Biovica International AB (publ) (BIOVICB) Earnings Call Transcript & Summary

Hello, everyone. And welcome to the Biovica Capital Market Day. Welcome both to you being here present physically and all people watching virtually. Today, me and my colleagues will be presenting during 2 hours the following topics. First of all, I will give an update on where we are, and where we are heading. Then Dr. Rotstein will present an oncologist's perspective. And after that, our SVP Marketing, Robert Dann, will, from the U.S., present the U.S. launch plan. And then Henrik Winther will take on and present our intent to launch within Europe and beyond that, the opportunity within companion diagnostics that we see. And finally, we have a Q&A session, which will be moderated by Charlotte [indiscernible] , and you can already now submit your questions to [email protected], and we'll pick them up during the Q&A session. First, a couple of words about myself. My name is Anders Rylander. I'm the CEO of Biovica. My background is within management consulting, spent a lot of years within Accenture, before cofounding a management consultant company, which I developed under a couple of years and came into Biovica as an investor originally. And I was attracted by the great potential, both commercial but also the human potential with the products of the company. And I've been the CEO since 2011 and is also now the main shareholder of the company. And I will start my presentation with describing the unmet need that we see, and that we believe we have a great solution to. And the need is defined by the fact that there are, nowadays, within metastatic breast cancer and also other areas of cancer, are a lot of available treatments for the patients, which, of course, is a very good thing and also have helped patients with cancer, getting a better outcome and prolonged survival and so on. So it's very positive, but it also increases complexity as the treatments becomes more and more targeted and all -- patient does not respond to all treatments, and over time, resistance will develop. So it's important to early on discover if the treatment is effective or not so that the patient can get an effective treatment. Other challenges is also that the costs for treatments are very high, $10,000 per month per patient in the U.S. and that also there are severe side effects. So there are many reasons why it's important that the treatment you provide are effective. When it comes to today's diagnostics that we use, there are also challenges, both that it requires time, and it's a complex process, which -- where we think we can offer something simpler and quicker to follow up and, thereby, offer a more personalized treatment follow-up of cancer treatment. It's not only we that believe so. The unmet need is well described in different publications by leading oncologists. And this is an example of 2 publication that was published last week, which describes this unmet need and the need for biomarker, like Biovica's, in order to be able to follow up patients that are on these kind of treatments. Also, the article suggests DiviTum, Biovica's product, and the enzyme, the technology that we're measuring as a good promising opportunity to address this need. So talking a little about the company and the product. So Biovica is an Uppsala company, founded in Uppsala, based on the research at the Uppsala University for many years. And the company develops and commercialize blood-based biomarker assays in order to improve monitoring of modern cancer therapies. And the product DiviTum stands for dividing tumor, which indicates what the product does. It measures cell proliferation. And as you all know, cancer is defined by uncontrolled cell proliferation. So by measuring that, you can provide very interesting information for the treating physician, something that Dr. Rotstein will talk a little bit about in his presentation. So this information is important, both before treatment as a prognostic information, telling how -- given an indication of how aggressive the treatment is, but this also during treatment that you can monitor a patient over time to make sure that the treatment is sufficient. Of course, the big beneficiary of this is the patients, but also the payers and society, providing treatments and also taking the cost for the treatments. Important part of Biovica's strategy has been to work closely with the leading oncologists within this field to be able to get the feedback on -- and input on both the need and the feedback of the product performance. It all started with Dr. Rotstein's colleague, Jonas Bergh at Karolinska, about 10 years ago, where we performed the first clinical trial in breast cancer. It was a positive trial, with results that opened up doors for different collaborations. First, in Europe, where we are collaborating with 2 breast cancer group with big impact, IBCSG and BIG, and oncologists like Angelo DiLeo and [indiscernible] in these groups, and we're doing clinical trials together with them. And that brought us to the U.S., where we now established strong support from several of the leading key opinion leaders within breast cancer in -- on the U.S. market. These collaborations are really, really important to us, not only for the feedback, but also for the data that it generates. The results from these clinical trials will be the foundation for our commercialization process. It will be used, going forward, in reimbursement, regulatory and also creating awareness, and in the end, generate demand for the product. Together with these leading oncologists, we have now, to date, done a lot of collaboration, in total 22 -- that resulted in 22 published and peer-reviewed articles in scientific journals together with DiviTum. And our focus area has been breast cancer, where we have identified a need for this kind of biomarker and has received strong collaborations and results from those. And to date, we have 11 studies with over 1,000 patients within the breast cancer area. And the results summarized its prognostic before treatment for recurrence in the early setting, and for progression in later metastatic cancer and also for survival. And during treatment, we've shown in these clinical trials that we can provide quick feedback on treatment efficiency. But the result doesn't stop within the breast cancer area. We have also performed several clinical trials outside that breast cancer area, creating proof-of-concept also in gastrointestinal cancers, lung cancer and blood cancer, for example. And these have been done with leading academic institutes, like in the U.S., the Washington University, the Mayo Clinic and the Baylor College. And as I mentioned, in Europe, Karolinska was one of the first, and we're now doing our third trial with Karolinska, which we're very proud of. And then in ongoing trials, we are working with the Johns Hopkins Institute and the SWOG Group, which is really important oncology group in the U.S., which Robert Dann, our SVP Marketing, will tell you a little bit more about. But the clinical trials and the clinical results is how important it is. It's not the only activity that you need to perform in order to take the product to the market and launch it. For many years now, we've been working on some key activities in bringing DiviTum to the market. First of all, of course, you need to have a product. And for several years, we have been developing the product. It's CE marked since several years. And the last years, we have worked on improving the product performance so it meets the FDA requirements. Since we're aiming for -- it's under validation, the development has stopped [indiscernible]. It's essential for all these activity. That's the foundation for launching such a product. And especially important for the regulatory pathway, where we are -- our highest priority is to get 510(k) clearance from the FDA, as it's called, where we intend to submit our applications by quarter 3 this year. And of course, the clinical data is essential in that process. You need also data for guidelines and reimbursement and to be able to prove the health economy of your product, if you want a value-based price, which we're aiming for since we can affect these very expensive treatment and how they are given. So we're working on that as well in parallel. And since we don't want to build a sales organization and a service business, we're looking for a partner that we can team with, that can help us provide the service and has a sales force that can reach out to our customers. So that's the commercial partnering. And the last piece of the puzzle is the market launch activity, which we are planning also already since we're planning to do it by first quarter next year, and that's what Robert is going to talk a little bit about. So these are all the activities, which we are working on in order to be able to launch this product. And which markets are we looking into then? Well, as I said, our initial market is the U.S. market, where we're performing all these activities, which also will be serving as a blueprint for expanding to other markets outside the U.S., where we can reuse a lot of the efforts and work that has been performed so far. The estimated size for the U.S. market alone, we estimate $200 million to $350 million. And that's based on market research we've done and the input from both payers and oncologists on what the price sensitivity is for this kind of product, how it will be used in number of tests per patient, et cetera, et cetera. The next area that we're looking into is the top 5 countries in Europe, EU5, but nowadays, it's -- should be probably called Euro 5 since the U.K. is in there as well, and the Nordic countries. And that's about 50% of all the patients living with metastatic breast cancer in Europe. And we estimate that market potential to USD 150 million to USD 250 million based on the same type of market research feedback from payers and oncologists. And the third market we're looking to approach is the Japanese market, which we think is interesting because it's a market that's very similar to the U.S. market in terms of both regulatory and the reimbursement process and also price levels, and we estimate that market to USD 50 million to USD 100 million. By doing so, we have addressed, as I said, 50% of the European market and about 40% of all patients living with cancer in the world. So there's great potential for geographical expansion outside these first 3 launch -- market launches. And the way we are tending to do this is through partners. We are developing a blueprint in the U.S. market that can be used and that we can work even more with partners in -- on the European and other markets like Japan also. So when you sum it up, these 3 first launches, we believe, will have a market potential of about USD 400 million to USD 700 million. We expect -- for every market that we enter, we expect that we -- within 3 years, we'll achieve about 50% -- 15% about that market potential. And over time, we estimate that we will reach to the 50% market penetration. So what about outside these markets and the breast cancer area? Well, there is still a lot of potential for expansion. The next step that we believe in is the locally advanced breast cancer area, which is patients that are, you could say, in between local cancer and metastatic cancer. These patients are pretreated before surgical removal of the tumor. So there's a need to follow these patients during that period as well. And we have already data that's supporting that application. We have clinical results on that, and we are currently doing prospective trials on that -- within that field. And we also expect the current treatments, the CDK4/6 inhibitors that are used within the metastatic area, to expand to that area. So it becomes natural for us to also monitor treatments in the local advanced setting. That will add another 30% to 40% potential on the already existing markets. Outside breast cancer, well, there, as we already said, we have data on gastrointestinal cancer and lung cancer, which adds an additional 20% probably of people living with cancer, outside the 16% that the breast cancer community is. And we already have data, but an expansion of that will, of course, require an expansion of the regulatory intended use that we're looking into. So that will be an additional investment. In total, this market is a growing market in terms of patients. If you compare 2012 to 2018, where GLOBOCAN can presented data of this market, you can see that it's a 5% yearly growth. Another way of seeing it is cancer treatment costs that grows about twice that pace. So it's a growing market over time. So that was a short update of where Biovica is, and where we want to go. And next one on stage will be Dr. Rotstein, and we will take all the questions after the last presentation. So bear with us. Thank you.

