everybody to the H1 2023 Earnings and Operational Update Investor Webcast of Kuros Biosciences. My name is Joost de Bruijn, I'm the CEO of Kuros, joining me from the Kuros side will be Daniel Geiger, Chief Financial Officer, and Chris Fair, Chief Operating Officer. At the end of our presentation, Laura Pfeiffer from Octavian will entertain the Q&A session of this of this part. Daniel, can you go to the next slide? Disclaimer. Next one. Yeah. Briefly, corporate highlights of Kuros, as all of you probably know, Swiss-headquartered biotech company with operations in the Netherlands and in the US. We are listed here in Switzerland on the SIX, currently have close to 80 employees. Kuros has a strong financial foundation. Half this year, we had cash at hand of about $18 million, with a runway beyond the third quarter 2024, and we've shown very strong revenue growth. Our medical devices segment showed a growth of 126%, first half of this year compared to first half of last year. If you look at direct MagnetOs sales, our commercial product, that showed an increase of 148%. First half of 2023, that amounted to $13.8 million compared to $6.1 first half of 2022. We're really excited with this significant growth, and both Daniel and Chris will allude more to this. Next to this, we have some legacy products, as you also probably know about, which is a Checkmate royalty potential income, amounting to CHF 21.3 million pre-commercial milestones and up to CHF 142 million sales milestone payments. We expect them not earlier than 2026. Kuros itself, we have a very strong scientific foundation. There's about 11 to 12 PhDs and MDs working in the company, we also have numerous active clinical studies, not only clinical studies of our Fibrin-PTH technology, which is regulated as an IND. There we are into Phase 2 trials, but we are also investing in clinical studies for our commercial product, MagnetOs. It's not required from a regulatory perspective. MagnetOs is already commercialized, but in order to increase our sales, the results of those studies will be pretty important. We compare MagnetOs there to other technologies for bone replacement. MagnetOs, again, our commercial product, has been launched globally, several formulation, and this is addressing a $1 billion market opportunity, and we target to grow to $100 million sales within five years, and obviously there's an upside to those $100 million sales afterwards. Next to that, we have our Fibrin-PTH technology, where we are currently in Phase 2 trials, and we have already, with this technology, performed two successful Phase 2 trials in trauma, where close to 400 patients have been treated, which shown both safety and efficacy of Fibrin-PTH. We have embarked on a Phase 2 trial in spinal fusion, again, that is de-risk, therefore our Phase 2 trial in spine fusion is relatively small, I will come to that in two slides from now. Next slide, Daniel. One slide regarding MagnetOs. As mentioned before, we are investing in clinical studies comparing MagnetOs to the gold standard, which is patient-own bone tissue, often harvested from the pelvis and then transplanted to an area where the surgeon wants bone formation, that is the, the gold standard autograft, we compare MagnetOs to that autograft, we are also comparing MagnetOs to other commercial products. On the right-hand side of this slide, you see the results of a large 100-patient study that has been reported. The interim data of 50 patients has been reported earlier this year, where we have implanted MagnetOs compared to autografts or the gold standard patient-own bone tissue in the spine. The right-hand side of the spine, you can see the bone formation with MagnetOs that is pseudocolored in blue, large amount of bone formation and good fusion percentages, whereas the gold standard, so the standard of care, autograft, pseudocolored in gray, you can see much smaller amount of bone formation. We quantified that, and we showed in these 50 patients that MagnetOs had 78% of fusion, compared to only 42% of fusion with the gold standard. Now, again, these are interim data from 50 patients. The full readout of this trial is expected at the end of this year, so we should be able to report the results of this study early 2024. Next slide. Fibrin-PTH, as mentioned before, we are in Phase 2 trial. It's a relatively small trial with 50 patients, and it's designed into two stages. 1 is 30 patients in a 2-to-1 ratio, comparing Fibrin-PTH to the gold standard, patient-own bone tissue. 20 patients with Fibrin-PTH, 10 patients with autografts. All those patients have been enrolled by the end of last year. After this, we continued in the non-randomized part, where an additional 20 patients were treated with a higher dose of Fibrin-PTH. All the 50 patients of this trial have been enrolled in July this year. You may have seen the press release, and that means that the readout of this study will be in two parts. The randomized parts readout will be end of this year, so the first 30 patients, the primary endpoint of 12 months is at the end of this year. We should be able to report those data early 2024. The full readout of the 50 patients of this Phase 2 trial are expected in Q3 next year. For your information, this is a study where Fibrin-PTH is implanted in cages, TLIF cages. This ends the Fibrin-PTH part. Now I would like to move over to the next slide. That is Chris Fair. Good afternoon, good morning. When we talk about the success of MagnetOs in the United States, which is about 95% of our current revenue, some of the metrics that we're tracking towards, you can see here. The number of ordering physicians from the end of the fourth quarter into the end of the first