Wonderful to be here. It is our first Capital Markets Day. It will be nice, hopefully, for all of us to actually spend a bit more time deep diving into the business, as opposed to those very short 20- 30 minute conversations that we often have. It's important that we have quite a lot of dialogue and interaction, hopefully, today. There are going to be times where we can have some good questions and answers. My colleague as well is going to do a product demonstration, which I think we'll all enjoy. I think you all know who I am. You've all heard me talk probably too much. I'm joined here today with my colleague, Dr.
Bandla, who's been really pivotal in a lot of the work that we've done on peripheral neuropathy and has worked in Singapore with our relationship with the National University of Singapore, and then more recently working directly with Paxman. You will really enjoy hearing from Aish today and learning a lot more about the exciting future we have in the space of peripheral neuropathy. A quick rundown of what we're going to be talking about. You are going to hear from me, obviously, an introduction. We are going to talk about that commercialization journey of the CIPN product, which I think you're all keen to understand what that timeline looks like and what the risks are associated with that. We are then going to touch on, from Dr. Bandla, the clinical overview and that product demonstration, which I hope you'll enjoy.
I'm going to not try and bore you too much with reimbursement, but it's obviously a number one priority for the organization and business. I'm going to deep dive into U.S. reimbursement a little bit so you can understand, hopefully, a little bit more about that and then the opportunity. I'm going to talk about post-acquisition or post-merger with Dignitana and what that integration looks like and ultimately what the figures look like based on that. Then a summary and some closing remarks. As I said, throughout, there'll be some Q&A sessions as well. Remembering our vision, or what our vision is today, and this will change, and I'll share with you what that looks like at the end of the presentation.
In reality, what we want to be able to do is make sure that all patients, no matter where they are in the world, have access to our scalp cooling technology, which really has a huge impact. I strongly do believe that together we can do this. Perhaps not all patients, but remembering we're only scratching at the surface. I know looking at some of the reports of late, perhaps people want to see more results, better results, quicker results. The reality is we're heading in the right direction with strong momentum. This year is about building the foundations for the future of our business. That future looks incredibly bright and exciting. We have a huge opportunity, not only in the space of chemotherapy-induced alopecia, but also chemotherapy-induced peripheral neuropathy. There's about 20 million cases of cancer every single year around the world.
We estimate about 3 million- 4 million of those are receiving some type of chemotherapy that will cause hair loss. If you look at our global traction, we treat less than 1% of patients. We have the opportunity to do so much more, not only just in the U.S., which is where most of our focus and investment is, but actually many other markets as we start to gain momentum. By 2031, or 2040, sorry, that estimated number of cancer patients is up at over 30 million. Even with changes in potential drug types, there is still a huge amount of alopecia-causing chemotherapies, which will cause hair loss and need interaction with either our alopecia product or our neuropathy product. In terms of where we are today, not including our friends at Dignitana, just a reminder, we have about 4,000 active scalp coolers installed.
Not all of those are generating per patient revenue, of course, which is unfortunate. We'd like to see more, and that's a longer-term vision. About 1,200 of those, if not more, are creating that per patient income or recurring revenue, as we often call it, although not your typical recurring revenue. We operate in 60 markets globally. Our focus really is not 60 markets, very much focusing on the U.S. operation, some European markets, and some Asian markets. We have so much more potential. We've treated well over 100,000 patients today. Those of you that had heard me speak before will look to the United Kingdom. We have 99% of the National Health Service using our technology on a daily basis, pretty much standard of care.
If we can do this in an underfunded socialized health system, there is no question we can't do it in other developed parts of the world and do it well. As I said, this long-term vision of ours is looking very, very bright, and we are well on our way to an exciting future. Onto the commercialization horizon. I'm not going to start talking about the prevalence and what CIPN means. I think we're going to hear directly from Dr. Bandla on that. What I am going to talk about is some of the opportunity, but also some of the value that we talk about when we're looking at peripheral neuropathy. First of all, the regulatory pathway. If you look for the U.S. market, which is our number one priority, we started the project early in 2025. That was really about a design freeze.
We didn't quite finish our design freeze as we wanted in January or February. It moved on a little bit as we learned a little bit more from our clinical trials. That has allowed us to start preparing all our technical dossiers and then start regulatory testing. We unfortunately got Breakthrough Device Designation declined from the F D A, which felt a little bit of a setback. Actually, in reality, looking at it, we're pretty confident with our new approach with STeP, and we'll still get many of the additional benefits, which I'll touch on, from the STeP program. We've had STeP feedback, as you all know, hopefully, in this room. That is approved. I'll touch on what that means for us. As of November, we've completed all our biocompatibility testing, all our 60601 and safety testing and electrical testing.
We've passed all those, which is fantastic. That is a very positive step in this process. That means we've now got all the data we need, including our clinical data from Singapore, to present to the FDA in December. We are bang on track for our December submission, a little later than the November piece that we'd wanted, but still on track. Because of the work that we'll be doing with the FDA, we believe that our device can be accepted, cleared is the right terminology, by April 2026. We'll talk about commercialization later. From a BSI timeline, so that's our European regulator, very similar process, very similar data, using the same 60601, using the same biocompatibility. We expect to submit to BSI, which is our notified body, at the end of the year, again with device accepted by April 2026.
In addition to STeP, which is the FDA route, we're also in early talks with our European regulator to look at some additional supportive approaches to getting our device approved or cleared quickly with some additional support from those regulators to make it as smooth as possible and de-risk that process as well. In terms of STeP, I think you'll have all probably seen the press releases. In reality, while this device is not considered lifesaving, so that's one of the reasons why we did not get breakthrough, it really offers that significant risk reduction and safety enhancement. There are two rationales here. What we're doing is we're reducing the side effects of an intervention, which is chemotherapy, making that treatment overall better and safer. We're also reducing the occurrence of serious adverse events as well.
In other words, this is an absolutely appropriate technology for this process. What it will help us with is that expedited one-on-one approach with the FDA to ensure a smooth sailing device clearance. I think many of you may be considering our timelines as being quite optimistic. I think it's also important to think that we've really looked at this from a de-risking perspective. We are very confident in our approach. Apologies, this keeps moving down a little bit. Let me see if that works better. Is that okay? Yeah. Apologies. It's not working very well. That is better. I don't want to hold it like I'm Kylie Minogue. If we look at the different areas, looking at sort of clinical evidence, a number of us have said, actually, why is Singapore evidence going to be appropriate for this approach?
We believe phase II data will be absolutely right. We've already had communications with our friends at the FDA, and they are already very satisfied with the data collection we've got. There are historical controls. There is very clear information on prevalence. There should be no reason why this is not accepted. However, what we've done is mitigate that risk by opening a clinical trial up in Boston. It's a smaller randomized control trial. That will allow us to provide very early randomized control data if the FDA so need it. In terms of the regulatory pathway, they may want further evidence. They may want extra data and clinical data. Again, based on STeP, you're actually allowed to use post-market data as well, so longer follow-up after clearance looking at efficacy and safety.
When I did this presentation earlier on, there were some concerns about government shutdown and delays. Thankfully, the FDA or the government in the U.S. have finally reopened. That is now mitigated. We're up and running and no chances of delay for review there. There are some concerns potentially around our quality, our production, etc. Again, this is tried and tested. This is not our first rodeo, as you might say. We know the route. We've got tried and tested manufacturing procedures, a good and enhanced quality management system in place. We're pretty satisfied that those risks are mitigated also. I guess possible delays from an FDA standpoint. We have the data. We have the testing. We have the processes in place. We're pretty confident that these risks are mitigated and our timeline is fairly accurate. All the risks are manageable.
We've got that support from STeP and sort of external timing from the FDA shutdown. They're back up and running. All in the right direction. Our go-to-market strategy might be a little bit different for CIPN. I think it's very clear that there's synergies between the products that we have, same patient, same nursing team using the product, same physician in many cases, same healthcare practice. However, we do have to slightly look at it in a little bit of a different way. I think part of that is there is a potential expanded use of this product, not only based on different tumor types, different chemotypes that it might be applicable for as our indication widens, but also the demand and the interest based on the unmet clinical need and the debilitating effect of this side effect for patients and the cost to the healthcare system.
We also believe we may see some challenges in terms of the significant demand. That sounds like a good problem to have, and I believe it will be. Again, the reality is this has a huge impact on patients. We really need to be mindful about how we roll this technology out, when we commercialize, and really look at making sure that the facilities we're operating with are ready for the expansion. We need to push on greater provider evidence. Again, this is new. Hair loss prevention or alopecia has been around now for some time. We're going to need to start focusing on different stakeholders, different education methods to really get the word about CIPN and the prevention or reduction of CIPN out there. Both these challenges and opportunities are, for me, incredibly exciting.
I think, as I've said before, this potential opportunity for us could even be greater than chemotherapy-induced alopecia. Talking about the market potential and talking about patient experience and also patient management of what the sort of situation is today, we know that there's about 30% of patients that will experience what we call moderate chemotherapy-induced peripheral neuropathy. About 10%-33% of those patients will have what we call persistent neuropathy. That persistent neuropathy, which I'll talk about shortly, is when it can really become difficult and painful for the patient longer term, creating lots of cost for the patient and the healthcare system. We know that recovery varies from patient to patient and can really be depending on comorbidities of the patient or the regimen that the patient's having. We've also seen that chemotherapy-induced peripheral neuropathy can worsen after the treatment is finished.
In terms of what's being used today, we know that there's been really limited pharmaceutical options to prevent or reduce peripheral neuropathy or even treat it once the patient is also having neuropathy. There's a very low satisfaction with the patient and the providers in the prevention and treatment. There's some use of off-label drugs, but again, they don't seem to work very well, and there's side effects of these drugs. Other non-pharmaceutical approaches such as occupational therapy, physical therapy, and exercise and other things like prescription cannabis really aren't sort of having as much impact as one hopes. Acupuncture has earned some promise, but it's about the management of the side effect rather than the reduction or prevention of it.
Again, lots of time and effort being spent on trying to support patients through this difficult side effect, but nothing as of yet other than our device has really shown promise. Again, back to that opportunity. We have a huge opportunity to support this clinical unmet need. I've put a couple of slides in here really to talk a little bit about the value proposition or the value that we can derive from offering this prevention treatment. It really is significant. The incremental costs for society, for patients having peripheral neuropathy, can quite easily exceed $15,000 per year per patient. What we found with scalp cooling over the years is we've really struggled with any sort of health economic or tangible data to talk about economic impact. Yes, we know it has an impact on quality of life.
It can impact workdays, etc., but the available data is limited. Whereas with peripheral neuropathy, there is already some really interesting and valuable data. That will help us drive our pricing strategy going forward. We believe we can derive more value, a higher price point for our device and for the treatment based on the financial impact that it has for a patient, not just quality of life. If you look at the prevention costs that are used today, again, we've already touched on there being limited recognizable options. Medical massage therapy, which is quite often used—it's back again—quite often used can cost anywhere from $700 to $1,000 for 12 weeks of treatment. Compression therapy alone can be anywhere from about $40 to $300.
What we tend to see is payer coverage, and we're experienced with this, is often burdened by the patient, a little bit like we see scalp cooling today. In terms of what a patient has got CIPN, so the treatment of the side effects, there's some different approaches. Some patients will have drug therapy. Again, depending on whether they're going to be using on-brand drugs and off-label drugs, can be anywhere from $44 up to $14,000 to manage the pain and the symptoms. Acupuncture, again, ranging from $300 to $800. Other things like exercise therapy with some level of reimbursement, about $2,500-$3,500. There are some newer technologies to help treat, which are like TENS machines, which can cost up to $18,000.
As you can see, and apologies if this seems like I'm burning on the pricing points and the cost, but it has a huge financial impact for the patients. We must try and prevent that and reduce that longer term. Grade 1 peripheral neuropathy, which you typically see in about 60% of patients, can cost anywhere from $4,000 to $18,000. Grade 2, which you see in between 30%-40% of patients, anywhere up to $23,000. Grade 3, anywhere up to $30,000. Just think what we can save the healthcare system if we can prevent or reduce this neuropathy to a small percentage of that population, which Aishwarya will talk about later on.
That prevention, that cost reduction from a healthcare perspective, from a patient perspective, allows us to drive up our overall price for our product as well, while still, of course, being fair to the patient and the payer. This just gives you a summary. I'm not going to go into that. That total annual cost of preventing and treatment can cost anywhere from $3,000 to $30,000 per patient. Commercialization. You've seen what we've done in the scalp cooling space. I'm not going to regret our approach, of course, but perhaps we've not been as focused as we should have been always in our earlier years. With peripheral neuropathy, we've learned an awful lot from our efforts in scalp cooling, from market entry and commercialization to market access and reimbursement. We've got a very clear strategy with peripheral neuropathy.
What we've also got is an amazing distribution network and some of the best end users in the world in terms of healthcare providers. Our focus is going to be primarily on the U.S. market, followed by, of course, our British market. Sorry that we're not putting Sweden up there as number one, but you've not accepted scalp cooling fully, so we won't be pushing peripheral neuropathy just yet. Singapore, of course, because of our relationship with the National University of Singapore. And then most likely one European market. That will probably be Germany based on the sheer size. Also, there's some momentum from our competitor in that market as well. In terms of our business models, the U.S. will be very similar to how we position ourselves currently.
