Hello, everybody. Thank you for joining our third quarter presentation. This is Geir Almås from SoftOx Solutions. Need to let everybody in before we start the presentation. Today, the presenters will be Kristine Rød and myself. Why doesn't this slide? Molly, can you please change the slide for me? Thank you. Something must work here. Next one, please. Yes. Today's presenters will be Kristine Rød, which will present financial reviews. Christopher Burton will give you an update on the technology development, and myself will give you the highlights and an update on the commercial development of the company. Next slide, please. Third quarter highlights. Helping the world fighting infection. Quite bold vision, but third quarter has showed us that we have a good reason for saying this. We got the virus, fighting the viruses.
I think the world have learned how nasty virus can be the last years with the coronavirus. EU and EDF have chosen our solution among those who shall be used for fighting the next pandemic and biological weapon. It shows that our solution is top-notch, and hopefully it will work. Biofilm resistant, antimicrobial resistant, two sides of the same coin. Biofilm resistance have very nasty infections in the chronic wounds with 40 million patients in the world worldwide. That really needs a solution. Christopher Burton will take you through the latest development of our clinical development of Biofilm Eradicator. Next slide, please. Research and development highlights. SBE Biofilm Eradicator finished phase I-B , and then they have also completed phase I. We had very positive top-line results, which Christopher will go further into details on.
We have the grant technology granting from the European Defence Fund. Commercial development, we got the approval from the Swedish authorities finally on our disinfectant products, which gives us a very solid base for going forward also in that area. The financial results was as expected, minus NOK 22 million. We have raised fund in the very difficult market. We managed to raise fund as a convertible bond, which Kristine will talk more about. Next slide, please. Product pipeline. I say that we hold good progress in our clinical development. Biocides are now finished with regulatory approval. Medical devices, we have a pending application for the wound cleanser in the U.S. market, and we'll then, as soon as we got that, start to work on filing also in the EU.
Due to some challenges on the resource side, we have decided to take the U.S. first. Drug development, we have finished phase I and are preparing phase II for SBE. We are having a coordination between our inhalation solution for civil purposes and military purposes, which Christopher will talk more about. SoftOx's technology development, and I'll leave the word to you, Christopher.
Thank you, Geir. Hope everybody can hear me. I'm just gonna take you through the latest research and development updates from Q3. As everybody knows, we have a technology platform that is based upon a stabilized formulation of hypochlorous acid, and this formulation has been shown to demonstrate pan-spectrum antimicrobial that's both virus-killing and bacterial-killing effects. We have been not able to induce, and nobody else has been able to induce, antimicrobial resistance in the use of this product, and we have a good safety and tolerability profile. The substance itself is not systemically absorbed, so there are no anticipated systemic side effects, which are major limitations, of course, to antibiotics. I'm gonna take you through now the three areas.
First, we're covering the wound care area, followed by the respiratory and disinfection areas. In wound care, when we look at chronic wounds, most wounds at the time of presentation are infected with multiple types of bacteria. Here we see on the panel on the right, the green and the red figures, we have a wound, a chronic wound that is looked at under microscopy and stained with different agents to bring forth different types of bacteria. In the panel on the top, A and B in the green, we're staining for Staphylococcus aureus, and the white arrows indicate the wound surface. As you can see, the Staphylococcus aureus is all very present at the very surface of the wound.
In contrast, in the panels below in red, stained in red, we see, we're staining for Pseudomonas aeruginosa, and they are all organized very deep into the wound, very close to the base of the wound actually, and away from the surface. We call this organization of bacteria in this way biofilms. They are also very difficult to treat because if you treat with surface antiseptics, you're only likely to really address the bacteria arranged at the surface, so the Staphylococcus aureus and similar species. In order to really treat the deep infection, you need to use and resort to systemic antibiotics. Of course, they are associated with also side effects and as we all know, contribute to multidrug resistance.
Biofilms do present a real problem to clinicians, and this is what we are trying to address with our specially formulated SoftOx Biofilm Eradicator. The whole purpose of this is to bring this product into the clinical treatment paradigm as a first-line prevention and treatment for locally infected wounds, as we know most of them are at the time of presentation, and that there should be a focus on early intervention. To this end, we have now completed and reported on the phase I-A and I-B results for SBE. This was looking at single and multiple ascending doses of SBE in actual patients. These patients had chronic leg wounds, and these formulations were applied directly to those wounds.
As you can see on the panel on the left, that just shows you the range of different doses and formulations that we have used. At all of those, whether you single dose or multiple dosing once daily or twice daily, we found that they were safe and well-tolerated. Not only that, but if we look at bacterial burden, so the amount, absolute number of bacteria that we could actually culture from the wounds, and we compare pretreatment shown on the panel on the left here in green with post-treatment, we observed a dose-dependent effect of bacterial removal or reduced bacterial burden as we move from, well, of course, placebo shown on the far left there, not really much difference as expected between pre-dose and after treatment.
