Devyser Diagnostics AB

STO:DVYSR

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Operator]

Welcome to the Devyser Diagnostics Q2 Report 2024. [Operator Instructions] Now I will hand the conference over to the speakers, CEO, Fredrik Alpsten; and CCO, Theis Kipling. Please go ahead.

[Fredrik Alpsten, executive]

Again, welcome to the Devyser Q2 2024 earnings call. It's a great pleasure to have you all here. This is the first time we published our Q2 results in July, earlier end of August, and that's something I'm very proud of. Today, you will listen to me Fredrik Alpsten, the Devyser's CEO; and Theis Kipling, our Chief Commercial Officer and responsible for business development. I have also asked our CFO, Sabina Berlin to join us during the Q&A session. A lot of positive things are happening in the company. Those of you who follow us more closely may have seen a record number of positive press releases during the quarter. The sales from bond tenders, et cetera, you found about in these published press releases are not yet reflected in the Q2 numbers. We'll see that later.

Today, we embark on a journey to our Q2 results. The second part of the presentation will be dedicated to highlighting the key achievements from the quarter and discussing our commercial outlook. Sales developed very well during the quarter and amounted to SEK 53.2 million, a new record. The earlier record from last year was SEK 50.7 million. Sales growth compared with the same quarter last year was 41% in SEK and plus 40% in local currency. All growth is organic. The growth of plus 40% in local currency is the highest growth we have seen for one single quarter since the company was listed. The growth for the first 6 months of 2024 was 35% in SEK and 34% in local currency. The growth for the last 12 months was 38%.

We now win our innovative products, high market growth, well-suited commercial organizations that we have heavily invested in over the last quarters and some of the best commercial partners. We are confident that our current positive sales trend will not only continue, but also strengthen. While we may face individual quarters that not perform as well, the overall trend is clear. Our sales are on a significant upward trajectory with most quarters expected to be record breaking. Even with the impressive sales growth we have achieved in the first 6 months, we are confident that we can maintain this level of growth in the second half of the year, achieving at least the same growth in local currency as we did in the first half of the year.

It's always dangerous to look at single quarters and draw too many conclusions from them, as single orders can heavily affect the quarter. It's much better to examine rolling 12-month periods. EMEA grew by 32% compared with the previous 12 months. During the quarter, we saw high sales growth in the Middle East, the European distributor markets, even if we are not fully satisfied with the development of the direct sales markets in Europe. Asia Pacific grew by 26% compared with the previous 12 months. Q2 grew by 75% compared with the same quarter last year.

During the last 12 to 18 months, we have signed up quite a few new distributors in Asia, and some of them have now started to generate revenue. The growth in North and South America was plus 166% compared with the previous 12 months. We are very optimistic about North America and see the flat development during the last quarter as a result of an uneven purchasing patterns from one of our business. And please remember that we do not yet have that many customers in North America. The potential in North America is massive, and we have just started to penetrate this huge market. North America will be one of our top priorities both for the near, mid and long term. Our direct sales represented about 75%, and our distributor sales represented about 25% of total revenue, both for the quarter and for the last 12 months.

However, as sales through Thermo Fisher are increasing and new distributors in regions like Asia and the Middle East are added, we may see an increased distributed share of revenue. One of Devyser's strength is its business model. We have very high gross margins because we only sell consumables and software, new equipment. Since I joined Devyser in the fall of 2020, we have managed to increase the gross margin from around 75% to around 85%. The reason is a scalable production process, even if it has up to now have been rather manual and our ability to increase prices. However, as we had grown out of our production facility, we decided Spring 2023 to move to a bigger facility to enable higher production volumes and automate production processes.

We have signed a 7-year lease with an option for another 4 years. With one shift of a production, we can stay here even if we have a growth of, in average, 50% a year. We got access to the new facility in January this year and moved our offices to the new facility in February. During the spring, we have worked extensively to build out the production and R&D part of the facility. As with all certified and regulated business, this must be done by the book documented, validated and verified. It must be approved by the regulatory authorities and notified bodies when ready. The regulatory authorities have now approved the new production facility, and we can move production and R&D labs from the old facility to the new one during Q3. All work to finalize the new facility has been costly. Cost of goods sold was negatively impacted by SEK 3 million during the quarter.

