Hello, and welcome to the Sedana Medical Q4 report for 2021. For the first part of this call, all participants will be in listening only mode, and afterwards there will be a question- and- answer session. If you are listening in through our webcast, you also have the ability to submit written questions. Today, I am pleased to present CEO and President Johannes Doll, CMO Peter Sackey, and Head of Group Finance Linda Frölén. Please begin.
Good afternoon, and good morning to those of you dialing in from the U.S. Welcome to Sedana Medical's Q4 and full year report 2021. As the moderator kindly introduced, I'm Johannes Doll. I'm the Sedana Medical CEO, and I'm here with my two colleagues, Peter Sackey, our Chief Medical Officer, and Linda Frölén, who's heading up our Group Finance. Thank you very much for taking the time with us. On page two, as always, I recommend you give a quick read to our disclaimer as we will be talking about the future in this presentation. If you then go to page three, please, let me again start with why we are here. Our purpose is to improve life during and beyond sedation.
In order to live up to this purpose, the entire Sedana Medical team gets up in the morning and works on only one thing, which is to make inhaled sedation a global standard therapy for critical care patients. These are very exciting days for us in Sedana because we've made some significant steps towards that vision. We've just had the first shipment of our own proprietary Sedaconda drug. Now we're moving from a company that was aspiring to offer the first and only enabled therapy for inhaled sedation in the intensive care units to actual patients out there benefiting from our therapy. That's of course a major milestone for our company.
On page four, if you look at the highlights of the quarter, we are looking back on to an eventful quarter where we've made progress on our key priorities, and we are also looking at a financial performance that we're quite pleased with. We've seen all-time high sales for both the quarter as well as for the full year. We've seen a 2% growth in the fourth quarter compared to the year before, which probably sounds like a modest increase. But keep in mind that the fourth quarter of 2020 was an exceptional quarter, where we had the first COVID winter, and we saw a lot of demand from customers with building significant stock. So I'm quite pleased that we could reach these high levels of the previous year again.
We've seen a gross margin of 71% in Q4, which is up from 64% in the year before, driven by the country mix, which we will get back to, and also by the fact that we were able during the quarter to avoid air shipment to a large extent. On the operational side, you know that we have two main priorities in the company to execute an excellent launch in Europe, and also to already now prepare for what one day will become our largest market, the United States. Fourteen out of 15 countries that were included in the European application have to date given us the green light on a national level. The first bottles of Sedaconda are shipped out of the door.
In January, we had a very nice highlight when NICE in the U.K. recommended inhaled sedation with Sedaconda as a cost-effective option for inhaled sedation. On the U.S. side, we took an important decision to build our own commercial operations in the United States. We got the IND approved according to plan end of last year, which also means that we will in all likelihood be able to keep our timeline and start our clinical trials on time. If we move to page five, I already mentioned we had a new all-time high sales for both the quarter and on the full year.
On this page you also see the significant jump that we have seen in Q4 2020 when a lot of customers built up significant stock as a response to the COVID-19 wave in the winter of 2020, which then also negatively affected the first half of 2021 in some countries. I'm very pleased about these results. On page six, if you look at the regional breakdown, we continue to see very strong performance in our main market, Germany, with 12% growth for the quarter and 9% growth in the full year.
In the other direct markets, which is France, Spain, U.K., Nordics, and the Benelux countries, we've had an interesting year with very low sales in the first two quarters as customers were still working through that significant inventory that they had built up in Q4 2020. We were chasing a pretty significant gap throughout the full year. I'm very pleased that now we do see quite good momentum in most of these markets, and we have actually reached the high levels of 2020 again. I'm looking forward to seeing that positive momentum continue going forward. On the distributor side, these are markets where we do not have our own commercial presence, but we sell our product through distributors. We've had a very strong year overall, almost doubling the business.
Having said that, we've seen a decline in the fourth quarter, which is again also we need to be a bit careful with the comparator here because Q4 2020 especially in the markets in Latin America, there was a propofol shortage which was not available, so people were basically buying whatever they could get their hands on to sedate their patients. Our distributors had over proportionately profited from that situation. If you go to page seven, you see our two main priorities, Europe and the United States, which I will now go through in a bit more detail. Page eight, after receiving approval on a European level last summer, we have now received national approvals in 14 countries.
