Bonesupport Holding AB

STO:BONEX

Q2-2025 Earnings Call

[Operator]

Welcome to Bonesupport Q2 2025. [Operator Instructions]

Now I will hand the conference over to CEO, Emil Billbäck; and CFO, Håkan Johansson. Please go ahead.

[Emil Billbäck, executive]

Thank you, operator. Good morning, and welcome, everyone, to Bonesupport's Quarter 22025 Results Call. I am Emil Billbäck, the CEO and I'm making this broadcast, as always, together with Håkan Johansson, our CFO. So over the next 25 minutes, we will guide you through the presentation of the second quarter results, and then we will open up the line for question and answers.

So if we go to the next slide, we will see the normal and usual disclaimers. And it's like to draw your attention to those in case there are any forward-looking statements we might make today. We'll go to next slide, Slide 3, and we'll start the presentation.

So quarter 2 2025 was another strong quarter for Bonesupport with solid execution across the business. Net sales came in at SEK 284 million, which corresponds to a growth of 29% versus quarter 2 last year. This is 40% growth in constant exchange rate. The difference between reported and actual in-market growth is quite large, and that is reflective of the more than 10% drop in value of the U.S. dollar to Swedish krona between the end of quarter 2 last year to the end of quarter 2 this year.

Comparing sales growth rates quarter 2 with previous quarters, we also need to remember that Easter, which usually eliminates 2 to 3 surgery days in the quarter, was in quarter 1 last year and happened in quarter 2 this year. This usually impacts between 3 to 4 percentage points. Despite this, quarter 2 in 2025 grew sequentially with 9% over quarter 1 2025 in constant currency. So for the first half of 2025 sales amounted to SEK 568 million and a growth rate of 44% in constant currency.

Our operating results, excluding incentive program effects, was NOK 62 million, reported EBIT at NOK 55 million and with an operating cash flow in the quarter of SEK 50 million.

Looking at the highlights from the quarter, I would like to mention the strong CERAMENT G sales in the U.S., which reached USD 18.3 million in the quarter. This is a growth of 84% in market, meaning in constant currency and 66% when converting that and reporting in Swedish krona.

We announced the appointment of Torbjörn as the next CEO of Bonesupport. He will assume his role on September 1, as I will transition to a role as Senior Adviser.

Furthermore, the proposed NTAP for CERAMENT G in open trauma as well as general orthopedic increase of DRG code by CMS, which we mentioned already in the previous quarterly call, bode well for the future. The quarter also saw additional clinical studies validating the strong value proposition of CERAMENT. We will also cover all these topics later in the presentation as well as the impact from the hospital reform at several German hospitals.

Let's now go into the core of the presentation and go to the next slide. So this chart, as many of you will recognize, shows sales in the last 12 months in Swedish currency every quarter for the last 7 years, we display this in stacked bars per region and product category.

So as you can see, the launch momentum for CERAMENT G in the U.S. is exceptionally strong. We're pleased to announce that since the launch in quarter 4 2022, the accumulated sales for CERAMENT G in the U.S. has now reached SEK 1 billion. Visually, it almost looks as if the last quarter is slowing down, which is, of course, not the case. It is an effect of the sharp drop in dollar to SEK. And if we look at the growth at constant rates for the last 12 months, the LTM in quarter 2 versus quarter 2 a year ago, the growth number is 47%. In total, antibiotic eluting segment grew with 49% in the last 12 months for the quarter for the global business.

Let's push forward and go to the next slide, please. In North America, quarter 2 sales reached SEK 236 million, which is a growth of 36% compared to quarter 2 last year or 49% at constant exchange rates. As mentioned, we've seen large swings in the U.S. dollar to Swedish krona rate, which is impacting both reported sales and sales growth.

The uncertainty regarding the future of potential tariffs continue. Regardless of outcome in this volatile situation, the impact on Bonesupport will be very small as we have covered previously in the April press release.

Some highlights in the quarter. We're seeing strong progress in the market penetration for CERAMENT G, with sales reaching USD 18.3 million. The growth is coming from new users, but even more so from increased and expanded use in broader set of indications by surgeons that have made their first experience with CERAMENT G 6 to 12 months ago.

