Hello and welcome to this Q2 presentation with OssDsign. With us today, we have CEO Morten Henneveld. My name is Kristofer Berggren, and I work for Finnwire Media. After the presentation, there will be a Q&A session, so if you have any questions, please visit finnwire.tv and click on this Q2 webcast where you can write your questions. With that said, I hand over the word to Morten.
Good morning, everyone, and welcome to this Q2 webcast. My name is Morten Henneveld, and I'm the CEO of OssDsign. This has been an extremely exciting time with a lot of big events happening that increase the sales potential for OssDsign, both within but also in particular after the quarter ended. I'll just start recapping who OssDsign is for any newcomers and also give an update on the COVID-19 situation. Then, as always, we'll go through the results and the main events and finish with questions. Just before I go into the presentation, as always, we have a disclaimer relative to forward-looking statements. But just before we go into the presentation, I want to introduce you to the latest addition to the OssDsign portfolio, OssDsign Catalyst. OssDsign Catalyst is a synthetic bone graft that stimulates the formation of healthy bone tissue in spinal fusion surgeries.
It's a very innovative bone graft that is composed of proprietary nanocrystalline structures that can be implanted into the spine and then resolved and replaced by new bone tissue. And I think the obvious question here is, so what's special about being nanosynthetic? So just to put it into context, the width of a human hair is about 100,000 nanometers. Materials made at nanoscale are 1,000 times smaller than that. So we are operating with material that is 1/1,000th of the width of a human hair. And it means that OssDsign Catalyst is a nanosynthetic with a material structure that essentially is sharing a size scale with the mineral crystals in bone, and essentially meaning that the bone biology will respond in the same way as it does with the host bone, meaning the patient's own bone. And that leads to more rapid and more reliable bone formation.
It certainly differs from traditional synthetic bone grafts out there in the market, which we typically refer to as third-generation synthetics because they operate on a macro instead of a nanoscale. Essentially, that will lead to less bone formation. We'll come back to OssDsign later. As always, in case there are new people to OssDsign, I just want to quickly recap what OssDsign is all about. We operate in the orthopedic industry. Right now, we are now participating in two segments, what we call CMF, cranial maxillofacial, as well as orthobiologics. We do this with a very clear focus on regenerative implants and solutions. We're headquartered in Uppsala. Today, we have approximately 50 employees, and we operate in 10 markets globally.
We've seen significant growth year on year of around 50%, and we have sold and have reported post-market surveillance of more than 1,000 implants of our key product, Cranial PSI. In all the markets we operate in, we are fully patented, and we are fully reimbursed. Before we go into the details, I just want to draw your attention to the key highlights that I see. We saw a much stronger momentum again, and Q2 that we are reporting now is by quite a mile the best quarter ever for the company on a constant currency basis. We've also won some very significant GPO contracts with Premier and the U.S. Department of Defense and Veterans Affairs, and in addition, we've also been selected to present, as we did a press release on, at the Vizient Innovative Technology Exchange.
And last but certainly not least, this Monday, we reported that even ahead of our own projections, we are now ready to launch OssDsign in the U.S., and that product is now available and ready for sale. I'm extremely proud of these profound achievements, which certainly will continue to increase the sales potential we have, and in particular in the U.S., which, as you know, is by far the biggest and most important market that we have. But we do need to spend a little bit of time on COVID because, as I'm sure you are aware, we are not out of the pandemic yet. And essentially, I think we're seeing, to just summarize it briefly, we're seeing really good improvements across the board. But we also see very different regional developments.
Of course, overall, the Delta variant that is now starting to gain momentum is something that we monitor closely. If we start in EMEA, I would say Germany is really operating close to normal. We have a good business there. It's developing in a very healthy way. We also see the UK starting to open up more. But this is also where we see regional differences, more in the south. We see the north, and in particular in Scotland and Ireland, as you know. We've seen closures and postponement of elective cases and very restricted hospital access. And as I also said last time, it's very, very obvious that the UK is building up a very significant backlog of cranioplasty patients because a lot of patients come in now and have their decompressions done, but they don't get their implants.
