Ladies and gentlemen, welcome to the XVIVO Group Interim Report Q1 2022. I will now hand over to Dag Andersson, CEO. Sir, please go ahead. Thank you very much. Good morning, good afternoon, or good evening, depending on where in the world you are. Kristoffer Nordström, CFO, and myself, we are very happy to be here in Gothenburg and present the Q1 report to you all. Let's start. Let's kick off by talking a little bit about Q1 highlights. There are quite a few highlights actually to note. If we look at organic growth, we achieved a great organic growth in the quarter, 32%, and we also delivered an adjusted EBITDA margin of 17%. Worth noting as well, this was actually already communicated in the last call, during last quarter of 2021, and in connection with the acquisition of Star Teams, we established a third business area Services. We have the three business areas, thoracic, abdominal, and now also the services. If we look at the gross margin development, we have seen a good development from quarter one last year to quarter one this year. Gross margin on disposables increased from 76% - 79%. This is a result of continued price increases and also economies of scale. If we turn to the next page, I just want to say a few words about the Kidney Assist Transport. In January, we received the 510(k) clearance in the U.S. for our unique Kidney Assist Transport device. In March, we also received the MDR certificate, which enables us to sell the device also in the U.S. What makes this device unique? I will talk a little bit later on about the kidney market, but the Kidney Assist Transport is a transport device which is unique because it offers hypothermic oxygenated perfusion of kidneys. If we move to the next one, I just want to say a few words about the groundbreaking xenotransplant activity in the U.S. Our technology made it possible to successfully transplant a pig heart to human being, and this happened on January 7 in Maryland. Research activities in both Maryland and Munich continue, and I'm sure that there will be more exciting news coming out of this collaboration over time. If we look at the next slide, we have received during the quarter regulatory approval for PERFADEX Plus in China, and we have actually now sold PERFADEX Plus in China. China is the fastest-growing lung transplant market now in the world. The number of lung transplant clinics is also growing at fast pace. Just to give you an example here, in 2016, there were 20 lung transplant clinics, and last year there were 50 of them. Other highlights during the Q1 of this year, we sold three XPS machines, one to Dublin, one to Cleveland, which was the second one, and one to Gainesville. We also sold a second HeartBox to Revivicor. Revivicor is the company behind the genetic biotechnology platform, which was used for the xenotransplantation case in Maryland. We are also signing the first Kidney Assist Transport agreements, limited financial impact in Q1, but more so will come in Q2. Star Teams continues to grow at fast pace with new customers and new agreements, and also a very important air traffic agreement with a company called NORA to secure that organs recovered will be transported in timely manner. There have been incidents in the U.S. where organs have been recovered but could not be used because of lack of plane capacity, which of course is very sad when that happens. If we look at transplant activity in the U.S., if we move to the next page, the transplant activity in the U.S. is we have seen a strong uptake in February, March. January was still in general, sort of slow, but February, March, very strong. If we look at transplant activity quarter one this year versus quarter one last year, it's more or less on the same level for the full quarter, but we believe that the activity level will continue to increase. Kristoffer, I will then let you guide the audience when it comes to the financial performance. Thank you, Dag. Happy to do that. Let's start with a summary of the P&L statement here. Overall, as you mentioned, Dag, it was a strong quarter. We are very satisfied with our performance, despite the uncertainties in the world, I should say. A lot of you can read a lot about inflation, et cetera, and we follow this very closely. Given that we're extra strong, we're extra happy with strong growth, strengthened margins, and also improved and EBIT and EBITDA. Net sales, a record quarter summarized to SEK 93 million. That was a growth of almost 60%. All areas showed organic growth. Total organic growth was 32%. And acquired growth, that's Star Teams, was 15%. We have a tailwind from currency effects since most of our sales are in USD and euros, so that represented 12% of total growth. As we have said, during the quarters here, we have implemented successfully price increases on all markets now. It was U.S. in November, Q4, and now Europe and rest of the world in January, Q1. That has contributed to both growth but also strengthened margins as you will see. It also, of course, gives a very strong and good outlook when transplant activities will increase even further here. We continue to see improvements on growth margins. As always, when looking at XVIVO, one must look at each business area to understand the development of the growth margin. If you look at the total gross margins, you can see that it decreased compared to last year, 70% versus 74%, but that's due to the high portion of machines this year, and also that we in this quarter have added the services business area. Worth mentioning on the gross margin side is that we, as most other companies, do see increased freight prices. For outbound freight, we have been successful to pass this cost on to the customers. For inbound freight costs, it will be absorbed by both COGS and distribution costs. We don't believe it will have a