Hello, welcome to DNB Carnegie. My name is Maria Karlsson Osipova, I'm an analyst here at the bank. Today we have the pleasure to talk with Richard Paxman about Paxman and your Q1 report. Welcome, Richard. Thank you very much, and great to be in the studio. First time in the studio live. Yeah, it's nice. I like it. Much better than being online. Yeah, I think so too. The format is as usual. You start presenting the quarter, and then we will jump over to a Q&A session. I remind everyone to ask questions in the chat. Yeah, please take it away, Richard. Super. Thank you very much, and great to be here, as I said. Q1 highlights, really pleased with the progress that we've made at the start of the year. Group sales amounted to nearly SEK 90 million. That's our highest level of sales to date. About SEK 90 million came from Dignitana, so really showing that acquisition is a positive move. I think it's also important to see that there was growth overall. I think growth in total was about over 30% from Q1 2025. I think what was promising is the EBITDA. EBITDA of about SEK 10.5 million for the quarter. Again, that really positively affected by the Dignitana acquisition, so now starting to see those synergies, and we'll talk about that shortly. Also good performance from Paxman as well. I think it's important to say that we're still investing into CIPN, which is great, and getting ready for launch. You'll see some impact there, but it's a positive impact because it's investment for growth. Our insurance-based sales were maintained, and again, I'll touch on that later, but I think that's also positive because we had a really strong end to the year as well last year. We've maintained that, and now we'll start to see better utilization and more sites coming on under IBBM. Overall sales were strong at nearly $4 million for the quarter for Paxman versus $3.1 at the same time last year. Legislation's fantastic. We'll touch on that, and then we'll give you a bit of an update on neuropathy. Some delays, but definitely moving in the right direction with no concerns as yet and ready for launch at the end of the year. You've all seen the results, I'm sure, by looking at the reports of that strong growth overall. Costs as well have been well managed throughout, even with the investments into CIPN of about SEK 4.5 million for the quarter. If we look at EBITDA overall, running at about 12%, but you adjust that, taking out those peripheral neuropathy costs in terms of new building, support, additional headcount, other regulatory costs. We're running at an EBITDA margin of about 17%. Overall, we're impressed with that, but still room for growth, of course. In terms of the acquisition, there's still some bits to do. There's still some cost savings to be made. The reality is the majority of the integration is now complete. Systems are well in the mix. People are well aligned. Really pleased with the overall position that we're in. This graph really just allows you to see the dramatic cost savings that we have made by the merger or acquisition and puts us in that strong position. There's still some room, not from a personnel perspective, but other operating costs, and we'll work on that through the year. These are commitments that are longer-term commitments. As I said, still room for improved margin. In terms of our U.S. business, again, although we didn't see a growth from quarter-on-quarter for IBBM, we maintained those strong levels, which I think is important because we had a really good Q4, if you can remember. What is important to understand, though, is that momentum is growing. We're seeing more sites now sign up, and there's a real general interest in our insurance-based billing model. I think you'll also like to see that Dignitana have now launched their IBBM model. Again, we'll start to see some momentum there as confidence increases. Taking a look at the utilization. I know many of you have wanted to see our figures in terms of what does it look like compared to a normal site to an IBBM site, and now we're actually very clear on the figures that we're presenting. If you look at Paxman alone, you're at least double in terms of the amount of patients that you see, either by location or by system installed. Again, I think that's a real signaler to say what we can achieve. Just doubling revenue is relatively easy, but that's with early CPT 1 codes, early levels of coverage and payment. You just think what we can achieve when we start unlocking more barriers as we navigate through this enjoyable reimbursement journey. Be careful with the self-pay versus IBBM data for Dignitana. It's their first quarter, so it's a bit skewed. I'd love to say they were getting 20 patients per location per quarter. That's not quite accurate. They had a stock purchase by a very large New York institution, so that skewed the results. The trends will start to follow through overall. I wanted to show we're now collecting that data. Coverage still looks positive, but we want to see improvements of overall coverage. Soon we'll start being able to get data from the payers to understand exactly what they're paying as well, which will be important. There's always a lag on that data. State insurance coverage just blows my mind, really, in terms of the momentum we're seeing independently. The N.Y. and Louisiana bill is already in place. Maryland and West Virginia already signing bills and effective in 2027. There's a large number of other states actively pushing this through. Some will now move into the 2027 session. I think it's also important to note the support we're getting from other societies requesting this too, and I think that's back to that understanding how important scalp cooling is for our patients. This will become standard of care one day. To touch on community oncology, I think I've talked about it before, but there's been some real limitations in our expansion with IBBM into community