Welcome to SciBase Capital Markets Day. Built on innovation from the Karolinska Institute here in Stockholm, Sweden, SciBase is now a global med tech company dedicated to support healthcare professionals in their work by facilitating early detection and prevention in dermatology. In today's meeting, you will meet with our new CEO of SciBase, Pia Renaudin. She assumed the role last year. Today, she will provide insight into SciBase's current strategy and path going forward. We also have two external speakers with us from the U.S., and that's Dr. Darrell Rigel. He's a medical doctor and a clinical professor at NYU in New York. He will provide his experience regarding the melanoma market, but also the clinical benefits of SciBase's products. We also have Kathy Francisco with us, and she's the founder and CEO of Pinnacle Health Group. She will dive into SciBase reimbursement process and our progression within that field.
Following the presentations, there will be a Q&A session allowing participants to post questions. We encourage you to do so, and you're more than welcome to send in those questions during the whole session. But now, we know that Dr. Rigel has patients to see, so let me introduce Dr. Darrell Rigel. He's a medical doctor and a clinical professor at NYU in New York. He's a global dermatology leader and author of the global ABCDE standard of melanoma detection, and those are used worldwide. He's a former president of major associations and testifies before both Congress and FDA. He's a scientific co-chair of clinical dermatology conferences and educates more than 4,000 colleagues annually. Specializing in melanoma and skin cancer, Dr. Rigel has delivered over 1,000 global lectures and appeared on major networks, and also serves as the team dermatologist for the New York Yankees. Please join us in extending a warm welcome to Dr. Rigel. We're so happy to have you here.
Well, thank you so much for that very kind introduction, and I apologize because it's still night here, so you'll see it's dark in the background. I appreciate you letting me present early, so I could get to my patients in a little bit. So I'm gonna go talk a little bit today about what melanoma, what the market is in the U.S., what the status is in terms of some of the data, as well as why this is an important issue, and how I integrate this SciBase device within my clinical practice. I'll be using it later this morning, even in seeing patients. Let's begin, and of course, I'm biased, but I think that melanoma is probably the most dynamic area of dermatology. There's so many things going on in terms of new approaches to management, assessing prognosis, and a variety of things.
But at the end of the day, probably still the most important thing for melanoma is early diagnosis. It's probably the most clear-cut case of a cancer. If you catch it early, detect it early, and treat it quickly, really can be treated pretty effectively. But once melanoma has spread, it's a lot harder to treat. Metastatic melanoma, there's still no real cure for it at this point. So early detection is really the way to make a difference for our patients with melanoma. Now, these are the 2023 data. The 2024 data just came out actually two days ago. But, again, the trends are the same. You can see that melanoma rates are rising. We had a little glitch, down in 2023, but it's back up in 2024. But this is a lifetime risk of an American getting invasive melanoma right now.
It's about roughly 2%, roughly in that area to do that. But you see, there were a couple of years we had down in the last couple of years. That may have been just from decreased detection from COVID. The 2024 numbers are back up again. Again, I just got them two days ago, but the trend is going in the wrong direction. So bottom line, there's still about 100,000 newly diagnosed cases of invasive melanoma in the U.S., each year, so a large, significant public health problem.
If you add to the invasive cases, the in situ cases, in other words, the lesions that have grown sideways but haven't started growing down yet, almost another 100,000 cases, do the math, about one in 26 or about 4% of Americans will get, during their lifetime, will get an invasive melanoma or in situ melanoma. So again, a significant public health problem. This looks at the data. You can see melanoma is currently the fifth most frequent common cancer in men in the U.S. as well as in women. So again, reemphasizing the importance of this as being a significant public health issue. Now, this was an interesting paper that came out projecting what's happening in the future, and melanoma rates in the U.S. is one of the few cancers that are still rising in numbers.
These are projections made with a. It was a very complex model, but very effective, and they estimate by 2040, which is, what? 16 years from now, melanoma would become the second most common cancer in the United States, after breast cancer. So again, it's a serious public health problem that's getting worse, reemphasizing the importance of early detection and the needs for technology to help us with this problem we deal with every day in our clinical practice. Now, if you look at the deaths from melanoma, which is really what we care about the most, bottom line is that you can see for the decade from 2006 to 2016, we had a continuous increase in the number of deaths of melanoma in the U.S.
We then had a fall off for four years, and this is because there were some new treatments that are available that are delaying death to some extent and helping some of the patients within melanoma, using the new monoclonal antibody approaches for this. But you can see that effect went away over the last three years. And in fact, the new data for 2024, there's 8,240 estimated deaths, so that strong trend is going up again. If we detect melanoma early, we also could cut the number of deaths, too. So looking at the data again, you can see that almost for 2024, over 8,000 Americans will die from melanoma. So almost one American dies every hour. So again, significant.
Typically, the deaths from melanoma are about two-thirds men to women, and that's primarily because men delay getting their spot looked at, so they present at a more advanced time. Again, reemphasizing the importance of having early detection and technology to help us with that every day. Okay, diagnosis of melanoma. Well, this was just alluded to before, but this is our original paper. I can't believe it's almost 40 years ago now that we published this, the ABCDEs of Melanoma, and in 2004, we added E for evolving because change was so important. But the bottom line is that if you can recognize melanoma early, it makes a difference.