significant effect on the margins in the future. We are working very good with this and with high focus. Adjusted EBIT was 6%, and the adjusted EBITDA was 70%. That's significant improvements, and we're happy over that. If you look at the thoracic business area, it delivered its strongest quarter ever, I think, in total sales. U.S. specifically showed great development and represented 63% of sales. Net sales amounted to SEK 68 million, and the organic growth was 35%. As Dag mentioned, strong machine sales, and we have a good momentum now in XPS. You can shed some light on that as well, Dag, but it looks promising also for the coming quarters here. Gross margin on non-reimbursable goods was good, 84%, and that's 1% better than last year. Moving over to abdominal. Sales came in on SEK 50 million. That's SEK 6 million lower actually than Q4, which was a record quarter. Transplant activity in Europe started low, especially for livers. We should remember that we are only, so to say, established more or less on certain markets in Europe at the moment. We expect this activity to increase in Q2, and we also expect to have some sales fueled by the Kidney Assist Transport launch in Q2 as well. Organic growth, though, was 21%. Services then, our third and last business area. Services consists of Star Teams, acquired in Q4 last year and their organ recovery business in U.S. I think it is good to recap what they actually do. Organ recovery, that refers to organ removal from the donor body. It refers to preservation of organs in cold solutions during transport, and also logistics and coordination before and during organ recovery. They are really helping hospitals with the whole chain of the recovery and transport part. By removing these tasks and responsibilities from the clinics, Star Teams adds great value to clinics. Net sales was SEK 9.5 million, and it represented a sales growth of 53% compared to last year, which is very strong. The number of cases grew with 57%. Some comments on the EBITDA for Q1. Adjusted for items affecting comparability, EBITDA was SEK 50 million, and that corresponds to a margin of 70%. This is a strong start of the year and a significant improvement from the 11% margin for the full year of 2021. I think seen in the light of the uncertainties in the world, as I said, regarding inflation and logistical challenges, we are extra happy that we can deliver this increase of profitability. This is a result of commercial and operational excellence to use Ex Vivo terminology, but also very hard work, of course, in close connection with customers and suppliers. Final slide for me here, cash flow. Cash flow from operating activities was -SEK 9 million, and this quarter it was impacted by bonus payments to employees for the full year of 2021. Also worth mentioning is that we have had extremely good sales in March, and we expect payments of those sales in April and May here. Total cash flow was minus SEK 64 million, and that was mainly affected by our final milestone payment for the acquisition of Organ Assist, SEK 21 million. R&D investment, SEK 27 million, and that is more or less in line with our internal budget, I should say, for the quarter. Thank you, Dag. Thank you, Kristoffer. Let's talk a little bit about R&D and the R&D pipeline. I mean, we are making very good progress in our R&D projects. If we start with the European heart preservation trial, we have now activated 11 centers, and we might add another two-four centers in the coming months to secure that we have finalized the study by end of year. The ambition is to include 202 patients in Europe, and we are getting close to 100 patients here in the coming couple of weeks. In Australia, a new record was actually set when it comes to donor heart out-of-body preservation time, more than eight hours of total time outside the body. Three centers have been activated, and we are planning to add one-two more centers, including Auckland, New Zealand. In the U.S., FDA discussions are in the final phase, and as previously communicated, trials are expected to start during the summer. If we take the next slide, Kristoffer. Outlook 2022. What do we expect? Well, if we start with transplant activity, we believe that transplant activity will continue to increase in U.S. and in the rest of the world. And as I previously communicated, there's a target in the U.S. of minimum 50,000 transplants by 2026. Of course, the ambition there is to continue to increase the number of transplants. There is a strong interest in ex vivo machine platforms, and we see also great momentum here, very much fueled by the XPS installations. as I said earlier, we have installed three machines so far, and we expect more machines in the coming months to be installed. We have the Kidney Assist Transport launch. I mean, with kidney being the most transplanted organ by far in the world, and with evidence behind our machine perfusion hypothermic Kidney Assist Transport device, I look forward to commercial achievements in the near future or in the near term. Price increases will continue. You have seen our margin improvement on disposables over time, and we are planning a next set of increases in the U.S., October 1, and in Europe again, January 1 next year. Star Teams will continue to grow and expand into abdominal organs also later on this year. Heart projects, I mean, the exciting and groundbreaking heart technology trials will start in the U.S. in summer. We continue with geographical expansion. Our first regional business manager has been employed in Brazil, and we believe that Brazil is an exciting market for ex vivo in the coming years. We will increase focus even more on professional education. We have global educators working with our key markets, leading the way forward in professionalizing education even further. Of