Welcome to BONESUPPORT Q3 call. My name is Richard Davies, I'm the CEO, and joining me on today's call is Björn Westberg, BONESUPPORT's CFO. This morning, we'll take around 20 to 25 minutes with the presentation covering our Q3 results, and we'll follow it up with a Q&A session. Moving to slide three, and before starting the presentation, we'd like to draw your attention to the disclaimers covering the forward-looking statements that we will make today. Moving to slide four, I'd like to start off by providing you with a quick recap on BONESUPPORT, our products, and the markets that we target. We're a commercial stage, rapidly growing orthobiologics company with three products on the market today. Our three marketed products are based on our unique CERAMENT platform. They're all used for the management of bone voids.
Bone voids are caused by trauma, revision arthroplasty, and/or bone tumors, and if not managed properly, these bone voids can become infected, leading into a condition called chronic osteomyelitis. The key benefit of all of our products is that they are clinically proven to remodel to host bone in six to 12 months, therefore, fully filling the void itself. In the case of CERAMENT G and CERAMENT V, the exciting development is that therapeutics are eluted to ensure the bone healing process is also protected by the elution of the antibiotic into the void. Our product target a significant addressable market with some 650,000 procedures per year based on the U.S. and the major EU5 countries alone, and includes major orthopedic indications such as simple and complex trauma, as well as revision arthroplasty.
We've developed a pipeline of product candidates based on this CERAMENT drug-eluting properties, which are targeted to also enhance bone growth. We're well-funded, which allow us to execute our strategy through to the end of 2020, by which time we anticipate break even and becoming profitable. Moving now to slide five, following this brief introduction to the company, I'd like to provide you with an update on our Q3 progress. Björn will review Q3 figures in much more detail later on in this presentation. BONESUPPORT has made good progress across the key areas of our business in Q3. We made solid sales progress, with the highlight being the continued rapid growth of CERAMENT gentamicin and vancomycin in Europe, which together delivered an increase of 48% in sales in Q3.
This growth is due to the clearly differentiated benefits these products provide to not only the surgeon, but to patients and the payers. A lot of sales growth in the U.S. was related to Zimmer Biomet, our distribution partner's hardware supply issues, which meant that the U.S. sales grew by 21%, to a total of SEK 21.6 million. We've seen good improvement in gross margin due to a much higher proportion of sales that now come from CERAMENT G and [CERAMENT V]. Our strategy to generate more clinical data to support the adoption of CERAMENT G and V led to new data presented at the European Bone and Joint Infection Society, as well as the British Orthopaedic Association conferences, both of which were held in September. We've also recruited our first patient into a revision arthroplasty study in Italy.
This study is a cohort study, which comprises the use of CERAMENT G and V prophylactically, to prevent and reduce the level of bone infections versus current practice. This is an important study, as there are currently no standard of care to prevent these periprosthetic joint infections in patients undergoing a revision. Success in this study would provide data which will support a significant opportunity for CERAMENT G and V. In September, we also entered the French market when we signed a distribution deal with a French company called NOVOMEDICS. We're committed to building the sales of gentamicin and vancomycin in France. We should note that our first French patient is now being treated in France. Finally, we're very pleased that Dr. Michael Diefenbeck has joined us to head up our R&D efforts.
Jerry joins from Zimmer Biomet Etex, which for many years experience in bringing new products to the market. We've also strengthened our executive team with the recruitment of Helena Brandt as Head of Human Resources. Helena will support our growth ambitions, given her experience with several major multinationals. Moving now to slide six. We've significantly strengthened the management team over the last 20 months. We've been able to attract these highly talented people because of our highly competitive products, the potential for our pipeline, and the scale of the market opportunity we're targeting. Now moving to slide seven, we've set out the market opportunity that we're addressing. As you can see, there are about 650,000 procedures per annum in the U.S. and EU5 alone, where our CERAMENT products could be used. This market grows at about 5% per annum.