This is what ABCDEs were designed to do, is put a template out there where people could look at melanoma and identify what early melanoma looked like, and hopefully come and present earlier, so that we could treat the patients earlier and have less morbidity from this awful cancer. Now, technology has evolved and helped in the diagnosis of melanoma. I think most of you are probably aware of dermoscopy, the idea that you have a polarized light source with a seven to 10x magnifier, where you can see down in the skin, and these are different forms of this. Now, you even have an iPad you could put on there and a wider screen. But the bottom line is, you can see into the skin and see some features that help you better diagnose early melanoma and decide what lesions to biopsy.
Remember that the challenge we face, and I'll be seeing patients in 45 minutes, that these patients come in with multiple moles, multiple pigmented spots. We have to determine which are the right ones to biopsy. I can use my clinical judgment. I can augment this, my judgment with something like dermoscopy to help make the decision, too. And we can use all sorts of clinical, histological, demographic, and historical factors to assess the diagnosis of these, brown spots that the patients come in with. But the bottom line is, new technologies help us make a much more accurate diagnosis, and I'll show you one of the papers in a moment that we published last year looking at this specific issue. So what is Nevisense, and really, what does this device do?
The premise here is that Nevisense is a device that looks at the electrical resistance, the electrical impedance of cells in a lesion. And the idea is that benign lesions and malignant lesions have different electrical resistance, electrical impedance. So when you look at these various tissues, and you look at across various frequencies of what the resistances are, you can see a differing pattern to do this. So this is a very easy device to use. It's small, it's portable, it's battery-powered. You basically put the device on the lesion on the skin. You see what the probe looks like. It's a bunch of little gold probes. It measures the resistance across from one probe to another, across that matrix of probes to do this. It does an analysis, and it gives you a number from zero to 10.
The higher the number, the greater the chances that it's melanoma. That's a very simplistic definition of a very complex and effective device. But each patient gets initial probe, additional probe with that, and in other words, the probe is put on the skin. You measure for a patient, disposable for each patient to do that. So you get this score, as I mentioned, from zero to 10 for this. And this was a paper we published several years ago in the Journal of the American Academy of Dermatology, which is our major journal. And we grouped people, 164 dermatologists. We showed them a number of lesions, pictures of clinical lesions, of moles and melanomas, and we asked them to diagnose whether they do a biopsy or not.
We divided the patients, the doctors, excuse me, then into four quartiles, the green being the highest scores, the red being the lowest scores, and these were when they just looked at the morphology or the shape of the lesions alone. Then we gave them the morphology plus the score from the device. And what happens is, you can see two things. Here's the original gradient. When we gave them the score from the device, when they had that additional information, everybody got better. But what you see is the least good diagnosticians got closer to the best group. So it's sort of a rising tide lifts all boats. In fact, that's what happened here to do this. Now, this was a paper we just published several months ago, and I think this is a very important paper because you've heard about dermoscopy.
We talked about that and that device. And the idea behind this study was, if you had a lesion and you had dermoscopy, if you had this EIS device, the Nevisense device, could you do statistically significantly better with having that additional information beyond dermoscopy? So we had a total of 50 pigmented lesions that where you can see were 15 were melanomas, six were kind of pre-melanomas, very dysplastic, severely dysplastic moles, and 29 were benign. And they were shuffled up, and each lesion was first evaluated by a clinician with just looking at the clinical image, then they were given the dermoscopic image, then they were given the EIS results. So they were evaluated at each point in the process. So for the melanomas, what you see is very interesting. For the clinical image, this group of dermatologists got it right 80% of the time.
If they had dermoscopy, they were significantly better, and they got it to 85%. But if they had that plus the EIS score, they did significantly even better, getting over 91% correctly. So just having this information marginally, significantly improved what you saw with this. If you looked at the severely dysplastic nevi, the high-risk moles, if you want to call them that, same features. You see it went from 60% to almost 70% with dermoscopy, to almost 80% correct with the addition of the EIS score. And then if we combine the two, the melanoma, because you want to biopsy both of those, you can see the improvement again was significant beyond dermoscopy, getting up to 88% with having the information for the two. What about the flip side? What about the benign lesions?
Well, interestingly enough, the group only got the benign lesions right about 40% of the time, but actually, they got a little worse with dermoscopy than statistically significantly worse, but got better again with having the EIS score. So they did also better ruling out melanoma by having the additional information from the EIS score from this. So basically, what this showed was that the Nevisense information significantly enhanced pigmented skin lesion selection for biopsy beyond dermoscopy. And frankly, that's why I use it, to make sure that we make a difference in helping our patients, and we select the right lesions to biopsy and the right ones not to biopsy with this. So just a couple of things here to remember, and then I'll take some questions. Number one, early detection of melanoma is really critical to minimize morbidity and mortality.