half of 2023 are up by 32%. The number of sales agents are up from 60 to over 85 by the end of the first half of 2023. As a reminder, we sell in an agent sales agency model, where we pay a commission to independent contractors for our sales force in the United States. They are managed by approximately 20 sales and marketing professionals, who do work for the company directly. Also, if you look at the numbers in the lower left-hand corner, the fourth quarter of 2022, we had approximately 108 ordering accounts, and that is up 74% by the end of the first half of 2023. This is truly a continuing execution of the rollout plan of increasing geographic territory expansion in the United States and driving the commercial success. If we also recognize that it takes about 6 months to onboard physicians, hospitals, sales agents, the work that we see and the results that we see within the first half of 2023 are really due to the efforts that were put forth and we invested in in 2022, second half. We'll continue to see that. As Daniel will go into later, we also see a split in our revenue from the first half to the second half of a 40%, 60%, so we will continue to see this growth moving forward into the second half of 2023. In addition, we continue to invest in the clinical data, which drives our ability to maintain a higher price point compared to our competitors, our pricing during this timeframe was certainly stable. Last point is, in the first half of 2023, we did engage into a limited, non-exclusive sales agency agreement with a top three spine company to represent our product line in selected geographies that we mutually agree to. What this means is we have access to a tier one sales force and an agency model where we continue to control both the contract as well as the end dollar pricing. That's been a positive generator for us in the first half as well. Yeah. Then also, a warm welcome from my side. If you look at the financial highlights, as, as we have seen, now in the last 3.5 years, we have gone through a tremendous sales trajectory and obviously have achieved a fantastic result now in H1 2023, almost catching up with the full year 2022. As Chris alluded to, we see that 40-60 seasonal pattern. This is quite traditional if you look at it, where we stand from an evolutionary perspective, and we continue to see that going forward as well as we speak. Obviously, the expectation for H2 2023 is now that we will continue to see that growth. In terms of the revenue, we have now also achieved a tipping point where we have seen for the first time in the MagnetOs segment, a positive EBITDA, which will now also in the second half lead to a positive operating cash flow, which obviously, as Joost already mentioned, will allow us to extend the cash runway, which was confirmed at H1 being Q3 2024, to be further extended into Q4 2024 or even beyond that. In terms of ownership, as you know, we have a strong key shareholder, high net worth individual in the Netherlands, and yeah, he's basically joining us also for any future strategic initiatives we have. In terms of the medical device segment, MagnetOs specifically, it's important to note that the key three drivers, revenues, sales and marketing cost, and EBITDA, are now correlating in a way that we achieve through EBITDA margin of roughly 16%, a positive EBITDA. This has not translated into a positive operational cash flow, given we had some investments into net working capital, mainly inventory and AR. In the second half, we'll now see this contribution from the MagnetOs segment, which, as I said, allows us to basically extend the cash runway into Q4, Q1 2025. In terms of sales and marketing costs, we are now basically aiming to push that cash and cost revenue ratio to 70% in the midterm. Midterm, we see as two to three years, where we will then further manage this down, obviously. Important is that in this cost, we have also reflected the commission cost, which Chris already alluded to, 43%. We were at H1, obviously, given that we continue with this strategy to work with top-tier investors and top-tier distributors, we will further improve that measure. In terms of EBITDA, we achieved CHF 2.2 million EBITDA for the first time, as you can see on the left-hand side, which will now turn into positive cash runway and will also help us then in the long run to cross-finance the overall group. The other segments, in Fibrin-PTH, we have recognized CHF 1.2 million of R&D expense, which is at the lower end. We obviously wanted to cautiously manage that until we have achieved the enrollment of the 50 patients. We will see an uptick in H2 2023 in order to prepare also for Phase 3. This is all factored into the cash runway already. Obviously, it's important that we now have achieved the enrollment, that we now prepare for Phase 3. Obviously, depending on the read-out result, which we expect to be positive, we'll now prepare for the CMC and the preparation of Phase 3. In terms of corporate functional costs, we have more or less kept FTE flat. I mean, we have invested into order fulfillment in the US, given that we have now reached a volume, a sales volume, which allows us to, you know, decide from a buy to a make decision, basically, that it's more economical now to in-source this person and this team. Basically, in the long run, we will aim to manage this cost ratio in comparison to revenue at about 20%. That's the target. We obviously will cautiously increase. We'll also invest into digitalization, ERP, in order to keep up with the sales growth. When we look to the second half of 2023, and we look at the US revenue, we're going to continue the geographical expansion of adding independent agents into our