Hello and welcome to today's teleconference presentation with Sedana Medical. With us presenting today, we have the CEO, Johannes Doll, and CFO, Johan Spetz. We'll do a Q&A after the presentation, and you can, either type in your question using the form that's located to the right, or if you're calling in and would like to ask a question, please press star 9 to raise your hand and star 6 to unmute. We will then announce if it's your turn by saying the last 4 digits of your phone number. With that said, please go ahead with your presentation, Johannes, and Johan.
Yes, thank you very much for that kind introduction. Very welcome to Sedana Medical's Q1 report 2024. Let us begin on page 3, please, with the highlights of Q1. This is now my 10th quarter at Sedana Medical, and of course one that I'm very, very happy with, because it really demonstrates the progress that we have made, and it's very satisfying to see that all of our hard work is translating into visible results. If you have followed us for a while, you know, of course, that the company is very focused on three strategic priorities. First, to bring Sedana back to a steady growth path in our existing business. Second, to reach break-even in our ex-U.S. business as a first important step towards our longer-term profitability aspirations.
And these 2 together, so a healthy growing business and the profits from it, will form a stable platform for our 3rd priority to make headway towards our U.S. approval and prepare for the launch in our largest potential market, which could put, put Sedana on a different growth trajectory. In 2024, we've come out of the gates strong. We have set a new all-time high in sales with SEK 48.8 million, which is up 29% versus last year, or 28% excluding the minor exchange rate effects we had during the quarter. I'm very, very happy that, like last quarter, all of our regions have contributed to the quarter to the growth. We had very solid growth in Germany and the high teens in our other direct markets. The pricing and reimbursement approval in Spain, and especially the MHRA approval in the U.K., are showing effect.
In our distributor markets, we've seen the first order from our main partner in South America since 2022, which was worth SEK 1.4 million. That order, as is worth noting, is not recurring, as it's expected to be enough to meet the in-market demand for roughly a year in Mexico and Colombia. But also excluding this order, we would have seen higher sales in Q1 than in any other quarter before, including the COVID-19 period. Big progress also on the profitability side for the group. We were still slightly negative by SEK 1 million, but we do show a positive EBITDA of SEK 1.6 million for the ex-U.S. business. Admittedly, there was a positive FX effect of SEK 2.3 million.
That has helped a bit, but it's very, very clear that we are very close to a P&L with the EBITDA in balance, which is a very, very important milestone, and one to be proud of, especially considering that I had to report the biggest EBITDA loss in Sedana's history only 14 months ago after the post-COVID year 2022. Therefore, I owe a big thank you to the entire Sedana Medical team that has bought into and also executed a strategy that focuses on both streamlining the organization and simultaneously investing into profitable growth opportunities and grow the business. The cash balance stands at SEK 361 million, which means that we continue to be financed to execute on our plans, including the U.S. study and a launch in the U.S.
Speaking of the U.S., you might have seen that we have had a busy morning with 2 press releases going out. Yesterday we have recruited the last 2 patients for our INSPiRE-ICU 1 trial, and also our second trial. INSPiRE-ICU 2 is getting closer to enrollment completion with currently 23 out of 235 patients that are still remaining. So we'll soon be done enrolling patients, which also means that we can again leave our timeline unchanged. We're still planning for an NDA submission to the FDA in the 1st quarter of next year. If we then turn our attention to page 4, we can have a look at the longer-term sales development with a sharp increase during COVID-19 and the following significant decline in 2022.
The recent years have been quite a roller coaster ride, but with 2024 we are leaving the last shadows of the global pandemic behind us as we now aim for a new all-time high in sales this year, and Q1 puts us well on track to deliver on that, and also gives us a little bit of a head start compared to our financial full year guidance. Let's jump to page 5, please. I like this slide a lot as it shows the impact of all the hard work we have been putting into executing our strategy. We've worked very hard to streamline our entire organization, especially in our headquarters. We have reduced costs in non-customer facing activities across the company, and we've also cut back in countries where we did not see the momentum and the bottom line contribution that we were expecting.
We have done all of this, to, of course, improve the bottom line, but more importantly, to be able to free up resources that we could invest in the front line, specifically in countries where we are operating very profitably and see strong growth momentum. For example, if I look at our German and Spanish teams, both very clear investment cases, we have increased the headcount of our field personnel by approximately 40% since the end of 2021, and that's in a time while the overall headcount in the company has decreased quite significantly. Quite decisive measures that we have taken, which also translate into quite substantial swings in the P&L on the sales side. You can see the typical seasonality with less sales in the summer quarters, but overall the trend is very much going in the right direction.