I can't emphasize that enough. The melanoma, the size of a 10-cent piece in the U.S., a dime, which is 18 millimeters across, has a 50% chance of having already spread. That's what makes this cancer so lethal. It just metastasizes very early in its course. As I mentioned, melanoma is projected to be the second most common cancer in the U.S., coming up in 2040. Obviously, dermatologists need to know this space to optimize patient care, and they need these kinds of tools to make a difference for this. And this is the only AI technology that really helps dermatologists increase their clinical accuracy that's out there at this point. So it really, it makes a difference. It's easy to use, it's quick, and there's no pain to the patient at all anyway with it.
For all those reasons, it's a very effective tool for us to use in our armamentarium to basically diagnose melanoma in its earliest state. So I will stop at that point and see if I can get out of the share mode here, if I can. Let me stop sharing, and hopefully, I can now see you all, too. If there are any questions, I'm happy to take them.
Thank you, Dr. Rigel. That was amazing, and we truly appreciate you having you here. We don't have any questions at this point, so I will let you go to your patients. But, truly amazing, and thank you so much.
My pleasure. I'm going to work. Thank you very much.
Amazing. Thank you. Take care. And now, let me introduce Pia Renaudin. She's the newly appointed CEO of SciBase. Welcome.
Thank you, and welcome to SciBase Capital Markets Day. So I have been the CEO for a little bit more than three months, and my mission is to drive the commercialization of Nevisense. The objective of today is to give you a status update and also to show you the strategy moving forward, and getting some more insights into the U.S. market and the U.S. reimbursement strategy, because this is really driving our success forward. You have already heard from Dr. Rigel, and after my first part of the presentation, you will hear a little bit more about the reimbursement process in the U.S. So a disclaimer, our Q4 report will be out on the 21st February. So in 2023, we have several milestones that we achieved.
We increased fee schedule in two MACs, and we expanded coast to coast in the U.S. and added four large dermatology chains, and we also strengthened the U.S. team. We raised SEK 70 million in rights offering, and there were several new key studies in skin barrier that were published. Germany continued with its profitable growth, and we also launched a new application at the end of last year in Germany. SciBase vision is to pioneer prediction and prevention in dermatology, and Nevisense is a unique, non-invasive point of care platform that uses AI-driven algorithms to improve the diagnostic accuracy, as you have heard from Dr. Rigel, both in skin cancer, but also in other serious skin conditions. We have been developed at Karolinska Institute, and we are approved in the U.S., Europe, and Australia.
Our business model is a razor and razor blade, so we have a platform that we can expand to new applications, and single-use electrodes comes with that. We have a proven solution with more than 350 clinics, and to date, more than 200,000 patients in Germany only. We have strengthened the U.S. team to drive growth. So you have heard about the fast-moving skin cancer progress. It's the fastest moving cancer, actually growing the fastest in the world, and 5,000,000 patients are detected yearly in the U.S., and 120,000 deaths worldwide on a yearly basis. The addressable market is estimated to SEK 4 billion, conservatively counted, and this is only in skin cancer. The skin cancer market is concentrated to North America, Northern Europe, Australia, and New Zealand.
About 50,000,000 to 60,000,000 patients are screened every year, and the majority of these patients are rather easy to detect. But there is this minority of 20%-25%, where it's much more difficult to assess, and this is Nevisense market. And as you have seen now, an early detected melanoma significantly increases the survival rate. So I will repeat some of the studies, but I think they are so important, so I think they are worth showing again. So this is one of the studies Dr. Rigel talked about with 200 dermatologists in the U.S., where you can see that Nevisense significantly improves the diagnostic accuracy compared to standard of care. And it actually reduces the missed melanoma with 14 percentage points.
You can also see on my slide here that regardless of the experience of the dermatologist, Nevisense significantly improved the diagnostic accuracy, but that those with less experience, they improved even more. And on the right-hand side, you can see the five-year survival rate of melanoma, and you can see that if you can early detect the melanoma, the survival rate is almost 100%. This is a study including 2,000 patients and 265 melanoma. The results show that Nevisense has 97% sensitivity. That means that Nevisense can detect 97% of the melanoma. If you look at the right-hand side, you can see the results, and in the biggest box on the top right, you can see all the melanoma that was detected, both by Nevisense and by the standard of care checklist.
If you see below, you can see that it's empty, and that's because there were no melanoma found by the standard of care that Nevisense didn't find. Then to the bottom left, you can see that there were still a few melanomas that were not detected at all. But what I find the most interesting is the top left-hand box, where you can see all those melanomas that were detected by Nevisense only. So there are a handful of competitor between the visual inspection and biopsy, and I don't have time to go into the details here, but what I can tell you is that Nevisense is outperforming all of these products when it comes to diagnostic accuracy, the data behind the product, or the regulatory approvals.
We have a great product for skin cancer, but this is a platform, so we also have an opportunity in other diseases like skin barrier or atopic dermatitis. Our commercial focus is on skin cancer, but we have an opportunity in atopic dermatitis. Atopic dermatitis is the most common chronic disease in the world. It affects 20% of the children and 7% of adults. This is a very interesting field right now. There are a lot of new medicines coming out. They are effective, they are costly, and they have side effects, and there is an increasing demand for diagnostic tools. We believe that Nevisense is well-positioned to play a role in this fast-moving field. This is also one of the reason why we see great interest from researcher and industrial partners in terms of Nevisense.
