Welcome to the Implantica Q4 2024 report presentation. For the first part of the presentation, the participants will be in listen-only mode. Welcome to the Implantica Q4 2024 report presentation. For the first part of the presentation, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to the speakers, CEO Peter Forsell and CFO Andreas Öhrnberg. Please go ahead. Thank you. This is Peter Forsell here, and we should talk about Q4 2024 investor presentation for Implantica, and I always have a slide about my background that I have actually done a successful journey with implants before and invested lots of money in this company. Implantica has something really fantastic in its pipeline, and that is that we have developed an e-health platform. This platform then will allow to treat patients on distance, and you can control what happens inside the body because the focus of this system is from inside the body. You can wireless recharge implants and connect the stimulation systems and so on. To be able to treat people on distance means they don't need to go to the hospital as much, and it will be much more convenient for the patients. We also have a huge patent portfolio because we have gone through the whole body to see how could we now improve healthcare if we have this platform technology, both the wireless end-user platform and the e-health platform. We actually have spent three years going through all these patents and evaluating them and selected not less than 40 products from 300 inventions. This will be able to, you know, revolutionize healthcare basically. You will be able to treat better, and you treat more efficiently. You will save costs for society. I have a few examples only quickly here. One is people who have, for some reason, taken away the large intestine, for example, and they have a plastic bag to collect the fecal matter. They don't need that anymore because we can now make storage and open-close-emptying function, everything inside the body, and they just need a remote control instead, and this is around one million people nearly every year who is operated with this. We also have people who can't urinate for some reason, maybe they are in a traffic accident or spinal cord injury or multiple sclerosis disease or something, and in this case, they put in a catheter in themselves every time they should urinate. Five times per day, at least, they need to put in a catheter in their own bladder, and that's quite a burdensome life, and instead, with our system, we can empty the bladder with a remote control without using catheters. Just as examples, and Implantica actually has so many products and such a big IP portfolio that we believe that we should become the world leader in smart medical implants. So we are not shy in our vision. And the main product that we, of course, are focusing on right now is RefluxStop, especially since we are coming closer and closer to U.S. launch. And before I start with the business update, just a quick recap of how RefluxStop works. So existing surgical treatment today has all been focusing on that you need to compress your food passageway. You need to try to close by applying pressure. That, of course, logically means you get swallowing difficulties, you can't belch and vomit, you get so-called gas bloating, you get distended swelling in your abdomen because you can press the gas down with your saliva and food, but it doesn't come up anymore. So it's not so well-liked surgeries. Implantica has then a completely new treatment principle, so you don't affect the food passageway at all. The only thing that was needed was to reposition and restructure the normal anatomy in this region, and suddenly the body itself treats acid reflux. By ensuring that this sphincter, the lower esophagus sphincter between the stomach and esophagus, that that is clearly on distance, far away from the opening in the diaphragm muscle, you know, who divides the chest from abdomen, people get treated by themselves. The reason is that when you breathe, you get pressure variation. You can imagine in the chest, the breathing, the pressure comes and goes, comes and goes, and this is leaking out through this opening here in the diaphragm called the hiatus, and that is what is affecting the muscle and creating the reflux. So very simple, very genius solution, and it also works exactly as intended. So here you see a little device to introduce it through keyhole surgery. You see the device in the end and the little deployment tool that is associated with it. And why is now acid reflux so important? Yeah, the reason is it's one billion people have acid reflux. That's one billion. It's an enormous treatment field. It's larger than obesity even. And it's dangerous to have this acid coming up in your lower esophagus over and over again because that's how you get cancer. To terrorize your tissue over and over again, you know, the acid is burning, causing small mini ulcers, red, irritated, and that's how you get cancer. It's 48,000 people die from this kind of type of cancer in the world every year today. It's an enormous amount of lost lives, and most of them are due to this disease. Let's come to the business update. Sorry, we have really good news for today, actually. You know, we have filed for FDA