Ladies and gentlemen, welcome to the XVIVO Group Report on Operations Q4 2021. I will now hand over to Dag Andersson, CEO. Sir, please go ahead.
Thank you very much. Welcome to XVIVO Q4 call. The presenters today, it's me, Dag Andersson, and my CFO, Kristoffer Nordström. I would like to start by summarizing some of the highlights during the quarter. We had a very, let's say, interesting quarter. Many things happened, positive things. We achieved, I must say, great organic growth in the quarter, 32%, and for the full year, 27%. Earnings growth total amounted to 42% in the quarter and adjusted EBITDA margin of 11%. The EBITDA number includes certain non-recurring items amounting to approximately SEK 4 million, which Kristoffer will touch upon later. During fourth quarter, I mean, in connection with the acquisition of the U.S. company Star Teams early November, we established a third business area, Services.
We now actually have three business areas, Thoracic, which still is the largest, then Abdominal, and now Services, where sales in November and December were consolidated. We had strong gross margin development as a result of continued price increases and economies of scale. In early November, as I mentioned, we closed the acquisition of Star Teams. Star Teams is a pioneer within organ recovery in the U.S. It was founded in 2019 by Dr. Hassan Tetteh and has doubled the number of organs recovered each year. In 2021, a total of 403 organs were recovered versus 200 the year before. So far, Star Teams is solely focusing on recovering thoracic organs, meaning lungs and heart, but will enter Abdominal later on this year. The acquisition was financed through a new share issue of SEK 250 million.
Strong support from existing shareholders, but also from new investors. Other important events in Q4 include the new heart preservation record set in Australia with our heart preservation technology, seven hours and 80 minutes. We signed a partnership contract with the leading Brazilian distribution company, Contatti Medical. We strengthened the North American organization by appointing Fredrik Dalborg as Managing Director, North America, as per December 15, and Jaya Tiwari, who was appointed Vice President, Clinical and Regulatory Affairs for the U.S. On January 3rd, we also opened a new office in Philadelphia, which will serve as a back office for the combined Star Teams/ XVIVO operations. As you have seen from press releases lately, we have had some exciting development also taking place this month. We received FDA 510(k) clearance for our unique Kidney Assist Transport device. This is great news.
As you might recall, this device was featured in The Lancet magazine in November 2020. U.S. is the largest kidney transplant market in the world, with close to 90,000 transplants from deceased donors in 2021. What makes this device unique is that it is portable and the only device to offer hypothermic oxygenated perfusion of kidneys. I believe you've all seen the news related to the first successful xenotransplantation of the heart from pig to human taking place in Maryland, U.S. Our technology was used, and the transplant would not have been feasible without our technology. The transplant itself took place on January 7th, and the patient's only other option would have been palliative care at the hospice.
The patient's heart today looks good with no signs of rejection, and though he medically could leave the ICU, they anticipate him to be moved to rehab 30 days post-transplant if all continues well as it appears right now. Talking a little bit about transplant activity, we can start with the U.S. As regards to the U.S., a new record was set in 2021 with over 40,000 transplants performed. All organs developed positively with the exception of lungs, which saw small decrease versus 2020. In Europe, lung transplant activity actually increased by 12%, 2021 versus 2020. What will 2022 bring? I'm not going to look too deep into the crystal ball, but I can sort of share the following view with you.
We believe the transplant activity will continue to increase. As an example here, I mean, there is a clearly communicated target of 50,000 transplants, 2026. It's a clear commitment. Therefore, we believe that transplant activity will continue to increase in the U.S., but also in other parts of the world. We will roll out our new Kidney Assist Transport device in the U.S. initially. We will start selectively with certain customers and then expand the launch program throughout the year. We believe that EVLP penetration, ex-vivo lung perfusion penetration in the U.S. and Europe will continue to increase, supported by XPS installations on both continents in the coming months. We will continue with price increases. In Europe, we increased prices again on January 1st this year, and we will increase prices again in the U.S., October 1 or November 1.
