Hello, everyone, welcome to the Biovica Q4 Interim Report, which is also the year-end for the fiscal year 2022- 2023. On the agenda, oh sorry, the presenters today is myself, Anders Rylander, the CEO of the company. We have Anders Morén, CFO, and we have Warren Cresswell, President of Biovica Americas. What we are going to present, you see here on the agenda, I'll give a short introduction about the company and our business go-to-market strategy. We have the highlights for the fourth quarter. Warren will give us a US update, how the US business has been progressing, and I'll cover the European and pharma services business before Anders gives a financial update, and we will round off with a summary and a short question and answer session.
You can already now, ask your questions in the live event Q&A chat window. If you want to remain anonymous, I recommend you to check that Post as Anonymous checkbox. That way, when we publish the questions as we answer them, you will remain anonymous. Before we start asking questions from the chat, we will also have our equity researchers following the company from Redeye, Arete and Kempen. We will let them into the call to ask questions. Just a short little background about Biovica our company. It's founded in 2009, and the product and the business idea is based on research performed at the Uppsala University during many years.
An important milestone for us was the IPO in 2017, and we're now currently being traded at Nasdaq First North Premier. Our headquarter, where we have R&D, research and development, and our production facility and our lab to be able to analyze samples, is still based in Uppsala, but we also have established our headquarter for U.S., including a CLIA-certified lab in San Diego. We have, since many years, quality management system, complying to the ISO 13485 regulatory standard. When it comes to regulatory labels, we have CE markings for Europe with the IVD standard.
Since last year, we have a 510K cleared product, which enables us to market the products for use of monitoring breast cancer on the U.S. market. A few words about the product called DiviTum, which stands for dividing tumor and is an indication of what we measure. We measure an enzyme really close related to cell proliferation, and as cancer grows through uncontrolled cell proliferation, we can provide very important information to the treating physician and the patient. We've shown in several clinical trials. Today, we have 25 clinical trials that has been performed, peer reviewed, and published with some of the leading key opinion leaders and academic institutes in the world.
In those, you can see that, our biomarker, test, our product, is strongly prognostic for how the cancer disease will develop. We've also shown that we quick, short into, treatment, only 2 weeks, we've been able to provide feedback on treatment efficiency. If the treatment inhibits cell proliferation, as most cancer treatments, is intended to do, that's of course, a very important feedback for the treating physician and the patient, whether to stay on the treatment or to find an alternative treatment, for the best possible outcome for the patient.
The test is blood-based, so it requires a blood sample from the patient, combined with our test kit, and you get a result that we will perform in U.S. in our own lab, and provide feedback to the treating physician and the patient. This has several advantages compared to the methods, the standard method being used today, which is image diagnostics, where you take a snapshot of the tumors, if it's metastatic, because several tumors before start of treatment and during treatment. It requires several months before you can follow up, and it's also cumbersome when it comes to patient logistics. It's invasive, it requires contrast, fluid, et cetera.
Having a blood test that blood can be drawn, and you can get quick feedback has significant advantages, especially since these treatments, if you take the metastatic breast cancer as the example where we're active, is priced at over $10,000 per patient a month, and have also some pretty significant side effects. Getting this feedback is essential from both patient perspective and health economic perspective. If you look at our commercial roadmap, which we'll dive into on the coming slides, our initial focus is the use within breast cancer, specifically metastatic breast cancer, to monitor those treatments in U.S. and European countries.
With the 510 cleared product, we are allowed to launch, to market, and to use it for patients in the clinical setting to monitor treatments within the metastatic breast cancer. We are in a phase of building revenues to realize the full potential, and in U.S., we're doing that with our own CLIA lab, our own sales force, and supporting functions, which Warren will talk about our strategy there. In Europe, we are benefiting on the assets developed in U.S. and work with partners on each market. We are looking for partners that have the right skill set to be able to basically perform the same activities that we're doing in the U.S. on the different European markets.
Other interesting markets going forward is outside of Europe, is the Japanese market, and the next areas within breast cancer to expand is the locally advanced area, where you see the same type of unmet clinical need that we can meet with this with our product. We also looked into indications outside of breast cancer and identified three candidates: metastatic malignant melanoma, where patients are being treated with checkpoint inhibitors, immunotherapies, where we have data together with Karolinska, which looks really promising and strong. That's a focus area of ours. We're also looking into non-small cell lung cancer, where we also have data and castrate-resistant prostate cancer.
All those are large area with an unmet need for better biomarker tests, which we believe we can meet also, like, from the data, that we can meet with DiviTum product. Finally, the third area, which I'll also cover briefly later on in my presentation, is collaborations with pharma, as pharma has expressed interest for our product and are using it in their development projects, developing new treatments for cancer. We're looking to expand that and drive that into a more tight collaboration business that will generate new products for Biovica, tailored for new treatments from pharma. I'll talk a little bit more about that going forward. That was a short introduction. No, sorry, we have the Q4 before we go over to U.S. and Warren.
I'll go through the significant events. Of course, one very significant event is the establishment of the CLIA lab in San Diego, and the last step in that process was to get the certification, so we are allowed to receive samples for clinical use at our lab in San Diego. We have actually already received samples for pharma services, as we were allowed with the approvals that we had. This last certification gave us the opportunity to be able to receive also clinical samples, so that's really good. We have started to sign commercial agreements. We have 2 commercial partnerships for commercializing the product on different European markets. First of all, Netherlands and Poland, with TOR Medical, and then also in Italy with IT Health Fusion.
After end of the period that is after 30th of April, we have had the first AGM is to launch an incentive program for the US organization that we did in May. We have two commercial agreements with the payers in the US, which Warren will talk a little bit about. It's the MediNcrease agreement and the Contigo Health agreement, which also it's really promising and offers a great potential source going forward. There you go. That was the introduction and the highlights for the last quarter. I will now hand it over to Warren to dive into our US business and go through the different areas that we are working on at the moment and where we are.
