Ladies and gentlemen, welcome to the XVIVO Perfusion Report Webcast. I will now hand over to Magnus Nilsson, CEO. Please go ahead.
Thank you very much. I have on my side, Christoffer Rosenblad.
Hello.
I'd like to take you through a presentation of the interim report of 2019, the 29th quarterly report. You have to excuse myself, for having a cold here, I hope my voice comes through. Right. Slide number two. We have had a historic year, 2019, which ended with a record quarter. Something everyone hasn't really appreciated, I think. Anyways, in Q4, we had a breakthrough designation with the FDA for the heart preservation system, something that would speed up the process in the U.S.. We have started up an Australian subsidiary, which was established after the third of four possible XPS installations, and also in preparation for our clinical trial in Australia. During the full year, we had our first PMA. The first for such a product, the XPS and STEEN Solution in the United States.
We have submitted applications for clinical trials for the heart device and an updated technical file for PrimECC. We have received patent approval in Europe for PERFADEX Plus, patents for heart preservation fluid in U.S. and Europe, and have had positive results from the safety study in Skåne University Hospital on the six first patients with the first prototype of Stage Stem. We have actually the two-year warranty program offered to all employees who are fully subscribed. The strike price of SEK 279. Please, number three. Sales highlights. A tremendous year for us. Record sales in the quarter compared to a strong Q4 last year. A little bit in details, we can see that in the U.S., more clinics bought more. The only difference was really that the Lung Bioengineering stocked up very much last year. If you look at the number of clinics buying more, has increased.
In the U.S., we can also see a really good development on sales in Europe. Warm sales of disposables increased with about 50% the fourth quarter. China has taken off from a low start. Now we can see a start in China. All in all, a very good year and quarter in sales. We can also see that we can keep a stable gross margin of non-durable goods at 77%. We also saw that for the full year, we passed the 200 million mark for the non-durable goods with a good growth, 20%, and durables and warm durables up 25%. Also a good positive trend for the cold preservation. Next slide, please. Number four. If you look at the profit and loss statement, there's a few points looked at, as we said. Continued high gross margin is notable.
We can see that we, excuse me, continue to build our customer support crew. We forcefully invest in the R&D. In spite of all this, we still have a very profitable lung transplant business. Especially if you then take away the items that affect compatibility of SEK 7 million due to the warranty program we have for our employees outside Sweden. If you remove that, you can see that the EBITDA profit actually increased. All in all, in spite of a heavy investment period, we still show a good profit level and a good gross margin. Next slide, please. We look at the accomplishment through the year. Next slide, please. Number 6. We received, as the first company, a PMA for warm perfusion device for lungs. In the multicenter, we showed that in 110 patients, that were lungs that would never have been used without an EVLP.
We can see that the survival rates for one or two years was similar to the normal lungs. We also saw a high use rate of these lungs in the study. More lungs can be used for transplants, which benefits patients on the waitlist. Next slide, please. The Breakthrough Device Designation granted by the FDA. This program is a means for the FDA to prioritize those medical devices that they are deemed to be especially important for patients by speeding up the development. This would shorten the administration time for the whole process from applications to processing clinical trials and application for approval. The whole thing means that we get a decreased time to market, which is very encouraging. Next slide, please. We can also see in China, a very fast-growing transplant market, especially now we see in lungs relevant for us.
It's the fastest growing market, with a 35% increase from 2018. I think from last year doubled, between 2017 and 2019. More centers are being certified to do transplants. We have installed the second XPS to the second-largest transplant clinic in China, in Beijing. We made more than 100 transplants last year, 2018. We have most of our products already approved in China, with the exception for the XPS. We hope to gain that during the year. We are in the forefront here, and we believe China will continue to grow and be one of the biggest markets in two to three years in the world, we believe. Next slide, please. Number nine. Another big thing for us was the upgraded ready-to-use PERFADEX Plus.
We have sold PERFADEX now for more than 20 years. It's the gold standard in all clinics all over the world, more or less, more than, I think, 95% market penetration. With the new ready-to-use version, we increased patient safety and ease of use. It was launched in Europe and U.S. before and we're now rolling it out in more and more markets. We also got now patent applications submitted in all relevant markets. Something we didn't have for PERFADEX. Next slide, number 10, please. Another key thing for us in the U.S. market is that we are collaborating with Lung Bioengineering, a subsidiary of United Therapeutics, where they serve centers, especially smaller clinics that maybe not have the organization to perform their own or not have the time to perform their own EVLP.