The market is split between bone grafts, such as autografts, allografts, and demineralized bone matrix, and the synthetic bone grafts, of which CERAMENT is one. Based on the clinical and economic benefits our CERAMENT products deliver, I'm confident that we will continue to gain market share from other synthetic bone grafts, as well as from the bone graft segment itself. I'd now like to give you more insights into our products and the advantages that they deliver. Moving to slide eight. Our CERAMENT platform consists of 60% calcium sulfate and 40% hydroxyapatite. This unique combination means all of our products can fully remodel the void to host bone, which is a critical point of differentiation. More importantly, this composition is able to deliver therapeutics locally into the bone void itself.
The ability to elute therapeutics in a controlled fashion allows us to develop products with important clinical and economic benefits, as is the case with CERAMENT, gentamicin, and vancomycin, two commonly used antibiotics in the treatment of orthopedics. We're confident that we'll be able to expand our product line further by bringing new products to market that are able to enhance bone growth, and this is the target of our current R&D activities. Moving now to slide nine. On slide nine, we've recapped all the positive factors that we believe will allow us to drive market share gains and to grow our sales at a rapid pace.
I'd like to emphasize the growing KOL support we have for our products, which is driven not only by the benefits our products deliver, but the ease of use or the ease of their use in the operating theater. Moving now to slide 10, I'd like to turn to the strategy that we're executing to deliver against these targets. As you can see, it really comprises of three elements. First is to drive rapid sales growth for our existing products. We drive sales by generating clinical data to increase surgeon comfort that our products remodel to host bone in six to 12 months, and that for the antibiotic eluting products, the presence of the antibiotic in the bone void protects that healing effect.
To achieve this, we're conducting a range of clinical trials such as CERTiFy, which is comparing a CERAMENT BVF versus autograft, an existing standard of care. We're also supporting clinical studies with CERAMENT G, setting its utility for major indications such as complex trauma and revision arthroplasty. We're also generating compelling health, economic, and outcomes research data to improve market access for our products and underline their attractiveness, not only to surgeons and patients, but to payers. In parallel with data generation, we're increasing our market and promotion spend as well as our sales footprint, both in U.S. and in Europe. The second key element to our strategy is to expand the use of CERAMENT G into the U.S. We're currently recruiting patients into the FORTIFY study.
The study is designed to generate the clinical data needed to support our planned PMA filing for CERAMENT G in the U.S. As you know, this filing is targeted for 2020. CERAMENT G has been a key factor in our recent strong sales growth in Europe, and we believe that access to the world's largest orthopedics market would represent a major commercial opportunity, given the clear benefits our product provides, which are fully aligned with the growing focus on value in this market. The final element of our strategy is to progress our pipeline. We believe that the eluting characteristics of CERAMENT provides an ideal platform for a range of therapeutics known to enhance bone growth. Again, we believe there's significant commercial opportunity with products that will enhance bone growth.
Moving now to slide 11, given the importance of sales growth to our strategy, I'd like to provide you with some background on our commercial activities in the U.S. and in Europe. Starting on slide 12, and in the U.S., we have our own commercial organization of 14 people, comprises a leadership team, regional managers, product technical specialists, and marketing personnel. As you can see, we've been investing in this team over the last nine months. Their role is to support the sales of CERAMENT BVF, which, as you know, occur via the Zimmer Biomet distribution network, who distributes bone void filler for us in the U.S.
In Q3, we saw a lower rate of sales growth in BVF due to the impact that Zimmer Biomet's hardware supply issues, which has meant that Zimmer Biomet has not been able to meet market demand for its own products. This has a knock-on impact on the growth of BVF, as the sale of it is usually in conjunction with the Zimmer Biomet hardware. In Q3, we've also recruited a new U.S.-based clinical program manager, who will be responsible for working with key opinion leaders to generate more U.S. clinical data, highlighting the benefits that CERAMENT BVF delivers, particularly in its ability to remodel host bone. These data are important to us in supporting the short and midterm sales growth of BVF.
In Q3, we've also enjoyed good success in penetrating an important segment, which is the oncology bone graft market, by winning several new accounts at orthopedic cancer centers. Turning now to slide 13, in Europe, our commercial team consists of 20 sales representatives and leadership. This team is focused on driving sales in five markets where we sell directly and in supporting specialty distributors who provide access to seven additional countries. In Q3, we continued to focus our sales efforts on selling G and V to top trauma centers. These centers are important as most of the patients that are there that are targeting our CERAMENT products manage there. In Q3, as I said earlier, a lot of new data was presented at two important conferences in September, the British Orthopaedic Association and the European Bone and Joint Infection Society conferences.
