Bonesupport Holding AB (publ) (BONEX) Earnings Call Transcript & Summary

Welcome to BoneSupport's Q4 Report for 2022. [Operator Instructions] Now I will hand the conference over to CEO, Emil Billback; and CFO, Hakan Johansson. Please go ahead.

Yes. Good morning, everyone. Thank you, operator, and welcome to the BoneSupport's Quarter 4 2022 Results Call. So speaking now is Emil Billback, the CEO; and sitting next to me is Hakan Johansson, our CFO. So we will use the next 20 minutes to guide you through the presentation of the fourth quarter results and then we will open the line for further question and answers. We go to the next slide, please. Before we start our presentation today, we would like to draw your attention to the disclaimers that are covering any forward-looking statements that we will make today. So let's jump right into it on Slide 3. Let me here begin to this presentation with some condensed highlights from the report that we have released this morning. Overall quarter 4 sales were SEK 103 million, which corresponds to reported growth of 68% year-over-year, in constant exchange rates, that is a growth of 49%. Gross margin was strengthened in the quarter and saw an improvement versus quarter 4, 2021 with 2.2 percentage points to 91.5%. The operating result was significantly negatively impacted by exchange rate movements to a minus SEK 10.1 million before incentive provisions and the reported EBIT was minus SEK 19.3 million. So for the full year 2022, net sales came in at SEK 329 million, which corresponds to a reported growth of 54% year-over-year and at constant rate that would have been 38%. The operating result before incentive provision was a negative SEK 36 million, which is a SEK 39 million profit improvement versus 2021. Reported EBIT was SEK 64.5 million. Now from a business operations perspective, the main highlight of the quarter was, of course, the launch of CERAMENT G in the U.S., and we will report more about that later in the presentation. And furthermore, CERAMENT G and our quality management system or quality system was granted MDR CE-Certificate. But let's now move into the details by moving to Slide 4. So this bar chart shows the last 12 months sales every quarter since quarter 4, 2015. And I'm proud to say that we have achieved 10 consecutive all-time high quarters despite the lingering effect of the pandemic. We can also see an acceleration in growth rates, and as you see, we've added a new color for the SEK 14.5 million contributed by CERAMENT G in the U.S. for the fourth quarter of 2022. The strong growth comes from the incremental sales of CERAMENT G in the U.S., but also from a rapidly expanding customer base and broadening use of CERAMENT. As an example, in the fourth quarter, CERAMENT BVF in the U.S. grew with 66% on an LTM basis. Growth in Europe was a bit more muted as health care staff shortage restricted pickup in surgical volumes. In the next 3 slides, we will look at the details of each region as well as to summarize some of the first findings on CERAMENT G in the U.S. Next slide, please. So we start with North America. Sales, as you've seen -- as you can see on the slide, SEK 73 million corresponds to a reported growth of 111% year-over-year and at constant growth rate or exchange rate that would have been 80%. Sequentially, growth was 30% over quarter 3 2022. Now let's go to the next slide and talk a little bit more about the details on CERAMENT G, which I'm sure you -- many of you are looking for. So on Slide 6, I would like to start by talking a bit about the penetration dynamic when introducing a completely new medical device to the U.S. market. The work with adding CERAMENT G to group purchasing contracts started almost immediately after the marketing authorization was given in May last year. With CERAMENT BVF already on contract and CERAMENT G having breakthrough device status, the contract inclusion has been strong. Thereafter, the product must go through hospital approval systems. We call this the [ GoStopGo ] phase as many major hospitals require an evaluation and trial usage before approving the product for regular use. Once hospital system approval has been given, the rollout can take place on a more broad scale within that specific system. So far, we have had positive feedback on product handling and transition to a one-stage procedure. Approvals with hospital systems has already been accomplished with several of the very influential hospital groups, as an example, Cleveland Clinic and Baylor Scott & White. Sales has been generated in 19 states and all the sales that you see registered is products actually used in surgeries. There has been no bulk sales. You know that we deliver within 24 hours, everywhere in the U.S., so there's no need for any customer to have inventory. Average selling price is in line what has been communicated in the launch preparations. For the evaluation of a new breakthrough device, it is more likely that the product used on difficult cases. That means that in the launch phase, we will see volumes per case, slightly higher than what one would see when the product is in regular use. Finally, we're progressing towards a potential submission of label extension of CERAMENT G to cover also open trauma. Meetings have been held with FDA and we have received confirmation that the label extension shall be viewed as a 510k, where the already existing approval for CERAMENT G shall be considered a so-called, predicate device. Now let's turn to Europe. This is Slide 7. The quarter was slow in EUROW as the positive trend that we saw in quarter 3 of pandemic recovery of general surgery capacity was not continued into quarter 4. With staffing challenges accentuated by nursing strikes and sickness absence, not only was the surgery capacity reuse, but also our ability to get access to caretakers for training and conversion. Among the operational highlights of the quarter were that we received an updated CE certification for CERAMENT G and for our quality system. The new regulations, which replaces previous EU medical device directives aims to improve patient safety through stricter methods of assessing and monitoring. The certifications were therefore an important milestone in securing BoneSupport's future regulatory compliance. CERAMENT V and CERAMENT BVF in Europe have been submitted for review and the aim is to obtain a corresponding CE MDR certification in 2023. In the quarter, we filled our vacancies in Germany and we're now ready with renewed energy to further drive market penetration in Europe's largest market. So with that, I will hand over to Hakan for a further deep dive into the numbers.