We are making steady progress in getting CERAMENT G approved with hospital systems, and we are quickly approaching 200 systems listing. It takes anywhere between 3 to 9 months to get an approval for a listing with a hospital system and usually the bigger the system, the longer time it takes.

We will continuously see a lot of go-stop-go dynamics. But so far, there's only 1 or 2 of the hospital systems that have rejected to list CERAMENT G.

The knowledge of the benefits of bone repair with local elution of antibiotics is increasing. To further nurture the growth driven by increased demand, we have signed up a few specific independent distributors, specialized in trauma and specialized in prosthetic joint infections. We've done this for states and regions where we did not have coverage with our legacy distributors.

The submission to FDA for market authorization of CERAMENT V was made at the end of March. During quarter 2, we received questions and requests for clarification on the data from FDA. The submission follows a 510(k) pathway where CERAMENT G has been used as a predicate device. The package of questions received should be looked at in the perspective of the very rigid and very demanding requirements on clinical data, elution profiles and special controls established when the category of antibiotic eluting bone graphs was established by FDA.

There is, by the way, only one product in that whole category, and that is the CERAMENT G. But by the end of this year, we hope to be able to add one more product to that category, namely CERAMENT V. The deadline to respond to FDA's question is in November this year.

The expectation is that CERAMENT V will open up additional avenues for growth in the U.S. market and increase the pace of market penetration for use of local antibiotics. The therapeutic ratio is totally different with local antibiotics versus systemic antibiotics, which has been shown in many clinical studies among those the SOLARIO study.

With both gentamicin and vancomycin in the toolbox, we believe that we completely meet all the U.S. surgeons' need for treatment and prevention in relation to bone healing.

We go to the next slide, please. So finally, when it comes to the U.S., I would like to give an update on the plan for our spinal procedure market entry. At the Capital Markets Day end of 2023, we announced that we will eventually enter the area of spinal procedures with both CERAMENT BVF and CERAMENT G in the U.S. Since then, supplementary regulatory approval has been accomplished for CERAMENT BVF and several preclinical application studies have been conducted and even more are ongoing.

The launch into the spine segment with CERAMENT BVF will take place in December of this year. We are launching simultaneously in the U.S. and in Canada. The launch will start with orthopedic departments where CERAMENT is already fairly established and used for extremities. CERAMENT is overall starting to become quite well known in the market, and there is a large amount of high-quality public data on the bone remodeling capabilities of CERAMENT, including a Level 1 randomized clinical trying showing equivalents to autograft. This is in extremities.

So in spine, well, while there are some patient case series, there are no published clinical studies yet. And this is something that we will address and generate over time with our partner hospitals. Recruitment of specialized independent distributors focused on spine procedures is ongoing. Details on regulatory and clinical study strategy for CERAMENT G in spine procedures will be presented in the autumn 2025 as earlier announced.

The pictures on the slide just show a few snapshots of some of the details generated from the preclinical study data. These ones are from a FUSION study using CERAMENT according to the Boden model. Strong FUSION results were recorded across the study samples.

Now let's turn to Europe. Next slide, please. Sales in Europe came in at SEK 49 million, representing 4% year-over-year growth, which is 7% at constant exchange rate. Sales in Great Britain is in recovery from the NHS imposed surgery priority program. Every month has seen a gradual increase in number of surgeries and growth rates versus previous year, leaving the quarter at a percentage growth in the mid-teens.

Sales growth in percent for the quarter was negatively impacted by fewer surgery days, a strong comparative quarter in 2024 and the ongoing hospital reform in Germany. A number of German federal states have launched cost-reduction programs related to hospital consumables and surgical procedures. The programs have resulted in quite a disruption for us with some hospitals reverting back to the use of autograft at the expense of synthetic bone grafts.

What we have seen previously with similar historical cost-driven initiatives is that the dip is rather temporary in nature as it relates to innovative products capable of improving the standard of care and providing strong health economic data.

To drive understanding of the benefits of CERAMENT, we intend to further intensify our efforts with decision-makers on all levels. Simon has very strong evidence supporting and confirming the benefits given to patients, caretakers and payers. In the quarters, 2 additional clinical studies were published in well-reputed medical journals, with impact factors of 1.8, respectively, 2.8.

