Kuros Biosciences AG (KURN) Earnings Call Transcript & Summary

Okay. Good morning. My name is Joe Ross. Welcome to the first Kuros Biosciences Capital Markets Day. Welcome to those of you who are in the room with us here in Zürich, Switzerland, also everyone who's joining us online. We are very much looking forward to providing everyone in attendance with a more in-depth view into Kuros Biosciences as a company, our global footprint, our corporate strategy, but also our people and our culture, those last 2 items of which we feel make us a very special company and also a very special place to work. Disclaimer language available if you would like to read it in greater detail. In terms of the speakers today, I'll start a little bit out of order, first with a -- to introduce a very special guest, Dr. Greg Berlet. Dr. Berlet is an orthopedic-trained foot and ankle surgeon. He practices in Columbus, Ohio, which is about 500 kilometers southeast of Chicago, Illinois. He is a renowned foot and ankle surgeon in the space. And he is here to provide a special perspective from one of our surgeon customers, his view on the biologics space, his decision-making process as a clinician and provider as he makes decisions for his patients in clinic and the hopes of achieving better clinical outcomes and thus better lives for his patients. And so we're very much looking forward to his presentation. A few other people that are much probably much more familiar to most of you: Chris Fair, our Chief Executive Officer; Joost de Bruijn, our Founder and President of Technology and Strategy; and then also Daniel Geiger, our Chief Financial Officer. So we're looking forward to that. So our goals for today, as I mentioned, we want to talk a little bit more about our breakthrough science, also talk about our strategy and our business models around the world and then, again, perhaps the most important presentation today is the surgeon's perspective and the patient impact. Quite simply, our agenda, we're going to start with Joost, and he will provide an update and a reminder of the decades-long scientific journey of discovery that has led to the MagnetOs product platform that we have today. Chris will then provide an overview of our global commercial strategy as it has evolved over the last several years and as we look forward into the future. Joost will then come back and provide an update on our ongoing clinical strategy, our investments in clinical evidence, gathering and research, both on the human side and on the scientific side. Then, of course, the discussion with Greg and the patient impact that MagnetOs can have at the individual patient level. And then we're going to finally close with Daniel Geiger and a discussion around our investments in business transformation as we evolve from more of a start-up structure to a mid-sized biologics company. And then finally, we will end with a Q&A session with all of the speakers, and the Q&A will be both for the people who are in attendance here in the room and also for those online. For those online, I think you'll see in the lower left of your computer screen a dialogue box to enter any questions that you might have. You can enter them at any time, I believe, but we will field those questions at the end of the program. With that, I will turn it over to Joost. Thank you.

Thanks a lot, Joe. Also from me, good morning, everybody. So I will talk about the science behind the success. But before I do so, if I dive into that, I would like to tell you a little bit about the clinical and medical need for MagnetOs. If you walk outside and you ask somebody on the street what he or she thinks is the current global crisis in health care, then most likely you'll hear cancer, cardiovascular disease, diabetes, maybe also kidney disease. However, most people do not realize that spine-related pain, specifically lower back pain is the #1 in area -- in the area where there is significant disability. Spinal-related pain results in disability. And the World Health Organization has estimated that millions of people in 2020, it was about 600 million people globally have problems with their back pain. So the reason for this or one of the causes for this lower back pain lays in the intervertebral disk. You can see on this slide, on the left, the normal spine. And when there's a problem with a disk such as a herniated disk or displaced vertebra, then you get a pain in the spine because the nerves that are running here in the spine are being impinged and there's also instability. And this all together causes significant pain in the lower back. Now ways to solve this pain are by doing a spinal fusion surgery. And the spinal fusion surgery basically means that you do a surgery in order to fuse 2 spinal bodies or 2 spinal bones together so that there's no instability anymore. And there's 2 types of surgery, one in the anterior column. So the surgeon approaches the spine from the front where cages are being placed in the area where the intervertebral disk was. And those cages, as you can see here, are then filled with a bone graft material. Another potential way of solving spine-related pain or getting spinal fusion is by doing fusion in the posterior column. And actually, in most cases, surgeons do a so-called 360 approach. So they do both anterior or interbody fusion as well as posterior column fusion. And the bone graft that is used here in the posterior side, but also anteriorly in the cage and around the cage, is crucial in order to get the bones to grow together. Now the gold standard for bone repair here is patient-own bone. This is an excessive example of a patient. This is an X-ray. As you can see, this is the spinal column. These are the pelvis, so the hipbones. And here, this patient's hipbone has been taken away and transplanted in the lower spine in order to fuse these 2 spinal bodies together because the intervertebral disk there was born. And as you can imagine, this gives rise to significant issues, one, disabling complications when you harvest these large amounts of bone from the pelvis. Donor site pain has been reported that up to 40% of the patients that have had such a surgery after 1 year may not have any lower back pain, but now the pain has moved to the area where the bone had been harvested. There's limited supply and also an extended surgical procedure. So basically, there is a clinical need to develop a technology or a product that is a substitute for a patient-own bone tissue. And if we look at such a substitute and why local or why our own bone is the gold standard still, then there are 3 aspects. One is bone is osteoconductive. So it basically provides a scaffold for bone growth, if you implant it, bone growth over the scaffold and into the defect. Autograft is also osteogenic. It contains bone-forming cells that actively help in repairing bone. And thirdly, material is osteoinductive, and that means that it either contains growth factors or you'll see later with MagnetOs, it's got a surface topography that stimulates the body to attract cells and to grow bone. And surgeons are, therefore, looking for alternatives that are similar to autograft and have preferably these 3 concepts. Now what I will do you -- do in the coming 20 minutes or so is guide you through the pathway that we've taken over the last 30 years or so for developing ultimately MagnetOs. And this started, again, about 30 years ago when I was working at IsoTis, which was a Dutch tissue engineering company. And there, the objective for us was to grow patient-own bone in a culture dish. So surgeons don't have to harvest bone, but we thought if we can just culture it in a culture dish, then we overcome those issues that I mentioned before with autograft harvesting. And this tissue engineering approach, as it's called, entails the following: you harvest bone marrow; in bone marrow, there are stem cells, stem cells you can stimulate to bone-forming cells; you multiply these stem cells and then you combine them with an appropriate biomaterial scaffold. And here, we use the calcium phosphate scaffold. And here, you can see such scaffold in white. And in blue dots, mesenchymal stem cells are seeded onto the scaffold. Then we culture these cells for an additional period of time to have them form a layer of bone on this material. So basically, we culture patient-own bone in a culture dish. Now in order to evaluate whether this technology works, what you do in a scientific experiment is implant such as scaffold with cells in an ectopic site, in a non-bone site. And here, we chose for an intramuscular implantation. And of course, as a good scientific experiment entails, you also implant a control scaffold, so calcium phosphate without any cells. And the result that you can see here after implantation of these devices in a muscle site, the cell-based scaffold, so the tissue-engineered scaffold indeed gives full bone formation throughout this implant, whereas the control scaffold is only filled with fibrous tissue. So this was a great result, and we thought this is fantastic because we -- the concept seem to be working. However, you, of course, want to form bone also in a clinical-relevant bone defect. And therefore, we implanted these scaffolds, scaffold with cells, scaffold without cells in a critical size, clinically relevant bone defect. And those results are shown at the bottom of this slide. It's called an orthotopic implantation. We use a 17-millimeter transcortical defect in the os ilium, in the hipbone of a sheep. And here, you can see that the cell-based technology compared to the control material does not give significant advantages. There is some bone information, bone growth here, maybe a slightly more bone growth than the control scaffold, but still both scaffolds are largely filled with fibrous tissue. And this was quite a deception, I must say. This was around 2000 when we had these results. And this basically, the take-home message was tissue engineering works really well in a well-vascularized implantation bed in the muscle site. But at the moment that you implant living cells in a large bone effect that is devoid of vascularization, these cells how do not survive and you do not see an effect of this tissue engineered approach. So again, this was a deception. This was just one example, by the way, of many studies we did. We even went, in IsoTis time, to clinical studies. And all those studies showed that this technology does not work when cells are implanted in a bone defect. So at that moment, IsoTis decided to stop this tissue engineering program. But when my colleagues and I looked at some of the control scaffolds, so just the calcium phosphate scaffold that had been implanted in muscle, we could see some areas, as you see here, that showed some mineralized tissue. This can be pathologic calcification. But looking closely, you can imagine that or envisage that these potentially are osteoblasts that are forming cells. And if that is the case, that would be huge because this had not been shown before, that the material by itself can stimulate bone formation in the muscle site. Now the reason for that, if it would be bone, could not have been the calcium phosphate itself, the chemistry because many calcium phosphates are already on the market. So one of the possibilities is that the surface topography might play a role in this process if this was bone. So what we then did is we went back to the lab and created a calcium phosphate with a chemical identical composition but with different surface topographies. And the surface topographies, we provided by sintering or heating the material at different temperatures, 1,100, 1,200 or 1,300 degrees centigrade. This is a low-magnification graph at the bottom, high-magnification graph. And you can see indeed that the surfaces are distinctly different. And I should say that the bottom-right surface of this BCP1300 is similar to the surface of current commercially available calcium phosphate. And the surface on the bottom left is the experimental surface. The middle surface on the bottom is the surface that we evaluated when we were with IsoTis. So what we then did is we created these 3 materials with different surface topographies. And now we implanted these materials again in muscle of animals to evaluate whether the surface indeed can stimulate or can allow bone formation. The result is shown here. Starting on the right with the surface that looks like any other commercial available calcium phosphate, here, you see just fibrous tissue ingrowth in the pores, which is what you expect. Calcium phosphates per definition are usually actually are not osteoinductive. They do not induce bone formation when you implant them in muscle. However, the BCP1100, the experimental surface, here, we could see significant amounts of bone indicated by this purple stain here in the pores of this material. And you should realize this is just a calcium phosphate with a surface topography that we implanted in muscle and then it stimulated bone formation. This had never been shown before. So we were able to publish this in a high-impact factor journal, PNAS, and we obviously were really happy with these results. So the take home here was that just by altering the surface topography of a calcium phosphate, we can make a material osteoinductive. And again, inductivity is something that surgeons are looking for in a bone graft material. Now as mentioned before, we've shown with our tissue engineering approach that tissue engineering works well in the vascularized implantation bed. This material also works well in an intramuscular implantation site. However, how does this material now behave if you implant it in a critical size bone defect? And for that, we implanted again the material in the critical size defect that I mentioned before, 17-millimeter defect in an os ilium of a sheep, a conventional osteoconductive calcium phosphate, so this is the BCP1300 with a surface that is similar to conventional calcium phosphate. Here, we can see the normal hallmarks of so-called osteoconduction. It is a scaffold. It guides bone formation from existing bone into the scaffold. But in the center of the scaffold, bone is not present yet. Bone -- it will take time for bone to grow there. Whereas our osteoinductive calcium phosphate at 12 weeks, this is all implanted for 12 weeks, you can see full healing of this bone defect. So this was, again, a fantastic result because now we showed that it's not just inductive, but also it forms bone very rapidly in a clinically relevant critical size bone defect. At that moment, and here, we are around 2009, we were approached by NuVasive, now Globus Medical, a large American spine company, who were interested in acquiring this technology. We made an agreement for the orthopedic field. And what NuVasive indicated then is that they wanted a material with a very high tri-calcium phosphate content, in other words, a material that resorbs quickly because they wanted the material to disappear very fast. So we did that. We signed this deal. I signed a non-compete for 5 years. And in the meantime, NuVasive performed a clinical study at the University Medical Center in Utrecht in the Netherlands where this was a very nice model, by the way, where they compared AttraX, that is the name of that product, with autograft in an inter -- intra-patient control. So up to 100 patients were operated, one side of the spine, autograft, the gold standard was placed; and at the other side of the spine with the same level, AttraX was placed. This study was designed to show non-inferiority between AttraX and autograft evaluated by CT scans after 1 year. And the results showed that the AttraX material showed 55% fusion at one site, whereas the autograft showed 52% fusion. So NuVasive was pretty happy. The surgeon was quite happy because they showed now for the first time in such a study, Level I study, that a synthetic material is equivalent to the gold standard autograft. However, when I talked to the surgeon, he was an ex-PhD student of mine, he said he was very happy, but he said, the material seemed to have -- the AttraX material resorbs too fast. And he said, if you have a material that resorbs slower and maybe even induces bone formation faster, we potentially could have a better result. So I decided then, I left Progentix because we sold that company to NuVasive again, to look at further refining surface of the materials because initially, we only did quite a simple experiment by sintering a calcium phosphate at 3 different temperatures. And when we were doing some studies in the lab and, how do you call it, sterilizing the calcium phosphate, normally, you do that by gamma radiation for commercial products. But in a lab, you can do that also by autoclaving, which means you put it in at high temperature, high humidity, boiling pan basically. When the investigator, my colleague did that study, the pouch in which the calcium phosphate was placed was leaking. And therefore, water vapor was able to get to the surface of the calcium phosphate material. When we then characterized the surface, we could see the presence of these needles. And this has now become our MagnetOs. And we thought these needles have a more refined surface topography, would this even be faster in bone induction? So what we did, again, is used MagnetOs. It also had a lower tri-calcium phosphate content, so it resorbed slower. We implanted this again in muscle, compared it to control, a non-inductive conventional calcium phosphate and the AttraX material that we developed for NuVasive. And what you can see on the top slide here is that the volume of MagnetOs is remained, whereas AttraX is smaller, whereas also MagnetOs Granules give rise to significant amount of bone formation. So one objective we reached, which is that MagnetOs is indeed inducing bone formation at a very high rate, but it's also resorbing slower. Next to that, we look at the onset and the speed of bone formation. I will not go into too much details, but we injected a fluorochrome at 6 weeks, took the samples out at 12 weeks. And you can see here, this was a green fluorochrome that there's much more spots of green, indicating bone formation already starting at 6 weeks with MagnetOs. Whereas with AttraX, there was only very few areas of green stain, meaning that bone formation started much faster with MagnetOs than with AttraX. We compared this -- our material also to other commercially available materials, Vitoss from Stryker, ACTIFUSE from Baxter, and only the MagnetOs product is highly osteoinductive, as you can see here by this purple stain, and that is due to the surface topography. These are the surface topographies of commercially available calcium phosphates, and on the right is the surface topography of MagnetOs. Then in 2016, end of 2016, we were approached by Kuros, a Swiss company, and we decided to merge Xpand Biotechnology, the Dutch company, with Kuros Biosciences. And the objective there was to further the studies and to actually show that MagnetOs also works very well from a clinical perspective, and we started commercialization because at that moment, we already had the first regulatory clearance of MagnetOs. And one of the first experimental studies we did is a spine fusion model in sheep. And here, you can see a spine. This is one spinal body; the another spinal body, transversed process, which are the ones next to the -- sticking out basically of the spinal body. And in there, you placed either autograft, MagnetOs and 2 commercially available calcium phosphates or bone graft materials, NovaBone Putty and Vitoss BA2X. At that moment, this was the market leader. And what you can see in this slide is that the amount of fusion in gray, that's -- the gray stands for bone tissue, is much higher with MagnetOs. And compared to the market leaders as well as autograft, there is no loss in fusion mass between MagnetOs -- with MagnetOs compared to the other products, autograft, NovaBone and Vitoss. We then also did histology, basically make thin sections of these fusion areas. And just to show you where the implant is placed, this is the spine, this is the transverse process, these little bones here. And this area is where the bone graft had been placed. So when we made a section, these 2 transverse process relate to these round spheres here. So this is a transverse process from one spinal body, the transverse process from another spinal body, and the objective is to get fusion between those 2 spinal bodies in order to get solidification. With MagnetOs Putty, with MagnetOs Flex Matrix and also autograft, you see a full fusion between 2 transverse process, so solid and robust fusion occurring. Whereas with the other commercially available materials, NovaBone Putty again, FIBERGRAFT Matrix, we looked at i-FACTOR, Catalyst Putty, Vitoss BA2X, you mainly see remnant material and lack of bone formation between the 2 transverse process. Catalyst shows some bone formation, but again, nowhere as good bone formation as we get with our MagnetOs and as with autograft. So great results. And at that moment, the PI, principal investigator, from University Medical Center Utrecht, he also noticed these results and he said, I want to do another study now comparing MagnetOs with autograft, very similar to the study that he performed before with AttraX. So again, it's spinal fusion up to 100 patients. This was during COVID, so some patients did not make the endpoint because they were not able to get to the hospital. So we evaluated 91 patients. One side of the spine, MagnetOs was placed; and the other side of the spine, autograft was placed. This was also powered as non-inferiority to show equivalence. But what we could see after 1 year with thin-cut CT scans is that MagnetOs fusion gave rise to 79%, where MagnetOs gave rise to 79% fusion, whereas autograft gave rise to 47% fusion. And to remind you, with AttraX, they saw 55% fusion. So MagnetOs fusion is much higher. Whereas autograft, 47% here; in the previous study, they showed 52% fusion. More importantly, this was a real-life patient population, which means that 1 out of 5 patients, so 20% of the patients were smokers. Now smokers are known to be very poor healers in bone formation. But interestingly, in smokers, the MagnetOs did not have a deteriorating effect in fusion. Overall, we had 79% fusion with MagnetOs; and in smokers, that still remains very high at 74% fusion. Whereas in the autograft side, overall 47% fusion; and in smokers, that went down to 30% fusion. In other words, MagnetOs seem to work very well also in a population of smokers with other comorbidities. Finally, what the investigators showed, as I mentioned, this study was powered for non-inferiority, so similarity between autograft and MagnetOs, but they showed that these results indicate superiority. So it indicates that MagnetOs is superior to the gold standard autograft. And again, this was a fantastic result. We published this, I think, a year ago or they published this a year ago. Never been shown before that a synthetic calcium phosphate with a surface topography that is inductive can actually repair bone better than the current gold standard. So looking at the evolution, again, started 30 years ago with IsoTis trying to culture bone in the lab; then founded Progentix, the first generation actually of synthetic calcium phosphate with bone-inducing properties; sold that to NuVasive and then found out via serendipity that we can get to create -- or create a surface topography like MagnetOs with the needles; merged Xpand, the company in which we developed that with Kuros in 2016 and basically performed a Level I study, and now we are here. And you -- well, you've seen that we are a very successful company with this fantastic product. So what, again, is MagnetOs and how it's different? I already mentioned it several times. But firstly, it gives surgeons really a confidence to get more predictable fusions. With autograft, it's a gold standard, but still there's not 100% fusion. And MagnetOs, at least, we have a very high fusion rate, a higher fusion rate compared to other commercially available calcium phosphate. We also have a Level I clinical study published in Spine, and I'll talk about that later in the clinical area. But there's very few studies done by also competitors showing in the Level I clinical study or comparing their products to other products and to the gold standard. It works very well on smokers, as I mentioned, and it grows bone on its own because of its NeedleGrip. So you don't have to add cells or growth factors. By virtue of a surface structure of MagnetOs, it really can stimulate the body to form bone. And this is what it looks like, and I've got another slide. This is a scanning electron micrograph showing a granule of MagnetOs. And when we zoom in, and this is a real image, you can see here at very high magnification, this is 20,000x, that the surface of this material is comprised of these needles. And these needles are the reason why MagnetOs is working as good as it is. Now the mechanism of action, I will not go into detail. That is a very scientific discussion, but we know that immunology, osteoimmunology in specific plays a role here. When you implant MagnetOs in the body, it stimulates a certain inflammatory response, form a body response that ultimately stimulates macrophages to polarize to a yielding macrophage type. Those macrophages produce cytokines, attract stem cells and stimulate those cells to form bone. There's quite a lot of studies and publications that we have on this mechanism, and that is what really sets MagnetOs apart from all the other calcium phosphates that are out there on the market. So again, why do surgeons choose MagnetOs? Well, it's because of its surface. It grows bone on its own. It's superior to other products, even indicated superior to the gold standard patient-own bone tissue. We've got a fantastic sales organization that can also support surgeons, distributors and agents with the data that we have. It is safe. It's just a synthetic material. It doesn't contain any growth factors or cells. It has a broad indication. We started in spine. But as you know, we moved out of spine or away from spine as well to extremities and pelvis. And last but not least, the science. I think we can say that we are the only company that has got such a robust amount of science as well as clinical data supporting the success of MagnetOs. And with this, I would like to hand the word back to Chris.

