Earnings call transcript: XVivo Q2 2025 reveals sales dip, stock plunges

XVivo Perfusion AB reported its financial results for the second quarter of 2025, showing a decline in net sales and a significant drop in its stock price. The company recorded net sales of SEK 178 million, reflecting an 11% decrease in organic growth. Despite maintaining a stable gross margin of 74%, the company’s stock fell sharply by 27.74% in pre-market trading, closing at SEK 299.2, a substantial decrease from its previous close. According to InvestingPro data, the stock is now trading near its 52-week low, with a high beta of 1.91 indicating significant volatility. This decline in stock value comes amid a disappointing quarter and a challenging market environment.

Key Takeaways

• XVivo reported a 11% decline in organic growth for Q2 2025.
• The company’s stock dropped by 27.74% in pre-market trading.
• Gross margin remained stable at 74% year-over-year.
• The company is preparing to launch a heart product in Europe.
• There is increasing interest in Donation after Circulatory Death (DCD) organ pools.

Company Performance

XVivo’s Q2 2025 performance was marked by a decline in net sales to SEK 178 million, with organic growth falling by 11%. Despite this, the company’s gross margin remained stable at 74%, consistent with the previous year. The adjusted EBITDA stood at 13%, indicating some operational efficiency. InvestingPro analysis reveals the company maintains strong financial fundamentals with a current ratio of 5.2, suggesting robust liquidity. However, a negative currency effect of 6% on sales further compounded the challenges faced this quarter. InvestingPro subscribers have access to 10+ additional key financial metrics and insights about XVivo’s valuation.

Financial Highlights

• Revenue: SEK 178 million, down 11% organically from the previous year.
• Gross margin: 74%, stable year-over-year.
• Adjusted EBITDA: 13%.
• Currency effect: Negative 6% impact on sales.

Outlook & Guidance

XVivo is gearing up for several strategic initiatives, including the launch of a heart product in Europe and the Pacific. The company is also targeting the start of a liver clinical trial in the US by Q3 2025. Despite the current challenges, XVivo remains focused on expanding its EVLP customer base and increasing opportunities for organ transplantation. InvestingPro data shows the company maintains a "GREAT" financial health score of 3.14, with impressive revenue growth of 33% over the last twelve months, supporting its expansion plans.

Executive Commentary

Christopher Rosenblatt, CEO of XVivo, acknowledged the disappointing quarter but emphasized the long-term potential: "This quarter is very disappointing, but the long-term case remains the same." He reiterated the company’s commitment to its strategic goals, stating, "We are committed to execute on our strategy, and we will, in order to one day accomplish that nobody should die waiting for an organ."

Risks and Challenges

• Supply Chain Issues: Potential disruptions could affect product availability.
• Market Saturation: Slowing growth in the lung transplant market could impact sales.
• Currency Fluctuations: Further negative currency effects could affect international sales.
• Regulatory Hurdles: Delays in product approvals could impact launch timelines.
• Economic Conditions: Broader macroeconomic pressures could affect demand.

XVivo’s performance this quarter highlights the challenges in the transplant technology market, yet the company remains optimistic about its strategic initiatives and long-term growth potential.

Full transcript - Xvivo Perfusion AB (XVIVO) Q2 2025:

Conference Moderator: Now I will hand the conference over to CEO, Christopher Rosenblatt and CFO, Christopher Nordstrom. Please go ahead.

Christopher Rosenblatt, CEO, XVivo: Thank you so much, and good morning and good afternoon, and welcome to Exvivo’s earnings call for the second quarter of twenty twenty five. I go to the first page after the front page. So today’s presenters are me, Christoph Rosenblatt, CEO of XVivo, and Christoph Nordstrom, CFO. And with that, we go to Slide two, the Q2 financial at a glance. I am disappointed to report that Q2 shows negative top line growth compared to the same quarter last year.

The three main reasons are a slower than expected lung market that led to some destocking lack of heart sales compared to both expectations and last year and thirdly, a weak U. S. Dollar. The positive news, however, in the quarter two are that where we invest in field force, we see strong growth and positive momentum. For example, The U.

S. Lung sales to clinic and OPOs grew by 26%, Liver in Europe grew by 32% and kidney sales in The U. S. Grew by 47% during the second quarter of this year. The quarter also showed great progress in terms of milestones for future growth.

The key event was the ISHLT in April and the reception of the European Heart Study. With one year data now available, we can conclude that the seventy six percent risk reduction in severe PDD led to improved patient survival. This was expected and known by everyone in the heart transplant community, but the clear correlation also in the study strengthened the conviction. I can’t remember how many times I got the question during ISRCT, how can I buy this device from surgeons I met during the meeting? We also have seen progress in the EU heart approval process and the Canadian launch activities for the abdominal portfolio.

Last year, we saw that the two largest U. S. Transplant clinics excluded programs safely by evaluating lungs. During ISHC, the presentation from Cleveland was very, very impressive, where they showed that they could safely transplant lung that was rejected by more than 47 clinics in The United States if the ex vivo was used. The convincing results from EVLP that was presented during ISHT has led to an increased interest to start an EVLP program, both in The U.