At EBJIS, we had six podium presentations as well as multiple poster presentations, which provided further support of clinical data, the use of CERAMENT G and CERAMENT V across a range of indications. We've also entered the French market by signing a distribution deal with NOVOMEDICS . We believe the French market in the midterm represents a significant growth opportunity for us. The quarter also saw us make progress with our market access efforts, where our application for a trial code was accepted by the Swiss authorities. This is the first step in gaining a separate reimbursement code in Switzerland for CERAMENT G. Moving to slide 14, I'd now like to turn our attention to our clinical activities. Now on slide 15, you can see we're conducting clinical activities to achieve two goals.
In Europe, we conduct a number of studies to generate data, which, if positive, should expand the adoption of our products in both existing as well as new clinical settings. This is either comparing our products with the current standard of care, such as the CERTiFy study, or by providing important clinical data about their use in a specific indication, such as the new Italian Revision Arthroplasty study, which recently recruited its first patient. In parallel, we're conducting the FORTIFY study, which is designed to provide clinical data we need for our planned PMA submission for CERAMENT G to the FDA. Moving to slide 16, I'd now like to provide you with more background on the Italian RA study as well as the CERTiFy study.
The Italian Revision Arthroplasty study is evaluating CERAMENT G and the patients undergoing hip and knee arthroplasty revisions, and Professor Carlo Romano is the study's principal investigator. She's previously conducted a positive RA pilot study with CERAMENT G and is therefore keen to assess G and V in a larger patient population, and this study aims to recruit 135 patients at six clinical centers in Italy. The study is looking to demonstrate an approved clinical outcome with a lower infection rate in the CERAMENT G or V group when compared to a retrospective control group from the same clinical centers. A successful outcome, which means a reduction in the rate of bone infections during the one-year follow-up, will be important, as at present, there is no standard of care to reduce bone infections in patients undergoing revision arthroplasty procedures.
Moving to the CERTiFy study, CERTiFy is planned to complete patient enrollment around the end of 2017 or this year. A publication covering the study results is anticipated in the first half of 2019. Positive data from a level one randomized study like CERTiFy could open up a significant opportunity for CERAMENT BVF, allowing us to expand the market to bioceramic bone graft substitutes. These data will also be a significant step forward in supporting our reimbursement activities, not only in Germany but in further afield. Moving now to slide 17, we've set out the planned timeline for the completion of our FORTIFY study. As you can see, we plan to submit the study outcome to the FDA in 2020. At this point, I'd like to hand you over to Björn, who's going to provide you with a review of our Q3 financials.
Thank you, Richard. Let's turn to slide 19. Sales in the quarter increased by 23% overall, impacted by slower growth in North America, as mentioned. I'll provide some more information in next segment slides. We first start in North America on slide 20. Sales increased by 21% in the quarter, which is good considering the effect of the internal supply issues Zimmer Biomet is having. It's difficult to quantify the exact impact, but it is significant. Sales year-to-date increased by 35%, which is good, as we expect the rate of growth to improve as Zimmer Biomet resolves its supply-side challenges. Gross margin was very high at 9.3%, 8 percentage points better than Q3 last year, driven by positive product size mix. The contribution, which includes direct costs, increased mainly due to the combination of increased sales and better gross margin.
Slide 21, Europe and rest of the world. Sales increased by 28% in the quarter, driven by increased adoption and usage, which was partially offset by the slower summer months. This is good growth, we are targeting a faster growth rate. Drug-eluting products, CERAMENT G and CERAMENT V, increased sales by 48% in the quarter. Year to date overall, 45%, which is good. The gross margin improved quite a lot here as well, 10 percentage points better than Q3 last year. It was positively affected by the increase in the drug-eluting products in Europe. Continuing slide 22, operating result development. Overall, this improvement of SEK 6 million in operating result in the quarter was last year, mainly driven by the improvement in sales and better gross margin.