Thanks, Joost. Good morning. So there's going to be a quick quiz relative to histology slides, and so everybody is going to break out a notebook. Just kidding. First off, thank you for those in the attendance for coming to our first Investor Day. This is new for us, and we appreciate you spending the day with us to learn a little bit about the company. One of the -- one introduction I want to add, we have a Board member with us, Albert Arp, who's sitting here in the front row. Very good. So we have an independent Board member here. So from a questions perspective, we really can address anything that you might have. So again, a lot of work goes into this, and I want to say thank you for the team that put this together. Before I get started, there was a lot of discussion on folks coming in relative to what happened, what's going on in America, relative to announcements that seem to be happening on a daily basis. I do want to say off the bat, we are not a pharmaceutical company. And so the -- what the White House is talking about relative to pharmaceutical and reimbursement and reducing costs, we are a medical device. It is completely different regulation. It is completely different reimbursement scenario, and we are not part of that conversation one bit. So to reiterate, we are not a pharmaceutical, we are a medical device. And that is how we are governed. It's how we are reimbursed. And none of those discussions in the recent executive order coming out of the United States has anything to do with our business. So I thought I'd get that out there right away, make sure everybody understands that before we go into the business and the commercial strategy. So we're -- so many of you in the room, I've met several times. Some of you are new. And so to talk a little bit about where we started from and where we are, we can look to -- these are numbers posted from our annual report in 2024. We are a business -- we are a high-growth business in the medtech sector. And late in 2023, in December 2023, we were half biotech, half medtech. We had an asset that we were looking at called Fibrin-PTH. And we chose to not continue with that asset, knowing that we had Level I evidence on both products, but yet the MagnetOs product performed so much greater and, from a cost standpoint, would be so much less expensive to continue to push forward. And so we made the decision in December of '23 to discontinue Fibrin-PTH and continue to focus our efforts on the MagnetOs portfolio of products. And so what you see in 2024 is a transformation of the company and really focusing on a category of products and space. And you see the results, from a revenue growth perspective, growing the business to CHF 75.6 million, but also our internal personnel, our publications throughout the business, we grew. You can talk about the number of employees, and many of you have grown businesses yourselves, talk about how many people we had to add to the business. And we're talking about a global business where we have offices here, we have offices in the Netherlands and also offices in the U.S. And so growing that on 3 different locations as far as the customer base, whether it's international, in the U.S., growing at exponential rates. So massive growth across the organization, but all held together with the science and the foundation of strong products, strong evidence that our customers and our physicians trust us for. This is a really interesting slide, and there's a lot of numbers, and I'm going to get a lot of questions afterwards and why this, why that, but what's really important to look at here is where we are in the ranking. And these are product lines in the biologics realms relative to the U.S. marketplace. So it's not global. And so the data is not exact. If somebody says, well, I think there might be $1 million off here. This is all market data publicly available. But in the world of biologics, Kuros is now seen as a #9 biologic product in a very large category. And when you look at Medtronic and Infuse, up to almost $1 billion in revenue, that's our primary competitor. And when you go down the list, we're growing at such a rate overtaking many of these. So last year, the year prior, we had done $37 million in revenue. And so what we're seeing is that surgeons are now -- it's no longer the early adopter physicians that are looking at us. We're now getting into the surgeons who are using this in their daily practice. The other good news is from a growth perspective, we're the only other product that's growing besides BMP. Everyone else is flat or down. And so what that tells you, if you look at different categories, so if you look at a product, there's a product called Vivigen, and Joost was talking about this earlier relative to cellular allografts, to describe what a cellular allograft is, is essentially -- I used to run a human tissue bank at one point in my career. You take a donated tissue from somebody who has passed on, you isolate those stem cells, you put them in a freezer and then you try to clean those cells up as best you can is what the FDA will allow you to, put them in a bottle and then you'll ship them somewhere where they're going to be used, unfreeze them, put them back into somebody else's patient. But they're somebody else's cells. And those somebody else's cells have to be make sure that are they clean, are they verified. Tissue banking is a very interesting business. And so live cells can transmit diseases, and they have. It's not 100%, and I'll talk about that in a little bit. And it's also the efficaciousness, the ability to have cells do that entire mission trip of they were just in somebody else's body, the patient died. Somebody isolates those cells, transports them to another vial and I'm going to give them to somebody else. Cells are very fickle. They don't always last. And there's nobody checking the volatility and the viability of those cells. There is no quality control because it's not a device. So what's happened is there was a big push in that marketplace, rose it up because people thought BMP safety issues had challenges, they went to cellular allografts, and cellular allografts rose. Now we're seeing this flip, and it's 2 things: flip to BMP and the flip to products like us who have evidence, no live cells, no risks to the patients. And also, you don't have to keep it in a freezer, so it's ready to be used off the shelf. So it's a big market. And when we target business -- or target the marketplace, cellular allografts, which grew to about a $400 million to $500 million business, it's a big target for us, and we're very successful in going after it. But this is a great slide to show how much growth we are -- where we're taking it from. Actually, go back. So we talk about -- we have many levers to grow this business. And we start looking at the spine business, which is what we've known to this point. And now -- and Dr. Berlet will be talking about, as an extremities physician, why he's so excited about the marketplace going forward. And it was really -- we wanted to make sure that it wasn't another spine talk. And here's somebody that's been introducing our product relatively new, but has massive industry understanding of how the foot and ankle business is structured as well as trauma and why it's such a great opportunity for us. So when we look at our opportunities in spine, still plenty of room to go. Right now, we estimate about 7% of the spine physicians in the U.S. utilize our product at some form or time in their practice. That's fantastic. Still a lot of upside. Now when we start going into extremity physicians where we're just starting, so many more physicians. I believe the number is around 5,000, give or take, about 5,000 physicians broken up between orthopedic and podiatry. And so it's a new marketplace. We also look at cranio-maxillofacial oncology as other marketplaces where we can have massive impact, and we have studies initiated in both of those categories. And so one of the things you'll realize about our organization, as Joost has gone through, we are scientifically based, clinically evidence-focused. We have to make sure that we are putting product into the marketplace that is proven. Most of the companies I put up on that roster do not have a Level I study to their name. We have several, and we're continuing to add more Level I studies. So not just in categories of products, but also geographic. We are a global business, as we mentioned before. I have the privilege of being able to go to several different locations to see our teammates, whether it's here in Switzerland, whether it's in the Netherlands and then also where I live in Georgia, we have -- it's a global business, and we are going to continue to grow our business globally. If we look at the international business year-over-year, we have doubled -- almost close to tripled that business with a small team of very focused individuals. [ I know she's ] here. She's in the back. She's one of those key folks. And we're really proud of that. And what we're seeing is this globalization of physicians wanting to work cross-borders from the U.S. to international marketplaces and really getting part of a -- and also from a study perspective, getting that data into one location. And so we continue to have registrations. When we started -- when I came into the organization about 2.5 years ago, the goal is to get to 25 countries within 5 years. We've been able to get to that target in half the time. And so we also said that we would be a $100 million business within 5 years. We also achieved that within half the time. And so with a focused team, with a great product and a lot of evidence, you can do these things. And so now we're growing in these businesses. Brazil is a key market for us. We're in the final stages of some additional product registrations, and we'll be going down there shortly. But again, Middle East, strong partnerships in Australia doing well, and our U.K. business and the European business continues to thrive. When we look at our portfolio of products around MagnetOs, it's a growing portfolio founded on the same principles and the same technology, the granules as Joost talked about. And by the way, if you have time, we have several samples up here, and you can play with them, put it in your hands; unlike samples, like hors d'oeuvres, let's not eat those. But we are continuing to improve and provide different handling characteristics based on the clinical indications. As we go into extremities, we're finding that, well, gee, for these types of fusions, I never really had a good product because it doesn't have this type of consistency. And so we're working on with different physician groups to find the right consistencies for different procedures. So as we grow, we're going to see that. And so we have a very robust R&D team and efforts to continue to launch new products, and I'm going to show you one of those that we'll be launching shortly. And so we've talked about the MIS launch. And so this is the first time anybody has seen this video, so let's hope that it works. This is pending with the FDA. It should be released anytime soon, but we plan on a launch at midyear. And what is the need for this? And when we start talking about minimally invasive surgery, it's how do we do surgery down a port, down a tube that's very tiny, so there's very small scar incision? A lot of times, in spine, for a younger patient, you don't want to have a large incision. But how do you get the graft? If it comes only in a big putty in a larger tube, how does it get down there? And so also, it's the fastest-growing segment within spine is minimally invasive surgery. [Presentation]