More or less the same increase as previous years, up to 15% in the U.S. and 5%-10% in Europe. We will initiate the clinical trials for our groundbreaking heart technology in the U.S. during the summer. Star Teams will continue to expand and include abdominal organ recovery later in the year. Kristoffer Nordström, will you guide the audience when it comes to financial performance Q4?
Yes, Dag. I'm happy to do that. Here we go. Overall, if you start with the big picture here and the underlying fundamentals, it was a great quarter financially. For net sales, we saw a strong recovery from Q3 in all business areas. Compared with Q4 last year, the growth in local currencies was 42%, corresponding to an organic growth of 32% , in line with our ambitions for the year. We continue to see improvements on the overall gross margin for the group. However, an understanding of each business area is important since the gross margins are varying for each business area, and I will comment on the business areas later on here. Adjusted EBITDA was 11%, and that was in line with Q3 and also Q4 last year.
I would like to mention that we took some initiatives strategically in Q4, which led to higher costs than forecasted, especially within marketing and sales. You could see those costs increase a little bit. And it was about investment in sales platforms, but also some one-time costs connected to the organization. And if we would exclude those costs, I would dare to say that we would have had an EBITDA of approaching 15%. We move over to the next slide. If we dig in a little bit to the Thoracic business area, we saw good growth in both U.S. and Europe, which was pleasant, especially in machine perfusion and EVLP, which is of course very, very important for us.
Here, the increase from Q3, for example, was actually as high as 85%, compared to that quarter, which is good. Net sales amounted to SEK 59 million, and organic growth was 33% compared to Q4 last year. We placed one XPS machine at the clinic in Berlin, Germany, and the transplant team there and perfusion team has now been trained, so we hope that they will have their first clinical EVLP very soon. Very exciting. Portion of machine perfusion was high, 53%. As reference, it was 38% in Q3. Gross margins continue to improve. Margins on non-durable goods were 83% in the quarter, which is 3 percentage points higher than last year.
That increase is mainly driven by our continuous price increases, as Dag mentioned earlier here. We also have some economies of scale, of course, especially from the fixed costs allocated to COGS, which represent a lower portion of sales as net sales is growing. Moving over to Abdominal and some Q4 highlights. Net sales came in at SEK 21 million, which is a record. All of our business areas showed records, by the way. It's a strong growth compared with SEK 13 million in the third quarter and SEK 17 million last year. Organic growth for Abdominal was 29%. Gross margins was very good compared to earlier quarters, 55%. It's a pretty large increase compared to previous year, 50%.
Worth mentioning there was that there were some one-offs in our favor in the quarter that had a positive impact on the margin. I would say that excluding those, the gross margin would have been in line with Q3, which means 53%, which is still a good improvement from last year. It will also continue to improve as we are increasing prices, as Dag mentioned. To Services, our new business area of the company coming from Star Teams. We have two months of sales, November and December. The transaction was closed on November 9th. Maybe worth mentioning, it consists of Star Teams and their organ recovery business. It's only in the U.S. Organ recovery refers to organ removal from the donor body. It refers to preservation of organs in cold solutions during the transport.
It also refers to, I mean, the logistic and coordination solutions that they provide to their clinics. By removing all these tasks and responsibilities from the clinics, they provide a great value to U.S. clinics today. SEK 6 million they contributed with in the quarter. They also contributed with an EBITDA of 25%. As Dag has said, I think, they doubled the number of cases that they did compared to 2021, so over 400 cases, which is fantastic. They have actually been a key for some clinics to actually increase their transplant programs. Couldn't be done without them. Next slide is the EBITDA overview, some comments on for the quarter.