There are currently 35 ongoing studies with researchers and industrial partners. We have sold to big pharmaceutical companies, and we are in discussions with big cosmetic companies because they are looking for something that can measure the skin barrier. Last year, we announced our collaboration with Kenvue, former Johnson & Johnson. This is a collaboration when it comes to predict atopic dermatitis in infants, and the results will be ready in 2025. So Nevisense is a combination of advanced EIS technology and artificial intelligence, developed at Karolinska. We currently have 85 publications and 5,000 patients included. Nevisense uses a small electrical signal at different frequencies to really be able to measure under the skin. So what we do is really to measure what cannot be seen. So Nevisense is a platform.
We currently have three commercial indications. It's melanoma in the U.S., and in Europe we also have non-melanoma skin cancer and the assessment of atopic dermatitis. But in the pipeline, there are several publications and studies ongoing that can, for the future, develop new interesting indications. But that are mostly done by researcher and industrial partners. We are focusing on the commercial part right now. With this, I will hand over to you.
Thank you so much, Pia, and now a warm welcome to Kathy Francisco. She's the founder and CEO of Pinnacle Health Group. Kathy and her team specialize in reimbursement processes for healthcare technologies. For more than 25 years, Pinnacle has provided reimbursement support nationwide. Today, Kathy will provide insight into how the U.S. reimbursement system works, but also SciBase's journey to reimbursement broad coverage. Please go ahead, Kathy, and a warm welcome.
Thank you, Sophie. Good morning or afternoon, wherever you're located. I was motivated to start Pinnacle Health Group 25 years ago due to more selfish needs of my own grandparents. There was a huge void in reimbursement for emerging technologies at that time. New technologies couldn't achieve reimbursement for a minimum of two years. I was instrumental in the development of legislation that required our governmental payers to make new technologies available to Medicare beneficiaries within 30 days of FDA approval or clearance. In the past five years, this legislation has been further expanded to include updates that require reimbursement to coincide with FDA or clearance for many drugs and devices. Reimbursement guidelines are dynamic, and I'm pleased to say that we maintain a high level of knowledge, as keeping abreast of these changes is key to our success.
Our strategic team has a proven track record with over 95% success rate with the technologies that we support. I'm going to jump right into reimbursement in the U.S. healthcare market. A clear pathway to successful reimbursement is the development and initiation of a payer strategy prior to FDA clearance. Once FDA clearance is obtained, there must be physician and industry acceptance for the technology before payer coverage can even be initiated. Without acceptance by our key opinion leaders and professional societies, the payer strategy will not be successful. I'm pleased to say that Nevisense has been positively supported by physicians and professional societies to date. A brief introduction to the U.S. market can be summarized into three buckets: Medicare, Medicaid, and our private coverage plans. Medicare is made up of our elderly population, and it's our governmental payer plan.
Medicare is one plan; however, it's subdivided into 12 regions that are managed by seven subcontractors. We refer to these subcontractors as MACs or Medicare Administrative Contractors. Medicaid is our state federally funded program for low-income beneficiaries that may not be able to afford health insurance. Medicaid programs are managed by each of the 50 states, and the state may offer either a direct fee-for-service program or an alternative managed Medicaid option. Each state program makes independent coverage decisions and designs their own fee schedules. Private plans make up almost 60% of covered lives in the U.S. today and include well over 600 different payers. Only 70 of these 600 plans cover 88% of the private payer-covered lives. When developing a strategic plan for a new medical technology, there are three core elements we must consider, and each is handled differently.
These include coding, coverage, and payment. Coding is required for the provider to be able to report the procedure or technology used to treat the patient. CPT coding is developed by the American Medical Association, or AMA, and requires support from the professional society that makes up the physicians using the technology, in our case, American Academy of Dermatology or AAD. The timeline for CPT coding is typically a two to five year cycle and requires multiple published peer-reviewed clinical studies reporting safety and efficacy. Prior to a specific code for a technology, miscellaneous codes are available, allowing technologies to be offered to patients immediately. Coverage requires peer review, clinical data for... Each plan within each market segment evaluates the data and forms an independent coverage decision. Strangely enough, health economics is not a required element for new technologies in the U.S. market.
Although the government can make national coverage decisions for new technologies, this is typically only done when the treatment or technology involves a very high-cost diagnosis, such as heart disease, cancer, or diabetes. In this case, economics may play a role on the national healthcare fund. Payment typically comes into play once coverage is in place. However, there's no mechanism that requires payers to assign a payment rate other than at a Medicare level, with some exceptions. I addressed the three core elements that must be considered as part of the strategic plan for every technology, but I'm gonna move directly into the strategy and status specifically to Nevisense. First, the key element of coding. We have successfully obtained a code that allows providers to report the use of Nevisense. This allows all payers, government and private, to pull utilization data specific to Nevisense.