Selling expenses in Q3 are flat versus last year. Have increased year to date as we continue to invest in our commercial activities. R&D expenses increased by SEK 2 million in the quarter, mainly driven by CERTiFy and the pipeline. The increase year to date is mainly driven by the FORTIFY study. Administration expenses are about the same in the quarter. The increased cost for the employee share option programs is offset by less external admin services. As mentioned before, the cost for the current employee share option programs will come down significantly in 2018, as much of the vesting has been done in 2016 and 2017. Slide 23, KPIs. The key, three key things here. We have achieved a significant increase in sales, despite the impact of Zimmer Biomet's hard drive supply issues in the U.S. Secondly, much improved gross margin.
Thirdly, the operating results improved over Q3 last year. Slide 24, tracking towards our targets. We are tracking, and we're a high growth company. Look on the gross margin is very positive due to increasing proportion of sales coming from non-antibiotic products, CERAMENT G and CERAMENT V, and we are well above 10% target of 85% already. Operating results is improving. We will see some variations by quarter due to milestone payments for larger studies. As closely communicated, we are increasing our activities in R&D and marketing, while administration will not increase at the same pace. Overall, a strong financial position and on track executing our growth plan. Richard?
Thank you, Björn, and I'd like to wrap up today's presentation before we move into the Q&A session. On slide 26, I'd like to conclude our presentation by saying that in Q3, we've made progress across all key areas of our business and are well positioned to deliver significant shareholder value. We believe that with CERAMENT G and CERAMENT V, we have two products with unrivaled clinical and economic benefits, and we're confident they will gain a significant share of the bone graft market. We continue to focus generating further clinical and HEOR updates to enhance the competitive position of all of our products to drive sales growth. As we previously communicated, we expect the first CERTiFy readouts to happen in 2018. We're progressing with the pivotal study FORTIFY, which is a key step in potentially gaining approval for CERAMENT G in the U.S.
We're also confident that our pipeline for CERAMENT product candidates designed to enhance bone growth. Finally, I believe we have an experienced management team and the funding needed to deliver that significant shareholder value. Great, I'd now like to open the floor for the Q&A session.
Thank you. Ladies and gentlemen, if you wish to ask a question, could you please press zero and then one on your phone keypad now in order to enter the queue. Then after I announce you, simply ask that question. If you find that question has been answered before it's your turn to speak, just press zero and then two to cancel. The first question is from the line of Kristofer Liljeberg at Carnegie. Please go ahead. Your line is open.
Yeah, good morning. It's Kristofer Liljeberg here from Carnegie. I have four questions, if that's okay. Maybe I could take them one by one. First, on sales performance in Europe in the quarter, do you see any particular reason for the larger sequential decrease than what we could see in the same period, last year?
Yeah. Thanks, Kristofer. Yeah, I mean, the summer months are always pretty difficult to predict, and, you know, we were somewhat disappointed by the September sales, which led to the sort of the lower quarter. You know, when we actually looked into it, the reasons why we didn't particularly see anything there that was systemic. You know, we've fully anticipate that, you know, our growth will continue as we previously enjoyed.
You expect the growth in Q4 Europe being up, but more at the historical trend you've seen so previously during the year?
Yeah, we would like to make a forecast, but as Richard mentioned, we, you know, the Q3 was a little bit slower than expected, and we expect it to come back to more normal levels, going forward.
Okay, that's fine. Of course, on North America, those supply issues for Zimmer Biomet, if I heard correctly, you said the impact was significantly. If I see, if I compare the growth rate figure here of 20%, something in the Q3 , it was more like, you know, 35%-40% in the first half of the year. Did you have those type of impact in the first half as well, or is that more a normal figure you could see going forward when this has been solved?
Yeah, I mean, the Zimmer Biomet issues are well reported by Zimmer Biomet in their note. This is something that's been going on all year, we didn't see very much impact into our sales. I would say in the first half of the year, it's something that's really gathered some momentum in the second half of the year. Yeah.
What do you think is the reason that the impact is coming now? The problem has been, as you said, ongoing for a year now.
Yeah, I can't speculate, honestly, Kristofer, on the, on Zimmer Biomet's hardware side. I mean, the thing that we would say is that, you know, as I think you're well aware, that, you know, our sales happen, you know, in the OR when the Zimmer Biomet distributor rep is in the room. If the Zimmer Biomet rep does not have hardware, then the Zimmer Biomet reps normally, you know, not in the OR itself, and therefore, the selling, the sale of our product, is harder or doesn't take place.