That's like the early screening of any movie. No one else has seen that except for marketing, so you're welcome for that. But no, we're very excited about this launch. These are procedures we currently do not participate in. And the reason being is you saw how that tube is in the spine, there's skin all around, getting our product in its current format into that environment is not simple. If it's not simple and easy, the surgeon won't use it. And so they'll use another product or some other funnel or some other system to do that. And so we're very excited about bringing this to market and getting access to incremental procedures. When we also look at our technology versus other product categories, posterior spine and also we talk about BMP being the market leader, bone morphogenic protein, which is sold by Medtronic, also under the name of Infuse, it grows bone. It is probably the most published biologic in the world. However, it also is most published as far as contraindications as well as challenges and also risks, whether it's postoperative care, patients have to be changed, but it's also cost. This is the most expensive biologic in the marketplace as well. And so there are other categories of advanced biologics like a P-15 peptide, which is known by the tradename of i-FACTOR, limited information relative to regulatory, only cleared in the cervical space, but also handling characteristics. They've grown that business. If you go back to that chart, it's up to about $125 million business in the U.S. predominantly. They have pulled out of Europe for the most part. And then cellular-based allograft, I talked at length about how those -- what that category of product looks like. And so when we look at what we offer to a hospital and to a physician, a product that is cell-free, so it's safe, product off the shelf that doesn't need refrigeration, it's less expensive than the most expensive products by about 30% to 40%, and we have clinical evidence that most of these companies do not. There is no, and I mean no Level I data on cellular allografts. There's no Level II data on cellular allografts. And so the reason being is they don't need to do a study to go sell and market, so they just decide that's what they're going to go do. So we have been able to prove not just our technology in stand-alone against autograft, but also against head-to-head, and we have several ongoing trials going -- doing that exact thing right now. And so I talked a little bit about cellular allografts and the risk, and this is real. Any type of human tissue donation, transference of disease is a thing. It's not a never. And so we recently -- there was a cellular allograft company where one patient had TB, and that patient went on -- or that donor ended up infecting over 100 patients with TB. And so -- and Greg can talk about that from a clinical perspective, but the repercussions of having TB as a patient introduced to you from some other product that they had no idea maybe that they were being used, that's a risk you don't want to take, also with a product that doesn't have any clinical evidence. And so you have physicians like Dr. Cook who says, I'll never use a product containing cells because of this risk. The risk is not 0. And so -- and that's why you see the transference of that market share to people like us as well as transference to market share of things like BMP. This question comes up quite a bit with the investor community. And so, why do sponsors choose bone grafts versus cements, right? And so I think many of the folks in this room, whether it's CERAMENT or any type of other company. And really, the cement-like products are used when you need a structural immediate impact, just like the name it sounds, cement. And so that is not what a bone graft material is. Bone graft material is used with other type of infrastructure, screws, plates, rods to grow bone. That is a completely different scenario when looking at a cement. Cement is to fill an immediate defect. And again, Greg can talk a little bit to the clinical indications. But when we look at products like this, again, I'll use CERAMENT, but HydroSet from Stryker or Zimmer Biomet, cement products are filling voids after a fracture. It needs immediate need, immediate stability. And in their case, they're combining with gentamicin and vancomycin, also vertebral compression fractures. Bone graft substitutes, as the name states, were trying to replace bone and grow bone while the scaffolding, i.e., the screws is holding everything in place. So that's the big difference. But this is a question that we always get, how do we delineate the differences? And we're talking a little bit about things that influence the surgeon's choice. We have actually studied this, and we continue to survey our customers and say, why have you chosen us? Why do we get the privilege to have you as a customer? They are looking for products with Level I data more and more and more, especially hospitals. When they have so much choice in products and companies, why am I letting one in versus the other? And it's not always about price, and it's not always about the sales rep. And so the data is where it starts, and that's really one of our largest strategies, how we've built a moat around our technology is not just with intellectual property. It's not just with the uniqueness of our product. It's also with our clinical evidence. As I said before, many folks don't have a Level I study, they don't have a Level II study. They don't have anywhere near the clinical evidence that we do. And that means something not just to the clinicians, but also to the hospital buyers. Surgeons are influenced by their peers. We've been out there now for several years, and we're starting to see at different meetings physicians saying, you know what, I trained with so and so and they've been using your product for the past year, and I just caught up with them. I want to learn more about it. We are getting into the next tier of customer base, not just the early adopters, but the folks who will do it who they trained with. We'll talk a little bit how we sell the products here in just a second. But handling and indications, when you come up and look at the product and you see how it's delivered, even the MIS delivery mechanism, it's very elegant. It's thoughtful. It works well in the surgeon's hands. These are all things that are very important because the last thing a surgeon wants to do when treating a patient is the mess and the fuss with something that they don't have to. So we got to make it easy for him or her. We've also spent a fair amount of our time not just in clinical evidence, but building relationships with our customers on training and education. Training and education is one of the key areas of growing a business like ours. And so investing into -- osteoimmunology is not something that is taught at length in med school. And so talking about how we actually grow bone to the different audiences we have, whether it's orthopedic spine, whether it's orthopedic foot and ankle, whether it's podiatry, there's different levels of understanding. And so we spend a great deal of effort on training and education and supporting those institutions. We invite them to our R&D facilities to show what we're working on. And so you can see some of the things of bringing folks to the Netherlands to work with the R&D group. We have small meetings with surgeons to talk about the data, what's important to them. And this constant customer interaction is part of our strategy to make sure they understand the why of Kuros. Just some of the other questions I traditionally get is, well, how do you sell things in the United States versus how do you sell things outside the U.S? This is not our org structure like complete. I'm not going to give you the complete how many we have where, but this gives you an understanding of how we're structured. In the United States, we use what's known as a sales agency model. The sales agency model essentially says we pay a commission to somebody who's an independent contractor. We end up getting the end dollar revenue. We build a hospital, we negotiate with the hospital. The pricing is all controlled by the company. And so that allows us to, again, have more control of our business, and we pay a commission. Our structure for sales in the U.S. over there to the right is what our internal people do, and they're managing the different business geographically. And the regional managers will manage the independent agents, the sales agents. And so that's kind of how we work and each one has different responsibilities, but geographically located. So as we grow the business, you can scale by adding more regional sales managers. And this is very important when we talk about extremities, and I'll get to that in just a second. And then outside the U.S., we use a distribution model. And what that means is we sell to a third party at a cost plus, and they end up working with local hospitals on the selling contract. That is traditionally how it's done from a -- in the med tech sector. It's much easier because 1 distributor may cover several countries, the registration issues, we end up handling, but we worked in tandem with them. But we don't have the SG&A cost associated with international revenue, but we do -- so it's a cost-plus model. So the ASP may not be as high as a U.S., but the pull-through is actually pretty nice. We talk about Medtronic. Our relationship with Medtronic started as a pilot, and that started about 2.5 years ago. And in January, we announced a 5-year strategic alliance with Medtronic. So what does that mean? It means that we have an arrangement in mutually agreed to geographies and territories where they will be our exclusive representative. That territory is defined mutually by their group and our group, they would say, we would like to sell the product in this area. We say we already have somebody, how about this area? We come to an agreement and then we allow them to sell it, like any other sales agent that we have a contract with. It does not -- it also means that we're working with other independent sales agents, but we do have a strong partner in Medtronic, and they have shown their capabilities to bring business to us quicker. And it's a great relationship. It also allows us to focus on these things like extremities, which is not a marketplace that Medtronic plays in. So a great partnership. We control the revenue. We have the end dollar revenue. We have the contracts. We have all of that. We do not make the product and sell to them like a distributor. It is a sales agency model. We get access to their reps, which is a huge, huge category. If you look in the world of spine, Medtronic is Tier 1. They have the best reps in most marketplaces. They're well-known. They're on all the contracts. And so we're able to leverage that and also helps the brand awareness and brand name recognition as we see that more and more as we go to meetings. So let's talk a little bit about the extremity business before Dr. Berlet comes up. When we looked at the marketplace outside of spine, really our initial intention was not to do this ourselves. We said, well, gee, we don't know much about the extremity space, how hard can it be? And so we did an analysis, we went out and we looked at it. And what we found was they're using the same products in spine. If the product is on the shelf in the hospital for spine, the foot and ankle physicians, the trauma physicians are pulling that same product. Okay. Well, how big is it? And so we started doing some research. When we looked at the marketplace, it's actually quite big. It's about a $1 billion marketplace with the predominant coming in the Foot & Ankle segment. And Dr. Berlet's experience in growing the marketplace with his firsthand knowledge of growing the marketplace from $100 million to well over several billion and working with companies like Wright Medical and Stryker. And so when we looked at this when we started looking at the data, no one in the biologics space has really spent a whole lot of time in educating, training and laying the groundwork. And so we looked at our data, we started to speak to folks like Dr. Berlet and others say, is this a big opportunity for us to do on our own? And so how we've gone about from a structure perspective without building an entire company, but leveraging our strengths and being innovative in how we support, we look at our business, said clinical R&D and distribution, that's the same. That doesn't change whether it's a foot and ankle box -- foot and ankle case or if it's a spine case, distribution, they're shipping a box to the same place. But the things that are different are sales and marketing, the knowledge base and the depth of knowledge that we have in spine, we had to start to duplicate that in extremities. And so we started hiring some individuals in Q3, Q4 of last year to start laying out the groundwork and the plan in extremities. And so leveraging the rest of our core business, like the hierarchy of the sales, we continue to do that in a cost-efficient manner, but accentuating with knowledge base in the right marketplace so that now we can have an extremity side of the business and a spine business. And it's really in the sales and marketing, more in the marketing more than anything else. And at the same time, we started saying, if we're going to go after this marketplace, we need to find those folks in the clinical side who are well respected, who have published, who believe in what we're trying to do, have seen the data and can actually make an impact. And so along with Dr. Berlet, Pete Mangone, who is the Chief of Foot & Ankle Surgery, University of Pittsburgh, UPMC; Carlos Sagebien, who is a trauma surgeon in New Jersey; and then Mr. Andrew Goldberg, the National Orthopaedic Hospital in the U.K. And so this is the beginning of our KOL. And why do we use surgeons to do this? A lot of it is to help chart the path. A lot of this is to what clinical studies, what are the products. We may have the right product for spine, but it may need a small tweaking for extremities. And so we're growing to have those types of relationships and indications. But this is the core group that we started to assemble. All that being said, and we talked about the levers to grow the business. And we talked about geographic expansion, product expansion, and we talked about how we're doing those things. Let's not forget how we are sitting as a business. Today, we stand before you as a business that is a high-growth business. We are profitable, and we have no debt. And we have -- we're opening up a brand-new $1 billion market opportunity. And so of course, the conversation is, are you going to continue to do this on your own? And so with organic product. And we are. We're growing to continue to drive R&D and product development organically, and we're going to continue to launch products in new categories as we go forward. But I would be remiss to say that we're not going to be opportunistic with acquisitions. And so when we talk about acquisitions and we talk about things that we're looking to partner with or to buy, we're growing to be very, very selective. It has to meet our core responsibilities, not just the physicians, but our own ethos. We are science first. It has to work. It's got to have evidence. It's okay if it doesn't have revenue right away or maybe it does have a little bit of revenue, but we have the ability to guide and scale and grow and use our infrastructure in a fiscally responsible manner to get higher market opportunities. But there are clear markets we are not going to participate in. We are not going to participate in commodity metal businesses. The reason being is there are several factors. One is just pure profitability. The amount of capital and cost it takes to run those businesses is very, very complicated. We're not growing to get into human tissue. Human tissue adds another layer of complication, plus we don't believe that there's human tissue out there that we can't find a synthetic alternative for. So we do not believe in the use of human tissue in the products that we're growing to be looking at both organically as well as inorganically. And no capital equipment type arrangements. Those will ruin a P&L faster than you can spell P&L. And so we are looking for high-margin businesses. It's okay if they're still in the product phase, but not yet a company. We have initiated the efforts to start to scope that marketplace, and we'll become more aggressive as time moves forward as we look to augment our organic strategy. But again, we can do this because of where we are and you as investors and supporting us along the way of having such a strong financial balance sheet and also how we grow the business. And Daniel will talk a little bit more about some of the operational optimization we have that's ongoing as well. So again, the future for Kuros is extremely bright. It seems like, gee, we just ran this race, and we're sitting at the finish line, but the reality is we're just getting started. And so it's very exciting to be up here to talk to you about this and talk about some of the future and looking forward to some of the Q&A. And so with that, I'm going to hand it back over to Joost to talk about some of the clinical evidence.

