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

Hello, and welcome to Biovica Q4 and Full Year Presentation. My name is Anders Rylander, and I will be presenting together with CFO Anders Moren. And here's the agenda for the presentation. We'll start with a short introduction to Biovica, the company and the product. We'll go through the Q4 highlights, and then Anders will do the financial update, and then we will finally do a summary and open up for a Q&A session. During the Q&A session, we will have Johan Unnerus, our analyst from Redeye, to ask questions, but you could also, as a participant, submit questions using the form in the Teams application. And if I should move to the Biovica introduction, I'll start talk about our product, DiviTum. DiviTum is a tool for measuring cell proliferation from a simple blood sample. And we do that by measuring an enzyme, which is closely related to the cell proliferation cycle. This has proven to have several advantages when monitoring treatments for cancer patients as cancer grows through cell proliferation and it correlates both to before start of treatment, how aggressive the disease is, but also it provides quick feedback if the treatment is efficient or not or if the treating physician needs to take action, change dose or change treatment. Currently, these patients are monitored by using different types of image diagnostics primarily. And so we offer a complementary tool that can more quickly provide feedback and also more convenient. This is, of course, very important, especially so for the patient to get either a confirmation that she is on an effective treatment or can take action changing the treatment if it's not optimal. It's also important, as we will talk about further down the presentation, for the health care providers as it has cost impacts. The treatments are very costly. And of course, you want to spend these resources on the most effective treatments. This has been proven in many clinical trials. We have, up until now, 30 clinical trials that has been done in collaboration with some of the leading oncologists and institutions in the world, especially so in the breast cancer field, where we have the majority of studies and patients, but we also have proof of concept outside of the breast cancer area. The evidence provided from these clinical trials that has been peer reviewed and published in leading scientific journals shows that DiviTum has value both before start of treatment and during treatment and can be an indicator if the patient is responding to treatment or is progressing and action needs to be taken. We especially want to highlight the results that were announced in the San Antonio Breast Cancer meeting in December last year, where we provided strong data within the metastatic area as well as some new data within the early breast cancer data -- area where we showed in 2 clinical trials that DiviTum also has a great potential and value in the earlier phase of breast cancer monitoring where the patient is being treated adjuvant for reducing the risk of recurrence of breast cancer. So this is a strong, solid foundation for the commercialization efforts for the product and has led to several important milestones such as the FDA 510(k) clearance, opening up the U.S. market as well as inclusion into Medicare and also creating the demand for the product. If we look at the market potential, our first application is breast cancer. The 510(k) clearance was focused on metastatic. So that's where we started, and that's where we have the majority of our revenues. We have our own CLIA-certified lab in the U.S. from where we serve the U.S. market. And the market potential is based on the price assumptions, which also has turned out to be a good estimate in combination with the treatment -- with the testing frequency and the number of patients living with the disease. And as I talked about the new data from the adjuvant area or the early breast cancer area where patients are monitored for their adjuvant treatment, it opens up a significantly larger patient group and also, therefore, a larger market potential. The test itself is not so costly to produce, which yields a very attractive gross margin for the price levels that we have been able to achieve. If we just zoom into the highlights from the fourth quarter that ended in April and also the events that have taken place after that. I'll start to summarize U.S., and then we'll dive into the details per area after this summary slide. During the -- or slightly after the close of the fourth quarter, we announced a collaboration with Tempus, and that is a great opportunity for us to expand the commercial reach, adding the product to the sales force of Tempus. And I'll get into the details about that collaboration, how it's structured. We also see that especially now in the U.S., we have a strong organic growth, and it's been stable now for the fourth quarter, actually started late third quarter. And I'll go into also what we see is the explanation and rationale for that. Also, our Pharma Services continue to grow. We see a trend of more and more Tier 1 pharma now being customers, and we see also a trend that the contracts, the work orders become larger and also that they are using this not only in 1 or 2 projects, but in several of their projects going on. In Europe, a very important milestone for us was the agreement that we signed with Eurobio Scientific, covering several countries in Central Europe, which corresponds to about 60% of the European market that we -- the way we've defined it with the key markets. And together with the 2 previous agreements that we have, we now cover the key markets, what we are focusing on in Europe. We continue also to add to our clinical evidence and documentation. We have had 2 important conferences where we have presented data. First of all, the AACR, where we presented data on immunotherapy, and also on ASCO when we have 3 different clinical trials being presented. And especially the one at AACR is interesting because immunotherapy is a very promising area for the future, where we now have 2 patents filed within that area, which we'll come back and report how we progress with those. And then finally, the financial news that we have, we communicated financial targets based on now the partnership that we have established as well as a rights issue, which is guaranteed to SEK 80 million but could provide us with up to SEK 130 million of cash in order to realize the partnerships that we have and accelerate the growth of revenues that we have communicated in our financial goals. So if I dive into U.S., we've now been 2 years at the U.S. market. And I think we have some lessons learned, which I'd like to share and communicate. First of all, we have a lot of positives. This is the first time we actually see that DiviTum in the clinical setting. And it's, of course, fundamental that it really works in that setting as well, not only in clinical trials. And it's been surprisingly a few issues with that, and the issues we've had is mostly to some logistics challenges, which we've been able to address pretty quickly with our logistic partners. So it has been fantastic to see how stable the product is in this clinical setting. Of course, it's fundamental. We also get very strong feedback on the value proposition that DiviTum has that there is a gap in the market currently, both in the metastatic area, where there are initiatives like the FDA Project Optimus to better monitor patients on treatment and also being able to optimize dosing, hence the name, as well as the early breast cancer setting and the need for finding better biomarkers for monitoring of adjuvant treatments in this area. One other very important thing that I would like to point out is that the assumptions that I presented on the previous slide with the average price that is a fundamental assumption for the market potential is the $400 from the U.S. market. And 2 years