Acarix (Stockholm:ACARIX) Q2 2026 Earnings Call

0:00 Good morning, and welcome to the q two twenty twenty six Acarix earnings call. I appreciate everybody joining. For our new investors and for those who who have been with us a while, I always like to start out with a little bit of an assessment as to who we are and what we do. The Casper system produced by Acarix is a highly high fidelity acoustic device that has the ability to listen into the coronary arteries of a patient's heart at point of care. And what we're able to derive from our negative predictive value of 96.2 is very high productivity in regards to being able to rule out coronary artery disease at point of care just in a few minutes, four to six minutes on average. We have over fifteen years of r and d, over 45 patents, and well over 60,000 assessments worldwide, along with 6,000 patients in clinical trials continually building our robust outcomes.

0:51 From a from a regulatory standpoint, we are FDA approved as well as CE marked, and we actually just announced a couple of additional ones we'll talk about in the future. We're a class two medical device, and we have a CPT code in The United States for reimbursement. We are headquartered in Sweden. We have our r and d manufacturing in Denmark, and we continually focus on deploying global sales. Really exciting news that we just came out Monday a couple days ago that we have received regulatory approval in The United Arab Emirates or The UAE. This is our first entry into the Gulf Region, is an extraordinary region that has a very significant focus in regard to health care and providing health care within the countries of of of each of the GCC as well as surrounding countries. And this is a first entry for us and a very, very optimistic one for us as we continually procure our outside United States opportunities and strategy.

1:47 We will be able to bring this into the market with a very well known distribution partner, Unitech Solutions, and they will be facilitating all the the distribution requirements in regard to commercialization of our product. As we've stated in the past, our goal is to align with vertically integrated distribution partners, and Unitech provides us that opportunity. This also will be an opportunity for us to get into the wider region of the Gulf Corporation Council, the GCC. As we as I mentioned, there's a very high level of of cases within the populations as well as demand for tools that that we provide, especially in the chest pain and shortness of breath categories when patients present. So we're really optimistic in what we're doing, and we're very optimistic in what can procure in The UAE as well as surrounding countries. As you guys are aware, we we are currently waiting regulatory approval in Saudi Arabia or the KSA Kingdom Of Saudi Arabia, and that is second to this. We had a lot of questions come in in regard to whether this was associated. No. They are two different distribution partners in two different countries. So very optimistic about what could procure in the near term with this UAE regulatory approval.

2:57 Now getting into the q two highlights as to what's procuring for us. One of the great things that happened was at ACC, which is the American College of Cardiology meeting that we go to every year. We were we had an abstract presented, and that was the UC Davis clinical trial that we initiated a couple years back. And it revalidated a lot of the things that we really were procuring. One, the most important is our negative predictive value. It just demonstrated a very consistent negative high negative predictive value, which is very, very important when ruling disease out. We also were able to showcase a significant amount of savings, almost forty hours per inpatient case, which translate to to a little bit more than $100,000 saved per patient. What this does is it reinforces our doctor Barron article that was presented last year at Pharmacoeconomics on the cost saving measures, that CASKOR can produce, and when implemented into the workflow, but it also really pushes our negative predictive value, being ninety six percent or higher. And what we can show that through 06/30/2026, the patients enrolled in this trial had no significant events. So, again, recapitalizing on our ability to safely and effectively rule out negative predictive value.

4:12 When we're creating a stable pathway for reimbursement, there's a lot of things going on that and and this should be received really well from our shareholder base. The best news is we had one last requirement to fulfill in regards to getting our CPT one transition application submitted, and we have now completed the enrollment for our US performance trial. And we are now in the analytic and really write up phase that we hope to be able to procure before the end of the year as well as publication before the m d before the end of the year. If you guys recall from my previous earnings calls, there was there's two things that we were lacked to be able to get in front of CMS for a transition to CPT one. One was a systematic review that was published last year, and this was the second one awaiting finalization of enrollment into the trial and now the analysis phase. So the plan and the goal is to submit and be published before the end of the year, meaning we will then get in front of CMS for a CPT three to CPT one transition in the first half of twenty twenty seven.