If we go to France, I think we're seeing France going at a fairly steady pace. We haven't seen any worsening nor any particular improvement. We are happy with the development that we are seeing in France. If we go to the U.S., that's really where we've seen the most positive progress, in particular driven by an early accelerated vaccine rollout. The East Coast continues to perform, do surgeries. But we also saw more and more states opening up and getting back to a more normal level. But of course, we monitor the situation. The numbers with the Delta variants are going up, and the exponential rise in that is, of course, something that could slow down again. In Japan, as you probably know, things were actually starting to look a lot better coming into the second half of the second quarter.
And I would say we are very, very close to actually launching. But then things, unfortunately, as I'm sure you are aware with the Olympics, significantly deteriorated, both before and in particular after. And what that means is that restrictions have now been extended. They've been broadened to more regions. And almost weekly now, Tokyo, for instance, reported an all-time high. And as you may saw, actually yesterday, they came out with even further restrictions, which means that 60% of the population is now under some kind of emergency law. Unfortunately, launching in an environment like that is just not possible. You need to have line of sight to patients being scheduled. And we've had a lot of good discussions with our partner, Muranaka. And right now, we believe that things are getting better. There is a fairly slow vaccine rollout that seems to be gaining some traction.
Therefore, we believe right now that we are able to launch towards the end of the year. That's the best we can right now. Of course, it is our best guess since things don't seem to be improved right now in Japan. As I said, overall, we are certainly seeing improvements. We are seeing things getting better. I think that's also important to take away here. If we go to the results of the second quarter, then we reported SEK 7.6 million revenue, which equals about a 96% reported growth. On a constant currency basis, the underlying performance is actually staggering 112% growth versus last year. It's also a 28% growth quarter on quarter.
This, as I said, makes this clearly the best quarter ever for OssDsign, even beating the first quarter of 2020 by quite a mile, which was prior to the pandemic and even positively impacted by some delayed shipments from 2020. So of course, we had hoped that we were out of COVID impact right now. Having said that, it is a result that I'm extremely proud with. We are showing good underlying momentum in the business. We are showing that the minute patients start to get scheduled, that we are turning that into business. Net profit came in at -SEK 25.3 million. It's slightly up in last quarter, and it's primarily related to cost around commercializing OssDsign Catalyst. As we look into kind of the rest of the year, what we also said this morning is we are seeing improvement.
Things we have good traction in the market, in particular in the U.S., as things are really getting better. But of course, we cannot exclude that there will be fluctuations either on a regional basis, in particular due to the Delta variant. For instance, we're seeing a few hospitals now in Florida starting to shut down. And I'm sure you saw last week, the governor of Texas also came out and recommended a stop to elective surgeries. So of course, those things are out of our control. Underlying, we actually see a good traction in the business, also relative to what we've been able to see into the third quarter so far. Just to reiterate, we do believe that these fluctuations are temporary in nature. They are likely to run for the rest of the year, mid to long term. Nothing has changed.
We see a very interesting case for OssDsign here, ample opportunities for considerable and steady growth. If we go to some of the important events, this may be a little bit old news by now. But in June, we announced the completion of a highly successful fundraise, where in particular, two things are important to me. First, we were fully subscribed, and it means that we didn't have to utilize any guarantee commitments. And we were actually all subscribed at 185%. And that also meant that we could trigger the over-allotment option, providing us with 270 million before transaction cost. That was number one.
The second highlight of that to me is the incredible support that we received from the existing investor base, but also that we attracted attention and were able to welcome a number of new high-profile investors, which clearly is a testimony to the potential that exists in OssDsign. In June, we also managed to get a peer-reviewed article into the extremely well-known journal called The Spine Journal on the preclinical study we did on OssDsign Catalyst. In the study, researchers use a very validated and widely recognized model. It's a very discriminating model. I've talked about it before, called the Boden model, essentially to evaluate OssDsign Catalyst efficacy in bone healing in spine surgery, and the researchers use an autograft, which is the patient's own bone, compared that to OssDsign Catalyst in combination with an autograft and to a predicate device also with an autograft.