Reduced amputation rate has previously been shown in clinical studies both from the U.K. and from Australia. And the recent study was made at Herlev Hospital in Denmark, shows similar strong patient outcome following a dedicated protocol where CERAMENT G or CERAMENT V was used.

The second study mentioned here follows a patient group that has been featured in previous publications by Henry and Al Jabali. The recent publication shows that the great results on deep infection avoidance and avoidance of amputation withheld and remained also over a long-term period follow-up. The study had a 10-year follow-up of patients that previously had been reported on in a 4.5-year follow-up.

And with that, I will leave to Håkan to do and lead us as deep dive in the numbers.

[Håkan Johansson, executive]

Thank you, Emil. So net sales improved from SEK 219.8 million to SEK 284.4 million, equaling a reported sales growth of 29% or 40% in constant exchange rate. Emil has already spoken about the strong performance in especially the U.S. and the major drivers behind the sales acceleration, but as the weak U.S. dollar somewhat hides the continued strong trajectory in the U.S., I would like to share the U.S. sales performance in U.S. dollars.

This slide shows the quarterly sales in the U.S. in U.S. dollars. Not only can we see a strong performance in this quarter but also a strong performance over the years, with double sales in recent 6 quarters and triple sales over the recent 9 quarters. The dollar growth in the quarter of 49% should be viewed in perspective of a record strong quarter Q2 last year.

The contribution from the North America segment improved with [ SEK 37.6 million ] and amounted to SEK 104.4 million. The improved contribution relates to increased sales after the effect from increased costs.

Sales and marketing expenses during the quarter amounted to SEK 117.8 million compared with NOK 98.3 million previous year, of which sales commission to distributors and fees amounted to SEK 78.5 million compared with NOK 61.6 million in the same quarter last year.

From the lower graph showing net sales as bars and gross margin as the orange marker, it can be noted that the gross margin remained stable and strong around 95%.

In Europe and Rest of the World, a contribution of SEK 13.6 million was reported to be compared with SEK 14.2 million previous year. Sales and marketing expenses increased with SEK 2.2 million, including SEK 2.1 million related to the previously communicated commercial investments in the Euro Booster program.

From the lower graph and the orange marker, a minor drop in gross margin is noted mainly impacted by market mix. The decrease in selling expenses is due to a depreciated U.S. dollar but also an effect of seasonality and depending on how the expense for large conferences play out. As mentioned previously, the quarter also included SEK 2.1 million related to the Euro Booster program.

R&D remained focused on the execution of strategic initiatives, such as the applications others in spine procedures and the market authorization submission for CERAMENT V in the U.S. These initiatives have been progressing well during the quarter and among others, leading up to the launch of our product CERAMENT BVF in Spine later this year. And administrative expenses, excluding the effects from the long-term incentive programs remain on a stable level, involving a SEK 1 million in nonrecurrent expenses in the quarter.

The reported operating profit amounted to SEK 54.9 million despite unfavorable currency effects totaling SEK 11.4 million. And I will come back to this in the following slide.

There is no impact from tariffs in the quarter, and we are following the conversations between EU and the U.S. with great interest. It should be said that regardless of the final outcome, the impact on Bonesupport is expected to be nonmaterial. As an example, a 10% tariff implemented in our business, would have meant an EBIT reduction on the just reported quarter Q2 this year of SEK 1.3 million or about 2% of reported adjusted EBIT. A worst-case scenario with 30% tariff would have meant a reduction of the reported EBIT of SEK 4 million.

The difference between adjusted EBIT and reported EBIT are costs related to the long-term incentive programs amounting to an expense of SEK 7.6 million in the quarter compared with SEK 7.3 million previous year, as you could see on the previous slide.

Cash conversion remains solid with a fourth consecutive quarter with strong cash flow and an increase in cash during the period with SEK 42.6 million. With this report, with a strong adjusted operating result, despite unfavorable currency effects and a solid cash flow, we continue to confirm a strong operating leverage and business scalability.

