Sedana Medical AB (publ) (SEDANA) Earnings Call Transcript & Summary

Hello, everyone, and welcome to today's presentation with Sedana Medical. With us presenting today, we have the CEO, Johannes Doll; CFO, Johan Spetz; and CMO, Peter Sackey. [Operator Instructions] And with that said, please go ahead with your presentation.

Thank you for the introduction, and welcome to our Q2 report presentation. I know that some of you are taking a break from your summer break to be with us, which we appreciate a lot. So thanks a lot for taking the time with us today. Let's start on Page 3, please. The first half of 2025 is over, and it was a very successful period for Sedana Medical. We have had new all-time highs in sales. Q1 was the best, Q1 we've ever had and Q2 was the best, Q2 we've ever had. We're looking at a positive year-to-date EBITDA in our ex-U.S. business and are on track to achieve our financial target. And in the U.S., we've received positive clinical trial results. We got an Early Access Program approved and have FDA Fast Track Designation. So overall, many reasons to be proud of the progress we have made during these 2 quarters. Let's dive into it. Q2 sales landed just under SEK 50 million, a year-over-year growth of 27%, of which 21% were organic growth and 6% came from contract manufacturing revenue stemming from our newly acquired manufacturing plant in Malaysia. And what really stands out this quarter is that we had excellent performance in our main market, Germany, with 19% growth, which I'm very happy about because, as you know, we've been working hard to reignite growth after having a slightly lower growth year in 2024 with only 5% growth. We saw slightly lower growth in our other direct markets this time, but still 22% up and 32% growth in our smallest part of the business, the distributor markets. Another highlight we've just communicated is that the results of our paediatric study was published in the Lancet. The paediatric study overall is a real success story, in my opinion, after we initially got quite negative reaction on the stock market when the data were published. But since then, we've received approval for kids in 13 countries. We have received a total of 3 extra years in data exclusivity and market protection and now this publication in one of the most prestigious journals. The good sales performance translates into further improvement of the bottom line, where we have seen a steady improvement all the way since 2022 through a lot of focus on commercial execution and at the same time, streamlining our cost base in noncustomer-facing functions. In Q2, the ex-U.S. EBITDA was in balance around the 0 point, and year-to-date, we're looking at 4% positive EBITDA, excluding exchange rate effects, which is fully in line with also our financial target for the year, which is to achieve positive ex-U.S. EBITDA in the low- to mid-single-digit range. I'm really looking forward to also the second half of the year because we will see the full effect of our newly acquired manufacturing plant on the gross margins, which we have started to partly see now already in Q2. On the U.S. side, we had several very good news as well. Early in the year, we had communicated that we've met the primary endpoint in both our pivotal trials and that the safety looked good also. And now we also know that the secondary endpoints have turned out positive with, for example, a greater reduction in opioid dosing than propofol, fast wake-up times with more than 75% of patients being awake within 60 minutes after treatment and also trends towards better mortality versus propofol and, for example, more ICU-free days in both trials. Apart from that, we are following our plan and still expect FDA filing in the first quarter of next year. And even before that, in the fall, we expect the first patient to be treated under our Early Access Program. Let's move to Page 4, please. Looking at the longer-term sales development, you can see that we are now operating at levels that are higher than the extraordinary COVID-19 years. And also this year, we are on track to set a new all-time high in sales. In the first half, we saw a sales growth of 22%, of which 17% came from the core business and the remaining 5% are contract manufacturing revenue from Malaysia. Again, this is a result of a quite dramatic shift in how we use our resources away from noncustomer-facing functions into the front line, just to illustrate that our headquarter team is now approximately half the size compared to when I started in 2021. And instead, we have a much more forceful frontline team in our core markets. On Page 5, you can see the effect on the bottom line. There's some cyclicality in our business with the winter quarters, so Q1 and Q4 being the strongest ones sales-wise and the summer quarters showing lower sales and profitability, but you can see a clear trajectory of steadily improving our EBITDA, both ex-U.S. and on the company level. With ex-U.S. EBITDA around 0 in Q2, we see a SEK 4 million positive ex-U.S. EBITDA since the beginning of the year, which excluding currency effects is 4%. And also on the group level, we see a SEK 12 million improvement compared to last year. On the next page, Page 6, no change on how we see our addressable market. The markets where we are active today represent a market potential of approximately SEK 3 billion to SEK 4 billion, and we see 3x that potential in the U.S. market, which we will talk about in just some minutes. For the more short term, we have