Good afternoon, and welcome to this annual report 2024 presentation and Q&A with ViroGates. With us today, we have the CEO, Jakob Knudsen, and the CFO, Josephine Baum Jørgensen. First, there will be a presentation, and afterwards, a Q&A with the CEO and CFO who will answer questions submitted via Stokk.io. There have already been pre-submitted questions on Stokk.io, and the Q&A is still open so that you can submit questions live as well. I will now hand over the mic to ViroGates to start the presentation. Jakob and Josephine, your line is now open.
Thank you, Anas, for the introduction, and we have been looking forward to presenting our annual report for 2024 that came out just after our board meeting yesterday evening. We have worked intensively with it, but you may not be familiar with it, but we are looking forward to taking you through and answering any questions you may have. First, a forward-looking statement, as you probably know it. It is the actual wording of the actual report that prevails. In short, ViroGates is an international medical technology company. We work within the field of IVDR, as it is known, in vitro diagnostics, so measuring a particular protein in the blood. We were founded back in 2001 and actually a spin-off from a university hospital here in the vicinity of Copenhagen. We are now located slightly North of Copenhagen, employ around 12 people, and we went public in 2018.
The focus area that we have today is to empower healthcare and enhance longevity. This is relatively recent that we've transitioned fully into the longevity field, but we look forward to addressing that more in detail. Our mission is to develop biomarkers into affordable solutions, and we aim to address some of the highly prevalent challenges that we are faced with, with aging population, growing labor shortage, the fact that people want to take more responsibility for their health, and start looking into how we live the best life possible, not necessarily the longest, but at least getting the most of when we're here. We also have a legacy business kind of where we work within the more traditional healthcare sector. We still supply products to that, and we obviously serve customers.
It is not something that we've forgotten about, but we actually have a quite strong focus now on the longevity field. In short, and this may be familiar to the ones of you that have followed us, but suPAR is an indicator of chronic inflammation. Chronic inflammation occurs within the body as a result of some of the aging that we're exposed to, but also to some of the chronic diseases that we might encounter. This gives rise to a process within our bodies of inflammation, which helps actually combat the disease, but it's also a reflector that something is wrong. This is where suPAR is highly predictive, and we've shown that in a number of peer-reviewed papers. We have solid clinical evidence for the claims that we are making in those sort of highly accredited journals.
We have actually more than 1,100 peer-reviewed papers now. This can be looked into in what's known as PubMed, which is a collection of all these articles where anyone can access it and look at the evidence that is out there. This is also quite familiar. What is basically depicted here is suPAR's ability to prognosticate outcome. What we see is that suPAR levels that are very high, above 10 nanograms per milliliter within the plasma, is highly associated with mortality, death, but it's also associated with the risk of cardiovascular disease, cancer, and other healthcare issues. This is what we play on. This is data from an acute care ward, but it's actually also reflective of average people. I should say that there are many more individuals in the green area, the ones with zero to four nanograms per milliliter.
It is not a numbers game, but it is just depicting that people with a very high chronic inflammation level by ways of suPAR also have to have intervention in the form of medical attention. Into the suPAR diagnostic in the general health space, also known as longevity, there are many names for it, but it basically reflects that we want to push suPAR in as early as possible so that average people also have the ability to measure suPAR, and not only the ones that are admitted to a hospital. That can allow for timely interventions within our lives to actually lead better lives. This is an area that we have focused intensely on, and we have transitioned over the last year, I would say, into this field to develop more and more of our efforts in the field.
We are working to create this pull effect for suPAR testing by ways of pushing some of the science that we have, suggesting that if interventions are done in effect to the measuring of suPAR, suPAR can be lowered and thus biological years can be gained. We do so by servicing primarily labs and health clinics, and this is to allow the consumer to have suPAR measured in an environment where also medical staff can guide the interventions and interpret the results in combination with other healthcare messages that the individual is looking to get. Most recently, we have partnered with a dedicated company that is being set up known as suPAR Health LLC, which is going to take care of this segment of our business in the U.S. What is shown here is our ability to guide healthcare.
suPAR levels that are below approximately four, but I'll get a little bit back to the individual interpretation with respect to age, is generally considered a good and low-risk health condition. suPAR levels can increase. We also know what we need to do about it, and this doesn't come as a surprise. Obviously, one of the big indicators of chronic inflammation is smoking, inactivity, unhealthy diets, too much alcohol, and so on. That causes systematic chronic inflammation. Those are some of the general advice, but there's obviously also the ability to measure if medical interventions are done to actually see if this gives rise to suPAR. Some of the more biohacker-oriented people are also looking into applying suPAR with respect to cold water exposures and so on to see if they can actually lower their suPAR.
