Bonesupport Holding AB Aktie

Welcome to BONESUPPORT Q3 2026. [Operator Instructions] Now I will hand the conference over to CEO, Torbjorn Skold; and CFO, Håkan Johansson. Please go ahead.

Thank you, operator. Welcome, everyone, to BONESUPPORT's Q3 2026 Results Call. My name is Torbjorn Skold, CEO of BONESUPPORT. With me here today is our Chief Financial Officer, Håkan Johansson; and our Chief Medical Officer, Dr. Diefenbeck. Together, we will use the next 30 minutes to guide you through the Q3 presentation and then open the line for questions.

Slide 2. Before starting the presentation, I would like to draw your attention to the disclaimers covering any forward-looking statements we will make today.

So let's look at the financial and operational highlights of the quarter. Q3 reflected solid execution across the business. Net sales came in at SEK 409 million, corresponding to a growth at constant exchange rates of 38% versus Q3 2025. Reported growth was 39%, showing that the currency impact on our figures for the quarter has decreased compared to previous quarters.

Our adjusted operating result, excluding incentive program effects, was SEK 139 million, corresponding to an adjusted operating margin of 34%. Reported operating result was SEK 123 million. We saw another quarter of solid cash generation with operating cash flow reaching SEK 138 million. After the ongoing share buyback program, this resulted in a cash position of SEK 510 million at quarter end.

After a period of significant commercial investments, it's encouraging to see the strong operating margin together with the continued strong cash flow as confirmation of the scalability of our business model. We continue to see strong traction for CERAMENT G in the U.S. with sales reaching SEK 288 million for the quarter compared with SEK 192 million in Q3 2025. In Europe and Rest of the World, we saw solid momentum across all markets and segments with a growth of 34% at constant exchange rates compared to Q3 2025.

The most important event of the quarter was the publication of the SOLARIO study in the New England Journal of Medicine. The study shows that the duration of systemic antibiotic treatment can be reduced significantly without compromising treatment outcomes when local antibiotic therapy is used as part of the surgical treatment. Dr. Diefenbeck will give an overview of what this study shows and why we believe it is a very important milestone and a game changer for patients.

During the quarter, important progress was made in the regulatory process for CERAMENT V within the framework of the de novo process. The supplemental data package requested by the FDA was submitted in September. If granted market authorization, CERAMENT V will constitute an entirely new product category like CERAMENT G in 2022. Just as in the review of the de novo application for CERAMENT G, both CDER, Center for Drug Evaluation and Research and CDRH, Center for Devices and Radiological Health are involved and the lead review team, which sorts under CDRH, remains the same as during the 510(k) process. The dialogue with the agency is constructive, and we look forward to the continued review.

In Q3, U.S. CMS confirmed improved reimbursement for the use of CERAMENT G in orthopedic infection surgery and more specific identification codes for CERAMENT G and CERAMENT V once approved by FDA. Progress on CERAMENT with antibiotics for spine continues to be solid. The CERAMENT BVF launch is on track and the preparations for the studies on Antibiotic eluting CERAMENT follow plan, an important step as we continue expanding our portfolio of indications and applications.

Now let's move on to the sales development. The chart shows total last 12 months reported sales in Swedish krona by quarter since 2019 in stacked bars per region and product category. As you can see, the launch momentum for CERAMENT G in the U.S. is strong and EUROW has accelerated in the last 5 quarters. Given that we keep bringing new strong clinical studies and opening up new market segments and new indications, a product like CERAMENT G will remain in launch phase for many years to come.

However, throughout 2025 and in the first half of 2026, we have seen strong influence from the U.S. dollar to Swedish krona depreciation, which influences the optics of the graph, but not the in-market performance, as you will see in Håkan's slides later in the presentation.

Last 12 months growth in Q3 of 25% in the graph corresponds to an even stronger 31% at constant exchange rates. U.S. US CERAMENT BVF's last 12 month sales were flat year-over-year at constant exchange rates. In total, Antibiotic eluting CERAMENT grew 39% in last 12 months at constant exchange rates.

In U.S., sales amounted to SEK 344 million, representing growth of 39% at constant exchange rates. We continue to experience strong growth of CERAMENT G, driven by both increased access to new accounts and new surgeons as well as wider adoption among existing users. We see growth from all 3 prioritized market segments; Foot & Ankle, Trauma, and Arthroplasty. In Q3, U.S. CMS, Centers for Medicare & Medicaid Services confirmed its proposed ruling in the full year '27 IPPS Inpatient Prospective Payment System, including changes that improve payments for the use of CERAMENT G in the treatment of orthopedic infections, such as periprosthetic joint infection, fracture-related infections and diabetes-related bone infection.

More severe injuries result in higher reimbursement. Regardless of severity, the hospital can use the highest codes when claiming reimbursement. This means that moderately severe conditions receive the same high reimbursement as when accomplished injury is treated. Note that this uplift applies only when CERAMENT G is used.

In parallel, CMS confirmed the introduction of more specific procedure and identification codes for CERAMENT G and CERAMENT V, consistent with the company's submission. This is very positive for BONESUPPORT as it validates the uniqueness and value CERAMENT brings and reduces potential barriers for using CERAMENT in daily clinical practice. CMS ties the extra reimbursement specifically to on-label use of approved products in this category, where BONESUPPORT currently holds the only approval, strengthening our competitive moat.

We have launched a rollout plan with supporting education and communication materials to fully capitalize on the ruling. The ruling came into effect on October 1, 2026. The initial and early feedback we have received from surgeons and administrators is very positive, and we expect it to substantially strengthen the case for broader and deeper use of CERAMENT G in existing and new accounts.

As part of our ambition to modernize an outdated standard of care in the U.S., we have opened one market segment after another, starting with foot and ankle followed by trauma, now moving into revision arthroplasty. Interest continues to grow for CERAMENT G in revision arthroplasty and periprosthetic joint infections, where the clinical needs remain substantial and the evidence supporting our Antibiotic eluting technology has resonated strongly with surgeons.

We have built a solid foundation for our spine strategy over the past quarters by establishing distributor coverage and preparing the market. The surgeon access and early stages of adoption in spine follow plan and indicate the strength and potential of this segment. As this is a new clinical segment for us, more clinical data is needed to support broader market penetration. Importantly, the performance of CERAMENT BVF in spine will help confirm the value proposition for the CERAMENT platform, which will pave the way for future antibiotic eluting CERAMENT launch.

Now let's turn to Europe and Rest of the World. Sales in EUROW came in at SEK 64 million, representing 34% growth at constant exchange rates. While part of this reflects a softer comparison base in Q3 2025 and also initial orders from distributor change in Australia and New Zealand, it was still a very, very strong quarter. We saw strong development across our 3 market structures; direct, hybrid and distributor markets.

This model is well suited to the early stage the company is currently in. Our direct markets, including U.K. and Germany, delivered solid growth across the board. Our investments in hybrid markets developed well, underlying continued potential ahead. During the quarter, we entered into a distribution partnership with Stryker for Australia and New Zealand, which contributed SEK 3.8 million to sales through a couple of initial start-up quarters.

The partnership strengthens our presence in the region and gives us a good basis to continue developing these markets. Our distributor markets show strong growth, and we see large potential to increase our footprint by increasing penetration in the countries in which we have presence as well as potential to entering more countries.

The SOLARIO study was published the evening before the start of the joint Congress of the European Bone and Joint Infection Society, EBJIS, and the U.S. Musculoskeletal Infection Society, MSIS in Porto. It was featured in several presentations and scientific discussions. The response to SOLARIO reinforces our view that a paradigm shift is taking place and that local antibiotic therapy will play an increasingly important role in the treatment of orthopedic infections.

SOLARIO has the potential to be an important catalyst for changing the standard of care and treatment protocols worldwide for the benefit of patients, health care providers and society, not least in antibiotic stewardship.

Now for a deeper scientific and clinical perspective on SOLARIO, I will now hand over to our Chief Medical Officer, Dr. Diefenbeck.

Thank you, Torbjorn. My name is Michael Diefenbeck. I'm Chief Medical Officer at BONESUPPORT. After a bit of waiting, the SOLARIO trial has been published on the 16th of September. SOLARIO stands for Short or Long Antibiotic Regimens in Orthopedics. The study was published in the New England Journal of Medicine, one of the highest ranked journal in medicine. First author is Professor Martin McNally and senior author is Dr. Matt Scarborough, both from Oxford, England.

You are probably familiar with the background. Orthopedic infection is usually managed with surgery, local antibiotics and a prolonged systemic antibiotic therapy. And exactly this prolonged systemic antibiotic therapy was the focus of the study. The research question was, "can the duration of systemic antibiotic therapy be limited to less than 7 days provided local antibiotics were used?" And the second objective is, if there is an advantage of local antibiotic therapy in terms of adverse events or side effects.

This is a multicenter, open-label, noninferiority trial. Adults who had undergone surgery and implantation of a drug-device combination product, including antibiotics were randomly assigned to receive postoperative systemic antibiotic therapy over long, longer than 4 weeks; or short, less than 7 days duration. The primary outcome parameter is treatment failure by 12 months assessed according to protocol-defined criteria by a clinical endpoint committee whose members were unaware of the trial group assignments and who were not involved in the treatment of the patient.

Next slide, please. Here are the results of the trial. 500 patients were randomized and 475 were assessed in the primary analysis. The primary outcome parameter is definite treatment failure and occurred in 14.1% in the long duration group and only in 11.1% in the short-duration group, which met the prespecified non-inferiority margin. This means that the short duration was non-inferior to the long duration.

Next slide. And here are the results of the secondary outcome parameter. By week 6 after surgery, symptoms potentially related to the treatment had occurred in 45.2% of the patients in the long duration group and only in 17.2% in the short duration group. This was a significant difference. On the graph, you can see that there is a huge difference, especially in the severe and moderate adverse events. This means that the short duration of systemic antibiotic therapy is much more patient friendly than the long duration of treatment.

Slide 10, please. The authors of the study came to the following conclusion. Among patients who had undergone orthopedic surgery and received local antibiotics, a short course of systemic antibiotics was non-inferior to a long course with respect to definite treatment failure by 12 months. So what do these results mean in a bigger picture? The World Health Organization declared at the end of 2019 that antimicrobial resistance is 1 of the 10 most urgent global health threats, along with, for example, HIV, climate change and Ebola.

To reduce antimicrobial resistance, or maybe better, the development of antimicrobial resistance, the WHO defined 6 points. Number one, shorten the duration of therapy and SOLARIO has clearly shown that this is possible. Number two, improve compliance in patients. Well, the device-drug combination product, including antibiotics is implanted directly into the bone, so there is nothing to worry about compliance. The patient cannot remove the antibiotic. And on the other hand, they don't need to be constantly reminded to take their medication.

Number three, narrow antimicrobial choice, indeed, mainly gentamicin and vancomycin was used. Number four, avoid underdosing. There is a high antibiotic concentration delivered by the local antibiotics. Number five, improved targeting. The antimicrobials are exactly at the right spot. They are implanted directly into the bone. And finally, number six, reduce the total antimicrobial burden. In a study, there was a saving of 6.4 kilogram not gram per 100 patients.

And with this summary, I hand over to Håkan, BONESUPPORT's CFO for the financials.

Thank you, Michael. Net sales improved from SEK 294 million to SEK 409 million, equaling a growth of 39% in reported sales and a growth of 38% in constant exchange rates. Torbjorn has already spoken about the performance in both the EUROW and the U.S. and the major drivers behind the sales growth, but as large overtime movement in U.S. dollars hides the true trajectory in the U.S., I would like to share the U.S. sales performance for CERAMENT G in U.S. dollars.

CERAMENT G is the growth driver in the U.S. And this slide shows the quarterly CERAMENT G sales in the U.S. in U.S. dollars with continued solid performance and a strong sequential growth in this quarter, both in net sales for the quarter and in net sales per workday. The contribution from the U.S. segment improved by SEK 60.2 million versus Q3 2025 and amounted to SEK 171.4 million. The improved contribution relates to the increased sales after the effect of increased costs.

Selling and marketing expenses during the quarter amounted to SEK 152.3 million compared with [ SEK 123.6 million ] in previous year, of which sales commissions to distributors amounted to SEK 111.4 million compared with SEK 85.1 million in the same quarter last year. From the graph at the bottom of the screen showing net sales as bars and gross margin as the orange marker, it can be noted that the gross margin remained stable and strong at 94%.

In Europe and Rest of World, a contribution of SEK 19.9 million was reported compared with SEK 12.5 million previous year. Selling and marketing expenses increased by SEK 6.4 million, mainly related to the previously communicated commercial investments in the EUROW booster. From the lower graph and the orange marker, a minor movement in gross margin can be noted, mainly impacted by market mix. Selling expenses, excluding sales commission and fees increased by SEK 12.7 million compared with previous year, following commercial investments in both U.S. and EUROW. Investments aimed at future sales growth driven both by market opportunities and by sustained high market activity.

R&D expenses reflecting a continued high activity level focused on strategic initiatives such as the market authorization submission for CERAMENT V in the U.S., the research and studies in spine and future portfolio innovation. And finally, administrative expenses, excluding the effects from the long-term incentive programs, remaining stable with an increase of SEK 2.5 million compared with previous year.

The adjusted operating result amounted to SEK 139.3 million with only minor currency effect impacting. This is something I will come back to also on the later slide. Gross margin levels returned after a temporary down in previous quarter following inventory write-downs in the second quarter. The difference between adjusted and operating result is costs related to our long-term incentive programs amounting to an expense of SEK 15.9 million in the quarter compared to an expense of SEK 13.7 million in previous year, as you could see on the previous slide. The increase in expense includes mainly a favorable share price development in the period.

Operating cash flow was strong in the quarter and cash position closed at SEK 510.5 million despite the current share buyback program initiated in September and partially executed during the quarter and impacting the period with SEK 60 million. During the quarter, the Swedish krona has continued to weaken against the U.S. dollar with only minor exchange gains and losses reported as other operating income and expenses.

This graph on this slide shows with gray bars how the relationship between the U.S. dollar closing rate and Swedish krona has varied over time. This is read out on the Y axis. The blue dotted line readout on the left Y axis showed adjusted operating results. The adjusted operating result, excluding translation exchange effect is the orange line and gives a more comparable view on the underlying trend.

In the table below the graph, you can see the FX adjusted operating margin of 32.9% in the quarter compared with 28.6% in the same quarter last year. Through second half of '25 and early 2026, the operating margin has been impacted by the commercial investments made in both EUROW and U.S., and this quarter shows a return to gradually improved operating margins. A solid cash conversion has been reported continuously since Q3 2024 with an average cash conversion of 83%, visible at the dotted line in this graph. And Q3 reported a solid cash flow and cash conversion of close to 100%.

And with this, I hand back over to Torbjorn.

Thank you, Håkan, and thank you, Dr. Diefenbeck. To summarize Q3 2026, sales grew by 38% at constant exchange rates, reflecting steady and consistent progress. U.S. growth was 39% and EUROW growth was 34%. The adjusted operating margin was 34% and the cash flow was solid, allowing us to buy back shares and still end the quarter with a cash position of north of SEK 0.5 billion.

Important clinical and regulatory milestones in the quarter were the publication of the SOLARIO trial, the confirmation of CMS increased reimbursement for CERAMENT G and V and the submission of the complete data package to answer FDA's questions related to the CERAMENT V de novo submission.

Following combined growth of 33% in constant currencies over the first 3 quarters, we confirm our previously communicated full-year outlook of sales growth between 33% and 36% in constant currency. The quarter confirms that the company's position has strengthened and continues to be characterized by low but rapidly increasing market penetration, creating significant room for expansion for many years to come.

Now let's open the line for questions.

[Operator Instructions] The next question comes from Philip Ekengren from Nordea.

So U.S CERAMENT G increased substantially Q-on-Q, especially the incremental growth here from Q2. With new customer recruitment described as rather stable across the indications, could you split up how much of the acceleration come from increased usage among existing surgeons and perhaps also in which indications, please?

So we don't publicly disclose the numbers, but what we can say is that we see solid growth across all the 3 segments; Foot & Ankle, Trauma, Arthroplasty. We can also say that in all of the 3 segments, we see a good healthy balance between the 2 drivers, meaning new accounts as well as increased usage.

Of course, taking into effect that Foot & Ankle, that's the segment where we have been in and actively worked on for several years. Trauma is somewhat newer and then Arthroplasty is the newest. But we're very pleased on the growth across the segments as well as by the growth type. That's how much we can say on it, Philip. And sorry, we don't disclose more numbers than that.

No, appreciate that, Torbjorn. On CERAMENT V, if and when approved, how much of the initial opportunity will come for patients or surgeons you cannot currently reach with CERAMENT G versus perhaps switching existing G procedures to V. Can you tell something about what your European experience suggests here going forward?

So our European experience and why is the European experience relevant? It is because we have had both products available in the market for several years. The European experience indicates that our product mix of all the G and V products that we sell, around 70% to 75% of that is G and the remaining is V. That's the product mix that we have. That is our starting point and starting assumption for the U.S.

Now there are indications that we see in the U.S. market, and this is not anything new for this quarter. We've seen it for several quarters, and we've raised this publicly several times, is that there seems to be a tendency or a preference in the U.S. more weighted on V than G.

Now how much of that is based on science versus tradition, history; that remains to be debated on. But our starting point is that we expect to see the U.S. come to a similar mix as we've had in EUROW. And then we'll see. But it's clear that U.S. surgeons want and need V. We expect the cannibalization to be limited, but there might be some. But clearly, CERAMENT V is expected to be a solid incremental driver of the growth case in the U.S.

I hope that answers the questions, Philip.

It does. And then perhaps a final one for me, squeezing it in. With Q3 growth at 38% and is unchanged at 33% to 36%, what assumptions distinguish the lower end and upper end here? And do you expect the CMS changes to influence growth already in Q4? Or is that more of a '27 [ thing ]?

I'll leave that to Håkan.

Thank you. No. Again, I don't think that we should or should include a material impact from the CMS already in Q4. The guidance is more related on continued commercial execution on existing baselines. And again, we have seen volatility in sequential growth in the past. We'll continue to see that as well. So it more relates to -- the guidance more relates to continued and in mega terms, normalized commercial execution.

And on CMS, sorry, I missed that -- related to CMS. So on CMS, what we've seen is that -- and we saw it at EBJIS, we saw it at OTA, Orthopedic Trauma Association in Phoenix, is that U.S. surgeons and the ones that we've talked to are very, very positive towards this ruling. And also the initial conversations that we've had with administrators are also very positive. So it's definitely going to help us, and it's definitely a strong ammunition for us, especially in the conversations related to when hospitals and administrators simply think that, well, it's a very expensive product, and we get a lot of invoices on CERAMENT G and why do you need that?

So then, of course, the CMS ruling is very, very helpful. Having said that, it is also very clear that it is not just something that we talk about to our surgeons and the administrators in the hospitals in 1 month. We expect this ruling to be an important topic for us in the coming quarters. But of course, it's very positive. We're well positioned for the growth journey ahead, not only with CERAMENT G, but also with CERAMENT V, which is actually also included in this ruling.

The next question comes from Mattias Vadsten from SEB.

So first one, just a follow-up. On your comment there, Håkan, on the incremental reimbursement for CERAMENT G in the U.S. And I think you said you do not rely on any help from that in Q4, but why would it not help really? Are you just being cautious on that end? Or sorry if it in the wrong way.

Thank you, Mattias, and good that you're asking the question. And what I said is I don't expect it to have a material impact on the revenue in Q4. Of course, it will be helpful, and it's helpful in terms of continuing to develop both adoption and access in the U.S. over time. So we are super happy to have CMS, but I don't think that anyone should exaggerate the impact in the very short term. we will make sure that this is something that -- this is a tool in our toolbox that we are using wisely in building the market.

And also maybe staying on the same note, in Q2, we talked about the go-stop-go dynamics for a bit. And you have touched on it before, but the communication was quite clear around that Q2. So just how has that developed since then? And also do you think this incremental reimbursement can change that picture? That's my next question.

Yes. Good. So go-stop-go that you referred to, Mattias, was something that we saw in Q2. But in all transparency, we have seen the dynamics of go-stop-go for many quarters previously. So it's a natural part of the business that we are in, and we see it on a clinician level, and we see it also on an administrative level. And what we mean by that is on a clinician level, when they are first exposed to CERAMENT and especially CERAMENT G and V, the surgeons typically want to try it on a relatively narrow indication and on a select group of patients.

They try it and then they watch these patients. So they go, they use it in a couple of cases, and then they stop and evaluate whether it has the clinical impact and the clinical results that they want to see. If they're pleased with the results, they go again. So hence, this go-stop-go. That is on a clinician level. And it's relatively common. It's very common.

We can also see it in -- on the administrative level in a hospital or in a hospital group, even on an IDN level in the U.S. And that's pretty much the same dynamics that we see on the clinician level, meaning that surgeons in the hospital start using the products. And then the more they use, they reach a certain level of value that the hospital purchase, then they typically are flagged to the buyers and the administrators.

And if the surgeons and the hospital as well as us; if we haven't done the work to prepare the administrators and the buyers and the purchasers, what CERAMENT G and V is, then there could be these effects that we not only saw in Q2, but we've seen previously. So there you have this stop on a hospital level. And then the approach is simply that we go and talk to the administrators, the value approval committees around the value of CERAMENT G and V.

So the go-stop-go, both on a clinician level as well as an administrator level has been there for years. We expect it to continue. We saw some of it in Q2. We continue to see it in Q3, and we expect to see it in Q4 as well as next year as well. So it's part of the business. But of course, Mattias, to your point, to have the ammunition with the CMS ruling, it's a fantastic tool. It's probably the ideal tool to use in that type of conversation, and it really helps strengthen our case in those conversations.

Very clear. Then my last question is, so based on the trajectory you see in trauma patients now, do you believe market share similar to diabetic foot ulcers is possible or with the long-term market share potentially in foot always be higher, you believe? I appreciate we cannot see into the future, you cannot either, but any insight sort of what you've seen in surgeon feedback, the uptick so far? Yes.

No, I mean great question. And what I can reference is simply the -- I think it was a couple of weeks ago, we were at the Orthopedic Trauma Association in Nashville, U.S. That was right after the SOLARIO publication that was right after the CMS ruling. And of course, it's only trauma docs there. There's not a lot of foot and ankle or diabetes doctors there.

I don't see any reason why we wouldn't be able to reach the same type of penetration in trauma as we've done in foot and ankle, not at all. And having said that, in foot and ankle, we are still just scratching the surface. Yes, we've reached higher penetration, and we've been at many more years. But I don't see any reasons why we should be more or less bullish on trauma than we are on foot and ankle.

The big question is, of course, how long will it take? But this is the beauty of BONESUPPORT that time is on our side. And the first principle that we always use is that you have to convert surgeon by surgeon, and you have to do it face-to-face. You don't do it with a study only. You don't do it with an e-mail because these products, they implant in patients. So yes, we remain very bullish on trauma as we've done previously as well. So no change on that, Mattias.

The next question comes from Sten Gustafsson from ABG Sundal Collier.

A number of questions, but I'll try to limit it to 2. Looking at the CMS ruling, I suppose it's for hospital only and not outpatient. Maybe that is sort of clarification. And secondly, if you could perhaps tell us your mix there between hospital versus outpatient. I guess I'm trying to figure out how much of your business will benefit from these improved reimbursements.

Yes. So thank you, Sten. The first question, yes, the ruling is only inpatient and that simply stands for how it's set up and how it's named. So it's called the full year '27 IPPS, so the inpatient prospective payment system. So this ruling relates to 100% inpatient. The majority of our sales is currently in inpatient. There is some in outpatient, but to the large extent, it's only inpatient. So it relates to that.

Then, of course, how fast and how much of the hospital will use it. Time will tell, but we look very, very positively to this ruling and it will have positive impact for us in the quarters to come. And we have good reasons to believe that the ruling will stay in place a year from now. And then all the work that we do now in the coming years, it will, of course, help us in the long term as well.

I hope that answers your questions, Sten.

Absolutely. And when it comes to -- I remember you had this NTAP and then you -- obviously, it's only temporary, but you gained it on another segment. Have you noticed a drop in usage among the doctors where the NTAP sort of disappeared after the 3-year period?

Not at all.

Very good. In terms of your organization in the U.S., I mean, it looks like given the improved reimbursement, you have a good opportunity here to capture a lot of growth. Will you invest in more salespeople? Or how are you going to sort of reach out to all these hospitals?

Very good and relevant question. So when we're growing in the U.S., 30%, 40%. And then, of course, we will need to continue to invest in our commercial organization, including sales. But you bring up a very, very relevant point, and it comes to the fact that we have, just as a company, started to step into this somewhat more mature phase where it's not only about the classical sales. That's still the core and that's still very important to be in front of orthopedic surgeons and to be in front of the infectious disease.

So we're not going to sort of slow down on that. That's going to be continued. But the point that you bring up is that these kind of conversations when it comes to the CMS ruling. Of course, the surgeons are important, but even more important are the administrators, however they are defined and whichever titles they might have, that really depends.

So in that area, we have invested and we are continuing to invest simply to make sure that we have the scale and the breadth and the depth in our organization. So that's an area that we have already invested. We have -- we're bringing on more people with a slightly different profile than the classical clinical sales. So that's an area that we have seen investments already done, and we're going to accelerate that in the coming quarter as well as in the next year.

The next question comes from Erik Cassel from Danske Bank.

I had a question on the guidance as well as a follow-up to Philip. As he said, the 33% to 36% basically implies anywhere between 32% to 44% growth in Q4. Do you view that full range as possible still? And if you do think that, I want to press a bit on what do you think are the factors that get you to either down towards 32% or up to 44%? And do you have any opinions on what is more likely in this sort of range?

Thank you, Erik. I mean we provide the guidance simply because we think that that's the guidance where we might end up, and that's why we provide it. So we think it's likely to end up anywhere in that. Otherwise, we wouldn't have provided it. So that's the first part.

To your second question, what will it take? Well, it's very much the same that took us to deliver what we delivered in Q3, meaning that we continue to drive new accounts and to increase the penetration in existing accounts that we do it in U.S. as well as OUS, and we do it in all 3 segments: Foot & Ankle, Trauma, and Arthroplasty.

And then we, of course, will not provide a sub-guidance to the guidance that we've already provided. The guidance is that we will end up in the year between 33% to 36%. And we focus more on the long term, and we're very pleased with the Q3. We look very positively to Q4, but we build this business for the long term, not just to hit one quarter or the next quarter.

Okay. Fair enough. And then it looks like the BVF have started to stabilize a bit more here in Q3. Would you say that you've sort of reached the stabilization point that you put back in Q1 that it now can start to grow again? Or is it -- expectation is a bit more muted still in the coming quarters?

Sorry, can you repeat the beginning of the question because I missed that one. Sorry.

Yes, of course. It looks like BVF in U.S. has started to stabilize, only down like 2% now, down 14% in Q2. So you talked about the stabilization in Q1 and then for it to sort of come back to growth, if I recall correctly. Would you say that we've reached that sort of stabilization point now and that we're looking towards growth again with the BVF product in the U.S.?

I think that's -- what we've seen and that is numbers also shared is that when we look at over the last 12 months, BVF has been relatively flat. And in a way, that is quite very much in line with our expectations. Are we reaching that inflection point where BVF will start to grow? Well, again, long-term, we don't expect a huge growth from the BVF. It will -- as we've seen in outside the U.S., in Europe Rest of the World, somewhat growing slowly with the market, but the main focus will be on CERAMENT G and hopefully around the corner on CERAMENT V.

What we've said and that still stands is that with an extending customer base, we also see more surgeons using BVF. But again, not anything that will have material impact or, if I put it that way, accelerate BVF growth. The main focus for any investor should be to follow and see how CERAMENT G and eventually CERAMENT V performs in the U.S.

Okay. And then lastly for me for now, the SEK 3.8 million from Stryker, was that a one-off stocking order to sort of get them going? And what do you forecast for the sort of quarterly run rate from them in Q4? Is that likely going to be a much bigger account than the previous distributor that you have? And are the gross margin setup different compared to the previous hybrid model that you run there?

Excellent question. So yes, you are right. It's -- these were 2 start-up orders to get going. We have seen operations through this both in Australia and as well as in New Zealand. So really nice -- it's early days, but it's a really nice startup. We don't provide guidance on a country level, but we're very pleased with the fact that we get faster and better access to the total potential of Australia and New Zealand with a phenomenal player in this industry. So of course, we're doing it because we simply think we can do it faster than with the previous setup that we had.

On your second question on the margins, for us, this is a very similar -- this is as close to a standard contract that you could have. So from a contractual level and a margin level, it's very similar to the contracts on the distributors and hybrid models that we already have.

The next question comes from Ed Hall from Stifel.

Most of them have been largely asked, but I think maybe just get back to the reimbursement side and maybe if we were to put ourselves in the foot of the hospital administrators, what is the time line and the aspects that they need to undergo before they could start to get sort of the updated billing sort of flowing through their P&L. So like what's the time line or lag that would need to happen? That would be my first question.

Yes. I mean the ruling is in effect as of 1st of October. So it's open now. So as long as they have been trained, they know what to do, they know how to code the surgeries, they know which surgeries to pay extra attention to. Everything else is set up. But it is also about making sure that we get access to the right people, inform them about what it means and how to do it.

It's not very complicated. It's just they use the same software and the groupers that they're used to. It's just making sure that they are informed about it. Some hospitals will move very fast. Some hospitals will probably take a bit longer. But what is very interesting to see when we have done the analysis on a hospital basis. So we use the hospital's own patient volumes historically, then it's a no-brainer to use it. But to make someone understand that it's a no-brainer, there's a process to get there.

Absolutely. I guess what I'm trying to understand is when we had the NTAP payments, there was a certain number of hospitals that either didn't acknowledge that, understand the NTAP payments around. Would it be fair to assume that this obviously is a broader code, it's more widely used. So that issue that you've had historically may not be an issue going forward?

I think the way that you should see it is that some hospitals will jump very fast on this, especially the ones that are on top of their operations. They are on top of their case mix, they are on top of their P&L and what drives profit and what doesn't drive profit. I think those hospitals are easier to convince than ones that are not as call it, have that focus or are as operationally savvy, it will take time. It's hard for us to sort of compare it with the NTAP. NTAP from our perspective was much -- had a much smaller reach and much less importance than CMS ruling, arguably.

Okay. Perfect. And then maybe just -- I mean, I think maybe it's an obvious question, but I just wanted to clarify it from you. I mean, with these reimbursement changes, what do you see as the greater impact for your business? Is it new surgeon recruits? Or is it greater surgeon utilization? I'm sure it's probably a mix of both, but if there's any sort of leading indicator I'd find interesting.

Yes. It's both. And unfortunately, we wish we have the data to say that it's more of this than the other. But however we analyze this, it's both, and it's as positive on both.

The next question comes from Mattias Thärn from Brummer & Partners.

Congrats on the DRG decision [ effect ] and on the SOLARIO. I would be interested to hear, when you discuss SOLARIO with surgeons, how do you describe the findings across the carriers in the trial? And did the investigators look at the outcome by carrier type? That's my first question, if I may.

Okay. Very good. So if we start with the carrier types, do you want to start with that one, Dr. Diefenbeck, in terms of which carrier types that were included? And what can actually SOLARIO say related to the products? How was the study designed?

Yes, sure. Thanks for the question. It's a practical study. So there were no -- it was not focused on one single antibiotic eluting bone graft substitute. Even PMMA, so the bone cement was included into the study. This is a study focusing on, in total 17 different products. And this is what I meant in the beginning, it's practical for the class of local antibiotics.

So far, there are no sub-analysis published, which show the differences. And this is not what the study was made for. It's not to identify the performance of one single antibiotic. It's on a group. So the task was to show that if local antibiotics are used, the systemic duration can be shortened.

Correct. So it's definitely not a CERAMENT study. You can -- clinically and scientifically, you cannot draw any conclusions on whether CERAMENT versus the other products did well or not. However, what you can say is that it clearly indicates that you can reduce the time of systemic antibiotics. And then you can also look at the number of patients that had CERAMENT G and/or V, and that was 70% of the total population in the study.

And then I'd like to bring up a topic. There was recently a peer-reviewed article in the Journal of Bone and Joint Surgery, where some researchers had effectively reanalyzed the foundational study, Stravinskas from 2016, foundational study in the sense from which BONESUPPORT has recently cited its sustained release antibiotic relief properties of CERAMENT G. And this was done by the researchers obtaining that data from this study and then this proved then by mathematically -- in quite a robust mathematical analysis, so not necessarily from any animal model that has been cited before.

Now the reason I ask is this may or may not be correct. But on that basis, the product would effectively then function as a bone void filler with a short but potent pulse and presumably outcomes would be much more driven by debridement quality, soft tissue coverage and systemic therapy. Now -- so far, we have not heard the company publicly commenting on this nor have I seen any analysts written about this, which is a surprise in itself.

So I would like to ask, I'm aware that one of your Board members wrote a letter to -- commenting on this, but it only touched the abstract and it did not, in any way, refute the principal conclusion of this very precise, mathematical argument that refuted the elution property of CERAMENT G. So I was wondering if the company could publicly just respond to how they stand against this.

And I shall add that in discussions that we've had with U.S. surgeons and others, I mean, one of the principal qualities that's brought up of CERAMENT G is precisely the perception of a unique profile. And I should also add that it's very evident that the company, including the CEO, you commented on this on many occasions recently in the Capital Markets Day 2026, where the large package was devoted to the sustained elution properties of CERAMENT G. So if you don't mind, how important is this for the customer proposition of CERAMENT G and CERAMENT V, respectively? And to what extent is this conclusion valid that has been now brought up in the recent JBJS study?

Thank you for the question, Mattias, and that was a comprehensive background. So let's break it down. And first of all, for those of you who are not informed of which study this relates to, it is the so-called mouse study published by a group in Denmark, Aarhus, in the publication of Journal of Bone and Joint Surgery. The study was published in mid-August.

And I think it's very relevant to bring up that the majority of the authors are not only part of the university there, they are also part of a company that is called Precision Antibiotics. And they have their own technology related to antibiotics and antibiotic elution. The technology is called CarboCell. We know of the company really well, and we've been made aware of this study early on.

I'll start with the sort of the clinical relevance or how we see the clinical relevance of this and then Dr. Diefenbeck will comment on some of the -- our views on that study. So, first of all, from a commercial point of view, what we have seen is that we see very, very limited feedback or questions from the market on this; very, very few. That's number one.

Number two, the reason why we believe it is commercially not really relevant is simply due to the fact that it is a preclinical study done on mice where they have used CERAMENT G off label, meaning not in a way that the product is intended to be used in soft tissue in mice and where they have used very, very small amounts of the product compared to the amounts that would be the typical case for when the product is used in patients.

So that sort of summarizes why we simply don't think that this study has any meaningful clinical relevance to CERAMENT G. That's sort of fundamental. And then if we then go to the next steps, what is important when we sell our products is not so much preclinical. We stopped using preclinical data to sell our products. Actually, we haven't -- never used preclinical data to sell our products. What matters to customers is the clinical data in general and specifically by segment and by indication. So it's really the clinical data that is important.

I think what is also good data points to have in mind is, for example, when this study was presented at EBJIS, what was the feedback from the audience, including Professor McNally from the SOLARIO trial, I think that's important feedback. So that's sort of the statement that we have from our side. Now from a more clinical and scientific point of view, Dr. Diefenbeck, would you happy to share your thoughts?

Sure. So, Torbjorn mentioned already very important points. So looking at -- the study has 2 parts, a bench testing and the animal study. And as mentioned already, in the animal study, the bone void filler was tested in soft tissue, which is not indicated for use. And of course, it should be obvious that the device needs to be tested according to the indication.

Then a bit on a more general base, if we look at what testing you can do with bone void fillers, you would start in a lab with bench tests. So for example, you would look at the mechanical properties, the setting time and dilution. The next step would be the biocompatibility or now called biological evaluation where you test against cells or bacteria; then you come to small animal models. This is the area where the mouse study was done.

The next step is large animal models. And then, of course, clinical studies, which reaches everything from case reports to randomized controlled trials. So here, this is a very, very early stage of research. Now if you want to start in a lab and compare this elution on the concentration of implants, you need to test, of course, the same volume with -- the same volume with the same volume of the test substance and of the liquid. And this has not been done.

So the volumes were completely different, which were tested. Very, very small sizes were tested in the publication, so it's not comparable to what has been tested before. And then as you already right said, a mathematical model was provided without any measurements. So just according to what I told you before, the medical model is -- mathematical model is almost before the bench testing. So very, very early results. So as Torbjorn said, no impact for the clinical performance of the product.