communicated a very simple financial target for the year, which is to deliver full year positive EBITDA ex-U.S. in the low- to mid-single-digit range, positive, of course. Year-to-date, we stand at 4%, which gives me good confidence that we will meet this target for the full year. As usually, I would expect Q3 to be a little lower sales-wise, just from a seasonality perspective, and then we'll hopefully have a stronger Q4. And again, for the full year, we should meet our target. If we then look at the performance by country, starting on Page 7 with Germany, you know that we had a little bit of a mixed year last year with a very strong Q1, a very weak Q2, then a solid Q3 and a flat Q4. And overall, all of that led to a full year growth of 5%. We had an explanation for that as we did not have a stable team, especially in the second half of the year with some turnover in the field force. But of course, we were not satisfied with this level of growth in our main markets, and we launched a sales acceleration plan in response. And now we are 6 months later and can see 19% growth in Q2, admittedly compared to a slightly weaker comparator quarter last year, and also 13% growth year-to-date. And I'm very, very happy with the progress we've made. The team is fully staffed again. The new colleagues have been onboarded successfully. And in general, we have improved our focus on high potential accounts. We have improved our commercial effectiveness, and it's great to see the passion and motivation that we have in the team. We will likely not see 19% growth in every quarter from now on. Again, Q2 last year was a bit weak, but we are definitely on the right track and 13% penetration of the market potential that we saw during last year is definitely not the ceiling. On the contrary, I think we still have some very good growth potential in Germany. On the next page, and our other direct markets, a lot of the positive things I have said about Germany are also true for our Spanish team, which has really shown fantastic growth for several years now. That was again the case in Q2 based on a good execution on the ground, but also a very strong network of believers and opinion leaders on the customer side. And what has worked really well in Spain is that we do not just have the, let's say, academic key opinion leaders who are oftentimes not treating as many patients anymore, but we have a lot of what we call bedside ambassadors. So oftentimes younger doctors who really treat a lot of patients, see the benefits of inhaled isoflurane sedation in real life and not just in studies and who are, at the same time, very influential for their peers, so other doctors who seek advice on the best treatment options. The reason that the overall growth rate in our other direct markets is this time a little bit lower compared to what we've been used to in the last quarters is a less good performance in France and U.K. this quarter. In France, we have some execution issues that we need to address where we have not managed to spend as much time with growth customers as we had planned to, but we also see some effect of the SESAR trial, which is different from all other countries. It's not an effect across the board, but actually, we see a very differentiated picture where our customers who use our Sedaconda isoflurane have grown quite well, but customers that still use off-label sevoflurane with our devices have dropped in sales. And overall, for the first half, we are only slightly above last year's level. So we're still growing, but very little, which is not good enough. So the plan for France is quite self-evident. We need to fix the execution issues and at the same time, really double down on switching remaining sevoflurane users to isoflurane because it's the better treatment for patients, but also better for the sales. In the U.K., we've seen a temporary sales decline in the second quarter, which, of course, we don't want to see either. Here, the reasons lie in specific circumstances in a few specific customers. For example, we had to temporarily halt delivery in an account that didn't pay the invoices or we're dealing with personnel changes on the customer side that have affected the use of our therapy. But the good news here is that we have several important new accounts lined up for go-live in the second half. So I'm expecting a return to growth quite soon. And hopefully, this will turn out to be only a small bump in otherwise a steep road ahead. Overall, for the other direct markets, we still had 22% growth in the quarter and 37% in the first half. So clearly, still the fastest-growing part of our business. On Page 9, we see our distributor business. This is the smallest part of our markets in the first half, approximately 7% of our core business sales and you're by now used to seeing a bit more of an up and down because most distributor partners order less frequently and stocking effects tend to influence the order pattern a bit more than in other direct -- in our direct markets. But last quarter, we had seen a decline in sales because we had a big order from South America falling into the comparator time frame. This time, we are up 32%. And from a strategic perspective, we're still pushing ahead with enhancing our focus and offer the best possible support to a few select key partners and have a more light touch support model for others. With this, let's go to Page 10, and let me hand over to Peter to talk about our paediatric publication and then, of course, the U.S.