We have solid evidence also within this field, and this is depicted here where up to 15 years can be gained in if we measure a large cohort of people, around 8,000 individuals, where we looked at the predicted age, and the predicted age for somebody in the lowest quartile, i.e., the lowest 25%, is 15 years higher than one with a high suPAR. There is a lot to be gained, and this can be measured successfully so that interventions can be measured. What I just said about these health hacks or interventions that can be done, eating healthier, quitting smoking, and so on, that can actually be transcribed into a biological age.
We have a biological age calculator at our website, so anyone can go and look at how do I stack up against a large cohort of about 10,000 individuals where we look at what is the spread on suPAR with respect to age. This is quite helpful in determining what is the individual effect of chronic inflammation because obviously there will be more chronic inflammation with age. There is an age component, but it is easy to translate by ways of this tool. A short word about suPAR in emergency care because obviously, as I mentioned, we do have some customers, especially in Greece, a little bit in Spain and Italy as well, where suPAR is used to basically guide the support of discharge. The low suPAR levels, patients can be discharged earlier and with more certainty.
Maybe there's not a need to see a very senior healthcare person, but a more junior can take that decision earlier on and thereby save bed time in the emergency departments. On the other hand, we also have the high suPARs where this supports the need for hospitalization, and thereby this is sort of a red flag that something needs to be done and probably intervention is more needed. We've looked, and I know some of you may have seen this as well, but it's still very reflective of the ability of suPAR to actually guide and improve the triage, as it's known, the decisions whether to admit or discharge patients in the emergency department.
With suPAR applied, so that we recalculate how the patients spread in the different groups, we see that many more patients on the lower bars can be retriaged towards the green boxes and also slightly more to the red, but that's actually what we want. We want a clearer separation of the yellow patients, and that is what is achieved here. Then suPAR is diagnostic in guiding treatment. We have a couple of examples, and one of them was the COVID example, and I'm going to get a little bit back to our collaboration with Sobi in this respect. We also have a more recent application, and this is within sepsis, very severe condition where basically the inflammatory system, the immune system is going into sort of what is known as also a cytokine storm.
It's basically that the body is not able to cope in an efficient manner with typically an infection. We've actually done a study where we randomized patients into receiving a suPAR result and treatment early or not. There it's been found that it's highly useful to see if suPAR is elevated in patients that are admitted with a sort of normal to low qSOFA, as it's known. It's a qualitative score that the physicians are applying. If some of those patients actually have a high suPAR, they need to be treated earlier. We saw that this had a tremendous effect in the accommodating of those infections with the septic patients. This is a highly useful tool also in the acute care and infectious medicine area. This is also something that we're looking into.
We also have an ongoing collaboration about a combination product where suPAR will be applied to that particular therapy. It is a little bit away from getting registered, but we are looking forward to that and supporting that program highly. I will leave it to you, Josephine.
Yep. Thank you, Jakob. I will speak a bit to our products, our business model, and our team. Looking to our products, we have a wide product portfolio of various ways of testing suPAR. The first product that was launched was the ELISA that is in the bottom right corner. It is a plate with many wells, making it useful for especially research purposes or at laboratories or clinics where you have volumes or bulks of blood that you want to test for suPAR.
We have primarily seen this being used in research, but are now also witnessing it being introduced into the labs that are catering to health clinics. The next product that was launched was the Quick Triage. It's a near-patient use test, meaning that you're able to do the suPAR test in close proximity to the patient. It has to use plasma, so you have to draw blood and then to centrifuge it to do the Quick Triage test. The following product that was introduced is the high-volume automated clinical use product. It's the TurbiLatex, which we've worked to validate on various of these larger platforms like Abbott, Beckman Coulter, Roche, and Siemens. The slightly graded POC+ in the top right corner, it's also a near-patient use test, meaning that you can do suPAR testing close to the patient.