oncology. Earlier this quarter, in Q1, Q2, we actually signed an agreement with one of the largest community oncology aggregators to start deploying IBBM throughout their site. It will be increased business overall in terms of locations, but it also will mean the sites are on insurance-based billing. That will open up utilization and really prove the test case in the community, which is incredibly exciting and our first sort of win there, which has been a bit of a frustration for me. In terms of neuropathy, we're still steaming ahead and making some great progress. Unfortunately, our timelines have extended a little bit, but we're not concerned. First of all, if we look at Europe, we hoped it would be an April device acceptance. This is imminent approval, so we expect approval within June, which is very exciting. If you look at the FDA, there has been some delays, and that's not on our part. That's really because of the under-resourcing at the moment with the FDA, which was a risk that we identified previously, although we thought it was a low risk. We're meeting with the FDA early June, and we'll have a better idea of the clearer timelines. We're still full steam ahead, and in reality, what we're doing is preparing for that launch. We were always going to be looking at launching Q4 anyway as an organization into the U.S. market. What we've been doing in Q1 and Q2 is finalizing our V1 versions, ready for deploying a number of pilots in different European markets, primarily the U.K., Germany, potentially the Netherlands. Finalizing our regulatory validation supply chain readiness for the more impressive rollout in Q4. Q4, we're going to be ramping up to build 150 systems by the end of the year and deploying those into the U.S. market and markets that want to buy, with a more aggressive rollout into 2027. Exciting times ahead. Just a little bit of update on our location and some new graphics. This really excites me and makes me very proud. This is our new location that will be coming in 2027. As you know, we have an interim location at the moment to prepare our CIPN launch, but this will be our new building later in 2027, where we can really prepare for some impressive growth of Paxman overall. Just a reminder on our strategic priorities. Reimbursement, reimbursement, product commercialization, of course, revenue growth for rest of world markets, digitization, which is important to make sure we can scale appropriately, and then last of all, that clinical excellence, which we still maintain that piece. The science we are doing is phenomenal. The clinical trials that we are doing are phenomenal. We are really ahead of the game above any other competitor. Thank you. Great to be here. Thank you very much. I think the talk of this report hopefully will be the community oncology and the work that you're doing there. You've talked a little bit about this in the presentation as well. Could you talk a little bit more on the deal and what would the rollout look like? What can it look like? They've got, I think, around 600 locations. We're in a number of those already, New York Cancer & Blood Specialists, Low Country Cancer Care, a couple of others, but they have some very far-reaching roots, and they're a growing organization. That's what I like. They're a really big name in community oncology. I think over the next 12 months, we'll see a large number of additional locations added, but I think then it's that drive in utilization. What we want to use that then is a test bed to speak to the other community oncology groups. If we can prove it works with this particular aggregator, there is no reason why it won't work with the likes of US Oncology, who we're still talking to but have that little bit of hesitancy. It's important to understand we've got some slightly different mechanics to support them getting up and running with IBBM, to support them to be profitable. We all need to do that. There may be some slight drop in margins, but nothing to be concerned about, but I'd rather be open and transparent. We will maintain our average selling price, and that's really important as well. Maintaining that position to make sure that the payers are not seeing any erosion in the business model, if that makes sense. Exciting opportunity. Would it be reasonable of us to somehow think that this will be a signaling effect to other community oncology centers then? Is that what you're? Yeah. 100%, yeah. They'll have to. It becomes really competitive at some point, and I know we talk about patients will choose the right physician, but the number of times globally we hear from patients choosing because of scalp cooling. If community are offering a very similar service, similar level of physicians, then if scalp cooling is at one and covered by insurance and self-pay at the other, they're going to save the expense and go where it's covered. Every time we've talked about Paxman quarterly reports, we've always touched upon the topic of bottlenecks that you see to the simple switch model. Maybe a little bit of an update. How is it going? How do you see a change in the first quarter and what do you see ahead? Yeah, I think we are learning sort of every time we onboard a customer. The problem is there's nuances to each customer. I think I've talked about Yale and NYU being two big health systems that would be joining our IBBM. They're contracted, they've still not gone live. I think that gives you an idea of the time it takes. What these systems are actually doing and what we're learning from that is building these appropriate pathways into their EHRs, EMRs, to understand how they can automate the process and actually make it easier. We're going to take those learnings and actually support our other customers. I think although sometimes it does take time, the information we're getting back allows us, for future customers, to make it more simple. It's not as straightforward as it seems. Yeah. There's