Thank you, operator, and welcome to the presentation of Bactiguard's report for the second quarter 2025. Our CFO, Patrick Bach, and I will go through the presentation together, and we will have a Q&A session towards the end. As usual, I would like to share some highlights from the past quarter, and Patrick will go through the figures in more detail later in the presentation. First, we continue to deliver EBITDA profitability, with this quarter totaling SEK 4.4 million. This is the fifth consecutive quarter with positive EBITDA for Bactiguard, in alignment with our promise to our investors during our strategic transformation. Revenues for Q2 came in at SEK 52.1 million, which was a decrease of 14.4% compared to last year. This is mainly explained by lower revenues from the BD partnership due to longer than expected timelines for new market registrations, as well as negative U.S. dollar currency impact.
Nevertheless, our collaboration with BD remains solid, and I will elaborate on this later in the presentation. We have also initiated early feasibility work relevant to cardiology under material transfer agreement. Cardiology is one of our newer key strategic therapeutic areas announced in the first quarter, and the applications for future potential licensing hold meaningful value. Our wound management portfolio had revenues of almost SEK 14 million, slightly lower than Q2 last year due to the slower sales of our suture products, but offset by strong growth in Hydrocyn Aqua. Our Hydrocyn brand now represents the majority of the revenues in the wound management portfolio. Notably, over the first six months of 2025, the total wound management portfolio delivered 21% growth compared to last year. As I stated in the CEO letter, infection prevention is our mission.
It remains a critical global medical need, and the demand for effective solutions remains so long as there are challenges for healthcare practitioners to deliver care. I am sure you are already familiar with the data: healthcare-associated infections are very common, affecting one in ten patients worldwide, and it's estimated that 40%- 60% of all HAIs are caused by medical devices. The Bactiguard coating technology offers an elegant solution to this urgent medical challenge. This is further supported by a wealth of real-world evidence and robust data demonstrating our technology's safety and efficacy in reducing medical device-related infections. In the licensing business, we continue to build on our existing partnerships, such as our excellent collaboration with BD, and simultaneously seek new partnerships in additional application areas.
Enhancing our specialists and knowledge expertise is another important area, and we continue to invest in capabilities and competencies such as business development, R&D, and regulatory, that are critical for Bactiguard to be the best partner we can be to our current and future partners. Our initiation under material transfer agreements of early feasibility work relevant to applications within cardiology is a great example of how important these two pillars are to our success. Within our wound management portfolio, the focus is on continuing profitable growth and expanding into new markets. I would like to revisit our strategic therapeutic areas, which we took the opportunity to refocus in connection with our new strategic and financial targets announced in March. Our focus areas are orthopedics, cardiology, neurology, urology, and vascular access. Therapeutic areas where infection rates are relatively high and the need for effective solutions is urgent.
Infections in these settings are linked to poor patient outcomes and, in severe cases, even death, underscoring both the medical need and the market opportunity. Across these areas, we see clear applications suitable for our infection prevention technology, particularly in addressing the unmet need for reducing medical device-related infections. These areas also represent the strongest potential for both enhanced and future licensing partnerships, combining high clinical relevance with tangible commercial potential for Bactiguard. We have well-established partnerships in both the orthopedics and urology therapeutic areas. Orthopedics represents a significant opportunity with an addressable market of nearly $40 billion, covering a wide range of applications across various implants throughout the body. This area also involves a high volume of procedures and, consequently, a high incidence of device-related infections. Infection rates can be particularly significant in fracture and trauma-related procedures, where they can reach up to 40%.
In urology, the Bactiguard-coated Foley catheter has already made a positive impact in preventing infections. BD has sold more than 245 million units so far with zero adverse events associated with our coating. Urology, as a field, continues to present strong growth potential not only for Foleys, but also for other applications within the field. This quarter, I would also like to highlight cardiology in particular. Application areas within cardiology present great potential for Bactiguard with an addressable market of around $10 billion. The therapeutic area includes a variety of implantable devices that are susceptible to infections, with reported infection rates of up to 7% for cardiac implantable electronic devices and up to 39% for ventricular assist devices, despite a well-appreciated respect for infection prevention within the cardiology field.
These infections pose a major challenge, often leading to device failure that necessitates surgical intervention and places considerable strain on both patient recovery and healthcare resources. This is the license partnership snapshot that we introduced in conjunction with our strategic and financial targets. Across the top of the chart are our partnership stages, against which we will communicate progress in our business development activities, mapped against the relevant therapeutic area on the left. As mentioned earlier, during this quarter, we have initiated early feasibility work under material transfer agreements related to the cardiology therapeutic area, and this is represented with a new check in that box for us this quarter. We are very enthusiastic about this development as a positive indicator of the work we have done in transformation to focus on the licensing business model.
