Hi. My name is Gonzalo Artiach. I'm an equity research analyst here at ABGSC, covering the healthcare space. Our next company is OssDsign, and with us, we have here today the CFO, Anders Svensson. Anders, the floor is yours.
Thank you. Yes, Anders Svensson from OssDsign. I'll tell you a bit about our company, what we do, and how we've been doing of late, and why we think that we are well-positioned for growth and future value creation. Just the usual disclaimer, just in case I happen to say something forward-looking, which I'll try to avoid. A bit about OssDsign. We're an orthopedics company. We are up and coming in a very big market, as you can see, $53 billion in total globally. We grow very quickly, 80% in 2022, and we operate in two orthopedic segments, CMF, which is skull, and orthobiologics, and we concentrate on the spine. We're active in about 10 markets globally. Most important one is the U.S., but also most of the large markets in Europe, and as of last year, also Japan.
I'll tell you why we exist at all. We believe that most bone replacement products currently on the market just don't quite provide the results that we would like to see. Looking at the cranial implant, just as an example, there's a lot of people every year that need cranial implants because of head injuries or brain injuries. 10% of these implants end up getting infected and have to be removed. The patient's going for revision surgery. That's not a good thing for the patient, painful, and also, of course, very expensive for the, for society. A procedure like that will cost easily $100,000. Looking in the bone graft sphere then, it's actually even worse if you look at the statistics.
There's 1.5 million people just in the U.S. alone that go through these procedures every year. One in five actually don't have what we call a successful outcome, so it doesn't fuse, sorry. What we do then, we've used advanced material science to produce products that actually stimulate the body's own healing capabilities, the materials in themselves. We have the legacy product, the Cranial PSI, so it's a patient-specific implant. It's calcium phosphate and then reinforced with titanium mesh for durability. Fantastic clinical results, also osteoconductive properties, claims that have now been recognized also in the U.S. It actually makes the patient's own bone start growing back. 1.4% infection rate, which is to be compared then to at least 10% generally in the market.
The other product, our newer product, OssDsign Catalyst, and the bone graft product, quite a different one. It's high margin. It's very scalable. It's an off-the-shelf product, and it's in the market for standard procedures. It's also calcium phosphate, actually. It's a fully synthetic product. We don't have any clinical data on this one. We are working to get it right now. We only launched it last year or end of 21, so it takes a bit of time to get there. We had fantastic pre-clinical data where we could see that this was performing better than any product, similar product on the market. six months after surgery, the patient was fully fused, 100%. Looking at the markets then, where we're in.
Cranial implants, it's a pretty decent sized market, good growth and a healthy profit margin, above 70% in general. Of course, with the bone graft market, there are some differences. First of all, it's not patient-specific, it's fully scalable. The market is five or six times bigger, many more procedures every year. Also, to top it off, a much higher gross profit margin of above 90% in general. This opens up our avenue to growth for sure. Within this market of bone graft, we will focus on, clearly have done to date and will continue to do so on spinal surgery and on the U.S.. The U.S. is also the only place where we're actually authorized to sell right now.
As you can see, it's by far the biggest segment of the market, cervical, so in the neck, and thoracolumbar. It's also, if you look at the U.S., by far the biggest market, more than 70% of the global market. $1.8 billion. We were below $1.8 million last year. I think this, there's ample room for growth. It's growing quite healthy, this market as well, in the U.S., at least 8%. Looking at what we achieved in 2022. It was a record-breaking year for us. We had good growth before, but something different happened in 2022 and of course, largely to do with the Catalyst launch.
Grew by 80% globally and a healthy growth on both franchises and in all geographies really. More importantly, we had three consecutive quarters of around 150% growth in the U.S.. The U.S. is generally the most important market for most companies in this sphere, certainly for us. We have to win in the U.S. That's the name of the game, and these are very clear signals that we're doing something right in the U.S.. After a slightly slower first half year, we saw also the rest of the world pick up in the second half of the year, and they ended up in the final quarter with 73% growth. That's just outside the U.S., so basically Europe, Japan is quite small still, and just the Cranial PSI product.
We made some changes to the European sales force early on in the year or end of 2021, and that certainly paid off, but it took half a year to get there. Catalyst then, the bone graft product, sold about SEK 17 million last year, which we are very pleased with for a first-year result. We actually also reached a milestone of treating 500 patients. A good start that we would now like to continue. It wasn't all sales. We also had. It's a lot of sales, and we tend to talk a lot about sales, but we also had very strong clinical and post-market surveillance reports. A number of publications, both on the Catalyst and the Cranial PSI, with the fantastic data. I don't know if you're aware, we also strengthened our balance sheet towards the end of last year.