We will be installing the capital equipment into the cancer centers that we already work with, and that's now over 900. We didn't have that when we launched our U.S. scalp cooling business, so we've got a really strong customer base already. What we will probably do, though, is either sell some of that capital, but more likely we will rent that capital to our U.S. customers. That's back to this value piece. We strongly believe that reimbursement rates will be higher to allow us to generate more revenues and margin from our customers in the United States. We will then have a consumable element to the product, which you can see just down here, and that will be the gloves and the boots. Very similar to the cooling cap we have today. That will be where we generate the majority of our income.
Our price point for scalp cooling is at about $1,800-$1,900. We expect to derive a much better price point for our gloves and boots. Of course, there is some more cost element to those garments, but over time, we'll be able to pull some of that cost out and maintain some strong margins. Our European approach is still yet to be finalized. As we all know, socialized healthcare is slightly different than the pay-for-use type of approach and privatized healthcare in the U.S. We do believe we should be able to derive some more recurring revenues or per-patient fees based on consumables or at least shorter use periods for the boots and the gloves. The U.K. will be our key test market. We'll be working closely with the guidelines, NICE guidelines, and other ways to get appropriate adoption by the National Health Service.
Germany will follow a similar suit. Our number one priority will be the United States. When we launched our U.S. business, and again, I've talked a bit about my naivety before, we didn't look at our reimbursement. We didn't look at how we were going to get paid ultimately. We've learned, as I said before, a lot about reimbursement, a lot about commercialization of products in the United States. What we're going to do is take a very different route to CIPN to the U.S. market. That means that what we're going to do is try and launch with CPT-3 codes. The idea is to launch, in essence, with our insurance-based billing model early on, reducing that burden that the patient has and improving overall access. What we hope is speed to market. We'll touch on some of the rationale shortly.
What we're doing is we've already submitted to the American Medical Association. That's the coding body that we've talked about a lot. Our CPT-3 coding application is currently being assessed. If that is accepted, we will hear relatively soon. We will then go to panel between the 5th and 6th of February. Of course, it might take multiple attempts with the AMA to understand this technology, understand the need. However, because we're so recently in front of that panel, we believe they will understand the concept, understand the process, and we think we're in a much stronger position to get early CPT-3 codes than we did do with our scalp cooling efforts many years ago. If it goes to panel in February, ultimately, we will hear by late February the actions from that and whether or not this is going forward
We will keep retrying if it doesn't. I want to assure you all, if it doesn't go in the first time, we will keep trying. That is not negative. It might mean that we just have to answer a few more questions, provide a little bit more data, re-explain our narrative or strengthen our narrative a bit more. We feel very confident that this is the right approach and that by January 2027, we may well be in a position to have probably two or three CPT-3 codes on a similar code structure to what we see with scalp cooling. What's also important to understand is that throughout this period, if you recall, and we all know about APC rates, mid-partway through, once it's announced that there is an appropriate CPT-3 code or multiple CPT-3 codes, Medicare will set an APC rate.
That means, yes, the APC rate might not be exactly where we want it. We've had those conversations before, but it is a really good start. We can start tracking the amount of peripheral neuropathy cooling and compression we'll be using, as well as billing for it under Medicare and with commercial payers. That is our plan. Of course, we'll adjust appropriately. There's still opportunity even on a self-pay market approach, but we think that going this way early on gives us a much stronger opportunity for a faster, higher-utilized product launch. This just gives you a bit of an idea about what our priorities are for 2027 and beyond. This really sort of sits around looking at our preparation for FDA clearance in 2027.
Because of the potential CPT-3 coding, what it might be is that we fully commercialize January 2027, but with a soft launch at the back end of the year. We start installing equipment, training on that equipment, selling directly to the provider, and therefore the patient thereafter. Not delaying it overall, but waiting for that sort of reimbursement piece. Over time, we're going to be looking at pricing strategy. We've touched on this just now, but where is the appropriate pricing point for scalp cooling? Sorry. I have a little bit of a cold. Then really working also on our guideline strategy as well. There is a lot to do through 2026, but we're very confident we're already making good traction. We're working closely with our partners, innovation partners, who've done a lot of work with CIPN over the last five years with scalp cooling.
They really understand this market. I did say this might happen. That's better. Yeah. They really understand our opportunity and really help guiding our approach. We're already having early-stage conversations with our providers who are working with scalp cooling already and looking at how best to roll this out in a sustainable but a reasonably aggressive approach. That will all depend on the sort of information we get back on our CPT coding strategy. Lots to go at, lots of interest, of course, and looking forward to launching at some point in 2026. Just very, very briefly, one of the key focuses that we're working on at present is readdressing our Paxman brand. Now, it's not a full rebrand, don't worry. Our messaging will be similar. We've spent the last 25 years looking at scalp cooling. Everything is Paxman scalp cooling.
We're in the process now of really putting ourselves in that position of side effect management. Over the coming months, you'll start to see new messaging, really preparing for our launch into this new space. This just gives you some ideas of what we might look like. We're very excited about this, and this will be the sort of early launch of our new product and our new branding strategy. On a final note, before I let you speak with my colleague, Dr. Bandla, I really want to emphasize the interest in this potential technology. It is incredibly exciting, the global interest we're seeing for chemotherapy-induced peripheral neuropathy. We've been at Birth Mask earlier in the year and more recently at ESMO, presenting both sets of our data releases.
You'll listen to Aishwarya talk about our data and how strong that data is, but also we filled the room with 200 people at ESMO. ESMO is one of the largest oncology conferences in Europe, and it is incredibly competitive. Multiple ongoing sessions at the same time to fill a room like that really does confirm the absolute market potential we have for this product. We are on track in terms of our regulatory timeline. We have some very clear commercialization plans. We are already seeing a huge amount of interest from our network that we are working closely with from a scalp cooling perspective. Our partners are paving the way for a very clear reimbursement strategy, unlike we had for scalp cooling when we first launched, and that was a success. Looking forward to 2026, and I'd like to invite my colleague, Dr.
Bandla, up to talk a little bit about peripheral neuropathy, a clinical overview, the prevalence, and then more importantly, the clinical data that we have. Thank you very much. As I've said before, Aishwarya has had a huge impact from the National University of Singapore. She's been involved in the product development, clinical trial development. She's a pretty impressive lady to listen to. I'm going to hand over to her now and welcome you to the stage.
Thank you, Rich. Let me try my luck with the mic. I hope you all can hear me. Hi, I'm Aishwarya, Clinical Innovation Manager at Paxman, and I also hold an adjunct appointment as a research investigator at the Institute for Digital Medicine at the National University of Singapore.
Very pleased to be speaking with you all today, and I hope to dive a little bit deeper into the clinical overview and sort of starting with the why of CIPN and really what this means to the patient and the physician in terms of the impact and also what the solution has to offer. So often, CIPN is described as a silent side effect and also comes with a significant clinical impact. Richard touched upon that a little bit. But looking at these two words, the silent and the significant, when we move into the silent, what patients and physicians often speak about is that they are not able to understand what CIPN really is until they actually face the side effect itself. Numbness, pain can be perceived a little bit when explained, but when a patient really faces those symptoms, it's a whole different game for them.
That really manifests in the form of interfering significantly with the activities of daily living, which we often take for granted. Imagine buttoning a shirt with pain. Imagine using utensils with constant pain. Patients often describe as they having to feel like they walk on air when these symptoms start to manifest. This is just a few weeks into their chemotherapy while they are also dealing with the other effects of chemotherapy, cancer treatment, the emotional side effects, and whatnot. That's the patient side of it. Looking at the physician side of it, CIPN is often described as debilitating and also dose-limiting, which is the key word for the physician. Why dose-limiting? It's because CIPN can continue to manifest in an increasingly painful way that sort of interferes with the patient's life in general.
Also, the experience of neuropathy can tend to make the physician reduce the dose of the cancer-curing chemotherapy, and that results in a double whammy, the patient not being able to get cured of cancer, but also resulting in often a lifelong manifestation of these symptoms. You can see all these keywords on the screen, which talks about the symptoms, but really what it manifests for the patients in terms of daily living. Describing and understanding what the problem is, is often half the solution. We are in a good place as a society and community that the awareness of what CIPN is and the need to sort of prevent this rather than just manage it and treat it is becoming more and more among the community of not only physicians, but also patients.
That sort of brings home the point of the prevalence because, as Richard spoke about, this is seen as a side effect in a large number of chemotherapy drugs, which often are treatment to the largest cancers in the world, a lot of female cancers and also gastrointestinal, which form the largest percentage of cancers in the world. The symptoms have been reported to be about close to 70% in the first month of completion of chemotherapy, and that's when the patients start their cancer treatment along with a whole load of other effects to manage. For several patients, it continues to progress to grade two. Grade two is when the pain becomes severe and starts interfering with activities of daily living.
When not attended to, not prevented, or the incidence is not reduced, it can go on to be lifelong, sort of altering with their way of living. The global prevalence for chronic and painful CIPN has been reported to be over 40%. Like I spoke about, the patients who are largely affected by this are treated by platinum-based agents or taxanes, which are the drugs which are used to treat the largest cancers in terms of the population effect, which are gastrointestinal and female cancers. We have taken a look at what CIPN means to the patients and the physicians. We have taken a look at the prevalence and what is really out there in the world to tackle this. Currently, management of the side effect is the most common sort of go-to for patients and physicians, which means it is painkiller symptomatic treatment.
Apart from that, looking at treatment, Richard spoke about some emerging therapeutic interventions such as acupuncture and exercise, which have been shown to treat it well. Like I spoke about, going back to the awareness in terms of patients wanting to tackle this serious debilitating side effect, they want to really prevent it rather than treat it. Think about a large portion of us going back to a computer-based job or even just typing on our phones with constant pain. None of us want that while going through an already painful experience of cancer treatment. Looking at prevention, what has really worked well in the world so far is cryotherapy. There has been a lot of evidence in studies with frozen gloves, which is currently the standard of care for cryotherapy for CIPN prevention.
Those studies have given us an idea of how efficacious cryotherapy can be for preventing or reducing the incidence of CIPN. Looking at frozen gloves, as we all can imagine, dipping hands and feet into buckets of ice for three hours is not a very pleasant experience. Unfortunately, patients are willing to go through that pain so that they can prevent CIPN, lifelong sort of incidence of pain from occurring. I've heard from a lot of patients whom I've worked with during my PhD work in cryotherapy for CIPN prevention that the awareness in patient groups is becoming more and more, and more patients are wanting to get cryotherapy for CIPN prevention. That prompted us in Singapore to look at whether a technology solution can be developed for delivering cryotherapy in a safe, tolerable manner, very similar to scalp cooling for chemotherapy-induced alopecia.
Our initial studies in Singapore a decade ago showed good efficacy and primarily safety of cryotherapy for CIPN prevention. Based on that, we started working with Rich and team at Paxman, who have the expertise and global leadership in designing and delivering cryotherapy solutions for a very specialized environment as a chemotherapy suite. From then, the journey of a decade began. We started developing, ideating the design for a very user-centric and bespoke solution for cryocompression for the chemotherapy suite. You see the most latest version of the solution here. The design process over the past few years has been a very interesting journey, starting with initial low-cost prototypes, iterating to an alpha version, to a beta version through several clinical trials in Singapore, and now to the U.S.. I'll speak a little bit about those in just a bit.
The other important and interesting aspect of the device development goes on to the intensive usability feedback that we have sort of built into the studies, right from the ideation to the trial-ready prototype and to the current clinical studies. Those have really helped us to develop the device in such a way that it is user-centric, and user-centric not only for the patients, but also for the nurses who will be delivering this device to the patients in the chemotherapy suite. A clear evidence of that is you can see the evolution of the different prototypes, starting from the alpha, where the wraps cover all the way up to the arms and the legs, and to the more sleeker version, which you see in front of you today.
Those have been a result of plenty of usability feedback from not only Singapore, but also the U.S. and the U.K.. I just would like to reiterate that the current version you can see is compact and miniaturized in terms of the refrigeration unit, but also very sleek and user-friendly gloves and boots, which the patients are comfortable using during their chemotherapy cycles and regimen. Looking at the results from the clinical trials, our pilot studies were conducted in Singapore, the phase one starting a few years ago, which has now progressed to the phase II. Until now, we have about three different sites, including public and private oncology centers, and close to 100 patients have been enrolled to the study, out of which most of them have completed all their planned treatments, and several of them undergo both scalp and limb cryocompression.
There were a few patients who withdrew from the study due to several reasons. It can be intolerance to the chemotherapy itself. Results overall indicate that 76% of the patients did not experience CIPN, and only 3% developed grade two CIPN, which is the cause for concern for the lifelong debilitating effect. These were measured using clinically significant measures of CIPN, which is called the CIPN20. You will see that in the next few slides as well. A point of interest will be that the therapy is delivered at a cooling temperature of 11 degrees Celsius, and that is for three hours and found to be safe and tolerable across populations. This study also helped us to prove in the Singaporean population that concomitant scalp and limb cooling is safe and tolerable, which was a concern for ethics bodies.
We've shown that repetitively in a population of about 100 patients in Singapore and across the U.S. now. Another point of safety was that cooling a large portion of the body did not affect the core temperature, which is called core hypothermia, given that we are cooling for about three hours. That's some promising data from Singapore. Looking at the expansion of the study in the U.S., the phase III study is supported by the National Cancer Institute and led by principal investigators from Columbia University, New York, and University of Washington. This study aims to recruit about 777 patients across 25 sites in the U.S.. We have all of them set up, up and running, and the study has accrued close to 500 patients already and is continuing to accrue well.