At the same time, we have moved from an EBITDA loss of more than SEK 83 million in 2022, which was a minus of 68% to a P&L that shows only slightly negative EBITDA, in Q1 2024, or even slightly positive, looking at only the ex-US part. There's no doubt that we are a stronger and healthier business today. If we then move to page 6, please. I would like to talk about our performance by region. In Germany, we again saw a slightly lower number of ICU patients than the year before. The main reason here is still that ICUs are struggling to fully staff their teams, and as a consequence of the staff shortages, have to limit the beds that they fill with patients. Again, a word of caution here.
After the end of COVID, we no longer have the same quality and granularity of publicly accessible data. So, for example, these numbers include both intubated and non-intubated patients, but they do show a certain trend. Anyway, against those slight market headwinds, we had a strong quarter, with 17% growth in EUR. What we see here is the impact from having extended the team, and new colleagues getting up to speed, and also starting to deliver. And also the results from our overall focus on field force effectiveness measures, such as maximizing the time we spent with customers, targeting the right accounts, enhancing the visit effectiveness, etc. On page 7, we can have a look at our other direct markets. Again, year-over-year growth above 50%, and another great step forward towards our objective to become a little less dependent on Germany.
These markets combined have now reached almost 30% of our total sales, which is great to see. The biggest contributor, at least in absolute terms, is still Spain. We had a great year last year with updated treatment guidelines, pricing and reimbursement approval, and an expanding customer base. We continue to really benefit from that, and the very high growth rates are still not slowing down. Great news also from the U.K., where the admittedly long awaited MHRA approval, together with some changes in our go-to-market approach, have indeed led to a significant acceleration of our sales growth. In that case, it seems we have reached an inflection point in the U.K., and I'm really looking forward to seeing further growth.
In France, growth was a bit slower than we expected during the quarter due to some unfortunate sick leaves that we had on the team, but that shows also a little bit how much we depend on our teams being out there and present with customers. So in that quarter, we couldn't have present with customers as much as we would have liked, but we still see growth, and there are great further growth opportunities in some important university hospitals that we have started last year, and a couple of tenders that are underway as well. Let us go to page 8, please, where we see our distributor business representing approximately 10% of our sales in the quarter.
For that part of the business, we have been through a pretty long period of declining sales, as it took a long time to get COVID out of the system, where we saw a lot of extraordinary demand in several regions of the world, and inventory effects have hurt the business a lot. Q1 was then a quarter where we have received the 1st order from our main South American distributor. It was the 1st order since 2022. And since the last order was 2 years ago, it's really good news that we're coming back to a normalization here as well. It's worth pointing out that many of our distributor partners do not buy as frequently as our customers in the direct markets do, which usually has to do with shipping costs, import tariffs, etc.
So also the South American order is one that is expected to fulfill the demand in Mexico and Colombia for approximately a year or so. So we will not see this kind of order every quarter. Outside this one order, the other distributors in aggregate showed a small growth of 3%. Then let's have a look at page 9, please. So where does all of this put us with regards to our full year guidance that we have published? We have promised to deliver a full year sales growth between 14%-18%, excluding exchange rate effects, which compares to last year's growth of 16% and EBITDA break-even in our ex-U.S. business during this year. On the sales side, the Q1 sales clearly the growth exceeds what we have guided for. We had 28% excluding exchange rates.
We're of course happy to have generated a head start versus the full year target already in Q1, and also on the EBITDA side. Technically, we've already done what we promised with a positive ex-U.S. EBITDA in Q1. Great start for sure. Of course, it's too early to declare victory, and we will continue to work hard on both the top and the bottom line. We will leave the guidance unchanged for now, as it's still early in the year. But of course, we see ourselves very well on track towards our goals. Let us switch gears to the United States on page 10.
The U.S. is our largest growth opportunity, and one of the reasons why we are so focused on turning the ex-US business profitable, as we want to be able to launch in the U.S. based on a stable platform in Europe and one that generates cash. We have estimated the U.S. market potential for our products to around SEK 10 billion-SEK 12 billion, which is 3 times as much as in our current direct markets combined. This is because, of course, a higher number of ventilator beds, but also a medical practice that favors intubation and mechanical ventilation more than we do that in Europe. Also an overall higher price level. That attractive commercial opportunity coincides with the fact that we are dealing with a very concentrated customer base compared to other markets. Less than 5,000 hospitals have intensive care units.