course, there is great uncertainty in the world. We know one thing, and that is that uncertainty is the only certainty there is, and this was actually written by mathematician John Allen Paulos. We all have to accept that we live in an uncertain world, and this means always staying close to the business, reacting quickly when something happens, and continuing to work with excellent people. We see uncertainty in the world related to the war situation in Ukraine. We have interest rates. We have inflation. Kristoffer mentioned the freight costs earlier. These are things we have to live with. So far, we have managed the uncertainties really well, and the plan is to continue doing so as well. That was everything from our side. As the last slide here says, nobody should die waiting for a new organ. I mean, that is why we all come to the offices and so on every day to make this happen. We will now open the floor for any questions or comments, and we'll try to answer it as well as we can. The floor is all yours. The stage is yours. Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad. Our first question is from Ulrik Trattner of Carnegie. Please go ahead. Great. Thank you very much. Good day, Dag and Kristoffer. First of all, congratulations on a stellar quarter. Just sort of looking here at it sounds very optimistic in terms of your outlook for placing XPS systems in the U.S. as well as launching the new transport device for kidneys. We have heard some sort of mixed signals throughout the last few weeks with some big U.S. healthcare providers perhaps being a bit more dovish in terms of where sort of the capital placement market is looking. Just from your point of view, are you seeing any slowdown at all in capital placements in the U.S.? Okay. Just to answer that question, in a very easy way right now, no, we don't see any slowdown. I mean, we have already delivered 2 XPSs to the U.S. in the Q1. We know that there will be more installations. We can't talk about that today, but we believe that we will have a very strong year when it comes to XPS installations. Regarding kidneys transport, more information will actually follow a little bit later on, not today, but we are planning a press release linked to some installations with customer names and so on, where contracts are being drawn right now. So no, I don't see any slowdown for our type of capital equipment so far. To add that for the Kidney Assist Transport, as communicated earlier, we will in most of the cases place those machines. Yes. We are not selling the machines. I mean, they are being placed, and then we are you know the earnings will come from the disposables that we are delivering. The XPS machines are typically sold on cost price to customers in the U.S. Great. On the topic of sort of the abdominal area, I think the highlight area also is the MDR approval. Yes ...for the upgraded kidney transport system. Have you seen any sort of additional interest from that device in Europe post the sort of re-registration of the system? Yeah, I mean, as you know, we received the MDR approval, was it March 23rd? Of course, there is interest in Europe as well, but we have decided to focus initially on the U.S. because it's such a large market and there is also a high need, you know, and you know, high demand from several customers to work with our new technology. We are concentrating on U.S. Europe will follow a little bit later on this year. Great. Since you also mentioned here the expansion in Brazil as well as for selling products in China, perhaps you can start off with China, and when do you expect to have the XPS approved in China? Secondly, Brazil, obviously a very exciting market. Are we to expect any meaningful sales contribution during 2022 for Brazil? If we take Brazil first, yes, I think we are going to see some meaningful numbers in Brazil. We have employed a very competent person in Brazil who has previously worked for Mölnlycke among other companies. We have already initiated very detailed discussions with certain customers in Brazil. We have also made an appointment internally. We have a business development director who is responsible for Latin America and for East Asia. There is also additional sort of resources to focus on Brazilian and Latin American markets. When it comes to China, we have the PERFADEX Plus registration as mentioned before. We have sold PERFADEX Plus in China. We are working with the XPS and STEEN registration. We thought it would be done a little bit earlier this year, but it probably takes another couple of months before XPS is registered. It's quite a cumbersome process with the authorities in China, and especially now, let's say, with the pandemic as well, it doesn't make things easier. We thought we would have it in Q2, but unlikely that it will be Q2. It will come in the sort of coming months. Great. Last question on my end. On services, from a product mix on the gross margin side, it looks dilutive. Based on its sort of history in terms of its EBITDA margin, it should be adding quite some profit to the entire group. Is there any possibility that you can provide it with some rough numbers on Star's profitability in Q1 beyond sort of the gross margin? Yes. That's a good question, Ulrik. On below gross margin, Star Teams did around 0% or some percent EBITDA on their sales. It was a quarter where we had some investments, mostly in the organization. We need, of course, to wait until new contracts come aboard, and then we will see new customers, and then we will see a big increase on the margins there. What we have done more in detail is that we have acquired a finance manager. This is more on the admin side, so a finance manager for Star Teams. Also, there is a shared HR person for the U.S. organization. there was also a very good surgeon hired in Q1. If or