2cureX AB (publ) (2CUREX) Earnings Call Transcript & Summary

Welcome to RedEye and today's strategy update with 2cureX. We will start with an update prepared by 2cureX, where we will learn more about the company's current and future focus challenges, strategy as well as the goals for 2023. After the study strategy update, live Q&A session, which 2cureX will follow, and I encourage you to send in your questions.

Hello, and welcome to our 2022 strategy deep dive session. This is a session that we do on a yearly basis to give everybody the chance to understand and to look in details about our company, the medical environment where we are living, our strategies, the progress that we are making in the execution of this strategy. So today, you're going to have presentations from Dr. Raphael Gruber, our Medical Director, looking at the clinical need that we are addressing with our [ in-vitro ] tests. You're going to have presentation by me on the strategy, the market and how we are modeling and addressing it. You're going to have presentations from [indiscernible] regarding our technology base and how it's evolving over time. And you're going to have presentations as well about our -- the execution of our commercial strategy. What we are finding, what are the hurdles, how we are overcoming them coming from Jesper Floyd Kristiansen, who is our VP of Business Development. So it's going to be a lot of information in these presentations. At the end, we will also share with our goals for 2023. We hope you enjoy it. And then after the presentation, there's going to be a Q&A session where we will be happy to take any questions that you might have as an audience. Looking forward to it.

Hello. My name is Raphael Gruber, and I am the Medical Director for 2cureX. I shall be very happy to speak to you today about shifting paradigms in metastatic colorectal cancer treatment selection. Introducing the disease. Many of you know that colorectal cancer is the third most common cancer in the world and the most common site of metastasis is delivered. What you can see on the right here is a colon cancer opened in its big bowl segment that has just been taken out by the surgeon. And on the right, you see one of those typical computer tomography scans with liver metastases in the upper left of the picture. That is the situation that we are talking about today. Clinical stages in colorectal carcinoma happen to occur at different time points. In Stage 1, we would find about 20% of the patients when they present with symptoms like bleeding fecal occult blood in the stool -- unfortunately, and that is if you look further down to the left of the graph, about 20% to 25% of the patients are discovered in Stage 4. That means that the tumor which arises from the glandular structures of the interior lining of the big bowl have actually grown their way through all the walls into adjacent tissue and are starting to be carried away by the lymphatic or the bloodstream into other localizations where they then [ grow ] metastases. Take-home message here, the stunning 25% of the patients with metastatic colorectal cancer actually are diagnosed in this very late stage. In this stage, chemotherapy is the best and most important option. Now if we look at how colorectal cancer treatments are being executed, on average, there are 4 chemotherapies of choice, which are used for the treatment in the first line of the MCRC Stage 4. They are usually applied until the patient progresses. In the second line, another choice can be made and so can in the third line. Unfortunately, and that is the challenge we are speaking about today, no guidance for the oncologists for those main therapies exist to date. We've tried to put that down on a time error for you. Where are the test-based guidances for treatment decisions in metastatic colorectal cancer today. We all know blood tests, tissue tests are being taken by samples by the endoscopist. There are mutational analysis possibilities trying to find biomarkers. Then there are tests on images or by imaging and in the end, comes then the establishment of the colorectal disease, diagnose. Following that arrives the main treatment, chemotherapy will be offered to all patients in Stage 4 mCRC diagnosed. When unfortunately, these stages progress to the next level, complementary treatments need to be selected. If we now think a little bit about testing in mCRC therapies, we've provided a table here that can show you what therapies have what biomarkers in what therapy line. And if you see the mass of green checkmarks here in the main therapy segment, -- the usage in first, second and third line is applied, but unfortunately, there is no biomarker whatsoever available today. Complementary therapies for the later lines of treatment in fourth stage have biomarkers, unfortunately, very little -- very low numbers of patients actually benefit from that. This is a flow chart of what test-based guidance for complementary mCRC treatments exist. And it's a little bit detailed, but I would like to direct your attention to these small words here, CT doublet or a CT triplet, both in first line and in second line treatment, the mainstay, the main backbone of the chemotherapy regime, consists of these therapies. It's always CT doublet or triplet plus something. Now let's have a look at where our test signals or test results feed into on the patient flow arrow over time here. Results from the very modern mutational analysis all flow into the complementary treatments, which is what we have just seen with these biomarkers. IndiTreat addresses the main treatment for chemotherapies and concerns all patients. This is where we can introduce functional testing for the mCRC patients by molecular and genomic profiling, which is the most modern way of addressing the most desperate cases. We shouldn't forget that there are no biomarkers for mCRC main therapies. And the current and molecular profiling tests, of course, rely on multiple technologies. You have seen some of these abbreviations they pertain to certain proteins, which are found or biomarkers or receptors. All these therapies are very important, but they guide the complementary therapies of the so-called druggable genomic or genetic alterations whereas IndiTreat is the missing link for informed choices among the approved main therapies that, as we saw all patients will undergo. Hence, there is an unmet need we would like to talk about today. Although presumed equivalent, the main therapies, those that every patient will be exposed to. The main therapies in mCRC treatment vary regarding individual efficacy and toxicity. The lack of predictive biomarkers is an important limitation to choose the main treatment for mCRC patients. The unmet need is, therefore, to make sure that the individual mCRC patient does not become his or her own test case by exposing the patient to unnecessary side effects -- that is also what the clinical voices say. We have conducted this summer, a survey in 140 experienced gastrointestinal cancer oncologists in Scandinavia, Spain and Poland. And over 90% of the colleagues out there said that they need new tools to support therapy decision-making in this important patient segment. The solution that we are suggesting is to shift the paradigm on testing. IndiTreat can show how individual mCRC patients, tumor cells are impacted by approved main therapies. Oncologists can therefore now use this information provided by IndiTreat to make a personalized decision even for the main therapy of individual mCRC patients. Thank you very much.