Less than 3,000 have units with more than 10 beds. Those tend to be in the metropolitan area. You don't need hundreds of key account managers to cover our customers. Based on that high commercial opportunity and comparably manageable investment size, it has led us to the decision to build our own commercial company in the U.S. to launch inhaled sedation onto the U.S. market. Having said that, as we've said before, we also keep the flexibility to complement our own presence with a potential partnership if we assess that a potential partner could help us get faster sales uptake, broaden our reach, leverage existing relationships, etc. We could create more value overall. Of course, we would consider that. We're still keeping the same timeline. We want to submit our NDA to the FDA in Q1 of next year.
So in a year from today, or a little less, the dossier has hopefully already gone to the FDA. As we've said, one clinical study is done, INSPiRE-ICU 1, and the other one, INSPiRE-ICU 2, is only missing 23 patients. What will be happening, or what is happening after the enrollment is done, is a 3- and 6-month follow-up where patients are receiving a call to assess their quality of life, their cognitive abilities, psychological state, etc. We are using that time while that long-term follow-up is going on to write big parts of the NDA's dossier already. That work has actually started already a while ago. We will do a database lock on the main part of the study. So a lot can be done in parallel here.
Adding the actual long-term data when it comes in will be relatively quick, so we can save time overall. If we submit Q1 next year, which is very much the plan, the standard would be a 10-month review time minus potential benefits from the Fast Track designation that FDA has granted us. There are, of course, cases where Fast Track products were approved in 6 months instead of 10. But again, as I've said many times before, the FDA is calling the shots here. We can only bring forward the best possible arguments, but at the end of the day, it's the FDA that decides, and they will only do that after the submission. So we're still making no promises on any kind of shortcuts here, even though we'd be very happy if we get them.
If we turn to the next page, page 11, it's worth reminding ourselves that we're dealing with the same primary and secondary endpoints that we have successfully shown in our European trial, Z001. Does that mean this is a zero-risk trial? No, of course not. There's always risk in a clinical trial. But as there's no medical reason why our therapy would work in German patients, but not in American patients, that risk is at least reduced compared to the average phase 3 trial. The primary endpoint, as in Europe, is showing that you can keep patients in a predefined target sedation range, and it's really the secondary endpoints that will hopefully show the real benefits versus propofol, as we have been able to do in the European trial.
For example, if I were to highlight one of them, we know from our European trials that our inhaled sedation patients need less opioids, 30% less in Z001, and even 50% less in our pediatric trial without these patients experiencing more pain. So now that's, of course, a great clinical argument in our everyday life in Europe already today. But if there is one country in the world that is most sensitive about avoiding opioids because of the devastating opioid addiction epidemic that's going on and more than 100,000 drug overdose deaths every year, it's, of course, the U.S. and also the FDA, due to their own history, is very, very much focused on reducing the use of opioids. So bringing a therapy that will reduce the use of opioids in a very vulnerable patient population would be a major plus on the U.S. market.
We can then go to page 12, please. This is also a slide that I like a lot because it really shows the caliber of clinical trial sites that we are working with. You will find the most prominent institutions in America on that list, including, for example, Johns Hopkins, Columbia, Mayo Clinic, Cleveland Clinic, Harvard, Mass General, and the list goes on. So I'm just naming a few here. And that is not just great from an academic point of view, seeing how some of these key opinion leaders in the space just gather around this novel way of sedating patients in the ICU is just hugely encouraging and provides a great platform for future commercial success. Then page 13 gives you a little impression on the conferences, symposia, events, etc., that we have dealt with that have dealt with inhaled sedation in Q1.
I'm always very happy when we fill a room with people that are as excited about inhaled sedation as we are. If I compare 2.5 years ago when I started in this role, we did fill the big rooms in Germany, but we're still very kind of exotic in other places. And today we really see hundreds of attendees at many of our events in different countries. So while you can't one-to-one translate attendance of a symposium into sales performance and nothing happens overnight, of course, I do see that inhaled sedation is developing into a true global movement in the ICU space. It's also worth mentioning here that, for example, the events that you see here in Brussels, ESICM, and also the one in Barcelona, there were very well-attended sessions of inhaled sedation without Sedana organizing them.
So in these cases, it was one of the study investigators from the U.S. and a top key opinion leaders from Spain that were asked directly to present on inhaled sedation. So it's really great to see that there's enough pull for learning about inhaled sedation, even sometimes without us having to push. So if we then move to the next slide, we're entering the finance section, and our CFO, Johan Spetz, will take you through the details here.
Thank you, Johannes. Yes, so in terms of the financial results for the first quarter, 2024, Johannes has already mentioned some of these numbers, but it's always useful, I think, to go through them in a bit more detail. So we report net sales in the quarter of SEK 49 million. That's up 29% relative to the same period last year, or 28% if we exclude currency effects.