approval to sell in the United States in three modules. We have now got the information that module one, that's closed from FDA's side, so that's good. We also have received feedback from module two. Module one is sort of closed, although they should come and do a formal inspection of the production sites. Module two, we got feedback who was very, very favorable. The people we have here who have experience of this kind of responses from FDA, they say this is absolutely unique, very, very light and pleasant response from FDA. We believe FDA really wants this product on the market. This is really, really good because this module two is the key module. It's the, you know, 10 times more important than any other module because this is the clinical trial. This is the basis for everything that you have a successful clinical trial that FDA accepts. We nearly opened a champagne here, actually. It's absolutely, this is a fantastic milestone, actually. This is something really incredible because that increased the likelihood that we now will get the FDA approval substantially. We are now preparing the response. Because these remarks and questions for FDA are so light, we talk about a few weeks to prepare this answer. We are also completing the module three, which is the last module to file, and that will also take a few weeks. We could, weeks to a few months, that's sort of the absolute maximum this could take to now file. It hopefully will be in the very near term now we can file the last module. That's really, really great news. Why is now FDA so happy with our clinical module? Yeah, the answer is that we had fantastic results. You have probably heard this before, but I like to talk about this because this is so fantastic. At five years, that's five years after treatment, one single patient still took medication. This is an absolutely incredible result. It's unheard of, such results. This is giving a little bit of indication why likely FDA wants this product to the market as soon as possible because this means something for the patients. You can see here a comparison at five years. It has recently been published a huge literature review of our main competitor, so to say, Nissen fundoplication, who is regarded as the standard of care in all the guidelines. There it has been huge compiling of all the different articles and all the randomized articles have been used. When you compare to that platform of results for Nissen, you can see here the green lower staples here, they are sort of RefluxStop, and it's basically like night and day. It's absolutely outstanding results. The likelihood that RefluxStop will conquer the world and become the new standard of care is quite high. That's very, very promising, of course. We are already starting the U.S. market entry preparation, of course. It's many, many things, you know, to think about here with the business development. We need to do the right marketing, and we need to build up some kind of customer service organization. It's many, many, many things that need to be done to prepare for a U.S. launch, and that's what we are doing right now. As we have done already a usability trial in the U.S., maybe you're aware of that we had 20 surgeons who were trained on cadavers and operating two RefluxStop cases each. Yeah, it's. We We are a good way here. We have already these centers that we trained on cadavers. They all want to start to do this procedure. And then we have 10-20 more who have told us afterwards during the congresses and meetings and so on that they want to start. So we have a fantastic start here in the U.S. to make a really good launch. And you can see a bit how it went for our main device competitor. That's, as you know, the treatment is not so optimal because it compressed the food passageway, but they still managed to get 400 hospitals in the U.S. and more than 50,000 implants. And now it has sort of declined because now they see new, better treatments. But still, it tells you a little bit the potential of the U.S. market. And what we are focusing on right now is three main topics. First of all, we need now to show the cost-benefit analysis. Those who have followed us, you know, that we have made very advanced cost-benefit analysis in many countries today. We've gone all over the world, so to say, to try to analyze the cost-benefit of RefluxStop. And now we are building a new model for the U.S. market, and this is very important for the payers. So this is in construction, an article about this. Also, of course, we need to find out what are the payers, so those insurance companies and so on, who pay for the procedure, what is their requirement. So this is ongoing. We have started with the 20 key payers and also selection of hospitals, you know, which hospital should we now select in the initial start here. And this cost-benefit analysis, you know, we have the leading surgeon in the U.S., basically Professor John Lipham. He is involved in this, and he will be the master for this article. So it will be a very, very important article. And that's very far away in this process as well. Also, the payers, you know, it's actually in the U.S., you have more than 1,000 payers, but there are maybe 20 who are the key, maybe 10 who are the key payers who pay for the