This study hopes to provide definitive proof on the efficacy of cryotherapy in terms of cryocompression or continuous compression in the population of these close to 800 patients. The measure that we are looking at, as I pointed out in the previous slide, is the CIPN20 score at 12 weeks following the chemotherapy. There are other objectives that the study looks at as well, but the primary objective being the CIPN20 score, which is the incidence of grade two neuropathy. I spoke about the usability feedback from these studies. The initial studies in Singapore and the U.S. use these versions of the device, and we have now incorporated the continuous usability inputs into developing our latest version of the prototype, which you see here. That is currently deployed in Boston, like Richard Paxman was mentioning, at the Dana-Farber Cancer Institute.
It is going to be a randomized control trial to look at comparing the efficacy of cryocompression versus no cryocompression as the control, and also looking at self-reported CIPN20 scores from the patients, apart from safety and tolerability endpoints. With that, I would like to invite you all to look at how the device operates. Let me try and go there. Looking at the device itself, this comprises a few different aspects to it. This is the portable miniaturized refrigeration unit, which also has a feature to provide cyclic dynamic compression. From our initial studies in Singapore, we've found that that aspect of compression helps the patients to better tolerate the cryotherapy itself and down to lower temperatures, which helps drive the efficacy in CIPN prevention. This also comes with a handle, which is easy to use.
In the chemotherapy suite, this device will be mounted on a trolley, which can be moved around between the storage space and the chemotherapy suite and in between patients across uses. Similar to the scalp cooler, this has a coolant, which is circulated through the coolant lines into the wearables, and that is maintained at a steady 11 degrees Celsius, which is our therapeutic temperature. The compression is equivalent to a mild BP cuff experience, 5-15 millimeters mercury. The wearables, again, like you saw in the slides, have evolved with a lot of usability feedback from the patients and the nurses. The wearables are of two types. These are the gloves. You can see that it has a little thumb here, and the hand sort of rests here, and there is a band to secure it in place.
This comes in two sizes. There is a regular, and we have a larger size for patients to accommodate differences in anthropometry. This also has a nice little window here with a thermochromic ink, which can indicate if the device is cooling or not. That is a quick visual indicator for the nurse to check if there are any connections which might have been not in place and helps to continue treatment. When they need to at all take off the device, it can be quickly removed, placed on the side, and the break can be taken if need be. That is the glove, and we have a boot. It comes with similar straps, and this has a little elasticated band. The patient can slip their feet into this, and the strap can be helped to secure the boot in place.
This also comes with the thermochromic window to indicate if the cooling is at the right temperature. The boot is interchangeably used on either leg, whereas for the hand, we have a left and a right glove. The screen has also been, the software has been designed to be minimal intervention by the nurses, plug and play as much as possible. The screen shows in bold what is the time remaining for the pre-infusion or the chemotherapy infusion and the post-infusion cooling times and a status to show that it is okay. If not, it draws quick attention to the nurses in a busy chemotherapy suite environment. I think we have a break later where you all can try out the device if you would like. I think that's about it from me.
Thank you, Dr. Bandla.
Thank you very much. I'll see my mic is on, I hope. Please stay here because we're going to do some questions both for you and for the Q&A. CIPN topic. I prepared some questions. If you have some questions, please feel free to ask. We have Anna, my colleague, who's going to be going around with the mic. If you are very eager to ask a question, you can just shout it out, and I will have to repeat it for the live, just so you know. Shall we start with a general thinking? Focused approach to the launch. You've seen what you've done. We've seen what you've done with the scalp cooling. What are the lessons you've learned? You mentioned that you've learned a lot from the scalp cooling, but what exactly? What are you taking with you to the CIPN launch?
Yeah, absolutely. When we launched scalp cooling, we spent a lot of time on the regulatory piece, the clinical piece. That took many years, of course. Ultimately, without really thinking about, and now I'm saying it out loud, it always seems a bit silly, but who will pay for the product? How will it be reimbursed in reality? We were a small organization of about 25 people turning over less than GBP 2 million. We also didn't have the resources to look at both clinical, regulatory, and reimbursement. Where we are today, we're in a much stronger position. We have the resources not only to support the clinical and the regulatory, but to focus on how do we get paid, where is the value, who should pay for it. In addition to that, we've been through this process.
Early on, we worked very closely with reimbursement consultants to start developing how do we get on the guidelines, how do we network and work closely with the American Medical Association, the commercial payers. All these things happened two years after we launched the product for a number of reasons. We're now doing all these things. We've already started, so we're well ahead of the game. That speed to market, that speed to adoption will be quicker. In addition, we've built relationships. We've seen what works in cancer centers. We understand how to manage the patient appropriately, how to get appropriate buy-in from the nursing teams and the physicians. Not always perfectly, but we're doing a pretty good job. We can take all that information and have a really strong and positive outlook for CIPN.
Yeah. If we are talking a little bit about the pricing strategy, have you had any discussion, or should we just consider that higher than scalp cooling? Can we get some more flavor to that, maybe?
Yeah, a very good question. We've not set any pricing, and I don't want to provide you expectations, but I think maybe overburdened you with the idea of how expensive peripheral neuropathy is for a patient, for a payer today. If we can prevent that cost down the line, an ongoing cost as well, it's not just a one-time cost, hospitalizations of patients, et cetera, then what we believe is that that upfront consumable element and that rental of that device can be more than scalp cooling. Can it be double the cost of scalp cooling, potentially? Could it be more? Those are the sorts of things that we're addressing at the moment with payers.
Part of our approach is a lot of sort of payer interviews, discussions, again, stuff that we didn't have the same opportunity to do with scalp cooling to get early feedback so we can set appropriate pricing from a commercial perspective. As we know, Medicare will do what Medicare wants, but our commercial payers are different. They're the guys who will really see that long-term saving by offering peripheral neuropathy, which we can't demonstrate with scalp cooling.
Yeah. We have a short one from the chat, and I'd like to remind you all who are listening in on live to ask questions in the chat as well. There's one wondering about representation in Norway, and that maybe we can talk about the launch in Europe. Germany is the focus, but above Germany, what are we thinking?
Okay, so 2026 is those key markets I've shared with you. The reality is we will start working on regulatory packages and reviewing appropriate partners in other markets. Again, I'd be lying if I sat down and stood here today and said Norway is a number one priority for us. In reality, and unfortunately, it's not. What we can't do is the sort of scatter grid approach that might have previously been taken. We have to look where the appropriate demand is, the appropriate population, and then potentially the appropriate level of reimbursement. Those are the things that we're reviewing now of which key markets are next. Japan, of course, will be a key market for us. That will be a high priority for 2027 and some other European markets. I'm not 100% sure about Scandinavia just as yet, as I stand in Scandinavia.
We have to wait a little bit. Yes, Victor? How much more expensive are the gloves and boots, I guess, than the cap?
Yeah, so from a cost perspective, the problem is we're just about to reduce the cost of our cooling cap, so it's not a good comparison. They're sort of double the cost at the moment, if not probably triple the cost in reality. As you know, Victor, our cost of goods sold is relatively low for a cooling cap. It's what, GBP 120, roughly. It's still a relatively low-cost product, which allows us to operate a single patient use approach with some still very strong margins.
You had a question there, I think? No? No? Okay, but then one for you, Dr. Bandla. You've mentioned ice buckets, and we've seen how people just put ice and towels and everything. But there are also some pharmacological ways to treat it, not very effective. Why do you think that is? Do you have any? Why doesn't it work?
Yeah. The pharmacological means are mostly for treatment, again, rather than prevention. Like I was mentioning, people want to prevent if there is a way to prevent. When they are already taking a lot of systemic treatment, a wearable preventive method might be a bit more of an adoption rather than another systemic treatment for them.
Yeah. Here is from the chat one more to Dr. Bandla. Considering the potential to maintain a higher chemotherapy dose, do you plan to conduct any trial investigating survival, for instance, comparing the device with placebo?
Survival in terms of?
In terms of different chemotherapy doses, I guess.
Yes. One of our endpoints is to look at dose reduction due to CIPN. All our studies have shown that the percentage of patients who have to undergo chemotherapy dose reduction due to severe CIPN is very limited. Like our Singapore studies out of 100 patients show that only 3% have had grade 2 CIPN, nothing above grade 2 even. That ties down to survival because they receive the complete planned dose of chemotherapy.
I think longer term, we might start to look at real-world evidence or collect larger data sets to assess whether or not overall survival is impacted. Of course, the patient volumes that you have to have for that level of evidence is quite high, and there's a lot of variables, of course, to consider. The idea is we do want real-world evidence going forward, which helps us with other areas. Back to health economics, back to proving the value of this product. That's something we'll look to do probably in the U.S. market initially, especially in sort of the community settings. That's part of our longer-term clinical strategy.
Yeah. Hi. A question I have is about the CIPN system. How many systems are you preparing for the launch?
I do like that question. I'm not going to answer it in full, unfortunately. I think you've all seen longer term, we're going to be building a new facility, which is exciting. I'll touch on that shortly. There are some delays there, so we've just taken the keys of a smaller facility for the short term. We will start preparing to build units early on at a greater number than we're building units from a U.S. perspective so far. If you look at our rollout originally with scalp cooling, we think that it will be a more aggressive approach. I can't give you the exact number as yet, unfortunately. We hope to plan to share some more forward-looking statements in due course, but to everyone.
They're probably going to hit my second question.
I'm used to your questions. Don't you worry.
My other question is, you also talked a lot, or you talked about during the presentation that you see this huge demand for, or you see this huge demand in your current clinics within scalp cooling. How many of your current scalp cooling network clinics have you talked to about the CIPN system? What's your expectations there?
I think I might have to repeat the question. Yeah, please hold the mic a bit closer so that the people on live hear us. The question was, if I interpret correctly, you want to repeat it yourself. Now you're holding it correctly.
Yeah, okay, I can repeat it. The question is basically, you see a huge demand for the CIPN system. What has the feedback been from your clinics within scalp cooling? Yeah.
The feedback is often, when can we get it? Which for me is a good buying signal. The frustrating fact is we have to respond, not yet. Yeah, there is an overwhelming interest in the product. In terms of percentages of cancer centers that I've spoken to that currently have scalp cooling, I'd be lying if I tried to answer that. We tend to speak to more physicians out of the clinic, or I do personally, at places like ESMO, ASCO, San Antonio. There is a real interest. I think the sort of presentation by Aishwarya really demonstrates why there is such an interest. This is a really debilitating side effect. Physicians today will go, "Oh, you'll lose your hair, but it grows back," which is not the right response, but it's a typical response.
With physicians talking about peripheral neuropathy, they instantly get it, even the old, bald ones. It is a real difference in approach and understanding of ultimately the impact it can create for a patient. You probably can speak about clinical.
Yeah, the question which we often get in various countries is, when can we get this device? A lot of the sites on our phase III study in the U.S. are a mix of those who scalp cool and do not, and all of them have quite a significant interest coming in both from the physicians who want to enroll patients to the study and patients who want to go on a study if such an option exists.
Yeah, we have a list of sites that want to start clinical trials with us just because it means early access. Hence, Dana-Farber was desperate to get it. They are paying for that clinical trial, which is not typical for a cancer center to fund these levels of clinical trials. The National Cancer Institute in the U.S. are funding that clinical trial because of the importance. Millions of dollars of U.S. taxpayers' money going into a clinical trial, it for me is self-explanatory. It shows the clear importance of this unmet need.
We had one more question there.
Thank you. I'm curious, how many percentage of the users do you think will be for the most severe cases with permanent nerve damage? Will that be 90% of the users, or what do you expect?
We want 100% of users to not progress to that stage. Since we are looking at prevention, our goal is to prevent a large population from not going to grade 3 or even grade 2 neuropathy.
For me, and I think we probably need to highlight it more, it was actually 2.5% I think of patients in our study of nearly 100 patients had grade 2 peripheral neuropathy compared to the normal 30%-40% you see from historical controls. That is a huge improvement. I mean, it's impressive.
There's one there in the back.
Yeah. Hi, and thank you for the presentation. I was just thinking, have you been looking into prostate cancer and breast cancer and for cooling the private parts?
Yeah. Our pilot studies have looked at a cohort of breast cancer just to keep the cohort clean. The enrollments will continue for other cancer types and also other chemotherapy drugs.
I think prostate, like you say, a high use of docetaxel, so a taxane-based therapy causing neuropathy. It is a really important market and a huge potential, again, for us. I think what we want to do eventually is expand our indication beyond sort of traditional taxane-based therapies as well and move into platinum-based therapies. That really opens up the sort of GI space and other opportunities where you start to see that more severe peripheral neuropathy. There are some historic concerns about cooling and platinum-based therapies, but actually there are some small pilot data sets out there which are showing that cooling is not a concern. That is our next step, but it is back to that focus and get past this hurdle first, and then we will work on the bigger opportunity.
Here's one question from the chat on a bit of the practicalities with the gloves and boots. Can you wash them? Can you reuse them? Can many patients use them?
They can be washed and reused, but maybe I'll let you comment on the different models.
Yeah, the U.S. will go back to that single patient use, so they will clean and wash them for themselves. The rest of the world, we think there will be an element of reuse. I mean, that is our European healthcare system. There may be some inners that you replace, but we think they will be potentially reused but changed every 12 months. Again, we're reviewing it. It will depend on reimbursement opportunities. At any point where we can provide single patient use, we will. We've also got to be mindful of the healthcare systems and how they operate.