Sales in Germany increased by 18% year-over-year, or 17% excluding FX. Our other direct markets show very strong growth again, 55% up relative to a year ago, or 54% excluding FX. And as Johannes pointed out, it's mainly driven by Spain, as we've seen in recent quarters as well. And now also the U.K., starting all, albeit from a lower base, but very strong growth rates from the U.K. as well. And the third bucket that we present in terms of our sales are distributor markets increased by 45% during the quarter compared to last year, 44% excluding FX. And again, that's driven mainly by a large order from our main South American distributor. Excuse me.
Our gross profit for the quarter was SEK 35 million, which corresponds to a gross margin of 71%, which is down from 73% in the same period last year. This decrease in gross margin mainly relates to the product mix, and in particular, the fact that we are now selling proportionately more of our pharmaceuticals, Sedaconda isoflurane, in terms of share of our total sales. EBITDA for the quarter for the group as a whole was slightly negative, so -SEK 1 million. Importantly, it's a big shift compared to a year ago when it was -SEK 11 million. If we look at the EBITDA excluding the U.S., so looking at our ex-U.S. business today, as Johannes has highlighted already, we report a positive EBITDA of SEK 2 million, which of course is a massive milestone for the company.
If you look at what's driving this improvement in EBITDA compared to a year ago, it's mainly sales. So if you look at OpEx, we report a similar level of OpEx this quarter as we did in the first quarter of 2023 of SEK 44 million. So relatively stable there. What this hides to some extent is that we continue to decrease our selling and administrative expenses due to the organizational efficiency measures that we have put in place. In the first quarter of this year, those gains were offset by increased R&D expenses, which is linked to the fact that we capitalized slightly less or had a slightly lower capitalization rate than the same quarter last year. But overall, OpEx in total very much in line with last year.
Also worth pointing out here is that the EBITDA is helped, as Johannes also pointed out earlier, by a positive FX effect of SEK 2 million. But still, of course, a clear and important improvement in terms of EBITDA. Going forward, we continue to find ways to streamline our headquarters and administrative functions in the company to find further cost reductions while at the same time also investing and adding resources to our frontline teams and customer-facing functions to really continue to drive sales growth. This can be seen also in our staffing numbers. During the quarter, we added 4 colleagues in Sedana Medical. We're now at 90 people, including consultants, at the end of the quarter. That's up from 86 at the beginning of the year.
And again, that's related to us adding field force personnel in our prioritized markets in Europe. And then if we turn to the cash flow and cash balance on the next slide, we report a cash position at the end of the quarter of SEK 361 million. That's compared to SEK 382 million at the beginning of the year. And this decrease is driven by investments in capitalized development expenditures, which is primarily our U.S. clinical trials. If we look at the components of the cash flow during the period, we have cash flow from operations of positive SEK 8 million. That is including interest received of SEK 4 million and also a positive working capital effect due to delayed payments related to our U.S. clinical studies.
Cash flow from investments in the quarter, there you see we report a large positive number of SEK 103 million compared to a larger, even larger negative number in the same period last year. Those numbers are very much influenced by us investing last year and this year getting repaid our deposits. That we invested into to achieve better interest rates than we would in our normal bank accounts. Trying to adjust for those flows, we can see that investments in intangible assets, so mainly again our U.S. clinical program, those, that type of cash flow from investments totaled SEK 52 million in the quarter.
And then finally in terms of cash flow, so total cash flow, again, if we adjust for the deposits and the impact of that in this quarter and the corresponding quarter of last year, we see total cash flow amounting to minus SEK 45 million for Q1 2024. Well, then perhaps just to add for some further explanation, so we have that total cash flow amounting to negative SEK 45 million. But then if you look at the top of the page here, you see that our overall cash position was only reduced by SEK 21 million in the same period. So the difference there is related to the FX gains that we make on our cash position that we hold in U.S. dollars. So as you may remember, we have approximately 75% of our available funds in U.S. dollars.
That's that effect coming through and helping our cash balance at the end of the quarter compared to our cash flow during the period. Again, we expect to be fully financed until break even and to be able to execute on our strategic plan, including U.S. approval and launch. As a reminder, we have no long-term debts in the company. Then on the next slide, you can see our largest shareholders at the end of the quarter, and we remain very grateful for your continued support. With that, I will hand back over to Johannes.
Yeah, thanks, Johan. To wrap it up, as always, let's take a step back, recap the investment case for Sedana Medical. Our business model lends itself to quite attractive profitability over time, and that is for two reasons.