The next question comes from Erik Cassel from Danske Bank. There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Very good. Thank you, operator. Then let's go through some of the questions that we have online. And then the first question is, can you quantify how much of the U.S. growth is driven by increased utilization of existing hospitals versus new hospital customers and how much potential remains within your current hospital network?

So again, we don't quantify it split, but what we say is that it's a healthy balance driven by both factors, and that is the same picture across the different segments in the U.S.

Then the next question is U.S. gross margin declined from approximately 95.3% to 94% year-over-year. What explains this decline? And should we consider it temporary or structural? Håkan?

Thank you. It's a very good question. And the main reason why there is a decline in gross margin over time mainly relates to increased manufacturing costs. So the market price has been extremely solid and stable over time. So the main impact is coming from the increase in manufacturing costs. There's been some impact from the U.S. tariffs that impacted us now. And here, we expect returns to come in later part of this year, et cetera. But the gross margin as reported in this quarter and compared also in Q2 is a good indication of a sustained gross margin in the U.S.

Good. Very good. So let's see scroll down. Next one, U.S. market penetration on Level 1 trauma center. Can you provide an update on your penetration of Level 1 trauma centers and your estimate of how much of the addressable U.S. market you have reached so far?

Okay. So we don't provide -- on a quarterly basis, we don't provide updates on the Level 1 trauma centers. But what we can say is the numbers and the growth that we have in the quarter gives a good indication of how we're doing. And in terms of how much of the addressable U.S. market we have reached so far, I still think the numbers that we provided on the Capital Markets Day is still relevant. So I would refer to that on that question.

Then we have another question, operating leverage, long-term profitability. With adjusted EBIT margin now above 34% and sales commissions declining as a percentage of U.S. revenue, how do you assess the long-term EBIT margin potential while continuing to invest in market expansion? Okay, Håkan will take that.

Good question. And again, I think that the question is well phrased because it's all about the long-term EBIT margin potential because as we've seen also during the last year, we will have periods where we invest, especially in our commercial organizational structures that will slow down the EBIT improvement that we've seen also over time. We haven't given any guidance on the long-term potential, but I think that the gradual improvement in EBIT margin and the higher level of operating leverage gives a fair indication on a long-term potential.

Good. Then I think we have one more call -- one more question on the line. So operator, I get the message here that Kristofer Liljeberg from Carnegie is on the phone. Would you care to open the line for Kristofer?

The next question comes from Kristofer Liljeberg from Carnegie.

I really would like to go back to the accelerating U.S. growth this quarter. I think you had USD 4 million higher sales quarter-over-quarter. Previous record was $2.7 million. 12-month rolling trend has been $2 million after the second quarter. So would you describe this as more a temporary effect or are something more sustainable going on right now?

I think that, Kristofer, as with any month that is a difference to what you've seen previously, it's just 1 month. So I do not think that you should see this as a sustained acceleration. It's a period where we have seen less impact of the underlying mechanics that we saw in Q2 in go-stop-go, et cetera. It's a period where some of new assets and new distributors has performed well in the quarter. So I think that's -- I really recommend and I look forward to continue to have the discussion in the future quarter report and see what that can represent in future run rates.

I think that here and now, it's a strong confirmation on the commercial structure that we have, the potential that we have, and we still have a lot of market opportunity to go after and how that will develop quarter-by-quarter. Let's come back to that and see.

Great. And then just a quick one. There was a question early on, on the call regarding the CERAMENT V potential if that is approved. So do you see this as an incremental opportunity? Or do you think a large part of the 20%, 25% of total sales will come from switching from current CERAMENT G used in the U.S.

It's incremental. Okay. Good. Thank you, Kristofer. Let's continue with the questions that we have on the chat. And then the next one is R&D in CERAMENT V. Given your strong cash flow and net cash position, do you see opportunities to accelerate R&D investments in CERAMENT V, spine applications and next-generation products without requiring additional shareholder capital? And can you provide an update on the remaining FDA regulatory steps for CERAMENT V?

Okay. I'll start with the last part, and then we'll get into the other. So the last remaining steps on CERAMENT V is very much related to that. We have now submitted the package. FDA is reviewing it, and we stay in contact, we stay in dialogue, and we look forward to what they will say. So, we expect a formal reply from the FDA on this sometime in Q4 or in Q1. Those are the remaining steps.

And then assuming that we get an approval, then the next step for us simply is to produce the product, ship them to the U.S., do the required trainings internally, externally and start selling the product. So we expect a couple of months between an FDA approval to actually when we start selling the product. Then if you go up a bit -- sorry, Håkan, you're too fast for me. I'm still not -- I'm still on the first part of that previous question.

The question was given your [ platform ], do you see opportunities to accelerate R&D?

I mean, R&D investments in CERAMENT V? No, we go as fast as we can. And if we could, we would go faster and we have the cash. So it's not cash constrained in any way. So we go as fast as we can. On spine applications, again, it comes back to that we need the clinical evidence to be able to, number one, get the required regulatory approvals; number two, to also go to market with evidence that make a meaningful difference.

If the question relates to, well, could we accelerate the CERAMENT BVF? Strategically, we want to focus on the antibiotic products in spine. That's where we see the big potential. BVF is a great product, but it's a very, very competitive marketplace in that segment. So our play on spine is with antibiotics. Next-generation products, absolutely, that's an area that we are continuing to invest in and want to go as fast as possible. We don't need any more capital. We have more cash at hand to invest everything we need, both commercially as well as clinically, scientifically and from a research and development point of view. So we're in a very good place.

More questions here. Regarding CERAMENT V, have you had any further communication or feedback from the FDA since submitting the complete response package on 21? And has anything changed regarding your expected time line?

I mean we stay in contact, but nothing material or controversial with the FDA and the expected time line remains as previously communicated.

And then another question here. As BONESUPPORT continues to grow and strengthen its market position, is your long-term ambition to remain an independent Swedish company? Or would you consider becoming part of a larger global medtech group? And have you received any strategic approaches or acquisition interest from larger industry players?

So the second question, we, of course, cannot answer that. So we leave that. And our ambition whether to remain an independent Swedish company or consider becoming part of a larger global medtech group? We're a publicly listed company. So if a larger medtech group would be interested to buy us, they could do that. That's easy. We are running this company with a purpose to make sure that our unique and innovative technology with CERAMENT reaches as many patients as possible.

We think it makes a very, very big difference to patients, to hospitals as well as to society when we think about the antimicrobial resistance. That's what we focus on. And -- I mean, our strategy is not including to become part of a bigger company if they want to acquire us. We're a public company. So I don't know what -- can that be explained in a better, smarter way.

No, I think you phrased it very well.

Okay. Thank you very much. I think we've gone through all the questions on the chat as well as on the line. Then thank you all for your interest, and have a great rest of the day.

Welcome to BONESUPPORT Q2 2026. [Operator Instructions]

Now I will hand the conference over to CEO, Torbjorn Skold; and CFO, Håkan Johansson. Please go ahead.

Thank you, operator. Welcome, everyone, to BONESUPPORT's Q2 2026 Results Call. My name is Torbjorn Skold, CEO of BONESUPPORT. With me here today is our CFO, Håkan Johansson. And together, we will use the next 25 minutes to guide you through the Q2 presentation and then open the line for questions.

Before starting the presentation, I would like to draw your attention to the disclaimers covering any forward-looking statements we will make today.

So let's look at the financial and operational highlights of the quarter. Q2 reflected solid execution across the business. Net sales came in at SEK 356 million, corresponding to a growth at constant exchange rates of 30% versus Q2 2025. Reported growth was 25%, showing that the currency impact on our figures for the quarter has decreased compared to the previous quarters. Our adjusted operating result, excluding incentive program effects was SEK 104 million, corresponding to an adjusted operating margin of 29%. Reported operating result was SEK 90 million.

We saw another quarter of solid cash generation with operating cash flows reaching SEK 67 million after completing a share buyback of SEK 83 million, this resulted in a cash position of SEK 434 million at quarter end. After a period of significant commercial investments, it's encouraging to see the strong operating margin together with continued strong cash flows as confirmation of the scalability of our business model.

We continue to see strong traction for CERAMENT in the U.S. with sales reaching SEK 295 million for the quarter compared with SEK 236 million in Q2 2025. In Europe and Rest of the World, we saw solid momentum across all markets with a growth of 26% at constant exchange rates compared to Q2 2025.

During the quarter, the regulatory process for CERAMENT V progressed according to plan within the framework of the de novo process. If granted market authorization, CERAMENT V will constitute an entirely new product category like CERAMENT G in 2022. Just as in the review of the de novo application for CERAMENT G, both CDR, Center for Drug Evaluation and Research and CDRH, Center for Devices and Radiological Health, are involved and the lead review team, which sorts under CDRH, remains the same as during the 510(k) process. BONESUPPORT has continued the constructive dialogue with FDA within the scope of the de novo process and is working purposefully to address the requested details and clarifications. Responses are to be submitted no later than end of August.

Progress on CERAMENT for Spine continues to be solid. The CERAMENT BVF launch is on track and the preparations for the studies on antibiotic eluting CERAMENT follow plan, an important step as we continue expanding our portfolio of indications and applications.

In Q2, U.S. CMS proposed improved reimbursement for the use of CERAMENT G in complex orthopedic infection surgery and more specific identification codes for CERAMENT G.

Now let's move to the sales development. Next slide, please. This chart shows total last 12 months reported sales in Swedish krona by quarter since 2019 in stacked bars per region and product category. As you can see, the launch momentum for CERAMENT G in the U.S. is strong, given that we keep bringing new strong clinical studies and opening up new market segments, new indications, a product like CERAMENT G will remain in launch phase for many years to come. However, throughout 2025 and in the first half of 2026, we've seen strong influence from the U.S. dollar to Swedish krona depreciation, which influences the optics of the graph, but not the in-market performance, as you will see in Håkan's slides later in the presentation.

Last 12 months growth in Q2 of 21% in the graph corresponds to an even stronger 32% at constant exchange rates. U.S. CERAMENT BVF last 12-month sales was flat year-over-year at constant exchange rates. In total, antibiotic eluting CERAMENT grew with 40% last 12 months in the quarter at constant exchange rates.

Next slide, please. In U.S., sales amounted to SEK 295 million, representing a growth of 31% at constant exchange rates. Growth of CERAMENT G was slightly lower than expected due to a handful of customers implementing restrictions in their usage of CERAMENT, so-called pre-approvals. This reduced the growth rate somewhat in the quarter. It's not new for customers who started using CERAMENT G more recently to temporarily limit usage while awaiting results. The restrictions are set by hospital administration to keep short-term costs down.

The demand and the need among treating clinicians remains intact and is growing. We've seen this pattern before. When customers accelerate their use of CERAMENT G, hospital administrations may, as a cost-driven response, introduce temporary restrictions, so-called go-stop-go. These hospitals continue to use CERAMENT G, albeit at a reduced level, which creates a good foundation for increasing usage, again, using health economic arguments. The proposed changes to DRG codes announced by CMS during the quarter with expected implementation in the fourth quarter add further strength to these dialogues.

Excluding the impact from these customers mentioned, we continue to experience strong growth of CERAMENT G, driven by both increased access to new accounts and new surgeons as well as wider adoption among existing users. We see growth from all 3 prioritized platforms, foot and ankle, trauma and arthroplasty. As part of our ambition to modernize an outdated standard of care in the U.S., we have opened one market segment after another, starting with foot and ankle, followed by trauma and now moving into revision arthroplasty.

Our market research presented at our Capital Markets Day indicates that around 60% of the Revision Arthroplasties receive some form of local antibiotics, mainly from PMMA and antibiotic powder. It also indicates that 80% of the surgeons in the survey found CERAMENT G appealing to highly appealing. Interest continues to grow for CERAMENT G in revision arthroplasty and periprosthetic joint infections, where the clinical needs remain substantial and the evidence supporting our antibiotic eluting technology has resonated strongly with surgeons.

We've built a solid foundation for our spine strategy over the past quarters by establishing distributor coverage and preparing the market. In Q2, we continued the early-stage launch of CERAMENT BVF in spinal procedures with distributors actively engaging spine surgeons across both existing and new partnerships. The surgeon access and early stages of adoption in spine follow plan and indicate the strength and potential of this segment. As this is a new clinical segment for us, more clinical data is needed to support broader market penetration.

Importantly, the performance of CERAMENT BVF in spine will help confirm the value proposition for the CERAMENT platform, which will pave the way for future antibiotic-eluting CERAMENT launch. Our market research also presented at our Capital Markets Day in April points to strong clinical and market rationale for antibiotic eluting CERAMENT in spinal procedures. Infection and reinfection prevention remain major unmet needs in spine surgery. 75% of surgeons already use local antibiotics for surgical treatment and 86% use them for prophylaxis in at least some patients.

The current standard applying antibiotic powder without controlled delivery, often called dumping, is used by roughly 78% of the surgeons, yet 82% considered that this approach is suboptimal, pointing to a clear gap between current practice and what surgeons believe is the right solution.

In Q2, U.S. CMS, Center for Medicare and Medicaid Services, announced a proposed ruling, full year '27 IPPS, including changes that improve payments for the use of CERAMENT G in the treatment of complex orthopedic infections, such as periprosthetic joint infection, fracture-related infection and diabetes-related bone infection. In parallel, CMS proposes the introduction of more specific procedure and identification codes for CERAMENT G. Although this is a proposed ruling, this is very positive for BONESUPPORT as it validates the uniqueness and value CERAMENT brings and reduces potential barriers for using CERAMENT in daily clinical practice.

The company submitted additional clarifications to the CMS during the public comment period, aiming to tie the extra reimbursement specifically to on-label use of approved products in this category, where we currently hold the only approval, strengthening our competitive moat. In parallel, we've prepared a rollout plan with supporting education and communication materials to fully capitalize on the ruling. A final decision from CMS is expected in late summer 2026. And the ruling expected to come into effect as of October 1, 2026.

Now let's turn to Europe. Next slide, please. Sales in EUROW came in at SEK 61 million, representing 26% growth at constant exchange rates. While part of this reflects a softer comparison base in Q2 2025, it was still a very strong quarter. We saw strong development across our 3 market structures, direct, hybrid and distributor markets. This model is well suited to the early stage the company is currently in.

In our direct markets, the market conditions in Germany have stabilized and health care providers have adapted to the new normal following last year's market reforms. Our investments in hybrid markets developed well, underlying continued potential ahead.

In our distributor markets, we see large potential to increase our footprints by entering more countries. Meanwhile, the CERAMENT launch in India with a focus on the private market is going according to plan. We note volatility in the Middle East, where geopolitical unrest is affecting market presence and logistics in the short term.

Now I'll leave the deep dive into the numbers to Håkan.

Thank you, Torbjorn. So net sales improved from SEK 284 million to SEK 356 million, equaling a growth of 25% in reported sales growth or 30% in constant exchange rates. Torbjorn has already spoken about the performance in especially the U.S. and the main drivers on the sales growth, but as the large movement in U.S. dollars over time somewhat hides the true trajectory in the U.S., I would like to share the U.S. sales performance in U.S. dollars.

Having CERAMENT G as the growth driver in the U.S., this slide shows the quarterly CERAMENT G sales in the U.S. in U.S. dollars with continued solid performance despite the isolated headwinds already covered by Torbjorn. The contribution from the U.S. segment improved by SEK 35.8 million versus Q2 2025 and amounted to SEK 140.2 million. The improved contribution relates to increased sales after the effect of increased costs.

Selling and marketing expenses during the quarter amounted to SEK 135.3 million compared with SEK 117.8 million previous year, of which sales commissions to distributor fees amounted to SEK 94.5 million compared with SEK 78.5 million in the same quarter last year.

From the graph at the bottom of the screen showing net sales as bars and gross margin as the orange marker, it can be noted that the gross margin remained stable and strong at 93.8%, with a decline in the quarter, mainly following the impact from tariffs impacted with SEK 1.5 million in comparison with the same quarter last year.

In Europe and Rest of the World, a contribution of SEK 16.8 million was reported compared with SEK 13.6 million previous year. Selling and marketing expenses increased by SEK 5.3 million, mainly related to the previously communicated commercial investments in the so-called EUROW booster program. From the lower graph and orange marker, a minor movement in gross margin can be noted, mainly impacted by market mix.

Selling expenses, excluding sales commission and fees increased by SEK 16.2 million compared with previous year, following the commercial investments in both the U.S. and EUROW. Investments aimed at future sales growth, driven both by market opportunities and by sustained high marketing activity. R&D remained at a stable level and focused on strategic initiatives such as the market authorization submission for CERAMENT V in the U.S., the research and studies in spine and also future portfolio innovation. And administrative expenses, excluding the effect from the long-term incentive programs, remaining stable with an increase of SEK 1.3 million in the quarter.

The adjusted operating result amounted to SEK 104.1 million with only minor currency effects impacting. And I will come back to this on a later slide. Gross margin is down following a SEK 2.7 million inventory write-down regarding components and materials as well as impact from -- continued impact from U.S. tariffs. As mentioned previously, a SEK 1.5 million impact compared with the same period last year.

The difference between adjusted and reported operating result is costs related to our long-term incentive programs amounting to an expense of SEK 14.5 million in the quarter compared with an expense of SEK 7.6 million previous year, as you could see from the previous slide. The increase in expense include SEK 1.6 million related to the long-term incentive program approved by the AGM in May 2025, which was included from the beginning of this year.

Operating cash flows were strong in the quarter. However, net cash is down following the executed share buyback totaling SEK 83 million. During the quarter, the Swedish krona has experienced volatility and weakened against U.S. dollars, among others, with only minor exchange gains and losses reported as other operating income and expenses. This graph on this slide shows with gray bars how the relationship between the U.S. dollar closing rate and the Swedish krona has varied over time. This is read out on the Y-axis. The blue dotted line readout on the Y-axis shows adjusted operating result. The adjusted operating result, excluding translation exchange effects is the orange line and gives a more comparable view on the underlying trend.

In the table below the graph, you can see that the FX adjusted operating margin of 28% in the quarter compared with 26% in the same quarter last year. In the shorter term, the operating margin has been impacted by the commercial investments made in both Europe and U.S. and this quarter shows a return to a gradually improved operating margin.

As already mentioned, a solid cash conversion has been reported continuously since Q3 2024 with an average cash conversion of 79%, visible as the dotted line in this graph. Q2 this year reports a solid 67% cash conversion.

And with this, I hand back over to you, Torbjorn.

Thank you, Håkan. To summarize, Q2 2026, sales grew 30% at constant exchange rates, reflecting steady and consistent progress. Highlights were euro growth versus prior year of 26% at constant exchange rates and strong adjusted operating margin of 29% and solid cash flow, underscoring the strength of the business and its scalability.

As a result of the first half of the year's sales growth of 31% in constant exchange rates, we estimate full year sales growth to be between 33% and 36% in constant exchange rates. Our confidence in this estimate is based on the underlying run rate coming out of Q2, the new account pipeline that we see with both IDNs as well as distributors, and on top of that, we see the potential positive triggers of the CMS ruling, the SOLARIO study publication and a CERAMENT V approval. The quarter confirms that the company's position has strengthened and continues to be characterized by relatively low but rapidly increasing market penetration, creating significant room for expansion for many years to come.

Now let's open the line for questions.

[Operator Instructions] The next question comes from Erik Cassel from Danske Bank.

I wanted some clarification on the, as you call it, stop-go, -- no, go-stop-go dynamic that you talked about -- sorry, in the U.S. on those sort of accounts, is it possible to say if they have some sort of special characteristics? Are they mainly say inpatient, outpatient? Do they do any sort of special procedures? Are they at typical in the, say, amount of procedures that they do? I think any color on how, say, general or niche these accounts are would be helpful to sort of pencil out the outlook and if it applies to everything basically.

Yes. So what we can see is that it's a handful number of accounts all the accounts are among the, let's say, the top 50 accounts that we have. We don't see anything related to that they are in a special niche or only in 1 of the 3 categories. And we also see that they are unrelated to each other. So we don't see a common trend or anything like that.

What is also very important is that all of these accounts continue to use our products at a relatively high volume level, although albeit at a slightly reduced level compared to Q2 2025. And we have ongoing conversations with all of them to provide arguments for why they should come back to the previous levels and also not only that, grow from there. So that's what we can see -- what we can say about those accounts.

I don't know if there's anything else, Håkan, that I'm missing on that one.

And I think that it's fair to say that if we look at that category of large customers, and we exclude the handful where we now experience the situation, there is a solid underlying growth among these accounts.

Correct.

Okay. And my assumption has been that all the clinical data and cost benefit, et cetera, is being assessed during the VAC approvals to sort of get into hospitals to begin with. Can you share some light on the arguments that you need to have with hospitals to get them to resume that higher usage and basically not have restrictions? Do they request more clinical data or are their own, say, clinical outcomes not really reflecting the sort of data that you have produced already? What's the actual pushback from them?

No. Typically, what we see is that the access comes at different levels of the hospital. So it's not that we have convinced one group of administrators and they change their minds. It has to do with that we increase the volume of usage either in the hospital or a group of hospitals and they see the increasing number of invoices and the volumes and the amount of money that they spend on CERAMENT. So it's not necessarily a new type of argument or new evidence that is required. It is just to make sure that we get access on more and more levels as we grow the adoption within the accounts.

Okay. Last question. Is it possible to, in some way, quantify what it could have been if it wasn't for this sort of dynamic, if those accounts would have performed, say, as the other cohorts that did not see this dynamic, what would the, say, overall growth has been in that case? And that ties into, can you somehow proactively prevent this dynamic by actively before that happens, showing the hospital administration, maybe by yourself providing more data or perhaps seeing those codes come into effect by October? Is there something to do on that?

Great question. Thank you, Erik. So on the first point, we're not going to give you a number, but high level, if it wasn't for these handful of accounts, we would be perfectly on plan, exactly in line with plan what we planned for. So that's what we can say.

On the second piece, it's a really, really good topic. And we have invested over the last couple of quarters in our medical education, in our national accounts, in our health economic teams, et cetera. So we're building that capabilities. We have done so, and we will continue to do so. And what we saw in the second quarter is that's exactly the right thing to do.

And exactly to your point that also being more proactive when we enter accounts to make sure that we don't enter into this go-stop-go that we have more of a linear and solid progression that we not only convince -- we have to always convince the clinical stakeholders first. That's just given in the business that we're in, but also that we early on engage them more proactively using the data that we have.

And I think there are 2 aspects in the short term that will really strengthen our case on this one. One is clearly that you mentioned, the CMS ruling. I mean it will be seen -- assuming that it comes into play, it will be seen very positive. It should be very positive. That's number one. So of course, we're preparing a lot of work on that to make sure that we have solid material and the rollout plan and educating not just our users and the clinicians, but also the administrators and the coders at the hospital so that they fully understand and can leverage this. That's number one.

Another point is, for example, the upcoming and expected publication of the SOLARIO study. That's a really, really good piece of evidence that really supports the usage and also the higher cost of CERAMENT compared to alternatives. So I think that's how I would answer those 2 questions, Erik, if that makes sense.

The next question comes from Kristofer Lilyberg from DNB Carnegie.

Three questions. First, on the same topic, could you maybe provide a figure what's your success rate historically has been turning around this type of administrative restrictions? Because, I guess this is not something completely new. Secondly, you touched upon the reimbursement changes. Is it too early? Or have you received any type of feedback in conversation with customers how positive this could actually be? And then my final question is more for Håkan on the selling expenses that were now flat sequentially after having been up quite significantly in the previous 2 quarters. Should we expect it to remain at this level now for some time here coming quarters? Or are you planning additional hiring short term that will drive up costs further?

Thank you, Kristofer. Good questions. So the first question on the success rate. We've been pretty successful with this historically, not 100%, but definitely more than 50%. So I think it is somewhere between 50% to 100% in terms of the success rate. What is positive here is that the dialogues are ongoing. So that's the answer to your first question.

Reimbursement changes, I think it's a combination between very positive to too early to tell, honestly, because it's still a proposed ruling. It's not been decided yet. But the limited feedback that we have is very positive, but I think it's too early to draw any conclusions on that. Those were the 2 answers to the 2 first questions. What about selling expenses?

So about selling expenses. Will this be flattening. I think that it is evident now given the market potential that remains that we will continue to invest commercially. Do we see -- and do we have plans that will make a big impact in the shorter term? No. But again, over time, I am sure that we will report and you will see gradually increasing selling expenses.

Yes, coming back to that. The reason I'm asking is because if we look at the fourth quarter and first quarter, the sequential increase in operating profit was pretty limited despite continued strong sales growth. So I just wonder if we could expect this -- as we saw this quarter, more operational leverage momentum for the remainder of the year sequentially?

I think that's what you can expect is that selling expenses as a percentage to sales will continue to come down and by that then support improved operating leverage going forward.

The next question comes from Mattias Vadsten from B.

Some of them have been asked already, but I will continue a bit on the go-stop-go dynamics. When you say that they are applying restriction and awaiting results, so just to be clear, is this result of patient outcomes or health economic outcomes or both? That's the first one.

Okay. Good. So the go-stop-go typically applies to 2 parts. One is the clinical. That's early phase. That is not what we saw in Q2, but go-stop-go can apply to a clinician wanting to try the product, tries the product in a number of patients, then stops to see the clinical results. That's one aspect of go-stop-go. That is not what we see in Q2.

The other aspect is simply that clinician starts using the product, but the approvals at higher levels in the administration, and it can be at several different levels depending on the amount of money that they spend of CERAMENT. There, it's not so much the -- I mean, they want to see the results of the health economic benefits. And so as Erik Cassel pointed out earlier, it could be a value approval committee. There are many different natures of these in U.S. hospitals. So they want to see the health economic results of it, number one, from other clinics, number two, sometimes in their own clinic. So that's the answer to that question, Mattias.

Okay. Then I guess that takes a bit of time because the major benefit is, of course, that the patients do not return with infections and so forth, I guess.

Well, I mean, most of the time, it's enough that you have a good meeting with the administrators supported by local key opinion leaders, regional key opinion leaders and ourselves. That's the most -- so actually, I wouldn't say it would necessarily take a lot of time. But for sure, weeks, months to establish these meetings and get the rulings in our favor. That's the timing aspect that I have in mind.

And I think, Mattias -- not to forget is that we are talking some high-volume customers. That means that there are plentiful of documentation from patients treated at these hospitals that we can benefit from in these discussions.

Great. That's a clear answer. And next question is, did you see this dynamic of those kind of key accounts change anything through the quarter? Or was it the same environment the whole Q2 or...

I think it's fair to say, and that's also to the last comment that I made in the presentation when we talk about the confidence in delivering the 33% to 36%. I think if we look at the run rate coming out of Q2, it looks very positive. There's no doubt about that. So I think the dynamic changed gradually during the quarter to the positive. But again, as we saw in the quarter, it fluctuates and it will fluctuate going forward. But we have good confidence in that in this going forward.

But it's not the first time that it happens and it's not the last time that it is happening. It's simply nature of the business that we're in. We're growing 30% -- 30%, 40% in the U.S. That means that the hospitals spend a lot more money on CERAMENT. We keep our pricing very, very stable, and we want to be disciplined around that. We don't want to take shortcuts reducing price just to get an easy approval or we want to maintain that price level and go-stop-go, we've seen in the past. We saw it in Q2, and we will continue to see it going forward.

Perfect. I'll squeeze in the last one. There have been some news this week from a major private hospital in the U.S. citing lower surgery volumes in the second quarter. So I'm just asking here, did you experience any impact in the quarter from a lower overall procedure volume in orthopedics in the U.S. during Q2? Or is not a factor for you?

Great question. And yes, we've noted the data points from several different external sources. When we look at market data that sort of is applicable to the indications that we are in, we also see the same data points. But to say that we see it in our numbers and to explain our numbers with that, I think it's difficult to confirm that, that's a factor, and it's also difficult to reject that that's a factor simply because we're so small. We're growing 30%, I mean, in the U.S. even more. So to say that we -- our results is because of a slight reduction in volume. I don't think it would be intellectually honest to say that. It could be the case, but it could not also be the case. We don't really see it that way.

The next question comes from Sten Gustafsson from ABG Sundal Collier.

You already answered a lot of questions about the -- the U.S. market. But I just want to confirm if I heard you correctly when you said that the momentum during the quarter improved gradually. So is that correct that sort of the growth trend was stronger in June compared to the start of the quarter?

Yes. I think it's fair to say that when we look at our estimates for the remainder of the year, we base how do we come to the 33% to 36%. I think there are a couple of factors. One was the run rate that we saw coming out of Q2. That's number one. So yes, is the answer to your question. But that's not the only thing, of course. What is also very important is to look at what we have in the pipeline of conversions, customers, IDMs and also equally important new distributors that we sign up. So I would say those 2 factors are most key underlying points in our confidence in the 33% to 36%. And on top of that, you have those CMS rulings, the SOLARIO study and CERAMENT V approval.

Yes. And have you heard anything about publication of SOLARIO study when that will come?

We have the same information that we've given previously, meaning that it has been approved for publication, and we have no news -- no new news to that. And we expect the publication in the near term, but that's what we said in the last quarterly call, and I hope it's the last quarterly call I say this, but you never know with these scientific journals. It's out of our control and it's out of the author's control as well. But we'll see how it plays out.

Sure. Then turning to Europe and Rest of the World. Can you -- obviously, it's great to see the growth rate there. Could you highlight some of the markets where you see particularly strong growth rate? And I mean, how is the U.K. and Germany, which I assume are the largest parts contributing to that growth and also the new markets where you recently entered into like India and Canada and so...

Sure. I think what's very positive with EUROW is that it's broad. It's broad across direct hybrid distributors. It's also broad within the respective countries. I mean I will not quote any numbers. I'll leave that to Håkan to do if he wants to. But I think high level, Germany, we saw recovery from last year. So both the health care market there as well as ourselves have sort of adopted and found our way in this new normal.

I think U.K. is more neutral. I mean we saw some recovery early in the year and in Q2 was more neutral. India follows plan, but it's still so small. So it's not a material driver of the growth in EUROW. It's more that most of the other countries just tick in the right way, and we gradually improve in all of them. But also, I think when you look at the EUROW number, you should have taken into account that we came from a relatively speaking, lower base last year. But when we adjust for that, it's still a very solid and good growth. So we're very pleased with the performance. I don't know, Håkan, if you have anything else.

No, I think to your last point, I think that, again, we know that we have soft comparables, but despite Easter in early April, the EUROW delivered good sequential growth in Q1 and delivered strong confirmations around stability in the U.K. also really the stabilization in Germany, stable growth in all our direct markets, solid growth numbers, high growth numbers in the markets where we have been investing. So I think that gives a lot of confidence around our strategies outside U.S. going forward.

The next question comes from Ed Hall from Stifel.

Apologies for sticking on the U.S. topic. But I just want to understand the customer concentration in the U.S. and maybe sort of the number of accounts that have this dynamic, like what channel were they in? And is this any way related to the Affordable Care Act subsidy expiring? That would be my first question.

Okay. So the number of accounts that sort of we saw the impact in Q2, it's a relatively small number. So we say a handful of accounts in the report. And we don't provide more specifics than that. That's number one.

In terms of the channels, no, it's -- I mean, we pretty much only have one channel. It's an independent sales reps channel, and there was no sort of pattern there that there was only related to one independent sales rep channel or the other. It's no pattern there. We don't have any information that this sort of round of go-stop-go in the U.S. can be correlated to anything related to the Affordable Care Act. But again, so we cannot confirm it and we cannot reject it. That would be my answer to it.

That's really clear. And then I guess maybe just on sort of the updated guidance. I would just like to hear your thoughts as we go into H2, and I appreciate it's easier comps. But obviously, there's still an underlying acceleration. So I just wanted to understand sort of what sort of underpins your confidence for this guidance now? Is it sort of the easier comps? Is it a real clear acceleration that you're seeing? And sort of any commentary there would be really helpful.

Yes, sure. And it goes back to what I said earlier around why do we feel very confident in the 33% to 36% range. It is how we came out of Q2. It is the trend that we saw in Q2. It is the absolute level that we sort of had in terms of run rates. It's also in terms of the product mix. That's number one.

Number two is also when we look at the pipeline of, call it, new accounts, new IDNs, it looks very healthy compared to our historic numbers. Also, when we look at the pipeline of new distributors, that looks also very healthy. So those are the 3 key points to that. And on top of that, if you overlay -- but this is sort of out of our control and it's difficult to sort of get the timing on it. But those first 3 things, those are within our control. But out of our control is the CMS ruling. It is the publication of the SOLARIO study, and it is also the CERAMENT G -- sorry, CERAMENT V approval in that order of, call it, magnitude of potential impact in second half of the year. That is sort of what is building our confidence in the new guidance.

Perfect. No, that makes a lot of sense. And then maybe just finally, just again, back on the U.S. sort of the 3 U.S. segments that you've broken out. Could you talk about which segments are maybe for the first half of the year really performing above expectations or in line with expectations? Or maybe put it another way, sort of what's really driving the print today?

Yes. I'm going to give the boring answer on this one. I think all 3 segments deliver in line with plan when we look at the numbers, the product mix. We see and hear a lot of positive feedback on the fact that we are entering -- still at a very early stage, but that we're entering revision arthroplasty. But that's more the, call it, noise qualitative feedback. And in terms of the numbers in the quarter, all 3 segments delivered according to plan. And spine also delivered according to plan, but it's such a small number. So it doesn't really change the overall picture.

The next question comes from Kristofer Lilyberg from DNB Carnegie.

Yes. Two additional questions if there is time. First on cash flow continues to be strong. Just wondering how you view the share buyback mandate you had and the need to keep a lot of cash on the balance sheet? And the second question is Germany, is that market back to growth? Or is it just that it has stabilized at the lower level?

Thank you, Kristofer. And I'll start with the first question. And again, as we could see, it's positive to see a continued underlying positive cash flow and giving us both necessary funds to continue reinvesting in the business. We talked about continued commercial investments, et cetera. But again, also open up for more utilization of the mandate that was given by the AGM in May to continue buying back shares.

Good. And then I -- since you stop, I assume I will take the second question. On Germany, I would categorize it more as stabilizing than growing, but clearly going in the right direction. And of course, as you sort of develop month-over-month, it's not black and white, but we're still more in the stabilization phase than the growth phase.

There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

So we have a few questions on the web, but most of them have been answered already, but there is one question that has not been covered in the call, and that is now back to the communication we made on Level 1 trauma centers and how they are progressing after the increase in access in '25. So Torbjorn, a few words on that one.

Sure. No, I think progress is solid according to plan, really. So we focus on more to increase the adoption in these that we managed to get access to rather than necessarily go for more. But we're progressing well, and we're pleased with the performance. But again, very, very early phase. I think that's one question, right, from the web.

What is this one? Then there's another one. What triggered the downgrade of your guidance for this year?

And I would say it's more a reflection that we have now 2 quarters in the books. We grew 31% in the first half year compared to first half year in 2025, where we grew 40%. So it is really to be as transparent and granular with the market on what we see, what we feel and what we think for the remainder of the year. That's really the background for the updated guidance.

The -- should we take this one is this? If the de novo process continues as planned, when do you expect to be able to make first sales of CERAMENT V in the U.S. Is that included in the guidance?

Okay. Great. So we plan to submit our answers to FDA no later than end August. Then it's really -- I mean, it's really up to FDA to say yes, no or something in between. But given that, let's say, that we submit in end August, it is going to have a very little material -- well, it's going to have very little impact on our numbers for this year. So we have not taken into account any CERAMENT V in the updated guidance.

Is that all?

That's all.

No further questions?

No further questions.

No, nothing on the chat.

No.

Okay. So with that, thank you all for your attention and wish you a great rest of the day and a fantastic summer for those of you who have vacations. Thank you very much.

We're on time. I want to greet you to Bonesupport's Capital Markets Day for 2026. It's been around 2.5 years since we last met in November 2023. So here we are today, a warm welcome.

My name is Charlotte Stjerngren. I will be the moderator of today. We have a full agenda with people from the management team, Bonesupport's CEO and also clinicians who are going to talk about the fantastic products of Bonesupport. So we are very many people here in the room and also on the web, so you can ask questions here in the room or you can send them on the web, and we'll post them to management and the clinicians. So without further ado, please, Torbjorn, the floor is yours.

Thank you, Charlotte. Great to see you here. A warm welcome also from me to Bonesupport's Capital Markets Day 2026. It's a privilege for me to kick off the first session.

