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

Hello, everyone, and welcome to the Biovica Q4 and Year-End Report. And here is our forward-looking statement disclaimer. The presenter for the webcast today will be me, Anders Rylander, the CEO; followed by Anders Moren, our CFO, then Hector Tamburini, Head of U.S. Operations will present the U.S. development and also Henrik Winther, responsible for our pharma businesses area. And the agenda, we will go through is our standard agenda. We'll start with a short introduction for people that are not so aware with our business, then we'll move into the fourth quarter and the highlights and Anders will follow and give a financial update. Then Hector will do the U.S. update. Henrik will do Pharma Services update, and then I will summarize and we'll move into the Q&A session. And for the Q&A session, we will have our 3 equity researchers, analysts from Pareto, from Kempen and from Redeye that we will let in to the meeting, to ask questions directly. But all of you that are listening into this webcast have the opportunity to post questions that we will do after the analyst session. And we'll answer as many as we can until we break at 4:00 the latest. If you want to post an anonymous, you can do that, but then you have to check that checkbox. So a few words about our company Biovica and our product DiviTum. So DiviTum stands for dividing tumor. We measure cell proliferation by measuring a very important enzyme active in the cell proliferation process, which is called [indiscernible] kinase. So it's very much so the core of cancer as cancer grows through uncontrolled cell proliferation. This has proven to be a very effective method both to use prognostically before starting treatment, for example, but also an excellent way of monitoring patients being on cancer treatment as a change in cell proliferation indicates whether the patient responds or not to the treatment or if the treatment is effective, I should say. The test is blood-based, which allows for simple and quick analysis. And we have also shown that we can provide information month ahead of the standard method being used today, which is imaging. This conclusion and the documentation lies in a very strong foundation and solid ground with our 30 peer-reviewed and published scientific articles. The majority of the documentation is within the breast cancer area with about half of those publications and over 3,000 patients. And it's done in combination with and by world-leading academic institutions and key opinion leaders, which, of course, is very important for us to communicate the message in a trustworthy way which also reaches out to other oncologists. In U.S., we have 7 well-renowned collaboration partners, of which we have published with the majority of these. We have the Mayo Clinic. We have WashU, Washington University, Johns Hopkins, Baylor college, et cetera. In Europe, we have both Karolinska Institutet, et cetera, and the [indiscernible] Hospital in Italy that has done several collaborations and publications. We also have breast cancer group in Europe with IBCSG big international group, covering several companies in Europe and also with the SWA Group in U.S. we get an excellent reach for the data that we have been publishing. If you look at the market potential, we've focused initially at the breast cancer area and within breast cancer monitoring of metastatic breast cancer. The 2 markets that we are focusing on is the U.S. market where we go to market with [indiscernible] model where we offer the test as a service. And in Europe, we have focused on the bigger countries than the Nordics is our focus on the go-to-market model is through partners that we sell kits and they provide the go-to-market service, including setting up labs, taking us through reimbursement, et cetera. We focus on partners that has a sales force with oncology that can meet the customer and generate demand. The market potential is based on -- in U.S. at an average price of $400 times the number of patients being on treatment for this disease. And a factor also will see this assumption seems to hold very well now when we also are on the market. We have great potential outside of the metastatic breast cancer area to expand and become a standard method of evaluating treatments within cancer, especially within the targeted treatments area where you target the cell proliferation cycle. And one example of that are the collaborations we're doing with pharma to support them to develop new therapies and also have the opportunity to codevelop new products complementary to new therapies. This generates value both for the pharma companies as well for patients and for the health care providers. Henrik will talk about this process in his part of the presentation. And looking further down the horizon, we have other indications that we have identified, and we also have started to generate data. One good example is the metastatic malignant melanoma, where we have data published and also an IP process going, which we'll report to give an update on. And then also interesting areas are prostate cancer and non-small cell lung cancer. If we go into the fourth quarter that ended end of April so February to April for us as we have a broken fiscal year. I want to highlight some areas, all our 3 major areas: U.S., Pharma Services and Europe. I think we made a great progress. We did not reach our SEK 10 million sales goals in total, which we are, of course, disappointed with. But despite that, we see great progress in all these 3 areas. And if we start with the U.S. area, we see that the trend that we reported in the third quarter, we are really getting momentum, and we see that the revenues growth and we get new oncologists ordering from new institutions and the number of patients are growing. Here, we see a really, really strong trend, which we think is very, very encouraging. And this is something else that Hector will dive into a little bit more. Same thing with Pharma Services. Here, we've seen the trend for some time. And if you look at the year-on-year and the Q4 revenues, we also are developing that very well in a good direction. And also, we have some mass on that Henrik will elaborate a little bit on. And also in Europe, we have 2 strong partners, which we have a great belief in Palex in Spain got a good start as we were presenting data with the GEICAM group at ASCO. GEICAM is the Spanish breast cancer group. That is the one that is defining guidelines, et cetera, important key opinion leaders to work with in order to introduce the test on the Spanish market. In the Nordics, we have an agreement with Ax-lab, and we also see that they are moving forward in their go-to-market work, and they have hired 2 sales reps soon we'll be starting, and they are dedicated on working with DiviTum. So progress in Europe as well. If we go into the actual highlights that we have communicated during this fourth quarter, the first 1 on this page is related to our Pharma Services, the 2 master services agreements that we signed and also that resulted in work orders related to those master service agreement. So this is an evidence of the progress we're making within the pharma services. Another thing within this or related to this area is the patent process that we have to expand our patent specifically for immunotherapies. And this opens up a new area for collaborations with pharma that has a very large potential even larger than the CDK4/6 inhibitors, that is our current focus. If you look into the U.S. area, in addition to the positive development when it comes to the revenues and the number of oncologists and institutions and patients, et cetera, we also are seeing a greater interest from oncologists to study this further and include patients in both interventional and observational trials. This has great value for us. The interventional trials will help us to drive demand and the observational trial is more local trial at the Mayo Clinic, also creates awareness and also as this being a standard of care treated patients, it contributes to our revenues. We did announce cost saving and restructuring program in -- at the end of the quarter, which will give savings of SEK 30 million per year or 25% of our costs, and I'll go into that on the next slide. Finally, after the end of Q4, we communicated that we together with GEICAM did present result at ASCO. We've been active at both ASCO and AACR. And both at these 2 large conferences, ASCO being the largest one within oncology, we've, yes, received -- have been very successful in terms of getting -- creating awareness and also establishing new relationships with pharma companies that has led also to progress when it comes to sales and agreements, which Henrik will dive into a little bit more. Yes. The cost reduction program, I'll give you some background around that as well. The implementation of that led to a reduction of 10 employees, 5 in the U.S. and 5 in Sweden. And rationale for doing that was to lower the cost levels and to address some performance issues. We did not meet the goals. And of course, that has consequences. What we focused on was reducing overhead staff. And instead also, we have kept high performers with customer-facing roles. That has also been promoted and has taken some management responsibility as well. The result of this is that we have achieved a leaner and more effective organization and with -- which we believe will be performing very well. And we've seen also that the sales -- the remaining sales staff, we kept out of the customer-facing staff, we kept 4 out of 6. We are performing. We're doing our best months here at the end of the quarter 4 and the beginning of first quarter at the current fiscal year. So yes, it's always hard to say goodbye to colleagues that has served us well and been very loyal and performed well. But I think with this, we have strengthened our position going forward significantly. Overall, this will give us a SEK 30 million per year cost saving and the majority of that is in the U.S. organization. It's also an SEK 8 million in restructuring costs, which was booked at the fourth quarter for the fiscal year '23, '24. With that said, I touched up on some numbers, but I will hand it over to our CFO, Anders Moren, who will go through the financials. Anders, please.