The difference between that product and the quick triage is that it's an actual fingerprick product, meaning that you can do the suPAR testing by applying fingerprick blood. It's great because we're currently working together with the device manufacturer GENSPEED to further develop it. Regarding our geographical scope or our commercial presence, we are present both through direct sales representatives and through established distributors and indirect sales. We cover most of Europe by ways of both direct sales and indirect sales. We have research use-only sales to various countries in the rest of the world, and especially also to North America. This is our management team and our Board together holding extensive knowledge within healthcare and life science. To what today is actually about, the publishing of our annual report.
Looking to the main activities or business highlights in 2024, we announced firstly the outcome of our first meeting with the FDA in April 2024. I think Jakob will come back to that, so I'm not going to say any more about that. Then we entered into this distribution agreement with US-based suPAR Health LLC for the introduction of our suPAR ELISA test to the US market to allow for population health management, monitoring, and preventative care in that market. In relation to this distribution agreement, we also announced a directed issue towards suPAR Remedy LLC amounting to approximately DKK 8.2 million in capital raise. In the end of the year, we announced the reorganization of our sales and marketing department to gear us or to prepare us better for the future and the transition into the longevity segment.
Jakob, a bit more on the Sobi collaboration.
Yeah. Many of you might think, why on earth still work on COVID-19? Is this an issue again? It is, certainly from a regulatory perspective with Sobi, an issue. Sobi, as some of you may know, had a drug that we, in combination with suPAR, used and tested during the COVID days. We found that by applying suPAR, the drug could be administered very effectively as opposed to when it was done in a trial without suPAR. It is also a very good indication of what I just spoke to you about, combining suPAR and treatments. We entered into an agreement with Sobi to basically have them funding some of our development work for getting TurbiLatex into the U.S. That was the clear focus initially.
We've actually managed now also to extend the collaboration. We're working with Sobi for them to sponsor our analytical work for supporting both the IVDR, as the new regulatory scheme in Europe is known as, and also an entrance into the U.S. by ways of the FDA, obviously following the learnings from the meeting that we had with the FDA, the Q submission meeting. That gave rise to a lot of clearance on what was needed to be done. ViroGates will be responsible for any additional clinical data. We have access to some research pools in the U.S. that we can measure. Sobi will fund a lot of that analytical work, which is actually the bulk of the work that needs to be done. We are doing that in-house with our development partner, Sobi, in Poland.
We are very excited to continue the collaboration with Sobi. It is still the background for some indications in the Sobi inserts, both in the U.S. and Europe. Therefore, they are very committed to helping us get through the hurdles with both the regulatory authorities here in Europe to maintain our products in the market beyond 2028, and also introduce our products into the U.S. This was also just announced earlier this week, and we look very much forward to collaborating further with Sobi.
Yeah. Going back to the financials of 2024, our revenue decreased by 12% compared to the previous year. It was primarily due to continued low traction among the hospital customers, but especially also lower activity from some of our larger research customers. Research customer activity tends to be a little bit more difficult as purchases are usually more fluctuating.
Luckily, and also as written in the report, we continue to experience interest from the research community, also shown with the many papers that are published every year on suPAR. Net loss increased to DKK 14.4 million in 2024. The negative result is a consequence of, of course, lower revenue, the writing down of stock, and then the accruals that we had to make related to our reorganization of our sales and marketing department in the end of last year. Unfortunately, when you've had years as we have had where you have less than expected sales, you need to write down products that are expiring, which is what we had to do last year, also affecting, of course, our result negatively. Diving further into the financials, other income increased last year by 60% to DKK 2.2 million from DKK 1.4 million in 2023.