EBITDA adjusted for items affecting comparability was SEK 10 million, and that means a margin of 11% in line with the year-to-date margin as well. What we say are affecting comparability in this case was more or less the costs for our M&A process, SEK 10 million. As I said earlier, we took some initiatives in Q4 which led to higher costs for marketing and sales than initial expectations, so to say. Cash flow, important. Cash flow from operating activities in Q4 was -SEK 1 million . In comparison with other KPIs that we have highlighted in this presentation, which were great for the quarter, the cash flow in that sentence was weak.
Worth mentioning here is the following, that first, in the quarter, we paid for these M&A costs roughly SEK 10 million. Secondly, we paid off some liabilities for Star Teams in connection with or actually after the acquisition of SEK 2 million. Also, I think it's important to know that, yes, we had very strong sales in November and December and the customers will pay us in Q1 according to the normal payment conditions. Total cash flow Q4 was of course impacted also by the directed new share issue of SEK 250 million and the initial purchase price paid for Star Teams of SEK 93 million.
That led up to a total cash flow for the period of +SEK 111 million for the quarter. In terms of R&D projects, we have invested according to our budgets for the year and according to plan. Final slide for me. Financial full year, just a comment. To conclude the financial section, some comments on the full year, yes, as I said. Net sales increased 44% compared to last year. Organic growth was 27%. Acquired growth was 22%, and the rest was currency effects. Gross margin in line are actually 1% lower than last year, but here we need to keep things apart here.
In this year, 2021, we include the full year of Abdominal, for example, and last year we only had one quarter and that has an impact on the total gross margins as Abdominal, at the moment has lower margins than Thoracic. The underlying gross margins have all improved. Very important to note that. That's very clear to see when we look at the Q4 isolated. EBITDA adjusted 11% for the year, as we have said before. With that, I leave it over to you, Dag.
Thank you, Kristoffer. I would just end by showing two slides. One related to R&D, and here really focusing on the heart preservation trial, which is ongoing. Just to give you status update, in Europe, we have now activated nine centers and we will activate a couple of more centers so that we still plan to have our last patient included by the end of 2022 and commercial launch still planned for Q1 2024. As I mentioned earlier, we set a new record with seven hours and 18 minutes of non-ischemic preservation time, which was announced in Q3. In Australia and New Zealand, we have two centers now fully activated. We are now in discussions with FDA to start the trials in the U.S. by summer this year.
When it comes to PrimECC, we don't talk too much about PrimECC, but it's potentially a very interesting project. We have so far included one center, which is Sahlgrenska Hospital here in Gothenburg, and we are now including also Dresden in Germany, which was fully activated in January. We are also in discussions now with Oslo and Copenhagen and a few more German centers. The plan is still to have a clinical study report finalized Q2 2023 to support the MDR submission. Just summarizing. Yes, we ended the year on a high. We had a strong Q4 with growth in all business areas, and we also had a new business area. Good momentum for EVLP. Kidney Assist Transport U.S. launch is now happening in first quarter. Continued focus on price increases.
I mean, price increases took place 1st of November last year in the U.S., 1st of January this year in Europe, and will happen again in the autumn in the U.S. Star Teams has doubled the number of organ recoveries, more than 400 recoveries in 2021. It's great achievement by the team. Then, of course, as I showed to you, continued progress in the clinical trials, both related to heart and PrimECC. Management team reinforced with two new U.S.-based members of the XVIVO management team. So, this is everything from me and Kristoffer. The stage is now open for any questions or comments by the audience.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press 01 on your telephone keypad. Our first question is from Ulrik Trattner of Carnegie. Please go ahead.
Thank you very much, and good afternoon, both Dag and Kristoffer. And I'll start off with what you're referring to as this new efforts being put into place in sales and marketing of around SEK 3 million-SEK 4 million. Could you please shed some more light on what that entails in terms of what efforts have been put into place during Q4, and why we should consider those as one-offs?
Absolutely, Ulrik. I leave that to you, Kristoffer, to explain.