But before I do that, I just wanted to put today's Capital Markets Day into a bit of perspective and into a bit of context. Here, you see the topics of previous Capital Markets Day. And I would like you to take home after today is really these 4 points of the focus that we will go through today. Number one, strategy update. Bonesupport's strategy remains right, remains very strong. What we're doing is that in order to fully unlock the potential of CERAMENT and Bonesupport, we want to become even more segment-specific in foot and ankle, trauma, arthroplasty and spine. We'll talk more about that.

Second topic that I want you to take home is that we are making an upward adjustment of the market potential that we see in the U.S. for foot and ankle, trauma and arthroplasty. Third topic that I want you to take home is around clinical evidence. Clinical evidence has been a core part of our strategy ever since 2018. It continues to be. We are announcing that we are continuing to invest in evidence across all 4 platforms, most notably so in spine, where we plan to conduct a multicenter study to introduce and start selling antibiotic-eluting CERAMENT in spine in the U.S. That study, we estimate to cost somewhere around SEK 80 million over 3 years. That is in line with what we have communicated before.

We are also announcing that we are going to invest in a study in arthroplasty. That is not to get any market approval. We already have market approval with -- but we're investing in a study to further penetrate the arthroplasty market. That study, we estimate to cost somewhere around SEK 40 million over 3 years. Last topic is that we will talk that I hope you take home with you is that in spine, we see a clear unmet need for antibiotic eluting CERAMENT in spine. And we're going to show you what our research in this field indicates, why we think it's an attractive space to be in and also our plan to not only get regulatory approval, but also start penetrating that market.

Those are the 4 topics that I hope that you bring with you home after today's session. So my part will cover 4 areas: strategy, the unmet needs, current standards of care and then the moat being what protects CERAMENT. And if we look at Bonesupport, the company has really transformed over the last couple of years. In the last 5 years, revenue has grown almost sevenfold. Cash flow has gone from negative to actually generate more cash than we actually need. We've stayed focused. We've stayed small. That is in order for us to continue to run very fast.

Qualitatively speaking, our evidence has gone from interesting to actually challenging the standard of care. Our brand has gone from actually no brand awareness whatsoever to now actually be a serious market challenger. And our penetration, if we look back 5 years ago, CERAMENT G was not approved for use in the U.S. So we almost had no penetration. Even today, when we look at the market, and we have grown, but still our penetration levels are very, very low. So we're very early on our growth journey. And the strategy that we currently have and that we will continue to apply was really formulated in 2018.

It's based on 3 pillars: innovation, which is the core of CERAMENT, this unique technology that focuses on bone healing and infection management. Next pillar in our strategy has been evidence. If you have something innovative in orthopedics and you want it to get traction, you need the evidence, not just to convert the surgeons who use it, but you have to convert the multidisciplinary teams that are around them as well as the payers. Third part of the pillar is around commercial execution. Once you have innovation and once you have evidence for that innovation, it's very simple in orthopedics. The only thing that you have to do is being very, very disciplined and very, very systematic and commercially get that product into the hands of surgeons so that it reaches patients.

Those 3 pillars have been the strategy for Bonesupport since 2018. It will continue to be the strategy for us going forward. However, we are taking the strategy and we're making it more segment specific in these 4 segments that I mentioned earlier, foot and ankle, trauma, arthroplasty and spine. Why is that important? Simply because it's different customers, different clinical settings, different needs. So in order for us to fully unlock the potential of CERAMENT it's the same product, but we need to be more segment-specific and cater to the needs that the respective customers have in these 4 segments because the needs are there, there's no doubt about it.

And if we look at bone infections, they are among the most complex, costly and consequential complication in orthopedics and the incidence is increasing. In foot and ankle, 1 in 5 diabetic foot infections progress to bone infection, which is the leading nontraumatic cause for amputation. In trauma, more than 30% of the fracture-related infections -- or sorry, more than 30% -- the incidence is more than 30% of fracture-related infections after open fracture fixation. And in arthroplasty, periprosthetic joint infections carry a 5-year mortality that rivals many cancers. not only the consequences for the patients, but also for the health care systems.

So I think since I joined, I read this quote from late Richard Rothman, a very famous orthopedic surgeon in the U.S. And I think the way that he describes it in this one sentence actually described the potential or the need for our products. telling an orthopedic patient that they have an infection is like giving them a diagnosis of cancer. This quote is 25 years old, more than that. It was recently repeated at the latest International Consensus meeting for bone infection in Istanbul. So bone infection still is a massive clinical unmet need, and CERAMENT has a role to play to deal with that.

And if we look at the 3 segments that we focus on now here and now, foot and ankle trauma and arthroplasty, Independent or despite that these segments are different, the patients are different, the clinical settings are different. The failure pattern is the same. You have a bone defect, you have an infection, but there's no single solution that addresses it. CERAMENT is really the first one. And when you don't have a single solution, what happens is that you have multistage care. You have high recurrence of infections. So patients come back. The infections don't go away. And there's a lot of costs.

We believe that some of that cost, a lot of that cost, not all of it, but a lot of that cost can be avoided by using CERAMENT because it addresses the unmet need clearly. And if we want to look at the scale of this, how big is this? We will talk about the market adjustment. That's sort of on the micro level. What I'm painting here is the macro level, what's behind the pool of patients that's behind. It's millions of patients. 38 million Americans have type 2 diabetes. In trauma, 54 million Americans have osteoporosis or low bone mass. And that's not the only pool that pushes patients into trauma. And in arthroplasty, 2 million primary hips and knees on average are done every year.

So there's -- it's very clear about this cascade. It's almost an inevitability that some of these patients more and more will end up with a bone infection. So what is it then that CERAMENT does? Here, you have a very simplified picture of a femoral fracture. So it's a broken bone. You can get a broken bone or femoral fracture from a car accident, you can get it from tumor. You can get it from many different things. But essentially, the surgeon meets this patient with a bone where they have to fill a void and they are afraid of infection.

So that rectangle to the left describes the starting point where you have filled that void with some white stuff with purple dots. The white stuff is CERAMENT BVF, the bone void filler. It's a mix of calcium sulfate and calcium phosphate, hydroxyapatite, which is a subcategory of calcium phosphate. The purple dots is the antibiotics. And what happens when you inject this into the bone, 2 things start simultaneously. First, that white stuff helps the human's own bone to regrow and replace the BVF. So after 6 to 12 months, the body has resorbed the CERAMENT and transformed it into its own bone.

The second thing that happens simultaneously is that in the first 30 days, you have these purple dots, which is the antibiotics that elute in a predictable, controllable way to kill bugs. We'll get more into the details of how that works. But that's essentially what CERAMENT does. It heals fractures as effectively as autograft, eliminating the need for bone transplants. Why is it so important with this local or elusion of antibiotics and the local application of antibiotics? Well, you see it on the picture.

To the left, you see when you go targeted only to the part where you want to treat -- where we want to manage the infection, you get with CERAMENT, you get a local concentration of around 90 milligrams per liter. Compare that to the standard of care, which is systemic antibiotics. You get a concentration level in soft tissue that is of 15 to 20 milligram. So a large difference. But bone is not soft tissue. It's even worse. It has much worse vascularization. So clearly, you're able to kill the bugs where you want to kill them. There's no problem with patients' compliance when you have local antibiotics like CERAMENT. The patient cannot pull it out. The patient can decide to not take the pills with antibiotics when they do it systemically. Systemically, you can get intravenously or you can take pills. There's no patient compliance risk. You know, the surgeon knows that this will give the patient antibiotics. So very important.

And this picture here really shows -- and I would say that you start looking at the graph to the bottom right. This graph really shows this picture that you have a controlled elution curve of antibiotics. So the X axis is time, the Y axis is concentration. It's a lower mix scale. And you can see that it's very predictable over time. That's one thing. But even more importantly, it is above that red line, which is called the minimum inhibitory concentration level. You have to stay above that line for a long period of time to kill the bugs.

It's easy to throw in a lot of local antibiotics in the short term, and then it reduces down to 0. That's not what you want because then some of these bugs will actually learn to deal with these antibiotics and become resistant. So this is one crucial part of CERAMENT combined with the picture that you see up there, which is the bone resorption. So here you have a fracture, it's a picture of the knee. You want to repair that fracture. You use plates and screws that's standard. And then in this case, you also use CERAMENT in the middle picture. And in the picture to the right, you can see that actually CERAMENT has been resorbed and the bone has been reformed.

So why doesn't everyone use CERAMENT? Well, the current standard of care has been used for decades and it's largely based on organic bone grafts and systemic antibiotics. And there's a lot of pros with all of those. So if you look at autograft and -- autograft that's the humans own bone. So typically, you cut up here around the hip and you carve out bone from the iliac crest. It's great. It's a standard procedure. It's very biological that knows and recognizes the bone somewhat similar on allograft, but allograft is donated bone from other patients. So biologically works really well, but there are limitations.

Part of the limitation is on autograft, there is only so much bone that you can take out if you have a big injury to repair. Also, you get a scar. It's a different surgery. It's another surgery. There's a risk of infection. So clearly, there are limitations with autograft. On allograft, there are other limitations, not as good as autograft. And also, there is an inherent risk of disease spreading from one patient to the other.

Clearly, CERAMENT addresses the limitations on both those 2, autografts and allografts. And if you look at systemic antibiotics, why is that good? Well, it's proven, everyone uses it all the time, and you can use a broad spectrum of whatever antibiotics that you want. The limitations you see on the slide, and also what I said earlier, you don't reach the therapeutic level where you want to. It's long treatments, 4, 6, 12 months. You have a toxicity risk, patients that get systemic antibiotics. They're not happy.

Just the other week, I was in Denmark. I walked around with the surgeons in the world. And one of the main things that 2 patients said was that, no, I really don't want to continue on the systemic antibiotics. It's awful. It makes me feel really bad. So CERAMENT GMV really addresses that. It regenerates bone and it delivers local antibiotics in a predictable, controllable way. That's the current standard of care when it comes to organic bone graft.

Since decades, there are many alternatives, synthetic bone grafts and I grouping them all together. And this is actually a table that I took -- I copied it completely. I didn't change anything. I put those boxes at the bottom below. But this is a picture from the Oxford Bone Infection Conference with Matt Scarborough. He put his overview together. I think it's a brilliant overview. That sort of indicates, so what does the playing field look like?

So you have calcium sulfate to the left. Biphasic-s, that's the category where CERAMENT plays. You have calcium sulfate and then you have bioglass and PMMA. All of these solutions have existed on the market for decades. Calcium sulfate was actually clinically documented already in the 1890s in Germany. The great product in many ways. However, it resorbs very fast. So to get that controlled antibiotic elution curve is very challenging for pure calcium sulfate. If we go to the other side of biphasic to calcium phosphate, it's actually on the other extreme. It takes too long. It almost doesn't turn into bone or it's not resorbed.

The last, call it, large segment is maybe not to be entirely accurate, but PMMA stands for bone cement. It's typically used when you want to fix primary or implants to the body. The big difference with PMMA and the other categories is that it doesn't resorb. It is in Swedish plexiglass that you put into the body. So if you want it out, you have to have a second surgery to pull it out. Also in terms of the antibiotic elution control as we believe CERAMENT is. So that's really the current standard of care and call it, the competitive landscape. But these technologies have existed for decades. It's nothing new. Now CERAMENT is a biphasic, and we introduced this product in around 2000. So we're in this category. But what is it -- it's unique, but what is it that makes it so difficult to copy and replicate what we've done with CERAMENT?

And as with all difficult questions in life, it's not one simple answer, it's multifactorial. And the way that we look at this is that the CERAMENT moat consists of 6 distinct interlocking barriers. We have the patents -- 34 patents valid until 2034. We have the evidence with more than 350 clinical papers and abstracts published. I will go into more details about the secret formula. But essentially, it's a proprietary experience-driven formula that you cannot really figure out just looking at the patterns. It's the know-how that we've built up. I'll go into more details soon.

We have the regulatory barriers. We're the only FDA-approved antibiotic eluting bone graft in the market. Reimbursement, I'll also talk about. It's not just the fact that we have IDN, GPO and NTAPs. It's about how the DRGs are assigned. We got some really positive news a couple of weeks ago related to the CMS proposed ruling on that. And then the last barrier is our go-to-market in the U.S. It's a nonexclusive call point-based independent sales rep model. That we started when we split from Zimmer Biomet in 2017, 2018. I would argue that's one key part of the success that we've had and that we plan to continue to have. It makes it better at the market, move fast and focus on this unique technology.

So a bit of deep dive into this moat 3, the secret formula. And here, what we mean here is that this is stuff that you cannot really read it in the patterns. So it comes separately. And essentially, it is a combination of advanced material science, years of bone biology research, manufacturing and production experience at scale. And I say at scale because one thing is to manufacture and produce this in small batches a couple of times, but to do it at scale at the volumes that we've done, you don't want to know the production yields that Bonesupport had a couple of years ago.

Most of the stuff that we produced just had to be scrapped. Now we don't have that issue anymore. And of course, it's a combination of all those things plus the clinical evidence, both from a theoretical point of view and a practical point of view. So it is -- this secret formula is part of the moat, and it's not so easy to copy. Another one is the regulatory barriers. And I would argue that this barrier or moat is probably the least understood or least appreciated by the investor community. And essentially, it goes to the fact that, as I said earlier, CERAMENT G is the only FDA-approved antibiotic eluting product in the market. If you look at the category of bone graft, calcium, I think the we didn't have the wording here. But synthetic bone void failures and resorbable calcium salt bone void fillers, it falls in this category. Since 1996, there are around 400 to 500 product indication combinations approved. That means between 10 to 20 approvals every year in this category. CERAMENT BVF is in that category. New products all the time. We created the category together with FDA, of course, that is called resorbable calcium salt bone void failure containing a single approved aminoglycoside antibacterial.

Gentamycin is an aminoglycoside. We were the first one in that category in 2022. It's been open for everyone to use it as a predicate device for 4 years. No one has done that. No one has done that. Is that because the space that we're in with CERAMENT G is not very attractive and not commercially viable? We don't really think so. So by setting the standards, you see that in the box below, we set the standard in terms of the clinical settings and special controls that all future products will need to live up to, to enter this space. And it's not only what you see here on the slide, but there's a lot of different things that future products will need to live up to. I'm sure they will. I'm not saying that it's impossible, but it's part of the barrier.

I think this is my second last slide and it relates to the last part of the mode, which is around reimbursement. As I said, reimbursement is not only on, IDN approvals. Those are important. As part of running the business, you have to get them in order to grow. We've grown. So we've got them, and we continue to work on them all the time. But this example relates to DRG assignments. And the CMS came recently with a full year 27 IPPS proposed rule. And if you simplify it, you can say that this proposed rule increases the payments to support the standard use of CERAMENT G in the U.S. It's a long document. It's a long document

I think it's 1,600 pages. Of course, not all related to CERAMENT, but there's quite a few pages that relate to CERAMENT G. But if we simplify it and we do our calculations based on the data that is in this proposed ruling, we see that the payments that we interpret is for CERAMENT G DRG codes, meaning codes where CERAMENT G can be used, will increase somewhere between USD 5,000 per procedure to $11,000. It's not just one simple list, and it's not very easy to sort of draw simple conclusions on what this means.

But we took an example here and looked at fracture-related infections, you see 3 DRG codes, 492, 493, 494. They exist already, so there's nothing new in that. What is new is what we've marked in blue. That's top level. That's the most complicated. MCC stands for major complications and core morbidities, I think. So that's the most complicated. And that category remains the same, but the proposal is that they change the wording of it or the title to include or insertion of antibiotic eluting bone void filler.

There's only one antibiotic eluting bone void failure approved in the U.S. market. So essentially, that DRG code can only be approved or used when CERAMENT G is used. What happens, well, there's not a lot of extra money from $26,700 to $27,700. So yes, it's an improvement. But the key thing here is that it's a proxy or instead of using the lower codes, whenever CERAMENT G is used, they can code it fully with this 492 code. And in this specific step that relates to fracture-related infections, the average payment increase for the hospital would be $7,900.

Now of course, what you all ask is, well, what does this mean this quarter, nothing this quarter because it doesn't have any impact this quarter. The -- this is a proposed ruling. We expect the ruling to be announced firmly beginning of August and come into effect starting October, but how fast and how much this will impact us, we don't really know. What we know is that it's very positive. And what we focus now more on is to prepare ourselves and prepare our customers to take advantage of this. This clearly reduces one of the barriers that we have.

Sorry, I ran over a bit, but we're okay. So that concludes my presentation. So I have taken you through the strategy, the unmet needs on a more of a macro level. I went through current standard of care and competition. And then lastly, we went through what are the components that protect CERAMENT. Now I'm happy to hand over to Emily, that will talk more in detail about what does it mean to take a more segment-based approach with CERAMENT.

Thank you. So good afternoon, everyone. So today, I will cover 3 areas. I will go more into detail around how we apply this segment specific strategy and the value proposition. I will also take you through the market opportunity and how we have updated our market model since the last time that we met. And finally, I will also provide some more insight to market research we have done in arthroplasty and spine. Need to be a little bit more firm there.

Yes, so the CERAMENT strategy applied. At the core of our strategy is a very straightforward and powerful idea. And as Torbjorn talked about before, we have the same core technology, but we apply it in different types of segments. As Torbjorn also said, CERAMENT combines 2 essential capabilities, the bone healing and also trying to control infection. As you can see on the picture here, we are there trying -- there you basically have the recipe for how we work. We start with early adopters. We start to make clinical evidence in forms of first case [Audio Gap]. We expand to clinical data and more longer studies.

Driving adoption and further on coming up with standardized techniques, which helps also for hospital protocols and finally, guidelines. That is what we also aim for. Importantly, we are also expanding from surgical treatments into prevention, and we look for adjacent market segments to move into and muih later here, arthroplastics.

So if we look at the different values Yes, basically, it's the same value all over, heal bone, repair bone and protect from infection. But there are some different surgeons to work with, and there are some different -- the basic problem is a bit different. So when it comes to foot and ankle and diabetic foot, the most important thing is there to save the limb. And it's to secure that the patient can stay mobile and preserve the function of the body. That really helps to prevent amputation. An amputation is really disaster for patients where the survival rates are really, really bad.

So within 5 years, there is a horrible situation for patients with larger amputations. We are also translating, if we can do that, we can translate the value into health economic value with fewer surgeries, lower complication rates. And in the reduced hospital stays and which also positively impact costs.

Looking at trauma. The most important thing there is to protect from fracture related infections or reinfections, which leads to -- sorry, sorry, which helps to faster recovery and shorter hospital stays as well. Trauma is a large underpenetrated market. I didn't touch anything, I think, yes. So trauma is a large underpenetrated market, and you will see that also when we come to the market model.

In arthroplasty, which is the latest segment where we have really made a big strong foothold in. We see here a strong growth driver and preventing prosthetic joint infection will really be a benefit. And we have the opportunity to also listen to Dr. Meller here, who have done the [indiscernible] study later on, and he will give you a much more deeper insight to how it is for these patients.

Lastly, but not least, spine, here, we see a future big growth opportunity. We have just stepped our toes into this segment. And right now, we're focusing on some [Audio Gap]. As I said in the beginning here of our recipe, standardizing procedures is super important for this. And here, you see some examples of different types of surgical procedures and application techniques that have been developed by our surgeon community serving around the globe and which also have been published and that is what we aim for.

And that really helps to expand into new segments and subsegments. [Audio Gap] picture and maybe also when you have been meeting H kan, Torbjorn at other different types of meetings. There, the data was triangulated by multiple data sources, including market reports, [Audio Gap] data, CMS codes and primary research. Data coverage was relatively strong there for synthetic bone grafts and allografts while the data we had on autograph was less transparent and often excluded from available data sets.

This is important, as Torbjorn earlier talked about, CERAMENT covers all areas, both synthetic in allo organic, both autograft and allograft -- and therefore, we need to have the whole full picture. Since then, more comprehensive and higher quality data has become available, enabling us to refine the underlying assumptions and improve the accuracy of our market segmentation and total addressable market. And in here, I will just give you a brief update on what is the most significant updates we have done.

So when it comes to the bigger changes we have done, revision arthroplasty is larger than we modeled earlier. Our earlier work underestimated proceeded volumes, but new data shows that it was bigger, and it also had grown over the years since we were last here. Second, local [indiscernible] yes, I will go back to that also. So at the time -- at the same time, infection has emerged [Audio Gap].

Second, local antibiotics are already widely used in clinical practice. This was also under estimated [Audio Gap] updates, which you will see. And [Audio Gap] our strategic focus. So in the previous picture, you saw 4 segments, now we focus mainly on 3 segments in extremities.

So this slide shows our updated U.S. market view for 2025, covering the 3 core segments [Audio Gap] foot and ankle [Audio Gap], trauma and revision arthroplasty. And the biggest update there is in revision autoplasty but all have been upgraded due to growth over the years. In the total number of 460,000 will also include tumor and [Audio Gap] but we are not focusing on that area. The infection incidents before we also try to differentiate between prevention and infective cases. And here, we now take a more overarching view on it. And the use of local antibiotics is quite high. And you will also see some number in the market researches that I will show that this is the case.

[Audio Gap] Spine, we have not done so much. We have upgraded the number a bit, and the total estimates are quite in the similar situation as in 2023, but we will do more research on those moving forward. At the bottom, you see how we expect our market share to be within the different segments. And as you can see, we are -- although we think that we are very successful in -- on the U.S. market, we are still just scratching the surface. So in diabetic foot and foot and ankle, is where we have the highest market share, while in trauma is still very modest.

And there, we have a big opportunity for future growth as well as in revision arthroplasty. And spine, we have just, as I said before, just put or toe in. Torbjorn was talking also about that this is not -- this is the current serviceable market that we are addressing. But there is a lot of other factors that will continuously increase the market size. We talked about diabetic patients. They get diabetic foot ulcers. These results in that bone also get infected where CERAMENT has a good -- good place hold.

Surgical trauma, we see a growing amount of people with osteoporosis, which will also eventually increase the number in our -- in the CERAMENT segment. Primary arthroplasty [indiscernible] is also growing. It's also increasing the number of primary ultra plastic procedures and -- so that will also give a lot of more revision auto plastic in the future, which will also come and help increase the market size. So market dynamics is there. We estimate the biggest growth of the market between now and 2030 to be in foot and ankle, diabetic foot and in revision arthroplasty, while a bit -- very much in the foot and ankle will be the diabetic foot, and we hope to be able to prove that earlier intervention can help even more patients in the future, which will grow that segment quite drastically.

And we believe that it can reach around 100,000 procedures per year. Today, around 40,000. We calculate that around 40,000 of the 80,000 is the [Audio Gap] now I will go into a bit more of our segment deep dives, and we will start with arthroplasty. And we are continuously doing market research stay alert and to stay informed about how the market situation looks like. So this is the latest study we did for arthroplasty and here, we were looking at revision arthroplasty, and also a bit into prevention of also in primaries, how do this [Audio Gap] do.

And I previously showed that there are around 120,000 revision arthroplasties made in the U.S. each year where bone grafts are used. Our quantitative research shows that 96% of the surgeon consider infection prevention challenging. Recent separate data from the structured registries from 2025 shows that the most common reason for revision of a primary arthroplasty is infection. The use of local antibiotics in septic revisions is very easy to understand.

But what we saw also in this research is that the surgeons are applying local antibiotics already in revision surge, 54% in hip and 60% in e PMMA and antibiotic powder were most -- the most common application forms. And when telling about the technology that we had without not mentioning our -- the name of CERAMENT, 82% found the concept compelling to very appealing. And this is a very high number for [Audio Gap].

So on the next slide here, it's also from the same -- the top the top section there is from the same research, and that was primary arthroplasties. And in this survey, they -- it showed that antibiotic local antibiotics is used in 40% of the cases already which, for the future, leaves a possible segment for us as well. We believe that this is primarily in high-risk patients and reflects the growing burden of comorbid disease as diabetes and obesity.

In the bottom section, it's from an earlier study we did in Europe and U.S., and it was specifically looking into prosthetic joint infection [Audio Gap] local antibiotics is critically important. And the current administration is through either PMMA and in space of [Audio Gap] for antibiotic powder or also [Audio Gap] So one other thing that was also seen was that [Audio Gap] were also worried about micro defects in bone, and that is something that can occur in routine surgeries, fractures, primaries and revisions. And this also opens up a significant use of CERAMENT with the possibility of its injectable form. So not just for larger defects, but also for small defects.

Yes. So the biggest challenge with prosthetic joint infections are recurrence of infection, bone loss and implant biofilm. 93% of surgeons expressed that PDI is a challenging condition and 84% of the surgeon express lack of available technology and techniques that would enable the transition to one stage procedure, things that CERAMENT can meet.

So to leave the arthroplasty segment and go into Spine. In 2023, when we were here, we said that we were going to start looking into the spine as well. And what have happened since this? Yes, we have obtained clearance for CERAMENT BVF use in interbody fusion. We have done preclinical studies specifically looking into application methods. We have done a lot of research and talk with customers in the spine market to understand the unmet -- clinical unmet need. And we have also started a targeted CERAMENT BVF launch, which is ongoing. And we have also initiated and established a plan for how to take antibiotic CERAMENT to the U.S. market.

The latest research we have done in Spine and this is also telling about how big the need is for antibiotic eluting CERAMENT. There is in spine everywhere in the body, it's a problem if you get an infection, but it's super hard if you get an infection in the spine, you can't take away the spine, you need it. And therefore, these surgeons are even more prone to use local antibiotics to prevent infection or to find a lot of different ways to not make this happen. So -- and in the research, 86% of the surgeons are already using local antibiotics for [Audio Gap] at least some patients, specifically if there are comorbidities. And 75% of surgeons use local antibiotics for surgical treatment if there is an infection.

The most usual way to do this is to dumping antibiotics, although almost all of them believe that it's not an optimal way to do this. So -- even though they do it, 82% of the surgeons consider the approach suboptimal. When we talk about how CERAMENT G is working, expressed a need for that kind of a product in this area. So it's about that's the same for arthroplasty. We see really high unmet need and he really high numbers for wanting to have a product like CERAMENT.

So this is my last slide, and this is telling about what we are right now doing and have initiated when it comes to spine. [Audio Gap] going over those numbers I showed you in this area really driving up those numbers. So they are even higher than the ones that I showed. And the idea is to build the foundational spine data across the full same portfolio. We are starting right now pilot studies to guide model selection and study design. And in the next phase, we'll do pivotal studies that could be used for presubmissions and then finally, also submissions to the [Audio Gap] the timing for that is around 2026 and 2027, we hope to be done with that.

The clinical strategy is also [Audio Gap] has also started to take for, and we plan to do basically 2 studies initially, 1 single center case series around 20 patients around CERAMENT and then a multicenter PLF study on antibiotic eluting cement versus standard of care. And the cost -- estimated cost there is expected to be around SEK 80 million to SEK 90 million as previously said, and timing starting in 2027.

Regulatory pathway strategy, we believe it will be a de novo pathway likely due to the novel spine indication and the claims. And we expect that to be done no later than 2031. Overall, what we see is a large and growing market from the market models that we saw. We have gone from 380,000 procedures to 460,000. We see that there is a need and a future where this serviceable market will continue to grow in all of the segments that we have now decided to focus on and to build upon. We believe that CERAMENT have and solves the really unmet need for both patients and surgeons.

And we hope that we will help a lot of patients coming back to life, avoid amputation and stay healthy. And with that, I leave over to our Chief Medical Officer, Michael Diefenbeck.

Thank you, Emily, for the kind introduction. I will continue with the clinical update. The clinical update will follow the already established market segments. I'm sure that you're all really well familiar with the market segmentation. But to me, as an orthopedic surgeon, it was somehow new how easily you can apply market segmentation to medical topics and if we look at the definition, we just have to exchange users with patients, we will share similar characteristics, and this would be specific diagnosis or specific diseases.

So here are our 4 market segments, as mentioned before, foot and ankle trauma, arthroplasty and spine, I will go through all 4 segments and following basically the same structure. I want to start with a patient case, then I'll follow with publications since the last Capital Markets Day. And then we look into ongoing and future clinical studies.

So let's look into foot and ankle. And this is a case of a patient, male diabetic patient in the age group 51 to 60 years. He has a diabetic for [Audio Gap]. And the Charcot deformity of the midfoot. Now maybe you're not so familiar with the Charcot deformity. But basically, what you see on the top is the normal anatomy of a foot, and the bones are kept in place by ligaments, tendons, muscles and the muscles are [indiscernible] by nerves. And in the -- with the progression of the diabetic disease, all these structures are weakened [Audio Gap] ligaments are weakened the tendons. The [Audio Gap] anymore by the nerves.

And then the whole architecture of the foot collapses, which you can see here on the right side, in the middle. And for example, in this case, the mid foot, the tallus, the bone in the middle points down and pushes out this part of bone. So now the arc that you usually have on your foot is reversed into a bump, which you can see on the clinical picture in the right corner. And if the patient walks on this bump, of course, the pressure increases on the sole of the foot, it creates pressure ulcer or diabetic foot ulcer, which leads to contamination, infection and the DFO.

Now in this case, Charcot deformity correction was performed by doing bone osteotomy and wedge osteotomy. So basically parts of the bones are cut out. And then the architecture is restored. And internal fixation use, which you can see on the fluoroscopy, this structure here is the intermediary locked with some screws and plates and screws, and [Audio Gap] onwards a file with CERAMENT V.

CERAMENT V is quite well visible in black and in the middle picture. But then we use a new software where we can mark the decrement and it's marked here in purple color. So it's easier in the follow-up to find the region of interest, which is here at 6 months. CERAMENT starts remodeling into bone. And here in the follow-up at 9 months, the architecture of the foot is well in place. The hardware is not broken, has not moved, and CERAMENT has remodeled into bone, now marked in green.

So CERAMENT V has here protected bone healing and promoted on healing. This is the first publication I wanted to mention. It comes from the group of Professor Hans Gottlieb from the [Audio Gap] Hospital in Denmark, Copenhagen, it's called Closeup, a favorable protocol for limb-sparing surgery in DFO. And here are the highlights of the study. It's a 1-stage procedure with local debridement or minor amputation, settlement bone settlement and primary wound closure in 92 patients. Then for systemic antibiotic [Audio Gap] protocol was followed. So this means a short duration of intravenous antibiotics followed by a 5-week duration of oral antibiotics.

And if we look at the results, failure rate, 13% with only 4 patients who had amputations. And please keep in mind, the benchmark, the amputation rate from the literature is up to 24%. So the conclusion of this study was that the defined protocol with CERAMENT leads to favorable results. The second study I want to show to you comes from an [Audio Gap] group from Manchester, the title is adjuvant local antibiotic therapy in the management of DFO. And here come the highlights of this study. It was 105 patients, all had surgical treatment. But then the group was divided into 2 groups. One group received CERAMENT V, which is called the local antibiotic group. And the other group had the conventional treatment without local antibiotics.

If you look at the results, reinfection rate, almost 20% in the CERAMENT group versus almost 50% in the nonlocal antibiotic group. [Audio Gap] rate, almost 2% in settlement versus 12%. So a huge significant difference. And as I mentioned before, the benchmark, 24%. So now the conclusion is very similar to the conclusion before from the Hulu group [Audio Gap] defined protocol with CERAMENT leads to favorable results, but now in direct comparison to a group, which did not receive local antibiotics.

On the next slide, I wanted to show you an overview of ongoing and future studies. I have the slide for all 4 segments. So I wanted to introduce it to you first. On the top, you can see the time line. In short term or midterm and long term, starting over 0 to 2 years, 2 to 5 years and 5 to 10 years. So starting at 2026 and then adding up to 2036 [Audio Gap] we have the studies color-coded here. So this is the normal progression of a study. You start with a planning phase, then comes after the study protocol has been finalized.

The agreement signed the enrollment follow-up data analysis, then the manuscripts written submitted to a journal and published. So here, we have 4 studies in the foot and ankle segment. I have an individual slide for each of them. So I'll just give you the overview here first. preserve. That's an ongoing DFO study in forefoot in the Netherlands. CERAMENT is done at the moment in Basildon and the U.K. again, DFO of the foot. But here, with a short duration of systemic antibiotics.

So they already applied the early findings from the SOLARIO study. In this study and [Audio Gap] Spain and Madrid focuses on a special surgical technique to introduce a new third technique, you could say, how to treat special anatomical locations of in the forefoot. In the planning phase, so not written in stone yet, but very far advanced in the planning is a randomized controlled trial, standard of care versus standard of care plus settlement in the U.S. So let's have a deeper dive.

The first one is the Preserve study, a prospective K series, DFO on the foot on 53 patients. The technique was a debridement and onward filling with CERAMENT G, and that was done in 10 hospitals in the Netherlands. The first results were already presented at, the orthopedic bone infection Congress at Oxford this year. And from a starting point, 107 patients were treated with conservative treatment, so systemic antibiotics and wound care.

For DFO, but 50% failed this initial conservative treatment. And this is really an interesting finding on its own in the beginning because it shows that the standard of care at the moment in leads to a failure rate of half of the patients, and they needed to have surgery and would have benefited if they had earlier surgery. So these 53 patients were included into the trial. And after a follow-up of 20 weeks, there were 15% revision surgeries. So if you remember from before, that's in line with the HERO data with 13% of the data with 18% from Manchester. There were no major amputations, which is really great for the patients, of course.

And the wound healing was around 70%. [Audio Gap] period is that CERAMENT promote bone healing protect bone healing for the ulcer healing that's more dependent on the deformity, reconstruction and on the wound care. The second one I mentioned is the study going on in Basildon, in the U.K., London area, 25 patients enrolled. They are now in the follow-up phase. And this is the one with the short duration of systemic antibiotics. And the 6-month results are submitted for presentation at the European [indiscernible] Society Meeting this year in Portugal. Mitano, this is the surgical technique, 20 patients enrolled and they are now in the follow-up phase.

It's a quite established technique. It is called resection arthroplasty, where to correct the deformity a part of this phone and the joint is resected and then CERAMENT is used to fill the bone and around the bone. And the idea of this study is to establish surgical technique, which can be used exactly in these very common cases of the diabetic foot infections on the metatarsal heads.

Finally, last slide on is the planned randomized controlled trial here. The planning is quite advanced. So I can share some more details with you. It's on the DFO on the foot. Oh, why always forefoot the [Audio Gap] we find in diabetic patients is on the forefoot. So this is why our focus is on the forefoot. 100 patients, 50 versus 50 million standard of care versus. Standard of care plus CERAMENT G. And the study will be done at the University of Texas at 2 sites, UT Southwestern and UT San Antonio. Follow-up will be 12 months. I said we are quite far with the planning. So the study protocol has been finalized.

We are in the phase of signing the agreement. So fingers crossed, we hope we can enroll the first patients until the end of the year. This was foot and ankle, now continuing to trauma. Food & Ankle is our largest segment. So the other segments will be a bit shorter. But in trauma, I have included some slides for Solaris maybe about the same size of foot and ankle. Starting with a patient case. So this is a patient, 30 to 40 years old, fracture-related infection of the right tibia. After a gunshot injury and [Audio Gap] to fixation with an intramedullary nail. The case was provided from a surgeon in South Africa. The nail was removed and the [Audio Gap] and filled with 10 milliliters of CERAMENT V.. And systemic antibiotic started.

And you can see on the right hand in this right white column now where CERAMENT V was placed and again, color coded down here. And if we follow up the patient now at 8 months, CERAMENT remodels into bone, creates new bone, which we can see quite good here. So this is the area where CERAMENT was placed. And here see how nicely new bone is built, color coded on the lower side and then the 13 months follow-up, full weight bearing and the patient doing well, if you ask yourself maybe what these little white dots are, this is Shamil, which is left from the bullet. So that will stay with the patient.

Looking at publications since the last Capital Market Day. The first 1 comes from Dr. Sands from Florida. It's intermediately nailing with CERAMENT G in fracture-related infections, and osteomyelitis. Here come the highlights of the study. It's a K-Series 7 patients with frac-related infection with the [Audio Gap] aspiration system was used. So this is a tool where you can clean the inside of the bone and at the same time, flushed or irrigated and at the same time, remove the debris so that nothing stays behind. And then CERAMENT injected via the 2 can. And when necessarily in case of instability, a new nail is introduced. Mean follow-up was 14 months, no recurrence of infection, no major complications or amputations.

And here, the benchmark, the recurrence rate usually is around 13% from the literature. And the 13.3% was the same benchmark we used for the FDA approval for CERAMENT G. Now the conclusion of the study. And for the conclusion of the study, I just put it these 2 images here, this is exactly they show how the 2 is used to precisely inject settlement at the place where it's needed at the fracture site or where the infection is. And we heard that 7 patients is it is not a large number. It's a small case series but this is exactly what the surgeons in the U.S. are interested in to see how CERAMENT can use in a minimally invasive technique here.