In Q4, we took in about 65 million SEK in a directed share issue. How did it look? Well, it looked like this. This is funny because being a CFO, I've done so many business plans and budgets in my life. I can't count them all, they normally look like this, where you grow more and more each quarter or more and more each year, of course, it rarely happens. It did happen. This is what happened quarter by quarter for our global sales last year. I think the picture in itself, 180% growth between Q1 and Q4 is very promising, but also the fact that it continues quarter on quarter, it sort of indicates to me that this is sustainable.
Looking at the U.S., as it is our most important market and where we have the only market where we have the Catalyst, you can see as well this is a bar chart where every bar is the last 12 months rolling sales. There was some growth in earlier periods, as you can see, but something very different happened in 2022, and of course, that coincides with the release of Catalyst. We run the market in the U.S. for about five years to reach about SEK 12 million in sales, and then just in the last two quarters, we've added as much. A pretty good momentum there. As you can also see here from the pinkish side of that last bar, the bone graft product is now about 50%, actually a bit more than 50% of the U.S. sales. It happened very quickly.
Looking at the sales split between the two franchises. We reached 38% actually for bone graft globally in Q3, and we were heading for more in Q4 and did very good in Q4, but we had staunch competition from the Cranial PSI product outside the U.S. towards the end of the year. We stopped at 38% also in the fourth quarter. For the full year, 30% for the new product if you look at it from a sales perspective. If you look at that from gross profit, I'd say it's probably about 50/50, since the bone graft product has much higher margin. That's a bit about us and a lot about sales, and I just want to recap what else we did, because we had some other major achievements apart from sales.
Clinical achievements, and I think this is, well, it's been overlooked in ter.ms of OssDsign at least, but a lot of the bone graft companies overlook the clinical side. Sales right now is really important, but the clinical investments that we're making are actually the foundation for the mid to long-term growth. We're not just gonna grow this year and next. We started off, if you look at the top side of the slide on the timeline, we got approval to start a registry for the OssDsign Catalyst product in the U.S. early on. We enrolled the first patient in April, and we reached 100 patients enrolled ahead of time in about November. We also completed the enrollment of TOP FUSION, which is our...
That's our first study, which we launched the product end of Q4, and right after we launched it, we set up this first-in-man study just to show safety more than anything else. It's a small study, but it's necessary. It gives really good data, and we got the first reports, six-month data towards the end of the year, which showed, surprise, six months data saying for one patient only, 100% fusion. Very similar to what the preclinical results were that we had previously. That's not always the case, because it's one thing doing it in animal and a different case doing it in a human. Very good early results.
We had our first safety report on the Catalyst, which showed 0% device-related complications, which is, of course, exactly what you wanna see. We reached 500 patients toward the end of the year. We also released a product extension with a 1cc. It's a smaller product, mainly used in extremities like fingers and feet. Now we have a complete range. Below the line, you can see the Cranial PSI successes. We won early in the year, the largest tender in France. It's in Paris, eight hospitals. We launched in Japan after more than a year of trying very hard due to the pandemic. At least at last, we launched our Cranial PSI in Japan.
We had some really convincing case studies that were published, showing that this product is just superior on the market compared to so many others. At the end, very end of the year, we also released new PMS post-market surveillance data, where we now show the 1.4%. It says 21.4, it's not true. 1.4% explantation infection rates. You could also look at this one a different way, which I would just like to tie back to 'cause it's... You put a strategy in place, and then you tend to maybe get a bit tactical and worry about the day-to-day work, and especially in a listed company, it's all quarterly, right? Here you have our strategy was based on five pillars. We put this into play early 2022.
What we did, we formulated five strategic priorities. The first one was win in the U.S., and I think with three quarters triple-digit growth and now U.S. being 60% of our global business and a much broader recurrent customer base, I think we can safely say that we're on the way to winning the U.S.. It's much more to do, a good start. We also said we're gonna build an Orthobiologics business. I think with SEK 17 million in the first year, 500 patients treated and some pretty heavy hitters being attracted to our advisory board, good surgeons and key opinion leaders. That's also a good start. Where we haven't shown that much yet is to innovate the portfolio. That's the third strategic priority. In the med tech sphere, it just takes time to produce, to come up a new product.
