Welcome to the Bactiguard Q3 2025 report presentation. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing five on their telephone keypad. Now, I will hand the conference over to the speakers: CEO Christine Lind and CFO Patrick Bach. Please go ahead.
Thank you, operator, and welcome to the presentation of Bactiguard's report for the third 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. Let's start with some high-level comments on the quarter, and Patrick will go into more financial details later in the presentation. We have had another profitable quarter with EBITDA totaling SEK 5.3 million, and the investments we have made over the last two years in strengthening the organization and capabilities to support licensing have not jeopardized our margins or impacted profitability. Even though we do not yet demonstrate significant top-line growth, we deliver a strong EBITDA, and I am confident that we are equipped to execute on the opportunities for our infection prevention technology across our strategic therapeutic areas.
Total revenues were just over SEK 48 million, with license revenues of almost SEK 30 million. Given our substantial U.S. dollar exposure within the license business, the weaker U.S. dollar does continue to impact these revenues negatively. We also had an exceptionally strong third quarter in 2024, which set a high base for comparison. Revenues from the BD partnership bounced back in Q3 compared with Q2 and totaled SEK 28.3 million. Notably, this quarter is the third strongest quarter of the last 10 quarters from the partnership, with only Q3 and Q4 of 2024 being stronger, and we remain positive about the trajectory of in-market sales. Revenues from the Zimmer Biomet partnership were limited this quarter, as no milestone or minimum royalties were recognized during the quarter, as was expected.
However, the partnership with Zimmer Biomet is progressing, including in the expansion of the clinical evidence supporting the advantages of the Bactiguard coated trauma implants. Newly published clinical study data benefits not just the ZNN Bactiguard, but adds a total body of clinical evidence for our coating technology that also supports our business development activities. Wound management had a slower quarter compared to Q3 2024, with revenues of SEK 15.6 million, but is still expected to deliver double-digit growth. I will come back to more detail on each of these highlights later in the presentation. Before digging deeper into the third quarter, I would like to summarize why Bactiguard is a compelling investment opportunity beyond the fact that we are now a profitable business geared for growth.
Firstly, there is a clear need for solutions to reduce the burden on patients, on healthcare practitioners, and in costs to the healthcare system of infections. Secondly, the Bactiguard coating technology and Hydrocyn Aqua line of products are differentiated from other solutions, and the coating technology has multiple levels of validation: validation from robust clinical studies, validation from demonstrated manufacturing scalability, validation from successful and sticky commercialization, and continued validation in real-world use over the last 30 years. Thirdly, our coating platform is highly scalable, with proven compatibility on multiple types of materials and in applicability to multiple therapeutic areas, including those that are as different from each other as urology catheters and orthopedic implants.
Our licensing business model also means high leverage in Bactiguard's scale as our partners reach commercialization stages, and once our technology is embedded, it is integral to the device, making the revenue stream sticky and long-lasting. Fourthly, we build from a positive EBITDA base and with new growth verticals in development, putting us at an inflection point for value creation on both sides of our business. I would also like to take a moment to reiterate our core value proposition. We provide global medtech companies with advanced technology that helps prevent medical device-related infections. Bactiguard's technology is an ultra-thin coating of the noble metals gold, silver, and palladium that has been demonstrated to work on multiple types of materials and devices and in different clinical settings. We have, over time, coated some 20+ materials with good outcomes, and more than 250 million devices have been coated for patient use.
Our technology has amassed a wealth of evidence of its safety and efficacy in reducing medical device-related infections. Some 100,000 people have been part of clinical trials demonstrating up to 70% infection rate reductions. Last, but certainly not least, in 30 years of real-world use, we have zero adverse events related to the coating. In short, a track record that gives confidence to our license partners. For our licensing business, Bactiguard is focused on therapeutic areas where infection rates are relatively high and there is an urgent unmet medical need for effective infection prevention solution. Infection in these settings is linked to poor patient outcomes and, in severe cases, death, and contributes to high healthcare costs, underscoring both the medical need and the market opportunity. Across these areas, there are clear applications suitable for our infection prevention technology and great potential to reduce medical device-related infections.
