Welcome to the Sedana Medical audiocasts and Teleconference Q1 2022. Throughout the call, all participants will be in listen-only mode, and afterwards there will be a question and answer session. Today, I am pleased to present CEO and President Johannes Doll, CFO Johan Spetz, CMO Peter Sackey. Please go ahead with your meeting. Thank you. Good afternoon, everyone, and good morning to those of you dialing in from the U.S. Thank you very much for taking the time with us today, and welcome to Sedana Medical Q1 Report 2022. Let's get into it. I will take the first part of the presentation and talk about the business and specifically about the sales performance in the different geographies. I will spend some time explaining the drivers behind that performance and also try to be as clear as possible on what you can expect in the short term, and in the longer term. Then Peter Sackey, who's dialing in from the U.S., today will take over to give an update on the clinical trials in the United States that are now underway. Lastly, Johan Spetz, our new CFO, will give a financial update and also a short introduction to himself, since this is the first quarterly report as Sedana Medical's new CFO. If you go to page two, as always, we will be talking about the future in this presentation and I therefore recommend that you give a quick read to our disclaimer. Let's turn to page three. Let me again start with our purpose, which is to improve life during and beyond sedation. In order to live up to this purpose, everybody at Sedana Medical is focused on making sure that mechanically ventilated patients in intensive care units around the world will receive inhaled sedation as standard therapy. At the end of each quarter, it's a very good check for us all to ask, have we moved closer to that vision? In the first month of 2022, the answer is clearly yes, as we have achieved two very important milestones on our journey. We have launched our Sedaconda drug in Europe, and we have enrolled the first patient in our U.S., clinical program. On page four, we have the highlights of the report. Our net sales were SEK 34 million, a 25% decline versus last year. The main reason behind that decline is that we have seen a significant decline in ventilated patients in the first quarter. I have myself visited many ICUs in Spain and Germany in the last weeks, and the picture is very similar in most units. Many empty beds, and many of the patients are not intubated and therefore not sedated and we will get to the explanations and statistics behind that. Our gross margin improved versus last year to 68%, mainly because we have managed to ship more volumes from air transportation to sea freight, and we continue to have a very healthy cash balance, which of course is intended to take us all the way through to a U.S., launch in a few years' time. On the operational side, the launch of our drug Sedaconda isoflurane is now underway. We had first sales in Germany in February. Now we have first sales also in Sweden. The product is also available in the Netherlands, and we are adding more countries over the next weeks and months. Also in the first quarter, we received a positive NICE guidance in the U.K., which now puts us in a position that we can not only talk about great clinical advantages of our Sedaconda product, but also have strong health economic arguments with a tangible saving for hospitals that comes from using inhaled instead of intravenous sedation. In the U.S., which we expect will one day be our largest market. We have enrolled our first patients in the clinical trial, which Peter will talk about, which means we are on track to keep our timeline of a possible NDA submission and approval in 2024, and a launch likely in early 2025, simply because we don't tend to launch just before Christmas. If you move to page five, please. Page five shows a longer-term view of our performance in the respective first quarters. You can see that Sedana had a steady growth trend before COVID-19. We saw a real trend break in the COVID-19 years, 2020 and 2021. Now we are at a lower level than a year ago, but still clearly above the long-term trend. I think it is important to take this full cycle perspective when looking at individual quarters because it confirms what we've been saying, that COVID-19 clearly has given the company a boost. Part of that boost is here to stay also now that COVID-19 is fading out because more clinics are equipped to use inhaled sedation. Let's turn to page six and the sales development by geography. Overall, the gap of SEK 11 million versus last year is explained by lower sales in Germany and in South America, while our other regions showed solid growth. I will now go through each of these geographies and explain the underlying dynamics. On page seven, in Germany, we did see a decline of sales of more than 20%. That has to be put in relation with the development we saw on the patient side. The number of COVID-19 patients alone that had to be ventilated in an ICU has decreased on average 42% in the quarter. This is because the Omicron variant was much milder, so less people ended up in intensive care. The ones that did end up in intensive care were actually less likely to need mechanical ventilation. These