S. And in Europe. So there is a very mixed picture in the second quarter from the sales figures we see and the interest on the other hand, the interest we see from clinic and OPOs who want to start an eBLP program. We have had four new XBS customers in The US alone in the first six months, and we see continued high interest, which makes us convinced that the market will come back to higher growth rates again. Q2 shows again that XLEVA has a scalable business model.

In terms of EBITDA, the scalable model leads to lower EBITDA as a percent of sales this quarter. It is best illustrated by the fact that gross margin as a percentage of sales are stable in the quarter. Cost in Swedish krona is the same as last year’s Q2. Hence, the EBITDA effect we see in the quarter is coming from sales. During the second quarter, we enforced a cost restructuring program to invest where we have the best ROI.

As I stated earlier, we see great progress where we stay close to customers. So the investment will predominantly be steered to the heart launch in Europe as well as supporting The US clinician, including patients into the CAP or the continuous access protocol for heart, ramp up The US liver trial, and lastly, increasing the field force since we now see growth where we invest close to the customers. With that, we can go over to the third slide, which is the Y2D financial at a glance for the first six months of the year. And the first six months shows a similar picture to the quarter, good and stable gross margin. We continued investment into fuel force and scalable production structures.

Cell came in at almost SEK 400,000,000 for the first six months. And as we stated earlier, we plan to improve abdominal gross margin to 70% at the latest in 2027 or earlier when we reach economies of scale in production. Christoph Nordstrom, our CFO, will get more into the details on sales, gross margin and EBITDA later in the presentation. More on the first half. We are ready to launch the heart products in Europe as soon as the last medical agency give their approval.

This together with the cap in The US that is now approved, and we are having the first center ready to include patients. We’re looking forward to an exciting second half for heart. We see that we have a few top clinics in The US for heart, and they will hopefully be one by one now able to start including into the cap during this the third quarter of twenty twenty five. We have seen very high interest. We have seen that in Australia, the heart penetration continued to be approximately thirty percent.

And we have seen very good result on DCD hearts. So this again shows us that the heart technology has the potential to change the paradigm of heart transplantation. The abdominal stage showed continued strength, and we are now starting to see positive news for European liver reimbursement based on excellent clinical and hospital economic data. I will come back to this later. In The US, we saw cat grew almost, or kidney assist, transport grew almost 50%.

And if we look at disposable, they actually grew 70%. So the usage is increasing every quarter. Short touch on services, and and Christoph Nordson will come back more into details. But we are not pleased with the progress in The U. S.

Service business. The first part of the strategic review is now concluded in June, and we see an increased interest for combined procurement and NRP services. We also see that this would fit very well into the heart launch in The U. S. As stated earlier and in earlier calls, the service initiative is strategic and the purpose is to support the future heart business in The United States.

Lastly and most important before we go into the business highlights are that the projects are progressing according to plan. The heart project is on time and budget. Or the we did not expect a long review time from one of the medical agencies in Europe. The high workload on regulatory bodies and medical agencies has affected the application review time more than we have anticipated. The production capacity project, where we invest to scale up volumes times 10 of today volumes for disposables, are running in line.

We communicate timelines. And the full scale production of disposable for heart, liver and kidney will be extremely important to capture future growth potential for all product groups. And with that, we can go into the the highlights, which is on slide four. I wanna stop here and just remind ourselves why we’re all here, and that is to make sure that no one dies waiting for an organ. Here, Alex, on the picture is one of the 400 patient who got the opportunity of a transplant, thanks to the XVIVO heart technology.

And interestingly, if we look at the results from the European trial and if that can the result can be fully replicated globally, approximately an additional five hundred patients would survive to see the one year anniversary of the transplantation every year. And then we are not counting all the donated heart that can be transplanted thanks to the XBivo technology that comes from the extended criteria donor pool. But with that, we can go to the slide number five. And we will start with two slides where we deep dive into lungs and the very mixed picture we see on on lungs. We have gotten used to very high growth for especially in The US lung market during 2023 and 2024 with double digit market growth in number of lung transplants.

The growth has been driven by improved allocation and especially EVLP, which has grown almost at five times that pace, that’s almost 50% growth during the two years. EVLP has been driven by ambitious programs, so you can safely grow the number of lung transplant using lung that was rejected by other centers. In 2025, we still see growth in the market, but at a slower pace than we used to. And EBLP growth has also slowed down in 2025. There are the reasons are manifold.

But speaking to customers, there are three that stand out. Number one, there is some fatigue of the very high growth for two years. Two, some centers are lacking resources due to changes in hospital economics. There was a reduction in NIH grants that has been enforced at the beginning of the year, and sometimes that has skewed the economics for some centers. And three, the most ambitious clinics using EVLP have temporarily reduced their waiting list.

This reduces the ability to match donor recipients, and hence, the use of EVLP goes down temporarily at those large clinics until the waiting list is restored again. We can turn to slide six, where to show this. As we stated earlier, we come from two very strong years in terms of lung growth and especially with B growth. And as stated in the beginning of the call, we have also seen fantastic results from ambitious lung transplant programs that can safely increase the number using XVPO. In 2025, we see some destocking at our largest customer at the same time as we see an increasing interest to start an eVLP program with XBS.