This other income covers this Sobi collaboration that Jakob just mentioned, where Sobi is funding the analytical work that is performed in relation to the FDA U.S. process and now also in Europe and IVDR. Our operating expenses increased by 5% to DKK 19.4 million from DKK 18.4 million in 2023. This is primarily due to increased patent costs, but also the fact that we have more project activity related to the Sobi collaboration. Whereas the costs are accounted for under R&D, the income or the funding that Sobi is providing for us is accounted for under other income. The net loss increased from DKK 12.1 million in 2023 to DKK 14.4 million in 2024. We ended up cash-wise at DKK 12.2 million at the end of the year, compared to approximately DKK 16 million at the end of the previous year.
The reason for our strengthened, you would say, at the end of the year cash position is the direct rights issue that we conducted to suPAR Remedy LLC in October. Looking to the product mix, as is very clearly visible, I would say it's been very stable compared to 2023 and 2024. It moved slightly in favor of the QT and less TurbiL atex. Other than that, the product mix is relatively stable. The number of recurring customers, as you see to the right, fluctuated throughout the year. You see year-end numbers for 2023, and then during the various quarters, and then year-end numbers for 2024. We ended up at 20 recurring customers compared to 17 recurring customers at 2023 year-end.
As some of you might or might not remember, we introduced this new measure of recurring customers back in 2023 to correlate the number higher to our revenues. A recurring customer is a customer that has placed at least two orders with ViroGates of an accumulated value of more than EUR 10,000 within a year, so within 12 months. Also noted in the announcement and in the report, we witnessed in 2024 a more diverse group of customers, which necessarily makes sense due to the transition that we are currently in from catering primarily to hospital customers to now also cater to health and longevity customers, also having research customers very much. We welcomed three laboratories into being recurring customers in 2024. These are laboratories that are handling blood testing or suPAR testing for health clinics in their near proximity.
This is really the route that we want to dive into going forward. We do, of course, acknowledge that customers in health and longevity are typically smaller of account size, which is why it's not entirely visible that we've included these three on the revenue side. We have to approach the new target in a different manner, and we look forward to doing that in 2025. Diving the last part into our customer base, you see here the separation between clinical routine customers and research customers. Clinical routine customers are customers, whether it be hospitals using suPAR for triage or health clinics or labs conducting suPAR testing routinely, whereas research customers are, of course, universities, institutions, organizations conducting research.
We see, you might say, a healthy development in that we are both growing the customer base within clinical routine, but also within research as compared to year-end 2023. I believe that that was it from both of us. Now we are looking forward to answering your questions.
Perfect. Thank you for that, Jakob. And you, Josephine, let's jump directly into the questions here with the first question being, what is the timeline for entering the US market?
Should I address that?
Yeah.
Yeah. I mean, there are actually two tracks to entering into the US market. The one that I mentioned with Sobi is the lengthy one. This is the registering with the FDA, and that has certain advantages in terms of promotional claims. That is not generating any revenue and will not generate any revenue this year.
We hope, touching wood, that we would have more news in 2026, but it's still pending these development efforts. The other track that was mentioned was the suPAR Health track where we have an appointed distributor. The U.S. is a market that also operates with state-organized CLIA labs where the healthcare clinics and individuals can have access to information like suPAR, like other biomarkers, independent of the FDA. It's basically overseen by quality standards that apply to these labs. Those labs can take in products, and they need to verify that they actually perform according to the standards. They can run it and report it to either physicians or individuals. That is the track that is actually already being launched as we speak.
We haven't seen the first revenues from it, but a lot of activities are going on in the U.S. to actually cater to that segment. That is the longevity because basically those kind of customers, typically health clinics, will request the labs to conduct these types of analysis, and we will supply the labs in due time. That is why we've then pointed a partner that is engaging with these customers directly in the U.S.
The next question is, you expect DKK 5 million- DKK 7 million in 2025 revenue, which means in the low end, no growth in revenue. What is your plan to increase revenue going forward?
Do you want to jump in?
I can start. Yeah.
As I kind of briefly touched upon before, the transition into the longevity segment poses a different way for ViroGates to go to the market and to serve customers because customers within hospital or within the longevity segments are just different from the hospital clinicians that we've worked with before. Currently, I can say what we're doing is that we are conducting a big push to our go-to-market strategy, figuring out how are the ways of working in this new arena for us, which is the longevity and general health segment, and then targeting these clinics and these labs in an entirely different way than what we've been doing before. The reorganization of our sales and marketing department and also a more content-different way of approaching our customers is how we will grow revenue in 2025.