surgeries and so on. And normally in the U.S., you can get them to accept that instead of doing the LINX to RefluxStop, that's okay, and you get the same pay. That's why the U.S. market is much easier to target than the European market. In Europe, it's like black and white. Do you get paid or not? Could you do surgeries or not? Here it's more a floating process, which I will show you. So we are already starting to talk to the hospitals. We, of course, are not allowed to make any agreement with the hospitals until we have the approval, but we can prepare all the ground because this is an admin process that normally could take quite some time. It could take half a year to get the hospital fully onboarded and trained and everything. So by starting this process already now, we hope we should get a quicker, you know, launch when we actually get there. And here is just an example who shows. This is a company called Axonics. There are actually many, many examples on the U.S. market. What happens when you get a good, well-working medical device on the market? Here you can see they get FDA approval 2018, and here you can see how the revenue expands. It's 2023, I think they had a value of $3.6 billion, something like that. There are other examples with even higher valuations and faster and sometimes lower. It's just to give you a feeling that the U.S. market is clearly superior when it comes to developing growth. If we talk about our three-pillar strategy, once again, you know, with the superior cost effectiveness, superior clinical data, and market expansion, I can show you a bit what we have done here during 2024 because we are now at the fourth quarter. It could be nice to summarize. You can see here that we have made 36 conference abstracts to leading conferences. We have 28 presentations, either oral or poster presentations in leading conferences. We have 22 submitted manuscripts of articles where 17 have been published. We have 11 additional manuscripts already because it's more and more data, you know, more and more surgeons to RefluxStop and more and more data pops up. So already this year we have 13 abstracts and so on, several presentations. So it's a really hard work to build the platform from where you can make a very fast expansion of this business. So here is one. It was Professor Lipham I talked about before. He held a nice speech about RefluxStop at this big, huge conference they had in Ohio here. Hawaii, yeah, Hawaii. Yeah, sorry. So we also have our clinical trials, you know, to really be able to really do this in a quicker way. We have realized we need to have randomized trials. So we have two randomized trials, and they are more or less ready to start now. We have seven ethics approvals in the different countries, protocols. Sorry, it's seven submissions and four approvals. Yeah. We have 12 sites we are working with. We will hopefully even start end of this quarter and maybe more realistic in the beginning of next quarter with these trials. That, of course, will also be a milestone for us. We also have lots of real-world data popping up, and actually the real-world data is more or less as fantastic as our clinical trial. It's not that our clinical trials stand out and the real-world data is poor. No, it's fantastic. Here you see one study from Germany. It's a totally independent regional hospital, not even a university. They operated 79 patients in Germany. Their results are even better than us. So they had also here PPI use, you know, it was 94.9% took PPI before surgery and 2.5% after surgery. So that's approximately in line with our data. And then they had the questionnaire. You ask people how they are treated, 10, 15 questions. Then you find that the median improvement was 100% and mean improvement 92%. That's absolutely astonishing. Imagine you have 15 questions and you have score zero to five, which means you can get 75 points. And you have 100% improvement. On On all 15 questions, the patients need to answer zero. And to have a median value of 100%, more than half of the patients need to answer 15 questions zero if they have any symptoms or any problems. That's an absolutely astonishing result. It's just a dream result, basically. And if we then continue on the economic aspect, we have done some further economic analysis. So we even have done now in Sweden, you know, so to show that we have better cost effectiveness in Sweden with RefluxStop than with any other treatment. And we also have made it in Italy, also successfully published. And the Italian paper even was selected as the top tier 5% in this ISPOR, the main congress, you know, for these topics for payers and the healthcare providers. So we are working effortlessly. And finally then market expansion, of course, the biggest effort with market expansion is the U.S. part. But you can see that we have done more than 1,000 surgeries, quite a bit more, and we have quite a bit more than 40 hospitals in Europe by now. And we had 15 new hospitals this year. And as you know, we can have many more hospitals. We can have much more revenue, but we are not taking all hospitals. We are ensuring quality. When you should go to FDA and U.S., they look at all the data worldwide. We need to control that we only have top-class hospitals, centers of