To put this in perspective, the last five years, we have been acquiring approximately two new accounts per year. But now in 2025, we have already four new accounts in the first six months and the pipeline of as many for the next six to nine months in The United States. So the growth is mainly coming from top lung transplant clinics, and we start to see progress in the South and the West Of The US where we already didn’t have access to the XVivo technology. We now have one active customer on the West Coast and interest from many more to start XPS program in both the South Of United States and the West Coast. So in conclusion, we grow where we increase our field force and we plan to increase investment in TVLP expert to support the growing number of XPS clinics.

Given the recent success of the number one and number two clinics growing their programs with the solid XPS program, we are now very excited to support more clinics growing their program safely. And with those two slides around lungs, we will go over to heart and deep dive a little bit into the result and the interest we have seen so far, especially from the ISHCT in Boston April. There was, in general, very high interest for the heart technology at the ISHCT that took place in April. A lot of preclinical work was presented where, for example, hearts were functioning after being preserved for forty eight hours in the ex vivo heart box. The highest interest, however, was generated from the European study presentation, the presentation of two early experiences from DCD direct procurement with the Hartbox by two clinics, one from Europe and one from The US.

As mentioned earlier, the European study is the first randomized controlled trial with superiority endpoint that has been conducted for hearts. But we start with the result from the EU trial that was presented during ISHAT. And the severe PDD was reduced with seventy six percent in the ex vivo group. Since severe PDD is the leading cause of one year mortality, with almost half of the patients diagnosed with severe PDD after heart transplantation not surviving one year. So we could see that the reduction in severe PDD directly led to ninety two percent survival in the ex group versus eighty six percent in the control group.

Hence, we saw six patients surviving thanks to ex vivo and improved preservation of hearts. This result is truly remarkable, since it has been achieved in a standard criteria donated heart population. In the preclinical setting, we have shown earlier that the ex vivo box shows even better results or better comparable results when used to extend the criteria hearts. For example, only donor, longer transportation time or DCD hearts. So now we see that we can unlock a lot of hearts not used before, but we can also use the Exviva Heart Box for the standard criteria heart that we actually transplant, that are the majority of the transplants today.

It should be said that we expected good results from the Heart Box based on the preclinical work that has been done. And we are now very pleased to see that the same results can be shown in the clinical setting. The good results will hopefully lead to publication soon. And after that, we can speak more freely on the fantastic results, on the detail on why we think we have seen those great results so far. Secondly, the early result from DCD direct procurement, in other words, not using NRP for DCD lungs, were presented during ICT from two very prominent clinics.

If the early result is shown and proved in a larger number of transplants, direct procurement for DCD using the ex vivo heart box could be a new gold standard for DCD heart. And that’s something we are striving for, but there is a bit of proof to be collected before we can state that. But we know that we have a European trial including 40 patients at four centers in two countries in Europe. We have now included more than half of the patients, and we hope to conclude patient enrollment at the end of the year so we can analyze the data. So the presentations as well as experience from the many clinics who now use the heart box were translated to an extreme high interest for the Xevo heart technology.

And we are looking forward to both the continuous access protocol in The US and European launch and continue the great experience we have from Australia. And with that, we go to the slide number eight, which is liver. I stated earlier that we see good progress in liver in Europe, where the liver assist is approved. And over the past twenty years, we have been working to refine and develop the liver technology and proving clinical studies that the Xevo liver technology is reducing biliary complication that over time reduce graft loss. In recent clinical trials and hospital economic trials, it has also been shown that the XLEVO Liver Assist increases the use for livers for transportation, as well as improving hospital economics due to less complication after transportation.

So with the clinical evidence as the base, we start to see strong growth for liver in Europe. During quarter two, we saw growth of 30% and we added six new accounts. The hurdles for growth when we talk to customer are mainly human resources and reimbursement. And we now see country by country that reimbursement is coming into place. And with an increasing customer facing organization, we now have the ability to support clinics better with human resources.

With the clinical results from Europe as a background, we believe that first Canadian clinics should get access to liver cysts. And that is also the reason why we initiated the liver PMA trial in order for American clinics to over time get access to this fantastic technology. And with that, we go over to two slides on regulatory and clinical updates, and we can actually go to the slide number 10, which show an overview of the regulatory approvals we have today in core markets. And our lung and kidney portfolio has obtained regulatory approval in all key markets. As stated earlier, liver is approved in all key markets except The United States.

For heart, we are awaiting regulatory approval in all key markets. Hence, to have our portfolio approved in core market, the focus is heart as well as liver in The United States, which brings us into the update for heart and liver in The U. S. On page number 11 or slide 11. We see constant progress in the four processes you see in front of you, but the key message is the same as the last time we met.

So I will partly repeat what I said in April 2025. The US heart trial was fully included in record time, thirteen months. Next milestone is the twelve months patient follow-up. In parallel, we will prepare the technical and preclinical files for submission as well as building the clinical file larger with the help of the continuous access protocol. After the twelve month follow-up, that will end in, November, some time for database lock and preparation of the clinical file, and then we will submit that to the FDA.

As mentioned before, in Europe, we have handed in all documentation for review recording to our time plan. The application consists of four separate approvals by three parties, our notified body and two medical agencies. As of today, we have received approval from our notified body and one European medical agency. However, one medical agency is suffering from a very high workload and are still reviewing the file. We are ready to launch when the product is fully approved.