The only one that is still outstanding and is taking a bit of time is Poland. We've not received a negative answer from Poland. It's just that they are taking a lot of time to get the product approved. We're expecting that hopefully soon. There's three countries in Europe that are on their own path. Switzerland, of course, is outside the EU. U.K., due to Brexit, also take a lot of pride in having their own process now. Italy is the only EU country that was not part of the initial application with these 15 countries. We have submitted in Italy before the end of the year in December, a little bit ahead of what we had planned.
In these three countries, we are expecting approval in 2022. Some of these timelines are a bit difficult to predict, especially in the U.K., where MHRA is quite under pressure from COVID and Brexit and other factors. If you then move on to page nine, we have finally launched in Germany and sold the first bottles of Sedaconda. Of course, an event that everybody in the company has been looking forward to for a very long time. A lot of work has gone into this, and we will have launches over the coming months. Launch timings are mostly driven by, of course, the availability of supply, but mostly from the local and pricing and reimbursement processes and how fast we are able to navigate those.
Of course, we are aspiring to launch as soon as possible in all of these markets. Assuming we get the U.K. approval by the end of the year, we will have the product on the market in all of our direct markets. Now, the big question, of course, is what can we expect in terms of uptake? How quickly will we be able to convert what is now off-label sales to on-label sales? As you've probably seen in our vision, we are aiming at becoming the standard of care. We are not chasing a small market share, but we believe that most patients will benefit from getting inhaled sedation rather than intravenous sedation.
Of course, the level that we are aiming at in the long term is to convert the majority or a significant part of the off-label sales to on-label. I will also say that we are not expecting a straight line, and now that we have the approval, the floodgates will just open, and we will see these sales automatically. We are expecting a gradual ramp up over time. That is because, A- countries don't launch at the same time, so we will see launches over time. Within each countries, it of course takes a bit of time to convert the accounts. From experience in every launch, sales never come automatically.
It's a lot of work. You have to convince the ICU staff to prefer this over generics. You have to convince pharmacists to pay a premium for our branded product over generics. Sometimes you have to navigate kind of committees, purchasing organizations, and you can't always influence that those processes. It will be a gradual ramp up rather than a straight line. If you then go to page 10, we've had a great milestone in January when NICE in the U.K. issued a medical technologies guidance, which was great in two ways. First, NICE recommended Sedaconda ACD for inhaled sedation. As you probably know, NICE does not give out recommendations lightly, so that's a great quality stamp for us.
They also came to the conclusion that Sedaconda leads to significant cost savings, compared to intravenous sedation of almost GBP 4,000 if you look over a 30-day timeframe per patient. A NICE assessment of this sort, as you probably know, is a very thorough process. In our case, it took more than a year. They looked at 21 clinical trials, including our own. If they issue guidance like this, it also comes with an expectation that they get implemented. It does not force healthcare personnel to implement the guidance, but there's a clear expectation that they are being considered and put into practice. As of course, you also know, NICE is a very reputable institution also beyond the U.K.
We're getting a lot of tailwind from this assessment also outside the U.K. If you then go to page 11, this NICE guidance puts us into a very nice position where we can not only talk about the clinical benefits of our therapy that we showed in the clinical trial SED-001. Less opioid use, more spontaneous breathing, shorter, more predictable wake-up times, and at the same time being as good as propofol when it comes to the sedation as such, so nobody has to worry about the patients not being sedated. On top of that, now we can also point to the health economic benefits that NICE has confirmed of almost GBP 4,000 per patient.
This is, of course, a stronger message that NICE has given this assessment as an independent assessment, as opposed to a situation where we would have created a health economic model and try to convince customers that way. If you then go to page 12, let's switch gears a bit and talk about the United States. As I said previously, we have no doubt that the U.S. is our largest potential market with five times the number of ICU beds compared to today's main market, Germany. Also three to four times the net price levels when it comes to the reference therapy with propofol, which of course is not the only input factor into what will be our pricing strategy in the U.S.