in, we can see that this assumption holds well. We are able to actually, in the agreements that we signed with our private commercial partners, go significantly above that. Those agreements is almost, yes, 80% above the $400 mark. And with Medicare, we are paid $322, and also Medicare pays regularly and within 30 days. So very good there. Another thing that I'd like to highlight that we have been able to reach out to the top oncology centers in U.S., the NCI and NCCN centers. Those -- that's where we have the majority now of our revenues, and we've been successful, and it also provides some strong reference cases for others. And we're able to use those oncologists to participate and share advisory boards, sharing their experience and success with DiviTum to other oncologists, and it's also been a great way of attracting new customers. A new area, especially so after the adjuvant data presented in December last year, is the IDNs. IDN stands for integrated delivery networks. Those are a combination of health care providers that, at the same time, are health insurance providers. So they can benefit from making smart treatment decisions with DiviTum and then also harvest the economic benefits of doing that in their insurance leg. And so we can provide a very, very attractive health economic business case for these companies. And we signed an agreement with one of the larger of those customers -- or those payers on the U.S. market in December, which we communicated, and I have an update on how that work is progressing. We've also seen some challenges. Our sales development has been slower than expected, both from these categories where we have received very good feedback, the NCI centers and the IDNs. And our conclusion is that there's -- although the value proposition for DiviTum is appealing and we have a strong foundation of clinical data, oncologists want to see for themselves. And they typically start using it selectively on a few patients, often the most complicated cases. And then now we see that more and more we see growth with existing oncologists as they have now been convincing it in real life and are now using it more and more on their existing patients as well as recommending it to their colleagues. So great progress there. Another area where we have realized that we need more scale volume in order to effectively reach out is the community oncologists where we communicated a year ago that we are looking for a partner to be able to address that. And during May, we communicated the agreement with Tempus, which is an example of such an agreement, which we believe strongly in that will address this shortcoming in our go-to-market model and being able to scale also in this segment. So if you summarize it, we have a lot of positives. We have some challenges, and I think we've been able to address it by the Tempus agreement, by finding the partners within the IDN area and building on the NCI centers. So we are well positioned for growth going forward in all these areas. And if I should break it down a little bit, how we see the market is structured, we have the NCI centers in the middle, together with the IDNs and the payers. Those 3 are the core area, which we will address with our Biovica organization. And the payers goes across the board. So a Medicare patient could be either at an IDN or an NCI center on a community oncologist. Same thing with the private insurance company. It depends on how the patient is insured. So working with the payers will benefit us in all 3 of these categories. And the community oncologists, that's where the majority of patients are being treated. And that's also where we now have signed the agreement with Tempus, where we will be able to get a totally different scale in reaching out to these customers. Looking at our sales, we can see that after a couple of quarters with slower growth, we've seen -- basically since the start of the year after the San Antonio conference, we've seen that every month is a new best month. And so if you compare it with a year ago, it's about 120% increase. And if you compare it to the previous quarter, it's an increase of about 30%. This trend continues also in May. So we think -- although it's early to draw too many conclusions, but we still see a strong trend. And when we are reaching out to our customer, trying to understand what's driving this, we see a couple of drivers for this growth. In general, the San Antonio results with the strong data, both within the metastatic area as well as the new data, which were very strong also in the early breast cancer area for adjuvant monitoring, has helped a lot to build confidence in the test. We see also on the existing customers, many of them have now been following patients for many months and have a lot of success cases and are now expanding both to a majority of their patients as well as recommending it to their colleagues. And then we have our sales reps reaching out to new customers, and we've been able also to enroll a couple of new institutions also in the New York area, which we are able to do since we have extended our CLIA license to cover New York as well. So with that, we are covering all the 50 states in the U.S. So a positive momentum in the U.S. business. And I think we have a great opportunity to accelerate that further a lot with the agreement that we signed in December with what we call the health care giant with revenues over USD 100 billion. We signed a client bill agreement, and they have started using it in the metastatic breast cancer area. And we are now, as we've also been communicating earlier, talking about a clinical trial that with the intention to introduce this as the standard of care for their early breast cancer adjuvant treatment. And the status here is that we have developed a protocol that we have agreed upon, and the next step is to submit it to the IRB. And we believe that we have a very high likelihood of getting that approved so that the trial can start in December this year. So we can start enrolling patients that way. And we will be paid for this trial in line with the agreement that we signed, and this has the potential to be the largest contributor to reaching those revenue goals that we've communicated earlier last month. This is how the trial is structured. We have a majority of their current patients that they will split into 2 arms, one with their current standard of care practice, and then they will compare that with -- using DiviTum to stratify patients into 2 arms and then monitor how they are responding to the adjuvant treatment. If they need to have a more aggressive and powerful treatment, they will then be moved to the arm where you have a CDK4/6 inhibitor. And this way, the patients can get an optimal treatment as well as avoiding unnecessary side effects as well as costs are managed and resources are used in the best possible way. We also signed an agreement with a company called Tempus AI. Tempus, I think, is interesting for many, many ways. It's a diagnostic company, but it's also -- it comes from -- the founder has a background within tech, the tech industry and IT. Hence, the name Tempus AI. It's based on their large database that they are building out based on the diagnostic data that they're generating. The company is listed on NASDAQ since June last year, have a market cap of USD 12 billion. And from 2024, they have USD 700 million in revenues, and they've been able to grow that very impressively, 30% compared to last year. And I guess it's thanks to a large and efficient sales force. They haven't given a detailed number officially, but we know that they have hundreds of reps and their focus is within oncology. So the way the agreement is structured is that DiviTum will be part of the oncology portfolio or panel that will be sold and promoted through the Tempus, both sales reps and their channels. They also have IT support, their web page and integration with electronic record systems so that