During the period, the Swedish krona has continued to strengthen against the U.S. dollar. Other operating income and expenses, therefore, contain foreign exchange gains and losses from the translation of the group's assets and liabilities in foreign currency amounting to a negative SEK 11.4 million. Simply put, the negative SEK 11.4 million is mainly driven by the operating assets in the U.S., such as inventory and trade receivables. These are originally valued in U.S. dollars and at quarter end translated into a much stronger Swedish currency versus the last quarter.

The graph on this slide shows with the gray bars how the relationship between the U.S. dollar closing rate and the Swedish krona has varied over time. This is read out on the right I axis. The blue dotted line read up to the left of the I axis shows reported adjusted operating results. The adjusted operating result, excluding translation exchange effects, is the orange line. In Q4 2024, the U.S. dollar to SEK rate was 11.03, which gave a positive effect of SEK 20 million. And therefore, the blue dotted line is above the orange line. In Q1 this year, the U.S. dollar rate was 10.02, creating a negative impact of SEK 30 million. And in Q2, the U.S. dropped down to 9.49, creating a negative impact of SEK 11 million, meaning that the blue dotted line drops below the orange line for these 2 quarters.

The orange line eliminates the translation exchange rates and give a more comparable view of the underlying trend in operating profit. In the table below the graph, you can see the FX adjusted operating margin of 26% in the period compared with 16.8% in the same quarter last year and compared with 24.6% in Q1 this year.

And with this, I hand back to Emil.

[Emil Billbäck, executive]

Thank you, Håkan. So to summarize, we've seen a strong momentum in 2025 with 40% sales growth at constant exchange rate in the quarter and 44% in constant exchange rate for the first 6 months.

The continued success for CERAMENT G in the U.S. is one of the main drivers for this strong growth. And yet, this product has just begun its journey towards its full potential. We have a strong underlying profit development and operational cash flow of SEK 50 million in the quarter. So all in all, we are confident in our guidance of sales growth above 40% in constant exchange rate for the full year. Bonesupport continues to perform steadily, converting an outdated standard practice into technically advanced patient-centric care and we remain committed to expanding into new geographies and indications as we're now starting the ramp-up for the December spine launch.

So let's open the line for questions.

[Operator]

[Operator Instructions] The next question comes from Mattias Vadsten from SEB.

[Mattias Vadsten, analyst]

Mattias Vadsten is here. I have a few questions today. I take them one by one, I think. First one, you said something regarding expansion of the distributor network I think it was trauma and prosthetic joint infections where the distributors -- the legacy of distributors for you is not covering those. So my question is really how many state region does we discover? And do you pursue an uplift of these 2 sales already from quarter 3? I'm just trying to get a feel for the incremental upside from this move. That's the first one.

[Emil Billbäck, executive]

Yes. Thank you, Mattias. We have shown a couple of places before how early we are on the journey with CERAMENT G in the U.S. and that our market shares is less and in its infancy in both trauma and in prosthetic joint infections. And there are a couple of reasons for this. We got the approval for trauma only a year ago and we launched in October last year.

On PGI, we have barely gotten started. We're still waiting for the clinical study from Charité in Berlin to support our case and to give valuable data points to drive penetration. But we're starting also already now to see more demand from the market. There are surgeons calling us that we have not been in contact with before within Open trauma. There are surgeons calling us with infected joints, and they ask if they could start using the product. So we have signed up specialist distributors to cover these target groups where our previous distributors couldn't cover.

Now the question you ask is, well, how to quantify this? What should we expect going forward? What you should expect going forward is many years of very strong growth. If we will succeed in trauma, if we will succeed in PJI as we have done in other areas where we also have continuous and further opportunities to seize then this company will be on a very long growth trajectory. But exactly how that will translate into distributors, regions, states, I think we cannot share that data from time to time.

I think one important observation is surgeons are starting to call us. Distributors are coming to us. CERAMENT G has a very strong reputation in the marketplace. And those surgeons that have used it also speak with their colleagues in other indications, which is creating a strong demand. But the specific numbers, unfortunately, we will not be able to share that.

