All right. Well, good day everyone, and welcome to Photocure's results for Fourth Quarter 2021. Joining me today is Erik Dahl. I am Dan Schneider, the CEO of Photocure. Next slide. A reminder, for today's presentation disclaimers are in place. Next slide. Fourth quarter highlights. Exciting, I think. We had 10% organic growth adjusted for one-time sales benefit last year from the reversal of Medicare 340B accrual and for the negative foreign currency.
We actually delivered this 10% revenue growth year-over-year, but most importantly, unit growth in the U.S. was 10% and Europe 11%. 11% and 12% segments respectively year-over-year. 11% U.S., 12%-unit growth in Europe. EBITDA was -NOK 5.5 million.
We continued commercial investment in preparation for post-COVID growth and the launch of the upgraded blue light system from Karl Storz in the U.S. On the publications and studies front, we had three significant publications put out in the fourth quarter. The first one, the Cochrane review, showed the beneficial effect of using blue light cystoscopy on disease recurrence and progression. This is quite an involved publication.
It's well-respected, and I think it further underscores the importance of blue light cystoscopy using Hexvix and Cysview. We also had two registry publications from our U.S. registry, which now registers over 2,500 patients.
We had one on the utility of blue light cystoscopy post BCG bladder instillation, looking at the recurrence protection in The Journal of Urology, and the role of blue light cystoscopy in detecting invasive bladder tumors, and that one was published in the British Journal of Urology. Finally, on the expansion and partnership activity in Q4, both Canada and China, we went live in Canada. First orders were received, shipped, and payments received and collected, shortly after January 1st, 2022.
We're excited about this growing opportunity in the North American segment. In China, Asieris initiated the Hexvix early access program in the Hainan region in December, performing blue light cystoscopy on two patients so far and both successful. We're excited about the developments in China.
As everyone knows who's been following Photocure, they also have their CTA approved in the first quarter of this year for the small clinical trial they'll have to perform to receive the China indication for Hexvix in China. Next slide, please. All right. COVID-19 update. Access restrictions continued. We had the Delta variant mid-year and Omicron in the later half of the year into December, which did slow down the pace of sales.
There is COVID-related staffing shortages throughout the world, and this does have an impact on all treatments done in hospitals and in physicians' offices. We continue to anticipate, though, normalized access and procedure volumes as we climb out of Q1 into Q2 in the second half of the year. The same restrictions returned in Q4 due to Omicron.
Upwards of 50% of the clinics and hospitals were limited to our access in the fourth quarter. In fact, by the time we got to December, it had actually plummeted quite low. We see them all opening up again as we're climbing out of COVID in here in February and into March. Staffing shortages also are affecting the European market. In a majority of hospitals, we expect we'll get to normalization by Q2, Q3 of this year. Next slide.
Next slide, please. Let's talk about the segments. First, let's get to talk about the U.S., Q4 momentum in the U.S. We continued growth despite the COVID-19 restrictions. Volume was up 11% in Q4 and up 16% for fiscal year 2021 year over year.
The Cysview uptake in the clinic was focused primarily in flexible cystoscopy, which continues to be a growing importance in the treatment of bladder cancer patients. We have leveraged the contracting. It continues to be a key growth driver for us with the flex system driving the economic benefits as well as the clinical benefits of blue light cystoscopy. The OR access and staffing shortages remain.
However, as I mentioned, we expect these to begin lifting in the second quarter into third quarter this year. The strong demand continues for both rigid and flexible BLC. As everyone is quite aware, Karl Storz announced that they received the approval for the new blue light system, which I'll show shortly.
This has built a very nice and healthy pipeline of interested hospitals throughout the U.S. who want to adopt the new technology. Next slide. This is an important slide, I think, for everyone to kind of understand what's happened in the U.S. market and how Cysview has weathered the storm. If you look at this, the curves, what you're looking at is a reduction in the number of TURBTs, approximately 11% from 2019 pre-pandemic rates to current 2021.
