New growth strategy called Scale to Profit, and we raised almost SEK 160 million, which means that the company is now sufficiently capitalized to put in place the resources necessary to execute our current growth plans and deliver positive cash flow. I'll now hand you over to Anders Svensson to walk you through the financial results for the quarter before I'll come back and spend some more time on our clinical programs and evidence, as well as our commercial progress and strategy going forward.
Thank you, Morten. As Morten mentioned, we continue to see high growth in the company during the quarter. Organic growth of 73% compared to the same period last year, so on an underlying basis, you might say. On a reported basis, the growth came in at 56%. This was driven, as you know, by a strong U.S. dollar foreign exchange headwind. We did see quite a lot of sales coming in the last day or two of the quarter. We always see some of that, but more so than usual this time, as there were some customers who ordered slightly earlier than normal. The numbers reported are slightly inflated as these sales would normally fall in the next quarter. Now, how to say exactly, but our estimation is that it's approximately SEK 1.5 million, or equivalent to approximately 5% growth we're talking about here.
If we turn to the first six months, we show an organic growth of 66% and 60% on a reported basis, not such a large spread. This is because the dollar was still very strong for most of the first quarter. As we've also said before, the growth will not necessarily be linear. It will take more of a form of a staircase where we increase accounts and users in one quarter and then may slow down somewhat in the following quarter as we get the new customers up and running, and then we increase again. This quarter is a good example of a quarter that jumps with 16% growth compared to Q1. We're, of course, very pleased with this development.
We continue, however, to believe that the best way to look at the underlying momentum in the company is to look at the 12-month run rate, which we call LTM. As you can see here for the second quarter, it's a strong trajectory continuing, and LTM momentum is up 68% year- over- year. That's an excellent performance that we 're highly satisfied with. Over to the gross margin, it remained very high in the quarter, 96.8%, which is up 360 basis points against Q2 2024. It's also slightly up on the previous quarter in 2025. For the first six months, we show a gross margin of 96.6%, quite stable for the year, and it's up 320 basis points on the same period last year. Gross margin remains high, significantly above the guided level. I will now hand you back to Morten.
Thank you, Anders. As mentioned, during the quarter, we had many important announcements. First, in May, we reached the milestone of 10,000 patients treated with Oss Catalyst. The continuous and rapid increase in treated patients is a strong testament to how well Oss Catalyst has been received in the U.S. market since launch. It's also a substantial increase from the 5,000 patients reported in May 2024, highlighting the increasing interest we're seeing from surgeons and hospitals. Early in the quarter, we also announced the long-term follow-up results from the clinical study ToFusion, which was published in the peer-reviewed biomedical journal of scientific and technical research. The results demonstrate a 100% spinal fusion rate and improved quality of life outcomes and validate Oss Catalyst's unique ability to form bridging bone consistently.
These exceptional results strengthen our market position, of course, and reinforce OssDsign Catalyst as a true game changer in spinal surgery. During the quarter, we also published a highly exciting new preclinical study where we compared bone formation potential of different silicate-containing calcium phosphate synthetic bone graft, and that was also published in a peer-reviewed scientific journal called Journal of Orthopaedic Surgery and Research. The research, which was led by esteemed professors from the University of Aberdeen as well as the University of New South Wales, compared various synthetic bone grafts in a preclinical setting. The results were quite striking. Oss Catalyst emerged as the first clinically available synthetic graft capable of generating robust functional bone in a very challenging avascular environment at early time points. The study employed an oval intramuscular defect model, which is a sophisticated method that mimics real-world conditions.
Over 6 and 12 weeks, researchers observed the performance of three commercially available synthetic bone graft substitutes. The results were clear. Catalyst outperformed its competitors, demonstrating significant functional bone bridging after just six weeks. In just six weeks, it forms strong bridging bone where others start to fall behind. The rapid response is not merely a footnote; it is a pivotal advantage. Traditional grafts often rely on the presence of host bone to stimulate healing. In contrast, Oss Catalyst thrives in isolation, actively promoting bone formation even in avascular conditions. This is therefore not just a scientific advancement, it is a very practical solution that could transform patient outcome. The ability to stimulate new bone growth in challenging conditions also opens up doors to new treatment possibilities.
