The Devyser Diagnostics Q1 Report 2025 presentation. During the Q&A session, participants are able to ask questions by dialing #Key5 on their telephone keypad. Now, I will hand the conference over to the speakers Interim CEO Fredrik Dahl, CFO Sabina Berlin, and CCO Theis Kipling. Please go ahead. Good day and welcome to the Devyser Q1 2025 earnings call. I'm Fredrik Dahl, the Acting CEO of Devyser, and would like to thank you everyone for joining our call today. On the call today, we have, in addition to myself, also our CFO Sabina Berlin and our Chief Commercial Officer Theis Kipling. I will start with a short summary of our quarterly results and then recap our updated strategy and present some highlights from the team before handing over to Sabina for a more detailed review of our financial results in Q1 2025, and then to Theis for an update on our commercial activities. We had another solid quarter based on revenue, the second-strongest quarter in the history of the company. The revenue was SEK 55 million, representing a growth of 8% compared to Q1 last year. Gross margins were 83% and EBIT SEK -21 million, including SEK 8 million in one-offs related to reorg and another SEK 6 million in FX headwinds. Our cash position was SEK 114 million. As mentioned on the previous call, we have made some updates on our strategy that we now have started to execute on. The overall goal for us in the coming year is to make Devyser a more efficient organization, and that goal starts with a clear and more focused strategy. As mentioned, we propose focusing on two customer segments: the Clinical Genetic Labs and the transplantation laboratories. We strongly believe there are significantly more unmet diagnostic needs that we can address here, together with our customers and scientific collaborators. We are now in the process of updating our product roadmap by reaching out to our top customers and asking them what they need help with. This voice-of-customer exercise will guide us to better prioritize which products we should develop in the coming years. Transplantation diagnostics has been subjected to a paradigm shift with the introduction of cell-free DNA as a sensitive diagnostic marker to measure transplant reaction. We're trying to transform how this diagnostic is carried out by bringing the test closer to the patient. Instead of shipping samples out to service labs with long turnaround time and high costs, we propose to provide products directly to the transplantation labs where patients meet the medical and scientific expertise. This results in increased turnaround time, better accessibility to patients, lower prices, and without compromising on performance. During the quarter, we have identified a number of customers in the U.S. that are ready to adopt our cfDNA product today through self-validation, already before an FDA approval is in place. In addition to a good business opportunity, it confirms our strategy on decentralizing the test, and a dialogue is ongoing with many of these large transplantation labs, and their overall opportunity for Devyser remains very promising. As part of the transplantation strategy, we have initiated an FDA project, as previously communicated. To put some more color into the process, we have now started to collect samples and qualified partnering transplant centers. The project's scope is quite straightforward, including just a handful of centers with a few hundred samples needed to carry out the required reproducibility and accuracy studies. A timeline will be communicated later this year. A few highlights. I would like to highlight a few activities from the quarter, starting with R&D and product updates. One of the most exciting meetings we had this past quarter was with a collaborator in Texas that carries out about 1,500 transplantations per year. They are reluctant to send out samples to service labs and have now started to work on evaluating our technology in-house for cell certification. This is not only a great commercial opportunity, but more importantly, it confirms our strategy regarding decentralization of transplantation diagnostics. We're now in the process of initiating more of these labs in the U.S. Continuing with transplantation, we have developed a product to address an unmet and very important clinical need in patients with malignant disease after stem cell transplantation. The product is called HLA Loss and will be launched before summer and represents a unique and premium product in the segment. This is something we are very excited about. Another upcoming launch is our genomic blood group typing that represents a tool for typing blood donors and has the potential to transform the field of transfusion medicine. We expect to launch this product during the summer and release more information on that. Finally, we're just weeks away from submitting our reimbursement application to MolDX for our post-transplantation test as a service called Transplant Trace cfDNA product. We expect confirmation after summer and are in parallel building up our commercial channel with some of the largest transplantation institutions and companies. I would like to add a few more highlights from the team that deserves mentioning. As previously announced in late 2024, we achieved IVDR Class D approval from our external regulatory assessment on our Devyser RHD product. We have now finalized our internal quality process that enabled us to start shipping the product. This is the highest risk classification under EU regulation. Getting it over the line, so to speak, speaks to the strength of both our technical and regulatory teams. We have now demonstrated that we