Q-linea AB (publ) (QLINEA) Earnings Call Transcript & Summary

First of all, welcome to our presentation today. We're going to announce our achievements and financial position during the third quarter. Before we go into the presentation, I would like to call out the next slide, which shows our disclaimer in case me or Anders we make any forward-looking statements. With that, I will present the next slide, which is really the third quarter at a very high level. And of course, we'll provide more details during the rest of the presentation. As you know, at Q-linea, we are developing innovative and disruptive solutions for faster and better infectious disease diagnostics. The first product, ASTar is in sepsis. But ASTar has really been that the platform to support many other applications to follow blood cultures. If I'm going to highlight one thing, in particular, during the third quarter, I would say that it's really the excellent feedback received for clinical use of ASTar at Uppsala University Hospital. I will come back to that. But it really indicates that all work we have performed during the last couple years have paid out. And of course, another very important step is all the work done in preparation for the upcoming clinical study of ASTar. And I must really say that I'm truly proud of the team at Q-linea with its dedication and motivation and all the hard work that has been put in on taking ASTar into the first clinical studies. If we look at the company in general, we have grown according to plan and are now 134 employees and consultants at quarter end. And I will also come back a little bit at the end of this presentation. But I would like to announce an upcoming webinar next week. So please go in and sign up on our website if you want to have the latest news on ASTar and perhaps some other interesting activities. With that, I would like to go to the next slide. And here, I would say, as we mentioned, sepsis is our first product. It is truly a global health crisis. It affects 50 million people annually throughout the world, and every third second a person will die from sepsis. It's the #1 cost driver in the U.S. health care system. And if we look at Europe and U.S. alone, more than 0.5 million people die every year. We have seen from early health economic research data that you could save a dramatic amount of lives with faster diagnostics, and time here is of essence. Because if you are on the wrong treatment when you're entering septic shock, the likelihood of mortality increases close to 8% every hour. And this is, of course, the area where ASTar would like to present a dramatic improvement. So if you look at the next slide, here, you can see on the top part of the e-mail, the traditional workflow for sepsis diagnostics today in practice. Without going into detail, you can see that every gray circle corresponds to a manual step or analysis of that sample in the diagnostic workflow. It's a multi-day, multi-step process. And of course, the answer you would like to have is the green circle, today indicated at Day 4, and that is what you can first really know what antibiotic or antimicrobial is going to treat that patient's particular infection. So if you look at the bottom graph, of course, not only does ASTar reduce dramatically the number of manual steps needed to be performed in the sample, it also produces the results much, much faster. So up to 48 hours faster with very little user intervention on the system. And I think it's important to remember that time it acts and result is really what matters. And I'll come back to that a little bit on the following slide. Let me take the next slide. We can see, really, the 4 pillars that ASTar has been built upon. And this has been done in close collaboration with a number of hospitals in various [ sittings ] throughout the world. I would say that one absolute key is the ease of use of the system. Our driver has always been that anyone at lab should be able to start analysis at any given time point. So of course, it needs to be fully automated. We also need to have a very short hands on time. It's less than a minute on ASTar. And we also build it according to random access workflow, meaning that if you have free capacity in the system, you can load a sample at any given time point. Of course, it needs to be fast. We provide the results in 3 to 6 hours, and we do that at a very high throughput. So these are, of course, important factors. If you are going to have actionable results, it needs to be also comprehensive. We can provide a very large antibiotic or antimicrobial panel at very long concentration ranges. We have tested the systems on the various categories of bacteria that you can find in septic patients, but of course, all the other infections. And ASTar is designed as a platform. I have already illustrated and shown that on urine, or for instance, isolates. So we see that there are many possible add-ons to come in the future of the system. So that's, of course, viewed as comprehensive, but any results also need to be accurate. And what we've seen today in the ever escalating increase in the antimicrobial resistance, we have seen the value of true MIC results. And MIC stands for the minimum inhibitory concentration, meaning the concentration that kills or inhibit bacteria. That's the highest precision you can deliver in a susceptibility test. And that, of course, needs to be reproducible. So I will look at these 2 things a little bit more in detail. So if we take the next slide, this is an example, and I will walk you through it. So what's seen in this graph on the y-axis is the probability of target attainment during a treatment regime. And on the x-axis, you can see various MIC concentrations, I mean the concentration that will kill or inhibit bacteria. Then we have 5 different graphs, all coupled to different treatment regimes. For instance, the concentration of sample, the time for infusion and what's in between infusions. And what is quite clear is that when you have low MIC values, you can see that almost all these treatment regimes are equally as effective. You want to be very close to 1 here. But it's also quite clear that if you have high MIC value of this particular bacteria, we can see that it's only the orange line that we provide effective treatments, meaning 1 gram during 8 hour -- 1 gram every 0.8 hour during a 3-hour infusion. So unless you actually have the MIC value, the likelihood of treating this particular patient to be wrong is quite high. So the value of MIC, I would say, becomes more and more important, when we see more and more resistance develop within the society. So that's important. If you take the next slide, as I said, the system also needs to be very reproducible. So what you see here on this graph, if we focus on the upper panel first, it illustrates 10 different samples for 3 different bug/drug combinations. And if you have a high reproducibility, you would expect that all these dots should be -- the orange circles should be on the straight line, then you report exactly the same result any given time point. And that is, of course, what you want to attain with the system. And ASTar is very close to that line, as you can see. Well, we then compare ASTar with the semi-automated analysis, and in these case, it's not 10 different samples. It's actually replicates. So it shouldn't really be a easier situation. We can see that the semi-automated analysis provides much, much broader range in the resulting reports. And here, we can clearly see I think all the work we have put into ASTar of making the sample preparation, adjusting the concentration of bacteria and performing then a true MIC value really pays off in reproducibility. So I think that these are 2 key aspects. But we haven't talked