Xvivo Perfusion AB (publ) (XVIVO) Earnings Call Transcript & Summary

Hi, everyone. Hope you're enjoying day 3 of the JPMorgan Healthcare Conference. My name is Vidhushi Taduri, and I'm an associate in the health care team here at JPM. It's my pleasure to introduce XVIVO's CEO, Christoffer Rosenblad, who will be presenting to you today. Over to you.

Thank you so much, and welcome to XVIVO's presentation. XVIVO is a company that scientifically pushed the boundaries of organ care prior to transplantation. And since you so amicably introduced me, I would jump to the XVIVO's vision. Today, organ failure is the most common cause of mortality. XVIVO is determined to change this and one day make sure that our vision come true, which is that nobody should die waiting for an organ. Alex, on this picture used to live in Perth, Australia, which is a very remote town in Australia. Before XVIVO, Alex would have died due to organ shortage or too far distances to recover new heart. Now she got enrolled in the XVIVO Australian study for the Heart Assist Transport device, and she did receive a heart from across the country. And this would have been impossible without XVIVO's technology. And I actually met her in Europe. Today, she's living her fullest life. She's taking her PhD in Amsterdam in the Netherlands and living a normal life like the rest of us going to the gym every day. So what do we do in XVIVO? This is an overview. If we start with the company's XVIVO, it actually means outside the body. And that is exactly where we operate in the transplant process. We are between the organ donation and the transplantation. And our job is to optimize organ care and evaluation of organs to enable more organs and better organs to be transplanted. This is a snapshot of XVIVO. Basically, XVIVO's products are based on almost 30 years of intensive research. It's hundreds of thousands of man-hours that go into basic research to come to where we are today. And we started in thoracic region, hearts and lungs. And we started with lungs and later actually intensified our research into heart technology. Now we come back to this technology later in the presentation. In 2020, we acquired the abdominal portfolio, so that's liver and kidney and became the first global all-organ company within transplantation. In the following years after 2020, we acquired service modules, so we can enhance our go-to-market strategy and be a true partner to our customers. In terms of financials, we always had very healthy financials and in the past years, healthy growth rate as well, especially in the years when we started to commercialize our paradigm shift in technology. We look -- pretty much in terms of market, we look like a lot of med tech companies with 60% in the Americas, 35% in EMEA and 5% in APAC. Then we can jump into the transplant market and the problem we are facing today for later on in the presentation, explain how we want to solve this problem. Today, we know that approximately 2 million people are in need of a transplant every year. However, in the year of 2024, only 170,000 transplants were performed. Hence, we are now meeting 10% of the global need for transplantation. And to explain a little bit more, for sure, to fill that gap of 1 to 10, we need to have more donors. But to be very clear, the key problem is that we need to use -- that we're using too few of the actually donated organ as you see in this picture. To increase the use rate of the donated organs we have today, we need machine perfusion. The other challenges we are facing is a change in dynamic of the donor population. There are 2 types of donation. It's either DBD, donation of the brain death. And the other one is DCD, which is donation of the circulatory death. During the past 10 years, we've seen a shift of a typical donor. From 10 years ago, it was typically a young DBD donor. And now it's typically an older DCD donor. Both DCD and age, donor age introduces uncertainty into the organ quality. And this is where machine perfusion come in, both in terms of keeping the organ in good condition and evaluation tools to determine what is a good or bad organ. And the best impact, where the impact that is best shown is the introduction of our lung technology. Even though we have seen overall a fairly low number in growth of donors with low single digits in the last 5 years, the number of lung transplants where we have commercialized our portfolio has grown 11% in the same period. So this is where we see that technology can shift how we actually -- how many organs we can use. So coming back more into how do we actually solve the problem. For decades, XVIVO has been in the forefront of saving lives. Today, we have the best innovation in the market. This is great, but not enough. We also need to provide the best-in-class services to help OPOs and transplant programs to grow. And our goal is to become the preferred partner in the transplant process in the next couple of years. And this is the offering of the best-in-class products we are providing to the market. XVIVO -- a few things to point out, XVIVO is the only company that develops perfusion sets that are the bags and the bottles you see in the picture. XVIVO is also the global leader in both lung preservation, transportation, preservation and in lung evaluation today. We are the European #1 in livers. But the most interesting technology is the XVIVO Heart technology. It's really the crown jewel of the product portfolio. Today, it's not commercialized yet. It's awaiting approval in Europe, but it has the potential to change transplantation forever. And we will come into that a little bit later. On the right-hand side of the slide, you can also see the service offering. This is under buildup to be fully built up during late 2027. We look at Slide 14, the regulatory approval status in the core market. It's -- a few things are clear. And one thing that strikes me is that we see that we have the majority of our growth in front of us. Today, the main share of revenue come from our lung products. And we see that we have approval -- global approval on kidney as well as European and Australian approval of liver. And the most innovative product, the