current infrastructure of sales and marketing. If you look at 2022, and we were representing approximately 20% of the United States, so more of an eastern half of the United States, and we've continued to move westward. The investment in sales management, as I mentioned before, we normally will invest in the sales management and independent agents, and then six months later, we'll see the uptick within physicians, customers, hospitals, and that is going to continue in the second half. As it relates to the rest of the world revenue, 2023, the strategy is to reestablish our partnerships. It represents a smaller percentage of our current revenue, but will represent a large part of our growth in the future. We have key market entry into Spain and Italy recently. We do sell into the French marketplace, and we do anticipate, through our investment and reimbursement opportunities, that that will also grow. We recently initiated getting clearance in the Brazilian market, which should take us sometime over the next 12 months. Lastly, we continue to invest in the clinical evidence of our studies and our product, and this allows us to do several things. First, it allows us to keep a higher price point in the marketplace in the United States because of the clinical evidence. It also allows us to have access into hospital accounts and networks, with hospital approval committees, which can be difficult in a very competitive marketplace. Basically, if we look at the financial outlook, as I mentioned, in H2 2023, we expect now positive operational cash flow. The target in the long run is obviously to finance the group and the Phase 3 preparation, and then also the overall cost of Phase 3 through a mix of different financing instruments, which will minimize dilution. That's for us, the key target. It will be a combination of equity, monetizing assets, or partnering, depending obviously on the results of Fibrin-PTH Phase 2. On MagnetOs asset in the long run, it will allow us because we will get to the point where we get total group cash flow positive, that we can fund basically part of the Phase 3 costs through the MagnetOs segment. I think that's quite an important message, we want to bring across. In the short run, it will help us to extend the cash runway. In the midterm, it will allow us to cross-finance the group overall, which obviously the key part is Fibrin-PTH. The other part of the funding needs will be covered through a non-dilutive instrument, which we have now well advanced in the discussions, and we'll obviously publish that to the market as soon as we come to final terms. Terms and conditions are more or less concluded, and it's now a matter of getting over the finishing line. Overall, it looks very promising, and that's it. We're going to communicate that as soon as we have the final terms. With that, over back to Joost. Thank you, Daniel. This is the last slide. The clinical studies outlook for the second half of this year, as mentioned before, we will reach the 12-month primary endpoint of the randomized part of the Phase 2 trial of Fibrin-PTH at the end of this year, so we expect to report the results early next year. We will also complete several clinical studies with MagnetOs partner study, but also the MAXA study. The MAXA study was the 100 patient study comparing MagnetOs to the gold standard at the end of this year, and also there we expect to report the results early 2024. We will also submit some other retrospective, investigator-driven studies with MagnetOs in interbody fusion. You can see that the coming four to five months will be an exciting time for Kuros, and we expect and we hope to report positive results quite soon in that period. With that, I would like to move over to you, Laura, for the managing the questions and answers. Yeah, sure. Thank you very much, Joost, for these interesting remarks. We will now do the Q&A session. I would like to first discuss the outlook for MagnetOs and then for Fibrin-PTH, and then we wrap up with some questions more on the financials and the strategy. I think at the end, we will open up for more questions from the audience. Maybe first on MagnetOs. Here I think we heard a lot about the commercial strategy, and I think you are now starting to really show also a lot of success with it. I was quite amazed, to be honest, to see this very strong H1 sales performance, and when I now listen to you saying that you expect a 40%-60% split on a yearly basis. Is it correct that this implies roughly CHF 30 million sales for the full year? Did I interpret that correctly? We have not given guidance prior, but if we follow the industry standards, traditionally you'll see a 40%, 60% between first half and second half. Right now, as, as revenue from July and August, July has, has been closed and August is trickling in, we see that the trend is continuing upward. I think that, you know, the 40%, 60% split seems to be reasonable. Okay, this would also imply a very similar growth rate, just on H2 over H2 of the prior year basis, so of whatever, 130+% range. Is that correct? That, that sounds to be correct. Okay. And can you maybe tell us a bit, how much of that growth is driven by volume? Is there also a pricing and maybe a product mix component that we should consider? Sure. If from the previous slides that we showed, this is clearly an issue of adding accounts, adding physicians, and adding sales agents. Price during this time was stable, so there was no inflection in price. As far as new product introductions or product mix, there wasn't much of a product shift to affect this. This is purely driven by new accounts and new sales agents on the street. Okay, great. I think, then my second question