so much about the system, but I wanted to highlight that during today's presentation. If we take the next slide and instead move into, really, the highlights for the third quarter. As I said initially, to receive such positive feedback from Uppsala University Hospital after testing ASTar in a clinical environment, it's really what we have all hoped for. It's very easy to use, anyone can load the sample. It takes very little time, so it's easy to include samples even though you have a lot of other activities going on in the lab. This, of course, is important because if you look at the microbiology lab today, they are required to run more and more tests with basically the same amount of staff. Then, of course, to see that ASTar provides a faster or much faster and broader result is, of course, also very positive. So we really look forward now in taking this product to the clinical studies and, of course, out commercially during next year. But I would like to go back and highlight a preclinical study that we did earlier this year together with the Uppsala University Hospital. We have further analyzed that and compared the ASTar results with the traditional care. As you can see, the overall results were quite high in both essential agreement and categorical agreement, both above required guidelines for both Europe and U.S. But I would like to highlight one example. This was a 17-patient study, so it was not massively large. But it's not far away from the up to 80 patients we would need in the clinical studies. So if you take a look at the next slide, what is clear on a high level is that ASTar was much faster and provide a broader answer. And that's, of course, all good. But in this particular example that I have highlighted here, we have a man, 73 years, from neuro surgery in the intermediate care ward and he was diagnosed with aspiration pneumonia. That patient then went into sepsis, you diagnosed him with that. We took a book culture and then immediately prescribed Cefotaxime to that patient. Later that day, the blood culture arrived in the lab, and we had a positive alarm the following day. We did a gram stain, and at that time point, you could also load the sample into ASTar. And of course, you also went on with the traditional work from the lab. You can see that the results from the lab did not come until day 3 in the early morning. But ASTar actually reported the result that it's resistant towards Cefotaxime really day 2. So here, you can see the value of having a rapid AST with a broader panel, you could have changed and acted on this treatment already day 2, and now we had to wait until day 3. So this is just one example of many we expect to see come up with what the value of rapid AST. And overall, if you compare it to the traditional AST diagnostic regime within the hospital, we performed analysis of 10 more antimicrobials. And in this case, we were 17 hours faster. So I think this is a very interesting case study. And of course, this is really what we work for, to provide better care for every patient. But if we now look at next slide, I think I'm also very proud to see that most of the analytical study is now complete. And of course, this is an integral part in the future claims for the CE study. First of all, we have now analyzed the most common blood culture bottles in Europe and U.S. We have looked in aerobic, anaerobic and lytic bottles. And we know now which 8 bottles that will be acceptable to use for ASTar in their early CE release. But another thing that I think is much more important is that the problem today is -- at the labs is that you can only allow the sample to be run in ASTar, for instance, at a given time into after it has triggered alarm or been positive in a blood culture cabinet. Initially, actually, we started to have an 8-hour claims, which is quite common in the market with other companies performing rapid AST. But when we did time stamp analysis, and we realized that in many daytime labs, say you have an alarm during evening in 1 lab, that means that when the morning shifts come in, it has passed more than 8 hours. So that sample would not be able to run in ASTar if we have limit ourselves to 8-hour inclusion. So we have not expanded and tested that. So we will actually support up to 16 hours past possibility, and we think that will have a dramatic effect on the number of samples that are possible to run in ASTar. Of course, 16 hours is a long time. And ASTar has really been made, so if you have staff during the night, anyone can load the sample. But this is the real-world situation at many daytime labs. So I think this is a very, very important claim to enable the high inclusion in the product following commercial launch. If we then take the next slide, another part which is, of course, quite important is the stability of our consumables. We are now past 4-month stability. And the goal we have for launch is to reach at least 6-month stability. Our prior data has truly indicated more than a year stability for the consumables. And this all puts us in the right direction to actually extend over a year stability during 2021. So a lot of hard work in the production and validation team on this regard. If I then look at the next slide, I think another key aspect is that we have now received the first commercial instrument delivered to Q-linea. These are what's called the 0 batches or preproduction batches, and we see no changes in instruments for the upcoming commercial launch. So we are ready from an instrument perspective. I think also importantly, if you look at the consumer production, we are in formal validation in the entire production process, also of course, a key step before commercial launch. And we've also increased production capacity 3x compared to beginning of the year. And of course, this was part the strategy during the year, but also the strong addition finding we secured during June as we have built up this capacity. If we then take the next slide, which I think is needed to be commented here. What are the effects of the corona pandemic on Q-linea? And so far, I would say, we have not seen any effect that has caused a delay on our operations. And as I said before, most of our activities are internal. We have adopted the new work routines, and I think the team has managed very well in doing so. We have seen some minimal impact late third quarter or beginning of fourth quarter, actually, but that has been more caused by restrictive guidelines for, in particular, Uppsala. I think on the positive side, we have, throughout this period, having received a strong interest for our clinical partners in both Europe and U.S. to commence start and sign up for the studies. And as we saw at academic -- university, the preclinical study went very smoothly. And I think here is really the key to have a system that's easy to operate and really require little time from operator. It makes it easier to start or include that sample, for instance, in a study. But I must say, and as we all see around us, the dramatic increase in corona and, of course, COVID-19 patients that we see in Uppsala and rest of world, I would say the probability is quite high that we see some effect on Q-linea. And this can, of course, influence the time to complete the clinical study. But as I said before, and I'm really proud to be able to say that our time line to start the clinical study remains according to our communication. So, so far, we have been able to manage the situation. But I can't give you any promise for the future, and I think it would be absolutely wrong thing to do so. But apart from that, I would like to hand over now to Anders Lundin, who will talk some more financials, and then I'll come back with the last slide of an upcoming webinar. Please, Anders.