How it can be used successful coming from 1 of their colleagues to describe this technique. And of course, this is a perfect promotion material for our sales force in the U.S. to show how to use CERAMENT -- the next publication is quite similar, same author. Now it's on the intramedullary nailing but now for fracture-related infection prophylaxis. So this is now open fractures and to prevent infection after open fracture, same setup, a K-series of 9 patients with severe open fractures, using intermedial remailing with RMNG through the 2 again, mean follow-up of 9 months. All fractures were healing, achieved union in no case of fracture-related infection and no amputation.

And the conclusion, again, on this slide, a practical guide how to use CERAMENT with this instrument, the 2 can, which you can see here. So the 2 can is basically a cannula inside cannula and you inject through this and place exactly the CERAMENT inside the bone where the fractures and a bit around and then a nail is introduced to stabilize the fracture.

Final publication on open fractures. So this is a publication you might be more used to a bit more heavier on the science side. It comes from Professor on Pillars Group in Manchester, adjuvant local antibiotic prophylaxis in it's difficult to treat 3B open fractures with a 10-year follow-up. The highlights, it's a retrospective evaluation of 76 patients, which is [Audio Gap] 3B fractures. Infection rate, 5%, with 4 cases of osteomyelitis after a fall at 8 months. So if you do the math, that's about a bit more than 7 years. And the benchmark is here around 15%, so far beyond the benchmark of infection from the literature and the conclusion that CERAMENT G is a safe and effective option for local antibiotic delivery to prevent infection.

This is the slide on the evidence pipeline. Now for trauma. You are used now to the setup -- the SOLARIO study, we talked about this before previously. It's close to publication, then there is a combined study where it's done in Gothenburg, here in Sweden, where CERAMENT GMV is applied in together in a bone void. The [Audio Gap] study in the U.K., that's a post-market surveillance study going on at Oxford and the conviction trial, randomized controlled trial in France, and they go through this in detail, starting with Solarius.

I took this picture at the AGS 2024 meeting, where Professor Martin Magneli is presenting the first results on Solarius. Just to remind you, SOLARIO stands for short or long antibiotic regimes in orthopedics. The design was a multicenter randomized non-inferiority trial. Indications were a wide set of orthopedic infections with osteomyelitis, FRI, DFO, PGI and -- it was done in 500 patients randomized in 2 similar-sized groups, 249 patients standard regime, which means at least 4 weeks of systemic antibiotics and 251 in the short regime, which was a maximum of 7 days of systemic antibiotics.

Now to the treatment. All patients had debridement and all patients in both groups had licensed antibiotic-eluting bone effect fillers and initially systemic antibiotic therapy after surgery. And at 7 days, the patients were randomized in half of the patients, the systemic antibiotics were stopped. And in the other half continued up to the suggestion or advice from the ID physician. And then the follow-up was a 12-month. These are the top line results. The end point was met. The short regime was equally good in infection are education as a standard of care.

So if you spin it around the short duration of systemic antibiotic was noninferior to the long duration of antibiotics. And if we look at the numbers, so the shorter systemic usage was 5 days versus 37 days and -- or an average reduction of 47 antibiotic days and a total reduction of more than [Audio Gap] days just into this -- just inside this trial. And the SOLARIO team did the calculation. If you take the weight of a small antibiotic pill, how much antibiotics were safe just in this trial and it is 15 kilograms. So now time comes a huge suit case, 15-kilogram of antibiotic were safe just in this trial. And this has, of course, a huge impact for the patient because this short regime reduces the adverse events.

And this is shown here on the right-hand side. So you have on the Y axis, the patient numbers. and you have the adverse events. And the blue 1 is -- the dark blue is the no adverse events. So 80% in the standard in the long group had no adverse event and up to almost 150 in the short, had no adverse events. And then if we look into the adverse event, moderate adverse event 70 in the standard group and this was reduced to 35 in the short arm and in the severe adverse events, the reduction was even more significant.

Why is Solaris so important for CERAMENT and for bone support? This is explained on that slide. So as mentioned before, all patients at local antibiotics and empiric systemic antibiotics, and 19 different products were used in this study, about 80% were resorbable like settlement and CERAMENT V and 20% were nonresolvable. So that's the PMMA, the bone cement. 81% of the Resolve products were seen CERAMENT V, which means 64% of all the procedures. So CERAMENT, so this study relies heavily on the results from CERAMENT G and CERAMENT V.

In summary, on Solarius, the advantages of using CERAMENT plus short antibiotic regime, it promotes patient well-being by reducing the side effects, the adverse events. It reduces the antibiotic costs. That's clear by saving the systemic antibiotics. It reduces costs associated with diverse events. And that's quite important because the adverse events are a cost driver in these studies. So this would be readmission of patients, maybe we needed to be admitted to intensive care unit. And then the costs really go up for these adverse events. It improves the patient adherence. Torbjorn already talked about that.

So the surgeon or the physician does not rely on it, need to rely on the patient taking his medication. The medication implanted by the surgeon. It improves antibiotic use because it's placed at the site of infection at the right site at the right time in the right dose, and it decreases the risk of creating antimicrobial resistance. With this ex course on Solarius, I come back to the other planned and ongoing studies in the trauma segment. This is the study where CERAMENT G and V are used together in the same bone void on the right-hand side in pink, you can see the size of the bone void where the products are placed.

And then in the follow-up, the bone healing. The study has been finalized and the manuscript is submitted to a journal. The conviction trial in France, which is run and organized by the Creo centers in France. It's a randomized controlled superiority trial. The indication is chronic osteomyelitis. The aim is to enroll 200 patients at the moment, 48 are enrolled. And it's the 2 groups, debridement without that space management versus debridement with seemed. 8 sites are now enrolling, but the enrollment is, as you could see, far below the forecast.

So the Cryo group will probably need to come together. They are driving this study and to decide if all these 200 patients can be enrolled. The next study is Certitude. This is a post-market surveillance study with a very long follow-up of 3 years, and this was demanded bones or demand from Bonesupport from FDA in the Novo approval. It is a consecutive case series frac-related infections, patients plant, 20 enrolled. It's done at Oxford. So the Oxford protocol is followed at the invention place basically. It's a long study, but we're happy to do it for with a 3-year follow-up.

So the last patient included around end of 2027, 3 years follow-up clinical study report in 2031. So for these results, we have to wait a bit. This was trauma. Now coming to the third segment, arthroplasty. So this is a 54-year-old patient, with a PGI or periprosthetic joint infection and the osteolysis of the right tip. If you have a close look at the radiographs on the right, you can see this is the prosthesis, the shaft, the head and the cup. And you can see around this translucent lines here in this whole. So this characteristics of a bone infection.

And then the surgeon would do a joint aspiration. You'll see if he can or she can find bacteria. And when bacteria are found, then it is an infection like in this case and the one-stage exchange with CERAMENT G was done. So this is how the surgeon is applying the CERAMENT G. He's augmenting the cup and the stem. And so by this, the CERAMENT G is transported or delivered into the bone voids around the cup and around the stem and then by implanting the cup and the stem. And here is a follow-up radiographs of these patients with this one-stage exchange only one surgery for this infected Hep.

One study I wanted to mention on arthroplasty, and this is coming from Charite, Berlin, it first author is Dr. Meller and Dr. Kakad and Dr. Meller will present after the coffee break online. So I will leave this presentation or the details of the publication to his presentation. Here are just the highlights. It's a prospective study on 20 patients with confirmed PGI, recurrence rate, 0%, no recurrence and the follow-up of 3.3 years and the benchmark here for the infections is around 15%, but all the details of the study and of the surgical technique then with Dr. Meller after the coffee break. An overview of the ongoing and planned studies, the overview seachange, a 2-stage study in Germany with used in the first stage.

CeraHep-2.0 is a continuation of the SeroHePstudy at Charite. It's in the planning phase. And in the planning phase, not written in stone this settlement in arthroplasty heavier lift, a multicenter RCT. The details, this one is the SERAChange study. It's a pilot study, a small pilot to see -- to gauge the differences in the results in a treatment in a 2-stage hip exchange. So in the first stage, this hip. Here you can interest in. I would suggest, I'm not going to touch this. I just continue with my presentation. I wanted to show you because you're experts now is the radio growth.

You can see here again this radiolucent lines, which shows that the hip is the prosthesis is and probably infected. So usually in the 2 stage, the prosthesis is removed and this PMMA space or bone cement space are introduced. And in this study in the CERAMENT group, no spacer is used, but CERAMENT is injected into the cup or into the acetabulum where the cup is placed in the proximal female. It's done at the University Hospital in Munich, and I have some more slides on this.

So the first stage is the removal of the prestige, the placement of CERAMENT, which can be seen terming here into the proximal femur and into the acetabulum. Here is the acetabulum, the look. And then after 6 weeks, when the revision is on CERAMENT is still in place. So the one healing has already started and the huge antibiotic elution led to the eradication of the infection and then the new hip is implanted. This is the continuation of the CeraHip study, SeroHyp-2.0, the PGI of the hip, 30 patients. There are 2 new things. One is that this 1 comes with a retrospective with 2 retrospective control groups, 1 is Cerahip on its own because this new 1 has a shorter duration of systemic antibiotics.

So again, following the Solarius results. And the second is a control group where no local antibiotics have been used. Final slide on arthroplasty. So this is the plan again, not written in stone, international multicenter as PGI the hip of the knee. We're probably aiming around 300 patients, but that has to be confirmed in a statistical sample size estimation. It's a single state exchange. The idea is to have 1 group with Calm and the short duration antibiotics systemically versus the standard of care, which is no local is and the long duration. This will be done at -- we think about 20 hospitals, and we are in the planning phase with our advisory board and with international experts in the field.

And the costs have been estimated as Torbjorn said, with SEK 40 million. Finally, spine -- my colleague, Emily AnelibaVikne has already talked about spine and the strategy here. So I just jumped right into the planning slide. 2 studies are planned in yellow. The first 1 is a single case series on posterolateral fusion. It's for deformity corrections of this. It's not a standard approach. So usually, you have just a tiny indication this year is to correct scoliosis. So to reconstruct the shape of the spine, it's 20 patients are planned. The treatment is the combination of CERAMENT plus autograft and instrumented posterolateral fusion and it will be done in a single center in Canada.

While Canada because in Canada, all 3 CERAMENT products are approved to be used in spine. And the second study, the heavier lift, the multicenter study, posterolateral fusion in high-risk patients for infection. So this is to show the prevention of infection to reduce the risk of infection, the same number of patients as an arthroplasty with antibiotic eluting CERAMENT plus autograft, multicenter and again, in Canada, estimated costs around EUR 80 million.

And with that slide, I hope I gave you a good overview of the market segments and the clinical update. And I would hand over to Charlotte to moderate the Q&A session. Thanks for your attention.

Perfect. Thank you very much, Michael. So please stay on stage and a little perhaps you want to come up as well. So we have microphones in the room. And could we get a microphone immediately, please because Kristofer here has a question.

A question on the market model. So the 430,000 procedures, do you think that you could penetrate all of that eventually with CERAMENT G and V and also I'm looking at the figure, 115,000 ongoing infection and then you have 190,000 for the use of antibiotics. Is the difference there prevention, just to make sure I understand it or should we add them on top of each other?

I'll start with the first one in terms of what's reachable for us. So if we look at those numbers, you saw the penetration levels, depending by segment. It's a couple of percentages on trauma and arthroplasty and it's slightly higher on...

Could I just interrupt because that was my second. When you talk about penetration, is that out of 430,000...

Yes. Okay. Yes, yes. So when we talk about penetration, I prefer to use penetration, but you can argue market share but penetration is that we define the number of procedures where we really we can be in as a bone graft and/or with antibiotics. So that's 1 piece. And then we always count procedures. We don't count value. We always count procedures. And then, of course, in some procedures, more CERAMENT is used in some procedures, less seen use.

But we start with that procedure count because that's important for us. So what's reachable? I think in the U.S. And the reason why we say that we're still on the growth journey early on the growth journey is simply because if we look at the U.S. where we are now, number one, it's only a few years since we actually launched CERAMENT G. Just a couple of years. It takes time in Orthopedics. That's number one.

Number 2 is that if we would achieve, let's say, the same level of penetration in the U.S. that we have achieved in certain regions and countries where we've been much longer. Then we will get not 100% of that potential in the short term, but a long runway. We know that we have data points where we reach 60%, 70% of the penetration. And in some countries where we haven't been as successful, we've only reached to 30%, 40%.

So we definitely think that, that range is definitely doable in the foreseeable future. Longer term, we expect this total addressable market to expand -- we talked about the cascades of patients. So we're not overly concerned that there is room for us to grow. We just focus on making sure that we get that penetration day by day, quarter by quarter. And then, let's say, in 2 or 3 years, do I think that the market size will expand even more? Yes. But this is the data that we have today.

And also, that is what we see today, everything else equal, but Emily showed also the so-called the preceding segments. I think that is a very interesting dynamic for us to follow in the medium to long term. But exactly how that will play out, we don't really know. But it's, of course, a very strong tailwind for us, if that answers your question.

The difference between 19, 115. Is that prevention?

Well, the way that you -- I would think about it is that, first of all, you have the total number of procedures where bone graft is used and some of these bone grafts are used with antibiotics and some of them without, whether prevention or not, yes, you could draw that conclusion, but there are also other nuances that we should take into account. But I don't know, Emily, if you have more I think in principle, you're right, there -- but there could be ongoing infections where you're not using local antibiotics today.

Absolutely. Yes, absolutely.

Great. Sten, did you want...

It's on the same topic. I'm just trying to understand the model. Previously, you talked about impacted patients also may like this around 50,000 and some 90,000 in prevention. So how do we go from those numbers to this 115,000 and 190,000?

So from my perspective, I prefer to talk about the segments as they are, meaning foot and ankle trauma, arthroplasty and stick to the definitions of in foot and ankle, you have the diabetic foot osteomyelitis. In fractures, you have fracture-related infections, and in arthroplasty periprosthetic joint infections. That using the term osteomyelitis is a bit confusing and different data points interpret the term ostomy lights differently. That's why we try to stick to that. That would be my starting point.

And then, Michael, I don't know if you can share why is that sort of use of these different terms, different in the different categories around osteomyelitis, fractionated infections and paraprotein joint infections?

Well, I think we -- over the last probably 10 years in orthopedics, we got more focused and we have now all these definitions on these specific infections, which we didn't have before. So before everything was thrown into 1 bucket, which is ostomy -- sometimes it was even called surgical site infections. And the numbers were a bit all over the place. And now it gets much more specific publications coming up with definitions of these infections and treatment regimes. And this is another way, which we follow with this market segmentation as well.

So I can answer directly on your number, maybe Emily will give a little bit more flavor.

Also because what we say is that this proceeding segments are now coming in with more patients that we were not counting on being able to provide treatment before. So we see more and more in the diabetic foot. You can preserve more and more of the foot. And we believe that, that is numbers that has come in and grow our the impacted size number, also in the revision arthroplasty or the prosthetic joint infection, we very much underestimated the use of local antibiotics together with a bone graph there. So that has also increased this number.

Okay. But the 190,000, is that the preventive use?

That is total. So that is both infection and prevention and also based very much on these market research that we have done that shows that there is a much higher use of local antibiotics already bone graft there preventatively.

So Torbjorn, you started your presentation today also mentioning the costs of these studies, and Michael reiterated them. Can you talk a bit about you put so much more money in 1 of these segments and how you distribute it over the years?

Yes. So I'll talk more strategically how we allocate the capital, and then Michael can provide sort of the assumptions behind why is 1 costing more of them. So on spine, we want to achieve 2 things we're doing the study, regulatory approval, surgeon buy-in or being able to use it. That's number two. In arthroplasty, we have all the regulatory approvals. We're not doing it for regulatory approvals. It's all about creating more science, more evidence to convert more surgeons and increase the penetration. That's really important.

When we look at the total potential of these 2 segments, Arthroplasty much more here and now closer to us less risk. It's just to go out and get it, so to say. Spine, we're not there yet. So new indication, new regulatory approvals, but both of the segments to us look very attractive and dependent on how we see them. So that's why it's almost a no-brainer to do the investments at this stage. Now the 2 studies that we, at this point, preliminary look at they are designed slightly differently, and that's also the cost.

So Michael, feel free to share what are the thinking around the studies.

Yes. And thank you, Torbjorn. And you mentioned some of the parts, so the spine study, as you mentioned, comes or should -- will be used for regulatory approval. So this needs a higher scrutiny. This has to be perfect to be used with the regulatory authorities in the U.S. In spine, we are not so far in the process compared to arthroplasty. In arthroplasty, we have an advisory board. We have a lot of surgeons which are interested in doing the study and which want to contribute to the study.

In spine, it's a starting point, we have to go out and find the interested surgeons. And concerning the cost, the calculation is that in spine, we need a CRO, or clinical research organization, which we have to rely on heavily to get the study done to all the standards for regulatory approval. With arthroplasty with the key opinion leaders. It's not written in stone, but it could be driven by one of the key opinion leaders, meaning that we don't need the cost for a CRO and the cost for clinical research atfor these studies are significant. So these are the 2 differences.

You're saying significant, but not as much as has been speculated in the market.

I mean what's being speculated in the market is up to market to sort of answer to -- we're -- I mean, on spine, let's be honest. The number that we communicate today here on spine is exactly the same number that we've communicated all the time. There is no -- nothing new on that. For those of you who have been in meetings and been in presentations when we get these questions, what we say now is exactly how we have answered that question. So around 80 million to 90 million. Now if other people have better or other estimates on how much studies cost for bone support and CERAMENT, it's up to them to answer that.

So I have 3 questions. The first 1 is, yes, you implicitly share the volume split between the 3 focus segments in the U.S. So it implies a quite clear major representation in diabetic foot, of course. So 2 questions there. So in your opinion, is any factor we should account for that suggests a lower market share in trauma and revisions long term, which you consider? And also, I think what would be helpful is if you could share the sort of volume split in Europe between these 3 segments where we've been before in certain markets?

Okay. Good First question. No. So I don't see that there is a different sort of threshold that we can reach in foot and ankle versus what we can reach in trauma versus arthroplasty. All of them look very attractive. At this point, we don't see a ceiling that 1 is going to be drastically different than the other. They will be different, but we don't really know yet. Foot and ankle has been a fantastic segment for us. [Audio Gap] fantastic for us. But it's early days. It takes time.

Arthroplasty, again, we're just scratching the surface. So all 3 of them are very important for us in absolute terms. It's easier for us to provide this level of granularity for the U.S. simply because we have much more granular data. And that comes from the go-to-market model that we have in the U.S., which I said earlier, it is nonexclusive call point based independent sales rep model. And that call point based, what that means is that we get data for 80% of all the procedures done in the U.S., we know what is the individual surgeon who is he or she, what is he or she using it for.

So we have that level of granularity in the U.S. In Europe, we don't have the granularity. It's more anecdotal and we can make estimates. So it wouldn't be fair to give an exact number for OUS because we simply don't have it. But do I think it will look completely different OUS than the U.S.? No. That would be my estimate. Good. Those were 2 questions. What was the third one?

No, I think maybe it's 4 questions here. The next 1 is how big a factor is the ability to plan the procedure when it comes to the decision of the surgeon to use CERAMENT G or not? I think maybe some words on the diabetic foot versus trauma, for example, would be helpful.

I think it's a great question that we can ask Dr. Matuszewski, when he presents. So part of that question then you hear it right from the surgeon. I think from our perspective the principles are the same. You have to -- number one, you have to have an innovative product, we do that. Number two, you have to have the evidence. That depends a bit in which procedure you're going after. Third, you have to do it surgeon by sign. So I have to convince certain -- you could argue, well, are the trauma docs easier or harder to get in front of versus the foot and ankle docs?

Some say yes, some say no difference. For us, we don't draw any sort of major conclusions on that. The principles are the same. You have to convert surgeon by surgeon with a normative product and with the evidence. And so far, I think it's still too early to tell, and we don't have enough data to say that, yes, 1 is absolutely more difficult than the other. We have enough demand on all 3 segments as it is today.

Good. And then in years here post 2026, let's say, 10 years out in time, how much faster do you think the local antibiotics patient cohort will grow compared to the total procedures? And a question to that is also, do you think SOLARIO is yet to help to hedge these patients higher? And also do you think SOLARIO, could have an impact on the U.S. behavior? What do you think of [Audio Gap]?

It's a very good question, and it's it is basically the orthopedic community has been waiting for this study. It has been waiting for these results. and has been waiting to reduce this long duration of the antibiotics. So I think if you can avoid these problems for the surgeons, for the patients by reducing the duration by local antibiotics. This is a driver towards the local antibiotics and to settlement GMV. So I think it has a high impact. The question in Europe, it's a European study. In the U.S., it is -- will probably take some more time to make it public and to get the adoption because the MES is quite known for the long duration of antibiotics.

They kind of will stick to their rules first. But on the other hand, if you compare it to the AVEVA trial, the OVEVA trial is where it was shown that oral antibiotics pills are as good as intravenous antibiotics. This was adopted quite fast in the U.S. because they immediately saw the benefit and the , then we don't need this 6 weeks of intravenous antibiotics, the special application, cannulas and so on and so on.

So could go both ways, but I think it would be more conservative in the U.S. for the adoption of the Solarius. But what we see starting now, and I mentioned this a bit in the clinical studies that there is a huge interest now to prove the SOLARIO concept in the segments. So we have -- we hear a lot about old diabetic foot, can we do a study on a shorter duration like it's done in Baseline now. So this topic is coming more and more and will help to get even more evidence behind the large SOLARIO trial.

And I think the key point, which I'm not really sure I cannot really quantify, but I think it will have a significant impact, and this is actually something that is over the last, I would say, year has been referenced in relation to the SOLARIO study. Because 1 of the key things that Professor McNally says when he presents this is that this study gives more decision power on the orthopedic surgeons. They don't have to rely as much on the infectious disease stocks and the systemic antibiotic receives.

So it gives them more evidence, more decision power. And I think it's not only good for society and the patients as such. I think it's also going to benefit with us. But exactly when, how we don't really know.

How important is the full publication do you expect to get an extra boost from that? Or is this -- I mean, it's already published the top line?

Yes. So top line results published in every conference that I go to or that we go to, salary has mentioned. It's been talked to -- it's been referenced. They talk about the results. And every time McNally and his team are out presenting they're presenting the data. So from an orthopedic surgeon perspective, it's already getting traction is already talked about. So that's 1 thing. However, in many hospitals and hospital systems Well, actually, the topic that we're in, it's not only a decision for the orthopedic surgeon. It is a multidisciplinary decision involving the infectious to see stocks. And -- what that means is that they -- in several areas, in many cases, they say, well, a great study, love it.

We're definitely going to go with this. But where is the publication -- last time when I was at was it Novus in -- on the West Coast of Sweden. This was exactly this. This is great. I will use it. But I cannot start using it because I need the publication, where is the publication. So yes, it will have an impact, but exactly how and we don't really know. And we have really good reasons to believe that it will come soon. but it's out of our control.

So after following you for many, many years, a couple of years ago, you did this Booster program to get sales up. Now it seems you're today talking a lot about the clinical side. But isn't there a potential still to do some type of booster programs. So what is hampering would be the wrong word, but what is holding your growth back? Is it the clinical side? Or could you -- you have the money to do booster programs as well?

You know what you on tells me all the time. We're doing all of this booster. We need to reduce the amount that we're boosting the -- we're doing a lot of booster recently. I mean, what has been announced has been announced. But if you look at '24 and '25, we've invested a lot in the hybrid markets OUS. We've invested heavily in the U.S. in '25 and also since I joined, we invested a lot in the back office functions to support the organization to drive more sales.

The good thing, as we grow, we build a stronger base, larger base. We're not shying away from investments and commercially in the U.S. as well as OUS. And actually, the good thing is that they pay off. If you look at the H kan will talk about the investments in the hybrid markets after the break. It looks really good. We continue to invest in the U.S. In the last 2 years, we have invested to boost production. We have doubled the capacity of the business. That's something that we've done over the last 2 years. I cannot really see it on the balance sheet, cannot really see it on the P&L. So we continue to do that.

But the reason why we put so much emphasis on this is a lot of exciting stuff on evidence around CERAMENT. And this is part of the strategy. We have an innovative product. But in order to get it into the hands of surgeons in a segment-specific way, we will continue to invest in evidence. So we don't really change the strategy. We just continue to what we've done historically, and it's more of the same really.

So we have a question on the web from the web on CERAMENT covers gram-negative organisms and CERAMENT gram positive. So how is the termination between when to use GMV made? Are there an increasing amount of procedures where GMV together would be appropriate?

These are very good questions. So CERAMENT G with gentamycin is the broad spectrum covers gram-positive and gram-negative. So this is basically the go-to product. because even if -- so this is especially for the one-stage procedure where you're not 100% sure which bacteria you're facing, you could use M&G Settlement is more focused on the grand positives, not for the grand negatives. And this is a good choice. If a patient, for example, is fewer already a surgery has been done somewhere else, and they found gram-positive bacteria, maybe even resistant to gentamycin. And then this is a really good case to use CERAMENT V.

So when you know that the bacteria there and that they would react really good to vancomycin. But they go to is CERAMENT V. for the [Audio Gap], the grand positive. And there is 1 part which is interesting for the PGI, the periprosthetic joint infections Here, the surgeons are doing this joint aspiration. So they find the bacteria even before they do surgery. And there are a lot of grand positives, bacteria and vancomycin works really well against. So I think there's a really good space for CERAMENT in PGI.

I hope they are happy with that answer.

So there's 1 thing that you have announced lately that we haven't covered it all, and it's the buybacks. And there has also been some questions from the web, why aren't you addressing this at all today. Perhaps H kan will, but now we have you stay.

Yes. I mean, Hakan, for sure, we'll address it when he shows his favorite slides relating to cash flow. I mean we're in a fortunate position. We're generating more cash than we actually need to do this. So we have plenty of cash. And also, please bear in mind that the Board proposed to the AGM to give approval for a buyback program, the AGM gave that. Now we didn't only do that for fun because we did it because we think it's adequate and relevant to do exactly when and how we will announce that in the correct way.

But now the focus for us is to continue to operate the business the way that we want to invest in the business that we have done and that we show now that we want to continue to do -- and I'm sure what comes soon will give more information about how we start executing on the approvals that we have received now from the.

So in a while, before that, we're going to have some coffee. And just please -- remember the A, B or C that you got when you entered the room. So now there is coffee, but please, as soon as possible, go to your A, B or C, and then we're going to rotate. So you get to see to of the product demonstrations before we are back here at 3:30.

And we have the eminent and great support of Karen, who's the Director of Medical Education in Euro. She is responsible for the foot and ankle demo. And for trauma, we have flown in Candis Maxwell, who runs medical education in the U.S. And for orthoplasty we have the eminent Paolo, the Director of Product Management. So take the opportunity, you get to feel the stuff. It's really fun. You get to feel the product and ask a lot of questions. Thank you.

[Break]

Welcome back from the coffee break. I hope you had some time for good conversations and some time to experience the product. We continue now with the clinical experience session. And it's an honor for me to introduce 2 surgeons who will present now. We have first, Dr. Sebastian Meller, is a consultant for Orthopedic Surgery. He is the Head of the Department of Hip Arthroplasty and Infection Surgery at the Charité – Universitätsmedizin Berlin from Germany.

And of course, he will present on the arthroplasty market segment. He will have the first presentation now online. And then after that, Dr. Paul Matuszewski will present. We brought him over from the U.S. for this presentation in person. He's Associate Professor of Orthopedic Surgery, Chief of the Trauma Service and Chief of the Trauma Research at the Department of Orthopedic Surgery and Sports Medicine College of Medicine in Kentucky, University of Kentucky. With that -- and of course, he is presenting on trauma at the expert for Trauma. With that, let's continue and see if Dr. Sebastian Meller is online. Sebastian, can you hear us?

Yes, I can hear you, Michael. Hello. Can you hear me as well?

Yes, we can hear you here in the room.

Now we can see you and we can see your presentation. Wonderful. So thank you for spending the time with us. And we are now looking forward to your presentation on arthroplasty. The floor is yours.

Yes. Thank you. So once again, Michael, thanks again. Hello, everybody. I'm Sebastian here from Berlin. It's an honor for me to talk here for the investor meeting, and I'm presenting our experience with CERAMENT in our PGI cases.

So let's start. PGI. So [indiscernible] joint infections means challenging diagnosis. We have big problems. We have time-consuming surgeries. We have high cost, worse function, worse outcome, and we have a high morbidity and mortality on the side of our patients. In some cases, we have higher mortality rates than in some cancer cases. So it's really a big problem.

What means PGI? PGI, it's an infection of a joint replacement and the surrounding soft tissue and bone tissue. It's biofilm driven, and it's mostly caused by bacterial pathogens. The diagnosis could be difficult. So this is why we need clear classification systems like the [indiscernible] or the Charité definition. The PGIs often requires revision surgery, implant exchange, prolonged antibiotical treatment. This is why we have to talk about the treatment in future.

Why we're doing hip revisions? These are the data from the German arthroplasty register. And you can see that almost 30% of all hip revisions are being caused by infections. So we are talking about a high number of patients, a high number of cases, which we are dealing with in hip and also knee revision. If we look at the re-revision rate, so these are patients which are revised and again revised after a hip revision, we see that in septic cases, and these are the -- is the blue line.

In septic cases, you have 30% of knee revision rates after 1 year and higher in 2 or 3 years. Even in aseptic cases, this is the red line, and you see 10% up to 20% in 5 or 6 years. So we're talking about not as good results in the real world. So this is why we have to improve our results, and we have to talk about strategies to improve these results. And this is why I would like to present our surgical treatment strategy for these patients.

The goal is to take the less invasive approach with the best results. And you can see here, this is the treatment algorithm for chronic PGI treatment. In a chronic PGI, you have to remove the prosthesis. You can do it in a 1-stage, in a 2-stage or in a 3-stage exchange. Let's talk about the single stage, so-called 1-stage exchange. For that, you need good patients. You need good soft tissue, good bone and no systemic infections.

These are the indications for a single-stage PGI treatment from our point of view. The current gold standard worldwide and most -- the most frequently used technique is the 2-stage. The 2-stage means in 2 surgeries in the first one, you explant the prosthesis and in the second surgery, mostly after 6 to 8 weeks, you go for reimplantation and reimplant the new prosthesis. So this is called a 2-stage surgery, and this is the most frequently used technique in the meantime until now.

The single stage is an option, a reliable option, which is getting more and more popular, increasing application, mostly in centers. And the success is comparable between the single stage and [indiscernible] in PGI of the hip in selected patients. So in good host, in sensitive pathogens, this is a point which we have to go if we talk about the single-stage exchange.

However, the treatment failure rate in PGI, in single stage and 2-stage remains high. We have reinfection rates with strict criteria with more than 20%. So it's really, really important to identify and modify risk factors which can be involved for better outcomes. That means host factors, local antibiotics, defect and dead space management. These are the 3 key points from our point of view to modify and to improve results in PGI treatment.

So let's talk about our surgical approach for a single stage exchange in these patients. And to illustrate our procedure, I want to present you a case. This is a typical case, 59 years old lady, PGI of the right hip, hip arthroplasty a few years ago. You see also on the right side, a CT scan with some holes around the cup with some defects. So from our point of view, a good patient for a single-stage exchange.

So what we did, we did a function, an aspiration before the procedure. We found a pathogen, Staphylococcus capitis in this case. So we decided to go for a single-stage PGI treatment in this lady. We used CERAMENT G with some allograft in the bone defects in the acetabulum. You see it here on the video in the middle, we fill the defects with CERAMENT and allografts, and then we go and implant the new prothesis in this new filled -- point in this new filled acetabulum, and then we are happy because we have local antibiotics, we have defect management for the new implant.

So let's talk about on detail about our augmentation technique using CERAMENT in these cases. So what we do usually, in the first step after removing the prothesis, we absorb blood and fluid and then we go deeply in the femur and fill the whole channel retrogradely without pressure deep into the femur under the stem with CERAMENT G. You see it here. It's quite deep after removing the compress, filled retrogradely. This is step 1 and step 2. The next step is an augmentation of the implant.

You see it here. Every implant surface has some glue, some notches, some holes, and you can augment these implants with CERAMENT like we did it in this case. And then you go straightforward according to your standard protocol and implant the prosthesis to this position like it's planned. You see here again the augmentation of the surface of the implant 360 degrees on the implant surface and then you go on with the implantation of the prosthesis.

In the next step, it's step #5, we fill and augment the dead space. You see it here in between the prosthesis and the bone, there's always some dead space. There's always some defect. So we go and fill it up with CERAMENT to avoid dead space, to avoid hematoma because this could be the next position and the next space for bacterial infection. This is why we fill it up with CERAMENT. And in the next step, step #6, we dry the CERAMENT. You see it here. Usually, I say a compress and push, compress the CERAMENT 8 to 10 minutes, wait until it's fully set and hardened.

And then you can see it's very nice, hardened, fully set and then we are happy and can go on with the surgery after the CERAMENT is dried. And in the last step, according to your protocol, make an X-ray, check the position of your implant and you can also check the position of the CERAMENT. You can see it here in the [ red marked ] areas, the CERAMENT in the approximate also in the distal part of the prosthesis. This is our augmentation technique for the femur side.

And sure, we also have acetabulum. And this is what I have here, the CERAMENT and the cup revision. And this is the same principle. We dry the bone, we absorb blood, use some compressors, use the suction device because you need a good dry area for a good visibility and application of the CERAMENT. In the second step, you go on with the application of the CERAMENT. It's applied into bony defects. You see it here, these osteolytic areas, the holes in the acetabulum are filled up with the CERAMENT like it's here shown. You can do it without or with allografts.

If the defect is a little bit bigger, you can also take some allografts like I will present it in the next second, again, some CERAMENT. You see it here layer for layer. And then after the CERAMENT, you take some allografts. You see it here some chips and then you can put it on the CERAMENT, make some compression, go on with a reverse reamer or with a pusher, you can compress it and fill up the holes and the defects very nicely, and you will get a nice osseointegration in this case.

In the next step, it's step #3. It's again the augmentation on the implant. You see it here also here on the surface of the implant. Also here, the same like in the female revision, you have in the acetabulum also implants with notches, with grooves, with holes, and you can fill them with CERAMENT. And then according to your standard protocol, you go on with the implantation of the prosthesis in the prepared acetabulum like you do it routinely.

You can complete it as per standard protocol. So you put the cup inside and then, yes, now it's in, take the right position and then fix it with the hammer. Step #5 , also here, filling and augmenting of dead space and defects. You see it here in between the cup and the bone, there's also remaining dead space, some cavities, you can fill it up and you can fill it up and close these defects with CERAMENT.

And also in the last step, step #6, you can compress and dry the CERAMENT 8 to 10 minutes until it's really fully set and hardened. And in step #6, you do the X-ray. And also in the X-ray, you can see the CERAMENT around the cup in the holes, in the cysts. And then this is also ready and the patient has a new hip after one stage PGI treatment.

So what are pitfalls in using CERAMENT? From my point of view, first of all, the incorrect patient selection. So you need a good strict selection criteria for a single stage. This is necessary. And the further pitfalls from my point of view, are insufficient drying of the bone. It will bring a poor adhesion. So dry the bone. The next point is high pressure application. Don't use high pressure, make it slowly, take your time.

Otherwise, you will get a misdistribution in the system. Number four, the incomplete filling of the defects of dead space. So residual spaces between implant and bone remained. So again, take your time, fill up the holes, fill up the dead space with a CERAMENT, make an X-ray, check if there are some holes and you can fill it up with CERAMENT. And number five, don't close the wound too early, wait until the product is hardened up to 10 minutes.

And if it's hardened, you can go on with a good soft tissue closure and then you are happy and also the patients will be happy. So to verify now the things I told you and to verify our protocol, we performed a prospective study, which was published a few months ago, the cementless once-stay hip revision arthroplasty with CERAMENT in infected hips. So we called it [indiscernible] study. It was a pilot study. and I want to present you the design and the results of the study. So it was the first prospective study using CERAMENT in PGI cases.

And we included confirmed PGIs according to the [indiscernible] criteria, and we involved 20 study patients in this prospective study with a follow-up of at least 2 years. And we used CERAMENT with gentamycin in defect in dead space around the STEM and also around the cup, like I showed you before. So then we follow up the patients with a standardized protocol like it's typical in our unit. So the patient characteristics, we included 20 patients, 10 men, 10 female with PGI of the hip, the mean age, 66 years.