Hence, the launch process is ready, staff is recruited, and the interest from clinics in Europe is very, very high. We get phone calls almost every day. And we so we receive a lot of questions from European clinics that wanna start it, and I can assure everyone that our regular team regulatory team is working both day and night to make sure that all outstanding questions are answered timely and correctly. In in Australia and New Zealand, we see a high usage of the product. They deem it unethical to not use it, so it’s approximately around 30% usage right now.

The regulatory approval will be pending the CE Mark in Europe, and the same will apply to Canada. We have previously reported that the Liver Assist has been granted breakthrough device designation by the FDA. With an approved ID, we’re working hard to get the trial started, and we are aiming for end of q three to get the first patient in. And with that, I will hand over to our CFO, Christopher Nordstrom, who will present the financial performance.

Christopher Nordstrom, CFO, XVivo: Thank you. Can move over to the next slide. And I will try to speed this up because I understand there is there will be great discussions in the Q and A afterwards. But we, of course, also need to dig into the numbers here, especially on the thoracic side. But overall, net sales in q two, 178,000,000 and the organic growth was lower than we expected, minus 11%.

This is a quarter where we see a mixed picture with areas of negative growth, but also areas with good growth and and and progress in line with our expectations. I will get into that as we move on here. Overall, gross margin in the second quarter was almost in line with last year, 74%, and year to date, identical, also 75% 74%, which we are very happy about. This was the first quarter where we saw some effects from the weakened US dollar versus SEK, and that translated into a negative 6% currency effect on sales. And that is expected to continue to have an impact at these currency levels.

But that said, we are pleased to see that the gross margins remained intact in the second quarter. Adjusted EBITDA was 13%. As we have a scalable business model, profitability will increase again when sales pick up. Next slide, please. So moving over to the thoracic business area.

The sales in Q2 were $105,000,000 with an organic growth that was negative 19%. As you know, thoracic sales consists of both lung and heart revenue. And for this quarter specifically, it is important that we dissect the different pockets of sales. So if we start with lungs, lung sales grew the growth was negative, minus 10% in local currencies. And this was mainly due to the destocking and softer EBT activity at our largest customer in U.

S, to whom sales were reduced roughly 40% versus q two last year. In 2024, this customer stood for about 50% of The US EVP volumes. So so obviously, any movements up or down currently gives large impact. To the positives, so outside this customer in The U. S, lung sales grew 26% and sales of EVLP kits grew 21%.

This tells that we continue to deliver on our strategy to become the preferred partner with the lung transplantation, and it was further demonstrated in q two by the acquisition of these two additional XPS customers in The US. One of them is a brand new high ambition lung transplant program. And over the summer, one of the customers that we acquired in late q one will be activated, and this is a top five lung transplant program in US. The outlook for additional Express sales in the second half of the year looks equally good as the first half of the year where we sold six Express systems globally. And that said, the interest of starting an in house EBOP program has actually never been bigger, and we now have the capacity to meet the the the demand here for the rest of the year.

Looking ahead, we expect that we will continue to grow our EVP customer base both in The US and in Europe, and we will invest in resources, as Christopher mentioned, to stay even closer to these customers. From a total growth perspective, though, the EVP activity at our largest customer will continue to have a large impact on the total lung sales growth. In terms of Perfodex, sales grew 18% in The US and 8% in Europe. So it was a good quarter. Let’s move over to heart.

Sales were SEK 3,000,000 in q two versus SEK 19,000,000 last year. As you know and communicated earlier, last year included trial revenue, which makes comparables tough this quarter, and it will be even tougher in Q3 and Q4 as we had SEK 30,000,000 in trial revenue last year in those two quarters. So heart sales compared to Q2 will grow in the quarters to come, though. We have the upcoming U. S.

CAP protocol, and it’s scheduled to start here over the summer, and that is allowed to include up to 60 patients. And as said, we hope to have the CE Mark in Europe soon, of course. Heart sales in Australia, Christopher touched upon it. If you look into the details, yeah, it was a softer quarter from a sales perspective in q one, but there’s no reason to draw conclusions from that as the enthusiasm in Australia remains very, very solid. Gross margin was very strong, eighty six percent and one percentage units better than last year, which is delighting.

So let’s move over to abdominal. Abdominal, the sales came in at 52,000,000 SEK, translating to an translating to an organic growth of 19%, and the Rolled 12 growth is at 25%. Similar split on revenue as previous quarters, you have liver on 74% and kidney on 26%. Liver sales grew 28% in local currencies. And on the main markets in Europe, we had a higher growth, 32%.

So we we we definitely are making a solid progress in liver and continue to do so. Christopher mentioned six additional liver assist devices have been installed in Western Europe year to date, and we also start to see a growing interest in the Eastern Parts of Europe, which is a little bit of a new market for us. So that’s exciting. We work hard on reimbursement as always for HOPE, hypothermic oxygenized perfusion, and we will believe we will have a new country coming on board with reimbursement here in the beginning of twenty twenty six. If go back again.

So kidney. Kidney sales declined 2% primarily due to high machine sales last year of 3,000,000 SEK. The utilization of KinderSys transport disposables increases though, and as an example, in The US, we saw a growth of 47%. Now we can continue. So last business area, services.