Hello. My name is Fernando Andreu, I am the CEO of 2cureX. And in this presentation, I'm going to walk you through our strategy through the market, the market opportunity that we see, how we are modeling it and how we are addressing it in general. Starting with our environment because we are not operating in the vacuum. We are part of an industry, and that's the in-vitro diagnostics industry. So some facts and figures about the industry. This is a very large industry. This is an industry that generates turnover last year of USD 86 billion and is projected to be at USD 118 billion by 230 -- 2030. It is a highly concentrated industry. If the top 9 companies that you see at the bottom of the screen accumulate almost 75% of the market. That's 60 -- more than USD 63 billion that these 9 companies generate in diagnostics only. And the rest of the market is a long tail of more than 500 companies that account for the remaining 25%. Europe represents approximately 1/4 of this total market. The U.S. is overrepresented in this industry. Prices there are higher and there is a different setup in general. It is as our audience probably already knows a highly regulated environment, IVD, both in the U.S. and in Europe with the new IVDR regulations is restricting a lot what companies can do, how they should do it, how you bring a new product into the market, et cetera. What is interesting about the IVD industry is that it is estimated that approximately 70% of the clinical decisions are based on one or another diagnostic test. Still, IVD accounts for approximately 1.5% of the total health care expenditure. So from an efficiency point of view, we could say that this is a very efficient industry when you compare the cost with the value that it is bringing -- and what is interesting also is that this is in an industry with a continued and steady growth. We see here that the compound annual growth rate expected between the next 10 years is around 3.3%. This is mainly driven by infectious diseases, which is a growing market and oncology, which is also a growing segment within this industry. How do we define our high-level strategy. By the handbook, we could say this is a differentiation through focus. What do we mean here? The starting point for us is the technology that we have. So our technology in generic terms is a functional drug sensitivity testing technology. So that's the starting point. Now the first strategic choice that we made is that we are focusing in the clinical applications of this technology, therapy decision-making support. So what we mean by this choice is that actually when we are focusing in the clinical application, we are leading out research, drug discovery, other activities that you could do with this technology. Why this choice? There are a couple of reasons for this. The first one is that diagnostics or clinical decision-making support is the largest segment by far potentially much more than drug discovery or research support. The second one is that while this is the largest segment, this is also the hardest one to enter. So the barriers to entry make it hard to get in. But obviously, once you are in, you are always able to build additional barriers to protect your position there. So there are certain benefits for being the first entrant, and this is what we decided to do. And then the third thing is related to our mission as a company, which is to make an impact on patients. Now not in 20 years from now, when you are involved in drug discovery, anything that you are doing in drug discovery is going to see patients 20 years away if it ever makes it. Our mission as a company is to support patients now, therefore, being in this diagnostic space is what made sense for us. And even further focusing, we decided to focus in colorectal cancer. Why? First, colorectal is the third largest cancer type different from lung and breast, which impact differently man on women, colorectal is very evenly spread, so to say, from this perspective. It is growing. It is growing significantly. We will see some numbers in further slides, due mainly to changes in lifestyle, but also to aging of the population. Importantly, the options for personalizing treatments are very limited in colorectal cancer as opposed to our cancers. So the clinical need that we are going to be addressing is very important there. And finally, -- this is 2cureX area of expertise. The starting point of 2cureX was in colorectal cancer. So this is where the company has developed most of its activity in the last years. Now with this focus, what we are trying to build is a sustainable competitive advantage for 2cureX within this space. So as said, we are first mover. We are developing a superior understanding of the dynamics of this segment. So how are colorectal cancer patients treated? What are the diagnostic pathways, what are the clinical pathways, how do they relate to each other? What is the relationship with imaging diagnostics, what are the new drugs that are being developed in this space, et cetera, et cetera. We then -- we are developing a portfolio of products that is focused on understanding very, very well the customer needs coming from this understanding of the segment dynamics. Being the first entrant and being active only in this space allows us to build our brand awareness and the customer relationships that are relevant here. Therefore, through this focus, we are trying to build a position where we can own the segment of colorectal cancer therapy decision-making. How can we define the market. First, a couple of words about how colorectal cancer is -- colorectal cancer today, we have approximately 1.9 million new cases every year. And it is projected that by 2040, it's going to be around 3.2 million new cases every year. As said before, main growth drivers are aging of the population and what this article here that is mentioned here calls the Westernization of Lifestyle. This is the spread by region. And as you see, Asia is a big chunk of it. Asia is almost half of all colorectal cancer cases nowadays. Europe represents 27%. This is where we are present nowadays, and North America represents approximately 10% of the total market. When a patient is diagnosed with colorectal cancer, and there is a specific presentation from our Medical Director going into more detail. But according to the progression level of the disease, it is defined as a Stage I, II, III or IV, IV being the most advanced cases. Patients can be Stage IV right from the beginning when they are diagnosed or they can become Stage IV through evolution after being diagnosed as Stage II or Stage III prior. Important is that patients in stage I, II and III are mainly treated through surgery, while patients in Stage 4 are mainly treated by chemotherapy or let's say, by drugs, what is called systemic therapy. Some patients, the high-risk patients in Stage II and Stage III are also treated with drugs, but mainly our current focus is in the Stage IV patients. And when we look at this, there is 1.3 million patients who start treatment every year, be it in first or third line, 1.3 million patients. And this is where our current products IndiTreat start, IndiTreat extend and IndiTreat explore are -- can be used for therapy decision-making. Now if we take this market of 1.3 million new treatments every year, and we would multiply by a certain price per test in the range of what we have today. This will amount to a theoretical, and I want to highlight here the word theoretical market of USD 3.5 billion per year. And this is only with Stage IV patients. If you would add to this stage III and stage II patients, that opportunity theoretical opportunity might be even higher. Now do we mean with this that our addressable market is this large, -- absolutely not. How do we move from this theoretical market to what we call the addressable market, what is really our target here. What we are using is we are using a well-known model, which is called the Diffusion of Innovations, theory. And that was developed long ago by Everett Rogers. And with the -- through this theory, we have built what we call the technology adoption curve for functional drug sensitivity testing. This starts with the recognition, and I'm sure many of our audience are familiar with this, that there are several -- there are different profiles when it comes to technology adoption. There are different profiles -- psychological profiles in people. We have what we call the innovators, those who jump first into any new technology that is available there. There are early adopters who are a little bit less risky. So they are still willing to be the first, but less risky than the innovators. And then there are -- there is the early majority, which is those who jump into the wagon when it is clear that it's going to move forward, but are still in the early pack. And then there is the late majority, which comes later. And what we have done here, we have classified or we have, let's say, linked these 4 categories to the adoption rate of the technology as a percentage of the total theoretical market. And then we have looked at how these different groups of customers kick in, in a time scale. And again, while we are using the theoretical model of Diffusion of Innovations, actually, we have tailored the model according to our experience and according to, let's say, recent related examples. And here, for example, we have been looking at how the next-generation sequencing technology has been kicking into the clinical use over the years. And we have also looked at how liquid biopsies applied to oncology have been also developing over the last year. So these are 2 references that we had used when building our model because they are very similar. They are also in the oncology space, and it's also very new technologies that came into the market. Of course, the curve builds on previous work of research and on building the foundations of everything. But actually, the curve starts -- the adoption curve starts when the first product is launched. So with this, we came to draw this curve -- the shape of the curve is the typical one. It's an S-shaped curve, but obviously, the parameters of the curve are not standard. So what is the length of the tail, what is the slope of the curve in every moment, et cetera. This is the curve that we have modeled. This is what we are using internally as our reference for our long-term planning, et cetera. I want to emphasize that it's important that what we have below the curve is the competitive space. So it is -- the competitive activity of the companies is for a share of whatever is below the curve. Now in this curve that we have shaped, we -- as you can see, we estimate that it will take approximately 15 years for this technology to penetrate 80% of the potential market. This is a very high percentage of penetration. And what are the triggers? What do we think are going to be milestones in this curve are here? So obviously, as I said, the first milestone is when the product is -- when the first product is launched because this is when the customers are, for the first time, able to use the technology. And then there is a first part of the curve, which is relatively flat. And this is where innovators are -- innovators and early adopters are relevant as customer segment. And here, for this group of early adopters and innovators -- what is important is their individual experience. So they hear about the technology. They understand the technology. What they want to see is that it works, and they want to see it in their hands. So this is why at the beginning for these groups, it is very important to give them the chance to try the technology. And here, we are using our IGNITE program to give them early access. Clinical studies is also a typical traditional way of giving access to the technology to this early customer groups. Then at one point, what becomes more relevant is that the test as the technology has to be easily usable. It has to be convenient. In this case, we relate this to the decentralization of testing. So as you know, we are today offering this test as a centralized lab, but our goal is to move that testing to the hospital because especially in Europe, hospital in-house testing is the preferred way to go. So we think that at one point, when somebody -- and again, I want to emphasize, these are not 2cureX milestones. These are milestones that we think are going to impact the curve. It could be to 2cureX and we hope that it's going to be 2cureX hitting the milestones first, but not necessarily. This is a competitive space. So we think that the decentralization of testing and the possibility of doing in-house testing at hospitals is going to be an important trigger as well as the steepest part of the curve. Then there is another thing, which is the critical mass. So this early majority segment of customers that you're seeing here. What these people want to look at is, okay, who else is using it. And they feel comfortable when there is other people who are using it, then they can use it themselves as well. So reaching this critical mass that we have quantified as 500 hospitals worldwide using functional drug sensitivity testing. We think this is going to set another milestone. And then finally, of course, there is the late majority and these people will move mainly when the functional drug sensitivity technology, this type of testing is mentioned in clinical guidelines. And that is happening in our estimates. It takes approximately 10 years to get a new technology into clinical guidelines as a recommendation. But again, it's not that before that nobody is going to use the test, as you can see, there is a large chunk of the market that can be unlocked even without having the guidance. But this is how it is now. When we put some numbers behind it, what we think is that, again, the addressable market size, just showing here a few significant milestones. We think the addressable market is going to hit approximately EUR 50 million around 2025, and it will reach the EUR 100 million 1 year later in 2026 approximately. And then it will continue to grow according to the curve, and it will hit the EUR 500 million as an addressable market, probably around 2032 in 10 years from now. If you try to do the calculation between the percentage that you see in the right side and the numbers that I'm showing here, you will see that there is a discrepancy. But this is because when we are modeling this, of course, we are not only looking at how the number of cancer cases is going to grow in the next 15 years. We are also building into the model the fact that the prices that we have today are not going to be the same prices that we have when this is in centralized reimbursement schemes when it is mainstream, when countries like China kick in, et cetera, et cetera. So all of these things are built into the model to reach to these numbers that I'm showing here. This curve actually has some accelerators. So why is the shape of the curve like this because we have modeled the accelerators and the stoppers. So -- or the brakes. What are accelerators, number of players. When -- when it's only one company pushing for a new technology, it's very difficult, almost impossible that this is going to go through. So in this sense, and we have said this before, we welcome competition. We welcome that there are as many companies as possible in this space because the more companies are here, the more companies are pushing, the easier it's going to be to move this curve forward. Obviously, the accumulated investment. This is an industry with large investments required to get new technologies in. So the accumulated investment is also a driver of this curve. The technology development as well. I mean, technology today allows to do certain things. But when we think of the next 10, 15 years, anything that improves efficiency, anything that improves convenience, anything that improves the performance of the test is going to help push the curve further. And then, of course, the clinical need, which, as I say, and if you have seen the presentation from our Medical Director of Gruber, you will have realized what the importance of the clinical need here. What are brakes in the -- what are the elements that push against the development of the curve. The first one is the complexity of reimbursement systems. We said it before. In Europe, every company has a different reimbursement system. There is no European system. Therefore, it is a very complex negotiation. Sometimes it's country by country, sometimes even within a country, region by region. So this is one of the reasons why we need to have local people in the different countries. This is why we have our distributors there. The second one is that when you bring a new technology, this technology falls in existing clinical processes, in existing clinical protocols. And when you bring a new technology, it's the whole protocol that needs to be changed and adapted. And these protocols are typically very, very rigid. And therefore, integrating these new technologies in the protocols and changing the protocols to accommodate the new technology is a very long process. And then the third one is that in general, health care systems are designed to prevent innovation. There are all kinds of hurdles, all kind of gatekeepers, et cetera, et cetera. Why? Because typically, innovation means higher cost. Therefore, the health care systems are designed to push back on innovation as much as possible to make sure that only very, very relevant innovations, we'll make it through. So these are the main stoppers that are built into this -- the shape of this curve. Interestingly, [ Deloitte ] published 3 weeks ago, a report about the future of diagnostics. And it's interesting to see some quotes that they have there in that report because they mimic exactly what we have modeled in the curve. Let me read them. One of them says, in terms of barriers, the #1 thing that stands out is the level of rigidity and inertia that you see in diagnostic pathways. Europe is a complicated market. It is still a patchwork of countries and regulations. And then having a share regulatory process doesn't mean that you get paid. You have to go into every country with its own policy, reimbursement processes, et cetera. So exactly what we had built in our own model. Now the positive thing is that also this report says, although gene-based companion diagnostics are becoming increasingly common, there is a complex relationship between genotype and phenotype and relying on genomic data alone risks missing vital information. Phenotype here means behavior in real life, so to say. So this is exactly what our test is doing. Our test is a phenotypic test in the sense that what we are looking at is not the molecular pathways that drive to certain behavior by the tumor, but we are measuring the behavior of the tumor directly. This is what we call phenotypic assay. So this recognition in this report was also very important to see and very interesting to see for us. Now how do we move from the high-level strategy that we defined before as this differentiation through focus, how do we move through operational strategy. So obviously, the fact that we are focusing in the clinical application and in the colorectal cancer application is the driver for the different functional areas, if you want, in our company. So our technology development, the development of our different test development portfolio, our geographic scope, our commercial channels, our business models, they are all closely interlinked one with the other, but also conditioned and driven by our high-level strategy. How can we define this high level -- sorry, these operational strategies, basically, and to keep it short. In terms of the technology platform, what we are focusing is on the quality of the patients tumor [ replica ] because this is important, very important. I mean we have to know that what we see in the tumoroids replicates well what will happen in the patient, original tumor -- turnaround time because, again, in the clinical setting, it is important that we provide the results within the timeframe when the oncologists can make the decision on treatment. And then, of course, we want to be able to capture new drug mechanisms and importantly, convenience. Convenient, including, as I mentioned before, developing a system that can be used for in-house testing at hospitals. In terms of our application portfolio, the different tests that we are developing around the technology, we decided and we have been doing this and we will continue to do this to develop specific tests for each therapy decision-making point. So the oncologist is facing different decision-making points throughout the life cycle of a patient. We are offering tests that cover each of these decision-making points with specific characteristics that adapt exactly to that situation. And here, we started with metastatic colorectal cancer [ third ] line, and we have been moving upstream to first line and then to non-metastatic to cover the whole patient pathway. In terms of business models, we started with testing service. So we have -- we are offering this as a service today in our facilities in Copenhagen, but our goal is to [ assess ] transition to hospital in-house testing when the technology allows us to do that. Geographic scope starting in Europe and because it's our natural environment and in as many countries in parallel as possible because with this, then we are addressing the different reimbursement schemes and the specificities of each country. We will expand to other regions when we can do the hospital in-house testing, as mentioned before. And then in terms of commercial channels, the only way how we can be present in so many countries with a limited investment, limited upfront investment from our side is through distributors. So this is what we are doing. How does it go from a competitive point of view? Who are our competitors? And how do we define the competitive landscape. If we follow the same logic as we used to describe our strategy, you see here that in terms of technology, so functional drug sensitivity testing, we are following nowadays, 36 companies that have this type of technology. The number is growing. So we keep track and we are adding new companies to our radar. Out of these companies, 19 are in Europe, 14 are in the U.S., 2 are in China, 1 is in Latin America. Of course, we could add to this all more research institutions, universities, et cetera, that are doing work around functional drug sensitivity testing. But for the time being, we consider that only companies, commercial companies are our competitors. 19 of these 36 have chosen the pathway of clinical decision-making support. So the diagnostic pathway, 19. And then out of those 13 have a focus or have activities in colorectal cancer. Only 5 including us has actually launched products, which means that we not only have the technology but also have the regulatory approval to launch an IVD product. So there are 5 companies, 2 in Europe, 2 in the U.S., 1 in China. These are the companies actually SEngine and [ Travera ] are companies that are in the U.S. Oncomedics, 2cureX are companies in Europe, InvitroCue is a Chinese company. Now we expect that the competitive pressure is going to be increasing in the coming months and years. First, because there are several companies who are developing IVD products. So these 13 companies mentioned here that are in colorectal cancer, 5 have launched products, but the other -- the remaining 8 do not have a launch product but are preparing to launch products. So we expect to see new products coming in. Several clinical studies are ongoing by different companies to support their cases. We see an increased funding activity and just as an example, a company [indiscernible] in the U.S. raised in the last months, USD 89 million, USD 70 million in the round and then USD 19 million in a complementary round a few months later. So this is the type of funding that we are seeing with some of these companies. We are seeing geographic movement. We see that, for example, that [ OncoPrecision ], company from Argentina has recently moved to California. So we are seeing that there is movement in terms of geographic expansion, and we are also seeing M&A activity starting to happen. So AccentCare acquired [ Hospice ], CrownBio acquired OcellO. So we are starting to see this kind of movement, therefore, showing the increasing degree of maturity of this market that we are in. We do have competitive advantages when we compare to these other companies, and we want to build on that and obviously continue to have these advantages expanded. One is clinical evidence. We still have the best clinical study that has been published so far prospective study, interventional study using our technology and showing the impact on patient outcome of the guidance of the IndiTreat -- of the IndiTreat test. We had the accumulated experience, and this is very important. At the end, this is all about trying things and seeing what works and what doesn't work, et cetera. So we have much more accumulated experience than any other company in the industry. And we estimate that we still have 1 to 2 years head start, meaning we started before the others. We are hitting the hurdles before the others. We are overcoming the harbors before the others. So we still think that we are in a good position compared to the others. We have our distribution network, which is something that nobody else has. And we have a couple of technology-related advantages that are relevant and probably will be developed in the technology part of the presentations today. One is that our technology provides a better [ vitality ] to the regional tumor in terms of the biological features. And the second one is that our readout is to image analysis and not alternative readouts, image analysis powered by AI. And we think that this provides better prediction and better guidance than alternative [indiscernible]. So all in all, it's a growing competitive environment. We welcome that because I said before, this is pushing the curve in the right direction. But of course, this means that we will have to stay on our toes and to keep close track of what the other companies are doing as well. And with this, I'm going to hand over to the next presentation. Thank you.