For new technologies, provider utilization is a key acceptance to all by all payers. There are two CPT coding categories: a Category III coding, that's typically dedicated to new, emerging technologies, and a Category I that follows once utilization is widespread, and the technology has been fully embraced by the professional societies. We have successfully moved Nevisense from a miscellaneous code to a Category III Nevisense-specific code. Coverage is the most difficult of the three core elements and requires published clinical data to support a formal coverage policy. There are three coverage categories that include positive, silent, and negative. Clearly, we wanna stay as far as possible from the negative policy, but for new technologies, it's generally inevitable by the private plans. For Nevisense with Medicare, we have silent coverage across the country, which it's worked very positively for us.
It has allowed our providers to successfully be reimbursed by Medicare. Private payers generally group all new technologies into an experimental investigational status until they're approached to review the published clinical data and utilization within their market. This two to three year private payer coverage process requires utilization as well as local KOL support. We have been able to successfully gain positive traction with our KOLs for payer discussions, and we're currently increasing utilization to drive exposure even more in 2024. Payment is the third element I discussed, and we have a provider tracking system in place that allows us to see the amounts paid to each provider for each patient on a monthly basis. With Medicare, we're addressing payment as appropriate and when needed. As Pia mentioned earlier, we've successfully increased payment, with one of our MACs covering 14 states.
Working with that Medicare MAC, we've gained an increase in the payment level by four times the published amount. Private plans are addressed with each provider individually and require the providers themselves to use cost tools and key negotiation points that are provided by our team. As a manufacturer, we're prohibited by law from negotiating payment levels directly with payers, as it may be considered price-fixing. By providing our customers with helpful tools, it becomes an easier process for our physician practice managers to negotiate appropriate payment levels with private plans. We've seen reimbursement success with Nevisense in all three of our core elements. For coding, we have a very positive relationship with AAD, and we're on track for elevation to a Category I CPT code submission in 2026.
For coverage, we have no need to address Medicare at this time, as we do have Medicare contractors with assigned payment values and providing positive coverage. For private plans, most consider Nevisense experimental, as they do all new technologies in this space. However, we've developed a very clear and positive dossier that's critically reviewed by the payer medical directors, and we've had very positive payer discussions and meetings. Our KOLs have welcomed the opportunity to discuss the use of Nevisense in their practice and the benefit it brings to their patients with these payer medical directors. Provider utilization will be key to increasing coverage with private plans this year, and the sales plan looks very positive to help us do that. We track target policy review cycles. We look forward to positive written coverage policies in 2024.
As mentioned, payment is tracked with providers, and we've developed a cost analysis and payer negotiation tool that assists providers with appropriate negotiations. In looking back to where we started and where we are in 2024, we've developed an effective strategy with very realistic but aggressive goals for successful reimbursement. We review our plan and update status on a weekly basis using key input from our customers, KOLs, and payers. Our dossier is continually updated with input from KOLs and the payer medical directors.
We continue to offer a high level of reimbursement support for our customers across the country, using a team of certified coders who are available to support any of their reimbursement needs. The relationship with AAD is strong and very positive, and it will lead to success of our CPT elevation as planned. Thank you for allowing me to share our reimbursement strategy and our successes to date, our goals, and our timeline. I'm available should you have any additional questions. Thank you.
Thank you, Kathy.
Back to you, Pia.
Thank you, Kathy. It was so helpful and so instructive. It was very good, very clear. I hope it helped all our listeners. I will let you call off, but I know that you have promised if there are difficult questions, you are able to respond to them later, and we can put them on our website, if that's okay. So-
Thank you
Thank you so much. Thank you. So then I will move on to strategy and financials. So our strategy is to become the standard of care, and we have three priorities. The number one is reimbursement and sales in the U.S. The U.S. is by far the greatest market, representing three-quarters of the addressable market in melanoma, with more than 6,000 dermatology clinics. Our second priority is sales growth in Europe, where we want to continue to grow Germany, but also expand to nearby countries, Switzerland and Austria, where we can leverage our current resources. And we will also start to a limited extent into Sweden as well. Our third priority is atopic dermatitis. Atopic dermatitis is this fast-moving field, where we have an opportunity and a first launch in the assessment of atopic dermatitis. So let's start with the U.S.
So we have achieved several milestones in the U.S. We have an FDA approval, we have our own CPT code, and we have clinics using Nevisense, and they are generating claims. Claims is in the center of the reimbursement process. Because when you generate claims, the payers will understand, and they will see that there is a clear market demand, and a market demand is important for them to eventually reimburse the product or the technology. We have two Medicare MACs, and we have also increased the fee schedule in those MACs. We did that last year. So we are right now in a position where we will continue to expand geographically, but we will also work to get more coverage or reimbursement in those states where we have the Medicare MACs.
This is a picture of our current reimbursement status, and you can see the dark blue, the dark blue color. This is where we have the Medicare MACs, and that means that about 20% of the population is reimbursed or covered. So what we do in these states is that we are aiming at generating claims to the private health insurers to broaden the reimbursement or coverage. And once we reach approximately 50%, this is the moment where we switch from a pure reimbursement focus to sales focus. You can also see the light blue color of California. That means that we have clinics there using Nevisense, and we expect that Medicare MAC to maybe be the next one for us. To reach the objective of becoming the standard of care, we have three strategies.