It's quite comforting to know that propofol is being sold if you look at the net-net prices. What customers are actually paying, which is at quite a bit higher level than we see in Europe. Even if the approval in the U.S. is still a few years out, we are already today starting to be very focused on the U.S. We are on the ground and preparing that market. On the next page 13, in light of this opportunity that I just talked about, we have assessed different go-to-market strategies and have decided to build our own commercial operations in the U.S. This is because of the size of the potential market, but also because the target universe is relatively manageable.
It's not like we have to cover 300,000 general practitioners in the U.S., but there's less than 5,000 hospitals that do have ICU care in the U.S. Even for a company our size, that investment level and the staffing that is required is manageable. We have defined a target organization that we want to have in place at launch.
We will build that organization over time, trying to strike the right balance between not taking the investments too early, but at the same time, also making sure we do have the proximity to the market so we can generate the insights, understand the market, build the network, so by the time that we launch in likely early 2025, we are well-equipped and well-positioned to do that. I will, of course, also say that this strategy that we have chosen will keep open the option to complement our own presence with complementary partnerships if we decide that makes sense, for example, to further increase the reach or to get access to hospitals that otherwise we wouldn't get access to.
I think strategically, it's very important for us to take our destiny in our own hands and then have that choice rather than being dependent on finding partners. Let's go to page 14, and Peter will talk us through the progress and preparations for the clinical trial in the U.S.
Okay. Yeah. As we communicated before Christmas, we have received the IND approval for the two clinical trials in the U.S. We also have had the study protocol reviewed by the central institutional review board, that's the ethical committee, and they've approved the study protocol. Contracting with study sites is running on, and we expect to have our first patient included in the trials in April. The studies have been given the name INSPiRE-ICU, which stands for Inhaled Sedation versus Propofol in Respiratory failure in the ICU. If you move over to the next slide, which is slide number 15. Looking at the overall timeline, we're recruiting in our European pediatric trial, IsoCOMFORT, and will continue throughout the year.
Two U.S. clinical trials will be starting recruiting patients in spring, and we expect to have the last patient in Q3 2023, and that would lead to an NDA in late 2024. The investigator-initiated trial, the SESAR trial, which is ongoing in France, is still recruiting and will contribute the data to the NDA submission.
Yes. Thank you. Thank you, Peter. If we then move on to page 16, please. A very brief update for what's happening outside Europe and the U.S. We're very clear that our priority lies in Europe and the U.S., but there's some activity, of course, also outside. We have during the quarter gotten approval in two sizable markets, Turkey and Argentina. Both of them are sizable countries with a decent number of ICU beds. And we've also seen a submission for marketing authorization to China, which our partner Kyuan has put into the Chinese FDA end of last year. And they're now in very close dialogue with the Chinese authorities.
While I cannot predict exactly the timelines of the Chinese registration process, because that has a lot of variations, if you look at examples, I'm very happy that we have submitted, and we are now looking forward to getting started and also seeing Chinese patients benefit from our medical device. We've also filed for marketing authorization of the device in Brazil. Brazil, of course, is also a sizable market with 200 million people. It's an interesting expansion opportunity because we're working with the same distributor that is already working with us in Colombia and Mexico. If you followed our reports over the last year, these two markets were the ones that came up as the second-largest markets behind Germany.
It's a sizable business that we have in Latin America, and strengthening that with Brazil once it is approved will of course further strengthen our presence there. Overall, we are active in either directly or through distributors in more than 40 countries, so we have sales in more than 40 countries, with of course the vast majority of these countries selling the device. In Europe, we're now starting to also sell the drug. On page 17, a very brief update from the supply side. We are running a dual sourcing project, a strategy to reduce our dependence on individual suppliers.
It's also not a secret that we are producing the majority of our devices in Asia and shipping from Asia, not just due to COVID, but also due to COVID, of course not the cheapest way of shipping, and it's also related to some supply risks. In order to mitigate that risk, we have started to look into production in the European Union. We have started actually the production of our Sedaconda syringes. So that's an important accessory. Every patient needs between two and three of these syringes every day. They are now being produced in our production site in the European Union, and step-by-step, we will add more products to production that is closer to the customer.
With that, I will hand over to Linda and to page 19, and she will take us through some of the financial highlights of the quarter.