My name is Anthony Letai. I am a Professor of Medicine at Harvard Medical School and Dana-Farber Cancer Institute. I am trained as an oncologist, but I spend most of my time supervising a Cancer Biology Research Lab at Dana-Farber Cancer Institute. Now I'd like to talk to you very briefly today about functional precision medicine what it is and why we might need it -- so first, what is precision medicine. And I'll be talking mainly in the context of oncology. Precision medicine is finding the right drug for the right patient that is developing assays that can allow us to predict what drug will work for what cancer patient, what tumor is going to respond to what drug or what set of drugs. So far, I would say it's probably fair to say that precision medicine has been nearly synonymous with genomic precision medicine in oncology. Starting back in around the year 2000, the absolutely fantastic results in chronic myelogenous leukemia, where it was found that a genetic abnormality common to nearly everyone with CML was targetable by a small molecule kinase inhibitor called imatinib. This was an astounding success for genomic precision medicine and completely changed CML and from a disease that killed many people to a disease that now people who are diagnosed in chronic phase can actually live entirely normalize and normalized span as long as they are treated with this miracle drug or something like it. Now based on that, tremendous optimism arose. So this is a pattern we could execute on nearly every tumor that is sequenced tumors know everything we could about their DNA. And that would point us in the direction of a drug to target this or a drug to target that. And that would have similar results where we would convert an otherwise deadly disease, something more like a chronic illness or something that will go away completely. And there were some early successes like targeting lung cancer with EGFR mutations or targeting melanoma with BRAF mutations. However, we also learned that these single agent targeting events didn't work as great for other tumors as it did for CML. Moreover, as we try to go beyond some of these early bridge heads of success, we found that it was very difficult. In fact, if you look at a lot of broad studies of genomic precision medicine, where patients are enrolled with an advanced tumor, their tumors are sequenced. And after the tumors are sequenced, there was an attempt made to assign the patient a certain therapy based on the results of the genomic precision medicine assay. However, what has been found is that in these trials, only a minority of patients can even make it to an arm, all that is to say only a minority of patients have a DNA sequence that allows them to be paired with a targeted small molecule -- and in many of these cases, the response rates are extremely low. So generally, if you take an all-comers approach to patients who are enrolled in these broad genomic precision medicine trials with advanced cancer. The actual clinical response rates are much lower than 10% in many cases. What is very clear is there is a majority of patients whose needs are unmet by pure genomic precision medicine methods and additional methods of precision medicine must be employed. So let's see how some other medical specialties approach this? So for instance, in infectious disease, even today in 2022, the gold standard for identifying the ideal antibiotic to kill the bacteria that is causing, say, the pneumonia or the urinary tract infection is the culture that bacterium and then expose it to all the drugs and see which ones kill -- just makes sense, right? If you want to know what's going to kill this bacteria, put all the drugs on it and see which drugs kill. Why don't we do that in cancer that is why don't we take the patient's tumor cells and expose them directly to all the drugs we have in mind and see which drugs kill. Well, I think that's a very good question, and I think we should be doing this. In fact, there were a lot of attempts to do this, dating back to probably 20 to 30 years ago and what were then called ex vivo chemosensitivity assays. And they had some success, but it just simply wasn't good enough to be entered into a broad clinical application. Fast forward 20, 25 years, there's many, many more drugs and much better technologies, both in single cell analysis as well as population analysis of cancer cells and cell biology in general. This allowed many of us to reexamine whether it was possible to develop accurate assays, where we could take a patient's tumor cell exposed to all the drugs and read out something smart to tell us which drugs should work on that patient's tumor cell. This is an approach that I call functional precision medicine. And an entire field is now growing around these very simple ideas. Just try to explain to a layman, Why, if you want to know -- if you want to know if this drug is going to kill this tumor cell, just try to explain why you don't just simply put them in the same well and see what happens. Well, that's what we're trying to do in functional appreciation medicine. Where is it being practiced, well, broadly in academia throughout the United States as well as throughout Europe. Also, many companies have started up in the last 5 years both in the United States as well as in Europe. And there have been some very prominent clinical trials getting to be published in absolutely the top journals in cancer biology. And I would recommend take a look at the February issue of if you look at the February issue of cancer discovery, that really the top journal in cancer biology nowadays in -- and you'd see some 2 very nice examples of functional precision medicine choosing effective drugs for patients who otherwise didn't have an option available to them. Where is this going to lead? Well, I think the great need for better functional precision medicine in cancer is going to demand that we explore avenues like functional precision medicine, and I see a slow accrual of improving clinical trial results over the next few years and eventually going to result in broader and broader adoption in academic medical centers, which will also facilitate the broader adoption of commercial functional precision medicine assays, both in the United States and in Europe. The need is so vast that I would see there will be many different assays, many different platforms that will make it across the finish line to actually be used in everyday clinical practice to treat patients. It's not going to be a one-size-fits-all. But I am confident, I'm very confident that functional precision medicine is going to play in a central role in matching the right patient with the right drug, which is, after all, the job of functional precision medicine. I'm telling you all this as my own personal point of view and as a practitioner functional precision medicine. But I would also tell you that if you are interested in this sort of thing -- consider checking out a -- consider checking out a society that I'm involved in and it's called the Society of Functional precision medicine. Hopefully, I've shared the screen with you here. If you're interested, visits at sfpm.io or you can use the QR code that I show here to get you there as well. I hope that you have enjoyed this presentation and load a little something about functional precision medicine. Thank you.