16 patients were cementless in the previous surgery. 4 patients had a cemented total hip arthroplasty. The stem was cemented in the cases. 6 patients one had previous revision, but it was aseptic. So it was no PGI case before. So the intraoperative characteristics, we confirmed PGI in all patients intra-operatively. We had positive microbiological or histopathological results. And in mean, we used 13.2 meter CERAMENT G per patient.

Postoperatively, 19 patients reached a follow-up. One patient had a lymphoma, was not able to follow up. We had one aseptic dislocation of the cup. We had no wound complication, and we had no drainage after the discharge of the patients. We found 60% of coagulase negative Staphylococci, so a typical cohort. staphylococcus epidermidis was the main pathogen, polymicrobial infections, 20%, culture negative 20%. So a typical microbiological finding in the PGI cohort.

The results -- the postoperative results for the [indiscernible] score, they improved significantly. Also, the EQ-5D-5L improved, that's a life quality score. So the patients felt better after the surgery, were happier. And also the pain evaluation improved in the hip cohort in the hip study also significantly. So very good results in this cohort. And we can say after now 3.5, more or less 4 years follow-up, we had no reinfection. We had very good excellent functional results, good radiographic results and the limitation, longer follow-up and more patients are necessary for future investigations.

But you can see it works and our study could prove that it works in our hand. So let me mention that we're also using CERAMENT in 2-stage exchange procedures. So I brought you also to one case for a 2-stage exchange. That means this is a typical case for a 2-stage. You can see it here on the left side, a lot of surgeries in before hip replacement of the left hip, explantation, reimplantation, fracture, also some different pathogens.

So the patient was referred to our unit. We did an explantation and [indiscernible] procedure, like you can see here on the right X-ray, you see no implant inside. So after 6 weeks, we go and made a reimplantation in our unit, and we decided to use CERAMENT mixed with some allografts for the defects. There were some defects in the bone around the acetabulum, also around the femur. So this is why we use CERAMENT also in the 2 stage in the reimplantation procedure in this case.

Until so far, the patient is good. And I wanted to mention that we also use CERAMENT for prophylactic use. That means we have patients which are like at high risk, patients after rerevision, patients with some comorbidities. And this was also the case in this lady. You see it here, she got a nail after a fracture on the left hip. And after a few years, she developed an osteoarthritis. You see it on the left side, she suffered from pain and was not able to walk probably.

So what we did, we removed the implant. And in the same session, we cut the neck. We removed the head, we cleaned the acetabulum and we implanted a primary hip arthroplasty like it's shown here on the right side. And because she was very old, she had a surgery before, she had some comorbidities, we decided to protect the implant with local antibiotics to do it like in a prophylactic way to save and to hope that the implant will be safe for the future.

So we used it in single stage, 2 stage and also here in prophylactic patients. So let's go to my take-home message. I would like to say that the 2-stage is currently the gold standard. The 2-stage is the gold standard, but the single stage is getting more popular. We're getting more brave worldwide, and so more and more surgeons doing single-stage in PGI cases. For the single-stage revision procedure, we need a critical patient election. This is mandatory.

I showed you our algorithm for these patients. CERAMENT G is in our department, firmly established in the treatment protocol as a local antibiotic eluting bone graft substitute for defect augmentation in the PGI treatment. The CERAMENT G is utilized according to a standard protocol. So we do a debridement, bone preparation and then we applicate in defects and around the hardware in the acetabulum in the femur and also around the knee.

The CeraHip study showed good functional and radiographic results. And we also could use it prophylactically in high-risk revision cases like I showed you before. So this is my team. I always say thanks to my team, and thanks you for the attention.

Fantastic. Thank you. Thank you, Sebastian, for this great presentation. And I think I'm not sure if you could see the audience, but what was really appreciated with the videos, I think. And I saw some smiles when we were hammering in the prosthesis. I think this is one of the highlights of each implantation procedure.

So all of you are invited to come to my surgery room if you want to see it live. No problem.

Sebastian, we have some time for questions. You just can hear my voice, so I would repeat the questions. And I would ask the audience for questions, but please formulate them short so that I'm able to repeat the questions. So no numbered questions like 1, 2, 3, 4. Okay. Let's start with Christopher.

Would you say that CERAMENT is as beneficial in the 2-stage procedure as the single-stage procedure? Or is it mainly in single stage that this is useful...

Thank you. So no, from my point of view, if the indication, if you need local bone graft substitutes, if you need local antibiotics with a high concentration, if you need a substitute for defect management, for death space management, it's also a good idea to use it in a 2 stage. The CeraHip study was about single stage, but we also do it now in some cases, if the indication is right in 2-stage cases as well, yes.

Great. Great answer. And it's fantastic, of course, when you use the microphone, then I don't have to repeat the question, though that was a mistake on my side. So Stan, the next question?

Yes. So Dr. Meller, approximately how many sort of wise or percent of your overall procedures, do you use CERAMENT G today? And where do you think that, that number should be 5 years from now or...

So in the moment, we use CERAMENT G in all our single-stage hip procedures. Why? Because we had these good results like I showed you in the CeraHip study. So we have a good working system, so never change a winning team. So this is why we use CERAMENT G in these single-stage exchanges.

We will look up how our results will be in 2-stage and also in prophylactic patients. But I can imagine that if it works and if the results getting also good, we can go and use it also there as a maybe standard product if you have defects, if you need a high concentration of local antibiotics.

My second question would be, would it make sense to use it prophylactically in primary hip procedures?

So the question is, if there is some space for the CERAMENT. Normally, you have -- there are no bone defects. There is not much dead space, so you don't use it. But some primary cases are difficult. In some primary cases, you have osteolysis, you have defects. And there, it could make absolutely sense, makes sense to use it in these cases, yes.

Yes, that's a great answer, and it really depends on the -- if there are bone void, CERAMENT is, as you, of course, know, bone void filler. So if there are bone defects to fill, then it makes sense. But sometimes there are no bone void, so then the application is tricky. Great answers. I think we have time for one more question, if there is interest. No further questions. So Sebastian, once again, thank you so much for presenting from Berlin, all your experience from the Charité.

Thank you. Have a nice day. Bye. Good luck.

Thank you. And now it's an honor for me to introduce Paul Matuszewski, Dr. Paul Matuszewski, Associate Professor at the University of Kentucky, presenting on trauma. I come down. And next place for you.

All right. Well, it's a privilege to be here to talk to you guys today and all the way coming from the United States and certainly, good to share our perspective. My job that I wanted to impart to you all today was essentially to get a little insight into how we use it and how it's been helpful for us, but also understand really what the burden is. I think that you can talk about market share and things like that, but I think it's really important to understand from a patient's perspective and a worldwide perspective, how big of a problem infection is for us.

So the socioeconomic effect in the treatment of fracture-related infection is quite high. And some of the prior speakers talked about this, the rate of infection has largely been unchanged. It's anywhere between 1% to 30% in patients. And why is that? Well, it turns out that we're getting better at taking care of patients. So it used to be that patients would have traumas and they would die. But with advances in automobile safety and also some of our trauma care, we're able to keep these patients alive. So when these patients survive their injury, then they become the broken man, so to speak.

And that's where I come into play. And so as these patients survive more, we have a higher rate of complex injuries. When you have complex injuries, you have a higher rate of infection. So when you look at it from a worldwide perspective, the burden is huge. So each year, there's about 178 million new fractures.

And that corresponds to about 1.8 million fracture-related infections, which is quite a bit of infections every year. So treatment for infection is expensive, right? So it could be anywhere from up to 6.5x more expensive than it would be for the original cost of fracture care. And an older study published, it said about $108,000 per case, but it's likely more. And a lot of that cost comes from staying in the hospital. These patients get admitted with their problem and they stay in the hospital and they there for several days and often multiple times.

And that's followed by the cost of the implants and the pharmaceuticals. And as these patients become more sick, older, so on and so forth, that expense increases. So when you think about that worldwide, extrapolating those numbers, if you're spending about USD 100,000 per infection and you have $1.8 million, you're talking about upwards of $200 billion a year spent on taking care of infection. And then when you look at it as a society, that number is probably a little bit lower than what we really expect because the cost is tremendous. In the United States, you have about a 45% increased odds of requiring some type of governmental supplemental financial support, meaning patients are in the disability and receiving benefits from the government. So -- but what about the actual individual?

I just talked about the numbers to society. Well, the cost is tremendous. And you have to think about it and look at it from the perspective of how good we are at taking care of infection. Well, it turns out that for infections, we're about 60% to 70% successful for the early infections. And when someone has a fracture, they get the surgery, they wind up with an infection, we can treat them with a debridement, washing things out, retaining what they have and they get antibiotics. And that's about a 6-week time line, give or take. But if you have a later infection where the infection is set more into bone, that's when we talk about removing implants and debridement, cleaning things up, giving antibiotics and returning to the operating room potentially for another stage, not dissimilar to the PGI literature. Similar success rate, but now the time line has increased. So now we're talking about 3 months. So these time lines are really only if it's successful on the first try. So that's historical data. So we've looked at this at my institution, and I have to say as an egotistical surgeon, this is prior to my tenure. So I don't know how much better it is now, but only 43% of patients were successfully treated with 2 stages. 29%, 3 stages, 27%, 4 more stages.

And that's with an overall success rate, including those stages of about 60% and with 32% of having recurrent infections. And with those recurrences happening between 8 and 9 months. with multiple complications, patients receiving amputations and complications associated with the IV antibiotics, delayed wound healing and things like that. So getting back to the patient, I love this picture. This is a perioperative care pathway from our preoperative unit at my hospital. It shows how straight line everything is in a hospital. But we talk about primarily the diagnosis, and we talk about eradication. But there's a lot going on during that time. I just told you that some of those time lines are 6 weeks 3 months, 6 months, 9 months, a long time goes by.

Think about yourself, you were out of work for that amount of time, what would have happened? So upon first diagnosis, patients are frustrated. It's like having they've heard cancer. We heard that earlier, but then they're out of work. They can't go to work. Maybe they have some benefits from the government, maybe they do, maybe they don't. They have pain. They have divorce happens during that time. They have problems in their family. They lose their job, and they develop chronic pain and all sorts of things happen before the eradication. So the effect is tremendous on these patients. And they can be devastating.

Patients have problems with the mobility, they get amputations. They have complications from antibiotics like we talked about. They lose function. They don't get back to where they were. And some of them go down the path of substance abuse disorder where they're addicted to certain substances. And the emotional and mental impact is tremendous, anxiety, sleep disturbance, pain, concentration problems, depression, even suicide is associated with this. So the long-term impact, though, is even worse. So once that eradication occurs, it's still -- those problems still exist. They get past the infection, they move on.

They're not in the hospital anymore, but they have decreased quality of life and the psychological burden persists even beyond 4 years. And as that time increases, those themes they worsen. The more time for longer treatment, the more complications, the more problems, the higher psychological burden and so on and so forth. So where does that leave us? Well, the fractures are increasing and patients are becoming more complex and these complications and infections are increasing in prevalence, but not necessarily incidents.

So more and more patients, even though we're getting better at taking care of these patients. So how do we do better? And what have we learned, at least in the trauma space? Well, we can actually take some of the data from the joint literature folks because they've shown in revisions that there are certain things that we can do. In the joint arthroplasty space, they have moved, at least in the United States, more towards outpatient procedures.

So patients are no longer staying in the hospital for 3 or 4 days. They're staying maybe 1 day or even less than a day, and they're going home. And guess what, patients do better. They have less complications, and they just overall mentally feel better. And then when we look at infection revisions, my colleague talked about this a little bit. But when you take a single versus a dual-stage procedure, it's a big difference for a patient. I just told you about all that time, right? So you have -- you go to the office and you get diagnosed and they said, okay, we're going to take out all of your implants and then we're going to come back 6 weeks later, 3 months later.

Think about how you feel while you're sitting there waiting to find out to get your next surgery. There's a lot of anxiety associated with that, a lot of problems. So when you change that to a single stage, the mental impact is tremendous and patients feel so much better. So if we take that to the FRI, the fracture-related infection side of things, we can easily -- if we decrease the number of procedures, decrease hospitalization and stay and also the length of stay, logically, we think that we have the same effect. So can we do it?

Well, I think we're working our way towards it. And I think that some of the evidence that was presented earlier helps sort of frame this and give this context for us. It all has to do with recent improvements that we're taking advantage of and combining those techniques. So number one, local antibiotics. Local antibiotics are a huge thing in the treatment of infections, right? So historically, IV antibiotics, we give them to patients.

They get it via an IV, they go home with this. Every day, someone delivers a bag of antibiotics to their house, and they have to administer and sit there for 30 minutes. Well, the problem with IV antibiotics is you can only have a small dose that's in your system because if you get a higher dose, it will kill you or you have severe complications. So we can only give so many antibiotics, whereas if you flip the script and you give it locally, you can give orders of magnitude increased concentration.

So instead of 10 units, you can give 10,000 units, so to speak, which is sort of like a battlefield approach to things if you think of an overwhelming force in the war, if you hit everyone with everything that you've got as opposed to a little bit of a time, you tend to be more successful, right?

We look at some of the gorilla warfare and strategies that have been used in the past and how it just takes a long time for these conflicts to go on and on. If you have an overwhelming force, things tend to deescalate pretty quickly. So what is the clinical evidence? So there's actually a lot of evidence that's available, right? So you can use it in both prevention and treatment.

We talked -- some of the prior speakers have talked about that. So in the prevention space, there's been a couple of trials in this looking at vancomycin and tobramycin, which is another aminoglycoside not dissimilar to gentamicin and showed decreased infection rates when we use this in the initial treatment. So for treatment, and we've talked about this before, there's multiple studies also that have shown that if you use local antibiotics, it benefits the patient, okay? What about the decreased reliance on IV antibiotics? I talked about this a little bit.

Well, IV antibiotics are problematic because there's a high cost of delivery, it's inconvenient, and there's lots of complications. And one of the prior speakers talked about some of the findings of the SOLARIO trial, which I'll touch on. But if you have an indwelling PICC line or an IV line in your arm for 3 months or 6 weeks, there's a high probability you wind up with an infection that usually is a bloodstream infection, which is a big problem for patients.

And that can create all sorts of systemic issues and can even cause sepsis and death. So it's a really serious thing. And when you treat patients with IV antibiotics because of that, the guidelines aren't clear. There's a lot of disagreement. Should it be for 6 weeks? Should it be for 12 weeks. So there's confusion surrounding that. So oral antibiotics are very attractive alternative, right, because it's easy to give. It's a pill. It's lower cost. You don't have the complications. And actually, there's plenty of evidence now. So in the U.S., there was the POvIV trial, which demonstrated that oral antibiotics are noninferior to IV antibiotics in the treatment of fracture-related infection.

And the AVeVA trial, which was mentioned earlier, shows a non-inferior result, meaning it's as good -- what about single-stage treatment? Well, historically, I talked about the dual -- the single or the multistage treatment, but a more modern version of this capitalizes on this, right? So if you use local antibiotics at the site of infection, you can actually be better than if you don't use it. So now when we use those local antibiotics, we can take advantage of that in a single-stage scenario because we don't have to rely on those systemic antibiotics much.

So the biggest thing is really a combination of all 3. And with sort of our powers combined. I chose this graphic here because this was popular when I was a child, and I read it was popular in Europe, too. But I don't know if you guys recognize the cartoon Captain planet, but it's all about combining the forces together to create this guy captain planet. And so the SOLARIO trial is a lot like that. So you combine the local antibiotic therapy plus the short course of antibiotics, and we showed that -- they showed that it was noninferior to a longer course, which you heard about that with a decreased rate of adverse events. So if we combine these improvements, it changes the landscape dramatically, right? Local antibiotics, oral antibiotics, single-stage therapy treatments. changes that paradigm completely.

And CERAMENT G plays a tremendous role in this because in the United States, that's the only thing that's available and approved to be a bone void filler that's combined with antibiotics. So that means that you get the local antibiotic delivery to help improve the eradication of infection. And then you get the bone graft substitute to fill the hole, right? So that's the single-stage part. So before we'd have to go in, take everything out and there's a big hole, we put something temporary in and then we come back later once the infection is eradicated and we put something back in.

So CERAMENT G allows us to do both at the same time. So here's a clinical example for you that I think can be illustrative to kind of make these points. So this is a 41-year-old lady who came to my clinic, very active lady. She had a prior trauma.

She was treated by another surgeon for ankle fracture. And she was a long ways out actually, and she started to develop infection in her way. And this is what our x-rays look like. And if you look at our X-rays, you can see screws at the bottom of our ankle. And if you look really [indiscernible] there, there's something that's in there. That's actually a drill bit from the surgery, which happens. It does happen.

And to get that drill bit out in the middle of a surgery is kind of tough. There's a significant morbidity associated with that. So a lot of times, we leave that in there. And so if you look really closely, you can see at the tip of that drill bit, there's a little bit of fuzzy stuff there. And what that fuzzy stuff represents is some type of reaction to something. most likely infection. So with this patient, I've got 2 choices, right?

So the traditional treatment is I can bring the patient into the operating room, admit them to the hospital, do my surgery, take everything out, give the antibiotics, send them home and then bring them back after we've confirmed that the infection is gone for a potential second procedure where we might bone graft because I just told you that in order to get that drill bit out, I have to make a hole in the bone.

So I have to create a hole. So how do I fill that? We'll have to go back and bone graft that or hope that it's small enough that it doesn't matter or maybe take advantage of some of these techniques and use more of a modern strategy where I can do everything in one shot. So bring the patient to the operating room, take it out and go ahead and put the local antibiotics with the CERAMENT G in it to fill the bone at the same time, discharge them with oral antibiotics, maybe IV antibiotics and then follow them as an outpatient and let's see what happens.

So I chose #2 because that was going to be better for this patient. This patient is a mother of 3. She's got to go home. She's got to take care of her children. She can't be in the hospital. There's no one else there to take care of her kids. So we did her outpatient surgery day 1. We did what we said we were going to do. We removed the foreign body. We put our biphasic calcium sulfate/hydroxyapatite, CERAMENT G.

And then we took cultures, and we discharged them home on the same day. We gave them 2 weeks -- we gave her 2 weeks of oral antibiotics. It turned out she did have infection or cultures were positive, and we referred her to ID for a referral. Now mind you, if this was the traditional way, those positive cultures that I just talked about on post-op day 3, patients still would have been in the hospital waiting for those things to percolate and then they would get their IV line, which would take another day and then they could be discharged home and then all of the stuff that's associated with that.

So she actually wound up not getting any systemic antibiotics because she had complete resolution. So she didn't need any further treatment. So this is definitely a success, minimal disruption to the patient's life. She's back to work quickly, no additional visits or procedures. And how does the hospital look at this? And is there any evidence for improvement? Well, we actually did look at this a while ago where we looked at the health care economics of this, and it all has to do with time.

So the more time you spent away from work and the more time that you have to spend on procedures, the worse it gets. So when you change to a single-stage procedure, you have a tremendous savings. This is probably a lower estimate of about 30,000 or so with a large part of that being the surgery. And there's also an improvement in life years and quality adjusted life years as well. So the bottom line, it's good for the patients, and it's good for the payer, the health care system.

We talked about that. But what about the hospital? Well, actually, the hospital is a little bit more complicated. In the U.S., if you have a complication, the hospital still gets paid for it. So more procedures, more complications, more revenue, right? Because things aren't really tied to performance. Now that might be evolving over time, but currently, that's how it is, at least in the infection management space.

So the hospitals look at these things more on a per case by basis, at least they did in my hospital. And what we found is that when you look at the cost of care associated with infections, it's usually a loss for hospitals. They don't want to treat infections. That's why a lot of the centers in the United States that are the academic centers that take care of these complicated patients, they're referred from other outside hospitals to take care of them. Why? Because the government supplements their overall revenue cycle to keep them alive.

So that's how it function in the United States. So when we looked at our cases, specifically CERAMENT G, shortly after bringing it -- it was brought on to the market and I got approval in my hospital, they said, you're losing money. It losing about $4,000 a case from these patients. And I said, "Well, wait a second, what if we flip this on the side?" And so when we flipped it on the side and we took this from an outpatient perspective, all those things I talked about, it turns out that we actually were making a profit.

Well, the health care administrators love that. So my health care administrators are split. We have some doctors and then we have some folks which are more into the finance. And the doctors say, this is good for patients, so you should be doing it. But then the administrators on the other side and say, we like that. But if you could do it as an outpatient, that would be better, which it turns out it's better for patients anyway.

So it's not just the money, though. It's about our ability to take care of these patients a little bit more creatively than we were able to before because not every patient is the same. Not every patient can be outside of work. And every patient is a little bit different. I talked about that mother and how she was a little bit challenging to treat because she couldn't get away from home.

But there's other things that are involved with this and patients tend to avoid traditional care. They are afraid to go to the doctor because they don't want to have to deal with what's going on, which leads to even more problems before. So consider this case. So I had a 48-year-old female. She had a bicondylar tibial plateau fracture. That's a very traumatic injury to the knee, and she had an implant infection. She had treatment of the infection. She had removal of the implants. Guess what, it wasn't successful. She came back and she -- after about 6 months after the antibiotics was stopped and she had a recurrence of her infection.

And she had drainage. So she had a hole in her leg and she's draining here. And this is a picture of her X-rays on the right, where you can see there's a hole. It's pretty obvious that that's there. And then on the left, that's an MRI sample, which shows a white spot. The white spot represents fluid, in this case, that represents infection. She had an infection in the middle of the bone. But this patient is a sick patient. She's not healthy. She's someone who has multiple medical comorbidities.

And the last time that she had IV antibiotics as an outpatient, it was poorly tolerated. She had severe nausea, she had diarrhea, she had kidney damage. So the IV antibiotics caused damage to her kidneys. She had a really rough growth. So she said, I'm not doing that again. I don't want to be stuck in the hospital for 3 months or 6 weeks because she went up being stuck in the hospital for a while for that.

And she wasn't interested in following up with our infectious disease colleagues. She didn't like them, but she likes me. So what do I do? Do I refuse her the surgery and say, if you don't do it my way, it's a highway. Or do we take more of an authoritarian strategy and say, no, you have to have this, but will that patient comply? Or will there be an issue?

So with these new techniques and these ideas and concepts and things that are evolving, we could take advantage of these findings. And I can offer her outpatient surgery with local antibiotics and debridement and oral antibiotics. She was okay with that. So this is her post -- this is her intraoperative photo, which shows the CERAMENT G that's been placed in the area of that hole that I showed earlier.

And she had complete resolution of her symptoms. She did great. This is 2 months postop, and you can see that the hole is getting smaller and smaller by 5 months. So this was a success story. She was very happy and able to get around with her life. With this nice lady, 49-year-old female, psychiatric, schizophrenic, okay?

This is someone who's in and out of the hospital, disappears, doesn't come back. You see them 1 year and they might disappear for 2 or they might have all sorts of issues and just compliance is an issue. They cannot go to the hospital. They cannot make their appointments. This is a standard problem that I see almost every single day, okay? She had a prior trauma. She had external pinsites on her arm from an external fixer and she had a draining wound. She's had this draining wound for years.

And if you look on the x-rays and the MRIs, you can see in the red circles, you can see where it almost looks like something has exploded out of the bone. And what that represents is the infection, and you can see it confirmed on MRI. There's that white spot that I was talking about before. So a chronic, localized infection, difficult social situation. So what do we do? We do exactly what I talked about, local treatment, minimally invasive, oral antibiotics and referral for outpatient antibiotics.

So that's what we did. So here we are, this is a good example. I'm very proud of this picture. Someone took this with the phone and it looks like it was part of a CERAMENT G brochure. So this is a small incision right here, and there's a cannula, which you might have seen in the presentations in the hallway there with me injecting the local antibiotics. So decision right here.

And what that looks like on an X-ray is just that. So that's the humorous, that's the top part of the bone and her infection is on the low part of the bone. So that wire is introduced, and we use that wire to guide to put a hole in the bone to sort of enter the middle of the bone. And then we use cannulas to get all the way down to the side of the problem. So that's a chisel that's used to get down to the side of the problem. And then once we clean that out and wash it out and core it out, that's the [indiscernible] on X-ray. And you can see there's a wire over here, which has directed me where to go, and I slide that down into the bone. And then at this point, this is where I am with it.

And then we put the antibiotics in its path. So this area here, where you can see it's hard to see actually on the projection here. But if you look pretty closely, there's a shadow. And that shadow represents the CERAMENT G. So I'm able to do that from all the way up here for something that's all the way down here to avoid flaying the arm open. So historically, what we would do is we would open this whole arm open, huge surgical approach, and I can do that through a pretty limited incision. So that's a big benefit for patients.

So patient grew out MRSA, which is a tough bacteria. They were discharged on the same day, and they followed up 1 to 2 weeks later. Infectious disease prescribed an antibiotic. It happens to be a pretty expensive antibiotic. And guess what? She never got it. So that's not ideal, but pretty common, especially for me. But the local antibiotics, I can take a deep breath because the patient is still getting treatment and they're still being compliant, 100%. I don't have to worry about it. She disappears, that's okay. She's taking care of.

So here she is at 6 months. Mind you, I don't have any x-rays before that because that's when she came back 6 months later. We only see patients at 2 weeks, 6 weeks, 3 months, 6 months. She came back at 6 months. Her [indiscernible] removed somewhere else, someone else took them out. I don't know who, but she did great.

So conclusion, the number of infections, they're increasing. And the complications in these scenarios and the complications of the patients continue to rise. And the patients deserve better. We're not that good. I just told you that when it works, it works 60% of the time. But guess what, it doesn't always work on the first try. So outpatient pathways can help us do that and single-stage procedures really improve the quality of care and the cost of care. Thank you.

Wonderful. It's really impressive to see these tough cases and all the complications we may be sometimes to think about or how difficult it is sometimes to treat -- to deal with the patients, not just to treat them.

Are there questions from the audience. Yes. Microphone is coming.

Thank you for that. Very good presentation. I have a question if you could talk a little bit about the process of deciding the risk of a patient potentially developing an infection. How clear is this typically to you after this assessment?

So what's the question being that what -- how do I decide that someone is high risk? Well, part of that is already set in stone for the patient. So some of these injuries have a pretty high risk of infection. So when you look at open fractures, for instance, the infection risk is quite high. If you look at the risk of what we call periarticular injuries, meaning injuries around the joints, the knee joint and the ankle joints and the foot joints, the risk is anywhere between 12% and 25%.

So these patients are very high risk, and they -- those were the targets of some of those trials that I spoke about earlier to try and help prevent. So we try to identify these patients. But what's interesting about that is that when you look at that risk, we look at the high-risk injuries, but the question becomes is really who's to gain? Is it the high-risk patients or the low-risk patients?

Because the patients that are high risk, they might actually wind up getting infections anyway from other reasons, whereas sort of even the patients that are low risk, if you have a 1% infection risk and you can take that to 0.5%, that's actually a tremendous amount because the number of those patients is much greater than the higher-risk patients. So I guess to reframe that, I think it doesn't matter really because both groups of patients benefit from some type of preventative treatment.

Good. And then I had a question before, which I will try again now with you here. So I imagine you're in a very stressful environment at work. So when it comes to the factor -- so the ability for you to plan procedures is not typically there, I guess, when it's acute procedures. So do you -- I typically get the question, so if that's a decisive -- or if that's a factor for the uptake of CERAMENT G use compared to procedures that are easily planned and you can plan for, for weeks ahead?

Well, we see both versions of that in the acute setting and then also in the reconstructive setting. So my practice is taking care of acute trauma, but also I have a little bit of a niche where I take care of some of these patients that have had surgeries and infections treated many times over. So to your point, does it help having the time to plan? Absolutely. But I think that this is something that's on the shelf for us that we can grab whenever we need it.

And sometimes these patients come in right in the morning, and then we have to make a decision minutes later. In my institution, every -- we each have a day that we're responsible for. So whatever comes in the night before, we don't know what it is. It's going to be a surprise, and that's what we have to take care of. So we don't have a lot of time to think about that. But certainly, this is a great tool to use, and we do use it on the fly. We don't get approval and then wait. We have to treat them right away. And it's perfectly it's -- it's just the same.

And then if a patient treated with CERAMENT G returns with an infection, what would you believe had gone wrong?

Well, nothing is perfect. And these patients are complicated, and it depends on the clinical scenario. And sometimes that can happen. Sometimes it could be as a result of an error on the surgeon's behalf or an inadequate debridement. We try to put it on ourselves. But sometimes these things are more complicated. I had a patient that we had treated for infection and had used CERAMENT G and it failed.

But they were better off this time around than the last time. So the first time I used CERAMENT G as part of a larger, much bigger procedure where they had extraction of implants and all sorts of things done and then an antibiotic-coated implant and the CERAMENT G was used to augment things. The patient came back with a small area of concern of infection. Now the big infection had been taken care of. So I just took care of this patient right before I came here, actually. And so we're able to go in and target it. That's one of the nice things about is you can take a bigger problem, make it less complex and then make -- turn into a small problem. We can address that and still use it again.

Thank you. Great questions. Here's a question from Christopher. We just need the microphone. But yes, pass it on. That's great. It saves time.

Considering your discussion here about the cost benefit with the product, I don't know if you were here earlier when there were a discussion about the new reimbursement proposal from CMS and that CERAMENT G use would automatically maybe trigger a higher reimbursement. Is that something you see would drive the use of CERAMENT G or in any way?

Absolutely. I think that one of the barriers, and I think the others touched on this to CERAMENT G as it entered the United States is the cost. So any time that we add something that's new, there's a significant cost associated with it, and it's not cheap. So when -- I just told you that on that [indiscernible] and when we looked at our value that we had a small negative margin when you talk about the fracture periods -- infection period is $50,000, $100,000.

So we lost $4,000, Well, those are the kind of margins that we're dealing with. And these conversations do occur. So the bottom line is that it's a huge burden because the hospitals are looking at it and they say, well, does it work. And they say because we're not going to spend the extra money to get it in. So when you add something like that for the DRG and supporting that, it's a big benefit because now in those cases, even in the inpatient cases, where you see reimbursement goes up just a little bit, that's enough actually to turn that margin positive for the hospital.

So when the hospital looks at it, they say, okay, I know it's better for the patients, and it's actually allowing us to make money. So it's a big thing for hospitals. And that was a big burden for me. That slide that I shared with you was an analysis after we got the CERAMENT G approved. And when I went to my Board to talk to get approval, we -- I said, okay, they said, how many times are you going to use this? And I said, "Oh, 6 or 10." I don't know. And about 6 months later, they said, okay, well, you used it like 40 times. That's a lot different than what you expected to use it. Well, there are other people using it, too.

And I said, well, that just happens to be the way it is. And so they looked at the cost. And they said, "Wow, this is costing a lot." And so that board consists of administrators and doctors. And the doctors say, "Hey, this still works and this works well." So we're going to give you approval, but you need to be judicious about using it. Well, the administrators say, yes, but why don't you use it as an outpatient preferably to try and make that work for you.

And that was a big thing. And this only adds to it. And at the time, when I first started doing it, there was a -- and you have to correct me on the terminology, there was a new technology code where the hospitals got extra reimbursement for the first 18 months or 12 months.

NTAP, it was called...

And when they said, "Oh, wait, that's something that exists." And I said, yes. And they look back and they said, "Oh, yes, we actually did get that. And then those numbers were even more positive. So these things are huge because hospitals are going to be very resistant to approving something like CERAMENT G without that. And now they have that, that's a big deal. It's wonderful. It opens up the door because surgeons are waiting for it, and that's a common conversation that we have. When I teach other people how to use this at all these conferences and they say, well, I got to get approval. This is how you get it. And then it just opens up the usage.

That was a great answer and great to hear the feedback from the administrators. And you already mentioned a bit the feedback from colleagues and surgeons, ID physicians. Do you hear any reactions there on your single-stage approach with CERAMENT G? What are they saying?

Well, I think that one of the things in the conversations and the questions were coming up that I think that everybody is forgetting to talk about is that physicians are very stubborn, especially surgeons. So getting change is tough. The things that I'm talking about, my colleagues, some of the elders that have more gray hair than me, they're very resistant to change. And it takes a long time. It's like trying to move an aircraft carrier.

It doesn't move very quickly. So -- and the same thing goes for the infectious disease collegues. They'll see one study, and they'll say, "Oh, I saw that, but I don't believe it." Or they go, "Oh, well, maybe, but it's hard to go against dogma that's been around for decades." When you look at the standard of treatment was 6 weeks of IV antibiotics followed by a consolidation phase of oral antibiotics. That's something that's sort of been beaten down over the course of many years.

And to go beyond that takes a little bit of sort of really [ wealth ] of confidence to do that. And I think that some of those slides that I shared about those studies, that's what that gives me that, to do it responsibly. And when I first started doing this in my practice, I used this in conjunction with the most difficult patients because they had no other choice. So I said, we've got to take advantage of what we know and how can we do this.

So I'm going to use it for the difficult patients. Otherwise, they're not going to get anything. And when you look at that, then the infectious disease colleagues say, okay, and I force their hand. So I don't even tell them about the patient now. I take care of them in the operating room and then they follow up with them a couple of weeks later as opposed to before, they'd be admitted to the hospital and now they have complete control over what happens in terms of getting antibiotics and staging it. So I set the stage now for these patients.

Great answer. Thank you so much for answering the questions. Thank you for your great presentation. And I ask now Håkan Johansson, Bonesupport's CFO to the stage for his presentation. And I think it's the -- it contains the final conclusions, right?

Well, that I will do also together with Torbjorn later on.

Exactly.

So thank you. And it feels like a bit of a challenge after 2 such exciting presentations, and we're starting to be quite late in the afternoon, but bear with me. I've been engaged with Bonesupport for more than 7 years, and I promise [indiscernible] new slides today.

And my ambition is really to use history, use the last few years to hopefully be able to explore more clearly the underlying trend. So we have had quite volatile periods in terms of currency, for instance, et cetera. So all the numbers I will be sharing today is based on constant exchange rates, whether it's on sales or whether we talk EBIT margins, et cetera, to give a better view of the underlying performance.

And again, we've been talking a lot about sales and sales and revenue growth remains a high priority on my side. When I joined back in late 2018, we were really in the starting point of changing some of the focus of the business. We made big changes in the commercial platform in the U.S. We made big investments in our European sales organization. And that was really the starting block of this journey. We have, since 2020 to 2025, delivered a 44% CAGR.

So with the FDA authorization of CERAMENT G in the U.S. back in 2022, launched in October '22, sales also accelerated. And this, as you've seen earlier today with a lot of market potential remaining. Well, that's looking at the total perspective. If we look at U.S. specifically, because again, U.S. remains a very high priority for us. It's a huge market opportunity.

Well, in the U.S., we had a CAGR of 55% during the same period. So now with the commercial strategy and the platform that we created in 2018, already from the start, establishing a good growth momentum and that only preparing for the launch of CERAMENT G later on and help accelerate that market pickup with CERAMENT G as we launched.

And as you can see somehow, the incremental growth is increasing every single year. But in terms of the relative growth in percentage, it's coming down. But again, incremental growth increasing year-by-year. If we continue to focus the numbers because again, in all means, some of the sales of CERAMENT G is really the focus point currently in the U.S.

Well, how does that market penetration go? Well, this is a slide. There's a lot of information on this slide, but this is a slide to show for every single year in the U.S., what are we gaining in terms of new access. And this is based on surgeons' first-time use. How much do we gain by adoption? So the surgeons that were recruited the year before, how much are they extending its usage? And the world is never perfect.

You also lose some business, and that is also disclosed on this slide. And what is really positive, I believe, in this slide is when you look at how access is growing year-by-year as well as adoption, adoption increasing from 6 million to 11 million to 18 million. And as we have been communicated when releasing Q4 last year, Q1 this year, et cetera, we're in a stage where new access and adoption are equally important. And that's why, again, we have been talking so much about the segment-based approach, et cetera, because that's really also a good way to not only drive adoption, but it really helps, but also extend market new access. So that's really U.S.

But also when we talk Europe, Europe is coming shy when compared to U.S. for 2 reasons. While it's a smaller part of sales and growth in percentage is so much smaller than in the U.S. But part of the reason for that is also that we have been doing investments lately in our so-called hybrid markets. We hybrid markets are distributor markets as a revenue model, which means that it's half the price. So how to present that to some, in a way, come beyond that and make numbers comparable. Well, I decided to look at euro sales in units because that changed the perspective somewhat. Euro in total for this period, despite quite a lot of headwinds in '25, shows a CAGR of 17% in total, increased its sales with 2.2x since 2020.

