Release Date: July 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CellaVision AB (FRA:C26, Financial) sees significant market potential in the bone marrow application, estimating it to be a billion-dollar opportunity annually.
- The company is expanding the addressable market for its DC one platform, targeting large lab segments with its bone marrow analysis capabilities.
- CellaVision AB (FRA:C26) maintains a strong focus on innovation, with ongoing investments in R&D expected to drive future value creation.
- The company has a healthy balance sheet with 55 million in cash and limited loans, providing financial stability.
- Pricing strategies have been a positive contributor, with annual price adjustments expected to impact future quarters positively.
Negative Points
- Order implementation timelines have been slightly prolonged, now taking 2 to 9 months, which could affect revenue recognition.
- There have been issues with a component in the D line, impacting DC one sales, particularly in the US market.
- R&D costs have increased, particularly due to external lab validations for the bone marrow program, affecting short-term profitability.
- The company faces challenges in integrating acquisitions due to its focus on building a cohesive digital ecosystem.
- Demand in small labs in the US has softened, partly due to internal issues with the smearing component, affecting sales.
Q & A Highlights
Q: Could you tell us the sales potential for the bone marrow application?
A: The bone marrow application is part of our specialty analysis segment, focusing on bone marrow samples rather than peripheral blood. We estimate the market potential to be close to one billion per year, with the majority of this opportunity related to bone marrow. We plan to target this market with our DC one platform, which is positioned for the small lab segment but can accommodate bone marrow analysis needs in large labs. This represents a significant revenue opportunity in the large lab segment. (Respondent: Unidentified_1)
Q: Are you investing large amounts in R&D, and how will this affect your BAA margin?
A: As an innovation company, we believe in creating value through investing in our own programs. While our investment profile has increased due to multiple strategic pillars, there is potential to reduce it slightly. However, we remain committed to innovation, which is crucial for our success. There might be a financial upside, but we prioritize maintaining our innovation profile. (Respondent: Unidentified_1)
Q: Can you capitalize any of the investments going into the FPM project?
A: We capitalize investments related to the FPM on the hematology analyzer due to the maturity level of the program. However, activities in the innovation phase or feasibility testing are not capitalized and are recorded in the PNL. We have a development model where capitalization begins after certain prerequisites are met. (Respondent: Unidentified_1)
Q: Why maintain a healthy balance sheet with cash and limited loans instead of paying dividends?
A: We focus on investing in our own programs as the key value driver. While we consider acquisitions, they must align with our digital ecosystem strategy. Our successful acquisitions, like FPM technology, demonstrate our approach. We remain open to opportunities that fit our core hematology strategy or supply chain expansion. (Respondent: Unidentified_1)
Q: Have you seen any change in customer behavior during the quarter?
A: Despite political instability, we haven't observed significant changes in order placements. The situation remains stable compared to previous quarters, such as during the Presidential elections. (Respondent: Unidentified_1)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