when, I should say, new contracts are coming on board, we expect a good impact on both gross margin and EBITDA. Just correct me if I'm wrong. One can assume then that sort of core XVIVO or organic XVIVO generated 17% EBITDA adjusted margin- Exactly. -roughly. Exactly. And- More or less. Yeah. We should expect Star Teams to essentially go back to its former margins as we add on more contracts. Exactly. That is what I would say for this year. Absolutely. Great. Well, thank you very much, both Dag and Kristoffer, and once again, congratulations on a stellar quarter. Thank you very much. Thank you. Our next question is from Dylan van Haaften of Bryan, Garnier & Co. Please go ahead. Hi, Dag, Kristoffer. Also congrats from my side. Just two questions from my side. One, the first one would be on the trends in the OPTN data. It looks like there's a dip in transplant volumes, so it's obviously early days. And obviously, that makes the result and the organic growth on the lung side, I guess, even more impressive. I was just wondering sort of what's driving that. Is that a supply issue? Has there still been some Omicron disruptions where people might be worried about? Could you help me on that question? I mean, hi, Dylan, by the way. It's a good question. I mean, if you look at lung data, let's sort of focus on that here. I mean, we know that we are gaining market share right now because there was a situation with several hospitals in the U.S., but also in Europe, where EVLP technology was a little bit put on hold due to the pandemic. You know, these institutions sort of focused more on safe lungs, so to say, not sort of marginal lungs. We have now seen an increase in activity level from many customers who have been doing nearly nothing during the pandemic. I mean, Vancouver is one case, and the other is another case and several others. The level of EVLP, you know, the number of EVLP organs are increasing clearly right now. That's sort of one part of it. When it comes to lung volumes, as we said earlier, January was weak, at least the first couple of weeks in January. We have seen a very strong uptake in volumes from, let's say, last week in January and on, and also now continuing into April. We believe that 2022 volumes will be very positive and developing in a good way. We have the volume increase, but we also have our, let's say, market share increase or let's say, penetration of machine perfusion, which we see now happening in many of our countries and customers. Does that answer your question, Dylan? Oh, that's perfect, Dag. That's good to hear. I was hoping that it would be. Maybe on exactly that topic, on warm perfusion, has anything sort of changed in respect to the uptake? You said there's more and more uptake. Yeah. There will also be some press releases coming up for new XPS placements. Yeah. Could you maybe contextualize that a little bit with how we should look at the Kidney Assist device growth, which I think is gonna sort of be sort of a negative mix. Should we look at from the current sort of quarter things to be sort of relatively stable in terms of those two offsetting factors, or how should we look at that? I mean, the challenge is always with lung machines that we don't make any money on them. I mean, we install them and then we make, you know, good money on the disposables. We have installed, as I said, three machines this quarter. We know that there will be, you know, several more installations coming as well in both U.S. and Europe and maybe also in other parts of the world. Of course, in a quarter where we have several machine installations, the impact on gross margin is there. That is why I always prefer when it comes to lungs, that the audience looks at the disposable gross margin, because that is really where we make good returns. If you remember, Dylan, I mean, we have 84% gross margin on the thoracic disposables, which I would say is quite an attractive number. That is, you know, where we will also continue to make money in the future. Excellent. Very clear. Just as a general comment, we've kinda turned the corner in respect to, let's say, the risk averseness around COVID, in regards to some of the transplant trends that we're sort of getting back to normal, if you will, in terms of what your business was pre-COVID. Yeah. I mean, as I said, you know, we had an organic growth of 32% in the quarter, even higher for lungs. We see strong momentum, Dylan. We don't see any reason why it should be slowing down. Excellent. Thank you very much, Dag. Thanks for answering my questions, and I'll hop back into the queue. Thank you, Dylan. Thank you. Thank you. Our next question is from Peter Östling of Pareto Securities. Please go ahead. Thank you. Hope you can hear me clear and loud. I have a couple of questions. The first one, it's also about the volume trend on organs being seen in the Q1. For most of the organs, the recovery has been quite good, but for lungs, situation is still below the same period last year, for instance, in the U.S. as you alluded to in your presentation and looking at the OPTN data. I understand that machine perfusion disposables, i.e., warm perfusion, is essentially well, if adjusting it for FX, it's probably down quite significantly. But what I'm not understanding is that PERFADEX is performing so strong in the quarter. Is there a stocking, or have you sold some bulk in late in the quarter to China or can you talk a little bit about that, please? I mean, PERFADEX Plus, there are many reasons for the performance. Well, first of all, there is one thing I have to mention here is that PERFADEX Plus has. We have had very little focus from the commercial team on PERFADEX Plus. I mean, it has basically sold itself, Peter, historically, and it still does. If you focus a little bit on PERFADEX Plus, you can actually