Direct markets, which is a handful, which consists of U.K., Germany, Sweden, Denmark and the Netherlands had a lot of headwinds in U.K., Germany during '25, showed a 13% CAGR. But also very important, if we look at the hybrid markets where we have done a lot of investments during the last few years, starting with Italy and Spain, extending during last year in countries and markets such as Australia, South Africa, Canada, Norway, Austria, et cetera, we see sales accelerating and showing a CAGR of 38%.

Turning to some of the OpEx side of things. Well, as has been said, we are constantly doing commercial investments. This is a slide showing selling expenses, not including commission and fees because they are so directly related to the revenue. This is all the rest, meaning this is people, this is marketing spend, et cetera. And we can see that we continue to invest commercially because we believe that's the right way also to support continued growth.

We have been adding substantial heads, especially in the last few years. So just from '24 to '25, we extended somehow with sales and marketing functions of close to 20 people, both in the U.S., but here also in the -- what we call the [ Eurobooster ], where we extended ambitions in our hybrid markets.

And what to keep in mind is that if we just take the 10 additional heads in Europe, we communicated when doing that investment that it takes 18 months until these people are returning their cost in revenue, and it takes at least 5 years until they reach their peak sales. So these are investments ahead of some of the revenue impact that is coming.

So again, what else? Well, we're not only investing commercially. We are investing our R&D expenses have been accelerating during the last 2 years. And the main reason for that is that we are investing for the future. So if you look at this slide, you see in '24 and '25 colored with the dotted line, the amount that we have spent that is much more forward-looking.

This is the investment we have made in terms of our CERAMENT G submission to the FDA in the U.S. This is our investments entering into spine, new market entries, clinical studies to get into new applications and product development. And we will continue to invest in that pipeline because we also believe that this is contribution to -- good contribution to our future sales growth. And we've been hearing a lot today about all the initiatives we do in terms of our segment-driven strategies and our ambition in spine and revision arthroplasty.

And despite all of those investments, with the strong sales growth that we're reporting, these costs are down to somewhere around 7% and 8% of revenue. So all in all, we see when we step out of all the impact of currency and currency volatility, et cetera, a very solid trajectory when we talk operating results, in this case, looking at operating results, excluding the impact from long-term incentive programs and the operating leverage, which is marked as the gray boxes on this slide, we can see that the operating leverage remains extremely solid and stable, and we see a clear trajectory in terms of yearly improved operating result and operating margins.

And as mentioned a few times, we not only sit on a very scalable business model. We extended production without impacting the P&L. And we can see that the strong operating leverage from the sales growth, we delivered a lot of profit improvements. Investments level low. All R&D expenses are costed and so on and with efficient treatment of working capital despite the fact that we hold extensive safety inventories to ensure flexibility to the market. So we have a very solid cash conversion.

So the cash conversion is part steadily over time, around 70% to that adjusted operating profit. And this gives us headroom. This gives us flexibility, whether it's investing in those clinical studies, investing in the full R&D pipeline, investing commercially or somehow using part of that cash in terms of share buybacks as an optional way to create shareholder value.

So if I sum that up, I believe that just by those limited numbers of shares, we can show that we have a lot of operational performance delivered during the last few years, still with a material untapped market potential being out there. So we've seen in our presentations about the low market share in all of our main segments and the market potential that remains in those segments.

I think that we have proven over the last few years that we have a very scalable business model, not only in terms of operating leverage, but also in terms of the lean balance sheet that we are operating with. And again, not to forget that we have a queue of interesting triggers short to midterm. The SOLARIO study that we've been waiting for since fall 2024, and we have heard from several speakers that we believe that this is for the longer term, something that will bring value to our contacts with some surgeons, hospitals and the market.

Our CERAMENT G submission. So as always with FDA, it's hard to say when, but we have a strong belief that with the experience we have in Europe of using CERAMENT G, we will get there, and we will be able to launch CERAMENT G in the U.S. Geographic expansion. So we invested in hybrid markets in the last few years. We made inroads in India early this year. We are working with the authorities in Japan to open up that market.

And we will continue to open up new markets outside the U.S. And again, also, as we've shared today, our plans to get CERAMENT G or V the [ antibiotic-eluting ] properties as into spine in mid- to long term. So with that, Torbjorn, I'll leave it to you to round off the meeting.

Thank you, Håkan. You can actually feel free to stay on the stage. We're going to do Q&A later. I promise, last slide for the day. Concluding remarks. I said earlier what I thought you should bring home as take-home message. The way that I would summarize the day is our strategy is proven. We're moving into the next evolution that relates to becoming more segment-specific because customers in the different segments are different, different needs. We have to cater to that.

We have upward adjusted our U.S. market opportunity. again, underlining the growth potential that we see with CERAMENT in the U.S. We continue to invest in evidence. That's one of the core pillars of our strategy with special emphasis on arthroplasty. That study is estimated to cost around SEK 40 million. We believe that we have a role to play in spine with an antibiotic-eluting product for the long term. We're not on label there yet, but we're investing in that space. That study is estimated to cost around SEK 80 million.

And we hope to or aim and have an ambition to have a regulatory approval or regulatory submission no later than 2031. And most important thing, however we run the numbers, you looked at the upgraded numbers, you looked at the market potential. You looked at the pools of conditions that is an inevitability of patients in this space. And you looked at the unmet need. We're very, very early on our growth journey. We're just getting started. So even though it's fantastic numbers that you guys have delivered, I'm absolutely convinced that the best days of Bonesupport are ahead of us and not behind us.

So with that, I thank you all for taking the time to be here and happy to take any final questions.

Thank you very much. So do we have any final questions to wrap this up? Yes, in front here.

It was on the adoption versus new access [indiscernible], that was really helpful. I wanted to see your thoughts of how that would look like in the future. Could you see maybe adoption sort of start to scale ahead? And then maybe to follow up on that, if you could focus on maybe sort of the ASC channel dynamics, sort of how are you growing there versus maybe other settings, that would be really helpful.

Okay. So the way that we split these questions is that I take the easy ones and Håkan takes the difficult ones. So Håkan, you take the first one, and I'll talk about ASCs.

Again, I think that's what we believe when we look forward is that new access and adoption will continue to be somewhat equally important. I think that it's also important to say somehow what we stated here is lost sales. Well, in that number, you find surgeons retiring from that certain practice. You find surgeons that is moving from a hospital where we had listings to hospitals where we don't have listing, which is in the longer term, it is not necessarily negative.

So I think that when looking at that slide, it's somehow a first indication of how this looks. I think that's now being still so early on that commercial journey with CERAMENT G, we need more time until we can see some of the firm underlying trend. But I think that now keeping 85% of the business that we had with us into the new year is a good level also if we look at comparables in the U.S.

Good. And on ASC, I think it's a very relevant question, especially if you look at it medium to long term. We are a very, very small player in orthopedics. Honestly, we're like nothing compared to the big guys. The big guys invest a lot in ASCs for the right reasons. There's a lot of patient volume moving in that direction. That's not going to go away. We see that. But where we are in our journey, now our focus is on inpatient, but Dr. Matuszewski has had a really good point on that. It's going to move, and we will, of course, be part of that move. But now we like to keep things simple, straightforward. Inpatient is more than we can handle at this point, but we stay very close to the trends because in a couple of years, it's highly likely that it will look slightly different.

Perfect. And then just a clarification on the sales force. So the ROI that you projected, is that based on historical data you've got? Or is that based on what you expect in the future?

I would say both. So that's the learning we've done with the investments they've done over the years. It's -- and it's quite steadily around that. It takes 18 months to somewhat recover the cost in terms of revenue. And I think that what we saw in hybrid markets somehow very much corresponds to that.

That's U.S. and...

That's Europe because that's really where we have a direct sales force. So in the U.S., we don't have the same front-end costs.

I don't know if this is a good or bad last question, probably not. But I want to back things up a bit to just now you've showed us your plan, how hard was it to prioritize this? I mean you've had areas that you could go into where you could put money into -- you have gone into Japan. Why this? And how hard was it?

I would say saying no to things is the most important task of the CEO and the CFO. We have to do it all the time. So prioritization is always very hard, especially when it comes to CERAMENT as a technology because it's so versatile. There are hundreds and hundreds of things that we could do with CERAMENT, combine it with different things. There are a lot of ideas. Some of them really good, quite a few pretty bad when it comes to inorganic activities.

So there's a lot of things that pull our attention all the time. But at the same time, when we compare all of those alternatives compared with foot and ankle trauma arthroplasty, which is here and now. It's so, I call it, easy. It always comes back to when we look at it rationally, we look at the numbers, we have to continue to focus here until we start seeing other data points that indicate that we need to look outside.

Spine is actually an area where we think -- we don't know for a fact, but we think that there's a lot of data points indicating that this could be another important leg for Bonesupport in the future. That is why we're trying to get into that segment. So yes, it's hard, but it's part of the job that we do. And especially with the P&L that we have, with the asset-light model, with the balance sheet, it takes a lot to improve on what we already do today.

So that's why we're pretty disciplined when it comes to inorganic activities and also moving into other segments. I think this is a very solid and logical and rational plan that we have.

Great. Thank you for a good day.

Thank you very much. Thank you, guys.

We're here for another 45 minutes.

45 minutes. Happy to take any questions either here or outside. If you want to have a couple of more demonstrations, happy to do that.

Welcome to BONESUPPORT Q1 2026. [Operator Instructions]

Now I will hand the conference over to CEO, Torbjorn Skold; and CFO, Hakan Johansson. Please go ahead.

Thank you, operator. Welcome, everyone, to BONESUPPORT's Q1 2026 Results Call. My name is Torbjorn Skold, CEO of BONESUPPORT. With me here today is our CFO, Hakan Johansson. And together, we will use the next 25 minutes to guide you through the Q1 presentation and then open the line for questions.

Before starting the presentation, I would like to draw your attention to the disclaimers covering any forward-looking statements we will make today.

So let's look at the financial and operational highlights of the quarter. Q1 was another strong quarter with solid execution across the business. Net sales came in at SEK 324 million, corresponding to a growth at constant exchange rates of 31% versus Q1 2025. Reported growth was 14%, showing that there was a continued strong currency impact on our figures for the quarter. Our adjusted operating result, excluding incentive program effects, was SEK 85 million, corresponding to an adjusted operating margin of 26%. Reported operating result was SEK 72 million. We saw another quarter of solid cash generation with operating cash flows reaching SEK 75 million, resulting in a cash position of SEK 455 million at quarter end. We continue to see strong traction for CERAMENT G in the U.S. with sales reaching SEK 222 million for the quarter compared with SEK 178 million in Q1 2025.

The sequential CERAMENT G growth quarter-over-quarter of USD 2.6 million was the strongest ever. In Europe and Rest of the World, we saw strong momentum across all markets with a growth of 16% at constant exchange rates compared to a very strong Q1 2025. Notable was also that our first CERAMENT sales in India were achieved during the quarter. During the quarter, the regulatory process for CERAMENT V progressed according to plan within the framework of the De Novo process. As communicated in early December, the FDA submission for CERAMENT V was transferred from a 510(k) pathway to the De Novo process in close dialogue with the FDA. If granted market authorization, CERAMENT V will constitute an entirely new product category like CERAMENT G did in 2022.

Just as in the review of the De Novo application for CERAMENT G, both CDER, FDA's Center for Drug Evaluation and Research and CDRH, Center for Devices and Radiological Health are involved and the lead review team, which sorts under CDRH remains the same as during the 510(k) process. BONESUPPORT has received questions within the scope of the De Novo process and is working purposefully to address the requested details and clarifications. Responses are to be submitted no later than end of August. We are progressing with the early-stage launch of CERAMENT BVF for spine in the U.S. in line with plan. The introduction in spine is an important step as we continue expanding our portfolio of indications and applications.

Now let's move on to the sales development. Next slide, please. The chart shows total last 12 months reported sales in Swedish krona by quarter since 2019 in stacked bars per region and product category. As you can see, the launch momentum for CERAMENT G in the U.S. is exceptionally strong. Given that we keep bringing new strong clinical studies and opening up new market segments and new indications, a product like CERAMENT G will remain in launch phase for many years to come. However, throughout 2025 and in the first quarter of 2026, we have seen strong influence from the U.S. dollar to Swedish Krona depreciation, which influences the optics of the graph, but not the end market performance, as you will see in Hakan's slides later in the presentation.

Last 12 months growth in Q1 of 22% in the graph corresponds to an even stronger 35% at constant exchange rates. So the quarter-over-quarter slowdown in last 12-month sales is mostly due to strong currency impact. U.S. CERAMENT BVF last 12-month sale was flat year-over-year at constant exchange rates. In total, antibiotic eluting CERAMENT grew with 48% last 12 months in the quarter at constant exchange rates.

Next slide, please. In U.S., sales amounted to SEK 267 million, representing growth of 35% at constant exchange rates. We continue to experience strong growth of CERAMENT G, driven by both increased access through new accounts and new surgeons as well as wider adoption among existing users. We see growth from all 3 prioritized platforms, foot and ankle, trauma and arthroplasty. At the American Academy of Orthopedic Surgeons Congress in March, presentations and discussions confirm the strong clinical interest in the CERAMENT platform and the commercial momentum in the U.S. Dialogues with surgeons and distributors show that CERAMENT G is perceived as a clinically relevant and practically useful solution in a broad range of procedures where there is a need for combined bone healing and effective infection control.

During the quarter, clinical evidence was further strengthened through the publication of positive data for CERAMENT G. In February, the first U.S. clinical pilot study in trauma was published describing surgical technique and treatment results with CERAMENT G. The study conducted at the U.S. Level 1 Trauma Center and published in OTA International provides practical and real-world insights into how CERAMENT G is used in clinical practice in the U.S. Additional support was added in March through the first U.S. clinical case series focused on infection prevention in open fractures. By demonstrating how local antibiotic release can be combined with existing surgical techniques, the study highlights the clinical relevance CERAMENT G has within a segment with a high risk of infection. Despite the limited scope of the studies, they are of great practical importance as they provide concrete support regarding application techniques and expected outcomes for surgeons introducing CERAMENT G into their daily clinical practice.

As part of our ambition to modernize an outdated standard of care in the U.S., we have successfully opened one market segment after another, starting with foot and ankle, followed by trauma and now moving into arthroplasty. Interest continues to grow for CERAMENT G in revision arthroplasty and periprosthetic joint infections, 2 areas where the clinical needs remain substantial and where the evidence supporting our antibiotic eluting technology has resonated strongly with surgeons. We have built a solid foundation for our spine strategy over the past quarters by establishing distributor coverage and preparing the market. In Q1, we continued the early-stage launch of CERAMENT BVF in spinal procedures with distributors now actively engaging spine surgeons across both existing and new partnerships.

The surgeon access and early stages of adoption in spine follow plan and indicate the strength and potential of this segment. As this is a new clinical segment for us, more clinical data is needed to support broader market penetration. Importantly, the performance of CERAMENT BVF in spine will help confirm the value proposition for the CERAMENT platform, which will pave the way for the future antibiotic eluting CERAMENT launch. We've made strong progress in evaluating and preparing the regulatory pathway, and we'll share more on the path forward at our Capital Markets Day this spring.

After Q1, U.S. CMS, Center for Medicare and Medicaid Services announced a proposed ruling, full year '27 IPPS in-patient prospective payment system, including changes that improve payments for the use of CERAMENT G in the treatment of complex orthopedic infections, such as periprosthetic joint infection, fracture-related infections and diabetes-related bone infection. In parallel, CMS proposes the introduction of more specific procedure and identification codes for CERAMENT G and CERAMENT V consistent with the company's submission. CMS also proposes new technology add-on payment, NTAP reimbursement for CERAMENT V effective October 1, 2026, provided that FDA grants the company's De Novo application by April 30, 2026.

If FDA approval is obtained at a later point in time, we plan to submit a new NTAP application with a potential for additional payment from October 1, 2027. Although this is a proposed ruling, this is very positive for BONESUPPORT as it validates the uniqueness and value CERAMENT brings and reduces the potential financial barriers for using CERAMENT in daily clinical practice. The company intends to submit additional clarifications to the CMS during the ongoing 60-day public comment period. A final decision from CMS is expected in late summer 2026.

Now let's turn to Europe. Next slide, please. Sales in EUROW came in at SEK 57 million, representing 16% growth at constant exchange rates. This is compared to Q1 2025, where we saw strong growth in EUROW, thus a very strong comparative quarter. We saw strong development across our 3 market structures, direct, hybrid and distributor markets. In our direct markets, the U.K. continued the recovery we saw during the fourth quarter of 2025. Our investments in hybrid markets developed well, underlining clear continued potential ahead. In our distributor markets, CERAMENT was launched as planned in India with a focus on the private market. We note some uncertainty in the Middle East, where geopolitical unrest is affecting market presence and logistics in the short term.

Now I'll leave a deep dive into the numbers to Hakan.

Thank you, Torbjorn. Net sales improved from SEK 284 million to SEK 324 million, equaling a growth of 14% in reported sales growth or 31% in constant exchange rates. Torbjorn has already spoken about the solid performance in especially the U.S. and the major drivers behind the sales growth. But as the large movement in U.S. dollars compared with the first quarter last year somewhat hides a continued strong trajectory in the U.S., I would like to share the U.S. sales performance in U.S. dollars.

CERAMENT V is the growth driver in the U.S. and this slide shows the quarterly CERAMENT V sales in the U.S. in U.S. dollars. And what we can note is an all-time high sequential growth resulted in accelerated growth in sales per workday. The contribution from the U.S. segment improved by SEK 25.5 million versus Q1 2025 and amounted to SEK 122.7 million. The improved contribution relates to increased sales after the effect of increased costs. Selling and marketing expenses during the quarter amounted to SEK 128.4 million compared with SEK 121.6 million previous year, of which sales commissions to distributors and fees amounted to SEK 85.1 million compared with SEK 78.8 million in the same quarter last year.

From the graph at the bottom of the screen, showing net sales as bars and gross margin as the orange marker, it can be noted that the gross margin remains stable and strong at 94.5% with a minor decline in the period following a gradual impact from tariffs. In Europe and Rest of the World, a contribution of SEK 12.7 million was reported to be compared with SEK 15.4 million previous year. Selling and marketing expenses increased by SEK 6 million, mainly related to the previously communicated commercial investments in the so-called EUROW Booster program. From the lower graph and the orange marker, a minor improvement in gross margin can be noted, mainly impacted by market mix.

Selling expenses, excluding sales commission and fees, increased by SEK 11.6 million, following commercial investments in both the U.S. and Europe, but also related to high intensity in terms of marketing activities. Research and development remained at a stable level and focused on the execution of strategic initiatives such as the application studies in spine procedures and the market authorization submissions for CERAMENT V in the U.S. And finally, administrative expenses, excluding the effects from the long-term incentive programs, remaining stable with an increase of SEK 1.4 million in the period.

The adjusted operating result amounted to SEK 84.9 million with only minor currency effects impacting. I will come back to this on a later slide. The newly introduced tariffs in the United States had gradual impact on costs in the quarter. The full effect of a 15% tariff will equal an impact of 0.8 percentage points on U.S. gross margins, and this will come gradually with full effect later in '26. The difference between adjusted and reported operating results are costs regarding our long-term incentive programs amounting to an expense of SEK 12.8 million in the quarter compared with an expense of SEK 10 million previous year, as you could see on the previous slide. The increase in expense include SEK 1.6 million related to the long-term incentive program approved by the AGM in May '25, which was included in the accounts for the first time this quarter.

Operating cash flow was strong in the period, partially supported by inflow of customer payments deferred from December to after the holiday season. During the period, the Swedish krona has experienced volatility against the U.S. dollar with a minor weakening towards the end of the period and with only minor exchange gains and losses reported as other operating income and expenses. The graph on this slide shows with gray bars how the relationship between the U.S. dollar closing rate and the Swedish krona has varied over time. This is read out on the right I axis. The blue dotted line read out on the left I axis shows adjusted operating result. The adjusted operating result, excluding translation exchange effects is the orange line and gives a more comparable view on the underlying trend in operating results.

In the table below the graph, you can see that the FX adjusted operating margin of 25.5% in the period compared with 22.6% in the same quarter last year. In the shorter term, the operating margin is impacted by the commercial investments made in both EUROW and in the U.S. A gradual return to improvement in operating margin is expected as these investments are assumed to have positive impact on future sales growth potential. The relation between the U.S. dollar and Swedish krona has been stabilizing over the last 4 quarters, which becomes visible when comparing the adjusted operating result, including and excluding translation exchange effects on a rolling last 12-month basis. By the reported figures in Q1 this year, it is noticeable that the difference between including and excluding translation exchange effects is becoming narrower following a more stable relation to the U.S. dollar. The strengthening of the Swedish krona over time impacts both net sales and operating results as visible in the graph.

A solid cash conversion has been reported continuously since third quarter 2024 with an average cash conversion of 81%, visible as the dotted line in this graph. Q1 this year reported ahead of the average, mainly due to the previously mentioned timing effects from customer payments.

And with this, I hand back to you, Torbjorn.

Thank you, Hakan. So to summarize Q1 2026, sales grew by 31% at constant exchange rates, reflecting steady and consistent progress. Highlights were sequential CERAMENT G growth in U.S. of USD 2.6 million, EUROW growth versus a strong prior year of 16% at constant exchange rates and record strong cash flow of SEK 75 million, underscoring the strength of the business and its scalability. I'm convinced that the most exciting part of our journey in BONESUPPORT still lies ahead of us. And as I said, to provide a clearer view of what that journey will look like, we will host a Capital Markets Day in Stockholm on the 26th of May this year, which you are, of course, all welcome to join.

Now with that, we're opening the line for questions. Thank you.

[Operator Instructions]

The next question comes from Kristofer Liljeberg from DNB Carnegie.

Three questions. First, on the increased selling expenses here in the quarter. Would you say that you have reached a new level now? Or should we expect them to continue to increase sequentially? And related to that, how you think about the operational leverage here going forward? I noticed underlying EBIT has been more flat here sequentially. So would you expect it to pick up again here in coming quarters?

My second question relates to the sales commission in the U.S. that seems to be down as a percent of sales. I noticed they are flat sequentially despite higher sales. If you could explain that? I know there's other variable costs included in that maybe as well. And then when it comes to the De Novo process for CERAMENT V in the U.S., if you could maybe explain a little bit what type of questions that FDA has and why you sound so confident that the product will eventually be approved and the risk of not receiving an approval?

Thank you, Kristofer. I will start answering the first 2 questions, and then I will hand over to Torbjorn to answer the question on the De Novo process. So let's start with the increased selling expenses. And again, as we have communicated also previously, we will continue to do gradual commercial investments if we believe that this is beneficial to sales growth. And on that theme, we have been both investing in the so-called EUROW Booster program, but we have also continued to strengthen our U.S. organization in terms of medical education activities, national accounts management and also more sales-related functions, et cetera, to continue supporting the growth and the aspirations in the 3 main segments in the U.S. So again, a gradual increase can be expected. But as we also mentioned in the call, we expect this to have beneficial impact also on sales and sales growth going forward, and we also expect that to come back with a gradual improvement in operating margins.

When it comes to sales commission and fees, I'm glad that you noted that there is a reduction in the percentage to sales in Q1. And there is one main driver in this, and that is an activity that we've been running in the U.S. in the theme of balance sheet and process efficiency. And it's been a program to move customers from paying with credit cards to pay electronically over our bank systems. And this is an activity that has resulted in a lower cost for credit card fees and that is moving down sustainably, the fee is down with a percentage point. So that's the main driver by the reductions. There are some other reductions in the quarter, but they are more seasonality driven than anything else. But the main impact comes from reduced credit card charges.

And what did you say that impact as a percentage of sales?

It's 1% saving.

Okay. So this is a sustainable effect?

Yes.

Okay. And then to the third question that you had around De Novo. So the way that we look at this and interpret this is, first of all, the De Novo process compared to a 510(k) process. It sets a higher bar. It sets a higher standard. That is not only a negative. It's actually also a positive, meaning that it strengthens the moat. What we also see is the pattern that we see from the FDA is very, very similar to the De Novo process that we had for CERAMENT G. What I said on the call, and I think it's also important to highlight is that as part of the 510(k) process, the department of the FDA that was involved was the CDRH, so the Center for Devices and Radiological Health. They were involved. They are still involved and they are still leading the audit. As we move to a De Novo process and as this product is a combination product, so it's a device with drug-eluting properties, then the CDER, so the Center for Drug Evaluation and Research is also involved. They're brought into the process.

The questions that we have received are more of the nature of being explanatory, clarifying rather than anything else. The 3 areas, which is also fully expected and planned for are in the areas of preclinical, clinical and biocompatibility. Now we're working on these questions diligently, and we want to answer them in a disciplined and robust way to make sure that we properly inform, educate, if you will, the FDA to understand what this technology does with CERAMENT V, what it already does with CERAMENT G, which is FDA approved. And also this is a product. CERAMENT V is a product that has been approved outside of the U.S. for many, many years. It is used every day in patients. So with that, I feel comfortable that it's more of not so much if we get approval, it's more of when we get it. And having said that, we control what we can control, how FDA reacts and responds that is outside of our control. But I feel comfortable that we're on the right path, and we will get it to market. It's more a question of when.

Could I ask -- sorry, but just it's not that they're requesting more data similar to what happened with CERAMENT G.

So far, it's more explaining and more details of the existing data that we have already provided.

The next question comes from Mattias Vadsten from SEB.

I have a few. So I think, as you pointed out, a solid quarter-over-quarter sales growth for CERAMENT G in the U.S. So if you could just tell me if there is something nonrecurring or extraordinary supportive in the quarter or if this is purely better penetration? And if so, what are the key contributors? You mentioned all of the areas, but anything to point out there? That's the first one.

Okay. So boring answer. No, it's no one-timers. It's no nonrecurring. It is more of the same that we've seen in the past. And the growth comes from all the 3 segments: foot and ankle, trauma and arthroplasty. And in absolute numbers, all 3 contribute positively. Of course, there's a lot of excitement internally and externally in our 2 newer segments, so trauma and arthroplasty, but all 3 segments contribute in a meaningful way in the quarter. When we look at existing and new accounts, it's very much the same trend that we saw in 2025 throughout the year and also at the end of the year, meaning that we get meaningful growth from both existing accounts increasing their adoption as well as we see meaningful growth coming from shifting from awareness to access with access on many different layers. So yes, unfortunately, there's no -- there's nothing more exciting than that, Mattias, to your first question.

That helps. My next one -- or can I just follow up in terms of working days, were they the same in Q1 vis-a-vis Q4? And what do you see here in the second quarter coming up?

So it's correct. So it's on the same level as Q4. So it's 61 days. And the number of work days is increasing in Q2, despite now starting with Easter holiday and with the risk of remembering wrong, but I believe it is 63 days in Q2.

I have a few more. In terms of CMS proposing changes that improve the payment for using CERAMENT G, as you mentioned also in the presentation here, can we say anything on magnitude? And can you refresh us just how important the CMS exposure is for both [indiscernible] and so on?

Yes. No. So first of all, it is a proposed ruling. So it is not -- it has not been approved. It's not been decided on yet. That's one piece. Number two, this full year '27 IPPS document, fully public, so all of you can go ahead and read it, knock yourself out. It's 1,600 pages of text of a very small portion of that, but still quite a bit of text related to CERAMENT. As it's complex, as it's many different codes impacted and several indications impacted. And when we look at it and when we also have advisers looking at it, it also -- there is a bit of interpretation in it. So we don't want to draw too many conclusions and too many specific conclusions yet. However, on a total level, on a high level, it is very, very positive. And pretty much everything that we requested in our submission pretty much went through. We have a couple of clarifications on how we should interpret it.

But overall, it's very, very positive. And there are many layers in this proposed rule. And I think some of them you can sort of peel out or take out separately. One is the proposed NTAP for CERAMENT V. It's pretty standard. We would have been disappointed if we didn't get it. So that's one thing. The other thing is the extension of NTAP for CERAMENT G for open fractures. That is also sort of expected and you can strip out.

What remains -- so if we strip those out, and those are very positive for us, what remains still is, in my mind, even more sort of strategically important for BONESUPPORT because it highlights a couple of things. Number one, it highlights that CMS continues on the path to pay more for outcomes rather than activities. Why that is important for BONESUPPORT is that, yes, we have a very expensive product. But the whole value proposition with CERAMENT is to avoid infections, avoid revision surgery, avoid readmissions. It is clear, not specifically only to CERAMENT, but in general, in this proposed rule that CMS is going in that direction. So that is very positive. And then you can see in diabetic foot infection, you can see it in also fracture-related infection and also periprosthetic joint infection.

CMS proposes to incentivize technologies like CERAMENT and also, to a certain extent, almost use CERAMENT as a trigger point for a higher reimbursement because CERAMENT is very much linked to cases that have higher complication, higher comorbidities. So -- and I know you guys want a specific number, how much will sales go up? We cannot provide that. We don't know yet. It's complex material. We're analyzing it. But we're very, very pleased and satisfied with the proposed ruling and look forward both to the clarifications that we expect in the next couple of weeks and also the ruling to come into effect later this year with full effect next year.

But that's helpful. Lastly, I have a follow-up to Kristofer's question regarding CERAMENT V in the U.S. So if I catch this correctly, the 150-day review period will pause and it will resume when you submit your answers or call it, clarifications. So with this in mind, what kind of delay do you think we're looking at here in the process? Is it a couple of months or and also August, is that sort of a formal last date, not necessarily means that BONESUPPORT will resubmit in August, I guess.

So I'll answer it. Number one, Yes, you're correct in your first statement about the timing and the clock there. That's number one. Number two is knowing how and what -- how FDA and what CERAMENT -- what FDA will do is impossible for us to guess. So whether it's the delay or not, it depends on who you ask. Now what we want to do and want to make sure is that we answer the questions in a disciplined, robust way so that we get the approval in a way that we wanted to, not only as fast as possible, but in as a robust way as possible. So that's what we're doing. But again, you never know with the FDA. Now the end August time line that we communicate, that's the formal deadline. I mean, we will use that if we feel that it is necessary and we feel that it is good for the process. If we feel that we can submit it faster than end August without risking the quality of the material and the outcome of the process, we will, of course, do that. But end August is the latest formal deadline that we have.

But it's still reasonable to expect it to be cleared in 2026 with all of this in mind.

Well, it's always difficult to guess what FDA does. I feel comfortable that we're on a good path. It's not so much a question. If it could be in '26, that's my best guess. But if it needs to be extended to '27, it's worth waiting for, for sure, if we put it that way.

The next question comes from Sten Gustafsson from ABG Sundal Collier.

Just sorry for going back to this CERAMENT V. I'm not sure if I got it right here, but could you please confirm that you do not need to carry out any additional clinical studies in order to be able to answer the questions from FDA. Is that correct?

That is our current hypothesis and current assumption. So yes, that's correct.

Perfect. My second question is regarding sort of the -- if you look at the sales split of CERAMENT G and CERAMENT V in Europe, is it possible for you to see in how many cases you use both products at the same time, i.e., where there's a super broad infection, whether doctors use it in combination?

So just so I understand the question, are you referring to OUS?

Yes. I mean in Europe, for example, where both products are approved and being used CERAMENT G and CERAMENT V, do you have a feeling for how many procedures doctors use both products at the same time?

We know anecdotally that it happens, but we have no somehow data-driven substance that we can lean towards, et cetera. But we know anecdotally that it happens. By that, it is not extensive somehow in terms of using both.

I get it. Excellent. And the sort of the split do you have a feeling for that in terms of procedural usage?

With some volatility, it's somewhere between 25%-75%, 20%-80%, where some of the largest use is on CERAMENT G. So roughly 25%-75%.

Okay. Perfect. My last question is regarding Germany. I'm not sure if I missed it in the report, but are there any comments on how Germany is developing for you?

So Germany is, in a way, somehow positive because it's stable. And what do I mean with that is that somehow it feels like somehow it's trending on the same level as previous quarter, meaning that we don't see a decline. And I think that's a first good sign that again, as we have commented, we're still focusing on Germany. We still have strong relations to German hospitals and German surgeons, et cetera. And I think that for Q1, we're glad that we see that the development is stabilizing.

The next question comes from Erik Cassel from Danske Bank.

I wanted to focus a bit on the trauma centers in the U.S., which you gave figures for in last quarter. I mean, penetration rate was obviously quite high. But is it possible to now that -- I mean, they've done pilots potentially up to a year ago to talk a bit about the current, say, conversion rates from pilots to continued use? And then also if you can say anything on how high, say, the continued use is as of now and how many of those are still in sort of an evaluation phase?

Okay. Thank you, Erik. I mean we don't provide -- we will not provide any numbers to answer your questions, but we can provide a bit more color on your question related to trauma in the U.S. So as I mentioned, we saw that all 3 segments contributed in a meaningful way for the quarter. That includes also trauma. So we see that the journey that we're on in trauma follows the plan and follows the expectations. I also said that there's a lot of excitement internally as well as externally around trauma and arthroplasty. That speaks to it. I think what creates internal and external excitement and helps us on this journey that you referred to are the 2 studies that we talked about earlier. I know that actually, you didn't really -- you quoted that those were not really meaningful studies.

I would argue against that and say that they are very meaningful for us from a commercial perspective, and they get traction because it's a great way for us to talk about our product in a practical evidence-based way. So we're seeing in trauma, there's continued excitement. We continue to move from awareness to adoption -- sorry, from awareness to access to adoption. So now we're becoming more in the access and adoption phase with many, many more years to come in trauma, partly supported by the evidence that we provided. But we don't really give on a quarterly basis any data that you're asking for, Erik.

Okay. That's fair enough. And then I also wanted to sort of repeat a question from Kristofer and see if we can get a bit more detail on it. I mean, you said in the report that the commercialization costs are going to peak this year sort of. But is it possible to maybe quantify or frame it in a bit more detail the implied cost ramp we're going to see this year and how that also transitions into '27? Because it makes it sound like the incremental margins this year might be a bit worse than what we normally see. So I just want to make sure that we get the expectations right on this.

It's a fair question, Erik. And again, I think that has been a repeated theme from our side is that we will -- and I promise you, we will continue to do commercial investments if we believe that this will be beneficial for continued sales growth. And on that team, we have the EUROW Booster as we've communicated, I think it's more than a year ago. And that the EUROW Booster is adding SEK 10 million in incremental cost, and it will take at least 18 months until that program is returning somehow sales that covers the cost. In the U.S., we have been gradually strengthening the organization.

And if we just look at current plans, that means that from during second half of last year and going into this year, we are adding 10 heads into our U.S. organization because we believe that this will be beneficial for the U.S. sales growth. That will create in the shorter term, a reduced positive trend in terms of operating margin. But as we said on the call, we are strong in our view and believe that this will come back to continued gradual improvements in the operating margins.

Absolutely. And on top of that, I mean, if we look at this case on a more of a couple of years basis, there's plenty of operational leverage in this business with what we're doing. We've taken quite substantial investments, both in EUROW as well as in the U.S. So if you take a more longer-term perspective, there's no change in the potential of the operational leverage of this business on the contrary, when we look at that internally and strategically in the more longer-term horizon.

Okay. And then I wanted to touch upon the U.S. BVF sales. That was, I guess, a soft point in this report. Previously, you've more talked about the BVF products perhaps becoming an add-on to CERAMENT G, so that you get new accounts doing CERAMENT G and then they also start to use the BVF product. Now it more looks like that there's cannibalization on the BVF product. Have you changed the -- what you're seeing for BVF and sort of the, say, longer-term implication of that? Or are you actually seeing any CERAMENT G accounts also picking up BVF?

So I think that in the longer term, we stay firm with that view because again, we continue to see that surgeons that has been -- that we're bringing on somehow thanks to CERAMENT G are also using the BVF product for surgeries that -- where there is none to very low infection risks. I think that what we've seen in the first quarter is, in a way, not negative for the longer term because what we've seen that somewhat explains some of the softer sales of the BVF in the U.S. is surgeons that has been traditional and solid BVF users have converted and increased its use of CERAMENT G. We believe that is positive, even though it may have a short-term impact on the BVF sales. But again, statistics shows that somehow with CERAMENT G as a growth engine, bringing in new surgeons, we also see that those surgeons are using BVF. So over time, we believe the BVF first will stabilize, but then we will see low-digit annual growth coming back.

Okay. But on the timing of that, it now looks like it's cannibalization. Do you think that will continue? Or is this sort of a stable rate do you think for that product?

I think it's too early to say because it was really visible this quarter in a stronger way than what we've seen, et cetera. So Erik, I'm sure let's come back to that question after Q2 and see somehow if that trend remains.

Okay. Just the last one, if I may. On the gross margin headwind from tariffs, I understand that as you're, of course, manufacturing the products with contract manufacturers. Is it possible to say in the medium term, transfer production locally to the U.S. to sort of offset this? Or is the relative cost in the U.S. basically too high, so it wouldn't be enough of an offset to actually do that?

