Xvivo Perfusion : Interim ReportQ32021

Interim Report January -

September 2021

XVIVO Perfusion AB (publ)

Interim Report January - September 2021

Q3

2021

Third quarter 2021 (Jul 1 - Sep 30)

• Net sales amounted to SEK 54.9 million (42.7), corresponding to an increase of 29 percent in SEK and 31 percent in local currencies. Net sales of non-durable goods amounted to SEK 48.9 million (42.3), corresponding to an increase of 16 percent in SEK and 18 percent in local currencies.
• Machine perfusion accounted for 53 percent (41) of net sales.
• Adjusted operating profit before depreciation and amortization (EBITDA) amounted to SEK 5.3 million (9.3), corresponding to an adjusted EBITDA margin of 10 percent (22). Reported EBITDA amounted to SEK 4.2 million (-11.2), corresponding to an EBITDA margin of 8 percent (-26).
• Adjusted operating profit (EBIT) amounted to SEK -2.9 million (1.8). Reported EBIT amounted to SEK -4.0 million (-18.7).
• Net profit amounted to SEK -1.1 million (-14.7). Earnings per share amounted to SEK -0.04(-0.51).
• Cash and cash equivalents at the end of the quarter amounted to SEK 284.5 million (608.4).

The period (Jan 1 - Sep 30)

• Net sales amounted to SEK 172.5 million (119.6), corresponding to an increase of 44 percent in SEK and 54 percent in local currencies. Net sales of non-durable goods amounted to SEK 160.0 million (114.5), corresponding to an increase of 40 percent in SEK and 50 percent in local currencies.
• Machine perfusion accounted for 52 percent (36) of net sales.
• Adjusted operating profit before depreciation and amortization (EBITDA) amounted to SEK 20.0 million (13.4), corresponding to an adjusted EBITDA margin of 12 percent (11). Reported EBITDA amounted to SEK 13.9 million (-9.1), corresponding to an EBITDA margin of 8 percent (-8).
• Adjusted operating profit (EBIT) amounted to SEK -4.1 million (-8.8). Reported EBIT amounted to SEK -10.2 million (-31.3).
• Net profit amounted to SEK -4.0 million (-24.2). Earnings per share amounted to SEK -0.14(-0.91).
• Cash and cash equivalents at the end of the period amounted to SEK 284.5 million (608.4).

Significant events during the quarter

• Strategic focus areas were presented at XVIVO's first Capital Markets Day. These will support the company's goal to become the leading player in the transplant industry during the strategy period 2022-2026.
• XVIVO participated with a strong presence at the ESOT Congress in Milan. The focus of the congress on machine perfusion was very evident.
• A pilot project in advanced data analysis from liver perfusion was initiated with UMC Groningen as a partner.

Significant events in the period

• Publication in reputable scientific journal The New England Journal of Medicine shows significant benefits of oxygenated cold machine perfusion prior to liver transplantation.
• The 510(k) application for Kidney Assist Transport was submitted to the FDA.
• Guidelines from NICE supporting EVLP as the standard lung preservation procedure were issued in the UK.

Key ratios

	January-	January-			Full year
	September	September July-September	July-September
TSEK	2021	2020	2021	2020	2020

Net sales

Non-Durable goods

Durable goods

Machine perfusion share of net sales, %

Gross margin, %

Non-Durable goods

Durable goods

EBITDA

EBITDA (adjusted)1) Earnings per share, SEK

Cash flow from operating activities

172 523	119 584	54 935	42 736	179 861
160 013	114 498	48 893	42 309	169 425
12 510	5 086	6 042	427	10 436
52	36	53	41	43
73	77	69	78	74
75	79	73	78	77
42	19	33	58	24
13 855	-9 131	4 181	-11 229	-15 637
19 976	13 370	5 306	9 315	20 172
-0,14	-0,91	-0,04	-0,51	-1,61
-11 497	9 733	-8 455	-1 882	-12 266

1. Adjusted for effect from cost provision attributable to cash-based incentive program for employees outside of Sweden, integration costs and cost relating to acquistion process. Net adjustment totals SEK -1.1(-20.5) million for the quarter. Net adjustment for the period totals SEK -6.1(-22.5) million.