can deliver Class D products end-to-end, from development to batch release and shipping directly to customers. Because we built a scalable and regulatory and quality framework, we are well positioned to support the development of any IVD product, regardless of risk class, as we continue to grow our company and portfolio forward. Moving on to production, there are still many low-hanging fruits to get our manufacturing more streamlined and efficient. We have initiated a number of value-generating projects, such as additional introduction of liquid handling automation and projects to extend the shelf life of our products. Therefore, we are confident that there is still plenty of opportunities to increase gross margins even further from where we are today. Finally, we have been able to execute the majority of initiated organizational changes in Q1 by increasing focus and efficiency. These changes have been done without compromising top-line growth nor delaying any development projects. This initiative is key for the company to reach our financial targets of 20% EBIT by 2026. With that, I would like to hand over to Sabina to share more details on our financial results for Q1 2025. Thank you, Fredrik. Let me give you a summary of the financials for the quarter. Revenue for the period January to March came in at SEK 54.8 million compared to SEK 50.7 million in the same quarter last year and SEK 64.2 million in Q4 of last year. Growth of 7.9% in the quarter is lower than what we saw in Q4, but as stated many times, there will always be fluctuations in individual quarters. We continue to see the same strong trajectory as we have in historical years. Theis will soon share some additional information about the performance of our different markets during the past few months. Despite the lower-than-average growth between two quarters, this was still the second-largest quarter revenue-wise in the company's history, as Fredrik stated early on in the call. Our EMEA region remains our biggest market, but grew less than usual this quarter, but with strong underlying growth trend. USA has taken some market share, and Asia-Pacific continues to show strong growth, although still from small numbers. It should be noted in this table that Thermo Fisher sales is split between EMEA and U.S. as we ship to both U.S. and European thermal warehouses. Distributor sales this quarter is a mix of a few smaller thermal orders and a healthy sales funnel from our smaller distributors globally. Our distributor sales business is well managed and steadily growing. Our direct markets, as previously mentioned, showed a more soft quarter overall, with some markets performing very well and some slightly below average, mainly due to phasing over quarters, which Theis also will cover shortly. Gross margin came in at 83.4% during the quarter after a soft 2024 and shows that we are back on track and have started gaining momentum from the expanded office facility with the new manufacturing section, a momentum that we expect to continue. EBIT during the quarter was SEK -20.5 million. During the period of January to March, several additional savings initiatives were initiated to right-size the cost base, and the P&L includes about SEK 8 million in one of the items from those initiatives. Some of these initiatives carry over into the beginning of Q2 before we see the updated run rate going forward. The quarter was also heavily impacted by an unusually strong Swedish krona, and EBIT carries about SEK 6 million in negative FX impact from the balance sheet alone. Comparing EBIT with that of Q1 last year, adjusted with the impact from one-offs on FX, the main operations of the company show an improvement over last year. We closed the quarter with SEK 114 million in cash, and I do feel comfortable that our cash flow will turn over the foreseeable period as our focus on profitability continues. With that, I hand over to Theis. Thank you, Sabina. Good morning from Boston here in the U.S., where I'm attending the annual conference for Solid Organs, focusing on heart and lung together with Thermo Fisher. What a great week in Boston this already is, I can tell you. Q1 of 2025 was, as mentioned, our second-best revenue quarter in the history of the company. Despite the expected softness in revenues from Thermo Fisher, we advanced our business on many fronts, launched our new strategy, optimized our cost structure, and most importantly, did we continue to onboard more new customers, which I will update you on here in the coming slides. Moving up and updating you on Thermo Fisher, Q1 was decent, even despite the very strong Q4 of last year, including the stock of effects mentioned for Thermo Fisher on their side. We continue to win over large new accounts, as Fredrik also mentioned in his slides earlier, and generally, we see Thermo Fisher drive the market expansion in a very strong manner across both Europe and North America, while gradually establishing the business outside these territories. I have had many potential customers here at this conference outside Europe and North America coming to us and asking about how can they get on and test cfDNA. It is a very promising outlook. The FDA program continues to follow plan, and we are engaging with several of the clinical sites within the U.S. to help us along with the studies needed for the FDA application. As communicated, this is basically only about replicating data that we have from Europe already. We know that the product works well, and hence, this is not a question of if, but it's only a matter of when the FDA approval will come. A general update on North America, as Fredrik mentioned, within