Thank you, Anders, for the presentation. My name is Sam Rotstein. I'm working as an oncologist at Karolinska Hospital. And I have been working in oncology for the last 35 to 40 years, mainly working with breast cancer and GI cancer patients. So why do we need a good, reliable, easily accessible marker? Well, we are dealing with diseases, for example, metastatic breast cancer, which is a disease that is consisted of proliferating cells, various degrees, and it's a disease that when it's metastatic, you cannot cure. And the disease progresses and is going on for years to come. Different therapies, different symptoms for the patients, and it's very, very important that the patient has an accurate therapy and doesn't suffer from therapies that are not effective. Now if we come to prognostic, we need a marker like DiviTum that will give us information about the prognosis. For instance, we know that if we have a tumor with high proliferation, it's a highly active tumor, has a bad prognosis, and when it comes to DiviTum, when you test it with DiviTum, you receive high values. When you have a tumor with slow proliferation, low tumor activity, good prognosis, and you test it with DiviTum, you have low values. And the same goes for prediction and monitoring. If you treat the patient, and you have increasing high values, you -- and when you use DiviTum, you will find that you have little or low effectiveness of the therapy. And if you have a discretion or unchanging values, you see that you have good treatment effectiveness. This is a very busy slide, and I don't want you to memorize. You don't need to memorize all the details here, but this represents the cell cycling. A cell that is in proliferation, and it's very fast proliferation, high proliferation, will release to the blood high levels of TK. A cell which has been treated and you stopped the proliferation will slow down the release of thymidine kinases, and you will get low levels of DiviTum. And this is the scientific basis for this marker. Well, how does DiviTum come in? How does it fit in today diagnostics? Well, usually, you have different diagnostic tools. You have clinical examination, you have image and functional investigation. And you see there is large array of different radiation, image examinations, complicated, expensive and also sometimes gives health hazard to the people and the population around by performing radioactive examinations. You have biopsy or surgery that can give you information of the biology of the tumor. It can give you, for instance, when it comes to breast cancer, you can determine the hormone receptor levels. You can determine proliferation, Ki-67 for example. You can determine the grade, HER2 status and sometimes you use blood marker CA15-3, which is not a perfect marker, and it's used in some institutions, and in some institutions, they don't use that marker. But to assess today the proliferation activity, you have to perform either surgery of the tumor or a biopsy of the tumor. When you diagnose breast cancer, you usually -- the patient comes into the clinic through screening, health investigations or self-diagnosis. That means that the patient herself noticed a tumor in the breast. You make a triple test diagnosis usually, that means you examine clinically, you send the patient for a mammography or ultrasound, and you perform either biopsy or fine needle aspiration. And then you come to the diagnose, and it can be a benign tumor and nothing more; an early-stage breast cancer, locally advanced; or it can be, from the beginning, a metastatic breast cancer, that means that it's already at the diagnosis, it's spread out in the body. And then depending on what kind of breast cancer, you have different treatment regimens. Here, you can see a slide how the disease develops. If you have your primary tumor, those 3 stages, you treat it. And after -- surgery is a main treatment, but in order to be sure that you really took away everything, you can give treatments before surgery in order to diminish the tumor. And after the tumor has been removed, if it's highly -- there is the high chance that it will recur, you can also give treatments after the surgery in order to diminish the risk that it will recur. So afterwards, you have 2 possibilities, either you stay disease-free or, after some time, the tumor recur. And when the tumor recur, you come into the metastatic stage. And this stage has been illustrated here by several lines of therapies. Because when you enter this stage, the tumor, the disease is not curable anymore. Everything here you do is to try to diminish the tumor growth and to keep the patient in a good situation that she will live, will be able to live with the tumor, and you try to make the disease more chronic. Now this stage of disease can continue for months or years or even decades. So -- and during this time, some -- during the time, sometimes the tumor responds to the treatments and you continue with the same treatment, then it progresses. And then you have to change therapy, and so you continue until you don't have any more effective therapies. And you come into a late palliative situation. Now in this situation, you understand that it's very important to be able to assess the effectiveness of the therapy because the therapies comes with a lot of side effects. And monitoring all the time the treatments with complicated radiological examinations are expensive and also it's a trouble for the patients because you have to take the patients into the clinic to perform all these examinations, and it's costly for the society. And this happens all the time when the patient is on metastatic treatments. So we have a situation, where we have unmet medical need and highly important to get early feedback on the treatment we have started. So it's very important that the patient is not on an ineffective therapy longer than needed. And you see the treatment options. There are today, chemotherapy, radiation, endocrine therapies, different kind of targeted therapies as immuno-oncology treatment, immunological treatments. And all these therapies brings more or less side effects, and sometimes, the side effect is severe -- are severe. And therefore, you have to limit the time the patients are on unnecessary, ineffective therapies. This slide shows the proliferation of the tumor. And usually, when you start the therapy, you wait 3 to 4 months until you perform your imaging diagnostics. If we, after a shorter times, for instance, 1 month, could assess the effectiveness of the therapy, there would be a large gain for the patient and also for the society. Our studies, which has shown the effectiveness of DiviTum, are based on a large amount of studies performed since 2013. And you can see here all those studies in blue are published studies, and the studies in white are studies that are going on to prove the effectiveness of DiviTum. These studies are performed in cooperation with the large cooperative breast cancer groups in the United States and outside of the United States. And we are accumulating large amount of data that showed, so far, the effectiveness of DiviTum when it comes to predict prognosis and treatment effectiveness. So finally, what is the value of using DiviTum? What does DiviTum mean for the patient? For the patient, it means that we don't have to take the patient to the clinic every third month to monitor the disease and the effectiveness of therapy. We can ask a nurse in the patient's local environment to come home to the patient and to make a blood test. And we will have a result that will tell us whether the treatment is effective or not. And imagine that maybe most of those patients are older women, 70-plus patients, that, for instance, lives kilometers, miles from the hospital, they maybe need a companion to get to the hospital and to devote a day, full day, in order to be able to perform all these examinations that are planned. So if we could solve that problem by making or drawing blood and make a simple test that would be -- mean a lot for the patients. How useful is it for -- DiviTum for oncologists? Well, for the oncologists, that would mean that the workload will diminish, and the oncologists could use that time for other patients. And for health care, we would save a lot of money by avoiding a lot of radiological examinations, health hazards, radiation in the environment and, of course, costs. It would be a tremendous reduction of costs for taking care of the patients. So we are looking forward to see the data that are going on in the studies and to see the results of data. And hopefully, we will have a more effective marker to monitor our breast cancer patients. Thank you for listening.

Thank you very much. And again, if you have questions, please send in to [email protected], and Sam will stay around, together with Mattias, our Clinical Development Director, so we can go into detail within this area as well. Now we will try to connect to Boston and bring in our SVP Marketing and the U.S. Business, Robert Dann. Let's see if we have Robert. Yes, hello, Robert.