excellence that do perfect surgery. That's why we select the key ones. We train them carefully. So our revenue figures, you don't need to care about. Just be concerned that we now get the U.S. approval and you will see how it will develop going forward. So here we have some hospital in Spain. I think this is three centers in Spain. La Paz University is one of the largest hospitals in Spain and also worldwide, a very famous hospital, actually. And we have some more hospitals here in Germany, in Italy, in the U.K. So we are. This is just for the last quarter, some hospitals. We are also launching lots of media and social media activities, and we have lots of ongoing things everywhere, you know, different activities. I can give you one example. Here is about the patient here, Philip Perkins, who got the RefluxStop, and he was interviewed in Radio Jackie, for example. And I don't know if it has like, yeah, 800,000 listeners or something like that. And Chelsea Westminster is one of these NHS hospitals, so that's one of the public hospitals in the UK. And they even made their own press release, and fantastic press release made by them. We are not involved, so to say. And they, in their own press release, says RefluxStop came in as a revolution, says Dr. Gomez. So it's not only we who believe in this. It's many, many others. We basically see that we have reached the status now that RefluxStop is unstoppable. This is like a little snowball in warm snow in the mountain, and we are rolling down. We are very, very optimistic for the moment in the Implantica team, and we are very much looking forward to the U.S. launch if we now can finalize the rest of the topics. Yeah, then we come to capital market and finances. I give the word to Andreas. Thanks, Peter. Good afternoon or good morning. Activity levels continue to increase over the fourth quarter. Compared to the same period last year, we saw the number of surgeries increasing, but revenues decreased by 30% to EUR 442,000, explained by an increase in free devices for studies. Full year net sales increased by 38% to EUR 1.9 million. We expect the business to continue to grow. There will be quote-unquote volatility due to order patterns, free devices for studies, as well as seasonality. However, to unlock the substantial revenue opportunity, we will require a U.S. market approval or broad European reimbursement. The business continues to deliver exceptional gross margins. Adjusted Q4 gross margins amounted to 90%. It decreased from 92% the same period last year. The lower gross margin is explained by expiring inventory. Full year gross margin decreased to 92%, down from 94%. Gross margin fluctuations are expected due to the subscale nature of the operations. At scale, the exceptional gross margins will provide operating leverage, enabling high profitability and free cash flow generation. The Q4 operating loss amounted to EUR 7.2 million, which is 3% higher compared to the same period last year. Full year operating loss increased to EUR 25.5 million, a 17% increase, explained by a fourth quarter impairment of intangible assets, which is a non-cash expense driven by a real alignment of the product pipeline strategy, and R&D expenses expanding year- on- year, driven by minimal capitalization of R&D compared to earlier periods, as R&D activities in 2024 were driven by strengthening the RefluxStop offering, which is not capitalized, including FDA submission preparations, usability study, and other data collection. Non-RefluxStop R&D has been further scaled down over the year. General and admin expenses have also been managed down over the period. Let us turn to the next slide. We have a solid financial position. End of 2024, we held EUR 64.6 million in cash and cash equivalents. Over 2024, we had a net cash outflow of EUR 22.7 million. We do not carry any interest-bearing debt on our books. Let us turn to the investor slide. In addition to management colleagues, including our founder and main shareholder, Dr. Peter Forsell, our investor base is dominated by Swedish and Swiss high-quality institutions. We are very grateful for the trust and support our investors provide to address a huge unmet patient need. Let me hand it back to you, Peter. Yeah, I maybe could add that, of course, this year has had lots of extraordinary costs. For example, the FDA process is very expensive, so you can calculate maybe EUR 4 million of extraordinary costs just for your understanding. Yeah, so then I think we have reached the questions and answers section. And we will see here what you... If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Chien-Hsun Lee from Pareto Securities. Please go ahead. Hi, good afternoon and congrats with the progress. Just have a few quick questions. So regarding the U.S. commercial preparation activities, do we have an estimate of how many sales force do you need in order to achieve a strong sales uptake? Thanks. So, you know, for the start-up in the U.S., we don't need people to sell anything because we have this up to 40 hospitals already lined up. So what we need is training, going there to be there to check the first surgeries and so on. And that we develop in regions. So we are planning region, basically. We have a European surgeon who is working in