In fact, at different points it dipped as much as 30%, from its pre-pandemic levels. Meanwhile, Cysview has continued its growth, indicating that we have continued to grow in importance in this space and have gained penetration in the U.S. I think when you speak with physicians, you'll find that most feel very confident using blue light cystoscopy, particularly during the uncertainties of access and patient flow. It's become a very important part of their growing practices.
In fact, just recently, this week, The Journal of Urology published, using their AQUA data, that upwards of 20% to 30% reduction in TURBTs. Slightly different data set, but still I think overall this is really encouraging news for us to say that we continue to grow in what has been a challenging market over the last two years of COVID. Next slide. We'll get into segments. Next slide. I'm sorry, I lost my place. Growth trend continues in the U.S.
This continues the top AQUA line shows continued growth in 2021. I think we've weathered the COVID storm quite well, maintained our cash balance for the most part and had many quarters of positive EBITDA. However, as we turn the corner into 2022, we are investing in the business so that we can get the accelerated growth rates we expect and that we enjoyed prior to the pandemic. Next slide. I think the nine tower installations in Q4 was quite good.
I think you know, customers now are awaiting the launch of the upgraded Karl Storz equipment. Many of the recent tower installations have been under the obsolescence protection plan, which allows those institutions to then upgrade to the new systems quite easily.
That is, I think that's quite good. We've also had growing interest in flex, and as I mentioned, that becomes an important part of our overall package of both the flexible cystoscopy along with economic strategy around contracting volumes, to increase the uptake of blue light cystoscopy in the U.S. We continue to grow, and I think that's a positive sign, despite the COVID impacts. Next slide, please. This has really got us excited.
I think the new blue light system from Karl Storz will solve all the issues of the old system. The old system had, you know, an older version of the visualization, a standard definition system. This one actually brings high def with precision blue light, razor-sharp quality in all visualization modes.
The reliability, the light hours, how long the bulbs lasted was always a problem. Over time, it would degrade and become dimmer and dimmer. The new LED source allows 30,000 hours of lifetime, providing a consistent light which won't degrade over time. I think if you think about physicians doing these procedures, if they're in the midst of beginning a procedure and the blue light starts dimming, you know, and they're in the midst of the day, they will move the blue light system to the side and open up and use white light.
Having a much more reliable system will allow a greater patient capture, we believe. The new fiber light cable giving, you know, it's now a convenient autoclave sterilization options versus the old version, which oftentimes was destroyed during cleaning process.
This is a very nice upgrade to the system. They also offer the CHROMA red contrast enhancement, which I think is Karl Storz answer to Olympus' NBI. You know, it shows the more visualization of the vascularity of the tumor bed. Finally, ergonomically it just has some better features around, you know, using the blue light intensity control with easy toggle between blue and white and various visualization modes.
Overall, it is elevating the standard of care. We're really excited as this is replacing a system that has been out on the market for probably 15+ years. Quite frankly, it goes back to the clinical studies that were done. This is atypical in the device world. Typically, there's iterations, you know, every year or two.
This one has, you know, because of its Class III status, was a much longer, more arduous process, but we're excited that the new system will be out. We anticipate them to go in a confidence phase testing here in March. This allows them to put the system into about a dozen different institutions, work out any bugs if there are any, and then begin a simultaneous rollout of the system in the U.S.
We expect, you know, a full-blown launch into Q2 and well into Q3. Now, just to point out one other element of this. This is a new system. Most institutions will require a full evaluation of the system from value analysis committee through capital equipment expenditures.
However, we believe because the system is much more known and, you know, everyone's used it in the past, they understand what it can do and will do, we expect this process to go quite smoothly. Exciting news, we believe, in the blue light world. Next slide, please. Key initiatives to drive growth in the U.S. I'll just touch on two. I mentioned the contracting. I think the contracting piece is a very, very important one. We found it to be much more productive with accounts when you have an economic incentive as well as the clinical benefits surrounding the use of blue light cystoscopy, and we'll continue to roll that out.