they can reach out to patients and oncologists and also do some targeting. So both strong sales organization, a strong sales processes supported by IT. The actual analysis will be done by Biovica in our San Diego lab. And so we will also be responsible for claiming the reimbursement of the test. And this means that we will have the upside if we can improve the current level of reimbursement by entering more agreements, for instance, with private payers. This will -- this improved margin will be to Biovica's advantage. So we have talked with Tempus and also discussed what we can expect together in this collaboration. And what they have estimated is that about 20% of their current customer base, which is growing to 30%, as we said, is an ambitious but reachable target to be reached 2 years after launch. And this agreement is also expected to be a significant contributor to the financial goals that we have communicated for U.S. revenues. If we look into the Pharma Services area, we have also some lessons learned there. We have a lot of positives here. We see that in these clinical trials when pharma are using DiviTum to develop new therapies or new indications for existing therapies. DiviTum works great and have a significant value. We have more than 20 pharma companies that are using DiviTum for this purpose. And we see also that a lot of the customers, more than 70% are repeat customers that are placing more than one orders. And especially the Tier 1s, the ones that have more than USD 10 billion in revenue, are repeat customers, are using it for more than one project and because the tier -- the bigger companies have several projects ongoing and see the value to use it more widely, which, of course, drives revenue for us. We also see some challenges in this area, especially the Tier 1 companies that have a long enrollment process. We have now 5 of those customers. We've actually been able to go through an enrollment process for the sixth one. Soon, we will have a sixth customer. This has taken some time, and it's been a learning experience for us as well. You need to have a lot of assets in place to be able to fulfill their high demands on their suppliers, which we now do. So we're able to scale this up, which is very positive. One thing that we also have learned, especially with the smaller pharmacies, that plans can change quickly. And that -- if we don't have that built into our business model, will hurt our revenues. So we have developed our business models, and now we have protected ourselves. We have more upfront payments, and we share the risk to a greater extent. That has led to that the orders placed, we also can rely more on the volumes that it will really happen. So it has improved the accuracy and precision in our forecasting. So yes, to summarize it, we have improved our business model, and that means, as I said, better -- stronger commitment from our customers and better precision in our forecasting. And we also have put assets in place to be able to quickly -- more quickly enroll and scale up, especially the big customers. And also having these revenues with high likelihood is an important part of our financial goals for the coming 2 years. So the current status during -- after the fourth quarter, we initiated 6 new projects, work orders that makes up of a pipeline of about SEK 25 million. The way this works is typically a clinical trial in this area is 1.5 to 2.5 years. And so the revenue will be booked over those -- that period of time where the analysis are taking place. We also have onboarded 2 new Tier 1s. So we have a total of 5. And yes, we expect more to come. As I said, we have passed the enrollment process for yet another one. So we're about to sign another deal there as well. So we've seen interest increasing after the -- also AACR, ASCO and San Antonio. So the clinical data that we were able to present is something that drives revenue here as well. We've also seen that when we are especially are targeting more and more of the larger customers, the Tier 1s, the project size also tends to increase. So now in our -- previously, our projects were around SEK 500,000 to SEK 1 million. Now we have several projects that we have announced that are SEK 7 million. I think there's a potential here also to increase that significantly when we move into the next step where we do more tighter collaborations are using DiviTum not only as an experimental biomarker, but also working into the protocol and also using for patient stratification and for monitoring and CDx collaborations. And I think the likelihood for that also increases where you have more Tier 1s in your portfolio. Last is Europe. And yes, if we do some lessons learned from Europe, we've seen that there's a spillover effect. The milestones that we've been able to take in U.S. and with pharma has a positive effect in Europe. We've been able to attract partners of higher quality with greater potential that we believe that have a strong probability of success and are also very committed to go to the market. And we also have been able to -- when it comes to our price assumptions on the European market, we see that we've been able to agree on the levels that we've used for our market potential estimates. Well, we have also seen some challenges here. I think one that is not -- we've learned from the initial partners that we were able to attract that it was not -- they didn't have enough resources of quality. So now we've been able to replace them with 3 that we really, really have a strong faith and believe in. So that's a progress. And also the new partners that we have, have set lower expectations when it comes to the time line but, I think, with higher precision. So we think Europe is interesting a few years in. So the potential is great, but it will take a couple of years because you need to get into guidelines, you need to establish partnerships with labs, et cetera, per market. And that's why you're also depending on having a partner strategy. And that's why we're also very happy with the partners we've been able now to agree with. And we also -- yes, so looking forward to work with them going forward here as well. We have also discussion with several of the breast cancer groups on how to get included into guidelines on the different markets. So this all boils down to us looking into the financials and are now giving guidance on what we expect in terms of revenues for the coming 2 fiscal years. For the fiscal year that started 1st of May, we expect to be able to have revenues of SEK 50 million, where the majority will come from the U.S. market. And the year after, our goal is to achieve SEK 150 million in revenues, still with the U.S. being the largest market. And those SEK 35 million plus SEK 100 million, so SEK 135 million, if you split it down, the majority of this is from the collaboration that we have with the health care giant, the IDN, where we have the study protocol that will drive about 50% of that volume. And there's potential to expand into other areas, other IDNs, and it will be a strong reference case. That have not been included, however, in the estimates for these 2 fiscal years, but it's a potential for the future. The next biggest contributor is the agreement with Tempus, where we expect about 30% of the U.S. volume for the 2 coming years to come from that source. It's a nonexclusive agreement. And although Tempus have a significant market share, it's still open to expand with other agreements into other areas of the market with other partners. So that's also a potential for the future. And the last area is the organic growth on the existing accounts, which we expect is going to be about 15% of the volume in the U.S. With that said, I'll hand it over to Anders. Anders will go through a little bit more in details our financials for Q4 and also the rights issue that we have announced that will take place later this summer. So we'll just switch seats, and Anders, please.