Please, Warren, we can.
Thanks, Anders. We are very pleased to report very positive progress in the U.S. If you can advance to the next slide, that'd be great.
Yeah. There you go.
Perfect. I'm gonna be talking about a number of different strategic objectives that we're focusing on. Some of these you'll notice that are more short-term focused, and some of these are long-term focused. The long-term ones really drive this long-term sustainable growth. These five that I'm gonna talk about over the next few minutes, is really around demand generation, client bill contracting, our commercial agreements that have been recently executed, coding and reimbursement progress, and also really the impact of our clinical utility. The next slide, please.... We're very disciplined with respect to our customer-facing activities, and as I've indicated previously, we have developed a very sophisticated call plan strategy.
In that strategy, we focused on a number of different things, one of which is our focus on NCI and NCCN designated cancer centers. We've been successful in regards to engaging all 100% of them, and we have these advanced discussions going on with about 60% of them. We're also focused on non-NCI/NCCN cancer centers. These are very prestigious cancer centers within the U.S., and we have approximately 18 advanced discussions there. Part of our call plan is we've identified 1,500 high-value medical oncologists across the U.S., and we have been successful in getting in front of about 350 of those and having discussions, and we have ongoing discussions with those individuals now. Our call point is really, we primarily focus on key opinion leaders and regional thought leaders.
These are medical oncologists, also nurse practitioners and physician assistants, as they also order, have the capacity to order DiviTum as well. In our sales process, you know, one of the things that we've picked up immediately is the high level of interest for DiviTum. When we meet with these clinicians, there's really a process that we walk through, one of which is education, is making sure that the healthcare professionals really understand the role of TKa in the cell cycle, and also understand the value of DiviTum. As we drive demand for DiviTum, we also work in parallel with the laboratories where those clinicians are based.
That's because what we, what we need to do is we need to put a process in place, an ordering process in place, so that sample logistics and ordering is seamless, and so that anybody can order that within their institution, DiviTum, within their institution. As that gets in place, then we receive samples, we test and report those samples back, and this has been going fantastically through the U.S. organization. Next slide, please. One of our primary strategies is executing client bill contracts. With respect to these contracts, they're contracts with institutions. These institutions are specifically hospitals, and it does a number of different things. As I just mentioned before, putting a process in place is really imperative for long-term success for our business.
That's what when we put these contracts in place, this is what it really drives, is that process within an organization. It provides expanded access within those hospitals, but it also guarantees payment for Biovica. As we sign these client bill contracts and we receive samples, we actually invoice or bill the institution itself. They bill the insurance company. What it does for us is it guarantees payment to Biovica in a very short duration of time. Our efforts are heavy in regards to really building a funnel of contracts. We're in negotiations and discussions with many, many institutions. We should have our first contract signed in the coming months, thereafter, we should see a flow of contracts coming after that.
Next slide, please.
As part of our private insurance reimbursement strategy, we are focused on executing as well these commercial contracts. To date, we've been able to execute two very quickly. These agreements provide solutions to employers, for services performed, and what that means is tests performed. As a test comes in, we run those tests, we report those tests out. When we actually do the invoicing to private insurance, this really helps for it, for providers that are out-of-network providers. We fit into that category today because we've recently launched DiviTum. As we work with insurance providers and we become contracted, then that helps out the process moving forward.
With these commercial agreements, what we've done is we've prenegotiated rates for our test. This really drives or enables reimbursement for DiviTum prior to being in-network with the insurance providers themselves. The two that we've signed, one of which is MediNcrease. MediNcrease is a great partner. They have over 1,000 payers contracted and over 15,000 contracted lives. It's pretty significant commercial agreement. Contigo Health, on the other hand, they have 900,000+ providers that they've contracted with, and from a scale perspective, they're probably 5 to 6 times more covered lives than MediNcrease. These are two very important partnerships for us and will really help drive our business moving forward.
Next slide, please.
With respect to our public insurance reimbursement strategy, we've applied to Medicare for our credentialing, and what that requires is an application process, plus it requires a on-site visit from CMS. That has gone well, and we've been able to be credentialed through Medicare. This enables us to submit Medicare claims through our Medicare administrative contractor, which is Noridian. What we're also doing is we're applying for our PLA code, and our PLA code stands for Proprietary Laboratory Analysis code. This is specific to DiviTum and to DiviTum being run in our San Diego laboratory. This process is very well-defined through both AMA and CMS. It's really a two-part system that you apply for. One of which is getting the PLA code granted, we've been working with the AMA to do that.
Hello, everyone, welcome to the Biovica Q4 interim report, which is also the year-end for the fiscal year 2022, 2023. On the agenda, the presenters today is myself, Anders Rylander, the CEO of the company. We have Anders Morén, CFO, and we have Warren Cresswell, President of Biovica Americas. What we are going to present, you see here on the agenda, I'll give a short introduction about the company and our business go-to-market strategy. We have the highlights for the fourth quarter. Warren will give us a US update, how the US business has been progressing, and I'll cover the European and pharma services business before Anders gives a financial update, and we will round off with a summary and a short question and answer session.
You can already now, ask your questions in the live event Q&A chat window. If you want to remain anonymous, I recommend you to check that Post as Anonymous checkbox. That way, when we publish the questions as we answer them, you will remain anonymous. Before we start asking questions from the chat, we will also have our equity researchers following the company from Redeye, Arete and Kempen. We will let them into the call to ask questions. Just a short little background about Biovica our company. It's founded in 2009, and the product and the business idea is based on research performed at the Uppsala University during many years.