Gradually we see as we move from single dose to once daily to twice daily treatment of SBE, we see an increasingly large effect on the removal of bacteria. As infection is actually a risk factor for non-healing wounds, it was also nice to then see a correlation with actual wound reduction in wound area. In the multiple dose groups, after five days of treatment, we saw reductions in the wound area of between 25%-35%, only after five days of treatment. Actually at SoftOx, we are not overly surprised by this because we have seen similar results.
This is an example of a study that we did with our SoftOx formulation, whereby we looked at acute wound treatment. The primary endpoint of the study was wound re-epithelialization on day 10. On day 10 versus normal saline, most of the wounds had healed anyway, so there was no real difference. In a prespecified day four endpoint, we also examined wound re-epithelialization. There we did see a difference between the treatment and the saline group. This panel on the right here just shows you a typical photographic series of the types of wounds that were treated, comparing saline on the top and SoftOx on the bottom.
I'm just drawing your attention to day four there, where you may be able to see that the wound itself all wounds started off the same size. On day four here, you can actually also visually with the naked eye make out a sort of more furled sort of circumference to the wound and which signifies that we have new epithelial cells growing into the wound. Of course, this also shows that on day 10, there was complete re-epithelialization in both the normal saline and treated groups. Not surprisingly, no difference at that point.
It signifies that we do expect to have faster wound healing with treatment with SoftOx technology. Of course, this is all together very encouraging as we prepare for a Food and Drug Administration application for a phase II clinical trial, which is currently in preparation and will be submitted next year, where we will continue our co-funding arrangement with the U.S. Medical Technology Enterprise Consortium, MTEC, to conduct a blinded, randomized, parallel, double-blinded study of patients with venous leg ulcer in the lower extremities.
Here we will test a regimen of once daily treatment three times per week for four weeks and look at clinical efficacy, such as you know wound closure, and of course also the bacterial burden, as well as of course adverse events. Also on the respiratory side, we've been able to aerosolize the same technology platform and deliver this into the upper respiratory and lower respiratory tract. That's the nasopharynx, the oropharynx and also the lower lungs. We have initiated the development for this aerosolized platform for the treatment of upper respiratory tract viral infections similar to that of COVID that we've all been having to have been vaccinated for recently.
We have, of course, already demonstrated actually non-clinical proof of concept. This is that you can deliver this agent in an animal model and see a reduction in the number of viral particles. That's the panel in the middle there. The panel on the left, infectious viral titers where we see in the light blue the treatment arms. We have lower amount of virus that can be extracted from the lungs of these animals compared to saline treated. We also used a similar test to the ones we are familiar with in terms of the COVID, the PCR testing, which is a quantitative test.
Here we the more you need to do a cycle of PCR, the less virus there is because you need to amplify it more and more. We see also however you measure viral load, whether you measure it directly by measuring the actual number of viral particles or indirectly by measuring the number of times you actually need to repeat PCR in order to find a viral particle, we see very similar results and the effect of treatment in these animals compared to saline. Early on in the year, we also presented our phase I results of safety and tolerability in healthy volunteers, where we examined doses up to 100 micrograms per ml administered four times per day.
These results have actually just been presented in Q3 at the European Respiratory Society conference, and the abstract number is there. Of course, we also looked not just at adverse events, but we also specifically looked at lung function, and we didn't see any difference in lung function from administration and over the time period of observation. As you would have heard, we do have also from the European Defence Fund some interest in exploring how we can translate this platform into a military medical countermeasure against biologic threats, and that is something we are currently looking into. Of course, we are looking at bridging as much as possible to everything that we have already done for the clinical development, the civilian development.
Of course, this will have to be done in negotiation with regulatory authorities and that's planned for next year. Lastly, but by no means least, we have very good news on the disinfection side as Geir Almås also has alluded to and as we reported just a week ago. We have received approval, a final approval from the Swedish Chemicals Agency, for a hand and surface disinfectant. This is a rubber stamp really of the whole regulatory acceptance of a very good safety and tolerability profile also when used in these concentrations for hand and surface disinfectant. With that, I'll hand back to Geir Almås.
Thank you, Christopher. Thank you very much. Just get back to control. Market and commercialization development. First of all, I would like to remind you about our, the potential of our disinfection products, where we see that it is a clear need for a more skin-friendly and working environmental friendly solution for disinfectants. We have done studies where we see clearly that our hand disinfectants has a very positive clinical improvement of skin health for people with hand eczema or in the risk of getting hand eczema. We also see from the HEMIL report with the Norwegian Defence Research Establishment has made for us regarding environmental condition for people employed in the healthcare sector using our solution contra using alcohol disinfectants.
We are going forward there and hope that we will soon be able to point out in which direction and with which partners we shall be able to take this to market. Next slide, please. Wound care. Here, I would like to put a little bit of focus on what Christopher said earlier regarding wound healing and wound disinfection. We have Radboud University have made evaluation of our technology based on inputs from an expert panel in Xcite International on what is the potential cost saving for the U.S. healthcare sector if we succeed with our technology development.