Okay. Thank you, Anders. See if I can get the technicalities to work. So year-to-date, sales ended up at SEK 8.6 million versus SEK 7.3 million last year. That's about 20% growth compared to last year. If we start digging into where is this growth coming from, you can see here that IVD test, that's the U.S. sales. That's the majority of the growth driver, a little bit more than SEK 2 million. IVD kits, we have started to see a little bit of sales in Europe. We will see a little bit sales this fiscal year also, but we think that, that will take a little bit more time, as Anders said, about getting reimbursement, getting lab agreements in place and so on. We see a slight increase in research test or pharma service test. However, that is balanced off by a negative impact on the kit sales in the pharma business. And as I've said earlier, that was a big number of kits sold to a clinical trial back in Q2 last year that were then -- that trial was finished. So we haven't seen that sales. However, we see sort of an increase in interest of performing clinical trials in China. We know that China is not very keen on exporting human samples outside of China. So we know that we will sell kits into China for clinical trials. And that's a general trend that there is more and more trials being performed in China in general. If we dive into the U.S. sales, we ended up at almost SEK 3 million. That's about 275% growth in absolute numbers or Swedish kroner. If you look at constant foreign exchange rates, U.S. dollars, it's a little bit more actually. It's about 280%, a little bit more than that even since the dollar has weakened quite significantly in the last quarter of our fiscal year. And we think that, that is coming from -- you saw that slight increase or quite significant increase in the U.S. sales in Q4, driven by the SABCS data that we announced on adjuvant data. Cash flow, very quickly, minus SEK 18 million. Operating cash flow before change in working capital, that's an improvement of SEK 2 million. Overall, basically the same as Q3. Net operating cash flow compared to Q4 last year has improved by SEK 8.5 million because we had a significantly higher cost base at that time, but we did that reorganization in April last year. A few words around the rights issue. It's fully guaranteed at SEK 80 million, and that gives an opportunity for us to leverage recently signed partnership agreements that Anders has walked you through. The structure is that the rights issue is on SEK 80 million. And then on top of that, if the rights issue is fully subscribed, there will be a direct issue to the top underwriters of another SEK 52.5 million. So all in all, the maximum proceeds could be SEK 132.5 million. We see here that the guarantees of SEK 80 million, that's top underwriters of SEK 52.5 million. We have subscription commitments from existing shareholders about SEK 17 million. And then we have a small part of bottom underwriters. It's only SEK 10.9 million that have the standard bottom -- guarantee of bottom underwriter. And we are really, really happy about this structure. And as I said, the way it works is that the top underwriters, they are guaranteeing their SEK 52.5 million, but they are also guaranteed to get their SEK 52.5 million. So if we get a fully subscribed direct issue -- sorry, rights issue, there will be a direct issue to the top underwriter of SEK 52.5 million. So the SEK 80 million plus the SEK 52 million becomes the SEK 132.5 million. That is the maximum outcomes of this. You see the process on the right side of the slide. We will have an extra general meeting on the 14th to approve this. We will have the Section 9 disclosure document published on the 17th of July; subscription period, last 2 weeks of July; and then the preliminary outcome, first week of August is the plan. We can also split these sort of guarantees or underwriters into 2 different categories. We like to talk about anchor investors. That's the top and subscription commitment underwriters. The largest one there is a Dutch family office that is going in with SEK 40 million. They have been a shareholder since 2024 when we did the direct issue where they participated. They have also signaled that they have a desire to be represented in the Board of Directors in the future. Anders, our CEO, is adding another SEK 10 million. And both these investments in SEK 40 million and SEK 10 million is a combination of subscription commitment and top underwriting. And then we have another section of the Swedish investors and existing shareholders that is adding SEK 19.1 million. So it's the same SEK 80 million, but it's just structured or cut a little bit differently. So you understand who is putting in how much money in total both in terms of top and subscription commitments. Bottom underwriters, only SEK 10.9 million. And again, we are really, really happy about this structure. Use of proceeds, about 40% being used for commercialization in the U.S.; 25% on service development within pharma; only 5% in Europe because we think that, that is more for the future. And product then, we also -- as Anders said, we have quite interesting data on outside of metastatic breast cancer and the CDK inhibition. So we'll use a little bit of that to continue to develop our product and also scale up our production capacity to meet the demand that we are expecting. And then, of course, some regulatory requirements coming on top of that. So with that, I think I'll hand it back to Anders for a summary and then a Q&A section after that. Thank you.