My name is Ole Thastrup. I'm the Chief Science Officer and Founder of 2cureX. What I will present to you is the IndiTreat core technology. The present status and our future activity that will strengthen our competitive edge. The agenda for the presentation is shown here. I will show you why is 3D so important in drug-sensitivity testing. I will also show that our IndiTreat system replicates the properties of the patient's tumor, I will show you a full testing platform -- and finally, I will also show you how is our automation of the IndiTreat testing platform going. I will end by presenting a new product that we have started to develop for earlier stages of colorectal cancer stages where the patient is not metastatic at. Let's jump to it. Drug sensitivity testing have been here for quite a while, actually way back in the 1940s antibiograms were developed to identify effective antibiotics against the patient's bacterial infections. This system is used also today. It was obvious to try to move such a functional test platform to oncology. That was done in the '70s and '80s, where cells were taken from the patient tumor and cells were cultured in 2 dimensions on a flat surface. I will show you what the problems was with this approach. The cells were taken from the patient's tumor. And this is actually 1 of our patients, primary solid tumor, where the cells have been plated out and glow nicely in 2 dimensions. And here's the problem -- in [indiscernible] turns out that these test systems do not predict patient outcome. And why is that? Well, -- if you have a look at the tumoroids as we call them, the 3D micro tumors in the IndiTreat test system, -- that is a 3-dimensional structure. That is a reason why these cancers are solid, that they interact with -- so the cancer cells interact with other cancer cells and other cells -- and creates this 3-dimensional network. And that is essential to predict patient outcome. And that's the reason why some oncologists say, well, we have seen this before, and it didn't really work. And there, we just have to agree with them. The old systems in 2 dimensions, actually didn't work that well. You need to go in 3 dimensions as we do. This system, these tumoroids have been characterized by a number of academic and clinical partners. And we have shown that they nicely replicate both the genetic and the functional behavior of the patient's tumor. How does the platform then look like? This is an example where we have taken a biopsy from a liver metastase of a colorectal cancer patient. And here, you have generation of 3D tumoroids. The next phase is that we expose these tumoroids to a number of approved drugs. And you will see under the arrows, it stated that the IndiTreat in the first phase have solid proprietary know-how. In the second and subsequent phases we have patents that are now issued in major markets that protects the technology. The exposure of these 3D tumoroids is followed over time with imaging. And you can see in this small table, the top panel shows how these tumoroids grow over a week. These have the first, the top level have not been exposed to drugs that sort of control. The patient is on his own control. The next, there is a slight effect but very little, whereas in the -- in the bottom, there is a very effective treatment that actually holds the growth even disintegrate the tumoroid. If we see the text under this panel says correct drug-induced killing. That's very important because the way in which you kill the tumor will have to be through what we call apoptosis. That takes time. That's the reason why we use 7 days for this testing. Now these tumoroids look very different. Here, they may look pretty nice. However, they have very different shapes and quantifying that is not a trivial task. We have in 2cureX develop what we call IndiNET artificial intelligence algorithms. So these go in and I have a small video just showing how this algorithm jumps and analyze the individual tumoroids. And here, we have hundreds of images in each patient. The result of this is then presented in a report to the oncologist. And you will see here just sort of presented that there are 5 drugs and they are listed according to sensitivity. Not only do we show what the sensitivity of that specific patient is -- importantly, it's compared to a panel of similar patients. So the oncologists know, okay, if my patient is in the green area, then it's among the most sensitive patients whereas in the red is the most resistant patients. Where does this then fit in the treatment workflow. Here is a [indiscernible] cartoon showing sort of what a patient needs to go through when the patient come in. The first is, obviously, to find what diagnosis do we have. So this is blood samples where there's biochemistry, there's pathology on tissue samples, mutation analysis and then there is imaging that could be CT or MRI. This will lead, hopefully, to a diagnosis and also a staging at what stage of the disease is the patient. The medical treatment go in 2 groups. The first is what we call main treatment, and that's chemotherapies, different chemotherapies. All patients -- I repeat all patients go through this. Then there's a complementary treatment. And these are subsets of patients that may have a biomarker that allow them to on top of the main treatment to have an additional treatment. How can we guide this? Well, the mutation analysis can actually guide the complementary treatments. However, there are no biomarkers that can guide the main treatment before IndiTreat. This is exactly where IndiTreat comes in. And as said, all patients will be provided a main therapy based on different chemotherapy machines. Now I want to update you on where we are with automating IndiTreat. IndiTreat is a complex technology, but we really would like to automate key elements of the technology. And why is that? Well, first, -- this will allow decentralized IndiTreat testing. Today, we test all the patient samples in our own 2cureX laboratories. In the future, with automation, we can decentralize -- and this system will also ensure reproducibility, robustness between these different testing sites allowing us to expand to the addressable market beyond Europe. Last but not least, this will allow us to introduce a new business model. Then I have some positive news here with regard to the automation. I can say that we have just received in this big box here in November -- the, hopefully, final adapt prototype from [ Freiburg ]. And you can see that it's being installed and these are our collaborators -- from Freiburg. So I will update you in the near future on how the system is working. I will also present to you today that we are -- we have started a new development of a product that will move us to earlier stages of the colorectal cancer to stages where the patient is not metastatic. The left-hand cartoon is presented sort of how the different stages look like in the patient where very small tumors actually starts with a polyp and then it moves all the way to stage IV, where the tumor has spread to destine organs most cases, delivered. That's where our 3 products today are addressing the disease. In the future, we will move in to also to be at Stage III, and then we have covered at all on the CRC space. In conclusion, what I'll show you is that the IndiTreat tumoroids replicate both a genetic and the functional property on the patient's tool. The time from biopsy to test report that fits with the therapy decision time. It fits with the workflow in the hospital very important. We have shown that our products in mCRC are clinically valid. IndiTreat is the first family of CE-IVD marked functional drug sensitivity tests for colorectal cancer. We are well underway to automate key elements of the IndiTreat platform. Last but not least, we are now starting to develop an additional IndiTreat CRC product that will cover earlier non-metastatic disease stages, 2B and 3. And with that, I say thank you.