Thank you. So a few slides on financials. You can see here our total year sales ended up at SEK 7.3 million. That's a miss versus our SEK 10 million target that Anders was talking about. We are, of course, not happy about that. But if we look down at the Q4 sales, that was SEK 1.9 million, that's 225% growth versus Q4 prior year. And for the full year, it was 115% growth versus prior year sales of SEK 3.4 million. So we are going in the right direction, a little bit slower than anticipated. We zoom in on the U.S. IVD sales, the same pattern here. We sold SEK 423,000 in Q4. That's more than the year-to-date number for Q3, SEK 365,000. So it's more than what we had sold year-to-date when we closed Q3. Total sales, SEK 788,000. And this good trend I think Anders mentioned that continues. Now we see also in May and June. So we're quite happy about the trend. A slide on the cash position. SEK 79.4 million when we closed Q4, rounding up with a look at the net operating cash flow by quarter, it was minus SEK 25 million in Q4. Of course, the SEK 8 million restructuring costs that we accrued for in end of Q4 because that was the decision was taken on the 23rd of April. So we accrued the SEK 8 million. That also inflates both the working capital and operating cash flow before change in working capital, but net minus SEK 25 million. So that's basically in line. And we have -- the plan is that, that should be improving as our cost saving reductions comes in and also as sales start coming in, following the trend that we just won the previous slides. Headcount, we were average 37 heads for the full year. As of May, we're down then to 27. So it's 20 headcounts in Uppsala and 7 in U.S. So that's minus 5 on each of the sites that we are operating in and all in all, a SEK 30 million saving, I think, about SEK 25 million of those SEK 30 million comes from the U.S. restructuring and SEK 5 million coming from the Swedish site restructuring. So with that, I'll hand over to Hector that will walk us through the U.S. update.