Thank you. I'll skip to comment on sales since Johannes did that quite thorough. For the quarter, we ended up on a gross profit of SEK 33 million, corresponding to a gross margin of 71%. The increased margin for the quarter is mainly an effect of a positive market mix and also lower shipping costs due to more sea freight. When it comes to EBITDA, Q4 ended up at -SEK 13 million, corresponding to a margin of -29%. The increase in cost is mainly increased selling expenses due to higher costs related to the pre-launch activities of Sedaconda Isoflurane, a larger commercial and market organization, and a higher level of activity compared to last year. Also increased R&D expenses, mainly due to a lower degree of capitalization attributable to the initial scale-up of the organization.
Slide 20, please. When it comes to cash flow, cash flow from operations were -SEK 2 million per quarter, -SEK 41 million for the full year, and cash flow from working capital of SEK 12 million, mainly due to high levels of accounts receivable at year-end last year. When it comes to investments, cash flow from investments for the quarter were -SEK 33 million, -SEK 110 million for the full year, and it's mainly related to expenses for clinical studies, work on registration of Sedaconda ACD and Sedaconda Isoflurane in the United States, as well as investments related to the pediatric study in the EU. Total cash flow for the quarter ended up at SEK 571 million, whereof 607 is net from the December capital injection.
Total cash flow for the year was SEK 454 million, which made us at year-end we had SEK 836 million in cash compared to SEK 262 million at the beginning of the year. Slide 21, please. When it comes to the list over our largest shareholders, that's roughly the same as the end of the previous quarter, apart from AMF entering the list after the share issue in December. On this slide, we can also mention that we have started the project to upgrade to Nasdaq Main Market, and we will come back to you with the timeline for that. Thanks.
Thank you very much, Linda. If we then move on to our last slide 22, which is again the highlights of that quarter, which I will not repeat, of course, but I hope we could give you a sense that it's busy days at Sedana. It's very eventful days, exciting days, and we're looking forward to an eventful year of 2022, as well. With that, I will give it back to you moderator, and open it up for questions.
Thank you. Ladies and gentlemen, if you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a brief pause while questions are being registered. Our first question comes from Peter Östling with Pareto Securities. Please go ahead.
Yes. Thank you for taking my questions. I know it's a little bit of a cliché, but I have to say it anyway. Congrats guys, for an outstanding quarter. Over to my question. I have numerous ones. I will limit myself to three initially and then go back to the queue. If we look at the statistics for Germany on patients on mechanical ventilation, the numbers have come down since the recent peak in mid-December, but are still on almost the same average level in Q1 versus Q4. Can you confirm that the demand has been high also in Q1, or was it some stocking at customers, as we have seen in some previous quarters? That's my first question.
Yes. Sorry, were you going to ask your three questions or, should I answer them one by one?
Yeah. Take them one by one. The other two are quite brief.
Thank you, first of all, Peter for your compliment on the quarter. It is true that if you look at the number of ventilated patients, the statistics are still on a relatively high level in the first quarter. While, of course, I cannot comment on the current trading and the sales we've seen year to date, what we see in the clinics when we are out there is still a relatively high level of patients in the intensive care units.
Having said that, from a COVID perspective, we do also see an impact from Omicron, which tends to have milder disease for most people. You see that reflected in the ICUs. From a pure underlying patient perspective, Q1 is a bit slower than what we've seen in Q4. Of course, I can't give you how that translates into sales in the Q1.
I think my specific question was if there was any inventory buildup in Q4 as we have seen in some previous quarters.
If you're referring to 2020, that was really an exceptional year because hospitals did not know what to expect. It was the first winter with COVID. COVID was a new disease. They were much less comfortable with handling these patients. We saw a lot of stock up simply because they didn't know what to expect. There was also in some countries a shortage of propofol or at least rumors of it running out in other places. That's why we saw this an enormous buildup. We've not seen that buildup in Q4.
Of course, you see some end of year rush sometimes in some accounts, simply because they have to spend their budget, so they need to squeeze their numbers into this year versus next. From what we are seeing is that the use in the hospitals is quite close to what's been purchased. We have much more regular purchasing pattern compared to what we've seen in the year before.