Ladies and gentlemen, I'm Jesper Floyd Kristiansen, VP Global Business Development at 2cureX. Today, I'll give you a status of the commercial strategy. The last year has been on one side very positive -- when we have been out being able to visit hospitals and meet with oncologists, it has been a fantastic feedback from all of them. Also now, except of Israel, all distributors are fully trained and Israel will be trained in the first week of December, and that's due to national holidays. But it has been a year of challenges. It was totally unexpected that we will see the new wave of COVID-19 for the first 3 to 5 months of 2022. The idea of doing distributor training in the home of distributor. It was that after the training, we could do co-visit at hospitals. That was due to the COVID-19 not possible during the first 3 to 5 months. It was also difficult for distributors as well as to [indiscernible] market to arrange face-to-face visits by ourselves after the training was done. The Ukrainian war has resulted in a recession and that there is a focus on most basic needs in most European countries and especially the ones which is bordering up to Ukraine, and that was not foreseen a year ago. So how do we get IndiTreat into the hospital? First of all, it is a question about creating awareness to know about IndiTreat. For that, we need the appointment with stakeholders. In the beginning, we were focused a lot on oncologist. Why? Because they are the ones who will main benefit from the IndiTreat report information. On the other side, they are very busy with having meetings with patients and the family of patients and therefore, we have now enlarged the appointment possibility to also include the pathologist. We see that often a hospital would love to have IndiTreat done in the hospital. The day when that's possible from our side is a less for sure that the IndiTreat will be done in the pathology department. Therefore, it's very good to already from the very beginning, have a very close collaboration with the pathologist. Also, they will be able to be part of the ordering process from arranging that the biopsy should be taken from the patient until the report is ready to be downloaded and then they can present the IndiTreat reports at the tumor board meetings together with all the other diagnostic results they are doing in the pathology lab. When we have the appointment done, then, of course, we are doing the presentation. As I mentioned before, have been a fantastic feedback from the market and all of our meetings have ended up with a very positive feedback. When they are willing to use a functional drug sensitivity test, then we can see that the easiest one, as Fernando has mentioned in 1 of the presentations before, it is innovators and the early adopters. We are open to try and we do that via the so-called IGNITE program. If they would like to have it more controlled, then we have the clinical studies, which we can participate in. Later, we will move into the early majority. It's a bigger group of customers, but we are asking us who else is using IndiTreat. And we would also like to see a more critical mass of evidence. Much later will be the late majority. They will be waiting until it is in the European guidelines. Another way of presenting this is, of course, we have put it all into boxes. So right now, you can see a lot is mentioned on the left side. That is for the innovators and the early adopters. They just want to know, does it work? Yes, you can try it by yourself either with IGNITE or via a clinical study. And then we do hope that it's all ending up in the bottom part in the middle that the physician has an intention to use IndiTreat. To use IndiTreat mean convert from [indiscernible] into routine testing. That means also that we are going to pay for the test report. And that is where we are looking into the availability of reimbursement and finance option. So how can we pay for it? First thing is for sure that the oncologists want to try the IndiTreat. That is a main driver. Then we are looking into different cost covering option. If it is a private hospital, for instance, it is a little bit easier because they just list IndiTreat as another point on their menu and the patient will have to pay for it. Some cases are also insurance who are paying for the cost of cancer treatment. If it is a public hospital, it's different from country to country in Europe. Some of them require a reimbursement -- and in other countries, it is possible to get payments done partly via hospital budget and that the patient is paying part of it. Later when IndiTreat becomes into the guideline then there will be local and regional requirements of how this is going to be paid from the governmental part. And of course, it is the innovators and the early adopters who will create the past the IGNITE. And again, here, another way of showing it is in boxes where we're in the middle, we have that the patient is able to pay out of the pocket. And on the left-hand side is where we do need the reimbursement, and we have to prepare file dossier and submitted and finally get approval. And that can take some time, depends from country to country. And on the right side, you see where the hospital is able somehow to finance it, and we do a negotiation based on hospital to hospital. And of course, ending up that IndiTreat test is available for ordering for a specific hospital. So Fernando has mentioned IGNITE program a couple of times, and we do see a very strong interest after we have been able to get an appointment, and we do the presentation. After the very positive feedback during the presentation, then we are sending them the IGNITE program agreement. And here, we have seen that there's a long process time for the legal approval. It is, unfortunately, more or less similar to the clinical study, even though we thought that it could be much shorter for the IGNITE. End of October, we have 15 enrolled hospitals, and we have ongoing conversation with another 39 at this moment. And we believe that out of the 39, we should at least have 5 all enrolled in the IGNITE in this year, meaning we will end up around 20 for 2022 compared to 30, which we were expecting in the beginning of the year. But that was before we realize the impact of the new wave of COVID-19. Patient samples are also coming slow than we intended. That is simply because after the IGNITE has been legally approved, then you still need some changes in the internal protocols of the hospital. So it's more a delay than a real issue, but we would have liked to see that the samples came in faster. I would like to introduce you now to our distributor from Romania, Mr. Grig Coica, from -- Chairman at Onco Systems and let's hear how he see the collaboration with 2cureX and IndiTreat.

[Foreign Language]

Thank you to, Grig. And as you see also in Romania, even though that we were only trained 1.5 months ago, we did have some co-visit, and we had very positive feedback from the market. And we are looking very much forward to see the coming weeks and months, which is coming from Romania. As of 1st of November, our sales channels look as what you see on the screen here. The dark blue is our home market where we are going direct. It's Norway, Sweden, Denmark and Germany. We have the middle -- blue color is our distributors and the light gray is where we still are looking for partnership under investigation. And the orange color, it is where we are working on reimbursement project. And in fact, in Germany, we are also looking on reimbursement even though that we are doing direct activities. And I think it's time again to have a video from 1 of our distributors. This time from Finland, and it is Mr. Johan Wolf, who is CEO at Alcon Diagnostics. Let's see what he says.

[Foreign Language]

Thank you to Johan. I think with video here from Romania and from Finland, it's also a good reason why we have distributors. It is a benefit to be able to talk the local language when we are out, having meetings. And therefore, we ask them to make the video in their local language. So ending comments from my side as of 1st of November, IndiTreat is represented in 17 countries, in Europe, 4 direct and 13 via distributors. We do expect that we will hit the 20 countries coverage before end of 2022, so as we promised a year ago. And we will continue to evaluate the best way of offering IndiTreat in each country, now and also in the future. And we have seen during the year that we have changed some distributors into direct, and we have also changed distributors during the year. We will be looking into how it's best possible to offer IndiTreat in every country. Thank you for your kind attention.

[Foreign Language].

Okay. In this final presentation for the day, final session for the day. I'm going to quickly guide you through our outlook of 2023. What are our goals? What can you expect and how to follow our progress? And for this, I'm going to follow the same logic and the same scheme that we had before with the different operational units. So in terms of technology platform, what you can expect is that, as said before, and I hope that by now, everybody gets a clear picture of what is the strategic importance of this. We want to automate the critical steps of the IndiTreat process that will enable hospital in-house testing. So our goal is to have a prototype of an instrument that automates the critical steps of the IndiTreat process, ready to be tested at hospital within 2023. In terms of our application portfolio, we are going to initiate the development of the next IndiTreat test still within the space of colorectal cancer, obviously, aimed at early stages of colorectal, so non-metastatic rectal cancer, and this is IndiTreat Neo. This is going to be our fourth test in the portfolio. The goal is to -- within 2023, the goal is to finalize the performance assessment phase. I mean, we are in the development of an IVD. There are different phases. Performance assessment phase is an important milestone. We want to have that finished within 2023. In terms of business models, as we explained, we are looking at transitioning as quickly as possible from the centralized lab testing into the in-house testing. Therefore, what we want is to have the first pilot site that can evaluate the in-house testing concept. And the goal here is to have the first IndiTreat test run successfully at a hospital. The fourth one, geographic scope. We want to continue geographic expansion in Europe to cover some relevant markets where we are not present yet. Our goal is to be present in more than 25 countries. Our expectation is that we finished the year 2022 with 20 countries. We want to expand to 5 additional countries in 2023. And in terms of commercial channels, we will continue local market development through our -- the joint activities with distributors. Our goal here as a sign of maturity of the different markets is that we want to have patient samples coming in from at least 20 different countries. When we get patient samples coming in from the countries, this means that the distributor is trained, the logistics are set up, that we have found the early adopters and the innovators that we have gone through all the process of signing agreements with them, et cetera, et cetera. So we want to have at least 20 countries at this level of maturity. These are all, call it, qualitative, semi quantitative goals. And then now we are going to look at -- from a quantitative perspective, we expect to have in excess of SEK 6 million in total revenue from which approximately SEK 3 million coming from sales -- from test sales, and the rest coming from grants and other sources. And in terms of number of samples tested, we expect to exceed 500 patient samples tested in our [indiscernible]. If you compare these results or -- sorry, these goals with the technology adoption curve that we have described before, you will see that we are aiming at a significant share of the addressable market in 2023. We will -- this is the scheme that we are going to use throughout 2023 to update on the progress of each of these areas and activities. And we are really excited with what we are doing, and we are looking forward to a very successful 2023.

Thank you 2cureX for this update. Here with me, I have Johan Unnerus, Life Science Equity Research analyst at RedEye. And I would also like to introduce Fernando Andreu, CEO, Ole Thastrup, CSO; Raphael Gruber, Medical Director; and Ken Graabek Johansen, CFO. Unfortunately, Jesper Floyd Kristiansen could not join us due to traveling. However, Fernando Andreu will answer all questions related to business development and commercial operations. This is a live QA. So I would like to encourage our viewers to send in your questions. Welcome to 2cureX. I would like to start with the first question regarding your -- the model and your assumption and modeling you presented in your update, which specifically focuses on function of drug sensitivity testing. Please, Fernando, just to recap and to simplify, could you just walk us through the modeling and your assumptions?

Sure. Sure, I can, Ethel. Thank you. So what we have done is we have taken this model where we estimate what percentage of the total market is represented by each customer profile, innovators, early adopters, et cetera. And then we have done this by region. So we have a separate modeling for the U.S. or Europe, for Asia Pacific and for China. And then we have estimated how long it takes to engage and convince each of these groups. So when they are going to kick in. We also estimated which triggers like we have seen, for example, before, what would trigger the different stages in the curve. And we have done this based on -- we have modeled this based on 2 more or less recent examples in the IndiTreat and is -- the uptake of next-generation sequencing and the uptake of the liquid biopsies. With this, we come to the curves -- and when we accumulate all the regions, we come to the curve that we have shown before. And then with this, we have more or less estimated how -- when or how the penetration of the technology will happen in clinical routine. And then we have here -- the number of patients. We have here the prices for the test, and this is how we ended up with the estimates that we provided. So it's an elaborated model. And of course, it's a model -- but what we are seeing, we are verifying this with all the real-life input that we are getting. I want to emphasize that in this model, we have also included metastatic or rectal cancer. So this is not the whole functional drug sensitivity testing, just colorectal cancer.