Thanks, Chris. So clinical evidence generation. It will probably not surprise you after you also heard from Chris that there's very limited published Level 1 data. And Level 1 data means randomized controlled trials comparing a product to another product in large patient population. Actually, to date, there's only 6 Level 1 studies that include the 2 studies from AttraX as I mentioned before, and our study with MagnetOs, the MAXA study. Out of altogether about 350 bone graft materials, commercial products. So very little data that is available currently. Why is that? Why are there a few Level 1 studies? Well, the main reason is that most products, specifically synthetic products are regulated as a Class II medical device in the U.S. by 510(k) clearance basically. So they follow the 510(k) pathway in order to get regulatory clearance. The only thing you need to provide is preclinical evidence, so animal data, implant materials in animals, most in this case, in the spine case, it will be rabbits to compare it to another so-called predicate device. So those are all synthetics. So these materials do not require clinical data. Other products, cell-based products that Chris mentioned, DBM, demineralized bone matrix and allografts are even Class I products. They do not require any animal or human testing, suprisingly by the way, because these products are placed in patients and you don't even need at least animal data. The only products that require robust clinical studies are the Class III products, which includes BMP and Infuse. So as Kuros -- what sets us apart from our competition is that we are investing in clinical Level 1 studies, next to Level 2, 3 and 4 studies, but we are really investing in Level 1 studies because we believe in our product. It's not needed from a regulatory standpoint, but we believe in the product. And therefore, we currently have 7 Level 1 human clinical studies ongoing, some are already finished, like the MAXA study, where we compare MagnetOs in the MAXA study to the gold standard autograft, where, as I mentioned, we've shown indication for superiority between MagnetOs and autograft. We also perform a study or about to do that with MagnetOs comparing to the cell-based allograft. Chris mentioned, it's a $400 million, $500 million market and also to DBM, demineralized bone matrix or fibers. And we're also initiating a study in Foot & Ankle surgery also together with Dr. Berlet. Next to that, as mentioned, we do also Level 3, 4 and other types of studies. Now some of the data that we already have generated, and this is starting from about 2022. So obviously, we did not have the time in that moment to do a Level 1 large study. But we altogether now published about 7 studies, and I'll briefly go through them with different type of MagnetOs formulation. This is MagnetOs Putty in ankle arthrodesis, a study performed by Thomas Fusco, and we published that in 2022, where it was diabetic patient revision surgery, 12 weeks postop and histology, so taking a sample out showed lamellar bone, and he was really happy with the results. Another study performed by Ryan Goodmanson used MagnetOs Flex Matrix in lumbar, that's here, lower back or cervical posterolateral spine fusion. Five patients were treated with comorbidities. Imaging was done postoperatively, and he showed consistent bone remodeling and graft resorption and also trabecular bone formation. And although no histology was performed, he could see based on imaging, that granular appearance of the graft disappeared, meaning that the graft is gradually being replaced by normal bone formation. This was published in 2023. Another study, Christopher Elia in Michigan. He used MagnetOs EasyPack Putty in cervical posterolateral spine fusion, so in the neck. 3 patients, multiple comorbidities showed radiographic fusion and favorable outcomes published in 2024. Then Pierce Nunley, he did a larger study. 63 patients were treated with MagnetOs Putty in the lumbar interbody, so the lower back, 101 levels were treated. 31 patients had many comorbidities, including, for example, diabetes or very high BMI rate. And he showed 90% of fusion with MagnetOs after 1 year of surgery. This was published in 2024. Also published in 2024, I mentioned this to you already. The MAXA study, the MAXA trial comparing MagnetOs to autograft. As mentioned, we've shown superior results of MagnetOs compared to autograft also in smokers. This was published in spine, a well-respected journal in 2024. And then the last 2 studies actually were published this year, World Neurosurgery, a study from Faheem Sandhu. He is one of our scientific or clinical Advisory Board members. He implanted MagnetOs Putty in the lumbar interbody fusion, 55 patients, average 3 comorbidities, and he showed after 1 year, 95.7% of fusion with MagnetOs in this lower spine. And finally, Justin Davis using MagnetOs Easypack Putty, a product that came out, I think, just over a year ago. 20 patients were treated, and he showed 94.4% fusion at 1 year. So these are just some examples. These are not all Level 1 studies. Some are prospective studies, Level 2 or 3 studies as well, but just showing that we actually put our money where our mouth is. So we really take it one step further compared to our competitors, showing that MagnetOs actually works. And I'll finish with one little video that was taken. This was a case study, a patient that was operated by Todd Allen in University of San Diego (sic) [ University of California, San Diego ]. [Presentation]

So 28-year-old female. She has [indiscernible] but she has hardware to be removed. [Presentation]

A lot of levels in spine were operated. Then you can see the hardware. These are pedicle screws. In between those screws there's rods placed. And then next to that, under and above bone graft is being placed. And yes, to remove some of the rods, and you can see that he has to really hammer. [Presentation]

And interestingly, from this study is that some of the samples that we took out, we could perform histology. So we could actually see whether it was bone or fiber tissue or still remnant material. And when we did that, so basically, this is what you saw, these are the pedicle screws little round things that you saw in that video. These are the rods. Materials placed under and also on top of the rod, so very far away from the existing bone. [Presentation]

This is a similar movie actually somebody else took this movie. You can see him hammering again. And this is the histology that was taken. So piece was taken out to perform histology, so a very thin section. And in pink, it's all bone. Here, some remnant MagnetOs. This was, by the way, after 22 months of implantation. This is high magnification. So lamellar bone was formed. These small areas or dots here are osteocytes or bone cells, meaning that really robust bone is formed. And these are some of the data that we are generating. Of course, this is a case study, but the results were astonishing, and he was really impressed with this data. So I think not only our scientific focus, but also our clinical focus really sets us apart from the competitor. That does not only relate to studies, but also to education. And in the last 6 months already, we have had more than 600 surgeon interactions with our team, both scientific team, clinical team, marketing and sales team, doing conference podiums, journal clubs, scientific symposia, meet the expert. So really educating surgeons, not just on MagnetOs, but also on spinal surgery as a whole and specifically the use of bone graft materials and the pros and cons of certain bone graft materials. And we are just starting. As Chris mentioned, a lot of data in the spine, but there are clear opportunities also to collect additional data from, for example, foot and ankle that Dr. Berlet is going to talk about, but also oncology and trauma. And with this, I will hand it back to Joe.

