Bonesupport Holding AB

STO:BONEX

Earnings Call Transcript 2021-Q2

[Operator]

Welcome to the BONESUPPORT Q2 Report for 2021. [Operator Instructions] Today, I'm pleased to present the CEO, Emil Billbäck; and the CFO, Håkan Johansson. Please begin your meeting.

[Emil Billbäck, Chief Executive Officer]

Yes. Thank you very much, operator, and welcome, everyone, to BONESUPPORT's Quarter 2 2021 Results Call. So I'm Emil Billbäck. Of course, sitting next to me is Håkan Johansson, our CFO. And together, we will guide you through next 20 minutes of the presentation, whereafter we will open the line for questions and answers. Operator, if you help me with the presentation, we'll go to Slide #2, where, in regular order, you will find the disclaimers covering any forward-looking statements that we might do today. We push forward to Slide #3, please. So I would like to begin this presentation with some condensed highlights from the report that we released this morning. Overall, quarter 2 sales were SEK 52 million, which was a reported growth of 43% year-over-year. Currency movements were significant in the quarter, and growth in constant exchange rate was 58%. EBIT was at a negative SEK 26 million, which is a slight deterioration compared to last year due to some extraordinary expenses in the quarter, and Håkan will cover more detailed overview on this topic later. Among the operational highlights, we've seen that reduced restrictions and also reduced infection incidents in COVID have led to a gradual return of orthopedic surgeries. I would also like to highlight, of course, that the FORTIFY study has the last patient follow-up in the quarter, and we are now awaiting the top line results of the study expected to be available in September. Last but not least, I would like to bring your attention to the strong improvement in market access that we have gained from the contract signed with Premier at the beginning of this quarter. This contract went effective July 1. All in all, despite challenging times, we're seeing strong progress in several areas. We will cover the above topics and much more in this presentation. And first, we will speak a bit about the pandemic impact on our market dynamics. Slide 4, please. So we entered quarter 2 with a very high infection incidence rate, but we have seen since then a steady and strong decline throughout the quarter. The U.K. has possibly been the exception as the Delta variant has brought infection rates in late June all the way back at the same level as was seen in the U.K. in February of this year. Fortunately, the Delta outbreak does not seem to translate into as many hospitalizations as previously dominant variants. CERAMENT sales is tightly correlated to the number of surgeries, which, in turn, are determined by the pandemic impact on the health care system. We confirm an almost complete correlation between the sales in a region and the infection rate in the population for that same region. With the opening of the societies and reductions of restrictions, we can see that patient flows are on a steeper trajectory than the capacity utilization, which is increasing the backlogs and queues even further, so in short, the increase of the number of patients seeking medical attention is higher than the increase in surgeries right now. The table -- the matrix in green that you see on the lower part of the slide shows public data from NHS, that's the National Health Services in the U.K. It displays the millions of patients that are in queue for elective care. And despite a step-up of care in April and May, the number of patients in backlog is still increasing. With patients becoming more active seeking care, staffing and resources for the surgical theater are and will become even more the limiting factor. The current accumulation of orthopedic procedures is now estimated to take more than 3 years to clear, and we are certain that there will be an acceleration of orthopedic surgery as the pandemic gradually recedes and resources are made available. Slide 5, please. So let's go from here and into the development of our quarterly sales. Here, we can see some very clear signs of recovery. This slide, we have gone through the details of this at many previous occasions. So the topic I would like to mention here is that with the ramp-up of surgeries in quarter 2, it is visible as sales took a significant step up on the LTM basis after a long period of pandemic suppression. Quarter 2 2021 was indeed our best quarter ever in terms of boxes sold, but the currency movement made it only the second-best quarter in value. So instead of going through further details on this slide, let's go to the next slide and speak more about the 2 