We also had a negative impact -- we also expect a negative impact during the third quarter, but we expect to be back on track by the end of Q4 this year and that's a gross margin in excess of 80%. This investment will help us to drive down production costs even further and help us continue automating the production processes and accordingly increase our gross margins in the long run. It should also be mentioned that to minimize risk, we decided to rent both facilities, the new one and the old one during the full year of 2024. This means that when we go into 2025, we will not pay rent for the old facility. The quarter's EBIT was in line with our expectations. It amounted to minus SEK 23 million compared with minus SEK 14 million in the same quarter last year.

A couple of onetime items caused the below result. The move to the new premises, as explained earlier, was SEK 3 million extra during the quarter, double rent for new and old premises. We have added SEK 3 million in additional rent costs per quarter during 2024. We had also increased costs for our expansion in North America, including other things work to get the best possible compensation for our products in our CLIA lab as well as work on setting up our own warehouse in the U.S., in total, another SEK 3 million. The positive development of the devices share price also meant that during the quarter, we were hit by higher costs for our incentive programs.

Total cost for incentive programs, et cetera, amounted to SEK 2 million during the quarter. It should also be noted that during the second quarter of 2023, we brought back a provision of SEK 2 million for a so called retroactive payback fee. We are convinced that the positive earnings development we saw in 2023 will continue and that we will reach our financial goal of an EBIT margin exceeding 20% from 2024 to 2026. Devyser has a very strong financial position, SEK 201 million in cash at the end of the quarter and no interest-bearing debts. During the quarter, an employee warranty program expired and the options were exercised. It meant a capital injection of some SEK 17 million for the company at the end of the quarter.

With that, I leave over to Theis to give you some highlights on the quarter and our commercial outlook.

[Theis Kipling, executive]

Thank you, Fredrik. Indeed, Q2 was a bid quarter, and I'm happy to take you through some of the updates and the outlook to give the gist and the understanding that, in fact, we're just getting started. On June 17, if we move to the next slide, we announced that we have expanded the agreement with Thermo Fisher to now cover global territory. The reason we didn't provide Thermo Fisher with access to global territory for our transplantation products already a year ago when we first signed the agreement with them was due to the fact that we wanted to be reassured that customers responded well to the collaboration as well as we wanted to be confirmed about the investments and the dedication made by Thermo Fisher.

This, we have now seen and hence we are gladly and now working with them on building a significant success globally. Our products have long been advocated for by key opinion leaders. But now we're seeing laboratories start bringing in these products in their clinical routine across both Europe and North America. And thus, we are confident that the momentum will only propel further once we get users across Asia Pacific on board as well.

Allowing Thermo Fisher access to global territory is attractive for the revenue growth of Devyser since we can now expand the market reach by an extra 43%, measured on the number of kidney transplantation in the Asia Pacific region. Together with Thermo Fisher, we are addressing more than USD 1 billion market and had already made a lot of headway together in establishing new standards within the market using the Devyser One Lambda post transplantation products. We have already reached the first IVDR approvals for both our assays and software. We are pursuing FDA approval in the U.S., and we are on a solid path towards also having our tests reimbursed in our CLIA certified laboratory. You can move to the next slide point.

Beyond the revenue logic related to the global partnership, it equally much helps with cost synergies since we no longer need to maintain a device-only product line for the transplantation products, including taking them through regulatory approvals, et cetera. These efforts will now be focused on the Devyser and Thermo Fisher co-branded product line only, hence truly a sound business logic and business decision. As we now look into year 2 and onwards, together with Thermo Fisher, we're intrigued by the opportunities ahead, not least on the product pipeline front, where we have several new and potentially groundbreaking product launches coming up. While these products are not automatically included in the master agreement that we have with Thermo Fisher, we do believe that these products will significantly enhance both Thermo Fisher's and our position within the transplantation area for the years to come.

Let's move into Italy. During Q2, we closed deals worth SEK 84 million in Italy, including an all-time high tender covering the region of Tuscany. We continued expansion of our oncology business as well as we won yet another deal for our thalassemia products. If you add the announcement that we did late last week, that number is close to SEK 90 million in the past 3 to 4 months. Italy remains our largest market, and I'm thrilled to see how the team continues to take market share and to expand our business. Looking ahead, I'm excited to see that we still have a large number of opportunities to further accelerate this momentum. I'm sure that a lot more will come.

