Q linea AB

STO:QLINEA

Earnings Call Transcript 2022-Q3

[Operator]

[Operator Instructions] Today I'm pleased to present CEO, Jonas Jarvius; and CFO, Anders Lundin. Please begin your meeting.

[Jonas Jarvius, executive]

Thank you very much for that and welcome all to our presentation for the third quarter of 2022. We'll move on to the next slide, Slide #2, where we have our disclaimer slide, in case me or Anders would make any forward-looking statements. Having looked at Slide #2, we move immediately, I think, into Slide #3 where we have a high level summary of activities during this quarter and also a bit after period end. As you know, who have been following us, we are developing disruptive solutions for faster infectious disease diagnostics. The first product targets downstream infections where sepsis is a most severe case. If you look at some of the statistics from the period, we are running at 174 employees and consultants. So more or less leveling out from what we saw also during the second quarter. We come back very strengthened from a very successful ID week, an infectious disease conference held in Washington in October this year and I will come back with some highlights from that conference. As you know, we also filed a 510(k) application for ASTar in June to the FDA. And we are now in the discussions with FDA regarding that application. I'm also really proud to say that we have now passed full IVDR certification. We did that in September. And I'll, of course, come back to what that means for Q-linea and for us as a company and opportunities that, that brings. I think though the biggest news, which we will focus much of our intention during this call is that we have announced earlier this week that we have jointly agreed together with Thermo Fisher Scientific and our partnership around ASTar distribution. So we'll talk a lot about that and, of course, our study moving forward. And apart from ASTar, of course, we also have other products in development. And as we have earlier announced, we are now in discussions regarding Podler. And I will also touch upon those discussions at the end of my presentation. But if we move to Slide #4, I just want to ground the importance of what we do. The first application sepsis is the leading cause of death in our hospitals. It's more common than lung prostate and breast cancer combined. And it accounts for around 30% of the deaths in the hospitals. It's also the most expensive condition to treat in the United States. For such infections, the real critical piece of information is what antibiotics should you use to treat this infection? And this is what we work with Q-linea and that's what ASTar provides. And by doing so we of course also aim to help more patients survive from septic episodes. If we're moving to Slide #5, of course, the big topic for today's call is the discussion between Q-linea and Thermo Fisher jointly and the distribution partnership. Thermo Fisher Scientific, as you know, is a very big company. They have to decide to refocus on their core media businesses. And in that decision, of course, ASTar was not part of that core media business. What I would stress is that the view of ASTar has not changed either at Thermo Fisher or the fantastic team we have been working on over the last couple of years. So that is the decision that has been taken. Of course also as you know, Thermo Fisher Scientific had an exclusive distribution partnership with Q-linea. And of course one important aspect is sales targets, of course, how much do we think we can bring to the market. We announced in our Q3 report that we are lowering our sales estimates during this year, I'll come back with some of the details, moving from [indiscernible]. And of course this is also very important when you're an exclusive distribution partner; this is, of course, important to meet these targets. What I would say and I really think that's important to stress that during this year, there's been a number of evaluations of ASTar and ASTar is truly a great performing system. So it has met expectations from customers and, of course, also the clinical value that it presents. However together with Thermo Fisher, we continue to work together. So as you know, we have been working in clinical studies where Thermo Fisher Scientific performs reference testing. What we need to compare to with us, of course, that will continue. Also the commercial customers that have been contacted by Thermo Fisher will be offered to be transferred to Q-linea. And of course we see that as a very positive transaction to happen in the near future. Also, apart from that, sales leads that's already in the pipeline that has moved through the sales funnel also together with ongoing evaluations will be transferred from Thermo Fisher to Q-linea. And they will, of course, also support us during this transition. So we want to make this smooth for both companies. And also we always keep the customer as a central part here so that the transition would be smooth for them and also actually for us at Q-linea when we do ramp up. So I think that is very good news. I would like to see that taking the next steps over the next coming weeks. If we then move into Slide #6. Why didn't we meet the sales target? Well, of course, we have learned a lot during this first initial launch phase. And analysts have performed quite deep analysis in Europe. And I would say that there are a couple of factors. One of them is that rapid AST is very young in Europe. There are really very few players in the market. It has not been around for several years with the difference, of course, if you compare that to the U.S., where we have seen more of that. I'll come back to that. So it's a young field. And when it's a young field, of course, you need to come to that market with that knowledge. We have also seen that Corona pandemic, all of the immediate effects of the pandemic has really decreased a lot. But we have seen that a lot of hospitals really have stretched strategies for 2022 and we don't see really an opening until next year for that. We have seen some limitation to that availability. But I would say it's really more on the financial aspects that you needed to sort of have 2022 to be able to recoup from