geographic segments, and we will start with North America. So that's Slide 6, please. So in the quarter, we delivered sales of SEK 29 million. This represents a reported growth of 35% year-over-year and a growth of 56% in constant exchange rates. Furthermore, sales in the quarter grew 16% quarter-over-quarter in quarter 2 of this year versus quarter 1 of this year. This is mainly due to the fact that there has been a gradual return of surgeries. At the end of June, 46% of the population in the U.S. was fully vaccinated. This is helping health care system to free up resources. Despite the disruption from the ongoing pandemic, our commercial team has made great progress in increasing CERAMENT market presence, geographic coverage, GPO coverage and continued to build the customer base. At the beginning of the quarter, we signed our largest GPO contract to date with Premier. The contract became effective July 1, and it's going to provide access to 4,100 hospitals. And everyone knows, a contract with Premier GPO doesn't mean immediate sales but rather a license to hunt. Our sales teams are ready to charge. And as soon as the pandemic starts to ease its grip, we are ready to start converting hospitals. One of the key priorities, of course, that the team is working on is to get the CERAMENT G registration in the U.S. The FDA communicated in late February that they required additional data in a few different areas. Our clinical, medical and regulatory teams are intensely working to collect, analyze and compile the data to meet FDA's request. We're aiming at completing our supplementary submission in October of this year. With regards to the FORTIFY study, the last patient follow-up was completed in late June, and we shall expect the first readout of this important study in September. One of the highlights of the second quarter was the categorization breakthrough device that CERAMENT G was assigned by the FDA for the indication trauma. The categorization is important for the priority with which our application will be handled but also for the upcoming reimbursement process. On the next slide, we will detail the time line of bringing CERAMENT G to the U.S. market, so Slide #7, please. Nothing has changed from this time line. All time lines and events remain confirmed. Now if everything goes well with our supplementary submission in October for De Novo, we could have an approval for CERAMENT G for bone infection in the first quarter of 2022. As for the PMA pathway, which is on the bottom of the slide, we're building our application submission late 2021 on the foundation of the FORTIFY data. Approval for a wider spending indication, including trauma, could come in the late part of 2022. Let's go to region Europe on Slide 8. So in -- sorry, not Europe, EUROW, Europe & Rest of the World. Sales were SEK 23 million, which was up 55% year-over-year and plus 61% in constant exchange rates. Capacity utilization in orthopedic surgery department is increasing, however, so is the backlog. According to data from NHS, orthopedic departments have the lowest goal fulfillment of all medical specialties, with only 51 -- 61% of patients meeting a specialist within the target of 18 weeks. This shows also that orthopedic surgeons have been down-prioritized. And we have seen also in the press and in the data that, for example, cancer surgeries have been prioritized during this period. The speed of recovery and the depletion of the acute surgical backlog will be dependent on mobilization of the health care system and additional resources. This is currently being decided and discussed in several European states. But some of the highlights I would like to mention, despite a bit of a delay due to the pandemic, the important SOLARIO study has reached its recruitment midpoint. So this means that 250 of the total 500 patients have been recruited. The study is designed to investigate if locally applied antibiotic in combination with the bone-graft substitute for patients with bone infections can reduce the need for systemic antibiotic and, hence, reduce the risk for antibiotic resistance, reduce side effects and reduce cost. Our hybrid setup in Italy is up and running. And this means we have our own salespeople work side by side with our distributor. We expect Spain also to follow suit in quarter 3. And some of the European sales team, the direct sales team, went back to full-time work already in May of this year. As even the countries with the strictest restrictions like Germany are starting to open up, all sales teams are now back to full-time work as of July 1. With that brief update, I hand over to Håkan, who will cover the details of the financial overview. Over to you, Håkan.