We continue to see good gross margins of 70% and up. So by definition, we can become quite profitable as a business when we reach scale. On the customer side, we're dealing with intensive care units, not primary care doctors, so a relatively small target group that can be covered with a reasonable operating expense level on a local level. We already have proof of concept for that in our main market, Germany. The majority of ICUs is already our customer today. The team is generating really attractive EBITDA margins on a local level. While we're maybe not at the same scale yet, other countries like Spain and now soon also the U.K. are operating with similar EBITDA margins on a local level already. So we do have the proof of concept that we can run the business in a profitable way.
So it's all about reaching scale. Convincing enough hospitals to use inhaled sedation more broadly and achieving profitable growth. And here we have convincing clinical data on our side, showing that patients really benefit from inhaled sedation. And equally importantly, these days, we can also show that hospitals save real money with inhaled sedation compared to the previous standard of care. We have lots of places to grow to create new Germanies. We are well underway in several markets, as you've heard today. We have regulatory approval in 18 countries in Europe. And the largest commercial opportunity, the U.S., is still completely untapped. We're getting closer. And the FDA has given us Fast Track designation. And so FDA permitting, we will see a launch in 2026.
Let's not forget, very important, of course, these days, we still, as Johan just described, have a balance sheet that is still strong and the commitment to get to profitability outside the U.S. and not being dependent on external funding. That concludes our presentation again. A quarter that we're very pleased with to see the progress. Thank you again for listening, and we'll be very, very happy to take your questions.
Thank you very much for that presentation. Like I said, now we'll jump into the Q&A section here. If you'd like to ask Johannes and Johan a question, you can either use the form that is located to the right, or if you're calling in, please press star nine to raise your hand and star six to unmute.
We will then announce if it's your turn by saying the last four digits of your phone number. We've got the first person calling in ending with 3089. Please go ahead, you have the word.
Hello, this is Mattias Vadsten from SEB. I have a few questions for you today. In the United Kingdom, you indicate in the report that you're improving here quite clearly, and you have an MHRA approval, of course. What I am wondering is that, you know, if you could put this a little bit more into context, are there further sort of customers willing to listen to you now, or are you even seeing pull effects? Maybe a bit more sentences on the United Kingdom would be appreciated. That's the first one.
Yes, so then let's take them one by one. Thanks, Matthias. Good question.
So yes, the U.K. is definitely one of the markets we are very pleased with this quarter. The U.K. has been operating with a little bit of a disadvantage because we didn't have the full regulatory approval. Now that came late in the year after waiting a long period of time. And what we've seen then is a combination of things. So it has been customers that started up that maybe were waiting for that approval to be in place. So sometimes the dynamics in a hospital are such that it's quite easy to use the lack of approval as an excuse to delay the implementation of a treatment. So that has definitely helped. What's also helping us is, remember, we got a very positive NICE guidance before we had the regulatory approval, which is kind of the unusual order here.
And in the U.K., a NICE guidance. I mean, it's not mandatory to implement it, but it comes with a certain implementation expectation. So as a healthcare professional, you should follow what NICE is recommending. And now with the fully approved therapy, that has caused more customers to use our therapy more broadly. And what has come on top, and that's always a very, very important factor. We've also made progress just on the execution side with better focus, a better go-to-market model. And the team that is really performing well at this point. So it's difficult to point to just one reason that the approval, of course, has helped. It's been a mix of new customers and old customers using more plus better execution.
So it's really a mix of things that has led to very, very positive development and a true inflection point if I compared with the growth before.
No, I think that's a good answer. In terms of Spain, are you willing to give the sort of run rate growth rate in Spain just to get a feeling of at what pace we are growing there? And then also in Spain, and perhaps also U.K., if you put it into context to like Germany where you have a very high penetration in certain hospitals or ICUs, let's say. Is that the same in Spain and the U.K. where you have sort of a few successful customer counts that you have a very high penetration at?
Yes, so we're not as you know, we are reporting the sales for these markets in aggregate.
So it's basically the sum of Spain, France, U.K., Nordics, and Benelux together. What we've also been saying is that Spain has the lion's share in the sales and both and also in the growth. So if you have the markets on average grow more than 50%, then with your very, very good analyst capabilities, you can probably figure out that the growth in Spain was even higher than the 50%, quite a bit higher without giving you a precise number. Sorry for that. And in terms of penetration, these markets are still a little less mature than Germany, of course. So what we have in Germany is really a couple of accounts that use inhaled sedation as the standard. So with almost the majority of patients that come in to the ICU receive inhaled sedation.
Those type of customers are still quite rare, both in Spain and the U.K.. We have a few that are coming close. But it often takes a little bit of time of getting used to the therapy to really implement it as the number one choice. So probably the average customer in Spain and also in U.K. is still a bit smaller than the average customer in Germany. But what I find quite important, and that's what gives me a lot of confidence, is we do see a really good momentum. And let's not forget, Germany was not built over one year or two years either. That took a long time. So the team has a big head start.