From a purely practical point of view, that could be a consideration. But from a regulatory point of view, to move production is a very timely and costly process. So we will continue to -- as the business in the U.S. grows to look at various options when it comes to manufacturing. But here and now and to offset tariffs, somehow, it's not a helpful strategy.

The next question comes from Oscar Bergman from Redeye.

Thank you for very interesting report as always. I have a few questions left. I think maybe the first one, if you could just sort of clarify the constant exchange rate growth for CERAMENT G in the U.S., I think it would be helpful.

Yes. So explaining in terms of?

The constant currency exchange growth for U.S. CERAMENT G in Q1.

So again, as we showed in the graph, somehow, the sequential growth of CERAMENT G in the U.S. was USD 2.6 million. And that is somehow what's supporting the statement and the numbers reported and made. So sorry, maybe it's too early morning for me, but I think you have to clarify really what you're after, Oscar.

Yes, I was just thinking -- okay, maybe I have to check the report again, those numbers maybe was too early morning for me as well. I think we can just move on to the other question instead.

Yes.

I know CERAMENT BVF for spine is still very early stage, and you don't report this separately. But could you just give some sort of ballpark figure or anything that helped me sort of decipher the sales contribution so far?

Yes. So the spine BVF launch follows plan. And the plan, just to remind everyone, but this is very important. It is that we take a very, very focused approach on spine BVF. And we've said that from a revenue perspective, it will not have any material impact on the overall numbers on the total or even on the BVF side. So we're really -- it's really small numbers for spine BVF. And the reason for that is simply we're not in spine. We're not going after spine to sell BVF. Our hypothesis on spine is that it's a very attractive segment for us offering a product that does the 2 things that CERAMENT does perfectly, meaning healing bone and in a very controlled, predictable way, elute antibiotics.

So from a sales point of view, spine BVF, I wouldn't put any material numbers in that, if that's what you're going after. However, what is very positive to see in Spine is that our hypothesis and assumptions about that segment in terms of the strength of the value proposition is being confirmed in the quarter. So -- but also just to manage expectations, to come with a product, an antibiotic eluting product into spine is a couple of years out. We need the clinical evidence. We need the regulatory approval. So that still remains the same. So no change really. But Q1 in spine with BVF confirmed at least what we see that we're on the right track and our assumption and hypothesis so far remain valid.

But can you share any numbers on maybe a number of customers that have tried out the product or...yes.

I mean, no, we don't provide any specifics on that. But these are -- we have wanted to keep it low. That's how we want it, and we're being very selective in which accounts we're going after. And to be fair, we could have gone for more accounts if we wanted to and actively promoted it more, but we want to keep it very strict, very disciplined, very controlled so that we do it in the right steps for the long-term case of CERAMENT in spine.

And I guess it's a fair assumption that you are targeting customers where you already have some experience with CERAMENT G for extremities? Or are you going for hospitals outside your sort of current customer base?

We're doing both, to be honest, because, I mean, again, it comes back to that you want the right surgeon, you want the right hospital that believes in our hypothesis of CERAMENT in spine, that believes and acknowledges the fact that infection is an issue and that also believes and buys into the characteristics of CERAMENT. Sometimes they come in already existing partnerships with our independent sales reps in extremities. Sometimes they come outside. So we're not fundamentalistic that they have to come from the existing distributors. But -- so we see a combination of both.

And I know you have a CMD in about a month's time. And I guess we'll hear more about the Spine segment there. But do you still expect it to be registered as a medical device and not having to go through a drug registration process?

Yes. I mean -- so our approach here is that we're a medical device company. We want to remain a medical device company, similar to what we have done with CERAMENT G and CERAMENT V. And that's also our plan and thinking on spine.

Okay. And just maybe a final question. The launch in India, I'm very happy to hear that you have first sales there already, but I suspect it's very small numbers still. Can you give some words on the progress here and maybe what we should expect for the full year?

Yes. No, absolutely. I mean, I sit here next to our CFO. He's super excited because it's not like we've only launched and we've only also sold it. We've actually done cash collections. So for once, Hakan is on good mood when it comes to India. So that's great, which is positive. But you're absolutely right. It's just the start. And in Q1, it's small numbers. And it's going to be small numbers as it always is when we enter a new country. With India, it's very exciting for a couple of reasons, meaning that if you look at the size of the total population, it's massive. We're not going after that. We're going after a niche segment of that population.

So private pay and closely sort of managed with private hospital chains where we have a good collaboration and good trust. But even in our smallest estimates, the segment that we're entering, it's a sizable country in -- or it corresponds to a sizable country in Europe with margins that are similar to distributor margins in Europe. So that's why we are excited. But it's early days. It takes time, but so far, very pleased with what the team has done there and the progress that we've seen. But again, small numbers in Q1. And hopefully, we'll work to make those numbers grow fast in the couple of years.

There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Okay. We have a couple of minutes left, and we still -- we also have a couple of questions on the chat. And then we'll just quickly read through. One question is -- and I'll leave this to Hakan. So I will read Hakan and then you'll prepare. So Hakan, could you please help us on the R&D spend for 2026? Should we expect a similar ratio versus sales as seen in Q1 and 2025?

So again, I think that what we've seen is a very stable run rate the last 4 quarters. And I think that's a good baseline to start from. The uncertainty that we have is some pending the discussions with the FDA and the regulatory pathway to get an antibiotic eluting product approved for spine. And we believe that, that will include and involve clinical studies and the absolute cost levels and the timing of these costs remains to be clarified, and that will add to the run rate.

Okay. Good. Another question we have is around dividends and capital allocation. And I'm going to read it and then Hakan, you will answer it. So why do you not consider a dividend appropriate at this time? What do you intend to do with the assets and the cash position of nearly SEK 500 million?

It's a good question. And again, some, it is good to have a solid underlying cash flow because that builds also confidence in the business for any future investments, et cetera. But also saying that, we understand and we see that we are generating more cash than the business needs in short to midterm. And there is also a good reason why the Board proposed to the AGM, the upcoming AGM in early May to get a mandate to buy back shares in the market as one way to allocate the funds that the business is generating.

Okay. And then we have another question related to CERAMENT V on the chat, and it goes like this. Do you expect that you will reply to FDA's questions regarding CERAMENT V before summer?

So what we've said is that we -- the deadline that we have end August, we will reply to the FDA questions before end August. So we confirm that what we already said. And then I believe there's one last question on the chat, and it relates to the SOLARIO study. And it says, when will the full report of the SOLARIO study be fully published? Or won't it be?

So we -- I mean, again, we don't manage the submission to the scientific journal. This is done by the lead authors. But we have good reasons to believe that the SOLARIO study will be published in the near term, exactly when and exactly which journal remains to be seen, but we have good reasons to believe that it will be published as per plan, and we also have we believe that it will confirm this paradigm shift that we see and hear about related to using systemic antibiotics versus local antibiotics. So we feel we have a good and positive outlook on the SOLARIO study. So hope to see something there in the short to medium term.

I believe that is it. That concludes. That concludes. So with that, right on time. Thank you all for dialing in. And again, a warm welcome to the Capital Markets Day in Stockholm on May 26. Thank you very much.

Welcome to BONESUPPORT Year-End Report 2025 Presentation. [Operator Instructions]

Now I will hand the conference over to CEO, Torbjorn Skold; and CFO, Håkan Johansson. Please go ahead.

Thank you, operator, and welcome, everyone, to BONESUPPORT's Q4 and Full Year 2025 Results Call. My name is Torbjorn Skold, I'm the CEO of BONESUPPORT; and with me here today is our CFO, Håkan Johansson. And together, we will use the next 25 minutes to guide you through the Q4 presentation and then open the line for questions.

But before we start the presentation, I would like to draw your attention to the disclaimers covering any forward-looking statements that we will make today. So let's look at the financial and operational highlights from the quarter. Q4 was another strong quarter with solid execution across the business. Net sales came in at SEK 313 million, corresponding to a growth of 22% versus Q4 2024. Sales growth at constant exchange rates was 36%, showing that there was a continued strong currency impact on our figures for the quarter.

Our adjusted operating results, excluding incentive program effects was SEK 81 million, corresponding to an adjusted operating margin of 26%. Reported operating result was SEK 82 million, and we saw solid cash generation with operating cash flows reaching SEK 54 million. We continue to see strong traction for CERAMENT G in the U.S., where both new accounts and increased use among current users contributed to the strong progress. CERAMENT G sales in the U.S. reached SEK 207 million for the quarter compared to SEK 154 million in the same period the year before. In Europe & Rest of the World, we saw strong momentum, which more than offset the negative effects of the German market reforms.

During the quarter, we also advanced our regulatory pipeline. As communicated in early December, the FDA submission for CERAMENT V has now been transferred from the 510(k) pathway to the De Novo process. This change reflects the FDA's assessment that CERAMENT V may constitute an entirely new product category like CERAMENT G in 2022 and positions us for a stronger long-term market entry. In addition, we initiated the early-stage launch of CERAMENT BVF for spine in the U.S., an important step as we continue expanding our portfolio of indications and applications. I will come back to that later in my presentation.

Now let's move to the sales development. This chart shows total last 12 months reported sales in Swedish krona by quarter since 2019 in stacked bars per region and product category. As you can see, the launch momentum for CERAMENT G in the U.S. is exceptionally strong. Given that we keep bringing new strong clinical studies and opening up new market segments and new indications, a product like CERAMENT G will remain in launch phase for many years to come. However, throughout 2025, we have seen strong influence from the U.S. dollar to Swedish krona depreciation.

Last 12 months growth in Q4 of 31% in the graph corresponds to an even stronger 40% at constant exchange rates. So most of this quarter-over-quarter slowdown in last 12 months sales is due to a strong currency impact. U.S. CERAMENT BVF last 12 months was flat year-over-year in constant currency. In total, antibiotic eluting CERAMENT grew with 54% last 12 months in the quarter in constant currency.

Next slide, please. In U.S., sales amounted to SEK 259 million, representing a growth of 40% at constant exchange rate. There was some general variability during the quarter due to the number of working days. At the same time, we continue to experience strong growth of CERAMENT G, driven by both increased access through new accounts and new surgeons as well as wider adoption among existing accounts and surgeons.

In trauma, we see expanding access and adoption in Level 1 trauma centers, which is an important validation of CERAMENT G for treating complex infections and bone voids in the most demanding clinical environments. There are roughly 250 Level 1 trauma centers in the U.S. These are the very large and most important centers for advanced trauma treatments. And at the end of 2024, we had sold CERAMENT to 15 of these.

At the end of 2025, we had sold to more than 140 Level 1 trauma centers. That said, actual use is evolving gradually as trauma surgeons carefully assess and evaluate new products before they become part of regular use. And remember that full healing and evaluation of a trauma patient can take more than 6 months. As part of our mission to modernize an outdated standard of care in the U.S., we have successfully opened one market segment after another. We started in foot and ankle, followed by trauma and now moving into revision arthroplasty.

Interest continues to grow for CERAMENT G in revision arthroplasty and periprosthetic joint infections, 2 areas where the clinical needs remain substantial and where the evidence supporting our antibiotic eluting technology has resonated strongly with surgeons. We've built a solid foundation for our spine strategy over the past quarters by establishing distributor coverage and preparing for the market. In Q4, we initiated the early-stage launch of CERAMENT BVF in spinal procedures with distributors now actively engaging spine surgeons across both existing and new partnerships.

As this is a new clinical segment for us, more clinical data is needed to support broader market penetration longer-term. Importantly, the performance of CERAMENT BVF in spine will help confirm the value proposition for the CERAMENT platform, which will pave the way for the future CERAMENT G launch. We have made strong progress in evaluating and preparing the regulatory pathway, and we'll share more on the path forward at our Capital Markets Day this spring.

Now let's turn to Europe. Next slide, please. Sales in Europe & Rest of the World came in at SEK 54 million, representing 18% growth at constant exchange rates. Sales in Europe continued to be influenced by the same dynamics as observed in Q3, meaning that hospital reforms and surgical protocol programs in Germany were still impacting our sales. However, direct markets, excluding Germany, delivered at normal growth rates. And by the way, when we say normal growth rates, we mean normal for CERAMENT. The growth rates that we see outside Germany are 4x to 5x higher than growth rates for the market in general. Furthermore, hybrid markets in Southern Europe, Australia and Canada are performing strongly. We see positive traction from the investments made during the first half of 2025 reflected in improved sales performance.

Now I'll leave a deep dive into the numbers to Håkan.

Thank you, Torbjorn. Net sales improved from SEK 257 million to SEK 312.5 million, equaling a growth of 22% reported sales growth or 36% in constant exchange rates. Torbjorn has already spoken about the solid performance in especially the U.S. and the major drivers behind the sales growth. But as the weak U.S. dollar somewhat hides a continued strong trajectory in the U.S., I would like to share the U.S. sales performance in U.S. dollars.

CERAMENT G is the growth driver in the U.S. and this slide shows the quarterly CERAMENT G sales in the U.S. in U.S. dollars with continued solid performance quarter-to-quarter. The number of working days in each period impacts sales, especially in Q4, which is impacted by both Thanksgiving and the holiday season over Christmas and New Year's. Taking this into consideration, a strong net sales per working day is noted during the quarter when looking at the orange line in the presentation.

The contribution from the U.S. segment improved by SEK 30 million and amounted to SEK 120.2 million. The improved contribution relates to increased sales after effect from increased costs. Selling and marketing expenses during the quarter amounted to SEK 128 million compared with SEK 108.8 million previous year, of which sales commissions to distributors and fees amounted to SEK 85 million compared with SEK 69.6 million in the same quarter last year. From the graph at the bottom of the screen, showing net sales as bars and gross margin as the orange marker, it can be noted that the gross margin remained stable and strong at around 95% with a minor decline in the period following a gradual impact from U.S. tariffs.

In Europe & Rest of World, a contribution of SEK 11.9 million was reported to be compared with SEK 12.8 million previous year. Selling and marketing expenses increased by SEK 4.9 million, including SEK 3.6 million related to the previously communicated commercial investments in the so-called EUROW booster program. From the lower graph and orange marker, a minor drop in gross margin can be noted, mainly impacted by the market mix.

Selling expenses, excluding sales commission and fees increased by SEK 8.6 million, mainly in staffing expenses, of which SEK 3.6 million relates to the so-called EUROW booster. The increase from Q3 this year relates to seasonality as Q4 is usually intense in terms of congresses and marketing activities. R&D remained focused on the execution of strategic initiatives such as the application studies in spine procedures and the market authorization submission for CERAMENT V in the U.S. The expense for the quarter includes submission fees and other additional expenses related to the change in regulatory pathway for CERAMENT V in the U.S.

And finally, administrative expenses, excluding the effects from long-term incentive programs, reports a small increase for the period, of which SEK 2.8 million relates to the CEO succession. The reported operating result amounted to SEK 81.8 million despite unfavorable currency effects totaling SEK 2.9 million. I will come back to this on a later slide. The newly introduced tariffs in the United States had a gradual impact on costs in the quarter. The full effect of the current 50% tariff will equal a 0.8% impact on U.S. gross margins, which will come gradually with full effect late 2026.

The difference between adjusted and reported operating result are costs regarding our long-term incentive programs amounting to a negative expense of SEK 0.5 million in the quarter compared with an expense of SEK 13.7 million previous year, as you can see from the previous slide. The reduced costs are due to the drop in share price. Operating cash flow remains solid with an increase in accounts receivables at the end of the year, mainly as customer payments seem to have been deferred to after the holidays.

During the period, the Swedish krona has continued to strengthen against the U.S. dollar. Other operating income and expenses, therefore, contain foreign exchange gains and losses from the translation of the group's receivables and liabilities in foreign currency amounting to a negative SEK 2.9 million. The graph on this slide shows with gray bars how the relationship between the U.S. dollar closing rate and the Swedish krona has varied over time. This is read out on the right Y-axis. The blue dotted line readout on the left Y-axis shows adjusted operating result. The adjusted operating result, excluding translation exchange effects is the orange line and gives a more comparable view of the underlying trend in operating results. In the table below the graph, you can see the FX adjusted operating margin of close to 27% in the period compared with 22.6% in the same quarter last year.

And with this, I hand back to you, Torbjorn.

Thank you, Håkan. So to summarize Q4 2025, sales grew by 36% in constant currencies, reflecting steady and consistent progress. Adjusted operating margin reached 26%. Cash flow also remained robust, underscoring the strength and scalability of the business. I'm convinced that the most exciting part of our journey still lies ahead. And as I said, to provide a clearer view of what that journey will look like, we will host a Capital Markets Day in Stockholm on the 26th of May this year, which you are, of course, all welcome to join.

Now happy to open up the line for questions.

[Operator Instructions] The next question comes from Viktor Sundberg from Nordea.

First one on CERAMENT G in the U.S. As you mentioned, year-over-year growth in the quarters are decreasing, but it's mostly FX related, as you mentioned. But when you say mostly, is it anything that indicates any, let's say, underlying headwind in the U.S. in 2025? And also what kind of underlying growth have you baked into your guidance for 2026? And how does that growth compare to 2025 growth in constant exchange rates? That's my first question.

Thank you, Viktor. And I think that the takeaway from the report is 2. One is, again, we see a continued strong trajectory with CERAMENT G in the U.S., especially when looking at sales in average per working day. Taking that in combination also what Torbjorn mentioned in terms of access to Level 1 trauma centers, et cetera. And of course, both these aspects are aspect that's been included in our estimates and our works out ahead of presenting the guidance for 2026. So we remain very optimistic on the continued opportunities for CERAMENT G in the U.S.

Indeed. And I would like just to add to that. When we look at the performance in '25 and in Q4, we look at 2 important aspects of where the growth comes from in general and also particularly in CERAMENT G. And it relates to new accounts calling access as well as increasing the adoption within existing accounts. So both those 2 levers, independent on whether it's on surgeon level, account level, IDN level or GPO level, we measure that and track it. And what's important for us is to make sure that we have a healthy growth, not only in access and not only in adoption. We want to have it in both.

And what we've seen throughout '25 as well as in quarter 4 is that we have a really healthy adoption and the growth rate on the total stems from both of those legs contributing almost to an equal size, which is very positive. And that goes generally as well as for CERAMENT G. On CERAMENT G, in particular, we've already talked about the Level 1 trauma center adoption rate. I mean, in '24, we sold to 15 of them. And in '25, we have sold to more than 140. And what we mean with sell is that we sell at least one product. So again, it's very, very early phase, but it's a really strong indication for us at least that we get access, we get interest among orthopedic surgeons, among the infectious disease doctors, and we have a really strong foundation to build on in trauma for many, many years to come. So that's on trauma.

The next segment that we're just about -- or just started to scratch the surface on is revision arthroplasty. Early days, we have very convincing evidence, but it's a pilot study from Charité, indicating very strong results for CERAMENT G in a revision arthroplasty segment. So this also looks very promising for both the short, medium and long-term in the U.S.

On top of those parts, meaning trauma and revision arthroplasty, we have foot and ankle, which we still see a lot of potential to continue to build on as we develop more application techniques, as we come out with more clinical studies. And then, of course, very exciting for us is when we get FDA approval for CERAMENT V. We transitioned from a 510(k) process to a De Novo process, which longer-term is actually very positive for us. And that, of course, adds to the total mix. We do not expect a lot of cannibalization on CERAMENT G from CERAMENT V. We believe that's going to be somewhat immaterial in the grander scheme of things. So I think that paints the picture of our outlook short, medium and long-term for CERAMENT G in the U.S.

Okay. And maybe in Germany and the U.K. also that's been a bit of a drag on growth in '25. How much of this drag is baked into your guidance for 2026? And when do you expect this to turn around? And any sense of what the underlying demand is if funding issues would be a bit better in these countries?

So we communicated already when releasing Q3 that we do not expect somewhat of a swift call it, recovery in Germany. We think that Germany will remain somewhat sluggish throughout 2026. However, when it comes to U.K. and part of that we also saw in Q4 is that we expect the situation in the U.K. to normalize in the sense that surgeries where CERAMENT is used is coming back to normal levels. The surgical backlog in the U.K. is still a launch, which means that somewhat there will be also periods where we see a bit of 2 steps forward, 1 step back, et cetera. But again, we have seen gradual improvements, Q4 confirmed that, et cetera. So we remain optimistic when it comes to the U.K.

The next question comes from Erik Cassel from Danske Bank.

First, of course, everyone cares about the CERAMENT G U.S. number and what that was organically. If I pulled the data correct, it looked like it was up 55% organically and that we have a USD number that was 21.9% essentially. Could you give any more detail on that sort of number, if I'm correct in that assumption? Because that would imply like an FX rate of minus 21%.

Again, largely, the numbers could be recognized. We're not sharing the exact dollar numbers because we're reporting in Swedish krona. But as we shared in the presentation, you have both the absolute numbers in U.S. dollar sales and also the average sale per working day. And again, as communicated here, we see a continued very strong and solid trend.

But the 55% organic, that seems reasonable to you, do you think?

Again, if you just look at it from Q3 to Q4 in U.S. dollars and not taking workdays in consideration, it is a small growth in Q4 to Q3.

Okay. I'll leave it there. But can you maybe talk a bit on what sort of indications that happen to grow, say, faster than the overall CERAMENT G sales in the U.S. and which indications may be lagging that growth rate a bit, so we sort of can understand what's driving this going forward?

Yes. So I think if we look at the U.S. and CERAMENT G sales only and then we look at the 3 segments that we are in today and actively sell into. Foot and ankle, of course, is the segment where we have been the longest period of time. That's where BONESUPPORT started really. But still both in absolute as well as in relative terms, an important contributor to the growth of CERAMENT G. But given the size of it and given that we've been there for a number of years, it's further on in its life cycle, so to say.

Second is trauma. And here, of course, a relatively new segment. You saw the numbers in terms of access. So that's clearly a segment that will continue to drive growth rates both short and medium-term. So we're very bullish about trauma as well as we are on revision arthroplasty. So I think you can sort of relate how long we've been in the respective segments to how much relative growth rates we can expect from them. But having said that, all 3 segments are very important in absolute terms for us short and medium-term.

And just to be totally transparent and perhaps obvious to several of you on the call, CERAMENT G for spine is not yet approved in the U.S. and will, therefore, not drive any growth in the short-term. But longer-term, we expect CERAMENT G once it's approved and launched in the U.S. for spine to be an important segment also in parallel to the 3 segments that we're already in.

Okay. Should I read that as the osteomyelitis indication being a bit more matured, maybe not growing as much right now?

I wouldn't read that into it. Osteomyelitis is actually an indication that can happen in foot and ankle. It can happen in trauma and also technically it can happen in -- also in revision arthroplasty. So I wouldn't draw that conclusion. Osteomyelitis is an underserved indication with a lot of unmet clinical need where CERAMENT G and V play an important role. So I would not draw that conclusion that we've reached a saturation or maturity on osteomyelitis in general. It's a very healthy and fast-growing segment for us.

Okay. And then I just have a question on commission rates. They sort of hit a new low here in this quarter. Does that sort of imply that fewer and fewer distributors are hitting their sort of bonus quotas? And if that's the case, could you maybe share a bit on sort of what's required for them to get to that sort of, I guess, 35% commission rate. This was, I think, high and say normalized lower. What's the difference there and how much they need to sell and grow the accounts to get different bonus levels?

So a good question, Erik. So it sounds like an area for clarification because I guess the line is defined as commission and fees and involves everything from commission to the distributors, GPO fees, credit card charges for the customers paying by credit card, et cetera. And it's the combination of these that is down a few percentage points and so on. So it's small movements in percentage of sales. Commission remains relatively stable around 30%. The commission are somehow included certain incentives if the distributors are exceeding their so-called quotas substantially, but we see very little movement in the average commission rate to sales. So the reason why it's down a few percentage points more relates to the other aspects of fees.

And to that, in terms of the distributor turnover, it's part of the beauty of the model that we have in BONESUPPORT in the U.S. is that we want distributors to be on the journey with us. We want them to share the same goals. So we actively add new distributors. And when we have distributors that are not performing in line with the targets and goals and principles that we set, we don't hesitate to phase them out. So turnover among distributors, we've always had. We will continue to have that. But as Håkan said, that is not one of the reasons why we see lower commission rates on the contrary.

Okay. And just the last question. So far, I mean, we saw that sort of surgical volumes per day was up a bit in Q4. Can you say anything on the sort of pace that has been now through January and February, if we're seeing the daily averages being roughly the same, increasing, just so we can think about the Q1 number we could expect?

Yes. No, thank you for the question. I mean we don't comment on Q1, as you know. But similar to -- we got a lot of questions on Q4 when we released Q3, I mean we feel confident in the journey that we're on. We feel confident in the guidance that we have said, indicating that we should grow in constant exchange rates at least 35%. And if we see any reason to change that, we will communicate it adequately and accordingly.

The next question comes from Mattias Vadsten from SEB.

I have a couple of questions as well. First one, what you shared there regarding Level 1 trauma centers, 140 versus 15 end of 2024. So just if you could share some color on how important this has been whilst establishing the sales guidance for '26. And of course, also interesting to hear some insights on adoption rates in sort of early Level 1 trauma centers as well? That's the first one.

Sure. So starting with your first question around the guidance of 35 -- more than 35% growth in constant exchange rates. So first of all, we have also communicated that we expect CERAMENT V to be approved by the FDA around mid this year. Of course, if we get an earlier approval and we launch earlier than that, then of course, we will distance ourselves or we expect to distance ourselves more on the upside versus the 35%. But however, let's say that we get late approval or no approval, then we will, of course, be close to the 35%. I think that's important to just point out that, that's the role of CERAMENT V.

Now when we did the guidance for '26, there's not only one factor, of course, that we take into account. We look at growth potential across the geographies. We look at the growth potential of the different segments, of course, trauma in the U.S. is an important segment for us and the data point that we have on the Level 1 trauma centers is an important data point as there are others as well, in foot and ankle, in revision arthroplasty in both U.S. as well as Europe & Rest of the World.

What is very important for us, and we've said this before, and it's important to continue to say that, it's the balance between access and adoption that is very important. We don't want to just only grow by getting new accounts. We don't only want to grow by increasing the adoption in existing accounts. We want to have a healthy balance between the 2. So that's also a very important factor when we put the guidance together.

Another also very important factor is when we simply again recalculate the penetration, meaning that the number of surgeries that we are in by geography, by market segment versus what we think is a realistic or a longer-term outlook. We still believe that we have a long runway to get to what we think are perfectly realistic penetration levels. So I think, Mattias, it's not just the trauma number, but it's an important factor as -- and combined with many other factors, as I just described.

Good. And are you happy with what you see in terms of adoption in the Level 1 trauma centers that you won early days?

Yes, very happy.

Good. Then I just have a follow-up on the revision arthroplasty segment that you discussed here in the presentation, which was good. Your position here and maybe how much work is yet to be done for BONESUPPORT in terms of evidence and so forth to be able to have an ideal position, call it, for a more material contribution and better sales pitch around the segment? That's my next one.

Yes. Very good. So it's early days for us in revision arthroplasty. We have a fantastic pilot study that came out of Charité as communicated last year. I mean the results from that couldn't have been better from a BONESUPPORT and CERAMENT point of view, showing excellent results. But again, it's a pilot study and the number of patients is limited. We're building on that study going forward. And I think this is an area where we, over several years, will need to do a lot more, which is perfectly natural, and that's part of the BONESUPPORT approach to penetrate a new market segment, meaning that we always lead with evidence. We know that our product is very innovative. It has unique capabilities in terms of its handling and in terms of how it elutes antibiotic. But we always lead with evidence.

So a lot more work remains to be done in revision arthroplasty on the evidence side. So more specific evidence. And we're working on it. We've initiated new studies, and we will continue to initiate new studies in this field. However, orthopedic surgeons, in general, they understand the unmet clinical need in the space of revision arthroplasty, where typically you face 2 challenges. Number one, how do you heal the bone? How do you make sure that you grow bone in areas where you, for example, have bone voids as a result of explanting the implants in a revision situation.

So having to deal with bone voids is normal, and it's standard for revision arthroplasty surgeon. We have a great solution for that with CERAMENT. Also, infections in revision arthroplasty is one of the key reasons why primary implants need to be revised because the patients have infections. So dealing with infections is also high on the agenda of the revision arthroplasty surgeons. And there with CERAMENT G and V in Europe and hopefully, when we get the approval for V in the U.S., we have a very, very intuitive solution that we already see now, surgeons are willing to try and test.

Some of the surgeons actually already use it as part of their standard routine. Several surgeons want to wait until we have more evidence. But nothing is stopping us to enter this segment and penetrating this segment already now. But of course, we need more evidence. In addition to that, we believe very much in specialization of our sales channels, meaning that a revision arthroplasty surgeon is not the same guy that does trauma, who is not the same guy that does foot and ankle. So we need specialization in our go-to-market channels. So that's, of course, another aspect that we need to make sure that we get relevant sales channels, whether that's distributors as well as direct people to go deeper in the respective market segments. So I hope that answers your question.

Absolutely. Good answer. And my last one is fairly quick. In terms of working days that you discussed here, how many fewer working days was it Q4 vis-a-vis Q3? Was it like 2 days or...

It was 3 days shorter, if I remember, 3 or 4 days, but my memory is not skewing me 3 days shorter.

The next question comes from Kristofer Liljeberg from Carnegie.

I have 3 or 4 questions. The first one on this sequential growth for CERAMENT G in the U.S. per surgery day seems much stronger in Q4 versus pretty weak third quarter. So could you explain, is there any particular reason for this or just natural swings between quarters?

Again, as much as we refer to underlying natural swings quarter-to-quarter in Q3, that explanation remains in Q4 because again, it's -- as with the forward-looking estimates, there are several parameters that is moving and so on. So I don't see any specifics, and I'm looking at Torbjorn, but I think that we share that view.

Okay. Good. And the better growth in Europe, would you say that's sustainable, just making sure that there is no positive one-off larger orders or anything this quarter, explaining the much better growth in Q4 versus what we have seen previously.

Again, what was positive to see, Kristofer was the improvement in the U.K. to see what's been in our analyzer to see that also realized. But at the same time, we're -- we remain modest. We have to remain modest because again, as I mentioned in the call, the surgical backlog remains long in the U.K. So there could be short periods of swings back to a slower momentum and then swing back again, et cetera. But again, I think it's -- we're remaining optimistic, good to see the improvements in Q4.

When we look at the investment markets, I call it, we expect that momentum to continue when looking outside our direct markets and investments made in our so-called hybrid markets, Italy, Spain, Australia, South Africa, Canada, just to mention a few. And again, there, we start from quite a low penetration level, and there are so much market potential remaining in these markets. And we believe that the investments done is a good way to capture that potential.

Okay. Good. And then my third question, you mentioned the increased number of trauma centers that you are selling to, still early days, but have you reached good adoption already at some of those centers? Or is that also too early to see?

No. I mean, clearly, in some of them, but still it's a very small number where we have reached a solid adoption level, but it's really early days. And if you -- again, the definition that we use here is that selling to meaning that we've sold minimum 1 packet of CERAMENT. Of course, some of them, early adopters that were early out, we have a good adoption level, but not even close to what we think is the potential. And most of these -- I mean, just do the math. Most of these trauma centers that we've sold to are still very, very early in their journey. So yes, we'll keep ourselves busy to increase the adoption in these Level 1 trauma centers in the U.S.

Okay. And then finally, just a clarification when it comes to guidance for 2026. So you have included, as it seems then, very little or no CERAMENT V sales in the guidance?

Yes, that's correct. And that's to be prudent because we only know what we know. And although we have a great dialogue with FDA, you never know with FDA, and we follow their guidance similar to what we did now in Q4 in terms of transferring CERAMENT V from a 510(k) to a De Novo. We think that although unexpected to us, we think it was a very good decision longer-term for us. And it is important that we follow and deliver on what FDA wants us to. But of course, if we don't get CERAMENT V, we still believe that the 35% growth rate is definitely realistic, but it's going to be a lot easier to overdeliver if we get an early approval of CERAMENT V in the first half of this year.

The next question comes from Sten Gustafsson from ABG Sundal Collier.

As a follow-up on the U.S. market penetration and adoption. I think to ask it in a different way. But I think in the past, you have shared with us a number of surgeons you have trained. And I believe maybe I'm mistaken here, but the last number I have in my head is 1,000 surgeons. I was wondering if you could update me on where you are today on that number.

Yes. No, good question, Sten. Thank you very much. So first of all, to put your question into context, this relates to all the sort of relevant surgeons in the fields that we're in today, excluding spine. So that relates to foot and ankle, trauma and revision arthroplasty. The boring part of my answer is that, no, we're not going to provide an update to that number. We don't have that routine yet. But when we have that routine and when we have updated numbers that we are willing to disclose, we will, of course, do that.

But having said that, we are not slowing down. We're putting our foot on the gas to accelerate, which I think we see from both the financial as well as the operational numbers, including that reference point around the major trauma centers because clearly, you don't really get access without training an orthopedic surgeon.

I understand. And those Level 1 trauma centers, on average, do they have like 50 or 100 different surgeons? Or what's the size like?

I mean, it, of course, varies depending -- I mean, in total, U.S. as per our segmentation, we have 250 Level 1 major trauma centers. If you're major trauma centers, you're not running around with only sort of 5 trauma surgeons. You're not the major trauma centers. But it can vary. And I don't want to put a number out there, but it could be anything from -- I would only be guessing, but there are several -- quite a number of trauma surgeons on these different centers. And our ambition in the first place is to focus on the market segments, of course, where we focus on, so foot and ankle and trauma and then focus on the most complex, difficult cases within trauma where we see that CERAMENT G adds the most clinical value.

And then you typically start with 1, maybe 2 surgeons and 1 ID doc. You start there, only one indication or one type of case and then you expand from there. And that's a journey that honestly can take several years. And of course, we want to do it in the right way and make sure that we and our product adds value to not only the orthopedic surgeon, but also the hospitals and the health care system.

Makes sense. My next question would be on BVF and spine in particular. And I noticed a nice uptick in the -- and change in growth trajectory for CERAMENT BVF in North America. And I was wondering how much of that is sort of quarterly variation? And how much is related to spine?

Well, given the fact that we honestly launched -- we initiated the launch in December on spine BVF, and we try to keep it a very focused launch. In Q4, I wouldn't draw any conclusions that it is the spine launch in the U.S. with the CERAMENT BVF that sort of made that number look the way it looks. It's more normal variations.

Okay. Excellent. My final question is India. What's the timeline looking like? And what type of potential are we -- or should we consider for India?

Yes. No, India, I mean -- so of course, no sales in Q4 for India. When we look at India strategically long-term, it's an attractive market for a couple of reasons. The main reason is it's a lot of people in India. And second, there's a lot of people who are willing to pay for care in India. So the approach that we take is a very focused approach on private payers and the hospitals that serve this patient population. When we look at that patient population in terms of size, it's a sizable segment, very attractive longer-term.

And what we see now in India is first early steps -- and longer-term, give it a couple of years, it could be an important contributor for us. But most importantly, it's another growth leg to have in Europe & Rest of the World because we say that a lot of times, even in Europe & Rest of the World, we're very, very early phase. I mean, we depend and have depended a lot on U.K. and Germany, and we've been painfully aware of that when we have had the market reforms in Germany. So adding India is an attractive segment. But again, as with all countries, it will take time. But if you count the total population and if you segment that population into how many of them do have private insurers and how many of them have access to certain private hospitals, we feel very confident about that number, and we expect sales to start in India already in the first half of 2025 -- 2026, sorry.

The next question comes from Oscar Bergman from Redeye.

I just have 3 questions for you. The first one, I think, at U.S. ambassador sites for bone infection, could you give sort of a ballpark figure of what percentage of relevant procedures on Berlin-CERAMENT G today? I mean, have they -- or have you become the type of standard of care at some of the centers in the U.S.

Great question. To answer that last part, I would dare to say, yes, but it's still only a relatively small number where we have genuinely become the standard of care. And of course, it goes to what's the definition of standard of care. Do you only look at one patient indication? Do you look at several, et cetera, et cetera. So I think we're getting traction. Clearly, one very important way to establish this for us is to look at our great collaboration with the Oxford Bone Infection Unit in the U.K., and we have a fantastic collaboration and partnership with them. And one of the best ways we can educate patients in the U.S. -- sorry, educate the surgeons in the U.S. is simply by sending them to Oxford and see how they work with it.

And we see great results, including changing the standard of care, moving to more CERAMENT use in their daily practice. But I would say, yes, there are centers in the U.S. that have changed their standard of care, but it's still very early days. But I don't have any hard data to share.