Basically, with their assumptions, they end up with that the cost saving, if we only disinfect the wound, means that we avoid that you get an infection in the venous leg ulcer, they will save approximately $650 per patient. If you go up to wound closure and you actually manage to reduce the time needed for treating the wounds and the patients, the cost reduction will be much, much bigger. It will be nearly $5,000 per patient. With 2.3 million patients per year, it is basic calculation to see that the cost potential reduction for the healthcare sector is very, very nice.
At the same time, we also know that the U.S. FDA has pointed this out as an area they would like to have a task force on, and they have established a task force because they see that this area with chronic wound is growing very fast, and the problem is getting too big to handle. Therefore, they have encouraged industry to come up with innovative solutions. Next slide, please. Respiratory tract. Here, we have gone through this before, and I would just like to mention that we have in the defense sector, we have together with the Norwegian Defence Research Establishment has put up numbers for what we think will be the stock NATO countries will have to their defense and civil defense solution.
We come up with a number of 250 units, which is basically approximately 25 million treatments. Expect that to last for three years with the solution that we are working on. Taking with the numbers we know that we have mentioned as a price per unit, we are talking about approximately EUR 1.8 billion every third year. No, sorry, every year. EUR 6 billion every third year. On the civil side, we see that there's a great need for a solution. There's a great need for those who go to doctor in the days like today with the flu, and the doctor need to give you something. Today's solution, only 3% of the patients receive. Our solution will be able to reach everybody that actually go to the doctor, which is over 20%.
The 3% market is approximately $1 billion per year, and we expect that our market will be larger than that. Overall, the income potential in the inhalation solution is large, and it's very promising. Next slide, please. With that I leave the word to Kristine Rød.
Thank you. The financial review. The financial results for the period are in line with our expectations. As a clinical-stage pharmaceutical company, we invest heavily in our asset and pipeline, which we assume will generate good returns down the road. We have a stable level of activities, which means that we also have a steady level of cost control, the costs quarter to quarter. We are focused on cost control when we are building up and professionalizing the company. As already communicated, we will now initiate a cost improvement plan to defer non-critical R&D activities, reduce future overhead and infrastructure expenditure. Most of our costs lie in our R&D and clinical development work, and a relatively conservative amount is set aside for the administration. We have achieved several milestones with relatively small budget.
As mentioned here today, in quarter three, we finalized the SBE phase I and further studies on the inhalation. We have experienced positive interest in our disinfection product but have not been able to market the product while waiting for approval. This is reflected in the low sales. As mentioned today, our disinfection products have now been approved for Sweden. Following our business development strategy, we will now carefully evaluate opportunities to partner up with suitable companies that can bring our disinfection technology to market, and the company will set the strategy in the area based on that. Looking at our current liquidity situation, which is as expected, the company has in October, so after quarter three, raised a convertible loan from existing shareholders for NOK 25 million and refinanced the loan from June for NOK 15 million.
As you know, we regularly consider the need for further and different types for a solution for financing. I, of course, cannot go into further details on this topic, while ultimately it's the board's responsibility. Thank you. I leave summary to CEO.
Thank you, Kristine. Thank you. Yes. What is important to understand that the technologies that we are developing, the four main technologies we are developing are platform technologies. With that I mean that they are technologies which we can also then create other applications and other products as well. I will not go too deep into details on this. You have heard me many times talking about it. I would like to emphasize that everything in our clinical development show that the potential for also other application is very good. The efficiency is there, the tolerability is there, and we are going forward with the great optimism that we shall also be able to deliver on other applications when we have finished the one that we are working on now. With that, I will say thank you to everybody.
If anybody has some questions, please send them to our IR mail, ir@soft-ox.com, and we will answer them as best as we can. It seems there have come some questions already. Kristine, your job is to ask me, and I will try to answer, or maybe I'll send it over to Christopher to answer.
Of course. We have received some questions. NOK 97 million are granted to the SoftOx project through EDF. How much of these finances will be received by SoftOx?
Approximately half of them. How it is made is that half of the grant will go to research institution that will do jobs on our application, and the other half will go to SoftOx paying salaries and the cost that we have internal building up the solution.
Thank you. What can you say about financing of the projects in total throughout the entire development process?
I think it's important to understand that when we have received a certain level of confidence on our solution like this, for example see on the wound care side now, where we are in a early to proof of concept phase. We start to reach the point where the industry will say that they want this solution on board in their portfolio, and they will finalize the clinical development and the financing that. On the other hand, I'd also like to emphasize on that the European Defence Fund has expressed the willingness to follow their projects all the way through. That doesn't mean that we have a carte blanche fund. No, not at all. We have to deliver the results, and we have to deliver the expected result.
If we do that, I also expect that we will have a nice cooperation with European Defense Fund.
Thank you. Last, you are investigating possibilities after the promising results from the SIS phase I clinical study. When can we expect a decision on what steps will be taken next, and what will they be?
What we have said is that we want to use the time up to summer, where this financing round also going, to explore the possibilities for the wound care business. We see the early proof of concept, and we would like to take it outside Norway, and we are in discussions already with three companies or distributors which find our results very interesting.
Well, thank you. That was it. If you have further questions, please send us an email on our IR email.
Thank you.
Thank you.