Thank you, Johannes. So earlier this week, the paediatric IsoCOMFORT study was published in the Lancet Respiratory Medicine which we're very pleased about. The results of this paediatric study are as earlier communicated that isoflurane was non-inferior to intravenous midazolam, the only approved IV sedative for paediatric action in the time to extubation and more predictable extubation and also reduced opioid consumption compared to midazolam. And the conclusion in the study, which is our conclusion also is that this supports the use of isoflurane-based inhaled sedation as an alternative to intravenous midazolam. And that was also the conclusion that was made by the competent authorities in Europe that approved the new paediatric indication for children between the age of 3 and 17, which is what we studied. So isoflurane is now approved. Sedaconda is now approved in 13 European countries. And besides approving the therapy for children, we were also granted 1 extra year besides the 2 years that are normally given when the paediatric investigational plan has been executed is that we got an additional year because this was considered to be a superior therapy versus available therapies. So that was also very gratifying. And the fact that this paper was published in the Lancet Respiratory Medicine is a quality stamp, I would say, on our study and on the results and will be helpful in the dissemination of our main clinical benefits of isoflurane and [sevoflurane], both in the paediatric ICU world and in adult ICU world. So the main -- the 3 main sort of differentiating factors when using an inhaled isoflurane is that it's always effective as a sole sedative, it's opioid-sparing and it's associated with rapid and predictable wake-up. So with that said, we'll move over to Slide 11, which is the U.S. trial. As you know, this was a trial that we completed last year, and we read out the results this year and posted them on clinicaltrials.gov. The 2 studies were identical studies, INSPiRE-ICU1 and 2 that we ran together with clinical investigators in 31 clinical trial sites across the U.S. Let's move to the next slide. So there was a lot of enthusiasm during the trials, I should say. As I mentioned, the 2 identical trials evaluating the efficacy and safety of inhaled isoflurane delivered via the Sedaconda ACD, comparing that with standard care propofol. So 235 patients were randomized in each study and the primary endpoint was the percentage of time and target sedation level assessed with the Richmond Agitation Sedation Scale. And the key secondary endpoints were opioids, time to wake-up after sedation, cognitive recovery after sedation and the proportion of time with spontaneous breathing. And what we found was that isoflurane was non-inferior to propofol with regards to the primary endpoint. And we also have looked at the safety results, and they indicate tolerability and no new safety signals compared to what is known for isoflurane for anesthesia and for ICU sedation from our European trial. Let's move over to Slide 13. When it comes to the secondary endpoints, just a brief review of what we have seen so far. These are data that have not been peer-reviewed, not published anywhere else in clinicaltrials.gov. But what the data tell us is that with isoflurane in the U.S. setting, opioids could be reduced compared to baseline more with isoflurane than with propofol with a reduction of approximately between 30% and 40% in the 2 studies. And why is this important? Opioids have many dose-related direct side effects that are well recognized in the ICU, and they include constipation, respiratory depression, withdrawal, delirium. But there's also an association between the dose of opioids given during mechanical ventilation and the risk for persistent opioid use in the year after ICU discharge. So an opioid-sparing sedative may bring other benefits than what is seen in the ICU. When it comes to the fast return to wakefulness, there was not a statistically significant difference between isoflurane and propofol in the 2 studies. But as Johannes mentioned earlier on, in both trials, it was clear that isoflurane was associated with the wake-up of approximately 3/4 of the patients within the first hour, and that is similar to what we found in the Sedaconda study and what we also have in our European label about wake-up. And this is clinically a very valuable feature. Short and predictable wakeup implies that neurological assessments can be done with greater certainty than when there's risk of accumulation of drug. It means that patients may need to go for CT scans less frequently if you can feel confident that the drug is out of the system very quickly and also potentially can impact mechanical ventilation duration, ICU length of stay in a favorable manner. And we know that with prolonged intravenous sedation, wake-up times can be very long and unpredictable, especially in patients with multiple organ failure, and these patients are very common in the ICU. We did find a trend towards lower mortality with isoflurane with a 5-percentage-point difference in both studies. And this is something that, of course, is a very good safety evaluation in parallel with the adverse event reporting that would indicate the safety of this therapy. And that's something that's important both for -- of course, for patients, for health care providers, but also for various committees and organizations that evaluate a new therapy. We also noted, if you look at the 3 studies that we performed in adults that in average, there's 1 ICU-free day more in isoflurane patients than those receiving propofol for up to 54 hours. And this, of course, is something that is a valuable aspect when it comes to looking at the cost versus survival. And that may be a beneficial sort of aspect when we will be looking for access in U.S. ICUs. And then finally, the general feature of isoflurane is well known and is in line with the clinical results, namely that metabolism with isoflurane is minimal and is not required for elimination of the drug. And this means that in patients with renal dysfunction and hepatic dysfunction, this drug will not accumulate despite impaired such functions. And I'd like just to move over to next slide, Slide 14. Now we are in the waiting -- working hard with our submission for the NDA and the FDA review. In waiting for this, isoflurane can be used in the U.S., thanks to the Early Access Program that the FDA have approved. And the Early Access Program is for difficult to sedate patients when intravenous sedatives cannot help the patients be at the targeted sedation level despite maximum doses -- maximum tolerated doses. This EAP is open to any hospital that's interested. They will be receiving our products free of charge. The benefits of the EAP are, of course, that patients that are difficult to sedate can receive an efficacious therapy in waiting for approval. Besides that, from our side, it's beneficial because it allows clinicians to use isoflurane in some patient populations that were not part of the clinical trials, for example, patients on ECMO or neurocritical care patients. It means that there will be continued use of inhaled sedation, isoflurane sedation during the review process. And that also means that hospitals and physicians will gain expertise and proficiency that we can leverage at the time of our launch. And it also is an opportunity for us to develop all the different tools and have optimized the supply chain, et cetera, at the time of launch. And we currently have 10 ICUs that have expressed interest in the EAP. So we're working on contracting and supply chain in order to facilitate start of the EAP in the fourth quarter of this year. And then we go to Slide 15. And I believe that's your slide. Back to you, Johannes.