An important milestone for us was the IPO in 2017, and we're now currently being traded at Nasdaq First North Premier. Our headquarter, where we have R&D, research and development, and our production facility and our lab to be able to analyze samples, is still based in Uppsala, but we also have established our headquarter for U.S., including a CLIA-certified lab in San Diego. We have, since many years, quality management system, complying to the ISO 13485 regulatory standard. When it comes to regulatory labels, we have CE markings for Europe with the IVD standard.
Since last year, we have a 510K cleared product, which enables us to market the products for use of monitoring breast cancer on the U.S. market. A few words about the product called DiviTum, which stands for dividing tumor and is an indication of what we measure. We measure an enzyme really close related to cell proliferation, and as cancer grows through uncontrolled cell proliferation, we can provide very important information to the treating physician and the patient. We've shown in several clinical trials. Today, we have 25 clinical trials that has been performed, peer reviewed, and published with some of the leading key opinion leaders and academic institutes in the world.
In those, you can see that, our biomarker, test, our product, is strongly prognostic for how the cancer disease will develop. We've also shown that we quick, short into, treatment, only 2 weeks, we've been able to provide feedback on treatment efficiency. If the treatment inhibits cell proliferation, as most cancer treatments, is intended to do, that's of course, a very important feedback for the treating physician and the patient, whether to stay on the treatment or to find an alternative treatment, for the best possible outcome for the patient.
The test is blood-based, so it requires a blood sample from the patient, combined with our test kit, and you get a result that we will perform in U.S. in our own lab, and provide feedback to the treating physician and the patient. This has several advantages compared to the methods, the standard method being used today, which is image diagnostics, where you take a snapshot of the tumors, if it's metastatic, because several tumors before start of treatment and during treatment. It requires several months before you can follow up, and it's also cumbersome when it comes to patient logistics. It's invasive, it requires contrast, fluid, et cetera.
Having a blood test that blood can be drawn, and you can get quick feedback has significant advantages, especially since these treatments, if you take the metastatic breast cancer as the example where we're active, is priced at over $10,000 per patient a month, and have also some pretty significant side effects. Getting this feedback is essential from both patient perspective and health economic perspective. If you look at our commercial roadmap, which we'll dive into on the coming slides, our initial focus is the use within breast cancer, specifically metastatic breast cancer, to monitor those treatments in U.S. and European countries.
With the 510 cleared product, we are allowed to launch, to market, and to use it for patients in the clinical setting to monitor treatments within the metastatic breast cancer. We are in a phase of building revenues to realize the full potential, and in U.S., we're doing that with our own CLIA lab, our own sales force, and supporting functions, which Warren will talk about our strategy there. In Europe, we are benefiting on the assets developed in U.S. and work with partners on each market. We are looking for partners that have the right skill set to be able to basically perform the same activities that we're doing in the U.S. on the different European markets.
Other interesting markets going forward is outside of Europe, is the Japanese market, and the next areas within breast cancer to expand is the locally advanced area, where you see the same type of unmet clinical need that we can meet with this with our product. We also looked into indications outside of breast cancer and identified three candidates: metastatic malignant melanoma, where patients are being treated with checkpoint inhibitors, immunotherapies, where we have data together with Karolinska, which looks really promising and strong. That's a focus area of ours. We're also looking into non-small cell lung cancer, where we also have data and castrate-resistant prostate cancer.
All those are large area with an unmet need for better biomarker tests, which we believe we can meet also, like, from the data, that we can meet with DiviTum product. Finally, the third area, which I'll also cover briefly later on in my presentation, is collaborations with pharma, as pharma has expressed interest for our product and are using it in their development projects, developing new treatments for cancer. We're looking to expand that and drive that into a more tight collaboration business that will generate new products for Biovica, tailored for new treatments from pharma. I'll talk a little bit more about that going forward. That was a short introduction. No, sorry, we have the Q4 before we go over to U.S. and Warren.
I'll go through the significant events. Of course, one very significant event is the establishment of the CLIA lab in San Diego, and the last step in that process was to get the certification, so we are allowed to receive samples for clinical use at our lab in San Diego. We have actually already received samples for pharma services, as we were allowed with the approvals that we had. This last certification gave us the opportunity to be able to receive also clinical samples, so that's really good. We have started to sign commercial agreements. We have 2 commercial partnerships for commercializing the product on different European markets. First of all, Netherlands and Poland, with TOR Medical, and then also in Italy with IT Health Fusion.
After end of the period that is after 30th of April, we have had the first AGM is to launch an incentive program for the US organization that we did in May. We have two commercial agreements with the payers in the US, which Warren will talk a little bit about. It's the MediNcrease agreement and the Contigo Health agreement, which also it's really promising and offers a great potential source going forward. There you go. That was the introduction and the highlights for the last quarter. I will now hand it over to Warren to dive into our US business and go through the different areas that we are working on at the moment and where we are.
Please, Warren, we can.
Thanks, Anders. We are very pleased to report very positive progress in the U.S. If you can advance to the next slide, that'd be great.
Yeah. There you go.
Perfect. I'm gonna be talking about a number of different strategic objectives that we're focusing on. Some of these you'll notice that are more short-term focused, and some of these are long-term focused. The long-term ones really drive this long-term sustainable growth. These five that I'm gonna talk about over the next few minutes, is really around demand generation, client bill contracting, our commercial agreements that have been recently executed, coding and reimbursement progress, and also really the impact of our clinical utility. The next slide, please.... We're very disciplined with respect to our customer-facing activities, and as I've indicated previously, we have developed a very sophisticated call plan strategy.