Despite this, we recognize that commercialization of medical devices requires a long-term approach, with timelines from early feasibility under MTA through to marketed product that can vary based on device class, desired product claims, and the associated time required to deliver data demonstrating efficacy and safety. We know that bringing new or existing applications to market with the Bactiguard coating can take several years. It is important to reiterate that Bactiguard's efforts in business development and in partnerships established in the nearer term are expected to deliver operational leverage and scalability over time. We remain confident in our stepwise and diligent approach to focus on areas of high unmet need and target partnerships where the value of the Bactiguard coating is relevant.
Our activities in the two earlier phases of application development and material transfer will be disclosed by therapeutic area, and we will not disclose more details around the companies or the number of active collaborations. The ambition is to provide transparency on Bactiguard's progress in business development while ensuring we protect the confidentiality of product development required during these early stages. Across the journey, partners can enter exclusivity with Bactiguard for a particular area, and this is the point at which we will announce who the partner is and what we are working on together. By the time of market approval and launch, we will update on the status of our specific partnerships on a regular basis, as we do with our existing licensed partnerships.
With that background, and to come back to the Q2 snapshot specifically, to the far right, we have our licensed partnerships with Zimmer Biomet, BD, and Well Lead in orthopedics and urology, respectively, with coated products in the market. We are also currently working in early feasibility and performance testing under material transfer agreements within the category of vascular access, and as I just described, we have initiated early feasibility work within cardiology. We may also do work outside of the strategic therapeutic areas, but only where we and our potential partners believe there is a clear need for infection prevention and that our technology has the potential in the application, and these will be represented in the other category. Turning to our existing licensed partnerships, the momentum in our collaboration with global medtech company BD continues to be strong.
We work together across the entire value chain, and a key focus right now is on ensuring that we are well prepared to launch in additional markets, which includes having a ready supply of Bactiguard-coated Foley catheters. Notably, in India, both latex and silicone coated Foley catheters are now duly registered and available for sale. In addition to the preparatory work for new markets, BD has also renewed efforts in the U.S. with the Bactiguard-coated Foley catheter branded BardX IC, including a recently launched product website. This dedicated online resource features a comprehensive information section that highlights the unique differentiators and clinical value of the coated Foley catheters. Healthcare professionals can access clear, evidence-based insights into how these catheters contribute to reducing catheter-associated infections, improving patient outcomes, and enhancing overall infection prevention protocols. We in BD are, however, experiencing delays in timelines to new market registrations.
Despite longer than expected timelines, BD and Bactiguard are fully aligned in the process to enable the Bactiguard-coated Foley business to grow. Although the path to commercialization in each individual market may take more time than we like, Bactiguard-coated Foley catheters represent a strong long-term value for both BD and Bactiguard. Next is our licensed partner within orthopedics, Zimmer Biomet. The focus continues on commercialization of the ZNN Bactiguard trauma nail across the European market, including efforts related to the transition to the MDR regulatory requirements. A recent example of market-related activities was Zimmer Biomet's participation at the International Consensus Meeting on Infections in Istanbul in May, where the ZNN Bactiguard system was presented. Zimmer Biomet is a strong promoter and carries the banner for infection prevention, and the ZNN Bactiguard system is an integral part of the solution Zimmer Biomet offers to their customers.
We are fully aligned on the ambition to improve patient outcomes through innovative and safe orthopedic medical devices. In addition, the post-market clinical trials in Europe with the ZNN Bactiguard continue. Both the MDR registration and clinical trial work should be expected to continue for the next couple of years. Looking at our wound management portfolio, the Hydrocyn Aqua branded range of products continues to be the main driver of the revenues and now represents the majority of the wound management portfolio. Even though the second quarter of 2025 was somewhat weaker compared to Q2 2024, over the first six months of 2025, the wound management portfolio delivered 21% growth compared to last year. The strategy for wound management remains firm, we will continue to focus on profitable double-digit growth.
Quality is an important area for our customers, and we are also pleased to share that the most recent audit in our Malaysian production facilities resulted in zero findings. In addition, our Malaysian site received formal ISO 14001 certification for our environmental management system from the British Standards Institution in Q1. Together, these milestones reflect our strong commitment to high quality, responsible manufacturing, and sustainable production practices. I will now hand over to Patrick to review our Q2 financial outcomes in more detail.