What that showed is that after 26 weeks, we had achieved 100% fusion. That is compared to only 60% on the predicate device, which is a fairly well-known product selling in the U.S. market today. The result from this study and the publications, of course, are key to commercializing and launching the product. I can tell you, it seems to resonate extremely well with surgeons already. After the quarter ended, we also announced two important GPO contract wins in the U.S. First, we won a contract with Premier in the 3D medical printing category. In case you're not familiar with Premier, it's one of the absolute largest GPOs in the U.S. They cover a network of more than 4,000 hospitals. Of course, we are extremely pleased having been awarded the contract, which essentially does two things.
It opens up a very valuable distribution network and provides us with a significant sales opportunity. But equally important, it is a very clear recognition of the high quality of our cranial reconstruction portfolio. In early August, we also announced that we've partnered with Red One Medical and awarded a contract with the Department of Veterans Affairs and the Department of Defense. And through this so-called distribution and pricing agreement, which we refer to as the DAPA, it means that American veterans and active personnel will have access to OssDsign's innovative portfolio. And I think it's worth noting here that not only have we managed to get Cranial PSI onto that contract, we actually also got OssDsign Catalyst onto the contract before it was even launched in the U.S. I'm extremely proud again that we've entered into this agreement with Red One Medical.
It is one of the most respected medical technology private sector representatives to the U.S. government, and what's quite unique when you're dealing with, and I'm sure you know this from other med tech companies, when you're dealing with Department of Defense, Department of Veterans Affairs, they only take the best. These are people that fight for the country that may have been injured as a result of that fighting for the country, so they only take the best in the market, and it is certainly a very clear acknowledgment of the high quality of the portfolio we have. As I also said, in July, we also announced that we've been selected to showcase at the Vizient Innovative Technology Exchange. Vizient is one of the other very big GPOs in the U.S.
The exchange is really an exciting part of the Vizient Innovative Technology program that essentially could result in a contract being awarded to the qualified products. So even if we're not on contract yet, it is still a very significant sales opportunity that we are getting here. And again, it's also a testimony to the quality and the reputation of the portfolio that we have. Otherwise, you don't get this invitation. So again, extremely proud of the many good things we are seeing in the U.S., which, as I said, is the most important market for OssDsign. And then this Monday, we announced that we are now launching OssDsign Catalyst in the U.S. And that essentially means that the product is available.
For those of you that are familiar with med tech, the med tech space, and how you introduce products, you will also know that really a lot of focus initially has to be on building centers of excellence and really creating this early ambassadorship among key surgeons, key opinion leaders. So that will be the absolute focus in 2021 for OssDsign. If we look ahead, we introduced a strategy earlier this year called Ascent 25, our strategy towards 25. We will continue to execute on that. The strategy is really zooming in the company on serving neuro and spinal surgeons. We intend to do that by participating in three orthopedic segments. And we are operating, as you know, with five very clear priorities. Number one being to win in the U.S. by really disproportionately direct investment to that market.
Second priority is to build the biologics business, the OssDsign Catalyst, building strong surgeon ambassadorship. And of course, we need to invest in the portfolio. We also need to invest in clinical work around that. Priority three is really to drive innovation in the portfolio by now leveraging the two strong technology platforms we have and potentially use that to actually enter the spine segment as such. Number four priority is clinical superiority. As I said earlier, we are already investing heavily in more clinical, in particular in the early part, in clinical studies, in building registries, in particular in the U.S. and in preclinical trials. And last but not least, we're going to have a high focus on driving operational efficiency very much towards reducing the lead time that it takes from we get an order to the surgeon has a final implant in his or her hands.