Good afternoon. Thank you, Anders. So I'm glad to be with you today, at least via video conference. I will take you through our plans for launching DiviTum in the U.S. As Bergqvist will share some thoughts on that revenue forecast. Next slide, please. So we want you to form an image of the typical patient we aim to help. That patient is mid-60s in age with metastatic breast cancer. She was probably diagnosed with early-stage disease some years ago, had treatment then, and now the disease has returned. A biomarker profile, as Dr. Rotstein indicated, was then to guide which treatment to use. Her disease is positive for hormone receptors, so endocrine-based therapies are the logical treatment. These are often used in sequence, and until after roughly 3 lines of endocrine-based therapy, the care moves on to cytotoxic therapies. One important thing to keep in mind, while metastatic breast cancer is incurable for many patients, during their time on treatment, most of that time their health status is rather good. The first treatment the patient receives for metastatic disease can be effective for 2 years or more. And during that time, you want to manage and optimize the many different elements of her care and keep her life as positive as possible. Next slide, please. So for the metastatic breast cancer patient, let's follow how her disease is monitored. And you saw some of this detail from Dr. Rotstein. We see the collection of physical tests, blood-based tests and imaging exams used. The process is not streamlined. And these tests, as Dr. Rotstein indicated, are often repeated every 3 months in order to look for changes. The reason why so many different tests are used is that, quite often, no single test gives a definitive answer on whether or not the disease is responding to treatment or progressing. And with each new set of information, the doctor faces the question, whether to move from one endocrine-based therapy to the next, or whether further on to move from any endocrine-based therapy onto cytotoxics. And if you're thinking that there really should be a better way for monitoring than just running a whole collection of tests and putting the information into the decision funnel, that's why we're here. Next slide, please. Moving from a single patient to a population. The flow here indicates -- illustrates how we have defined our initial target market. We start with the number of new cases reaching the diagnosis of metastatic breast cancer each year in the U.S. Within that, the patient's disease should be suitable for treatment with endocrine-based therapy. And because of the scope of our pivotal studies, the patient should be postmenopausal. That amounts to 31,000 new cases each year. Then let's follow the patient journey. As indicated earlier, the patient may receive a sequence of 3 endocrine-based therapies. You can see the median times on treatment for these endocrine therapies from the published studies. For all the time, while the patient is being treated with one of those therapies, DiviTum can be a part of her disease-monitoring strategy. If we consider the needs of the patient and her doctor, there are a few common themes: make the right decision on treatment, make it quickly and efficiently and with confidence, and delay the time to disease progression and to treatment with less well-tolerated therapies to as far away as possible. Next slide, please. I mentioned our pivotal study for registration. We are collaborating with SWOG on using blood samples and data from the S0226 trial. SWOG Cancer Research Network is part of the nation's oldest and largest publicly funded cancer research network. It's led by top opinion leaders from hospitals such as MD Anderson and University of Michigan and funded by the U.S. government's National Cancer Institute. The original study compared 2 drug treatments and that -- the results of that were published, as you see on the right, in the New England Journal of Medicine. You can also see the size and shape of the DiviTum study here. By using the samples and the data from this study, the profile, the size of our study and its date of maturity are unusually high as clinical evidence for a diagnostic. In our study with SWOG, they are investigating the association of DiviTum values with disease progression and with overall survival. Assuming that the data is similar to the results of earlier DiviTum studies, one would see that a lower decline in DiviTum value is associated with a more favorable outcome and a high or rising value with a less favorable one. The SWOG team is analyzing the data, and the aim is that data will be published and presented to the breast cancer community by the time DiviTum has regulatory clearance and is available for use. Next slide, please. So that will help us take us through registration, but we've got a vision beyond that. Proving the accuracy is important. We also need to prove its clinical utility as that is essential for market adoption. We're developing collaborations with leading breast cancer clinicians. And we're testing each of the 4 hypotheses that you see here. It's worth understanding why each statement, when proven, is important. If other monitoring tests that are conventionally used today can either be reduced or eliminated as the patient is doing well, this saves time and money as well as considerable inconvenience for the patient. From the moment, it stops having its desired biological effect, and if you think back to that chart that Dr. Rotstein showed, until you see how large a tumor needs to be to be visible on imaging, that's important. If you can detect that lack of biological effect earlier, that allows you to potentially discontinue a therapy that is no longer working and move on to the next treatment. Continuation of the therapy that is no longer working is an investment that neither the patient nor the health care system can comfortably afford. A signal from DiviTum might start that change process. The blood-based tumor markers in use today have mix support. In the clinical guidelines, they get commentary about that mix support because of limitations to their accuracy. DiviTum can offer an improvement. And if DiviTum enables a limb reduction or elimination of other tests, or early cessation of a therapy no longer working, that gives the potential to reduce overall cost of care and to improve quality in relation to the amount of money spent. Next slide, please. So the value propositions from our registration study and from our clinical utility studies, you can see these here. They are the logical extension of those studies. Most important, this is about confidence, confidence in the mind of the physician and in the patient herself. We all see in ourselves that when we take decisions with knowledge and with confidence, we take those decisions firmly and quickly, and we project that confidence to others. Anecdotally, we have been told that in the course of her treatment, a metastatic breast cancer patient may receive 6 or 8 different lines of therapy. That's a great number of changes to manage, and both confidence and efficiency are important in that change management process. The consequence of the change in clinical practice we hope to support should have positive impacts on the process of delivering care. With processes being approved, we hope to enable measurable effects in cost and in workflow. And with improved decision-making sooner and with more confidence, that's a plus. For the metastatic breast cancer patient, time is her most important commodity. Next slide, please. Starting to look at the details of our commercialization plans. This chart shows our key events and ongoing activities for the next 14 months. Anders has touched on the path to 510(k) regulatory clearance. We also expect DiviTum results, as indicated, to be presented at major upcoming medical and scientific conferences and outcomes research conferences. We will work to maximize communications from these conferences. We've already done significant research on U.S. reimbursement, and we have further work ongoing in order to test the value propositions. Alongside that, we will put in place a small commercial organization to execute on the launch activities and to support the needs of stakeholders. To that point, let's consider the key audiences the DiviTum value propositions need to reach. The breast cancer community closely follows new scientific evidence. The key opinion leaders that have done the research with DiviTum, they will be the ones to present the findings. These clinicians and others in the opinion leader community can be our early adopters. Payers and managed care providers are driven by evidence on cost, quality of care and cost efficiency. The clinical utility studies that we are working to deliver are designed to address their needs and be communicated through the health economics journals and major leadings. Major reference laboratories and major cancer center laboratories will be the ones to deliver the DiviTum test as a service. The commercial team is developing information packages for the laboratories to explain DiviTum's likely impact on the lab's operation and how to communicate results from DiviTum most effectively to the oncologist. Individual community oncologists and patient communities will have less direct contact with us because they are much larger groups. This requires further development of web communications and other tools with wide reach to communicate DiviTum results and utility. Next slide, please. I've mentioned stakeholders and they're key in each of these groups, here, you can see greater specificity to our targeting. Thought leadership and changes in clinical practices primarily originate with the 71 NCI cancer centers. Additionally, many of these hospitals have large clinical laboratories as part of their facilities. And separate from the hospitals, there are independent reference laboratories that specialize in oncology. These labs serve both the major hospitals and the many community hospitals in the United States. While there are other oncology reference laboratories beyond this list, it is not a large group either of major hospitals or of reference laboratories. And last, on the right, you see a few examples of key payers and integrated delivery networks. Risk-sharing agreements that rely on DiviTum driving improvement in their care delivery is a logical market entry point for early use. The number of key stakeholders across these communities is not large. This enables us to provide solutions that fit individual needs, and we intend to partner with these organizations on further research, perhaps on risk sharing and on providing the best information possible from DiviTum into clinical practice. Next slide, please. As you just saw, the number of customers and partners to focus on is not large. To support our commercialization activities and interactions with partners, we will put in place a structure of 5 regional managers who collaborate with opinion leaders, manage lab partnerships, enable the lab sales forces on the actual selling of DiviTum test as a service and work with the payers in those regions. You can see the intended regional structure in the chart. We're also putting in place a small central team to deliver national activities. This includes support for participation in the major scientific events, message development to communication and development of the justifications for how DiviTum adds value to the health care ecosystem. The national team will take a strong role in further developing the clinical evidence and the science for DiviTum. I've mentioned partnering several times. We're in discussion with potential partners to define our roles. As agreements take shape over the coming months, we'll share these details with you. Next slide, please. Finally, turning to return on investment. Earlier, I shared the profile of the 31,000 new arrivals at metastatic breast cancer that we aim to benefit. With DiviTum in clinical practice, usage can also start during the course of the approximately 3 years that a patient may receive endocrine-based therapy and not just an initiation. So advice from key opinion leaders has suggested that monthly testing with DiviTum during the early period of line of treatment and then reducing that to 3 monthly until disease progression. So if you bring all of that information together, that would create an opportunity of 700,000 new tests per year in metastatic breast cancer. Several other factors will then influence usage of DiviTum as we establish the test. This includes market access factors, physician response to the test and the appearance of competitor tests. We've done some market testing of pricing. Preliminary research suggested $300 to $500 per test as a market price. Bringing all this together, by the third full year of sales, we expect to see about 15% of eligible cases. And with time and maturity at about 10 years from launch, that would rise to close to 50%. And beyond metastatic breast cancer, we can work further to expand the target market population. We -- Anders has already mentioned, locally advanced breast cancer, premenopausal breast cancer, and there are opportunities outside of these. Henrik will talk more about the wider opportunities for the tests. Next slide, please. So in summary, I've shared with you our near-term plans and the messages that we hope to share with physicians, payers and patients as we bring DiviTum into the market. We firmly recognize that there are things that we need to do and things that the DiviTum test needs to demonstrate for the market introduction to be a success with strong uptake. We also recognize that a test like DiviTum needs to fit well into the health care ecosystem. This is where we need to support the right collaborations with a strong set of activities carried out by a small, yet skilled team that -- such that the product has good access -- has good market access and a clear understanding of its capabilities. I'll stop there, and thank you for your attention.