May I follow up on that? So do your model consider the competitive landscape?

So as you have seen in this curve actually does not -- this is not a representation of 2cureX sales. I hope we made it clear. This is a representation of the market. So everything that happens below the curve is actually where we will be fighting with the other companies for the market share. But of course, we have modeled in the system, as explained before, the more companies are pushing in the right direction, the faster this curve can take up. So yes, we are looking at the competition and how they are helping shape the curve.

Understood. Next question is directed to Ole. Together with the Hacker micro engineering center in [ Paribas ], you developed a prototype for the automatization of critical parts of the IndiTreat process, with the goal to decentralize hospital testing and using IndiTreat automation and IndiTreat testing. So please tell us more about IndiTreat automation. Well, what is the current stage of it?

Yes. Thank you. I mean I should say that the IndiTreat technology is a pretty complex technology, mostly because these tumoroids that we make, they are pretty fragile. And we need to make sure that we do not disturb them, so that they keep that functionality that the tumor has. So when we said about a couple of years ago that we wanted to automate it, there was a number of things we had to take into account. This about being careful. The other is the complexity of the assay. Today, we have very skilled technicians move that to an automatic [Audio Gap] centrally. That's what we have done with our partners at [indiscernible]. The -- further we had to make sure that the IP we have, the AI algorithms, the strong know-how is built into this automation. So that's just to sort of explain all the process we have gone through. And now I couldn't sort of stand -- I'm not showing the big box because we were so excited when we saw the instrument here on site about a week ago. And it's now being installed. That is a key element of the IndiTreat technology. So when that is fully implemented, and we have tested it, it will become part of this automatic system that we can send out to hospitals.

You mentioned that the prototype is currently being installed at your lab. So when do you believe we could see IndiTreat automation in the hospitals?

I mean, I should say that, as it also was mentioned in the presentation, we actually have a goal for 2023 that we will have testing at a hospital. So we are pushing -- we are really accelerating this process. Now the full instrumentation that needs to go into this will need to go through the regulatory process. So we move the automation into the clinic next year, but that is simply to make sure that everything is working and then we will go through the regulatory process. But you should see the IndiTreat conducted at a hospital next year.

And full rollout, would you say it's within 1, 2, 3 years?

I mean I definitely do not hope that it will be a slow rollout. In the beginning, obviously, we need to make sure and learn how it works, and feed that back to us. So we get it all optimized for the subsequent installations. But then after there, I hope that and expect that the rollout will be pretty fast.

Yes. Just a follow-up. It seems very impressive to have develop the prototype. The processes involved are obviously contracts. And the term prototype can mean sometimes different things. How close to the real thing are you?

I mean -- first, I'm going to say that [indiscernible] has been absolutely a fantastic partner. They have done something like this before. The handling of the liquids, the moving of tumoroids, that is something they have done before. So I would say that the prototype is very close to how we expect it will look in the future. So I'm -- I mean, we will throw tumoroids added or sort of the coming period. But I hope we will not see major changes. There may be some changes that are needed to get it through the regulatory process. But that's not substantial changes to the whole concept of the prototype. I think I also mentioned in the presentation, I said, hopefully, the final prototype we have had another instrument in-house we have tested. And both tested [indiscernible] here with the right patient samples. And they have been up here and looked at the results, and it's all been -- it was all sent back and actually changed quite a lot. So the instrument that we see now is actually very different from the one we saw here several months ago. So I think we all expect both, us and [indiscernible] that we are close.

Another question. So will this -- will IndiTreat automation have any effect on the turnaround time, compared to today when you actually send a lot samples to lab and Copenhagen?

If I just look -- if I'm going to -- if I'm just looking at the test itself, then you can say the -- we will obviously not have the transport time to the [indiscernible] lab. There will also be -- it will be easier internally at the hospital, so they can very fast get assembled to the IndiTreat test. But we just have to say, to run the test, the actual sort of exposure of the tumor, that will have to be done over several days. That we cannot cut. So yes, there will be -- it will be a little bit faster, but that's not the most important thing. The most important thing is that it now can be done locally. That's -- there's a number of hospitals that are asking for that. It is easier to get it into the standard workflow at the hospital.

And the number of days, what would you say that -- is it 14, 15 days approximately?

I mean, that would be sort of where we would be looking now. I mean we are saying now, 21 days. And that's obviously to be on the safe side. We have delivered results before that, but we cannot cut it down. So yes, I mean, what you say is probably close to what we expect. Sorry. But I guess, I have 1 small remark, what happens is, a day after we have received the sample, we will provide a feedback to the oncologist, so that they know exactly how it's going, and we will also tell them when they should expect the results so they can plan accordingly.

And thee -- just short follow-up. And the variation, let's say, looking at between 2 and 3 weeks, the variation is that depending on a little bit of safe side of things? Or is it depending on the complexity of samples for each tumor in patients?

I mean, I don't know if you mean that it's an issue with the 2 weeks.

No. Insight into, if there is a variation.

I mean it will be -- I mean, again, it won't be longer, but there are some instances now. We have 21 days, in some instances, we will be able to do it a little bit faster. But I mean, as presented in the presentation, 7 days is what the actual exposure is taking. Then there will be some logistics before and there will be some reporting. So it will be very few days that can be taken out of this. This is just -- and a lot of other tests are actually maybe even taking longer. So I don't see this as a problem, and we haven't bumped into that when talking to the oncologist. They do not see this as a problem.

And it might be worthwhile pointing out that for sort of less -- sort of technical listener, we're talking about a very tailor-made specific test. Once you get the test results that is that we're looking at something that's very, very tailor-made and specific for each patient. So it's not -- it should be and could be very precise I suppose.

Yes. I mean, again, I think it's very important when we have presented this to our oncologists sort of the timeframe, the types of drugs and everything. They have been involved in sort of designing the output as well. As you probably know, we lived in a hospital for 10 years. So we know the process very well. And we know that the timeframe we are presenting is not a problem. I mean that -- so I do not see that as an issue. And whether we can cut a day or 2, if we can we do it, but it won't be that important for the oncologist.

I would like to continue with IndiTreat Neo project that also was introduced in the update. The aim is to providing support for the treatment of earlier stage colorectal cancer. Raphael, what is the utility with IndiTreat Neo?

Yes, Ethel. Thanks for the question. It is important to understand that neoadjuvant cancer therapy actually means that the chemotherapy comes first and then comes the operation. So the curative act is actually taking the tumor out. Now you can protect that curative act and try to improve the surgical outcomes by applying chemotherapy even upfront. That is done in most of the solid tumors, out in oncology today, but not yet so much in colorectal cancer. The aim would be to make the tumor melt or shrink, following an efficient application of chemotherapy and then have a better surgical outcome. In the clinical stage IIIb, the clinical utility is for IndiTreat to select situations in which the drug sensitivity can be defined before in these tumoral cells that shall be operated later. So you can see a clear advantage in providing additional information for which patient actually could especially benefit from neoadjuvant therapy.

And what can you say about project activities and timeline for the activities with regards to this project?

Ole, would you like to say something about the development stages?

I can do that. I should say that the reason why we started with metastatic colorectal cancer actually being the most difficult one, that was simply for us to get ethical approval for interventional clinical trials. Moving into the earlier stages as we do now is something that we actually have worked on before. So I'm not that concerned about the technical development. And we have set that we -- within 2023, we will have finalized the performance assessment, and that is everything that needs to be done with regard to the technology, the way it's performed for it to go into the clinical trials needed for regulatory approval. So we expect that, that whole performance assessment will be finalized next year.

And speaking of clinical trials, in -- overall both more specific to IndiTreat Neo, can you tell us a bit more about the design of a clinical trial in terms of number of patients and the protocols?

I think when we talk about clinical trials, that's a phase of the projects when multiple stakeholders come into play. These are regulatory stakeholders. These are stakeholders from scientific guideline, giving societies and of course, also stakeholders in the reimbursement environment that we address. So we need to follow these 3 stakeholder requirements to find synergies and design clinical trials and data evaluations, data generations that support the benefit that patients are supposed to obtain from a test. Now we are in a better place in an IVD situation because the requirements are quite clear. And apart from laboratory and scientific validity, it is important to show that the test always does what it's supposed to do, which is crowned by the CE mark, of course. And we have actually committed to starting 2 clinical trials in 2023 and are looking very much forward to this exciting new phase.

And how many patients do you expect to enroll for these 2 clinical trials? And can you tell us more. I guess 1 of the trials will be for IndiTreat Neo? And please just tell us more about the second clinical trial.

Yes. Clinical trials have the requirement to have a statistical outline and the statistical calculations, they are based actually on power calculations and on other assumptions. These assumptions flow into the design of the clinical trial, and we are currently in the phase of defining exactly how these trials will be set up.