Yes. Thank you, Peter. Just to reiterate, the U.S. is clearly our largest growth opportunity. We have estimated the U.S. market potential for our products to be somewhere in the area of $1 billion, SEK 10 billion to SEK 12 billion, which is 3x as much as in our current direct markets combined. And this is because of a high number of ventilator beds, but also a medical practice that favors intubation and mechanical ventilation more than in Europe and also an overall higher price level that you see, even though that is not built into that number yet. We see a very good product market fit, for example, because of the proven opioid reduction Peter just talked about, for example, because a reduction in the ICU length of stay is generally an effective driver of adoption. And for example, because the guiding thoughts behind existing treatment guidelines, so fast wake-up, early mobilization, early ICU discharge are quite in line with some of the benefits of inhaled sedation with isoflurane. On top of that, Peter and his team have done an excellent job in building a network of key opinion leaders already in our clinical trial sites who, as you have seen, have some of the premier names in the U.S. hospital landscape that are very, very supportive in giving advice, but also supportive of our therapy and already very active beating the drums for inhaled isoflurane sedation in different global conferences. So if you put these pieces together, a high market potential, a good product market fit, a KOL network that is eager to get started and positive results from the trial, then it's quite clear that we continue to believe that we can create the most value if we launch ourselves in the U.S., capture more of the upside and generate proof of concept that this therapy can be successful in the U.S. ourselves, while then over time, keeping the option open to complement our presence with a partnership if we come to the conclusion that, that would create even more value over time. Now let's hand over to Johan for some more details on the financials before I will close it off, and then we can open it up for your questions.