I guess as well, that, when we have these kind of issues and they continue, the first period, like the first quarters, is probably easier for Biomet to shuffle the demand around between the different geographies. Of course, when it discontinues, it gets harder.
The one thing I would say, you know, on a, on a positive note, you know, our partners are working very hard to sort of fix their supply side challenges, and we're appreciative of that. You know, one of the things that we're doing is directing our regional managers, who are basically our sales representatives in the US, to support Zimmer Biomet in the, actually in the OR itself, you know, as needed. I think this does lead us to, you know, types of growth rates we're currently seeing.
Did you see this impact, was it mainly hurting the new customers, or was it also an effect on existing customers?
You know, again, I think, you know, we've got to sort of direct you back to Zimmer Biomet's quarterly report that they made yesterday. I think, you know, supply side challenges are usually across all customers.
Okay, fine. How should we see this, in the Q4 ? Did you see the negative impact for the entire Q2 , or was it more elevated in the latter part of the quarter, meaning there's a higher risk for going into Q4?
You want to take that, Björn?
It's of course, difficult to say, as you have said, I mean, we have had to focus on the Biomet, and they, in their public statements, they are saying that they're increasing gradually quarter by quarter. That together with the activities which I mentioned, that we are putting more efforts in certain areas and so on, we will come back to more normal levels. If that's beginning next year, for instance, or we'll see about that. It's difficult to say, as we don't have really full control of that, we are still having many activities really coming back to more normal levels going forward.
Okay, I see. My Q3 and Q4 is about the cost level. I'm surprised your operating costs are actually down year-over-year. That's kind of different from the message given at the time of the IPO. If you could comment on that, and also considering the lower R&D costs here, is that caused in any way by a slower patient recruitment in the FORTIFY trial or if there's another explanation? Thank you.
Overall, we are clearly executing according to our timetables, both in the sales and marketing activities and also in R&D activities. As it's mentioned before as well, the Q3 is somewhat, there are lower activities. So and also regarding the R&D expenses, very much depending on when various milestones are achieved. That is very quarter by quarter. But there's an increase in this quarter compared to last year and overall. As you see, the overall R&D expenses is much higher than last year. So we don't see any delay. On the opposite, we are continuing towards our plan.
Okay, thank you.
Thanks, Kristofer.
We're now going to Sten Gustafsson at ABG. Please go ahead, Sten. Your line is open.
Hi, good morning, Sten Gustafsson from ABG. First a follow-up question there on what's going on with Zimmer Biomet. I'm not sure if I heard it right. When did you say you noticed a negative impact? Was it throughout the quarter, or was it sort of in the middle of the quarter, or when did you notice your sales growth to be negatively impacted? That's my first question.
Yeah, I think it's been pretty evenly spread problem across the quarter, actually, Sten. Yeah, I don't think there was suddenly a, you know, a day when it's like it was apparent. You know, we must remember that we're still growing, and we're still growing at a pretty healthy clip. You know, it's just not quite where, you know, we would want it to be.
Sure. Sure. Thank you. My second question is regarding your new agreement in France. Can you tell us a little bit when that will have an impact on sales and what activities are taking place there now?
Yeah, sure. This is quite an exciting development for us. It is a midterm play, we should be clear. You know, we're aiming to get a reimbursement registration for CERAMENT gentamicin on the French high tech reimbursement list. That would be a specific listing for CERAMENT G. To do that, we need to run a small clinical, level one clinical trial in France, and we're setting up to do that now. That's likely to be an osteomyelitis study. You know, we need a distributor on board, which we got NOVOMEDICS, and as you saw or as I said, we've now got the first patient treated in France. This is an exciting development.
The French market has the potential to be big, but it's a midterm, you know, by the time we get through the study that would then feed into the reimbursement, and we do the negotiation with the government, you know, we're a couple of years away from significant sales in the French market, although I think we're going to continue to see them rise as French hospitals can purchase anyway, and that's the point of having NOVOMEDICS there.
Okay, that sounds good.
Yeah. Yeah, very exciting.