the hospital budget. Another strong message, as I talked to you before, is that with the new technology, with the new system, you really want to try before you buy in a sense. So they want to see how ASTar performs in their respective clinical setting, how is it to operate, what type of data can I get? How can I incorporate these data in the clinical management of the patients? We'll also see that there's a big ask for clinical and health economic evidence. So here are studies and I'll also come back a little bit about that. But now when we actually see a couple of companies providing rapid AST solutions, we also see that customers in general really like to see these systems compare and contrast to each other. Which system is the best in my settings? What are the respective pros and cons? And also, and I would say always in a launch of a new product, the voice of key opinion leaders in the field, scientific evidence is truly important. So these are really the highlights, what we have learned and also what we have gotten a more deeper understanding on during this initial launch period. So if we then take a look at Page #7. This is just some highlights from studies that have been done, where a customer has other published data or presented them at conferences. And really the performance of ASTar is strong. Very easy to use and the coverage is very broad. Meaning that the likelihood of actually being able to act upon results. I mean, the crucial decision is very high [indiscernible] ASTar. So I think we have a good base. But then the big question is, of course, what will that do with our lessons learned and how do we think about the future? So if you take a look at Slide #8, we think, first of all, that launching a new product, a long-term strategy is important. And in a long-term strategy, you will have something that's very critical in the initial phase, in the medium phase and, of course, long term. I think what we would like to do now, even more actively is increased awareness of rapid AST in general and of course as ASTar being a priority for us. But we'll provide further support to key opinion leaders to really provide them with ASTar to be able to do evaluations to test it in their studies. So that level of activity will be increased. We also talked about customers really want to see how ASTar performs with other rapid AST solutions in the market. Here we would like to take a very active role and we encourage these types of studies. So we are now in really late-stage discussions with several independent, of course, clinical hospitals that want to compare us with other systems on the market. When I look at ASTar performances, I am really encouraged with these types of studies and I do think that ASTar will perform well in these studies. Also when we talk about try-before-you-buy is we want to increase the commercial footprint. We want to accelerate the valuation in clinical evidence studies. You can see on the map, there's another 5 that are either commercial customers or being part of developing or supporting these types of activities. Our health economic study, the first one will be focused in the Southern Europe. We are already to start. All the instruments have been installed, all training has been commenced, all protocol has been approved. And we're really upgrading for the last ethical approval of one remaining site. So as soon as we have that, we are ready to really start health economic outcome research studies. And actually together with Thermo Fisher Scientific, we will now enter -- we have entered into discussions of transferring the sales leads that they have, and of course, it's the ongoing evaluation. So that we can really be prepared to make a smooth transition of what has been done from Thermo Fisher during this year. If I then look at Slide #9, I think what's also important to remember is that when we signed the agreement with Thermo Fisher Scientific, it was a partnership. It was not a distribution of ASTar. Because of that being a partnership, we haven't really been continuously mirrored their organization and we have focused on some particular aspects here in Q-linea. What that means now that I think we have a very strong commercial and clinical value teams. We have already 15 persons in the commercial organization and 7 persons working within clinical value. And I do think, when I look at Q-linea, we have really been excellent at supporting the clinical evidence. I mean, when you sell these types of products, it's not only for the microbiology lab, but it's also to the clinicians, the persons who will need to act upon the result of ASTar. So of course we plan to expand that commercial team and we'll have a very clear focus initially on key geographies, at least internally. And naturally we take the lessons learned from Europe. And we also see the commercial adoption of rapid AST in the United States. That, to me, brings the conclusion that U.S.A. will be a clear focus for us. We are actually already in discussion with several hospitals that really would like to try and test us even before FDA approval. And I think that's very positive feedback from the U.S. market. We also, of course, I want to make the preparations setting up in U.S.A. and really start planning for our own sales force in the U.S. In another company I cofounded a number of years ago, Olink; they have through the same journey going from Sweden to the U.S. And I think Jon Heimer and his team has done a very good job at that. So we look at sort of a similar type approach when coming into the U.S. markets. For Europe, I think we are in a good place. We can do initial commercial coming from Sweden. And we will focus on building awareness and clinic and scientific evidence. And then we will really focus on the top 3 European countries before we expand. This is our current thinking. It can change. We have a very firm plan on what we want to do over the next 2, 3 months and then, of course, what we need to in 2023. So that was our story in where we are in direct control. So if we take a look at Page #10, of course, we're also going to look at how we can expand these sales capabilities with tentative commercial partnership. And I'm actually quite proud to see that within just a few