Justice to question.
Yeah, you seem very confident that you will file now in December on the CIPN side. Previously, you mentioned, I mean, the biggest worry you had was that FDA might want some U.S. data. Does it mean that you had already that discussion with FDA and they said, "Okay, we're happy to accept this," or is that still a risk?
Yeah, it is a risk, hence doing the work with Dana-Farber, albeit it's not a risk that's been articulated by the FDA. They've been quite open with the data we've already shared with them. It's a low risk, but of course, it is a risk. The nice thing about the STeP program, though, is that actually it allows you to collect post-approval, post-clearance data. We believe that even if they said, "Well, we'd like some U.S. data. We want some Americans in your clinical trials, please," we're able to do post-market data collection anyway. It won't hinder us. It's a safe device. It's a 510(k), so you're really proving safety and effectiveness, not efficacy. We're, in essence, cooling the limbs. It's a pretty safe treatment. We're confident in our approach, but we do have the Dana-Farber trial as that backup.
Maybe if I can ask the question that was asked back here in another way. It took you some, I think you launched in the U.S. in 2019, something like that.
'17.
It took you eight years to get to 900 hospitals, including one acquisition. I mean, obviously, it will probably be faster with the CIPN. Is it reasonable to expect half that time to reach a similar sort of reach with 900 hospitals, or can it go even faster than that?
I think worst-case scenario would be half the time. I mean, a lot of the effort is building relationships, isn't it? Getting your foot in the door, changing attitudes towards using devices. We've already done that. Really, I think the speed of rollout is depending on us to a certain extent. Of course, there is a demand, but we're confident in the demand. Yeah, it will be a much easier challenge for us going forward. One of the things that we didn't really touch on is that the device as well will originally, we had two devices creating one system. One device treated the arms, one for the hands, one device treated the feet. Our new model, as you can see, does all four limbs at once, which allows us then to put a scalp cooler on top.
As and when we start to change out capital equipment in the market, for example, Dignitana equipment, or we expand into new locations, we can come in with a solution where we have a peripheral neuropathy cooler on the bottom of the trolley and a scalp cooler on the top of the trolley. Our scalp cooler has been redesigned as well. It makes access and ease into these cancer centers having both technologies easier than trying to put multiple devices around the infusion chairs. That will help adoption too.
There's actually a question from the chat right on what you just mentioned. The question is, are you aiming to maybe make a system that combines the possibility of both scalp cooling and CIPN and if there are any advantages to having two separate ones?
Yeah, so our approach at the moment is two separate ones, a small scalp cooler, which will just look like that, but it will just have a cap connected to it with no compression, and then the cryocompression device for neuropathy. Longer term, we have an R&D program which is looking at thermoelectric wearables. Actually, the scalp would be maintained through that device or a device like that, but the patient would wear a thermoelectric glove as opposed to being connected to a machine. That makes it simpler, more mobile, easier to move. That is a longer-term project which we have already started, but not close to commercialization yet.
Yes.
For this new product, how important are CPT codes for this sort of commercialization of the product? Or do you only need FDA approval, hopefully in the first half of next year, to go to market and get reimbursement from commercial payers, for instance?
The FDA clearance will allow us to go to market, but it would mean that we would go to market on a self-pay basis like we've done with scalp cooling, which is not our preferred route. The CPT codes, CPT-3 codes specifically, and I've got a nice slide on that, which I bet you all can't wait for, but really talks about, really allows us to track the usage, but it also allows an early APC rate for the technology, a new technology rate. That will help the payment piece and allow us to launch what we call our insurance-based billing model early. That, for me, is the real way to launch the product.
As I said, we can do a soft launch where there's some sites where we know patients will pay out of pocket, but with a view that very quickly soon after, we'll be selling these to the provider, and the provider will be billing the payer like it should be.
The insurance companies won't sort of start paying for this from sort of, let's say, Q2 next year, no?
No, no. They'll want, and again, I'll talk about the three pillars of reimbursement, which you've all heard me talk about before, but you must have coding, you must have coverage, you must have payment. All of these align to help bill insurance. Without them, it's rare that you would get payment.
Hi. Two questions. First of all, what's the cost profile of this machine compared to the current scalp cooling one?
If you look at a double two devices, for example, it's comparable to our one device. It's not far out, so.
All right. The second one, in terms of kind of market launch, I mean, we're talking about rollout in terms of number of clinics, but it's also the question about utilization. Currently, utilization of the scalp cooling machines is quite low or even disappointing in terms of the usage per week or per machine. I mean, could you elaborate? What's the strategy there? Because it's not just about getting machines out at lots of clinics. It's also about getting them being used.
Yeah, an absolute valid point. Our utilization is mixed. We've got some great sites which are utilizing the scalp coolers very well. Others are not. As I hope you all understand, the biggest barrier to utilization goes back to patient cost. Remove that barrier, you drive utilization, hence spending $500,000 a year on reimbursement activities. We believe that is what unlocks utilization, more than anything, more than awareness, more than anything. The idea about how we improve utilization and not just install loads of capital equipment across the U.S. for our neuropathy product is all about our reimbursement strategy and all about why we're going so soon with CPT-3 coding so we can launch early with an insurance-based billing model to drive patient access and drive utilization on the capital deployed. That is the key plan.
There's one very popular question here in the chat that I think that you've been asked quite a lot, but the SWOG trial, when do you expect it to be completed and when can we expect data readouts?
The study has accrued about 60% of the patients. Another two and a half years is what we mentioned that the patient accrual will finish and then we see the readouts.
Quite a while. I think the recruitment's improved, hasn't it, somewhat? We might finish before that. The issue is, again, it's an independent funded study. That typically means we're not in control of how fast they analyze the data, when they release it, when they publish it. That's another driver for the Dana-Farber study as well because we all like randomized controlled data. It's the right type of data to have. Actually, being able to have more control over Dana-Farber when they publish allows us to have a good RCT early on, but longer term, we'll get our large SWOG study published. It takes the pressure off us doing the other studies.
Thanks for taking my questions. First one on the Dana-Farber trial, you mentioned that recruitment is relatively slow. Do you believe that it could be due to it's relatively unattractive to be randomized into the no compression arm? Or how are you feeling about accelerating the recruitment to that trial at this point?
It's actually just a nursing issue. It's literally, you probably know this better than I do, so please, Ash.
Yeah, so for Dana-Farber, the study is planned to accrue in a year, 50 patients. The randomization, like rightly mentioned, is actually two is to one. More patients go on the cryocompression arm. The barrier has been really just getting the timing right in terms of consent and patients onto the study and they're just about starting off. Like we saw in the SWOG study, it will catch up once the first few patients are on the study.
They had like 20, they've already had over 20 odd patients interested in the study, but they couldn't consent them quick enough to get them on study before they started. It is a nursing, it is a research nursing issue as opposed to anything else. We've suggested we might help fund some more time for a research nurse to expedite that. We are just in talks with them at the moment to help them overcome this challenge.
Again, the interest is there is that we heard from them.
A follow-up on the SWOG trial, do you think it would be challenging to prove statistical significance or a big difference versus, for example, just compression versus cryocompression? You're comparing to a somewhat active arm, if you will, there.
The large number of patients has been designed in such a way that we hope to prove the statistical significance across the arms.
Okay, good. Thank you.
There's some impressive biostatisticians that work on that trial. Yeah, it was a well-organized, long process.
I have a question on the cost side. Can you speak some to the incremental OpEx that you foresee for rolling out the CIPN in the coming 12 to maybe 24 months?
Yeah. You've already started to see that OpEx creep through. I'm not going to give you an exact figure, but we need to operate on new premises, of course, and longer-term additional, a larger additional premises. You've got further headcount, so not only in production, but also regulatory support, commercial teams. There's synergies, of course, but there will be additional headcount, and that will be the main cost from an OpEx perspective. The CapEx, though, will be the biggest cost associated with the commercialization piece, as said with the reason behind the rears, that rollout of neuropathy product into the market is where you'll see the most spend.
Do you see the increase, the biggest increase, is that in a rearview mirror or is it coming next year or 2027 or?
I'd love to say it was in the rearview mirror, but that's not quite accurate. You'll start to see Q1, Q2, some additional headcount, but not enough to really stand out. We'll continue to report on it as well in terms of where the costs are associated. It's not yet in the rearview mirror. You will start to see it throughout 2026, hence the rears.
Thank you.
Is there anyone else before me? No?
There's another question coming from the audience.
Yeah. We know that clinically and in theory, you could provide sort of both scalp cooling and sort of this treatment at the same time. Are there any sort of obstacles or issues of doing that sort of in practice with regards sort of to the nurses you need or so? Or will you be able to sort of provide both services?
Great question. We had, I think, two aspects to it. One is the manpower and also the safety. I spoke about the concern for core hypothermia. I think our Singapore study has shown us that both are not a concern. In the study of about 100 patients, most of them do both scalp and limb cooling, and they are delivered by the same nurse who manages that patient. Safety-wise, tolerability-wise, they've all done very well.
Also in a sort of U.S. hospital setting, that will also work. Okay.
It's a marginal additional piece of work in reality. I believe the patients can take a little bit more control about putting the gloves on. Yeah, it is additional workload, we can't take away from that, but it's again marginal. It's back to potentially how do we develop the value proposition, the story for the payers in terms of we're having some difficulty getting them to pay for the additional workload with a scalp cooling perspective. If you can again articulate longer-term cost savings for the payer because the nursing team are working on delivering this cryocompression, then you've got a better chance of someone paying for it, and then they can appropriate the resource for it, which is critical.
Maybe another one for you, Dr. Bandla. We are quite in a good place, you've mentioned, regarding awareness of CIPN. You see that in patients, you see that in congresses, but out there in the clinics, there are quite many clinics. What do you see out in maybe some community hospitals? Are oncologists aware? Are they worried about this? Is it the same response you get there?
Probably a two-comment on the community setting, but in terms of the hospitals I've interacted with, there is a good awareness, like I mentioned, both among physicians, healthcare providers in general, including nurses and the patients and the caregivers. I think the patient group, social media, all adds to this awareness and driving the need home more.
Yeah, I think you're spot on. I don't think there's a real difference between academic versus community. I mean, same patient populations, same unmet need. In fact, it's possibly easier to deliver in a community setting.
Have you seen any changes in the patterns in the clinics? You've worked with this for quite a lot. The awareness keeps on growing. What are the patterns that are changing? What do you see there?
Yeah, one thing on a lighter note we've noticed is since this treatment is offered only on a study basis currently, it's not for patients not enrolled to the study, those who are in the ward looking at the patients receiving this treatment, they get interested in like, what is that? Can I also have that? That way the interest builds around it too.
Maybe a last one. Neuropathies, there are quite so many different types of neuropathies. How difficult is it for a physician to distinguish? Okay, this is CIPN, this is maybe diabetic neuropathy. How do you look at that challenge?
Typically, it can be a mix of diabetic and CIPN, but CIPN, clearly the manifestation is tied into the administration of the chemotherapy. Like I said, a few weeks after they start receiving their neurotoxic chemo, these symptoms manifest, whereas in diabetic neuropathy, it's a whole different indication and disease pattern in itself.
Do we have any last question from the audience maybe? Or yes? We have one there.
Thank you. A lot of talk about reimbursement. What about other guidelines or working with key opinion leaders? What can you do there to accelerate this CIPN journey?
Yep. Again, part of our scalp cooling efforts was to get cryotherapy scalp cooling on the NCCN guidelines, which again was quite a big feat. If you actually look to the guidelines for CIPN, we already see cryotherapy on those guidelines, which is a big win. There's more work to do in terms of formalizing those guidelines, getting the right clinical data associated, but it's a strong start. We'll also be working very closely with MASC, which is the Supportive Cancer Care Group. We have very strong relationships with them. There is a group specifically looking at peripheral neuropathy already because of this unmet need. We believe once we get the right data released, they will update guidelines and provide appropriate guidelines. In terms of KOL integration, the SWOG study is the start of that. That's 25 at least KOLs in the U.S. interested in peripheral neuropathy.
We have then a number of global KOLs that we're working with. An example recently would be ESMO presenting at a very well-known European conference, and we're going to do the same in the U.S. on the data, on the need. We had Hope Ruger speak from City of Hope, historically UCSF, great, well-known KOL. Mariam Lusberg at Yale speaking. Mary Tanea, head of Oncology Nursing Society. Ella Hayd-Sarley from Dana-Farber. There's probably someone else.
I think.
Strong, really.
She's been really driving the study as well.
Charles LaPrinsey as well, yeah, driving the SWOG study. I mean, those are already pretty impressive names supporting what we're doing. And they do it because they understand the importance. It's not a paid-for opportunity.
Just to quickly add to that, the ASCO and the ESMO guidelines did cite some of our early work saying that cryotherapy is promising and more evidence is warranted. That is what the phase III study will bring us.
Thank you. Thank you very much for all the questions. Thank you for all the questions in the chat as well. I think we're all looking forward to maybe looking and testing the machine. I don't know. Thank you very much, Dr. Bandla. Thank you, Rich. We will continue in approximately 25 minutes with the next topic, and you will tackle the reimbursement landscape and the IBBM model. Yes. We continue on with our Capital Markets Day with Paxman here. Next topic is reimbursement and IBBM. Please, Richard, take it away. As the last session, we will continue with the Q&A after the presentation.