Thank you, Emil. So let's move to Slide #9. So net sales improved from SEK 61.4 million to SEK 103.2 million, equaling a growth of 68% or 49% in constant exchange rates. The organic growth in the segment North America measured in fixed currency was SEK 27.8 million or 80%, confirming a continued strong growth trend and the organic growth in Europe and Rest of World was SEK 2.3 million or 9%. Changes in currencies measured year-to-date averages in 2022 versus 2021, had a positive impact of in total SEK 11.8 million, of which SEK 10.8 million relates to a stronger U.S. dollar. The strong growth in the quarter comes from an expanded customer base, extended use of CERAMENT among existing customers and sale of CERAMENT G in the U.S. The latter amounted to SEK 14.5 million in the quarter. Next slide, please. The contribution from the segment North America improved with SEK 13.6 million and was reported to a regional contribution of SEK 17.3 million. The improved contribution relates to the strong top line development. Sales and marketing expenses during the quarter amounted to SEK 50.3 million compared with SEK 26.5 million previous year, of which sales commission to distributors and fees amounted to SEK 28.2 million compared with SEK 13.9 million the same period last year. The increase of SEK 11.1 million, excluding sales commission and fees was driven by positive currency effects of SEK 4.1 million and an increased activity level, including expenses for the earlier communicated U.S. booster program and for the launch of CERAMENT G. From the lower graph, showing net sales as bars and gross margin as the orange marker, it can be noted that the gross margin remains stable and in line with previous quarters with a minor improvement following favorable product mix. In Europe and Rest of World, a contribution of SEK 3 million was reported to be compared with SEK 5 million previous year. The lower contribution is impacted by a SEK 2 million correction of underprovided sales expenses in the previous quarter. Sales and marketing expenses adjusted for the correction increased with SEK 3 million. The increase is partly attributable to filled vacancies as well as a higher sales bonus cost than in previous year in the market that showed a strong recovery after the COVID pandemic, and partly to a generally higher level of market activity. From the lower growth, and you can see a continued stable gross margin with an improvement compared with previous year following a favorable market mix. Next slide, please. Selling expenses increased with SEK 11.4 million, of which SEK 4.7 million relates to currency effects and SEK 2 million to a retroactive correction for the previous quarter. The adjusted increase of SEK 4.7 million, excluding currency effects and the correction relates to an increased activity level, including the expenses for the early communicated U.S. booster program and the launch of CERAMENT G but also filled vacancies, as well as the higher bonus costs than in the stronger performing markets. To improve transparency in our financial reports, the ROW sales commissions and fees now includes all direct sales expenses, such as commissioned, but also charges for freight, credit cards and GPO fees. These expenses have been reallocated from the ROW selling expenses and adjusted in previous quarters. All details for the latest 8 quarters are disclosed on Page 18 in our [ quarter 4 ] report. R&D remains largely in line with previous year, increasing from previous quarter following normal seasonality and finally, administration remaining on a stable level, excluding effects from the long-term incentive programs. Next slide, please. The operating loss was reported to a negative SEK 19.3 million compared with the loss of SEK 21.8 million from the same period previous year. The reported loss includes expense provisions regarding long-term incentive programs amounting to SEK 9.2 million compared to SEK 4.8 million in the fourth quarter 2021. Of the expense provision of SEK 9.2 million in the period, only SEK 1.4 million is cash flow impacting in the future. Excluding the long-term incentive provision, we get the adjusted operating profit, which is the underlying minus SEK 10.1 million. And also now reporting on an operating cash flow of minus SEK 6.5 million compared with minus SEK 16.7 million previous year and comparing to a minus SEK 9.8 million in previous quarter. And to sum up on the next slide, to be noted in this report, there is a substantial movement between Q3 and Q4, following realized and unrealized currency effects from conversion of net assets, reported as other operating income and other operating expense, moving from a favorable SEK 2.4 million in Q3 to a negative SEK 2.7 million in this quarter. And with this, I hand back over to Emil.

