Ondine Biomedical Inc. (OBI) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Ondine Biomedical Final Results Investor Presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I would now like to hand you over to Dr. Nicolas Loebel. Good afternoon to you sir.

Good afternoon. Thank you so much for the opportunity.

Over to you, sir.

Thank you. Welcome to investors. We are going to speak for the next 20 minutes on annual -- Ondine's annual 2023 results. You will see that this presentation is focused on growth. We are very pleased to be able to bring you what I think is a live and absolutely extraordinary set of pieces of data from last year and focusing on what will happen this year. I'd like to start by reminding investors of a dangerous fact. Imagine nine Wembley Stadiums, that's 90,000 people in that stadium in the U.K., every year, suffering a hospital-acquired infection. That's something that occurs to you, when you come into an institution for health care. You did not bring necessarily that infection with you. You acquired it from the hospital itself and no fault of the hospital or the patient or the health care workers involved. This is something that occurs as a fact, and it is a consequence of bringing people together into hospitals and health care systems in order to receive care. But when those people come into those hospitals, they bring microbes with them. Some of those microbes are antibiotic-resistant bugs, which cannot be treated with modern antibiotics or even combinations of antibiotics and sadly, in too many cases, people will die from these infections. And if they don't die, they will suffer morbidities, extended recovery times and indeed extensive antibiotic therapies, which can wreak havoc with allergies with the gut and with other downstream sequela. Okay. We're looking at around 6% of hospital budgets being affected by this problem. This represents the single most deadly and costly adverse event in a hospital. Recall that many hospitals are operating at or below a 6% gross margin. And so infections like these can remove the entire operating profit of the hospital. If you look at the U.K. you'll see that there's around a GBP 2 billion problem, representing roughly 5 patients per 100 getting these infections. This takes 5.6 million hospital bed days out of the NHS availability. Recall that you're facing the largest backlog in NHS history of almost 6 million patients. And so those 5.6 million hospital bed days that are used at that GBP 2 billion cost really represent an extraordinary burden on the national health system. Patients are delayed to care, large amounts of hospital acquisition cost for new patients is deferred and delayed, there are large amounts of patients who do not receive therapy and for whom co-morbidities cannot be treated, and these are often chronic conditions such as cancer and heart disease. When we look at how to effect this problem, there are numerous guidelines, worldwide guidelines ranging from international bodies to local institutions, which recommends certain methods of removing bacteria, fungi and viruses from the human body, but there are very few that target the nose. And if you've been an Ondine investor for a while or you've looked at us recently, you will know that in the nose sits many microbes, it's warm, it's wet, it's supplied by sugary fluids, which microbes love. And they tend to duplicate in the nose rapidly and yet it's very difficult to remove them from the nose. We can wash our skins, we can shampoo our hair. We can even take oral antibiotics for systemic suppression, but it's very difficult to get to the epithelium, the skin surface of the nose. And this is something that Ondine does superbly. Current options for clinicians to remove these microbes from the nose are beginning to fail, in some cases, have been failing for many years. In all cases, the ideal characteristics of a nasal decolonizing agent that is immediate single-dose microbicidal activity. Microbicidal is an important word. It means eliminate the microbes, not just stop them from replicating, which takes a long time to suppress bugs often over 5 days like Mupirocin, the current standard of care, which is a bacteria static antibiotic. The ideal characteristics also include effectivity against all types of pathogens, that means all bacteria or fungi or viruses. And that is something no other technique can lay claim to, especially when we deal with speed as we are. And indeed, it would be difficult if the approach were to induce antimicrobial resistance, and we have proven over many years in many published experiments that there are no inductions, no increases in microbial resistance associated with the therapy. That's critically important. Finally, when you add the fact that this technique takes only a few minutes is painless, is inexpensive. You see that the nursing staff in hospitals who are burdened with this approach to patients who really enjoy the easy workflow. They don't have to apply something 5 days in a row, twice a day. They don't have to reapply. They don't have to worry about outcomes. This produces a sense of comfort to both the nursing staff and to the patient. Ondine is the leader in a new technique or at least new to many hospitals. We've been developing this for over a decade. It's called photodisinfection and it involves the light activation of a stain, which is placed into the nose and otherwise does not affect the microbes, but when activated by appropriate amounts of an appropriately colored light, produces an intense antimicrobial effect without harming human tissue. We are a public company on AIM. Obviously, we went public in December of 2021, and we are now in a commercial evolution. This is the growth I referred to earlier, where we're evolving rapidly in our home country of Canada as well as now starting to branch across the EU and the EMEA. In the U.S., the system is regulated slightly differently, and our clinical partner in that effort is HCA Healthcare, that's Healthcare Corporation of America. One of the largest institutions in the U.S. and therefore, the world, over 300 hospitals and surgery centers, almost 5% of all U.S. hospitalizations and as of 2022, over $60 billion in revenue. This is a remarkable partner to bring to the table as you develop a system which will change the face of health care. And we're very grateful and pleased that HCA has devoted itself as they have to co-developing the system, helping us with our clinical studies in Phase II and now becoming the target for our large Phase III study, which I'll talk about in a few slides. So when I said we're