Perfect. Thank you very much. This feels better as well. Actually, that's a good start. Reimbursement, I guess it's what we're all wondering about and wondering how much traction there is and could it be faster.
I'm going to try and set the scene a little bit and give you a bit of an A to Z of reimbursement in the U.S.. Please don't leave while I'm doing this. It is a bit dry, but hopefully it helps you understand a little bit about its intricacy. I am no expert, so apologies, but you've probably heard me talk about, and if you haven't, you've not been listening very well, the three pillars of reimbursement, and that's coding, coverage, and payment. You have to have all three aligned, really, to have a successful market access and reimbursement strategy. I'm going to talk about our timeline shortly, but we've been working hard on all these three areas and actually made really, really strong progress and momentum. I'm incredibly proud of that. Albeit we might be, well, IBBM, it's not as quick as it should be.
Actually, putting all these three things in place is a hell of a lot of hard work, but it lays the foundations for what should be a very exciting future. It also supports the work we'll be doing for peripheral neuropathy. The biggest thing, though, is you can have all these three work perfectly aligned, and if we haven't switched our customers, then we won't get the traction. That has to be now a sort of key priority for us. There is obvious hesitancy to switching to that new model before these are all aligned as well. It's a bit chicken and egg, but we're confident that everything is now coming together, and through 2026, we will see the traction we deserve and very positive about that momentum.
The flow of healthcare funds in the U.S., I'm not going to spend too long on this, but ultimately, the private households are paying for healthcare no matter which way you look at it, whether it's public payers paying for it, the healthcare, or whether it's private insurers paying for the healthcare. You're either paying state and local taxes or federal taxes, interstate government and federal government, or you're getting cuts out of your paycheck going to private employer groups and private health insurance groups. As you're seeing scalp cooling, ultimately, you're paying out of pocket for your healthcare expenses. This is all funneling through, whether it be public payers, private payers, out of pocket expenses into the providers of healthcare, which ultimately are our customer. It can be complex, regardless of what anyone says, it's expensive.
It's expensive for the patient, even in a fully reimbursed program. We, as Paxman, are trying to navigate this, trying to see where the benefit sits, who's paying for what, and it takes a bit of time, but I think we're pretty much now on a positive and right traction to ultimately getting future reimbursement for scalp cooling and peripheral neuropathy. The public payer, now, this is typically made up of both Medicare and Medicaid. We won't talk about the two other buckets on this slide, but Medicare are those patients that are over 65 years old or have disabilities. I think it's about 20% of the patient population in the United States. They are the largest payer of insurance in the United States. However, they are not our biggest customer as such.
Our patient population is made up of more commercial payers, that younger subset of patients, and also, yeah, that we're seeing less Medicare patients in reality. The Medicare patients really are not our target audience. These are patients that are below the poverty level and ultimately are not even thinking about scalp cooling in reality. They're thinking about how to get to the cancer center, how to get home, how to feed their kids. This subset is important, but it is not our primary focus. This sort of relates to some of the recent APC ratings as well. On the Medicare side of things, it is not that we won't support those patients. Please remember that we have an amazing patient assistance program, which will actually support access to this technology if a patient cannot afford.
These are the key groups that we need to educate, that we need to build appropriate coverage policies with and get appropriate payment for. There are many healthcare providers, private healthcare insurers across the U.S.. You'll have heard of the Uniteds of this world, the Aetnas, the Cignas. There are employer groups within those payer insurance companies that are representing large organizations like GE or General Motors, who also have a huge influence and pretty much mandate what is paid for for their employees. You have also got to think about, yes, there may be some large payers, but then you have to think about every payer may have different plans, different rules in different jurisdictions. It is complex. You can't just say Aetna covers for scalp cooling, slam dunk, that's brilliant.
Aetna will have multiple plans, multiple situations on a state level, which will all mandate potentially different levels of coverage. It is complex. It will take time. What we've done, as you all know, is that we have been working since 2022 on changing our business model. From 2017 onwards, we launched our business as a self-pay model. That is where we install that capital equipment, and then we generate revenues from patients. Ultimately, there are barriers to that business model. The first is that the patient may not be able to afford out of pocket, and the second is that you get hesitancy from providers about offering such treatments to their patients. We needed to remove that. All our efforts behind the scenes has allowed us to launch our insurance-based billing model.
This allows us to still install the equipment on a free-of-charge or a low-cost basis to the cancer center, but we then start selling the cooling caps directly to the provider. We sell the cooling cap at a fixed price to the provider, and then the provider bills the insurer for that cooling cap and for associated services with offering scalp cooling. We believe that when our customers switch, they're really demonstrating that sort of leadership in providing accessible care for all patients, not just those that can afford. It should allow them to attract patients and support demand for those at those sites. Scalp cooling, people do really start to vote with their feet in terms of if scalp cooling is offered at a cancer center or not. We believe offering this model allows fair and reimbursable workflows.
In other words, the hospitals can actually get paid for what they are offering and what they are doing, which is something that they do not do in a self-pay model. It removes that awkward financial discussion, which I talked about earlier, which was the physician feeling uncomfortable about talking about a costly treatment to a patient. It should ultimately also increase patient access and add revenues to that cancer center longer term. Just to touch on that revenue flow, I have talked about it at a very high level, but the healthcare provider purchased the Cap Kit stock from Paxman. Today, that cost is around $1,800-$1,900. Regardless of what the APC rate is, regardless of what the payers are paying, that is our price. Our margins are $1,900. Our end price is $1,900. That is our fixed price.
We would deliver that cooling cap to that healthcare provider, and then the healthcare provider has a discussion with their patient. They're eligible for scalp cooling, and they would prescribe scalp cooling to that patient, giving them one of our single patient use cooling caps to take home with them. What happens then is the patient starts treatment. In the background, the healthcare provider is then billing for the relevant CPT codes that we've got. The first code typically at that first conversation when they provide that cooling cap to the patient, and then they use the second and third code or second currently every time that patient has chemotherapy. The payers receive those coding and bills and then ultimately pay out so the healthcare provider can cover the cost of the cooling cap. That's the primary goal, and then generate a contribution towards the cost of care.
Many of the cancer centers that we speak to today are just satisfied with covering the cost of care, but I think longer term there will be more interest in also generating revenues and ultimately profit. They do not like the word profit. They prefer a contribution towards their costs. How have we got to where we are today? I mean, it seems a relatively straightforward approach. You get some codes, you start billing for them, but it is not. There has been a lot of work in the background over the years. In 2021, the American Medical Association issued two CPT-3 codes. We will talk about what CPT-3 codes are versus what the CPT-1 codes are shortly. Now, just as a reminder, 2021, and we launched in 2017. Look at what we are going to be doing with CIPN.
We're actually applying for CIPN CPT-3 codes before we even launch, which means we're in a much better, stronger position earlier. In 2021 CPT codes, we had the first health system, which was Robert Wood Johnson in New Jersey, start billing in 2022. Their main driver was compliance, which I'll talk a little bit about later, is they believed that they had to bill insurance because it was now being considered covered by Medicare, APC rates, etc., but also because they saw it as a potential revenue generator. In 2023, we saw some work from the MAC strategy that we'd put in place where we saw a local coverage decision being implemented by one of the MACs, which is a Medicare administrative contractor. What they're doing is, in other words, supporting coverage, one of those pillars.
It is really saying that scalp cooling should be covered in this jurisdiction for their patients. We got a reassignment of one of our APC rates. Now, this did not cause us an issue then. Therefore, we do not believe this new APC rate should cause us an issue now. That was at $1,250. That did not affect commercial payers' payments. In 2024, CPT-1 codes were announced, and that is probably one of the biggest breakthroughs we have had in our reimbursement journey today. Again, I will describe what a CPT-1 code means, but it really starts to unlock those coverage and payment pieces and that simple switch piece unlike never before. One of the interesting things that we are starting to see now, which supports coverage as well and long-term payment, is this state activity where bills are getting proposed and legislated to actually ensure that scalp cooling is mandated at a state level.
New York passed their first bill in 2024, which will go into play in 2026. In 2025, Louisiana followed suit and did the same. We saw the issuing of our category one code set, which I'll touch on shortly as well. 2026 is all about the introduction of those permanent codes and the pushing to switch our customers to that new business model. We'll also touch on the OPPS and MPFS coding shortly. Now, this is a very, very busy slide. I'm not going to go through all of it, but the reality is it shows the difference between what a category one code is and what a category three code is and the real value that a category one code adds.
In terms of a key benefit of a category one code, it's really about established recognition of the code, and that's based on strong and robust clinical data, but also high levels of utilization contrary to your beliefs in the U.S. market in terms of the technology. With that widespread adoption and that clinical data, it is the real clear pathway to ultimately reimbursement from payers. That is not me saying that. That is the general consensus of what a CPT-1 code is. The thing with the CPT-3 code is, and albeit I'm positive about CPT-3 codes, you need them before you get a CPT-1 code. It's really a tracking tool.
Yes, it does allow early reimbursement through getting APC rates, but the key use of a CPT-3 code is about making sure we can understand where treatments and when treatments are being used, which then helps drive what a CPT-1 code looks like. As I said, I'm not going to go through all this detail, but this really does establish a big milestone for reimbursement for us, and I hope everyone in this room understands that it is critical for getting that payment and future coverage right. This is our new code structure. Again, not too important for you, but three codes. The first and the most important piece, which we're reasonably comfortable with where it sits at, is the supply of the cooling cap kit itself and also the education piece around scalp cooling.
The second code is the pre-cooling piece, that 30 minutes of getting the cap on for the patient and cooling them for 30 minutes. There is no code for the chemotherapy infusion piece that is bundled with chemotherapy. There is a third code, and that third code is that post-cooling section, that 90 minutes afterwards. Okay, I'll talk about the frustrations that we've got at the moment, but the 97007 is the most important in both. If we can get the cooling cap kit covered and some contribution of at least breaker, even in Medicare, that's a positive sign. If you look at the small footnote below, that for me is an important piece relating to our competitive environment in the United States.
We've invested significantly in reimbursement, as you all know, and there are newer entrants to the market who perhaps think that different approaches to offering scalp cooling are appropriate. What we've done and what the AMA have done is really carve out appropriate use of these codes for technologies like Paxman's and Dignitana's. If you are a self-administered technology where the patient has to do the upfront work, ultimately these CPT codes do not apply. That supports the use of our technology in clinics going forward. In terms of OPPS and MPFS, what you've got to understand is just because we've now got our CPT-1 codes doesn't mean that this whole cycle of re-evaluating price points for these codes has ended. This is an annual process every single year where these codes are looked at, the claims data is assessed, and the new payment rates are established.
What they do is at the beginning of the year or close to July, they'll review the claims data of the CPT codes that have been charged for. What happens then is they will come up with some strange arithmetic rules and other means and understand, you know, ultimately what is the average price per code that's being used. They will then put a proposed rule together like you've seen where the Centers for Medicare & Medicaid Services will say, "This is what we expect to pay for this particular code. This is what we'll pay for this particular code," etc., etc. There's then a comment period, which again we've all witnessed and experienced. Sometimes they listen to us. Other times, like this time, they don't. In November, you see a final rule.
That final rule comes out that sets the payment for the next 12 months, and then the cycle starts again. What's important for us to do is to work with our customers, work with our providers, and make sure they are educated appropriately on how best to charge. We can't tell them what to charge, but we can certainly advise them and support them in what appropriate charging looks like. If we do that and we do a good job, the overall means increases, and then in the next cycle, we see better payment. My wording of disappointment might not have been appropriately understood. Of course, I'm disappointed in these rates. I want higher rates. Who wouldn't want higher rates? It's obvious, but this is not the end of the world. This is the foundation. We have made so much progress.
Albeit from an OPPS setting, the $1,450 might not sound quite as good as we'd like it to be, it is a starting point. First of all, it's a small patient population. Secondly, hospitals understand that often Medicare often costs them money, often is a loss-making patient population, unfortunately. What we need to focus on is the commercial payer plans. Those are the ones that are paying much more. We've seen this rate at $1,250 before, and it didn't slow our momentum down. It didn't stop those commercial payers paying a fair rate to the cancer centers. In addition to that, there are a number of cancer centers who have their own rates. This doesn't even apply. Dana-Farber, Memorial Sloan Kettering, for example, our biggest customers, have their own relationship with Medicare. They don't even follow the OPPS rule. Yes, it's frustrating.
Yes, it should be better, but I'm not concerned that it will have a negative impact on our overall momentum. The bundling of the, or the packaging of the codes is also quite typical from a CMS perspective. What you would normally see with a code set like this is that everything is packaged into the first code, wrongly or rightly. It is our job, in addition to that education, to potentially work with lobbying groups to actually try and overcome that longer term. If we can drive up that first code with appropriate claims data, that will be the positive and easiest first step. From an MPFS perspective, actually, if you look at this scenario, which is a common scenario of six treatments, that means roughly a break-even from a Medicare patient.
If you speak to a community oncology practice and they can break even with a Medicare patient, they're pretty happy. We're really convinced with this. Again, can it be higher? Yes, we'll work on that, but it's the starting point. This will not slow us down. Excited that we got the codes. We have got payment rates, albeit not exactly where we want them, and that's the steps for the next year, but more importantly, what it's going to look like in 2027, 2028, 2029. This piece really, really excites me. This has all been driven, and it's a coverage piece. The last piece was on payment. This is coverage. There are people in the U.S., whether they're providers, whether they're patients, all working on legislation to get scalp cooling mandated. We're not doing it. This is all independent, which is fantastic.