achieve more because for example, there are very big differences in volume uptake between customers. A customer like Cleveland uses 8-9 L of PERFADEX Plus for every EVLP run, you know, from flushing the lungs to flushing again before transplantation, whereas other hospitals use 4 or 5 L of PERFADEX Plus. That's actually one reason why, you know, if you focus on PERFADEX Plus and you somehow look at, you know, what are the best hospitals actually consuming of PERFADEX Plus and why isn't everyone else, you know, following the same route. We have looked at that and trying to optimize consumption of PERFADEX Plus. That's one part of it. The second part is, of course, also once again, price increases. You know, we continue to raise prices on PERFADEX Plus. I mean, we have an excellent gross margin on PERFADEX Plus, but we believe that we can do even more because it is a unique product. It's a patented product. There is nothing else on the market that corresponds to PERFADEX Plus. Coming to volumes again, when it comes to lungs, yes, the Q1 was at 1% down versus last year. You have to look at the weeks, Peter. If you take February, March, it's a big difference from January this year. In January, we had very little lung activity in general. I think people were still a little bit tired from the pandemic and, you know, many reasons for it. February, March, and also continuing into April, you know, great performance. Yeah. Well, January was weak, SEK 164, and then you have SEK 211 and then SEK 247 in March. There is- Yeah a trend. I agree on that. It's mainly high. There hasn't been any stocking on PERFADEX ahead of this positive trend continuing. No, no. Absolutely not. People don't really stock PERFADEX Plus that much. In general, I mean, most of our customers, they place orders, and we deliver the next day. It's a different sort of supply chain compared to other med tech sort of companies, Peter, in general. Okay. Very difficult to- We have seen in the past these stocking effects for certain quarters. Anyway. Yeah. Um- It's very. I mean, it the intention is never to stock. I think you know, today when we are you know, customers know us. You know, we have a good you know, delivery performance. If you look at our delivery performance last year, I think we had 100% on time delivery. Customers are trusting us as well, Peter, in a different way today. They know that we deliver on time. They trust us. They don't have to stock up to be on the safe side anymore. Okay. Even with these supply chain disturbances that you see around the globe? Yeah. I mean, we are not having any supply chain problems impacting our customers when it comes to PERFADEX Plus or STEEN Solution, you know, at all, you know, right now. Nothing. Okay. I noticed that the gross margin on machines are higher than for disposable in the abdominal segment. Normally, there is the other way around. Could you please- Yeah Elaborate a little bit what's going on there? Yes. I mean, in general, it was a decent sales for machines in abdominal as well, so SEK 4.3 million. Those sales mostly consist of Liver Assist machines, as we know. There were also one Kidney Assist Transport sold for research purposes, and our first one actually, and also some Kidney Assist machines, not to be confused here. For those, it was for research purposes. We were able to take very good prices for those. Yes Basically. Okay, great. Could you talk a little bit, I mean, as you said, as the numbers deliver, there has been a rather weak start for abdominal in 2022. I noticed that the U.K. is performing well, while when you look at Eurotransplant numbers, they are still slightly behind the 2021 numbers. France and Spain, I don't have any good numbers. Could you please talk a little bit about the development that you see at the end of the quarter and the start of Q2 within abdominal, please? Yeah. The problem with the Eurotransplant numbers, Peter, you know that as well, they don't cover all the countries. I'm a little bit skeptical about that. No, you have Germany in there, which is the biggest one. You can see if you take Germany or Eurotransplant with the U.K. numbers, you cover a good part of Europe. Of course- Yes You have to add other companies, other countries as well, but. No, absolutely. Yeah. You know that for example, Germany, U.K. are very small countries for us when it comes to abdominal today. So we don't have much activity on the abdominal side. I mean, in the U.K., the focus right now is on getting started with the EVLP program in Papworth. In Germany it's also the same thing with Berlin and the EVLP program, which has started there. On abdominal, we are still weak in Germany and U.K. The ambition, of course, is to you know, focus more on these countries as well. If you look at 2021, the total increase in transplant activity according to Eurotransplant was 12% versus 2020. I think it's still a little bit early days to conclude on European transplant numbers, Peter. It's based on total three months. Okay. Yeah. That's why I asked if you had seen a pickup here in the start of Q2. Yeah. I mean, if you look at our numbers for abdominal, I mean, we had organic growth of 20%, Kristoffer, in Q1. We are not strong in U.K. or Germany, so I cannot really comment on those two countries in particular. I mean, we are doing very well in Netherlands. We are doing very well in Italy. We are selling in France. We have a number of customer countries in Europe, but Okay U.K. and Germany are still weak countries for us, and we have very little knowledge about the exact activity level and what is sort of happening in those two countries. Okay. Because most of the growth was attributable to machines. Yes Disposables actually had a negative growth year-over-year. Yeah. Yes. Yeah. There's always a time lag as well between machines and