Thank you, Jonas. I would go on Page 15. And the income statement for the third quarter is that we didn't recognize any sales in the third quarter. It's according to what we expect. So we will not see any net sales until we have ASTar launched. We have an operating result of minus SEK 50 million, which was SEK 14 million, up from the same quarter last year. We were down SEK 9 million -- we were SEK 9 million better than we were in Q2. And third quarter is normally our quarter with lowest expenses due to the vacation period. We reported a loss after tax of minus SEK 48.7 million and earnings per share of minus SEK 1.80. So then I go to the next slide, to the balance sheet. So we have -- the assets we have here that can be transferred into cash quite easily. It's, of course, the cash and cash equivalents of SEK 17.8 million. We have short-term investments of SEK 205 million, little more than that. And we have a current portion of the listed bonds we have is SEK 151 million. And we have listed bonds of SEK 34 million. So all in all, we have SEK 409 million by the end of the quarter that we can -- okay. So we could go to the next slide, which is the cash flow. So we have the cash flow from operating activities is minus SEK 46.7 million, and this cash outflow is mainly due to the larger operating loss. We have investing activities of SEK 27.4 million. And that is basically that we are selling the short-term interest funds when we need the cash. So that is what we have done in the third quarter. And financing activities is small numbers. It's basically we had some SEK 0.7 million minus this quarter, and there were some issue expenses related to the rights issue in the beginning of June that came into the third quarter, and we have a repayment of loans. So as I said, SEK 409 million we have as easily converted assets to cash. So by that, I would like to hand over to Jonas so he can conclude the presentation. Thank you.