days after the press release, Q-linea has been approached by several large companies in the field to start having meetings and discuss if there is an interest, how we could work together. And I think there are a number of reasons for that. I think the primary reason is that people who have knowledge in this field, they really see the performance of ASTar and what Q-linea has done over the last number of years. So I think we are an interesting company with a very interesting product. But also the partnership with Thermo Fisher that was focused on ASTar, meaning that other developments we have running in the company had been open for also discussions with other players in the field. So where we are right now, and of course, this is fairly early days, but now really trying to evaluate what strategies can best build company shareholder value, both internally with our capabilities, but also expanding that with commercial strategic partnerships. If I then take a look at Page 11, that's a very high-level summary of sort of where we are in Europe and U.S.A. on the regulatory side. So as I mentioned, FDA, we are in discussions. We're actually waiting feedback from the FDA. And as we have announced before, FDA has 90 days to make a clearance or approval of the product. But that doesn't mean that it takes 90 days. So as soon as they have a question or a comment or want to see some perhaps more evidence, the clock stops. So if you look at an average cycle for similar type of products is typically 12 to 18 months. I think what's very positive from Q-linea side is that we have been classified as a breakthrough device. And that really means that we have priority with similar devices in our field. So we are now in discussion, looking at perhaps performing more extended testing. But I would also absolutely come back to you when I have some more details around the timelines for FDA approval. I think from Europe, of course, we have not been sitting still there either. And I'm extremely happy to say that we have now passed IVDR certification. You may know that Europe is moving from the IVDP, the directive for In Vitro Diagnostics Products to the IVDR, the regulation. This really means that Europe becomes more similar to the U.S. You have to have an outside body that approves products. By being one of the first company actually to accomplish it and of course the certificate will come typically earlier in 2023, but we have passed all the formalities so to speak. And you know that if you are not fully IVDR compliant, you are allowed to sell products that you have on the market before May 26th this year. But you are not allowed to place any new products on the market in Europe until you are fully IVDR certified. You are not either allowed to make any sort of major upgrades to the product. So I think that Q-linea, with our long-term thinking, we took very long slots to be able to have this audit performed this year and now to be able to accomplish, that means that we have full sort of freedom to operate and place new products, make products updates. And I think that puts us in a very good position compared to some of our colleagues in the field who are not [indiscernible]. If we then take a look at Slide #12, sort of a highlight of some of the activities. Of course we needed to focus today primarily on the distribution partnership. Podler, again, we are making good comeback there. I would, however, say now that when we have both Podler and ASTar within our complete control, we would also like to see what's really the best value for the shareholders and the company, so we are sort of revisiting the strategy for ASTar and Podler once again. Also, very importantly, is that we have made some very good steps in the capabilities for consumable production. Key part of our consumables is really the AST disc. We are now in late-stage verification of our internal developed equipment for ASCO antibiotic manufacturing with a much higher throughput. We have automated quality control and much more good progress in the production team. If we then take a look at Slide #13, just one highlight. We just came back from ID week. As I said, it's an infectious disease conference, it was held in Washington earlier this month. And we can clearly see a difference between U.S. and Europe. And if you compare that to Europe, we don't really have so many questions of why rapid AST, but rather when and what technology. So of course we need to get competitive in the market, but we see that U.S. has come quite further along in that journey. I know Europe will follow, but I think U.S. is clearly leading this development by far. And as I mentioned before, we now see several hospitals that are expressing to really test us out before FDA becomes approved. And of course this is something that's important for us to have a running start as soon as we have clearance. If we then look at Slide #14. So in summary, I mean, of course, separation for Thermo Fisher was not the plan, was not the intent when we entered the partnership 2 years ago. We clearly have the same vision. However what I think is very positive is that we are on our full control on the commercial direction for both ASTar and all the other products we have and we see that interest in our company is strong. I mean we have developed a good product and a good company together with all of you. So of course it will be a transition period before we have fully implemented and decided our new strategy. But we have a great product and a good base. We have a clear view on what's needed in EU and U.S., respectively, to build the future value. We have commercial customers, a pipeline of evaluations and sales teams to build from. And of course we have a continued support from Thermo Fisher during this transition. So although it was not the intention a couple of years ago, I think that where we are right now, we are in a very good position to actually capitalize on what has been done and also take the next step. And I truly look forward to taking that together with all of you in this next journey. So that will conclude sort of my overview of events during the third quarter. I will hand over to Anders Lundin, who will walk you through the finance part of that. So welcome, Anders.