The first one is to targeting large dermatology chains and the key opinion leader. We are currently included in 11 large dermatology chains, and they together have more than 350 clinics, and we are in 34 of these clinics today. But that gives us a huge potential to expand into. Our second strategy is the switch from reimbursement focus to sales focus once we reach a certain level of coverage. And the third one is that we have an objective to be included in guidelines and be supported by the societies, because this would mean that we would be the standard of care. Germany is the country where we are most advanced. We are in 350 clinics, 400 Nevisense installed, and to date, 200,000 patients has been measured by Nevisense.
We are currently at the run rate above 10,000 patients per quarter, and we are supported by key opinion leader and guidelines. At the end of last year, we launched a new application, the assessment of atopic dermatitis. Germany is profitable, and the sales increase is driven by current customer increasing the utilization of Nevisense, but also by new customers and new applications and indications. We are profitable to that extent that increased sales fall through to the bottom line immediately, and we are currently on a profit margin of around 20%-25%. The last report was the Q3 report. It's becoming a little bit dated, but there are still a few things I would like to mention.
We had a record-breaking quarter, reaching over SEK 7 million , double-digit growth, and we grow electrode sales with 60%, and we had a gross margin of 68%. So in summary, we have a very attractive product, a product that has been proven to improve the diagnostic accuracy, both in skin cancer, but also in other serious condition. We have been greatly performing in Germany, and we are now focusing in the U.S. We have a great key opinion leader support, and we have achieved several milestones. We are targeting strong growth, and we believe that we will be at break-even when we have about 800-1,000 devices being used 6-7x per week. We are really committed to become the standard of care. So we're done.
Thank you so much, Pia. Now let's move forward with a Q&A session, and that session will be held by Mats Hyttinge from Redeye. Please go ahead, and a warm welcome.
Thank you, Sophie and Pia. Thank you for a very interesting presentation. I also should say that I would encourage other listeners to pose questions on the site, so I can ask Pia the questions. So you've been at SciBase for just above 100 days, about over 100 days. What's your first impression, and why did you choose to join SciBase?
Why I choose, if I start there, is really because I think the areas is passionate with skin cancer and other skin disorders, but also have a having a unique product. A unique product that has been developed in Sweden, and there is nothing else like it. And also, of course, the phase of commercialization, because this is where my the this is where I have an expertise.
Mm-hmm.
What I find so far is that their product is as amazing as I thought. The team is fantastic, and maybe the most amazing thing of all is actually the key opinion leader support we have. We are supported by the top names in the U.S. specifically, and they are really supporting us in the reimbursement process, as you probably heard here today, and that's something I've never seen before, so amazing. But it's also because the product is really good. So...
Okay.
Mm.
Well, we already have a couple of questions from the audience. I'll start with them, and then I'll follow up with my own. We have one question here. We heard from Dr. Rigel, first of all, is he receiving any payment from SciBase? And also, what's the usage of electrodes? Is it on one patient or several?
He's using on several patients, and he has done a lot of studies as well. He's shown a few studies where he has used Nevisense, so he's a high publisher as well. He gets paid from us in his support in the reimbursement, because this could be quite some hours that he's being used there. Yeah.
Another question is, when working for the Nevisense reimbursement, is the challenge mostly spending time to go through a process, or is it some other challenge to get it accepted overall?
I don't think I heard the first[crosstalk].
No. Okay, so when working towards the Nevisense reimbursement, is the challenge mostly spending the time to get through the process, or is it actually getting accepted reimbursement overall?
Okay. I think it's more the time because we have a very clear process, and we are well supported. We know exactly what we are doing, and we are a small team, so we are working really focused to work state by state and follow with resources as we reach certain trigger points. So I would say it's more the time than... Yeah.
Okay. Then I also, the last question I have right now is: what are some typical objections from clinics when attempting to use Nevisense or to become users?
Ah, good question. I think, actually, when they start using Nevisense, they keep using it. And, I have also been a little bit surprised by the level of referrers we get. So in Germany, for instance, but also in the U.S. now, we get new leads, as we call them, from MDs, from current users. So, they are so happy with the device that they actually suggest it or recommend it to their peers-
Mm
Which is very, very interesting. The majority of objections, I would say that that's before they use it. It's that they, we don't even get there to make them try it because they don't think they need it. I think the objection is more before they use it.
This is one of the challenges, maybe, to get [crosstalk]
Yeah
The access to doctors and whoever is gonna use it [crosstalk]
That's just normal work.
Yeah. Yeah. I have another question. There's a lot of activity here on the platform here. So what's the total installed base of Nevisense in Germany and the U.S.?
In Germany, it's EUR 400.
Mm.
I don't know if the question is also how much are being used, because there are about 200 installed Nevisense in Germany. They are actually being used at least six to seven electrodes per week.
Mm. Okay.
In the U.S., I think we are in 34 clinics, and I think there are about 40 Nevisense installed. But of course, many of them are very new customers, so they are just ramping up now.
Mm.
A little bit lower usage right now.
Okay. Wow, there's a lot of questions, which is good. Financials, someone's asking is, assume that SciBase will need to raise money before the company is profitable. Could you elaborate how this will be done?