5:16 So really excited about that. That is a very, very important milestone that we need to achieve, to really get to the trajectory in top line sales and mitigate the reimbursement pushback, in regard to where we're going. We also are scheduling a CPT meeting with CMS in regard to the outpatient setting that we were already awarded in January 2025, and we are looking to increase that payment and reassign the code so that we can deviate from the approximate $60 per check to closer to the 300 that we see on average across The US. So that is really important for our continued sustained ability in the inpatient setting, but also the outpatient setting, is the CPT one pathway, which is much, much larger than the inpatient setting. So a lot of great things moving along from that regard in regard to reimbursement.

6:05 The last thing is our submission for CPT three codes. CPT three codes are typically for five years, and you resubmit for application for an additional five years every fourth year. So next year, we will also be in front of CMS for the extension and renewal of our CPT three code to continue access until we transition to CPT one. So in a in in in essence, there are three things we are working in parallel, and the goal is to get to CPT one, which is the most important factor for us in regard to commercial commercial efforts. We continue to work with the clinical policy team at Blue Cross Blue Shield. As you guys know, we've been working on this for coming close to two years. We've had continued great robust conversations, and we we are hopeful that things procure.

6:52 Now, again, once CPT one fits, our profile and we have acceptance, this this entire continuum changes. But, again, we are working diligently in parallel in every regard to ensure that we are locking in payer reimbursement at the private level, even before, CPT one. So cautiously optimistic that we continue these conversations and come to some sort of resolution, but the good news is CPT one is in sight, and we are moving towards that direction. As we continually build and strengthen our our position, we expect the utilization and long term reimbursement scalability to really quickly follow, which typically takes three to six months, maybe nine months when you when you first are awarded the CPT one transition. But, overall, we continually push on all facets in regard to reimbursement.

7:41 It is one of the top priorities we have and have had for the past few years, and it's nice to see a lot of those efforts now start to come to fruition. The q two financials. Really, really pleased with the delivery from the team in in regard to our q two twenty six. As you can see, our total revenue was up 102%. That is showing accelerated growth. And most specifically with our target market, which is The US, we were up 212%, and our delivery on systems was up over 53%. So, really, what this continually shows is the momentum and adoption of Acarix and the CAT score platform, and we will continually scale that with the limited resources we have, but we'll look to for ways in the in the coming years, you know, within the next few quarters to really look to expand upon that in a significant way, but very, very pleased with our q two results.

8:34 When you break it down in actualities, looking at quarter over quarter from '25 to '26, you can see here we went from 1.1 approximately to 2,300,000 SEC in top line revenue showcasing a 102% growth. Now when you look at the the volatility in the world and most specifically with currency in this regard, it's approximately 100% 108% overall in regard to total top line revenue and 223% in The US, our target market. So when you look at the installations, it it continually grows. As you can see here, our trajectory, while it's not the hockey stick every investor wants to see, it is continually and consistently growing. And as we continually build on upon this installation base, we can see the patch sales will continually increment higher and higher because once you have the installed base, it's truly about the patch derivative.

9:32 We continue to expand in the PCP market, which is our target market, and the CV space. We're we're really focusing on the primary cardiology space, but also really focusing on the on the concierge med and the ED space as well. So you can see that we're we're consistent in in in our regard, but when we look at the opportunity, the largest opportunity out there is the PCP market, followed very quickly with the cardiology market, and then very closely behind is the ED urgent care market. So we continually focus on the avenues in which we feel the best applicable nature for CAT score as well as the patient outcomes. So when you look at patch sales, which, of course, that that's our business. We're a patch company. You can see that in The US, we grew 100% from 70 to four 140 boxes of patches.