[Mattias Vadsten, analyst]

I appreciate that, and I think that's a good answer. Second one relates a little bit to fine I think it's 2 questions in one, really, but on the BDF and the preclinical application studies, so can you say anything about what results you're seeing? Can you talk anything about FUSION rate based on what you're seeing and what you expect maybe? And if the results are overall in line with your expectations before end or if they are even better?

And then on CERAMENT G, there in spine procedures, so what makes you confident in an updated time line autumn 2025? Does this mean that the proprietary work is developing in line with expectations and that you can maybe start to start this towards the end of this year? Or how should we look upon that?

[Emil Billbäck, executive]

So we have done a lot of preclinical testing on CERAMENT BVF. We have also done some on CERAMENT G. Some results are ready since a while ago, and other results are pending to be finished by the report and others are still to be completed later during this year. You asked specifically about FUSION, so let me say that we're targeting spine procedures quite broadly, where we're looking at several different application areas and several different indications. But when you ask about the FUSION specifically, yes, we have done FUSION studies with the Boden model, which you can say is a bit of standard at least when it comes to preferences expressed by FDA. This is a demanding model, which is rapid spine model to intended to replicate human infusion. And yes, the results are very good.

Now we don't release results from preclinical studies. We feel that can be quite deceiving. I think we should wait until there are clinical studies, which we intend to start up, sometimes next year when we have established the partner centers, but I wouldn't sit here today and tell you that the launch takes place in December this year, unless we had very encouraging results from the preclinical studies.

When it comes to CERAMENT G, well, the contrast here to CERAMENT BVF has gone to market or will go to market through a 510(k). So there are products in the market and a lot of them are performing within a certain range, so they can get the regulatory approval. When it comes to CERAMENT G or V for spine, there is nothing like it. There's nothing even close to it, which means we will have to again create a new category. We feel confident in doing that. We have done that before, and we're one of the few companies that have succeeded. We have the first ever combination product of medicinal substance and medical device registered through de novo in orthopedics. And De novo is the pathway most likely that we would have to go through with CERAMENT G for spine.

And there's still some conversations that has to be had with our external partners, with FDA, with regulatory consultants before we feel that we can give a clear time line. But you can be very sure that since we addressed the market from the Capital Markets Day, we have been working very hard to get all the pieces of the puzzle in place. And it's not long more that people have to wait now for us to be able to share when and how that will look like going forward.

[Mattias Vadsten, analyst]

Sorry for the long question here. I think that's a good answer.

[Emil Billbäck, executive]

Yes. Thank you, Mattias. And sorry for the answer.

[Operator]

The next question comes from Kristofer Liljeberg from DNB Carnegie.

[Kristofer Liljeberg-Svensson, analyst]

Two questions here, three actually, but the first one are related. So on the selling expenses that were down here sequentially, how much of that is just U.S. dollar effect, if that's possible to quantify? And related to this, I'm wondering how you view the potential operational leverage going forward, i.e., how much are you planning to increase operating cost here for the remainder of the year and maybe into 2026? And that's, of course, excluding the the royalty you pay to distributors or the distributor commission. So that's my first question.

And then how do you view the potential to accelerate this sequential growth you see in the U.S. in U.S. dollar?

[Håkan Johansson, executive]

Well, thank you, Kristofer. And again, I can understand the questions related to expenses also giving some also that as with revenue, there is naturally also consequences in terms of translation of expenses in foreign currencies. The FX impact in the quarter is around SEK 5 million from currency. And the rest is coming back to, as we mentioned, somehow, it's the seasonality. It's really also the timing when the large Congress is happening.

[Emil Billbäck, executive]

That was the first part. And then on the operating cost going forward.

[Håkan Johansson, executive]

Again, we have been giving guidance on revenue and revenue only. And there we have communicated that we expect this year to grow with more than 40% in constant exchange rates. And the reason for not being more disclosed in terms of expenses or operating result is that now we continue to do investments. We continue to do commercial investments, and we communicated late last year some of the Euro booster program, et cetera. And we will seek all opportunities to continue investing in continued sales growth. For that reason, we don't give any firm guidance on on operating expenses.

However, saying that, just by looking at the general trajectory, we can see that whether we talk selling expenses and general and administration, et cetera, we can see that it's coming down as a percentage to sale despite those initiatives and cost increases.