Focusing on thalassemia. Thalassemia is one of the most prevalent hereditary diseases in the world. The market is therefore huge. At Devyser, we are well positioned with our products, which grew almost 60% during first half of this year versus same period of last year and now is about 10% of our total sales. We're pursuing a large number of opportunities in markets where thalassemia prevalence is high, such as Italy, Spain, Saudi Arabia, Malaysia, India, Singapore and I could go on. Recently, our thalassemia test was chosen for State Screening Program in California, the U.S., and we are pursuing other similar state programs within the U.S. as well.

Lastly, I can share that we are in dialogue with large pharmaceutical companies who have expressed interest in the product as well. And I will soon come back sharing more information about these potential engagements in the months ahead of us. Another interesting product is our RHD test, where we have seen lots of strong traction. We continue to expand our market position and we just signed up with another leading laboratory in Canada, in addition to Héma-Québec, which we already have announced. In addition, we announced in December that our RHD test was chosen for nationwide screening in Wales, which is just yet another country to the list where our RHD test is chosen for either state, region or nationwide screening.

One of the markets yet to be penetrated with RHD testing in the U.S. where -- is in the U.S., where the market standard is still the prophylactic injection for pregnant women. However, just recently, the prophylactic drug program came into shortage by the suppliers. And thus, we now are seeing a very heavy intake of requests for testing in the U.S. I have early on been very bullish about our market opportunity for this product in the U.S. And now especially once the market turns towards testing before injection, I am even more bullish with this potential. These days, we are in dialogue with some of the largest laboratory chains and laboratories in the U.S. around our RHD test. And I'm hopeful that one or several of these opportunities will land during this year, and I'm excited to be communicating soon about this.

Let's move into the next update regarding what does the future hold with regards to Thermo Fisher. We're now 1 year in, and we're already seeing strong growth and currently are up some 65% above H2 2023. With lead times, as we have talked about before, being 12 to 18 months, we're just at the beginning of the growth journey with Thermo Fisher. And we are confident that this will accelerate in the months and the years to come. We're adding 3 new indications: heart, liver and lung. We are pursuing FDA clearance and launching new products that will be groundbreaking in the care of transplantation patients globally. The additional 3 indications, as mentioned before, will expand our addressable market measured on the total number of transplantations done globally.

This is an exciting time in the field of transplantation, and I'm absolutely sure about Devyser becoming a key player for many years within this exciting area. Looking at what's next in the U.S. We continue to pursue the opportunities within testing for cystic fibrosis following the updated guidelines from last year. Our first customer is soon reaching clinical routine and more opportunities are already in the pipeline. RHD, as mentioned, looks very promising and I'm confident that this will be a great product for the U.S. market in the years to come. And alongside gaining traction in Canada, this product has the potential to become one of our best selling products in the company. In the U.S., 15% of the population are RH negative, meaning that across the 3.7 million new births annually.

There is a patient population of 550,000 patients annually who should be tested for their fetus that is, which is a very attractive opportunity for Devyser, now with the vacant interest in RHD testing rather than defaulting to the prophylactic treatment. Devyser Genomic Laboratories, which is our CLIA-certified laboratory in Atlanta is doing well. We are on track towards having our first products being reimbursed and covered as well as our engagement with the U.K.-based oncology company Cyted are moving along well and the laboratory of fulfilling the objectives as a growth catalyst for device in the U.S. Within just a few years, I'm confident that our North American business will be the largest region that we have in the company, even bigger and ahead of our otherwise large and strongly performing markets that we have in Italy.

With that, I hand it back to you, Fredrik.

[Fredrik Alpsten, executive]

Thank you, Theis. As you know, over the last 2 years, we have taken some very important steps to build a global, fast-growing, highly profitable diagnostic company. As you also have heard, we are very optimistic about the future. We are focusing on North America and Europe. It's done via all our sales channels: direct sales, partners, via our CLIA lab and via distributors. With our innovative products, a high market growth, a well-suited commercial organization that we have heavily invested in over the last quarters and some of the best commercial partners, we are confident that the historical development we have seen can continue and even enhance. However, as important as high growth is to continue our way to profitability is our main focus.

With that, we'll stop here now and open up for questions. Back to the operator.

[Operator]

[Operator Instructions]

The next question comes from Ulrik Trattner from Carnegie. Please go ahead.

[Ulrik Trattner, analyst]

I have a few questions on my end. First of all, very thankful for the split in one-offs. But perhaps if you can comment on how these one-offs have developed since Q1? I note that OpEx has increased close to SEK 10 million, and it looks at least in reported number to be mainly in admin and R&D. So if you can just help us understand that dynamic, how much is related to increased one-offs? And what to extrapolate and what's not to extrapolate into the second half of the year? That would be my first question, please.