So compared to the development we've been through in Germany, I'm very pleased with the speed at which we progress right now in both Spain and U.K., the two countries you mentioned.
Good flavor. Next one is on OpEx in the U.S., because it almost looks like you, you know, you'll be profitable on a group level pretty soon. You don't need to talk about actual costs in numbers in the U.S., how it will develop going forward, but maybe a bit more on how you think about adding personnel and sort of what kind of personnel that you need end of this year and sort of into next year. That's the next one.
Yeah, sure.
So for that question, you always have a little bit of a balance between on the one hand, wanting to prepare for the launch as diligently and as good as possible. And you need to balance that with the financial realities and us not wanting to have a big organization sit on the P&L too early before launch, right? And the way to solve this is for us now that we have concluded the enrollment of Inspire ICU 1, we're getting very close to the Inspire ICU 2. So it's not very far away that we will get the top line data in the second half of the year. That will inform us. I mean, it's no guarantee, of course, but we will know how likely it will be that we will have a product on the U.S. market.
Of course, we very much hope that those news will be positive. Once we have those data, we can feel more comfortable ramping up the team. But then also, as you say, we have to be very smart about the timing here depending on the different role. Of course, you want somebody to lead the U.S. team to come on relatively early. So let's say late this year, early next year. And you would want to have a bit more medical staff because there's this kind of profiles like an MSL or medical affairs can speak to physicians pre-approval. They can attend conferences. They can build a KOL network building on the great relations we've already have with the different clinical trial sites.
But then the more sales-related roles, for example, the key account manager that will at the end of the day cover the hospital, those you would want to bring in relatively late, let's say a month or two before the launch such that you have enough time to train them and for them to get comfortable with the territory, do account mapping and so forth. Because there's not very much they can do at the customer interface before you have the label approved. You're not allowed to sell. You're not allowed to do any pre-selling in the commercial roles. So it's kind of a staggered approach where the trigger point will be the top line data, as I said, and then depending on the role between launch and later this year, we'll ramp up a bit.
Good.
The next one is only on if you could give any sense of how the cost for the U.S. studies will level off here. Maybe talk about it in the context of when you have recruited all patients also in INSPiRE-ICU 2. Because I imagine patient enrollment costs a lot. Or how should we see it?
Yes. So if you look at the cash flow that Johan has been through, I mean, there has been quite a few effects this quarter. But if you cut to the essentials here, the biggest cash out, of course, is capitalized expenses. And in that, by far, the majority is the U.S. trial. And the way we pay for the U.S. trial, of course, we're not running that ourselves. We're working with the clinical research organization.
There's essentially three elements here that we need to pay for. One is most clinical trial sites ask for a startup fee. So just to include them in the study, you pay a certain amount. Most of that is behind us because of course we are not opening any new study sites anymore now that we are so close. The biggest part by quite a margin in the cost is a per patient fee. So every patient that gets included in the study, we pay to the hospital a certain amount. That amount is different by clinical trial site. But it's quite a substantial amount. So that directly correlates with the enrollment speed right now. We of course, we're running full speed. As you saw, a higher number of that in Q1.
Q2 will also still be quite high as we are enrolling a lot of patients. And then the last one is simply a fixed fee to run the project for the clinical research organization, which is why we have such a big interest in finishing the study on time so we don't run over budget on that end. So what all of that means now is as soon as we have stopped enrolling patients, the bulk of the spend will be behind us. So we said that 23 patients are still missing in ICU 2. So it's a matter of weeks or a few months until that's done.
After that, you would of course still have a little bit of a lag effect until, from a cash perspective, all the invoices are paid and so forth. But with the study recruitment ending, that cost will come down quite dramatically. We will still have U.S. costs for preparing the dossiers, statisticians, medical writers, and so forth. But it will be nowhere close to what we have seen. So we will have a few quarters still with a little bit of a lag effect where the cash out on the U.S. is quite high.
But then that should be reduced quite a bit, which is also why we're confident to say that the cash level we have at hand will be sufficient to bring the product to market because we will not see SEK 50 million cash out on the U.S. trial per quarter for very much longer.
Thank you very much for that.
Okay, we'll move on with a Q&A here. And also a reminder to press star six to unmute yourself, and we'll take the next person calling in ending with 6771. Please go ahead, you have the word.
Hi, it's Filip Eneberg from Pareto. I believe most of my questions have already been answered, actually, but I just have one on the growth side here.