[Anders Lundin, executive]

Thank you, Jonas. So I will go into Slide 15. In the income statement for the third quarter, we have net sales of SEK 2.9 million compared to SEK 1.1 million same quarter last year. The operating result was minus SEK 58.9 million compared to SEK 50 million. We reported a loss after tax of SEK 59.4 million minus. And the earnings per share before and after dilution was minus SEK 2.03 million compared to minus SEK 1.68 million same quarter last year. So if I go to Slide 16, we have some balance sheet items. Cash in the bank and cash equivalent was SEK 28.9 million. We had short-term investments, which pertained of short-term bonds of SEK 65.3 million. And we have noncurrent assets, which is listed bonds of SEK 63.2 million. All in all, if I add those assets, it comes up to SEK 154.4 million. We have inventory of ASTar and consumables of SEK 22.3 million compared to SEK 28.6 million at year-end. And those numbers includes also SEK 55.4 million compared to minus SEK 63 million same quarter last year. We see a decrease in outflow mainly due to the favorable changes in the working capital. But it's partly offset, of course, by the lower operating results this quarter. We have investing activities of SEK 64.5 million, which is sale or net divestment of short-term interest funds. We have invested in production equipment of SEK 0.9 million compared to SEK 2.7 million same quarter last year. And the cash flow from financing activities is very low, zero this quarter, minus 0.1 and represents payback of loans, which are now fully repaid since quarter 2 this year. So as I said, if I add together the assets that we can convert into cash, we have SEK 154.4 million, which is -- and that is compared to the year-end, we have SEK 347.8 million. So with the current business plan that we are working on, it is the Board's assessment that this existing working capital does not cover what the company needs and plan for during the next 12 months. So that we will come back with. So with that, I would like to hand back to Jonas and we can conclude the call.

[Jonas Jarvius, executive]

Thank you very much, Anders. We'll just put up Slide #18, where we see that our vision and our ambition has not changed since last week. We still want to contribute to have the society by future cruising a new generation of healthcare professional labs and hospitals. And I think we are on a good journey of doing that.

So with that said, I would thank you all for listening in to our presentation for the third quarter. I would hand back to the operator and open up for any questions. Thank you very much.

[Operator]

[Operator Instructions] And our first question comes from Gonzalo Artiach from ABG.

[Gonzalo Artiach Castañón, analyst]

I have a couple. And the first one, I know that you won't give a number at this point, presumably, but we are 2 months from '23. So I wonder if you could provide some comments around your expectations for ASTar sales in '23.

Could you confirm whether the expectation for European sales next year is for broadly similar sales as in '22 or whether you expect to materially grow sales next year?

[Jonas Jarvius, executive]

Well, thank you, Gonzalo for that question. Yes. So I will not comment on the details for 2023 as just yet, since we're working in this overall plan. What I do say and what I would envision is '23 to be about a year than '22 for a couple of reasons.

Yes, we are now moving away from our partner. But as I said, we have during this year, been performing a number of evaluations and of course, discussing with sales leads. So I think a lot of the work that has been done through here, of course, we want to see the fruits of that during next year. So I will not provide any details yet. We'll come back with that. But we do see next year at least is a better year. What I should say and what is important is that, of course, putting in a new strategy in place will take time. So under all circumstances, we really see '23 as a year of transformation on setting the new targets in place and having an extra of motion. So I think that's sort of the high-level answer I can provide if that would be okay for you.

[Gonzalo Artiach Castañón, analyst]

Okay. Second one, can we expect any P&L impact from the ASTar systems that Thermo will return to you to Q-linea?

[Jonas Jarvius, executive]

Yes. I mean, of course, the commercial contracts, and of course, that has to be agreed with the customer that they can be transitioned. I have a very good place that, that would happen. But of course, one commercial contract with the growth to our P&L that will hit that for sure, yes.