Thank you, Joost. So we're running right on time, actually a bit ahead of schedule. So that will allow us to take a short break. When you come back, I think I can promise no more open surgery videos. So maybe we should have warned you about those, but we're in good shape. So let's try to reconvene at the bottom of the hour, for those online and 10:30 a.m. this time in Zurich. So we'll take a quick break. Thank you. [Break]

Thank you, everyone, for reconvening, and it is my privilege to invite to the podium, Dr. Greg Berlet.

Well, good morning. My goal today is to introduce you to a market you might not know much about, which is the Foot & Ankle market. I'm excited about the Foot & Ankle market because that's what we do. It's also in North America, been the fastest-growing musculoskeletal market for the last 15 years, and we've been busy growing it. So when we look at the way I practice medicine, I'm going to really try and humanize this for you. We're going to look at my perspective, going to look at the patient's perspective, and then we'll look eventually at where the science and data says we are. So here's my patient. This is a real person. She is coming to me now at age 52. But to understand her life, you got to go back. At age 32, she was in a motor vehicle accident. It was not her fault. She was hit and extracted from the vehicle. The good news is she lived. The bad news is she broke a lot of things. In her ankle, she broke her heel bone called the calcaneus, and she broke her midfoot, which is called a Lisfranc injury. Both of those are significant ideas. So her first medical interaction was not her choice. This is nonelective trauma surgery, and they fixed her heel bone and they fixed her midfoot. She did pretty well depending on how you want to judge that. If you judge it by, she kept her leg, she did. She returned to most of her normal function, but her life changed that day, and it wasn't any decision she made. Her life just changed. What's interesting in Foot & Ankle is that you have the event, you do the surgery, but then there's repercussions that come down the road. What we know is we know that on average, it's about 15 to 25 years later where the arthritis sets in. The reason patients get arthritis is the cartilage, which is what caps the ends of the bone, melts off. It melts off because the original trauma was an impact sheer trauma. And when you look at it day of injury, it might look fine. But what will happen over time is that cartilage will melt. So what she developed was arthritis. She developed arthritis in her midfoot and in her subtalar joint. The subtalar joint is the joint below the ankle. It's the one that gives you side to side. So if you're hiking, the subtalar joint lets you walk on uneven surfaces. It does not necessarily affect your up and down. So at age 50, she's got subtalar joint arthritis, and she's got midfoot arthritis. Not a big surprise. But remember, she's kind of knowing this has been coming for 20 years. So what are we going to do? We're going to fuse it. We're going to take 2 bones that used to move on each other. and we're going to lock them together. A fusion cures pain. The nerve endings are in the bone, not in the cartilage. Cartilage does not have nerve endings. And infusion, what you do is you bring them together. I use the analogy of a cavity, you cap the cavity in your tooth, your pain goes away. With fusion, we get those nerve endings buried. So with surgery is performed, and it is subtalar joint fusion and mid-foot fusion, the subtalar joint did not heal. Pretty big deal. So same patient, same surgeon, why would one heal and one not? There's something going on here. And it's devastating for everybody. It's devastating for the patient because she can't work while she's trying to recover. She risked her job because she's not there. And she's got a family. She's got children, and she's just really not able to do it. For the surgeon, it's a big deal as well, say, why didn't it heal? Was this me or my team's fault? And what could have been done to help her heal in a more predictable manner. So those are the things that we're dive into and we challenge ourselves with every day. What are we doing? What can we do better? Why? How can we move the needle? Because in Foot & Ankle, despite all of our technology, we have got a persistent nonunion rate across the board of about 20%. That's a really, really high number. I can't think of anything I do that I feel good about myself when I bat 80%, but that's what we're doing in Foot & Ankle. Smokers, diabetes, sometimes it's just the nature of the surgery. So a TTC fusion is where you're fusing the heel bone to the middle ankle bone to the leg. So the whole thing is being made stiff. And if you do TTC fusions is they're pretty high-risk surgery and they don't always heal. I'm not trying to make this sound too negative. What I'm trying to say is there's a lot of opportunity to be better. So back to our patient. Third surgery. Imagine what a big deal that is. Hey, doctor, I know you did this 2 years ago and it didn't work. I still like you. I'm willing to give you another chance. But you better get it right. And the obvious question they will ask is, what's different? Are you going to really do the same surgery a second time and hope you get lucky? And the answer is, no. We're going to do it better, and here's what we're going to talk about. And what we did is we added in MagnitOs. Patient understands what are you doing, why are you doing it. And then when we read out our success, we read out success on how does the patient feel, but we read out CT scans. So at 12 weeks, remember, dial back, 2 years I did the surgery, didn't heal for 2 years, still disappointed. Within 12 weeks, I had her healed. And she's like, wow, well, why don't you do that the first time? And the answer is the technology wasn't available. So in the U.S., here's what we've got on the plate is there's over 200,000 Foot & Ankle fusions done per year. So a pretty good market size. How do I earn trust and how do you earn my trust? Well, you do it by data. So the stakes have never been higher in the U.S. We have got a medical system, which has got some challenges. And patients come expecting success. There's not a single patient that sees me who has not done research on me, who has not read some of my publications and who doesn't expect that I can get it done. And the reason is it's expensive. And if it doesn't work, we've got even more expense because they're not working. And patients need to be able to trust. They need to be able to trust that I'm doing everything I can to do it once, do it well and let them have their life back. That's what they want to hear from me. So what my commitment is, I'm going to invest in knowledge. I'm going to build the team that's the best of the best. And to do that, I need a biologic solution. So where are we in Foot & Ankle? As I said, we've been growing this market segment for a long time. And we've been focusing a lot on the metal. We've got good joint replacements. We've got good metallurgy. We've got some advanced materials, but we haven't gotten to the bio as much as we should. And that's where the market is now, and that's why I think Kuros is perfectly placed for what the U.S. market needs. So the reasons from my perspective for product use. Well, here's what we have in our market, and you've already heard it. So we've got a product called Stryker. It's Augment, it's platelet-derived growth factor. It's a little long in the tooth. It's been on the market 10 years. It does have Level 1 data, though. Cellular bone grafts are no fly zone, not going there. I do not want to have to have that conversation with my patient that I've put in a graft that made them sick. That is just a horrible thing. It's just not going to happen, and that's where the market is going. If I talk to anybody about cellular-based grafts, I try and talk them out of it because it's just not as good as we can be. Here's an idea though that I don't think most people understand. When we take 2 bones and we want to fuse them. Remember, I did this. Here's what our data says. If we actually get 50% fusion, that correlates with a good clinical outcome. So the bar is not as high as maybe we need. But here's what we know is when we pull 2 bones together, it is not this. It ends up being these little touch points with a bunch of defects in between. And our data is clearly showing you got to fill those defects. If you fill the defects, you have a 16x higher rate of getting that diffuse. That's my way of saying every fusion, not just the high-risk ones, every fusion needs a strategy. You've got to fill the defects, and you can't just pull it together with screws. So that is one of the big messages our market needs to hear. So where are we here? MagnitOs is easy for me to talk about because you give me data. It's novel, and you're focused. That's what surgeons want to hear. It's not like, hey, use my screw, use my nail. Oh, by the way, here's some bio that's in my back pocket. It's like, no, this is what we do. We are laser-focused on bio, and here's what we're going to do. And you've proven it. This is your data. This is red meat for me, I can take this to surgeons, and I can say, hey, here's the data. Here's what it means. Here's the context, you need to try it. And as a general rule, they will follow that. How has MagnitOs been differentiated? We know how it works. So it's not a guess. We know what's in it. That's not a guess. And we can explain its mechanism of action because we've got 20 years or more of work behind it. It is solid stuff. We're not guessing. So remember my patient. She's 52. Third surgery, it's got to work. What does she hear from me? I talk to her about the product. I say, hey, here's what we're doing different. And I'll talk to her about this product, why I think it's going to be the answer. So I am building the trust, the trust that you guys have earned through your science and your focus. So the takeaways that I want you to hear is fusions are quite common operation in the U.S., over 200,000. Despite all of our technology, we have a persistent nonunion problem and the industry is focused elsewhere. You are very one of the few who are willing to dive straight into this market. Kuros has great data. It gives me what I need to talk about, and I'm interested, which means our general market is going to be interested. And I strongly believe this product will succeed in lower extremity surgery in the U.S. Daniel?

Okay. So let's talk about business transformation. So when Chris and Joost approached me back in time in '22 when I started basically how we're going to build basically this foundation. I saw that there's a tremendous growth, revenue growth. So the top line growth was just amazing. Initially, we were thinking that within 5 years, we're going to achieve CHF 100 million and/or basically U.S. dollars. And basically, what you see now and you have seen the guidance is that we are now predicting about CHF 250 million for 2027. What this means is basically that you need to focus really not just on the front end because when I started here, the front end was already well developed and what was really lacking behind was basically the back end, right? When we talk about the back end, we had challenges on the functional side, but also from a structural perspective and also obviously from a system perspective. And what we decided before we started was basically to come up with a governance and steering model where we basically would focus on the financial steering and operational steering also on a strategic steering. And the first area we started to focus on was obviously to fill the gaps from a functional perspective with additional FTEs. So as you can imagine, in the beginning, when we started, for example, the Investor Relations function was simply not well developed. So what we started to do is really to come up with an investor strategy, a road map, how do we want to approach capital market, how do we want to approach investors and basically then build the equity story in order to translate what we are doing today into a compelling story. And what obviously, an important milestone was in '23, as Joost mentioned already when we had this switch from being a hybrid company to really a focused med tech company. I think this was a crucial pivotal moment because our risk profile changed basically from being kind of a venture capital entertainment to really being a growth case, which would in the long run, then also move into a value case. And in order to achieve that, we also did invest into further functions, as you can imagine. So in the FP&A and accounting area, it was important to basically also do a mindset change. So in the beginning, when I started here, people were very much backward looking. And what we wanted to do is basically introduce a business partner concept where we work with our business partners, which predominantly our sales and marketing people to really support them in order to basically increase the market share. And in order to do that, we were implanting kind of an entrepreneurial mind shift that people really start to think from a proactive basis. What you see here is also a result of the financial pillar we introduced. So this basically reflects a 5-year plan and the key focus areas we are following. So in essence, from a structural adaptation, we have now started to also invest into a dual footprint. We mentioned that in Q4 already that we will build now also a production facility in the U.S. But what we're also doing is we will do a supply chain redesign in order to also manage the tariffs. We'll come to that in a minute. But important also is really to get the optimization then and also the efficiencies out of the systems, that we started to lay out again the whole process and workflow landscape. So we started to streamline, to standardize out of the system to make sure that people follow the same procedures. And now since last Tuesday, we have now gone live with an enterprise resource planning system. We initially had Navision and Business Central, Navision in Europe, Business Central in the U.S. And now we have basically a comprehensive enterprise system with Dynamics D365. We went live last Tuesday. The big advantage of this new system, and we will come to that also in a minute on another slide is basically that we can now fully automate the supply chain. So we are able to basically do the production planning, the alignment with the demand planning all on an automated basis and also make use of AI going forward. And that's quite a crucial step for us to get basically the efficiencies out of the system. If you look at it from a fixed cost perspective, as you can imagine, obviously, the first structure we have started from a functional perspective will add up additional cost, fixed cost. And in the second phase, we will then start to scale the business and then start to leverage the business. And that we always announced is basically that we are still in this growth phase. We are still investing into growth. You have seen in Q1 that we grew again by 82% compared to last Q1, and we will continue to grow as we guided. But important is really that we will invest the operational cash flow, which we achieved now to be positive from a group perspective in Q3 last year to grow and invest into growth initiatives. And as said, growth initiatives are functional structural system. in order to get really that efficiency out of it. And obviously, we'll make use of data in order to digitize the value chain. So important is that when we -- when I started here, the financial management, but also the controls and the data analytical horsepower we had was simply not there. And in order to achieve that, what we have now done, as I said, is that the supply chain is fully digitized now. We will now start to switch on also the customer relationship management interface, and we will also then embed human resources that we have in the end, an employee performance management system, which helps us across the board to basically manage all the resources. And as you can see here, just some examples, what we can do now is that we have automated bill of materials, which we can route throughout the system and basically can also manage how products are transferred to the end customer. We have now a unique identifier, which we can manage and basically trace it through the system. So the full supply chain, but also the interface to the customer is fully digitized. And as said, from a geographic expansion, what we're doing now is really that we start to diversify and redesign the supply chain in order to derisk the business and optimize tariffs and tax that's quite crucial for us because as you know, there is some impacts coming out of the U.S. But in general, and that's important to say, we have seen such a tremendous volume growth that we planned that about a year ago that we go to the U.S. And this is really important for us that we start to build that production capacity in the U.S. But at the same time, as we mentioned, we doubled twice in the Netherlands production capacity. And basically, we are just about to go live now with the new production capacity we have in the Netherlands, which allows us to further fulfill all the orders, which have quadrupled or even more in the past. And as said, in '26, we'll also go live with this U.S. production facility. What this will also do is basically, and here, we are talking about the supply chain. So far, our supply chain was built out in the U.S. direct supply chain. What we will now do is basically, we will switch in between Zürich as a wholesaler hub. And in order to do that, we will also be able then to adapt certain tariff mechanism, which in essence means we can adapt the so-called first sale method. First sale means that if you have a chain sale, the first sale in the chain will count and dictate basically the tariff price. In order to do that, we obviously had to make that adoption, but it will also help us on top of that to make use of the tax loss carryforward. As you know, in Switzerland, we have quite a massive amount of tax loss carryforward, about $48 million. And in order to make benefit of that, we will substantiate Switzerland to get more profit into Switzerland and make use of that tax loss carryforward, which is basically an unrecognized asset we have on the face of the balance sheet. So to sum it all up, we continue to grow. We continue to scale. We continue to innovate, and we will, in the end, make ourselves more resilient, which means we continue to invest into clinical, operational, product, market and potentially then we'll also look into an inorganic growth route. Thank you.