Thank you very much, Anders. So I would like to bring out to the next slide, Slide #18. As you heard now, we've made tremendous progress towards the upcoming clinical study of ASTar. I would like to encourage you to sign up to webinar we have next week. You can do that on our web page where we'll, of course, discuss ASTar in more detail and see the value you can bring in improvement patient outcome and ease the life for people working in microbiology lab. But I'm actually truly excited also to provide a sneak peek on an upcoming exciting product we have in development here at Q-linea, and it will be followed by a Q&A. So the title of the webinar is Equal and Better Care for Everyone, and I would really encourage you to sign up for it. I think it would be an interesting webinar to listen into. But with that, I will just bring up the next slide and conclude our presentation for that, and we'll be happy to answer any question you might have. Thank you very much.

[Operator Instructions] Our first question comes from the line of Ulrik Trattner of Carnegie.

Anders and Jonas, I have a few questions. To just start off, if you're emphasizing the true value of ASTar, if you can contain a correct or very exact MIC value. And I thought that were beneficial for deescalating antibiotic use, but it seems like it carries more value than that. Could you please elaborate a bit on that, please?

Yes. Of course. Thank you, first of all, Ulrik. No, you're absolutely right. I mean true MIC values have become more and more important. First of all, to also provide the right dosage, particularly for more resistant infection, but then also, as you say, to deescalate. And de-escalation can be in a number of things. First, of course, you want to avoid the multidrug broad spectrum that you initially start the patient on. So you want to deescalate, of course, to IDD1 antibiotic or antimicrobial. But also, as you saw last year, you caught changes in our guideline from the 3 categories S, I and R, whereas S means sensitive; I, intermediate; and R, resistant. And the intermediate range now is not sort of an area of uncertainty that it has been before. They actually encourage to use intermediates and actually say that it might be treatable if you cannot assign the right dosage for the right concentration at site of treatment. For instance, if you some have antibodies they are concentrated in the urinary bladder and knowing then the MIC value could really mean that you could use an antibiotic that you might have avoided before, and that went with a sort of a tougher, more broad-spectrum antibiotics. But having a MIC value, you can actually use the I region in a better way, meaning you can provide a better care with less side effects and also at potentially less cost. So I think providing MIC values is not just obvious that it's the most precise value, it really changes the escalation regimes, using of the intermediate region and, of course, providing the right dosage. So there are many, many more sort of values of MIC to bring to better patient care here.

Great. And the second question is on the clinical study, and if you could provide some more detail on the overview of how fast that the CE-IVD approval could be obtained once the study is completed. And also, obviously, 80 to 100 patients should be fairly quickly to include in the study. But could you give us some rough time lines on the retrospective part of the study, because correct me if I'm wrong, that is quite a bit larger than the prospective part.