I understand. And -- but just once again, you mentioned 2 trials. One of the trials is following the IndiTreat Neo and the -- is the second trial also related to the same project? Or is it related to another project or another stage of metastatic colorectal cancer?

We have 3 products in the market IndiTreat: Start, Extend and Explore. We are looking for very lean synergetic projects that collect data to satisfy the aforementioned regulatory reimbursement and guideline, giving requirements. As far as the medical world is concerned, everybody is interested and intrigued about a missing link in the diagnostic as we saw. IndiTreat can actually provide information to support a decision which main treatments in metastatic colorectal cancer can be chosen. And that makes people very interested. We have great feedback on the medical need and on the outlook of participating in such trials. Of course, we need to look, exactly which centers may take part and how many patients they can provide? I hope that answers your question.

Thank you. Also, you have previously mentioned during both, conference call related -- associated with quarterly reports, but also during the update, you mentioned that you welcome competition. And that you consider competition something positive that could help pave with the way full clinical and market uptake of functional drug sensitivity testing. So what are your thoughts on the competitive environment?

Yes. I guess that's a question that I will take, Ethel. We have presented it in the slides. But to summarize, we are now following 36 companies who have technologies based on functional drug sensitivity testing. And then some of these companies are actually more into the drug discovery or the research space. Others are in the clinical testing like we are. And some of those are looking at other things like, for example, hematological cancers, leukemia lymphoma and others are looking at other solid tumors. So for us, it's very important now. We are focusing very much on those people who have products in the market for colorectal cancer. And this is 5 companies, as I mentioned before, including us. So we have 2 American companies, Syngene and Travera. We have a French company, OncoMedics and we have a Chinese company Invitrocue. And then it's us. So this is how we are looking. Obviously, we are keeping an eye on all 36 and all the upcoming companies that are appearing all the time because, of course, companies that have products for other solid tumors might enter the colorectal cancer space. So we have to keep an eye on that. But when we look at these companies, I think we are still in good shape in the sense that we started first. So all the processes that you need to go through, all the harbors, all the accumulated experience that we have, the trial and error that we have gone through that we have already done. And many of these people are still in the process. Also, we have a distribution network that's unique. None of the other companies is operating in multiple markets at the same time. And very importantly, I think also we have our technology is optimized for the clinical application. So we have, especially in the way how we culture tomorrow is that replicate much better, the original tumor than other approaches. And also, in the image analysis powered by AI, I think we have here a solid technology competitive advantage as well. But of course, at the same time that we are seeing them as competitors, as you mentioned, we are also seeing them as allies in the sense that we need all of us to push, to convince the market, to get support, to get reimbursement for functional dragon CTV tests as a category because this is important. This is not something that 1 single company can pull off.

You already mentioned this, but just to summarize your answer. So in 10 quick seconds, the most important competitive advantages that 2cureX has.

The technology, the focus in colorectal clinical applications and our distribution network and the accumulated experience that we have. Was that 10 seconds?

Yes. Perfect. Fernando, this question is also directed to you. During 2022, 2cureX has had the goal to include 30 hospitals in your IGNITE program. And yesterday, you communicated that this figure has been revised. And at your aim is to include 20 hospitals. So what are the reasons behind this revisited figure?

Yes. So the first thing I want to emphasize, because it's really important, is that this delay is not due to: we are seeing a challenge or we are seeing pushback on IndiTreat or on the concept of functional drug sensitivity testing. We are not seeing such pushback. It's a matter -- mainly it's a matter -- there are several things. The first thing is, the summer period has been much longer and slower in activity than we anticipated. I mean, we all know that in the summer period, hospitals tend to lower their activity, but it was more than we expected. That's 1 thing. The second thing is the process of reviewing. So the IGNITE program is something that we offer, but then of course, it has a certain legal and administrative framework. So we have a contract, and we have a number of documents that we need to submit to the hospital. The review of these contracts and administrative documents and legal documents is extremely slow. We have an example where it took 8 months, literally 8 months from the moment we send them the documentation to the moment we got back the signed document from the hospital. So that's another thing. And then we are also seeing that some hospitals actually have -- one of the reasons why this might be delayed is that the IGNITE program does not accommodate to their standard processes in the sense that they are used to clinical trials. So for a clinical trial, they have everything set up. They had, call it, like this a template for how to deal with the clinical trial. There is ethical committee approvals. There is a patient consent. There is GDPR compliance. There is insurances. All these things that go around a clinical trial, while the IGNITE is supposed to provide a simplified version of this. Now while the simplified version is working in some hospitals, actually, for other hospitals, this goes outside their standard operating procedure, and then they prefer to go into the clinical trial. This is why, as mentioned by Raphael before, we are offering now to these hospitals who feel more comfortable with the clinical trial setup, we are offering them another way of testing IndiTreat, which is, okay, let's set up a clinical -- traditional clinical trial. Anyway, I want to emphasize that the goal of reaching 30 hospital was an ambitious goal. The fact that we are now lowering it to 20 is -- I mean, we are lowering it 20 until the end of the year. Obviously, we will reach the 30 hospitals. It will just take us a little longer. But I want also to emphasize that this is the only goal that we have announced for this year that we have not fulfilled.

I would like to continue on this question. And -- because you do mention a long time for legal approval as well as patient samples coming slower than you expected. Is there a possibility that we could see these challenges when hospitals that are not included in the IGNITE program, are interested in implementing IndiTreat?

Actually, -- so IndiTreat can be implemented in any hospital across Europe because we have seen marketing. So this is, let's call it, like this, it is an approved product. So in a way -- and I think I understand the direction of your question. In a way, in some hospitals, the administrative process to start using IndiTreat in routine might be even shorter than what we are seeing with some of the IGNITE or clinical trial approaches, yes. But in general, I also have to say that since this is a very new technology, in general, oncologists want to see this working in their hands. We want to see this working in their environment. And therefore, we expect, and we know -- I mean not we expect, we know that some countries -- not some countries, some hospitals in some countries will jump straight into using IndiTreat in routine. But mostly, we think that they will go through a first, a testing phase.

But will there be any difference from -- between the IGNITE program and those who are not trying IndiTreat within the program with regards to the legal processes or legal approval and the sample's coming and the pace. Will there be any difference? Or can we actually -- can we -- will -- is there a possibility that these challenges will replicate themselves?

The process of negotiation for getting the test into a hospital, I mean, this has certain stakeholders. Call it, generically economic decision makers. These are administrators, purchasing departments, et cetera, et cetera. And that process is different depending on whether the country has a centralized reimbursement scheme or the country does not have a centralized reimbursement scheme. Because if there is a centralized reimbursement scheme, then it takes very long. But the moment the test is accepted in the reimbursement scheme, then the hospital has no problem using it because then they will charge the centralized insurance for the test. In the other countries, it's really a hospital-by-hospital negotiation. That's the main difference that we will see, not whether they went through the IGNITE or not, but more, whether the hospital belongs to a centralized reimbursement country or not.

I understand. And you have already touched upon this topic. But Fernando, what are the biggest challenges and hurdles with the commercialization of IndiTreat?

Yes. I think we have explained a little bit. So first, there is the topic of -- so there are 2 steps here. In the first step, we need to convince the -- let's say, the clinical stakeholders. So because at the end, they have to trigger their internal processes in the hospital asking for the test to be included in the hospital portfolio, so to say. So first step is, we need to get the endorsement from the clinical stakeholders. Then comes the second step, which is what I was just describing about the economic decision makers and the negotiations which can be different, country to country. I think, in general, what we know also is that health care systems are very conservative and very cautious with new technologies. Keep in mind that everybody is -- one of the big problems in any developed country is the cost of health care, the increasing cost of health care, sorry. So they are always trying to put some hurdles to new technologies to -- because, in general, new technologies means additional cost. And then we have the complexity, and we have mentioned that the complexity of the diversity in Europe. And this thing where, as opposed to the U.S. where you have one system, okay, you have several insurance companies. But in general, you have only one system as opposed to here where you have to go hospital by hospital, region by region, that makes it. So this is the complexity that we are seeing. But what I want to emphasize is that what we -- these difficulties, these hurdles are not specific to 2cureX, not specific to IndiTreat. These are the hurdles that we see for each and every new technology that comes in. when you are launching a new product into an already known category, so to say, when you're launching a new hematology analyzer or you're launching a new immunochemistry analyzer, it's much easier. But when you are launching a new technology, something that doesn't fit into any existing category and you have to create the new category, this is the type of complexity that we are seeing. But again, we are not seeing anything that is specific to IndiTreat or specific 2cureX. I think we are experiencing the same that all other new technologies have experienced in the past.

Thank you. And so Raphael, you recently published the results from a survey to -- directly to oncologists. Could you comment on the main findings?

Yes, I'm glad you pointed that out. So as already shown in the presentation, during this summer 2022, a survey was conducted among 140 highly qualified specialists, oncologists in our mainstay markets: Scandinavia, Poland and Spain. And I think it's very important to focus on the 3 main messages that actually came out. The first and most important message here, the colorectal cancer societies or communities, they affirm with over 90% that there is a need for additional biomarkers, additional tools. That is a whopping number. The second most important message, and I'm going to tell you why is it only second, but it's as important for us. It came out that over 80% of those specialists said, yes, it's functional testing that we need because it complements the genomic and histologic and all the other tests. We were speaking about the missing link that IndiTreat can provide. So the neutral question was, is functional testing the right way? And over 80% said, yes. The third and most important in a proactive way, information that we have obtained by the survey is the propensity to use. And the number that I'm going to give you here is over 75% of those would use or are willing to use IndiTreat in the next 12 months. And when we compare that number with the so-called early adopters, the numbers that we know from other tests and that are currently accepted out there is that early adopters have results in the 20s, 20% of people would consider themselves early adopters and are willing to accept and to try and to use, that number is 76% in our survey. So these 3 messages, yes, we need more testing possibilities in colorectal cancer. Yes, functional drug sensitivity testing is the right way to go. And yes, we are inclined and will use it in the next year.

