Welcome to this Q3 presentation for Kontxt Vision. You are Fredrik Paul, the CEO of IMO Light Cloud. The Q3 was a good quarter for Kaltek Syshun. Could you give us some highlights?
It was yet another progressive quarter for the company. We are following the launch plan within digital pathology with our first product for prostate cancer launched in the end of this last quarter. Sales is increasing compared to previous quarter, which we cautiously take as a positive sign. Our X-ray sales continue to grow and we are maintaining solid financials.
But regarding the Innify, which is your first digital pathology product for screening of prostate cancer using deep learning and artificial intelligence, is it on track?
Yes, we have installed. We made several installations during the quarter and now we proceed with extended studies in the clinical workflow. And this is according to the plan that we had.
But what's so good about it?
I mean we are in the beginning of a paradigm shift within pathology. The digitalization opens up for huge opportunities, both in terms of workflow, in terms of increased level of quality and increased level of confidence for the pathologist. The product in itself, Innify Prostate Screening automatically detects suspicious cancer areas in digital prostate sample and outlines them for the pathologist. So it works like an experienced digital colleague sitting on your shoulder that already have made its assessment on the samples before it even gets presented to the pathologist.
But how do you tackle the workflow here?
So to say, in addition to outlining suspicious cancer areas, the software also sorts the sample in a worst first order. So it means that it will automatically attract the attention from the pathologists to the samples with suspicious cancer and minimize the time they will spend on samples with benign tissue.
But it sounds like you're revolutionizing the screen of how screening of prostate cancer is done. Yeah. As I said before, we are in the beginning,
of working within pathology.
Yeah. But the market drivers,
what are they? I mean, there is a lack of pathologists around the world and the workload is only increasing. Just a few examples is that some reports tells that there will be a lack of 5,000 pathologists only in the United States by the year 2,030. And if we look in development countries, some countries are as low as 1 pathologist per 1,000,000 people. And the analog process entirely relying on humans naturally gives a variation and it limits the possibility to standardize things.
So becoming more digital is a necessity within healthcare and Innify is a product in the forefront that instantly adds value to the patient and the medical professional, so to say, in this transformation.
What are the next milestones we can expect from Innify?
Now we focus on installations and extended studies with selected reference sites in the digital forefront. And this is to build a solid ground for expansion, of course. In parallel, we further develop Innify with to incorporate diagnostic capability, which means that the product will also be able to support the pathologists in judging the severity of the cancer according to the Gleason scale.
Yes. But Innify, that screens prostate cancer. But you're also working on other different cancer types for digital pathology. Can you tell us a bit about that?
Yes, we have a portfolio strategy where we focus on the cancer types causing the heaviest burden on pathologists since coming back to that there is a lack of that profession. Solid candidates coming up is, of course, colorectal cancer and lung cancer. And we have already started some research in those areas.
Exciting, exciting. But we are living in tough times at the moment. And but how is Contax Vision coping with in these COVID times?
I mean, COVID-nineteen challenge us all. We've been sort of say fortunate so far, have seen limited effects on sales, but that's also, of course, related to that we are operating in an area which actually where we see an elevated need of efficient health care solutions. Our X-ray business continued to grow, while we have seen a slowdown effect in ultrasound due to other priority acute priorities in hospitals and clinics around the world. So the 3rd quarter saw an increase compared to previous quarter, while actually if we compare the sales in the Q3 this year compared to the corresponding quarter last year, adjusted for currency effects, these sales are actually on par. But what I think it's even more important to look at is the 1st 9 months of the year, we are delivering a 6% growth with an EBITDA margin above 30%.
And I think that's a fantastic result given that we are in the middle of a pandemic since February.
Yes, absolutely, absolutely. But do you see any differences now than you did in the start of the pandemic?
I mean, the pandemic hit us all basically overnight. We got restrictions. We have no international travel and we have very limited, so to say, limitation in terms of domestic travel as well. But I have to say that I'm impressed about how quickly we have adjusted to do this new conditions around the world, both ourselves, partners and customers. So we are making progress, including signing new contracts, but short term at a slower pace than anticipated in the end of 2019.
In pathology, to say, the transformation into digital work is also, of course, affected and moved slightly slower than anticipated. But we have to keep in mind that the situation underlines and the elevated need for efficient solutions within healthcare, which is a positive sign for context vision.
Listening to you now, the future seems really good for context vision.
I certainly say so. I mean, we created and implemented an action plan in the middle of the first quarter focusing on continued progress while maintaining solid financials. We have a solid cash position after this quarter. We just had a slightly negative cash flow. And we are following this plan and we are continuing to build the company brick by brick.
And most important, I think, in a 3 to 5 year perspective, the pandemic is not a threat to the development of our company. It only stresses the need for our present and future products.