All right.
Great. Well, good afternoon and good morning to those in the U. S. And good afternoon to those in Norway and other parts of Europe. My name is Dan Schneider.
I'm the President and CEO of Fotocure. With me today is Eric Dahl, CFO and we're here to present the Fotocure ASA results for Q3 2020. Next slide. Typical disclaimers are in place for today's presentation. Next slide.
So just to give you a brief overview and I'm proud to say that we can now claim this. We have direct sales both in Europe and the U. S. Beginning on October 1 in Europe and worldwide rights and partnerships throughout the globe. We are now actually approved and in use in over 30 countries across the world.
We have over 100 employees now that we've absorbed and built out the European operations. We treated well over 500,000 patients and total revenues in 2019 were approximately 32,000,000. The map to the right shows where we're direct, which is the darker blue. The purple is partner countries.
And you
can see Chile down on the far bottom of the slide. What's not pictured obviously is Australia and New Zealand, which could not fit into today's slide. Next slide. So reminder on our mission, The mission is delivering transformative solutions to improve the lives of bladder cancer patients across the globe. We see this in basically 4 phases.
Phase 1 is where and Phase 2 is where we are today. The acceleration phase where we've invested more heavily in our commercial organization increasing the depth and the breadth of HEXVIX and SysPhu use across countries that we're direct into. And we use expansion Phase 2, which includes the acquisition of European Rights Back to expand into geographies around the globe, partnerships with companies like GenoTests and others across the globe and other countries. In addition, expanding it in terms of the use of the product and taking a look at whether there's enhancements to the product to improve the surgical guidance and the diagnostic and possibly the therapeutic benefits of the product. Moving on to Phase 3 is the acquisition phase, partnering and licensing.
A very good example of that is Combat Medical in the Nordics. We're doing quite well, which is a Hyvex system. We'll look at continuing to add to our portfolio with products that are very synergistic, used by the same types of physicians in the same settings of care. And finally, Transform and it's building into a complete global bladder cancer company, inclusive of pipelines and other acquisitions. Next slide.
So highlights of Q3, I am extremely pleased with the results in our continued rebound of the depths, I guess, of Q2's COVID impacts. We had a 17% U. S. Unit sales growth this quarter. We've had a 14% increase in revenues for HEXVIX and SysVue.
This is adjusted with some of the one off costs in the transition to European rights and operations of building out. I'm proud to say that we are now live in Europe and that began officially on October 1, although we had a little bit of a lead in with people working behind the scenes and establishing the strategic planning that goes with it and setting up the MAH transfers and also the supply channels. So thanks to all those individuals throughout FotoCare who put a lot of long hours in to make this a reality. And I have to say it came without any hitches. It was as smooth as I've ever seen a transition.
And I think in addition to that, we'll get into a little bit more, having many of the sales force from Ipsen come over with the product ensures the transition and the continuity to be very smooth and we think we could pick up running. And then finally, partnership news, we announced that Savira's NMPA, which basically the old Chinese FDA has approved for the start of the Phase III in China. We expect that will happen here soon. In addition, we also synced a deal with Genotest for HEXfix rights in Chile. Next slide.
So a reminder on the disease itself, it has been chronically underserved for generations. It's the 6th most common cancer in the world with over 550,000 new cases annually across the globe and over 200,000 deaths. It's also one of the most expensive and I think that often surprises both patients, physicians and payers. It has the highest per patient lifetime treatment cost of any other cancer. And that's because once diagnosed is a lifelong treatment.
And hopefully, you don't progress to muscle invasive, where more invasive procedures are used. In the U. S. Alone, it's about $5,700,000,000 expenditure. And from a recurrence standpoint, it has a very high recurrence over 61% patients have recurrence within the 1st year.
And by the 5th year, nearly 80% are now going to see recurrence and have to be retreated. It's progressive and this is the most important part of non treating non muscle invasive bladder cancer is you want to keep it non muscle invasive. Once it becomes muscle invasive, you undergo cystectomies, which having your bladder removed and more invasive procedures and it really changes a person's life. But the progression rates run from 1% to upwards of nearly 50% for patients progressing to muscle invasive within 5 years. And that obviously plummets survival rates significantly.