Frankfurt today, who is targeted to get a nice package for him. So he can then train surgeons and they can go to this hospital and be taught and so on. So we are preparing different matters, so this should be efficient. And I don't think it will be a large, expensive organization for the moment. It will be reasonable. But of course, we need to do some activities here to get a fast expansion in the U.S. That's clear. Okay, thank you. And regarding the European reimbursement, could you provide a little bit more flavor on maybe which country is so far the most advanced? Because I understand you are trying from multiple channels, putting the effort, but it's not so straightforward a process. But if you can provide some details on the progress, that would be great. Thank you. Yeah. So the problem we have is that every country is different. And if I take, for example, Spain and Italy, where we today have 22 hospitals just in Spain and Italy, there is like a budget system. The hospital applies, could I please operate 30 RefluxStop, and then they get, okay, you get paid for 30 RefluxStop. The next year, they can ask, could I get paid for 50 RefluxStop, and so on. And more or less, all these hospitals are now applying because we have several hospitals, as you know, who have got paid for their device in Italy and Spain. So now it's all these hospitals are applying to get paid, and more and more get paid, and this will expand over the coming years. So I'd say maybe it takes three years to have a full coverage here with lots of hospitals getting paid. But it's a process. It gets more and more and more, so to say, in these countries. If you take a country like Germany, there it's the total opposite. There you have something called DRG. That's to say you have a certain surgery has a certain number. This number gives you a certain amount of money. You get nothing else. If you are not part of that system, you are lost, so to say. There is no extra money. Nothing to say, no, no, I want this or this in the budget system. No. You need to be in that DRG with a certain amount of money. We have then in Germany managed to get our own DRG. We have our number. We have everything registered. We say fantastic, but we just don't get paid enough. So it's too small amount we get paid. In this process, we are done working. It's something in Germany called InEK hospitals. That means it's hospitals who do economic calculation. They send all the costs for everything, for the procedure, everything to InEK so they can do their calculation, what you actually should be paid. Currently, the problem with this is that the InEK hospital is not so many, and very few of them actually are doing reflux surgery in a good way. You know, we also need centers to do this kind of surgery. For the moment, we are starting up in a few weeks our fourth center of the InEK type. They need to operate a certain amount so you then can file into InEK and say, oh, look at the figures, we need more pay for our number. But we have the number, we are in the list system and everything. It's just a matter of time. In the U.K., for example, NICE is currently doing an evaluation of our device to decide how we should be paid. Basically, it's not a reimbursement decision, it's a medical recommendation decision that will follow with the payment, so to say. There we have, NICE is just evaluating if they are willing to postpone. We have applied that they should postpone the decision a bit because we have five hospitals supplying data and safety data, 574 patients, and that's a fantastic thing. That's why we are asking them to please put our process on hold. It's tough work, but most of the work is done. We are coming closer and closer to finally get paid. You know, when you look at our revenue, as I said before, you can't judge this company of revenue. We decide how much revenue we want. We have prioritized quality, not revenue. So convincing the surgical society that we have the best treatment, that's already done. We don't need that. We just need someone who pays for the device. Then it will be something. Okay, perfect. Perfect. Thanks for taking my question. Thank you. Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. Yeah. So then. There are no phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments. Okay. So here I have many questions. So has FDA visit to production for that has been scheduled yet? Do you have an indication when it might be? We don't have an indication. Our specialists, who is expert on how FDA works, believe it could be maybe in June. We can't say, but it seems like FDA is favorable to us and our device. Then it's a question, when is FDA approval coming for Implantica? And the straight answer is it's not in our hands. It totally depends on how quickly FDA acts, if they quickly come and do their inspections. And yeah, we don't know. The only thing we can say is that the first two modules, I guess there will be nothing really to discuss because those will be sold. So the only module we have left is the testing module when we do all these biocompatibility. Yeah, I can't also in relation to FDA, I can't really say any timing here, but we hope it will not be so long. It likely will be in a shorter time period. What is the timeline to get reset? That's