Thank you, Johannes. So if we turn to our financial results for the quarter on Slide 16, starting with the sales. So to reiterate some of the points made earlier by Johannes, we report net sales in the quarter of SEK 50 million, which is 21% above last year or 27% above last year if we exclude currency effects. And also, if we exclude the recently acquired contract manufacturing, our revenue would have been SEK 47 million, which means 21% growth organically if we exclude both M&A and FX, so 21% growth if we look at that. And it's driven by, in the quarter, very much a good performance in Germany, 19% growth in local currency as our acceleration plan is showing clear effects. Other direct markets report continued good growth, albeit a bit slower than in recent quarters, 22% in local currency in Q2. And as Johannes pointed out, mainly driven by Spain. And we have our distributor markets where sales increased 32% in local currency. And then as you know now, we also report contract manufacturing revenue, and that was SEK 2.7 million in Q2 2025. Gross profit for the quarter, we reported SEK 35 million, which corresponds to a gross margin of 70.2% which can be compared to 70.5% in the same quarter of last year. So steady gross margin at slightly above 70% continues to be the case for us. We are experiencing cost increases for materials and other key components. But as we have communicated previously, we continue to expect to see a positive gross margin effect from the integration of the acquisition of our supplier Innovatif Cekal in Malaysia during the second half of this year. So we still expect that to come through more clearly in our gross margin as we move forward from here. Looking at EBITDA, we report EBITDA in the quarter of negative SEK 4 million, which is almost SEK 10 million better than the same period of last year. And also, if we look at EBITDA ex-U.S., we report a similar year-over-year improvement in the quarter so that we're now very close to breakeven also for Q2. And as Johannes pointed out, Q2 and Q3 are seasonally our weaker quarters. So good to see that we're close to breakeven also in Q2 ex-U.S. So again, compared to negative SEK 10 million in Q2 last year for EBITDA, excluding U.S. So what you can see in our numbers is that we have been able to combine the sales growth that we are reporting with actually reducing overall OpEx slightly in Q2 this year compared to last year. So this year, we're at SEK 45 million compared to SEK 46 million last year. And of course, that translates into the EBITDA improvement, which we expect will continue going forward as we continue to grow, of course, and remain very disciplined on the cost side going forward. The group has grown in terms of staff on the back of the acquisition of our Malaysian supplier in late 2024, and we are now 131 colleagues in Sedana Medical, including consultants, and that can be compared to 89 a year ago. Then if we move to the next slide to take a look at our cash flow and cash position. We can start with the cash position. At the end of Q2, we had SEK 131 million in the bank, which is SEK 34 million lower than at the beginning of the quarter. And the 2 main drivers of the change in the cash position is mainly CapEx and U.S. CapEx related to our preparations ahead of the submission in the U.S. And we also have an effect of negative -- a negative effect from changes in working capital of minus SEK 10 million in the quarter. But if we look at them in a bit more detail, so starting with the cash flow from operations in Q2 2025 was negative SEK 12 million. And again, a big driver of the negative number here is changes in working capital. So the cash flow from operations outside of U.S. has improved in line with the EBITDA development, but total cash flow from operating activities has been negatively affected by changes in short-term liabilities, negative SEK 6 million and also changes in short-term receivables, which had a negative effect of SEK 3 million in the quarter. And I can add there with regards to the short-term liabilities that those SEK 6 million include an adjustment payment related to the sellers of our Malaysian supplier Innovatif Cekal during the quarter of SEK 3 million. So half of that change is related to that acquisition, which was as per the purchase agreement with the sellers. So looking next at cash flow from investments in intangible assets in the quarter was negative SEK 17 million. And again, that's driven by U.S. CapEx related to the NDA submission and other operations. This is significantly lower than the same quarter last year when we had SEK 56 million of CapEx. And we expect this new lower CapEx level to remain sort of the level going forward here in 2025, so significantly lower than in 2024. As you know, our clinical trials were completed in 2024, and that results in a significant reduction in U.S. CapEx this year compared to last. So adding this all up, we have total cash flow in the quarter of negative SEK 31 million. And then there is a bit of currency effect as well to get to the full change in the cash position. But again, of that reduction in cash, SEK 10 million is due to changes in net working capital. In terms of liquidity management, we continue to have a large part of our available funds in U.S. dollars. So still above 60% of our cash is in U.S. dollars, reflecting the fact that that's where the most of the cash outflow will continue to be going forward with, of course, leading up to the submission and thereafter as well. We continue to have no external long-term debt in the company, and we expect to be fully financed to execute on our strategic plan. Next slide, we have our updated shareholder list, and thank you for your continued support, as always. And with that, I will hand back to Johannes.