Okay. So as with MagnetOs, we pride ourselves on being both effective and also efficient. So we are well ahead of time. We will move into the Q&A. So we have plenty of time, obviously, for Q&A. [Operator Instructions] I will take a minute just to further introduce myself, Joe Ross, as my title implies, I'm responsible for marketing. I'm part of Chris' leadership team. I work very closely with Daniel and Joost and others. As part of marketing, of course, it's things like branding, positioning, advertising and others, but it's also product marketing, which means on the upstream side, we work very closely with R&D to define and develop our future products. And on the downstream side, that means we also manage our current product portfolio. So when Chris showed the MagnetOs MIS animation, that is something that was developed by my product marketing team. Marketing communications, that's things like web assets, social media strategies. So whenever you see a LinkedIn post on Kuros, that should have flowed through my marketing communications team. You can't always control social media, but we do our best. But we also work very closely with public relations and investor relations, including the preparation for this meeting. We run meetings and events. So it's things like all of our surgeon engagement activities and meetings, the pictures of which you saw on previous presentations. We have another extremities surgeon engagement meeting next weekend in Miami that we're very much looking forward to. Also training. So we're responsible for training our new employees, our sales leaders that we hire and also our distributors that we bring on board, both in the U.S. and internationally. And then as Chris mentioned, we've hired specifically dedicated extremities resources. So part of that lives in my organization. And that leader, Jantzen Cole, he defines, develops and executes the strategy for extremities and partnerships with Dr. Berlet and others. And then overall, my team is very highly engaged with our commercial sales organization throughout the world. So we are closely involved in surgeon customer interactions, distributor interactions, et cetera. So that's me and what my team does. Please. [Operator Instructions] So with that, happy to open the floor.

And Joe is strikingly good looking. I don't know if you've noticed a resemblance.

Well, when the job was posted, it was for a seasoned marketing professional that was bald.

I have a type.

Any questions? Up here at the front, and then we'll go directly back. There we go, that's fine.

Okay. So I start. Laura Pfeifer from Octavian. I think you have given out this midterm target by '27, CHF 220 million to CHF 250 million in sales, can you maybe a little bit dissect from where the growth is coming from. So I think you mentioned, of course, the spine market that is still your mainstay, but you will also have contribution, I guess, from food and ankle and extremities. Maybe if you could give some kind of magnitudes, what we can expect and also when they will kick in and also in that respect, I'm also wondering what share of ex-U.S. sales or revenues you expect in the future?

So I think that it's too early to tell relative to as we've just started revenue in the extremities marketplace, right? And we have not broken down nor do we predict to break out our revenue on spine versus extremities. We're just starting. And so if we start looking at how we grew the spine business in Kuros methodology wise, we started with a small group of KOLs. We went out, we researched, what are the right applications, the right surgeries. Find that core group of 5, 10, 15 physicians, build the clinical data story and then start to expand upon that. We're in those early days in the extremity piece now. And so we're a little ahead of the game since we have more clinical evidence from spine and we have more experience. But we're following the same pathway. We're not going fast out to the extremity markets and signing up 200 distributor agents the next day, we could do that. But the problem really is, we don't have the evidence that's specific to their nature. We have not learned enough about their community. So I would say 2025 is really kind of the initiation to identify is the product right, do we have the right size and the right product formulations, et cetera, et cetera. What are the right indications, which ones we want to focus on. We started that process in Q3, Q4. We're now executing with the initial physicians. And so what we saw in the first quarter is we met our targeted physicians that we wanted to approach and get them to use. The good news, I would say, you asked the question relative to velocity. We should see a greater velocity in speed in extremities compared to spine. And the reason being is we're already in 400-plus hospitals in the United States as an example. So we don't have to go through that 6-month cycle all the time and go through a new VAC committee if we're already on the shelf. So we should see a quicker velocity. The ASP per case in extremities is much lower than in spine because much smaller joints, less coverage. Do we have definitive answers? No. Again, it's early days. So I would tell you that 2026 is a data gathering year, and I'd be probably much better suited to answer that question at the end of this year, which I'm sure you'll ask me then on what that prediction might look like? Because right now, we're still in data gathering phase. So I can't sit here and tell you what it's going to be. On the international question, I'd like to see our revenue get to a place where our international revenue represents somewhere between 10% to 15% of our overall revenue. Right now, it's around 5%. But also remember, we sell at a cost plus, right? So a $5 million revenue international might be a representative of a $10 million revenue number in the U.S. But I'd like to see a balance -- us get to a balance of about 10% to 15% of our revenue is international based. I know we didn't answer all the questions, but more data is coming.

Second question in front row.

My question is outside foot and ankle and spine. How do you see the potential in trauma?

It's a great question. We started in foot and ankle -- part of our process and how we run our businesses, we want to make sure we do it in a thoughtful, fiscally responsible and Daniel loves when I use those words, fiscally responsible manner. And so we studied enough on the foot and ankle. We hired those experts, and we're now executing the first phase of that. We're now in the early stages of the trauma, where we've identified KOLs from a surgeon perspective, do some cases, let's get some clinical evidence. Where does this product really work well? Where does it shine? What are some of the other problems? I just recently attended a presentation of one of our KOLs, looking at this first 15 or 20 cases in trauma, extremely impressive results. Kuros is blown away by the speed of fusion and what they're doing. So I think that as we go forward in the second half of this year, and you saw in one of the slides, you'll see another pickup and focus on the trauma centers. Trauma centers are very specific. And certainly, Dr. Berlet can comment on this. What's interesting about the trauma business is there's not a lot of haggling. If the surgeon wants the product, the patient is getting the surgery, they're going to get what they're going to want. And so that's a good news. But they're all specialists. Level 1 trauma centers are specific in nature. And so identifying the right ones, publishing with those centers. We're identifying those now. So the trauma business is massive, and -- but it's also multifactorial. Some folks only work on trauma of the hip, some work on upper extremity traumas. There's a lot of folks we have to go out and talk to. And we just want to make sure we're doing it in a very precision-like manner. And so the second half of this year as we build up the foot and ankle business, we'll begin to execute more strategies and tactics on the trauma business. You'll see an increase there. So we're doing this in a phased approach.

Yes. And the trauma business will pull the foot and ankle business. There's a lot of overlap between trauma and foot and ankle. Like the case I showed you is even the best treated trauma will still often have a secondary surgery down the road. And so if you get mind share with them on the trauma piece, you'll automatically pull mind share when it's time for the elective reconstruction.

[indiscernible] from Vontobel. I have a question about your regional activities. So you're strong now in Europe and U.S. And I would like to understand why is Brazil a key market. And second, if you grow so fast, China could become a new target because China is one of the largest health care market. Could you explain how your goals are looking in this direction, please?

Thank you. Good question. So Brazil is a very strategic marketplace, just the number of people within that marketplace, number one. Number two, the opportunities for bone graft materials, it's not a marketplace where BMP does well because of the high price point and also the risks. Human tissue is not a marketplace. So really advanced biomaterials for fusion are almost nonexistent. So it's a massive market opportunity, finding the right partner and going through the right registration process. For all those reasons, it's a fantastic marketplace. Pricing wise, because it's a distributor model, is good, not great, but the volume certainly picks up for them. So I think that strategically, it made sense for us. Relative to China, having been in this market for, I don't know, since I had hair, about 32 years, China is a very difficult market to succeed in medical technologies. A lot of that has to do with the local environments and how to get into that marketplace, also the protection of your technology. I would say that this China currently make the top 10 list of markets for us to go after, the answer is no. Quite frankly, the amount of effort, work and time and the risk our business would take to go into China, it's not worth it. There are other marketplaces that makes more sense for us. Say, like Japan is a marketplace we are targeting for the future where we think there's great upside. When you start looking at our data with smoking data, you start looking at the vascular nature and the problems and also that there is no BMP able to be sold in Japan. It's been tossed out of that marketplace. It is a marketplace that's ripe for opportunity with great reimbursement. I'd rather focus our efforts in a market like that, say, in China.

We've front corner.

[ Stefan Zola from ] Zola Capital. Brief question to Greg. Obviously, very convincing what you said about what the surgeons should see when you present the data and also what it does, what sort of major pushbacks do you expect to be confronted with?

So the U.S. extremity market, foot and ankle market is multidisciplinary. So we have MD orthopedic surgeons, DO orthopedic surgeons and then DPM or podiatry surgeons and each come to it with their own knowledge base. And you have to meet them where they are. So on the podiatric side is spine data is not going to resonate as much because they're not trained in spine. Whereas in the orthopedic community, we're all trained on spine. So that knowledge pulls. So that means you have to go local and you really need to understand your audience and then feed them and help them build their story. So in a podiatric audience is I'll help them understand why spine is so hard to get diffuse. And then you roll in the data on that and then you directly help them convert their brain from spine to foot and ankle and you give them those analogies. And once you're there, they're very loyal and they will drive it. But you can't just present product. You really have to help them understand the process. And so -- and Joost and I will be doing some roadshows together to really help them do that. On the orthopedic space, a little more sophisticated. You don't have to go quite as slow. You can go spine to foot and ankle, but you still have to remind them that we're not as good as we think we are, meaning our fusion rates aren't as high as they ought to be. We need to remind them or maybe teach them for the first time that we have Level 1 evidence to say that every fusion needs a bone graft strategy. And that last point I made, that's where we can make a lot of headway right off the bat because probably half or more of fusions are going ungrafted. And they just don't understand the literature.

Additional questions in the room?

[indiscernible]. If I understood correctly, about 95% of your sales comes from the U.S. This lets me think that you sell also at a much higher price than elsewhere. Now you said, yes, you're in the medical device and not in the pharmaceutical, but couldn't there be pressure also that the U.S. government would say, "Hey, why are we paying 3x or 4x as much and let's push the prices down? I understand your product is already a little bit or less expensive than some of the competitors, but that -- isn't that a risk?