Of course, also as part of that process, keep driving down our cost level. So nothing has changed to that. We will keep executing to this plan. And just to highlight a few important milestones in the rest of the year, we will soon be commencing our first clinical program for OssDsign Catalyst, what we call the TOP FUSION study. We will also be launching the first sites in our bone graft registry in the U.S. in the fourth quarter. And as I said previously, the expectation is also that we'll be able to launch in Japan in the fourth quarter of the year. So I think with that, I'll hand you over to the operator, and we'll go to questions and answers.
Great. Thank you, Morten, for that presentation. So let's kick off the Q&A session. Let's start with the first question then.
OssDsign has before had low insider commitment. Do you intend to buy shares?
Yeah. Sorry. Yeah. I don't know who asked the question. I may not have seen. Listen, I know it's been challenged in the past. I can tell you we are investing a lot in the company as insiders. We issued a warrant program recently where the board and management in total subscribed for 1.3 million. I can tell you personally right now, I have bought a lot of shares in the company during the end of June and early July, meaning that I have personally invested approximately SEK 1.8 million in the company. Our CFO, I think, is also getting closer to SEK 700,000-SEK 800,000 investment in the company. So yeah, do I intend to buy more? Yeah. Probably over time, I'll keep buying. But right now, I have invested a lot of money in the company. I think we are showing the commitment which is needed for outside investors as well.
Okay. Thank you. You had touched on the new product, Catalyst, a bit during the presentation. But we received this question in the start. So maybe we can just walk through it again. The first stage of the question is, do you have any plan on launching Catalyst on more markets, for example, Europe or Japan?
Yeah. No, listen, I think we made that very clear when we also launched the strategy. We see OssDsign clearly as a global product. We are in the U.S. right now. We are launching clinical programs, and we are launching registries, which essentially will allow us to collect data so we can get regulatory approvals in other markets, including the EU, Japan, could also be Australia, other markets like that. So to answer in short, no, absolutely, this will become a global product.
What do you think makes the new product, Catalyst, so special?
It's two things. I think if you talk about the history now, I've been in orthopedics for quite a number of years, and when the first synthetic bone graft came to market, they didn't really have good results, and they've evolved from first, second, and third generation where we started to see some movement. We haven't really seen anything that looks like OssDsign Catalyst in the market, most notably because it is based on nanoscience. It is nanosynthetic where, as I said in the beginning, we are really mimicking the mineral crystals inside the bone. So we're getting as close as I'm not saying we cannot get closer, but we're getting very, very close to having a synthetic product that really looks like and interacts and behaves like a natural host bone. So I think that's one thing that sets it apart.
The second thing are the preclinical data that we are showing. When you compare to what's out there in the market and you look at their respective preclinical data, what was also published in the Spine Journal is on par with Medtronic's Infuse of BMP-2, which is actually not a bone graft, but which is a product that's selling at, I think right now, $600 million-$700 million in the U.S. It's achieving the same outcome in that preclinical bone model, and I think that is very, very unique. Of course, we need to demonstrate it in a clinical setting as well, but it certainly resonates extremely well with surgeons that are used to look at preclinical data.
Okay. Thank you. We have a question here from, or two questions from Rickard Anderkrans at ABG. The U.S. continues to lag Europe in terms of sales. Can you talk a bit on why this is the case and if there has been any issue with the U.S. sales agent? That's the first question.
No. I mean, to answer your question, I got no. There's been no issue at all in the U.S. I think what you've seen, the biggest difference to me is if we look back at the start of the pandemic, Germany, which is by far the biggest market we have in Europe, has remained fairly open throughout this process. There was a period here early in the year when there was a lockdown. But by and large, they have really managed well. So we've been able to do a lot of surgeries actually in Europe where clearly the situation has been different in the U.S. where it's been mainly parts of the East Coast that have been opened up. Other big states like California has been more or less virtually shut for more than a year.
Texas have also had their problems and certainly also Florida, which are the other key states, so I think it's just a mixed effect you're seeing simply as a result of these regional differences in the pandemic.
