Welcome to the interim report presentation for the third quarter of Sedana Medical. We can go directly then to slide three to introduce you to the company. I think you're well aware of the company today, but I just wanted to give you some updates on where we are and where we are heading. Peter will end this meeting and give you updates of the clinical development. Also I will summarize the financial update in the end of the meeting as well. As you know, our purpose and what we are looking into in our focusing on in our company is to improve life during and beyond sedation. Our vision is to make our therapy, inhaled sedation with our product, to become a global standard therapy for critical care patients. Going to slide four.
Many of you have seen this before, I think it's good to remind you sometimes that there are definitely medical need out there to improve the sedation within ICUs around the world. Where we can see inhaled sedation have advantages when it comes to reliable wake-up times and reduction of ICU stay and ICU-free days. We also see benefits when it comes to the safety profile regarding cognitive recovery. We are also interested to see also that we can have a possibility to reduce the usage of opiates, which is important for all patients, especially under discussion in the U.S. We also lately, during the last years, have a huge interest regarding potential organ protection, especially regarding the lung functions where we can see now there is also, with inhaled sedation, improvement of oxygenation and gas exchange. These are the benefits for inhaled sedation.
Going down to the next slide five. The potential of the market you also have seen before, and it's still not updated, but it's very much current. It's EUR 2 billion-EUR 3 billion is the total potential. That should be divided into three different regions where U.S. is very interesting with also a high price level. Europe level is average price in Europe for the therapy, including both device and the pharmaceutical. It's also relevant and the price level on EUR 100 per day. What are our strategies to actually reach and penetrate this market then? Looking into slide six. You can see that we have there some visions based on that we should make the inhaled sedation with our product become a new standard and the golden standard in how to sedate the patient in the ICU. How would we do that?
We, as you know, we have already started in level 1 where we enter the market and the objective is to register AnaConDa, the delivery device, for delivery of volatile anesthetic in as many markets as possible, as fast as possible. That we have ongoing just right now. Of course that will continue over the next years as well. We need, of course, as a Level 2, we need to go from off-label treatment as we have today, and to get the full label treatment and therapy where we own the therapy. That is the establishment of this and the entrance ticket to start to promote it fully, the therapy. That is what we are aiming now for in the second half year of 2021 in Europe, and then adding up in more markets step by step.
Actually to start to grow this market, we need to have evidence-based medicine. We need to have more supportive study showing that inhaled sedation are superior versus IV sedation. Therefore, we are focusing very much on sponsoring investigator-initiated trials, as well as our own studies, phase III studies, and introduction of phase IV studies in the future. That will also end up in the Level 4, with both superior inhaled sedation together with organ protection. You actually catch two birds with one stone with the treatment. When you have achieved that, when we have achieved that, definitely we have the possibility to become the standard treatment all over the world, actually. These are the steps that we are looking into. Going down to slide seven, what have we achieved according to this strategic plan there. Going to slide seven.
You can see the map and the blue countries become more and more. They are more and more, still we are lacking U.S., obviously. Out of that, we are coming closer to a very nice new map here. Also going to slide eight. As you know, we have increasing adaptation of this treatment despite off-label situation. We have sold more than 500,000 units of our treatment. We have a rolling 12-month growth of 86% of the sales of our devices. In Germany, which is the first country, it's more of the test market, we have a capture rate of 5%-7% of the market. We have examples of even better capture rates around the world, or penetration rates. This shows obviously that there is a medical need for this, and also that we are included in more and more guidelines.
Shows that this is an alternative and that there's a medical need despite off-label situation. Looking into the sales in the third quarter on slide nine. We have today announced that we had a growth in local currencies by 39%, in Swedish crowns, that is 31% growth. That is looking to 12-month rolling, it's 86% growth, which is massive, I would say, and impressive. As you see on sales, on 12-month rolling, we are up on SEK 116 million on the AnaConDa sales. Going to the next slide 10. We are now preparing for the full launch next year, we have direct sales now, organization in Germany, Benelux, France, Spain, U.K., and Nordic, we will add up some more markets before or just after the launch next year.