Next slide. So here's the product itself and how it works. We believe blue light stopes we can and will become a new standard of care. It doesn't come without effort. It does require the commercial and medical teams to really go to work throughout the globe.
The drug itself is
a colorless reconstitute solution that's instilled
into the bladder. It uses the body's hear people comment that it is a dye. It is not a dye. It is actually a biologic reaction within the cells. And once it's absorbed, it is actually seen glows bright pink, the malignant cells glow bright pink under blue light and gives very clear margins and gives a physician the ability to see all the cancer throughout the bladder.
We believe HEXfix blue light cytotopy offers an improved detection during surveillance and surveillance and this could lead to the reduced recurrence versus a white light cystoscopy alone. Next slide. On a way to becoming a standard of care, it's probably one of the most important elements is becoming finding yourselves on the major guidelines, both globally and nationally. And SISU, HEXVIX has and is on the major guidelines AUA, EAU, SUO, NICE, AFU, the German guidelines and many, many, many regional guidelines throughout the world. And we'll continue to work on improving our positioning, but this is a great foundation upon which you can build a standard of care as a reference.
Next slide. So this slide depicts the journey of the patient. I'll take you from left to right. Patient finds blood in the urine of some other symptoms. They move down the continuum to the right.
They go to urologist offices. The urologist will perform an initial cystoscopy. This is not generally done under blue light, probably very rarely if ever would it ever be done under blue light and we actually do not have the indication to be used in this setting for an initial diagnosis. If bladder cancer is suspected, if they see polyps or otherwise or perhaps they have blood in the urine with a negative testoscopy, they will schedule the patient into the OR and perform a TURVT, which is a surgical procedure to remove any polyps and cancerous tissues in the bladder. There are over 700,000 cases in the U.
S. In the EU5. And just I say the EU5 because as you know we've taken over complete European rights. So that number obviously is higher than that we have all of Europe. The patient, once the tumors are all removed, the patient is then also staged and asked to come back for ongoing surveillance.
If they're high risk, they may be asked to return to the physician's office in 3 months. Intermediate might be 6 months and maybe if it's low risk it might be upwards of a year. If the patient returns, they'll come back to the physician's office. This is where if you kind of circle underneath where we talk about the regular surveillance of cystoscopies, According to the risk stratification, there are over 2,300,000 of these cystoscopies that take place in the U. S.
And Europe. If the patient is clean, they'll be asked to come back in 6 months, 3 months, a year, whatever, depending on again the risk stratification. If the physician sees something in the bladder, they see additional cancer, they may do some low level procedures, but quite often they will refer them back into the OR for a complete TURBT. And this cycle continues for the patient for the remainder of their life, trying to keep them from moving to the far right, which is progression to muscle invasive. So that gray area where you have the 2 red dots is where blue light cystoscopy is most dramatically going to change a patient's life and prevent them from moving to the right side of this slide, which is where there is a plummet in life expenses of patients who end up with muscle invasive bladder cancer.
Okay. Next slide, I'm going to hand over to Erik Dahl, who will give everyone an update on our financials. Erik?
Well, as usual, in this part of the presentation, we will do a financial IFRS numbers, but I will obviously comment by using the adjusted numbers. So let's start with the commercial franchise. The headlines for the commercial franchise in Q3 are, 1st of all, the rebound from the pandemic we experienced at the end of Q2 continued into Q3. And the commercial franchise was obviously heavily impacted by transition activities in Europe. However, if you adjust for these activities, Q3 EBITDA was positive €4,200,000 We see total HEXVIEX VI adjusted revenue in Q3 increased 14% compared to Q3 last year.
This includes adjustments for the inventory changes in Q3 at Ipsen. Without these adjustments, the revenue decreased Okay. We're sorry about this. Apparently, the sound disappeared when I started. So I'm just to make sure that I get every items included there.
We're going to start with this slide, financial highlights from the Q3. And we have 2 major streams that are defining the financials in the 3rd quarter. First of all, we have a strong business performance, which was driven by significant revenue growth as well as positive adjusted earnings in the quarter. U. S.
Volume is up 17% in the quarter and European volume sorry was up 7%. Adjusted revenue increased year over year 14% in the quarter and adjusted revenue and earnings are after eliminating one off costs related to the transition of the Ipsen activities. The European transition is the 2nd stream in the quarter. We have gone through a major transformation of the global business as we are building and integrating the European business. The European transition alone is adding 50% additional revenue for the company going into next year.