No, you're absolutely right. So I'll answer the first question first. So when you do the CE study, of course, you will have to run the retrospective and prospective parts. And then of course, you need to put all the documents together and file and affix the CE mark. Really, we plan, of course, to do a lot of these in parallel. So you continuously build up the registration file as you move through the study. And if you do it in the proper way, it means that you will not have a very long period after sort of the last patient in or the last sampling. Of course, you need to verify that with a reference method as well. So we don't see the extension of the period after sort of the last sampling to be extremely long. I will not give you an exact time line, but we are not talking months for that to be complete. It's more in the week strategy. If we then talk about sort of time line for the study, you are right, the retrospective part is much higher -- larger. It's around 10x larger than the prospective parts. And we would not like today really to give a guidance on the time line. And the reason I would not like to do that is because we see the dramatic increase in COVID. We have also seen that everything so far has indicated that we have managed well so far. We've also seen from, primarily, I would say, Uppsala University Hospital that even the preclinical study we performed in April, it's hard to sort of forget now, but in April, it was one of the most busy time in COVID patient in Uppsala early this year. And that went really smoothly because it was easy to include the samples, it took a little bit of time in the labs. And we also saw that what we have been doing now during the autumn to test it more in clinical studies has also worked nice, although we didn't see the absolute rise in COVID-19 patients at that period of time in Uppsala. So I would not like to give you a firm time line under the current situation. But what I can guarantee you is that the full team is -- from Q-linea and Thermo Fisher, of course, doing everything to make this as quick as possible. And we will, of course, announce when we start the study. Obviously, we'll see if we can provide some general feedback during the study. I know that's not exactly the answer you wanted, but I think that under the certain conditions, I think that's really the most sensible answer I can give you.

Fair enough. You mentioned in the report that you have met with customers during the quarter. If you could please elaborate on that geographical presence of these customers, which type of customers, how many have you met so far and has this been in collaboration with Thermo Fisher? And sort of follow-up on that is, what type of activities are you seeing in Thermo Fisher currently committing to? We note that they have held webinars internally, but is there any other activities? And should we expect this to accelerate in the coming months?

Right, yes. So if I answer the first part of the question. Yes, of course, so first of all, I mean, our primary activities have been meeting customers or potential customers in Sweden. That's going to be on [indiscernible] for the sales of ASTar. And we had a great number of visits during the last couple of months. They have been on-site visits. We are now moving into electronics visits because of the change in the corona situation. And I can't give you an exact number, but from a high sort of perspective, we have potentially around 30 key customers in Sweden looking at the larger institutions. And I would say that we're halfway through, more or less, on that. Then of course, we have a lot of other activities coupled to health economic studies, and we actually receive a lot of interest from customers attending our webinars. We had one earlier this spring. Thermo Fisher is also hosting webinars on AST in general. So we get a lot of feedback for potential customer that asks for more information. So of course, we plan to do that. But there, of course, we have a very clear separation that if they are outside Sweden, we, of course, will provide those leads to Thermo Fisher, and they will have the possibility to contact them. I think also, what you will see and what we plan for is, of course, an expanded activity in streams of webinars, presentations from both us and Thermo Fisher. That is, of course, what we plan for as premarket activities. And that, of course, we aim for a big launch event at a time point not yet communicated, of course. So I think what you can see is an overall ramping up from both sides really to come -- to prepare ourselves for the commercial launch that we all work so hard to accomplish.

Great. So the last question, and this might be a tough one for you to answer and it relates to the last slide of this presentation. And one could suggest that, that is a teaser for the webinar. And based on that picture, doesn't look like a either AST or an ID instrument, in my view. What type of conclusion could we draw from that or do we need to wait for the webinar next week?

Yes. I would say you need to wait. I would also say that it's a fairly fair conclusion from our side, the one you just made. But I really would encourage you to sign up for it. And I think it's going to be an interesting part. But of course, the primary work we have now is provide more details of ASTar and the value it can bring. But we as a company, we always focus for the long-term success of Q-linea. We see a lot of areas in treatment of patients where we have technology and, of course, IT support to sort of develop products. But we look at the big picture really from a deciding the diagnostic workflow. So we are not sort of resting. We have seen ASTar taking a big step now towards clinical studies and we had a number of interesting activities over the year that really encouraged us to also, of course, in parallel, develop other products that we think is going to be very interesting if we manage to take them to market, of course.

And our next question comes from the line of Victor Forssell of ABG.

A few from my side, if that's okay. I'll start with the one with the I mean overall situation in Uppsala at the moment and just a couple of last week's dynamics and stringent restrictions. I mean I think that you alluded to it in the presentation, but is it even fair to assume that even when Uppsala will start, both -- I mean it's part of the study that even this part could be prolonged given reallocation of staff and internal leverage, if that's what you alluded to, is that correct?