is more or less obsolete. The next one is on, on your, on your U.S. sales, where you generate almost all of your sales. Maybe two questions related to that. Could you please update us on the size of the current commercial network, and also how we should expect that to grow this year- Yes ... also looking into next year? Secondly, what is your strategy as it relates to partnerships in the U.S.? I think you're working now with a sales agent, but would you also look for other types of partnerships? To answer the, the first question, we currently have approximately 20 sales and marketing professionals that work for Kuros. As a science-led company, we also have a scientific and clinical affairs team that's led by a, a fellowship-trained orthopedic physician, that works with our physician community to help drive adoption of our products and to teach the benefits thereof. In that group of 20 professionals, they oversee currently a group of 85 sales agents. These are independent contractors, they represent, you know, across the country. On average, they have between four to five sales reps apiece. As we scale and continue to scale, we certainly believe that that number of sales agents will go over 100 sales agents by the end of the year as we continue to grow geographically. So that's going to continue to drive adoption, new physicians, new hospital approvals, and again, greater expansion of our product being sold in the US. To the second question, relative to other partners or other sales channels, I believe we will be opportunistic to look at non-spine sales channels and those types of relationships, where it's not to our core competency. I think currently, we're gonna be focused on executing on the sales plan and driving our revenue via the spine sales force. Okay. You also mentioned in your, in your prepared remarks, this limited non-exclusive sales agency agreement with the top 3 spine player in selected geography. Yes ... geographies. I understand this is in the US, but could you please explain a little bit more about the scope of this agreement, and also the potential impact on sales and margins it could have? Certainly. We did. We've started a partnership and relationship that's very similar to the currently sales agent agreements, where we pay a commission based on revenue. This company has been very successful in this space, and they have access to a tier 1 sales force. When markets where we are mutually aligned, where they would like to represent our product, and we would like to have them represent our product, and it doesn't compete with other revenue we receive directly, we'll go ahead and grant them access to our product in that geography under exclusive geography rules. It is mutually, and we do we still control end dollar revenue, and we also control the contract with the hospital. That's very important to us. This is not a distributor who purchases product and resells it. We still maintain the margins from that product line. In the first half of the year, with the, the revenue to date was less than 15% of our total revenue, so it is growing and it is impactful, but it is the same type of contribution margin that we receive from other sales agencies. It's, it's in line with our corporate goals and our strategy. Okay, why don't you tell us the name of this company? It's, it's, it's a contractual relationship, and so it's a, it's a requirement. Okay, do I understand correctly that they sell the MagnetOs brand? Yes, it is, sold as MagnetOs. It is under the Kuros product brand. It is Kuros contracting with the hospital, so we just pay the commission to the third-party company. Okay. Given that it just started obviously sometimes in the last couple of months, and it already generated less than 15% of sales, is it fair to assume that this ratio will grow further in the future, and will become quite more substantial? I think if you look at the cadence and the pace of our growth of the non-partnership revenue and our direct revenue, if it were, I think we're they're both keeping up with each other. I think the percentage of 15% or 20% would be normal, but we're still seeing a, a large contribution outside of that relationship, and so we're being very selective in the marketplace as we partner with this company on it... Okay to make sure it's beneficial. Sure. Maybe a bit looking ahead, you mentioned again, I think you already did that in the past few years, this CHF 100 million sales targets in five years. Yes. I understand this will now be probably 2028. Can you reach this on your own? That's the first question, and also the second, is this expect to be more a linear kind of take-up, or will it be rather back-end loaded? No, I believe this will be linear. You know, certainly we plan on doing this with our, with our current strategy, our current team, and the current people at the table. We're not required to... I don't believe we need to partner with anyone else to, to achieve that revenue line. Okay, great. Maybe quickly on the production setup for MagnetOs, can you update, also how much product you can manufacture with your current setup and your capacity, or do you still need to grow there? We have a tremendous team, in Bilthoven, that is constantly working to maintain, you know, product and, from a production standpoint, we are actively engaged right now in looking at 2024 to 2025 production plans. We do not see the capacity being a limiting factor for us at this point in time. We are making the proper investments that we can scale. Again, having our own manufacturing, having us internally manufacturing, certainly is a benefit to us, not only just from a cost control, but also from a production control. We, we do an