All right, so the ABGSC Investor Day continues. We have another very exciting company up next here. So it's OssDsign that will be the next company presenting. And without further ado, I will hand the word over to you, Morten Henneveld, CEO of OssDsign. Thank you for participating today.
Thank you very much, Rikard, and a warm welcome and a good afternoon to all of you. As always, when we do these presentations, we have a disclaimer around forward-looking statements. If you could move to the next one, please, Rikard. What I really wanted to talk to you about today is really to show you how we've, over the years, built a foundation and a platform that we can now use for acceleration and value creation. I also want to talk about the very transformative step we took with the acquisition of the Scottish company called Sirakoss last year, and then I want to go in and show you how attractive markets we are in today and also how we are addressing some real unmet clinical needs, and then last but not least, we launched our new 20 25 strategy called Ascend 25.
So I'll be spending some time walking you through that. So if we go to the next one, just in case there are anyone who don't know OssDsign, we are a Swedish medtech company headquartered in Uppsala, very focused on regenerative solutions for bone repair. We're about 50 employees and operate in 10 markets globally. And everywhere we operate, we operate fully patent protected and also fully reimbursed by the healthcare system. If you go to the next one, OssDsign is about 10 years old now. And really, the last four or five years was about getting ready and doing some preclinical work. And then we started commercialization around 2016. And then in the last couple of years, a lot of things happened. IPO'd in 2019, setting up the reg subsidiary in the U.S. Last year, we were also cleared for Japan and appointed a partner. We acquired Sirakoss.
Just a few weeks ago, we also announced the completion of a SEK 270 million rights issue that was completed, which was heavily oversubscribed at 185%. Clearly, a lot of things are happening. What I think is unique, so I want to spend some time about that, is really the commercial infrastructure OssDsign has built up over the last couple of years. Being a fairly young company, a fairly small company, this is quite unique. What it gives us is really a platform that we can use to drive growth. Right now, we are direct in the U.S. We operate with a direct subsidiary, but we're also managing a distributor network of approximately 60 agents and distributors. In the EU, we are direct in the U.K., in Germany, covering also Sweden direct. Then southern Europe, we cover with agents and distributors.
As I mentioned, we've also appointed Muranaka in Japan to be our main distributor. So currently, we are present in all the largest medtech company markets that you want to be in as a medtech company. So you'll hear me talking about that later, but that's how it looks right now. And that is really going to be our vehicle to drive future growth. Go to the next one. OssDsign is a company that's in the orthopedic industry. And what characterized the orthopedic industry is that we tend to treat degenerative diseases. So essentially, as we grow older, we start to suffer from various kinds of degenerative diseases. And when you look at the macro trends out there, they are extremely favorable to the orthopedic industry. We see a population plus 60 years likely to double over the next 30 years.
We also see an increase in average life expectancy. So what this means for us is that there will be a growing need for services like ours for many years to come. When we look at the orthopedic industry in itself, it is clearly dominated by the U.S., representing more than 60% of the world market, about a quarter in EMEA and the rest in APAC and rest of the world. So you'll hear me talking about that later also when we talk about the strategy, because clearly, if you want to be big, if you want to succeed as a company, you also need to succeed in the U.S. Go to the next one. Now, for the first 10 years of OssDsign's life as such, we've been focusing on what we call CMF, cranio-maxillofacial or cranial reconstruction.
Last year, we took a very transformative step by acquiring a company called Sirakoss to really start broadening out the company. And what the acquisition gave us was access to a very large and fast-growing orthobiologics market. It also gave us a portfolio and a product that is already 510(k) cleared for the U.S. market that is clearly scalable. And then last but not least, it's also both a business space, but also a product that has some very strong commercial synergies to where we already are with some very strong relationships to neurosurgeons. We see customers both using bone graft and using cranial reconstructions. We see it in our distributor network, also covering both businesses. And then last but not least, many of us in the company, both in the management team, in the U.S. salesforce, and in the board, actually have experience with this business of orthobiologics.
This is maybe new to OssDsign, but it's certainly not new to many of us. If you go to the next one. And what we'll do with the acquisition and the product called Osteo3 ZP is really to target spinal fusion. The product is cleared also for trauma indications, but as you can see from the slide here, clearly the biggest market and the biggest opportunity is in spine, and very much so directly in the U.S., where we already have a 510(k) clearance. If you go to the next one. And what it means for OssDsign is that with the acquisition, we will now have an addressable market, which is five times bigger than what it was before.