commercialized, I'd like to draw your attention to the fact that there are now over 150,000 patients treated. That number is higher in 2024, and there have been no serious adverse events reported among any of those patients. Meanwhile, the real-world evidence demonstrates that the simple intervention can reduce infections by over 50%. This is a remarkable outcome, and it's something that has been validated time and time again in small, medium and large hospitals. In fact, the largest study has taken over a decade since we first deployed and has demonstrated a 60% reduction in spine infections, which is truly extraordinary. But from a hospital standpoint, you'll see that the length of stay is shortened. You'll see that the readmission rate is reduced. That's critical for the NHS. And you'll see that we have downstream advantages such as almost half the number of antibiotics need to be prescribed, thereby safeguarding the antibiotic for future use in systemic infections, which we can't access and cost economic studies have demonstrated in major hospitals, annual cost avoidance vastly exceeding the cost of deployment of the system, over $4 million in 1 case. And so with this kind of a real-world evidence package, going into our Phase III is an absolutely key thing now. We want to bring that to the table and ensure that the U.S. market can access this extraordinary level of health care. How we make money? We sell the consumable pack that you can see on the screen. That produces recurring revenue. It's a high-margin product. And there are flexible options for a hospital to lease, own or simply be given the light source depending on the volume of product that they purchased from us. As you see on the left there, those pre-saturated foam swabs with the photosensitizer, that's the part that's placed into the nose. And then the light guide single-use is clicked into the light source to the right. and activated for only a few minutes. That's it. No pain, 50% reduction in infections on average, and the patients see this high-tech optical approach to care, which is really beginning to sweep hospitals in Canada. You'll see on the left, we're now almost 4x the number of hospitals since the start of 2023 and those dotted bars show you where we feel we will be by the end of the year. We are in exponential growth. We have cracked the code on how hospitals should be talked to and introduced to the system. We now integrate a whole hospital approach into our thinking. We bring prior sites of care data to hospitals. We demonstrate outcomes; in many cases, we will provide a period of time when the hospital can try the system and see for themselves the results. And what you're seeing is a remarkable take-up as hospital after hospital starts to recognize the benefits of photodisinfection. Meanwhile, we've identified how to reduce the sales cycle from relatively long a year in 2023 to get a hospital understanding the system, adopting the system through the studies and then becoming a repeat user to only 4 months. And that is a really extraordinary outcome for us with a 66% shorter time to close, we can really expand this business. Meanwhile, not a single hospital who has ever purchased the product has stopped using it, and we've done all of this on a single salesperson with 1 sales manager and a limited budget. So just from the perspective of the number of accounts last year, we added 10 more hospitals, and you can appreciate that this exponential growth is very real, and in fact, is now attracting significant interest from partners such as distributors and other strategic partners. We'll discuss that in a minute. Cost per treatment has now increased. That reflects increases in worldwide supply cost, but in addition, increases in gross margin. When we say that the cost per treatment is CAD 71, please recall that we are offsetting an infection which can rise to $100,000 such as a revision surgery for a hip or in the spine or orthopedics or cardiac in general. So an almost insignificant cost to the provider relative to the gain. Our cost of goods have reduced now by over half as we move from our original light illuminators, very successful system to an injection molded system capable of being scaled at much higher volume, important when you're moving from a few thousand to tens of thousands and now hundreds of thousands of units every year, that is important to be able to reduce the time in manufacturing, increase the reliability and make sure that the gross margin improves. So shrinking cost of goods is an absolutely critical component of our design for manufacturing. And you'll see that as we land in a hospital, the average dollar per client growth potential is in excess of 60%. So that is the initial deployment, let's say, in orthopedics or cardiac relative to the overall deployment possible in a hospital, and we've seen many of those types of situations. So if we just look at the financial results themselves, in 2023, you'll see that the revenues almost double from a year-over-year standpoint. And this, of course, was driven by that heightened market adoption with 10 new hospital implementations, a significant shortening of the sales cycle. And then again, the tailwind of numerous public health organizations starting to recommend nasal decolonizations in several cases, considering its standard of care. The gross margin has increased due to new customers acquiring at these higher average sale prices, and we are focused heavily on bringing down cost of goods sold and the supply chain management in general. G&A costs during 2023. We remain focused on disciplined discretionary spending. We emphasized runway extension, which will continue into 2024 as we initiate our clinical study and our 2023 figures did include various credits such as IRS reimbursement that we believe will be nonrecurring in 2024. Share-based costs also decreased by almost $1 million. In R&D, we are currently in the final stages of that Phase III study, and we intend to complete the majority of the preparation here in the next couple of months. We look forward to initiating that Phase III in the second half of this year. This is a study that will be shown in more detail in the next slide. But in general, requires 14 hospitals in almost 5,000 patients. It's the focus and target of our finance raises that we have undertaken. And we, in 2023, also substantially completed the development of the second-generation nasal illuminator, the injection molded unit, which can be produced at much lower cost of goods. We are preparing for its commercial launch in 2024, and finally, our sales and marketing