two factors together led to this 42% decline, which we also see continue into April. Right now that number is down 80%. In all of Germany, we now have less than 600 ventilated COVID-19 patients in ICU. At the same time last year, that number was close to 3,000. The same quality of statistics and data is not available for other patient groups outside COVID-19, but we have seen these groups decline significantly as well. Like all parts of society, of course, hospitals were also hit very hard by staff absence due to Omicron on top of high level of burnout and turnover, which you already had before in intensive care units, which then reduced ICU capacity, and led to a situation where a lot of surgeries had to be postponed. In Germany, you still have a lot of people wearing face masks, work from home, move around less, so you have less community-acquired infections. Essentially, you're left with kind of your heart attack, strokes and trauma patients, but you have much less surgery and pneumonia patients on top of the COVID patients that are not there anymore. On page eight, you see there's a daily survey in Germany where ICUs report whether they can operate under normal conditions. As you can see here, the vast majority of ICUs in Germany had restricted or at least partly restricted operations in the first quarter, and that situation was even worse than a year ago. The reason is that staff absence, which we have already talked about, which leads to ICUs having to close down beds because there's a maximum number of patients a nurse is allowed to look after in Germany, like you have the same situation in many other countries as well. For Sedana, this meant that less patients were in the ICUs, but also we had restricted access. Trainings were being postponed and new therapy introductions are moving a bit more slowly. Let's move to our other direct markets and page nine. We saw quite similar market dynamics as in Germany, less patients overall, more access restrictions, with of course very different variations between the markets. The U.K., for example, being on the very strict side with NHS banning pretty much all external visitors and banning any introduction of new therapies in a number of hospitals to protect the staff. Spain, for example, being on the more liberal side. The underlying growth in these markets, especially in Spain, especially in France and UK, and of course also the comparably low levels last year, resulted in a 12% year-over-year growth. On page 10, on the distributor market side, you see a very significant decline, which can be isolated to only one distributor in South America, which as you know if you followed us for a while is our most important distributor region. All other markets actually showed quite nice growth. What happened in South America is two things. We had a very high first quarter last year, an artificially high quarter, as we had a Propofol shortage in the region at the time. People were buying whatever they could get their hands on to sedate the patients. Secondly, our distributor had stocked up in the winter anticipating a new COVID wave like the year before, which did not come or at least did not hit the ICUs as much, as Omicron turned out to be much milder than previous variants. We had no orders in January and February from these countries, but the outlook is more positive. Orders have picked up again, and importantly, we did get the device approved in Brazil, which is a sizable market and will be taken care of by the same distributor and contribute to this important region. On page eleven, this fits with the overall progress in distributor markets. In Q1, we got the device, Sedaconda ACD approved not only in Brazil but also in Indonesia, which both of them are sizable opportunities, and we are looking forward to quite a few launches of both the device in Brazil and Indonesia, also Argentina, Turkey, and hopefully also China in the not-so-distant future. Also of the drug in some of the markets where we are not present ourselves, but where we have or will have approvals like Austria, Switzerland, Italy, et cetera. If we move to page 12, please, let's switch gears a bit to what we can expect. I'll say it again, our clear ambition is to become standards of care, and we believe we should be standard of care because of the clinical benefits that our therapy is bringing versus intravenous sedation. Less opioid requirements, more spontaneous breathing, shorter wake-up time compared to IV, and at the same time, not having to compromise on the efficacy. The clear health economic benefits. You remember the NICE guidance that recommends the use of Sedaconda ACD as a cost-effective option and showing a per patient saving looking over a 30-day period of GBP 3,800 versus intravenous sedation. That saving is largely based on a post-hoc analysis we have presented as a poster at ESICM this year, a big intensive care conference, which has shown a significant reduction of ICU-free days, actually four days compared to IV sedation, which is of course very meaningful as patients leave the ICU four days earlier than they would have otherwise with IV sedation. On page 13, how should we think about what is to come? What should we expect this year? What should we see in