Acarix AB

STO:ACARIX

Earnings Call Transcript

[Filip Einarsson, analyst]

Welcome, everybody, to today's Live Q together with Acarix. Besides myself, we have with us the acting CEO, Fred Colen, as well as the CFO, Christian Lindholm. And we're going to dig deeper into the Q3 report released earlier this morning as well as the company's outlook, which is currently commercializing its category system in the U.S.

So without further ado, I'm going to leave over to the acting CEO, Fred Colen.

[Fredericus Colen, executive]

Thank you, Filip. Much appreciated, and good afternoon, everybody in Sweden. Here is Fred Colen, the acting CEO of Acarix, and I'd like to start with a short presentation. I will give you an update on the corporate side in general. And then Christian will give you some more details on the financial side and then we'll have a short Q&A session in the end as well.

So let's get started today. So number 1 -- let me move my slide. Number 1 is the disclaimer. It's important always to understand what we talk about and in the context of which we present, it's very important that you rely on your own research before you make any investment decisions. That's the long and short of this. And the other part that I always like to say is nobody can predict the future, and I cannot either. So there's always uncertainty in forward-looking statements. But please keep this in mind.

So let's talk about Acarix. So I think the headline here in terms of our mission statement is quite significant. We are on a mission to transform early cardiac diagnostics. And then you see a little bit more of the details about what this is all about, which I'm sure most of you are already very well familiar with. So transforming early cardiac diagnostics, meaning transforming a clinical practice is something that is certainly achievable and it's achievable with a very promising new diagnostic tool as we have, but it also takes time. This is not something that you can do from 1 day to the next. It takes consistent hard work, continued energy pouring into this transformational process on many levels. And I'll touch base on a few of those while we go through this presentation. So that is our mission, and I believe we can be successful with it. But again, it takes time to accomplish that.

Here's the background. And I think it's quite significant when you look at the data, there are a lot of patients that go to their family physician, their primary care physician or an emergency clinic. And they basically complained about chest pain that is there, that has been there, comes up once in a while. We were not talking about acute chest pain like a heart attack. That's obviously not what we're talking about. We're talking about more we call chronic chest pain, something that is really starting to bother these patients and they go to physicians to figure out what is this.

And then the clinical reality is that in 9 out of 10 cases, it's actually not related to significant coronary artery disease. And so these patients today go through a lot of testing or the patient, the physician takes a risk of not doing anything, which is also not a good thing. It doesn't give you peace of mind. Or they go through significant testing in the hospital or they need to be moved over to a cardiology practice or to a hospital for more in depths and more invasive testing. And so obviously, if there would be a good tool available already at the point of care that can be used by the primary care physicians as well as physicians in emergency scenarios, this could be very meaningful. And so we do believe that this is a very promising proposition for the community.

So what is CADScor? It is designed for an early and rapid cardiac assessment using acoustics and integrated computer processing. It's actually a very intelligent device. It works very well, but it's very simple. It can be done right on the spot, nobody needs to be transferred over to a different clinic or a different physician. It can provide peace of mind to the patients rather quickly. And the flip side of that, by the way, I should also mention, which is that if you do have significant coronary artery disease and you get a high reading on the CADScor System, it actually elevates the importance of going through this additional test.

So there are 2 sides to this coin. One is that if you really don't have serious coronary artery disease, it is a quick and easy tool, noninvasive, can be done right there at the point of care to give the patient peace of mind and to avoid a lot of additional testing, which always takes more time. So it really has these benefits. But on the other side, if you do have a serious cardiac -- coronary artery disease, you can actually be elevated in the importance of going through additional testing, therefore, reducing the risk of these patients. So it actually provides a benefit on both sides.

And by the way, when I talk about benefits, I have been talking to the team a lot about. We talk a lot about benefits to the health care system. And we also need to put together benefits as it relates to the patient and benefits as it relates to the physicians that are using the system.