Thank you very much, Robert. See we can get slides back. So our next speaker, last, but not least, we are grateful that our SVP Business Development, Henrik Winther, has managed to get himself out of quarantine in Denmark and is here in Stockholm. Please, Henrik. Thank you.

Thanks, Anders. So I'll be speaking about EU launch and CDx opportunity. My name is Henrik Winther. I've been in the diagnostic field for the last 20 years. I've been with Dako and Agilent Technologies and also a little bit with a Swedish company called Immunovia. I'll primarily be speaking about the CDx opportunity, but I also have 1 slide on our EU launch. It is 1 slide, but there's actually a lot of information in that slide regarding our EU plans. And it's only 1 slide because it's still some time ahead before we actually move into Europe. But let's go through the slide here. And as I said, there is quite some information -- quite important information on this slide here. Number one is that we're talking metastatic breast cancer. We talk in Europe. And as you can see, we talk a start 2 to 3 quarters after the U.S. launch. That's number one information. Second information is that, initially, we look at the big 5 countries in Europe and the Nordics. Then we'll dive a little bit deeper into these markets. And it is, as I said, metastatic breast cancer, and we used kind of the U.S. model. And for launch strategy, we are also going to look into the U.S. model. We're going to use as much as we can from the U.S. model, obviously. It wouldn't make sense otherwise. I will lead this commercialization in Europe, but I'm going to work closely together with Robert, of course. So again, it's the same target market, metastatic breast cancer. The incidence is obviously different as compared to U.S. We assumed same testing numbers -- sorry schedule, you could say. And that is fair, I think, because it is countries that are very similar to U.S. If we look at the test opportunities, it's based on the incidents. And you can see that we have -- for the big 5 and Nordics, we have 945,000 tests per year. It's a little bit higher than the U.S. potential. And if you look into rest of Europe, there's another 730,000 tests there. So that's looking into kind of the market potential, you could say. You could combine with -- that with the pricing. And as we obviously know, pricing in Europe is not the same as in U.S. We also know that the countries are different in Europe. We have had several analysis. And right now, where we are is that there's a pricing range there, $150 up to $250 per test. So it's different than U.S. On the other side, the number of tests is potentially bigger. What is important to know about Europe is that we have individual countries. And therefore, even if we're going to use a U.S. model, we have to adapt it to the single countries in Europe. There will be different uptake drivers depending on whether you are in France or if you are in Italy, or if you are in Germany or U.K. So that is very important to take that into account, and we will certainly do so. So this is about adapting and customizing to the specific needs in the individual countries, which we will do. We are going to rely strongly on partnerships in Europe to get the test out there. And we will, of course, come back to you and give you more details on the European launch as we get a little closer. But this was just to let you know that we have started that process and dived into the European market. I should also mention, lastly, that, from a regulatory perspective, DiviTum is actually already IVD, CE labeled. And we believe with that label, plus the 510(k) that we're going to get in U.S., we're actually also ready for the, what they call, the IVDR, not only the IVD, which was directive. These are the guidelines, but actually, the regulations we're going to have in U.S. -- sorry, in Europe. So I think we are in a really good situation when it comes to Europe. And again, we're talking Q3, Q4 2021. So we have time to plan for a proper launch in Europe. Then I move into the CDx, which is my specialist area. And before I actually start talking about CDx, I'll just provide you with a little bit of background on my experiences within CDx. So I was among the pioneers who were kind of kicking off the companion diagnostic area. I was design responsible for HercepTest at Dako, which was the first ever CDx test on the market actually, except if you think about the estrogen receptor, which is kind of a CDx test as well. But first ever recognized CDx test was HercepTest, and I was the scientist responsible for that. So I had a huge passion for this companion diagnostic area. And it actually also meant that I ended up hitting the companion diagnostic division at Dako and later at Agilent Technologies. And we grew the business. It was -- started out as a small team, 12 people. And over 7 years, it actually became 175-plus people only working on CDx. And we -- from a revenue perspective, we grew it from [indiscernible] on the market. So there's a lot of potential within companion diagnostics for a company like Biovica. And now I just say this word companion diagnostics. And what is actually a companion diagnostics? We'll try to illustrate a little bit here on this card, too, what is a CDx. First of all, important to understand that a CDx product or device is a device that comes out together with a drug. They go hand-in-hand, the CDx test and the drug. And what it does is that this CDx test will assure that you have a safe and effective use of the drug. So they go hand-in-hand, and the test is there to assure that you get a safe and effective treatment. And there are actually 2 settings where a CDx test is needed. Everyone is talking about this one up here. This is about identifying those patients that will benefit from a specific treatment. So if, for example, over here, we have breast cancer patients, we know they're all breast cancer patients, but we also know that they are individuals. They are very different. And it's -- we try to illustrate it here by color coding those patients because it's about -- they have different biomarker profiles. We all have different biomarker profiles. And if you have developed a drug that actually targets a biomarker, which you find in this green population here, then you want to have a test that can actually find those green ones. And this is the first companion diagnostic test. This is about finding these patients that will benefit from a specific drug. It's not only about carrying the biomarker. It might be a matter of actually carrying the biomarker at a certain amount. So it's not that easy just to have a test that can identify. Yes, they have the biomarker. You need to design the test in a way that you know they have the biomarker, yes, and they will benefit from the drug. So you need to collaborate with pharma, have the testing ongoing and see, yes, they benefit from it. If you set the cut-off here and now you have a test, a companion diagnostic test that can actually select patients. So that's one setting. That is a classical companion diagnostic device. But in FDA guidelines, there is also described the monitoring piece, the monitoring companion diagnostic. So now you have the patients here treated with drug D, as we call it. Those patients, you want to make sure that they actually keep responding to that drug. So you need a test that will actually monitor those patients and see that they continue to respond. So if they are positive in your test, however, we define positive, but if they are positive, they actually stay on the same drug because they continue to respond to that drug. Whereas if they are test negative, they are no longer -- we have shown in a clinical trial they are no longer responding to that drug, and therefore, they need to switch to a new drug. So this piece here, as I said, has been described in FDA guidelines, but there's really no company currently doing anything in this space here. And our biomarker is fantastic suited for this piece down here. So this is companion diagnostic, 2 situations where it's needed. So what do we have at Biovica? Do we have something that can actually fulfill this companion diagnostic requirement? Yes, we have. You've heard Sam, you've heard Anders, you've heard Robert talk about all the stuff that DiviTum can actually do if you look in this patient flow that has been shown up here. So a patient will typically go through being diagnosed, being treated. We do the monitoring to make sure they still continue to respond and then we adjust the treatment. And we've heard how good DiviTum is actually, it has some prognostic value. We've also seen that it has some monitoring value with monitoring when the disease is progressing. And what I'm saying here now is that companion diagnostic-wise, we're going to take advantage of these monitoring capabilities of DiviTum. And we are in a fantastic spot because if you look at who's actually the key players in the different activities up here now diagnosing, diagnostic companies, yes, treatment, pharma, monitor. This is where we're actually going to play a key role with our blood test. It's not imaging. It's not invasive testing. It's just a blood sample. And to adjust treatment, this is exactly where we come in together with pharma. Then you would obviously ask the question, okay, so pharma, they now need to have a test down here to select patients, first of all. And secondly, now, we also say they need to have a test that will make sure that their drug continue to work. Will they do that? Yes, they will because the way they use a companion diagnostic is actually as a brand differentiator. You have several pharma companies out there working on the same drugs. We know that. I've seen it with