Thank you, Anders. Good morning, good afternoon, everyone. My name is Hector Tamburini. I am the Head of the U.S. operations based in San Diego, California. Just as a brief summary of my background. I'm a clinical biochemist by training, I worked alternatively in diagnostic and pharma companies for over 30 years now. Joined Biovica in 2023 and have managed the CLIA laboratory in San Diego and more recently expanded the role to the oversight of the whole U.S. operations. I'm going to share with you the overview of the last quarter of the year from the perspective of U.S. operations. So next slide, please. Yes, that's the agenda. We're going to review the sales performance, take a look at the reimbursement status, regulatory outlook, our clinical trial activities and some of the use and benefits of the real-world patient data that we have accumulated at the moment. Next slide, please. So the sales performance, as you already heard, some information, the revenues grew over 100% over the past quarter of the year. We noticed 16 order institutions, which is 4 more than the previous quarter. So we keep adding prescribing institutions, which is a very positive indicator. The number of patients also grew about 50% over the past quarter. And one thing that we noticed is that more patients are having multiple DiviTum tests over a period of time. And that's a key indicator for us because it kind of describes how the prescribers use the test. Initially, they select specific patients or cases where they feel DiviTum can provide some good information about the therapy. And once they become familiar and comfortable with the results and how the -- and the correlation with the treatment, they expand to other patients and even more, they expand to other professionals within the institution. So that to us is a key success factor of the market expansion of the test. Next slide, please. Regarding reimbursement status, we are very satisfied with the fact that on all 3 fronts, Medicare, private insurance and client bill claims. We have not had any denials due to medical necessity or clinical utility and as Anders mentioned before, we are aiming and confident that we can get a blended channel reimbursement rounding the USD 400, which is our expectation probably higher. Next slide, please. That would be the regulatory outlook. You heard before probably from my colleagues that we've had several audits and certifications not mentioned in the chart, but we also host audits by our pharma customers. And the reason why they're important is they keep us at a very high industry standard. They follow international regulations. So we are in compliance, we pass them. And right now, the next big milestone will be the New York State Department of Health inspection, which is scheduled sometime in the second half of the year. We've been in communication with the inspector. And it's just a matter of them scheduling the audit and hopefully, after successfully meeting their expectations, we can obtain the permit that will allow us to serve and offer DiviTum in such an important state as New York. Next slide, please. We mentioned before the existing clinical trials, some that started recently at Yale University and Washington University. We added 2 more recently, one with Hunterdon blood and cancer specialists. It's an observational clinical trial, very reputable institution in New Jersey. And also, we're working very closely with Mayo Clinic of Jacksonville, Florida, also in an observational clinical trial. Both of them aim into improve the efficacy of the treatment and the use of DiviTum as a tool for the physician in the management of therapy. I think we can go to the next slide, please. And previously, we have presented several real-world or real patient cases where we see the use of the clinical utility of DiviTum. This has continues happening, and it has multiple effects in our potential for growth of sales, at least in the U.S. One of them, as I mentioned before, is the word spreading or the knowledge sharing among colleagues and in certain institutions. We've seen that already happening and that has rendered amazing results when we started seeing a significant number of prescriptions from some physicians. There's a tool that we implemented very recently, which is the advisory board. And this is key opinion leaders sharing their experience, their knowledge and their use of DiviTum in the management of the therapeutic regimen of their patients. This is extremely helpful because it's not just a company speaking. It's also a peer who tells how they use DiviTum, how DiviTum has helped them manage their patients, and it's very well received. And we hope that we can continue doing that with multiple professionals, and that will also create a sense of community of how these tests can help them and help their patients manage through the course of the disease. And another very important factor, which is also resulting from the recent restructuring is to center the focus on very large institutions with multiple specialists, multiple oncologists, multiple locations and that includes many of the IDNs, or integrated delivery networks, among which we -- in the U.S., we have HCA Healthcare, Kaiser Permanente, the Essential Health Mayo Clinic. And the reason for our interest in focusing on these institutions is they manage a very complex and critical sense of treatment management, optimization of the treatment as well as health economics and that benefit for almost everybody involved because they benefit from optimizing the use of therapy and DiviTum can be a very good tool in that process. So with that, I'm going to hand over to my colleague, Henrik. Thank you.