Also, the Veterans Affairs environment where there's more complex cases, comorbidities, where blue light cystoscopy can make an even more dramatic impact in patient care. And in the Veterans Affairs ecosystem, we're finding many of them will do both the rigids and the flex simultaneously because they want that continuity of care. We believe that that's also a very key part of our overall initiatives to drive growth amongst the six that you read there. Next slide, please. Moving on to Europe. Fourth quarter volume was up 12%.
There's been positive developments in Germany, and quite frankly, I'm excited about the uptick in the growth that we're seeing in France, U.K., and Italy, which were our targeted countries for high growth rates and already seeing the fruits of our efforts there despite the COVID-19 volatility.
The full year volume was up 3% versus 2020. The commercial execution, you know, in the first full year, I think is in a good place, despite the pressure of the COVID-19, despite the restrictions, the staffing shortage, et cetera. We are well-positioned with a fully intact European sales force that is ready to go as things are lifting in Europe and it's exciting.
I think, you know, to give you context, you know, getting out into the market and having limited access allowed us to only get some levels of insights and yet still making the impact in this market. I'm excited about you know, 2022 and beyond, because as our sales reps walk into accounts that used to have blue light cystoscopy and we're bringing it back, I think that's an exciting opportunity for us.
I think the bladder cancer tour buses we've talked about in the past where we did this in conjunction with Wolf, 63% of those hospitals we visited have requested the testing of new equipment. Wolf's equipment is state-of-the-art. As you know, as we mentioned, Karl Storz and Olympus both intend upgrades as well in the European market. I think this is exciting development.
It's showing this. We've re-energized the market. There's growing interest by the capital equipment manufacturers who are investing in blue light cystoscopy and upgrading all their systems to compete in the European market. Having 63% of the hospitals that we visit now asking to test the new equipment by Wolf is really astounding. That bladder cancer tour bus was intended to go to EAU, although EAU is now postponed to July.
It still will do a tour through the rest of Europe, including the Nordics and France, Italy, and the U.K. Finally, the European KOL faculty they cooperated on the first Euro webinar, the bladder cancer TURBT, highlighting the use of blue light cystoscopy.
There's been over 1,000 views to date. The engagement with the KOL community in general in Europe has been extremely well-received. It's re-energized the entire market that had all but been ignored for the better part of six or seven years. This is a really exciting opportunity. They're excited to be part of it, and Photocure's here to stand by them. Next slide. We think Europe's positioned for growth after a first full year of being commercialized. You know, I think we stabilized some of the years of degrading sales, and particularly in France, Italy, and U.K. Germany is starting to climb as well.
I think we got a solid base, and as I mentioned, we've had limited access throughout COVID, but as these final restrictions lift and we get full access, I think you're gonna see some really nice impact in the European markets. Next slide, please. Why am I so excited? As I mentioned, you know, France, Italy, and the U.K., here are the, you know, from the growth rates of -12% in 2020 to a +11% in 2021 for France. Italy was -25% in 2020, growing to 13% in 2021, and -37% in the U.K., now at 44% growth in 2021. These trajectories are all continuing forward. It's really an exciting development for us in all of Europe.
As I mentioned, Germany is now also starting to see the signs of our impact. I think this engagement with the overall European community is really having a positive impact. We're creating value throughout the region. Next slide, please. Just a couple key initiatives that are gonna drive growth in Europe. I think it's the establishing the advocacy. The bus tour is an example of how we've engaged both the physicians and the patients in gaining interest around blue light cystoscopy.
I think the blue light equipment suppliers two very engaged partners in Wolf and Karl Storz, and Olympus coming on as well with their new upgraded version coming or expected in the second half of this year. I think it's exciting developments and their continued interest.
If you think about those capital equipment manufacturers being re-energized, re-engaged, you know, we are leveraging their sales forces as well. It's not just the Photocure sales force that's selling blue light cystoscopy, but now we have three engaged, active blue light capital equipment manufacturers who are also gonna be pushing blue light. I think that's gives me great excitement and confidence in the coming year and beyond.