It also means that we'll be present in the two most attractive spaces in the orthopedic industry in terms of growth and certainly also in terms of gross profit, both growing around 7%, gross profit in excess of 70%, and in particular, orthobiologics typically sitting north of 90%. So with good underlying growth, good value growth, and also good profit, those we feel are very attractive places to be for a company like OssDsign. But if we just take a step back, because we are really here to address the unmet clinical need. So let me just try to give you a few examples. If we start with cranial reconstruction and we take that example, unfortunately, there are many people each year that suffer from some kind of traumatic brain injury.
It could be a trauma to the head, could be a hemorrhage, it could be a tumor, it could be other things. Some will need to be hospitalized, and some will need a decompression and the need for a cranial implant. Unfortunately, what you see in the literature is that quite a high number of those implants end up with infections. The range is actually enormous. We're speaking to some surgeons just in the last month or so who are reporting up to 20%. But clearly, we see infection rates around 10%, which is, in our view, way too high. So there's clear unmet clinical need. Similarly, if we take the example for where we now plan to go to market targeting spinal surgery with our orthobiologics product, unfortunately, as we grow older, many of us will suffer from back pain.
Some will also get what we call spinal instability and therefore have a need for a surgery. And essentially, what you want to have in that surgery is you want stability of what we technically call a fusion. So the implant that's inserted needs to be integrated with the body, and you want bone formation around that implant to make sure that it sits stable. What you see in the literature is actually up to one-third does not achieve that outcome. I think the common denominator is typically 20%. So one out of five patients actually do not achieve the desired outcome. So this is an enormous burden for the patient, of course, but it's also an enormous cost to society having to do a resurgery on so many patients.
Those are some real unmet clinical needs that we are addressing and will be addressing in the years to come. If you just move to the next slide, Rikard, please. And what we'll do is we'll do that with our two technology platforms now that we also have after the acquisition. If we start with our CMF technology platform, already from the very first study done by Karolinska in 2018, what we showed here was a 2% removal rate due to infection. So this is a very low number and something we're extremely proud of because it certainly sets us apart from what we see in the marketplace. And that number has actually proven to be very consistent. Just this year, we launched an updated post-market surveillance, and now it covers more than 1,000 patients, more than 181 hospitals from all over the world.
And we are still seeing that 2%. So I think it's fair to say that that is a number that we think that actually the industry should be looking at because it is something we're extremely proud of, and it's also something that clearly benefits patients. And of course, it's starting to attract more attention in the academic community as well with more and more peer-reviewed articles. If we look at the orthobiologics, now we haven't launched the product yet. So this is preclinical data. And what really got us excited is, as I said, when you look at the other synthetic bone grafts that are out there, they actually only perform about 80% of the fusion. So they don't get to the last 20% that I talked about before. There is actually only one product out there. It's not a bone graft. It's called BMP-2 or Infuse from Medtronic.
That product actually gets closer to the 90%-100%. But it's extremely expensive, quite often two to three times more expensive than bone graft. And also recently, there have been a number of adverse incidents because it's a liquid that it actually starts to leak into the body, for instance, and you start to see bone formations in places you don't want. So there's been a certain degree of skepticism for that product. So what really attracted us about the technology platform that we acquired from Sirakoss, well, that is when you do Preclinical Trials, you test it in something called a Boden model. It's a very discriminating rabbit model. And when you look at the other bone grafts out there and you look at their data in that model, they actually only achieve the outcome in 25%-50% of the time.
When we saw the data from Sirakoss, you see already after 12 weeks, we're seeing fusion rates around 90%, and actually, we get to the 100% after 26 weeks. So it is very, very promising, and it is the best preclinical data we've seen on any bone graft. And that's, of course, also what led us to do the acquisition. So what you're seeing now is really the platform that I believe we have in place in OssDsign that we can and we will use to accelerate growth in the coming years. But of course, also as an incoming CEO, you want to spend some time on really thinking about the business in the years to come. So the management team and I spent some significant amount of time conducting a strategic review of the business here over the winter.