So you seem to acknowledge that you got a quite a head start towards your financial target now for the year, but I'm just wondering what it would take for you to update them. Is it just to see another quarter with similar results or what would you want to see?
Yes. Yes, I can understand your question for sure. We are off to a good start. As I've said, we are trending above or quite a bit above our full year guidance. Also, if you take out the South American order, which will not be recurring every quarter as I said. Still, this was one quarter out of four, right? So the seasonality we have in the business looks a bit different every year. For example, Q2 last year was quite strong in relation to Q1.
So let's see how things develop, and then we can assess what that means for the full year guidance. As a general note, as I've said before, I like to be a bit cautious when planning for the revenue side because it makes it easier to stay very disciplined on the cost side. We want to build a company that does not need 28% growth this year every quarter to break even. We've made very good progress over the last five quarters, as can be seen in our P&L by both growing the sales and saving costs at the same time. But we cannot at all afford to become sloppy and where we invest and where we don't. So we must keep the focus and as much easier to do, I think, with a slightly more cautious revenue planning.
Now, of course, if during the year we come to the conclusion that the guidance should be changed and the board of directors sees more upsides in this year than we have previously guided, then we will, of course, adjust that. But I think doing that after a Q1 with still the majority of the year to come, that would be a bit premature.
Okay, thank you. And just the other one. So this South American distributor that can be counted as a one-off. But were there any other such that can't be counted as recurring revenue?
No, so we singled out that one because it is for the distributor business a comparatively large order. But the fact that it's recurring is actually not so unusual for the distributor side.
So a normal hospital will buy our products, let's say, every six weeks, every eight weeks. So they have a little bit of a stock, but they buy quite regularly for many of our distributors, not all, but many of our distributors. It's like a once a year purchase, sometimes even less often. And therefore, that has to do with like import tariffs, shipping costs, and so forth. So it's a different dynamic in that business. So we always have a little bit of that phenomenon that depending on whether an order falls on one side or the other side of the quarter, a quarter is stronger or weaker. But we did single out this one because it was a little larger than what we usually see.
But there's no other effect in the sales of that size or even close to that size that would be worth mentioning as non-recurring.
Okay, thank you very much. I believe you had handled all of my other questions already. Thank you. Sure.
We'll move on with the written questions that we got. We'll start with the first one here. Can you please explain which factors will have the most impact when you set the pricing of inhaled sedation in the U.S. given FDA approval?
Yes. It's probably a little premature to answer that question. We still have some time, but the way to think about it is, of course, it will depend to some extent on the clinical trial results that we will get.
So in Europe, we were, as you know, fortunate enough to show that in many aspects, inhaled sedation is better than propofol when it comes to how fast patients wake up, how much spontaneous breathing you see, how much opioids that they use, etc. The more of these benefits we will see in the study and the more of these claims we get approved, so we can talk about it. Of course, the more pricing flexibility we have. And of course, what we will also take into consideration when setting the price is that our hospital, and we hope to show these results in the U.S. trial as well.
But if it's similar to what we've seen in Europe, we will be able to say that our hospital has a direct financial benefit from using our therapy because our patients would leave on average the ICU 3.5 days earlier based on the European results. And that, of course, makes a big, big difference for a hospital because the intensive care unit is the most expensive place to do care in a hospital. So from that perspective, it's very important for us to also consider how much value we're actually creating for the customers. Now, giving a price level at this point in time is, as I said, too early.
What, of course, we hope for is that we can benefit from the fact that a lot of comparable therapies are sold a bit more expensively in the U.S. Medical devices on a general level are a bit more expensive in the U.S. So from that perspective, I think there's some opportunity on the pricing side. But let's see that we get the data first and then we can think through how to price it appropriately. And of course, we also want to make clear that we want as many patients to benefit from this therapy as possible. So we are not going for something that is sitting in a niche at a very, very inflated price.
We really want to make sure since we are, of course, convinced now we are not neutral, but we are convinced that this is the best way of sedating most patients in the ICU. So of course, we also want to make sure that most patients get access to that therapy.
Okay, and we'll take one final question here. Considering the strong start to 2024, how do you plan to maintain this momentum and achieve your financial goals for the remainder of the year?
Yeah, so I think we've at least partly addressed that. That question is a great start into the year. It's we're trending above what we have given out as our goals for the year. So we again, we guided for 14%-18%. Now we have 28% growth in the first quarter.
That definitely puts us on a great track. We always have to be a little bit careful because there's some seasonality in the business that is a little bit different every year, depending on how flu seasons go and different infection rates and personnel shortages in hospitals. And of course, since we are exposed to a very specific market, which is mechanically ventilated patients in the ICU, there will always be some volatility. And maybe not every quarter we will show 28% growth. But what's very important for me is that we really see good momentum both in our mature market in Germany, where we've continuously grown at good rates now for a while, and especially also in the other direct markets, Spain, I've mentioned U.K., also France.