Thank you, Hakan. So let me then conclude and summarize [ about ] the status as well as the exciting journey ahead. So we saw the 10th consecutive all-time high sales quarter with the first time the quarter breaking SEK 100 million. For the full year, sales growth was 38% in constant currency and that with CERAMENT G only launching at the very end of the year. We believe we have a unique position in the U.S. market, which is the biggest bone graft market in the world where we have built a strong commercial platform and have the relevant evidence to drive the transformation of an outdated standard of care. In the extensive clinical material provided to FDA leading up to the market authorization, we showed that CERAMENT G is clinically superior to the raining standard of care, in a market survey of U.S. orthopedic surgeons, 92% of them expressed that they have a preference for single-stage procedure. The European market is destined to see improving market dynamics and we are excited about the many levers that we can expect to play out in 2023 and in coming years. I summarize with, we are in good position to deliver on our overall growth target of 40% per year. And with that, we conclude the presentation and would like to open up the Q&A session.

[Operator Instructions] The first question comes from Mattias Vadsten from SEB.

I have a few questions to start here. I mean, just the first one, really, how would you say the initial launch phase of CERAMENT G deviates from your initial expectations? And perhaps also to that, on the one hand, the use of CERAMENT G going forward should be helped by broader use, of course, outside KOLs with more hospital system approvals and so on. But on the other hand, I presume those KOLs may have waited for the product since summer so to speak. So could you add some thoughts to this matter? And what you see here really in the upcoming next quarters that would be very interesting to hear.