Okay. And do you know those centers are typically university hospitals?

Yes. I mean one of the key strategies in the U.S. that we have and had for several quarters and potentially years is that we target academic medical centers. And that is simply because that's where they are very evidence and research focused. So they actually pay a lot of attention to the evidence that we have. You know that one of the key pillars in our strategy is to invest in and promote and lead by evidence. So that sort of fits like a hand in the glove to that.

Commercially, it's a really good way to sell and target academic medical centers because they train a lot of fellows that when they're done training and when they're done with their fellowships, they go to somewhere else. They could go to a different academic medical center or they could start their own practice or go somewhere else. So definitely, our product fits very well in academic medical centers simply because it's much higher evidence level on our product than what's currently on the market.

Okay. And India, it was very interesting to hear about. I assume that the regulatory processes there are piggybacking CE marks for CERAMENT G and BVF, right?

Yes. I mean, of course, we use the clinical data, we'll use the material that we've produced for U.S. that we've used for Europe. India is a particular country and with a somewhat complicated process, but the team has done a fantastic job on that, and we're getting very close to starting the launch in India in the first half of 2026.

Okay. And are there any other markets that you aim to launch at in the near to medium-term? I think we spoke about Japan before, very high level, of course, but it would be interesting to hear about Japan.

Yes. I mean, Japan is still on the list. It's a very attractive orthopedic market. Similar to India, somewhat complex regulatory pathway to enter in Japan, but we're actively working on it. We've said that before also. So there's no change in that strategy. And we're getting closer to launch. But from a timing-wise, India will happen before Japan.

Okay. And you also mentioned some safety inventory and the longer payment terms due to the holidays. Is it a fair assumption then to make that your free cash flow conversion should normalize already in Q1?

And again, I think that -- when you look at that, Oscar, it's key to see you have some accounts receivables, but you also have accounts receivables in combination with some of the so-called K sheets that is reported as accrued revenue. So part of the increase in accounts receivables in Q4 relates to a reduction in accrued revenue or open K sheets end of Q4 compared to Q3.

And the rest is simply that payments has been deferred from December to after the holidays. So with that, yes, we can expect to see the situation stabilize and normalize going into Q1. But again, the balance sheet is measured on the clock on 1 day. So there will always be volatility in the balance sheet. But over time, cash flow never lies.

The next question comes from Viktor Sundberg from Nordea.

Just to follow-up on your progress in trauma. One of the worries in the market with regards to trauma in the U.S. has been that maybe surgeons do not always feel the acute need to prophylactically use infection prevention in the surgery risk with the products such as CERAMENT G that comes with a bit of a price premium to other products without infection prevention in contrast to osteomyelitis when the infection is already always present at the intervention. So can you just comment on that as you have met more surgeons day-to-day at these Level 1 centers and got their feedback if this is correct or not to look at adoption in trauma in that way? And maybe also quickly, the NTAP here, any more color on how the added NTAP for trauma and the dropped NTAP for osteomyelitis will impact U.S. sales when we have moved a bit into 2026 and you might have gotten a bit more data on this dynamic?

Yes. So we'll start with the second question first for simplicity and then we'll comment on the first one. So in Q4, we did not see any material impact -- negative impact of the lost NTAP, that actually came into effect 1st of October. So we don't see that we lose volume due to that. Again, early days, but in Q4, we didn't have any signals on that. I think to your point on trauma surgeons prophylactically or not, I think we need to start even more basic in trauma, meaning that actually, when there is a very high risk of infection or actually that they have confirmed infection, that's where we start with in trauma. And I don't think that we have reached any maturity or saturation on that level. Once we've done that, then, of course, it comes to prophylactically.

Prophylactically, of course, is always more challenging than the starting point. But once you get the starting point right, my experience is at least that once you get that right, you see -- you get the surgeons to understand and see the value that CERAMENT has, then moving into that prophylactic stage becomes more natural. And different surgeons, different clinics, different centers are in different parts of this journey. But I would argue that still prophylactically is further out, but we're making really good progress by starting with the basics and getting them to be aware and understand the role of CERAMENT G in these type of cases.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

No. With that, thank you all for your interest, and we wish you all a great rest of the day. Thank you.

Welcome, everyone, to BONESUPPORT's Q3 2025 Results Call.

My name is Torbjorn Skold, and since September 1, I'm the CEO of BONESUPPORT. With me here today is our CFO, Hakan Johansson. And together, the 2 of us will use the next 25 minutes to guide you through the Q2 report and then open the line for any questions.

Before starting the presentation, I would like to draw your attention to the disclaimers covering any forward-looking statements that we will make today.

Next slide, please. So let's look at the financial and operational highlights from the quarter. Q3 was another strong quarter with solid execution across the business. Net sales came in at SEK 294 million, corresponding to a growth of 24% versus Q3 2024. Sales growth at constant exchange rate was 34%, showing that there is continued strong currency impact on our figures for the quarter.

Our operating results, excluding incentive program effects, was SEK 79 million, corresponding to an adjusted operating margin of 27%. Reported operating results was SEK 65 million, and we saw strong cash generation with operating cash flow reaching SEK 71 million, leading to a cash position at the end of the quarter of SEK 379 million.

One highlight in the quarter was the publication of the long-awaited CeraHip study, which now kicks off our market penetration efforts in this market segment, revision arthroplasty. We will look deeper into this later in the presentation. We continue to see strong traction for CERAMENT G in the U.S., where both new accounts and increased use among current users contributed to the strong progress. CERAMENT G sales in the U.S. reached SEK 192 million for the quarter. Furthermore, the proposed NTAP for CERAMENT G in open trauma has now been decided upon as well as a 6% general increase in CERAMENT relevant DRG codes by CMS for orthopedics. So all in all, an eventful and successful quarter.

As I've transitioned into my new role and reflect on the business, I find our strategy sound and that the business develops very well. What really stands out is the solid evidence base supporting the CERAMENT platform and the significant long-term opportunity of CERAMENT globally in several clinical segments. This spring, we're planning to host a Capital Markets Day, where we'll share a structured overview of our key initiatives and our path forward. We'll follow up with more details on the official dates later.

This is the moderator speaking. We are having some technical issues, but we are going to try to get the speakers back as soon as possible. [Technical Difficulty]

So the speakers have connected again. Can the moderator please confirm whether the sound and technology is up again.

Yes, everything is great.

Thank you very much.

Thank you, moderator. Moderator, can you please inform us how long did you listen to us?

We came to -- you were at like the third slide in the third quarter report.

Okay. I assume that we have gone through Slide 3, and we move over to the sales development. This chart shows the last 12-month sales in Swedish krona by quarter since 2019 in stacked bars by region, by product category. As you can see, the launch momentum for CERAMENT G in the U.S. is exceptionally strong. However, in the last 2 quarters, we've seen strong influence from the U.S. dollar to Swedish krona depreciation. Last 12 months growth in Q3 of 37% in the graph corresponds to an even stronger 41% at constant exchange rates. So most of this quarter-over-quarter slowdown in last 12 months' sales is due to the strong currency impact. CERAMENT BVF last 12 months dropped 2% year-over-year in constant currency. In total, antibiotic eluting CERAMENT grew with 59% last 12 months in the quarter in constant currency.

Next slide, please. In U.S., sales amounted to SEK 246 million, representing a growth of 40% at constant exchange rates. There was some general variability during the quarter due to the usual stop and go dynamics, a reflection of the strong pace of new customer recruitment over the past 6 to 8 months. As part of our mission to modernize an outdated standard of care in the U.S., we have successfully opened one market segment after another. We started with foot and ankle, then we followed with trauma, and now we're moving into revision arthroplasty. Revision arthroplasty and the subsegment of periprosthetic joint infections are areas we have not specifically focused on in the past. Each year, approximately 1.5 million primary joint replacements are performed in the U.S. with just over 70,000 revision procedures requiring bone graft.

The CeraHip results are groundbreaking. Although the study is not very large, patients have been followed for an average of 3.3 years with no infections reported. I'll speak more about CeraHip on the next slide. We have expanded our U.S. organization, and we plan to recruit additional team members with specialized expertise in revision arthroplasty to support the market entry and the medical education programs. We are expanding our presence in the market to introduce CERAMENT BVF for use in spinal procedures in Q4 2025. Several distributors are now in place to begin engaging with spine surgeons. Some of these distributors are already our partners today on the extremity side, while others represent new collaborations.

The spine segment is new for us, and we will begin generating clinical data during 2026 to establish a foundation for further market penetration. We have also made strong progress in evaluating and preparing the regulatory pathway for introducing CERAMENT G into the spine segment. We have reached a stage where guidance from the FDA on the regulatory path is required. We plan to meet with the FDA at the beginning of 2026. The path forward will be shared and communicated at the Capital Markets Day this spring in 2026.

The team have been working diligently with assembling data in reply to FDA's question on CERAMENT V, and we expect to send in the supplementary data pack in November. The material relates mostly to clarifications and making sure that the evidence is presented in the way that FDA wants to have it. Being a pioneer technology, there is no template as how to bring forward the evidence. The thoroughness of the process testifies to the rigor of solid data required to qualify a product into the unique category of antibiotic eluting bone graft. And we should remember that this category is defined by another CERAMENT product, namely CERAMENT G.

So let's turn to Europe. Next slide, please. Sales performance in Europe continues to be influenced by the same dynamics observed in Q2. The third quarter typically shows some volatility due to seasonal factors. Additionally, the contraction and disruption in Germany have persisted as anticipated. Sales in EUROW came in at SEK 48 million, representing 5% year-over-year growth and 7% at constant exchange rates. Hybrid markets in Southern Europe, Australia and Canada are performing strongly. We're beginning to see positive traction from the investments made during the first half of 2025, reflected in improved sales performance. In the U.K., the previously announced prioritization of hip and knee surgeries is gradually restoring procedure volumes, which bodes well for the future of BONESUPPORT in U.K. However, the pace of recovery varies by region and is largely dependent on staffing levels.

During the quarter, the European Bone and Joint Infection Society held its annual meeting. Several podium presentations and posters highlighted the efficacy of CERAMENT G and CERAMENT V in single-stage procedures and demonstrated improvements in patient outcomes. A poster presentation by Dr. Meller from Charite showcasing results from the CeraHip study attracted significant interest and a large audience. We'll review the detailed findings from the now published study on the next slide. Also, Professor Ferreira from University Hospital, Stellenbosch presented results from his study involving 103 trauma patients with bone infections. These patients were treated with a single-stage procedure using CERAMENT G or CERAMENT V. After an average follow-up of 11 months, 96% remained infection-free and no amputations done. [Technical Difficulty]

Sorry for having some technical issues again. The speakers will be back as soon as possible.

Annual Meeting of the American Association of Hip and Knee Surgeons, AAHKS in Texas, which last year attracted over 5,100 participants. In fact, our U.S. team is actively preparing for the event at this very moment as it kicks off today.

Now I'll leave a deep dive into the numbers to Hakan. Hakan, please.

Thank you, Torbjorn. And again, sorry for what seems to be a day of technical disruptions and hopefully, now the -- everything stabilizes.

So into the financials. Well, net sales improved from SEK 237 million to SEK 294 million, equaling a growth of 24% reported sales growth of 34% in constant exchange rate. Torbjorn has already spoken about the solid performance in especially the U.S. and the major drivers behind the sales growth, but as the weak U.S. dollar somewhat hides a continued strong trajectory in the U.S., I would like to share the U.S. sales performance in U.S. dollar.

This slide shows the quarterly sales in the U.S. and U.S. dollar with continued solid performance quarter-to-quarter. The growth in dollar in the quarter of 40% should be viewed in perspective of volatility on BVF sales being 1.7% below same quarter last year, whilst CERAMENT G continued to show solid performance with a growth of 59.2%. The contribution from the U.S. segment improved with SEK 31.9 million and amounted to SEK 111.2 million. The improved contribution relates to increased sales after the effect from increased costs.

Sales and marketing expenses during the quarter amounted to SEK 123.6 million compared with SEK 102.6 million previous year, of which sales commissions to distributors and fees amounted to SEK 84.2 million compared with SEK 65 million in the same quarter last year. From the lower graph showing net sales as bars and gross margin as the orange marker, it can be noted that the gross margin remained stable and strong around 95%. In Europe and Rest of World, a contribution of SEK 12.5 million was reported to be compared with SEK 15.6 million previous year.

Sales and marketing expenses increased with SEK 4.6 million, including SEK 2 million related to the previously communicated commercial investment in the EUROW booster program. From the lower graph and orange marker, the minor drop in gross margin is noted mainly impacted by market mix. The flat selling expenses compared with the same quarter previous year is due to a depreciated U.S. dollar, but also an effect of seasonality. As mentioned previously, the quarter also included SEK 2 million related to the EUROW booster program.

R&D remained focused on the execution of strategic initiatives such as the application studies in spine procedures and the market authorization submission for CERAMENT V in the U.S. These initiatives have been progressing well during the quarter and, among others, leading up to the launch of our product, CERAMENT BVF in spine later this year. And administration expenses, excluding the effects from the long-term incentive programs, remain on a stable level.

The reported operating result amounted to SEK 65.4 million despite unfavorable currency effects totaling SEK 5.7 million, and I will come back to this in a following slide. The newly introduced tariffs in the United States are not expected to have a material impact on cost in 2025 due to high safety inventories. The full effect of the current 15% tariff equals a 0.8% impact on U.S. gross margins and will come gradually with full effect from 2027. The difference between adjusted and reported operating results are costs regarding the long-term incentive programs amounting to an expense of SEK 13.2 million in the quarter compared with SEK 7.3 million previous year, as you could see from the previous slide.

Cash conversion remains solid with a fifth consecutive quarter with strong cash flow and an increase in cash during the period with SEK 69.3 million. Despite unfavorable currency effect with this report with a strong adjusted operating result and a solid cash flow, we continue to confirm a strong operating leverage and the business scalability.

During the period, the Swedish krona has continued to strengthen against the U.S. dollar. Other operating income and expenses, therefore, contain foreign exchange gains and losses from the translation of the group's assets and liabilities in foreign currency, amounting to a negative SEK 5.7 million. Simply put, the negative SEK 5.7 million is mainly driven by the operating assets in the U.S. such as inventories and trade receivables. These are originally valued in U.S. dollars and at quarter end translated into a much stronger Swedish currency versus last quarter.

The graph on this slide shows with the gray bars how the relationship between the U.S. dollar closing rate and the Swedish krona has varied over time. This is read out on the right Y-axis. The blue dotted line read out to the left axis shows reported adjusted operating results. The adjusted operating result, excluding translation exchange effects is the orange line.

To explain this, in Q4 2024, the U.S. dollar to SEK was above SEK 11, which gave a positive effect of SEK 20 million in the quarter. And therefore, the blue dotted line is above the orange line. In Q1 2025, the U.S. dollar to SEK rate was SEK 10.02, creating a negative impact of SEK 30 million. In Q2, the U.S. dropped down to SEK 9.49, creating a negative impact of SEK 11 million and in Q3, continuing down to SEK 9.41 with a negative impact of SEK 5.7 million, meaning that the blue dotted line dropped below the orange line for these 3 quarters. The orange line eliminates the translation exchange effects and gives a more comparable view of the underlying trend in operating profit. In the table below the graph, you can see the FX adjusted operating margin of close to 29% in the period compared with 23% in the same quarter last year.

And with this, I hand back to you, Torbjorn.

Thank you, Hakan.

And if we take the last slide, so to summarize Q3 2025 for BONESUPPORT, sales grew 34% in constant currency, reflecting steady and consistent progress. Adjusted operating margin reached 27%. Cash flow remains robust, underscoring the health of the business and its scalability. With the publication of the CeraHip study, strong endorsement from leading surgeons at Charite and detailed procedural guidance for using CERAMENT in revision arthroplasty, we're unlocking a new avenue for market expansion. This marks a significant step forward in our ongoing mission to transform the standard of care.

We maintain our guidance on sales growth above 40% in constant exchange rates for full year 2025.

And to conclude, my first period at BONESUPPORT has been as rewarding as it has been intense. I'm convinced that the most exciting part of our journey still lies ahead. And as I said, to provide a clearer view of what that journey will look like, we will host a Capital Markets Day in the spring of 2026.

Lastly, again, apologies for the technical issues that we've had during the call, but now we're happy to open the line for any questions that you might have. Thank you.

[Operator Instructions] The next question comes from Erik Cassel from Danske Bank.

Yes. So India has probably cut out 70% of what you said. So you have to excuse us if we repeat some stuff. But first, I just want to confirm the sales level for CERAMENT G in the U.S. Was that USD 19.9 million in, 59% organic growth? Or is it a completely different figure?

Again, as commented, CERAMENT G reported a 59% growth.

Okay. Good. First, I then want to ask, what are you seeing for trauma now during the initial 3 weeks of NTAP for CERAMENT G in the U.S.

Again, as communicated previously, what we see is a slightly different market dynamics than what we experienced launching into when there is a bone infection. So when there is a bone infection, the surgeon was looking for treatment options and CERAMENT G fitted very well. With trauma surgeons, it's a bit of a timing issue. We meet the trauma surgeon and the trauma surgeon haven't had a patient coming back with a bone infection during the latest weeks or months, et cetera. It's a harder call to convince the surgeon to try a new product. However, if the surgeon had had a bone infection lately, it's an easier call to convince the surgeon to start trying. So what we see confirms what's been previously communicated. It's a big market potential in trauma, but market penetration to start with will be somewhat slower than when there is a bone infection.

Okay. But just specifically on the NTAP, you haven't seen that in and of itself accelerate uptake anything?

Again, the NTAP, Erik, is valid from 1st of October. So it's too early to see whether this has any impact in the penetration of the trauma segment.

Okay. And then U.K. down 5.5% year-over-year. Germany, you said was worse. Is it possible to give any sort of more specific numbers on how bad Germany is doing and sort of how much that represents of the European sales?

Again, we have always been precautious to disclose exact numbers on geographic level. But again, if there are structural challenges...

Speakers have been disconnected again, but if you have to stay on the line, I hope they will.

The speakers was not disconnected. We heard them.

So do you hear us now, Erik?

Yes, I hear you loud and clear.

Thank you. So again, some of the challenges [Technical Difficulty]

Okay. Now I don't hear the speakers.

Yes, a second, we're trying to fix the connection problems.

So dear moderator, where are we now in terms of technology? Because it feels like things are going silent.

Yes. Now you came back. So maybe, Erik, can you repeat your last question, so we can go back from there.

Yes, sure. It was on Germany. U.K. down 5.5%. You said Germany was worse. And I asked for if we could add any more color on Germany. How much is it down? And how big is Germany in terms of Europe sales?

Well, Germany is our second biggest market. So of course, when we have a setting in a market like Germany, it impacts on the totals.

Okay. And then just lastly, do you have any visibility on U.K. and Germany coming back? You're saying that you're seeing a gradual, say, recovery in the U.K., but when can you be back to sort of normal levels or normal growth rates in those markets, do you think?

Again, what is impacting in the U.K. is that U.K. is a market where a substantial health care backlog is impacting hospital priorities. Already before the pandemic, there was patients -- 5.5 million patients in queue that has increased to 8 million patients. And the political priorities has started to recruit or reduce that queue, but still from a very high level. So again, we will be fighting against hospital priorities from time to time. But in the environment, we start to see that patients that have been waiting for surgeries where CERAMENT G is a good fit are gradually coming back. But as Torbjorn said in the call, it will probably be a slow process for the market to return into a normal and steady situation.

The next question comes from Viktor Sundberg from Nordea.

I have 2. So I guess it's not your main product in the U.S., but I just wanted to dig into the BVF product in the U.S. a bit. We've seen a negative trend in the U.S. for that product here for a couple of quarters. I just wanted to understand a bit more what is driving that and how to extrapolate that negative growth we see at the moment into the coming quarters and into 2026. And then I have another question.

Again, I think that it's 2. Again, as you said, we've seen that the BVF has been soft in the latest quarters, but also then showing volatility with a few quarters where we have good BVF sales. And we see that when we look at sales and hospital levels that there is an underlying volatility in the volumes. What we also see, and this is important for the longer term is that with the extending customer base and with surgeons recruited thanks to CERAMENT V, we also see these surgeons starting to use BVF in such cases where there is a controlled infection risk, et cetera. So we remain with a belief that all the time, BVF will stabilize and BVF will, like we've seen in Europe, deliver a small organic growth, but the main driver will be our antibiotic eluting products.

Okay. And just looking into 2026, if we see substantial cuts to Medicaid as part of the One Big Beautiful Bill Act, even if you're not particularly relying on Medicaid directly, I guess, hospitals could see an increase in uncompensated care and maybe strained overall budgets due to this. What's your thinking around how hospitals will look at CERAMENT G as it carries a bigger upfront costs? Our feedback just by speaking to some orthopedic surgeons is that price is the main barrier for wider adoption of CERAMENT G in the U.S. And I'm just thinking that if major cuts to Medicaid will materialize in 2026, hospitals might focus even more on price next year. But I just wanted to understand how you plan to mitigate some of those budget headwinds, I guess, for next year.

Yes. No, I'll start and then Hakan can fill in. So I think the plan to mitigate that is just to follow the BONESUPPORT strategy where we focus on evidence. And I think it was very interesting to listen in on what was discussed and presented at European Bone and Joint Infection Society. And it's very clear from those presentations and the discussions that are ongoing, and it's similar also at OTA that happened last week, which is a big trauma meeting in the U.S. is that it's very clear that there is a paradigm shift in the market in orthopedics going from long systemic antibiotic regimes in orthopedic surgeries to move to shorter, if any, systemic antibiotic regimes and combining that with local antibiotics with, for example, CERAMENT.

So that paradigm shift is happening. There is clear evidence already now on the market. The topic is clearly highlighted. And more evidence will come in the future, partly by BONESUPPORT and CERAMENT and partly because the market moves in this direction. So I think it's nothing new really. It's something that has been happening. It will continue and our plan to address this is just to focus on the strategy, continue to build really, really strong clinical and health economic evidence and make sure that, that evidence is right and center, not just in front of orthopedic surgeons, but also the other decision-makers that play a role in those conversations.

Anything to add, Hakan?

No, I think you covered it quite well. And again, the pricing is something we meet as part of the dynamics that we have referred to. And we have hospitals that are becoming frequent users and hospital administration noticing that this drives a certain level of costs. But so far in those discussions, when we come with strong clinical evidence and health economic evidence, this is discussions that we're able to handle through. So we're confident in the evidence around the technology and the difference to standard of care it represents.

The next question comes from Mattias Vadsten from SEB.

I have 3 questions. I think I'll take them one by one. First, I think quite confident wording around Q4, if I read it correctly. You also reiterate guidance of at least 40% sales growth. This require a quite strong finish to the year, I guess, very close to 40% organic sales growth at least and an acceleration quarter-over-quarter. So just what brings this confidence? And yes, if you have any further color on sort of how the start of Q4 have looked for you? That's the first question.

Sure. I'll start with that more from a, let's say, tactical operational side and then Hakan can hopefully back it up in the numbers. So as we reviewed both the U.S. business and as we've reviewed the EUROW business in detail and the outlook for the quarter, the fundamentals look very strong from my view in terms of the number of accounts that we have, the penetration in the accounts whether we are increasing penetration or losing penetration. So I feel very confident in the numbers on an account level and regional level that we've gone through. I think also very high level, and Hakan will speak to this also, if you look at the comparables Q3 versus Q4, that also gives me more comfort in the numbers. So yes, I feel pretty confident in hitting that guidance that we've provided with 40% sales growth above prior year on a full year basis in constant currencies.

Hakan?

Again, I think you covered this quite well, Torbjorn. And again, to bear in mind that if we look at the U.S. dollar -- sales in U.S. dollars, for instance, in the U.S. Q3 to Q4 last year, Q4 was a bit soft after a strong Q3 and then followed by a strong Q1, et cetera. And with the momentum that we have and again, we believe that Q3 somehow gives us a lot of confirmation in that underlying momentum, we are confident that we [Technical Difficulty]

I can't hear Torbjorn or Hakan anymore.

Yes, just a second. We're trying to fix the issue here. I hope they will be back at us soon.

Moderator, do you hear us now over a mobile line instead of over the Internet?

Yes, now I can hear you.

I can hear you, Hakan. I heard the full answer from Torbjorn and I heard, I don't know, the first sentences from you, Hakan.

Okay. So what I said is that when we look at, for instance, the U.S. in U.S. dollars, last year, Q3 was strong and Q4 was a bit soft. And with the underlying momentum we see in the U.S., we see good opportunities to be well in line with the target we have set for the full year.

Okay. That's perfectly clear. Then I have 2 more. So the next one is the revision arthroplasty segment. I mean, as you said, quite supportive data to say the least. Sort of what are the sales volumes of CERAMENT in this segment today? And could you talk about what you think is required to sort of achieve a meaningful uptake in this segment?

Sure. So I think it's fair to say that currently, this is a segment that where CERAMENT, we've had -- it's been on label. It's been on label in the U.S., and it's been on label in Europe. But at the same time, without clinical evidence, very few orthopedic surgeons will pick it up. That's just how orthopedics works. Now over the last couple of years, the team has worked with Charite, which is, I would argue, top 3, top 5 hospitals in the world when it comes to revision arthroplasty. They've done a study and to be frank, the results could not have been better. So that's the first important step. But to answer your question, our sales in this segment, I would argue it is very, very limited. There is some, but very limited.

And I think the potential, if we look at the number of procedures that are done in revision arthroplasty in general and specifically in periprosthetic joint infection, which is going to be our primary focus area. Those are pretty considerable volume numbers that we have at hand. And what is required is, of course, that we have a sales force that is in front of the customers that are in the ORs talking about this and that we promote the evidence and the application techniques that we already have today. But also, let's be frank, we will continue to invest in education. We will continue to invest in further evidence in this space. And this is work that we've kicked off, and that's something that I foresee will continue for several years ahead because this is such an interesting and important segment for us strategically for many years.

Very clear. Then I have a final one. I think it will be quite quick. If you take away the effects of incentive program and sales commission costs, the OpEx look a bit low, I would say. I know quite substantial FX effects year-on-year, but I think down SEK 5 million versus Q2. So question is, is this just usual seasonality? Or is it anything you would mention here, Hakan?

It's primarily that relates to normal seasonality in outside the U.S., people tend to have vacation and during vacation period, there's a lower level of activities, et cetera. So just normal seasonality.

The next question comes from Kristofer Liljeberg from Carnegie.

Three questions. First, just a follow-up on the previous one on implant revision. Is this something you think will start to generate revenues for you already in 2026? Or will that be later?

On revision arthroplasty?

Yes.

Yes. I mean it will generate revenue in Q4 this year. And it will, for sure, generate revenue in 2026. If it doesn't, then we do something fundamentally wrong.

Okay. So -- but do you think you could see a faster uptake in this indication than for open fracture trauma, for example?

So really good question. And I don't have any solid data points on that because of my somewhat limited history in BONESUPPORT. But if you think about the segments and how surgeons generally work and how they take decisions and you compare revision arthroplasty, which is an elective procedure and trauma and especially open trauma, which is acute trauma. So it's not an elective procedure. It's always easier to sell into a segment where you have elective procedures. So only looking at those sort of characteristics, you could argue that, well, it should be easier and faster to enter revision arthroplasty than it is trauma. So I think there's something in that, that you're absolutely right on, but I have a hard time quantifying it, to be perfectly honest.

Okay. And then I don't know whether we missed that due to the technical problems, but did you say anything about expected launch timing for CERAMENT V in the U.S.

So CERAMENT V in the U.S., we follow the plans. So we deliver on the plans and the plans that were previously communicated was that we submit additional data to the FDA in November, that is according to plan. And then we feel comfortable that we have the right data in place and expect a positive outcome of that review with the FDA. Exactly when FDA will come with an answer, it's hard for us to predict. But typically, historically, what we've seen is that there's a 90-day period following the submission of the supplemental data until an FDA decision is taken. So that's typically the guidance that we give on the CERAMENT G for the U.S.

Great. And then finally, just on R&D costs, should we expect that to be more stable now quarter-over-quarter or year-over-year before you start the CERAMENT G spine study?

Yes. I think that's a fair comment. And again, you've seen quite a solid stable level over the last year, et cetera. And it's a fair estimate to assume that, that level continues. High activity level remains, but there is no true acceleration until we would start a clinical study preparing for getting CERAMENT G approvals.

The next question comes from Sten Gustafsson from ABG Sundal Collier.

I think most of it has been covered already, even though there were some technical issues here. So I just want to confirm that I heard it correctly. Did you say that you had CERAMENT G sales in the U.S. of -- was it $19.9 million in the quarter?

We did not confirm the dollar amount, but we say that we confirm that the growth in constant exchange rate was 59%.

Okay. That's good. And then the number of procedures in the U.S. related to this hip joint infection category. Did I hear it right, 70,000 or...

So what we say is that the number of primary hip and knee arthroplasty as per previously communicated data from BONESUPPORT is estimated to 1.5 million. So that's the number of primary arthroplasty. Revision arthroplasty is a smaller number, of course. But the initial focus that we have on revision arthroplasty is the subsegment that is called periprosthetic joint infection. The previous numbers from BONESUPPORT that has been communicated related to the size of that segment is 70,000 for U.S. only. So those were the numbers that we refer to. So we're not communicating any new numbers on this call compared to what's been communicated earlier.

And that was 17, 1-7?

No, 70. And the 70,000, just for absolute clarity, those are revision arthroplasties with bone infection where a bone graft is needed.

Okay. Excellent. And then on NTAP finally, and I heard it, I think correctly that you expect the trauma NTAP will be more challenging than when you got it initially on osteomyelitis, which makes perfect sense. But do you think that the net impact here short term with the sort of -- will be then a negative driver? Or do you expect the underlying osteomyelitis procedures to carry on even though you don't have the NTAP on those particular procedures?

Well, sorry, I think that to clarify, I think we were talking about what the market dynamics and the differences between there is a bone infection and in trauma. When we talk the value of the NTAP specifically, I think that it showed to not have so much impact when penetrating the market when there is a bone infection, et cetera. But when we are talking trauma, open trauma and the surgeon has the patient in front of him, there's always a consideration between risks and costs. And here, the NTAP is taking away the cost aspect. So potentially, the NTAP for open trauma has a bigger value. But again, it remains to be seen over time. So it's been valid from 1st of October, so that after Q3, and we don't have the data to back that up. But we honestly believe that it has the potential of having a bigger impact than for bone infection.

The next question comes from Maria Vara from Stifel.

Just a couple of them. I think we, of course, see extremities as the near-term opportunity, what's going to be driving growth for the company for many years. But of course, I think we haven't dedicated much time to the opportunity in spine during the Q&A session. So I just wanted to maybe get some thoughts on how this recruitment of sales reps is going? And any kind of guidance on contribution we could see from the first quarter launch as well as from 2026?

Yes. No, good question. And I think to put spine in perspective, spine is clearly a very interesting area for BONESUPPORT for the long term, but we also want to be realistic in the short term, we will likely see much bigger uptake from revision arthroplasty than we will see in spine. But spine is an important strategically and large opportunity for us. The approach that we take is that we first launched spine with CERAMENT BVF to build the market. So we are going to have a relatively focused launch. So we're not going to go fully and nationwide to all the accounts everywhere at the same time.

We want to take a focused approach with certain distributors that we already work with, some new distributors that are specialized in spine. And we want to make sure that we build the right clinical evidence and the right and validated surgical techniques over time. And then, of course, the big strategic play for us is to go into spine with CERAMENT G. But that, of course, requires a market approval. But we see a couple of good scenarios ahead of us. So the question is not if, it's about how and when. And that's why we engage with a discussion with FDA in the near term to make sure that we feel comfortable on the right way to market and that we are also able to execute on that.

Okay. That's helpful. And then if we think about the profile of the sales commissions in the U.S. we see a little bit of an increase with respect to the U.S. revenue for Q3, if I'm not wrong, 35% with respect to the U.S. sales. How should we think about this percentage changing over time, especially as of the U.S. launch in spine? I mean, there's not much of an investment there, but still with something. So if you can guide whether we could think about the same range with respect to revenue or any major changes here will be appreciated.

Well, thank you, Maria. And again, in the short to midterm, you can expect the increase in Q3 is mainly related to short-term volatility, the commission level remains stable. There is no change in commission levels. There are a few performance-related aspects in the commission structure, and that's why it can be some volatility between quarters. But in general, it should keep itself the commissions plus other fees that is involved around -- I mean, between 34% and 35% over time. And we don't see the inroads into spine with BVF changing that structure.

The next question comes from Oscar Bergman from Redeye.

Torbjorn and Hakan, I know you've answered a lot of questions, but I only have a few more to you guys. So first off, on your current base of U.S. CERAMENT G users, is there any noteworthy crossover to spine surgery among these?

Very limited type of sales. Of course, when we have hospital accounts where ultimately you have both surgeons on the extremity side and on the spine side.

Yes, but it's very...

Yes. And again, coming back to as we communicated, our strategy of launching into spine will be very focused. We have a list of hospitals and list or surgeons that we are addressing so that we reach the right surgeons to build additional clinical data and validation, et cetera, before we go wider. So with that, we also work very focused with what distributors and what sales reps we're contracting.

Okay. And just wondering if you can elaborate a bit more on the situation on eventual pushback on price, both for customers in the bone infection segment and in trauma. Has this been sort of a driver of customers either not signing up or perhaps even signing off during this quarter?

Well, Oscar, price is always a discussion. We're living in a commercial environment and so on. And -- but so far, it has had no impact in terms of listing and continued growth of listed hospitals. We meet that also, as I mentioned in the call, as part of go stop go, we have hospitals where we have surgeons becoming frequent and high users and not seldom, there is a reaction from hospital administration where we have them to involve with our med and health economic specialists to help explaining the data that is backing up the price level and the savings that is enabled by the clinical and health economic benefits by using CERAMENT G. So of course, that's part of daily life. But so far, we don't see a general pushback on price.

Okay. So those efforts in training and education on the health economic benefits, they are holding back customers from perhaps signing off them essentially?

As for now, and again, that's also the reason why we're confident with the approach that we're using, and that's why we also will continue to invest in additional med and health economic resources.

All right. And what do you say in terms of user rate at the existing customers? Are they at desirable levels in bone infection? Or is there still plenty of room to grow in the existing number of CERAMENT G surgeons?

From my perspective, what I see is that there's plenty of room to grow in current markets, in current products, in current clinical indications. Now I might be wrong on that, but all the data that I've seen so far after a couple of weeks indicate that we're just scratching the surface on these 3 main segments that we prioritize short term, which is foot and ankle, trauma and revision arthroplasty. And then, of course, longer term, we're entering spine. So I think there's plenty of room to grow going forward.

All right. Just 2 more quick questions. I suspect you're in a hurry. The geographic reach in the U.S., are you at a good capacity already in the different key regions? Or are there any initiatives that you will accelerate on?

I mean the U.S., as you well know, that's our most important market, both from a growth and profitability point of view. So it has priority #1. I think we have good coverage, but that doesn't mean that we will not continue to invest. We're investing in Q3. We will continue to invest because if we're not investing, we're not taking advantage of the potential that we have. So I don't think it's a coverage issue. It's about making sure we invest to address the potential we have in terms of increasing the penetration.

Okay. So there's no specific region in the U.S. where you feel like, okay, we should really focus on this specific region.

I mean, when we look at the map, of course, we have certain regions where we think our penetration/market share is lower, but that's not something that we disclose on this call. But on a high level, we will continue to invest to make sure that we increase the penetration in the U.S. and certain regions have higher priority than others.

Okay. This is my final question. You are quickly accumulating a lot of cash over SEK 220 million since Q3 last year. Will you perhaps present some sort of plan on how you aim to deploy this growing amount of cash in your CMD in the spring?

Oscar, I think that, as Torbjorn mentioned during the call, and sorry for all the technical breakout is that, that's an area where we own the market, some clearer communication and the Capital Markets Day in spring time is a good opportunity to do that. In the shorter term, again, this gives us the comfort of continue to investing in the business. We believe in the business. We think we do the right things. We see strong confirmations also in the Q3 report on the work that we're doing and the cash just helps us to continue investing in this.

And gives us the freedom to operate in a way to take advantage of all of the opportunities that we see in the 3 priority segments plus spine as well as on more longer-term strategic initiatives and scenarios that we, of course, also work on. But more on that in the Capital Markets Day this spring.

So unfortunately, now we have to close this call. We're coming to an end. Again, thank you all for attending. And also from our side, we apologize for the technical issues that you guys have experienced, and we thank you for your patience with us. Thank you.