Well, I think everything is a risk given the political state in the political status. It's an hour-by-hour thing relative to the White House right now. I think that the -- first and foremost, understanding how products are cleared from a regulatory environment is important. So medical devices and pharmaceuticals are vastly different in the cycles and how they're approved. More -- even more complicated and more separate is how they're reimbursed. And so if we look at the pharmaceutical executive order as it stands today, I don't believe the way it's written and the way it's intended is going to have any effect at all. It was tried before in his last presidency, and it was held up in the courts. And again, currently now, the goal here, what I believe, again, trying to read the tea leaves of this White House is obviously very difficult for anyone, alone myself. I don't think the impact of what will happen is going to matriculate in the pharmaceutical. There's just too many layers to do that. We are exposed with 95% U.S. revenue, and we have 5% outside the U.S. So let's live in a world where maybe this gets pushed into medical devices. I don't see that happening. Let's say it did. Most normal folks would say, well, 5% of the revenue that you're getting outside the U.S., maybe you would just stop selling outside the U.S. I don't know. But I'm not going to predict what's going to happen in the White House. I think from where we are from a strategic standpoint on the tariffs is the right side. There has been zero talk relative to medical device, medical technologies. If you look at total joints as another medical device technology, half of which are made outside the United States, right? So when you talk in the import/export and the tariffs on that, there's been zero discussion relative to that. Always, it's about pharmaceuticals, always it's about who's manufacturing the pills and where they're being manufactured. I believe that's what this President wants. He wants to move pills from outside manufacturing to bring that to the U.S. manufacturer. That's the -- I believe, the need behind the need in that executive order. But again, if I were to lay a dollar bet down, I believe we're never going to see any implication of that executive order. It's hard to execute, and it's not how the business actually works. That makes sense.

Yes. Maybe one more question. You presented as a new product that's sort of injectable MagnetOs. Sometimes before, there was also mention of maybe the surface of some implants. Can you say something more about that? Or any other products or product categories that you're working on? You also mentioned certain fields you're not going to go into, but where would you like to go into if it came to an acquisition or a partnership?

So I'll let Joost, go ahead and chat about some of the advanced work he's working on.

Yes. So from an organic perspective, we are doing quite a lot of work because we have shown that surface topography plays a role in stimulating the body to form bone. Now we have that on MagnetOs, which is a calcium phosphate-based material but we're also looking at, for example, metals. That is an R&D process. It's hit and miss. So it's not that we will develop or have a product on the market this year, but we are actively working on that and seeing how we can generate a bone-forming surface on metals, for example.

And then to the question of technologies we might look at from an acquisition strategy and standpoint, very clear on defining what we're not going to do, which leaves us to say, well, gee, that leaves a lot of things, where are you going to go? And I think that where we are as a business and what we have accomplished with our clinician base, we have built a reputation, a strong reputation of being clinically focused, evidence-based so that whatever we attach ourselves to, we will have the same reputation. And so our goal as we grow this business beyond the targets that we put on there is to how can we grow the musculoskeletal biologics business where a clinician, whether it's a foot and ankle physician, a trauma physician or a spine physician could say, it came from Kuros. We can trust that brand because of all the work they've done when they didn't have to. And so when we look at new technologies, it has to stand up to that rigor. And that may take us down a pathway of looking at technologies that are different biomaterials for analgesic delivery. It might be different biomaterials for spine and dural repair, things that are not fusion-based but are still biologic in nature. There's a whole wide world of things that we can do. And so there's -- you go through the analysis of what can we do on our own, what does our expertise lend us to do internally and what is going on outside in different technology spaces. The other part of this is technology is looking for funding these days, they are second universities are in early stage. They're a product but not yet a company. They're having a hard time raising capital. And so we can be opportunistic in finding some of those technologies in the rough and apply a little bit of our capital towards getting the right studies, getting it to marketplace, et cetera, because raising capital in this environment is not an easy thing for them to do. And so I think we are very well positioned. But again, very selective of what we, as a company, will do, and it has to meet the rigor of our clinical and our foundation because that's what we've trusted -- the physicians trust us with.

Good and then back to you, Laura.

[indiscernible] Invest. Two questions. I'm not really an expert here, right? I'm just looking in from the outside. And I think you've done a great job so far bringing the product to market, growing the company, you're profitable, cash flow positive, et cetera. But there's always a but. I mean, given the data that you presented, are you not somewhat disappointed that the growth is actually even higher? I mean, should there not be more pull from all the surgeons out there to actually use this product?

Tough to please. No, listen, I'm not disappointed in the growth at all. I think that if you look at what we've accomplished in a short amount of time, we did several things. We transitioned from an R&D organization to a full-scale commercial organization on a global platform. We turned off 2 product categories going from a biotech/medtech to being solely a medtech. By the way, I believe the stock price at that point in time was CHF 5. So our capital market growth. We expanded from 57 employees at the end of 2022 to now we're sitting about 140. We've doubled our manufacturing plant twice. So even if I had an extensive amount of orders, we couldn't fulfill them until we're building as fast as our feet can carry us. And so some folks would say, well, gee, throw more capital at it. Well, then we wouldn't be profitable. And I don't want to be sitting -- I'd be sitting here with a bucket of debt. And so there are times when you can stand on the gas pedal and there are times where you have to be judicious. I believe we've been judicious to build the infrastructure to capture up. Daniel talked about some of the infrastructure we've spent money, time and effort going live with D365. Had we mashed the gas pedal and say, let's go 6 months ago, 9 months ago, we might have collapsed under our own force. And so there's a very thoughtful process in how we go about running our business to do that. And I think that as we get the infrastructure, the operational control that we have and as we've built out the manufacturing facilities to give us greater capacity, we can stand on the accelerator more and more and more. So no, I'm extremely happy and pleased that, number one, we've been able to assemble the team of teammates around the globe who have gone through this transformation of the business. We've achieved all of our targets, our 5-year targets in 2.5 years and to do so in a way that nobody else in our industry sector can stand before you and say we grew at this rate, we're profitable and we have no debt. And so no, I think we have done this to the efficient frontier as far as we can -- as far as possible and to try to go faster for short-term top line gains, we would have crushed the internal part and probably lost some really good people along the way.

And for the surgeons using your product, is there a reimbursement difference? I mean, does the surgeon make more money if he uses an INFUSE product than a Kuros product or...

No, it's a hospital. In the U.S., it's a hospital who makes more money by using our product than using, say, a BNP. There -- the way the system works in the United States is you're given a set amount for the procedure. And so -- and what's used for that, the implants come out of that and the cost of the biologics. And so if BNP was going to cost $10,000 and we cost $5,000 for the same procedure, that's a $5,000 pickup for the hospital because they're capitated, especially on a Medicare basis.

Surgeon makes the same amount...

Different fee structure for them.

Okay. And then a question for Daniel. I mean you will have way above $100 million of sales this year and obviously growing to the intended $250 million. But you seem quite reluctant to be or to give kind of a positive feedback on the margin that you can achieve. I mean, I think that with above $100 million company, it's not unrealistic, especially with the gross margin of 90% to be in an EBITDA margin territory of 20% plus and at $250 million, obviously, you should then be in a territory of 30% plus or so. I mean, are these numbers that start you? Or I mean, are you kind of -- can you confirm or guide us a little bit into that direction so that we have not only something we can dream about on the top line, but also something we can talk about on the bottom line?

Yes, sure. I mean I can obviously not say more than what we said in Q4, right, because this is -- would create any ad hoc, right? But as said, what we mentioned in Q4 is basically that we will continue to invest into growth. And one of the big drivers from a cost side perspective, obviously, was D365, as we said, in '25. And at the same time, we also continue to invest into the market activity we have for extremities, which is also driving cost, and we are still not finished to build the company. So what I can tell you right now is we stick to our guidance. It's in that range of 10% to 12%. Potentially, we might be able to raise it a little bit further. But right now, as it looks like also from a latest estimate perspective, that's about what we can offer.

But it was higher in Q1, right?

It was a little bit higher in Q1. That's correct. But yes, seasonality obviously will kick in here as well.

Also, we invested over [ 2.8 ] was the... [ 2.8 ] net working capital getting ahead of tariffs, getting inventory. And so we still saw an increase Q4 to Q1 also by reinvesting into the inventory. So I think that as we go, we're going to continue to find operational efficiencies to improve the bottom line, not at the expense of growth. I think as we see mix of revenue on U.S. international because remember, SG&A, our exposure is 95% where you have the SG&A versus international of 5% where we don't have such a large expense. And so as we grow our international business, we should also see improvement there because it's a much more direct margin, right? So we keep a very strong eye to that growth. But remember, we're building a business with inside of a business and extremities inside of spine, we're still seeing incremental growth on the bottom.

Yes. And the Medtronic collaboration had no impact yet in Q1, right? I mean that's something more for the second half of the year, I would assume.

Yes. So we signed the 5-year arrangement in the first week of January. And so really, the first quarter was more about new markets, new surgeons. And so we'll start to see that impact in the revenue line certainly after the first quarter as we move forward because it takes 4 to 6 months to get in those hospitals. You got to go through the process, get contracts, all that kind of stuff. And so yes, to your point, second half, we'll start to see a little bit more impact on that.

[indiscernible] You're getting larger, you're growing fast, you're getting more profitable. You're getting more into focus of medtech companies, other companies and obviously, also investors. Is an approach of a medtech company a scenario for you that it could be acquired? Would it be something friendly, unfriendly because the large medtechs have a lot of firepower for go-to-market?

Yes. So I think that -- I appreciate the question. It's always why is Medtronic not bought you or along those lines. I can tell you from a leadership perspective and certainly from a Board perspective, and Albert can comment as well. It's not our focus. Our focus is not to sell this business. Our focus is to grow this business. If somebody finds value in what we're growing and what we're doing, that is for them to decide. It's not for us to dictate. And so we are not banging on doors looking to sell this business. We're profitable. We don't have to do that. And so we are in control of our own destiny. And I think that the shareholders and certainly the rise of our -- in the Capital Markets appreciates that. And I think that, that helps us. So no, I think that we're going to continue to grow the business, control what we can control. And if somebody wishes to knock on our door and there's value for our shareholders, then that's up for the shareholders to decide. But we're not going to change our strategy because of it.

So I also have a follow-up maybe on your pricing strategy. I think you are still way below Infuse. I'm just wondering what potential you see also in the future to increase prices given that you show such a strong clinical data. And then also how do you price new products such as the MIS that is an added value. I'm just wondering what potential you have? And maybe you could also comment then in that context if you have room to increase prices further, for example, if tariffs were really an impact that we will see in the future?

So answer the second part first. The tariff impact on us, we've looked at extensively, obviously, and we believe it will be de minimis to our business. I think that our ability to change pricing and going back to contracts with hospitals that we have in place is you're not -- it's not capable, right? You lock into a price with a hospital system and say, listen, sorry, raw materials are going up, and you're going to take that -- they're going to say, well, we have a contract at this price and it's 3 years, and that seems to be your problem. But what we have done from a strategy perspective is as we've introduced new products, new formulations, specifically for ease of use is where we've taken price premiums. As an example is if you look at our category of products, you start with granules. Granules are the foundation of the product, its usefulness and its handling characteristics, we have more friendly versions, but that's your least expensive. The friendlier the product gets to the customer, the more expensive it becomes. And so that's really what we've done. And so when we look at the MIS as an example, it's a friendlier option for the physician, it's providing a different delivery tool, and we'll take a price premium on those products. And that gets us up into the range and moves the ASP on the category of the surgery up and to the right, which is a good thing. And so -- but on existing products, we've held price. And actually, what the clinical data allows us to do is hold our price position versus going into these negotiations where they say, well, gee, you're a commodity, we're going to give everybody in this category a 20% haircut. We have the ability to go into those negotiations and say, well, tell you what, everybody in that category who has a Level 1 study raise your hand. Oh, they don't have that, we do. Therefore, we're going to hold our price. And we've maintained -- we've been successful in doing so. And that's coupled with physician support. If the physician -- it's not always a cost game because the physician has a say. And if the physician has a say and they're getting great clinical experience with it, that helps us. So yes, hopefully, that answers it.