In that strategy, we focused on a number of different things, one of which is our focus on NCI and NCCN designated cancer centers. We've been successful in regards to engaging all 100% of them, and we have these advanced discussions going on with about 60% of them. We're also focused on non-NCI/NCCN cancer centers. These are very prestigious cancer centers within the U.S., and we have approximately 18 advanced discussions there. Part of our call plan is we've identified 1,500 high-value medical oncologists across the U.S., and we have been successful in getting in front of about 350 of those and having discussions, and we have ongoing discussions with those individuals now. Our call point is really, we primarily focus on key opinion leaders and regional thought leaders.
These are medical oncologists, also nurse practitioners and physician assistants, as they also order, have the capacity to order DiviTum as well. In our sales process, you know, one of the things that we've picked up immediately is the high level of interest for DiviTum. When we meet with these clinicians, there's really a process that we walk through, one of which is education, is making sure that the healthcare professionals really understand the role of TKa in the cell cycle, and also understand the value of DiviTum. As we drive demand for DiviTum, we also work in parallel with the laboratories where those clinicians are based.
That's because what we, what we need to do is we need to put a process in place, an ordering process in place, so that sample logistics and ordering is seamless, and so that anybody can order that within their institution, DiviTum, within their institution. As that gets in place, then we receive samples, we test and report those samples back, and this has been going fantastically through the U.S. organization. Next slide, please. One of our primary strategies is executing client bill contracts. With respect to these contracts, they're contracts with institutions. These institutions are specifically hospitals, and it does a number of different things. As I just mentioned before, putting a process in place is really imperative for long-term success for our business.
That's what when we put these contracts in place, this is what it really drives, is that process within an organization. It provides expanded access within those hospitals, but it also guarantees payment for Biovica. As we sign these client bill contracts and we receive samples, we actually invoice or bill the institution itself. They bill the insurance company. What it does for us is it guarantees payment to Biovica in a very short duration of time. Our efforts are heavy in regards to really building a funnel of contracts. We're in negotiations and discussions with many, many institutions. We should have our first contract signed in the coming months, thereafter, we should see a flow of contracts coming after that.
Next slide, please.
As part of our private insurance reimbursement strategy, we are focused on executing as well these commercial contracts. To date, we've been able to execute two very quickly. These agreements provide solutions to employers, for services performed, and what that means is tests performed. As a test comes in, we run those tests, we report those tests out. When we actually do the invoicing to private insurance, this really helps for it, for providers that are out-of-network providers. We fit into that category today because we've recently launched DiviTum. As we work with insurance providers and we become contracted, then that helps out the process moving forward.
With these commercial agreements, what we've done is we've prenegotiated rates for our test. This really drives or enables reimbursement for DiviTum prior to being in-network with the insurance providers themselves. The two that we've signed, one of which is MediNcrease. MediNcrease is a great partner. They have over 1,000 payers contracted and over 15,000 contracted lives. It's pretty significant commercial agreement. Contigo Health, on the other hand, they have 900,000+ providers that they've contracted with, and from a scale perspective, they're probably 5 to 6 times more covered lives than MediNcrease. These are two very important partnerships for us and will really help drive our business moving forward.
Next slide, please.
With respect to our public insurance reimbursement strategy, we've applied to Medicare for our credentialing, and what that requires is an application process, plus it requires a on-site visit from CMS. That has gone well, and we've been able to be credentialed through Medicare. This enables us to submit Medicare claims through our Medicare administrative contractor, which is Noridian. What we're also doing is we're applying for our PLA code, and our PLA code stands for Proprietary Laboratory Analysis code. This is specific to DiviTum and to DiviTum being run in our San Diego laboratory. This process is very well-defined through both AMA and CMS. It's really a two-part system that you apply for. One of which is getting the PLA code granted, we've been working with the AMA to do that.
The other is we're working with CMS to establish Medicare pricing moving forward. We should be able to have the PLA code in the next month or 2, and from a pricing perspective, later in the year, kind of towards the end of the year is when CMS will issue that. Next slide, please. My last slide, and probably arguably the most important strategic initiative, is our focus on our clinical utility. Our real advantage within our business is that we've been building a body of clinical evidence for more than 1 decade, and this has helped us along a number of different fronts. One of which is FDA clearance for our product.
Another is it really supports the PLA process, working with the AMA and CMS. It really drives the credibility when we meet with clinicians and talk about DiviTum and the utilization of DiviTum with oncologists. I can't say enough about the strength of this data that we have. What it's also done for us is it's enabled really deep conversations with oncologists that are doing research as well. We've had many, many discussions with principal investigators at institutions that want to be able to include DiviTum within their clinical trials. What that does for us, it does a couple things. One of which is it strengthens our current intended use, but it also expands our intended use. It helps generate data for expansion outside of metastatic breast cancer as well.
With that being said, I'm going to pass it back to you, Anders. Anders, you're muted.
Yeah, I saw that. Thank you. I'm going to cover Europe and the pharma services before going into financials. Next slide, we have the two contracts that we have signed with the European partners, covering three territories. We have had, like, a requirement specification on partners that we would like to work with. One of them has been that they have success in the past. Another one is that they've been active within oncology. A third one is that they have a sales force with oncology and are able to reach out to customers and can drive reimbursement and, yeah, basically go-to-market activities in these countries. We are very happy with the two partners that we've signed agreements with so far.
In Italy, it's IT Health Fusion, and we have TOR Medical covering Poland and the Netherlands. Going forward, we are now doing activities to establish the product on these markets. We're working with key opinion leaders, having our key opinion leaders represented by Vikas, keynote speakers, creating awareness and demand, setting up similar processes that Warren talked about for the logistics of receiving blood sample, performing the analysis, and returning the answer, and collecting the payment on these markets. We are very happy with these agreements when it comes to the price levels. It's in line with or actually, a little bit above what we expected and communicated in the past.