Sales amounted to twenty one million sick. The organ recovery part of services decreased by 19% due to lower activity volume. During the year, we have seen that customers, both existing but also potentially new customers, begin to express more and more interest in NRP as a procurement technique for hearts, and that is currently not a service that we offer broadly. We have, however, set up a pilot program with one customer to define how this could look, how a partnership could look. And NRP is one of the topics we will address in the strategic review of our service offering that is currently taking place as the market opportunity is I mean, for these type of services are is very, very high, of course.

The acquisition of Flowhawk contributed positively with a growth of 13% similar to last quarter. Moving over to EBITDA profitability. As mentioned, EBITDA came in at 13%, and rolling twelve months, we’re currently at 19%. Sorry. In terms of OpEx, the outlook for second half of the year, our focus will be on further investments into our commercial organization, the markets where we see the highest return on investment.

We believe that our back end organizations such as operations, r and d, administration are right sized for what we want to achieve near term, so no significant investments are needed there. Not affecting EBITDA, but definitely worth mentioning related to OPEC is that once we obtain our CE Mark for our heart technology, we will start to amortize the development and trial costs of approximately SEK 200,000,000. That amortization will be spread out over ten years, which means SEK 20,000,000 per year and SEK 5,000,000 per quarter. And as stated before, and Kristoffer mentioned it, our ambition is to continue to improve EBITDA year on year, but have a healthy relationship between growth and sustainable profitability development. And my final slide before I hand the word over to Christopher again.

So cash flow financial position. Q2 operating cash flow was positive, SEK 9,000,000. We continue to invest in inventory and will continue to do so primarily to be able to meet the demand for heart once approval is obtained. Investments amounted to SEK 72,000,000 primarily spent on The U. S.

Clinical trials and and perfusion devices to be placed at customers. And in alignment with our announcements in connection to q one, we have financed the increase in working capital with utilizing our revolving credit facility, €8,000,000 utilized in q two. And that was all from me. Over to you, Christopher.

Christopher Rosenblatt, CEO, XVivo: Thank you so much. We go to the outlook for the year, and we can go start with the twenty twenty five outlook. The the we will, as stated earlier, restructure our cost base to be able to invest more close to customers on field force. And key focus will be to invest in EvelP expertise close to customers to activate the growing number of new customers. For Hearts, we are preparing for the launch in Europe and in The Pacific.

We continue to build The US regulatory clinical file and support US clinics during CAP. For liver, the excellent clinical data published, we will continue to invest in commercial capabilities and capture the opportunity we see in Europe. And we aim, as stated earlier, to start a liver clinical trial in The United States during 2025. We have met Canadian customers, and we see a great interest for both the liver and kidney products. We are staying very close to those customers when prepared both for reimbursement because they need financing to start the program and also our launch activities.

And lastly, we will continue to prepare ourselves for The US art launch by strategically building a service offering in The US with the aim to become a preferred partner. And as always, I will end with a long term outlook. There will always be better quarter and worse quarters, but the long term outlook is very important to keep in mind when we invest towards a future market that is not fully there yet. So we see a demand for transplants that are 10 times higher than today’s supply. The sales value of machine perfusion versus cold static storage is approximate times 10.

We have seen and we’ve seen more trials than machine perfusion have proven to increase the number of organs to be used for transplantation and, as we saw in the heart case, also improve patient survival. We know that the DCD organ pool is growing very fast. And especially in this segment, machine perfusion will play a vital role. And hence, machine perfusion service model on normal and BCD graphs will drive growth in the near and the long future. So in conclusion, this quarter is very disappointing, but the long term case remained the same.

Exceva has a unique and proven product platform. We are committed to execute on our strategy, and we will, in order to one day accomplish that nobody should die waiting for an organ. So with that, thank you for listening to us today, and we will open up the lines for

Conference Moderator: The next question comes from Jakob from Lemke. Go ahead.

Jakob, Analyst, Lemke: Hi. Good afternoon. Thank you for taking my questions. My first question is on Lang. And I think it would be interesting to hear, yeah, some more color on your dialogue with your largest customer and then, in particular, if you’ve gotten any sense on when the destocking will be done?

Christopher Rosenblatt, CEO, XVivo: That’s a great question. I mean, I think we all on the market were a bit surprised by slower growth, so were them as well. And they were planning and as as well as we were for a continued 50% growth this year. So what when that has not materialized on Evelp, we have seen a destocking in the second quarter. I think to answer the question, when it will stop, it’s hard because we it will stop now when the market returns, so to say.

It will stop as of when the market returns. So it will be dependent on on that. We if there is a flat growth on on EVP on the market this year versus last year, there might be some additional destocking that we could expect.

Jakob, Analyst, Lemke: Yes. But assuming that the market returns to maybe, again, mid single digit to high single digit growth here going forward, do you expect to see like a sharp rebound from this customer already in the next quarter? Or do you think there’s still, yes, some more inventory that needs to be worked on?

Christopher Rosenblatt, CEO, XVivo: No. If we return to normal, we don’t expect any further inventory decrease.

Jakob, Analyst, Lemke: Okay. And also, I’m wondering if it’s possible to quantify the impact from this headwind in Q2 from this customer.

Christopher Rosenblatt, CEO, XVivo: It was approximately 1,500,000.0 US dollar in economic terms.

Jakob, Analyst, Lemke: Okay. Thanks. And given that you’re now ramping up multiple new EDLP centers in The U. S. And then you as you mentioned, some of them are more high volume, is it fair to assume this 21% growth from direct U.