heart is not even approved yet. But all regulatory trials are completed, and we are on the brink now to launch those products and change the paradigm for heart in the world. And if we look at the liver, we are investigating our regulatory pathway for the U.S. market for liver as well. The impact XVIVO will have to the transplant industry is mainly 4, and this is how we want to reshape transplantation. The first 2 points are patient-centric and the last 2 points are more transplant and society-centric. But the first and more important, which is completely linked to our vision is that we need to make more organs available for transplant. And with our technology, we can do that. The other thing we see in all clinical trials is that by using XVIVO, we can improve the patient's life by better outcome and longer survival. But this is not enough. We also need to support our partners, the transplant clinic and the OPOs. And we're going to do that by reducing cost and increasing efficiency in the transplant system so we can enable more transplant for the same U.S. dollar amount. But it's also -- what we also want to do is to reshaping how transplant are perform and making it a plannable procedure. And we can see that already on liver in Europe, for example, it's now a plannable procedure versus before it was something you did in the middle of the night. So we are in the process to do that already. I started to say that we spent 3 decades on research, and this is something that makes us completely unique in the field we are. We have really tried to optimize organ care with best-in-class perfusate solutions. And we -- as I said, we are the only company who actually brought those solutions to market. The third point which makes us unique is that we have spearheaded and have a large body of evidence for HOPE, which stands for Hyptherermic Oxygenated Perfusion. And that has proven to be the best way of transporting an organ between the donor side and the transplant hospital. You keep them in the best condition possible with the lowest risk and with the best patient outcome. It has also been proven that with HOPE, we can increase the out-of-body time more than you could before. The last part of the presentation will go more into the future and the outlook. We start with a little bit shorter-term outlook. And since the U.S. is our largest market and also has the greatest growth potential, both short and long term, the catalysts for next year are to drive lung evaluation adoption where we are already leaders today, and we're going to grow that market. We also will implement NRP into our service offering on customer request. The most important milestone next year will be to file the heart file to the FDA. And we will invest heavily into our commercial organization, both to drive growth from existing products we have today, but also to prepare for the heart launch that will come in '27. In Europe, we have a very strong position, and we are looking forward to the CE mark also for heart in Europe that will drive growth for the next decade in Europe as well. And we will enable customers to use the best-in-class products. And it's a question I get every day from European clinics is when can I buy your heart products, so I can start recovering more heart and get better patient outcome, and I can also make heart a plannable procedure versus today, an extremely stressed procedure. We have approximately 4 hours out of body time. If we look a little bit further into the future and how we want to change the paradigm of especially heart, I promise to come back to heart. And if I want to highlight one thing, is the transatlantic flight that was performed. It's the first time ever a heart flew across the Atlantic Ocean. And not only it was unprecedented due to distance, it was also the longest out-of-body time ever recorded with more than 12 hours. And it's amazing. But typically, today, you use -- even for short distances, you use private airplanes. This was done on a commercial airline or an Air France in commercial. And as you see on the picture here, this is an actual picture from that recovery. It's on economic -- economy seat, which is -- so it's unprecedented for 3 things. What is even more striking with this case, there have been many more after this. But what is striking with this case is that Professor Lebreton, he really pushed the boundary because the donor was very old. And more so, the patient was older patient and too sick to transplant. So he was delisted from the transplant list. But thanks to Professor Lebreton's hard work and XVIVO's heart box, the patient got a second chance to live and actually had a very good recovery after transplantation. And to sum up, why you should invest into XVIVO. As I started, the market potential is huge. In terms of number of transplant is 10x larger than what standard of care can accomplish today. XVIVO is the only global company that can offer a portfolio for all organs that increases availability and improve patient outcome. We have similar to the previous presenter here, we have a history of continuous profitable growth. And last point I want to point out that spending those 3 decades of heavy research has paid off, that the portfolio we have now is truly innovative. And when we go into next generation of organs such as xeno organs or printable organs, that's when XVIVO products really needs to be used. So for example, there has been 2 xeno hearts made here in the U.S. Both were made possible with XVIVO technology. Without it, those would have not been possible to make -- to have been done at all. And with that, I want to end the presentation with a little bit longer look into the future. When you fly, you might be seated next to one of those heart boxes. That is a heart donated that is transported to a patient. This patient has likely been on the waiting list for a long time, hoping for a donated heart. At the same time, there is a donor family. And in the darkest of moments, choose to give the gift of life to someone else they don't know. And I invite you today to be part of this journey and share this vision that one day, nobody should die waiting for a new organ. Thank you for listening.