Thank you, Christine. I will now present the financial details for the second quarter and the first six months of the year. In short, we are pleased to deliver continued EBITDA profitability for Q2, despite the decrease in total revenues across license and our wound management portfolio, including the negative currency effects. Total revenue decreased by 14%, or SEK 8.8 million, to SEK 52.1 million in Q2. Adjusted for the negative currency effects of SEK 2.8 million, our revenues decreased by 10%. In particular, we saw 10% lower revenues in our licensing business, yet net of the currency effects, this was in fact flat for the second quarter. In addition, we have in the base of last year our exclusivity revenues from the now discontinued recon agreement.
For our wound management portfolio, we saw a total decrease in revenues of 5% for Q2, while our revenues for the first six months are growing at 21% net of currency effects. We see continued strong growth for Hydrocyn across regions, which now represents the majority of our wound management portfolio and from which we do expect continued strong double-digit growth. The BIP portfolio is, as planned and announced, phased out, and its contribution for 2025 will not be significant. Looking closer at our core licensing business, we saw Q2 total license revenues of SEK 34.1 million. Adjusted for negative currency effects of SEK 3.6 million for license revenues, we saw license partner revenues grow by 7.3%, in fact. These are the in-market royalty-generating application areas.
In here, we did see lower revenues from BD of SEK 8 million down to SEK 19.2 million in total for the quarter, which corresponds to about a 21% decrease adjusted for the negative currency effects. As Christine mentioned, we interpret this as an inventory effect in connection with delayed approvals for some of BD's new markets, and we remain positive about our partnership momentum in the coming periods. Revenue from Zimmer Biomet this Q2 was SEK 14.2 million versus SEK 10.2 million last year and pertains mainly to minimum royalties received from the trauma agreement. Please note the minimum royalty received in Q2 2025 represents a similar minimum royalty that we did receive in 2024 across the two quarters, Q2 and Q3. For Q2 this year, we report no exclusivity revenues, versus the SEK 2.7 million in the base of last year.
For application development revenues, we report zero, which is the same as last year's Q2. For the first six-month period, we see license partner revenue growth, i.e., our in-market royalty application areas, growing at 11% overall from BD and Zimmer Biomet combined, adjusted for the negative currency effects. On costs, we continue to operate diligently, driving savings across our external expenses as well as personnel. In Q2, our total OpEx decreased by 14% to SEK 40.9 million for the quarter, or about an almost SEK 7 million saving. Now, on a rolling 12-month basis, we see our OpEx down at the SEK 195 million level. As we have mentioned before, while we are driving savings across our business, we continue to invest and strengthen our organization in key strategic areas.
We also continue to see reduced cost of goods in our operation, with a decrease of about SEK 6 million or more than half of last year as a consequence of our transformation and strategic shift. As mentioned, we continue to improve our profitability with EBITDA at SEK 4.4 million for this Q2, an increase of more than SEK 3 million. We now see our six-month EBITDA at almost SEK 14 million and our rolling 12-month EBITDA at around SEK 32 million. Finally, our Q2 operating loss amounted to SEK 7.3 million, yet an improvement of SEK 3.6 million for the quarter, and a net loss for the period of SEK 8.1 million versus the SEK 14.3 million loss last year. On cash flow in Q2, we saw total cash flows for the period remaining overall flat, with a positive cash flow from operating activities at SEK 1.7 million.
When we look at the six-month period, obviously, the total negative cash flow mainly pertained to the voluntary amortization of SEK 51 million in connection with the refinancing with SEB. All in all, our cash position is now at SEK 46.1 million at the end of Q2, net of all voluntary repayments. With that, thank you and back to Christine.
Thank you, Patrick. Time to conclude and share a few key takeaways. First, the positive profitability trend continued in Q2. This is very important and continues to ensure that we deliver on our promise to our investors. Second, the momentum in the BD collaboration is strong, and despite the longer timelines to market approval and launch, we are fully aligned in the process to enable the Bactiguard-coated Foley business to grow. Third, Zimmer Biomet continues the ZNN Bactiguard commercialization across Europe with their continued focus here. Our enhanced efforts within business development and R&D are making progress and are demonstrated in the start of our early feasibility work in cardiology. Last but certainly not least, Hydrocyn Aqua's strong growth was the main driver of the wound management portfolio revenues. Looking ahead, we remain focused on continuing to drive growth and profitability while maintaining discipline cost-control.