[Håkan Johansson, Chief Financial Officer]

Thank you, Emil. So let us jump to Slide 10, please. Net sales improved from SEK 36 million to SEK 51.8 million, equaling a growth of 43%. The organic growth in the segment North America measured in fixed currencies was SEK 11.9 million or 66%. And the organic growth in Europe & Rest of World was SEK 8.8 million or 61%. Changes in currencies had a negative impact in comparison with the second quarter last year of in total SEK 5.1 million, of which SEK 4.4 million relate to a weaker U.S. dollar. Next slide, please. The contribution from the segment North America improved with SEK 3.9 million and was reported to a negative SEK 0.3 million. The improved contribution was due to increased sales. Sales and marketing expenses during the quarter amounted to SEK 22.8 million compared with SEK 18.6 million previous year, of which sales commissions to the distributors increased with SEK 2.4 million to SEK 9.3 million following the sales growth. The increase in sales and marketing expenses depends on the cost reduction as reported previous year because of COVID-19. The contribution was also burdened by R&D costs that decreased from SEK 5.2 million last year to SEK 4.6 million this reported quarter. From the lower graph showing net sales as the bars and gross margin as the orange marker, it can be noted that the gross margin in this quarter was 3.5 percentage points ahead of last year, explained by the low sales previous year in relation to fixed production costs as the second quarter last year was heavily impacted by the COVID-19 pandemic. In Europe & Rest of World, the contribution of SEK 3 million was reported to be compared with SEK 2.3 million previous year. The increased contribution was explained by increased sales aftereffects from increased costs. Sales and market costs increased by SEK 6.8 million compared to the corresponding quarter previous year and amounted to SEK 16.2 million. The increase is mainly due to the large cost reductions reported last year because of the impact of COVID-19. Also in Europe & Rest of World, an improved gross margin was reported and also in EUROW, explained by the low sales previous year in relation to the fixed production costs as the second quarter last year was heavily impacted by the pandemic. Next slide, please. In summary, we reported, despite continued impact from the pandemic, a recovery from the first quarter this year and a 43% growth compared with the second quarter last year. Gross margin recovered from the drop in the first quarter this year following the sales improvement. The operating profit was reported to a negative SEK 25.9 million, an increase with SEK 2.4 million compared with the loss of SEK 23.5 million for the same period previous year. The higher loss was mainly related to the large cost reductions reported last year because of the pandemic, and I will share more details on the expenses as we move to the next slide. Selling expenses increased with SEK 11.1 million as the second quarter previous year included substantial cost reductions because of the pandemic. A large part of the cost reductions last year relates to work time reductions, most of all which have been reverted in Q2 this year. Selling expenses remained below pre-COVID levels despite the investments made in our direct sales team in the Netherlands mainly relating to lower travel expenses and conversion from physical meetings and events to digital meetings and webinars. R&D reported increased expenses in the quarter, catching up with a low level the first quarter this year and involving a milestone payment for the SOLARIO study of SEK 1.8 million (sic) [ SEK 1.7 million ]. Administrative expenses in the quarter included a provision of SEK 3 million relating to long-term incentive programs following revaluations based on the favorable share price development during the period. And with this, I hand back over to Emil.

[Emil Billbäck, Chief Executive Officer]

Thank you, Håkan. So let's sum this up and go to Slide 15, please. Slide 15. Yes, very good. So let me sum up and give a few key findings from the presentation as well as an outlook on the journey ahead. So in short, the period has focused very much on strategy execution and situational adaptation. The latest quarter has had regional differences in pandemic impact. We have continued to navigate through these challenging circumstances and seen the volume of surgical procedures slightly increased. The sales growth of 58% in constant exchange rate shows the impact of the gradual recovery. We expect the recovery to continue, and we feel that we are in a good position to capitalize on this from our extended commercial footprint. We are committed and we are relentless in our effort to bring CERAMENT G to the U.S. market. We have made good progress during the quarter. With the potential approval in quarter 1 2022 of CERAMENT G, this would be the first-ever solution in its kind on the U.S. market. And we hope to create and establish a new market standard with this as foundation. With the data from FORTIFY, SOLARIO and CONVICTION studies, we believe that we have a continuous stream of pivotable -- sorry, pivotal evidence to help us transform the outdated standard of care for treating bone injuries and bone infections. The first readout from these important trials will be the FORTIFY top line results expected in September. All in all, we are well positioned for strong growth. We're navigating with a clear strategy and clear objectives through the challenging market conditions that the pandemic had brought. Our confidence in our corporate target of an annual growth of 40% once the pandemic resides is very high. With that, I conclude my presentation. Thank you very much, and let's open the line for questions.

