Good morning, everyone, and thank you for the opportunity to present here to you today. I am Hanna Sjöström. I am the CEO of Neola Medical, a Swedish med tech company listed on Nasdaq First North Growth Market in Stockholm since 2020. We have developed Neola, a medical device for continuous monitoring of the lungs of preterm born infants with an instant detection of the severe lung complications such as pneumothorax, lung collapse in preterm born babies. Our focus is very clear, to support earlier detection of these very severe lung complications that they today die from and get very severe complications, and really support an earlier intervention where minutes can matter.
For the next seven minutes, I will talk about three focus areas for investors, the unmet clinical need, our recent progress to FDA Breakthrough Device Designation that we got just two weeks ago and what that means for us, and then also the value creation path ahead of us. The clinical starting point is really the patient. Preterm born babies are amongst the smallest and most vulnerable patients that we have in our hospitals today. Respiratory challenges is the complication for the neonatal intensive care unit to manage. Today, while the clinicians have some tools, especially chest X-ray, it is very old, it is invasive, and most importantly, it only gives a snapshot of what is going on in the lung. You have some pulse oximetry that will give you some overall oxygenation in the body, but nothing really knows about what is inside of the lungs.
That is so important to understand for the clinicians in order to do their early intervention. Our focus is on the life-threatening lung collapse, pneumothorax, where the lungs really deteriorate very quickly and minutes really matters. An earlier detection would support that timely intervention that would really improve the clinical outcomes for these babies. Also it is highly relevant as an investment case since the clinical need is so significant. This is an area where there has been really a lack of innovation for children. It leaves a lot of room for, I would say, really profitable, meaningful innovation. Neola is built on Gas in Scattering Media Absorption Spectroscopy, which is a brand-new technology coming out of Lund University here in Sweden.
In practical terms, it is developed as you have a medical device that stands next to the incubator, and then it monitors using those disposable probes that you see here on the screen, non-invasively and continuously. The commercial concept is, of course, also very important. This is not only a device sale, it is really a platform with that main unit, the disposable probes that are changed daily on the baby, and also service agreements. For investors, this really creates a very attractive med tech model, more than just a hardware transaction. The device really installs a very stable base in the neonatal intensive care hospitals, and then we have that opportunity to really scale with our profitability with the running disposables that are changed daily on the baby. 2026 has been a really important year for the company.
It has been important because we have finalized our very first clinical study on preterm born infants, including very low birth infants, with excellent safety results. The study confirmed a favorable safety profile and also gave us the confidence to even do a sharper strategy in terms of our clinical proposition, where we are now going for an alarm function on pneumothorax. That is how secure we feel that we will immediately be able to detect pneumothorax in these babies. With that data, we could also then apply for an FDA Breakthrough Device Designation, which we received here just two weeks ago. This is just a very clear confirmation from the FDA that this is a technology that needs to come to babies as soon as possible. We have fantastic interactions with the FDA. There is a very clear path to market in this very profitable niche.
As you know also, pediatrics is a cost-free process in the U.S. because of the high clinical need for groundbreaking innovation. This has really been a very promising external validation of our technology, of our device, but also where we are at, that we have now a finished, developed product that is ready to take to our pivotal clinical study in the U.S. on preterm born babies ahead of that FDA approval. The Breakthrough Device Designation really gives us that opportunity to have constant dialogue with the FDA, making sure really that we take down the risk in this project, that what we are going to send in in our technical file is also going to be what the FDA approve. The breakthrough also gives us a priority in the lane for review, which should speed up our route to market. Our commercial focus is the U.S.
It is a very attractive market for Neola Medical because of the size of the neonatal intensive care system and the particularly high rate of preterm birth in the U.S., more than 10.6%, which is also accelerating because of the success of fertility treatments and having more twins and triplets, but also more moms being over 40. Our addressable market is really driven by the large number of preterm born babies in the U.S. More than 400,000 babies are born preterm every year. Many of them require neonatal intensive care for their survival and their respiratory challenges, and discovering them in time is really that key pain point for neonatologists today. We believe that we have a very compelling entry point on these high-risk babies, especially the ones on mechanical ventilation or respiratory support. For the hospital, the potential value is really clinical first.
Earlier detection, better decision support, and better outcomes for these babies, and we fall under DRG payments, and we see that we have a very high willingness to pay, both from neonatologists and hospitals in repeated market research in the U.S. We also have the opportunity to reduce very costly procedures today, and most importantly, one of them is really making sure that the babies are healthier, so that they can come home sooner to their families. Also for the hospital to free up their beds, because for every new baby they bring into a bed, they get a higher reimbursement level. This is one part where the business and improved clinical outcomes really comes together, which works very well for a profitable case. The objective moving forward is to start our pivotal clinical study in the U.S. that is planned for next year.
To conclude, I think that this is a very exciting point to get involved in the company. We are in a very important stage. We are addressing a clear unmet clinical need. Not a lot of innovation within this space. That really gives us a lot of traction from neonatologists around the world. We have a patented technology platform that is really unique, and the FDA has also said that this is a groundbreaking innovation. It is a De Novo application for us moving forward. As a proof point to that, we have received the FDA Breakthrough Device Designation. Now the path moving forward is to generate the evidence for our technical file to be sent into the FDA for approval and then to scale with our clinical partners in the U.S.
We are also a Stanford Impact1 company, which means that we have, say, the top connections within the neonatology community, especially in the U.S., but also in Europe. We go U.S. first and then scale to Europe.
Right. Thank you, Hanna. One of the questions was obviously anchored in the panel discussion. It is obviously very U.S.-focused, but how do you think around other markets then?
For us, U.S. is really the market because of the neonatal niche opportunity. We are in a very profitable niche market, where the path to market in the U.S. for pediatrics is unusually promising. You have the FDA with Congress decisions to really focus on pediatric innovation coming to market. We now have that FDA Breakthrough Device Designation as well, and then a cost-free process.
Thank you so much, Hanna.