Okay. Thank you. Next question from Rickard. What is the timeline for the TOP FUSION study? Can you talk a bit more about that study?
Yeah. TOP FUSION study is what you call a first-in-man. Right now, it's scheduled, as I said, to launch in Q4. But of course, as we came out ahead of our own projections, we are, of course, discussing with the site on when we can start that study. But it is something that, as I said in the presentation, we expect to start fairly soon. And we'll be able to report at least a three-month result early in the new year.
Okay. Thank you. Next question. This is from Stephan. Not sure how you can answer this, but I was asking to you anyway. Do you expect current rise in delta-related infection to impact sales in Q3?
I think, right, I mean, I'm not going to give any forward-looking statements relative to sales. As I said in the presentation, clearly, if delta starts to take over and that leads to elective procedures to get canceled or postponed, of course, as with other med tech companies, we are likely to be affected by that. But I also think that the healthcare society in our system in general are getting better at navigating some of the challenges related to that. We're seeing certain procedures being moved from one hospital to the other one. But of course, if it leads to a stop in surgeries like we're seeing in a few hospitals right now in Florida, then of course, that could impact our sales on a short-term basis.
Okay. Thank you. Another question from Rickard here at ABG. Did the GPO contracts entail any pricing discounts?
Yeah. I mean, of course, when you're dealing with a GPO where it's a matter of bargaining power, I think, basically, for every single industry when you're dealing with larger contracts, of course, prices tend to be a little bit lower compared to what I would say the list price of the product is, but it's nothing I wouldn't say it's not massive discount at all, but of course, it gives a discount when you are provided access to a lot of hospitals.
Okay. Thank you. Next question here from Oscar Bergman at Red eye. Have you experienced interest among newer surgeons for Catalyst in the U.S.?
Yeah, we have. It's a short answer. Well, in two different levels, right? Of course, before you launch, you do a lot of market testing, what we call voice of customer. And I think surgeons see what we see. They see some of the composition of the material and what that could lead to in terms of bone formation. So the story we have around OssDsign resonates extremely well. We also already have commitments from a number of surgeons to start using the product.
Okay. Next question from Oscar. When do you expect to see some impact on sales from Premier and Red One Medical?
I don't think it's not like a magic wand where you just flick it and then you get a lot of sales. These type of GPO contracts, both the Department of Defense and Veterans Affairs and also the Premier, it means you have access to the hospitals. You are approved under the listing. So it removes an important barrier for you to sell in that account. But it is still hard work, hospital by hospital, surgeon by surgeon, and show them the efficacy of your products. So I can't give a timeline, Oscar, on exactly when that's going to translate into sale. I think you will see sales coming in in certain accounts fairly fast, actually. I think one of them may actually start in the month of August. And then, of course, there are other accounts that could take longer time to penetrate. So it will be a mix.
Okay. Thank you. If we look out a few quarters, what will be OssDsign's main focus?
That's a very big question. Listen, we will continue to execute on the strategy. Right now, we've said what the key commercial milestones are. Clearly, the opportunity that exists with Catalyst means that we are going to focus a lot on that, but in essence, as I said earlier today, we have five very important priorities in the company strategically towards 2025, and we will keep executing according to that, and there's no change to that compared to what I said earlier this year.
Great. Thank you. And the last question for this session then. Are there any plans in the future of moving the stock to a larger exchange, so to speak, to attract bigger investors?
Yeah. No, that's an interesting question. It's not the one I normally get. Listen, I think we feel good right now being on First North Growth, but of course, it is something that we will keep looking at and discuss with the board which marketplace is the best place for OssDsign to be, but I can't give any outlook or any determination. It's something that we will constantly monitor, and if there is a change to that, then of course, we'll communicate that.
Okay. Great. Thank you then, Morten, for taking your time to do this presentation for us. And thank you all to the viewers and to you who sent in your questions. I hope to see you again on the next presentation with OssDsign. Take care and have a good day. Bye-bye.
Bye-bye. Thank you.