All right. Thank you very much, Hector. So I only have a couple of slides, but I'll take you into the Pharma Service world and what we're doing here at Biovica. So as you can see, the first slide here, it might be a little bit busy slide. And hence, allow me to provide you with some background and also remind you or refresh your minds on what kind of activities we have within this part of our business. So this is about onboarding pharma companies working together with pharma companies. Initially, we offer our TKA service testing and also kit sales for pharma. This is for -- in order to create trust in our biomarker assay, but also create trust in our company. And then when pharma, they are really convinced that this biomarker can make a big difference for them, we continue into CDx or into collaborations at least. And part of that is -- part of these collaborations are CDx collaborations. And then finally, out of the CDx collaborations, we will have a product that is going to be owned by Biovica and sold by Biovica. So that's the process we're going through with the different pharma partners. It's a stepwise approach, as you can see or an end here. And you can also see from the cartoon here that this step-wise approach have different value components tied to each of the steps. If you look at the status or the outcome of Q4 on the service and the kit sales, today, we have -- at the end of Q4, we had a work order book at SEK 11.6 million. At the end of Q3, we had a work order book at SEK 8.5 million, so a significant increase. And then remember, as you will see for below -- but actually, during Q4 also executed on SEK 1.4 million. So you can see a significant increase in the work order book during Q4. Also Q4, we made 2 new MSAs that was mentioned by Anders. And we actually also have 2 MSAs in negotiation currently. And when it comes to the CDx collaborations, we have ongoing discussions. We have actually initiated our first pilot study, which is running now. If we dive into the numbers, and this is just to show that we really had a strong Q4 and also a strong year-over-year revenue growth. If you compare Q4 last year to this year, we had 135% increase. And this just tells us because we've seen this Q4 with pharma has been slow over a couple of years, but it seems as if we have now really convinced Pharma to work together with us. And hence, we have turned our Q4 into strong Q4 as compared to earlier. On the year-over-year revenue, we had almost 80% increase as compared to last year. So also there, we are happy with the financial performance. If we dive a little bit deeper into some of the highlights and what are the key progresses over Q4, we have mentioned we signed 2 new MSAs. One was with a Tier 1 pharma company and the other was with a Tier 3 pharma company. And we have earlier defined a Tier 1 company, a pharma company as a company that has above USD 10 million -- USD 10 billion in revenue per year. And the Tier 3 pharma company, we have defined as a company that has below USD 1 billion in revenue per year. So we've signed 1 in both ends there, which we're really happy with. We also signed 3 new work orders and actually 1 of those were the biggest we've ever had so far. It was a work order above SEK 2.2 million. We concluded our lab and process preparations that will enable us to start 2 major work orders. And these activities, I'm kind of referring here to prepare is logistics and it's also data transfer agreements getting those in place. So we have them now all in place, and we expect to have the first batches of samples arriving end of this month here. So we are really happy to move into this -- into the big studies because that will allow us to have a robust shipment of samples on a monthly basis. Then we initiated negotiations on additional 2 MSAs, and we actually outside the Q4 and here in June, we signed 1 of those. And the other 1 is in progress. I expect that 1 to be signed within the next 3, 4 weeks. Then we also, as I mentioned before, initiated a pilot study with a new pharma partner. And this was using our assay as a stratifying patient stratifying tool. So this is as a CDx tool and we're obviously super excited about this. And I can't share any data currently, but we will, of course, as soon as we can in agreement with our pharma partner. Otherwise, we had this positive feedback from the EPO, the patent office in Europe about a PCT application we made last year. And this is using our assay as say, monitoring to within immune checkpoint inhibitor drugs. This is a huge market potential that we expand into by using our assay in this regard. I think currently, the CDK4/6 inhibitor market globally is around SEK 50 billion, but if you look into the new checkpoint inhibitor market, it's probably 5, 6x as big as that. So that really unlocks a huge market potential for our assay. Then lastly, we've had some successful meetings or presentations at AACR and ASCO both internal data but certainly also data presented by pharma. And this is what is now establishing new collaborations and this is going to be the foundation for our Q1 and further Qs in this fiscal year here. And we have already -- in this week, we have meetings with a couple of new pharma partners that are really excited about the data we presented at those 2 meetings. So overall, really, really strong performance in Q4 and over the year within the pharma business. And with that, back to you, Anders.