Okay. Great. My second question is on the upcoming U.S. study. The study design was approved by the FDA already in July last year. Up until now, you have been rather mum about the actual design of the study. Can you talk a little bit more on what the primary and secondary endpoints will be and how the study will differ versus the European one? For instance, is it still a non-inferiority study versus-
You're correct. I can share some information there. These two trials are both non-inferiority trials. They're identical, so we can call it just trial, the two trials. The primary endpoint is the proportion of time, the targeted sedation RASS interval, which is the same as in the European studies. That's RASS minus one and RASS minus four. It's hopefully the comparator in the label, the dosage, which is slightly lower, sorry, than Europe. The four key secondary endpoints. We're looking at opioid dose over time compared with before randomization. We're looking at time to extubation for patients extubated during treatment. We are looking at cognitive recovery one hour after anesthesia.
Finally, we're looking at proportion of time to pain-free. We have our four key secondary endpoints. It's not too different from the signals we found in the European study. The approach is slightly different, of course, according to FDA guidance. It's a quite fixed sequence testing. When it comes to differences compared to the European study, the randomization is 1.5 to 1. For every three isoflurane patients, there will be two patients treated with propofol. A slight overweight to isoflurane. The reason for this is that we need to have a number of patients in our safety database. We treat isoflurane in our safety database, and that number will be sufficient with our own trial.
We no longer need to depend on any investigator-initiated trials to get the safety database patients. That's one difference. Another difference is that the study is assessor blinded. In the European study, the RASS assessments and the pain assessments were open. Whereas in the U.S. trials, we will use a blinded assessor approach, which means that bedside staff will know what patients are receiving. Every two hours, someone will come in who doesn't know what the patient's receiving. Everything will be covered, blinded, and there will be like a dummy Sedaconda system there. This person comes in and does assessment and leaves the room.
This is one of the things that they did want to see, one of the reasons why they wanted a new trial in the U.S., is that the efficacy trial, the primary endpoint would be performed by blinded assessors. We also have a long-term follow-up, which is a telephone-based cognitive test, cognitive testing and activities of daily living that will be performed centrally via phone from randomate, which we didn't have that type of follow-up in the study.
Can you just remind me about the time where you measured the sedation? Was that 24 or 48 hours?
It's up to 48 hours. Sorry about that. The trial, the duration of treatment is 48 ± 6 hours.
Okay.
The same as the U.K .
Great. Thank you. Just lastly, before I go back to the queue, you had about SEK 32 million in intangibles in Q4. Is that a good number, quarterly number going forward, or will it increase significantly as you start the U.S. trial? I guess what I'm trying to ask is what's your budget for the U.S. trial over 2022, 2023, 2024?
Yes. We've not guided on how expensive exactly the trial is. What I will say is, the capitalized expenses that you don't see in the P&L in this year will be the majority of the cash flow effect. The study is of course a trial with 500 patients in the U.S. While I can't give you a specific number, that's a very significant investment. We should expect non-P&L expenses or capitalized expenses of a pretty sizable amount in the year.
Okay, great. Thank you. I go back to the queue. Thank you.
As a reminder, if you do wish to ask a question, please press 01 on your telephone keypad. Our next question comes from Carl Melldahl with SEB. Please go ahead.
Yes. Hi. Thank you for taking my question. I just have a question in regards to the financial targets and more specifically, the 40% margin target. Yes. That has now been pushed until you reached a steady state in the U.S. Is it possible for you to give any type of indication of when you expect to have reached that steady state? Or if not, could you provide some type of guidance on how you see OpEx levels developing throughout primarily 2023, 2024? That would be very helpful.
Yes. Thank you for that question, Carl. Yes, it's true. We've kept the guidance for 40% EBITDA, but we've moved that after our decision to go to the U.S. ourselves to a steady state after launch. That the current timeline, as Peter has alluded to, is we are expecting, if all goes well, an approval in the U.S. late 2024. Then we're probably looking at a launch in early 2025.
Now, without giving you a very concrete year, but of course, we would expect from a launch that in the third year or so you're starting to generate a profit, and then afterwards, you should reach a steady state relatively quickly. That's kind of as much as I can say. Of course, I'm hoping or I'm expecting by the time that we launch in the U.S., we'll have three years of selling the full therapy in Europe under our belt.