The intention is to have approximately 15 countries with direct sales in Europe, and in the rest of Europe, we will sell via distributors. U.S. organization and the commercialization setup, we are looking into that, different pathways, the alternatives just now, and working on that. We will not decide before 2022 what to do here, if we're going to do it ourselves or together with a partner. Another strategy is actually to be included in guidelines and actually via that way, become a standard treatment. On slide 11, after this quarter ended, we announced that we are now also reviewed by NICE and the Medtech Innovation Briefing. There is a review on AnaConDa saying that this is a good alternative to IV sedation in the ICU. That's, of course, a very interesting reference, additional to the German guidelines, actually.
Another step in this evolution is to also not only working through the guidelines and sales organization in slide 12. We are also, of course, focusing very much on the evidence and the increased number of studies and the number of patients that are evaluated through controlled studies like this. This is the package that we have now. There are some other studies ongoing in parallel which are investigator-initiated as well, but which is not included here. We will have more studies actually coming up later on. These are the most important ones. The blue ones are our registration studies in Europe on top with the SED-001. Peter will come back to that, as well as the pediatric study.
I think the interesting thing with the U.S. studies is that we are very much in line with the plans, and we foresee that we should initiate these studies after next summer. They will have different focus, as I have said before. One will focus on lung protection and improve gas exchange. Another one will really focus more on the cognitive recovery effects, such as reduction in delirium and hallucination. That will be the same thing with the green ones. SESAR study is the one that is looking into the ARDS and improved gas exchange. The INNOSED is looking much more on safety side and cognitive recovery and reduction of delirium. The ISCA trial is interesting, of course, because that is looking into COVID-19 patients and that's an observational retrospective study comparing IV sedation and inhaled sedation. That's what we have now.
Peter will go into the updates of the clinical development here now on slide 13, and maybe go directly to slide 14.
Yeah, please. Slide 14, the European marketing registration study, the IsoCOMFORT study. First, you may know that this study was completed. It was a phase III trial that was performed in Germany and Slovenia. The study was completed in January this year, which was a randomized, controlled open-label study to confirm the efficacy and safety of inhaled sedation with isoflurane in mechanically ventilated ICU patients. This was a study that, design-wise, was discussed with the German competent authority, which will be the reference member state in our application. The study was a 48-hour study with regard to treatment and with a follow-up up to 30 days. The primary endpoint of the study was sedation efficacy, assessed as portion of time within the target RASS on the sedation scale called RASS, minus one to minus four.
Secondary endpoints included wake-up time, portion of time with spontaneous breathing, opioid requirements, ventilator, and ICU-free days.
Could you just mention the spontaneous breathing? What is the clinical benefit for such an indication?
Spontaneous breathing has various benefits, reduces the risk of diaphragm atrophy, and improves the pressure ventilator conditions for the patients and associated with better pulmonary function. The top-line results from IsoCOMFORT study have been presented earlier. In short, we will now present the primary endpoint, which is on slide 16. If we move to slide 16, the primary endpoint, sedation efficacy, was assessed as a proportion of time within the target interval on the RASS, Richmond Agitation-Sedation Scale. For isoflurane and propofol, the proportion of time was above 90 for both and with quite a tight confidence interval. The non-inferiority margin was a 15% relative difference, meaning that the lower boundary of the confidence interval could go down to 77%.
As you can see on this picture, the confidence interval is far away from the non-inferiority margin, indicating non-inferiority of isoflurane to achieve sedation in patients on mechanical ventilation. Move to the next slide. Adverse events and serious adverse events were assessed, and there were no safety signals, no concerns regarding this, and no treatment-emergent adverse events leading to ending the study. All in all, looking at the data in more detail, we are confident that the study merits to be a registration study for our marketing authorization application in Europe. We move to slide 18. Sorry, the secondary and tertiary endpoints have been analyzed and will be communicated as per standard in a scientific publication sometime in 2021. We move over to slide 19. Clinical development for the U.S., and we go back to slide 20.