They can then use this service to have Lung Bioengineering doing EVLP for them and then sending the lung back to the clinic. They're using ex vivo technology and ex vivo products. It's neutral for us. We now co-market with them to extend the reach of EVLP in the United States. They have now three machines that they are, for the moment, validating and they believe and we believe that they will use that during this 2020. We hope to be successful. It's a very important collaboration with us. We also collaborate with another subsidiary of United Therapeutics in the area of xenotransplantation, where we have provided for them to use the new heart preservation technology in that Revivicor subsidiary. Next slide, please. Let's talk a little bit about the R&D pipeline and what we do to ensure future growth. Next slide, please. Number 12.
In the lung area, we continue to develop the XPS. We have released another new version with a lot of new features, and we plan to do that furthermore during 2020, with more sensors for metabolites, blood gases, and other things, and looking at also biomarkers in order to improve the basis for the decision-making that the doctor do. Should you transplant or not the organ that has been evaluated? We also look at expanded use for non-heart beating donors, DCD donors, especially during controlled and uncontrolled, which means patients that arrive dead to or die in the emergency room. We also continue to develop the protocol in collaboration with academic organization, where they look at ventilation, optimizing ventilation strategy, turn the organ pruning, and other things that could improve the EVLP technique. We also investigate the immunological response during EVLP.
We know a lot of things happen during EVLP in terms of immunological response. The target there is to see if we can even better the short-term organ function and long-term survival. Next slide, please. Number 13. It's an overview of the new development projects. Priority one, of course, is the heart transplant project, optimized for the preservation to sustain organ quality and to increase time outside the body. The second priority is the PrimECC, which is an optimized priming solution to reduce the known side effects by using a heart-lung machine. Second tier of priority, the third is liver and kidney transplant. We continue to collaborate with clinicians using STEEN Solution for the livers. There have been more than 30 transplants that we made with successful results. Also another number of kidneys too.
We look at that in the future, a possibility to expand the reach of our technology into other organs. The fourth priority, there is still an interest of perfusion isolated organs and tissues with STEEN Solution to administer, especially cancer drugs but also other drugs. Next slide, please. Number 14. Let's talk about the heart transplant project. The most exciting project we have right now, I think. It's a total novel concept with a very advanced solution. We pump through the heart during all the way from being taken out of the donor until it's into the recipient, and it's oxygenated, or that solution is oxygenated in the device. That means we can keep the heart in better sustain the quality of the organ when it's taken out until it's transplanted. It's also, in animal experiments, been shown to be possible to prolong the preservation time.
The data preclinically, the most exciting was the pig-to-monkey transplant with a six months survival, which was the kind of world record in xenotransplant, only made possible with this technology. We also have, obviously, the first human trial, which is ongoing still in Lund University. They had made a number of patients, but what's been reported is six patients after six months, where it's shown that hearts can be safely preserved with this technology and with a successful transplantation. We can also see then a reduced risk for ischemia use with perfusion reduced. Very promising results, which have encouraged us to go ahead with full force to develop the second, more advanced prototype of both the solution, disposables, and the machine. As I said, been granted breakthrough device designation from the FDA, shortening the time to market.
Got patents for the heart preservations fluid approved in U.S. and Europe. We have built a clinical team to be able to run the Design be finalized, it's been tested, validated, and the production has been ramped up for these, making it possible to start up the trial. The ongoing preservations for the multicenter trials, both in Europe, U.S., and Australia, are in full speed. Centers all recruited. Applications been submitted, and we have interactions with regulatory authorities in Europe. There are obviously six different authorities. It takes some time, but we are optimistic and hope that we now can expect to start the first patient in during the Q1, depending, obviously, on authority approvals. The same subsequently in the other countries and markets. Next slide, please. The PrimECC.