And the team is working on that right now because I think we can actually provide for a broader package of where this is beneficial. We are convinced that it's beneficial for the health care systems. But not only there, it also has benefits for the using -- for the physicians that use the system as well as for the patients. And we are working on getting that more sharply defined and then also start to use that as a tool in our sales process.

So again, it's -- we are positioning this as a first-line diagnostic aid. So you basically go to the primary care physician, the primary care physician probably wants to do a regular ECG, but that really doesn't tell you much about any potential coronary artery disease. And therefore, we would like for patients that have these coronary artery disease symptoms we would like the physician to use this device as a first-line diagnostic aid.

It's not something that has only been used on a few patients. When you see the third bullet point, we have already used this on about 29,000 patients worldwide. It has been around for quite some time. Its well patent protected. And there's a lot of sophistication behind it, something like 15 years of R&D. So it actually, when you talk to the physicians about it and they really start to understand what it does, they're actually quite amazed how good this can work.

Now important also in the first bullet point is this so-called NPV value. So we basically are able to rule-out a patient with significant coronary artery disease with a 96.2% level of certainty. As I'm sure you're aware, there's hardly any test that gives you 100% certainty. And we specifically in our clinical data worked out that the certainty, the NPV certainty is indeed in the range of 96%. So that's quite significant.

For the usage in the United States, the American Medical Association, AMA, issued us in July 22 with CPT III code so that the usage of the system in clinical practice can indeed be tracked in the administrative systems.

Again, this is a very nice picture to show you what we are trying to do, transform a clinical practice again to incorporate an early assessment of patients with stable chest pain, first-line diagnostic aid before any other diagnostic if and when you have CAD symptoms. And you see that that's what we like to do and insert it before you have to go through anymore -- much more invasive, much more daring and much more sophisticated testing. That also has risks associated with them. For example, radiation is associated with quite a few of these more invasive tests and other risks. So again, if you can separate the patients out and avoid patients that don't need it to go through it, great. And if you can find the patients that actually do need to go through it because they are really at risk, even better for those patients as well.

So initially, and this is a little bit of history here. Initially, the company started with the CE mark process and has CE marked in Europe and developed sales in Germany and what we call the DACH countries, Germany, Switzerland, Austria, a little bit in the Nordics and did some clinical studies in the U.K. In about a year ago, a year plus ago, the company decided to really focus its attention and investment on the U.S. expansion. So really, all of our focus to grow revenue and to grow the company is focused on the United States. That is a big market. It has a great opportunity for us to establish ourselves, but obviously, it will take time.

You should also remember that we have a U.S. FDA approval for our device and that is in FDA de novo clearance. But it was done with clinical data from Europe. And so we are really doing a lot of educational work in the United States to really become visible in the market. That takes time. When you do a U.S. clinical study, but as part of U.S. FDA approval, you already start to establish some level of visibility in the U.S. market. That was not the case with Acarix. So we need to continue to really build momentum and visibility in the United States, which we are doing. That's what we are focused on. That is what we are investing in.

Now having said that, and you have seen the financial results and Christian will talk about it, we had a somewhat disappointing Q3 quarter in Europe. We are well aware of that. We, I think, I explained the reasons for it, and we are working hard to counteract those reasons for Q4. So we are not making additional investments in Europe. We don't believe that's necessary, but we are certainly aiming at going back to the levels of revenue in Europe from about a year ago because we think that should be possible even with the infrastructure that we have today in the European marketplace.

Now as it relates to United States, since the company does not have any overall reimbursement approval from the United States CMS, the best entrance into the United States system is the VA. This is the veterans administration, the military side, so to say, of the United States, there are a huge amount of clinics in the U.S. where the Department of Defense through its VA arm basically takes care of all of its military personnel. And the Department of Defense via the VA is responsible for all of its members. So this has nothing to do with any generic U.S. CMS-wide reimbursement system. It doesn't matter because VA has to pay for their solders and for the veterans in any case. So this is why this is a perfect opportunity for us to enter.