Thank you, Anders. Very good. So I just have one summary slide, and we'll go into the Q&A session. So over the several years, we've been able to make some key milestone and key achievement that has laid the foundation for our commercial journey with DiviTum. I think also with the latest addition here, the agreements both in U.S. with Tempus and the large health care giant plus the European agreements and also the development in pharma, we have put ourselves in a position to be able to scale up these initial revenues that we currently have. And we have actually some upcoming milestones. One thing is to formalize the adjuvant breast cancer monitoring offering, and that will be done as a complementary test that we can offer from our CLIA lab. And we will be able to use our current PLA code to get reimbursement from Medicare. So this is for extending the regulatory label. We also are looking to close that protocol for the clinical trial, get it through IRB, start enrolling patients with the ambition to establish DiviTum as a standard of care. And for the health care giant we talked about and that we signed a frame agreement with in December, we will, later this year, do a submission for NCCN guidelines and looking forward to the feedback there. And also, we're continuing to work with our pharma partners to extend revenues, also closer collaborations and leading to new projects and products. I think in addition to these milestones, I think the focus now will be to work with the partners that we have signed agreements with in order to drive sales together with them as well as targeting the customers that we have both on the U.S. market and within the Pharma Services area. I think also I would like to thank also especially the anchor investors taking part in the upcoming rights issue and for the confidence that they show me and the team. This will enable us to leverage all the achievements we made so far, the agreements we have put in place in order to scale up the revenue and create value both for patients that get better and quicker feedback on how they are doing with their cancer treatment and together with the treating physician being able to act on that as well as the value we can create for health care providers and payers, making best possible use of the resources that is being spent within this area and, in the end, also to create value for our shareholders investing and supporting Biovica. So thank you very much for taking part in this. And I will now open up for questions. And I think the first one we have here is Johan Unnerus. So see if you can unmute yourself, Johan, and I'm happy, together with Anders, to take your questions.