The transition, however, does not come without one off costs. We have said previously that the transition will cost us around NOK 30,000,000. In the 3rd quarter, we incurred NOK 15,000,000 and year to date the transition cost was NOK 18,600,000. I do see us incur cost in 4th quarter as well, but the total cost of the transition will be well below the NOK 30,000,000 we have indicated previously. The one off items incurred are of various types.
We have identified revenue, obviously, the transition impact includes reduced revenue. We did not want Ipsen to remain with an inventory after the transition as we do not want a competitor out there. Therefore, we agreed with Ipsen to reduce the shipping of goods to Ipsen in the quarter and we also agreed to take back inventory remaining at the end of 3rd quarter. The impact of revenue was $8,900,000 and on cost of goods sold $2,500,000 The transition cost also include operating costs relating to the European organization established during the Q3. The cost in Q3 of that organization was about 1,500,000.
Dollars Then finally, we had one off restructuring costs, including recruitment costs, various setup costs and legal fees. Adding the revenue impact and cost impact, we get to a total transition impact of NOK 15,100,000 in Q3. Adjusting for the transition impact, we have an adjusted revenue of NOK 58,500,000 in Q3, which represents a growth of 14% from the Q3 2019. Furthermore, we have an adjusted EBITDA of $2,500,000 positive compared to last year SEK 8,300,000 Keep, however, in mind that last year EBITDA was driven by a milestone payment from ASEY Arias of SEK 8,700,000. So looking at HEX VIX SysV only, we have an improvement from Q3 20 90 over 2019 of approximately SEK 3,000,000.
So to complete, and in spite of the COVID-nineteen, we have improved our HEX VIX issue revenues and EBITDA performance compared to last year. Looking at the details, we will start with the segment performance and we'll look at the commercial franchise first. The headlines for the commercial franchise in the Q3 is, first of all, the rebound from the pandemic. We have experienced that in Q2 as well as in Q3. And then also the commercial franchise has obviously been heavily impacted by transition activities in Europe.
However, if you adjust for these activities, Q3 EBITDA was positive €4,200,000 Total HEX VIX VISV adjusted revenue in Q3 increased 14% compared to Q3 last year. This includes adjustments for the inventory changes in Q3 at Ipsohn. And without these adjustments, the revenue decreased 3% in the quarter. Year to date adjusted revenue growth was 8%, foreign exchange impact was 9% to 10%. In U.
S, Q3 revenues increased 20% to SEK 30,000,000 and unit sales increased 17% in the quarter, a clear rebound from the pandemic. Year to date, U. S. Revenues increased 13% to SEK 80,000,000 and foreign exchange impact was approximately 10%. We are growing the installed base of Blue Light Cystoscopes, although due to the COVID-nineteen pandemic not at the same rate as last year.
During the 1st 9 months, 30 cystoscopes have been installed driving the total installed base to 253 cyst scopes, which is a growth of 20% compared to Q3 last year. Nordic revenues decreased 3% to $9,700,000 in Q3. The decrease was driven by sales from the extraordinary COVID-nineteen related safety stock purchased by the Danish authorities in the 2nd quarter. Nordic revenues increased 6% year to date. In constant currencies, we had a decline of 2% year to date.
Partner revenue is obviously heavily impacted by transition activities with Ipsen. Unadjusted, we had a revenue decline of 40% in the quarter. However, adjusted for the transition, the partner revenue grew 16% in the Q3. Quarter FX impacts was approximately 8% and in market unit sales was up 7%. In real terms and looking at the development of our in market sales, this was a good quarter reflecting a rebound from the COVID-nineteen pandemic.
Year to date adjusted partner revenue was at $52,900,000 an increase of 6%. Currency impact was positive about 10%. In markets unit sales decreased year to date 7%. The German unit sales was at level with last year. Year.
Total revenue including milestones and other sales declined 4% in Q3, however, increased 13 adjusted for transition. Other revenues in 2019 include IFRS 15 adjustments. We have no such adjustment this year, which explains the difference in other revenues. Operating expenses, excluding depreciation and amortization, increased year over year 12% in Q3 17% year to date. Q3 adjusted for transition costs of $1,500,000 was 8%, driven by sales and marketing costs as well as FX.