That should hopefully generate cash that would put together with the funds that we have brought in in the fall and finance the launch in the U.S. Now, the second part of your question, the OpEx in the coming years, I think for this year, well we of course don't give out very specific guidance or a range of what the OpEx should be. What you can expect is probably Q4 being a relatively good indicator for what it will look like during the year. The one thing that I will remind you of that outbound freight is pretty big booked as part of the OpEx. That will of course scale up in relation to sales.
We will start to see some costs also from our activities and starting to prepare the market in the U.S. this year. Although the majority of that spend will come in 2023 and 2024. 2024 will be the year where then we will scale up the organization. In 2023 you should expect that we are probably making a few recruitments in the U.S. The way you typically do it is that we focus on medical roles first, because that pre-label period in the U.S. is quite valuable and you need MSLs and medical staff to be able to engage with key opinion leaders on a scientific level.
The actual key account manager team and marketing team and risk code functions, those people build up much closer to launch. Those spend items you would see in 2024 if everything goes according to plan.
Okay. Thank you. That's very helpful.
Next, we have a follow-up question from Peter Östling with Pareto Securities. Please go ahead.
Okay, thank you. I will start off my second period here with my usual question regarding the ISCA and CAESAR trials, especially the CAESAR trial. The study reached its recruitment for an interim analysis already in October 2021, and now five months later, we are still waiting for those results. Do you know if the Omicron surge have in any way affected the timelines for this interim analysis?
I wish I could answer that. I can only say that I know that the recruitment has continued. There's over 450 patients in the trial. We have not received any information, neither on the result of the interim analysis nor when it will be ready. It's the same investigator who's responsible for the ISCA trial, and I believe they're working hard on getting those results compiled and submitted.
Once they have compiled the publication that we get the data, that would be an embargo for us until they're published.
Yeah. Okay, great. The question that I need to ask, I don't know if you will answer it, what price did you get in Germany compared to generic isoflurane for Sedaconda?
Yes. I'll say up front that I will again disappoint you with that question. What I will say is, there's the way it works in Germany is you list the product in Lauer-Taxe, which is kind of the system that all pharmacists in Germany have access to. There's an official list price that is listed there. That is a comparably high price. Then the actual net price depends on negotiations with individual hospitals and our ability to pull through these prices with purchasing organizations and individual purchasing pharmacists basically in the hospital.
The reason I'm shying away from giving out prices is that, of course, you will see a bit of a variance between accounts. Typically, you would have a bit better prices for larger hospital chains or purchasing organizations than for some individual hospitals. If I were to communicate prices and then hospitals learn about that they are paying more, that of course does not help me. What I will say is we've invested a lot of money to get this off-label therapy to an on-label therapy and to have a branded product that is no longer off label, but on label. Of course, we are charging a significant premium over the available generics.
We are also trying to pull through those quite a bit higher prices than the generics with our customers.
Generic price is the one that you had on one of the slides for Germany.
Yes, but that was propofol prices.
Yeah. Sorry. Yeah. Of course.
What pharmacists will look at if they buy the Sedaconda drug is the generic versions of isoflurane that you can buy from different customers. Those products are not approved for use in the ICU. They are mostly being used in the operating theater. I mean, it's a relatively old molecule which has been
Yeah
Around for a while. The generic versions of that are not very expensive.
Just a couple of euros per day.
A bit more than that.
Okay.
I'll leave it at that.
Okay, great. Thank you. Your Chinese partner submitted the file for the device in December. What's the timeline for also getting the drug on label in China?
Everything we've done in China so far is related to the device. We've not started the process for the drug yet. The only place, as you know, where we've filed and got approval for the drug is Europe. What we're currently doing is reviewing our distributor markets and prioritize them in the sense of which markets does it make sense for us to try and register a drug. The factors we are of course looking at is the market potential. We are looking at how much work is it to get it registered.
There's a few places in the world like Saudi Arabia, for example, where it looks like you can get quite far with the European dossier that we've already submitted.
Sorry, Johannes, I have to interrupt you there. I think you misunderstood my question. I thought that the Chinese partner would be responsible for getting both the device and isoflurane Sedaconda approved in China. That you didn't have to do anything or
No. Yeah. No.
Was it only related to the device?