My last question is regarding the study in Italy. What's the timeline for... Maybe you mentioned it, but I couldn't hear it or... That revision arthroplasty study you're doing?
Yeah. It'll be a one-year enrollment and a one-year follow-up. It's obviously we'll see data from it as we go through the protocol. This is important. Revision arthroplasty is important area. You know, not only is, you know, the risk of infection to patients that are going through this revision, you know, significant to them in terms of their health, but the volumes of Bone Void Filler are meant to be used in those individual procedures is also pretty significant. You'd be thinking about, you know, 20 to 30 mils per procedure.
Okay. Actually, can I squeeze in one last question?
Sure.
It's going back to.
Okay.
to the OpEx rate here, which was lower than I had expected. Will it be ramped up in Q4, or will it remain at a, you know, similar to last year's level?
That mentioned, I mean, that there we have, of course, more, normally more, activities and there's marketing Q4 compared to the Q3, as there are some summer vacation breaks there in the Q3. During the expenses, except there is mainly depends on the milestones when they sort of occurs. Overall, as you know, we have, since that part of the IPO funds be used, of course, both as marketing and R&D. We will see a higher level cost, going forward.
I think that's what Björn saying. That's pretty standard. I mean, you don't tend to run large marketing programs in the summer months because, you know, your sales force is on holiday, but also your customers are predominantly on holiday as well.
Sure. All right. Thank you.
Thanks, Sten.
We're now over to the line of Franc Gregori at Trinity Delta. Please go ahead, Franc. Your line is open.
Thank you. Morning, gentlemen. As you know, I'm quite new to this story, so I'm going to ask some basic questions, if that's okay. I'll only ask one and then come back at the end. The key question is, I get the technology, I get the commercial opportunities, I get all of that. Can you clarify for me what the barriers to entry are, what your IP position is, and what's to stop a competitor, a larger competitor, copying your product, at least in technology?
Yeah, sure, thanks, Franc Gregori. We have over 100 patents that protect in several different families that protect the intellectual property that we have. You know, if we think about the drug-eluting side, and the composition of CERAMENT, you know, being a 60/40 mix, we've been able to patent protect that, you know, that composition with fairly broad shoulders. It's not like somebody can come along with a, you know, a 39/61 mix, that would be protected under our patent procedures. I think that's really how our intellectual property is, sorry, our invention and therefore, our ability to generate revenue is protected.
Okay. I've got other questions, but I'll let other people ask, so I'll come back later.
Thanks, Franc.
Just a comment there as well. I mean, regarding barriers to entry, I mean, the regulatory requirements, they are increasing year by year. Some of the products on the market today would not have been approved today, for instance.
Mm-hmm. Okay.
Also it's much more requirements on the clinical data, and there...
Yeah.
we have very strong position there. That's also quite high increase in requirements there as well.
Yes. Thank you.
We now go to the line of Mick Cooper at Trinity. sorry, we go back to the line of Kristofer Liljeberg at Carnegie. Please go ahead. Your line is open.
Yeah, thank you. One additional question, and that's related to markets outside North America and Europe, and whether you're becoming more active trying to seek a partner in Asia, for example?
Yeah, of course. I mean, we are interested in these markets and there are big markets outside Europe and, and U.S., and especially Asia. It varies when you can sort of, when you get the approval of these markets. Clearly, we are, we are looking at these markets and we have discussions ongoing.
Yeah, I think that's the key that, you know, we're discussing with various parties, you know, how to enter those markets.
Okay. What do you think, is it in your view, better to have, you know, smaller local partners in individual countries, or are you more after an agreement like with Zimmer Biomet in North America, a bigger one?
I think at this point we could go either way, honestly. You know, there's an attractiveness to going with a large, you know, international player because they already have sales forces in all of these countries, et cetera. I think there's no doubt when you start to think particularly about Asia, that, you know, relationships with local companies, you know, also have some pretty significant potential for companies like BONESUPPORT.
Thank you.
Sorry, Kristofer, at this moment.
Our next question is over to Mick Cooper at Trinity Delta. Please go ahead, Mick. Your line is now open.
Good afternoon. Good morning, sorry.