[Kristofer Liljeberg-Svensson, analyst]

You're not planning any larger programs, Rest of the World or adding a large number of sales reps in the U.S. or any big clinical trials will significantly that will increase on cost or anything like that?

[Emil Billbäck, executive]

No, that's right. Not that we're not.

[Håkan Johansson, executive]

I think it's fair to say that we have a tradition to communicate such initiatives in time in advance.

[Emil Billbäck, executive]

Yes, I mean, there's no hesitation to invest, but it's rather 3, 4 people in different slots of the commercial or central organization that wouldn't have that kind of pivotal effect.

So you also had a question on how confident are we on accelerating the sequential growth in U.S. dollars, and I assume you refer to CERAMENT G. So such a breakthrough in pioneer product is going to be an intensive launch phase for the first 6 months. It takes about 5 years to really be actively launching the product, and then you have to nurture and continue to build the customers. What we see today is, it's an everyday battle. Every day battle to get the attention from the surgeons, everyday battle to convince them to go through the science, go through the clinical studies, use the product and then follow up on the product. And unfortunately, we're not alone in the marketplace. We are one of the smallest players, but we're one of the fastest growing. There are some gigantic sales teams out there from big orthopedic companies, and it happens that just by force and total assortment, they convince customers to switch back to older kinds of orthobiologic products, even like bone cement. When it is given to them as part of a package deal when the customer buys robotics, hardware, metalware, knee implants and all other things.

The KPIs that we follow with the exception of sales, of course, sales is one of our main KPIs is how many doctors we convert, how many hospitals that put us on listing and how many protocols we show up in. But over the first 5 years of launching a product, we will win accounts and we will lose accounts. But overall, it's like stopping a title wave. We are winning almost every head-to-head comparison with any of the other products out there. So by commercial muscles, sometimes we lose an account and sometimes we win an account, but in the long term, we are strongly convinced that CERAMENT will become a major part of standard of care.

As we are opening up more indications, as we are increasing also loyalty with customers who have used CERAMENT, maybe being convinced by one of the big orthopedic companies to switch back to an older therapy and noticed they don't get the same results, so they're switching back to CERAMENT. As all these dynamics will stabilize, I am sure that we will see also an acceleration in our growth from CERAMENT G versus a rather linear trend that we have seen over some of the recent quarters. Again, a long answer, again, sorry, but hopefully, it was clear.

[Operator]

The next question comes from Sten Gustafsson from ABG Sundal Collier.

[Sten Gustafsson, analyst]

A few questions here. Firstly, on the hip and joint potential, you talked about, just maybe a clarification, is that part those patients? Are they part of sort of the addressable market that you have talked about in the past of around 50,000 infected and 90,000 for prevention use? Or is this incremental, new potential procedures that you will target going forward? And if that's the case, what does the time line look like? When will you start to well, address those potential procedures?

[Emil Billbäck, executive]

Thank you, Sten. The procedures related to infected prosthetic joints is part of our total addressable market as we have identified it. However, we have not done so much efforts in this area. So it's a rather untapped area within the total addressable market. Why have we not? Well, when launching a breakthrough product like CERAMENT G, the surgeons will try the product in various different ways. And we are trying to take the lead to explain which protocols, which manuscripts, we believe will work the best in different applications technique for the different surgical technique there. There are so many different surgical techniques that exist, many of them have the last name of the person who invented them, and we have to adapt many times how to use the product to fit different techniques.

In PJI or in joint infections, there are several doctors that are now starting to use the product very intensely, and what we can tell, they have also very strong results, but we don't have any published clinical study with a clear instruction on how have the study authors used the product, which techniques have they used to arrive at the conclusions and the results they have. So when that comes, hopefully, now after summer in the published way, we will have the chance to further explore this group, and we expect a strong market penetration.

Then local antibiotics is used preventively for joint surgeries. This is a huge market, but we don't have that on label yet. So we have actually excluded that from our total addressable market. Of course, there might be surgeons that decide that they have such good results with CERAMENT G for their infected joints that they decide also to use it to prevent the infection from even establishing, but this is something that we have to pursue more long term to also broaden the label into prevention of joint infections, and then it will be a significant increase to the total addressable market, but this is something we will have to come back to because we don't have clear plans to communicate on these steps yet.