Can you elaborate more on the benefits of the alliance with Sobi and what the news from a few days ago means?
Yeah. I mean, I think the huge benefit to us is a direct effort of supporting something that we need as a company anyway to maintain our products in the European market. Obviously, the aspirations with the U.S. is what sort of gets me up in the morning because it would pave the way for something that is much bigger on the longer playing field. The labs in the U.S., it's just easier for them to adapt an FDA-cleared product as opposed to the CLIA lab developed way because they need to do a lot more testing initially to verify or validate the product. That is why the Sobi will be very exciting.
We also plan to use this as a spearhead to maybe registering additional indications or some of the other products. It has a lot of aspirations assigned to it in the future. In the short term, it is, as Josephine also alluded to, a source of other income and cash flow. That is why also with the directed issue and some contributions with Sobi that will continue in 2025, we have a support for our cash flow in general. There are a lot of things that are exciting about working with this and maybe also mentioning just working with a therapeutic directly and being associated with that claim in the therapeutic product is the first time we've experienced that. We are very excited about that because it just doesn't happen very often. I think it's actually the first one within infectious medicine. That's quite a landmark for us.
The next question, what will the future hold for your POC+ product, which currently has some issues, I believe?
Yeah, I think you alluded to it, Josephine. The POC+ , as you might know, was cleared IVDR back in 2022. We ran a confirmatory trial and saw that it had some issues. That's why we went back and thought long and hard about what could be done maybe to improve that product. There are a lot of technical aspects that I don't want to dwell into here. We had some good ideas in collaboration with our device manufacturer that's actually also doing the actual cassettes. We supply bulk reagents that they will use to coat the plates and utilize the machine. We're actually doing the work as we speak.
It would be preliminary for me to take a guess at whether it'll be successful because, quite honestly, we need to see the evidence. It was a performing product. It just didn't perform to the expectations that we both had. That is why we decided to see if some of those minor changes to the product could improve the performance of the product. We have products that report the results in a quality that we like and, obviously, are within the boundaries of the legislation, but also to the quality standards that are more strict that we adhere to here.
We arrive at the final question for now. Make sure to generate traction in those areas where you had to downscale on people.
Should I address it or do you want?
Yeah, I can definitely address.
It's a little bit in continuation of what I mentioned before. The way that you target this segment is entirely different. I think you are not necessarily applying the same sales strategy as you would, as we've previously done, by visiting hospitals one by one. If you are to visit health clinics in Europe one by one to get them interested in suPAR, I think you'll spend a lot of time, and it won't necessarily be worth the cost. They are working in different arenas, and especially on the marketing side, it's something entirely different from what we're used to. I would say it's a simultaneous push to, of course, contact and reach out to the labs and the clinics, but also, as Jakob mentioned previously, creating the pull effect from consumers.
Actually getting people, individuals, clients that are normally attending these clinics interested in chronic inflammation and interested in suPAR and interested in monitoring whether their health is at a level that is sustainable is also something that we're working at. We're also boosting our marketing efforts or our targeting more broadly, you might say.
Y eah. I guess some of the hopes that we also have is that there's actually a little bit more involvement by ways of a monetary system that works here because the actual clinics are not part of the socialized medicine application. They need to charge a customer for something, and they're interested in providing those results as opposed sometimes to the hospital segments. The labs, it's also a business for them. We generally are tapping into a more business-oriented system than traditionally with our emergency department strategy.
That is definitely something that we can see affects the dynamics. That is why we are very excited about this new segment.
That was actually all the questions for now. That finalizes the Q&A. Before we end the webcast, I will just hand over the word for you for your final remarks.
Yeah. I think concluding a remark here is that we had difficulties with respect to the financials in 2024, which is evident from the report. I also hope that you will take away the message from the report that we are transitioning into a completely new arena where we believe that we have done enough groundwork to actually have a play in that market. It is actually with great excitement that we are looking into 2025 and working hard to reap results for our shareholders.