[Gonzalo Artiach Castañón, analyst]

Okay. And next one, it's on your 510(k) application to the FDA. In the report, you mentioned discussions on potential expanded testing. Could you clarify what this means?

Is this additional testing beyond what Q-linea has submitted in order to secure 510(k) approval for Gram negative use? Or is to expand the approval, so to say, to include Gram positives or other samples?

[Jonas Jarvius, executive]

Right. Yes. So what we are -- and I mean, when we did file our 510(k) application, it has been the most comprehensive filing in our field, really. We have a very broad panel. So what we are discussing now is expanding sensitively, I would say, some testing on the Gram negative. The reason for that might be that since we have such a broad panel, in some cases, you might have a certain limitation of fine isolates needed for that. So that's a discussion.

It has not been decided yet. But that's something that we are considering and of course, discussing together to see what will be eventually decided to do moving forward. But the focus for the brand-negative panel.

[Gonzalo Artiach Castañón, analyst]

Okay. And a fourth one, it's on the portion of the commercialization that you will look to bring in-house. Could you provide some color on how big a sales force needs to be -- to cover a certain region, let's say, Scandinavia or Northern Europe?

And how soon in time can we expect to see -- begin to build the sales force?

[Jonas Jarvius, executive]

Yes. So I think we have quite a good sales force already to have in Scandinavia. So for that, we don't really have to scale up, in my opinion. But of course, if you want to expand into other geographies, it will depend a little bit on the country at hand.

We don't see that Q-linea will build hundreds of people in sales. So we don't think that's needed. There is fairly good segmentation of this market what needs to drive. So I basically would say it will look something like between 8 to 15 people if you decide to go direct in a country because we still have the back-end support from here. So we tend to do is quite orderly. And I think we can do it in a very well sort of staged fashion really as we approach this region. So the exact numbers are not that. But it gives you some highlight triangulation that I think could be valuable.

[Gonzalo Artiach Castañón, analyst]

Okay. And just last one before jumping back to the queue. Just to clarify, on my previous question on the P&L impact, I was more asking about whether we can expect any negative P&L impact from systems that have been yet sold to customers being returned from Thermo and Thermo Fisher to Q-linea?

[Jonas Jarvius, executive]

I don't think I can comment that, yet on that. So that's one part of the discussion how we are going to do with that. So I can't really provide any detail on that as of today.

[Operator]

The next question comes from Ulrik Trattner from Carnegie.

[Ulrik Trattner, analyst]

Great. And good day, Jonas and Anders, and I have a few. Yes, obviously, some turbulence here with your divorce from Thermo Fisher. And if you stay in your fear wording that you're seeing sort of continued strong interest in your products from other major companies in the market?

And if you could please clarify that. I think majority of us know that Bio Maria has acquired specific here in recent time and second Dickinson has a commercial partnership with Accelerate Diagnostics. So who is actually left there to actually partner up with you guys and did you plan on like looking into the future? Do you believe it will be a deal-specific regarding ASTar or would it be to include the partner as well? That would be my first question.

[Jonas Jarvius, executive]

Thank you, Ulrik. Thanks for good questions. Well, what I can say is really what we have seen is really within us the last couple of days from our press release; several of the biggest companies have approached us and are open up for discussions.

Of course, we have in discussion with some of these companies continuously, of course, because everything that was not ASTar was something that we could have a continued dialogue around. Without speaking to specific, I would not neither include or exclude any company in this field no matter what their previous decision has been. So what I clear, I clearly believe in my sense is that -- most of these companies working in the field have really seen ASTar. They have seen Q-linea and our progression and are now actually seeing what ASTar performs. And to me, it's really encouraging to see that what we set out to deliver, we have delivered that. It's precise in the system with a broad coverage, simple to U.S. automation, random access. So I know necessarily that's not exactly the answer you want to record. But I would basically say that nor ruling or roll-out any company at this stage. Coming back to sort of the follow-up part of your question was really looking at how do we think about ASTar and Podler? And I would say that -- it all depends. I think it's important now to actually be in control of our destiny, so to speak, to make sure that we are at the steering wheel and controlling the next steps moving forward. So no matter how we decide to tentatively enter new partnerships or so. I think it will be done at a very different level from last time. First of all, we are much more mature. We have been building up our commercial and pines value force during these last 2 years. And I think that we need to see really how should that look like to really increase the value. So this is something, of course, I would be happy to come back and provide more words to...

