Release Date: July 11, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Quarter two sales reached SEK220 million, marking a 57% year-over-year growth.
- CERAMENT G sales in the US surpassed SEK100 million, indicating strong market penetration.
- Operating results hit a record high with SEK36 million before incentive provisions.
- US regulatory approval for CERAMENT BVF in interbody fusion was received, with a planned launch in Q4 2025.
- Strong data from Australia showed a significant reduction in amputation rates with CERAMENT.
Negative Points
- Elevated R&D costs impacted the quarter's financials.
- Sales and marketing expenses increased significantly, from SEK66.5 million to SEK99 million year-over-year.
- A SEK1 million bad debt provision was made due to the bankruptcy of Steward Healthcare System in the US.
- Temporary higher receivables contributed to a negative cash flow for the period.
- Challenges in Europe included staff shortages and disruptions like the NHS hacker attack.
Q & A Highlights
Q: How should we think about further investments in selling expenses and hiring additional people in the US organization in the near term?
A: The investments are forward-looking, aimed at opening new market segments and product indications. We don't expect further hiring in the near term; the current hires will focus on driving new accounts and strategic initiatives. (Emil Billback, CEO)
Q: Can you comment on the temporary higher receivables and how we should think about DSOs going forward?
A: The temporary high receivables are not indicative of a trend. Underlying, we see a gradual improvement in DSOs in the US and stable DSOs in Europe. (Hakan Johansson, CFO)
Q: How will Cigna's reimbursement recognition impact sales and demand?
A: This is very positive. It eliminates potential hurdles in outpatient settings where the DRG reimbursement was low relative to CERAMENT G's cost. This should encourage more usage in smaller procedures. (Emil Billback, CEO)
Q: Can you say anything about the CERAMENT G unit volume growth in the US and how that compares to the growth of the number of surgeons using the product?
A: The sales increase is fully reflective of the increase in units. The growth is driven by both new and existing users, with a recent overweight towards existing users ramping up their usage. (Emil Billback, CEO)
Q: Are there any unusual orders in Q2 like stocking orders from any customers?
A: No, there were no unusual or stocking orders. The sales reflect actual product usage on patients. (Emil Billback, CEO)
Q: How should we think about R&D costs in the second half of the year?
A: The second quarter forms a good reference for the level going forward, though there may be some volatility in timing. (Hakan Johansson, CFO)
Q: What incremental new insights are you hoping the SOLARIO study can show?
A: The study aims to investigate if CERAMENT G and/or V can reduce the days of systemic antibiotic required. It has the potential to influence standard care on a societal and national level. (Emil Billback, CEO)
Q: Is there any reason to start worrying about the cash position?
A: No, we are confident in our cash flow and available cash. (Hakan Johansson, CFO)
Q: Can you comment on the administrative approvals among hospitals for the trauma indication ahead of the launch?
A: The addition of information in systems where we have approval is progressing well, likely to be completed by mid-August. (Emil Billback, CEO)
Q: What is driving the increase in the "other sales" line in the US?
A: This reflects the use of ancillary products and tools for various applications, including trauma. This trend is expected to continue as CERAMENT is used in broader indications. (Emil Billback, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