That's for where we are in Europe, we are looking to continue adding agreements and partners like these, and we're focusing on the big European countries and the Nordic countries. If you look at the pharma services, you can say this is the business that we have been running for the longest time in the commercial settings. As we have a regulatory approval for research use only, which this falls under, the regulatory agreements are lower, the clinical data that we have published has generated an interest for pharma to use our assay, our product, in their development work of new cancer therapies. The process can be outlined in these steps. The first one is that we typically go through a technical evaluation, a smaller project.
We call them, these agreements, TESA, Technical Evaluation Services Agreements. They're typically around 100,000 SEK. With a successful outcome of such an agreement, we typically enter a more close collaboration in a Master Services Agreement, regulating the relationship between us and the pharma company, the customer. That agreement also covers multiple projects, typically, so they're not using it only for one project, but for an entire pipeline of drug projects, could be in different drugs. Our main focus and strength is inhibitors, like the CDK4/6 inhibitors in breast cancer, where we have such great data from the metastatic breast cancer area. We see that new versions, new generation of similar targeted therapies attract companies developing those.
We have a really attractive product and are used to a great extent within that field. These products are typically bigger, and our ambition is to develop these products into even, in closer collaboration, so-called companion diagnostic collaboration, where we develop a tailored product, especially for the new therapy enabling great advantages for the pharma partner as well, because then the new therapy will be given together with a companion diagnostic test that will enable a more precise treatment or patient selections and better treatment outcome for probably, which will not only increase probability for regulatory success and also being able to more attractive price levels for the pharma. There's win-win for us as the pharma.
For the diagnostic company, we will get customer funding for developing new products, and also can benefit from the marketing investments being made by pharma when launching the product. The last step would be the new product, regulatory approved out in the market, in conjunction as a product in conjunction with the pharma product. The status where we are now is that we have developed this area quite significantly since last year. When we entered this fiscal years, we had six ongoing projects. We today have 17 ongoing projects. Six of those are these technical evaluation projects or agreements that we expect to convert, to a great extent, to Master Services Agreement and increase volumes.
We also have 11 ongoing projects of these somewhat more, the bigger sort, which is the master services that falls under the Master Services Agreement. Of course, we're getting closer to our goal of entering the first companion diagnostic collaboration project. Our long-term goal to have a new product out in about three to four years from now seems achievable with this development. We also said that we expect to see a significant revenue increase within this area. It's based on the pipeline that we have developed so far in this area and we of course intend to add additional projects to this portfolio.
This, this area has developed really well, and we can see also the additional clinical data that we have generated and the 510K clearance builds trust in customers and attracts new customers. And also the outcome from these projects. We have several customers that we now have had for several years that come back and use this for new products. Here's an area we can develop as well. The next topic is the financial update. I will switch place and hand over to you, Anders.
Yes. Thank you.
Some logistical challenges.
Thank you, Anders Rylader. Regarding the financial update, just a few slides. We'll start with the net revenues. You can see here, we sold for about SEK 3,383,000, which is a 65% increase versus prior year. This is coming then mainly from the research development collaborations we have with pharma businesses, mainly in the U.S., I would say. You can see here that the net sales for fourth quarter were slightly below what we sold similar time last year. That's just reflecting the nature of working together with pharma companies developing new drugs.
Sometimes things happen that you're not in control with, and what happened in Q4 was that one of the drug candidates for one of our customers failed, which led to decrease in work orders or canceled work orders for that specific product, and that is reflected then in the slightly lower sales. However, we see a significant higher interest in this, and as Anders pointed out, we have really scaled up the number of contracts and Master Services Agreements, and this is a little bit of a numbers game. The more contracts you have, the more stable the growth will be and will attract more and more customers for us. This is really significant, this increase in interest after the 510K clearance that we got last year. A few sentences around cash position and headcount.
We closed the year with SEK 114 million on our cash balance. We have an average headcount in Q4 of 35 people. Last year, the same number was 27. You can see here it's flat in Sweden, around 22-23 people, whereas in the US, we have added from 4 up to 13 people, which includes then the sales force and the reimbursement people working in the US for the commercial launch of DiviTum. With that, I think we can hand back to Anders and have a short summary before we open up for Q&A.
Very much. I'm going to this, the summary slide and talk about the future milestones. Just mention that we have a product which measure what's really vital within cancer, cell proliferation, and we can do that from a simple blood sample, which offers great advantages for the treating physician and also can both more convenience and could shorter time till you get an answer. This is an important clinical need, which is somewhat unmet today. This has been recognized by several key opinion leaders, leading ones within especially the breast cancer area, where we have the strongest set of data and strongest collaboration, and that's also our key focus area to introduce the product.
Together with them, we have co-performed many clinical collaborations that has resulted in publications, clinical data, which is the foundation, as Warren said, for more or less all the commercialization activities from there. That also has generated interest from our pharma customers. The market potential is huge, SEK 2 billion for the one that we have identified, excluding the pharma services and companion diagnostics, where the metastatic breast cancer area is about 25% of that. If you look at the milestones, yeah, the first one in U.S. was the lab certification. Now we are open for business, you could say. We have made progress when it comes to the PLA code and agreements, both with, yeah, for commercial agreements and with hospitals.
That next big milestone, I would say, is during 2024, where with the PLA code, you're able to get a specific code and a price allocated to that code for Medicare. We expect to have that in place during 2024, and that opens up a big patient population for us. Our long-term goal is to be able to realize 15% of that identified market potential in U.S. within metastatic breast cancer. Also in parallel, expand outside of the metastatic breast cancer area. If you look at Europe, the milestone that we've passed is the first agreements, 2 agreements, 3 markets. During 2023, 2024, this fiscal year, we will add additional ones. We'll focus on the big European countries and the Nordics.