Yes, thank you, Dag. No, but it has been a quarter where we have taken some strategic decisions of how should I say, of putting our efforts together with Abdominal and Thoracic sales force. That has one of the key things here is that we have implemented a completely new sales tools for our sales forces out there in the field with a lot of education, a lot of new strategies taken with also with some external help. We have also taken some initiatives on modifying the organization a bit, which also led to some costs. There has also been some costs related to one-time events.
Overall, I think these are costs that did not really qualify to be adjusted for in the adjusted EBITDA, but worth mentioning because they are costs that we will not have next year, and these costs will increase the efficiency and make us have a good foundation for future growth in 2022.
Great. Thanks, Kristoffer. A few questions on the durable goods side. Looking at the Thoracic segment, are you seeing sort of improved momentum for XPS sales in the U.S. or as well as for the U.K., given the NICE recommendation that we have seen? You mentioned that one system was placed in Berlin, but how does the current momentum look like and the outlook here in the short term? As well as for durable sales in Abdominal, it looks really impressive.
Yes.
Given that it is pure European sales, is there any underlying reason for the strong momentum in Europe?
I mean, if we start with XPS, Ulrik, I mean, we are sometimes, you know, placing an XPS and sometimes selling the XPS, depending a little bit on the, let's say, we call it the customer commitment. For example, we have placed an XPS in Berlin, and Berlin has a commitment on achieving a certain number of EVLPs. We use a little different strategy here, depending on the customer side. In Berlin, we now have an XPS, and we have started EVLP. U.K. has actually done one EVLP, but they have not yet installed the machine. It's going to happen now any day a week. They are sort of, you know, have started with the EVLP program.
We are already we have orders now for XPS in the next two, three months, which are very positive, both in the U.S. and in Europe and also in new sites, which are highly interesting. I cannot yet talk about the geography here. That will come a little later. When it comes to Abdominal, I mean, we have had success with Liver Assist. There is high demand for this machine. As we all know, I mean, Liver Assist was featured in the New England Journal of Medicine last year. We have had good sales in Europe. We also believe that we will be selling outside of Europe actually this year.
We are still debating how to apply for, let's say, U.S. regulatory approval. There are different pathways here to take depending on what kind of scope we want to include in the application. We see very good momentum on the Abdominal side, Ulrik, and XPS machines there will be several machines placed or sold during the next couple of months in Europe and in the U.S.
Great. Thanks. Two follow-up questions on that. Perhaps we could start off with Liver Assist. As you mentioned, there are different pathways going forward here. Is it likely that you can deviate from a PMA route for the Liver Assist in the U.S.? Thus then that would entail that it wouldn't be on the market until next year.
No, no. I mean, we believe that it will be a PMA route, Ulrik. That is our, let's say, main assumption today, and that also involves a certain number of clinical trials depending on what's. Let's say, what kind of scope, you know, we want to have in that sort of PMA route. So that's most likely to be the case for Liver Assist in the U.S.
Okay, great. On XPS, is there any increased interest from Lung Bioengineering, or have they sort of filled up their capacity of number of XPS being used?
Yeah, let's answer it the following way. I mean, there are today, Lung Bioengineering is working on two sites. They have Maryland, and they have Jacksonville, Florida. We now have two XPSs in both Maryland and in Jacksonville. But of course, if there is a decision to invest in a third perfusion center, then of course we will be involved in that, you know, discussion and decision as well, Ulrik, with Lung Bioengineering.
Great. A few more questions. Big opportunity in Brazil for Abdominal. It's really nice seeing you expanding your footprint here with Contatti.
Yes.
Should we expect to see sort of material sales from Brazil in 2022? What reach does Contatti have? Do you have any numbers on the sort of market share of number of transplantations performed by Contatti or something similar for us to build our understanding around your opportunity in Brazil?