[Sten Gustafsson, analyst]

My second question would be on I think you mentioned in the text, and correct me if I'm wrong, but you talked about reimbursement -- positive reimbursement changes in the U.S. and whether or not you see a potential there for raising your prices. I think we talked about this at the Q1 as well, but maybe you know more today on that topic. And also on the NTAP, if you could just remind me on the sort of the net effect of the NTAP for the 2 different parts.

[Emil Billbäck, executive]

Yes. So we're positive to see that CMS has made a proposal, a proposal to basically themselves. They make the proposal, and they also make the final decision in August. They made a proposal in general to increase the diagnostic-related group codes. So the reimbursement codes for orthopedic extremity surgeries with 6% effective 2026. This is an increase which is close to twice as much as they've had previous years. So it shows that there's a broader understanding and recognition taking place that orthopedic surgeries actually do have a very positive impact on total health economics because the patient comes back to mobility and to a normal life.

So we are looking constantly at raising prices. And we do that in different ways. Whenever the market allows and would accept a raise price, we will take that opportunity. So not specifically related to higher reimbursements but related to what we believe that the health care can carry in terms of cost related to the benefits that we provide.

The NTAP that has been proposed is on open trauma. So before we've had an NTAP, which was on infection, meaning if there was an infection present and the NTAP that is now being proposed is for the use of CERAMENT G preventively. We do believe that NTAP on prevention is slightly more relevant than if you have an infection. Why? Because if there is an infection, you probably had also quite a severe injury. The codes, the DRG codes, the reimbursement codes will be high as they are. While prevention is -- the codes does not reflect that you have an infection because the infection hasn't started yet. So an NTAP will, of course, function for some surgeons as a tipping point of making the choice to do effective infection prevention versus hoping for the best. The prevention NTAP in open trauma will be decided in August and be effective from October if the decision is positive.

[Sten Gustafsson, analyst]

Just a follow-up. So on the for already infected patients, which is in place today, do you see a chance that NTAP will remain because I think that's about to disappear. Is that correct?

[Emil Billbäck, executive]

Yes. There is a discussion with FDA. So there's a discussion with CMS. I'm mixing them up. There's a discussion with CMS, of course, I used the word to permanent the codes, but what it basically means that those specific codes where NTAP has been used because the DRG codes in themselves was rather low in the past. We are pledging and pushing for those to get a permanent increase. And CMS has been a bit overwhelmed with administrative work recently. So we have not received answers and that's fine because the final decision will be taken also in August which is next month, which codes and if there will be a permanent increase to accommodate an innovative product like CERAMENT G.

Historically, we have seen both reductions of when the NTAP has disappeared, there has been reductions of raising the codes and we have seen acceptance when it comes to other innovative medical devices. So we couldn't give any forecast or readout on the observations we have so far from the conversations, but have to wait probably another 1.5 months before we will have a final decision from CMS.

[Operator]

The next question comes from Erik Cassel from Danske Bank.

[Erik Cassel, analyst]

First question on CERAMENT V, now given that the FDA has returned with some questions on that, how do you see the likely time line for market?

[Emil Billbäck, executive]

That's a million-dollar question or even more, I would say. It all depends on FDA actually. They have undergone quite some disruptions with the entry of the new U.S. administration. Now CERAMENT V is a breakthrough device. And I must say that the contents we have had on FDA have worked diligently through the extensive material. So once we get the approval or final notification from FDA, we will need a couple of months for production. So we are not producing these products in advance. The reason is that even though it's a 510(k) using CERAMENT G as a device, it is a breakthrough therapy. It is one of its kind. And it will come with very strict quality controls batch controls like we have today. I think I've shared with the market that every batch we produce on CERAMENT G, we have to do specific measures and control parameters related to, among other things, the elution of antibiotics. And if we have similar demands for CERAMENT V, it will be difficult if those products are already preproduced.