We have a similar goal there, to realize 15% of that market potential on the markets that we are introducing the product on 3 years after launch. If you look at the pharma services, we see significant growth within that area. We're starting the new fiscal year with 3 times as many ongoing projects. Of course, you could expect that we are able to grow the revenues proportionally, or even more actually. The next step there is to establish the first companion diagnostics, the development contract. With a bigger portfolio, the probability increases for that, and we're looking forward to come back with a more detailed timeline around that. That was our presentation, and the next step is to open up for a Q&A session.
I think, Johan Unnerus from Redeye, if we start with you, then we go through the equity research analysts before opening up from the audience that has submitted questions to the chat. If Johan is online and is not muted, like I was, you are welcome to. Please, Johan.
Yes, I believe I'm unmuted now. Can you hear me?
We can hear you well.
Excellent. Great. Thank you. Yes, a few questions. During 2023, 2024, this year for you then, are you intending to report when you activate the centers and hospitals in terms of delivering sales, as delivering tests, sorry, DiviTum tests, of course?
All right. That's a good question. Well, we are, our plan ambition is to continue the way we have done. As long as we enter a commercial contract, we would like to communicate that as transparently as possible. When it comes to... So far on the US market, we have communicated with MediNcrease and Contigo Health, and as you have maybe noticed, it's in conjunction with them. It's a collaborative, they have a quote on our PR. If you look at Contigo Health on their social media, et cetera, they are also communicating that. That's the best possible scenario. The next best is that we can enter agreement, but they won't be so keen on us mentioning their name, then we will PR anonymously.
So far, we haven't been we have always been able to disclose the other party, but we would like to continue serve all investors with that type of information because we understand that's important to be able to follow the progress that we're making. When it comes to received tests, et cetera, we will report that as part of our quarterly reports. At this point, we haven't broken down revenues on different areas, but going forward, we will be doing that according to the IFRS rules basically. We're following that, you can expect to see a more detailed breakdown going forward.
Okay, very good.
Does that answer to your question?
Maybe also it would be interesting to, going forward and to have the feedback regarding actually how many centers and hospitals that are active and.
Yeah
are delivering tests, not only the-
Yeah
sales number.
Yeah, that's a good point, and we have not. We have our first commercial agreement with payers. We have delivered two. Our first agreements with hospitals, we are in negotiations. We could expect to see that in the coming months. Of course, such an agreement is not only one hospital, it's several hospitals. It's a kind of a chain of a network of hospitals, and we would like to be as specific as possible on the numbers, so everyone can do their analysis and see how we are progressing.
Excellent. A clarification then on the commercial contract, like Contigo, are sales efforts and marketing efforts included on their side, so to speak?
Yes. Warren, maybe you can elaborate a little bit on, the, how these agreement works, because this is something you don't see in Sweden at all. Maybe we need some little bit of a education here. Warren, can you help us with that?
Absolutely, and thanks for the question. With regards to these commercial agreements, how they work essentially is that they work with the employer. Employers have employer-sponsored health insurance plans, and so they work directly with employers to provide additional benefits to their members themselves, their employees. For institutions like ourselves that are out of network, what this tool basically does is it enables a sample that comes in. We run the sample, we report the results out, and then as we invoice or bill the insurance company, the insurance company themselves take a look at the agreements that they have with these commercial providers, so Contigo or MediNcrease.
The rates are already negotiated so that the employer themselves can be able to essentially approve that those particular tests or services so that their members have access to these types of tests, and so that there's a method in place for us to get paid as well. From a marketing perspective, what these organizations do is they do notify their members that they have signed an agreement with us. There is information that flows back to the employer themselves, but it also gives us access as well to contact those employers and work with the employers to let them know about our particular product, DiviTum itself, so that they can notify their members that are being treated for metastatic breast cancer. There is a marketing angle to this as well.
Excellent. Also follow up on, we can call it matches with, these commercial contract like Contigo and MediNcrease. Are there matches between their network and reach and the institution that you have established contract with from earlier studies and KOLs and the likes?
Absolutely. When we work through these particular contracts and the members that these commercial agreements, these organizations are contracted with, that is exactly what we do, is we take a look at the location of the employer groups, and we align that with agreements that we have had or collaborations we have had with key opinion leaders or institutions. We are able to really use this as well from a kind of a targeting perspective and be able to drive outreach in those specific geographic areas where we have already had relationships with key opinion leaders and institutions, and know that organizations in that area actually have coverage or are contracted to these commercial agreements.
Very good. And could these relationship be complemented with direct contracts with specific centers and hospitals?
That's a little bit different. These commercial contracts are really designed so that when we do the billing to insurance companies, it's a tool that we use to be able to get paid and provide access to those members. With the agreements, the client bill agreements that we're talking about, these are agreements directly with institutions. When I say institutions, I mean hospitals, specifically. With those particular institutions, when they send us a sample to test, we receive the sample, we test the sample, we report the results back, and then we actually invoice the institution for that service rendered, so for us running the test. In those situations, we actually do not provide or we do not bill either private or public insurance. We bill that institution, that institution itself. What they do is they bill insurance companies.
From our perspective, the real benefit is that we're able to negotiate a price with those institutions. We get paid that price, and we get paid on time with that price. It makes the efficiency of billing and getting paid much greater for us when we sign these commercial agreement or these client bill agreements with hospitals. And that's why we have such a big focus on that side as well. They're two really separate things that we're working on there.
Yeah. These billing contracts, direct billing contracts, is something we can expect then between one or two months or something like that?
That's correct. We're in the next month or two, we should be able to share with the market that we've executed our first contract. I can tell you that our customer-facing team, this is a very high priority that we focus on. We do have a funnel of these that we're working on. What we anticipate is after we're able to get that first one across the finish line, there'll be more to follow, so there should be kind of this continuous flow of these contracts. That's part of our core strategy.