I think we can move on to Q&A if there's any questions from the floor and any that are coming through online. To kick things off, it will be really interesting to hear what makes XVIVO really unique to your competitors and versus your peers in the market?

Yes. Thank you for that question. I think the 3 decades of ground research into how do you actually keep the cells alive, how do you optimize organ preservation, how do you optimize organ evaluation, what type of perfusate liquids do you actually need to accomplish this makes us truly unique in a couple of ways. But the most striking way is that we have -- we're the only company who brings perfusates to market in the transplant industry today. And the perfusate is the blood substitutes, and that is so important to keep cells alive. And that's why we see in clinical trial superior outcome over and over again when we run clinical trial. So that makes us truly unique. We're the only one in the world doing this today. And secondly, I would say we have spearheaded the HOPE, way of transporting organ. And that is by finding the right temperature, which is hypothermic, but not ice and oxygenated and perfuse it both during transport, but also for making implantable surgery in a safe way. And HOPE offers a lot of benefits. it will prolong out-of-body time, but it will also be the safest way of actually transporting an organ. For example, if something goes wrong with the device or if anything happens during flight, there is no -- the organ will be in good shape no matter what because it will be kept at optimal temperature. It will be far better than ice, which are -- is the standard of care today. So even in the worst-case scenario, it's still better than what we actually do today.

In your presentation, you often referred to the paradigm shift when describing your heart technology. What do you mean by that? Would you mind expanding a little bit further?

Yes, absolutely. Thank you for the question. We believe that heart has the potential to become the gold standard in heart transplantation and heart preservation transportation. The reasons are manyfold. But one, patient outcome is better. If we compare normal hearts that we did in Europe, we saw that we got an improved patient outcome using this. And this is normal hearts below 4 hours, DBDs that are -- they are improved. We can also see that not only can we improve patient's life, we can also make more organs available because of matching. Today, matching is limited or opportunity of matching is limited due to the short out-of-body time which is approximately 4 hours, which doesn't allow for optimum matching. But with the heart box in the market, you could go for national allocation in Europe, in United States, in large areas. And we can already see one example of this is Australia, which is prior to approval. So we don't -- we can't market the product, we can't sell the product. But in DBD heart, we have a 40% market penetration already without actually selling the product or promoting it. So I think that's a hint to why I think it will change the paradigm and lastly, the heart product and the heart box you see in the picture here, it allows for reducing huge amounts of cost into transplant system, where you before had to pay hundreds of thousands in U.S. dollar in transportation costs, you can today go on a commercial airline there or for shorter distance opt for car instead of private airplanes, which is the -- what we use today. So we're driving down costs, we will enable more transplants to be made and hence, more patient lives to be saved. So this is why we believe this should be the gold standard going forward and once approved.

Yes. That's great. Any questions from the audience? Okay. I think a final question from my side. I think when we look forward into 2026 and the years forward, what should investors keep an eye on? And what should we be excited about?

I hope the same things as I am looking forward to, and I'm excited. Number one, we are looking forward to the biggest heart and lung transplant congress. It will be held in April. We will have some -- hopefully, some great presentations there. We hope for U.S. data to be presented or U.S. data will be presented during the conference. We also run a direct procurement DCD trial in Europe that we hope to be presented, which is fantastic, 40 patients, which will make the DCD recovery process so much easier than we do today, and we will drive, again, drive down cost by using this simple device. Besides that, we are obviously looking forward to handing in our application to the FDA for the heart box and the CE mark, hopefully this year for -- in Europe. So we can start selling it and start marketing in Europe. And besides that, I will keep my eye on the -- what we have seen in the last couple of years, the increase in penetration of existing technologies we have on the market. So that's, of course, something to keep an eye on. We have a great lung product approved everywhere in the world and the liver technology in Europe to see that continued market penetration.