PD-L1. That was in this setting down here where they all try to find a way of selecting patients for PD-L1 treatment. So they -- just to say, I mean, that there are lots of companies working on the same drugs, and they want to be able to differentiate themselves from the other companies. And Merck did that with PD-L1 test. Actually, BMS was trying to avoid that test. Merck said, no, we're going to have that test. That's going to be a brand differentiator. It's going to be great even if it's going to limit the number of -- or put some restrictions to the number of patients, it's still a brand differentiator. It is a more safe and effective use of our drug. The same goes for this setting up here. This is about monitoring the patients and have a safe and effective use of the drug. So let's take an example, CDK4/6 inhibitors. It's different companies doing those inhibitors, and you really want to differentiate yourself because the way they work is very similar, but you want to differentiate yourself from your competitors. One way is of course to make sure that the safety and efficacy of your drug is better than the others. And you can actually differentiate your drug by having a test tied to it, a test that has been specifically developed together with your drug so the cutoff for when you are actually still safe on that kind of a drug is tied specifically to your drug. And at the same time, if you have a safe and more effective drug, oncologists will of course recommend that drug, which means that patients might even be transferred from some of the less safe drugs to the safer drug. Oncologists, they actually also would love a test like ours, which is actually a blood test and not, as I said, invasive or imaging. Then there is one more incentive to pharma -- financial incentive to actually have a companion diagnostic, another companion diagnostic tied to their test. And that is if you have a drug which is only going to be used when it's safe and effective, they will -- it will allow for a higher price on that drug because it's only used when it's safe and effective. And thereby, you will avoid any futile therapy or side effects. So you actually have a pharma need for the companion diagnostic, not only the predictive one but also the monitoring one. So how do this CDx business and what I call the Biovica core business compare and complement each other. Well, over here, we have what I call the classic or the core Biovica business and here, I have the CDx business. Both businesses take advantage of the monitoring capabilities of DiviTum. And over here, it's a matter of monitoring disease progression, whereas over here, it's a matter of actually monitoring the effect of a specific drug. Over here, in the core business, you have to pay yourself for all development, registration, commercialization. And you have to await some product sales. So you invest before you get the product out there and start generating some revenue. If you look at this business over here, it's a little bit different because in this business here, typically, the development of a companion diagnostic, it comes via request from pharma that they need this test to be able to differentiate their drug. And therefore, this kind of development over here is a fee-for-service development. Meaning that we, as a company, will get paid for actually developing this kind of device. And at the same time, we will actually own this device, which means we will also generate revenue from the product sales. So it's a different kind of business because you actually get paid to develop that kind of products. And then the beauty is that those 2 businesses also complement each other. So there's a positive feedback loop, meaning if you are successful over here, for example, if you install companion diagnostic devices in laboratories, there's a tendency too that those laboratories using the Biovica DiviTum test for a CDx device will actually also use more of the core business device because now they have installed the test in their lab, and therefore, they will actually use the test more also for the -- more core business monitoring of disease progression. And same goes the other way around. When we are successful over here, this is actually going to mean that pharma is going to be impressed. They like to see we can actually take it through a 510(k). They're going to be impressed by the quality of our product and also what Biovica can do, and this will then establish more collaborations with pharma. So they work hand-in-hand, those 2. In my experience with this field here, it is really attractive. And if we dive a little bit more into the financial potential, you could say, then it's actually not only a business -- a self-funding business. It's not that like pharma is actually only paying fee-for-service, meaning they pay for whatever you do, but they actually pay it with an okay gross margin. You can actually make business on this. You can have gross margins up in the upper 40s on this kind of fee-for-service business. This is the experience we had from both Dako and Agilent. That being said, I'm not standing here saying that this fee-for-service business should be the goal. It should certainly be the goal to have companion diagnostic products out on the market. As I said, we will own these products and therefore also generate revenue on those products, high-value products. So that is of course the goal, to get products out there. But it is always nice to actually have a gross margin on your development. And we experienced that both the development and registration and commercialization was paid for by pharma. So lots of opportunities there. I should say that it is important that you actually build a portfolio of projects running with pharma because we know with these drugs, some of them will fail. And therefore, some of the projects will not go through the end. And therefore, you need to have a, say, portfolio of 7, 10 projects running with pharma. And out of those 7, 10, you will probably have 1, 2 CDxs. So we build actually into our business model here some ramp-up time on the fee-for-service revenue we generate on the activities with pharma because they have to adapt to our capabilities and to our technology. But if you deliver on time and on quality, you will get more projects, and you will certainly have a steeper curve here on the revenue you generated. This is only revenue on the fee-for-service part. This is not taking into account the individual products you bring to the market. That's important to say. So what kind of partners are we actually going for? Well, we will of course use -- or we will continue collaborating with those partners that Mattias has already established collaboration with. Those pharma companies where we supply some research use only kits and where their products are actually targeting tumor cell proliferation. That's obvious. The most obvious low-hanging fruit is of course the CDK4/6 inhibitors, both the current generation but also the next-generation of those drugs. Yes. So I think there's a huge potential there. So I'll just end up by summarizing and saying that this CDx business will actually allow us to, number one, and very important, we shouldn't only be focusing on money here, of course, most important is that we're going to actually improve patient care because it will allow for a more safe and effective use of targeted treatments. So that is very, very important. But we're also going to take advantage with the CDx business on the synergy between the core business and the CDx business. We will generate some more revenue on the fee-for-service part, the self-funded or fully pharma-sponsored development of Biovica medical devices. And then we will bring to market high-value and reimbursed products. So I think altogether, the CDX opportunity is just huge for Biovica. So Anders, back to you.

Thank you, Henrik. Very good. Okay. I just want to summarize before we move in to our Q&A session. So today, we have presented about the unmet need for the product. So we can address a very important need and make improvements, both for patients and payers, which is very inspiring. We have strong collaborations with leading oncologists around the world, represented today here by Dr. Rotstein, but also both in Europe and the U.S. and that will be the foundation for our commercial journey, which will be kicked off on -- after regulatory approval, by beginning next year, 2021, starting with the U.S. And as you can see, we have a lot of potential by -- starting by U.S. and then expanding into other geographies into other cancer areas and also to a very, very interesting business model with companion diagnostic, like Henrik talked about. And we also have something which is not mentioned on this slide, we have a great team to be able to do all this, both internally within Biovica, but also with the people that we collaborate with. So I'm really looking forward to the time ahead. It's exciting times. And there are some milestones coming up. First of all is the 510(k) FDA submission that we expect to do during quarter 3. And then we expect approval beginning next year, 2021, and that will also be the starting point for our launch in the U.S. And during 2021, we expect to get our first reimbursement. And then by end of next year, we expand into the big 5 markets in Europe and the Nordics. So if we can provide great value or benefits for patients and payers, I'm also convinced that that will translate to great value for our shareholders. Thank you very much for staying so long. And now I'll will ask Henrik to get back up on stage together with Mattias, Dr. Rotstein and Robert back in the U.S. And Charlotte, please take us through the Q&A session. See if we can fit everyone on stage.