With the appointment of Jerry Chang , I was wondering whether or not there are going to be any other clinical trials likely to start up, and related to that, have you got any more interest for investigator-initiated trials, such as the Italian one?
Yeah, thanks, Mick. Yeah, we're delighted that we were able to sort of attract somebody of Jerry's, you know, caliber and talent to BONESUPPORT. You know, he's literally just getting his feet under the table at the moment. He's only been on board a few weeks. I think it's, you know, we would see him bringing his own skill and expertise to our portfolio. I think when it comes to investigator-initiated studies, yeah, these are important for us, and as we're looking at our budget for 2018, which is not yet approved by the board, but we're contemplating increasing the number of IITs that we would do.
That's a core part of our strategy to be able to develop, you know, an increased level of clinical data in the surgical segments where, you know, we think we can play successfully.
Great. Thank you.
We're now over to the line of Franc Gregori at Trinity Delta. Please go ahead again. Your line is reopened.
Thank you again. Can I follow on from what Mick was saying? We strongly believe that clinical data, the value of it, should not be underestimated. I know that you're funded through to 2020. I know that you're keen on maintaining your cash flow. If it weren't for that, are there additional studies that you would like? If this were money no object, what would you do to strengthen your marketing position long term?
Yeah, that's kind of the, that's the wish list.
Yes.
Thanks, Franc, really. You know, I think we're well-placed, right? I mean, you know, we're one of the only companies running level 1 trauma, level 1 orthobiologic studies. You know, when we met previously, we talked that through with you. I think the new addition would really be doing this study for the French reimbursement. We would anticipate to run a level 1 osteomyelitis study starting in 2018. We still need to sort of, you know, finalize protocol, finalize funding on that, but that's the type of thing which we do have funding to do.
Sorry, Franc, I'm just gonna reopen your line. There was some noise on it. Do you have any follow-up questions on that?
Can I follow up? Can I just ask a question again? Sorry, am I on... I've just been cut off. Am I on or off?
You're on, Franc. We can hear you.
Thank you. As you probably can tell from my questioning, I believe this is a fantastic long-term story, we shouldn't be focusing on quarter-by-quarter numbers. That's where I fear that if we're not careful, the investment story is going to miss the opportunity that you guys have.
I appreciate your comment. I can't help but echo it. I think we've actually got to do both. You know, the quarters are important to us, but the long-term prospect for this company, as you know, and, you know, certainly we as management believe, you know, fully believe in. We've raised the money to do several things, one of which was to develop more clinical data, more high-quality clinical data. As we go forward in through 2018 and 2019, as we finalize some of these IITs, you know, we would expect to be able to share those with investors as we go forward. You know, I think our understanding of the positioning of our drug-eluting products, I mentioned gentamicin and vancomycin, particularly.
You know, our understanding of the positioning of that is enabling us now to sort of work with investigators on more focused, much more focused studies. I think the, you know, as we talked about on North America, in the US, the, you know, the orthopedic oncology market is a very exciting market for us, where we have clear differential and benefit, and certainly with the BVF that we have, at the moment in the US, we've been able to open up several major new accounts, which I think is a, is a very exciting development for the company.
Thank you.
Okay, that was the final question on today's call. Gentlemen, may I please pass it back to you for any closing comments at this stage?
Perfectly. Thanks, everyone, thank you for your time today and your interest, let's really just sort of reiterate our key active messages. In Q3, we've made significant progress across all our areas of our business are well-positioned to deliver against shareholder value. You know, we believe that CERAMENT G and V, the two products, with unrivaled clinical economic benefits. I think that's been demonstrated in the market and by the growth rates. We're confident that they'll continue to gain significant share of the bone growth market. We continue to focus further on generating clinical and health economic data to enhance the competitive positioning of all of our products to drive sales growth. As we previously communicated, we expect one of our major level one studies, CERTiFy, to read out in 2018. We're progressing the pivotal study FORTIFY.
That's a key step in getting approval for CERAMENT G in the US. We're also confident that our pipeline of CERAMENT product candidates designed to enhance bone growth. I believe that we have an experienced management team and the funding needed to deliver against the significant shareholder value. Thank you for your interest, and we look forward to continuing to deliver against our goals and to report back on our next quarterly call. Thank you.