excellent job. Plus, the shelf life of our products has several years on it, so we, we have enough product in the field to continue to fuel the growth that we're seeing. Okay, great. Then maybe the last question, specifically on MagnetOs. Outside the US, your sales are still at a very low level. What is your strategy here, and, what are your financial targets in, in this region? Sure. To date, we've, we've gotten clearance in countries, and if we look at historically, it really is a recent-. ... you know, markets that we've been able to enter. We have not made the proper investments from a commercial standpoint, as of recently, we've added headcount directed solely at international revenue. In 2023, our goal is to reestablish our partnerships with our distributor agents there, add selective countries where we, we feel it's a, an appropriate partnership, you know, certainly like Brazil. In 2023, reestablish, re-educate, retrain, and in 2024, we anticipate seeing growth on a percentage basis similar to that of the U.S. Okay, great. This brings me now to Fibrin-PTH, an update on the clinical development. In July, you have finally completed the enrollment of all 50 patients in this Phase 2a study, and I think for the first 30 patients, you will communicate the initial 1-year data in early 2024. It means that you won't go for an interim data look at, for example, six months. Is that correct? Yes, that is correct indeed. We will, beginning of next year, we will have the one-year data of the randomized part. We will also have the safety six months data of the entire study, so that will also be included there, but that will be the first time of or the next time of reporting results. Okay. This will be the next time of kind of investor communication, but internally, when can we expect you to make a go, no-go decision? For the go, no-go decision, we will need the data of the entire trial, so all 50 patients. And that is, as mentioned before, expected in the third quarter of next year, because the, the one-year endpoint of the entire study, or the additional 20 patients, will be July 2024. Again, the go, no-go decision will be made afterwards. Yeah, then I guess this will also be the starting point probably to engage then with the FDA. What, what is what is kind of the, the, the best case timeline that you could start the Phase 3 study? Yeah. So we will already, after the randomized parts, have the first discussions with the FDA in a so-called Type C meeting, which will be somewhere in Q1, Q2. The Type C meeting, basically we will start discussing the setup of the Phase 3 trial. After the full readout, we will have an end of phase 2 discussion with the FDA, where we will conclude the design of the Phase 3 trial. The start of the Phase 3, so the start of enrollment of the Phase 3 trial will be the first half of 2025. Okay, I think, previously, you always said that you do not expect the FDA to require more phase 2 data, like a phase 2b, but you intend to go directly into Phase 3. Is this assessment still? Yes ...still valid? We don't have, we don't have any indications, for that. Correct. Yeah. Okay, you did not have any further interactions with the FDA? No. The first interaction, as said, will be a Type C meeting, in the second quarter next year. Okay. good. is it still fair to assume that we'll at least your, your, assumption at the moment, that you will have to run 2, Phase 3 studies, with a total of 500 patients? That is correct. The product is regulated as a drug, so it's a combinational product, a drug biologic. The drug is PTH, biologics is fibrin. That will be regulated therefore as an IND, and that means we will have to do two pivotal trials, and that is indeed 250 patients each, obviously, which will be discussed with the FDA in 2024. The assumption is also then to have, like, two-year data-. Yeah ... on these patients. Okay. This is unchanged. Then, if you do the Phase 3 trial yourselves, and you don't partner, just assuming that, would you also consider marketing the product by yourself? At the moment, that is our strategy. Our strategy is to do it ourselves, do the Phase 3 trial ourselves, and also the marketing ourselves. Obviously, we are open to any potential strategic collaborations, but we don't have any lined up at the moment. Okay. This brings me to, I think it's now a seamless transition to the strategy and the financial questions I have prepared. Maybe we first start with MagnetOs, which should become cash flow positive in the second half of the year. I think, Daniel, you, you mentioned, you have already achieved a positive EBITDA in the first half, I think a margin of 16%-17%. Part A of the question: What should we expect in the second half? What level of EBITDA margin you think is feasible? Then also part B, what profitability level, and here I'm also talking about the EBITDA margin, do you see for MagnetOs in the medium term, and maybe also in the long run? Yeah. I'd say, at H1, we were at roughly 16%, equating to CHF 2.2 million. You know, we see that definitely at least doubling for the second half. Therefore, you know, we will remain at, yeah, at the level where we will be in the range of 16%-17% for year-end. in terms of the long-term target, obviously, industry benchmark, for us also to continue to generate sufficient cash for the overall organization will be to drive that up to 20%. That's the current, midterm plan, to have EBITDA margin of roughly 20% in the next two to three years. Okay. Would you see further scope in the longer run, like after three, four years? Yeah, you know, I mean, obviously, as everybody is doing, we have a three to five-year plan. You know, let's say in the three to five -year