I think also the key opinion leader leader faculty is another example of what we've been able to do in this market in getting all these world-renowned leaders back engaged with blue light cystoscopy, looking at, you know, how blue light cystoscopy can make an impact in patient care.
also developing these centers of excellence throughout Europe, you know, beginning last year and going into this year and beyond. Watch the space. All right, we'll go to the next slide, and I think I'll turn it over to Erik. Erik?
In the financial section of this presentation, I will comment on the financials for our two main segments, U.S. and Europe, as well as the headlines from the consolidated income statement, the cash flow, and the balance sheet. Only 2% of our sales revenue is in kroner, the movements in foreign exchange rates may have significant impact on our results. In short, the FX impacts in Q4 was for revenue negative approximately NOK 5 million. The full year impact was negative approximately NOK 23 million.
When we go through the financials, please keep in mind that unless other currency is specified, all amounts mentioned in this presentation are in Norwegian kroner. We'll start with the segment performance and focus on U.S. first.
Looking at the U.S. numbers, before we try to understand the development from last year, I need to comment on a one-off accounting entry in Q4 2020. As you may remember, we made an accrual Q2 2020 of $1.2 million for a possible discount, the so-called 340B discount. We were able to release about $900,000 of the accrual in Q4 2020, and this release obviously added to the revenue in Q4 2020. To compare with Q4 2021, we need to adjust for this release as well as for FX impact. Based on these two adjustments, we get to a year-over-year revenue growth of 11% in U.S.
This is reflected in the volume growth as well, year-over-year, 11%. The sequential revenue growth from Q3 to Q4 was 9% measured in dollars. This is good given the pandemic and related staffing shortages, but it's significantly below what we had before the pandemic and what we expect after the pandemic. Full-year volume increased 16% and revenue increased 11% to NOK 125 million. Measured in dollars, the full-year revenue growth was 20%. Direct costs in Q4 increased 6% to NOK 34 million. Measured in dollars, the increase was 9% to 10%.
Direct costs include local costs within sales, marketing, medical, and GMA. In full year, the direct cost decreased 2%, and in dollars, increased approximately 6%. Due to the pandemic, cost containment has been, and still is, important.
However, as the pandemic loses its grip, we should expect increased activity level and expenses to drive further revenue growth. We saw the first signs of this in the second half of 2021. The contribution was -NOK 0.5 million in Q4, and full year -NOK 7.3 million. However, given the increase in revenue and decrease in cost for the full year compared to 2020, we have had a significant improvement in contribution from 2020 to 2021.
An improvement of NOK 15.7 million or 13% of 2021 revenue. The European business is growing. Unit sales was up 12% in the quarter and 3% for the full year. Major drivers for the full year were Germany, France, U.K., and Austria.
No country transferred back from Ipsen had a decline in unit sales from 2020 to 2021, as opposed to what we saw before we took over the European operations. Revenue was up 5% in Q4. Adjusted for FX, the revenue was up 12%. The revenue increase in Q4 was to some extent driven by lower sales in Q4 2020, as many customers had built safety stocks in Q3 2020. That was prior to the transfer of the business from Ipsen to Photocure.
Full year revenue was up 59%, but this is obviously driven by the inclusion of the European revenues from Ipsen from the fourth quarter of 2020. Direct costs increased year-over-year with NOK 8.8 million in Q4, and sequentially with NOK 4.2 million from the third quarter.
The cost increase is driven by the investments in the local European commercial organization, and during the pandemic, cost containment has been important, and we have deferred hiring and kept spending low without disrupting the business. We ended the quarter with a contribution of NOK 26.2 million. Full year, we had a contribution of NOK 118 million, an improvement of NOK 20 million from last year.
Let's look at the consolidated income statement. Total revenue, NOK 94.5 million in Q4, a decrease of 4% from last year. In constant currencies and adjusted for the reversal of the 340B accrual in Q4 2020, we had an increase of 11% driven by volume growth.