The flip side of that is that the VA is notorious for being extremely slow. They are an extremely slow organization. They are not like the quickest moving forward with new things. They are very conservative and not very fast moving. But as you've heard, we were able to work with one, what I call Beachhead VA system in Southeast Louisiana. And they had ordered systems in February of this year. And then there was a little bit of a pause. And we actually went back and spent a lot of time since I have been with the company to really trying to figure out what's going on at the VA in Southeast Louisiana. And we found out that they did have the correct overall standard operating procedure in place to utilize the CADScor System in their VA system. However, there were some issues with the implementation of that SOP in their electronic record system, their ERP system, which also includes the ordering by physicians to the nurses to implement certain overall SOP requirements.

We have worked very hard on that. During the month of October, we've also trained a lot of additional personnel at the VA in Southeast Louisiana. And things are moving forward now. They are in the process of modifying their ERP system, and we are waiting like any day to get confirmation that it's completely through. We have the approvals of all the physicians at that particular VA to indeed modify that ERP system. Everybody is in favor of it. It was just some unfortunate mistakes that were made. And so I'm quite optimistic that this will indeed move forward, and we'll be able to announce rather soon, I hope, that it's completely modified, and therefore, will be utilized a lot more than it has been in the last, call it, half year. So I think that's really good news on the VA side. And the VA is also important, not just only as a VA organization, but in general, because it has a radiating effect elsewhere in the U.S. market as well.

As you know, we have -- we made good progress, here is a little more detail on that. And I can tell you that on top of everything else you see on the bottom of the slide, that Q4 so far that Southeast Louisiana VA has indeed reordered patches now twice. So as a confirmation of what I just explained to you, we are actually quite optimistic that we will not really see a continuous business and a growing business at that particular VA.

The other VA, you're probably wondering what's happening with these other VAs going on. The other VAs, we have 2 or 3 additional ones in the pipeline in different locations that are also very interested in implementing that same standard operating procedure that we have established at the Southeast VA in Louisiana. However, they are waiting for new budgets. The VAs are notorious for budget cycles. At the end of the budget, they all claim down. They want to make sure they have enough money they got through the end of the year. And then they really wait to get a new budget before they make any new commitments to new items, of which the CADScor System would be one. They really need to invest in the CADScor System first before they can realize savings, and that's really what's behind this. So that's the update on the VA.

And then as it relates to other initiatives, we are really getting close to working with one particular IDN in the United States. We have very advanced discussions with them at the highest level now. The physicians are on board. It's hopefully a matter of a few more weeks and we hope to be able to get to an agreement with one particular IDN, a large integrated delivery network in the U.S. on the general population side.

On the payment side, we are getting paid by some insurance companies not by all. Sometimes they pay, sometimes they don't, and we have to appeal, sometimes they pay on appeal, sometimes they don't. So this is an ongoing continuous battle for payment that we are very engaged in and also spend quite some time on. So I think that's all from my side at this point.

So Christian, why don't you talk about the financial side?

[Christian Lindholm, executive]

Sure. Thank you, Fred. So if we go to the next slide. Yes. So as in previous presentation, I will start to talk about patch utilization. And that is actually one of our most important key figures that we follow weekly on a customer level. And also patch utilization will drive both the company's growth and the profitability in the long term. So globally, we see a fluctuation between 0.5 to 3.3 patches per day and per system as it looks today, depending on the market and, of course, depending also on the size of the customer.

So based on the customers that we currently have, we can definitely see and conclude that the average utilization is and will be higher on the U.S. market compared to the European market. In total, we have sold over 31,000 patches as of today, and that's an increase of 9,300 patches compared to the same quarter 2022.