costs, well, we continue to invest in refining our business process. We became very efficient, as you saw, with a reduction of threefold in the length of time it takes us to sell this product. And this allowed us to almost double our revenue while maintaining only a 30% increase in sales and marketing costs. And these operational efficiencies have been projected across the organization, which have resulted in shortening of the sales cycle and lower customer acquisition costs. Again, disciplined with our spending during this period of rapid growth. And in December of '23, we raised a gross financing of CAD 4.9 million and then just in the subsequent May, we raised CAD 6 million along those targets. As we approach tipping point with a number of hospitals that are buying this product in Canada, starting to purchase this product in the EU and with our initial launch into the U.K. with 2 hospitals and others starting to look at the system. We are starting to plan for rapid scaling. And with our current established investment, facilities and people, we can do up to 6,000 laser units and up to 1 million of the injection molded nasal light illuminators. That is an extraordinary capability. We are talking about not having to invest further into our current capacity in order to do a business with up to 1 million treatments a year. However, because of strategic partner interest, we have now started to plan what happens beyond those levels and initial growth up to 10,000 lasers and up to 6 million of the nasal light illuminator treatment kits is possible with only a small investment. That is less than $1 million investment in CapEx, in people and in facilities. And then finally, if we ramp this business up to a 40-foot container load per week, we know how to do it. We have the facilities available to us in a associated building from where I was speaking to you now in Bothell, Washington, where we can drive up to 17,000 light illuminators and up to 11 million treatment kits. And that is an extraordinary footprint, which should be able to blanket most hospitals in the EU and the U.S. with that extraordinary new technique to decolonize the nose and indeed become the basis for jumping off points to other technology developments which we have. So those annual production capacities really do not represent extremely large investment requirements. You're dealing with less than $1 million per phase to develop to annual capacity shown on the screen. Our Phase III study is key to opening up that U.S. market. Again, we are dealing with 14 sites, 14 different hospitals, all of them HCA hospitals. We have identified those sites, they're capable of providing vastly more patients than we need. Recall that we do not need a specific patient with a specific illness. Any patient presenting for surgery within the areas of cardiac surgery, spinal surgery, breast reconstruction, neurological surgeries and cardiac are available to the study. And that is something that we're very proud of because we are not restricting the study in some way to only focus on particular groups of patients who are treated in particular ways. Rather, we are looking for an outcome that is broadly applicable across most high-risk surgeries, if not all, and then not restricted by particular inclusion or exclusion criteria. In fact, if the patients are being treated other ways with other interventions, that's fine. We've seen those real-world evidences where in major hospitals worldwide, we work very well despite the fact that there are existing treatments. And so you'll see this crossover design in the study where on the top, there's a treatment arm, again, a single 5-minute treatment before surgery is all that's required. And then that's compared to a control arm, which is the standard of care, whatever that may be. We believe that recruitment will be complete within 2 months because of the large number of patients coming through these hospitals. At that point, we wash out those hospitals, meaning we do not continue the study for 6 weeks as we let the effect of the intervention subside, and we take the treatment arm and cross it over from the control arm and vice versa. That technique permits us to eliminate bias. And we have a very important set of interactions with FDA requesting this kind of approach. It's a very powerful approach. It produces the best evidence and it stops the potential for site selection for temporal bias and other biases within and between hospitals to contaminate the data. Note that, that second phase also just required us 2 months and then there's a 30-day follow-up. The 30-day follow-up is critical because it's very short. Whether or not a patient received an infection is all that matters. It's a yes, no. The study includes an analysis board of infection professionals to ensure that those infections are appropriately classified beyond our company's interests. So that is something that is, again, absolutely top-notch level of investigative factual determination. This is not something that we just do ourselves, and we expect the entire study to be complete within 6 months. So the primary outcome will be the post-surgical infection rate. That is the clinical benefit of decolonizing the nose. We do have a number of secondary outcomes. The most important of which is the staph aureus kill rate, i.e., the most important microbe in the nose carried by almost half the population, which contributes the most to these infections. But the primary outcome is the postsurgical infection rate. And this study, again, has been designed both with HCA and with now 2 significant meetings with FDA. We're targeting to stop the study in Q3 of this year. So just to summarize: One, this is a proven technology now over a decade of development in Canada, rapid growth and attracting large partner interest; two, we are seeing the final phases of planning organization of that Phase III study. HCA and Ondine have worked hand-in-hand over many, many quarters to design and develop that study. And we believe this is going to be a breakthrough. It's going to be the largest nasal decolonization study that we're aware of using photodynamics with an outcome that is clinically oriented. And as we move forward in both the EU and the U.K. and ultimately, into the U.S. We intend to do so with key partners, both in the clinical and in the sales domain. And as I said, we're attracting those partners today into discussions because of the extraordinary benefits of the system and the clear advantages that it offers over current standards of care. Thank you for that. I would like to open it up for questions, please.