Excellent. Finally, Anders, you mentioned that the growth of pharma collaborations has been significant, up to 17 from 6, I believe. That you also alluded to that the sales might increase something in line with the similar ratio. What's the baseline then, to clarify from the previous?
Yeah, the baseline, we just closed our fiscal year with $3.5 million or $3.4 million, $3.5 million in sales, and that's entirely, more or less entirely on from those research use only. Since we're just starting up the business in the U.S. and in Europe. Up until, yeah, the majority of that is from pharma services and those projects that we've been running. Now going in with 3 times as many, of course, we should see, first you contract and then you deliver the product, then the revenues come. Yeah, that's the logic. Yeah.
Excellent. That was all from me. Thank you.
Thank you.
Thank you.
Could we move on to Dan Akschuti from Pareto? See if we can get Dan in. Of course, it looks like you're unmuted, so say something, see if we can hear you, Dan. No, you're on mute now.
Now I could unmute.
There you go. Very good.
Thank you for taking my questions. Just to deviate a bit from the sales topics, noted on page 5 of your report that you mentioned that the cash run ways into March 2024, and that you consider financing options sometime during the fall. Considering your current stage, is it an option for you to look for non-dilutive funding, especially considering also where the share price is that, and we saw it with many other companies recently, that you can do kind of maybe a normal bond or a convertible, or...
Yeah.
Is that something you're looking at?
Yeah. That is very true, and the financial climate has changed a lot in the last 12 to 36 months, but 12 to 24, I would say. We have, as Anders reported, SEK 140 million in cash at the end of period and a burn rate of roughly SEK 10 million per month. That ends up in where you said quarter to next year. You should also expect our revenues during the year to grow, as and we will keep our cost focus. Revenues should grow more than our costs, of course.
With that said, we think we would like to have more margins when it comes to our financial strength and our financial position. We are looking to several different options, and we've been doing so for basically since the last transaction we did in December. We're looking broader than just equity. That's true. That's all I can say right now, but it's an ongoing activity, and we make progress there as well. We have to come back with more details when we can talk about it and make a PR about it. Yeah, we're looking into that. All the different areas that you mentioned has been assessed.
Okay, thank you. Maybe a follow-up here. Considering, you have a strong U.S. sales team, of course, but you have a product that needs to get to a lot of patients. Just comparing your sales team in size versus other such, and there is, it's on the smaller end.
Yeah
quality is more important than quantity, absolutely. Are you expecting maybe if you get a good non-dilutive funding, that you might expand your U.S. operations as well then?
We are looking to expand our sales teams over time, so we can accelerate uptake. At the moment, we're pretty happy. We're focusing on establishing these contracts, and it's more, yeah, bigger agreements, and with our senior sales team, we are, I think we have a perfect match and fit currently. It's also great to hear that you have benchmarked us against the other organization. I think we have a very effective approach with the senior people in that are able to generate this agreement that will enable a large scale increase, yeah, in a short period of time.
As was expressed, there is huge benefits of starting with this client bill agreements in combination with the PPOs that we have already PR'd those agreements. Yeah, we are cost-focused. We have an efficient small sales team. We won't increase costs until we see an opportunity to do so through increased revenues or and a stronger financial cash position.
Okay, thank you.
Anders, if I can make an important comment as well on this.
Sure
is that, you know, because we're, you know, we're very, very laser-focused in regards to our call points, we're able to be very effective with the size of the team we have today. Where we also have a real advantage over other kind of similar companies is, you know, we are calling on a very specialized portion of the, of the healthcare system. We're calling on medical oncologists that focus on breast cancer, and where other products on the market are really designed more for screening and primary care. When you go that path, you're talking about a population of 250,000 doctors that you're trying to address. There it takes orders of magnitude more effort to be able to penetrate that market.
I think that the position that we're in, we're in a very, very nice position in regards to being able to be really laser-focused in contacting and driving interest and through medical oncologists.
That's a good point. If so, I'd like to add also, you covered briefly, Warren, but, the preparation work you've done, identifying the oncologists with the highest potential, and getting these contracts in place, et cetera, that will contribute even further to the sales efficiency, which is, of course, important. Thank you for the answers. I think, what you touched upon, Warren, is what we noted also in our research, that you're having a product in a treatment setting and monitoring. You don't need to convince a lot of people to do screenings of conditions that they don't have right now. That should make it easier. Maybe one last question.
It's to funnel down all the complex processes that you're engaged in right now with your, on one end, with the reimbursement side, where you also work with these companies, where you signed already two agreements, and on the other side is where you mentioned that you had basically discussions with all the NCI centers as well as 18 others. We can expect now, from what I understand, that you will get the reimbursements in place now in the second half, and even Medicare PLA code will come, which will be very important versus the general approach there.
That you will have, in the next one, two months, orders from hospitals, that kind of both the order side and the reimbursement side is falling into place now in the second half of this year. Is that correct to summarize it like that?
Yeah, I'll hand this over to Warren for the details, but I'd like to comment actually that reimbursement is not that binary. I mean, you could say to some extent we already have reimbursement in place now, because we have approval now that we can submit codes, for instance, to claims to Medicare using a generic or miscellaneous code. However, that's a bit cumbersome because there's a lot of parameters that you have to negotiate case by case.
It's, it's costly, and it takes time, and it's the same same thing with the private side. Having these agreements with PPOs takes care of that, having agreements direct bill, so we'll take care of that for these customers. We, we're slowly and, but securely, building coverage over time. It's not a binary thing that you go from non-reimbursement to reimbursement. With that said, maybe you could elaborate a little bit and give a little bit more how we're thinking with those different areas, the public Medicare, the direct bill, and the private payers work.