That led us to come out with a new strategy called Ascend 25. And what that strategy, in essence, is a focusing of the organization on offerings for neurosurgeons and orthopedic spinal surgeons. And we intend to do that by participating in three different segments of serving this customer group with cranial implants, with bone graft, or the equivalent of orthobiologics. And also, we have an intent later in the strategy period to also come out with what we call more traditional spinal implants, but all focused on neuro and orthopedic spinal surgeons. And to do that, we've set five strategic priorities for the company in the years to come. If you go to the next one. I think the way to think about that aspiration is really the last year's goal around building foundation.
The next three years will be about expanding and investing in portfolio, in footprint, and in clinical data. And then when we get to 2024, 2025, that's where we are going to have the scale where we can start to get much more focused on cash flows and profit and business optimization and so on. And as part of this process, we also took a revised view on our financial ambition. And we now have a financial ambition of reaching SEK 300-400 million revenue by 2025 and also to become cash flow positive from operations by 2024. So those are the two new financial ambitions that we've set for the company. If you go to the next slide. And in order to deliver on that, as I said, we have five very clear priorities.
One is winning in the U.S., and in essence, that is all around accelerating our KOL, our surgeon engagement, and our footprint. Then, of course, number two is we need to build the orthobiologics business. This is the business we acquired. We're setting it up right now, and we will commercialize and launch it in the second half of this year. Then we also want to really drive innovation and start to build a bigger and a better portfolio. As I said, we have the commercial infrastructure in place. We need more products out there. So that's also what we intend to do. Number four priority for us is a very significant acceleration of our clinical programs. This year alone, we are likely to spend three-to-four times of what we spent last year. So a very, very important aspect of the coming years for OssDsign.
And then last, but certainly not least, as we start to get more scale into the business, we start to build more volume. Of course, we need to be extremely vigilant and mindful of our COGS levels and our delivery time and keep optimizing that as we're building robustness. So those are the five priorities for the company. But when you also focus a company, it also inevitably means that you have been doing things in the past that may not fit that picture anymore, unfortunately. One of those places for us is Dental. We published some data in August actually showing that we can replicate the same strong bone formation with granules used for the dental space. But the dental space is very different to neuro and orthopedic surgeons. It's a completely different dynamic. It's a different customer group.
So while we think we may have an offering here and we may consider outlicensing or other things similar of that kind, you're not going to see OssDsign moving into the dental space. Similarly, we have worked with surgeons all period of time to really try to find a good solution for them to deal with some of their facial reconstruction. We also just have to admit that the needs are very fragmented. They're very different in the market. And we haven't yet come to a point where we can say that this is a fully marketable product. So we're going to take a step back now, reassess that potential, and also reassess the clinical usage before we can confirm that that's a product that will stay in our portfolio. If you go to the next one.
And the reason we're also deselecting certain things is because we think there are so many opportunities for us to drive value into the company in the coming years. As you see here on the slide, we expect to have a number of regulatory approvals in the coming years and also longer term. On clinical, we're going to keep building the cohort that we have in our post-market surveillance. We're going to start a number of Preclinical Trials. We're going to start a number of Clinical Trials on our new bone graft product. And then we're also going to launch and set up two registries in the U.S. for cranial and for our new Osteo3 ZP product. And so over time here, you'll see us start to come out with a lot more data than what we've been able to do historically.
And then, of course, we have some commercial milestones we need to hit. So just to summarize what OssDsign is, I truly think OssDsign is very uniquely positioned for growth. We are present in very attractive markets. We clearly have, as you saw, a very differentiated technology that is showing some very strong outcomes. We already have the commercial infrastructure in place. Of course, we'll start building that, but it is there, and we can use that synergy right now. We're also extremely well positioned for the U.S., which you saw is a must if you want to be successful in the orthopedic industry. And then we've come through, we're still not quite out of it, but we've come through the COVID pandemic very well. And now we also have a very clear line of sight to what the company needs to do in the coming years.
So I think the summary of all that for me is that OssDsign is uniquely positioned for growth.
All right. Excellent. Thank you very much, Morten. We'll move into Q&A. And the first one from my side, looking at your current commercial infrastructure in the U.S., you mentioned that you have roughly 60 or so agents and local distributors which you work with. Are you happy with the sort of size and reach of that as of now? And can you give an approximation of how much that base will have to expand in order to reach your long-term targets of between three to 400 million SEK sales in 2025 there?