So let's say, best of case, we answered the questions in November, and there's a fast process. I couldn't speculate on that, but theoretically, then we would launch somewhere in the first 6 months of 2026.

[Erik Cassel, analyst]

Then I wanted to understand the set up for sales and distribution a bit more on spine and sort of what commissions we are to expect and really just anything you can share on the likely setup you're going to go with for selling in spine?

[Emil Billbäck, executive]

Absolutely. So very few of our existing distributors cover both extremity and spine. There are a few, and we will work with them. But mainly what we have is incoming calls from distributors completely specialized in spine and spine instrumentation and they have heard about CERAMENT. They've seen CERAMENT. They have surgeons that have requested it. On top of that, we are also reaching out through our networks to a few of these very specialized spine distributors. They are independent distributors, so we're not signing up a partnership at this stage with any large sales team. It will be independent distributors that have between 3 sales reps maybe up to 30, 40 sales reps. And the price of the product will be the same as an extremity and the commission will be the same as we have in extremity. We have validated this, and we've already had discussions with distributors. And given that CERAMENT has such strong documentation in extremities and such strong and evolving and growing reputation, the commission will be the same between the 2 indications, so around 30%, plus/minus 5%.

[Erik Cassel, analyst]

Perfect. And then just last question, a housekeeping one, we can call it. There seems to be a lot of confusion on the FX effects now as well, seeing FX negative 18% on CERAMENT G in the U.S. isn't really how the U.S. has developed year-over-year, but I understand there's some special effects there. Can you just get it, can you sort of explain it so we have it on the books, how that sort of FX effects work?

[Håkan Johansson, executive]

So again, doing this very technical, Erik, is that somehow the all the financials, how we take the translation of revenue and cost is down by using the yearly average FX rates. And then the reported quarter is year-to-date less previous reported quarter. And that gives us an impact somehow more or less or equal to the average FX rate in the reported quarter. So it becomes a bit technical, and so you have to work up the numbers when you compare the various years to understand the movements in between. And that's why also again so how we took the opportunity to show the revenue growth in U.S. dollars as well when it comes to the U.S.

[Emil Billbäck, executive]

Yes. Thank you, Erik. So the it is indeed a bit confusing also because the dollar is swinging pretty rapidly. But you can rest assured that the numbers we share with you are all audited. Okay, so I think possibly we have room for one more question before we break this up. Are there any more questions on the line?

[Operator]

Your next question comes from Maria Vara from Stifel.

[Maria Vara Fernández, analyst]

Maybe a very last one question could be, why is the pricing that we expect for CERAMENT BVF when we launched it in spine in the U.S., could we think about a similar range to what you're charging for extremities and if this is under any kind of reimbursement code?

[Emil Billbäck, executive]

Yes. Thank you, Maria. What a lovely way to finish this session. So the weighted price for CERAMENT BVF is around USD 2,600 and USD 2,650. And that is a blend of the 3 different sizes that exist. It's the 5 milliliter. It's the 10-milliliter and it's the 18 milliliter. Before we announced that we would go into spine procedures, we did extensive market research, and we have continued with that market research after the announcement that we did at the end of 2023, where we have had big focus groups and also advisory boards, and we've done general service and market research to see what is a price that would be accepted for this kind of product. And it has landed that the price between spine and as we charge an extremity would be the same, namely a weighted average around [ USD 2,600, USD 2,650 ].

When you look at the reimbursement codes, they're quite generous in spine, but it also depends on the severity of the injury or the intervention. So let's say there's a spinal fusion and an interbody fusion or it's a posterolateral fusion, they both come with codes that have no problems to accommodate CERAMENT BVF. If we look at scoliosis, for example, big codes, big reimbursements. So we don't expect any pushback. We've also done on price. We have also compared our intended pricing point with what is coming in the market, and we have got also that confirmed that we are on the right level. And then CERAMENT G in the future, well, something we will have to come back to when all that material is in place.

Thank you, Maria. And with that, I think we wrap up this session, and thank everyone for taking the time to call in and listen to our presentation on quarter 2. And also, I would like to wish everyone a nice summer, and thank you for the great work that we've had together during my 7.5 years as CEO for Bonesupport. Thank you, and goodbye.