Yes, it was only related to the device. Of course, we can have a discussion with that partner, whether it's worthwhile to also try and register the drug in China. All the activities we've had so far in submitting for marketing authorization to the Chinese FDA, that is related to the device.
Okay. I misunderstood that press release. Could you also talk a little bit about what's happening in Japan? I know that I think you had scheduled a meeting a couple of years ago, but that was postponed when the pandemic broke out. I don't know what the plans are for Japan now that we are hopefully leaving the pandemic behind us.
Yes. The situation in Japan is we do have a local partner, again, that is selling the device. We're getting some sales from that country. Not huge, but some sales. The drug is not registered, as you rightly say. What it will take for us to get the drug registered is having a discussion with the Japanese authorities. Japan and this is the reason why we haven't prioritized this in the short term. Japan tends to be a country that requires a local clinical trial in Japanese patients. Which is of course a significant investment.
In light of the other priorities that we have of launching the product in Europe and preparing for the U.S., we feel that the money is better spent right now at least on these priorities as opposed to running a trial in Japan. That's why we've not prioritized pursuing the drug in Japan at this point.
Okay. Finally, have you met any obstacles during the latest Omicron surge when it comes to customer access and the ability to train customers to use inhaled sedation?
Yes, absolutely. I mean, I think we've had this discussion before. The COVID is a bit of a double-edged sword for Sedana Medical, right? Because we have a few more patients in the ICU that needs ventilation. In the countries like Germany where we have a certain presence, we are rising a bit with the tides. At the same time, we're trying to launch a product, and we want our teams to be out there in the ICU working with our customers and being able to train them and being able to get time with the physicians and so forth. Different by country of course, but in all, you can say that access to hospitals is quite restricted.
It's been that throughout COVID, and we're still not back to a situation where we have free access to intensive care units. It's getting better now in most countries, but we're still not at 100%. We have a bit of an advantage because we are of course bringing a solution to the problem. It's a bit easier for us to get access to ICUs and perform trainings compared to maybe somebody who's selling disinfectants or something like that. It is not at 100% access yet.
I'm looking forward to the days when COVID is over, and we can have full presence in the ICU again.
Yes. Can I just a quick one before I hand over to somebody else. When it comes to the U.S. study, do you expect any startup problems relating to the ongoing pandemic, or will most of the centers be up and running fairly quickly from April and going forward?
Yes. Obviously we don't have a force of 30 educators, so we will not be able to start all sites in April. We anticipate that we will have lots of work throughout the spring up until the summer, activating sites. There are a few sites with this approach that I think they need to see a little bit less of the hard pressure they've had in the last maybe three months with COVID in order to start the new clinical trials. Things are looking good there. Of course, we can't postpone whether there will be a new wave. As things are now, we are optimistic when it comes to studies, study activation, site activation.
Okay, great. Thank you.
At this time, there are no further questions. I will now hand back to the speakers for a final remark.
Do we have questions submitted through the webcast moderator? Yes. Okay. There was a question from the webcast, what period are the NICE cost savings based on? The answer to that is, they have looked at a 30-day period. They've basically looked at the difference in ICU days between our study population and the intravenous population. If you follow these patients over a 30-day period, you also take into account things like nurse time. How much time does a nurse spend changing the propofol bag every couple of hours versus changing our disposables every 24 hours.
That resulted in that cost saving of GBP 3,800 over a 30-day period. I hope that that answers the question. There was a question, are there any plans for new products to come this year? We've been a bit silent about kind of our R&D activities. We do have an R&D team that is of course working on next generation products and also with new products to support the Sedaconda business. The reason we don't kind of guide on when we will launch a new product at this specific point in time is that we need to secure patent protection first and don't give that advantage away.
In the very short time, you should not expect any new products to come on the market. There was a question around what is the anticipated timeline to upgrade to the Nasdaq main list. As Linda said, we've started the process. We think this is an important priority for us for the finance function this year. We've just started the process and are in the process of laying out that timeline. We will come back on what exactly the time plan will be. The process is kicked off. I can't give an exact timing here, but it's moving forward.
If there's no more questions, then I would like to thank you very much for spending this time with us today. Yeah, we're looking forward to report on further progress. Thanks a lot, and you have a nice day.