[Fredrik Alpsten, executive]

Yes. Without giving too much details because I'm not aware of them exactly, but I think it's important to remember a couple of things. The setup of the new production facility, the cost for that and the move that has affected cost of goods sold by SEK 3 million during Q2, the extra costs we have for having 2 facilities. The extra cost for the old facilities, that's taken as an administrative costs, not affecting cost of goods sold. So that's one of the reasons why admin costs have increased quite much.

And then we have -- we talked about the nice share price development we have seen that's quite much also on the administrative costs. When it comes to the R&D costs, you have both capitalized and non-capitalized R&D expenses. And we maybe have capitalized slightly less during the quarter due to accounting reasons. So I'm quite sure that if you take both capitalized and non-capitalized costs, they have not increased that much compared with Q2. I think we'll be back on track also on how much we capitalize in Q3 and Q4. Does it answer your question?

[Ulrik Trattner, analyst]

It does. Thank you. And really strong sales development across the board. And you touched upon the size and you talked about expected continued sales development for Thermo Fisher into the second half of the year. And I know that you have commented historically and continued to comment on the lead time of 12 to 18 months in regards to the tender activity. But in terms of the actual tender activity, have you seen any type of acceleration or interest in your Accept portfolio? And a follow-up question would be, you mentioned now that you're ready to commercially launch the expanded Accept portfolio. Are these already commercially available? Or when are you expecting first revenue to come in to the company?

[Theis Kipling, executive]

Thank you, Ulrik. Let's start with the first one. I mean the traction that we are seeing is still in the early phase, I would say. So of course, we are still only just 1 year in from the initial launch of Thermo Fisher. And still with that, I think we're reassured with the initial traction. We are seeing -- what really reassures me is when you look into what is being published, what is the clinical research that are made out there. And that's pretty phenomenal, I'd say, talking to the opportunities that we have with our products.

So short answer, to make that as short as possible, we are still in the early phase, but we are very confident and reassured by the initial traction in terms of revenues, customer interest, tenders that are being written. So very strong start, but -- and that should bode well for what the future should hold for us and Thermo Fisher together.

[Fredrik Alpsten, executive]

Yes, a reminder there, Ulrik. Please remember that we signed the agreement with Thermo Fisher in beginning of Q2, but they didn't launch until end of Q3. So we are still in a quite early phase. We have not been with them for 12 months yet. They have not launched our products during 12 months. And as we said in the interim report, we foresee revenue from the expanded territory starting from 2025, even though we have some ongoing discussions with some certain accounts in this country, but you should not expect too high revenue for the expanded in 2024. Please wait for 2025.

[Ulrik Trattner, analyst]

Okay. Great. And the second question is related to timing of when the expanded number of Accept tests were to be commercially available in the U.S.?

[Theis Kipling, executive]

Yes. So that, as Fredrik also commented, I think we are expecting to see most of the initial answer of that during 2025. And so that, obviously, there is a number of adoption aspects that are being made now with customers. But again, lots of great traction also on those new indications that are being made on customer sites today, especially in the U.S. and Europe. So there will be a lot of that and you'll read about and see during the remainder of the year, and that will kick off the revenues for 2025 on those new indications.

[Ulrik Trattner, analyst]

Okay. Great. And obviously, Thermo Fisher collaboration expanded, both in terms of products and geographies. But in general, it looks like your products have commercial traction in the U.S., and you have a portfolio beyond the transplantation portfolio. And you still only have 3 people in terms of your headcount in the U.S. Obviously, you have your CLIA lab. But would it make any sense in your view to expand the number of distributors selling your product portfolio in the market, breaking it up by indications, cystic fibrosis or RHD screening? Or would it make more sense for you to keep it in-house and then just go for potentially more high-value tenders?

[Theis Kipling, executive]

Good question, Ulrik. That's something we're actively assessing day in, day out as these opportunities, they come by. We have been approached several times by some very significant partners, potential partners, and yet decided that we were better suited to deliver on these opportunities ourselves. That being said, we're constantly, I'd say, in dialogue with very attractive opportunities that could make us pivot a little bit. And obviously, the reason we're only 3 currently in the field organization of the U.S. is because we are careful in terms of the investments, and we are still very confident about the opportunities, right? So when those opportunities they will turn, you'll see that we will be investing in an increased fashion in the U.S. But for the time being, we're confident with the level that we have versus the potential that are coming ahead of us.