We launched the Catalyst 1cc. We have line of sight to some more products in the next year or two, as I say, it takes time. We wanted to fundamentally change the way we look at clinical. We started the TOP FUSION, the first-in-man study directly after launch, which has resonated very well with a lot of surgeons. Proves that you're a serious contender, not just there for the short term. We established PROPEL, and as I said before, really got that growing quickly. I think pretty good progress on all four. The fifth one, we don't talk that much about it. It's part of the strategic priorities, driving operational efficiency.
This is sort of a long game or a long play, target where we, for the Cranial PSI particularly, are rethinking the entire process, how we design, how we manufacture it in Uppsala, and also how we deliver it to customers as quickly as possible, especially customers in the U.S., where we have FedEx and customs and all sorts of things to contend with. We actually released some gains from this project in 2022, some minor ones, but still, we formulated the targets for 2022, the next phase of the project. We believe that we will see fairly early in the year, in this year, substantial reductions in lead time. It looks pretty good. That's what I wanted to conclude with. Just remember, I'm the CFO, so technical questions, I'll try.
No, it's more general question. Now we have a little bit of time for some questions. I will start with one. It's on the. I mean, it seems that the key point for you now is to convince surgeons to switch to Catalyst from whatever they're using now. Could you give us some words on how does this market look now in of alternative, like, technologies now? What is the things that Catalyst brings to the market that competing alternatives don't?
Well, to start with, it's a fiercely competitive market. There's a lot of players out there. What we normally come up against is, I mean, the market is sort of dominated by some huge companies, but they are not that focused on selling bone graft. They are selling the metalware or the other stuff where they make their money. The most competition we see from other small companies who've been in the market for a relatively short space of time. I think, well, our preclinical results are much better than those guys. That's also one other very big difference is that we are so focused on clinical to convince with clinical data, the market that this is by far the best product.
That's very interesting. Now you're mentioning surgeons.
Mm-hmm.
I mean, I guess that there must be something that convinced surgeons to switch. Is there any kind of pull in terms of better economics or better handling that on Catalyst that can convince or you can use to convince surgeons to switch?
Probably not economics 'cause we've got very good price for our product, but I'm sure others do, too. Handling for sure. The preclinical results in themselves and the, what we now can release the first safety report, et cetera, they sort of reinforce for the, for the surgeons who've already tried it, they get more confidence in the product, and the people about to try will. It'll be easier for them to take the step. Handling is probably the biggest one. We have what we believe is the best handling on the market. It's quite important when you have a product like this that you have to fit. You sort of mix it with blood and maybe a bit of patient's own bone, and it cannot dissolve. It has to stay stable when you insert it around the vertebrae, which ours has proven to do.
I wish I had one here, can put it in a glass of water and you would see it would still look the same in half an hour.
That's very, very interesting. You're mentioning now that of your preclinical data. I mean, of course, your preclinical data looks outstanding. How hard or easy is to really be solid and say like, "Okay, what we see in animals can be translated into humans." 'Cause that, as you mentioned in presentation, it's not always the case.
No.
How confident are you that your data is on the right direction?
Well, obviously we're waiting to see full results from the first study and for the full 12 months. That's sort of the gold standard. We also wait to see some interesting results from our registries in the U.S.. What we've seen so far, sort of three-month data, six-month data is very encouraging. Since we now have the first full data for one patient, which showed 100% fusion, then I think we are very confident that this is gonna develop well.
Nice. Another question is on the scalability.
Mm-hmm
... of your product. I mean, we have gotten questions from investors that are focused on the old cranial segment and, yeah, issues with scalability of that part.
Yeah.
The question is how confident are you that you can reach this 90% gross margins with reduced OPEX, let's say? Well, how confident are you that this can be actually be scaled up?
We already see that, so we are reaching it. There's a big difference between the two franchises. The investors are quite right when they have questions around the scalability of the Cranial PSI. Since it is patient-specific, we have to treat each case differently. With the Catalyst, it's we can scale PSI as well, but nowhere near as fast as we can do with Catalyst. That's an off-the-shelf product. It comes in a box, The actual material comes in a syringe, and they are just different sizes, but it's exactly the same for all patients. The procedure that the surgeon performs is exactly the same as he did before with another product. It's there's nothing new, just a better product. Yeah, we're confident.
Anders, thank you so much for being here with us today.
Thank you for having me.