First of all, Victor, well, I mean, of course, the situation in Uppsala is escalating, and we have some new guideline... [Technical Difficulty]

Apologies. We seem to have lost our speakers. Bear with us just one moment as we reconnect them.

Okay. So if you can hear me now, we had a drop out. It's not just COVID that affects us, apparently. But to continue to answer your question, Victor, well, yes, what we see is more a change in the guidelines in how we work and how we operate. We see some effects, I would say, still minor. We have been able to manage it well. From the study perspective, you are correct, we could see a prolongation of the study. I mean there are 2 reasons you can see that; either if we have a lot of people within the company that contract COVID-19. That is, of course, what I try to protect and try to work to sort of mitigate or fight against. We could see, for instance, that the hospital will have a lower inclusion rate. So that could happen for sure, if they need to prioritize it. But I think the positive part is what we have seen. I mean we have been running a preclinical study in test period under the COVID-19 situation, and that has gone very, very well. So I'm still positive, but I think it's the right place to announce that we might see a delay. We haven't seen it, but I can't say that it will not come.

Yes, that sounds very fair. And if I move over to the site in Denmark just to give a sense or any comment really about the installation phase of ASTar in Denmark. Also, you've been able to do something in terms of educating the staff, et cetera. And if not, I mean, do you feel certain that the access to do this will be all right given where we are now with COVID again?

You're right. So we have been, of course, doing pre-site visits and prepare for that. Also, I should say that the hospital in Denmark from [indiscernible] they have really been active in the part of ASTar and been doing a lot of usability. So they are more or less up to speed with the system. Then you need to have an official training as part of the documentation for the CE, and that has not been performed yet. So that you're right, we might see a situation that where Denmark closes or we haven't seen it yet. And we also, as I mentioned, we also look at the possible mitigation. So we are in contact with additional sites. So if that happens, we plan to make it move shifts. So we are already preparing for the worst, so to speak, but also expecting it to go on schedule. We have a very, very strong commitment from Hvidovre Hospital. They really, really want to participate. They want to see a prioritization of ASTar. So we are in a good sign, but we also try to plan for if the worst happens, so to speak.

No, that sounds good and helpful. Moving over to the U.S. market. Obviously, I appreciate that there is limited access to certain regions and travel restrictions and what not. Perhaps this question becomes a bit hypothetical, but what would you say is holding you back at this moment where we are from securing to U.S. sites and then, obviously, apply for the 510(k)? Very briefly after the EU study, and coupled to that, what should we be seeing as a realistic time frame until the FDA could receive all the documents needed?

Right. Yes. So it's a little bit harder to give a final call on that. So what we have seen, and as we said, we needed to postpone the discussion with the U.S. site because of the dramatic increase during earlier this year when the U.S. basically shut down. We have, of course, restarted that. And we are now in a very good position in acquiring and contracting sites for the study. And that has actually progressed very smoothly even under these situations. So for sure, you will see a little bit of a space before Europe and U.S. And I would like to come back to you when we see that when we have the final agreements in place. So be a little bit cautious on providing that time line. I still think that under these situations, it's truly proven that the value of having Thermo Fisher as a worldwide partner. They have, of course, already people on the ground in the U.S. And they can also really be helping out and participating in the study and are quite willing to do so. So I think here, even if the situation sort of turns to the worst with travel restrictions. We are, of course, trying to plan for that as well. And I would say that I'm truly happy to have Thermo Fisher as a partner, strong support, strong commitment and they have a worldwide presence. So at least I think it puts us in a better position. But I would like to be a little bit cautious now. We also want to -- not want necessarily, but we'll have to follow the election and if there might be a new guidelines coming up after that. But from a study perspective, talking to sites and planning, it's going very well, I would say.

Okay. Great. And just a final follow-up on that. What is the feedback you hear from the market or from Thermo Fisher in terms of what could perhaps become a backlog for FDA as well? And whether you, for some reason, get a sense of if you could get prioritized or not, it would be very interesting to hear some of the dynamics here.