These areas also represent the strongest potential for both enhanced and future licensing partnerships, combining high clinical evidence with tangible commercial potential for Bactiguard. Across the top of the partnership snapshot chart are our partnership stages against which we will communicate progress in our business development activities matched against the relevant therapeutic area on the left. Starting from the top, we have our partnership in orthopedics within the trauma area with Zimmer Biomet at commercial stages in selected markets and have full rights available for licensing to all orthopedic applications outside of that. Orthopedics represents a significant opportunity with an addressable market of nearly $40 billion. This area involves a high volume of procedures and, consequently, a high incidence of device-related infections, and infection rates can be particularly significant in fracture and trauma-related procedures where they can reach up to 40%. We see significant opportunity forward in this segment.
Cardiology is one of our newer strategic therapeutic areas and represents great potential for Bactiguard with an addressable market of around $10 billion. Cardiology includes a variety of implantable devices that are susceptible to infections, with reported infection rates up to 7% for 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 major challenges, often leading to device failure that necessitates surgical intervention and places considerable strain on both patient recovery and healthcare resources. Last quarter, we initiated early feasibility work and are now progressing in non-clinical studies to demonstrate proof of concept in this area. In urology, the Bactiguard coated Foley catheter has already made a positive impact in preventing infections, especially in our longstanding partnership with Becton Dickinson.
Urology continues to present strong growth potential both for the already partnered Foley application area and for other applications within the field. In vascular access, we already have an evidence base that comes from the previously approved and marketed BIP central venous catheter, which we are building on with additional non-clinical studies. Even though we are very excited about the variety of early-stage testing that is ongoing, bringing medtech innovations to market is a long-term process that can take several years from initial testing to commercialization. As mentioned in my CEO statement, the efforts we are making today and will continue to make in the coming quarters are building the foundation for future growth. We are steadfast in our strategic direction, targeting therapeutic areas with significant unmet medical needs and forming partnerships where Bactiguard's infection prevention technology delivers clear and lasting value.
Now, to give a bit more color on our commercial stage partnerships. As I noted earlier in Q3, the revenues from this partnership bounced back versus the second quarter, and the momentum in our collaboration with global medtech company BD continues to be strong. Looking at 2025 progress so far, the partnership has advanced steadily. For their core U.S. market, BD has introduced a dedicated product website with a comprehensive section offering evidence-based insights into how Bactiguard coated catheters help reduce infections, improve outcomes, and strengthen prevention protocols. The Bactiguard coated catheters were also launched in India, where healthcare-associated infections and antimicrobial resistance remain major challenges. The team has been actively working on transitioning this market where we previously sold the BIP Foley from Bactiguard to BD. Preparations for launch readiness in Europe are also ongoing, and we expect more market launches in the coming quarters.
BD and Bactiguard continue to work closely together, sharing insights and jointly driving growth, and we remain fully aligned on growing the Bactiguard coated Foley catheters business. Zimmer Biomet carries the infection solutions banner as high as we do, with this category being an important strategic pillar for them company-wide. The ZNN Bactiguard trauma nail system is part of the prevention focus area and continues to be commercially supported across Europe, including through Zimmer' s exhibition and educational symposia at the annual EBJIS meeting held in Barcelona this past September. Even though Q3 revenues from the Zimmer partnership were limited, we see in-market growth in sales of the ZNN Bactiguard orthopedic implants, and the partnership continues to make progress. Zimmer continues to work on increasing evidence supporting the Bactiguard technology through clinical studies with the ZNN Bactiguard trauma nail system.