That have shown growth rates for 50% and up very consistently for a pretty long time now. So if we can maintain that and at the same time keep some discipline on the cost side and continue to focus on profitable growth opportunities. I see a very, very good future for us. And then, of course, when we then get to a point where we can add the U.S. to the mix, which is by far the biggest potential market with three times the potential compared to the European markets. I think this can be very exciting.
Okay, we have Matthias from SEB with another question. Please go ahead. You have the word again.
Could you hear me now, perhaps? Yes. Sorry, I was on mute. I wondered if you to end this conference call.
Maybe it requires a long answer, but if you could speak a little bit about the, you know, bar for success in the INSPiRE-ICU studies, perhaps, you know, what do we want to see, perhaps looking at the secondary endpoints, some of the more important secondary endpoints, and also in terms of sort of the most common adverse events, what we want to avoid to see. I mean, it requires a long answer, but maybe a few thoughts. That's my question.
Yeah, so if I get to pick my own clinical study results, which would of course be a luxurious position to be in. And the one thing to know is that we've built that study based on the study we've run in Europe and what we know worked and what we know didn't work.
So that's, of course, a great advantage to be able to design the study based on that level of experience. So the basic that, of course, we want to see is that we meet the primary endpoint and show that you can sedate patients with isoflurane as well as you can do that with propofol. That is important from a regulatory perspective, so that the approval will depend on that. At the same time, commercially, it's not a fantastic story yet. If you basically just say, hey, we're launching something that can do the same what you already have. So that, of course, is not enough.
This is where the secondary endpoints come in, where we, as you know, we've shown benefits in spontaneous breathing, wake-up times, and opioid use in Europe, and then also showed the health economic benefit by the shorter ICU stay. All of these would be great to show in the U.S. Wake-up times are important from a just and workflow perspective in the ICU. It's, of course, much better for the patients if they can interact with their family earlier, if you can start physiotherapy faster. All I mean, there's only benefits in the patients being awake faster.
But if I were to pick one in the U.S. that I think will play a larger role than it does in Europe, it's, as I alluded to before, opioids, because there's just so much more so much more attention to avoiding opioids after having used opioids very liberally for way too long and having caused an addiction that is just yeah probably one of one of the biggest healthcare crises that the U.S. has seen or the world has seen. So from that perspective, if we can show that patients on inhaled sedations need less opioids, that that I think would be a big, big swing factor in in our favor in the in in the U.S.
On the side effect side, as you were, or maybe just to complete the efficacy, I think another wish, of course, is any data that is pointing in the direction that a hospital saves money without therapy. So that could be ventilator time. That could be ICU three days. That could be things like that. So everything that is saving the hospital money. And that is extremely important in the U.S. Because the financial incentives and also the awareness of purchasing decision makers of the impact on the hospital economics is much more pronounced in the U.S. So it's much more important whether or not you save the system money or whether you cost the system money. So that definitely would be great to show again as we have done in Europe as well.
So essentially, yeah, I'd already be happy if we get to the same label that we have in Europe on the side effects side since you asked for that. I'm not so concerned because isoflurane is a well-known, well-studied molecule. We've used inhaled sedation in several hundred thousand patients. We know the side effect profile very well. If something unforeseen severe had happened during the study, we would know because you have to report these things. But the side effects that have come up were very much in line with what was expected. So that would be a very negative surprise if something comes out that I don't expect. So the short answer is everything that's showing superiority in the secondary endpoints, especially opioids.
Everything that helps building a health economic case towards hospital decision makers would be fantastic.
Good. Maybe you mean, I mean, you covered my second question as well, but if you show, let's say, the reduction in opioid use as you did in the European study, that would be sort of good good results from that perspective. Also for the U.S. And the FDA.
Yeah, for sure. Absolutely. So I think that would be very important. So yes, let's let's hope for that. And I mean, again, we showed 30% reduction in Europe, even 50% in kids. So we know that the starting base for opioids in the U.S. is even a bit higher than in Europe. So more potential to show a reduction. So let's let's hope for the best. I'm quite confident.
Yeah, I mean, thank you so much. Thank you.
Okay, that's a wrap for the Q&A section here. Thank you very much for everyone tuning in to Sedana Medical's Q1 presentation here. Also thank you very much, Johannes and Johan, for presenting and answering all of the questions. Yeah, thank you very much. Until next time, have a good day.
Thanks. Have a good day.