I mean, I have not yet met Contatti myself. I've had several colleagues who have been to Brazil, and we have also reinforced the business development organization with a person who will be supporting Brazil very actively. I mean, Contatti Medical is the leading company this year in working with transplant centers in Brazil. The most famous transplant center is the Albert Einstein Israelite Hospital in São Paulo, and they are working very closely with these transplant centers. We believe that 2022 can see. We can achieve some good sales numbers in Brazil.
There is a plan that we have agreed on together with Contatti, and we are most likely also going to employ now a person based in Brazil, a Brazilian person who will then be working actively supporting Contatti, but employed by XVIVO. I cannot give you any numbers, Ulrik, in terms of what to expect.
Okay. That's fine. If we were to move direction then to China, are we to expect any news during the year on expanding into China, some progress on reimbursement or at least—
Yeah, yeah.
— cost coverage for transplantation?
Absolutely. I think China, the good news is that we have achieved regulatory approval for PERFADEX Plus in China. So that's done. That's ticked. We are in the process now of working with regulatory approval for XPS in China as well, Ulrik. So I think these are the, let's say, priorities right now. We will also. You know, if sales sort of develops, we will also recruit possibly two to three persons more throughout the year in China. But, yeah, we all know that, you know, regulatory approval can take some time in China, but at least it's done for PERFADEX Plus, and we believe that XPS will follow in the not- too- distant future.
Great. One last question on my end. Star Teams' reporting an EBITDA margin of 25% out of Q3—
Yes.
— that was brought into Q4. They reported 31% for rolling 12 months up until midyear. Is there any seasonality that goes into these costs or any reason for why the profitability should be lower than 30%?
Kristoffer, will you respond that, to that?
Yeah. I would not say any seasonal effect in here. What they have done is that they have done a very good job in recruiting surgeons, which has and they do that a little bit ahead of the curve, and that gives some impact on the gross margin and also then of course on the EBITDA. That was also the reason why the gross margin was a little lower than when we looked at the company and the pro forma in the beginning. But they will have very good economies of scale once they add a few customers as well.
Just by curiosity, how many partner clinics do they have currently? Is it feasible for them, now that they doubled the number of organs recovered during 2021, to do the same in 2022?
I mean, Ulrik, that is also a little bit of a leading question, and I'll try to answer it in a good way. Yes, they are adding new contracts all the time and they are approaching 15 sort of customers where there are sort of clear contracts in place. The way Star Teams, you know, how it works is that they have a subscription model where you pay your monthly fee for having access to Star Teams, and then there is a recovery fee per organ sort of recovered. When it comes to number of organs recovered 2022, I cannot give you exactly the number that we have planned for, but it will be higher than last year, Ulrik. Yes.
Great to hear. That was all on my end. Congratulations on a good quarter.
Thank you. Thank you, Ulrik, for good questions as well. Thank you.
Thank you. Our next question is from Johan Unnerus of Redeye. Please go ahead.
Thank you for taking our questions. Once again, congratulations to a very solid and surprisingly solid quarter. Can start off with Thoracic, which came in very strong, especially it seems to be good contribution from the U.S. market as well, despite that the lung transactions, transplants was pretty flat overall. Is there any pent-up demand there or any other things underlying?
No, but I think you can just say following when it comes to U.S. and especially then Q4, we have gained market share in the U.S. That's one part of it. Then of course, price increases also have an impact on the Thoracic performance in the U.S. We have gained market share, we also have new customers in the U.S.
That's positive, of course. What's the momentum? Can we expect you to continue to gain market share and what to expect from new contribution from new customers?
I mean, as I mentioned to Ulrik as well, there will be new XPS machines installed both in the U.S. and Europe in the coming months. Whenever you install a new XPS machine, of course, it leads to more ex vivo lung perfusion executions. Yeah, I cannot give you any sort of numbers as you can understand when it comes to this year. But we see good momentum and we ended the year on a high and yeah, we do our best to continue to take market share at least.