So if you could go to the next slide, please. Looking at the rolling 12 months revenue, we see an increase of 31% from SEK 5.1 million to -- in Q3 2022 to SEK 6.7 million in this quarter 2023. And if we divide our two markets, the U.S. accounts for 58% of the total revenue during the first 9 months. And we see also an increase on a quarterly level of 344% in the U.S. At the same time, we see a decline in Europe, as Fred was talking about previously. And this is, of course -- this is an effect from our decision 2022 to focus our resources and the liquidity on the U.S. market.

Next slide, please. So looking at the total revenue for the quarter, and that amounts to SEK 1.573 million, and that's an increase of approximately 35% compared to the same quarter in 2022. On a 9-month basis, we see a revenue growth of 21% and the revenues, they are generated from 14 systems and 1,900 patches that was sold during the period, and that's both in line with previous year. And if you look into the gross margin, we can see that we improved by 3 percentage units from 79% to 82%, and that positive development of the gross margin is to increase sales to -- in the U.S. market where we have a different pricing model compared to Europe.

Next slide, please. And here, we are looking into U.S. specifically. And the revenues in the U.S. market increased by 236% in the first 9 months, while on a quarter -- the quarter more than tripled. We sold a total of 10 systems and 640 patches in the U.S. during the quarter. And looking into a rolling 12 months basis, revenue in the quarter increased from SEK 1.2 million to SEK 3.9 million, and that's an increase of 233%.

We can go to the next slide. And that's the last slide and my last slide here shows the development of the earnings. And for the quarter, we show a loss of SEK 17.2 million and compared to SEK 20.7 million in the same quarter previous year. And what we can say here is that we continue to be extremely cautious with both liquidity and the cost in the company. And we are really scrutinizing everything we do, and we make sure that the majority of our cost is being allocated to sales-related activities in the U.S. market, as we have said before. And that's -- I think that's an important message.

So that's it. That was quick. And with that, I hand over to you, Fred, to continue the presentation.

[Fredericus Colen, executive]

Yes. Thank you very much, Christian. Very well stated here. So I -- this is the team that we have. And I'd like to point out that on the U.S. side, we have -- on the bottom right, Jennifer, who is the Head of Marketing & Communication, but mostly marketing. And I call that downstream marketing sales support. She is dedicated to that work. Carma is dedicated to training and onboarding, and she works with all the customers, also in particular, as it relates to getting payments. And then Jennifer Matson, she is really important on the medical affairs side.

And one additional thing that I'd like to mention here is that we are also gearing up to do some, what I would like to call, low-cost actual real-world clinical studies in the United States that are mostly driven by physicians, and we financially support to some extent, but not very expensive. And so we are actually looking at, at the moment, too different, what we call the physician-initiated clinical studies that we think are going to be quite interesting and good for us because they will not so much focus on the performance of the system, but more on how does this system when you implement in clinical practice, how does it transform the clinical practice in real world? And how does it actually do compared to the historical situation. So I think that's all very interesting.

So before we get to the Q&A, here's the final slide. I can tell you from my perspective, it's all about the top line. It's all about revenue. It's all about sales, sales, sales. That's what we are focused on. And we do that very well as a team. I think I touched based on a few important things, in particular, VA and our hopes to make a first inroad with a large IDN.

I can also report that we had an earlier press release on osteopathic physicians. We have a couple of those that are actually using our system, so they acquired it and are using it. And we've gotten some good feedback from them as well. So this is more in the preventative space where they use it in their actual clinical practice to take care of patients' wellbeing. So with that, I think that basically sums it up.

Filip, I think we can go to the Q&A session.

[Filip Einarsson, analyst]

All right. Thanks a lot for a good presentation. And to start things off here, I actually want to turn towards you, Fred. I mean, you have come in as acting CEO of the company. It would be really interesting to hear sort of -- from your point of view, what were your first interaction with the CADScor System and a little bit of your background, please?