model, yeah, we see about this 20+ range, so it might well be that we can push that further up. You know, currently, we feel comfortable to commit to 20% in the midterm. I said this turns into a positive operational cash flow. That's also important to mention. It's after investments into net working capital, before CapEx and any other financing measures from an external perspective. It really helps us to internally also cover a big fraction then of the Phase III Fibrin-PTH cost. These expectations for a positive operational cash flow is not only for H2 now, but I guess also then for next year and the year thereafter. Yeah, absolutely. Absolutely. I mean, I said we are now investing into additional sources. You know, one of the key topics is obviously net working capital management, given that, you know, cash flow management has always been at the forefront of our priority. Now, you know, with the scale we see now in the sales volume, it's important that we even further intensify these efforts. Yes, sure. Maybe on R&D, you already gave us some hints that this will move up. ... in H2. Can you maybe indicate a range? I mean, will it go to CHF 5 million? Will it be substantially more than that? No, it will. preparation cost? ... you know, will definitely more than double. It will be in the range of CHF 3 million-CHF 3.5 million, which includes, obviously, a combination of phase II and then, as a prep cost for, phase III. Okay, great. You said that you had CHF 17 million cash- ... at the end of June, and this gives you a cash run. I think you now say not at least into Q3, but you say beyond Q3, Q3- ... 2024. Yes. Maybe can you explain us a little bit what has changed and what, you know? Yeah you mean? Yes. I mean, on the slide where we present the H1 numbers, we still talk about into Q3 2024, because this was based on the actual sales numbers. We have now obviously done the financial modeling forecasting, as you know, state-of-the-art, six plus six, which means six months actual, six months forecast. Based on this latest forecast, we feel comfortable, with also less investments into net working capital, that this will extend our cash runway, I said, coming from a positive, operational cash inflows. We currently are evaluating that. It will certainly give us another quarter, but we, we believe that we can push it out to Q1 2025, which is also important, you know, from obviously from a from a going concern perspective, which giving us much more comfort, you know, in, in 2024 to decide on, on the next steps with regards to the financing strategy. Okay. This brings me just to the next question, which is about your, your funding gap, until you reach ... I think, break even, on a company basis, so including Fibrin-PTH. Maybe could you give us first a short overview of, what will be the total amount of Phase III cost you expect- ... to have, for, you know, to really, push through the development of Fibrin-PTH? Then secondly, how much will be the funding gap, you know? Yes on a net basis you see until you reach profitability? Yes. So, total cost, subcontractor costs, we estimate at roughly Swiss francs 55 million-60 million. Which, you know, doesn't include R&D and personnel cost, which, you know, are in the range of Swiss francs 2.2 million-2.25 million, on an annual basis. Overall, it's obviously a substantial amount. The financing gap has narrowed now, as we said, because we see now much more inflow coming from MagnetOs. We see in the midterm that we will turn cash flow positive, on a company-wide basis, as you say, and that's also in the midterm. Therefore, this gap has now narrowed to between Swiss francs 30 million and Swiss francs 40 million. In essence, that means we can cover at least more than a third of the total preparation of Phase 3 costs for Fibrin-PTH through internal generated cash flow. The CHF 30 million-CHF 40 million is basically then depending on the financing strategy and the financial instruments we select. I said the key target is to minimize dilution. We have a substantial part in the last steps with this non-dilutive financial instrument we talked about, which we're gonna obviously announce as soon as we can. The remainder is then a combination of either I said, monetizing assets, collaboration agreement, or then basically another equity measure. Target is clearly to minimize dilution to the extent possible. Probably just with regard to this non-dilutive instrument, I just wanted to mention that this is structured in a way that we have the highest flexibility. We will conclude this contract before the readout, but we will pull the first tranche within a timeframe which allows us to wait for the readout of the randomized part, which obviously then gives us great comfort and great flexibility. Okay, it means that you don't have to pay for this? It's a type of a credit or a loan. Yes if you don't go for the Phase 3, is that correct? Then you wouldn't draw it. Yeah. Yes, exactly. We wouldn't draw it. We would pay a certain fee, but, you know, flexibility has always its cost, so. It's not, it's not a high cost, so we, we have negotiated best possible terms. From that end, it will, will not have a big impact on, on the financial, costs. Maybe could you elaborate a little bit on the other funding alternatives you mentioned? I think the monetization of assets, does this relate to, to, to Checkmate, I guess? Yeah, that's obviously an option we are looking into. You know, it's too early to say. We first need to obviously, you know, get in contact with the different parties. I said, it also might be that we will enter into collaboration agreement. I think the strategic opportunities are quite open for that part, which, you