Very warm welcome today to everyone. I will today present the Neola Medical's Q4 report for 2023, and I'm also really excited to summarize a very intense, and developing year for the company. During our fourth quarter, we are continuing to reach our milestones according to our commercialization plan, as you by now, following us for, for a few years now is really important to us. We have also expanded our presence in the, in the U.S. market, and, this also strengthens our position, positioning and our opportunity to really grow in the U.S. m- moving forward. So today I will talk a bit more about Neola Medical, why we do is, is important, what has happened during 2023, and specifically the fourth quarter.
We'll talk about the numbers as well, and then finally I'll invite you all for Q&A sessions where you can ask any questions about the business, the last year but also moving forward. So thank you so much for joining, and I hope you will have a lot of interest in this presentation. So presenting today is myself, Hanna Sjöström. I'm CEO at Neola Medical since five years now, taking the company through the very exciting first research phase, then development phase, and now approaching the commercial phase. We are also inviting our CFO today to talk about the numbers for 2023 and also specifically for the quarter, Christian Gyllenberg, who has been the CFO since 2022, and also with a great experience from large commercial companies before joining Neola Medical. So starting a bit with investment highlights.
So why is Neola Medical such an interesting company but also a very interesting investment case? Well, I would say number one is that we have a very large and growing addressable market. The neonatal intensive care respiratory device market is expected to reach, actually, $3 billion in 2030. So this is a very interesting market. It's also clear that for our medical device for continuous lung monitoring, we have a great clinical need and demand from both hospitals, hospital Directors, and neonatologists. And we can also see that now the clinical benefits of Neola with continuous monitoring greatly exceeds those of current monitoring methods that are really old and invasive.
Important is as well that we have already, from the very beginning of the company, built our, our medical device and our disposables in order to make sure that we have a future profitable business model that gives us, recurrent revenues from disposables. We have some exciting news coming for the fourth quarter as well, with regards to the disposables that I will talk a bit more about, shortly. But then, of course, a growing company and a startup is nothing without its highly experienced team. We are now 12 experienced people in Neola Medical, especially here at the headquarters in Lund in Sweden. We have algorithm developers and very advanced developers within atomic physics, in combination with experience within regulatory affairs, quality management system, and not to say the least also financials.
So we're in a very good position, together with our experienced Board of Directors, to prepare our company for the very exciting next phase, which is launch of our medical device in the U.S.A. And why is then a launch in the U.S. so important? Well, let's talk about this from a global perspective. It's actually as many as 1 of 10 babies that are born too soon and may depend on intensive care for their survival. This is the most common cause of death for children under the age of five today globally after pneumonia. But specifically, our preterm-born infants, that is our patient group, that is the most common cause of death for them are respiratory disease. And respiratory failure is the most common cause of death but also the most common complication for these infants.
So that's why it's very important to address lung monitoring for these babies. And there are so many of them, and especially in the U.S.A. So in the U.S., we have more than 30,000, for us, relevant beds in the neonatal intensive care unit where our market research showed that is relevant to place a Neola device. So if you see here in combination with some of the European countries, we can see that the United States has really focused on developing their neonatal care units and the amount of beds in the recent years. And that is because of the success of fertility treatments in the U.S. leading to many more mothers having babies over the age of 40, which is then a trigger for preterm birth. But also that we have more twins and triplets because it's still allowed to put in multiple eggs in fertility treatments.
So, with that, the American Food and Drug Administration, the FDA, has put a lot of efforts in making sure that now when we have so many babies born preterm, we also must make sure that they have access to the newest technology so that they not only survive but also that they survive to a healthy life without the severe disabilities that we see on these babies today. So the FDA has put in place some specific projects in order to facilitate medical device for children coming to markets such as ours. And I will tell a bit more about that, why that has been so important for our journey moving forward. So what the FDA and what the neonatologists see today is that the current standard of care is in such great need of new technology. The current monitoring methods are really old, invasive, and insufficient.
So, what we're talking about is that the babies are monitored today: the golden standard is chest X-ray. Chest X-ray is done on a routine basis on these babies, which is a bit controversial because we have the risks of being exposed to the amount of radiation that they do, sometimes every day, that is risking causing complication later in life. But also most because an X-ray is just a snapshot of what's going on in the lungs at the specific time. In the large hospitals, both in Europe and the U.S., it takes between 40 minutes to two hours to get a chest X-ray. With that time, with severe lung complications, it's often already too late for a lot of the complications that these babies get.
