Release Date: July 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sales growth of 41% in SEK and 40% in local currency, marking the highest growth for a single quarter since the company was listed.
- Record sales of SEK53.2 million for Q2 2024, surpassing the previous record.
- Strong performance in various regions: EMEA grew by 32%, Asia Pacific by 26%, and North and South America by 166% over the last 12 months.
- High gross margins, increased from around 75% to around 85% due to scalable production processes and price increases.
- Expansion of the agreement with Thermo Fisher to cover global territory, enhancing market reach and cost synergies.
Negative Points
- EBIT for the quarter was minus SEK23 million, compared to minus SEK14 million in the same quarter last year.
- Negative impact on cost of goods sold by SEK3 million due to the move to a new production facility.
- Increased administrative costs due to double rent for new and old premises, adding SEK3 million in additional rent costs per quarter during 2024.
- Higher costs for incentive programs due to positive share price development, amounting to SEK2 million during the quarter.
- Flat development in North America attributed to uneven purchasing patterns and a limited customer base.
Q & A Highlights
Q: Can you comment on how one-off costs have developed since Q1?
A: The setup of the new production facility and the move have affected costs of goods sold by SEK3 million during Q2. Extra costs for having two facilities are taken as administrative costs, contributing to the increase in admin costs. Additionally, the share price development has impacted administrative costs. R&D costs include both capitalized and non-capitalized expenses, with a slight decrease in capitalized costs this quarter due to accounting reasons. Overall, the increase in costs is mainly due to these factors.
Q: Have you seen any acceleration or interest in your product portfolio, particularly regarding tender activity?
A: We are still in the early phase of our collaboration with Thermo Fisher, but we are reassured by the initial traction. We are seeing strong interest and tenders being written, indicating a promising future. However, significant revenue from the expanded territory is expected to start from 2025.
Q: What is the timing for the expanded product portfolio to be commercially available in the US?
A: We expect to see the initial onset of revenue from the expanded product portfolio during 2025. Adoption aspects are being made now with customers, and we anticipate significant traction in the US and Europe.
Q: Would it make sense to expand the number of distributors in the US for your product portfolio?
A: We are actively assessing opportunities and have been approached by potential partners. Currently, we are confident in our ability to deliver on opportunities ourselves, but we remain open to expanding our field organization in the US as opportunities arise.
Q: What is the current commercial traction of your CLIA lab in the US, and what type of revenues are you expecting prior to obtaining reimbursement?
A: We are seeking reimbursement for our RHD test and transportation products, with expected coverage early next year. We anticipate volumes and revenue to start generating quickly once reimbursement is obtained. Additional products like cystic fibrosis and Thalassemia tests are also being worked on.
Q: How should we look at the phasing of revenue in the second half of the year, particularly regarding the RHD tender in Canada and the Cyted commercial contracts?
A: The majority of the Cyted contract will happen in 2025, with some ramp-up in the second half of 2024. The RHD testing in Canada is also more of a 2025 opportunity due to delays. However, we are confident in maintaining the same growth in the second half of 2024 as in the first half.
Q: Can you provide an update on the number of employees and organizational growth?
A: The number of employees has increased significantly over the past year, mainly due to investments in supply chain and commercial organization. We have also hired special competencies for reimbursement and market access in the US. We do not expect substantial additional hires for the remainder of the year.
Q: Is the CLIA lab running at a profit?
A: The CLIA lab is not yet running at a profit, but we expect positive numbers during the second part of the year. We are optimistic about generating revenue from ongoing discussions and projects.
Q: What are the prospects for renewing the Cyted deal, and should we expect similar or greater sales figures?
A: The current agreement covers 2024 and 2025. Both parties are happy with the engagement, and while it's too early to provide specifics, we see no reason why it couldn't be extended.
Q: Are there any other bottlenecks that could hinder sales growth from the Thermo Fisher deal?
A: Beyond the natural lead time, we are working on building evidence for the importance of monitoring transplant patients, which takes time. However, we are very confident in the potential and excited about the future opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