[Fredericus Colen, executive]

Yes. So I'm intrigued by the CADScor System. I think it has a very good promise to actually become a first-line diagnostic tool for patients that have CAD symptoms and to rule out the ones that really don't. At least a certain portion of them. I think it is a promising system and it deserves attention and it deserves energy and investment to actually get it going, in particular in United States. So I'm actually very intrigued with what I see, I also see that physicians in the U.S. are really interested in it. In particular, the primary care physicians, they really do like it because they are able to do something themselves right on the spot. Instead of thinking about what shall I do with this patient, what kind of additional tests can I still do. They have a limited amount of test capabilities in their own practices typically. And so they're mostly wrestling with having to transfer a patient over to another clinic or to another cardiology group.

And so if you are able to give them something where they can do more on their own, they like that. So that is something I think that's going well. So it's very promising. For me, from my standpoint, I have been in medical technology for about 40 years. I came up through the technology product development side. I have brought a lot of products to the market very successfully, a whole range of products in my career. And I've also been engaged on the sales side in a lot of different companies from startup companies to midsize level companies to very big companies.

On the big side, I can tell you that I ran the Cardiac Rhythm Management group of Boston Scientific, the ex Guidant organization for a few years as the President and an overall division head. And so that was an organization with about $2 billion of revenue on a worldwide basis. And I grew that revenue base in the years that I was there by about 10%. In a flat market, basically taking away from the competition through their interactions with physicians and better products. So I have quite a bit of experience also on the sales side. That is a very big one. But they also have been engaged with quite a few small companies and getting engaged and really developing early sales.

I'm also on the Board of two other European companies. The one is called Xeltis and one is called ONWARD Medical. So I'm involved in Board work for those two companies. But I had time to take on another opportunity like this. I felt bad for what happened to Helen getting diagnosed, all of a sudden with some serious stuff that she needs to take care of. She has a very, very good prognosis. It's very treatable. But she just needs to step back for a while. And so I was happy to step in and keep this going and keep the development of the product going.

[Filip Einarsson, analyst]

Perfect. Thanks. So now, I want to change a couple a little bit to the quarterly report. And I note that in the message from the CEO, you mentioned that you've established a new purchase model in the U.S. And I'm curious if you could sort of just expand on the implications a little bit of this.

[Fredericus Colen, executive]

Yes, certainly. So in the United States, we historically had a, what I call a straight purchasing model, which is basically you buy the equipment and then you buy the patches as you need it. That model is still available. And sometimes that work just fine, like the VAs, that's what they do. That is why they're using that system.

And then we had a lease model where basically a clinic could sign up to lease the equipment for a monthly charge, but it was really not -- I wouldn't say it was a real commitment. It was like, well, yes, we sign up for it and we'll try it and some tried it and really give it some effort and then really went with it. But there were also quite a few that really didn't give it any attention because there was no real skin in the game for them. And they never really bought any patches and some of them actually returned the equipment, and you've seen that in some of our financial results as well.

So when I came in, I really wanted to replace that lease model with something else. And I call it the use model. Basically, what we do is we try to avoid the initial high hurdle of having to buy a piece of capital equipment, which is the system itself. Because that is always a difficult thing to do for anybody. It goes to additional scrutiny in terms of approvals, why do you need to buy capital equipment. Capital equipment sounds already very, very expensive. Our box isn't that expensive, but it's still capital equipment for them. So that is a hurdle that's pretty high.

So in the use model, we basically -- what we are selling to the clinic is a certain amount of usages. So they can sign up for, okay, well, I would like to -- for example, I like to use it on a 100 patients. And then we basically provide them a system and patches for 100 users and they pay per usage and then we basically account for the cost of the equipment in the use on top of the patches expense. So they pay more per usage, but now they don't have to really buy the piece of equipment separately, and the company still gets paid for it because we get paid for the usage.