The background for this, their priming solutions are always used in order to be able to use the heart-lung machine before it's employed in open heart surgery. The thing is that this priming solution, besides having to prepare the heart-lung machine, it also goes and enters the patient's bloodstream at the start of the procedure. With these non-optimized solutions, they are known to cause side effects. There are 600,000- 700,000 bags of these solutions used each year when running heart-lung machines in open heart surgery worldwide. PrimECC alleviate those known side effects. Next slide, please. Accomplishments in the PrimECC, are patented now in EU, U.S., China, Japan, and CE mark. Clinical studies already performed 40 plus 40 patients showing that it's safe to use, it improves fluid balance, and it reduces side effects using heart-lung machine prime in the Sahlgrenska Hospital study.
We have now made a production. First validation was forced to change the bag into an eco-friendly bag which are now validated first production with satisfying results. That regulatory file, the new technical file, for whole production process, validation, sterilization, everything, and packaging, has been submitted actually in early Q3. We now hope and expect to have that approved by the notified body in Q1 2020. We have recruited a project team, which is completed, that can run this. Again, we are now waiting final approval from the ethical committee. Preparation are full at full speed to start the clinical documentation trial, and we now plan a multicenter trial at seven Swedish hospitals to start at Q1, obviously conditional administrative approvals. This is in late-stage preparations and really waiting for the approvals. Next slide, please. All in all, we look forward.
Focus areas, obviously thoracic transplantation surgery, primary focus. Lungs, further support development of EVLP technology, spread it in more countries, more clinics, and in more clinical practice. The heart, the startup and running of multicenter trials, all the important markets for regulatory approvals. PrimECC, here we have an approved product in Europe, but we need to increase the documentation. We are going to do that by starting and running a multicenter study for that clinical documentation. In abdominals, which we think is the secondary focus, but it will be the next area, so to speak, where we continue to exploratory research to see how we can apply the technology in liver and kidneys. Very promising, but in the early start. We will further investigate during the year.
Long-term year goals, solidify position in thoracic surgery, lungs, heart, PrimECC, build a new business long term in the rest of the organs. Thank you very much, and we are open for questions.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad. The first question comes from the line of Arvid Necander from Redeye. Please go ahead.
Okay. Thank you for taking my question. Not too much from me today, so I'll spare your voice a little bit. Just summarizing the year and touching upon what you said in the report, how growth has accelerated in Europe during the year. Could you provide a bit more of a granular view of this? Where does the growth stem from? Is it maybe a few selected clinics that are reaching a higher degree of utilization, or are you seeing growth across the board? Could you give us some insight into this?
It's actually both. We have some clinics that really excel and are increasing very much, like Paris, tremendous site. I think more than 30%, I think, of their transplantation is EVLP right now. It's also spread into more clinics applying or employing the technique. It's actually a little bit of both.
Okay. Yeah. Just a quick follow-up then. If you look at the clinics that have come a bit further, such as the Paris clinic, where you also have adequate reimbursement, how far are these clinics, would you say, reaching how far is EVLP from becoming a more or less standard of care procedure, such as in Canada, where it's the most advanced? Could you provide some insights into that?
It depends a lot on the country and the basis for reimbursement, because in the budget countries, so to speak, like Sweden and others, it's very hard. It's an uphill battle to get these techniques established because of the cost. They only look at cost. They don't really look at the number of patients, unfortunately, treated. On other places where, like in France, where they have an external or special financing, I should say, it's really increasing. It's country by country almost, you could say. We know in Holland, for instance, there's a great improvement in the use, they have this special system too, with insurances. It's a little bit of both. It's a little bit of depending on country. In Germany, for instance, there's a lot of clinics now applying for they need to apply for reimbursement ahead.
We know the number of clinics are interested now, and they are applying for it, and it takes some time. A little bit of both, but you can see, especially in the countries where have a special financing transplant, then you can see it's much more employed. If that is a good answer for you.
Okay. All right. Yeah.
It varies.
Yep. Okay. Yep. Got it. Right. That's it for me. Thanks, guys.
Once again, ladies and gentlemen, if you do have a question for the speakers, please press zero one on your telephone keypad. Once again, it is zero one on your telephone to register for a question. There are currently no further questions from the phone lines.
Okay. Do we have any from the internet line?
No, I see no questions on the internet.
Okay. Anyways, thank you all for listening in, and I hope you will join us for next quarter. It's been a tremendous pride in the company for delivering this great year. A lot of things have been achieved, and we are really anxious and looking forward to 2020, where a lot of things will start up and exciting times ahead. Thank you so much. Hope you will join us next time. Thank you.