So that's why, the more than 50% of the preterm-born infants have what we define as severe disabilities at age 11. And that really impacts your school. And this is specifically for the variant extremely preterm-born infants, but you can talk to any teacher now and they will tell you that they can see the children that have been born too soon because of their complications. So a lot of new technology is needed in order to discover these complications faster. And that's why we're getting such support from neonatologists for our continuous monitoring Neola, Neonatal Lung Analyzer that is constantly monitoring the lungs, very fast to show results. So we're talking within seconds. It's also very safe for the vulnerable skin of the baby and it's then non-invasive. So it's not breaking any skin barriers on the very sensitive skin on these babies.
With Neola, that is now, finally, developed. So a closed product that we're now taking through all the clinical tests moving forward. For 2024, the doctors will be able to follow exactly what's on the screen here. So they will in real time be able to follow the lung volume of the baby, also left side versus right side, and the free oxygen gas concentration that's actually in the lung. So in today's care, the neonatologists know the ventilator settings, but they don't know actually what's going on in the lungs. And this is a new measurement for them and something that will give them real-time data for, as an objective decision support. So brand new technology, really groundbreaking technology. And with Neola, we are looking to really upgrade current standard of care.
Three things that are really important, that we're looking to do is a faster detection of pulmonary complications, so lung complications, that prevents further major morbidities. We will also try to prove that we can, with a faster detection, decrease the number of days in very expensive neonatal intensive care. This is especially important for the U.S. hospitals as they are reimbursed a much higher level for the first two days of the babies in care. That's why they have an incentive to really make the babies healthier so that they can have a higher turnover of babies to a higher reimbursement. Then also, this is a very time-consuming, visual observation care. So today for the sickest babies, you have one nurse per baby looking at the baby all the time.
For the not-so-sick babies, you still have one nurse per two babies looking at the baby. So with Neola, we would also then try to decrease time for visual observation by the nurses that could then time that can be well spent somewhere else. And our focus for 2023 was three things. Really focus on technical verification, so that's technical studies, and clinical validation startup. And then focus on our regulatory work, specifically with the FDA, and then prepare for market launch. And we have been working relentlessly, really in line with those focus areas. And we have delivered on all of our milestones for 2023 in total. And specifically, there's been some significant events coming in the Q4 quarter that is really supporting our focus targets. And one of those that came in now in Q4 is that we got our patent granted for our disposables.
The disposables are probe sets that are placed on the baby's chest that need to be changed daily. So why is this patent important? Well, it needs to be changed daily. And they are also quite advanced. So they will have, we will have good margins on these ones. And there are also a base for our future profitability model. So with those disposables, we want to make sure that we protect them as well as we can because that's really our key to becoming profitable early. So that's why this patent that was granted for Europe was very important for us. And now that patent application is also up to be decided to be granted for the U.S. market. So we are, of course, looking forward, hopefully for that decision to come early this year.
Another significant event during Q4 was that we started our Neola Medical Inc, in the U.S., so a daughter company to our Neola Medical. This was one of the milestones that we had in our commercialization plan that we now achieved. Why is it so important to have an Inc in the U.S.? Well, it really strengthens the collaboration that we have with both American key opinion leaders and neonatologists. But now it's also a risk mitigation foundation for us as we're this year going to do a large clinical study on preterms in the U.S. And that's why it's important to have this legal construction in order to make sure that we have everything in place as we're now starting to be very operational on the U.S. market. With that, we also started our first office in the U.S.
We have an office just 10 minutes from Stanford, our collaboration partner, in Palo Alto, in the heart of Silicon Valley. So this is also a very important place for us to be. You will see that we're much more active in the U.S. market now. And it's important in order to have those face-to-face meetings with both hospital Directors, key opinion leaders, neonatologists, but also regulatory authorities. So you will definitely see us spending much more time in the U.S. now as of the first quarter of 2024. We also have a very exciting event in Q4 that we are able to do a directed share issue of SEK 20 million to a number of important shareholders that are existing, like ANMIRO, Pär Josefsson, and LMK as well. But also a very warm welcome to our new investor, Brodvik AB.
The Board of Directors carefully considered alternative financing solutions and found that just this direct share issue is the most favorable one for both the company and its shareholders, as the purpose is to really strengthen the company's ownership base, but also secure funding for 2024 in a very cost-effective manner. So therefore, we are very pleased to welcome Brodvik as a new shareholder in Neola Medical, together with the support from our previous large shareholders as well. I would say that this is a major sign of strength for Neola Medical that we are able to attract a new strategic investor and receive further support from the major shareholders, also at a premium at the share price.