Thank you, Anders and Henrik.

Where should we stand?

Where should we stand? I will leave spot here for Robert.

I think it's for the film team to decide.

Is this okay? Yes, thumbs up.

Good. So let's start with today's very interesting news about your new outlook or prognosis of market share of 15%. Can you elaborate a bit on how you came to that figure?

Yes. We have looked at other successful launches. And first of all, we've broken down the market potential into more details, and we also compare with other successful launches within this area. And I think we have a great opportunity. One, you could compare with Oncotype DX, which after 3 years managed to get about 18% of their market potential. So we believe that with a good strategy, a strong team and a strong project -- product with good documentation, it's doable. And I don't know if -- Robert, if you're there, you can elaborate a little bit on that. No. No sound?

Yes. Can you hear me?

Yes. Now we hear you well.

Okay. We've also looked through what we've seen historically from other products, such as Oncotype DX and looked at -- modeled some of our work on what we saw happen with that product as something that was going to change the care paradigm. And in some ways, they had a more difficult role in terms of driving a bigger change to the care paradigm than we did. But we've looked at their percentages that they've reached of available patients each year after launch. And we sort of followed that as a track for the U.S. market as a reference point.

Okay. And all this is built on the application, which is going to be sent in Q3, and then after about 0.5 year, you're going to get market approval. Do you see a risk in that -- not getting that market approval, Anders? And how do you look upon that? And then...

Yes. There are risks associated with this project as well, of course. But we've done a lot to mitigate those risks, of course. One thing is the outcome of the clinical validation is one. And I think one thing that has derisked that process is that we have done similar trials previously with great result. What we're doing now is repeating those trials on a greater patient population. So yes, we have good hopes that we -- will be successful also.

And can you tell us a bit more in detail on where you are on the validations, the analytical, the clinical?

Yes. As we communicated previously, we have simplified it a bit and said there are 2 areas. The analytical validation that technically validates the performance of the project -- product, and then you have the clinical that -- where you're doing clinical trial to prove the clinical utility and the clinical value of the product. So with the analytical validation, we have performed most part of it. We're doing the last pieces of it now -- from now until beginning of summer. And included in that is something called reference range, where we analyze a lot of external samples from similar diseases. So that's also included and will be completed by -- before summer. And then during summer, we will continue with the clinical validation. And we also have some feeling for that because we've already done that validation for the SWOG team and sent it to them for their publications. So we have some insight in the results as well. Even though we can't communicate the details about that, we know that it will be published. So we can time our launch with their publication because that will be essential.

And when do you hope the publication will be?

That's a little bit out of our hands. But normally, when you submit results, it's about 6 to 9 months before you get published. I don't know if you want to expand a little bit on that, Mattias?

Yes. I think the aim is to present this before the end of the year.

Before the end of the year? Okay. So there is a risk in FDA. You have to say that of course, we all know that.

Yes. We don't want to fool people into something else, but I think there's always risk, and the question is how you mitigate them.

Yes. But then if you then get your approval and then you can start launch, this sounds fantastic. But it also sounds like it's going to cost money.

Yes.

So do you have the money? How much will it cost? How do you plan on this?

Yes. So currently, we made our Q3 report about 1.5 months ago -- or 2 months it is now. We had SEK 52 million in cash and a burn rate of SEK 2.5 million. So currently, we have cash to continue to develop the company and the activities we've been talking about. But we've also said that we will -- when we're getting closer to launch, we will increase our burn rate, and we will need a capital injection to finance the market launch. So we need to get back with details about that.

Can you say anything about the scope of a market launch like this, what it costs?

The way we've done it, which we tried to explain here as well, is that we will develop in the U.S. a specialized small team that will complement the partners we intend to work with. And in the U.S. market, we're looking to complement a lab partner that can offer both a service -- analytical service of the product and, at the same time, has a sales force that can address the customer. So we will work together with them on different regions and have a central team providing kind of the material, the messages, the health economics and all those that is required for reimbursement and all the milestone you need to make the path to the market.

One small question that I thought about also that I missed about the FDA is have you had any communication with them regarding corona? And do you see any risk in that?

No. We haven't had any specific communication regarding corona. And normally, when you submit, you submit a digital copy and a physical copy. And so far, we have been able to conduct meetings with our partners virtually like this. We haven't checked specifically with the FDA, but I assume it will be done the same way. And also the conferences where we present data and so on is now turned into virtual conferences. However, I believe that if we're submitting in quarter 3, the first discussion with FDA will be about a month or so later. So hopefully, we will all be less impacted by corona by then, which open up for physical meetings.

And so 15%...

But even if we don't, I think the virtual track has turned out for everyone, including us, to work almost as good.

So let's hope all this goes well. And then 3 years after launch, 15% of the market, how much would that turn into in sales for you? How much can you keep of that?

Yes. We would share of course with our commercial partner on every market that we'll have a commercial partner. And as both Robert and Henrik said, what we developed now in U.S., we will be able to reuse and deploy on different markets. And then we'll be revenue-sharing with our partner. But apart from that, with a small organization and a very, very good gross margin, the margins are looking really good.

But on the sales price also, I mean, we're talking about 15% of the market, that's the sales price to the...

Yes. Yes, the -- yes, exactly. So the biggest cost, so to speak, is the margin, the revenue sharing. So that's correct.

And that is, what, 50%?

Well, it will be stupid to me to give away detailed numbers before negotiating with our partners. But well, hopefully, slightly less.

Okay. We have some people in the audience. So please feel free, if you want to ask questions, just raise a hand. Yes, Johan, please.

Yes. A question on the approval, of course [indiscernible]

I'll just repeat the question. So the approval is also dependent on precision. So what can you say about that?

Yes. As part of the analytical validation, those -- and the clinical validation, those numbers will be generated. And the targets are that we should outperform the current assays on the market, and I think in that sense, the benchmark is CA 15-3, which is, as Robert said, it's the best that's out there. And so far, we've been compared once with that -- in a trial with -- at Karolinska, the TEX trial, where we outperformed CA 15-3. So we have a good hope, we expect, to outperform CA 15-3 based on previous results. I don't know, Robert, if you want to complement on that when it comes to guidelines on the U.S. market.

So I think that makes sense. And if you look within the detailed information in the U.S. guidelines at this point in time, you can see that the authors of the guidelines are very open about their concerns of the limitations of the current tumor-based markers and their recommendations -- or lack of positivity in their recommendations follow that. We know that we need to deliver better than that to obtain the right positioning of DiviTum within those guidelines. And that's what we're aiming for.

And if you're talking about sensitivity and specificity, which I see that you're nodding, for CA 15-3 -- the CA 15-3 is not one assay. It's many assays, but it's in the range of low -- like 65% up to 80%, in that range. So 70% to 80%, depending on sensitivity and specificity. And that's in the metastatic setting when following a patient. So we need to perform better than that, and that's absolutely our ambition.

[indiscernible]

No.

Can you make more clinical sense?

No. No. Let me put it like this. It's important to convince the oncologist community and I think which we -- that has been a key strength, I would say, that the results that we had in our early trials has resulted in a generated interest, that has resulted to more and more trials. And now we were invited to -- we went through the due diligence of NCI in order to get access to the SWOG trial -- SWOG biobank to perform the SWOG trial. So we've been able to convince the oncologists. And I think that's something you should look at -- because those are the most important stakeholders to convince in order to make a product available on the market. Well, I don't know if you want to add something, Mattias. This is...

[indiscernible] based test [indiscernible] that's great. But if you get the same, that is not working then actually [indiscernible]

That's right. But...