We are continuously looking at our current plans and looking at opportunities that could be there that we want to sort of take advantage of. But the board is also considering several different options. We are at the run rate at SEK 5 million for the moment, and that could, of course, be... That is something we can control to a certain extent.
Mm.
I think that's what I can say.
Okay, yeah. We're gonna jump around a little bit here because this covers a lot of things. But I have one here about, can you describe the patient's experience with Nevisense? Does it hurt? Is it less invasive than traditional diagnostic methods?
No, it doesn't hurt. We do penetrate the skin slightly, but that's really... It's so small, so, yeah. We do that, but it, it doesn't, it doesn't hurt. The electrical signal is so small, it, it doesn't hurt either. I, I tried it myself. You, you don't feel it. You feel the pressure of the product, but it doesn't hurt.
There's also a question about the U.S.: Why has it taken time to get up to speed? This, you know, they've been approved for about four years, it says, and you have a strategy with a new partner. What is speaking for you than previously? What is, like, looking forward, what's going on?
It's easier for me to speak for moving forward.
Yeah.
But of course, we are a small team. We have just increased with three more people, so we are five now in the U.S., so it's not a big team. But we have a very detailed plan, and I think what we do now is that we are working really focused. And we have a new leader in the U.S., and he comes with a lot of experience in the reimbursement field, too. So of course, that helps, too. But I think having a focused plan and deploying the resources in the right way, so we are not spreading too thin, but we really know exactly what we are working. And that's why we have a reimbursement focus generating sales and claims to certain patients, so we that can also give us reimbursement in the midterm.
There's one question here about Nevisense in Germany. Is it reimbursed by private insurance companies, or are you working to get more reimbursement by public health organizations? I guess this is about Germany.
Yeah, so Germany. Yes, it's reimbursed by private healthcare, but about 20% of our patients are actually out-of-the-pocket patients. So patients are willing to pay for this themselves.
Okay. Another question here before I start with my own questions. Which is great, though.
Good question.
I like it, like this. How do you see the skin barrier market? How much of the market could you get with the same customer starting now with melanoma? I guess it's that you have the base already. What's the sort of-
So, um [crosstalk]
The outlook a little bit?
Again, to not sort of spread too thin the approach of atopic dermatitis in Europe is to build on the current customers. So, we have launched at the end of last year, so it's about 10 customers that have this new application, and very encouraging results. But we will continue to sort of work with those... build on those current customers because this is buying a new applications and use it. Those patients, they also go to the dermatologist, so it makes perfect sense, and we can do that with current resources.
Mm-hmm. I'm gonna go to one of my questions before I continue with the online here. Going back a little bit, like, on the broader picture, you have pretty much you brought in to be, to push the commercialization. So what is your essence and your vision for going forward, the commercialization, especially in the U.S.?
It's to be laser focused on exactly what we are going to do and do what matters the most to reach our goals. We know exactly what we are going to do now. We have a very detailed plan on the reimbursement. We are going to go to the populated states, and that's where we are then broadening the coverage. First, we have a reimbursement focus. It doesn't mean that we are not selling. We do. But once we get to a certain level of coverage, around 50%, then we will move to just sales.
Mm.
We move from the reimbursement focus to sales focus.
Okay. I'm gonna take one more question myself, and then I'll go back to the ones on the line. You also cover a non-melanoma skin cancer? I mean, it's mostly, I mean, it's Germany right now.
Yeah.
What are your plans for that in the U.S.? I guess, and you've already shown it in your presentation, but maybe you can elaborate a little bit on it.
So that's also, there is a study ongoing, and we probably would need another study from the U.S. So we are assessing that, but right now we have plenty to do with melanoma. And this is just me sort of thinking, but if you already have Nevisense approved for melanoma, it's probably easier to get it then approved also for non-melanoma skin cancer. But this is me thinking out loud. But right now we are focusing really on the commercialization, the product we can sell here and now, but there are a lot of studies ongoing, in the back.
I'm gonna continue when I'm on a roll here. You have, also, of course, in skin barrier, a collaboration with Johnson & Johnson in the U.S. I know it's a long, long process. Could you just elaborate a little bit on how this is going and what the plans are going forward?
It's a collaboration in the prediction of atopic dermatitis in infants. This is a pretty extensive study, which we will have the results in 2025. And, and then let's see what happens. It depends, of course, on the results.
Yeah.
But it's very exciting. But we have a lot of interest from other big industrial partners as well, because there is nothing like Nevisense out on the market. And with this field of new therapies and a need for learning more about skin barrier and being able to test creams, medication, et cetera, we are in a good position.
Sounds exciting. Okay, I'm gonna go back to the audience here. There's two different ones, and it's hard for you since you're also new, I guess. "Do you have any plan how you're supposed to communicate better with the market?" And I guess this is one of the reasons you're here today.
So we want to communicate, and we want to communicate, in a very clear way, the progress we are making, because we are making a lot of progress. But it's hard sometimes to know how to sort of simplify it. That's one of the reasons today was to bring in Dr. Rigel and Kathy to try to sort of deep dive a little bit more in the U.S. market for better understanding. But we will try, and we will improve, and I'm also happy for suggestions.