the following years until 2025? What will happen from 2025 and onwards? When trying to predict the market dynamics, there's of course some uncertainty involved, but I'm giving you our best estimate from today's perspective and from what we know today. We are anticipating a few more quarters, probably two quarters that will be affected by lower ICU capacity and access restrictions. It will take some time until hospitals are back to normal staffing levels. It will take some time until we can access hospitals in a normal way again. That impact should become less severe over time, and we are already seeing some signs of access, for example, to some hospitals improving somewhat. It might take until closer to the end of this year until we are back to a fully normalized state. Then from that point on, and this is of course under the assumption that we are not hit by another COVID wave, and we have been surprised by this virus before, then we should return to something similar to a pre-COVID state and a steady structural market growth in line with demographics, which in most markets is probably somewhere in the area of 5% a year. Against that short-term uncertainty, as a company, we are of course fully focused on what we have under our control, which is the commercial execution. We are currently implementing a phased growth program with different initiatives that we have named Mission Standard of Care. That is really the focus. We have a few ICUs already today that use inhaled sedation as a first-line sedation, meaning that every patient that will be ventilated and sedated for more than 24 hours will receive inhaled sedation and not IV sedation. It's our job to get as many accounts as possible to that state because we know that these patients will benefit. In terms of what you can expect, assuming we get approval by MHRA in the U.K., by the end of this year Sedaconda isoflurane should be available in all of our direct markets, and a few more, I should say, in the distributor markets. During the year, we should see increasing penetration of inhaled sedation overall. Again, it might be versus a temporarily smaller addressable market, but the penetration should go up and a gradual shift from off-label generics to our on-label therapy. Again, as we have said previously, this is not something that will happen overnight as we have to work through the purchasing processes account per account and deal with every group purchasing organization individually. Gradually, we should see more and more isoflurane moving from off-label to on-label. By 2025, we are expecting to reach sales levels of SEK 500 million in Europe. We have postponed that target by one year, and that has two reasons. First, at the time the guidance was made, for the first time back in 2017, the company underestimated the time it takes to maneuver through national reimbursement processes, as there's a quite long period between approval and actually being able to sell. Second reason is the temporary market conditions I've discussed. Lower ICU capacity, access restrictions, which are slowing down the launch to some extent, and it will take some time until staffing levels are back to normal once again. By that time, we have an ambition to have converted the majority of off-label isoflurane to our drug. From 2025 onwards, we will be able to add the United States to our market. We will give sales guidance including that market when we move closer, but it's quite clear that the United States is the highest potential market. What we have communicated already and what we are keeping is the EBITDA target of 40% for the whole company once we have been through the initial launch and have reached a steady state in the U.S. Importantly, of course, if things go as planned, we expect our cash position to be sufficient to get us through that U.S. launch. With this, let me hand over to Peter for the clinical update. Thank you, Johannes. Could we move to slide 14, please? As we've communicated previously, our intention was to start the clinical trials in the turn of Q1, Q2, or more specifically April. We successfully enrolled the first patient to the first trial INSPiRE-ICU yesterday here in Nashville. We are anticipating a ramp-up now of study sites over the coming months. These two studies are identical studies and INSPiRE-ICU one and two. INSPiRE stands for Inhaled Sedation versus Propofol in Respiratory Failure. These studies are non-inferiority studies that we've agreed with the FDA when it comes to design, and they're to confirm the efficacy and safety of inhaled isoflurane via the Sedaconda ACD. Two studies will be enrolling a total of 470 adult patients for the primary endpoint and an additional three-five patients per site as run-in training patients. Similar to our European study, SED-001, the primary endpoint is the proportion of time spent within the target range of sedation depth. In essence, the depth of sedation assessed with the RASS scale. The target is the same as in SED-001. The secondary endpoints are use of opioids over the duration of sedation, time to wake up at end of sedation, cognitive recovery after end of sedation, and spontaneous breathing. As the primary endpoint will be assessed by blinded assessors. It's not a double-blind