know, is just the other part of the CHF 30 million-CHF 40 million. I said the substantial part is covered by the non-dilutive, and therefore, you know, given with this cash runway, we have now really the freedom to make, you know, the right decision in order to minimize that dilution. That's the key target here. Okay, what is your target in terms of a timeline? In terms of, I mean, I said for the non-dilutive part, within this calendar year. For the other part, yeah, somewhere in the range of Q1, Q2. Next year, okay. Okay, can you maybe prioritize a little bit what you would, you know, what you see as your most, most preferred solution, or could it also be a combination of a couple of different things? Well, I said, I mean, as, as we haven't spoken to the different parties, it's obviously a little bit, looking into a glass ball. Anyway, I, I said, I mean, our main target is certainly to minimize dilution. I mean, that's the key message, we want to give also today, if that's possible, then obviously the priority is monetizing assets or a collaboration agreement. As I said, I mean, this is something we need now to further investigate. A rights offering is certainly something which has the least priority for, from our end. Okay, when you say a collaboration agreement, I guess this, this would relate to Fibrin-PTH, and could maybe, you know, mean that this company or this partner would, would fund part or whole, or the whole, you know, investment you need? Yeah. I mean, yeah, that's in subject to negotiation. It relates to fibrin, yes. Okay. Maybe I can say, obviously, and we've mentioned that before as well, we're on the radar of. ... all the big companies that have an interest in fibrin in PTH. They always indicated, you know, we want to see the results of the phase II. If they're there and if they're positive, something we really think that we might be able to sign a collaboration agreement, whatever that looks like, that should also be able to provide some income in the company. Yeah, I guess we should assume this would happen after the full Phase 2A data is available. Could already happen after the randomized part of the-. Okay. Yeah, as you said, earliest in Q1 next year. Great. I think this, I'm now at the end of my prepared questions. I think I would now like to open up for further questions from the participants. If you want to ask a question, you can either raise your hand and ask directly, or Serge, who will... You know, maybe you have sent already some questions via the chat, then he can ask the questions. Yes, hello there. Go on, Serge. There are actually a few questions which came through the chat, let me try to unmute one of the participants. Eleanor, I try to unmute you? Can you hear me now? Yes. Yes. Good. Perfect. Yeah, I just wanted to go back on a few sort of details during the presentation. First of all, if I understand correctly, with your non-exclusive sales force, could you give us a little bit of color as to the typical number of different products or different brands that such a sales force would be presenting to a final customer? Do you have any way of charting whether MagnetOs is gaining in market share at that individual sort of sales agent level, so they're selling more of MagnetOs than sort of a traditional allograft, for example? Certainly. I'll, I'll go ahead and take that. Thank you for the question. I think that when we look at our sales force and our sales agencies, we try to select ones that do not have a directly competing product. They'll have products that are, market adjacent, but not directly competing. The reason for that is it's difficult for these, sales agents to build those relationships with physicians, to trust them and, and move to products that make sense. So, there would be limited number of directly competing products, if any, in the sales agent's bag. They would carry, on average, 4 to 5 other companies that are, whether it be the hardware portion of the case or other complementary, products for a spine fusion surgery or products that a spine surgeon would use. Directly competitive, very few, I would say carry something, market adjacent, many. That's great, thank you. Another question I would have is, you mentioned the fact that net working capital had got a little bit more important, for you, and I understand that was due to inventory build-up. I presume that was just to be sure that you had enough product for your ramp up. Were there any issues whereby, you were surprised that an order didn't come through or anything like that? No, not necessarily. I mean, it's, we just have a safety cushion, you know, in order to meet the demand from the customers. You know, we are currently exploring whether, you know, we can further optimize that, so far it went according to plan. We have, you know, traditional sales operations meeting where we have, on a monthly basis, demand forecast and, you know, the, the, the production team in Bilthoven is then producing according to plan. From that end, this is actually all going well. As you can imagine, you know, especially also on the AR, we need to focus especially on, on the terms and conditions with regards to payment terms and just manage especially the aging pockets. There is quite, you know, some potential there to, to further optimize that, and that, that will give us additional cash runway, just to, to, to further optimize that portion. In terms of the inventory, this is according to plan, and we are adapting the product mix to, you know, the, the actual demand. Whenever we see a change in the product mix, demand pattern, then we're obviously adapting that. Is there any seasonality in that kind of build-up? Well, I said, I mean, the, the