Full year revenue was NOK 360 million and was impacted by the inclusion of the European business from Ipsen, as well as overall growth of the business. In addition, we received an upfront payment from Asieris of $750,000, or NOK 6.4 million in the first quarter. This payment was for the partnership agreement with Ascletis for Hexvix in China and Taiwan. Operating expenses before restructuring and excluding depreciation and amortization was NOK 92.5 million in the fourth quarter, an increase of NOK 16.7 million or 22% compared to Q4 last year.
Sequential growth in operating expenses from Q3 to Q4 was NOK 10.2 million or 12%. The expense growth is mainly driven by the inclusion of the European business from Ipsen in terms of establishing the local commercial operation.
EBITDA in Q4, - NOK 5.5 million. The comparison with prior year was impacted by the reversal of the 340B accrual and foreign exchange impact, as well as the investments in the European commercial operation. Full year EBITDA, NOK 18.3 million, an improvement of NOK 22 million from last year or from 2020. This is a significant improvement, and it's driven by increased EBITDA from the inclusion of the European business as well as revenue growth in U.S. Depreciation and amortization, NOK 6 million in Q4, NOK 24 million a year or full year.
Main cost item is the amortization of the intangible asset related to the return of the European business from Ipsen. We had restructuring costs in 2020, NOK 12.9 million. Nothing in 2021. Coming to net financial items, we need some additional comments here.
Net financial items in Q4 were -NOK 21.5 million, and full year, -NOK 25.8 million. Net financial items were significantly impacted by increased accrued earnout liability related to the future earnout due to Ipsen. The earnout liability is a dynamic balance sheet item in the sense that the value will change according to future forecasted earnout payments, which again will change according to future forecasted revenue in the former Ipsen markets. Higher revenue forecasts drive higher earnout payments, which again results in higher earnout liability. Increasing the revenue forecast was what we did in Q4.
Now, given sales performance in 2021 and future growth opportunities, we expect revenues to exceed the forecast we prepared in connection with the Ipsen transaction in 2020. Obviously, as a consequence, the revenue-based earn-out will increase as well, and the discounted value of the expected increase in the earn-out payments is NOK 17 million . This amount is accounted for in Q4 under financial expenses. You will find. If you need more details, you will find them in note six to the accounts.
Other items impacting net financials are interest on long-term loan, as well as accrued interest cost included for the deferred earn-out liability. These items are partly offset by net currency gain and interest income from financial assets.
After net financial items and tax, we have full year net loss of NOK 30.9 million compared to a net loss in 2020 of NOK 22 million. You will find in the cash flow table that approximately NOK 39 million of full year net loss is non-cash items, which explains the positive operational cash flow, both in the quarter as well as full year. That leads us to the cash flow. That was wrong. Net cash flow from operations was +NOK 6.3 million in Q4 and full year +NOK 24 million. The improvement from prior year was mainly driven by EBITDA improvement as well as working capital development.
Cash flow from investments was full year -NOK 1.9 million, while cash flow from financing was full year -NOK 34 million, driven mainly by repayment of the bank loan and by the earn-out payments to Ipsen. That gives us a net cash flow in Q4 -NOK 7.2 million and full year -NOK 12 million. Now, the net cash flow includes repayment of loan of NOK 12.5 million for the year, meaning that we had been cash flow break even excluding servicing the loan. With this cash flow, we end 2021 with a cash balance of NOK 323 million. Looking at the balance sheet, we ended the year with total assets of NOK 790 million.
Non-current assets was NOK 376 million at year-end, and this included the customer relationship, NOK 146 million. Customer relationship is the intangible assets identified in the purchase price allocation for the Ipsen transaction.