And we could see that from the market reactions that that was very well received, from the stock market as well, with a really nice development of the share since this rights issue was announced. So, thank you so much for your support. And we now look forward also to preparing for the market launch of Neola and continuing to create long-term shareholder value. So looking at the full year of 2023, as a CEO, I would say that this has been one of our most important years to date where we have got a lot of very important milestones achieved. I would like to highlight specifically three of those milestones that are really setting up the company for the future success. The first one is that we sold our first Neola device to a University hospital in Cork, Ireland, a very important European center for neonatal research.
We sold that in a research version a few years ago, and they now, during fall, announced the completely independent research results that they had done on 100 newborn infants. And this independent research shows that Neola actually measures oxygen in the lungs of 100% of the 100 participating newborns. So we, with these results, we got our confirmation that the our technology works. It's also very good to have it in a clinical setting. And importantly, the neonatologists concluded in their official presentation that, even though that the research were done on 100 newborn babies, and not preterms, that this is a very suitable technology and device also for preterm-born infants, with which is our core target group. So that was really excellent news and gives us a really a calm in that the technology is validated.
Then another important milestone was that Stanford has been looking for all the new innovation around the world that can really make an impact in today's care of children from day one. Neola has been selected as one of those that's called Impact 1 companies that Stanford stands behind and say that we are one of the most promising innovations within neonatal intensive care today. This is, of course, a very important support to have from Stanford Medicine and Stanford Biodesign, who are number one in neonatology in the world and the highly key opinion leaders that we needed to have on Board in order to have a real success in our commercial launch of Neola. Very, very important. It also gives us a lot of practical support.
It means that we are now collaborating with the Stanford neonatologists about our clinical studies, with regulatory support with the FDA, and also with a lot of support for our commercialization and commercial launch. The third area that I would really also want to highlight is that we now got the patent for our disposables. We have been working very actively with our patent strategy. We're patenting everything that regards to both the technology, the device, and the performance of the device, and especially the disposables because it's such a profitability driver for us. So that that was now approved for Europe and has a good progress to be approved for the U.S. as well is a very important commercialization factor for us. So with that, I would like to hand over to Christian Gyllenberg, who will talk more about the finance for the year and for the quarter. Thank you so much, Christian.
Thank you, Hanna. So, operationally, the fourth quarter has progressed in line with the previous quarters, and we have kept our costs very tight with also the financial focus on the upcoming studies. We know that the finances that we have in our books are still not the most important thing in this company, even for an investor, but we are really keeping our costs tight so we are able to have a long runway. Regarding the fourth quarter, however, we have a financial event that stands out, and that is, of course, the disclosed share issue that was proposed just before the end of the year. We are, just as Hanna mentioned, very grateful for the confidence from both previous shareholders and also from Brodvik AB.
Financially, this transaction puts us in a very good position while it occurred at a very low cost since we only needed to consult external parties regarding the paperwork exercise. For the full year of 2023, while we're summarizing the full year, we can see that a lot of the major financial events have also occurred in the fourth quarter. As we have discussed in previous reports, operational, we have focused on internal development and preparations for the studies, which has resulted in the year's total cost even being slightly lower than last year as the need for external resources has decreased. The cash flow for the full year is still negative since the issue was decided on the last trading day of the year, and the proceeds from this did not come into our account until January 2024.
Looking at our share, we choose here to actually show the shareholder table as of January 31st, as we consider it to be more significant due to the new directed share issue. We can see that the new shareholder, Brodvik AB, has become our third largest shareholder and that one of the company's Board of Directors, Urban Ottosson, has further strengthened his holdings in the company by purchasing stocks on the market. We could also see that the directed share issue led to a positive development in our stock price, far exceeding the premium paid by the participants, but it also had a positive effect on the trading in the stock at the moment. Now we hope that more investors who are not yet shareholders in the company will notice the company and contribute to further increasing the trading. That was from the financial perspective. Thank you.
Thank you so much, Christian. You're also available for more questions, from the financial side if you have that later. So summarizing now, we are in very exciting times because, as you know from our history, we have already concluded the research phase where we have had great clinical research data on newborns here in Lund. We have moved through the technology validation phase for the past years where we have really had clinical and preclinical results that also prove that we can add a lot of clinical value to today's neonatal care in terms of monitoring of lung volume. And now we got the first really large clinical data that's completely independent from the company that also supports the validation of the technology. And with that, we're now ready with the full design of the Neola Medical device, and we're now in a very exciting year.