the same question. Yeah. Swedish healthcare system is that someone has taken the Swedish Osthyvel, and they have cut down the resources for the healthcare over and over and over and over and over again. So in Sweden, you can't get the best healthcare anymore. It's administrative people who decide what healthcare you should get. It's a disaster, basically. There are no resources for anything. You should be saved, save money. Save money is the only thing that counts, that you have a new, better treatment that costs something, even if it's more economic in the long run. Cost. But they only look at the cost now, and it's admin people who decide, so Sweden is a bit problematic country for the moment in terms of healthcare. Would an FDA approval, which seems to be very likely now, which I agree, affect the European market and acceptance of RefluxStop? I mean, of course, every step you can take, I think, affects a bit. So if we get US approval or we get NICE to say yes, for example, and so on, everything will affect a little bit. So it goes a little bit faster. But we are quite far. It's not that it will take forever now, I hope, to get this. Then is someone who asked if we should do a broader program for privately funded operations. I think that's a very good idea. Absolutely. We could probably do quite a lot of surgeries with private pay also. So I think that's a good idea. Yeah, then it's the question of NICE, and this I have basically answered. Then there's another question of FDA's visit. Would you prefer partnership in the U.S. when launching RefluxStop? We actually don't think we need that because we already have made good sales already, so to say. Would you consider selling? Someone has asked if you would consider selling RefluxStop and instead focus on all the other excellent products. I mean, we have many fantastic products, incredible many products, actually. But I think RefluxStop will generate so much funds because it has such a high gross margin. It will be quite a lot of profit when we finally get going. So I think that could be a really good cash cow to have, and you should make all these other different products. Very good slides in today's presentation. Where we download the slides? Oh, that's a good question. I can't answer that one. Will you be able to keep gross margin this high? What is the long-term grade? I mean, it's all depending how you, let's say, you start a new hospital and they need to train first and so on. Maybe you give them three devices for free. That's, of course, then affects the total gross margin a bit. But because our product is so inexpensive, it doesn't matter so much for the company. But we have not done that because it affects the reimbursement process and it's not so good. But it's always a possibility that you make it a little bit smoother. But we will have a very high gross margin anyhow. Timeline for module three. Are you expecting FDA finish in three months? Yeah, I think there is something called 100-day meeting. So I think FDA will make this three-month review of module three. And then, so totally after 100 days, we will have a meeting with FDA. And that meeting, they will basically, I guess, tell us a little bit that we will be approved or, yeah. So we are coming forward more and more, of course, now. NICE, I think I've answered. What do you expect to charge for the device in the U.S.? Yeah, I mean, in the U.S., the price will be higher. That's part of the investigation we are doing right now. We are discussing with the surgeons, the payers, and so on. And I will come back to that, but normally the price is higher in the U.S. What is the longest the device has been in place in the patient? Yeah, since December 2016. So that's eight years. That's a very long time. And it still works. I want to do surgery in Sweden or Norway. Who can I contact? In Norway, we have a couple of hospitals. I don't have the details on my hand, but the person who asked this question could maybe send an email to Nicole, and we can answer where you can operate in Norway. In Sweden, it's difficult. They have done three surgeries in Sophiahemmet, that's Sophiahemmet. Yeah, Karoli... No, no, no, not Sophiahemmet. You're right. Karolinska Sjukhus in Ersta, actually. Ersta Sjukhus. They have done three surgeries. But then, due to economical reasons, although the surgeon wanted nothing more than to do this, they have stopped. So I don't know the situation there right now. Yeah. Long question here. Someone is asking about potential capital raise. And that's, of course, this is nothing we have decided anything about. But of course, we have looked into how other U.S., how other companies have made a U.S. launch. And we see that those who have invested a little bit more, of course, have been a little bit more successful. So it's a balance, you know, what is the best outcome here. And it could be that you raise some money for a faster U.S. launch. That could not be excluded. Yeah, I think I have now answered all the questions. And sorry for taking some time, but I need to read in between here. And I thank you very much for listening. And I hope I've given you a positive feeling of the future for RefluxStop because at least I have a very positive feeling right now. Thank you and have a good day.