Thank you. Kenneth, this is a question for you. So in light of the goals and activities for 2023 that you have presented, but also that relates to the additional clinical studies and additional geographic expansion as well as the forecasted SEK 6 million, where SEK 3 million is attributed to sales. What are your thoughts on 2cureX's financial runway?

Well, the view on the financial runway here is actually quite straightforward. So we have a runway today when we're supporting the activities that we are elaborating here, would go, I would say, far into 2024. So our financials to support the operations are quite stable. So the runway, we consider that to be sufficient for the time being and for the plans that we are discussing here.

I could actually continue with questions, some questions from viewers. It also relates to the financial part. So Kenneth, a viewer asked, what is your current view of the financial? Will some sort of funding be needed before reaching positive EBIT?

We don't have any specific plans today to secure further funding or increased equity. So as mentioned, we do have a runway here that would take us into a decent place into 2024. So we don't have any specific plans to do that at the moment.

And again, another question from a viewer also directed to Kenneth, I believe. 500 patient samples and SEK 3 million in sales were equal to SEK 6,000 per test. Is there a short way to summarize your pricing model?

Well, there's a pricing model here. I think Fernando will probably be better describing the pricing model, if we were to go into details. No, that's completely okay. I know the pricing model, but Fernando has quite more in-depth knowledge about the background for it.

Yes. Actually, we have to take into account that the 500 samples include samples coming from the IGNITE program as well as fully commercial samples, so to say. This is why when you make -- divide one by the other, the price that you get is low. This doesn't mean that this is our average selling price. This means that the 500 samples are compounded of some that are free of charge and some that are charged. We have disclosed in the past, our end user price is around EUR 3,000. This is something that we have already mentioned before. And then out of this, of course, there is the margin of our distributors. So remember, we are selling to the distributor. The distributor is selling to the final hospital or to the final user. But that's more or less how it goes.

And Kenneth, what are your comments on the development of the share price?

I think on one hand, we don't comment on the share price as a whole. On the other hand, we are, of course, very aware of the development in the share price. I think from our perspective on it and our focus is obviously on the operational and the execution of the strategy. I think that is our view on the best path to shareholder value creation for us. I would add to that as a comment that we are obviously, and it was also presented earlier on, not just in our competitive landscape, but also as the market as a whole that we are seeing other similar companies, and we are seeing a market within our segment that has shown some quite significant abilities to raise quite a big awareness. We have seen some mergers and acquisition that takes place. So I think from that perspective, we are focused more on the value of the company more than necessarily the share price as itself. And I think we are seeing evidence in the market that I would say, lay the foundation for a much higher valuation of the company than what the share price indicates it is. But we don't comment specifically on the share price. I don't think that's ethics, of course, to do that.

So I would like to continue with a question from a shareholder. So you have extensive experience and knowledge in your management team and Board to implement new medical product into the market? What are you doing to help the hospitals overcome these obstacles, Fernando?

Yes. Yes, I take this one. So I said, none of the hurdles that we are seeing are specific to us. So basically, what we have to do is we have to continue doing what we are doing. But of course, we are constantly -- and not once a year, but constantly fine-tuning our commercial approaches and seeing what can we do to helps speed up these things. So for example, we are seeing that we have put all the effort until now in the oncologists, which is obviously a very important stakeholder. But pathologists actually are very important also because at the end, although the oncologist is the 1 making the decision on the treatment, the pathologist is the 1 supplying them with all the information to make that decision. Pathologists are the ones who nowadays handle all the biomarkers, et cetera. So we want to -- actually, we are already implementing specific actions, directed to the pathology group. Just to give an example, next week, I am participating in an event from our distributor in Spain, Werfen, where they expect to see -- to have 50 or 60 pathologists in a room, speaking about IndiTreat and functional drug sensitivity testing. So that's just 1 example. So we will increase our focus in the pathologists as a group. This is 1 thing. The second thing is, we also want to be more active with patient associations. At the end, the -- what we are offering as a test is a benefit for the patient. And therefore, we think that the patients' associations need to have a saying as well in what we are doing, how we are doing, how we are approaching it. And then, of course, as I said before, and we said several times, the clinical studies, when the IGNITE setup is not optimal for whatever reason, offering a clinical study as an alternative. And finally, I want also to emphasize that our effort that we mentioned in speeding up the possibility of in-house testing at the hospital. This is also related to how we think we can speed up things. While in the U.S., the model of a centralized lab where samples are shipped from all over the country and tested overnight and then sent back the results. This is a very well established. They are very powerful lab chains in the U.S. doing that. But in Europe, in general, hospitals want to have the testing done in-house. So I mean this is not something that we have discovered now. This is something we know from the beginning. But the reason why we are now speeding up all our activities around automation and having the first pilot site, as Ole mentioned before, having the first pilot site already in 2023 in place is exactly because we are -- we want -- we see this as a way to accelerate the acceptance of the test. So I think, again, they are not magic formulas here. There are no silver bullets, but we are constantly analyzing the feedback that we are getting. And we are constantly fine-tuning our approach adding new things.

Okay. And so we have 2 viewers' questions left. And our viewer wonders: your approach is image-based and relies heavily on cell death. However, most chemotherapy, especially in the range of days is cytostatic. Are you not missing a lot of options this way?

I mean I think it's so clear also what we stated in the presentation that the chemotherapies in colorectal cancer is absolutely essential. We do see a number of drugs coming, also in the antibody space that we regard as these complementary treatments. They will all come on top in colorectal cancer. They will all come on top on the chemotherapies. So I do think that concentrate on that backbone is essential, but we are testing all new drugs that are coming. I mean you will see in our clinical trial that we have presented last year, there was a number of drugs that were targeted and outside the chemotherapy space. So seen from that point of view, the technology doesn't limit us to chemotherapy. It's exactly the disease that guides us to concentrate there.

And the last vewier's question is for Kenneth and you have answered the question already, I believe. But let's take it again to -- just to recapitulate. And our viewers wonders: earlier, you said that your cash will be ought or cash flow positive. Is this still valid? If no, how will you resolve this to protect your investors' value?

So we do have in our business plan, a plan and projection to go breakeven in 2025. So it's part of the answer is that, yes, we do consider that what we have at hand now that we are not -- we have not and are not planning right now to do any further funding for the company.

So we have received some more questions.

This one, 1 in 3 patients that not benefit from the first-line treatment they receive. The survey indicates that oncologies are comfortable with that outcome. For me, the question here. It sounds like we missed a big sales opportunity, 2/3 for this product. Is this something you are specifically targeting? Or will the IGNITE and the word of mouth take care of this?

May I answer at least the medical part of that? I like the thinking behind this question so that I think the asker has said that oncologists seem to be okay with that low efficacy. They are, of course, not. We are not happy with that. And this is why, as you have seen in the survey, everybody needs new tools because nobody is happy with that result. It is unfortunately a reality for the patients out there. So what we are trying to do is to provide this missing link for compounds, which do not have biomarkers. And whether they generate -- and that was a prior question, whether they generate cytostatic or cell death effects does not impact on IndiTreat because our test works on growth impairment compared to unhindered growth from those 1,000 tumoroids, which every patient will be diagnosed with or analyzed with. So this is exactly where we want to help.

And if I may add something here. If I may add something here, I think what is important here is -- or let me rephrase it. I think we have a problem with how we are looking at the efficacy of drugs because it is always expressed that as what is the percentage of patients that respond? And while this is fine for a population where you would say, okay, 60% of patients respond, fine. How will you know whether 1 specific patient belongs to the 60% or belongs to the 40%? So looking at these big numbers and averages is actually the opposite of personalized medicine. And I think we have to -- we cannot emphasize this enough. The fact that the drug is effective in 60% of cases doesn't help that individual patient who doesn't know whether he will respond or not to the drug. It doesn't help the oncologists who have to decide whether to give this drug or not. So we are not aiming at the 30% or the 40% that do not respond, we are aiming at all patients to be tested with IndiTreat, so that the oncologist has a good picture of whether this patient belongs to one category or the other.

And another question from our viewers. You mentioned M&A, in your field, is being acquired something you are open to.

Should I take that? It's a difficult question. I mean, all scenarios -- I mean, we are business acumen company. So we would care take all the conversation that might come in, but there is no ongoing M&A activities as we speak. But if there are opportunities for it, that would have to be taken onwards into the company, into the board. I think that's the most -- the closest we can get to an answer to that question. So obviously, we are -- we have a responsibility to take in and explore opportunities as this, mentioned here, and bring it forward and make an analysis of it.

And that rounds up the Q&A session. We have no further questions. And with that said, I would like to thank 2cureX for the strategy update and for the live Q&A session. Thank you.

Thanks very much. Ethel and Johan. Thank you.

Thank you.