disposables, and you install machines and then you- Yes You work with the disposables or program. It's the same with XPS. It doesn't mean that if you buy a machine, next day you buy a lot of disposables. There is also a little bit of training needs and all these things that have to happen before you actually start consuming the disposables. It's also I mean, we had a very strong Q4, the final quarter last year. It was the record quarter ever for disposables in abdominal. As said, we are at the moment focused on a couple of important markets in Europe. Italy, Benelux, mostly France. Yes, it could be maybe that there was some stockings in Q4, because we saw that the beginning of the year was weak. The trend now is positive, and when we reach out to our, for example, distributor in Italy, they have a good view of Q2. It should be good in Q2. Thank you. Absolutely. Okay, great. How many patients do you think will be needed in the American part of the Heart Study? I don't know. Maybe you have said that in the past. I mean, that sort of number varies a little bit depending on- I think- Yeah. It's around 160- Yeah ... is the last number I have seen in the U.S. We are planning- We- Not too many clinics because, you know, the clinics are very large footprint as well in the U.S., and we know already which will be the first clinic that we start in the U.S. I'm not allowed to give the name today, but No ... we are talking about very large, objects. I think we should say we are very close to finalize the discussions with FDA, which is as said. Yes ... is very delightful, and we will get back with more information when we have something clear to communicate there. Absolutely. Okay. My final one, could you talk a little bit about your M&A activities? Peter, I mean, this is always a little bit sensitive, as you know. But let's put it this way. We made an acquisition in 2020. We made an acquisition in 2021. We are very happy with both acquisitions. I think Organ Assist completely transformed the company into an all organ company. I think Star Teams took us into the service dimension, which I think is also a way to achieve sort of barriers to entry. I mean, there are very few competitors who have the service arm, which we now have. I think it's very likely, Peter, that we will make another acquisition this year, but I cannot tell you which company it will be. That will come later on when it happens. I understand that, but you apparently have still an active M&A agenda going on. Absolutely. We have a business development team now. We have employed a person who is working full-time with business development. We are absolutely working intensively with that. We have very regular business development meetings. We keep track of all competitors and all service companies that exist, and we have made a target list. Absolutely. Are you mainly targeting well, the U.S. or Europe, or would you consider expanding your geographical reach with an acquisition? Absolutely. I mean, if you take product and service companies, they are based in Europe or the U.S. with the exception of ORS, which is owned by Shanghai Genext in China. Yeah. Otherwise, you know, it will most likely be a new company in the U.S. or in Europe this year. Next acquisition. Yes. Yeah. Okay. Yes. Thank you, Dag and Kristoffer. I jump back into the queue. Thank you, Peter. Good question. Thank you. Thank you. Our next question is from Johan Unnerus from Redeye. Please go ahead. Thank you and congratulations. You want to hear us here. Yes. Second, follow-up first, on the M&A side, just confirmation. Would you say that you are already now ready organizational-wise with your previous recent acquisitions to move on for the next one? I mean, it's a good question, Johan. I mean, it always takes time to integrate, you know, a new business. If you take Star Teams, it is the first time that we have acquired a service company, and we are working very closely together with Star Teams. As Kristoffer explained, we have employed a finance manager, and we have an HR person, you know, working very closely with Star Teams. You know, we are very happy with Star Teams' performance and progress. I mean, organizationally, we are ready to do another M&A activity in the not-too-distant future. Absolutely. I mean, we have the resources for it. You know, Kristoffer is actually moving across to the U.S. himself here on Sunday with his family to live there for two years. Also, you know, to be closer to Star Teams and the, you know, the American team and market. I would say that we have geared up organizationally and, you know, for next acquisition. Absolutely. Interesting. Regarding the launch that is ongoing, you can say, I guess. With this approach that you are going to place the machines in the system, what can we say regarding the transparency and the intention from the centers that are committed to placing these systems? I presume you're not just scattering them around. I mean, there. No. is some level of commitment. Absolutely. There is a level of commitment, Johan. I just would prefer not to go in too much detail on this because there will be a press release fairly shortly related to some customer insights. I mean, the intention is, of course, you know, to replace the machines, and there will be certain volume commitment from the customer. Mm-hmm In order for us to place the machine. There's a price already established for the market. I think we have set the price at SEK 4,800 for the disposables. Correct. For Kidney Assist Transport. That is how we start, Johan. More information will follow. As Kristoffer said, we have already—we have had the first research, you know, delivery of Kidney Assist Transport, and now we are taking the next steps here right now and more information to follow. I will not go into customer names right