The experience from the price increase is obviously positive given the numbers, but it also seems to be positive that you allude to another increase in the coming autumn.
Absolutely. We will continue to increase prices. I mean, we have unique products. We have unique technology. If we look at customer sort of comparisons, we are still priced, you know, below our main competitor in the U.S., and there is no reason why we should be priced too low. At the same time, it's hard to increase prices more than I think 16% increase is quite a large increase. So, it's hard to do more in one go in the U.S. Europe is a little bit more sensitive because in Europe it depends a little bit on contractual arrangement, you know, reimbursement models.
I mean, even if reimbursement is now increasing in countries like the Netherlands, for example, and being introduced in Belgium and so on, we are not able to increase as much in Europe as in the U.S. We plan to continue with the price increases for the foreseeable future.
Excellent. Can you remind us of the price range for Kidney Assist Transport in the U.S.? The launch is going to take off pretty soon, of course.
Kristoffer, do you have the price numbers in your head?
For the Kidney Assist Transport, the launch in U.S.?
Yeah.
I think our initial assessment was somewhere north of $4,000 per procedure. The strategy for the machine itself, the device itself varies a little bit, but we lean towards placing those machines to a certain volume commitment of course. But the pricing point is also something we will learn along the way. I mean, it's a new product, it's a new market in that sense for us. So, we will know more further on during the year of course.
Excellent. What sort of objectives should we have for 2022? Not that we expect any specific guidance, of course, but it's a specialist market. You have the centers. Presumably some of these centers will have a higher rate of deceased circulatory donors. Are these the prime targets?
Can you repeat the question? I was a little bit uncertain what you actually wanted us to answer there, Johan. If you can just repeat it.
Can we expect you to address most of the centers that have a higher proportion of deceased circulatory death donors? Presumably these are one of the prime targets.
You mean for in general or for lungs or which?
Kidney Assist Transport.
With the Kidney Assist Transport, I mean, of course. I mean, we know that there is an increasing, how to say, utilization of donors, of organs from deceased. You know, people dying, patients dying from coronary death. That is naturally something that we will be targeting, Johan, of course.
It was also very useful to hear about the path for Liver Assist. When can we expect more clarity in terms of the pathway that seems to be perhaps more obvious, but also the clinical level of clinical trials that will be involved?
I cannot give you a date for that yet, but as soon as we are ready and we see that we have, you know, taken the right decision and also anchored it with the board, then we will also communicate this. Could be in connection with the quarterly report communication or something else. It will come, but not today.
It will come this year, presumably.
Yeah, of course, that we will communicate this year, yes. I cannot give you the date for this year.
Okay. No, I think that was all on our part. Thank you.
Perfect. Thank you.
Thank you. Our next question is from Caroline Banér of Danske Bank. Please go ahead.
Thank you very much. Congrats, gentlemen, on the report and of course, on the FDA approval. Really good news. Just a question related to the rollout of Kidney Assist in the U.S. Do you see any additional sales costs related to that rollout? How should we think about that going forward?
I mean, we have today one person who is dedicated to Kidney Assist Transport in the U.S., one very good salesperson . I mean, the plan is of course to add a few resources as the year goes by and the volume sort of build- up. That is all planned for and budgeted for and has always, you know, has been in our plans for some time. That is also why we want to take it a little bit, you know, careful in the first weeks or months not to push too hard because we also want to gain insights and competence because we are entering a totally new market in the U.S. where we have never been before.
We know that we have a fantastic product, but we also want to ensure that the organization is capable of handling the volumes as they grow and also that we can hire the right person or persons over the year. Because also with Kidney Assist Transport, we are talking about machine numbers which, you know, would be much higher than XPS over time. We need to learn and see a little bit how we are going to, you know, service the machines, what kind of resources do we need for that. We don't have the answer to everything yet, Caroline. We don't. That is why I have said that we will start by launching, you know, selectively so that we really give, you know, the best customer service possible and not overpromise.