Right. Yes. I think it's true. I mean if you looked at the FDA sort of workload during at least summer and the spring, I mean, they had a lot of activities approving or clearance of COVID testing. So you could -- I think you'd be right to assume that they have a backlog, for sure. And the next phase, hopefully, we all hope for will be vaccine clearance. I think also what's important -- and of course, that's very hard to judge. Where do you put AST on the sort of priority ladder? But we also saw, and that was couple of years ago, FDA really prioritized rapid AST testing. I think it's important to remember that although we have a terrible situation with COVID-19 now, we see that sepsis is the #1 killer year-by-year in the U.S. and in Europe, and it accounts for the biggest single diagnosis for healthcare costs in the U.S., more than USD 24 billion just for sepsis. So I think that it's definitely a high-priority area. But it's, of course, impossible for me to say what would be the top priority. And I should say that if you have a vaccine that needs to be cleared, that should be the top priority. So I would not like to say that. We had a couple of interactions with FDA during the autumn for sort of finalizing some parts of the U.S. planning. And there we have a very swift response from our person in FDA. So again, promising in the past. We will see how the future looks.

We have one further question in the queue so far. It's from the line of Alex Cogut of Kempen & Co.

So I think, overall, part of it's been addressed so far. But given all the different moving parts, could you just walk us through the, let's say, the steps towards commercialization in Europe? And then separately, the next steps toward commercialization in the U.S.? And then as a second question I have, regarding your prospective trial. Can you give us a sense of the benchmark results that you need to achieve to qualify for CE marking?

Yes, of course, Alex. So if we look at the steps for commercialization, I would say, of course, pre-activities have already started, naturally. Really, the next step for us, if we start with Europe, is to perform the retrospective and prospective part of the study. And then really, we are lining up our internal organizations to be absolutely ready immediately when that happens. So that is the phase for Europe. Of course, we have together assessed and prioritized regions. We already have interest from customers that want to know more about ASTar, so we are, of course, looking into that. So we really hope and aim for that the pace after the CE mark could provide sort of a swift move over to the commercial environment. If we then look at the U.S., I would say the situation would be sort of similar. The difference, of course, is that we first have to complete the U.S. trial. And we have a bigger issue with COVID in the U.S., I would say, primarily due to regulations. There are still some states that are not as affected as others. This might change on a daily notice. Then of course, we will then need to file for a 510(k) clearance, which is the category our product would fall within. And I think also in the U.S., I think the benefit we have if we are successful in Europe is that we can also build from wordings from key opinion leaders and start addressing customers. But I think the feedback we have received now while we are out contracting sites for participation in the U.S. study, there's a tremendous interest. So I think that is on the positive side. We, of course, have to see what the financial effect might be on the U.S. health care system. But I really see it now as a step-wise approach. We are aligning and we'll be ready the day we fix the CE mark, for sure. If we then look at your second part of the question, the targets we need to attain. I mean on a high level, you have the essential agreement, meaning that you acquire the same result as the reference method. You need to provide 90%. That's the same for Europe and U.S. U.S. actually have 89.9%, but let's round that up. And then you have the categorical agreement, again, you have to be above 90%, and that's to provide the treatment categories at INR. Then of course, you have reproducibility. I think as I've shown today, we have an absolutely excellent reproducibility of our study or in our system. So there, we are really acing it, so to speak. So those are really the primary end points that we'll be matched up against, and they are very similar for Europe and U.S. I would say the slight difference to the U.S. environment is they have a little bit more of interference testing that they would like to perform or see performed. And I think the way we have designed our sample preparation to really remove everything that's not a viable pathogen as indicated clearly that we are strong in that regard. And as you can see, we have maneuvered through all of the most common blood culture bottles with more or less close to 100% performance. So I'd say that that's really the difference from the U.S. apart from the Europe study. I hope that answer your question, Alex.

Yes. No, absolutely. That's very helpful. Maybe on the path to European commercialization, you mentioned, obviously, the prospective and then the retrospective study, which I understood earlier, the timing of which is a little bit uncertain and then CE marking. Am I understanding right that the CE mark then is still targeted towards 2021?

Absolutely, definitely, yes.

Right. And then in terms of how commercialization would occur in the back of the CE mark, is there already a plan in place together with Thermo Fisher, any specific geography that will be targeted first? Just trying to think of how revenue could potentially build up next year.