Of course, the biggest announcement in the quarter was the publication of phenomenal one-year data on the first 108 patients in our proposed spine registry. As we also mentioned early July, this is a highly, highly complex cohort. I just want to reiterate the profile of that cohort. We had an average BMI of 31.9, meaning that the average patient is highly obese. We had 93.6% of patients that had at least one comorbidity, with 48% having three or more comorbidities. We had 50% of the cohort that had previous spine fusion surgery performed, with another almost 16% having decompression, which is a non-fusion spine surgery performed. In total, two-thirds of the cohort had some kind of surgery performed before. We had 48% that were active or previous smokers. We had a little more than 20% of all procedures that involved three or more levels of the spine.
We had another 12% suffer from diabetes, and we had just about 6% with osteoporosis. The results that were published have to be viewed through these lenses. These are very complex and very difficult to fuse patients who suffer from so many other things that hamper bone formation, or where so complex procedures had to be performed that really you should not be expecting a high fusion rate in this cohort. As you know, we managed to achieve a fusion rate at 12 months of 88.4%, which is phenomenal. The fact that we can achieve fusion rates in such a difficult real-world population, and then beating most of the randomized controlled studies and coming in significantly above the average in the industry, is no other than remarkable and well beyond what you generally can expect.
I think what's even more remarkable is the fact that we achieved a high fusion rate throughout all the known risk factors. As you can see on the bar chart, it doesn't really matter if the patient was old, obese, smoking, diabetic, osteoporotic, had previous spine surgery, or even had a large multilevel construct performed on them. Throughout all of these groups of known hard-to-fuse patients, we achieved very high fusion rates. As also mentioned in our call in July, even the authors were blown away by the result. What you see here is a quote from Dr. Schwenke, who's one of the investigators and also the lead author on the paper.
I think he says it very clearly, and I quote, typically, I would expect to see dramatically lower fusion rates for such a complex real-world patient population, with 48% of the patients in the study having three or more comorbidities, increasing their risk for potential nonunion. Most clinical studies exclude these difficult patients, which unfortunately represent the majority of patients in need of spinal fusion. The Oss Catalyst fusion rate of 88.4% achieved in the proposed study significantly exceeded my expectations." End of quote. I think this statement actually says it all about how doctors themselves view the result. To sum up, despite only being active in the orthobiologics space for a little under four years, we have already built a very solid repository of evidence with now a total of 15 preclinical and clinical publications and white papers.
I just want to draw attention to the fact that, as you may remember, when we entered 2024, we did not have a single piece of clinical evidence but had commercialized solely on the preclinical evidence from the very early bone model. During the last 18 months or so, we've therefore generated more than 10 publications and white papers, which is something that I'm incredibly proud of and which is crucially important to the company, both now and also for the future. The most important thing is what the clinical evidence shows. I apologize for this somewhat busy slide, but what you see here is a summary of the clinical studies we've published. Across all of these studies, we've consistently been reporting high fusion rates and fast bone formation with rapid progression to fusion.
From the 100% fusion in our bone model to 100% again at two years in ToFusion, and now 88.4% in a highly complex real-world population. In addition to what you see here, you can also add the many strong case reports as well, which have been published. What is it we can conclude based on the data we've published to date? The overarching conclusion is that all preclinical and clinical studies confirm the potency and differentiation of Oss Catalyst. More specifically, we can see that, firstly, we have shown now high fusion and fast fusion across all types of studies: preclinical, randomized controlled trial, and real-world registry patients. Secondly, we've also shown strong clinical outcomes in simple as well as very complex patient cohorts. Thirdly, as I mentioned, we can see that high fusion success rate is consistent throughout all well-known patient and surgical risk factors.
Finally, as the authors themselves conclude in the oval study, Oss Catalyst is the first clinically available synthetic bone graft to successfully generate robust functional bone in challenging avascular environments at early time points. All in all, it's a set of very strong data, which means that we are incredibly well- positioned in the market. Of course, at the same time, all of these clinical publications have also helped us fuel commercialization. We just want to give a quick update. I think the last time we updated was in November of 2024. We 're now sitting with more than 200, what we call VAC approvals, so hospital approvals, in the U.S. We also continue to build and strengthen within that distributor network, and that network now counts approximately 120 distributors. We also, as you know, have full military access both to active and veterans.