Again, shows that demand, shows that interest. New York and Louisiana have passed bills. We've got two new, reasonably new recent bills pending in, I think it was Pennsylvania and Ohio, and then others that are all ongoing. I'm not going to go state by state, but we also have, in addition to that, California looking at doing something similar and Florida doing something similar. All we're doing now is supporting with appropriate testimonials, connecting them with users, providing them data on access, but all driven. Typically, the New York and Louisiana bills will hit 2026, and then these would be expected, hopefully, throughout the next couple of years. This mandates either large employer groups or small employer groups or smaller plans to cover scalp cooling. That's that coverage piece, which is critical. It doesn't set payment.
It can have some impact on payment, but this is that coverage pillar, which is incredibly important. I can share these slides as well after, but this gives you an idea of where they are, how convinced we are in moving forward with these different legislations. Overall, again, I think it's a very strong signaler to say things are moving forward. Coverage is looking very, very promising. The simple switch. I talked about this earlier on in the presentation, and this is one of the key elements that we've got to overcome: getting customers onto the new business model. We've had quite a lot of success in the hospital outpatient setting, and that could be because of the APC rate, potentially. It could be that they've got better back offices and appropriate staffing to support appropriate billing. Now we need to see more community.
We've launched our simple switch campaign really to heighten the awareness among our customers to try and drive this switch. Some of you, I know, joined our webinar, which was really positive. We had a large audience of 386 sign-ups, but I think, what, 259 viewers, which I think shows, again, I mean, it's a boring subject as you're just listening to it now, but it shows a really decent interest across all our providers in the U.S., and that continues to be. I've just been in China. Ignore that. I was also in Las Vegas the week before. Very, very different places, of course, unless you look at Macao. The interest from the community oncology groups finally is happening.
Florida Cancer Specialists, one of our biggest customers, it's actually a Dignitana customer, but a real great target, one of the reasons why we acquired Dignitana. They say, "Brilliant. This is, you know, we've got the Blues Plus. Florida Blues, it's 80% of our patients. They're already paying for scalp cooling by all accounts. Why are we not doing this? Let's get moving and doing it." If we can get good community oncology groups taking that step, we'll start to build the momentum. The interest is there, but you've got to remember there are other priorities of these cancer centers as too. I know scalp cooling should be number one priority, but it's not always. Please be patient as we navigate this, but the momentum is happening, I promise. Why would you transition?
Again, we really focus on that underserved population, that equity piece where patients just can't afford, but they should have access. We talk about patients more likely to enroll when their out-of-pocket resembles a normal medical visit. Let's say an out-of-pocket might be, in a normal scenario for this, $20, $30 a treatment, maybe even $100 a treatment. It's far better than the $2,000 or $2,500 out-of-pocket treatment that they can pay currently for scalp cooling. It's easier for the healthcare providers to actually access and provide. I mean, at the moment, we've got a specialty pharmacy in spelled self-pay. We've got a hub. There's faxes. There's benefits, not benefits, investigations, enrollments, etc. This way, the healthcare professional actually takes all the burden, but it speeds things up. It makes it easier for everyone. There's actually improved efficiencies.
There can be increased revenues longer term for the providers. I think we're going to be mindful that that might not be immediate. It's easier for providers to submit claims instead of the patients themselves. That's a laborious and difficult task for a cancer patient. Longer term, the more people do this, the better coverage we will get, the better payment we will get. I'm just going to play you a quick video, which really just highlights some of the benefits on what the insurance-based billing model is.
Sometimes the biggest change starts with a simple switch. For many, out-of-pocket costs for scalp cooling create a barrier to access. Equitable access to scalp cooling is now within reach. The simple switch to the Paxman insurance-based billing model will unlock a new age of coverage and access.
With CPT-1 codes launching January 1, 2026, you can now offer scalp cooling with fair reimbursement workflows. That means fair compensation through billable clinician time, streamlined processes, and no more awkward financial conversations. Advocates are lobbying state representatives and pushing to mandate coverage. States have already passed legislation, effective January 2026, and more states are following. Patients will seek locations that bill insurance directly. Therefore, the time to make the simple switch is now. We'll guide you through the simple switch process, anticipating your needs and walking you through from start to finish. With plenty of confidence from our positive coverage data, you can begin the simple switch to pioneer a new age of scalp cooling coverage for patients. Plus, our patient assistance program covers under- or uninsured patients with a household income at or below six times the federal poverty level.
The IBBM model protects everyone: patients, providers, and healthcare systems, all fairly billed, all supported. Make the simple switch now.
Probably articulated much better than I did it, but we really are starting to see that interest build, which is fantastic. We've just now got to make sure those transactions happen and our sites get on this new model so we can deliver that improved utilization we already see when we make that switch. I think this data speaks volumes, and it's important to remember that the data we collect on coverage today, this is not payment, but this is coverage, is with CPT-3 codes. Remember that previous slide? CPT-3 codes are typically investigational. They are not permanent. Even with those types of codes, we're seeing really strong levels of coverage.
Of the 3,000 patients that go through our hub services, not all patients do, and it's good that they don't because it's additional cost. What does happen is that of those, 2,275% have positive coverage. That's 75% of patients today using this model have positive coverage. We believe that with CPT-1 codes, this should only improve, giving that certainty to the providers and the patients that they will get positive coverage. Something that I'm also very proud of is that there is a large patient population who also get access to our free goods program. I think that's the right thing to do to make sure that this really is equitable for all patients and is in line and aligned with our vision. I've adjusted this slide that you might have seen previously just based on a couple of findings.
First of all, our capital cost has increased since we originally presented it. That's partially due to our friend Donald, who has put in place some tariffs on us. That is amortized over, or depreciated over, sorry, the five years of the useful life of the device, although we expect devices to be still in market for up to 10 years. Our annual capital cost, including the service and maintenance of that equipment, on the high side is about $2,600. It's relatively low in reality. Each one of those scalp coolers costs about $2,600 a year. After it's depreciated, of course, less. Our average income per patient on insurance-based billing is looking at about $1,863. I appreciate that's a little bit off $1,900 where we're now priced at, but there are averages somewhere still on the lower rates, etc.
Therefore, we've got a contribution towards fixed costs of about $1,200. That takes into account the cooling cap kit itself at the transfer pricing cost, not the actual true cost to Paxman. So half that, in reality, it will be even lower. It also includes benefits investigations that our hub does and some other hub services. In many cases, the hub do not even interact with our providers on the insurance-based billing model. So that contribution to fixed costs could actually increase, and we believe it will increase longer term based on the fact that as we're more confident with coverage, more confident with payers, less sites will use our hub services for that security blanket. So each piece of capital installed in the U.S. only costs us just over two patients per year.
You think if we start to drive that utilization from that small seven patients per system per year installed, even to doubling that or tripling that, it really becomes an exciting proposition. I do believe removing those payment barriers will drive that utilization. This is a good example of that. Now, this is a relatively new site. They started in June 2024. We've got data up till April 2025. Not all sites started at once. Some sites have only just started recently. We've got about 10, and this is community oncology as well, where we've seen some of the difficulties with coverage and payment. They have 10 scalp coolers, eight locations, annualized patient volume of nearly 120. That's 12 new patients per system installed per year, bearing in mind it always takes a little bit of time to get started.
That utilization level is beyond what our average is just by implementing and starting straight away on our insurance-based billing model. They're getting roughly $2,500 of payment. Yes, they're not making huge amounts, but they're making about $600 on each kit. They're also charging about $103 per treatment, so between $400 and $600, roughly. That site's making nearly $1,000 profit per patient. Not huge, but $1,000, that's $120,000 a year. That pays for a nurse. I mean, that all adds to the contribution. As we start to see better coverage, better payment with the CPT-1 codes, we expect that price point to increase. We also expect utilization to improve as well. Again, if we can start to do that at lots of cancer centers, driving that growth, driving that utilization, we're in a good position. It's a win-win for all.
It's not a win-win for just a win for Paxman. It's a win for the providers, and it's a win for the patient too. In terms of who's paying, we're seeing Medicare, Medicaid paying advantage, as well as United and Blue Cross Blue Shield. In fact, Blue Cross Blue Shield, interestingly enough, is one of the best payers in the United States and has very clear coverage policies. Just a bit of a reminder. This really gives you an example of what can happen if we start to unlock that utilization. Some of you have heard me talk about a local hospital in Leeds before. We've got about 12 scalp coolers. They're used every day. Each machine is used every single day, at least once a day.
That means that on five days a week, it would be about 3,000 treatments a year, roughly 500 patients, or 41 new patients per system per year. Now, I'm not suggesting all our customers could get up to 41 patients per system per year in terms of utilization. That's tried and tested total removal of costs. You start to see just increasing and doubling the utilization, the increases in revenue potential for the business are significant. Remove the cost barrier like we do in the U.K., and you drive the utilization. Why wouldn't you try scalp cooling if it was a very low or out-of-pocket cost or no cost at all? You would. Today, the alternative is, "We'll have $2,000, please. Now try it. It might not work." This way really, really enhances the opportunity for patients to access the treatment and just try the treatment.
Strategy for the new year, preparing for the rollout of the CPT-1 codes obviously is critical. It's all about, as I've said before, getting those sites to switch. We have to see them switch to really see the improvements in utilization. Community oncology groups are the critical ones because we've seen less traction there. Again, after the Accelerate conference with McKesson, I'm actually feeling a lot more confident about those community oncology sites. Look at that case study I've just presented. It is working. We just need people to take the leap and go ahead. One of the key areas is expanding or engaging with payers. We've sort of been quite hesitant to engage too closely with payers for some time, but we've now started that process so we can start to drive appropriate coverage policies. It's clear.
When I say coverage policies, when you search on a payer's website, for example, you should and you will in the future be able to see that scalp cooling is covered by this particular payer, by this particular plan. There's lots of data you can buy so we can assess where we need to focus our attention, and that's a critical next step. We're also looking at developing a budget impact model, and that's really based on our community oncology practice work. Again, trying to let them understand that if they do this, what are the costs of expanding the program, but what are the benefits? What are the key profit drivers potentially for that site? Community oncology is quite a low-margin business. They're fighting for additional revenue streams. This here, not like the OPPS setting, could be really positive. We've touched on payer strategy.
We'll continue to work on our max strategy, which is very much about coverage. Then we'll start again with the CIPN stuff as well, working with more IDNs, working with more providers so we start expanding those 900 locations into more. Yes, primary focus is drive utilization, but let's not forget there's still a lot of customers to go out in the U.S. market as well. We'll continue to support policy and legislation too. Thank you.
Thank you very much. That was a tough topic. Hopefully, you got more of a hang of it. Do you have any questions from the audience to begin with? While I scroll through the chat. I have one.
How long is the life expectancy of the machine?
We put five years in terms of depreciating the asset on the balance sheet, but we have systems that are in use up to 10 years in reality. We would start to review the machines at eight years. Because we own the equipment in the U.S., we have the ability to really monitor its reliability, whether it becomes more costly for us to service as opposed to change the capital out. We definitely get more than five years. You will not see a sudden rise in our CapEx expenditure, do not worry.
A little question on the decision to adopt the simple switch. What factors are influencing the clinics? What do you think lies behind their decisions?
I think the decision not to do it today has really been about where the clarity comes with the coding perspective and also the coverage perspective.
Without all those three pieces aligned, people are going, "Well, I'm going to wait a little bit longer. I'm going to wait till you get CPT-1 codes. I'll wait to see what the APC rates might be or the final rules might be." I think now there's more clarity that allows them to start making the appropriate switch. Longer-term, compliance will be a driver to switch. If these are covered and paid for by Medicare, ultimately, you need to bill Medicare for these codes. If they don't do it, that is a compliance issue. I'm not going to go out on the 1st of January and start saying, "Look, sites, you've got a compliance issue here," but we will subtly provide that information. They're aware of it anyway. The long and short of it is they will have to convert eventually.
If they've decided to convert, they've decided that they're going along with the simple switch, what operational changes do the clinics have to do, and how can you support them in that?
Yeah. The support piece is the piece that we've learned a lot about over the last couple of years, and we've got better at it. We're putting some things in place as well during this sort of transition from CPT-3 to CPT-1 codes, some extra support as well, so how we help them navigate denials and other issues with claims. It is quite a process. You need a multidisciplinary team to set start up. For those of you that joined the webinar that we did, we actually had a number of stakeholders on the meeting talking about this and the best practice. Multidisciplinary approach is important.
You've got to have people from your revenue cycle management, from procurement, billing and coding, and then also the team on the ground, the field team. The reality is that most of the scalp cooling process is the same. It's the back office stuff that needs adjusting.
Yeah.
Question here.
I have two questions. First of all, if you could add some clarity, because you mentioned 60% of the IBBM in the IBBM model or you do benefit investigations for, and it's quite expensive for you guys. I guess with more clarity and as time goes by, we should see a decrease in that figure. Given that it's quite a bit more expensive compared to the actual cap, is it reasonable to assume that that figure will go down to 10% in 2028, or is it more 40%?
I don't know the percentages, but I absolutely agree that the use of our hubs—we call it our hub services—the use of our hub services will dramatically reduce because there won't be any need. It just adds a layer of sort of bureaucracy and time. Over time, yes, you will see less and less. Will it be 10%? I'm not sure, potentially. Not in the next couple of years, ultimately, because there's still that uncertainty piece. We are confident it will reduce. Like you said, the cap is actually cheaper. The cap kit is cheaper than the benefits investigation, which is crazy. It's an external organization we use to support us with that. It's a supportive approach, but it's costly. It's the right thing to do now, but we are already actively recommending cancer centers do their own because they're doing it already anyway.