In Europe, post-market clinical trials are ongoing, including a key comparative study of coated versus uncoated trauma nails, which is on track for completion in 2026 or 2027. These studies are also a portion of the work to the transition to the MDR regulatory requirements for the CE mark in Europe, which also continues according to plan. As a highlight for us this quarter, through the Zimmer Biomet partnership was the publication of two independent studies in medical journals, which have further expanded the clinical evidence supporting the Bactiguard coated trauma nail. The study conducted at the Leeds Major Trauma Center in the U.K. is the first clinical comparative evaluation of noble metal alloy coated nails in a high-risk orthopedic trauma population. The aim of this pilot study was to assess the clinical effectiveness of two commercially available coated tibia nails compared with non-coated implants.
The single center cohort study included 234 patients over a 10-year period. All patients had tibial fractures considered at high risk of infection and were treated with one of three types of implants: the coated trauma nail, ZNN Bactiguard, an antibiotic-releasing nail, or a standard uncoated tibia nail. The results showed that the Bactiguard coated nails had the lowest infection rate at 4.9% compared to 7.8% for gentamicin-coated nails and 13.2% for uncoated nails. Patients treated with Bactiguard coated implants also experienced fewer unplanned interventions due to complications, a lower nonunion rate, no cases of anaerobic infections, and were observed in both versus what was observed in both of the other treatment groups. While the study was not statistically powered for all outcomes, the data consistently confirms improved clinical results with Bactiguard coated nails.
Another independent study recently published in the medical journal Injury was conducted at the Vall d'Hebron University Hospital in Barcelona, Spain. The objective of this study was to evaluate the clinical outcome of a novel hybrid bone transport technique using a Bactiguard coated nail for the treatment of infected segmental tibial bone defects and showed good outcomes without increasing complications. These studies add to the growing body of evidence supporting Bactiguard's non-releasing biocompatible coating technology as a superior tool in the fight against implant-associated infections. I also just wanted to note that the Bactiguard technology was also featured in a real emergency situation captured in a Netflix documentary series covering the London trauma hospital system called Critical: Between Life and Death, where a Bactiguard coated implant was used in a patient involved in a motorcycle and bus collision.
While we expect to continue to see real patient outcomes published in medical journals, this unexpected but more accessible context was a gratifying recognition of Bactiguard's role in advancing infection prevention. The wound management portfolio had revenues of SEK 15.6 million, a decrease of 13% compared to Q3 last year, which was primarily related to a decline in suture sales. Hydrocyn Aqua sales continued to expand with growth delivered across all regions, and we continue to expect to deliver double-digit growth in wound management in line with our strategic targets. Our focus in the near term is on onboarding of new distributors in multiple markets to support the clinically differentiated marketing and sales of the Hydrocyn Aqua line of products and capture the demand we see in wound cleansing and healing, as well as the future potential in surgical sessions and peritoneal lavage.
I will now hand over to Patrick to review our Q3 financial outcomes in more detail.
Thank you. With our release this morning, we, in short, deliver continued positive EBITDA of SEK 5.3 million in Q3 alone, despite a decrease in the total revenues across our business. Total revenue amounted to SEK 48.4 million, down SEK 25.5 million or 35% against negative currency effects and a high comparison quarter last year. Net sales amounted to SEK 45.5 million, a decrease of 27% net of negative currency effects. This was driven by lower revenues in both our license business as well as within wound management this quarter. First, net of currency, we see 30% lower revenues in our license business, amounting to almost SEK 30 million for Q3, again versus a high comparison of SEK 46.6 million last year. This mainly pertains to periodic effects in Zimmer revenues, where no minimum royalties were booked, and the currency effects overall.
Secondly, in our wound management portfolio, we saw a total decrease in revenues to SEK 15.6 million total, or about a 12% decrease net of currency effects. We do see continued growth for Hydrocyn Aqua, and as mentioned in last quarter, this represents the majority of our business and revenues. However, we saw a decline in suture sales in Q3, impacting the total wound management result. On a year-to-date basis, we now see the total wound management business growing at 8%, fueled by high double-digit Hydrocyn Aqua growth, and we remain confident and still expect our total wound management portfolio to deliver double-digit growth going forward.