study, but an assessor blinded study. Both of the studies are identical, as I mentioned. Let's move over to slide 15. Looking at the start of the clinical trials now, we anticipate them to be completed by towards the end of 2023 in Q4, and then to submit our NDA early 2024 for an approval before the end of 2024. With that, I hand over. Back to you, Johannes, I think. Yes. Thank you very much, Peter. So if we look at page 16, a quick comment, of course. We are following the terrible war in Ukraine, which is affecting us all. Business-wise, however, the impact for Sedana Medical is manageable. We do not have a presence, either direct or indirect in Ukraine, and only very limited business in Russia. Last year that was 0.1% of our sales. We have actually decided not to stop supplying Russian intensive care units, as we would be withholding products from critically ill patients that could improve their outcome. But percentage-wise, that's a very, very small share of our sales. The more relevant impact on us is that our gas monitors have been produced by a Russian engineering company. It's not a big contributor to our sales and profits, but quite important enabler of our therapy because a lot of ICUs feel more comfortable using our product if they can measure the gas concentration. In the short term, we have sufficient supply to satisfy the demand for at least a year, so we are not in direct trouble here. We are, of course, anticipating a situation where trade with Russia will be limited for an undefined period from what we know today. It is, of course, prudent for us to look for an alternative, and we have started a project to do exactly that, and should have time to find a solution before we run out of stock, so we can continue to supply our customers with gas monitors if they choose to source them from us. Of course, there's gas monitors also available from other manufacturers where they can buy directly. With this, let's move on over to Johan and the financials. Thank you, Johannes. My name is Johan Spetz. I'm the new CFO of Sedana Medical. I assumed my role in late March. My career so far has been in the finance industry. I joined Sedana from my previous role as Partner and Head of Equity Research at Pareto Securities here in Stockholm. I'm now very happy to be part of the team here at Sedana and to contribute to bringing our new therapy to ICU patients around the globe. If we turn to the financials for Q1 2022 on slide 18. Johannes has already described the sales development, so I will focus mainly on our margins and cash position. Our gross margin increased to 68% in Q1 2022, from 64% in Q1 2021. This is mainly due to lower transportation costs that Johannes mentioned earlier and also to some extent a positive market mix where we see a relatively lower share of distributor market in Q1 of this year. Our OpEx, if we are excluding costs, so that is the selling, administrative and R&D costs were SEK 45 million in Q1 2022. That's up compared to SEK 39 million in Q1 2021, but down compared to Q4 2021, when it was SEK 51 million. Slight decrease sequentially in Q1 relative to Q4 of last year. The resulting EBITDA was SEK -16 million in Q1 2022, and that's compared to SEK -8 million in Q1 of last year. If you turn to the next slide 19, to have a look at our cash flow and cash position. Cash flow from operations during Q1 2022 was SEK -28 million. Of this, SEK 11 million was working capital-related, related to an increase in inventory and also VAT and bonus payments. Cash flow from investments during the quarter were SEK -32 million. And as most of you are aware that's mainly related to our clinical studies and related work. We have a total cash flow for the period of Q1 2022 of SEK -61 million. That takes us to a cash balance at quarter end of SEK 779 million, so a very healthy cash balance. That's compared to SEK 836 million at the beginning of the quarter. Importantly, when looking at this is the case also after considering the slight revenue guidance revision we published this morning. We expect to be fully funded until break even through the U.S., launch phase, as Johannes mentioned earlier. So a healthy cash position that provides stability and flexibility for us. In addition, it should be mentioned as well that Sedana Medical is a debt-free company. As a final remark from me regarding the move to the Nasdaq main list here in Stockholm. We have now finalized an assessment and have a tentative work plan in place that should lead us to our main market listing during this year. With that, I will hand the call back to Johannes. Yes. Thank you, Johan. And thanks everybody for listening. Let's move to the last page 20. The highlights again, which I'm of course not going to repeat. What I would like to reiterate is that with the launch of our drug in Europe and our first patient enrollment in the U.S., study we have achieved two very important milestones since the beginning of the year. Despite the temporary contraction in the market that we are seeing, we of course remain fully convinced that inhalation should be and will be the future standard for sedation in ICUs. With that, I will give it back to the moderator and open it up for any questions you might have. Thank you. If you do wish to ask a question, please press zero one now to enter the queue. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a brief pause while questions are being registered. Again, if you want to ask a question, please press zero one now to enter the queue. Maybe in the meantime, we can take a question that we received via the chat. I'm just going to read the question. A question for the new CFO. In an increasingly difficult inflation environment globally, how does Sedana Medical perceive any threats from the Swedish krona, considering Sedana is currently very cash-heavy? This comes from a private investor. That's a great point. We are cash-heavy, as I mentioned. We have SEK 779 million in cash at this point. As you will be aware, a lot of the expenses that we have coming up are related to our clinical studies in the U.S. It will be USD expenses. We have some evaluation to do here with regards to how we convert that into U.S. dollars. What we started doing already is to convert a certain amount bi-weekly to spread out that FX risk. That is something that we will come back to on that topic. It is a risk that we are already managing and we will continue to manage it going forward. Back to you, moderator. No questions have come in the telecon. Oh, one question just coming in from Peter Östling at Pareto Securities. Your line is now open. Yes. Thank you, for taking my question. Just a quick one. Could you just remind me what the estimated cost for the U.S. trials will be? Thank you. Yes. There's no reminding to be done because we have not disclosed the amount. It is a clinical trial in the U.S., two phase III trials with a total of 470 patients plus the run-in patients, so that is of course a significant investment, even higher than what we have seen for the European approval trial, A, because it's more patients, B, because U.S. trials tend to be more expensive, but we have not disclosed a concrete amount. Sorry for not directly answering the question. Well, I tried anyway. I know you will continue to, Peter. Thank you. There are no further questions in the teleconference for the moment. For closing remarks. Sorry. We have. Yeah. We have received one more question through the chat, so thanks for that. How has the market share of Sedana in Germany developed? That is a very good question. I think a very relevant question because, of course, the 25% decline overall and the 22% decline in Germany is a very short version of the truth. That it has to be seen in relation to a very significant contraction of the market. Unfortunately, we are not dealing with a market where you can just look up the data. Ideally, I would like to look up how many ventilated patients do we have in the ICU and how many of these are being sedated. We have almost perfect data for COVID patients, but we have to make assumptions for the patients that are, of course, the majority of patients that are outside of COVID. For COVID, we can say that the number has decreased by 40%. In relation to that, our sales decline was lower. We don't have that exact number for the other patient populations. As an estimate, and from what we're seeing in the ICUs when we are there, it is a fair assumption that our sales decline has been lower proportionately than the decline in patients. Consequently, we should have seen the penetration go up. The penetration rate we have seen previously or communicated previously in Germany is in the area of 8%-10%. We have seen some slight improvement on that in the first quarter. Of course, there's a clear ambition of not just seeing a slight improvement, but seeing that penetration improve a lot now that we have the approval, now that we have the Sedaconda launch, which the approval gives us kind of the hunting license, if you like, because now the full therapy is on label, and we can fully promote it. Any more questions from the phone? No new questions have come in. Okay. Sorry. Every time I give back to you, there's a new question on the chat. What is the status of the SEVA study? There's no update to be given. Maybe for the sake of everybody, maybe Peter, you can remind people what the SEVA study is about. Yes. The SEVA study is a study, it's an academic study led by investigators from Clermont-Ferrand in France. This is a study that we do not have any direct insight in. It's an investigator-initiated study where we have provided devices and materials for the study. We do know that they've had a good recruitment overall, and that they're still continuing to recruit across France. It's a study looking at ARDS patients, and we're using Sevoflurane, which is not our drug, but it's also volatile anesthetic. We're obviously very interested to see the results when the study comes out. As far as I know, the progress in the study is good, but I don't have any recruitment number that I can share with you. Good. I can see no more questions in the chat. I assume we have no more questions on the phone either. I would thank you. I'd like to thank you again, for taking the time with us. Thank you for the good questions and discussion, and looking forward to keeping you updated on the progress. Have a nice day. This concludes our conference call. Thank you all for attending. You may now disconnect your lines.