[Ulrik Trattner, analyst]

To play the beers argument here. You're looking at placing roughly 10 systems in Europe throughout 2022. Thermo Fisher obviously have addressed sort of their attention elsewhere. And one could argue that interest in fully automated rapid AST is rather low.

So how would you just comment on that? And a follow-up question on that would be, given that you now are not on the assemble of Thermo Fisher anymore, when are you to announce how many evaluation contracts are out there currently and we could see a gradual pickup in placements?

[Jonas Jarvius, executive]

Yes. So I'll start with the first part of the question. Well -- and I think it come back a little bit to what I said about long-term ambition. So we need to understand that it's easy on field in Europe. There has really been no companies offering rapid AST for -- well, for a number of years.

So I think that to get the traction, you also need to be perhaps even more active in placing instruments at the correct side and have a very active evaluation pipeline. So I think that you might be right in that the orphan has been lower than we hoped for. I would agree to that. I would not say that there's a lack of interest for Rapid AST. We have seen throughout the year that we have had more requests to do evaluation than has been performed. And of course, we want to change that as well. So I think in Europe, as I've said in the presentation, one needs to focus on really what do Europe need now to really go into the sort of commercial mode of this product. I think we need more KOLs voices of customers. I think we need more evaluations and more clinical support and evidence around Rapid AST. So I think that adoption in Europe will be slower than adoption will likely look like in the U.S. because the U.S. has been working with Rapid AST accelerate had some 300-plus basements. And also the voice of customers from ID week is much more not really sort of why do we need it in that sense it's really how and what type of system? So I think that's going to be incremental to put this in motion. And here I think that a good view of lessons learned is that you should utilize in your strategy going forward. On the second part of the question, this is something we're partly discussing within the Board. But of course, now that when we are in full control of our commercial activities, we are going to revise our way to be able to present a little bit more what you're asking for a number of years, how we are progressing in the commercial pipeline. I'm not looking outstanding press releases every time we have an evaluation going on. I don't think that's the right strategy. But for sure, we should provide more details in the quarterly reports. And we're going to try to keep you and the market more updated, particularly now in this transition period. So we'll have to balance that to see that it's sort of give you more information, but that's significant when it comes.

[Ulrik Trattner, analyst]

Okay. Great. 2 more questions on my end. The first would be on the FDA process and the 510(k). And as you mentioned, well, the wording that you're facing in the CEO wording looks like the FDA has a lot of outstanding questions regarding the applications.

So what are the topics of discussions right now? And how does this sort of process, not generally from an FDA standard point, but in your personal experience handling the registration of ASTar in Europe versus the FDA, what are their concerns?

[Jonas Jarvius, executive]

Well, I mean, I wouldn't say really. I think that typically as they always have a number of questions that was for any type of filing; I don't think that's unusual at all. I think what's discussed really now is that the way we do it, did it in Europe, of course, we make a study.

And then, of course, to have improved algorithms that ongoing work. And then, of course, you reset it with the latest general algorithms. The real purpose of doing it that way is, of course, also to have the latest software up to the system. So I think the discussions are more general now looking at what could believe it if any into other testing. So I wouldn't say that we have any sort of specific topic or -- it's just sort of an overall review of quite an extensive filing. Compared to your timing, I would say that we do have results going forward and back with the FDA. And I would say handle my heart, actually, I'm really happy that we have breakthrough because, of course, the process, I would have loved it to be even faster. And I guess any company would say that. So I think that with the breakthrough, we are pleased first in line, and I think that's good. So no real particular focus that I can highlight, but it's just a lot of things to digest. And they, of course, want to have clarification on the full entirety of all the application, so -- which was quite a big one.

[Ulrik Trattner, analyst]

Last question, that would be on the cash end. I think a lot can conclude that current cash is not really sufficient in order for you to establish your own sales force and run this into positive cash flow. And that leaves me to look at the potential commercialization of Podler and licensing agreement.

And where are you standing on that? I know that you want to disclose more when it's possible. But would you believe that the current discussion and letter of intent would at least put it in a phrase that it would mitigate the capital need going forward? And is this letter of intent that you announced in the last quarterly report, is that still active? Or is there a completely different discussion right now?

[Jonas Jarvius, executive]

Right. So first of all, we have to comment on other side. Of course, when we look at our sort of running concern, of course, that includes now building sales force, so that's included in that statement.