[Operator Instructions] And we'll start off with the first question, which reads as follows. "What changes has Ondine made to enable the rapid scaling of manufacturing volumes as shown in your presentation?"

Thank you for that. We have invested quite heavily in existing infrastructure. We have experts in lean manufacturing at Ondine, and we have applied Six Sigma lean approaches to our system in order to maximize our cost and time efficiencies. We have converted the existing light radiator from fiber optic rather expensive unit to a injection molded unit that can be produced in just a few seconds and which produces the same or better outcomes. Safer and higher outcome efficacy. So with equipment, people, facilities, and design for manufacturing, we believe we're poised for rapid development and scaling for growth.

Just turning to the next question. "Have you had any feedback from the FDA?"

Yes. We've had a major Type C meeting and then a follow-up meeting on the protocol specifically as well as questions relating to the microbiology side of how the system works. Nothing particularly concerning or out of the ordinary. This is the regulator requesting full understanding and data behind the system, including the many years that we have been selling this product in Canada, the real-world evidence package, the toxicology package, certainly everything associated with the microbiology and its outcomes. This is a combination product in the U.S., so a drug device combination in the U.S. And there, the U.S. FDA has specific requirements, which we have followed, and we are in discussion on a constant basis with the FDA in order to ensure a successful outcome.

Perfect. Next question here. "When we get approval to operate in the U.S.A."

Well, I'd like to know that answer formally myself, but I can tell you that our plans and projections have us finishing this clinical study within the first half of the coming year and then submitting to the FDA Ondine drug application. We are a fast track and QIDP company, which implies accelerated review and we're able to roll that review, so we don't have to submit everything in 1 bolus, but rather we can submit as we go. So we expect the second half of the year to be spent on the clinical study reports, the data analysis and the FDA review. And so at the end of the year, first half of first few quarters, maximum of the second year, that would be 2027, we should expect to be through and selling in the U.S.

The next question here. "Any of the sites in the Phase III study outside the U.S.? And if so, will that help with you the commercial uptake in already approved markets and/or in advancing any other regulatory approvals in other potential markets."