Thank you, Anders, Hector and Henrik. So I'll just summarize and we'll open up for Q&A. So I said in my introduction, we have a product that measures what's really core in cancer, the cell proliferation, and it's ease and convenient with a simple blood sample. And we have also shown in an extensive clinical documentation that we have strong evidence for the benefits of using our assay and the benefits are both for patients as well as health care providers and pharma companies. The foundation we laid with the evidence also clinical evidence is the foundation that we based on our commercial efforts on to unlock that huge market potential. We start with metastatic breast cancer in U.S. as a clinical focus and also in Europe using partners. We had a little bit slow start, but now we believe that we really see the flywheel starts spinning what's heavy in the beginning. But now we've got momentum, especially in U.S. And the process like Hector said, the oncologists are curious, interested. They tried out in small numbers on maybe difficult patients. They see the benefits and they're increasing the orders, monitoring quite a significant part of their patient, if not all, and they become regular customers and supporters and starts to communicate this to others, and that's where we can accelerate the uptake. And that's where we are now the 2 advisory boards that we have has been really successful and is driving that -- accelerating that process. So after some time, we see that the flywheel was a bit heavier maybe to start up, but now we have the momentum. Pharma Services is super interesting, such a huge potential, and we are also expanding that portfolio. And I guess the big milestone will be the first collaboration project with pharma. And with the cost reduction program, we have also made a more effective organization, taking out SEK 30 million per year in cost. Of course, that's important for us, 25% of our total cost base. So we continue to -- with this to strive against our very important target of becoming cash flow positive. And our ambition is to achieve that second half of 2025. And I was -- because we have open fiscal year to be very clear calendar year when we're seeing that. So with that said, we're moving into the Q&A session, and I'd like to start with our analysts. And I think we should start with Chien from Pareto, which I know is online. Maybe you could unmute Chien and please.

So I have a few questions. Could you tell us a bit more about the progress of the new U.S. go-to-market strategy? Is there some sort of timeline and what kind of terms can we expect? Or would that be more front-loaded or backloaded agreement?

Yes. As Hector touched upon, we have slightly changed of focusing on not just 10 client build contracts. We see that we can generate -- get paid basically both inside the ones that we've got and from Medicare and from private payers. So instead, we chose to focus on the ones that really can leverage the uptick of dividend and where we have seen very great response and interest are from those large IDNs that has a strong financial incentive to push the product out. So we could help in pushing this out to oncologists. So that's our primary focus. Hector touched about that. And that's also the first 1 we expect to be able to communicate that we can sign. Secondly, since we now have reduced our sales force from 6 to 4 customer-facing which I must say those 4 still performs very well and drive sales in a great manner. Over time, of course, we would like to be able to expand the sales force without driving our need for capital too much. So we have also investigated the opportunity to partner with an external partner at the U.S. market that has sales force that we can utilize and then share revenue. We are not -- we expect that to take a little bit longer time, and we'll keep you updated on that. There is interest, but we haven't found the math yet.