Yes. Let's have a look at our last page. Let me wrap it up and recap the Investment case for Sedana Medical. As you know, our business model has the advantage of having a good chance for attractive profitability over time because we continue to see good gross margins of 70% and up with some upside now from the Innovatif Cekal acquisition. So by definition, we can become quite profitable as a business when we reach scale. And at the same time, our customer base are intensive care units, so a relatively small concentrated target group that can be covered with reasonably low operating expense levels locally. And we already have proof of concept that, that model works in our main market, Germany, where the majority of ICUs are already our customers. The team is generating very attractive EBITDA margins on a local level already, and we see very good growth momentum also outside Germany. And while we're not at the same scale yet, almost all of our countries contribute positively with good local profitability by now. So now it's all about reaching more scale, convincing enough hospitals to use inhaled sedation with isoflurane more broadly and achieve profitable growth that way. And for this task, we have convincing clinical and health economic data on our side, showing that patients really benefit from inhaled isoflurane sedation and that hospitals can save money versus the previous standard of care. And we have still lots of places to grow in Europe, as we have discussed and hopefully also soon in the U.S. where we have Fast Track Designation, the positive clinical trial outcomes and also the FDA authorization of our Early Access Program. So all very positive signs towards a future U.S. business and still a balance sheet that allows us to execute our plan with no debt and SEK 131 million in cash and of course, a commitment to keep doing what we have done quite successfully for some time now to grow sales while being very disciplined on the cost side. So that concludes our presentation. Thank you again for listening, and we will be very happy to take your questions.

[Operator Instructions] And we have Filip from Pareto.

Hi, can you hear me well?

Yes, perfect. Hi, Filip.

I've got a few questions here, but I'll take them one by one. So first off, just nice to see Germany performing well, but it seems like other direct markets lost some momentum. It's been a real growth driver now. So looking back, I think, for the past 9 months, the growth has been in the range of 40% to 60%. So now 12% for '22, excluding FX. So is it only these 2 countries, the U.K. and France that led to this effect? Or was there some kind of effect from Spain or some other markets as well?

Yes. So a clear answer to that. So our core markets within other direct markets is Spain, U.K. and France. There's a little bit of Benelux in there as well and some small Swedish sales, but the effect that you see this quarter is driven by U.K. and France as described. So no other effect.

Okay. And around France then, can you share anything more about what they are saying? So is it only the sevo users that have become more cautious in the user? Have you also had any changes in the sentiment to inhaled sedation as a class?

No, it's a quite clear-cut picture. So you can almost divide France into 2 halves. It's not exactly 50-50, but the customers that have either always used isoflurane or have now switched to isoflurane following the SESAR results are growing quite nicely. So we've seen good results. The best performing accounts, by the way, in France are the ones that were SESAR sites, so participating in the clinical trial. So remember, it was a French trial that have after the trial switched from sevoflurane to isoflurane. So those are the ones where we see the best growth in France. But then reversely, we also see that accounts that have not yet switched to isoflurane, so that still use our devices with off-label sevoflurane. We've seen that customers are more cautious using inhaled sedation in that case, with sevoflurane in ARDS patients following the SESAR results. And that makes France quite unique. So overall, you can tell from our numbers that SESAR has not had an effect on our growth. So our growth rate in Q2 was even higher than in Q1. So we've been able to manage that situation well and actually see the opportunities in it. So we didn't have a negative impact. So France is a bit -- stands out a bit from all the other markets in that sense because we still have a significant share of customers using sevoflurane because France has traditionally been a sevo country. So now the focus needs to be on switching that over to iso. And whenever we see that, we also see usually an increase in sales.

Okay. Okay. Perhaps switching focus a bit. So distributor markets picked up in the quarter now, and I know it's quite irregular the order pattern. So is it fair to assume that this quarter was unusually strong? Or what are your expectations moving forward now?

No. Well, it was not unusually strong because Q1 was quite weak, right? So year-to-date, we're still roughly in line with last year, so not a lot of growth. So from that perspective, we did expect a little bit of a catch-up effect in Q2 now. Overall, what's important from a strategic perspective is we still have quite a high number of distributors. So as a small company, we really have to focus. So we can't spend a lot of resources on supporting partners even if we would maybe like to do that, that generate very little sales. So we have to be really, really focused and offer the best possible support to, let's say, the handful of key partners that have the best growth potential and where we have the biggest business. And with that strategy, I'm assuming that over time, we will see growth. But as you rightly say, there's a little -- there's going to be a little bit of up and down between the quarters. So it's not unusual to see a 30% swing in either direction. So from that perspective, you'll always have to look at a slightly longer-term trajectory in the distributor markets.

Okay. Moving over now also quite interested around the feedback you have received from the medical community now after the U.S. results. So it's been almost a month, I think, since you presented it. So what have you heard from the community in -- and I'm thinking both then in Europe and the U.S.?