[Ulrik Trattner, analyst]

Great. Some additional questions on the general commercial activities, but potentially we could keep our eyes on the U.S. and on the CLIA lab. So internally in your CLIA lab, what's your current commercial traction? How are things progressing? And what type of revenues are you expecting prior to obtaining reimbursement in the U.S.? And I heard throughout the call that you have invested in people specializing in the matter of obtaining reimbursement, so where are we at in that progress?

[Theis Kipling, executive]

We're probably -- from the reimbursement, if we just look at that, the initial products that we have commercialized are the RHD test. And now we are seeking reimbursement for [indiscernible] and our Accept cfDNA, so the 2 transplantation products. And those 2 products are not covered by the Thermo Fisher agreement, right? Those we have retained exclusive rights to be commercializing through and from our laboratory. And those are the efforts that we are now investing in, in terms of getting those coverage by and reimbursement in the U.S. Time lines can be a little bit fluffy, but we're hoping that early next year, you would see that we have those products covered. And then we would see volumes quite quickly start to be generated.

In addition to that, there is a number of opportunities for adding new products. And one of the products -- the 2 products currently being worked on and that's the test for cystic fibrosis, but also the test for thalassemia. And then there could naturally be additional products, but it could also be additional partnerships like the one we have with Cyted as we disclosed, generating up to SEK 25 million just on that one opportunity. So it is meant to be a widespread and wide-focused catalyst for the growth in the U.S., and it's shown to be also.

[Ulrik Trattner, analyst]

Great. And the last question on my end, and it would be kind of a follow-up question as well. If you could talk a little bit about phasing of revenue in the second half. We already talked about Thermo Fisher, but if we can talk about the delivery of the already awarded RHD tendering in Canada as well as Cyted commercial contracts, how should we look at this for the second half of the year?

[Fredrik Alpsten, executive]

Maybe I can say a couple of words there. It's always difficult to talk about single quarters because it can be delayed from the customer. What we said and what I said earlier is that we are rather confident that we can maintain the same growth during the second part of 2024 that we had during the first part of -- first 6 months of 2024, and that's in local currency. And as you know, we had a growth of 34% for the first 6 months. We are confident that we can maintain at least the same during the second part of the year. And we prefer not to say about something about single quarter because there can always be delays. But if you look at 2 quarters, it's easy to say things.

[Ulrik Trattner, analyst]

Okay. But do you expect some deliveries on the Cyted contracts and as well as in the RHD screening awarded already in Canada during the second half of the year? Or is there risk that this will be pushed into '25?

[Theis Kipling, executive]

Yes. So obviously, you're right to bring up Cyted. The vast majority will happen in '25, right? But that will also mean that we are starting to see the ramp up into volumes and revenues here during second half. But the big chunk of that potential sits in 2025. With regards to RHD testing in Canada, that also is more of a 2025 opportunity. As there have been some delays with Héma-Québec, as we have already communicated. But as I also mentioned in my walk-through of the commercial update, we actually just landed another account out there and I'm still waiting for some details before I can disclose much more. But I wouldn't expect that, that would have a great impact in 2024, but it's going to be building on our accumulation of growth in 2025 and beyond.

[Operator]

The next question comes from Oscar Bergman from Redeye.

[Oscar Bergman, analyst]

Just a few questions to you. I was looking at the number of employees, and it has gone up quite a bit since Q2 of last year. So if you could just give some commentary on your organizational, well, I guess, increase?

[Fredrik Alpsten, executive]

Yes. If you look 1 year back, of course, it has gone up quite heavily. But if you look at the Q1, it has not done that. We have invested in supply chain quite heavily because we are building up for future growth. We have also invested quite heavily in our commercial organization. So that's the 2 main drivers, I would say. We have added some special competencies. We have already talked about the reimbursement and market access in the U.S. So that's the kind of expertise that we have hired. We do not, however, expect to have any substantially more hires during the remaining of the year.

[Oscar Bergman, analyst]

Okay. And could you just give an update on the CLIA lab in terms of it running on a profit?

[Fredrik Alpsten, executive]

No, it's not yet running on a profit. I think we shared at the last earnings call that we expect positive numbers during the second part of the year, and we just started that part of the year. So we still run with a loss, but it's not a huge loss. We have 4, 5 people in the lab. And we have now started to work with Cyted, but also the other things that we have disclosed here, we have some more discussions. They have not -- the other ones, they have not started to generate revenue yet, but we are optimistic that we'll do that during this year. So we will remain with what we said earlier, positive during the second part of the year.