now, Johan. No, that's sensible. Thank you. That's also very useful. Also, too, again, without any specifics, of course, that sort of level of volume commitment is clearly very interesting aspect. There might be other aspect that could add. It would be a reason why you would place a system as opposed. It's not only volume commitment. No, but I think in the beginning, of course, it's good to utilize, you know, devices as much as possible to gain attention as well and see that it is used to transport organs around the country. You know, we are looking primarily at volume commitment rather than other criteria right now, Johan. Excellent. On a different or related aspect, you are clearly investing in supporting the growth and that shows also in the SG&A and the sales and marketing. Should we expect this to increase? You mean the relative share of SG&A? Is that your question, Johan? Sorry. I guess it's very relevant. A bit of both. Of course, you will continue to increase in absolute terms, but the speed of increase, I mean during 2022 because there's a lot of things happening and you will... Yeah. Yeah. I mean, I think what normally drives costs is, in our organization, sales activities. You know, start to travel more, the pandemic eases, and I think from that aspect, that Q1 was a fairly representative quarter. It's also our drivers if we hire new employees. I think we have, organizationally, a custom now that will enable our growth plans. Probably talking about, you know, 1-3 new more resources during the year. I would say more or less, we should be able to maintain this good profitability level that we presented in Q1. Yes. Very good. I also suppose that your take on the market readiness for partly recovering to more normal levels and also to accept new technologies comes into this as well and seems to improve lately. Yeah. I mean, the market readiness for machine perfusion is clearly there. As I said earlier on, I mean, we are increasing the penetration level of, you know, machine perfusion. We know that there are also reimbursement programs like here in the Netherlands, for example, you know, which is connecting or linking reimbursement to machine perfusion. Everyone knows that machine perfusion is the way to make more organs sort of successfully transplanted. I think, you know, the market is ready for it. We see that as well in the uptake and also in the sales volumes. You know, quarter four, quarter one, you know, machine perfusion is very much in focus. There seems to be very little worries about sort of any knee-jerk reaction regarding capital interest and investment. Yeah. I mean, especially if we are placing the Kidney Assist Transport, then it's not an issue for the hospital. In the case of XPS, I mean, we are selling at cost price, so we are not making money on the machines on the lung side. No. Finally, just a small thing. On the cash flow side, you had some employee deferred non-cash items. Is that all we can expect from that part and it relates to bonuses and that sort of thing? I think two key explanations to the somewhat weak cash flow from operating activities of SEK 9 million was the fact that in the Q1, we always pay out the yearly bonus to the employees that was earned in the year before. All costs were taken, of course, in 2021, but payout was made in Q1. That effect, I'm not going into the details there, but that effect will not be seen in the cash flow until Q1 next year. Then also we had a very, as I said, strong sales in March, meaning of course, that we did not get paid for those invoices in March. That will be a good upside in April, I hope, or May. Thank you. It sounds like that's the sort of problems you would like to have. Yeah. Yes. Excellent. Okay. That's all from me. Thank you. Thank you, Johan. Thank you. Our next question is from Caroline Banér of Danske Bank. Please go ahead. Hello, Dag and Kristoffer. Thanks for taking my questions and congrats on a good-looking quarter. Just some questions on Star Teams' expansion. Recent case growth. I was just wondering if the growth is coming from existing customers mainly or from the new ones and hospital and also from the expanded agreement with the Inova Hospital. I don't have exact information on all contracts, but there's one new contract in the quarter, and there's one renegotiated contract in the quarter. I know that several of the customers have increased the activity level with Star Teams. It is many times carried in this case that when you know, when you agree on a contract, you want to try and test, you know, how it works first. You know, once the case is sort of proven, you expand and you know, you give more activity to the providers. That is what has happened with many of the customers that they are, you know, utilizing or call it decentralizing even more the recovery of organs to Star Teams. I think also with the agreement here with NORA, you know, with flight transportation, it has also made many hospitals feel more secure because there have been incidents, quite significant ones in the U.S. where organs have been discarded because flights have not arrived or been delayed and so on. There is a big shortage when it comes to plane capacity in the U.S. Many people are using private planes nowadays, and this is also something that makes, you know, the customers of Star Teams dare, you know, to give them more volume. I would say it's more, many times old customers doing more with Star Teams than before. All right. Could you explain a little bit more on what the expanded agreement with Inova entails? It'd be interesting to know. Yeah. I mean, can you explain what is in that Kristoffer more? At the plus model. Yeah, the plus model. Basically, there is an agreement that Star Teams can have the possibility to provide more services than just only the recovery part, so