Yes. Yes. I can't communicate the exact details, but there's a clear priority on where we would like to go first. Yes. That's already been in the planning. And it's ready, so to speak. So we are prepared, and we have a priority on for many good reasons where we'd like to sort of put that first for ASTar.

Right. And is it fair to assume that the U.S. launches end roughly 1 year after CE marking?

I would not like to give or provide an exact time line for that. I would rather focus first on the FDA filing, when we file for approval. I mean the FDA has supposed to deliver an answer in 3 months. We know that under the COVID flag, it might not happen. But definitely, that should be a good goal to aim for, for sure.

And we have a follow-up from Vic Forssell at ABG.

Perhaps you can answer to this. But in terms of a launch hearing in beginning of next year in Europe, do you currently see any sort of risk or hindrance view for the adoption rate compared to perhaps what you could do in the U.S. as Accelerate has been pioneering in that market? And also, if there is, by any chance that you could give us sort of a range of scenarios for what you feel comfortable in terms of placements in Europe for next year? I know that you alluded to, you've been talking to 30 customers in Sweden during this autumn. I mean is it fair to assume that all those 30 could potentially be -- see placement at those sites already next year?

Right. So if I take the first part of your question first. I would not say really that -- of course, we have been more Pheno system placed in the U.S. compared to Europe, for sure. I do think that if you look at the overall ASTar value proposition and what we could bring to this group of sort of customers, I would not really see that as a hindrance. Of course, if you have a site that has fully adopted the Pheno system, of course, that's going to be a challenge. But we don't really see so many sites that are fully committed of running all the samples for many reasons on that platform. So I think that the U.S. as a market is still very interesting in the way they prioritize and the way they use this type of rapid tests. So I would not say that I see a hindrance because of that in the U.S. market. I think it's balanced out by the drive for these type of tests. And I think also the capacity we have into ASTar really supports these larger institutions, larger hospitals, they have a vast amount of blood cultures that they need to analyze. So of course, that's looking into future, no one knows. But I would not say that, that's something we are particularly considering to be an issue. If we go back to the statement during next year. And to be correct, if I did -- I said, we've probably talked to half of the potential 30 customers in Sweden. I would, of course, absolutely love to have every single site adopting ASTar. But I think what's really most important for me and for our company is that when I look at our technology, I always plan to be an absolute successful company in the 5- and 10-year range, to be there in the long run. And I also honestly think that the most successful companies, they do much more, I would say, careful placement in the initial phase of a launch to really make sure that we pace it at the right customers to evaluate and really get ready to have any sort of early diseases that you want to wash out in the system. And I think if you do it that way, it really enables you to have a much, much faster ramp-up at sort of the second stage. So of course, we have internal plan for placements for next year. But for now, I think I'll keep them to myself. And we hope we beat whatever plan we have for next year anyway. So I know, again, it doesn't really answer your question, but I hope you understand that I don't want to give a firm announcement today on that.

No, I understand. And I think it also answers the last question that I have, given where we are now approaching the launch, it would be interesting to hear about the split between capital placements and reagent rentals. So but I think that you perhaps answered that, that you -- we should expect you to shoot more for capital placements initially that ultimately, in the coming years would trend more towards reagents rental. Is that a fair assumption?

I'm not necessarily agreeing on that. I think the type of sales probably depends a little on the institution. So -- and of course, I mean, for most -- all customers outside Sweden, that will be handled by Thermo Fisher, and they have really many type of options for this. It could also be a lease type option. So I think it will depend a little bit on what we target. So I would not say that we aim for capital first and reagent trends later. I think we aim for the right institutions. And then we'll find the best one for that institution to sort of support the uptake of ASTar.

[Operator Instructions] There seems to be no further questions at this time. So I'll hand back to our speakers for the closing comments.

All right. So thank you very much for all the questions and comments during this presentation. And we all, of course, look forward to coming back to you and really announce the start of the study and, of course, aiming for a very positive uptake during next year. So with that, we'll conclude the session from our part. And of course, be safe and practice social distancing so we can fight this pandemic together. Thank you very much from us.