our CLIA lab, we're soon planning on submitting our reimbursement application to MolDX related to our Transplant Trace cfDNA test for solid organs. Reimbursement is expected during the second half of 2025 and is an important milestone that will be instrumental in the current conversations that we are having with potential partners within the U.S. around commercializing the services of solid organs. We have also already submitted for reimbursement for our ISD service in our Atlanta-based CLIA lab and await confirmation during Q3. The new cited contracts are being delivered on, and there is a lot of activity every week, which we anticipate will only ramp up continuously during the month ahead of us. RHD in Canada is starting to generate revenues, with especially Canadian Blood Services starting testing in larger volumes, while Héma-Québec is expecting to reach this a little later on. Within the U.S., we continue our work with RHD across different channels, and I remain confident that we're still only at the very onset of our RHD success story here in the States. During Q1, we did a U.S.-focused webinar on RHD together with the prestigious CAP Today, featuring 2K wells from Canadian Blood Services and Héma-Québec in Canada, which generated a lot of interest. During this year, we will announce more about whom we will be partnering with to have RHD testing in the U.S. to go before the prophylactic treatment, as the current standard is. Lastly, we're now starting to see our first customers using our test for cystic fibrosis in clinical routine testing, which is also very promising. Generally, our growth in the U.S. will come from across our product technology areas, both PCR, next-generation sequencing, fragment analysis, and will be accelerated by our CLIA lab. Moving on to Europe, I'm pleased to see that across our markets in Spain, France, DACH, and the U.K., we actually had growth of around 50% versus Q1 of 2024. This is as we have planned it, and hence, I expect to see a continued strong growth momentum in these markets also going forward. In markets such as Nordics, Italy, and Benelux, we were impacted by some large customers placing their orders in late Q4 of last year, which had an impact and made Q1 of this year softer, as Sabina has mentioned. The underlying growth and the outlook, however, looks strong also in these markets. As you may have seen, we announced another very strong tender win in Italy just last week, with an incremental growth of 10% over the previous tender. Generally, across Europe in Q1, we had 10% more buying customers than the same period last year, and at average selling prices, excluding transplantation, being 13% above last year as well. Devyser is leading across Europe when it comes to IVDR-certifying products, which is a quality reassurance to our customers that we are the safe choice when considering new products to their labs. The new IVDR regulation comes into full effect in just a couple of years now, and hence, Devyser is in a very strong position to leverage the regulatory leadership that we already have. Q1 was indeed a busy quarter where we especially focused on the launch of the new strategy. That was a key milestone. We are already for many labs a preferred one-stop shop, and I'm confident that this is a position we can claim across all our direct markets over time. We are now gearing up to launch several new products and software solutions alongside AI collaborations during the remainder of the year, which will further support our growth. For example, when looking at our four most recent product launches, they actually accounted for approximately 18% of total revenues in the past year. With that, I pass the word back to you, Fredrik. Thank you, Theis and Sabina. The theme for 2025 is to leverage our recent investments, focus the organization, and turn the company around to profitability towards our financial targets. With all the exciting product launches, internal activities, and commercial focus, I'm confident we will turn the company around and achieve these goals as we have set out for 2026. With a more focused and efficient organization, we are positioning Devyser to better serve our customers and patients, as well as our employees and shareholders. With that, I would like to open up for questions. 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 Filip Wiberg from Pareto Securities. Please go ahead. Hi. We have a couple of questions here. Perhaps I'll start with just a question about the distributor sales here. Thermo Fisher orders have been in focus now for the past quarters. You know, it's almost half now since Q4, and that's nothing unexpected. I was just wondering if you could say anything more about what you're expecting now going forward. As you said, there were some small orders in this quarter, but are you expecting any big ones now going forward, like we saw in Q4, for instance? Yeah, hi, Filip. As we usually answer, we do not guide on any specific customers, and that is true for Thermo as well. There are orders coming in, as mentioned, both in Q1, and it continues in Q2, but no further guidance. Okay. All right. Perhaps on the growth rate here now for this year. It started a bit slow and also a bit expected, but you also have a financial target to reach 30% organic growth per year. How confident would you say that you will reach that during 2025? We're very confident that we're going to meet all the goals and milestones that we have set out. As Sabina mentioned, there are fluctuations from quarter to quarter, but for the full year, there is no reason for us to change any guidance. Okay. You and I think Theis also