Finally, looking at the total revenues, as expected, we had no BIP revenues recorded in Q3, and for the year-to-date period, this results in a negative top-line effect of SEK 12 million, reflecting the discontinued BIP portfolio that is included, obviously, in our 2024 base. In addition, other revenues for the quarter were down SEK 3.7 million, and in year-to-date, other revenues are down SEK 4.7 million, mainly driven by the negative currency effects. Naturally, this also negatively impacts the total revenue comparison versus last year. Looking closer at our core license business, we saw Q3 license partner revenues of SEK 29.8 million, a decrease of almost SEK 17 million or 29%, adjusted for the negative currency effects of more than SEK 3 million.
Despite the BD bounce back and recovery from last quarter, BD revenues came in at SEK 28.3 million, down 15% versus the high quarter last year of more than SEK 33 million. Here, we see negative currency effects alone of more than SEK 3 million, and net of this, we see a 5% decrease versus the high comparison quarter last year. We remain confident in the strength and future growth from our BD partnership. On Zimmer , Q3 revenues amounted to SEK 1.5 million, obviously a large decrease of more than SEK 9 million, however, explained by the fact that no minimum royalties were booked this quarter. For the first nine-month period, our core license partner revenues declined 10%, yet net of currency effects merely a 5% decline against the high base comparison period.
We remain confident in the positive in-market growth and positive demand from clinicians we see across our partnerships for our technology. On costs, we continue to make progress on reducing costs and complexity across our business. In Q3, our total operating cost decreased by 36% to SEK 36.6 million, or more than SEK 20 million in net savings in the quarter alone. This decrease is mainly attained to high other external costs in the corresponding quarter last year, which was driven by the increase in costs for consulting, regulatory, and legal services. In the first nine-month period, our total operating expenses amounted to SEK 119.9 million, a decrease of more than SEK 33 million versus the similar period last year, or corresponding to 22% in savings. On a rolling 12-month basis, we now see OpEx costs down at SEK 174 million.
As mentioned, despite a decline in revenues, we continue to deliver positive EBITDA with SEK 5.3 million for the Q3 alone, a slight improvement versus our Q2 result, but down versus our Q3 last year. On a year-to-date basis for the period January to September, EBITDA amounted to SEK 19.1 million, an increase of SEK 9.5 million, and an EBITDA margin of almost 12% versus 5% as of Q3 last year. Our rolling 12-month EBITDA is this quarter slightly down at SEK 27.5 million. Finally, Q3 operating loss amounted to SEK 6.4 million, again a slight improvement versus our Q2 last quarter, yet higher than Q3 last year. Net loss amounted to SEK 7.5 million for Q3, and net loss for the period January to September amounted to SEK 20.4 million, an improvement of SEK 8.5 million versus last year's year-to-date period.
In Q3, our total cash flows for the period were negative SEK 8.4 million, while cash flow from operating activities was -SEK 2.8 million. Looking at the nine-month period, the total negative cash flows mainly pertained to the voluntary amortization of SEK 51 million in the refinancing earlier in the year, and year-to-date cash flow from operating activities are -SEK 13.2 million. All in all, total cash end of Q3 is SEK 37.4 million net of repayments. With that, back to you, Christine.
Thank you, Patrick. Time to conclude and share a few key takeaways. The positive profitability trend continued in Q3 despite a lower top line, comparatively speaking. Our existing partnerships continue to make progress both clinically and in preparations to deliver future market launches. We continue to build the partnership pipeline in new business development efforts and in early proof of concept studies, and our wound management business is expected to deliver double-digit growth driven by our flagship Hydrocyn Aqua product line. I will leave you with this final slide outlining the strategic focus areas to meet our 2030 targets. We will remain focused on continuing to drive growth while maintaining discipline in our costs. We will continue to strengthen our existing partnerships and advance new opportunities and early-stage testing in our key strategic therapeutic areas.