Yes, absolutely. So they launched in the U.S. of CERAMENT G was a big event and both Hakan and I have traveled quite a lot to the U.S., met customers also to further build first-hand impressions. What we see in the U.S. is very much similar reactions to orthopedic surgeons in Europe that have used the product for a while. It's too early to make conclusions on clinical outcome. But what we see with the U.S. orthopedic surgeons is positive feedback on the handling of the product, the surgeons that have switched to CERAMENT G have before either used pure bone cement, meaning PMMA beads or they've been average users of autograft or allograft. And with autograft and allograft, there's quite some procedures. There's the refrigeration in the basement of the hospital for allograft and so on. So the handling has been appreciated by both the surgeon and the nurses present in the [ cervical theater ]. We've also received a lot of positive appreciation for the antibiotic elution. And I think it's more the concept in itself than it is the results, because the results are too early to interpret. And finally, we have seen positive feedback on the transition to a one-stage procedure, I think for convenience of the surgeon, for convenience of the patient, but also for the economics of the clinic. So with the SEK 14.5 million, we are pleased, we're happy with that sales, and it's slightly above our expectations for quarter 4, also given that the launch was pushed forward with a few weeks. It's true that a lot of opinion leaders have started to use the product. And so far, we have no negative remarks in terms of adverse reactions or side effects. And now, of course, the work continues where our salespeople are in very close contact with the opinion leaders to collect their feedback and use that to further drive the approvals with hospital systems. So we started launching the product in October last year, but we will be in the launch phase for all of this year, the same kind of work, adding up hospital approvals and then train surgeons and nurses to switch to a more modern therapy.

My next question would be -- you had some hospital system approvals now in the quarter here. I guess, you have not had any such unsuccessful outcomes from many of those. So my questions here are, have they gradually continued to increase here at the onset of 2023? And by the way, can you also sort of describe the process of receiving those hospital systems approval from initial negotiations to final approvals? That would be helpful.

Yes. It's a tricky question to answer after only a couple of weeks in the market. But what I can say, yes, you're right, there hasn't been any hospital system that has rejected the product. There are hospital systems that for someone is [indiscernible] saying very vividly. So if the person [indiscernible] could slow down a bit or put on mute, then we can hear also, thank you very much. So there is no hospital system that had rejected the product. But some of them made immediate decisions based on the product performance and others would like more time. And then, of course, with our team in the U.S., there's only so many that we have the chance to visit. So the work definitely continues into 2023 and it will likely also continue into 2024. The rest of the [ new ones ] is a little bit difficult possibly to answer on because I think still it's too early. We should be aware there are more than 1,000 hospital systems in the U.S. And we started with the ones of highest value. So 2 of the ones I mentioned here, Cleveland Clinics as one and Baylor Scott & White, these combined, just as an example, have more health care spending than the total of Sweden. So these are pretty big accounts that we start to target immediately after launch.

My next one, in terms of Europe, so to speak and orthopedic procedures, you say no improvements were visible Q4 over Q3. 2 questions on the back of this then. First, have you seen any improvements towards the end of the quarter and into Q1? And second, does this mean, you're sort of a 5% to 10% below pre-pandemic levels in underlying activity in Europe? Or how would you describe this?

Yes, you're correct. So the low light in quarter 4, probably when the U.K. nurses went on strike, U.K. being our biggest market in Europe, as you know. After that, I would say that we could see a bit of pickup at the end of the quarter in procedures again. There was not only, let's say, some COVID influence, there are also the regular flu that made procedures difficult for many of the pan-European hospitals. So I think the recovery is going to take place gradually but also take time. But we know that it's the biggest orthopedic backlog since recording started for the European markets. So we look forward with a very positive view on the market dynamics.

And then maybe as a round off, in terms of new customer wins in Europe, how this has been affected lately? And with the stressed staffing situation, yes -- and is there anything BoneSupport can do to further improve this rate or are you satisfied?

Well, let me start by saying, I'm very satisfied with the team we have in Europe and their efforts. They're able to penetrate even accounts where things are -- the situation is a bit [indiscernible]. But of course, if the nurses and doctors can barely manage to do their job and I think we've seen both in the Swedish press, in German press, in French press, in British press, where the nurses throw their hands in the air and say, we're done. We cannot cope with this workload. The likelihood that they will accept a sales representative, even when that person tell them, we have something revolutionary breakthrough therapy, they simply don't have the bandwidth for it. So when the situation is as it is, it's also difficult for us to recruit new customers, a little bit similar to some of the peers during the pandemic.

The next question comes from Kristofer Liljeberg from Carnegie.