[Operator]

[Operator Instructions] And our first question comes from the line of Rickard Anderkrans of ABG Sundal Collier.

[Rickard Anderkrans, Research Analyst]

So a few from my side here. So can we expect a sequential improvement in Q3 sales from Q2? Or will the negative seasonality on electives be stronger than usual this year because you have the push and pull factors here to consider?

[Emil Billbäck, Chief Executive Officer]

Yes, your question is, let's say, what to expect for quarter 3, and we never give those kind of estimates, of course. But let's dwell a little bit on the market dynamics. Quarter 3 is usually one where there is vacations in the most parts of those countries where we are well-penetrated. I think now there's 2 forces playing against each other. One is an increase of patients seeking medical attentions having after been in quarantine and isolated for a long time. But we see on the other side, recurrent -- a health care system, which is very worn out, where people are demanding to get their vacations or they will leave the workplace in total. So I'm not in a good position to say how these 2 forces will play out. The third component here, which is the joker of course, the Delta variant, which has an incredible steep infection curve in the U.K., Spain and a few other territories. And I think not even the experts in the area can predict how this is going to influence the ability for the health care system to recover. Sorry, I didn't give an answer because I cannot, I'm afraid.

[Rickard Anderkrans, Research Analyst]

Yes, I fully understand. It would just be interesting to hear your thoughts. And looking on shifting gear to the FORTIFY trial and the upcoming PMA, could you confirm that the De Novo pathway would be open in the trauma indication as well if FORTIFY does not lead to a premarket approval?

[Emil Billbäck, Chief Executive Officer]

Yes, I can confirm that. If, for whatever reason, we will go through the study and conclude that we would not select a PMA pathway, there is nothing hindering us from making a renewed evaluation of instead choosing a De Novo pathway.

[Rickard Anderkrans, Research Analyst]

Right. Fantastic. And can you comment on the data compilation for the De Novo submission in more detail? Can you comment on how many patients you need data from or at least comment how far along you are in that processing or perhaps a percentage of the totality or something like that?

[Emil Billbäck, Chief Executive Officer]

The only thing I can comment on this, I'm extremely proud of my team, who has done a great job, first of all, to understand the difference in perception between FDA and our internal and external advisers and experts on how the data should look like and then working diligently in rain and heat waves to make sure that we secure that data. I can also say that I feel we are making very good progress. We're following the plan that we communicated earlier in the year, and we should have no problem meeting the deadlines or the milestones that we have articulated.

[Rickard Anderkrans, Research Analyst]

Right. Great. And the final one, on the 40% annual growth target postpandemic, how far out in time should we think about that target? And does it include contribution from pipeline products such as zoledronic acid, DBM, et cetera? Or is it purely on -- based on the portfolio as it stands today?

[Emil Billbäck, Chief Executive Officer]

So we set this target in 2018 and said it's for the next coming 5 years. Always said we had a 5-year strategic plan, and in this strategic plan, the ambition was to grow 40%. Now in 2019, we by far exceeded that objective. And one can say, yes, but you had this disruption in the U.S. Yes, sure. But if you only look at the European sales like-for-like, we grew more than 40%. 2020 then has been an unprecedented year, I think, for everyone. And yet in constant currencies, we grew with 19%. This year is incredibly difficult predict, but we have said that we stick with our projection of 40%. So in that case, it should be valid at the minimum until 2023. 2018, 5 years ahead, 2023. And of course, there will be situations where we will review this again with a new 5-year plan, but we haven't dared to do one because there is such a rapid shift in environment constantly.

[Operator]

Our next question comes from the line of Kristofer Liljeberg of Carnegie.

[Kristofer Liljeberg-Svensson]

Three questions, please. First one, is it possible to comment a little bit more on what you saw impact on surgical volumes from the pandemic in the second quarter? Of course, good to see the sequential improvement in sales, but it's not actually a larger sequential improvement in second quarter of '19, for example, but I guess there's still a lot of impact there from the pandemic. My second question relates to costs and how we should think about that now when things open up and your activity will increase in the next few quarters, how much extra costs that will drive versus what you have in the quarter if we adjust for the one-offs. And then maybe if you could give a little bit more detail how you think -- what you think about your work approaching new customers here and how difficult this -- would this backlog be a positive thing? Or do you think it could be negative and make it more difficult to approach new customers as they have to focus on just doing surgery and maybe sticking to what they have instead of seeking alternatives?