[Oscar Bergman, analyst]

And my next question is a bit speculative. And I guess you can't really tell so far. But the Cyted deal, do you stand a good chance of it being renewed? And if it could be renewed, should we expect similar sales figures going forward? Or could it even be greater?

[Fredrik Alpsten, executive]

Maybe a question to you, Theis. But please also remember, we cannot -- yes, like for Thermo Fisher, we cannot always disclose what has been discussed between a partner and us. But maybe you can give some more color here, Theis.

[Theis Kipling, executive]

Yes. I mean, right now, the agreement covers 2 years, right? So '24-'25. I see no reason for why it couldn't be extended. And I'm back in the States in mid-August, both in California, but also in the lab and we're -- together with Cyted actually in the lab, so -- but it's too early to be communicating more than just that. But it's moving along well. I mean both parties are very happy with the engagement.

[Oscar Bergman, analyst]

Okay. And just a final question on the Thermo Fisher deal. I mean, I understand the lead time of 12 to 18 months since the initial signing before we can see any considerable sales development. But apart from this, are there any other bottlenecks that we should be aware of that could hinder sales from growing?

[Theis Kipling, executive]

From my side, I think there's the natural lead time, right, which is what we are in. But beyond that, what really excites me about this opportunity is that we're also changing the care of which transplant patients are looked after, right? And here, especially how we can protect the organ from being rejected. So we are also working on building up a lot of evidence for why monitoring is important. And that also takes some time. But if you call upon some of the key opinion leaders, you will hear that what we have going currently is very, very exciting and could be game changing in the way of caring for the transplant patients. So that's why we are super excited about what's to come, and we're very confident that it will come. It just takes the natural time. This doesn't happen overnight.

[Operator]

The next question comes from Ludvig Lundgren from Nordea.

[Ludvig Lundgren, analyst]

So on the EMEA countries, we are currently establishing direct sales channels, such as in Germany, Spain and France, how has the development been here? Have the dynamic been similar to when you established direct sales in Italy?

[Theis Kipling, executive]

Should I cover that one, Fredrik?

[Fredrik Alpsten, executive]

Yes, please, please.

[Theis Kipling, executive]

Yes. I mean, yes, in general, it replicates. So you heard me say before in some of the earlier calls that when I take the growth curve from when we initially started going direct in Italy with what we're doing in the DACH region, Benelux, U.K. and so forth, the curve of growth looks the same. That being said, as we also have written in the report, we had expected more growth in the direct markets of Europe. But again, very, very sure that this will absolutely come. So we are posting some 30% -- 34%, I believe, in the direct markets. And obviously, we're expecting plus 50%, some of those margins we want to see doubling, but we're working on getting there.

But again, when I look at what we have done in the larger markets like the DACH region and the Benelux and so forth, it looks very, very solid. And now we're doing the same in France. We're doing the same in Spain, doing the same in U.K., which is a little bit later on that growth curve that we are working on. So I'm confident these markets will also be replicating what we have done in Italy.

[Ludvig Lundgren, analyst]

All right. Great. So when you switch to these direct sales, you get this price effect, right? But would you say that this typically is also driving volumes? Like have you seen that also in these new markets that volumes increase when you establish direct sales channel?

[Theis Kipling, executive]

Yes. Usually, that should happen, right? The initial effect is obviously on the price side, where you even work from a distributor to drive sales, that has an incremental value effect. And then as you get closer to customers, you build a relationship, you are closer in tenders, then volumes are also coming, which will be also confirming when we look into our numbers.

[Ludvig Lundgren, analyst]

All right. Great. And then just a final one. On the interest from pharmaceutical companies that you mentioned on the thalassemia test, is a potential outcome from this that the test could be used as a companion diagnostics? Or are there other use cases for the tests?

[Theis Kipling, executive]

That's too early to comment, but that I would encourage you to look into because that market, the companies that are working within sickle cell disease and working with thalassemia is very, very interesting. And we have one of the best products out there, I'm confident. So I think we are very well suited actually to partner and be a strong partner to pharmaceutical companies.

[Operator]

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

[Fredrik Alpsten, executive]

In these earnings calls, even if it's holiday times for most people in Scandinavia, at least. I hope you will have a nice holiday, and let's get in touch later in the fall when we have our third earnings call for this year. Thank you.