After scientific advice meetings with the FDA, the roadmap to the U.S. was clarified and consists of a number of steps. As you can see on slide 20 here, the one step is non-clinical studies. Human factors engineering program is another step. After those, we move over to two clinical trials, randomized, blinded studies. After completion of these and compiling a safety database, the NDA application submission will be in 2023 or 2024. We move over to slide 21, where we see the timeline for the activities in Europe and in the U.S. As mentioned before, we have had the last patient in the IsoCOMFORT study and delivered the high-level data.
We are submitting the marketing authorization application in this fourth quarter of 2020 and also initiating first patients in the pediatric study, which is the IsoCOMFORT study, which is taking place in France, Spain, Germany, and Sweden. We are currently doing the final preparations to include the first patient in that trial. For Europe, we anticipate to have marketing authorization approval in the second half year of 2021 and in the second half year of 2022 to complete the pediatric study and have a pediatric indication in 2023. For the U.S., we are currently completing the human factors formative testing together with Harvard Medical School, and we are underway with the preclinical studies and will be going to the FDA for an end-of-phase II meeting and IND in early 2021. Thereby, we will be able to start.
All goes as anticipated, we will be able to start clinical studies after the summer and do the additional preclinical studies that the FDA requests, for example, for pediatric approval. We will be discussing, planning for the launch. In 2022, we'll be doing the planning, and in 2023, submitting NDA, and then hopefully an approval in 2024. We move to slide 22. Back to Christer.
Yes. Thank you, Peter. Looking into the financial highlights then for the quarter, what we could mention here, added to what I already have said is, the sales is so now SEK 21.4 million in sales, which is increased by 31% in Swedish Krona, but 39% in local currency. We have a slightly lower gross margin this quarter due to different reasons. Mainly it's a leftover from the chaotic second quarter in increased transportation and transportation cost. Also it's a little bit different product mix compared to what we have seen normally. We are estimating that it should be on a normal situation around 70%+. EBITDA we have a loss, SEK 10 million. Compared to last quarter, we were approximately breakeven. Of course then we had a higher sale. OPEX is increasing because we are preparing us for the full launch next year.
We are increasing number of people both in sales and marketing, but also within medical regulatory and quality. We will soon have a pharmaceutical in place, and we are also pharmaceutical companies. We need that. We are growing in number of employees as you see. Cash flow operation last quarter, we were positive cash flow thanks to the increased sale. This quarter we are negative. Total negative cash flow is -SEK 27 million, which is a relevant figure, especially looking forward when we're starting up in U.S. as well. The cash flow will be negative significantly also, especially during next year when the clinical studies start up in U.S. Looking into slide 24, we have a good cash situation, SEK 406 million by the end of September in cash.
That is okay, and we are fully funded for European commercialization, which is the focus now, as soon as we have the registration in place here. We also are funded for the clinical development in U.S. as well. It looks good from that point of view. Next slide, looking to the shareholder list. No big changes compared to last time. Still we are a combination between institutions, long-term institution, both Swedish but also international, German and French and British ones, and together with the founders in the company as well. That was the last slide. Just a reminder here, slide 26. This year has been very strange for many different ways. From our perspective, it has been a door opener for many new ICUs to look into this treatment.
Of course, it has been challenging from a clinical development perspective to collaborate with ICUs that are in the middle of a huge crisis. I think we have done it fantastic over these first three quarters. I'm looking really much forward actually to follow the rest of the year, but also into going to 2021, which will be a very interesting year from many perspectives, both in Europe and in U.S. That will be the last slide on slide 27, where you have the question slide. If there are any questions, we are open for that now.
Thank you. If you do wish to ask a question, press zero one on your telephone keypad. If you wish to withdraw a question, you may do so by pressing zero two to cancel. There will now be a brief pause while any questions are being registered. Our first question.
I'm sorry. Go ahead. Yeah, go ahead.
Our first question comes from the line of Peter Östling from Pareto Securities. Your line is open, please go ahead.