We will work on strengthening our existing partnerships and advancing new opportunities and early-stage testing in our key strategic therapeutic areas. We also look forward to welcoming additional experts to Bactiguard joining us after the summer, and this will continue to strengthen our capabilities in the areas of business development, R&D, and quality and regulatory. We will continue to enhance our knowledge and specialist expertise to be and to become the very best partner to our partners. Together, we will reach more patients, prevent more infections, and achieve a positive outcome for both us and our partners. I would like to conclude Q2 in a similar manner as Q1. We are doing what we have set out to do and are delivering on our promise following the strategic shift in 2024 and continuing to deliver consistent results.
With that, I would like to hand over to the operator to open up for questions.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Christopher Lilleberg from DNB Carnegie. Please go ahead.
Thank you. One question related to Zimmer Biomet royalties, and then on the weaker BD sales in the quarter. Zimmer Biomet royalties, did you say that the minimum royalties you had this quarter should be seen in what you had distributed over two quarters last year, i.e., that this revenue line, Zimmer Biomet, next quarter should be down significantly again, closer to zero, or if you could explain that. Thank you.
Yeah, thank you, thank you, Christoph. The minimum royalty that we recognize now here for Q2 is correct. It represents a similar minimum royalty that we recorded in 2024 during both Q2 and Q3. That is correct, yes. We cannot say what we expect in terms of the future revenues, but it is correct that we see that more in line with the quarters of last year where we did not report the minimum royalties, for example, Q4 or Q1.
The fact that you have, for example, the first quarter, this revenue line was very limited, and it seems it will be the same in the third quarter. Does that imply that you're still far from reaching with underlying sales close to the minimum royalties?
In this quarter, our total Zimmer Biomet revenues mainly pertain to the minimum royalties, yes. We have shared that we have minimum royalties based on a global agreement, and since we do not have actual in-market royalties across all regions, the minimums do represent a larger amount than the in-market royalties, yes. That is still the case.
Thanks. Great. On BD sales that were quite a bit weaker than what I expected, at least, could you explain this in a bit more detail? Is it so that BD has done a lot of stocking in recent quarters that has inflated sales, i.e., that underlying sales was maybe not as good as we thought here in the previous quarter? Is this also related to the longer approval process? Could you maybe give some more explanation about why it takes longer to get a product approved, if there's any specific markets? If that has impacted sales this quarter, is it something that you think will continue to impact the BD revenue line coming quarters? Thank you.
Good morning, Christopher. It's Christine. I'll expand a little bit on the BD relationship as well. As you noted, our concentrate is part of BD's supply chain. It is a portion of the revenues that we receive when they create the inventory in order to be able to be prepared for market launches in future market launches. That certainly is a part of BD's supply chain and to be expected. We do expect BD to actually sell the stock in conjunction with the market launches. We are not concerned about destocking or anything like that in the coming quarters. These products are intended for the market launches.
While we appreciate, together with BD, that the timelines to market registrations in all of the individual markets are taking a bit longer than either of us expected, we are actually not concerned about anything going on in those processes, even if it does take longer for the notified bodies to provide confirmations of registrations. Of course, before they are actually fully registered, BD is unable to actually do the launch that they plan for. As BD has demonstrated over many years in working with us, they have never failed to commercialize in the markets they have had in an extremely good way, and we are confident in those market launches when they are able to come.
To your point about specific market registrations, perhaps a good example of this is that we only recently announced in Q1 that the India market is now fully registered, ready for launch, and that process has now begun in this quarter with product available for commercialization and sale. Bactiguard, of course, has had the CE mark, which is the European markets, but also other markets that rely on the CE marking for registration and sale as well. This represents our ability and BD's ability to have their Bactiguard-coated product under BD's registration, which will then enable market launches in multiple countries because the CE mark enables many countries.
Is it possible to say anything about if we take BD sales in the last four quarters, the last 12 months, how much of that is to the old markets, Japan, U.S., and how much has been stocking ahead of a launch in new markets? Just to get a sense of if you're growing with BD in the U.S., for example.
Thank you. We obviously have a global agreement with BD. To be very honest, we don't know the exact details of where sort of our concentrate ends up in every single market. What we do know is that we see strong growth in the existing markets. We see mid to high single digits for the existing markets. As Christine mentioned, when we sell to BD, we sell into their supply chain, basically. That is not the same thing as the sell-out for BD. As Christine also had mentioned, in the recent quarter's growth that we have seen, we have seen anticipation of the new market launches. The growth that we have seen is obviously a combination of growth in existing markets, which is sell-out in existing markets, and also preparation for the new markets.