[Emil Billbäck, Chief Executive Officer]

Yes. Thank you, Kristofer. When it comes to the surgical volumes, we have to refer to open sources, and we could conclude, for example, in England that the number of surgeries went up with roughly 15%, 1-5, from quarter 1 to quarter 2. And England is one of our biggest markets. Second-biggest market, let's say, outside of the U.S. is Germany, where the number of surgeries was almost flat between quarter 1 and quarter 2. And by that, I'd say that's very much dependent on region by region. If you take the U.S., I would say that the increase of surgeries were somewhere in between what you saw in England and Germany. And the reason it was bigger in England than the U.S. is that they had also bigger impact over the winter and stronger restrictions. Germany, with available data, has the -- still the strictest restrictions in Europe, and the increase of service was max 1% or 2% from quarter 1 to quarter 2, so basically flat or impossible to at least make any conclusions on it. So our interpretation yet with a lot of uncertainty, a lot of difficulties to interpret the data is that with our growth in quarter 2, we have constantly continued to gain market shares.

[Kristofer Liljeberg-Svensson]

But on the -- yes, and then follow-up on that and related to the previous question about the third quarter, so even if things normalize here, you're not sure that, that will make up with normal seasonality?

[Emil Billbäck, Chief Executive Officer]

That's true simply because I'm absolutely going to admit that I believe that the impact of COVID was going to be less in quarter 2 than what we have seen. It shows that I'm not very good at giving prognosis on the health care system. It's easy when you look at how the restrictions are being lifted, and you see more people out in society, you see cinemas opening and everything, it's easy to interpret that, okay, there's more people in motion, there should also be more activities at the hospital. The hospitals has continued to be very strict because it would still be quite disastrous if COVID made it into the hospitals and infect these otherwise healthy people or fragile people. And the surgeries that have been prioritized has been life-threatening, such as cancer or acute, very acute conditions. And this is also what we tried to display here that when we show that the queues of elective surgeries are actually increasing. But yes, quarter 3 is very difficult to predict with seasonality, hopefully rising surgical volumes, but also the Delta variant impact, which we haven't been able to assess.Håkan, do you want to comment on the -- or did I answer your question? Did you have anything further on that topic, Kristofer?

[Kristofer Liljeberg-Svensson]

No, that's very clear.

[Emil Billbäck, Chief Executive Officer]

Okay. Håkan, do you want to comment on the cost side, a little bit happy to what everyone can expect going forward?

[Håkan Johansson, Chief Financial Officer]

And Kristofer, as we mentioned in the report, the selling expenses for the period is still now involving some savings, cost reductions made during the period, work-hour reductions that we have lifted 1st of July, so after the period. We also still have a lower activity level than we saw pre-COVID. So in terms of physical meetings, local events, larger events, et cetera, most of that is still on hold and, of course, then impacting cost levels. So we do expect and we hope to see increase in selling expenses as we go forward because that would be a sign of increased activity in the market. When it comes to R&D, well, as noted, we had a large expense this period with the milestone payment to the SOLARIO study. Adjusting for that, you see that the level are remain very stable all the time. Going forward, what we've communicated is that we're reaching the end of the FORTIFY study. That's been an expensive study over the last 4 years, and when it reach its end, it will have a favorable impact on the general cost level in R&D.