Does that make sense?
Absolutely. Fair enough. I definitely don't expect you to have all the answers, so. When you say launching selectively, could you give some more color on what the perfect customer would look like to you in Kidney Assist, for example?
I mean, we have made a launch plan and a plan for 2022, and we know which centers are the ones to target first. We are already. We've had discussions with several centers, and there are centers today who are using, you know, the competitor product. There is one competitor on the market, and there are centers today who are using old technology, needing an ice box, you know, nothing else. We have the target list. We have already had discussions with centers. Most of the big kidney centers in the U.S. are in the south, east, or eastern part of the country. Those are the ones that we have built relationships with. There are certain centers which are actually very large, Caroline. I mean, there are centers doing a lot of transplants.
Those are the ones we are also, you know, primarily sort of discussing with. I can't go into more detail on specific names right now.
That's fair. I was kind of hoping you'd say that you were looking at the ones with the larger volume. I'm—
Yes.
— pretty happy with that answer. Looking at the heart device in the future, could you give any guidance on what share of Thoracic you expect that to be or it could be? You know, I understand that it's, you know, looking into your crystal ball and all that, but any guidance there?
Caroline, I love the question, but I can't really answer it. I mean, we have made, of course, internal plans already when it comes to how we will price it and so on. If you look at heart holistically, I mean, the number of heart transplants, it's a little bit more than lung. I think lung is around 4% of all transplants in the world, and the heart is 6%. It is a more transplanted organ than lungs. I think our heart device will also enable more transplants to take place because, you know, one of the limiting factors is the ischemic time, you know, three to four hours outside the body, and after that, the heart will not function in a new body.
I think you can make your own assumptions around it, but I can't be more specific right now and give you any volume indications. That would also be a little bit premature.
All right. Understood. I have plenty of assumptions. I'm just trying to you know—
Yes.
— bounce them off you and see.
I know you make your assumptions anyway, Caroline , so.
Okay. Let's go back to kidney, then. What kind of capacity do you have to meet the potential demand in the U.S. in terms of the—
You mean manufacturing? You mean manufacturing capacity?
That's right. Yes, that's right. Yep.
Yeah.
Yep.
I mean, we are using external manufacturer in the Netherlands. One company is producing the shell, and one is sort of assembling the device itself. It's two well-known, well-reputed Dutch companies. There is a production ramp-up, of course. We are starting since, you know, a couple of weeks with, you know, we are producing one device per week, and that will then increase over time. It's like with everything, Caroline. You have to be a little bit careful in the beginning. You have to make sure that the supply of components, that everything sort of works. We don't see any rush to, you know, flood the market quickly with this device.
We need to work very closely with the external manufacturer and make sure that capacity is built up in a good and logical way. You know, right now it's sort of one device per week. That's all information I can give you right now.
All right. Thank you so much. That's actually all on my part. Congrats again, Dag and Kristoffer on the report.
Thank you. Thank you very much.
Thank you. Just as a reminder, if you wish to ask a question, that's zero one on your telephone keypad. Our next question is from Peter Östling of Pareto Securities. Please go ahead.
Yes, thank you for taking my questions. First, nice quarter, guys. First, I just wanted to. When you talk about market share in the U.S. within lungs, how do you define that market? I guess it's not just the EVLP market, and you divide it by yourself and TransMedics. How do you define the market, and how do you look at a specific market share when you talk about that in the U.S. for EVLP?
It's a good question, Peter. I mean, if you look at the total market, I mean, what we have done, it all depends on what you include in the potential market. The way we see it is that we include, you know, the consumables, STEEN Solution and PERFADEX Plus at a certain price level. That becomes, let's say, the potential revenue per lung transplants performed. So that's one part of the story. Now, with the acquisition of Star Teams, you can actually expand—
Minus.