XVIVO Perfusion AB (publ) Corp. ID no. 556561-0424 - Interim Report January - September 2021

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CEO comment

New strategy launched

XVIVO had an eventful and intensive third quarter. In August, the company launched a new strategy
for the coming five years to support our goal of becoming the global leader in the transplantation
industry for all major organs. The strategy focuses on five areas: becoming the global leader in
abdominal (kidney and liver); commercializing our unique heart preservation system; increasing
penetration of machine perfusion; ensuring cost reimbursement for machine perfusion on key
geographical markets and, last but not least; making China our second biggest market in terms of
sales during the strategy period.	Dag Andersson, CEO

Total sales were SEK 55 million (43) in the third quarter, corresponding to an increase of 31 percent in local currency. The increase was attributable to the acquisition of Organ Assist which was completed in October last year. Whilst the business area Abdominal presented its strongest quarter for this year, business area Thoracic showed a weaker performance.

Thoracic's sales amounted to SEK 42 million (43) and was affected by low lung transplantation activity in the US due to the continued impact of the Delta variant on intensive care. The first half-year was strong in the US, although after the downturn in the third quarter lung transplantation volumes in the US have now returned to 2020 levels and are 6 percent below 2019. The number of lung transplants in the US during the third quarter was 586, which is a decrease compared to the second quarter by 18 percent. At the beginning of September, nearly 100,000 patients were treated for Covid-19 in U.S. hospitals, and at the beginning of the quarter, the number of patients was only 13,000. At the time of writing, the figure is down to 55,000 and the trend is thus going in the right direction again. We expect a gradual increase in the number of transplants in all markets as the number of new Covid-19 cases decreases.

Lung Bioengineering bought their fourth XPS machine in September, which was pleasing. The company's centralized model for lung perfusion, which supplies several US hospitals with perfusion services, is very successful and something that we expect to see also outside the US. Two new EVLP centers will shortly be activated for lung perfusion in the UK and Germany. This represents a significant advance on both markets, as clinics in these countries have previously mainly used our preservation solution, Perfadex® Plus.

"XVIVO's vision that "Nobody should die waiting for a new organ" has become even more relevant during the pandemic."

Abdominal presented a strong quarter. Sales was SEK 13 million (-). In the third quarter, hospitals in Abdominal's main markets in southern and central Europe were under less strain than in the US. When it comes to our goal of launching Kidney Assist Transport on the US market, we await final decision on our 510(k) application. We hope to begin a selective launch in the fourth quarter.

XVIVO is presenting another quarter with strong margins. Thoracic's gross margin totaled 78 percent (78) and Abdominal 53 percent (-). Although, raw materials costs are expected to increase in many sectors, including ours, I am confident about our ability to protect Thoracic's margins and significantly improve margins in Abdominal over time. Our unique and world leading products shall generate strong margins.

Another center is now up and running in the European heart preservation study, which means that six centers now include patients in the study. Several further centers are expected to start up in the fourth quarter.

XVIVO has taken the first steps on a digital transformation journey through a partnership with UMC Groningen, where we are developing a technology for the analysis of data collected from liver perfusion machines in a new pilot project. We have also initiated a similar collaboration with a leading US transplant clinic, which aims to develop a technology for analysis of lung transplantation data.

In conclusion, we completed several important marketing activities in the third quarter. In September, XVIVO hosted its first capital markets day. Our five-year strategic plan was presented, which also includes our ambition to achieving an EBIT margin of 20% and EBITDA of 30% in the strategy period.

XVIVO also participated in the ESOT Congress (European Society for Organ Transplantation) in Milan. We had a very strong presence, including a successful symposium on machine perfusion. It was clear at ESOT that it is now generally accepted that machine perfusion is key to ensuring more successful organ transplants, which means that we are well positioned to drive progress in this area on key geographical markets globally.

Dag Andersson, CEO

XVIVO Perfusion AB (publ) Corp. ID no. 556561-0424 - Interim Report January - September 2021

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This is XVIVO

Founded in 1998, XVIVO is the only medical technology company dedicated to extending the life of all major organs - so transplant teams around the world can save more lives. Our solutions allow leading clinicians and researchers to push the boundaries of transplantation medicine. XVIVO is headquartered in Gothenburg, Sweden, and has offices and research sites on two continents. The company is listed on Nasdaq Stockholm.