Okay, perfect. That's actually also my follow-up question because as you mentioned, you are retaining most of the sales force. So we can still assume your sales force will take care of part of the commercial activities and the other part will be maybe licensed or partner out to the commercial partner. Is that correct?

Yes. I will see if I understood your question. Yes. So we've been able, so we reduced the sales force, but we've been able to increase the sales since then. So yes, I don't know if that was -- so we continue to work on -- with the sales force we have, and we're able to expand use of DiviTum and increase sales in parallel with looking on other value leveraging activities like partnerships, deals and both with IDNs and outsourcing partners. So the work is done in parallel. Was that the answer to your question?

Maybe to start off, could you perhaps expand a bit on which factors do you believe contributed to DiviTum sales not reaching the guidance that you provided earlier?

Sorry, Luísa, I didn't hear the beginning of your question. Say again. I lost you there in the beginning. Can you repeat the question?

So I was just wondering if you could expand a bit on which factors do you believe contributed to the digital sales not reaching the guidance that you provided earlier? So I'm guessing it's a combination of more than one, of course, but if you could explain a bit.

The main factor is the longer uptake time in U.S. I think we underestimated the time for that process that both me and Hector explained that typically an oncologist when we generate interest, they try it out. They increase the volume, and they start communicating to peers, and that's how we get the flywheel going. We've seen that work very well in the last couple of months here, especially. But the timing, it has taken longer than we thought. On the other hand, now we have it's like rings on the water. Now we have more oncologists talking to more oncologist. So it's we hope, on an exponential growth from here on based on that.

Makes sense. And which -- if you know, which is now the average number of DiviTum tests that are being ordered in the U.S. per patient, I mean.

Do you know that -- do you know that, Hector, I don't know that to answer it, but maybe you can give some guidance, at least, Hector.

Yes, I can help with that. So in general, we see at least 3 to 5 tests per patient. Usually, if it's a new patient, that starts treatment, you'll see a baseline test, which is prior to initiating therapy. At the beginning, there is more frequent testing, which coincides with the visit to the specialists. And as hopefully, if they respond to the treatment well, then they start spacing out the visits and the treatment, similar to the image diagnostics that are used traditionally in solid tumors. But that's pretty much what we've seen with the majority of patients and doctors.

I think it's a little bit difficult to -- because patients that has been on, we have a significant increase as Hector said in the slide last month or so. Of course, those patients, we only see the first test for the new patients. But if you look a couple of months back, you see that when they're used for monitoring, which they are typically after testing out or starting to use for more or less all of their patients they are coming back monthly to follow up on that patient. And we see actually sometimes even 2 and once or twice, 3x per month. But I think you can assume that the guidance that we have given that these -- the test will be used monthly for patients being on CDK4/6 inhibitor treatments, especially the first 6 months and then quarterly until progression and then a new treatment monthly again initially. I think that seemed to hold based on the data that we have so far. You would like to see a little bit more data over time to really, really -- to really be -- give a precise comment on that. But it looks good so far.

That was actually very helpful. And maybe just 1 last question. Could you elaborate a bit more on the presentation and the results at ASCO because I feel like that was a quite remarkable presentation. So if you could just expand a bit more on that.

Yes. I'll leave it over to Henrik to switch seeds, and he will give a little summary of that.

Yes. So at the AACR meeting, there we had our own -- yes, okay. Only -- yes, just going to say no, at the AACR meeting, we had our own presentation and a lot of our attention around that by pharma. At the ASCO meeting, it was not our data presented. It was data presented by a pharma partner, pharma company. I probably can't mention it right here because I have not aligned with that pharma partner on mentioning it out here at an investor call, but that at least attracted a lot of attention from other pharmaceutical companies and has now triggered a lot of conversation, additional activities with that current pharma partner plus additional activities with new pharma partners. And that is also involved in one of the MSAs that we are currently discussing.

And also the -- Henrik, I think also the GEICAM FLIPPER trial.