I'll get to that in a minute, but I just want to reconsider my answer that I've just given you. I may have used the 1 year to late, we're dealing with 2024 initiation of the study, 2025 completion of the study and FDA review; 2026 would be when we expect to commercialize in the U.S. And then with respect to sites in the Phase III outside the U.S., we do expect to continue to look at sites outside the U.S. but not within the current Phase III. The current Phase III is specific to a U.S. regulatory requirement, which is majority or even the vast majority of sites should be in the U.S. And if you look at the operational complexities of running sites outside the U.S., it's a little more complex and a little more expensive. However, it's critical that we bring in our commercial and clinical partners outside the U.S., and so we will be joining sites outside the U.S., predominantly in Canada and in the EU to further studies, including ancillary studies to the Phase III.

Perfect, Nicolas. We've got a number of questions from investors. What I'll do is I'll just ask you one by one. The first question he's asked is, "Can you talk about how you're thinking about the relative importance of ex U.S. growth to Steriwave over the next 1 to 2 years?"

Thank you. We think that's critically important. The U.S. regulatory track, as I've just outlined, is still 18 months away to conclusion and could be as long as 24 months. And therefore, it's critical to maintain our sales growth that we focus on existing markets, such as Canada and the EU. So outside of the U.S., we see growth coming from strategic partnerships as well as organic growth from sales that we will conduct ourselves and that, to us, is really the commercial focus of the business versus the clinical research focus in the U.S. So that's critically important.

Perfect. The next question asked if you can run through some of the feedback you've had from hospitals where you've made placements and the ones that converted from trial into a full subscription.

Thank you. From the hospital feedbacks where we've made placements, that's a really important question because we are fundamentally driven, driven by customer feedback. The entire system is a response to hospitals saying, why do we have to deal with an antiquated antibiotic called Mupirocin that requires to be deployed twice a day for 5 days prior to surgery. 2/3 of the patients don't even complete their course of therapy. And even in the third that does complete, we're concerned that the patients are resistant to the antibiotic. And so there's a big hole in our infection control paradigm. Indeed, we've recently seen the emergency room emerging as an important target for us because in the ER, there isn't enough time to treat a patient with an antibiotic. And they just get rushed into surgery, and that's a hole in the infection control paradigm whereas a system such as ours can be deployed literally, we've seen patients as they get wheeled into the operating be treated using the photodynamic approach. So when hospitals see the system. It's a completely new approach, photonic decolonization, it's a high-tech approach. But in general, they really like the fact that the patients enjoy the experience that the nursing staff can be integrated into patient care in a way they never have before. Hospital administrators like the fact that they're looking at health economic benefits, which we've been able to demonstrate now in a number of full publications from third parties. And indeed, when you look at the expectation, it's very high. And those that convert from the trial into a full subscription are doing so rapidly. Most hospitals that deploy the system will actually convert because they see the benefits so rapidly written into their patient population. In fact, in the U.K., it happened almost before the data was finally published. Internal reviews of the data demonstrated extremely good outcomes. Patient care was improved. The health care nurses and health care professionals involved really like the system because of the speed of decolonization and so the ones that convert are always full of praise for what we've done. And in fact, it's become standard of care in several major hospitals now to the point where they really rely on the system. It would be a tragedy to remove it.

Perfect. I might merge the next 2 together. So the investor asked if you can share any details of ongoing discussions with other NHS hospitals and also if you can share any details on any ongoing discussions with the European distributors.

We are in discussion with other NHS hospitals, given the nature of this discussion as well as those talks, I would say that that's about all I can say. We are expecting to deploy in both private and NHS hospitals. We are discussing deployment from South of England to the North of England and we believe take-up will be relatively rapid. That's in combination with a health economic assessment by YHEC in York who have looked at outcomes in the first NHS hospitals, and we have been invited to join the NHS supply chain. With respect to European distributors, we have disclosed in the past that we are in discussions with a number of entities, some small, some large. And we have progressed discussions extensively with the European entity with whom we intend most likely to go to market here within a short period of time. Those discussions are very sensitive, both price and time sensitive. And if you'll allow me, I will just simply leave it at that. Extensive discussions had a far extended deployment, and we are looking forward to working through much larger entity footprints with existing customer bases in pre-surgical health care as we do that over the next year.

Perfect. The next question here. Can you talk about your expectations for your cash runway, both with and without the trial/rate?