It's more like a comment.

Yes, a comment from Dr. Rotstein, on my statement basically.

The CA 15-3 is -- it's a little complicated marker. It is used in some institutions because we don't have a better marker. And in some institutions, it's not used because it's considered not too precise. So therefore, a new blood marker, easily accessible, is very much appreciated because we don't have any good marker today. So we are waiting for the results with eagerness.

Yes. I think you gave us also some very good feedback before the presentation when we discussed our clinical trial program. And I think you pointed out, if I can quote you...

Yes, sure.

That what you've done so far is really impressing on -- but on -- to be honest, not that many patients. The trials we're doing now with Sloan, with Johns Hopkins, now we are getting up to trials with patient number on hundreds and above. And of course, then your -- the impact or the results is even more important. And in order to be able to -- for instance, the 510(k) submission, that's the kind of data you need also for such a submission and for reimbursement and so on. So we have taken it step-wise in order to get to the position that we get access to the trials that we require to base the commercial process. And the previous one has been a ticket to that with the good results that we've achieved.

[indiscernible]

You want a figure, don't you? Yes, if it would have been that simple.

Is 90% very good or...

Is 90% a sufficient level?

And you're talking sensitivity, specificity.

Yes. I mean that'd be much better than we have today. Also depending on the cost. That's also a factor.

Yes.

So elaborating a bit more on the competition. When you're saying you're going to take 50% of the market, are you taking that from someone else? We've got some questions on just the competitive situation for you. So that's one, are you taking from someone else? And also there was someone who wanted a specific comment on [indiscernible]

Robert, could you elaborate a little bit on the general setting? And then I could do the specific one on the competitor.

Happy to do that. So the initial setting is more a question of indirect rather than direct competition. So you've heard all of the other diagnostic tests mentioned in the course of treatment monitoring. So we would expect to have some impact on the numbers from many of those different tests. CA 15-3 would be one. Imaging would be another. So you would need to look across the whole collection of testing done, ideally show some reduction to the other tests done as DiviTum comes in, but it's not something where you could do a simple a for b, 50% market share from that one, 20% from that one and so on. I think it's a much more complicated equation from that and will come down to the individual oncologist's decision with their patient on what can be dropped in favor of adding DiviTum. Hopefully, many things could be dropped in favor of adding DiviTum if we give the right levels of sensitivity and specificity that we're just asked about.

And can I add, Robert? We have of course done a health economic business case that we modeled and now are doing trials to generate data for. And in that business case also, as in one of Robert's slides, we assume a reduction of imaging costs, diagnostics as well, not complete replacement but a reduction. And then our Swedish competitor. So there are similarities and differences. So we start with the similarities. We're measuring the same enzyme but in a different way. There are no direct trials showing the difference. So -- but the difference from our point is that we have generated data for this application, we were about to commercialize in about 10 trials on the breast cancer area with leading oncologists and now growing in size in clinical trials. So we have a foundation for commercialization. I would say that's a key strength. Another key strength is that we have a team on the ground now in the U.S., the market that we initially are going to launch in. I think those are the biggest differences.

You said in your last slide that you aim for your first reimbursement in the U.S. in 2021. Can you elaborate on how that reimbursement market -- how it's working, in the plan? And Robert, did it a bit.

Yes. So first, there are a few strategic decisions to make, what kind of coding you want to achieve and so on, and the application, your health economics and so on. So on that strategic level, we have performed an analysis. We did that already last year, and we continue to do that in depth. So we have set our strategy. And then you have to generate data to support that strategy. So we're in the middle of doing that in clinical trials. And then the last step in that process is to start -- interact with the payers and negotiate and come to agreements with the different payers. And Robert listed some of them that we have started looking in and preparing how to negotiate. Do you want to add something, Robert?

Yes, please. There's one other element to keep in mind, and I mentioned it very briefly. With some of the integrated care networks, they actually have a history of being early adopters of new tests, typically in agreements that are risk-sharing arrangements because they would expect to see an overall impact on delivery of care, certainly in terms of cost. So the first major organization to offer payment for the Oncotype DX test was the Kaiser health system. So it may be possible through discussions with integrated delivery networks such as Kaiser that we could enter into some sort of risk-sharing study early on as a way to get to market. And we have a fair amount of confidence that, for us, that would work well, given our potential impact in reduction of other test volumes such as for imaging and potentially other in vitro diagnostics.

If I could add one other thing, which was also briefly covered in your presentation on one of your slides. Reimbursement is closely coupled to guidelines, inclusion of guidelines. So that's key success factors for a successful reimbursement, of course a good strong health economic business case as well. So we're working in order to -- the clinical trials we're doing now, also we look how we could submit them to get included into guidelines. And then the 2 most important ones is the ASCO guidelines and maybe even more important is the NCCN guidelines. Those are the 2 ones that is really important for whether breast cancer area or cancer area in general, but especially breast cancer. And that's also something I would like to highlight when it comes to the key opinion leader page, if you remember, like Matt Goetz for instance, William Gradishar. If you read the current breast cancer treatment guidelines, those are the authors of those guidelines. So of course, it's -- you have to think -- that's a way of -- stating how important that you work with the right people, so you get the feedback and also you'll be able to reach out with your results. So yes.

You work with the right people. You've done some studies that were positive. You're making larger studies now that we hope will be positive so we can get an uptick on this. You said also there are articles published even last week that are supportive of DiviTum. In one of those articles, there's a trial called [indiscernible], which is a really big study, which you haven't mentioned in your studies. Can you comment on that?

No. We were actually taken a bit surprised, which is very positive. We are involved -- we communicate all the trials that is official. So it became official with that publication, which is very, very positive. So [indiscernible] is a European CDK4/6 trial. Mattias, maybe you could expand a little bit on the trial and the time line as well.

Yes, I'm happy to Anders. We communicate all trials where we collaborate and do the analysis work. The [indiscernible] trial is run by a pharma company, and they are buying our technology to analyze DiviTum in their own lab. So this is beyond our control, so to speak. That's an objective-run project by a pharma company. Hence, we cannot communicate that. That's their choice. But now it's been communicated by the key opinion leaders in this excellent editorial in British Journal of Cancer, and now it's official.

That's very good and -- that you point that out. And I think that's an example of, say, the snowball effect, that it's important to get the first trial, get awareness, that you can enter this kind of collaborations. And then they call us to purchase the kits. That's kind of the process. So an example of the sales we have on the research, we -- every month -- every quarter, we show the sales on the research. It's for that kind of collaboration projects. And also, I think that's a good foundation for everything that Henrik talked about because we are already selling kits to these companies. The next step is to enter collaborations that could add a lot of value to pharma -- to patients, first and foremost, but to pharma and also to us. So it's a natural next step in the strategy.

Yes. I've already tried to ask Mattias how many such trials have you been selling kits to. He doesn't want to tell me. I just want a number. Is it like -- can we hope for more news like this or..

Are you twisting our arm?

But we could give a ballpark maybe. So we have -- I think, the -- this has been -- this is a result of the first initiatives in the U.S. So this is a couple of years. We have like Dana-Farber, for instance, was the first one. There was a pharma partner involved that saw our technology, they started purchasing kits, and then it has expanded. So we have a couple of additional pharma partners, and the one has been that -- and several of them has purchased repeatedly. The ones that have been around now for a couple of years, we've done a lot of -- it's more than -- it's closer to [ 510 ] than 1 -- and the one that has come in lately, we have done repeated deals with also. So that's also important that they only -- don't only buy once, that they come back for more.

They come back for more.

But still, it's an area for -- that we can develop, and it's a resource question. And now we have people with that experience, which is -- because we've seen the opportunity for a long time, but now we're adding competence within that field, with Henrik.

We've talked a lot about the U.S. now and your FDA application and so forth. But you already have a CE mark in Europe, but you still start in the U.S. And 0.5 year later, you're going to start in Europe, and it's going to be the big 5. Can you say anything about how that is going to -- is it going to be 1 country first or all 5 at one time, or it depends on the partner you get, or...

Finally, a Henrik question. Henrik, do you want to elaborate a little bit on that?