Great. Can you hear me?

Very well. Very good. Excellent.

Some questions then from our side. Of course, you pointed to a significant market opportunity for quite some time. You added partners in both especially pharma and increasingly so on the U.S. and European clinical side. And as of late, you also added partners with potentially specific sales forces and sales cloud. So it would be very interesting to hear what your visibility is and activities is on especially Tempus and the large IDN partner currently and over the coming quarters, the rest of '25 basically.

Yes. So yes, that's why I broke it down into 3 areas for the U.S. If you start with the organic growth, you see that already, and we expect that to continue. And as we will be able to refocus our resources, so we can put more resources in the areas that we want to focus, and we can leave other areas to our partners like Tempus. I think the organic growth will benefit from that as well. When it comes to the Tempus agreement specifically, we signed the agreement in late May, and we're now in discussion with them on how to start up the -- yes, we are in the initiation phase, you could say, where we are training their sales reps, we are establishing integration solutions so we can handle large volumes that they will submit and also integration to their system so that they effectively can include our product in their portfolio. And so time line is that we are doing it right now, and we will require a couple of months before we will see that we'll start generating revenues from this. But -- so yes, basically late summer. And then when it comes to the health care giant, the big IDN, we've estimated that during September, we will be able to get the IRB approval so that we can start enrolling patients or we -- it's them. We already have initiated some logistics there as well. We have set up processes for collecting blood samples, sending it to the lab. They're starting using it for the metastatic area, a few oncologists, and we have planned training of oncologists also to spread the words and get it out. But there is an upcoming milestone, which we will publish both when we submit to the IRB and also when the IRB approves so you can follow how this important project develops. I hope that answers your questions, Johan.