Yes, the GEICAM FLIPPER, that's outside my area, that's the clinical development piece. That was obviously also a very important trial percentage, and that's into our core business and not the least, I guess, European sales, very important.

So if I fill in there, Henrik, the FLIPPER trial, that was the PR also. So it was both former partners with PR and then a FLIPPER trial, which we PR-ed, that was performed by the GEICAM, as I said, the group in France, the French -- in Spain, the Spain Breast Cancer Group, and it was monitoring of patients that was on a CDK4/6 inhibitor on treatment for breast cancer. I think you can -- you will find if you look for GEICAM and FLIPPER trial, you'll find it both on clinical trials and the ASCO information. Hope that helps. . We have Johan Unnerus from Redeye.

I have a few questions. It's obviously important to -- with the reference sites on the clinical testing. I think you have activated, was it 14 or 16 account. How many of these would you refer to as important sizable reference size?

That's a good question. Hector making an elaborate on those. We can -- how many would you consider as important reference size of these 16? I think I could start and then I'll hand it over. But most of those are well renowned NCCN NCI centers typically. And like Hector mentioned on that slide also, we have the Mayo Clinic trial. That's one of the examples. And also that was the oncologist on the ad board. And we have also a few in the Arizona, where we had a client bill agreement also. And then we have a couple of additional ones that are, I would say, in the eastern center -- eastern part of U.S. that are well renowned NCCN NCI centers. I don't know if you have a more precise number, Hector, that you can give.

I think you described it well, Anders. I believe out of the 16 institutions we see probably there are top 5 if you want to run up the number that are large, some academic organizations, and that carries a heavy weight because the way the word spreads within the institutions, we've seen that even with 1 case that makes a market in 1 physician, then all of a sudden, we see the propagation of the interest in DiviTum. So I would say probably the top 5 are the most relevant, but all of them are important to us.

Yes. And then just to give you some perspective also, Johan, the reason for it -- that's the way it is. It's also due to our sales targeting strategy. So we have data and an analysis on where are the largest prescribers in terms of CDK4/6 inhibitors. Those are the 1 that can benefit most or assay and also most potential for Biovica. So those are the ones that we have been targeting. And we've also been prioritizing and CCN and NCI centers where we have relationships. And from our clinical program, that is quite a lot. So we have a head start on those institutions. And so when you see the orders comes in, it's primarily from those big ones that we also have been targeting.

And is it possible to say I think regarding the outlook and the activity coming -- for the rest of the '24?

Yes. If we -- it was cut off, I think I heard -- so can we give some guidance for the outlook of '24. And I guess, also to end of '25 when we are talking about that breakeven milestone, which is so important to us. So in order to -- so we need to -- we have aggressive sales goals for the fiscal year '24, '25 to get to the breakeven by second half than of '25, where we previously announced SEK 50 million per quarter. Now with a cost reduction, that is around 20%, 25% lower. So we've lowered the bar, but it still requires significant growth to get there. But still, I think we've laid a very good foundation both when it comes to U.S. and pharma where we see the growth. And to go back to your previous question, we have 1 or 2 -- typically 1 or 2 key opinion leaders per those big institutions. So there is potential now when they are starting to share their patient cases and success stories with DiviTum to grow within those institutions, and we also are negotiating and are talking with partners, new partners that will help us to push dividend out to a big population. So that is the strategy in short term for '24, '25 which is required for us to be able to achieve that aggressive growth rate in revenues.

In order to hit that sales level of just below 40%, then is it possible to say anything regarding the mix, clinical versus pharma-related contribution and sales services.

Yes. We believe that the majority of the revenues will come from the U.S. business slightly followed by the pharma services business and then a small contribution from the European business. So that will be the smallest one. That when we're working through partners, it's also we started the go-to-market we signed the deals, but then to some extent, it's also dependent on the progress in U.S. with patient success stories and yes, assets that we developed in the U.S. So Europe will be the smallest contributor of the 3.

And earlier, you alluded to around SEK 10 million in cost base per month after this restructuring, what sort of level can we expect as a run rate?

Yes. So then you can expect a 25% reduction. So yes, slightly below SEK 8 million cost base. And then, of course, revenues add on top to reduce negative cash flow.