Year to date, the main contributor to the increase is currency impact. The remaining is mainly driven by costs related to non cash related share based compensation as well as scaling of the group activities within regulatory and marketing. EBITDA for the commercial segment was negative 3,700,000 in 3rd quarter and negative 13.7 year to date. Adjusted for translation activities, the Q3 EBITDA was positive SEK4.2 million reflecting an adjusted EBITDA margin of 7%. Year to date EBITDA adjusted for transition was negative $5,800,000 obviously negative impacted by the COVID-nineteen pandemic.
Looking at the development portfolio. Development portfolio been driven by the license agreement for Savaira with Acerus. Last year, we received $5,000,000 sign in fee payment from Acerus. In addition, we accrued revenue of 2 development milestones totaling $3,000,000 The fees from ACIris are accounted for according to IFRS 15. And revenue recognition in 2019 was therefore based on contract value, which was $8,000,000 applying the currency exchange rate at time of the executed contract.
We received $1,500,000 of the accrued milestones in the Q1 2020, obviously impacting cash flow but not revenue for the quarter. In 2019 Q3, we received $1,000,000 in milestone payment from Assieris impacting the Q3 results for last year. Operating expenses continued to decline for the development portfolio. The reduction from last year was year to date $4,700,000 or 46 percent and the decline is partly driven by one off expenses in 2019 related to signing of the license agreement with Acerus. Let's go to the consolidated income statement.
We recognize the revenue numbers, so let's have a look at the cost base. Operating cost increased 8% in the 3rd quarter. Adjusted for transition, the increase was 5%. Year to date, the operating cost increased 13% and adjusted for the transition 12%. Again, the main contributor to the year to date increase in operating cost was currency impact of approximately $11,000,000 or 7% and the remaining, a total of a total of approximately €6,000,000 was mainly driven by non cash costs related to the share based compensation as well as scaling of the group activities.
We see that many companies have reduced number of customer facing employees due to the COVID-nineteen pandemic. We have not done that. We have maintained our sales resources and as far as possible maintained customer related activities during the COVID-nineteen pandemic. And we believe the benefit of being prepared was demonstrated with a rapid sales rebound in the second and the third quarter. EBITDA in Q3 was negative $5,400,000 and adjusted for transition positive $2,500,000 Year to date EBITDA was negative €19,100,000 and adjusted for transition negative €11,200,000 Q3 dollars Q3 year to date 2019 EBITDA was driven by a sign on payment from Acerus of $1,000,000 Depreciation and amortization year to date $11,600,000 Main single item within depreciation and amortization is the amortization of the investments in the Sysbu Phase 3 program.
The remaining amount will be totally or fully to the transition activities for the European business that we have already discussed. Net financial income SEK8.2 million year to date, which is mainly driven by related to foreign exchange gains. Tax expenses year to date, an income of $200,000 We had significant tax expenses in Q1, which was related to our tax asset and tax loss carry forward and therefore not tax payable. In Q3, however, we had a tax income of $8,000,000 After net financial items and tax, we have year to date a net loss of $32,600,000 compared to net loss last year of $10,700,000 Cash flow. Net cash flow from operations, negative $9,900,000 in the 3rd quarter and positive $4,500,000 year to date.
Year to date, the improvement from last year was $14,300,000 and partly driven by the milestone payment from ASEAs of $1,000,000 in Q1 as well as improved working capital. The impact from changes to working capital year to date was positive $10,200,000 and driven by accruals and payables, partly offset by increased inventory. Cash flow from investments was year to date negative €166,000,000 and obviously driven by the acquisition of rights from Ipsen. Cash flow from financing year to date positive €358,000,000 driven by private placements and bank financing. We had 2 private placements in the Q2, 27 April 24 June, raising a total net of NOK 302,000,000.
We also secured bank financing of SEK50 1,000,000 in the 2nd quarter. So net cash flow was in Q3 negative SEK177 1,000,000 driven by the acquisition of rights from Mipson. Year to date, the net cash flow was positive $196,000,000 driven by additional funding in Q2, partly offset by the acquisition in Q3. So this gives a cash balance at the end of the Q3 of SEK 322,000,000 Looking into Q4, we know that we have taken over the European revenue and we know that activity or that revenue will drive accounts receivables in the 4th quarter. And as we described when we described the Ipsen transaction, this will drive a negative working capital in the 4th quarter.