We are, as I said earlier, maintaining tight discipline on expenditures. We maintain a very lean crew of people, both in manufacturing production as well as on our medical science side. And we are intending only to raise that amount of money needed to minimally dilute investors as best as possible. So as we move into this clinical study, we are going to be working with third parties who have an interest in the outcome that includes potentially Healthcare Corporation of America. There are individuals who have expressed interest, both private and institutional in raising money for specifically that study, including on the debt side. And so we feel comfortable that we will be able to raise the amount of money needed for that clinical study to initiate this year and also operate the company and its evolving sales targets over the next year.

Perfect. Just turning to the next question. "With Steriwave gaining recognition throughout the world, why not get a larger company involved to get quicker approval of USA requirements."

Indeed, we are working with one of the largest in the world, Healthcare Corporation of America to help us on the clinical and customer-centric basis. As you may or may not know, HCA Healthcare are heavily involved with the Centers for Disease Control as well as with the FDA. And so we're ably partnered and stewarded by a $60-plus billion enterprise, about 5% of U.S. health care. We also are in discussions with third parties for deployment on the commercial side in the U.S. after approval.

Perfect. The next question here. "What do you consider to be your competitive advantage, if any, over Destiny Pharma's XF-73."

Thank you for that. As I always say, Destiny Pharma and other companies who are involved in nasal decolonization have the right target and are doing a thing which we believe is critical in human health. This is not something to be taken likely. It may disinfect a few square centimeters of tissue, but they're absolutely important to disinfect, as you see from our outcomes. The difference between Ondine and XF-73, I think, is mainly the difference between the commercial state of our company. It's further propagation into markets now both outside the U.S. and with a firm focus within the U.S. I think our system produces an advantage from the perspective of speed, also from the perspective of regulatory comfort level. We are well known now to the regulators. We have achieved commercial success through those regulatory bodies, so really, the focus is that we are a commercial stage company rather than a development stage company and the fact that our systems are now in use by tens of thousands of people every quarter and in hospitals with a large head start. So the difference between more of a clinical development company and a commercialized company that's going to market as we speak.

I think you might have touched on this question, but I'll ask it anyway. "Are you looking for a global distribution partner or different partners in different geographies?"

Thank you for that question. We are in discussions with 1 or more partners for various geographies. We have not concluded those discussions because there are certain partners who have different footprints in different geographies. There are economies of scale and efficiencies that can be gained by working with a single partner, but transactions have not progressed to the point where we can say definitively there's any sort of a substantive deal on the table. And therefore, we're keeping all our options open, we may well work with multiple partners in multiple jurisdictions.

Great. The next question asked, "Is the system patent protected?"

Thank you. There are over 70 patents that are involved in the system. On the device side, on the light distribution side, on the formulation side, the system contains multiple ingredients, which works synergistically with respect to each other, very important both in order to effect this extremely rapid, deep disinfection and then maintain it over time. So multiple patents in multiple patent families, but just to reprise, reacquaint investors with the idea that this system is a first-in-class system, and it has the advantage of having received qualified infectious disease product status as well as fast track. And so once approved, we do expect to receive the normal regulatory monopoly in the United States as well, which does provide us with many years of exclusivity for the system. So between the regulatory components and the patent components, we feel very well protected.

Perfect. We've got two questions here, which I might combine again. So the first one says, "Good to see commercial traction? Do you see this momentum continuing? Could anything be done to accelerate this?" And the second question, "given the outstanding real-world study data on Steriwave, what are the biggest challenges you face in getting hospitals to adopt Steriwave?"

Thank you. We do see the momentum continuing. We're projecting exponential growth. That's something that we can confirm is well within our grasp. We have no supply chain limitations there either. So this is really about how fast we can put salespeople on the ground in order to communicate the benefits of the system to hospitals. And we have been very diligent in ensuring that we maximize spending efficiency. And so we've not had a large sales force, we do intend to expand it in order to capitalize on the emerging understanding of hospitals and indeed, all of medicine about photodynamic disinfection. So we definitely will accelerate momentum by adding sales staff. We may do that organically ourselves and/or we may do that by bolting on, if you will, third-party sales staff. And we are talking about the idea of going from 1 or 2 people to 10 or 15 people. So a significant expansion in order to capitalize on the opportunity. And then given the question about the outstanding real-world study on Steriwave, the biggest challenge is facing us in getting hospitals to adopt the system, I honestly think that -- these are mechanical restrictions to us, if you will, the mechanics of getting sales staff into hospitals to demonstrate the package of information that we have. And that's about investment. So expanding our investor base, getting more capital into the company is key to get more hospitals to adopt Steriwave because once we can demonstrate as we do the signal benefits to the system, the speed, the patient compliance, the nursing staff, absolutely enjoying the system, it sells itself. Really, it's about getting to the opportunity, and that means evolving the entire sales and marketing infrastructure of Ondine. And I would say that in and of itself is the focus, real focus of the company going into the next year, especially with our discussions with commercial partners.