Yes, very useful. And what about the IRB? When can that be sort of cleared?

Yes. So this big company have their own -- it's part of their own organization. So they have a dedicated IRB. And so I think they have a good understanding and how the process works. And that also is a very well worked through protocol where there's a great demand, not only within this company, but in general on the market. So with that said, our estimate is that there's a very high likelihood for a quick process to get this approved within a couple of months. That's why we say September for start of enrolling patients after approval.

Okay. So in summary, then we should expect some sales contribution perhaps already in late Q1 from these, especially Tempus, and then more so Q2 and later in '25 and '26?

So we expect our organic growth to be seen in the coming quarters. On top of that, we will see the -- especially the impact from the IDN, the clinical trial to start happening, yes, from, let's say, if we start next September, so from October and onwards. Because they have a strict protocol, they will start enrolling patients. And so we think that will be quicker and, therefore, also the biggest contribution going forward.

Yes. And a slightly technical question then. You mentioned that you will handle the reimbursement, I think, regarding Tempus. But what about the sales recognition?

Do you mean when we can book the sales?

Yes.

Yes. So that will follow our ordinary process. So we will -- we are currently recognizing our sales when we report back the results. And typically, our lab has a very quick turnaround time. So if we receive the sample and documentation that comes with the sample, we're able to turn it around most often within 24 hours and report back. And in the U.S. lab, we have already now established very efficient processes supported with IT, so we could easily scale for bigger volume and do the reporting and then do the reimbursement. And then what we do is we report on an expect number, so how much we expect to be paid for that sample. And when we -- now after 2 years' experience, we can see that our people handling the revenue cycle process, which is it is called, have a very, very high precision in estimating what we then later receive as payment a little bit later. And typically, for the Medicare payments, we get paid for Medicare in less than 30 days. So they are very good when it comes to payment. When it comes to the private payers, it varies a little bit more, but most of them, a high portion of the volume is from our client bill contracts. And then payment term is regulated, and then they pay according to those terms, typically 30 or 60 days. And if it's 60 days, we typically are compensated price-wise for that. That's how it works. And the last category is the private payers. That varies a lot. But the good news there is that we get -- we have not received any rejection from medical necessity that they don't support the claim. But then payment, both price and payment time, can vary a bit. But I think we are doing better than expected in that area as well. That is the one that we can improve the most over time. With greater volume, we have the opportunity to have agreements with the largest payer, and then it will be similar to a client bill contract.

Yes. Very useful. And what about on the pharma side? You had some work order, you added partners, and is it -- but sometimes the actual sales can come a bit later and...

Yes. So pharma, I think that's why also we have some lessons learned there as well. The general trend is very strong. And those numbers that we have presented there, we -- especially for this fiscal year, we have a very, very strong belief that we can meet those. So there's the one with the less risk, I would say, because we have agreed -- we have agreements for almost the entire service volume. And as Anders said, we know that on top of that, there will be kit sales because when -- especially the Tier 1 pharmas, they will have to buy kits for the Chinese -- they do studies in China. In China, you need to have kits because you can't bring out biological samples out of China. So we're confident, and we have also had some lessons learned. So we're more efficient now, and we are able to mitigate some issues that we've seen with delays and reduced volumes, et cetera, already in the contracting phase. So that's why we are more confident also being able to meet those numbers.

That's useful. And what about -- of course, you will need to support your partners, and you guided for OpEx around SEK 90 million per year. Is there a risk that you will need to add more supporting resources?