a lot of U.S. focus, for all the right reasons, obviously. If we zoom out a little bit of the North America continent, what do you see in the rest of the world and the APAC? If we maybe start with the rest of the world. Yeah. There is a lot of U.S. focus. I was actually with my international team yesterday, or the day before, sorry, out for dinner, and we were talking about that focus and at what point can we make more investment into our rest of world markets to help them grow. We will do that, I think, when we get the ROI on our U.S. market. We're seeing growth. You've seen the report. There was actually good growth from the rest of world markets, although scattered across Europe and Asia. We're overall confident. It's just a very different business model. CapEx, it's a slower churn. There's less certainty. The growth is still there, which is exciting. We just need to be sure we're putting the right focus into the right markets, and making the right investments at the right time, but not taking our eye off U.S. reimbursement and ultimately, the CIPN commercialization, which actually, especially for capital markets, we believe will be a very good and positive business development tool. Where there is some hesitancy to offer scalp cooling, if we go in with a package, we think we can win over more customers. Is there any particular rest of the world market that you would like to highlight that you've seen extra development in, for instance? I don't particularly see any one market overall, but I think there's been a general improvement in all markets and awareness. There is a real hive of activity in our direct markets, which is important, France, Germany, Spain especially. India, again, continues to be interesting. We've just signed a new distributor, which has a much larger footprint across the U.S., across India, which is important. We used to have a small partner. We've also signed an agreement with MOC, which is one of the largest private oncology groups, where we sell directly to them, and that helps them gain some traction in that market. They've just placed their first order of six systems. They're really aggressive in terms of growth as well, one to watch. Yeah. The chat is suggesting that we jump back to the U.S. again here. Sure. What has the initial feedback been regarding the CPT 1 codes, and when would you expect a clearer impact, as the numbers are fairly flat this quarter compared to Q4? There is a lag with CPT 1 codes, so as they're built into people's systems, as they're supported by contracting at cancer centers, and then even the insurance companies picking them up. The impact was never going to be immediate. I think you can feel the momentum. You can feel the confidence from the cancer centers themselves. We won't yet start to get the figures and the numbers out till probably Q3, hopefully. When we're stood here next time, hopefully I've got some data for you. It's not a slam dunk win that we've got CPT 1 codes. I always talk about this. Coding is one piece, coverage is another, payment is another. It's definitely in the right direction, so we're confident. More confident than ever, actually. You look at MSK, for example, our biggest customer, the CPT 1 codes and the legislation meant that other payers started paying as well. Their volumes increased. They're going crazy with scalp cooling. Good to hear. There's another question about the time of the approval for CIPN device with the FDA. When would you expect it? I think you mentioned it in the presentation. Yeah. June is when we're meeting with them. They're really behind. They wrote to us to ask if we could delay our meeting, and they accept they're not within their time limits. You could push, but do you really want to push the regulator to meet with you and upset them? You've got to be understanding. We don't need the FDA clearance just yet, so we'd prefer to work with them to do this. We've had many conversations with the FDA. We've got some great data. Europeans are about to approve the product, so we're very confident in our approach. We just need to have the conversation, understand exactly what else they need to do, whether they want it to be a de novo classification as opposed to a 510(k) is a question that we're answering at the moment. Both will allow us to still work on our timelines to get launched by the end of the year. That is the plan. Yeah. Like a short, very practical question. Is there an actual difference between the initial device that you're planning to produce and the final launch device? Yeah. We've got the current sort of prototype device. We've got, then, V1, which is going into build literally in two weeks time at our interim facility, we're building 50 systems. Those 50 systems will potentially be sold to some people, ideally it's about pilots and about collecting implementation data and ultimately marketing. That's what I see this as. Placing devices in the U.K. for a start. Leeds Teaching Hospitals NHS Trust, The Mid Yorkshire Hospitals NHS Trust, a London-based cancer center, and some private cancer centers to really just get usability, people talking about it. How do we implement it into the NHS with no funding and no nurses? Which we're confident we will do, there's so much interest. Same in other markets, probably Germany, probably the Netherlands, maybe France, maybe Spain, get that feedback. What we're doing is we already know the developments we want to make. There's some improved noise cancellation, there's a revised improved trolley for ease of use, improved serviceability and manufacturing capability. We start building in October, 150 systems, which will be the ideal. We'll always continue to iterate and improve like we've done with scalp cooling. Yeah. Okay, back to scalp cooling again then. The question from the chat came in here on the topic of how many systems did you install during the quarter in total, if you have that number? Good