S. Lung customers will accelerate in the coming quarters?

Christopher Rosenblatt, CEO, XVivo: We will do our utmost to accelerate that number. Yes. We will invest in customer facing personnel that will ramp up the the the new accounts we have. Yes. That’s what we will do.

It’s hard to speculate because sometimes it depends on the wait lists for for customers we have as well. But when it comes to new customers, yeah, definitely. And we expect to see we are planning and budgeting for a better second half versus the first half.

Jakob, Analyst, Lemke: And and also that you said that the the interest from new programs or or to start new programs remains high. Is is that also for sort of high volume centers? Or yes, what can you tell us about what kind of customers those could be?

Christopher Rosenblatt, CEO, XVivo: Yes. We see interest from mainly high volume centers. I think we have seen that last year, the two biggest lung transplant clinics in The United States grew the program with the help of the XPS, and they could safely use, declined. Right. So we see from larger clinics, we see a high interest to to do the same.

We see also an increasing interest from OPOs, where they have they due to NLP on heart, they leave a lot of lungs on the table. And we see an increasing wish and need to also evaluate those lungs. So that those are the two main, let’s say, customer groups we see increased interest in The United States today. We see a similar interest in Europe, which is more country by country. There are also very high wait lists in Europe.

Europe has not experienced the high the high growth we have seen in on lungs in The US in the past two years. We have not experienced that in in Europe, so we see high waitlists. So also here, we see a high high interest for starting EBLP programs and utilizing XPS to use more of the donated lungs.

Jakob, Analyst, Lemke: Okay. Then a question on heart. Assuming you get the approval here in Q3, how should we think about sales contribution in the coming quarters in Europe?

Christopher Rosenblatt, CEO, XVivo: We should view it as ramping up. There is always a period where you need to list the after an approval, you need to list them country by country. And some are are we have done a lot of preparation during the first half, but there is always a a bit of a administrative period. And then we will get, let’s say, country by country and clinic by clinic up and running. As we have stated, there were 15 clinics in from eight countries in the in the trial.

So we would, of course, start with them. But we also have received very high interest from larger heart clinics that were not part of the European trial who also wanna be part of the first, let’s say, batch of of activated customers. So I think we will see a step by step approach, not a high high launch volume and and then stabilizing. I see we’ve seen increasing sales quarter on quarter. And the main reason will be listing of the product, getting retrained, and over time, also getting reimbursement country by country and financing.

Jakob, Analyst, Lemke: And a final question from me. That’s good. No, I had a final question just on when you expect first patient in the liver trial and also first patient in the continued access for heart in The U. S?

Christopher Rosenblatt, CEO, XVivo: For heart in The US, it could be any day. So it it depends on on waitlist matching, etcetera. For the liver trial, we have guided end of q three, which is, yeah, the the the September, and we’re still working towards that. Then I know we are working with with clinicians that have patient waitlist, and they need to list their patient for trial, etcetera. So it’s it’s not an exact science when the first patient’s in.

But we’re still aiming for, let’s say, September for the liver PMA.

Conference Moderator: The next question comes from Simon Larsson from Danske Bank.

Simon Larsson, Analyst, Danske Bank: Good afternoon, guys. My first question also relates to The U. S. EVLP business. And I was wondering like what kind of visibility do you have on the larger accounts that you’re mentioning with respect to the shortened waiting list.

Do you speak with them? What do they tell you about sort of the outlook?

Christopher Rosenblatt, CEO, XVivo: That is great. We have, of course, good access to the larger customers, and we do want to partner with them. And I would say that the customers also want to partner with us due to the technology we have. So we have good visibility. And what we hear is that during, yeah, the especially the aggressive and the ambitious customers who have been growing, I I mean, take Northwestern, for example, they almost doubled their program in one year, very much thanks to ULP.

And and when we spoke to them a month ago, that that was one of their messages that, yeah, we actually our our waitlist is now shorter, and and we don’t see as many matching opportunities anymore as we saw a year ago. And we have heard that from many other larger ambitious programs, the the same story. From experience, I’ve done this for thirteen years now. This happened from time to time when when especially ambitious programs grow their their their programs fast in a short time. The the wait list seems to dry out, and then matching gets more difficult.

And and the program kind of stabilized for a year, and then it it starts going up again. The the only difference now is that now we see it on on many accounts at the same time, so that has affected the overall e v p numbers for for q two. Hard to tell when it’s back, to be honest. It takes some time to list patients on a waiting list.

Simon Larsson, Analyst, Danske Bank: Yes. No, that’s understood. And do you have any kind of intel into, let’s say, the the penetration rate for EVLP in these key accounts? I mean, like, do do they use the XPS for 20% of their lungs or 30%? Or sort of what’s what’s the level for for these key accounts?

Could you share that with us?

Christopher Rosenblatt, CEO, XVivo: Yeah. Yeah. I think I’ve I’ve shared that before. The the top accounts are using EVLP for approximately 32, in some cases, 40% if it’s very aggressive of of their their, LAN offers.

Simon Larsson, Analyst, Danske Bank: Okay. Okay. And just for the context, I mean, the backlog or the pipeline for new XPS accounts seems very healthy still. Could you just remind us about how many XPS accounts you actually have live in The US right now just to put this in perspective?