So this is the model that I developed and we're in the process of rolling out. So far, I've heard very positive news and feedback from several clinics in the U.S. that they really like this. It's an easier way for them to get going. And what I like is they really still now have some skin in the game and they really sign up for something not just like, yes, I pay $350 a month and as long as I want to, and it's not much, but it's also not really any skin in the game in this lease model. So I think that's -- I think it's a good development. And we are still in the process of rolling that out. It's still in the initial phase, but I think it will be promising.

[Filip Einarsson, analyst]

Interesting. And is that -- just a short follow-up to this. Is that something you have sort of worked with before in your career with the medical technology and then sort of extrapolate it into Acarix here?

[Fredericus Colen, executive]

Yes. It exists. It exists elsewhere too. All other companies and all other products are being sold like that as well. In that sense, it's not completely novel we're leveraging something that is being used elsewhere. But yes, this is certainly a doable thing. Absolutely.

[Filip Einarsson, analyst]

Perfect. And also, I saw you discussing sort of ongoing discussions and tangible progress together with large IDN. And this is, of course, a topic that has been discussed a lot we're talking about Acarix. So could you please tell us a little bit more?

[Fredericus Colen, executive]

Yes. So we are working with one specific IDN since quite some time, and that was also talked about, as we said in the past. We've now gotten to a stage where we've actually presented them a proposal which is also based on the used model, by the way, which helps them a lot in signing up for it. We have the physicians on board. The physicians at the clinic are supporting it, and it's now at the highest level or the executive level of that IDN. The person who needs to approve it is in principle in agreement and supportive, but it just takes time to get to the final step. So I think it's -- they are reviewing the use model contract at the moment, and we hope to hear back from them rather soon. I hope this will fall in place in the next few weeks. It should certainly fall in place in Q4. That is our plan.

[Filip Einarsson, analyst]

Perfect. So we also have a little bit of questions coming in from, I would assume investors here interested in. I mean you touched upon that sort of budgeting in the U.S., and the implications for Acarix. So the question is sort of related to when -- do you have sort of a time when these budgets in the U.S. for customers related to you are being set. And how are we keeping track of this.

[Fredericus Colen, executive]

Yes. So that -- the budget item is specific to the VAs. So don't mix it up with anybody else. I mean this is not an issue for IDNs. It's not an issue for clinics, for primary care facilities. The budget item that I mentioned is specifically there for other VAs other than the two that we have in Louisiana, where we already are an ongoing budget item because they already bought the systems. We are in their system. We are in their budget, so to say. It pertains to an additional 2 or 3 other VAs that are interested where the physicians are saying, yes, we would like to also use this just as the Louisiana VAs. And we would like to get going on this, but they don't have it in their budget yet because it's a new item. And so that's what I'm talking about.

I'm particularly talking about those other VAs that want to get going and are waiting for a new budget cycle. The budget cycle is typically associated with the calendar year. So it's basically, you're talking, well, I don't think it's going to happen yet this year. It's probably going to be early next year because that's when a new budget will be available. That's basically what I'm alluding to for these other VAs in the U.S. outside of the ones where we're already in.

[Filip Einarsson, analyst]

Got it. So just to wrap things up on at least the IDN part here. We've talked it's, of course, an interesting customer for you. It's potential -- large potential, et cetera. But in terms of systems at least in your first stage, do you have any sort of estimate or range of what can investors be expecting here? If anyone of you could -- could you give us some context there.

[Fredericus Colen, executive]

Yes, I do, but I think it's too early to talk about that. And also, I can tell you that this is a large IDN, they are not going to jump in with like 10 feet at the same time. They go, as I always say -- and by the way, I think it's a very good talking point. I always talk about, you got to walk before you run, right? You got to walk before you run. I think they apply the same concept. Let's walk and let's see how it goes before we run with the system. So I think it could be a sizable order but it's not going to be like we're going to use it everywhere. It's not going to be that kind of a scenario because they also wondered to really see how it works in the clinic, how it falls in place before extended to every office that they have. But it's -- I certainly suspect it will be more than 1 or 2, but it's not going to be like their whole IDN at the same time.