question. I need to go back. That's really bad, isn't it? I apologize. It was on one of the slides, I believe. No, we're just talking about U.S. systems here. Yeah. I apologize for that. I would need to check that. That's pretty poor of me. I apologize. It should be in the quarterly report, and if not, we'll follow up with the response to that. Yes. Another question here is also on the topic of the switch in the U.S. It's mandated scalp cooling now in New York and Louisiana. Yes. Do you see any difference in those? You talked about NYU, but any other differences that you can maybe talk to us about? I think no major switches. Just clarify the question a little bit. As in how is the switch going? I guess it's how is the switch going in New York and Louisiana? Do you see better traction in those states? Sorry. Understood what you mean. Yeah. Louisiana, I'll be very honest, we have limited customers in Louisiana. Let's talk about New York. I think that's most important, where the real traction is. What you saw with the CPT-1 codes and changing legislation was better coverage. We saw some of the payers that potentially weren't paying or not paying appropriately now changing approach. That's meant that you've actually seen some increased volume at MSK, where they've had to increase numbers of systems on site, and they're preparing for even further growth. It pushed NYU to contract, although they've not gone live yet. It also pushed NYP, Columbia to switch, which you saw the Dignitana numbers. That was them buying the stock. In addition to that, you've got New York Cancer and Blood, which is one of the large community oncology groups under OneOncology, which are all ready as well, chomping at the bit to switch. Patients are aware, and they're asking for it to be covered, and if it's not, I can't swear on here, but they're not happy. All right. Now let's dig into some numbers. The operating cash flow was a little negative. It was weighed down by the receivables, as you mentioned in the report. How should we think about that? Are we supposed to expect that it will reverse in the second quarter? Is it a timing effect, or is it some sort of a change in how the customers are paid with the IBBM payers? It's purely a timing effect, depending on where you get stock out, where you're invoicing. There is some, again, reductions in paying off of finance. It's a timing effect. We expect it to reverse. Cash flow and how we present it's always strange. I think looking at the actual cash of 106 million SEK, whilst we've spent a fortune on the merger in reality, whilst we're investing into CIPN, really still gives us a really strong position. Yeah, it's a timing effect more than anything, where we're in a really strong position. I know that you don't give any guidance, but any comments on the cost development in the coming quarters? You mentioned that there's still a little bit to take from the Dignitana. We expect to see some Dignitana cost reductions, but they'll be gradual over a period of time. We've still got an office and those bits. We still got all bits of IP coming through, legal cost, accounting cost, those sorts of things which, all areas we can actually reduce over time. In terms of our expenditure into peripheral neuropathy, we'll continue to see those increase with headcount, with preparing for commercialization. What won't hit the P&L but will hit cash and balance sheet is the V1 build as well, because those will be capitalized most likely, unless we take the decision to let them hit the bottom line. Those are all accounting requirements. Again, by the end of the year, we might spend another SEK 20 million on CIPN, but very manageable and actually, that's all expected to provide a really strong ROI later in the year and into 2027. Without giving any formal guidance maybe, we're quite well ahead in the Q2 already. What do you see ahead of you in Paxman? Again, U.S. focus, I think, it feels like we're starting strong, and that's good. The contracts are coming in. You won't see the benefits of OneOncology until probably Q3. That's to say that, I was on email last night with their purchasing people, and they're pushing ahead. They're keen to get started. As you know, the switch takes some time. Rest of world. Rest of world's always hard to give you an idea because you sort of get ebbs and flows of the order book, but overall in the right direction. We're pleased. Since you mentioned the order book, how does it look like? There was a question here in the chat on the order book. The order book looks probably similar to where it normally tracks at. Nothing exciting one way, nothing bad on the other way. Again, that's a KPI that we're not reporting on at the moment, but if there's interest in us keeping that there, we're very happy to keep that there as well. Yeah. I think this particular question gets asked pretty much every quarter. How much would you expect your new factory in the U.K. to cost you until completion? How much? How much would the factory cost you? The building. Oh, the factory. Yeah. Oh, millions. No, I'm only joking. We're renting the premises, so we are a tenant. There is fit-out costs that we expect in back end of this year into next year. We originally budgeted for, what, over GBP 1 million. Our expectation is it will come in under that. The build and the support has been helped by the combined authority in West Yorkshire, to support through an investment zone grant. That's helped as well with not the fit-out, but the build and to specification. I think in reality, quite reasonable. It's Huddersfield, not Stockholm. Yeah. I mean, it's not cheap there either. No. It's cheaper than Stockholm. Yeah. Thank you very much, Rich. Thank you. Thank you all for asking the questions. I hope I took all the questions from the chat. If not, please feel free to email me, and we will ask the questions to you after that. Thank you again. Thank you very much. Thank you.