We continue to execute on our premier GPO contract, which, as you know, represents a very large part of the entire U.S. market. What that also means is that we have actually hit the 10% access point. As we've said before, that still means that we have 60% of the spine orthobiologics market, which is untapped and which therefore represents a significant growth opportunity for the future. In addition to that, we can, as we also disclosed during the strategy update, go into adjacent orthopedic segments in the future based on our existing 510(k) clearance in the U.S. As a result, in June, we launched our growth strategy to achieve positive cash flow, and we call that new strategy Scale to Profit. The strategy has four very clear focus areas. The first is to accelerate access and coverage in the U.S. market.
In order to do this, we'll double the U.S. sales force by 2026 and also accelerate our marketing effort. In addition to that, we will, at some point during the strategy period, also enter new adjacent orthopedic segments. The second priority is to expand our product portfolio and indication. We expect to launch two new products, an MIS Solution in 2026 and a hydrophilic strip sometime between 2027 and 2028. In addition to that, we're also aiming at obtaining minimum one new indication expansion. The third priority is to build a complete repository of clinical evidence. This means continue to build and publish data from our proposed registry. Equally important, we're going to initiate a large level one randomized controlled trial, which is expected to start during 2026.
By investing in this level one randomized controlled trial, Oss will become a top-tier orthobiologics company and one in only very few that can demonstrate such clinical evidence. The final priority is to scale production and increasingly also build a U.S. production footprint. Specifically, that means we'll be implementing a scalable, more cost-efficient production process and, over time, also move to an increasingly bigger U.S. footprint. As part of the strategy, we also updated our financial ambition. These strategic measures are intended to increase Oss sales to over SEK 400 million by 2028 and achieve a profitable operating result and cash flow in the second half of the strategy period. The quarter was also marked by a successful completion of a directed share issue where we raised almost SEK 160 million before transaction costs.
The overwhelming investor interest, which prompted us to increase the offering from SEK 9 million-SEK 11.5 million shares, demonstrates strong market confidence in our strategy and in our performance. This capital injection means that the company is now sufficiently capitalized to put in place the resources necessary to execute our current growth plans and deliver a positive cash flow. With those final words, I want to thank you for listening to the presentation and hand back to the operator who'll handle questions.
Thank you so much for the presentation here. As you mentioned, now we'll carry on with some questions here. Can you elaborate on the timing for the RCT? When do you expect the first patients to be recruited? For how many years should it be? Should the trial be running? How much will it require in CapEx?
Yeah, as we also said when we announced the strategy, we expect the study to start sometime during 2026. We can't be more specific right now. We think it's going to be somewhere between 200 - 400 patients, and it's probably going to take approximately five years. There are a lot of variables that are being discussed with sites and so on, so we can't be more precise at this point in time.
Thank you. How have the customers welcomed the first data from Propel? Will it help in discussion relating to pushback on price or even increase pricing?
I think overall, as you can imagine, it's been incredibly well received. This is not a result that any other companies have been able to publish on a real-world complex cohort. Of course, it resonates well with surgeons, not least because the patients that we included in the 108 patient cohort we have are the same patients that surgeons see in their everyday practice. That's point one. Point two, of course, is what the study also clearly showed is that it is agnostic somewhat, at least, to patient and surgical risk factors. We demonstrate much higher than average fusion rates across all types of risk factors. That, of course, means that surgeons are instantly drawn to the fact that this is a product that they can use to actually help the most difficult patients they have.
By saying that, of course, they can also see that we can help the more simpler patients. I think this underlines and emphasizes that this is a product that can be used for all patients in the U.S. market.
Thank you. To what degree are Catalyst-trained and educated surgeons moving hospital effectively to stop using Catalyst?
Sorry, can you repeat that question? I'm not sure I understand it.
Yes, of course. To what degree are Catalyst-trained and educated surgeons moving hospitals effectively to stop using Catalyst?