Non-current assets also include goodwill from the Ipsen transaction of NOK 144 million, and a tax asset of NOK 53 million in addition to fixed assets totaling NOK 33 million, including leases. Inventory and receivables, NOK 90.3 million at year-end, an increase from year-end 2020 with NOK 12.9 million, and this increase is mainly driven by the inclusion of the European business from Ipsen, as well as a couple of prepayments, one of them being the annual fee for 2022 to FDA.
Long-term liabilities totaling NOK 185 million include the earn-out liability of NOK 139 million and a long-term interest-bearing debt, of which NOK 12.5 million is due after one year. Now, total interest bearing debt, including the short-term part, was NOK 37 million and is a loan secured under the state guarantee scheme for loans related to COVID-19.
The earn-out liability totaling NOK 139.4 million represents the capitalized value of estimated future earn-out payments to Ipsen, as we reviewed a few minutes ago, and the liability is subject to a 10-year annuity. Again, please see note six to the accounts for details. Finally, equity at the end of the quarter, NOK 502 million or 64% of total assets. This concludes the financial section. Thank you. Dan, it's back to you.
All right. Well, thank you, Erik. You want to go to slide 21 with the global penetration. I think, you know, we'll wrap this up with the last few slides. Just I think this is always a good slide for everyone to come back to and reflect on what the opportunity is ahead of us. You know, this is a $1.9 billion TAM, total addressable market. The key success factors were put in place pre-COVID and during COVID, pre-COVID in the U.S., during COVID in Europe.
We've got our approvals in the surgical and surveillance markets. We have acceptance on major and local guidelines and continue to strengthen those. We have access with permanent and favorable reimbursement in all markets, and we continue to work on even improving that.
That's a never-ending job in the world of market access and reimbursement. We have activated awareness. You know, I've given examples in the past where, you know, physicians and patients have sought facilities that offer blue light, causing those facilities to you know, look to get blue light cystoscopy installed into their account because they're losing patients to other facilities.
That patient demand via advocacies, and now we've engaged it on a world level with all the advocacy groups around the world. It's quite robust. The acceleration, I said, as I mentioned, you know, we put the commercial investment in 2019 into the U.S. and then hit the winds of COVID in 2020 and 2021.
We built the European operation at the end of 2020 and into 2021, last year. Everything is standing by ready to, you know, capitalize on the lift of COVID. Now, it doesn't go without saying that COVID isn't going to have some challenges left behind, the remnants of staffing shortages in the near term, but over time, it will resolve. The best news is that, you know, with the U.S. and the rest of EU, with large markets, tremendous opportunities and low penetrations, although growing, as we mentioned in the prior slide.
You know, the U.S. market has grown in the face of a decline over the last two years or a blunting of TURBTs. It continues to grow, demonstrating the importance of blue light cystoscopy in the market. Our intention is to move those penetration rates up to the Dutch, German and Nordic penetration rates of the 30%, 40%+ range to become the standard of care. Next slide, please. Anticipated milestones, corporate priorities.
You know, regaining the sales momentum, keeping that commercial organization intact throughout COVID, being very thoughtful about where we spent our money, looking for the greatest returns, and keeping everyone engaged from the KOLs to the physicians to the centers of excellence, I think is going to prove out to be very, very smart on our part.
The launch of the blue light system in the U.S. in the second quarter of this year will have a positive impact on the overall market. I think, have a positive impact on the overall market. Karl Storz and Olympus will be launching their new upgraded versions in Europe as well to meet, you know, the standards that Wolf has set out there. That's exciting development as these new equipment roll out.
These are physicians that like to use new systems, and they're going to see the benefits of doing so. We're gonna continue to execute on contracting with GPOs and large hospital systems in the U.S. As I mentioned, the economic and the clinical benefits aligned.
Geographic expansions penetrating the untapped European markets, as well as recently launching in the Canadian market, where we're seeing already early signs of returns for the work we're putting in there. We're gonna continue to present and publish additional clinical data. There's a lot of data that's gonna come out of the registries, the U.S. registry, the Nordic registry, and even the Danish registries. Look for much more evidence of blue light cystoscopy and its importance in becoming a standard of care.