I have 4 questions. Maybe I'll take them here one by one. So the one -- first one relates to -- just a follow-up on Europe. So do you expect European growth to pick up here in 2023?

Yes, I do. And I take that with the disclaimer, given that there is no more such disruptions that we have seen either of absence from sickness or strikes, but those are the 2 factors that mainly influenced quarter 4 and we can get back to at least a slightly more normal situation, the market dynamics should improve.

Okay. And then on the topic of penetration for CERAMENT G in the U.S. Is it possible to comment how many of existing BVF customers in the U.S. that now has so-called hospital approval? And how many of those who have acquired the G product in Q4?

Well, we have -- we discussed internally how much, let's say, we should try to analyze the data. It's a little bit too early, I think, Kristofer, happy to come back to that as we have more data. There's quite big swings, of course, in the launch of such a product. But what I can say, of course, is that it helped a lot to have such a good representation of CERAMENT BVF. I think I've commented in previous quarterly reports that our success with CERAMENT BVF in terms of getting contract approval has been a bit above expectation and this has given us also a bit of a pull now on CERAMENT G.

But is it fair to say that sales so far in Q4 is spread on a large number of accounts rather than a few hospitals using a lot already…

That is correct.

Then to margin and cost question. So first on the U.S. margin picking up a little bit here, 94.5%, I think. Is there a positive or a meaningful positive currency impact here that we should consider could have a reverse effect if the U.S. dollar weakens.

It is very minor because again, somehow there is a very small part of production cost being exposed to U.S. dollar changes. It's primarily Euro/SEK based, et cetera. So it's a much lower volatility in terms of production costs, so it should be a minor impact.

Okay. But if you have production cost in Europe, I guess, you benefit from a strong U.S. dollar as…

Correct. But we are talking somehow the small percentage points.

And then on your new definition here for selling expenses, I think it was SEK 158 million for the year, a bit higher in Q4, even if we adjust for the phasing effects or what I should call it, between the quarters. But how much should we expect these costs to increase? Is Q4 a good level and then just multiply that with 4 or will you have -- are you planning to add additional sales reps, et cetera, in Europe?

We are not planning at the moment to add any resources in the EUROW and the -- in the U.S., we have invested in the U.S. booster and as communicated at the Capital Markets Day there we said that some of the impact in 2023 is SEK 2 million full-year impact 2023 is 8.5%. So there you will see a certain impact. But apart from that, no planned increases.

But -- so you had those costs in Q4 here, already?

Yes.

The next question comes from Sten Westerberg from Aktiespararna.

You referred to staff shortages in the European market, so this is a story that you also hear a lot from U.S. companies -- companies based in the U.S. I mean, is this a phenomenon that you also observe in the U.S.? Or are you simply so early in the launching phases here that you're not seeing any staff shortages in the U.S. market?

I mean we've seen a lot of the big medical device companies release their quarter 4 and all of them speak about supply chain disruptions and staff shortages. When it comes to the U.S., I -- we felt that significantly from January, I would say, to early summer months. And after that, I think it has [ eased ] up for us at least. In the U.S., this topic is solved a little bit with money, of course, because many of the university hospitals, they have the ability to raise salaries to attract the staff missing, while the European labor market is much more sclerotic. So when we look at the U.S. big hospitals, their margins have actually dropped slightly, because of the high salary cost. But on the other hand, they're now able to do the procedures that generate money for them. So long answer maybe, but we saw it for H1 last year but significantly less for H2. I think there's still a bit of improvement in market dynamics in the U.S., but U.S. has developed much more positively than what Europe has overall during quarter 3 and even quarter 4.

Okay. A question on -- following up on previous questions. The -- being -- launching a new product in the U.S. market is often associated with promotional activities, not only addressing key opinion leaders. Could you discuss also if you are driving other activities that then solely the interaction between the sales manager and key opinion leaders?

