be clear, was this something that started or that you started seeing during Q2?

No, I mean that, well, the volumes at those markets has picked up for us and all the installations of our devices. If you look at Q2 specifically, I would rather say it's the fact that we have been very successful on kidney and kidney sales globally are at lower margins. That's how the market looks today. And with the reimbursement long-term, we hope that we can improve that. And also we touched upon it, but I want to mention that one of the good outcomes of the We should start to see that coming in.

Thank you. And then the final question for me, please, also on the COGS. I mean, besides what you just mentioned, you've also previously been speaking about, for kidney specific, that Volumes have been too low and that's why the gross margin has been lower. I mean besides the initiatives and the move of production that you mentioned, how much higher volumes do you think is needed to see higher gross margins for the kidney cells?

I can answer that to some extent. I mean, we need to see three things. One is a geography mix. I should also mention it's partly by choice where we choose to gather more DBD data on kidney in countries with a little bit lower margins, but you get very good data. It makes economically sense because we don't have to pay for it so to say but we pay for it through slightly lower margin. We think that that will be very useful data going forward in approximately one to one and a half year. So it's a geography mix where we when we grow more in high margin countries it will So to say, look at the picture. Then it's definitely cost per kit. And there are two components there to look at. One is the component cost where we need to reduce that and also get a better process. And then lastly, we have seen that when we go into When you come up to, let's say, stable production, it's not exactly a quantity because we don't have a pricing with our production suppliers that is based on how much we purchase. We don't get lower if we purchase more. It's more that the process gets improved over time and then you, year by year, reduce a little bit of cost every year because of better processes and higher scale, pretty much. So it's a combination of those three factors that I think we take one to one and a half year to get out of the system. But once we do that, we will have very healthy margin on our full product line.

Very clear. Thank you so much.

The next question comes from Ed Hall from Stifel. Please go ahead.

Good afternoon. Thank you very much for taking my questions. I have a couple here. The first one would just be on lung and the OPOs. I guess if we look into H2, how much do you view that as driving growth? And maybe more specifically in Europe and the EBLP momentum you've seen there, do you see that continuing into the rest of the year?

Yeah, looking into forecast, yes, we do believe that that momentum will continue. We do see an increasing interest for Lungs in general, EVLP in particular. The donor pool is becoming more and more extended criteria, to put it that way. Hence, there is a larger portion of DCG, there is more TINRP done, which potentially harm the lungs, etc. So there is an increased insecurity Coming from donor lungs. So we see an increased interest and we believe that that will, if we are staying close to customers and do our job right, we believe that that momentum will continue through the rest of the year. Yes, both in Europe and the United States.

Perfect. Perfect. That's really clear. And then maybe just more of a Q3 question, but it's obviously we've seen the typical seasonality in the US for lung and I was just wondering to hear your thoughts on it for this year, sort of given dynamics like phasing of revenues and obviously this growing OPO strength. Is there anything to upset that seasonality?

I mean, in general, doing this for 14 years, E3 is typically a bit of a weaker quarter, very much depending on that's where the majority of people take vacation. And that applies, of course, to triathlon teams as well. Last year was a bit of an anomaly with an extremely weak Q2 and actually July-August and then we saw volumes picking up in September but that has more to do with United States and the economy behind transportation, more resources in the transport system. So if I look at a normal year, I would say Q3 is a bit weaker and then Q1 to Q4 is typically a little bit stronger.

Okay, so this year there's nothing to upset the last 14 years that you've experienced?

No, we haven't seen any sign of that so far.

No, that's really clear. And then just my last question just would obviously be on FlowHawk, and I appreciate it's a small part of your service business, but obviously it looks like it's growing really well, and it's a SaaS, so I assume quite a high gross margin contribution. I just want to try and understand sort of how big could this be both in terms of sort of your revenue I guess who's using it now I just be curious to understand a little bit more about this business yeah I agree with you I mean we have high hopes for for Flowhawk and it's

and a transplant administration tool. We, I mean, we will paint this picture more, you know, deeply for you guys during the rest of the year here as we move into our strategy work at ATEX Vivo, but it's, we want it, we see it as, you know, an air traffic control tower, more or less, that could be used by all of your, all, Transplant Centers and we believe that in the near future here you should be able to integrate our technologies with Flowhawk which will create stickiness at the centers and so on. and so on. But it's still in the early innings but that's why we're also happy to see that we have this growth now and it comes from both renewals from happy customers but also additional centers coming on board. So it's definitely a product for the future for us.

Perfect, that's really clear. Thanks a lot.

Thank you. I see we have one more question left. We are nearing the end of this call, but of course we will allow one more question. So, Elvin, please.

The next question comes from Elvin Roelder from DNB Carnegie. Please go ahead.

Yes, good afternoon. Thank you. And I appreciate you taking the questions, even though we're pretty much out of time. Just have two ones and see if we can manage both. Perhaps beginning a bit on the gross margin dynamics in the thoracic segments. They're strong but they're still down a bit year over year. You mentioned mixed effects here in the quarter and I guess it's because of the EVLP outgrowing Perfidex year over year but I guess also a bit on heart. So I guess my question is what is the kind of current gross margin that you're operating with in the heart business? And how would you expect this to kind of evolve from where you are now and the kind of 12 months post a European approval? How should we think of that?

I can take that one.

Yeah, heart being coming from clinical trial supply chain setup has lower gross margin compared to the rest of the product portfolio. So I think that it will take a couple of years post launch until we are let's say up and running but we will see definitely 12 months after European launch we will see improvements and then going further into You need typically those changes since it's a PMA in the United States and a Class III device here in Europe. There are quite long regulatory timelines for all production and product improvement projects. So I would say we need... Probably a couple of years to get up to both scale and optimize production before we see the really high margins we see on more mature products.

Okay, great. Thank you. And just one more from me. Looking at cash R&D costs here in the quarter, It took quite a noticeable step up in Q2 versus Q1 and I guess also versus Q2 last year. And I appreciate, I acknowledge of course that you have the kind of intensive work with both the PMA submission and the European approval. But are there any kind of sort of extra-temporary effects that are specific to Q2? Now that we'll start to abate once we have a potential approval in Europe or how should we look at R&D when we include capitalized development as well?

I'm glad you asked the question there. It's been a busy question. We will see that go down the second half of the year. And what will happen is that when we get the C mark, we will start to amortize the I've disclosed that before, and it's around 25 million SEK per year in amortization. But despite this, we still believe that we should be able to end the year, if we track sales-wise, we should be able to end the year being cash positive for 2026, which would be the first

Okay, great. Thank you so much for taking my questions during the last nick of time. I'll get out of the queue. Thank you. Thank you so much.

And with that, I want to conclude this quarterly Q2 report, and I hope to see you all back on October 22 for the Q3. Thank you very much for good questions and thank you everyone for listening and being part of the journey of making sure that nobody dies waiting for an organ.