10:20 So what this means is we're we're looking at the continued growth. We're looking at the continued installed base growing and the usage growing on patches, which will continually reinforce our top line as well as our bottom line as we integrate more and more installations nationwide as well as worldwide. Our gross margin, it went down a bit, but which this was expected. And as we've stated, we have now shifted to selling the CAD score model, the unit, the hardware piece of equipment, which has lower margin than the patches. But we are very, very consistent in regard that we should maintain a robust, robust gross margin between 8090% over the long haul, which is far exceeds the benchmark in med tech in general. So we're very optimistic that we can sustain this kind of gross margin as we have continually done so over the previous quarters.

11:13 Operating cost reduction, as you can see, quarter over quarter, we continually run as lean as possible with with the exception of reinvesting funds where we feel it's applicable in regard to top line or ROI. But as you can see here from q two twenty five to q two twenty six, we reduced our OpEx by 19% from just under 14,000,000, brought it down to right around 11,000,000 sec. Our net loss is another great slide here. We've come down quarter over quarter from 12.8 or 12.9 to 9.4, so a 26% betterment in our net loss. So we continually demonstrate that while we continually grow our top line, we can continually reduce our OpEx as well as our net loss. And, again, I wanna reinforce that we will continually evaluate ways to reinvest that capital that we're saving to drive ROI, most specifically in commercial efforts.

12:09 Our monthly burn, as you can see, again, another great delivery from the team. Q two was approximately four million sec of a burn. We're down to just around 3,000,000 sec, which is a 26 production per percent reduction in in our monthly burn. So we we feel that this is gonna be a little bit more of a consistent burn rate. There's very little for us to burn an addition, so I anticipate that we remain somewhere within this range over the next few quarters. And then as we start to see our top line trajectory grow, additional resources will be put in place for commercial efforts. So when you look at a financing perspective, you know, at the start of q four twenty twenty five, we we did release a directed issue, of approximately 33,400,000, before issuance costs. And by June 30, we have received a full allotment of the 33,400,000, SEC.

13:03 And in q two twenty twenty six, the company recognized 15 approximately 15,000,000 SEC, from the direct issue net of transaction costs. And as of today, our cash and cash equivalents through June 30 is right around 29,000,000 SEK. So in a healthy position as we now look to really expand our commercial efforts. We have some very, very significant opportunities ahead. We're we're we're positioned really, really well to convert our commercial momentum into durable reoccurring revenue in in the back half of twenty twenty six and beyond. There's a number of categories we're working towards, but the three most significant ones, like, obviously, expanding, reimbursement coverage, delivering 29 systems, for this quarter, and continued double digit growth. And and the clinical adoption continually gets deeper, which enables a continued installation of our units, our CAT score units, which obviously procures the reoccurring revenue of our patches.

14:02 We have really, really deep reimbursement opportunities in the back half of of the year in in regard to getting our CPT one final need to publish the performance trial in The United States, which we hope is before the end of the year, which will then enable us to be in front of CPT one committee early next hopefully before the first half of the year. That is all gonna be predicated on the publication and the date of publication. And then second, a deep deepen our clinical use. The most important factor for us is obviously continually delivering on the organic commercial opportunities, but most specifically, the rural health transformation program. This is something we have worked extraordinarily hard on over the last eighteen months. And as recently as this week is the the first disseminations of the allocations across The United States. It's been extraordinarily slow process.

14:54 I think the government is really trying to keep this right and make sure we're keeping fraud out of the picture across the entire US with this grant money. So but what the good news is we are now starting to see slow and trickles of deployments, and we anticipate that should grow. Excuse me. From expanding global app access, as you as you guys know, we announced in The UAE, and we have slowly following up on what will procure next steps in The UAE, and that's the UAE team, Unitech Solutions. To get in front of the MOH or the Ministry of Health, which has 16 different hospitals for demos, and that is ongoing as we speak, and we anticipate hearing more in the near future. We also have the Kingdom Of Saudi Arabia that we have produced all the documents in regard to our regulatory approval, and we we anticipate that that procures within the next sixty days. So really optimistic about what can procure there.

15:53 So with that, as always, we are very optimistic about our future. We have really started to see some of the the efforts, procuring to fruit, and we're really pleasure to, have you all as shareholders and appreciate your support and look forward to talking to you in the near future.