Yes. And finally, then on the pharma side, this pilot testing is interesting, of course, is it possible to give any flavor for time lines?

Johan, it's obviously difficult to give exact time lines there. It is ongoing -- but it's also very obvious that is before pharma is jumping into such a conclusion of making a CDx, they really want to make sure they have the right data. So that's why, I mean, it's still ongoing, and they are collecting more samples. We're testing more samples. So I really have a hard time currently to give any clear guidelines. It really depends on the results so far, so good, but it depends on the final results and so also the decision from pharma to move into it. So I would not say more than that currently.

Yes. And the prospects of an additional master service agreements is, of course, also interesting, and maybe that decision has taken slightly lower in the partner organization. Presumably, you will press release when that is a fact.

Yes. Absolutely.

Well, I just want to say, Henrik, it's fair to say also that in our plan to reach that breakeven milestone. We are including our first co-development project so as part. But it's -- we're dependent on external factors so difficult to forecast exactly and promise, but I think it's a good sign and a good step that we are now doing pilot trials, and we also have a portfolio because it's a little bit of a numbers game. The probability, of course, increases when you have a portfolio and several discussions because not every pharmaceutical becomes -- goes to market and it goes all the way. So that's why it's important to have built up that portfolio that Henrik and his team has done.

Finally, on the sort of more important or key reference sites. It seems like you need support from these in order to establish also commercial collaboration. Is it possible to say if it progress well with these sites and growing volumes and KOL impact. Is that something that you could be more active on perhaps towards the end of '24 or...

I didn't understand the question. Can you just repeat the question?

The impression is that the support from the more sizable and important clinical sites in clinical use are very important for sales, but also important in terms of reference for establishing commercial collaboration and partners. Is that something that is more sort of reasonable to secure by the end of '24? Or is it something that could be more something that can find support from in '25.

Yes. Okay. I'll interpret. I don't think I totally understand that. All right. So you're right that in this business, it is -- a couple of things are very important to be successful. First of all, you need to have data that supports your claims that we have addressed. And also, you need to have trustworthy people communicating that data. And in this world it's oncologists talking to oncologists. And initially, that's also why the initial sales is challenging because then it's the Biovica sales reps that are trying to convince oncologists. So what we've been able to do and lay the foundation is now that we have oncologists that are believers seen us with their own eyes and that are now promoting this to their colleagues within institutions and to colleagues, oncologists, another institution. What we are focusing on doing now, and hopefully, I'll answer your question, is to accelerate this process by, for instance, creating a forum where we can share their voice to other, like the ad boards that we're doing virtually. We can cover 10 to 20 or so in each. And the majority of those 10, 8 will be new customers, there will be some existing customers that kind of verifies what the key opinion leader that's communicating so there's more that gives the same perspective. And so by doing so, we have a strategy to accelerate this and create a forum where they can share their voice. And that way, we'll have more and more and will be quicker to have oncologists, testing, trying out the product. That's the feedback we get already and hopefully, also being a bit quicker in testing on a couple of patients in the monitoring application. Was that an answer to your question or...

No, I'm thinking since you're scaling down your direct sales force. Of course, the prospect of adding a commercial partner is interesting, and you alluded to earlier that that's a bit further on. And presumably, that's related to this KOL impact and the support from key institutions and their use of the test.

Yes. no, that's true. And I think that's -- there's interest. We have received interest -- confirmed interest I think that will be even a greater opportunity going forward as our revenues grow and the buying for this is becoming even stronger. I think, of course, you can find ways to out-license areas or applications to a partner that has a sales force. Of course, you have to give away revenue. I think that opportunity is still interesting for the future and should be weighed against investing more money in increasing our own sales force that is more -- requires more capital but also, of course, provides a higher margin. So we are evaluating that in parallel. I hope that answered your question. Thank you very much. I received a lot of questions from the audience. We're over the hour. I think most of them were answered answering the analyst questions. So unfortunately, I'm not able to continue because we want to keep to that 1 hour. But with that said, I'd like to thank you all for the great interest and the great questions you post, and I wish you all a great summer, and we're looking forward to communicate the process and -- that we expect to have going forward. Thank you very much.