Biovica International

Significant events during the first quarter

• DiviTum TKa results presented at ASCO, the world’s largest cancer conference
• Biovica signed a new drug development agreement
• The extraordinary general meeting of Biovica International AB resolved to implement new incentive programs
• Biovica carried out a directed new issue of units for approximately SEK 16.4 million

Significant events after the end of the period

• No significant events after the end of the period

Webcast:
When: 12 September 2024, 3 PM to 4 PM CET
Where: registration via: Biovica Q1 Earnings call
Broadcast language: in English

*See also the section on Shares, page 7

CEO’s comments

During the first quarter, we continued to build on the strong foundation we laid in the prior financial year, with special focus on clinical use of DiviTum® TKa in the USA. Despite having reorganized in April which, among other things, included a reduction in the US organization, our team there delivered their highest quarterly sales to date, with a 50 percent increase compared to the prior quarter and in line with our budget.

We have been successful in expanding the user base in the USA, which is clear evidence of DiviTum TKa’s growth potential in this market. Thus far, more than 150 patients have benefited from the new product and the number is steadily increasing.

One of the largest integrated healthcare networks (i.e. organizations that conduct both research and provide care) in the USA has started using DiviTum TKa with positive results, which is an important achievement for us. Because of that, it has been possible to discontinue ineffective treatments and replace them with alternatives, which confirms the assay's ability to significantly improve the lives of patients and save money for the healthcare provider.

The next step will be to sign a commercial agreement (client bill) with this important healthcare network, which would ensure that we reach millions of policy holders at an attractive price level for us that is also cost-effective for the customer. This would be an important component in achieving the sales growth that we have planned and becoming cash flow positive in 2025.

There is also much growth potential with our 20+ current customers in the USA. For example, we are setting up Advisory Boards as a forum for existing users to tell about the benefits of using DiviTum TKa as a means reaching more oncologists. We are also making continuous improvements to our administrative and logistics processes, which will make it easier for our customers to use DiviTum TKa in their daily operations.

Sales were lower than anticipated in our other areas, Europe and pharma collaborations. This was primarily attributable to delays in the clinical trials that our customers are conducting. We anticipate that we will receive that revenue in the next quarter. The projects have been contracted but not yet implemented because clients are behind on their delivery of samples.

During the summer, we signed an additional master service agreement and received an initial work order of SEK 0.75 million with a new customer that is a US-based biopharma company specialized in breast cancer. It is our fifth master service agreement to date and an important step towards developing our first Companion Diagnostic (CDx) product.

For sales of DiviTum TKa in Europe, we are using distributors and have already signed agreements with distributors who are leaders in the Nordics and Spain. Efforts to launch in those markets are in full swing and salespeople with specific responsibility for DiviTum TKa have been hired. Many activities are underway aimed at creating awareness and demand for our product, along with ensuring that it will be included in treatment guidelines in the future.

The savings program that we announced in April has positively impacted both operating profit and cash flow. Specifically, the cash flow from operating activities before changes in working capital, and adjusted for the cost of the program, improved by around SEK 9 million compared to the previous quarter and with around SEK 8 million compared to the same quarter of the previous financial year.

One of the cornerstones for successful commercialization of DiviTum TKa is strong scientific support. It was thus very positive that a poster with DiviTum TKa results from the GEICAM FLIPPER trial in Spain was presented at the world’s largest cancer conference, the annual ASCO meeting, in June. The results confirm DiviTum TKa’s ability to monitor and predict outcome on first line treatment of HR+ metastatic breast cancer patients, thus enabling more informed treatment decisions. The GEICAM group is responsible for treatment guidelines in Spain.

I would like to take this opportunity to thank all of those who participated in the directed new issue that we carried out at the end of the quarter. In July, we also held an extraordinary general meeting that resolved to implement incentive programs for employees and board members. The program for employees and the Board of Directors of the Swedish Parent company has been implemented, which means that participants are purchasing Biovica shares in order to participate. I am delighted to see the enthusiasm for this and that these programs are oversubscribed.

I am convinced that we are well positioned for continued growth and success. Our team is working diligently to make DiviTum TKa available for as many patients as possible to maximize value for all our stakeholders.

Anders Rylander, CEO