Yes, of course. So we have been heavily promoting CERAMENT G because we have to remember, I mean, it's a breakthrough unique product, but we are still in the U.S., a small player. So we have to raise ourselves in the noise that surrounds these surgeons to be heard. We have invested in social media. We have invested significantly in fairs, events, congresses, what we call journal clubs, meaning that one of the key opinion leaders together with us invite other surgeons and then the opinion leader speaks about their experiences of CERAMENT. So there's been a huge number of these events throughout all of quarter 4, which I think also is a bit of explanation to the quite strong sales results that we saw with CERAMENT G. So there's been -- all the elements, Sten, that you would see from a classical medical device drug combination product with a breakthrough status.

My very last question then, seeing penetration slowly moving upwards in the European market, why should we expect a faster uptake or faster penetration in the U.S. market as CERAMENT G is launched currently?

Well, I think everyone has to make their own view if they think it's going to be faster or slower, but we can talk about the factors that have been positive and beneficial for us. And one of them is the NTAP, which gives incremental reimbursement. The other is that there is no other way in the U.S. to get local antibiotic to the site of the injury and to protect the implantation you have done. The other options are all off-label, which puts the surgeon, the clinic and the hospital at a difficult liability position. So in Europe, that's slightly different. So I guess, if you measure those in, you can already look at the first quarter and conclude that it was slightly higher than similar first quarter in Europe. And I think the factors I gave you is a big part of that explanation. And then also not to forget, we have had since 2018 to build a very strong and effective commercial apparatus. And you see that we have invested in it. So we're quite ready also to roll this product out.

The next question comes from Erik Cassel from ABG.

So first, on the cadence of CERAMENT G in the U.S., so basically sold for 2 months in the quarter. And I assume based on [indiscernible] data that December was a bit weaker. But basically, based on the same cadence, we're already at SEK 21 million in sales for Q1. But do you expect that this sort of stop -- start-stop dynamics will resort in some sort of a gap in Q1, meaning that the run rate should actually come down in Q1? Or do you think that new CERAMENT G users will offset that potential drop?

So I mean, in general, we don't give that kind of forecast and especially with the newly launched product. I would resist to do that, because it could set us all off in the wrong expectations. And we don't know actually. We can only report back on the early comments that we have received and explain, let's say, the dynamic of the [ GoStopGo ] we will know in a couple of months what to expect. I cannot say more unfortunately. The impressions of the launch are good. The patient cases and I've been also myself present at implantation of CERAMENT G has been positive. And then we need to -- I think we need to give it at least 2 full quarters to make impressions on trending.

But have you seen sales drop significantly in January compared to December? Could you say something on how that's trending on a month-by-month basis?

Well, I will not comment on the new quarter, only what has happened in quarter 4.

All right. You've touched upon this, but I've heard several comments this morning that people are quite concerned about your cost base. But looking at cash flow, that doesn't really seem like underlying costs have increased that much at all. But could you just again talk a bit about the underlying cost base here in this quarter and then how you're planning to develop that during 2023?

Yes, sure. And you're absolutely right that we look at reported and underlying. And Hakan, maybe you would like to share more details on actually what is driven by currency here and what is the underlying leverage?

Sure. And again [indiscernible] we went through this during the presentation, but still it's a valid question. And again, let's take the easy pass first and look at the administration and R&D. And there, we see a relatively flat development, where we see an increase is really in selling expenses. So we look at the movement from the third quarter to fourth quarter by first glance, it looks like an increase of SEK 8 million. But in the SEK 46.8 million, there is quite a high currency impact. There is also that correction between the third and the fourth quarter, where we had to take a corrective adjustment of SEK 2 million in the fourth quarter was really belonging to the third quarter. So we would take all of that in consideration, so increase compared to previous year is just below SEK 5 million. And taking conversation to U.S. boost, the loss of CERAMENT G, et cetera, it is remaining very stable. And as answered previously, the only planned investment that we are doing in the commercial structure going forward is the U.S. booster that will have impact on 2023 and then somehow normalizing and keeping up a good and high activity level as we've seen in the fourth quarter also during 2023. But no major investments planned.