seasonality is this 40-60 we talked about. This is mainly- Yeah ... a volume seasonality. From an average sales price and mix perspective, currently, there's not that much seasonality. Obviously, we see that Easypack and Putty are the top sellers. You know, we see tremendous growth now also with Flex Matrix, obviously on a lower level. Overall, it's going according to plan. Good. Then just the last question from me, if I may. You were talking about concentrating on improving reimbursement pathways, and I was wondering if you could give us a little bit more color. You're not dealing in a segment of the market where payers are particularly rapid to adopt new technologies and reimburse generously. I was just wondering whether there were any particular differences per geography and also potentially per type of payer. Certainly. Those comments were directed predominantly at the rest of the world marketplace outside the U.S. Inside the U.S., you know, our product is covered under the codes that for spinal fusion, which are cleared under, you know, different DRGs and payers and, and the like. Outside of that, in other countries, it's a, it's a market-by-market condition, depending upon the reimbursement rules. One example would be, you know, if we look at, you know, take Brazil, a marketplace we just entered up, we'll look to get registration and reimbursement work through over the next 12 months, and work with that distributor to engage. We've, we've initiated efforts in marketplaces like France, where we do sell product in the country of France for a non-French company that is somewhat unique. We, we do believe we can actually grow that even more so with some of the investment initiatives or investments we are making in the reimbursement pathway. It's really getting local knowledge, working with great partners from a distribution standpoint, who understand the local reimbursement landscape, to make sure we're putting ourselves in the, in the best pathway to succeed. Would I be correct in understanding that if you get a reimbursement agreement in France, that would open to other EU countries? It's actually different. France is separate. We currently sell in, certainly in the UK, we sell in France, Spain, Italy, Portugal. Australia is a strong partner of ours. Certain marketplaces, like Germany, we don't sell because of their reimbursement pathway and how they're structured. We have to look at each of these markets individually to make sure, again, as we're early days with the international revenue, we have to be thoughtful for the resources that we deploy to ensure that it's gonna have the maximum benefit to the company. We're being selective in those marketplaces. France is independent. Their reimbursement pathway is different than, say, in Portugal. Super. Thank you very much. Okay. Thank you, Elinor. There is another question coming through the chat: In terms of spine fusion, what are the main therapeutic differences between MagnetOs and Fibrin-PTH? How would you make sure they won't jeopardize the sales of each other? Yes, I, I can take that. MagnetOs is indicated for posterolateral spine fusion, so it's at the sides of or the gutters of the spine. Whereas Fibrin-PTH is indicated for use in cages that are placed in between the vertebral bodies. They're used in the spine, but in different areas. To give you an example, our current phase 2 trials is designed in such a way that the Fibrin-PTH is used in a cage in between the spinal bodies, and as a standard of care, MagnetOs is used in the posterolateral space. Most of the time, surgeons do a so-called 360-degree fusion, so they do an interbody fusion as well as a posterior or posterolateral spine fusion. This means that these two products are mainly not cannibalizing upon each other. Thank you. There's one more question. On your MagnetOs technology, are there still gaps in the portfolio you want to address in the future, or is there potential to broaden the indications for MagnetOs? So- I'll take that. You can go for it. I think from the product portfolio we just released, you know, the one section of the product with Flex Matrix, and that was earlier this year. We're seeing a build-up of that, and adding that to our portfolio certainly has been helping to drive some of the growth. We continue to be our R&D team in Bilthoven, again, very strong group of folks that are constantly looking at how to provide differentiated products utilizing the foundation technology. We do have items in development. That being said, you know, the, the move to get more indications with our existing technology is something we're always pushing the envelope for, and we think that if we're able to do, to, to do that, it increases our capability to drive revenue through increased indications, and also better contracting support, in the US with hospital systems. It is, certainly, on the R&D's team schedule to get those things completed. And we're active in both of those aspects. Okay. Are there any other questions? If so, please raise your hand. Otherwise, I hand back to Laura. Well, I think, we are now, right, through with all the questions also from my side. With that, I would like to thank Joost, Chris, and Daniel, and hand over maybe to Joost for a few concluding remarks. Sorry, I was on mute. Thanks, Laura. Thank you, everybody, for participating in this, in this webcast. If you have any questions, don't hesitate to reach out to either of the, the Kuros team. Our contact details are on our website, we look forward, as mentioned, to the coming four to six months, because there will be several important value reflection points, I hope to speak to you at that moment. Thank you very much. Goodbye, everyone.