We then estimated about SEK 25,000,000 of negative working capital related to account receivables, and that we believe that is going to be the number. Looking at balance sheet. At the end of Q3, total assets of $608,000,000 noncurrent assets, dollars 227,000,000 at quarter end. This included marketing rights acquired from Ipsen of 100 and $67,000,000 It also included a tax asset of $38,000,000 and investments in tangible and intangible assets totaling 6,000,000 dollars We also find an other line within non current assets totaling $16,000,000 This relates to the remaining 1 point receivable on our ASEAN. In addition, this other line includes a balance sheet impact of adaptation of IFRS 16 on lease accounting.
Inventory and receivables, dollars 60,000,000 at quarter end, reduced from year end $62,000,000 dollars The long term interest bearing debt is a loan secured under the state guarantee scheme for loans related to COVID-nineteen. The loans carries a floating interest, effective interest rate at the end of the quarter was 2.7%. The loan is 3 year term loan, 1st year interest only and thereafter quarterly equal repayments. And equity, finally, at the end of the 3rd quarter, dollars 492,000,000 or 81% of total assets. And this concludes my part of the presentation and Dan will continue by discussing the U.
S. And European business.
On Slide 17, just talking about Europe here. The overall strategy is to move the markets. We have a tremendous untapped market in the UK, Spain, Italy and other countries. I think recently we announced in the UK, we've already formed a very strong relationship with Karl Storz, who has 100 percent of the scope placements there. We are sharing a booth at BAUS, which is the urology conference in the UK.
It is a fantastic virtual booth in which we're highlighting blue lysoscopy, which quite frankly has not been highlighted in years. So this is a fantastic opportunity for us. Looking at the dock region, 30% to 35% penetration, France at roughly around 15% penetration. We believe there's still growth in those regions to move to the Nordic penetration rates of 40% or better. So there's tremendous unlocked potential still in Europe and many countries have barely been touched and we're seeing opportunity 30 days into our launch.
Slide 18. So all key commercial resources are in place. I also mentioned early in the presentation that 100% of previously Ipsen doc sales force from Germany have come over, which is fantastic, has ensured a smooth transition. And we pick up immediately where they left off on the 1st October. All distribution channels have been built, legal entities established in Germany and France, and all MAH have been moved over of the 19 that needed to be moved over.
Majority there's a couple that Italy and Greece, which we're working on, but that was expected. We will have Ipsen continue to supply while we do the commercial work in those countries. Moving on to Slide 19, talking about U. S, Slide 20. I think this demonstrates the growth signs that are coming out of COVID.
I think the slide to the right probably is the best depiction. As you can see, the tremendous trough compared to prior years in April of this year, the quick recovery out and then the exiting out of September back to an all time high for us, in fact highest month ever. So fantastic recovery in the U. S. I think that's attributed to having our commercial people in place, and utilizing both personal where we can, as well as digital and virtual means to meet our customers' needs and serve our patients.
And I think that has bode well for us, and that was always our strategy, a slingshot strategy, knowing that COVID was a temporary situation. Going into Q4, we know that COVID is making some sort of a return. What we believe is that the institutions, the physicians' offices are far better prepared and are going to want to see the patients. If patients choose on their own not to venture out, that is their choice. But what we're hearing from our customers is that they don't see any major disruption in their ability and capacity to treat bladder patients into Q4.
So we'll see. Obviously, no one has a crystal ball to see how it all will go, but we do not expect a trough like April to happen again. Slide 21 is the installations of cystoscopes. We've had 30 on the year so far, 33 flex and 220 rigid. Flex is starting to pick up a little bit now, and we think that is a still remains a growth engine for us.
I think all in all, given in a year like this, having 30 installed to date, we'll have more in Q4, still bodes well for us going into the new year. And I think I mentioned early in the end of last year's quarterly or end of year presentation that our big strategy this year was to drive more units per scope. So having that strategy in place coupled with installing new scopes is boding well for us going into future, and this is all despite the challenges of pandemic. The challenges being that institutions have, in some cases, frozen their capital equipment, or in other institutions, if they shut down, the installations are delayed. So we see the pipeline as having just moved out into the future for those accounts that were queued up for this year.