Perfect. Maybe just time for a couple of more questions. The next question here. "When can we expect to see profit as the market likes profitable companies?"

At the present growth rate, if we do not, let's say, have any external growth, any projected income from commercial partners but just growing ourselves. We believe that if we were to double the size of the business or a little more than double it, we would be in cash flow neutral territory. So you see already that we are at 23 hospitals at the end of 2023, and we will be somewhere double that at the end of the year. And that means we would not be at exponential growth more than a few years away from cash flow positive operation. Now if we do bolt-on those third parties, and we do bring in those dramatic accelerations in sales, that point comes in a lot earlier. Why? Because we do not require a lot of investment in order to scale. Our current systems take us to a large number of units, 1 million units a year can be sold without any further expenditure on Ondine's capacity. And so it's within our current purview to be able to reach that cash flow neutral standpoint soon, as soon as we bolt on these third parties. And as I said, we are in advanced negotiations to do so.

Perfect. Nicolas. And just time for maybe one more question. So final question here. "Which of your 7 projects will be next to be implemented?"

I think this question deals with our pipeline. Obviously, having achieved the success and the growing success that we are achieving in the nose, the question becomes where else can we deploy the system and we have spent a great deal of time in research and development, in some target areas and key areas because the system attacks all microbes, fungus, virus and bacteria. It's a very rare combination of advantages. There are many disease states or human conditions that are polymicrobial like that, oral disease, a disease in the sinus cavities, those infections that occur in burns and wounds. And so we have developed a system in those capacities extensively in some cases, with significant clinical studies, 40-odd, 40, 50 patient studies in the sinus cavity with tremendous results. Different types of administrators have like different types of administrators of the stain. These are adapted for the anatomy that you have to work in, but the results are always spectacular because nothing resists the system. It is something that is truly new to biology. There is no resistance that can be seen of any importance. We haven't induced any resistance. And so removing microbes, which are key to human health, does produce great outcomes. So I would say that the most likely project that you will see next implemented beyond the nose will be direct topical administration on chronic wounds, on acute wounds, such as burns and injuries such as those that are experienced in warfare. And those are because it's very difficult to determine what the infective microbe is fast enough. You can take a patient into a hospital, and you can spend 6 weeks trying to get the antibiotic right while the patient is declining. And in all too many cases, over 100,000 people die every year in the United States from this alone, it's just too late versus don't worry about what's infecting the patient, hit him with a broad spectrum, powerful disinfectant that takes 5 minutes. And that's our approach in the nose as well. Don't bother with all of the detection systems and worrying about whether they have MRSA or worrying whether there's an Acinetobacter or Pseudomonas component, just place the system in the nose and remove whatever there. The natural microflora and the natural microbiome will reassert itself within a week. We've done those studies. So most probably, you'll see burns and wounds and also the sinus cavity as being our next target.

Perfect, Nicolas. I'd just like to thank you for answering all those questions as you can from investors. Of course, the company can review all the questions submitted today, and will publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, which we know is particularly important to you, Nicolas, could I just ask you for a few closing comments?

Certainly, thank you so much for the opportunity to talk to our investors and to those investors who have been with us for many years and to the new investors who've just joined us, I'd like to say thank you. You are the company, you make our future. And indeed, you're not just investing in a good economic prospect. You're investing in something that truly can and is changing the face of health care today. It is something where you yourselves may be advantaged by as you go in for routine surgeries, which should be routine, but all too often result in various dangerous infections. So thank you for your focus and thank you for your support. We very much appreciate it, and we look forward to a great coming year.

Perfect, Nicolas. I'd just like to thank you once again for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This won't take a few moments to complete because I'm sure it would be greatly valued by the company. On behalf of the management in Ondine Biomedical, we'd like to thank you for attending today's presentation, and good afternoon to you all.

Thank you again.