We're gonna progress with partnered companies and the license agreements. I didn't mention Cevira specifically today, but Asieris continues on the path of developing that product in clinical development. It continues. It's on track.
More to report as they hit more milestones, but everything seems to be moving along fine. Finally, evaluating strategic product or business opportunities into the future. All right? Let's go ahead to slide 24 for a summary on the quarter. Strong Hexvix Cysview volume growth, as I mentioned, increased penetration in the U.S. and a return to growth in Europe, approaching the pre-pandemic growth levels or unit levels. We have a strong new account pipeline. People are queuing up systems and hospitals are queuing up for the new Karl Storz equipment.
So that's an exciting development, and we think that will unlock business in the second half of this year. There were nine new towers placed in the U.S. during Q4, and the demand for flexible light cystoscopy continues to increase. The Karl system will launch.
It's approved in February. We expect a national launch in the first half of this year, as I mentioned, probably into the, you know, more towards in the Q2 timeframe after we get through the confidence phase testing. We'll continue to drive key initiatives in the commercial regions, and I believe, well, you know, that we are well positioned for a strong growth post-pandemic to return to those post-pandemic growth rates in the U.S. and a return growth in Europe. With that, we will go to Q&A. David?
All right. Great. Hello, everyone. I'll be running the Q&A. Thanks, Dan. Please, feel free to send your questions in, and we'll take them. Limited number of questions in the queue, and right now focusing on kind of a non-core item, which is Cevira. The question, Dan, is when can we expect an update on trials and progress in China? I know you just covered that somewhat.
Yeah.
What are the next big milestones, and when are they expected?
Yeah. There's you know, this is a clinical trial. This isn't news on a daily basis. It's usually on quarterly basis or half yearly basis because it takes a couple of years to get through these clinical trials. We are approaching another milestone just based on the time of them executing the agreement. Provided everything's going well, we should you know, we should expect some sort of milestone payment coming up in the first half of this year.
Beyond that, everything has gone fine. The enrollments have been fine. It's you know, it hasn't been without its challenges through COVID, but they feel like they will be on track. Reminding everyone that this is their product, so it's their news flow.
They are also a public company now as well, so we can't disclose anything that they don't disclose. At this point, all I can do is assure you that everything, at least to this point, appears on track and with, you know, marching towards the timelines, which was to complete the trial by the end of this year and file in 2023. We'll see how that goes.
All right. Thanks. Okay, the next question is on the Karl Storz launch. Can you tell us a little bit more about the pipeline that you have for new installations? Is the Karl Storz system, the new system in the U.S., is that also gonna launch in Europe?
The first part is Europe has an upgraded system already, but some of the enhancements from the U.S. system will be carried over into the European system. That will launch, you know, we're hoping towards second quarter, third quarter this year. You know, hold tight. When it does, we'll let everyone know. The interest in it is extremely high. I had the privilege. Could not believe it. He was walking up, and he said, "Yeah, the next thing you do is you toggle it to blue light." He looked at the screen, and he just went, "Oh, my God. I can't believe this." This is really exciting.
I think, you know, what traditionally has been the way to perform TURBTs is they would toggle to blue light, see the margins, the tumor, then toggle back to white light and resect. Now, some of the more sophisticated KOLs like this particular one do resections under blue light. I think this new blue light system will allow them greater visualization and more confidence to do blue light. The other thing about this, you know, with surgeons in general, is they love the new tools and toys.
This is going to have excitement just by the virtue of having all these new features that they've been wanting for years and, you know, excitement of seeing how much more they can see and how much better it'll be for patients.
You know, reduction in false positives and getting, you know, better margins and, you know, better outcomes overall. Then just the overall reliability of the system. You know, not having to deal with destruction of light cords in the cleaning or sterilization process or the dimming of a light. You know, that won't happen anymore. 30,000 hours of LED light is a lifetime of light for TURBTs, given the average procedure's, you know, 20 to 30 minutes.