Moving to Slide 22, this depicts the relative penetration rates of the market, You can pretty much see the rest of the EU and U. S. As being a major opportunity for us. DOCS still has growth in it. We actually see opportunity 30 days in and we'll be going after it.
We have all the right success factors in place from approvals and acceptance to access, activated awareness. I think we've got engaged capital equipment manufacturers as well as patient advocacy groups throughout Europe and the U. S. And we've now put the commercial engine in place to accelerate the sales. Slide 23, there is increasing media attention on BLC procedures.
We were featured in Euro today on the 11th 24th June 13th September. We've also been in Norwegian Patient Association magazines in September. So again, the growing interest in blue isotostomy continues. Slide 24, increasing media attention, particularly on the European markets. There was a lot of write ups on this.
I think we can conclude that the transition was fantastic. It was smooth. We saw no disruption, and we're going to carry forward into the Q4 and forward. And again, as days go by, I see more and more opportunities to really do some good work in Europe. So moving to Slide 25, on to Slide 26 from summary and outlook.
Current year guidance, Q3 rebound will continue into Q4, although we know that there is COVID implications now as we're heading Q4 both in Europe and in the U. S. But we do believe hospitals are better prepared. Procedures might be postponed, but they're eventual. This is a disease that has to be treated.
There may be restricted access to the OR, but I've mentioned in the past, we we can be there personally. We've also had zoomed in on OR procedures where need be. We also are asked in some circumstances to assist physicians, particularly if they're new in doing blue light cystoscopy during the COVID pandemic. And then equipment budgets have been temporarily reprioritized. A lot of those capital budgets were shifted to respiratory equipment and things to treat COVID earlier this year.
We do see some of those budgets being loosened. Where they have been, we're going to try very hard to bring capital equipment in and get ourselves set up in Q4. If not, it will be into next year. Again, the pipelines remain, they just may be pushed out a little bit. So in conclusion, we maintain our ambition of worldwide revenues of $1,000,000,000 in 2023 by the end of 2023 with our approximate EBITDA of 40%.
We'll do that through the accelerate, expand, acquire and transform. And with that, I'll move to the last slide for Q and A. I know I ran quickly through those, but with the challenges we had with audio, I thought it'd be better to get right to Q and A. So open it up from here. Thank you.
Thank you, Dan. Okay. So I have a question from the web and I'm just going to start the
talk before
all the comments about no sound. But the first one here is from Thomas Gaivis, the marketing rights of the balance on the balance sheet is going to be any amortization of these rights over time. We are in the process of doing a PPA, a purchase price allocation these days together with KPMG. There will be either amortization or impairment test, quarterly impairment test depending on how this asset is classified. But there will be amounts between EBITDA and EBIT certainly.
I have another one from Thomas Gavis. How quickly are you going to enter the markets where HEXVIX is not available now in Europe any more specific or concrete plans? Do you want to take that Yes. Okay. How quickly are you going to enter the markets where HEXVI is not available now in Europe?
Any more concrete plans?
Yes, we're actually in the process of assessing that. I was in meetings 2 weeks ago where we're going through many of the other countries where HEXVIX is actually in supply, NIH is available, countries in the Baltics, Estonia, Latvia, etcetera. What we're assessing now is would a direct sales person or persons make sense with the return be there. Early conclusion is it may in well fact be the case. We got to make sure access reimbursement is set up properly and that we can put the right amount of effort behind it.
But we can move as quickly as the opportunities present themselves. Currently, the European operation is approximately including the support staff that's with it around 24, 25, 26 people. There's a finance person and marketing person and market access person, market access person, supply person that support. But majority are sales is a sales organization in the major countries of DACH, France, UK, Italy, Benelux. But we do see opportunities in those other countries.
Spain, in particular, comes to mind. Poland, another large country that we think is not only an opportunity, but there's already built pent up interest in bringing blue isotopy through the KOLs that have heard about it and would like to lead it in those countries.
Does this include the U. S. And EU?
No. This is China 2022 for China. And I would say put it towards the end of 2022, assuming they can get a first patient in this year, you're going to look at probably a good year and then they got to pull the data, submit and then they got time for an approval. So we think data in 2022 with approval in 2023 for China. EU and U.