Yeah. To me, Rikard, and it's a good question, of course. But to me, it's less around the reach, actually. It's equally much around the deepening, right? The U.S. has some really big states. As you know, we have 10 focus states that we focus on, being the East Coast, California, Texas, and Florida. And then we have some selected metropolitan areas. We cover those well. But I also think there are much more to be gained just through that focus than necessarily broadening out. But we do have an intention that over the next five years, we also want to be present in six to eight more states with more heavy presence than what we are today.
Great. And switching gears a bit to Japan, can you talk a little bit about why that's a very interesting market opportunity and perhaps talk about the potential of that market as you see it?
Yeah. I think Japan, by default, for any medtech company, is extremely important. It's typically a fairly high price, which means you have, well, you get good prices, but you also have good profitability in that market. It's also, for most medtech disciplines, actually the second largest medtech market in the world. So that makes it in itself attractive. Then it is also attractive because there are some very, I would say, instrumental key opinion leaders in that market, also key opinion leaders that international surgeons are looking at and referring to. So to me, that's really the attractiveness. There's both a longer-term positioning aspect, but there's certainly also just an immense growth potential in that market.
Sure. Absolutely. And some investors might, historically at least, have been a bit concerned about the scalability of OssDsign's business. You touched upon it in the presentation, but it would be very interesting to hear more on how we should think about the scalability of the business going forward.
Yeah. Yeah. No. And listen, it's a concern I understand, right? We are in patient-specific. We have historically been doing patient-specific implants. Now, I don't think that we've reached how we've really seen and demonstrated that we can get more scale into that business, which I'm sure that we can. And we also just launched a product last year in the beginning before the pandemic called Cranial Plug, which is also a cranial volume-based, more of the shelf-type product. So I don't think we've quite demonstrated to the market yet that we can get more scalability in our CMF business. But of course, with the acquisition of Sirakoss, that is a truly scalable product. It is batch, it's volume production. It's typically also volume selling. So you're selling in bulks.
And what it means also with our current commercial infrastructure is that we don't need to necessarily go out and start recruiting lots of salespeople to run with the new product because we actually have people in place speaking to surgeons who are also using the bone graft product. So we also see scalability effects in terms of our own infrastructure.
Great. Great. And just a final one from my side. You have a quite ambitious study program here lined up. Can you talk a little bit about the cost structure there and how important this study program is for the commercial side of OssDsign's path going forward?
Yeah. Yeah. I think the way to think about our clinical programs is that really you can put it into three boxes. We have some Preclinical Trials. We have some Clinical Trials. And then we have our Registries. And if we just start backwards, in spaces where clinical data is not that great, Registries become extremely important because we're going to build up our own Registry. And what it means is that we can, first of all, we get a big patient cohort into those Registries, but we can also get time series data so we can follow patients.
And then I think equally important, we get a lot of data points so we can start to publish, and we can also start to say something very meaningful on, for instance, how we are dealing with or performing for very troublesome patients, typically diabetics or smokers that have issues actually going through and forming the bone that's needed for that. So I think the Registries are there. The risk profile, I would say, is very low. There is, of course, some cost associated to running the Registries. Then we have Clinical Trials. They're fairly small, a Prospective Trial on Cranial Plug in Europe. And we're also going to do what we call a first-in-man. It's a study called TOP FUSION on our new bone graft product, which will be fairly small, and it's likely to be completed by this year if all goes well. And then we have two preclinical.
You may ask, why do we do preclinical when we already are about to commercialize? Well, we want to have more clearance. We want to have a standalone clearance on the product, which today you need to mix with the patient's own bone. That requires a Preclinical Trial, and then I think very importantly also, we've seen some very promising osteoinductive potential. So, osteoinductive, meaning that we can actually grow bone in non-bony sites, for instance, a muscle pouch. No other product currently can do that other than this BMP-2 product that I talked about, so we think that actually warrants a proper Preclinical Trial.
Great. Thank you very much for that run-through, Morten. In the interest of time, we'll have to cut the presentation here. But thank you again for participating. Wish you the best of luck going forward and have a good day ahead.
Thank you very much. Thanks for having me. Have a good day.
Thank you.