Yes. So as I said during the presentation, we've done some analysis and looked into the different countries. We've chosen the big 5 and the Nordics because they are very similar to U.S., the way they test patients, the way they go through the different regimens. So that's one kind of assumption. Secondly, for each of these countries, we are diving into the test volume opportunity, pricing opportunity, who are actually the drivers, the uptake drivers, decision drivers in those countries and then actually also looking at something like the uptake of CDK4/6 in those different countries. Those different parameters are going to help us prioritize the different countries and how we're actually going to roll out in Europe drop-wise, you could say.

And this will be a collaboration with the commercial partners that we enter agreement with. So it will be also a discussion -- and we'll have different partners maybe on different geographies.

Yes.

Now that we are anew, Henrik, you've been at Agilent and Dako. They are major competitor to Biovica. Do you -- how do you look upon that coming as a smaller company to big pharma?

Yes. I think it was -- even if I was with Dako, it was an okay company, diagnostic-wise, you could say, I don't know if it was huge. But always, CDx was extremely small when I began and had my passion for that area. So it's not that different, you could say, actually now being with Biovica, a small company, and then we're actually going to start or grow this companion diagnostic. What attracted me was, again, the TK activity biomarker, which has a huge potential. And then especially also this kind of second-line of companion diagnostics, the monitoring piece, which is not at all out there and just have a huge opportunity, the same way as we grew CDx on predicting the same way we're actually going to grow it here with Biovica, and this -- I mean, again, I think it's a great biomarker.

Yes. Follow up related to the European rollout 15% of the 3-year in the U.S. market is perhaps challenging but I mean it's by market guidelines [indiscernible] show good position that can go [indiscernible]. Europe is a bit different in that there's more reimbursement country by country. Should we understand the 3-year target for reimbursement to take one or 2 years [indiscernible]

And I guess also the question is, is it 15% per country market then and not Europe?

Yes, per market you enter. And as you pointed out, Johan, there's different reimbursement settings in different markets. Like in Sweden, there is no reimbursement on diagnostics at all. It's kind of paid out of pocket of the government. And like Germany, there is a reimbursement. You would require local trials, but there's a big out-of-pocket market. So we assume -- and this is the same thing in the U.S. We won't get reimbursement from day 1 in the U.S., and we won't get that from other market -- on other markets as well. So it's really, really important that we look initially at the out-of-pocket market as well. And so we need to create a value proposition not only for labs and oncologists and so on but also for the patient and involve the patient organizations because patients benefit from this, but we need to communicate it. So initially, like in the U.S., the patients are willing to pay for it and also on the European market until we get it fully reimbursed. And especially on the U.S. market, this is important because even if it's fully reimbursed, the patients still pay out of pocket. So you never get out of the out of pocket. So having a value proposition towards the patient and being able to communicate it through patient organization and such is really important.

[indiscernible]

There will be health economic studies.

Yes, yes, yes.

Johan, I have to repeat so just a short question.

The pipeline, it's like very ambitious, with filing in third quarter, sounds like it's going to be late in the third quarter. We have the FDA uncertain time line with the COVID-19 and so on. So how confident are you that you are going to be filing in the third quarter and launch in the first quarter?

Do you believe in your time line?

Yes, I do. Yes. Otherwise, I won't be communicating. But it's an aggressive time line, I agree. I think it's doable because now we're pretty close. We have the -- we performed a lot of the analytical validation. We've done one round of analysis of the SWOG samples for SWOG. And so we're redoing it in the summer for the FDA settings, so we're coming to an end. So we're taking away a lot of the hurdles of our internal process. So it's still aggressive. People will work during summer for it to happen. But yes, with everything we've done so far, I'm very confident. When it comes to the external factors, it's the FDA and their process. They have KPIs that they should fulfill. So if you submit, they're supposed to come back with an answer within 90 days. And I think their current response time is about 122. So I think it depends, the better you prepare your submission, the quicker you get the answer. Otherwise, it's turnaround time discussing with the FDA. And we've invested quite a lot in several meetings during several years to get their feedback, and so we can do a good -- not only to shorten the time, but also to improve probability for success. Success rate is actually pretty good for -- that's also official statistics when it comes to 510(k). Do you know them by -- is it like 70, 80 -- or it was even more actually than 80%. But that's official statistics on the FDA home page. So you could actually do your homework yourself and see what the probability is because FDA gives away a lot of information.

And then a follow-up on the launch. I mean you are dependent on partners, and there are ongoing discussions. I'm clear how they are, but still -- I suppose they are not willing to commit to that partner agreement before the approval, I suppose. So it should be some time -- get approval, then you get all the signatures on the paper, and then they are going to prepare the launch...

How fast after approval can you launch?

Yes. You can of course have an assumption in that agreement, some -- that we're FDA-approved. No, but -- see if I can understand the question. Yes, we'll work transparently with them and of course show the data that we submit, and we have this discussion. Some of the potential partners are involved in our FDA process so they have insight. They have tested the assay during our FDA process. So one of the use cases that you need to test and provide data about is external analysis of the test. So we have sent this to several American labs that have run their -- the assay. And we've seen the data. So that's also good for us, see that not only that our assay performs, also that our partner delivers. So we are already, yes, pretty tightly discussing with some potential partners.

Do they have to hire additional sales reps? Or is that sort of...

No. As Robert said, we would look at partners, specialty labs that's strong within oncology because that's where we aim to launch. So they should have a sales force within oncology for us to be interested.

Johan, one last question.

Yes. Is it correct? Or does it make sense? I mean the reflection seems to be that there's less risk in the approval as such than perhaps the market penetration [indiscernible]

Is it less risk in the application than in upcoming sales?

Yes, I would say so because we are like 4 -- 3 quarters into our FDA process, and we're starting up the launch. Yes. Yes. And there's more parallel activities. You have the guidance reimbursement and -- not that the guidance reimbursement have to be in place for launch, though. We can launch out of pocket, but then the commercial agreement and so on. So yes, of course, there's greater complexity in that. So of course risk and complexity goes hand-in-hand. But also within this area, we're thinking how to mitigate risks and of course involving commercial -- potential commercial partners early is one.

And the attributes -- the clinical use in the initial stage with the monthly testing of the 6 first months -- monthly testing thereafter, how much impact or precise impact you get from monthly testing from different patient responses on therapies [indiscernible]

How much feedback can you get from oncologists using this?

I think it will take time until an oncologist will abolish an X-ray control or something like that. But much in the beginning will be parallel in order to be safe to gain knowledge about how it behaves, the marker. So it will take time. And I think as we see today, for instance, with CA 15-3, no oncologist will only rely on CA 15-3, but they will perform the radiological examination, too. And probably this will continue with the DiviTum until you feel safe that, well, you can skip 1 or 2 radiological examination, and slowly, slowly, I hope, we will feel comfort to use the marker.

Very good. Robert, you've done some research on that. Maybe you can give some feedback from the oncologist's session, the advisory boards that you've headed.

So they follow the same sort of thinking that you heard Dr. Rotstein emphasized. It will take time, but they would, in the first order, look to start skipping various imaging exams. So the presence of a low DiviTum value would be enough to say, well, the one we've got scheduled for a month from now, let's hold that. We've got another one 4 months from now. As long as we see the DiviTum values stay low, then that's what we'll do. Our first way of testing that is to probably allow the physicians carry on -- to carry on normal care but to record what they would do after being given the DiviTum results and see if that's any different than their intentions were before seeing the DiviTum results. And so we're working to generate that sort of evidence of change or intention to change in a stepwise fashion.

Great.

Yes. Good. And based on that, that's also behind the assumption when we talk our health economic business case, it's not by replacing everything. It's a gradually replacement, and our market potential, the pricing level and the testing frequency, it's based from that kind of sessions.

Thank you, Anders. I'll leave it to you just to -- if you want to say some last words, or we're finished now?

Thank you very much. It was a great session. I was proud to present the team and where we are. And I think we have a very, very exciting year ahead of us. There's a lot of things that's happening right now. That's going to be really interesting to see develop

Thank you.

And thank you, Charlotte.

Thank you.