— a bit the definition of market potential as we expand the value chain. We take the number of transplants, and we apply it by a number or multiply it by a certain, call it, value per transplant according to our definition of what is then included in this, in the transplant activity from our side. We make assumptions on how much could actually be EVLP or and how much would not be sort of EVLP programs, and we make certain market share assumptions. We have talked in the past, Peter, about EVLP having a penetration globally of 5%-6%, and in the U.S. it's a little bit higher.
Of course, we have an ambition to gain market share every year, and we have that in our plans up to 2026, where we have set the revenue targets for per year, and also of course, profit targets. That is a little bit how we define it. I don't know, Kristoffer, if you want to be more specific about the market size calculation model that we apply.
No, no. I'm good.
Okay. One way of seeing it is that as you probably know, the OPTN started to collect EVLP data for transplant recipients a couple of years ago.
Yes.
I think the last number I've seen was that EVLP was used at around 6% of the recipients. That, I think it's a couple of years old. I don't know if you have any later number. Maybe it's—
Kristoffer, no—
— moved a little bit during the pandemic.
Yeah, I think so. I haven't seen, I don't know, Kristoffer, if you have any recall of the latest numbers.
No, I don't. It's always a little tricky to gain data from regarding EVLP. A lot of that connection needs to be done by ourselves, actually. We do know, I mean, based on the Q4, that we sold a lot of high volumes, a lot of EVLP goods. We also know that the major clinics, for example, the Cleveland Clinic, has actually grown their programs during COVID. That I think is all what I can comment.
Okay. Liver Assist seem to have had a very good quarter. I was just a little bit curious. I mean, both the Liver Assist and the Kidney Assist is rather flexible, so you can use it both as hypothermic perfusion and normothermic perfusion. I was just wondering, when it comes to Liver Assist, is the main use actually the way it was used in the New England Journal of Medicine article, or is it also extensively used for normothermic evaluation of livers?
I mean, we believe, you know, that hypothermic, which is what was used in the article, is, you know, the main way sort of forward. We have flexibility. It can be used normothermically, but it's nothing that we sort of promote, Peter, if I may say so. I think that's how I can sort of comment it.
Okay. When you say that—
Yes, yes.
Oh, sorry.
I won't say with livers. The good thing is there is flexibility, and I think not every device has that, Peter. I think that's, it sort of works—
Exactly.
Y eah, and some institutions or hospitals have, you know, different view on normothermic versus hypothermic, and I think it's good to be flexible. I think that's also worth commenting from my side.
Sure. I mean, in my view, they are quite complementary.
Yes.
In order to expand the pool of available organs in the long run.
Absolutely.
Yeah.
Absolutely.
I guess that maybe it's a little bit early to say, but when you talk to the FDA about the future route in the U.S., is it mainly the hypothermic use that you discuss, or will you still have that flexibility in the U.S. also?
We will come back on that.
I think that is one of the things that we are discussing with FDA at the moment since there are—
Exactly.
— different routes. We haven't concluded yet.
Okay. Finally, when will you start to give more numerical guidance for the full year? Your main competitor does that. When will you start to provide a range of top line expectations for the full year?
Yeah. I mean, it's a good question. I know that you would like us to do this, Peter. I think we should at some point do it. I think the more mature projects we have and the wider the assortment and assortment range we have, which is sort of happening as time goes by, I think we will come to a point when we can give this guidance, Peter. Once again, let us come back when we feel confident of doing so. You have a point, and I support your thinking and wish, you know, that we should be able to do it. I cannot tell you exactly what date we will do it on.
Okay. Thank you. That's all for me.
Thank you.
Thank you.
Thank you. There are no more questions on the audio line, so I'll hand back over to the speakers.
Perfect. I think we can conclude here unless yes, if there are no further questions. Thank you for excellent questions, by the way. Good discussion. Hope to see you all again in one quarter's time when we report first quarter 2022. Thank you from Kristoffer and myself to all of you. Thank you.