Absolutely, Anders, I think I'm glad you pointed out the fact that we can file claims today, and there is a process in place. There's a CPT code that we can use. It's a miscellaneous chemistry code that we can apply today for any products that come in, where we're billing either private insurance or we're billing Medicare itself. The important thing to note here is that there's not just one thing we need to do in regards to driving revenue or driving reimbursement itself. I think as I tried to demonstrate in my presentation, there are things that we do from a private insurance perspective. There's things that we do from a public insurance perspective.
There's some things we do to, you know, kind of a bit navigate around private insurance, and we do this with client bill. One of the real benefits that we have in applying for a PLA code and getting that pricing in place is that another benefit of DiviTum is that 50% of its total available market is Medicare patients. By us being able to go and get that PLA code and get that price, that really covers about 50% of the total market, which is really beneficial to us. Then when you layer on those agreements, those commercial agreements, the client bill agreements, that ends up taking, you know, pieces of that private insurance and providing coverage there.
By all means, today, we file claims under miscellaneous codes until we were able to get that PLA code. I hope that helps out as well.
Thank you very much.
Good. Okay. We have Kempen and Luisa.
Can you hear me?
There you go. Yeah, I could hear you briefly, then you went on mute again. Try again, we'll hear you.
Can you hear me?
We hear you well.
Okay.
Welcome, Luisa Morgado.
Thank you. Hi, team. Thank you for taking our questions. I have a few. Maybe just to start off, we were wondering if for the upcoming time, so let's say this next financial year, will you fully focus on the DiviTum, or are you also currently developing or trying to develop other assays? How does this reflect more on the OpEx side, so on the distribution of R&D and SG&A expenses for the coming year?
All right. I can answer that. Our focus is more or less fully on DiviTum, basically, it's not so much more development being done. The product is developed. It has gone through 510K clearance, what we're doing now is more product maintenance and support. That's what the R&D team is supporting the commercial organization and are doing improvements to the product so we can manufacture it even more efficiently, et cetera. It's, it's more product support and maintenance that we're doing. We're looking to do our take the major step in developing the product in collaboration with pharma, and that way, get customer finance product development. That's the plan.
Clear. Well, as we've been discussing, you already are fully on establishing the commercialization in the US and Europe. For when do you expect more or less the launch in Japan?
Yeah
... of DiviTum? If you have any idea.
Yeah, I think that's a priority in, I would say, the coming years. Because there, we're not looking to establish our own operation. We are looking to do that through a Japanese or a partner with presence in Japanese. I think a successful launch in U.S. and in Europe, of course, will make us more attractive from potential partners. Yeah, I think that will be an enabler for those discussions.
Okay. Regarding the pharma collaborations that you have established so far, correct me if I'm wrong, but I think you haven't really disclosed any names on this. Are you considering at any point to disclose it or not? Why? Because I think could be some kind of validation, let's say, for your-
Yeah
... assay, of course. Yeah.
We, yeah, we have disclosed pharma companies that has disclosed that they work with us. The one that has published data with DiviTum, that they have acquired with us kits and then analyzed with the DiviTum are, yeah, as our customers. The first one was Pfizer. Pfizer did a presentation on AACR in April 2018, when they did a poster presented data on CDK4/6 inhibitors palbociclib with our assay.
It was a really interesting poster, by the way, because they were the first one to take serum samples only a few hours apart, and you could follow how dynamic our biomarker is, because when patients were off treatment, you could see how the cell proliferation increased. That was Pfizer's data that they were generous enough to publish. Another, the next one was Carrick Therapeutics that's developing a second generation of CDK inhibitor. They published their data at San Antonio. I think it was in 2020 or, yeah, 2020. They have also disclosed that we've been collaborating. The last one I would say is Novartis, through their BioItaLEE study that was presented on the 2022 ASCO conference as an oral presentation.
Those are the three that has been, yeah, that have been disclosed. We strive to, when we sign agreements, that we can communicate, we'll do so, if possible. Like, a companion diagnostic agreement, where we sign a deal that both parties are committed to do a project, we can our ambition is definitely PR that either anonymously, but probably with the partner name, as we've done with the commercial PPO contracts that we just published.
Okay, that's great, and indeed a good sign of validation. Just one final question and a bit straightforward, but how many contracts with the cancer centers that you have mentioned, do you expect to achieve more or less, let's say, for this upcoming financial year?
Yeah. You want to elaborate on that?
Yeah, absolutely. Our focus is extremely heavy on being able to get these contracts in place. As I mentioned before, in the next month and a half, I guess we anticipate, our first agreement in place. What we're targeting for the year is to be able to put 10 of these agreements in place. That's an internal goal that we're focusing on, and I'm feel confident that we'll be able to achieve that.
If you want to just roughly, if the majority of those are NCCN, NCI designated cancer centers, there's about, is it 55 or around like that treat patients?
Yep.
That would be a significant part of the cancer treat centers treating patients in the U.S.
Exactly. There's 56 that actually see patients, and if I can even elaborate on that. When we sign these agreements, you know, many of these institutions are, they're enormous. They have many hospitals that are part of that single kind of... It's not a single institution, it's a network of these hospitals. When we sign these agreements, it's typically not a one institution contract. It's many institutions. In some cases, there's some of these organizations that have 20 hospitals associated with it. These are pretty sizable. 10 is not a small number. 10 is a very large number in the grand scheme of things, but that's what we're focused on.
Okay, very clear. Thank you.
Right. With that said, we actually, we usually have a lot of questions in the chat, but this time, although there's a lot of attendees, actually, but you can, of course, always come back afterwards and mail our IR @Biovica address, and we are responding to IR questions. With that said, we're also out of time, maybe it was good from that perspective. Thank you very much for your attention. We are in a very exciting space, and we have some early wins and a lot of progress within all areas. We're looking forward to the near future, and we wish you all a nice summer going forward. Thank you very much.