Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bactiguard Holding AB (OSTO:BACTI B, Financial) achieved profitability on an EBITA level for both the third quarter and year-to-date, demonstrating the effectiveness of their license-focused strategy.
- Total revenues for Q3 increased by almost 50% compared to the same period last year, reaching SEK73.9 million.
- The partnership with BD showed solid growth, contributing significantly to the positive EBITDA and demonstrating a successful global collaboration.
- The wound management portfolio performed well, continuing its trajectory of profitable growth, with significant results published in the British Journal of Surgery.
- Bactiguard's infection prevention technology continues to gain interest from global MedTech players, indicating potential for future partnerships and revenue growth.
Negative Points
- Zimmer Biomet terminated the agreement covering multiple orthopedic product segments, impacting Bactiguard's 2028 financial targets.
- Revenues from Zimmer Biomet decreased slightly, and the termination of the agreement necessitates a review of financial targets.
- The BIP portfolio continues to decrease as inventory depletes and production ceases, impacting overall revenue.
- There is uncertainty regarding the timeline for FDA approval for Bactiguard's trauma products, which could affect future revenue streams.
- Operating expenses increased in Q3, and while cost control is a focus, there is a need to balance investments with profitability.
Q & A Highlights
Q: What makes you confident that Zimmer Biomet is committed to the long-term partnership, especially regarding trauma implants? Also, can you provide an update on the FDA approval timeline for the Bactiguard-coated trauma implant?
A: We continue to work closely with Zimmer Biomet in the trauma area, focusing on regulatory pathways and commercial development. Zimmer Biomet has expressed strong belief in our technology and the importance of infection prevention. However, we do not have an updated timeline for FDA approval in these categories at this time. - Christine Lind, CEO
Q: Can you provide a detailed split of the SEK24 million in license revenues from Zimmer Biomet, particularly regarding the expanded agreement?
A: The total revenues from Zimmer Biomet include license revenues, exclusivity revenues, and application development partnership revenues. Most revenues under the orthopedics agreement were recorded as exclusivity or milestone revenues. We do not provide a detailed split in the report, but revenues are recorded across the three categories. - Patrick Bach, CFO
Q: How would you describe the development with BD this quarter? Are the volumes above normal levels, or is this the new normal?
A: We are pleased with the growth in our license revenues driven by the BD partnership. This quarter showed solid growth, reflecting the strengthening relationship. Whether this is the new normal will be proven in future quarters, but we remain confident in the continued growth of our partnership with BD. - Patrick Bach, CFO
Q: What are the next steps for expanding the wound management portfolio, given its steady growth?
A: We aim to grow profitably by highlighting the benefits of our products, such as the Hydrocyn product line. We focus on strategic growth in core markets and continue to drive profitable growth in the wound management segment. - Christine Lind, CEO and Patrick Bach, CFO
Q: With good cost control this year, how do you plan to allocate resources for future projects in 2025?
A: We focus on maintaining OPEX control while making necessary investments for growth. We aim to balance investments with profitable growth and remain committed to this strategy in 2025. Investments will be paced with developing new strategic partnerships to support future revenue growth. - Patrick Bach, CFO and Christine Lind, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