[Filip Einarsson, analyst]

All right. And this is also sort of a returning topic, and we've seen a large interest, of course, from shareholders, investors related to this. And Acarix has previously announced a financial target for 2024, which is practically next year here. And I mean, we just saw that the quarterly reports here presented by Christian. But what is your view of this financial target, this question goes to both of you at the current state and outlook with, of course, exciting times. Exciting things going on with both the VA and IDNs, but sort of the sheer numbers, 3,000 systems and the SEK 200 million in revenues. Can you give us...

[Fredericus Colen, executive]

Yes. Yes, Filip, at this point in time, I mean, I'm on board, with the company now for just over a month. And so it's really too early for me to give a prognosis for next year. I don't think that would be right. So let me refrain from commenting on that at this point. I'm sure, later in the year, we'll get to a better understanding of where we can be next year. But at this point, I don't think it will be correct for me to make any statement on that. It's just too early for me.

[Filip Einarsson, analyst]

Right And maybe I'm turning a little bit to you, Christian, here now. I mean Acarix recently went through financing round and got some fresh growth capital into the company. Could you give us a little bit overview of where we stand in that regard right now? And how is the outlook looking for 2024?

[Christian Lindholm, executive]

Yes. I mean, that's correct. We did -- we actually did a package of financing set up for Acarix in 2024. And it's really 3 buckets. The first one is the rights issue that we have announced, that's final. And that net proceeds from that part is -- was SEK 45 million after costs related to the rights issue. And the second bucket is the warrant program, [ series 1 ]. And that depending on the share price that we will have by that time, it's something between SEK 22 million to SEK 45 million. And the same with the last and the second [ 1 series ]. The first one, we have a subscription time in March and the second one is in September. So if all going well with the sales. We will be able to capitalize on both of them and take us through 2024 cash-wise. But it -- of course, it requires an increase in sales now in quarter 4, then moving forward.

[Fredericus Colen, executive]

So if I can just add to that. So the intent of the company really was not just to come up with financing for the next, let's call it, 6 months or so. But to really put together an integrated plan, financial plan to get to a longer-term financial security. And so this is how I view it. It's like, well, step #1 has been done, and that gets us to sometime in March or so March or April next year. depending on how things go.

And then there is a first level of warrants and then in the springtime and then in the March period. And then there's another warrant exercise model in September. And so you really should look at this as an integrated approach to provide for financing of the company, not just for the next 5, 6 months, but for a much longer period of time. That really was the intent of the Board from the get-go. And I think it's actually a quite good and very interesting value proposition that so far has been falling in place very nicely.

[Filip Einarsson, analyst]

Okay. Got you. So sort of -- to wrap things up here, I have well last question from an investor here actually. I was interested in how is the sales force progressing in regards to sales of individual clinics. So if we change the scope a little bit to sort of smaller individual clinics, I guess, in the U.S.

[Fredericus Colen, executive]

Yes, yes, right. I mean, I talked about the VA particular and about IDN because it's strategically important. But obviously, we have other things happening as well. We have small clinics that are actually quite good users of the system. We have some primary care offices that are using the system on a regular basis. Which also drives what Christian was talking about in terms of patch utilization going up. So we have that as well. And I mentioned the osteopathic, we have a couple of osteopathic physicians in their own clinic doing this as well. So I didn't talk about that too much because I talk about more of the strategic important things. But yes, there's a lot of smaller level primary care offices that are also involved and where we have ongoing sales.

[Filip Einarsson, analyst]

Perfect. I think that was everything for me. Thanks a lot, Fred, and thanks a lot, Christian, for this conversation and for the presentation. And I wish you the best of luck going forward.

[Christian Lindholm, executive]

Thank you.

[Fredericus Colen, executive]

Great. Thank you so very much.

[Christian Lindholm, executive]

Thank you.