We can comfortably say that we see growth and strong momentum, as Christine also mentioned, across our existing markets. The growth that we have seen in the last quarters is not only driven by the existing market sell-out. Did that answer your question?
Okay. Yeah, absolutely. With that in mind, I guess BD sales will remain muted here likely, at least next quarter.
We.
Unless they will launch now in several new markets.
We see the current quarter, as we mentioned, as an inventory effect due to this delay of the approvals in some markets. We do expect the coming periods with positive momentum in our partnership. We cannot, of course, tell how we expect and when exactly we expect the different launches to materialize and how fast they will grow, but we remain confident about the future growth prospects also with BD in the coming periods.
Okay, thank you.
Thank you.
Next question comes from Mattias Vadsten from SEB. Please go ahead.
Morning. Thank you for taking questions. I have three questions. First one is on wound management. It looks like timing effects to me, at least. If you could just confirm that, that this is just quarterly variations and nothing sort of suggesting lower growth for the quarters to come, and maybe also related to the wound management. Which countries are the main material drivers for Hydrocyn Aqua currently? That's the first one.
Thank you, Matthias. I'll answer your first question, at least. We are pleased with the six-month growth of the wound management business. We are not concerned about the momentum there. Is it only time effects? You're right. We did see a very strong Q1, and we saw, as a consequence of that, also a little bit lower Q2. We expect continued strong growth from wound management. This is driven primarily from Hydrocyn Aqua. We continue to be optimistic and to have strong expectations from wound management and especially Hydrocyn Aqua in the coming quarters, yes. What we do see in the first six months is that we see growth for Hydrocyn Aqua across various regions, both in Asia-Pacific. We see it also in newer markets, which India is an example of, and also the European markets. We also have a low base here.
We continue with growth across our regions driven by Hydrocyn Aqua.
Thank you. A follow-up to the earlier question around BD and the sizing effects and the inventory build-up: which markets are delayed here? Just to make it a bit more easy to understand.
Hi, Matthias. Christine. Good morning. The key area, which is taking a little bit longer, as I guess we've indicated that we've been working on this transition for a while now, is the CE mark. We appreciate that many of the notified bodies in Europe have their work cut out for them, as it were, with heavy workloads on lots of MDR transitions. We have appreciated that the work with the notified bodies in Europe is taking a little bit longer than either BD or we had hoped for. This is primarily, again, for the CE marking in Europe where we see a little bit longer than expected timelines to ability to launch.
As we indicated, while the European countries are, of course, an important area of registration for the CE mark, receiving the CE marking does also enable lots of other countries to have local market registrations on the basis of that CE mark. It is for Europe specifically, but also more broadly than just Europe.
Okay. Thank you very much. The last one, you talked about the early feasibility work with the coating related to the cardiology therapeutic area. This was initiated during this quarter. I'm just curious here, what does this mean more in practice, maybe, for Bactiguard?
Thank you. Yes, I guess you heard my excitement about the early feasibility work in terms of the cardiology field. While, of course, we can't be too specific about exactly who we're working with and what we're working on, we do believe that where we would be working here in the early feasibility with potential for demonstration of success with our coating would enable multiple potential application areas within the field of cardiology should we be successful here. As a theoretical, but this does apply to all of our different therapeutic areas in cardiology as well. If we are able to show progress in the coating development work here, that would be expected to enable an actual application development agreement. That's where the real work of the development begins.
It may also be that it would be able to enable an exclusivity agreement as well should we move quickly in terms of the ability to get to exclusivity and not just work on an application without exclusivity. This is not necessarily a straight linear process. Both an application development and exclusivity can come in conjunction, but not necessarily. That would be our expected path forward in terms of how we would work in the cardiology field. Did that answer your question, Mattias?
Yeah, absolutely. I think that was a clear answer. Thank you very much.
A reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more phone questions at this time. I hand the conference back to the speakers for any written questions and closing comments.
There are no written questions. What I would like to say is thank you, everyone, for your questions and for listening in today during what we understand is a very intense reporting season. We look forward to our next engagement opportunity and also want to reiterate that while we appreciate that these partnerships do take time, once products are launched, the stickiness of the revenue streams is extremely high, and we look forward to continuing to deliver on our promise of growth and profitability in the future. Please do not hesitate to reach out to us in the meantime. Thank you.