I'm just really excited about this. The interest of the community is very, very high. We've got a robust pipeline awaiting the new machine. We had people, you know, accounts that had postponed purchasing cause they want to purchase the new machine. We have accounts who had bought the obsolete protection plan, which allows them an immediate upgrade. All those accounts will come due, you know, in the second quarter and third quarter and beyond of this year. It's exciting.
Great. Thanks for that. Another question has come in about the flexible market. You know, how do you see that developing, and how do you see it developing with the new HD instruments?
Yeah. Couple things. The flex market. In my opinion and what we're observing is that it's become a more important market. Not just in the U.S., but also in Europe, particularly the U.K. As everyone felt the effects of COVID, access to hospitals, OR systems, et cetera, they have seen the growing importance of getting surveillance and getting it right the first time, getting a complete understanding of where if there is tumors, where they are, and in some cases doing some low-level procedures.
We see it as a growing segment for us. When you couple it with the economics of a contracting strategy, it really has an accelerating effect. We're gonna continue pushing. Now, you know, the listener had a question and picked up on right away.
You know, this is not the high-def system. It's standard definition system. It still doesn't have the state-of-the-art visualization that the new system is gonna have or that Wolf has currently or that Olympus will have when they launch in Europe. However, Karl Storz is committing to this segment, and they want to enhance the flexible system and bring the technology up to the state of the art, at least standard today. You know, we'll see how that goes progressing.
I think just getting the rigid scopes for the operating procedures up, you know, upgraded to state of the art has been a big leap for them. How they go about flex on the timelines they have, it is of interest. Well, you know, we'll report on that as they feed us that information as well.
The flexible market does appear to be a growing opportunity for us as a remnant of COVID, to be honest with you. COVID underscored the importance of doing proper surveillance and proper TURBTs, and you can only do a perfect TURBT or surveillance if you have blue light cystoscopy where you can see all the tumors.
Very good. One more just came in. Give me a second.
Okay.
Now that the FDA has approved the Karl Storz instrument, what do you think of healthy competition potentially entering the U.S. market?
Healthy competition. Oh, there's a question around... [crosstalk] [crosstalk]
From the capital equipment side, yeah.
Yeah, capital equipment. Yeah. You know, it's not without notice by all the capital equipment manufacturers out there, the known parties and the unknown parties, that they see blue light cystoscopy's growth. They see the growing interest. Physicians are asking for it. As you know, other technologies launch or other light devices are out there, the physicians in the hospitals are saying, "Well, what do you have in blue light?" Of course, at this point, this is a PMA Class III device for Karl Storz. You know, we expect this to change.
You know, I don't know if it'll change this year, but maybe in 2023, when other capital equipment manufacturers who want to come into this market, we know they want to come to this market, in the U.S. market, will come into this market.
That will have an accelerating effect on the business as it did in Europe. You know, when you have three sales forces or four sales forces or six sales forces of blue light cystoscopy out in the marketplace touting the benefits of blue light cystoscopy, it has an additive effect. You know, all I can say is I'm optimistic and we stay tuned for that development.
Great. That's all the questions we have, so we definitely appreciate your participation. Dan, I'll turn it back to you for any closing remarks.
Okay. Well, great. Thank you, David. Thank you, Erik. Thank you all for listening in today. Again, if you haven't picked up, I am very excited about where we are today. I think we've weathered the storms of COVID quite well. We're well-positioned for growth as we come out of the COVID.
There is still remnants of staffing shortage that will affect the business and linger probably throughout 2022 in some form or fashion, but I think all things that we can overcome as an organization. I think, you know, when you look at the overall market decline in TURBTs during COVID of - 11%, there's other publications saying upwards of 20%.
Despite all of that, you know, we continue to grow. I think underscores the importance of blue light cystoscopy and the efforts and results that we believe we can get, now and into the distant future. Thank you all. Have a great week, and I'll talk to you at the next quarterly. Thank you. Bye-bye.