to say. It also means that we can offer perfusion services, for example. I think it also entails the transport, the flight transport agreement that we now, which we didn't do with them before, can offer these flight and air transports. also products. I mean, for example, there is PERFADEX Plus. The expanded agreement means that Star Teams will provide the PERFADEX Plus and charge the hospital for it. In the past, it was the hospital which sort of provided partly, you know, the solutions and everything. Revenue will increase where we have renegotiated the contracts. That would be a consequence of applying this so-called plus model, you know, which means more products, you know, logistics, services provided. It's also a model that of course will be very interesting once Star Teams move into the abdominal area, because then we can. Yes ... of course, we have the possibility to also offer the best-in-class preservation method with our kidney transport. Okay. That's really interesting. Is this agreement, this plus model agreement that you have with Inova, is that unique for Inova? Is that something that you have with other customers as well? Or are you- We are planning to change all contracts so that as much of the plus model as possible is included, but the contracts sort of are renegotiated at different times. Inova is the first one that has been renegotiated, and we are now this quarter renegotiating other contracts, Caroline, as well. You will see more of that in the next quarter, Q4. All right. That sounds very promising. A question on China. One should always ask about China, I guess. The number of lung transplant clinics in China has grown from 20 to 50 clinics in 2021. In how many of these clinics are you present today? I mean, we have very little presence in China. I mean, there are a few clinics, Caroline, which are large clinics. I mean, 50 clinics means that many of the clinics are hardly doing any cases at all. We have not sold that much yet to China. I mean, as I said earlier, it's only PERFADEX Plus that has been delivered. I would guess without knowing exactly, but I would guess we are talking about a couple of clinics where we are present today. We want to have a little bit of control as well of how things are handled and sold in China. We are taking a little bit slow, and now we are waiting for the XPS regulatory approval and STEEN Solution. We still only have one employee in China as well. We will over time increase that number, but as you are well aware, China has its challenges, and we have to make sure that we manage our sales in China in a strong way. Yeah, that's my answer. All right. Thank you very much. That's all from me and congrats again on a good quarter. Thanks. Thank you, Caroline, and see you next week in Stockholm. Thank you. Thank you. We have a follow-up question from Dylan van Haaften of Bryan, Garnier & Co. Please go ahead. Hey, guys. Sorry, just a final two questions. Just on the xenograft progress, I might have missed it, but obviously, it was a big story in the news. I was just wondering sort of what next steps were gonna be, because at one point, there was talk about starting a clinical trial, you know, IND enabling. Is this still the case even though the patient did not leave the hospital, or do you have any granularity on what's gonna be next and if we can expect any news flow? Oh, you mean on the xenotransplant side, Dylan? Yeah. What will be the next. I cannot really answer what will be next now. I'm actually going to visit Maryland quite soon and also Munich to understand a little bit what is next. We know that we are delivering as I said earlier, we have delivered an additional Heart Box to Revivicor, which is the biotech company. You know, behind the genetically modified pig. There is a lot of activity, and I know that activity level is sort of picking up as a consequence of the success of xenotransplant. What that means in practical terms, I cannot really answer that question today, Dylan. Hopefully by next call, I should have more information on that. Excellent. Very clear. And maybe on the second part as well is I know that the solution, and I'm just gonna call it the heart STEEN solution, was also kind of part of that secret sauce of the xeno- Yes transplant. I wasn't really clear on if that's been sort of obviously, it's been patented and whatnot, and what the plans are gonna be in regards to launching that solution. If you could perhaps- I mean, that solution. Give some color on that as well. Yeah. That solution is used in the clinical trials in Europe and Australia and then U.S. It's combination of HeartBox and this unique solution that. Yeah that is always used. You know, you don't use the Heart Box without the solution, Dylan. It's the same solution that is being used in clinical trials at the moment. Yeah, absolutely. That was used in the xenograft. There's no difference there. In terms of commercialization, yes, it's what we have said earlier. Q1 2024 in Europe and then in the U.S. once that study has been concluded. Okay, perfect. I remember, it's also. Could you remind me about the patent situation around that? That is sort of unlike the other STEEN Solution. This one is patented for a much longer time, right? Yeah. It is patented for a much longer time. Do we have the exact time here, Kristoffer, or to- Yeah. It's 2035. Yes, 35. That's a long time from now. Excellent. Yeah. Thank you very much, guys. Okay. Thanks for taking my questions. Thank you. Thank you. Thank you, Dylan. Thank you. Thank you. There are no further questions at this time, so I'll hand back over to our speakers. Perfect. Thank you all, and thank you for listening, and thank you for asking good questions. Looking forward to the next call in three months' time, Kristoffer. Yes. Thank you. Thank you all. Bye. Bye.