Okay. So I guess, you don't have to comment on any timing of this, but I guess internally, you haven't really pushed forward the point of profitability in any way.

We never gave a guidance on it, so the answer to that is, no.

Then last question from me. Do you have any information on the current reviewing times at the FDA for this sort of 510k application? Is it reasonable to assume that it's possible that approval could come in H1 '24 still?

Unfortunately, with FDA, everything is possible in both directions. The 510k is a slightly leaner process than de novo. So theoretically, the 510k is shorter than a de novo. But then when we speak about pioneer products, first of their kind, then I think there's high variability to that. So the time lines that we have provided, we stick with those, which is basically that we will submit in -- sometimes in the early mid-quarter 3, and then that we expect results from FDA at the very end of the year -- 2023.

[Operator Instructions]

I just have a few short questions. The first one, if we look at CERAMENT BVF sales in Q4 versus Q3, it's pretty much the same. So I'm just wondering if you can elaborate on any potential cannibalization already in Q4 or at least how the user dynamics between CERAMENT BVF and CERAMENT G works in the first quarter of CERAMENT G sales in the U.S.?

Yes, I think it's too early again to tell because we would make conclusions on quite a small number of products used still. What we have discussed before is that there will, of course, be some cannibalization as we have seen -- otherwise, I mean, we wouldn't have those experiences in Europe. But how much that cannibalization will be, it's for us very difficult to interpret at this stage. I think we need at least [ 1 to 2 ]more quarters before we can make those conclusions. What you can say, Erik, and I want to support you with this is, if you take those key opinion leaders that now have started to use CERAMENT G, yes, there might be a cannibalization effect, but there are still so many untapped customers that we haven't visited yet or that we are in the process of it to convert some hospitals can take up to 6 months. So there's still so much work going on there on BVF. So there are conflicting forces, one of cannibalization, but one of constant continued market penetration.

Can you elaborate a bit more on the current and expected GPO status for CERAMENT G in the U.S.?

CERAMENT G has had very good acceptance to the GPO contracts better -- as I shared on quarter 3 better than expected on Premier, HealthTrust, HCA. Basically, all of the big GPOs that we had with CERAMENT BVF has also been very open and positive to CERAMENT G and it has listing with the majority of them.

And are you in any -- I guess, maybe you can disclose this, but I'm thinking about the Vizient, the last remaining giant GPO. Do you have any discussions with that GPO?

Yes. This is the information that we've shared. So there's absolutely transparency here. If you look at Cleveland Clinics, for example, that's a Vizient account, so as Baylor Scott & White. So there are conversations ongoing, as we mentioned, also Vizient leave much more room to the individual hospital chains to make their decisions. And that's why Vizient hasn't been the highest priority for us. While Premier, HealthTrust, HCA and the others are much more strict and can actually forbid their hospitals from using something which is not listed. So this is how this should be viewed.

Can you give some -- or elaborate on how things are progressing with the hybrid market structure in the European market?

So I think it's progressing well. We know that establishing presence take time. And when we set up these structures, we were in the middle of the COVID pandemic, which, of course, wasn't the best time, but we'd rather be early and aggressive than wait for better times. So as the pandemic and sort of the pandemic restrictions have eased and disappeared in most of the European markets, we are progressing well to plan, I would say. And we should also start in the future to see more meaningful contribution from these markets.

Congratulations on the very strong sales.

Yes. So this was Oscar Bergman at Redeye in case the introduction didn't come through there.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

So thank you very much, operator. Thank you, everyone, for calling in. We appreciate that you took the time to be with us this busy Thursday morning and look forward to continued conversations with you and a tight fellowship during a very exciting 2023. Thank you, everyone. All the best. Bye-bye.