Mm-hmm
If someone think that-
Yeah
It's not clear enough.
I have a question for the same... from one person, two questions. "Do you have to change electrodes between every patient? How do you know and prevent the doctor from using it several times? And also, why not outsource Australia to local partner?
Good questions. So, the reason for changing the electrodes after each patient is actually because we do go down a little bit into the skin. So the health authorities, they didn't accept to use the same on other patients, because there is a risk if you have tested on a melanoma, for instance, that you could potentially bring other cells into the next body. So that's clearly from a healthcare possibility. You cannot do that. But you can use the electrode 20 times on the same patients, and they often have a lot of lesions. You can use it several times on the same patients. Then in between the different applications, we have different electrodes, too.
Okay. And then the Australian question.
It's a great s ource. Let me bring it with me.
Yeah. You are also another question here. So, you're in German market, and you're expanding to the Austrian, Swiss markets. Will the German sales team be able to handle this, or do you need additional resources?
So, it will be led by the German team.
Mm-hmm.
But they have an additional resource that is breakeven in the first year. So it's...
Sounds pretty good then. If you go a little bit, I mean, you already answered that. What's a little bit about the financials, but what is now, I mean, in the third quarter, there was quite substantial growth in the electrode sales. Is this a one-off, or is this something that you see in a, like, this a new, part of a new trend?
I mean, we expect to, I mean, to continue to grow. That's the whole idea. We are just at the beginning, so I see no reason why we should not continue to grow.
Yeah.
Yeah. I don't know if [crosstalk] that answers your question.
No, that's good. Yeah [crosstalk]
But, uh-
You talked about the need to raise the capital, I know you can't answer more than you did, but what's your current burn rate?
So it's SEK 5 million, and...
Per month?
Yeah, and we could... That is possible to control a little bit.
Okay. I have another question coming in. The possibility licensing your product to other companies, thinking about Japan, Spain, and Italy, is that a possibility?
There are a lot of possibilities out there. We have a Japanese company now testing the product. So, I mean, there are, as I said, a lot of interest, more almost than we can handle for a small company. Yes, a lot of things could happen, but there is nothing concrete on the table today.
I know that you have a solid base in Germany, and I know, of course, it's very interesting to hear your thoughts about... Since you have, it's a platform, as you say, and you can also so you can expand to new things melanoma skin cancer barrier. How is-- Do you see this as a good, as a success at this point, or is it a lot more work to be done to see how it's gonna work out?
No, but it works. It's actually every time it's an AI-driven, it's a new AI-driven algorithm, actually. They can be improved, and there can be new ones. So it's a matter of, I mean, if there are good study results somewhere, we could develop a new application. So, I would say that we have it, and it depends on the data and where it makes sense.
Mm. Uh[crosstalk]
But again, also making sure that we focus [crosstalk] on the-
Yeah
Commercialization-
Of course. Yes.
On the products we have today.
Yeah. You mean with the limited resources [crosstalk]
Yes
You have as a company, I guess. If you, going back a little bit to, to, the reimbursement, of course, because everyone's, U.S. is the main thing and the main market in the future. Can you elaborate a little bit more on, we already heard from Dr. Rigel and from, Kathy about, all these things, but, just to understand clearly how the process is going, how, why it takes time a little bit? And, I mean, we all know it takes time, but how can you take us through, like, in a more simple way, maybe for us, or who doesn't know, knows that much, how, what the process is and what, what's important for you?
Now that the process is to continue to sort of drive utilization in the clinics where we are and expand within those, dermatology chains that we are in today, and also find new ones, of course. But it's also important to focus on generating those claims so the payers can see that there is this market demand. So they need to, they need to see this. It's really important, and then we get more reimbursement. The broader our reimbursement gets, the easier it is for a doctor to just keep using Nevisense for every single patients that enters the door. If there is no reimbursement at all, he might be a little bit hesitant, and he might just pick the right patient and so on. But the more sure is that most, the majority of patients are covered, or at least a big part of the patients are covered, it's easier for him to use it more often.
Mm-hmm. Okay.
I don't know if that made it any clearer [crosstalk]
Yes, it made clear for me, at least. Then I just take a little bit of a follow-up question is going back to Germany in the sense, if you, what's the percentage of out-of-pocket payers you have?
Around 20%.
Around 20%. So, is that a level you're happy with, or you want it to be lower? I guess better to have reimbursement there as well.
No, it doesn't really matter [crosstalk]. For us, it's the same.
Yeah.
For us, it's the same. So I think it just shows that people are willing to pay to get the right measurement and diagnostics for themselves.
Mm.
So, yeah.
Okay, I think that's all the questions I have at this time. I thank you for your answers, and also, maybe you want to finish with some ending remarks.
Oh, thank you. Thank you for helping out with the questions. Now, I think we are in a very exciting moment. There is still a lot of work to be done, but we have an incredible product that has really been shown what it can do in Germany, and in the U.S., we have a strong support, and we are really committed here to make it a standard of care and a success. And I hope that many of you would like to join us on this journey. So thank you for listening in, and thank you for all the, to all the speakers. It has been great to have you here. Thank you.