	Vision				Purpose				Target
	Nobody should die waiting				We believe in an extended				Establish machine perfusion as a standard method for preserving,
	for a new organ.				life of donated organs.				evaluating and transporting donated organs before transplantation.

>160,000

Organs transplanted per year, representing ~10% of the need*

*WHO estimate

	Kidney
~98%	64%
of the market is addressed	Liver
with XVIVO's total offering
24%
	Small bowel
	0%

NET SALES PER GEOGRAPHICAL REGION IN THE QUARTER

Americas (49%)

EMEA (44%)

APAC (7%)

Lung

4%

Heart

6%

Pancreas

2%

Strategic drivers

CUSTOMER-DRIVEN		HIGH-PERFORMING
INNOVATION		ORGANIZATION		COMMERCIAL POTENTIAL	OPERATIONAL STRENGTH

To develop XVIVO commercially,we will bring innovation and progress even closer to our customers. Our established relationships with clinics, scientists and opinion formers are an important asset in this context.

XVIVO has developed its leadingresearch and development competences and capacity over many years. The next phase consists of building a more efficient organization to ensure the successful commercialization of our entire product portfolio.

XVIVO's commercial ability will be developed. Our active pricing strategy will be driven by clinical relevance, and we will expand into new geographical markets.

Our commercial potential is closely associated with our operational strength. A clearer operational focus will improve cost efficiency and delivery reliability.

XVIVO Perfusion AB (publ) Corp. ID no. 556561-0424 - Interim Report January - September 2021

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Compilation of Net Sales and

EBITDA

	January-	January-			January-
	September	September	July-September	July-September	December
SEK Thousands	2021	2020	2021	2020	2020
Net Sales non-Durable Goods	160 013	114 498	48 893	42 309	169 425
Net Sales Durable Goods	12 510	5 086	6 042	427	10 436
Net Sales Total	172 523	119 584	54 935	42 736	179 861
Cost of Goods non-Durable Goods	-40 148	-23 837	-12 974	-9 422	-38 980
Cost of Goods Durable goods	-7 213	-4 129	-4 026	-180	-7 906
Cost of Goods Total	-47 361	-27 966	-17 000	-9 602	-46 886
Gross income non-Durable Goods	119 865	90 661	35 919	32 887	130 445
Gross margin non-Durable Goods, %	75%	79%	73%	78%	77%
Gross income Durable Goods	5 297	957	2 016	247	2 530
Gross margin Durable Goods, %	42%	19%	33%	58%	24%
Gross income Total	125 162	91 618	37 935	33 134	132 975
Gross margin Total, %	73%	77%	69%	78%	74%
Selling expenses	-63 653	-40 670	-23 344	-13 470	-59 899
Administrative expenses	-34 691	-19 179	-9 053	-8 462	-30 342
Research and development expenses	-40 020	-40 292	-10 457	-11 233	-56 178
Other operating revenues and expenses 1)	3 004	-22 825	888	-18 631	-32 231
Operating Income	-10 198	-31 347	-4 031	-18 661	-45 675
Amortization and depreciation cost of goods sold	-259	-642	-90	-211	-462
Depreciation administrative expenses	-2 542	-2 400	-896	-880	-3 154
Amortization of research and development expenses	-17 455	-15 063	-5 894	-5 038	-21 133
Depreciation other operative expenses	-3 797	-4 111	-1 332	-1 303	-5 289
EBITDA (Operating income before depreciation and amortization)	13 855	-9 131	4 181	-11 229	-15 637
EBITDA, %	8%	-8%	8%	-26%	-9%
EBITDA (adjusted) 2)	19 976	13 370	5 306	9 315	20 172
EBITDA (adjusted), %	12%	11%	10%	22%	11%

1. See note 4 for "Other operating revenues and expenses"
2. Adjusted for effect from cost provision attributable to cash-based incentive program for employees outside of Sweden, integration costs and cost relating to acquistion process. Net adjustment totals SEK -1.1(-20.5) million for the quarter. Net adjustment for the period totals SEK -6.1(-22.5) million.

XVIVO Perfusion AB (publ) Corp. ID no. 556561-0424 - Interim Report January - September 2021

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