We will do this through our knowledge and specialist expertise to be the very best partner to our partners. Together with our partners, we will reach more patients, prevent more infections, and achieve positive outcomes in both our coating technology and wound management portfolios. With that, I would like to hand back 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 Mattias Vadsten from SEB. Please go ahead.
Hello, Patrick and Christine, can you hear me?
Yes, good morning, Mattias.
Morning, Mattias.
Perfect. I have three questions, I think. First one, you mentioned the report in-market growth for ZNN Bactiguard and that the partnership is progressing on multiple fronts. Just some expansion on this, or if you can expand on this, and if there is anything that happened lately that we should be aware of, and also cover maybe what countries that Zimmer are selling the product today and where there is a sort of momentum building. That's the first question.
Absolutely. Thank you. Great question. As regards the in-market growth and where we see progress in the partnership, what we do note is that even though our partnership contract is structured around a global agreement with multiple prongs, Zimmer has launched primarily in the European markets. This is broadly across Europe, including the U.K., of course, where the studies were also delivered out of. We see actual in-market product sales growth, which is very positive for us, even though our revenues from the partnership cover more areas than just in-market sales. Patrick can give you a little bit more detail on this as well. That, of course, is a positive for us to actually see pull-through in the market of growth and demand for the ZNN Bactiguard trauma nail system product. As we noted, the product is widely available across Europe.
It is in the major markets first, and Zimmer continues to work on increasing market expansions as well, even within the European countries. It is also available in Saudi Arabia and South Africa, but those are smaller markets than the European markets are put together.
Okay.
Just to add to Christine, absolutely, we see positive in-market growth across both partnerships. For Zimmer , obviously, in-market royalties are growing from a low base, but growing double-digit. As Christine has mentioned, we've seen here positive feedback across launch markets. As we also mentioned, in this quarter alone, we did not book any minimum royalties. You may compare this quarter not with our Q2 last year, but rather sort of the Q1 this year. For BD as well, despite that we see net of currency effects and a decline this quarter of 5%, the sort of year-to-date growth that we see in-market is positive. As we reported last quarter, we see mid-single-digit positive growth coming from existing BD markets. As Christine has mentioned, we are also excited and expect more future launches in the coming quarters.
Okay. That was actually touching on my next question there on BD. It was, as you say, coming back. I guess communication is then more normal ahead and, yeah, that there are certain arguments for sort of growth to resume in 2026, all else equal.
Yes, we do continue to see BD continuing to make progress in terms of their planning for new market launches, which, of course, we're working on together with them. As I think we indicated last quarter, although the timelines are taking a bit longer for BD to be able to receive the market regulatory approvals that are necessary for them to be able to actually do the launches, we do continue to make progress on the planning for those launches, and we're very confident for the periods ahead.
Thank you. I have a question on you also talk about partner dialogues, visibility work, and so on. If you could just provide us with some insights on this, how it has progressed here maybe during Q3 or year to date.
For sure. One of the things that we've continued to work on as Bactiguard has transitioned to a primarily partnership model in the license portfolio is to change from being a supplier of product to our partner or a supplier of concentrate to being a true partner. That includes both in terms of how we work on data, non-clinical data to help support claims, continued market growth, or what have you, even for the commercialized products, all the way through helping them work together on train-the-trainer events that allow them to do sales launches in new markets. We appreciate that we are the expert on our coating and what it can deliver to patients and patient care, and we work actively together with our partners who have the underlying devices that are also delivering benefits to patients to ensure that we have a joint message that works in market.
It's everything from work on the technology all the way through the market launches and the way that the products are positioned. This definitely helps us align with our partners where they carry similar messaging and appreciation for patient outcomes and impact on infection prevention as strongly as we do when they go to market with our products.
Okay, thank you very much.
Thank you, Mattias.
Thank you, Mattias.
As 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 appear to be no written questions, so I will conclude. Thank you everyone for joining us today on the call. Thanks for your questions and for listening in today. We look forward to our next opportunity to engage with you. In the meantime, please do not hesitate to reach out. Thank you for today.