Every patient, they're doing pre-cert on chemo, on immunotherapies, on other surgeries. It is a process they have tried and tested. The sooner, the better, in my view, but I can't give you a percentage.
The other question, you mentioned previously that you signed, I think, NYU, Columbia, Yale, and a few names to switch model on the 1st of January. Could you add a bit more color on? Is it more on named names of hospitals, or is this only a minor part sort of?
No, I think it's a good—I think it's a strong signal that cancer centers are ready to do this. In terms of volume, Yale is pretty high volume, so it could have a decent impact, as is NYU.
Columbia is a Dignitana customer, so I'm not quite sure off the top of my head their volume, but it should have a decent impact. I think the location of where they are is supporting. We've got MSK in that area. You've got other New York and New Jersey practices, very close to Connecticut, of course. It should be positive, if I'm understanding your question correctly.
Thanks.
There's a short one. If you could remind us of what proportions of your installed base has switched to the IBBM.
Not enough, as we will all agree, but 120 sites out of the 600 are Paxman sites. It's about 30-odd percent. It's more income.
Maybe the last question for me then. The assistance program, how sustainable is it going forward if we assume that volumes accelerate, more people know about it? How many people can you support?
Good question. I think, first of all, we would expect coverage and payment to improve for all patients. Your applicable patients under the PAP would reduce as a percentage. As I sort of alluded to, the cost of a cooling cap kit is relatively low, and actually, it will be lower once we've launched our new cooling cap and cooling cap cover. It is certainly achievable, and it is the right thing to do. It drives utilization and adoption. Without that, sites, again, have got the same issue of equity. It is definitely the right thing to do and will not cost the earth. We build it into our budgetary models as a percentage of overall income, so we are good.
There's one question here.
Hi. Related to the number of providers having switched to the new business model, you used to have a goal around that.
Is there a goal for 2026?
I removed the goal because I didn't achieve it. No. Sorry. Yeah, we used to say 40%. That was our original goal. As I've communicated, it has been slower. We expect the traction to increase in a very positive way over the coming months, but I'm not setting any specific targets as yet.
Is there any specific reason for you being hesitant communicating a goal? I mean, there seems to be some friction not anticipated. I mean, you had the goal for 2024, and now, quite a while later, you're not willing to set the goal, even though we have the CPT-1 codes in place. I mean, is there any kind of third-party factors impacting this, making you hesitant to set the goal? I mean, so that it's not in your own hands or people can call on it.
I think I've described the factors that create hesitation. There is a certain amount of uncertainty in terms of timing of these things. I set goals when I'm reasonably confident in exactly what percentages we'll achieve. I think it's unfair to try and figure out what percentage might switch. We've not had a strong track record of X number of sites per month. Sales data, I could probably give you a decent prediction, but exact percentages of switch, it doesn't make sense for me to do at this stage. I am, however, very confident that sites will start to switch to what momentum. I'm not 100% sure. The biggest plus I'm seeing is the fact that community oncology providers are finally showing interest.
That will definitely help momentum because if you look at the split, you've got large volumes of community oncology practices, which will increase that overall sort of percentage. Yeah, apologies. I'm not trying to be difficult, but it would be an unfair guess.
I think to understand the thinking behind it, as you used to have it. A related question, the switch to the new business model, is it irrespective of Dignitana versus Paxman, or are you prioritizing Paxman over Dignitana, or does it have happening simultaneously?
Yeah, that's a really good question. Both companies are at very different places in our reimbursement journey. If you met the leadership at Dignitana pre me being in that situation, they were not fully convinced of the IBBM model because they hadn't done any of it yet.
They were quite far behind in terms of pushing the IBBM model. What we've got to do with Dignitana's customers, which we've already started, of course, and we're getting some very positive feedback, is an education piece. A lot of our customers have already had education, so they are already considering preparing. We've had first meetings. We're planning second meetings, third meetings. Dignitana, it's all about the first meetings, the education. You would suspect that Paxman's customers would convert quicker than Dignitana in reality. Apart from some of the community oncology groups that we're having conversations with who are seeming pretty convinced about it already, which is great.
Thanks.
Thank you all for the questions. Let's digest this topic, take some coffee, some fika, and have a break for 10 minutes. Then we continue on with Dignitana. It was a good segue into the next topic.
Perfect.
Perfect. Thank you.
We had a wonderful transition to our next topic with our last question on the previous topic. Over to Dignitana and what's been happening there and how the integration process is going and more. Please, Richard.
Thank you. I'm pleased that we've not fully lost the room just yet, which is good. I thought you might have all disappeared. Post-acquisition, I'm using acquisition and merger probably both at the same time. The auditors want us to call it an acquisition now, which it truly is, but I prefer the word merger. I think it's more culturally sensitive to our current situation. It's important that it really is the merging of two decent companies. As of very recently, we've now got full control of all the shares, which is fantastic. It's been a process.
I think it's fair to say that this is my first acquisition of an organization. It's been a learning curve, but a very positive learning curve. What's been important for me throughout the whole process is communication. You probably can tell I talk a lot. Actually, it's been really important keeping everyone, not just our customers, updated on what's going on, but our teams because they're the people who make this great organization. We spent a lot of time in both Dallas and London, not just me, thankfully, but my colleagues, especially our Finance Director and our Head of Operations and Regulatory, as well as our CFO, really building those relationships, but getting to understand the businesses, the nuts and bolts.
We, of course, had our own views prior to the acquisition in terms of what we were going to do, how we were going to manage it, but we still needed to go in and fully understand those businesses. Thankfully, it's a small business in reality, so relatively easy to manage and get under the bonnet, as I would say. I think everyone understands the group structure. The structure is not changing as yet. Maybe longer term, it will do, but as yet, in essence, I think it's pretty clear the company that we are buying is Dignitana U.S.. That is where the key revenues are coming from, where the key opportunities are from a growth perspective. The timing was perfect.
As we enter this realm of CPT one codes and future reimbursement, we have adopted 259 locations, give or take, in terms of active locations across the U.S. They have some real strengths in Florida, parts of New Jersey, and New York, and specifically California, where we've got a great opportunity to build on that business. It would have taken considerable time to acquire those customers. They're happy with Dignitana. There is no reason for them not to be, which is good and positive news. That's the sorts of things we've been learning. That additional sort of $8 million revenue for the organization puts us in a strong position, but then puts us even in a really strong position when we start to switch and we start to see that improved utilization.
The sort of key things we've been looking at, of course, is ultimately how do we make Dignitana as a group a profitable organization? Yes, we can grow sales. They've been trying to grow sales for some time. The most important thing is looking where the costs are, looking at where the synergies are, looking at where the economies of scale are. For a start, just delisting the company. I think getting rid of the board sounds a bit awful and a bit severe, but changing the board, letting the board go, looking at the C-suite, looking at certain management with the organization very quickly allows us to start taking out some considerable costs in the Swedish entity. It has been our decision to close down the London office. Again, I'm not against Sweden, by the way.
I keep talking quite negative, but the reality is the organization is very much U.S.-led. That is where the growth potential is. We've assessed the London operations. We've made all the appropriate changes. By the end of the year, we will be in a position to just have two people left in Sweden who will eventually work under Paxman AB, and they will support our international expansion. They will look after current distributors for Dignitana, but also support some of our growing international network as well. They have great language skills and great business development skills, and that's what we need. All the sort of operations, regulatory, marketing, finance functions will all sit with me in the United Kingdom or within the U.S.. This really is the new structure for Dignitana with myself as CEO.
My colleague, Karen Buck, will lead on the U.S. entity from a sort of sales, marketing, business development perspective. She'll now head up working with Krista. I know you don't need all the names, but it just gives you an idea of the structure and what we've put in place. My colleague, Emma, our Finance Director, will support all the financial operations for the U.S. entity with a colleague who's been working at Dignitana for some time. My current Head of Ops in the U.K. will look after all operations from our Dallas office too. I've touched on the international group. A very simplified structure. Most people will sit either in Paxman U.K. or alternatively in the U.S. entity. Really reducing overhead costs. Marketing, of course, will cease to a certain extent.
We will support existing customers, but there will be no more commitments in terms of exhibitions, etc. All those will be built into our overall Paxman AB expansion. Paxman, sorry, Dignitana already have some really decent margins. I'll talk about, I'll come back to that. Yeah, overall, some really strong margins. One of their biggest issues was the cost of their technology. Capital rollout for Dignitana to grow and expand would be difficult. You're talking $15,000-$16,000 for a scalp cooler purchase through ThermoTek compared to what I've demonstrated, a landed cost of around $7,000 for a Paxman system. And that is a landed cost. That $15,000-$16,000 does not account for training, shipping, delivery, etc. What we've decided to do is finish all manufacturing of the Delta system, which I think most of you are aware, and really focus on our Paxman system.
That works perfectly because it aligns with the launch of our new neuropathy product, our new alopecia product. As and when the technology in the field from Dignitana needs replacing, we will start to replace it with the Paxman system. We are not making any proactive uplifting of equipment as that would be expensive for us. The customers are happy with the equipment. Until a point where that equipment needs replacing, we will be leaving it in field and supporting it and continue to support it. One of the biggest benefits of renegotiating our contracts with suppliers and paying off the debt that was owed, which gave us a much better negotiating position, of course, is that we have saved significant amounts of dollars on our consumable elements of the product, which will be seen in our gross profit margins.
As you've already seen and heard, I said we've got good gross margins in the U.S. for Dignitana. We will only improve those with the changes we've made in terms of our supply chain. We're keeping the equipment there for now, but eventually, we'll upgrade it over time. We did look at the intellectual property. The reality is that is not where the value is. We also looked at the technology itself to see if we wanted to incorporate any of it into our equipment. We're pretty confident with the Paxman equipment. I'm also quietly pleased to say that their technology is not superior after many years of having that debate. Looking at the cultural stuff, which is important to me, getting this right was critical. The people, as we all know, make the organization.
What we've done is we've worked with, I'm just going to get this right again, worked with the Dignitana team to really understand what was right, what didn't go right. Overall, we've seen an overwhelmingly positive response to the integration. That makes me feel incredibly proud about what we're doing. We've got a 94%. Sixteen out of the seventeen people we asked have responded. As I said, we've been out there multiple times. We've been supportive. We've communicated a lot. I think if you look at the data here, how would you describe your overall feelings about Paxman integration so far? Really, the majority of those people are saying it's been a positive experience. They felt very welcomed by us. They feel that we've communicated clearly about the integration. They believe the integration process has been smooth and has worked well.
They've also felt like they've had adequate support and resources. We'll continue to do that. This is a really important piece for me. The weakest area is probably about understanding Paxman's culture and values, but ultimately, those things will come along longer term. I have communicated on this before. Ultimately, we're in a strong position now to reduce costs and drive what is a really profitable business. I'm going to show you some of the sales figures, but then the impact it's having on our overall business. This sort of shows you where Dignitana have been over the last quarters, but more importantly, the impact it's had on Paxman in Q2, but actually a full quarter in Q3. I think this demonstrates clearly that ultimately, the core business is U.S., and hence why we're shutting down our rest of world operations.
Nearly 19 million SEK of revenues for Dignitana, which is now adding to our overall business, which is fantastic. What I'm going to do now is talk a little bit about Paxman as a group. You've all seen our financials. We presented at our Q3 earlier in the year. What is becoming apparent and what I've understood and what I believe is based on the integration recently and changes in our reporting, based on over time, we've added different KPIs, which all seemed like a good idea at the time. We believe, and some of you perhaps in this audience believe that there is some element of complexity to our reports. What I'm going to do today is present some of our new KPIs, which hopefully you can look at.
I do not need feedback today, but if we are in agreement with the sort of approach we might want to take for future reporting, it becomes much clearer to everyone how we best see Paxman and Dignitana as a group and remove that complexity. One of the key things which is not presented here today is that we are looking to use, there is a lot of Forex movement, of course. We report in SEK. We sell in sterling, euros, dollars. There is a lot of Forex movement on our sales alone, which can sometimes provide a lack of clarity in terms of our overall underlying performance without explanation. We are going to start as well presenting average sort of set Forex levels at the start of the year, reporting our KPIs on that Forex rate so you can actually see true growth without Forex implications.
Of course, the numbers below will show you exactly where we've performed in a SEC basis, but we're trying to simplify things and remove some of the challenges that we see when we report. Ultimately, net sales is a key KPI. What we'll plan to do is really separate that out into basic U.S. income alone. So all U.S. income, not trying to differentiate by the U.S. income. The reality is the majority of it is patient income. And then our rest of world income. You can start to see ultimately where the fluctuations are on a quarter-by-quarter basis and overall trends. We will then also separate our Dignitana U.S. income out. So again, it's very clear in terms of our overall performance, but also the impact that our friends at Dignitana have on the organization. We'll then look more specifically at our rest of world income.
This is probably where you see the most volatility in terms of split, whether that be U.K., rest of world exposure. What we're going to report on is purely system sales, cap sales, and then group revenue. We're not going to start having a recurring revenue stream line for rest of world activities. This then gives you an indication of how we are performing exactly in those markets around the world that are non-U.S. I think what's important to see, though, is if you do delve into the numbers, there have been comments around perhaps not being as strong rest of world as other areas. If you start to look at Q1 at SEK 21 million, Q2 at SEK 27 million, Q3 at SEK 20 million, compared to the prior year, we're still performing relatively strong.