talked a bit about launching new tests and additional customers coming up, and you have reimbursement. It sounds like it's going to be pretty heavily tilted towards the second half. Is that a correct assumption then? I think that's fair to say. I mean, but there's definitely still activities. We're seeing, as Theis mentioned also, that we definitely see more activity with Thermo Fisher, and I think in a very good way. But it's true. It's a fair assumption. Okay, thanks. Perhaps just the last one from me then here. All of these restructuring costs, this one-off effect, you said that there are some that will now go into Q2 as well. Is it possible to give you any sort of quantification around how much that is in relation to what we now saw in Q1? Sabina, maybe you want to take that one. We will not guide into the details, but I can say that it's only the tail of the restructuring that will impact Q2, and the main changes were carried in Q1. All right. Okay. Yeah, thanks for that. That's all from me. Question comes from Ulrik Trattner from Carnegie. Please go ahead. Hi, it's Clara from Carnegie. I'm here on behalf of Ulrik. You are mentioning your restructuring. Can you clarify a bit more what this entails? Without going into any specifics, as communicated on the last earnings call and the recap today, we have updated the strategy to be focusing on these two customer segments, the clinical genetics labs and the transplantation. What we have done is to just make a few adjustments to the organization that better reflects this updated strategy. Okay, thank you. I have one more question. You mentioned that Europe is going quite well, if I understood it right. Is there a trend shift that we see in the direct sales in Europe? Maybe Theis, you want to take that one? Yes, I can do that. No, no, I mean, no trend shift in any way. I mean, the underlying demand is solid, right? We saw a little bit of a phasing here with Italy, especially being slower in Q1, and other markets really over-delivering, honestly. No trend. Everything is moving. As I said, we are increasing the number of buying customers. We're increasing the prices, not only for Europe, but across the board. It is a very healthy state. I could say something that. Okay, perfect. That we are particularly happy with, that some of the regions outside Italy and Europe are picking up pace. You know, everyone who's working with diagnostics, you know it takes time. When you have tractions in diagnostic, it tends to stick as a very sticky business. I think that's what we're capitalizing on right now in regions outside Italy. It's very, very exciting, actually. Thank you very much for those answers. If it's okay, I have one last question. What do you think is expected in terms of Thermo Fisher, the de-stocking effects in the second quarter? No, I think I will refer to the same answer as I did previously, that we're not guiding any specifics about the Thermo orders. The orders are coming in, both here in Q1 and Q2, but no further guidance. Okay, thank you very much. The next question comes from Oscar Bergman from Redeye. Please go ahead. Hello, everyone. I've got a few questions. The first one is if you can elaborate on the phase development and its drivers in Italy specifically, and just some comments on how much more you can actually get out of this market. Theis, do you want to take that one? Yeah, I mean, a good question, Oscar. I think take the most recent tender as a good example. Now we're taking out at least 10% incremental growth on that tender. Italy, in historic terms, has been growing modest, double-digit, or high single. I do not see anything that will change that in any way. It is a very robust business. We are, in many of the areas, clearly the market leader, and we are certainly the one-stop shop. This is the market where we have most traction with this strategy of becoming a one-stop shop. That will accumulate. Italy will continue. Okay, all right. I guess sort of a follow-up question on that then. As we said, we see tenders have increases from previous agreements. I was wondering if you can explain what drives these increases. Is it mainly pricing? Is it new tests or more of the same tests? I mean, is it driven by crossing upselling or just more of the same? Yeah, Theis, you can. Yeah, it's a combination. Whenever there's a reopening of a new tender, that's our opportunity to also impose more of the increased prices beyond what has been otherwise stated in the contract of the tender. There's a value increase in terms of how we manage and work with pricing. Beyond that, we are successfully adding more and more products into the same tenders, right? Doing demos, presenting new opportunities, and by that, we're enlarging the tender scope to include more of Devyser products. Maybe just a short comment on pricing. Sorry, Oscar. Maybe just a short follow-up on pricing is what we have noticed is that we're not losing any customers. Very, very rarely. I would say it's fair to say that there is room for looking at the prices on our products to see sort of what we can do there. Clearly, we're not at the point where the customer feels that they need to look at alternatives. Okay. I suspect you can do the price increases once you get new tenders, or can you go and sort of make changes in existing tenders for price increases? Right. Yeah. Yeah. Oscar, usually tenders, any contract is restricted or gated. There is only a certain increase that you are allowed to, right? If you really want to have bigger changes, it has to be when you roll that tender over to a new tender. That is the usual pattern. All right. I think you guys, I do not know