So I think that when we look at cash going forward, order could definitely be one aspect of that for sure. I think there are also a lot of other options that we have at hand here that the Board is currently revisiting. So I would say that there are a number of opportunities to take the next step going forward. I think also as well as we did early on with ASTar. Of course, now when we are in control of ASTar and Podler together, a week ago, it was Podler, not ASTar, I think we should also really consider what's the best long-term value is it to move actively forward with a positive discussion and we are in those? Or is it to look at the combined package and think what really could bring a cheaper value curve moving forward. So not necessarily easy decisions to take. But I think I'm quite fortunate we can have these type of options to our table. So I would say we have a number of opportunities here. And we are really looking into what's the best for our shareholders. What's the best for taking Q-linea into the next up in the future. So I think that's answering a little bit around your question, Ulrik. But I think it also describes a little bit about opportunities currently being discussed internally in the company.

[Ulrik Trattner, analyst]

Great. And just a follow-up question on Podler. It looks like to be a good other driver for you guys in the coming years. But on our end, on the sell side, it's hard to pin down a value since we don't have sufficient information on when clinical trials are to start or the size of these and roughly the capital need.

So when should we expect to receive those type of comment, so we can be more certain on the development pathway of Podler?

[Jonas Jarvius, executive]

Right. So I think that's an excellent question, Ulrik. So I would say that we are really looking into providing some more nuances around Podler timings. I wouldn't be surprised to see more information coming out definitely before year-end report is published to give a little bit better guidance on timing and thoughts around Podler. So not necessarily a very long way.

But the reason that we have been not talking so much about Podler is also to see that -- knows that what we are doing, what we are focusing on is providing traction for ASTar and putting our real efforts there. So we are going to have that as a top priority going forward and actually continue these discussions with Podler, but then also be able to provide a little bit more granularity on timing around -- or current thinking about timing for Podler. So that's going to come here in the not too long distant future, Ulrik.

[Ulrik Trattner, analyst]

Just one more question on my end. Sorry for squeezing me another one in. How about the rest of the IP portfolio?

I noted that one of your colleague's company, if we were to call them like that, the Astrego in Uppsala, they were acquired by a company which are looking at what I believe to be more urine analysis and quite similar to your system, ASTar. Would you look into divesting certain parts of your IP portfolio or to partner that type of IP, given that it's obviously an industry interest for those products and IPs as well?

[Jonas Jarvius, executive]

I think that's also an excellent question. So I think when we look at Q-linea, first of all, I think we're an absolutely unique company. Maybe all CEOs would say that for their companies. But really, when you look at our technology and our IP coverage, I mean, apart from Podler and ASTar, of course, which we have talked a lot, we have absolutely unique, highly multiplex molecular technology, also an area of increased interest.

No one has so far beaten us in multiplexing for bacteria identification, for instance. Also to talk about ASTar, sort of ultra-rapid UTI testing. So of course, when we are now moving on in our strategy, you will always have a couple of key cores that you want to focus sort of your primary efforts around. And everything else you have in the company, you always have to decide is this the best long-term value for the company? Or should we try to divest it to bring more energy into the other sort of higher priority currently. So I think we are sort of as I mentioned before, we are in a very fortunate situation that we're not a company that's a one-trick-pony. And I think, first of all, our hard horse to the ASTar story has proven to be an excellent one to bet on. But we do have much, much more under the CMM we have quite an extensive, in my opinion, IP portfolio. So you can imagine, we're looking at really what's the best next step for us to add and increase shareholder value. And just to be able to build that position. I mean, we have been building the company long term. And we have no change of view of where we want to be in the long run. But we have a number of options. And we are going to really look into those options quite heavily, of course, over the next following months. So yes, a good question. I can't give you a direct answer more than, of course, that's an opportunity for us to look into.

[Operator]

[Operator Instructions] No further questions at this time. I hand over back to you, Jonas and Anders for any closing remarks.

[Jonas Jarvius, executive]

Okay. First of all, thank you all for coming and diving into this meeting. I know that it's a lot of activity to happen. And of course, big news in change of distribution, but clearly has not put any change in my mind that we are really in the right track. And now we can really take control, take the next steps.

And I think we have a very good of doing so. So I look forward coming back to you, of course, not waiting through the next report, but hopefully in the time between and give you some more news on where we're going. So with that, I would like to say thank you from my side and Anders' side and hope to talk to you again soon. Thank you very much.

[Anders Lundin, executive]

Thank you.