Yes. So I can start and then, of course, Peter can probably give you even more insight. So one of the things we did relatively fast after the trial data were released, we brought the investigators from the U.S. trial together to discuss the results. And we had a lot of enthusiasm in that room. So in the sense of, wow, this is getting real. So these results look like we can really get the therapy approved in the U.S., and there was a lot of anticipation of having a treatment alternative. And I think that the feedback has -- so the results have been appreciated. They've been considered very positively, especially when it comes to opioids, but also some of the trends we're seeing such as shorter or more ICU-free days or also the mortality difference that people are quite intrigued with. So U.S., I would say, very positive reception. And of course, also in Europe, we are -- since the data have been made public, and we have a lot of doctors that are very curious what's going on outside Europe. We've received a lot of interest on the -- especially the mortality data because, of course, people have seen the SESAR trial. They've seen that apparently with sevoflurane, at least in ARDS patients, we saw a mortality disadvantage. And now seeing the opposite with isoflurane, I think, drives home that point that isoflurane and sevoflurane are indeed different drugs and people who have been seeing the benefits in their daily lives with inhaled isoflurane sedation feel very much confirmed in that approach. Peter, what would you say?

I agree with everything you said, Johannes. I think one can add one aspect that when we had the investor call that we didn't discuss so much. But if going back to the anesthesia and volatile anesthetics, the history of these drugs is that there were 3 early drugs that were used a lot, halothane, enflurane, methoxyflurane considered very good, efficacious and so on. But over a few years after their introduction, they were found to have toxic effects and new drugs came, isoflurane, sevoflurane, desflurane. And today, no one considers methoxyflurane to be a volatile anesthetic that one would use except for immediate pain relief and this green whistle thing that you can use. But otherwise, it's not used for anesthesia. And I think we're seeing the same development, same evolution in inhaled sedation that inhaled sedation for everyone 5 years ago was either iso or sevo. And I think we're learning more and more that sevoflurane is not the drug that one should use for prolonged sedation, whereas isoflurane appears very safe. So the reaction that we are getting is a lot sort of these are 2 different drugs. We realize now more today than we did before. And also many of the users are sort of reassured when they see the results from the U.S. study, as Johannes was alluding to, all outcomes were sort of either neutral or in favor of isoflurane compared to standard treatment in a completely inhaled sedation naive context, the U.S. And if you look at the paediatric study, it's actually a similar kind of trend, small numbers, but there's no mortality in the first 30 days in the iso group. There's a 6% mortality in the midazolam group. So all looking at the big studies that have been performed with isoflurane, which are our studies, it's really clear that isoflurane brings benefits compared to propofol, whereas the large seizure study shows something else. So I think it's not difficult to explain with the help of the U.S. data.

All right. That's a good answer. I'm just thinking around the long-term follow-up that you had here also. So mortality at 6 months out from treatment also trended lower. How much weight has been given to that number, so to say?

So the mortality at 6 months is potentially there's a sort of possibility that -- I mean, the further you go from a short-term intervention, the less impact you'd expect to have from that intervention on mortality because there are many other reasons for dying. I mean we still see positive results in the 6-month mortality in both U.S. studies. I think there's no inhaled sedation study that has that long follow-up, but we included it because we were doing the cognitive outcomes analysis anyway. So that also looks good. I think 30 days is the classical sort of mortality endpoint mark, if you like. But as I said, in the 6-month mortality assessment, we had something in the range of 10% almost difference in one of the studies and a few percent lower for the second study. So those data also look good.

Okay. And then just a final question, I think that's to you, Johan. So it's around the cash flow and the U.S. regulators. So I think you mentioned now that maybe I just want to check so that I got this correct. So the investment in intangibles that you have now, is that the run rate going forward now for the rest of this year until you send in the -- until you submit to the FDA and then it will go down further? Or what are the expectations there?

Yes. I think that's a good starting point. I think it will gradually be coming lower during the second half of the year, but the big shift will then be once we actually submit in early next year. But of course, if you look at it, now we're at -- if you look at the first half of the year, we're at SEK 34 million CapEx. And really, it's -- almost all of it is U.S., and that's down from SEK 108 million last year, right? So that tells you sort of the shift. So hopefully, we'll continue on this or slightly lower level by quarter during the second half of the year.

Okay. And that concludes the Q&A session here. Thank you very much, Johannes, Johan and Peter for that presentation and answering all of our questions. And I wish you all a great rest of the summer. Thank you very much.

Thanks a lot. Enjoy the summer, everyone.