[Emil Billbäck, Chief Executive Officer]

Yes. I think what maybe we had not communicated historically or previously is that the SOLARIO is not, let's say, a monthly or quarterly cost. It is completely related to the milestones. So that is why cost and expenses were inflated in the quarter. And on what periodicity could these milestones be expected, well, somewhere between 6 and 9 months is the time between the milestones if everything goes as planned. And then Kristofer had a final question on the new customer recruitment. So -- and this is, of course, a very important question because a big part of our journey is to bring CERAMENT to more patients. And so far, let's say, historically, our market penetration has been somewhere between 2% and 3.5%. So customer recruitment has been very difficult during the pandemic. And my assessment is that it's going to be -- continue to be very difficult for the remaining part of this year. Even when the pandemic starts to recede and be under control, there is a frenzy and a stress level and a worn-out feeling with the health care system, which makes it, unfortunately, a bit difficult to introduce new methodologies that requires a slightly different procedure and handling of the patients even though the data, the science shows that this is a much more effective and efficient way of treating. It's difficult to reach out fully with that message unless the health care system is coming back to some kind of normal state.

[Operator]

Our next question comes from the line of Hans Bostrom of Trinity Delta.

[Hans Bjorn Eskil Bostrom, Analyst]

Hans Bostrom at Trinity Delta. I had a question actually backing on to Kristofer's last question regarding the improvement in sales and approach to new clients. Is it possible to give us a sense of how much of your very strong sales increase effectively is deriving from additional distribution capacity as opposed to existing sales force distributors selling to an existing customer base and how that has changed in the course of the last year?

[Emil Billbäck, Chief Executive Officer]

Yes. Yes, thank you for your question. So we analyze in detail, of course, where sales is coming from, which customers and what is the recruitment rate of new customers and how do they ramp up, when do they buy their first product, when did they buy their second, the third, when do they to reach 10 products and so on. This data we cannot share. We feel that if we would start to share that, we would have to change our presentation, start bringing that information at every session. What I can say to support, let's say, the dialogue here is that during the pandemic, existing customers have reduced their volumes of surgery, and this has influenced CERAMENT. There is one more effect which is negative to BONESUPPORT and CERAMENT, and that's in the pandemic with the difficult access, it has been a bit of a struggle for us to implement our business model, which is to take the heavy users of CERAMENT and bring them to other hospitals where they can testify and preach and educate and train about their very positive experiences. Needless to say, the dynamics of the pandemic has made such a process impossible, which is why we have reverted to more digital ways of communicating, which admittedly not has been as effective. So we have seen during the pandemic difficulties to recruit new customers simply because we cannot meet them. The lead generation has been exceptionally good. And what does that mean? It means that the list of names we have of people interested, people that have participated in our webinars, people that have contacted us and said, once we get rid of this pandemic, we would like to try this new thing that is going to save us both time and money. Every salesperson has a clear list of people to visit, but we have to push that a little bit ahead of us because it's still not possible to visit as many surgeons as we would like to especially in Germany, where the restrictions are still very strong. That's as much as I can comment on this. I cannot share numeric details on what that mean, unfortunately, not at this stage, maybe at a future meeting but not where we are now.

[Operator]

[Operator Instructions] And our next question comes from the line of Oscar Bergman of Redeye.

[Oscar Bergman, Analyst]

Emil and Håkan, I only have 2 questions for you. And the first one's related to Premier and GPOs in general. And so I wondered what degree you expect the Premier contract to impact Q3 sales and if it would be too optimistic of me to expect an additional signing with another GPO during the year.

[Emil Billbäck, Chief Executive Officer]

Yes, thank you, Oscar. I think the impact from Premier in quarter 3 is going to be marginal. The contract kicked in on 1st of July. And I'm happy to say that we already have some first customers under the Premier network that we didn't have before. But I think those are rather exceptions of surgeons that have been waiting for this contract to clear. There is an administrative backlog, of course, on one hand, by the pandemic and one by the nature of the business to get registered in systems and so on. We try to do as much as possible before 1st of July, but until you're actually on the contract, the willingness to work with the new suppliers is rather limited. So I think the Premier sales we're going to start seeing in quarter 4, maybe in the transition between 3 and 4. That's my experience based also on previous GPO contracts. And as you rightfully pointed out, there is one big driver still out there, one big GPO, it's actually only one left where we don't have a contract yet for CERAMENT. And we are working intensively. We're in good dialogue with Vizient, but I'm afraid to give any kind of timing and projections to when that could be turning into a successful listing.