I think we -- that's something that's good that you point that out because I think I forgot that on the financial guidance slide. But it's not only the revenues that we've given guidance. It's the cash flow for -- especially this fiscal year, where we think we have the organization in place that we need, and we don't foresee any large increase. And so far, I think in managing cost, we have been very strong and have a history of being able to do that well. So I'm pretty confident that we will be able to do that going forward. When we see the revenues increase, I think there are areas where we can then add resources to further accelerate sales, both within the U.S. organization and the Pharma Services. So we will be looking into doing that as soon that we can see a positive trend in revenues. With that said, our goal is to become breakeven in the third quarter of fiscal year '26, '27. So that will be January '27 for breakeven.

Great. And finally, from our side, based on your outlook guide, which is reasonably specific, you don't seem to expect that much from Europe despite having gone through your partners and replaced some and added some.

That's a good comment. So for next year, we only estimated SEK 1 million. And we -- I think we already are in discussion from our Spanish partner. We have deals coming in. So I think we have identified revenues. We have revenues from Italy. We're in discussion also on the Swedish market on how to get into guidelines, et cetera. So there is progress in Europe as well. But I think we've been learned a hard way. The targets that our first partner committed to that we added continuously and communicated, they were not close to meet. And now we have stepped up several steps when it comes to partnerships on the European. So we think that this is something that will be developed over time, but there are a longer go-to-market process in Europe. And that's why when we communicate these 2-year financial goals, it will only be SEK 10 million year 2 that impacts that.

Interesting. So in terms of reaching breakeven, it will be the U.S. side and especially IDN side; and secondly, the pharma; and -- well, Europe will take more time.

Yes. And also now that we have these agreements in place, we also are spending very little of the resources, as Anders pointed out, in Europe. I think it was only 5% of the use of proceeds to train and to manage and to support them. We put our -- the majority of our resources where there's shorter time to market and greater potential short term. So that's how we think. Because the price of capital is currently very high right now, we need to use it wisely and invest, put it where we get the most leverage. Hence, we have down-prioritized Europe, and we're also working with partners that will be able to drive the work there outside of our organization.

And perhaps adding -- what about pipelines and additional partners? Some of these partnership are nonexclusive. Are you still sort of having the ambition to add U.S. partners? And can you support additional partner?

Yes. So our ambition when it comes to the U.S. market, we have -- you could call it an unquantified upside in this plan for the 2 coming years that we will see a large impact from revenues from additional partners, both another diagnostic companies with a sales rep like Tempus or like the IDNs. Especially on the IDN side, there is a lot of options, and we already have ongoing discussions on several of the IDNs in our customer list. So our ambition is to add additional IDNs. And I think the first agreement that we have is a great reference. But when estimating revenues, we have had very low expectations from additional ones for these 2 years. We believe that in the future, we can add several IDNs. There's no real competition there. The same way when it comes to Tempus, they have competitors. And I guess there's a maximum of how many competing partners that you can have before, yes, it becomes too dense, sort of. I think another opportunity with Tempus is to move into a closer collaboration. We will explore that as well. They have also a significant business within their pharma services. And I think with the customer list that we have now and the ongoing projects, that will be attractive for them as well. So we will also continue working to see if there's additional value to be explored. So there's a lot of potential in the milestones that we have achieved. I think we should spend the majority of our efforts with our existing collaborations and customers because there's a lot of unexplored potential, and it's also the quickest way to get revenues before spreading into new areas. So...

Yes. And a follow-up there, which I should probably know, let's say, you get the -- or your IDN partner get the clearance in September, will other IDN partners' future benefit from this clearance? Or will they need to follow the same route?

It's a little bit open for discussion. I think the ambition that this first one has is to really establish, yes, guideline change so that they have a high ambition, they want to do a real solid clinical trial that can be a game changer the way you treat patients in the adjuvant setting. So that is, of course, also interesting for us because we will benefit from that as well. I'm not so sure that other IDN players have the same high level of ambition, and then it could be also less demands on such an ambitious clinical trials and thereby also shorter time to market on the -- in the adjuvant setting. In the metastatic setting, I think it's not as a strong health economic business case, to be honest, but the threshold is also lower, and you can start using it right away with the data that is available currently.

Excellent. Thank you.

Thank you very much. And thank you all. We are a couple of minutes over time, but thank you for attending and listening, and I wish you all a great upcoming mid-summer. Thank you from Biovica. Bye-bye.