Christopher Nordstrom, CFO, XVivo: We have I would I would say we have around 15 clinics outside these larger clinics who we define as truly active customers, which mean they do a certain amount of of either PPE here, which means that, you know, if we can if if we can get this, don’t know, four clinics that we have onboarded now and, you know, assuming a few more active customers further added in the in the second half of the year, that’s a significant increase from where we were, you know, twelve, eighteen months ago.

Simon Larsson, Analyst, Danske Bank: Yes. Okay, perfect. Final one from my end. On the cash flow development, I mean, I understand that it’s important for you to continue to build the inventory here ahead of the heart launch and the liver study going live. But it would be super helpful if you could give any color on sort of when you believe or plan for maybe the free cash flow to turn around and to yes, to go into black numbers.

If you can give anything on how you’re thinking about investments, basically.

Christopher Rosenblatt, CEO, XVivo: Yes, that is a great question. And to we are doing that work right now. That would be finalized in September with the strategy meeting with with the board. But in general terms, we believe that with the heart launch in The United States, that will be, let’s say, a key cash flow point for us when when the full and before that, of course, operating cash flow will be positive. As it was even though q two was a weak quarter, the operating cash flow was still positive.

I should mention that.

Johan Underis, Analyst, Redeye: The

Conference Moderator: next question comes from Ulrich Trotter from DNB Carnegie.

Ulrich Trotter, Analyst, DNB Carnegie: Thank you very much. A few questions on my end. And I also want to get back into the EVLP and outlook. And if I can challenge your comment on the certain accounts and the reduction in inventory and just ask, is there a structural change in terms of how EVLP is performed and how the demand is looking in terms of is it more done? I look at your number of ex beds closed here in the first half, same as last year, few more high volume hospitals.

And it sounds more like hospitals are taking this in house instead of the previous decentralized model. Is there any truth to that or any trend in that direction?

Christopher Rosenblatt, CEO, XVivo: Yeah. I mean, there there is a trend in that direction. Yes. That especially, I would say, especially among the the the really high volume academic clinics that it’s something that they want to take in house. We can we can see that trend.

We can also see that, for example, on the on the West Coast and the South Texas, there is a lack of good EVLP services at the moment. So we can see an increased interest from there. But yes, as I stated earlier in one of my answers, we see two customer groups who are the main driver of the increased interest, and that I would say is largely NICs, typically academic, and OPOs.

Ulrich Trotter, Analyst, DNB Carnegie: Okay. Great. And just in terms of OPOs, because that would be my follow-up questions. It looks like you started to take on a few OPO contracts. Is that main focus short term to elevate that given, yes, well, as you mentioned, the NRP and the hard situation?

And how could we sort of track this and view this? And how important is this for you to continue to grow with the broadening customer base?

Christopher Rosenblatt, CEO, XVivo: That is a great question. To to start with, for for full transparency, we we have a bit of homework to do how we can best cooperate with OPOs. They typically need more service elements for for the XPS. So there, we definitely have more homework to do. That being said, the company now believes that the OPOs will be with the NRP trend, we see the OPOs will be a very important customer base in the future, to increase the number of lung transplants, especially in The US Or only in The US, to be honest, because that’s where the OPOs are.

In Europe, that work will be taken care of by clinics, of course. So long term, we believe it’s a very, very important customer group to increase number of lung transplant.

Johan Underis, Analyst, Redeye: And

Ulrich Trotter, Analyst, DNB Carnegie: just last question on EVLP before moving on. The accounts that you have or programs that you have sold into during 2025, have they all been activated and fully in sort of contribution during the first half of the year? Or is there some delay in terms of training before these are are up and running at sort of kind of full speed?

Christopher Rosenblatt, CEO, XVivo: Typically, to activate an account, take it from we sell the XPS, then get them trained, and then get them fully trained. And then when once they have have done approximately six EvertPs, they are are typically up and running. That process could take anywhere between six to twelve months depending on clinic to clinic.

Ulrich Trotter, Analyst, DNB Carnegie: Okay. So we have yet to see a sort of full effect of the accounts already sort of cleared in the first half?

Christopher Rosenblatt, CEO, XVivo: Yes. That is correct.

Ulrich Trotter, Analyst, DNB Carnegie: Great. And my second question relates to DELIVER study. And as you say, sort of ambition is to include first patient here in Q3. And I guess since we are now closing in on first patients to be included, how are discussions regarding reimbursement in the trial similar to what we did see of in heart?

Christopher Rosenblatt, CEO, XVivo: Yes. That is a great question. We are in discussion with CMS regarding reimbursement. And we hope to have reimbursement or or in this case, it’s actually cost recovery from CMS. It’s not it’s not reimbursement to be clear.

The levels will be slightly lower than for heart, but there will be an element of cost recovery during the trial, yes.

Ulrich Trotter, Analyst, DNB Carnegie: Great. And follow-up in addition, so on labor in Europe, and you presented some nice data as well as our health economic data and working on reimbursement. How many markets currently are reimbursing HOPE in Europe? And how has that changed here over the last twelve months?