So let me talk a bit more about the outlook for 2024. We will have four very important milestones for the company. Number one, is that we'll do a preclinical study that is securing our performance data for the application that we will have to the Food and Drug Administration in the U.S. Furthermore, we'll do a human factors study that is also for the FDA grant, in order to show that Neola works really well in today's standard of care. So that's a study being done with neonatal nurses in the U.S. during this year. And then number three, we'll do a clinical study also in the U.S. with two different sites. More to come and to be announced during the spring. But this is, of course, a very exciting and important study for us, that will be done on preterm-born infants in the U.S.
And then all of that really prepares for sending in our application to the FDA with all these data in order to be able to start market launch of Neola that is probably looking to happen, like not during 2024, but in 2025. So, a very exciting phase now ahead as we're laying the foundation from a data perspective in order to support our FDA application to be granted to start selling in the U.S. So exciting times ahead. And our focus is razor sharp during 2024. We will mainly work on three different areas. The first one is clinical validation. So we're talking about our clinical study here, also the human factor study that is critical for us to really nail this year. Number two is the FDA process. We're going to have a very tight collaboration and dialogue with the FDA during this year.
We're going to do that through pre-submissions to the FDA where we formally ask them questions in order to support, for example, our clinical protocol. This is a way for us to really de-risk the project, making sure that we have FDA on our side and aligned before starting any studies. Then number three, preparation for market launch in the U.S. So we're now really, we have laid the foundation in Q4 of last year with Neola Medical Inc in the U.S. We have an office in Palo Alto. We are now also working with Stanford, number 1 in neonatology in the U.S. And me myself are also very present in the U.S. market now, for example, by attending JPMorgan and other more pediatric events that are focused on really building connections for our commercial launch.
So I definitely hope that you will follow our journey during this year. Our next report will be the 9th of April. So that will be also where we invite you to the general assembly that will be on May 22nd, here at the Neola Medical facilities in Lund. So a very warm welcome to come here for the general assembly, to be able to participate and ask all your questions and also look at the Neola device and see how far we have come. So with that, I thank you so much for listening and I will open up for any comments that are in the chat or that you would like to tell us. Thank you so much.
So if we don't have any questions in the chat, we have received a few on beforehand and also a few that we think can be interesting to have answered for you. One of the most important things, and I think that people are very interested in, is what we will do with the money that we received in the directed share issue and also how long the proceeds will last.
Well, thank you for the question. It's a very good one. So the proceeds from the directed share issues will go directly into the studies that we're doing this year, laying the foundation for our application to the FDA. So we're talking about the human factor study, a preclinical study, and then also a clinical study that is being performed this year.
It is, as always, our aim that when we release the yearly report in April, 9th of April, that we will also always have 12 months going concern. And that will also be the case for this year. Minimum 12 months. And I would say with some margin as well. Thank you. You talked a little bit about the Neola Medical Inc that we have registered in the U.S. How will we actively use that company and for what purposes? Neola Medical Inc is founded in order to make sure that we are paying and having contracts with U.S. collaboration partners from the U.S. There are a couple of real benefits with that. It is, firstly, the hospitals in the U.S. They love interaction with American companies. So it really facilitates dialogue. It facilitates the negotiation of contracts.
But also from our side, from a risk mitigation side, it's also important because we're doing studies in the U.S. market. It's also where we will sign the contracts, and insurance, for these studies with pre-terms. So, it's a risk mitigation perspective as well. And then not to say the least, it is a sign that we now have the entire foundation in order to plan ahead for the next phase in the company where we are going to really start the commercialization journey. I often get the question of when will you hire a sales force in the U.S.? And we will wait with that until we are pretty sure that we know exactly when the FDA will grant us the approval. And that is also in order to manage costs in the U.S. market. Thank you.
And of course, for the foreseeable future, what are the biggest challenges and opportunities for the company?
So in terms of challenges, it's very important now that everything goes the right way with our studies this year. So I would say that we will put a lot of focus really making sure that any type of challenge related to the studies will be managed in a very fast way. So that's top of our agenda. In terms of opportunities, we will have opportunities with the doors that now Stanford Medicine is opening for us. We can already see that happen. So hoping to be able to share some press releases in the areas of key opinion leaders and studies being made here during 2024.
Great. Thank you, Hanna. That was a few of the questions that we have received beforehand. If nobody else has any open questions.
Well, then I thank you warmly for participating in this presentation. And I look forward to you following our journey here in 2024. Thank you so much.
Thank you.