[Oscar Bergman, Analyst]

All right. And the last question I have is related to the new hybrid model that we have in Italy. How long could it take before you would see some considerable impact on EU sales, do you think?

[Emil Billbäck, Chief Executive Officer]

I think sales in Italy should have close to an immediate impact. That's my experience from having run this model both in orthopedics and in wound care in previous geographies with similar dynamics. You basically place a well-competent person to support distributors. You increase your key opinion leader interactions. We should remember that our sales in Italy has been very -- in its very infancy before. But I hope to be able to report maybe some more details also going forward so that we can display that this is a successful model of implementation. But as soon as the famous Italian vacation is over, we should start to see some results.

[Oscar Bergman, Analyst]

And congratulations for a good quarter.

[Emil Billbäck, Chief Executive Officer]

Thank you.

[Operator]

Our next question comes from the line of Sten Westerberg of Analysguiden.

[Sten Westerberg]

Two questions on the FORTIFY study, if I may. First, I understand that you expect to file a PMA on a broader indication than the one which is studied in the FORTIFY study, the trauma or with the tibial plateau fractures. Now if you could explain what this CONVICTION is founded on, receiving a broader indication than the one that you're actually studying in the FORTIFY study. That's my first question. Secondly, can you go into such details how the study is powered to show, for example, specific number of reductions in surgical procedures?

[Emil Billbäck, Chief Executive Officer]

So let me start with the first question, Sten. Thank you. The study was defined in 2017 -- '16 -- sorry, 2016 and initiated in 2017 and with the purpose of giving the answer on how bone voids or bone surgical procedures with the risk of bacterial contamination would react with treatment of CERAMENT G. And I agree this is a pretty delicate topic to say do you have a patient with a fracture which is then suitable immediately for an injection with CERAMENT G or do you have a patient with a fracture where you have a bone void that first needs surgical debridement, which then it creates potentially an even bigger void after debridement and cleaning and the removal of that tissue is completed. So the study, if successful, would show that where there is a bone void, a gap, as a result of the fracture, CERAMENT is hypothetically leading to fewer deep tissue infections. And this is how we would have to interpret and closely analyze the results, when they come, to see how broad we can aim at the indications. And this is also a conversation that we will have a dialogue with FDA. So currently, we're opening up the possibility of a broader label, but the data will eventually have to dictate what path we will take. Okay?

[Sten Westerberg]

Okay.

[Emil Billbäck, Chief Executive Officer]

The second question, if you could please repeat it. I didn't fully understand it.

[Sten Westerberg]

Yes, I wonder if you can go into such details as how the study may be powered to result in or to show a certain reduction in the number of surgical procedures that has been following the trauma.

[Emil Billbäck, Chief Executive Officer]

Yes, I cannot comment in detail on that, unfortunately. I can when the study is also completed, of course. But one parameter is, of course, the patients are followed up on a regular interval. And if the patient -- you can say very simplistically, if the patient is healing well, no infection, bone regrowth and so on, there's no need for further surgical procedure versus if the problem -- or sorry, if the patient is experiencing problem, that are of the nature that the doctor makes the conclusion that here we need further intervention, then all those interventions, of course, are registered if they deal with poor bone healing or if they deal with infection or drainage or whatever it could be. So that's how the study is ultimately designed. And then the details, I think, to stress that in also data and details, I think we will have to wait until we have the final study results because some of those topics could be voided, and others could be more interesting to discuss.

[Sten Westerberg]

Okay. Great. Looking forward to that.

[Emil Billbäck, Chief Executive Officer]

Yes. You're not the only one, I tell you.

[Operator]

There are no further questions at this time. Please go ahead, speakers.

[Emil Billbäck, Chief Executive Officer]

Well, thank you so much. And then I would like to thank everyone for joining the quarter 2 presentation of our results. And especially, I appreciate that you took the time to join us today. I know we're competing with a beautiful summer day, so thank you, everyone, for taking the time. I wish you have a great summer. I wish you have a great time until we meet again. And I hope you also look forward to the journey ahead with BONESUPPORT. Thank you. Bye-bye.