when you said this. I think maybe it was in November sometime, but there was a presentation where you said that you have high expectations on the U.S. market, and it is going to be a bigger market than Italy even. I concur with that assessment. What is interesting when you make that sort of statement is a sort of timeline for it. I was just wondering if you can give some sort of timeline of when the U.S. could actually be a bigger market than Italy. Theis, I think it's a question for you. Yeah, I think I'll stay with Fredrik's comments before, right? We don't do and give this type of guidance, but it's on good track, I can tell you. Okay. I can always try to get some sort of answer. Just have a few more questions before I head back into the queue. It's very interesting to see the geographical sales development. Unfortunately, we sort of have to wait for the annual reports to see this in any higher detail. Is this something that you are looking into providing on a quarterly basis as well? Sabina? The annual report tends to provide more details in general. And so far, we've been going with our biggest regions in the quarterly reports. We'll take your feedback with us, and we'll see when we provide more details also on a quarterly basis. Okay. We know in Q4, there was also some shimmer in some customers who were transitioned, I guess you can say, to Thermo Fisher. Was this also the case in Q1, or was all of that transition finalized in Q4? Yeah. Sabina and Theis, maybe she can. Yeah, I can start. Sabina, it was transitioned during last year. That is to be considered also in the comparison, right, to last year. Some of it has now shifted to distributor sales in our Q1 report. All right. And then the conversion of distributor markets to direct markets, can you just elaborate on how this has progressed in Q1 and how you expect this to be developing for the rest of 2025? Theis, you can take that one. Yeah. I mean, we have markets in scope that could be converted, but right now, we're not making any active changes. We're doubling down on the markets we have already made that conversion into direct and have put our own team on the ground. We want to see that we apply the necessary focus to truly deliver and double down before we add more markets. There is a nice tail of additional markets where we certainly could and we will in time convert, but not in the soon future in any way. Okay. Would you say with the transplantation tests and an increasing focus on that part of your business that the conversion of distributor markets to direct markets in Europe is something that would be less prioritized going forward? Yeah, Theis, please continue. No, I would answer no. I mean, we focus on all the strategic imperatives that we have. Direct converting markets is a growth enabler also for us, right? We want to make sure that we have the right onset for doing it. We have just taken some right-sizing in the organization. We are really focusing on doubling down on growth, and that is the focus before we start expanding further. Okay. All right. I promise this is my last question. Is there any reason to sort of be prepared for any risk of a negative impact on sales and increasing costs in the short term due to this updated strategy? Anything that can halt selling activities and marketing activities and so on? I'm not sure I'm answering the question, but we are looking at our business today with the adjustments we have made. We feel we're building a very solid foundation for further growth. I think we have done the great majority of the changes that we have planned when we started this year. We have started to execute as a company much more efficiently. I'm very confident that this is a trend that will even be stronger going forward. I'm not sure I answered the question correctly, but. I think it is. Just to be sure, I think Filip asked previously in this call about your expectations of your sales target. It seems like you're very confident that you will be able to deliver on the 30% organic growth target for 2025 also. Yeah. I mean, if you look at the history of the company, you have seen fluctuations during the year, right? We are seeing a good solid funnel going forward. We have very exciting new releases of new products. We have the MolDX application that's going to be submitted within weeks that we expect to go live after the summer. We have so many exciting opportunities here in addition to Thermo picking up speed that we think we're in a very good shape. Okay. I know that this target was set before the Thermo Fisher deal. If the Thermo Fisher deal will not be in place, would you be as confident in this sales target as you seem to be today? If the Thermo was not in place, is that the question? Yeah. Yeah, because the sales target was put before the Thermo Fisher deal was a fact. I think if you're looking at how to commercialize transplantation products, you can either do that direct or by partners. We made a strategic decision that at the time, we believed that partnering with Thermo would sort of make most sense and has the lowest risk to get to the targets. Okay. Thank you. I'm very happy with those answers. If you wish to ask a question, please dial pound key five on your telephone keypad. Okay. If there are no more questions. No more questions at this time. I hand the conference back to the speakers for any closing comments. All right. Okay. No more questions. Again, thank you, everyone, for joining our call today. We certainly feel a very good momentum and energy in the company today and look forward to continue to deliver on all our initiatives that we recently initiated. Thank you, everyone.