Yes. Good afternoon. Thank you for taking my questions. I have a couple of ones. First, I would like to ask you about one of the investigator-sponsored trials that are ongoing, the ISCA trial. I noticed that there is this venture capital company called RA Capital that has done a large map over potential COVID-19 treatments, vaccines, diagnostics, and Sedana Medical is on that list. I just noticed that they put completed for this specific COVID trial. I was just wondering if you could give us an update when you think that the results would be published or announced. Thank you.
I wish I could give a straightforward answer to that. I believe the most recent communication we had with the main investigator there who was given a grant for data collection is that data being currently entered in the different countries. This is an observational trial, so there's not a prospective recruitment target. His gist, as I thought, was that there would be sufficient patients already available. I can't give a timeline for when they will have completed the data entry or when there'll be a publication out there.
Okay.
Yeah. It should be during the year.
Yeah, absolutely. I would anticipate within the next six months, hopefully. It's a question mark there.
Did you say within this month or?
No, I think I would anticipate that they submit something in the next six months.
Okay
That's my guess. It's not our study. Of course, if COVID-19 surge leads to heavy clinical duties, that this might be late.
Maybe they have misunderstood it, the RA Capital that they put completed on their map.
Completed means that the patients are there. In each country, there are sufficient number of patients treated with inhaled sedation and IV to actually compile the data. The people who are doing this are clinicians who work in the ICUs, so they don't have the same timeline as we do. In case the situation that they need to work with clinical patients, that will go before publishing this, unfortunately.
Okay. Understand. Quick question, if you could give us some updates about China, and then how many employees do you expect that your U.S. operations would have at the end of 2021? Thank you.
I can start with China. The registration process is ongoing, so it will come within the timeline that we have said before, and that it was before next summer. That is the timeline that we have given before, and we are following that path. Regarding U.S., what we will do in U.S. now, and as long as we can go there, which we don't know when we can go, but expecting to go there at least in the beginning of next year. That is our aim. Then, of course, we will employ a handful of people during the next year, taking care of the clinical studies and networking with the key opinion leaders and more intelligence work for the American market. That is what we foresee now. It could be changed depending on what the outcome will be then, of course, in the future.
That's what we have now.
Okay. Lastly, before I enter back into the queue. I might have misheard you, but when you talked about Germany and said that you had market share there of between 5% and 7%, I believe you said that the market share in other markets are higher. Could you elaborate about that?
No. Well, of course, when you look at the penetration in different markets, there are different penetration rates, of course, in different markets. Germany do have 5%-7%, which is a huge market. It could differ in different markets, obviously. Yes. Most of them do have lower than that, of course.
Yeah. There are markets where the uptake already now has been better than the penetration of 5%-7%?
Well, I cannot comment on that. I don't know why I said it, actually. I should not comment on that. Sorry for that.
Okay.
I'm not concentrated today. Sorry for that. Yeah.
Okay. Thank you. I go back to the queue then.
I have another question which I should not answer, but only regarding the trends, what's happening now in the ICUs around Europe. We see everywhere that COVID-19 is hitting all the countries quite badly. What we have seen in third quarter, what we have already said in our report is that the sales that we have in the third quarter is back to normal, I would say. ICUs around Europe in the third quarter were not affected very much of COVID-19 patients, actually. There were a few of them in them. That shows that we have a very strong position now after the first wave. It's up to you then to explore now when ICU are starting to get more occupied again, what kind of impact that will have. That is the only thing I can comment on that.
Obviously, it's not like the first. You can see that nowadays, they know much more how to treat this disease compared to what they knew in the beginning. Obviously, there are much less people that are dying, and that is, of course, relevant when you're looking into the figures in the ICUs as well. That is what I can comment on that. Any other questions?
Thank you. I remind you that if you'd like to ask a question, press zero one on your telephone keypad. There are no further audio questions. I'll pass back to the speakers for more questions. Thank you.
Okay. Thank you very much for this meeting, and all the best, and see you around. If not, before we hear from you after the fourth quarter. Thank you. Bye-bye.