S, they'll assess coming out of this trial, they'll do an interim analysis, determine what, how and when they will design and launch the next trials necessary for European and U. S. Rights. We expect European U. S.
Approvals maybe late 'twenty three and 'twenty four, probably more like 'twenty four.
A question from Anders Lunde. When do you think first patient Savira is coming?
Hopefully soon. That's all indications are. They got everything lined up. Trial sites are in place. Enrollments have begun.
So it should be any day.
A question from Thomas Gavis. Can you comment on cost base Q4 versus Q3? Any significant changes? And I think I'll take that one. Yes, there will be a significant change, because the cost base on of Europe will then be included in our P and L.
What we have said previously is that we will having we will incur additional cost annually in Europe of going to be slightly less. But obviously, there will be an additional amount on the spending driven by Europe. I have one from Rickard on the grounds. There seems to have been stocking in Ipsen territories in Q3 given the increase in volumes. Can we expect that to cycle out in Q4 20 20?
Let me take that. We might it seems that some larger customers have stocked some units at the end of the Q3 in anticipation of Folicure taking over the distribution in Europe. We don't think that is of a significant or is significant, but there might be some impact. But it's very difficult to estimate how much that impact will be. I have one from Andre Evansen.
Why do some hospitals choose Rigid over Flex for new installations?
Eric, I can't hear you.
Okay. It's from
I can't hear you. I can't hear you.
Can you hear me?
Yeah. I can hear you now.
You can hear me now?
I can. Yes.
Okay. I can hardly hear you. But
Well, there are 2 different sayings of care. Rigid has a very clear obvious history of benefit in the OR practice with Blue Light. And when you're going in for a TURBT, you're going in for a complete, you know the patient has cancer, you're very highly you know, confirmed to have cancer. And so you're going to want to go in with a rigid and get everything you can see. So blue light is a very easy sale there.
In the surveillance market, it's an easy sell, but obviously reimbursements and things have to be obviously lined up with it. But that's the values, you know, that we're bringing is that they can do some of these procedures in the surveillance setting. Plus, you know, if they're doing a white light surveillance, they may have missed something. And you're doing blue light and doing a low level procedure and bringing them back to the OR, they can assure that that patient will be discharged and put on the right, the right follow on treatment. But some institutions have brought in flex before Rigid, but generally it's Rigid before Flex.
Can you hear me?
Yes. So M and A targets, Yes. That's part of our strategy. Step 3 and 4 is looking for products, small companies. And then again, the products can be agnostic to drug or device.
I think that's one of the fortunate things about being Fotocure is we understand the device side as well as we understand the pharmaceutical side. So we can compete. We also have extremely strong relationships in the uro oncology space, which makes us a very attractive partner, either someone we want to sell or hand their product to us to do the selling for them or if they want to sell themselves or the company. So, yeah. So we'll be looking at those things going into the future.
Number one priority for us this year was Europe.
Nicolas de Flon, I'm not sure if I had this question before, but has If not, when will they start? Will it trigger a milestone payment? If
so, what
is the amount?
Yes, the milestone payments already it will trigger payment. We've accounted for it. We expect first patient to be dosed soon, as in probably this quarter. I will say this about Acerus, what I meant to say in the prior answer. Acerus' development plan and milestone was also dated in terms of a time stamp.
So they had to get to this point by a certain time. That time point was actually next July. So if they're bringing a first patient in, in this quarter, they are ahead of what the original sort of development timelines were expected to be, which would be fantastic and that's what we expect. They've been a fantastic partner. They're extremely excited, extremely capable.
I couldn't ask for a better partner right now to take Sabiro.
One more from Nikolas de Florent. You said that expected cash flow from EU operations will be negative, dollars 25,000,000 in Q4. When do you expect it to be positive? I think you're referring to my statement on account receivables and how we expect the account receivables to build up in the Q4 as we take over the European business. That's a one off expect the cash flow from the European business to be positive in 2021 full year.
I think we are slowly approaching the end. Let me see one more look here. No, I think that's about it. Okay, Dan. I think we're ready to close.
Okay. All right. Well, great. Well, thank you. And I apologize for some of the technical difficulties.
Hopefully, you got a lot out of today's presentation. We look forward to speaking to you at the Q4. Thank you very much. Bye bye.