Christopher Rosenblatt, CEO, XVivo: We can see that more and more markets are having reimbursement, such as France and The Netherlands. We now see we are conducting work in Germany, Italy and Belgium, UK to also achieve reimbursement in those countries. And we see some progress, a little bit different in the pace country by country. But I would say all those are important parts for the liver.

Ulrich Trotter, Analyst, DNB Carnegie: Perfect. Well, that was all questions on my end. Thank you very much, Christophe and Christopher.

Christopher Rosenblatt, CEO, XVivo: Thank you so much.

Conference Moderator: Next question comes from Johan Underis from Redeye. Please go ahead.

Johan Underis, Analyst, Redeye: Thank you for taking our questions. Hello. And yes, the first one, there is obviously underlying activity on the lung market. Even if it’s slightly slower than perhaps going dropping from some ten percent to five percent or six percent. On your side, on the VLP, it’s considerably lower.

But to to dig a bit into the reason apart from this large account, assuming they’re sharing some of the same thing, It’s center opt to do sort of a higher proportion of less risky lungs, more sort of low risk lung. They presumably they can’t do going on doing that for an extended period. Is that correct?

Christopher Rosenblatt, CEO, XVivo: I would say and as I stated this in communication with customers that coming off very high growth period, that there is certainly a little bit of fatigue in the system. And as well as we can see the aggressive ones who are typically going for the declined lines, we can see that there are a wait list effect on those accounts. So we think that this situation is temporarily. It’s hard to say exactly how long, of course, but, we we do see that if you’re gonna hit those 10% growth rates in The US, we makes me do believe that you need to have EVLP to achieve those growth.

Johan Underis, Analyst, Redeye: Yes. And in the scheme. Try to dig in

Christopher Rosenblatt, CEO, XVivo: to should do that.

Johan Underis, Analyst, Redeye: Yeah. And to dig into some of the reasons for for this this period? Could it be budget consideration or staffing consideration or a bit of both or or apart from fatigue? Because that’s probably

Christopher Rosenblatt, CEO, XVivo: That’s part of it. And also, as I stated earlier in the course, at the beginning of the year as part of the dose initiative, NIH grants were cut. This has mainly affected clinical trials, but we do see that that, it has some effect on the hospital economics also for, let’s say, the current business. The because if they have less staff for running clinical trials, profusions, etcetera, that might also impact in some accounts, the ability to do EVP. But it’s a non trans So I don’t know if that answered the question.

Johan Underis, Analyst, Redeye: Yeah. Yeah. That’s partly I I I suppose so. If if if part of the resources are related, then you cut down on the study side and part of the team is also working on the more high risk that could be part of it, I suppose. And what about the OPO and the MRP dynamics?

It’s obviously interesting that you get interest and requests. How fast can you sort of meet those requests and and and perhaps rescue more lungs as as a as an indirect positive effect even though this mainly relates to heart and liver as well.

Christopher Rosenblatt, CEO, XVivo: Yep. True. I mean, you favor the heart over the lung, and and therefore, you leave a lot of lungs. And and I think the the transplant community in The US start to see this. The we we can act reasonably fast.

OPOs are not really fast moving organizations, so it it might take some time.

Johan Underis, Analyst, Redeye: Yes.

Ulrich Trotter, Analyst, DNB Carnegie: And and the

Johan Underis, Analyst, Redeye: NRP protocol presumably is used also partly outside the opioids.

Christopher Rosenblatt, CEO, XVivo: Yes. Correct.

Johan Underis, Analyst, Redeye: And is this is this when can you sort of be ready to support this? Should we think twelve months or less or more? Or

Christopher Rosenblatt, CEO, XVivo: No. I mean, less than twelve months.

Johan Underis, Analyst, Redeye: Yeah. Very good. And it’s it’s, of course, a challenge to both sort of become more efficient and perhaps even reprioritize? And also, it seems like some accounts need more support to to grow the business than perhaps was perceived. Should we think that you you will actually cut some cost or it’s more restarting reorganization and and among existing staff and resources going forward?

Christopher Nordstrom, CFO, XVivo: You’re referring to our internal resources and organization?

Johan Underis, Analyst, Redeye: Yes. I mean, you you you presumably will support a bit more regulatory front front end support and perhaps less activities in some other areas.

Christopher Nordstrom, CFO, XVivo: Yeah. No. But that that’s what it’s primarily about here when we talk about, you know, it’s it’s more of a cost effectiveness program where we allocate resources where we see the strongest growth, so to say. And that’s definitely, of course, in in the commercial organization.

Johan Underis, Analyst, Redeye: Yes. And and finally then from our side, on the services side, when can we expect to get more clarity around the, yeah, business overview and the strategic overview on the services?

Christopher Nordstrom, CFO, XVivo: Yeah. It’s it’s I mean, it’s premature now. It’s a fast moving part of the transplant market. So we’re we’re agile, and it’s it’s it’s an exercise that we will run here in in in the fall, and then we will get back to you when we have a clear clear direction on strategy.

Christopher Rosenblatt, CEO, XVivo: When you’re ready.

Johan Underis, Analyst, Redeye: Okay. Thank you.

Christopher Rosenblatt, CEO, XVivo: Thank you. Thank you so much, everyone. I see that we are three minutes over time. So we have to conclude this meeting, and we hope to see you in October, the October 23 for our third quarter, report and earning call. Thank you so much for listening in today, and I wish you a great summer.

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