[indiscernible] Capital. Two questions. During coffee break, Chris, we definitely spoke about the work or the sales force of Medtronic. Quite surprisingly, you mentioned you're not actually paying more for the Medtronic guys than you do for your own. I thought that would be worth mentioning in the plenary. And the second part is also how they are reimbursed. And the second part is regarding the new product, the applicator where is it produced -- produces it, what's the sort of margin...

Impact? So the last question first, we're not going to release margins by product. So we use an OEM for manufacturing of the plastic parts and guns and then we do the assembly kit with our product itself. And so that's done in Bilthoven currently. Relative to the Medtronic, the question was, do we pay a higher commission to Medtronic versus our other distributors and et cetera, et cetera. So we don't disclose what we pay any of our sales agents. I would tell you that the commission that we pay Medtronic is within the band of what we pay our independent agents that are not Medtronic. And so -- and I think there were some surprising why is that? I'm sure that they would want to have higher commission. But the reality is we have -- we hold the competitive edge. And so we can always say no to a geography because if it's not the Medtronic sales agent, there's probably 2 or 3 others that do business in that hospital that we can gain access through and contract with them directly. So the way the structure of the relationship is extremely positive for both parties, but it's also with a little bit of caution. We don't want to have all of our sales and marketing control handed over to one company. They're never going to care about as much as Kuros as we will. And so we just want to make sure we hold on to that.

Thank you. If I may, Alex, are there any questions from the attendees online?

Yes, sure. So there are a few questions. So let's start with the first, let's say, two ones because it's about the indication of MagnetOS. So because we showed some slides about oncology. So can MagnetOS also be used for both cancer? Or is it just them to fill, let's say, the gap or the void that resulted out of cancer? And the second one is about -- can it be used also for the healing of osteoporosis?

As a clinician, you can handle -- don't you handle the osteoporosis comment. Relative to oncology, we -- there is no contraindication for oncology. We have physicians actively using it, and we have studies ongoing to collect that data. And so the question with -- what's happened in the oncology marketplace is really interesting is many, many years ago, when I started in spine and we had a horse and a buggy, we would cover cases a long, long time ago. They would use just cement. And really, it was just to get the patient comfortable because they weren't going to survive. And so they weren't thinking about growing bone and cancer patients. So what's happened over the last 30 years is the cancer treatments have gotten so much better, patients are surviving and thriving and going into remission. And so now you have physicians saying, well, gee, I need something that's actually going to grow bone. And when you look at the product opportunities that are out there, using BMP in oncology patients is not something that is preferred and a lot of it has to do the mechanism of action of BMP and the inflammatory response and what it can do and kick up other cells and proliferation of other dormant cancer cells that may kick up. And there's been several publications on this. It's an ongoing discussion. You also certainly can't use cellular allografts because of the mechanism of action of cells in an oncology patient. So what is the best alternative to a patient that's going to go through radiation and other treatments. And so when we start looking at how our product is designed, it's really uniquely designed to treat that oncology patient population. So we're actively having discussions and collecting data in this marketplace. It's a very small subset of patients, but it's a very important subset because, again, if you can get incremental claims, if you can get incremental evidence when you go into hospitals to say, we can go walk into MD Anderson clinic and say, let's look at your cancer patients that are getting fusions, what are you using? And so that's actually a huge benefit. And then from an osteoporosis perspective, Greg, do you want to talk about it from a clinician standpoint?

So osteoporosis is still wildly underdiagnosed, mostly because we don't have the widely available diagnostic tools that are accessible to our population. So in the setting of osteoporosis, our goal is to try and avoid fracture. If you have an osteoporotic fracture, we'll call that a pathologic fracture and you are going to throw advanced materials for both the biology and the metal components of it. So it could be part of that trauma surgery and it could be helpful there.

And predominantly, what's been used is methylmethacrylate or other cements and type of compression fractures, vertebroplasty, kyphoplasty type products. And those are slightly different, and Joost can chime in relative to the technical applications of it. But for the foremost, in osteoporosis, things like Fosamax and other types of drugs and you're taking to get for general bone health is one thing. We're not interested in going down that path, interested more in the acute and surgical intervention. When you start looking at compression fractures, that may be an area we want to look at. We think there's about 700,000, give or take compression fractures in the United States. That's what vertebroplasty and kyphoplasty marketplace we currently don't have a product that goes into. And so that may be a biologic realm that we explore.

And we are actually really excited to see the results in oncology -- or sorry, in osteoporotic patients because part of the mechanism of action of MagnetOs involves, as I mentioned before, macrophages, but also osteoclast. Osteoporosis patients have a high osteoplastic activity and osteoclast on MagnetOs seem to be involved in bone formation. So we're looking forward to see whether implanting MagnetOs in osteoporotic patients can actually increase bone formation locally. You'll not be able to heal osteoporosis by itself, but locally, potentially you are.

Thank you. Any other questions online?

Yes several ones.

We're going to be here for a while.

So the next question is about the sourcing of the raw material. Is there a certain dependency on particular countries to source the material to produce MagnetOs?

We have certain vendors that part of our risk analysis and risk and audit and the committee, Albert heads that up, is to look at some of our supplier base to make sure that the materials we use for manufacturing, whether it's in the cases, the trays, the polymers, et cetera. And I think we've done a nice job of securing long-term 5-year agreements in some cases with these suppliers and really staying ahead of it. I think with the deployment of D365, the digitization and looking at that makes that even easier to make sure we're staying ahead of the manufacturing curve. But no, it's not -- we don't believe right now that's a large risk that the company faces. We've de minimized that risk pretty well.

And I think the diversification we are currently pursuing to move to the U.S. will obviously also mean that we locally source that will further derisk the whole business.

Next question is related to the clinical development that we showed before. So the question is when are we going to publish the next clinical data on the next studies?

That's an ongoing process. So we are -- as I showed on the Slide 7 Level 1 studies. Altogether, I think there were about 35 studies. So during the years, it will not all come this year, obviously. But some of the studies still have to be started, but there will be a gradual output of publications, clinical publications.

Yes. I believe there's literally submissions going in every month from different areas and different levels of studies.

So next question is about the difference between MagnetOs and OssDsign. So OssDsign with the product catalyst are claiming that they have similar spine fusion rates as Kuros with MagnetOs. So could you talk about similarities and differences between those 2 products?

Sure. So OssDsign is also a calcium phosphate. It is -- it contains silicon. They -- what is indicated that it's got similar fusion rates, which is not what we are seeing. We've done a preclinical study that's about to be published where we compared MagnetOs, different formulation of MagnetOs 2, catalysts from OssDsign, and we see superiority, more fusion with MagnetOs than with the OssDsign product. Yes, so that's what I can say. So they're both calcium phosphate-based materials. MagnetOs has got a high osteoinductivity because of the needle structure. And the OssDsign has got some silicon and it's amorphous calcium phosphate, which is also resorbing faster than MagnetOs.

And so just on fusion rates, and this is something that's always challenging. People will say, well, I've got 100% fusion rate. Well, what was the lens to look at said fusion rate? If I were to put 2 x-rays up across the room and say, well, I look at those. And from my eyes, I think that those are fused. Okay. And I have 100% fusion if I look from here to there. But if I look under a thin-cut CT slice, what's the fusion rate. It's going to be different. And so the definition of how -- what is fusion and what is the clinical rate doesn't always translate into clinical success. And number two, -- the last time I checked, OssDsign does not have a prospective randomized trial of any kind ongoing. And so if you want to compare data to do the same exact study, then we can have a discussion. And the reality is we did the same study with -- in the MAXA study with MagnetOs that we did with AttraX, and we showed what the improvement in the technology does. That's how you do a clinical study. That's how you provide clinical evidence. Saying you have 100% fusion rate on a study that is not prospective, that is not randomized and is not done thin cut CT and not done with independent investigators, I call suspect.

So next question. It's about the production in the U.S. So when -- how is the status in terms of starting production? Or when could that be?

So we've already started the process. From a production capacity, we believe in 2026, we'll be producing live product to be sold and commercialized. The steps to go through that, obviously, there's steps to build the plant, get it qualified, run processes, get people hired, trained, et cetera. That will take some time. But we believe sometime the target is within the first half of next year that we'll be up and running ready to do that without any permit issues, you never know.

Yes. And important to say is also we will finance that with our own...

Great. So now it's a question about the shares of the management or otherwise, in the past, there were some larger inside share sales, which sometimes raise some questions of investors. So can you please elaborate a bit on those transactions that happened in the past?

Uncle Sam watches taxes. That's what I'll say. It's a tax-based issue.

So I'll say we are well over on the Q&A session. We can entertain maybe just 1 or 2 more. And then I think several of us will be available after we break for some additional questions. So maybe just 1 or 2 more, Alex.

Great. So well, next question about Medtronic in general. So how is the collaboration going on? And when do you expect to have it fully up and running in terms of agreeing about the territories and training the sales force. And one additional question to Medtronic is also why does the competitive nature between Medtronic Infuse and MagnetOS not represent a conflict of interest for the sales force?

Great question. So the partnership is -- it's a living, breathing thing. And in that, what I mean is on a regular cadence, 2 or 3 times a month, our team and their teams get together, they mark progress. They look at new accounts, they look at new opportunities. They look at opportunities that didn't pan out where one party wants to reclaim certain geography or territory. And so it's a constant ongoing. And so they've done a really good job of meshing that. So to say when it will start and when it will be finished, I don't think it will ever be finished. It's going to be a constant evolving relationship, and it's been very positive for both sides. I think that the relationship on BMP and MagnetOS is actually very symbiotic relative to a portfolio for them in the sense that they have a high-priced category product, a market-leading product in BMP but they also recognize a lot of hospitals aren't going to want to spend that kind of money on every single patient. And so -- and it's also not every patient requires BMP. Just like if you're a 25-year-old motorcycle accident who needs a fusion, you're going to grow bone pretty well. And so you may not need a product like you'll be fine with your own bone sometimes. And so it's a matter of when do you use which product when. And so looking at the category of products, if you're a physician working with Medtronic or Medtronic in general, and you say, I have best-in-class, the thing that will grow the most bone but it's the most expensive. What's another category that we should be participating in? And they did the analysis, they did the research and we came out on top and a lot of it was the clinical evidence because we don't have the risk of cellular issues. We don't have -- it's shelf stable, et cetera, et cetera. And from a sales force perspective, to my knowledge and the things that I've been told, I mean, the sales force gets credit for selling MagnetOs towards their quota. I don't believe they get that when they sell BMP. So we actually have an advantage there. So I think all in all, it's a very positive relationship for both parties. They get access to great technology. We get access to a great company. From a training perspective, that is also ongoing. We have training sessions on a monthly basis, not just for their team, but our team, our online resources for them. We have dedicated people solely for the Medtronic relationship because it's very important to us and to them. So we've invested a good deal, and I think both parties are quite happy with it.

So we're just about at 11:45. Alex, if -- is there anything particularly urgent that you see or we can address otherwise? Any other final questions from the audience? We'll do one more.

Yes. So just one more on the studies that are ongoing. You mentioned 35 or so are ongoing and the 7 that you presented, they're all done already or 1 or 2 are still have to report the results, but I think some others are already done because in the media release, there's, I think, if I read it correctly, it said 7 studies are ongoing or something.

Yes. So 7 Level 1 studies from which one has been published. That's the MAXA study. And the other ones are in progress in different levels of progress. And the 35 I mentioned is also relating to Level 2, 3, 4 and even case studies.

And those are then mostly initiated or...

Some of them are. Yes.

Okay. Well, thank you. I think we'll stop here. I just want to thank everyone again, both in the room and online for participating. I hope you get the sense that we really love the opportunity to tell the story of Kuros Biosciences. We are immensely proud of our history and also our team today. We look forward to continuing our discussions. The leadership team is available for questions at any time. Feel free to reach out. I know that you all do. And with that, we will end. Thank you again very much.