I think you're always going to have a, as part of the market, you know, surgeons stop and move around in hospitals. Of course, sometimes it benefits you, and other times, you may have a user who's using your product in an approved hospital who moved to an unapproved hospital. Of course, that sets you back for a period of time until you get an approval in that site since the surgeon still want to use your product. I think there's nothing out of the ordinary. That's how the industry works. You know, surgeons move around to different hospitals over time.
Thank you.
Nothing we can control.
When should we see your cost increase due to increasing headcount in the U.S. sales force?
I think you see it slowly but surely each quarter. We've said that we're going to double the sales force by the end of 2026, but that won't come in one big swoop. It'll come one or two salespeople every here and there. You will see slight increases every quarter.
Thank you. How quickly will you expand your sales and marketing team in the U.S.?
I think, you know, we've said we expect to double it by the end of 2026. The exact path that that's going to follow, I think that's to be seen. We see it as a gradual, as Anders said, a gradual ramp-up from now on until the end of 2026.
Thank you. Any larger clinical trials starting in H2 2025? Should we expect R&D costs to increase in H2 2025?
I wouldn't say that the large clinical trial will drive R&D costs in 2025. It's mostly preparatory work, scoping the whole study. I'd expect that to start happening in 2026.
Thank you. Q2 numbers being somewhat inflated by last-day orders, any clarification on Q3 impact here would be appreciated?
I think, as we said, let me just go back. We have a mix of customers. Some customers, the vast majority, use consignment, which means that it's invoiced on a case-by-case basis. We also have certain hospitals who like to buy in bulk. Maybe they buy once a month. Maybe they buy twice a month. The reason that we just called it out is simply because it's fairly insignificant. As Anders Svensson said, our estimation is that SEK 1.5 million. It was a change to the order pattern, which normally would fall in Q3, and now it came on the last day of the quarter. Therefore, it probably slightly inflated. Time will tell. If they go back to the normal order pattern, that would indicate that we've moved about SEK 1.5 million from Q3 into Q2 as a result of that. It's too early to say right now.
It is a changed order pattern. That's why we want to call it out, that maybe the reported number is maybe slightly overstated or inflated because of that. It could also potentially mean that Q3 will be missing that SEK 1.5 million as a result.
Thank you.
Let me just confirm, we still see a strong underlying growth in the company. We still see, as you saw, we have more than 200 approvals. All the leading indicators continue to move in the right direction. This is just a fairly insignificant event, but it is an event, nevertheless, that can skew a little bit quarter-on-quarter comparisons.
Thank you. Could you share any comments on CapEx? When is it anticipated to ramp up? Any magnitudes appreciated as well?
I'm not sure we're going to magnitudes, but you have seen some of the CapEx in both Q1 and Q2, especially now in Q2. We expect that to continue in Q3 and Q4. Of course, if the clinical study, the big trial, is capitalized, which we don't know for sure yet, that's going to have a much bigger impact, but that'll come in 2026. The normal sort of product development costs will continue to be capitalized in Q3 and Q4 and onwards.
Thank you. Are you expecting any interim readouts from the RCT , or is it too early to tell?
Way too early to tell. Right now, we're in discussion with potential sites and doctors, and we are discussing the exact protocol and how that's going to play out. That's way, way too early to start to speculate on.
Thank you. As your sales force will double in the U.S., do you have a target in terms of coverage versus the current 10%?
I think we've disclosed that as part of the strategy. We've said by 2028, we want to have access to 30% of the market, and we want to cover 35 states in the U.S., which is about 15 states more than where we are today.
Thank you. For how long period does Catalyst have patent protection?
Yeah, we have a number of patents, approved patents, and we also have some ongoing applications. Right now, we are covered into 30 and 35.
Thank you. Moving on to the last question here. Do you agree with the consensus that Oss might do the same journey, if not a better one, than BoneSupport? Is it reasonable to expect similar growth and profitability?
I don't think we're commenting on comparison and how other companies have performed. I think we are obsessed with developing this company, and we're very pleased with the growth rates that we are seeing and how we're building the company, both in terms of the financial performance, commercial performance, but also equally on putting all the building blocks, the fundamentals in place relative to clinical data and so on. How that compares to others, you know, I'll let other people draw those comparisons.
Thank you so much for the presentation here and for answering all the questions. That was all we had. I wish you all at home a good day. Thank you for watching.
Thank you very much.