Going forward, one of our core opportunities is also driving more revenues from cap sales. That sort of not quite recurring revenue streams, but that additional income that we derive from not single patient use caps, but caps that are going to be sold on an annual basis. Our goal is to increase that revenue in 2026 and beyond with the launch of our new cooling cap and cap cover. It will be nice to see that as a KPI as well. That will be clearly differentiated from our sales. U.S., again, rather than trying to separate self-pay, foundation, insurance, billing into all the different categories, we'll just have three simple categories. It will hopefully allow you to see the trends a little bit more. What is important here is if I think this is ultimately affected by Forex.
Again, you see some slight improvements in what overall performance looks like when we do it in U.S. dollars. That is one of the reasons why we're going to start using a sort of simplified average Forex rate. You can start to see and understand where the growth is overall and pick out the one-off occurrences that will happen. I think number of patients is a key figure. That is very easy to understand. There's no effect by Forex. We're not comparing average daily treatment revenue in SEK versus U.S. dollars. It is just a very clear KPI: self-pay and foundation patients, insurance-based billing patients, and then patient assistance patients. It allows you to see where the growth is or where the stagnation is to a certain degree. As you can see, we're performing strong with improved number of self-pay patients.
We have plateaued a little bit, as you're all aware, in our insurance-based billing situation until we start to see more sites switching. This gives you an indication of how much we achieve in terms of price per patient. Again, I think that's a useful indicator of how we're performing, getting better average income per patient on our insurance-based billing model. Again, I think a useful statistic. In dollars, we'll probably use one or the other, not both, of course, going forward. Just to finish off, what we're trying to represent here is an indication of margins. Now, as you will have all seen through the different reports of late, we've had additional costs relating to peripheral neuropathy, as in when we will continue to have those additional costs. We've had additional integration costs, which create one-off costs, etc.
What we're trying to show here is that we will present our revenues, of course, our gross profits, our operating expenses, both in terms of with those additional costs and without the additional costs. You can start to feel what gross profit margins look like and what potentially EBITDA margins look like removing the one-offs. Now, this is not me giving you forward-looking statements and saying throughout 2026, we will achieve 16% margin. I think it does help give you some clarity in terms of what would be achieved without the one-offs on a normal trading basis, what this will look like. I think going into 2026, when all our costs have been fulfilled from the Dignitana merger, things will become a lot clearer in terms of the synergies and economies of scale that we're going to achieve from that merger.
I think what you can see is that based on the acquisition, we've had some really strong sales growth, and that will lead to improved margins overall longer term. As we start to see those costs being removed from that integration, our EBITDA will continue to improve also. I appreciate there was a lot there, maybe not as much as you'd want on the integration, but I'm very happy to answer any specific questions. I would really welcome your feedback on the proposed new KPIs of how we would like to present. You can provide it today, or you've all got my email. You're very happy to share. What we want to try and achieve is a simplified approach to our reporting so you all understand the business better. That's what's behind the idea of me presenting those slides today. Rich?
Let's dig into the questions. We have one question here from the audience.
All I see is a lumpy sales figure all over. I see declining sales. I see a declining margin, EBITDA margin. How are you going to improve those margins? What are you going to do more actively to not just hold your costs down, but also maybe invest in your own business?
Yeah, absolutely. I think good question. I think some of the lumpiness from a sales perspective is Forex. That's why we want to try and remove that lumpiness to a certain degree. It does have an impact. I also think separating rest of world versus U.S. is important because we're not investing heavily into that rest of world market. You're not seeing the same growth, albeit you are seeing growth.
Overall, on the annualized basis, you're seeing rest of world, for example, growing at about 20%. That's not a bad figure. In terms of the EBITDA, and I'll talk about it shortly, the future is about focusing on some of our operational excellence as well as an organization. Over the period, yes, we may have added headcount, other costs associated with growing the business, but we want to try and improve overall efficiencies now. We've been spending a lot of time and effort over the last six months to twelve months looking at very key business process mapping, looking at how we can automate certain processes, looking at AI as an implementation to support some of those costs. What we don't see is just this additional of OpEx as we grow top line as well.
We're very aware that that could be the case if we weren't picking up on actually improving overall operational excellence as we navigate this next growth stage. In reality, the lumpiness of sales growth in the U.S. should start to deplete once we've got to this simple switch scenario.
As a follow-up, how long does it take to win a client and win a new clinic whenever you go out to find new customers?
New customer acquisition does vary. I mean, I'd love to have a better statistic on it, but you can have early conversations, and it can take up to twelve months to acquire that customer. You can have other conversations which take three months. There is always a lead time because it's not a matter of just delivering equipment and selling. You've got to train.
You've got to go through that sort of multidisciplinary approach to get included. There is a bit of a lag there. One of the reasons for the acquisition, we got those 260-odd customers from Dignitana because it would have been quicker than actually acquiring those customers on a different basis. Our core focus is utilization, not new customer acquisition.
If we keep on the clients' track, what has been the response from Dignitana customers now that you've taken over and acquired or merged with Dignitana? What do you hear from them?
In the whole part, I think positive. I've spent some time with our customers in California. You've seen that we invest a lot in clinical data, science, our people, our infrastructure, albeit sometimes at a high OpEx cost for now, but longer term, it's the right decisions to make. They feel more supported.
I think they're also really pleased with the communications we've started to have regards to the IBBM model and how that looks. Again, they see that as a positive. Having more people, more team provides better customer service in that respect. There's only five of them, really, looking after a large patient population and customers at the moment. As we start to merge the two teams, which we started in November in Philadelphia, not last week, the week before, we're going to have more coverage across the country, which will be better for all our customers, not just Dignitana.
Yeah.
Oh, you have a question.
I can shoot a short one. Do we have all the one-offs regarding the integration behind us in the rearview window, as someone said?
In the rear?
Y eah, in the mirror in Q1. Is that the correct understanding?
Yeah, Q1 is our clean slide. I'm looking to our CFO just to confirm that. Yeah, it is a clean slide. Q4, of course, there's a bit of—there's going to be some costs, but it will be a nice tidy organization with clear synergies to be had.
Yeah, it's impossible to quantify a bit. I mean, Dignitana was losing maybe $1 million-$1.5 million, something like that per quarter when you bought them. Took out the board, the management, closed down Lund, changed the contract with the manufacturing site or contract manufacturer. Could you quantify? Is Dignitana a profitable business as it stands already now, or?
Yes, it is. Yeah, I won't say exactly how, but yeah, it's a profitable business. As I said, strong gross profit margins. We've taken out a reasonable amount of cost already. As it stands, it will be—yeah, it's profitable.
There's a question here again on a little bit of the financial situation that Dignitana was in before the acquisition. It's asking you to give us a little bit more flavor of who contacted who regarding the acquisition. I'm not sure you can answer that, though.
It depends who you ask, I guess. I don't think we were in the situation where we would—yeah, I think it's probably clear. It was a good—it's a good coming together. That's all we need to worry about.
There was maybe—no, no question here. I can continue with one, actually, but it's going back to the reimbursement questions, actually, now. I think that maybe we can start wrapping up the—
I think Victor might have had a—
did you have a—
it was not.
Yeah.
There's one person who is wondering about the actual importance of the CMS reimbursement rates as proxy for private insurance companies. If you can elaborate that and explain how that works again, I guess.
Yeah, so I think there is a certain baseline to it. If you look at our historical data in terms of what commercial payers were paying and how much that's adjusted based on the APC rate over the period, bearing in mind it started at—well, it started at $35, everyone. Thank God it's not there. It then went to $1,850. It then dropped down to $1,250. It then went to $1,450. It then went to $1,800, and then it's now back at $1,450. The commercial payers have not changed from our customer base perspective anything. They've continued to pay.
Now, I do think a higher base would, of course, be better, but I'm not overly concerned at this moment in time.
One question in the audience.
Related to Dignitana, they used to have a partnership with Konica Minolta in Japan. Is that something that you plan to keep running, and do you see any possibility of expanding that, including Paxman machines, possibly to other countries in Asia?
Yeah, they still do—well, we still, I should say, we now—we still do have a relationship with Konica Minolta. So we're assessing that at the moment. They're a great organization. Of course, we've also got a partner in Japan. We need to assess the appropriate route forward with all international partners that we've not already had dealings with, if that makes sense. It's something I can't openly say.
No, no, I understand that.
Looking at Saipan, and I mean, your focus on these four markets, I mean, could that also be a strategy to get a rollout, kind of a global rollout faster to work with large companies such as Konica Minolta, for example?
Yeah, absolutely. I mean, large companies have often the infrastructure to roll out. They don't always have the focus or the interest in rolling out. I mean, we've worked with large organizations like Teva before, other large organizations, and worked with smaller. It doesn't always mean that it will happen quicker. It is a case by case. I need to learn and understand the relationship more with Konica Minolta and spend some time with them before making any decisions.
Our focus is the U.S. primarily, and that will be Paxman directly handling that rollout, along with our partners like McKesson, who are Fortune 5 companies, to support us in that process.
The questions in the chat are now more of a general nature, so I think we can wrap it up with one last question. There is one person wondering, what must happen or what must be first in place before you are comfortable on giving any type of financial targets? Very forward-looking question.
Emeile, do you want to answer that?
We will not communicate anything.
Yeah, if you can repeat the question in the mic as well.
We have made the decision in the board that we will not communicate any financial targets.
Yeah. Thank you for the clear answer.
I know there is interest. Maybe in the future. Never say never, but not at the moment.
Exactly. Yeah.
Maybe perhaps with more certainty.
Yeah. We are nearing the end now, and I think maybe we can hear some closing remarks from you and what you've thought of the—what you're thinking of the coming twelve months. What do you look forward to?
Yeah, okay. Just to give you some idea about where our core focuses are, I think I've touched on this, but these are our strategic objectives or priorities for 2026. It has to be about the simple switch. Without that, no matter how good we are at those three pillars I've talked about, we won't gain the traction we need. I'm confident in that, and that will ultimately drive utilization and then increase EBITDA, which we'll all be happy about.
We've got product commercialization, so that's both our new cap and cap cover, which is going to drive costs down, improve ability to supply, and what we hope is actually improve overall patient experience. We've got the launch of our alopecia and neuropathy products, which will go in tandem, U.S. and other markets, as I've already said, and really establish ourselves as a sort of multi-product company, moving away from just the scalp cooling company we are today. A huge opportunity there. We'll continue to push our rest of world markets, but they can't be a primary focus when we've got all the other things happening. They will continue to provide a good source of revenue, and they will continue to grow, but perhaps not at the same rate as our other parts of the business.
I touched on this before, but operational excellence, this is something we need to do. The business is growing in terms of people, revenues, but we also need to be better at what we do, delivering things more effectively and efficiently, and making sure that it's a good place to work and the work that people are doing is adding value and not just process. Then clinical excellence, continue to really focus on R&D and be leaders in that clinical excellence space. We do have the odd competitor joining the game, and of course, we will do. It's an exciting opportunity for many people, but we hold all this wealth of knowledge, this clinical data, this clinical excellence, and we continue to do it. We continue to invest in the biological research. We continue to invest in clinical data.
That's something that clinical people, professionals around the world really respect and understand, and that's why we will continue to lead the way with scalp cooling and peripheral neuropathy. This is our new facility to support our growth. 2027 is the year we are looking to move in. You are all very welcome when we have our open house. It's taken a long time. It's going to planning committee next week. Hopefully, that is a positive message, and we will look to break ground at some point early in the new year. Moving from a small 10,000 sq ft space to a 30,000 sq ft purpose-built location with appropriate R&D facilities too. This has been supported by our local combined authority as well, which is wonderful, and really sets the stage for our next five to 10 years of growth. Incredibly excited about this opportunity.
I think it's really important that we don't forget why we do what we do, the impact this has on patients. It's very easy to be sort of thinking about gross profit margins, EBITDA, what's our OpEx look like, where's the growth? Let's think about the impact it has on patients. That really does show what the opportunity is. We are scratching the surface. Less than 1% of patients have access to this technology. This is what it means to patients. I met this lady, actually, in Philadelphia a couple of weeks ago where Paxman won the Impact Award from one of the largest advocacy groups in the country, which was a huge honor and a privilege. This lady here came recently, finished treatment, full head of hair, and it's made a huge difference to her life. It really did.
She got reimbursement as well, which was even better. Just thinking about the simple things, keeping your hair for your wedding, letting your children continue to play with your hair while you're going through treatment, or it might be back to neuropathy, the issues that you have with undertaking those normal daily activities. Let's not forget why we do this. It's not just a commercial focus. There is a social focus too. I think we can do both brilliantly. We're already doing a good job, but so much more to do. Thank you very much. This is our future vision. Beyond that, we may go even further, but we do believe we can work in a world where chemotherapy-induced alopecia or peripheral neuropathy is no longer an issue.
Our continued efforts in this field will continue to improve both these side effects for our patients. Longer term, who knows? Could we move into more side effect management? I think so, as the business proves itself in the two fields that it's entering in now. Thank you very much, everyone. I know it's been a long day listening to me rabid on some very dry subjects, but thank you. Appreciate your continued support and your investment in us and your belief in us. This is the start of a journey. We have really got some long-term excellent opportunities. Thanks for your support.