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Edited Transcript of PNV.AX earnings conference call or presentation 26-Aug-20 1:30am GMT

Full Year 2020 Polynovo Ltd Earnings Call

MELBOURNE , VICTORIA Aug 26, 2020 (Thomson StreetEvents) -- Edited Transcript of Polynovo Ltd earnings conference call or presentation Wednesday, August 26, 2020 at 1:30:00am GMT

TEXT version of Transcript


Corporate Participants


* David Williams

* Jan-Marcel Gielen

PolyNovo Limited - CFO & Company Secretary

* Paul Brennan

PolyNovo Limited - CEO, MD & Director




Paul Brennan, PolyNovo Limited - CEO, MD & Director [1]


Good morning, everybody. This is Paul Brennan, Managing Director of PolyNovo. With me today is Jan Gielen, our CFO; and David Williams, our Chairman.

Apologies first up, for the delay this morning, a few technical issues on our end. The results are now launched with the ASX, both this presentation and other 4-A and the annual report, and I encourage you to download those and look at those.

But we'll start this presentation, which is a summary. And then at the end, we'll take some Q&As. The format this morning is that I will show you through the highlights of the commercial activities and R&D, et cetera. And then we'll pass over to Jan for financial slides and then come back with FY '21 outlook and question and answers.

Next slide, please. So if we look at the revenues for the year with NovoSorb BTM revenues have been up on FY '19 to be 104%, up year-on-year. This has been a very good result, particularly given the COVID situation globally; and our second half was actually stronger than our first half, which is encouraging given that it is done through the COVID cloud. So increase of 104% of BTM sales.

The run rate of Q4 is looking towards $24 million. Australia, New Zealand, U.S. and Germany have been the strong performers. And we're building a very solid revenue base in trauma, reconstructive surgery, hand surgery, neck, eyes and fasciitis and general surgery. So our reach beyond the burn segment is critical, and we're well on to that part. Burn remains strong, and it does give us lumpy upsides from month-to-month as the activity occurs. Next slide, please.

So the COVID-19 impacts on PolyNovo to date have been minimal. The sales continue to be very strong, and the second half was a very good half. We've had an active global digital marketing campaign with webinars and engagements of our customers through Teams platform and Zoom platforms as well as some of the sales reps using WhatsApp, and that has been highly productive.

The production at actual manufacturing facility here in Port Melbourne continues unabated. We've been running 2 shifts and have all the COVID safeguards in place, and that has continued on. No decrease in functional activity at the factory level.

The inventory build, we've got significant inventory build. You'll notice when you look at the numbers that the finance number or the cost of that inventory is only slightly increased over the holding that we had at the end of last financial year, but that speaks to the gross margin improvements because the volume of stock is significantly more good news in those numbers when you dig into the detail. We've appointed a safety officer, and now this is a proactive measure and that was prior to COVID and we're glad that we've done that. This is in a very strong position with policies and procedures around staff safety and well-being and also risk mitigation. All staff have PPE and guidance documents on how to handle COVID globally, that includes our sales teams out in hospitals and meeting with customers, and they're all provided with PPE and hand sanitizers and policies on their behaviors.

The factory and the machine commissioning was slightly delayed due to COVID, and we resolved many of these issues digitally. Most of that has been on the commissioning of delivered machines where normally, the technician from Germany would be on site with his head in the machine, commissioning it, and we've had to do that remotely without team doing that commissioning, and that's caused some delay in the Hernia factory machine commissioning. But not a significant impact on the timeline of the project.

Next slide, please. With our BARDA trial and revenue, we're very pleased that BARDA has already committed USD 15 million to our pivotal trial. We're well down the path with everything with the FDA. We are literally just waiting daily at the moment for their approval of our IDE submission. That's an investigatory device exemption to run the pivotal trial.

We have sites lined up. We've got contracts with many of those sites. And we anticipate as soon as we get the FDA formal letter of approval, then we'll move very quickly to initiating that study and move into recruitment in the first half of this year. Next slide, please.

We continue to build the talent within the business, and there's been quite extensive additions, not only sales, but also to marketing and particularly quality and clinical infrastructure is in the business. So it's been a very productive year for attracting high-quality talent and making that talent highly productive for us as a business. So we have added production staff, quality and validation staff, safety officers, I pointed out, and also clinical roles. These clinical roles are helping not just with the BARDA program, but also with diabetic foot studies and reimbursement studies, which we'll cover shortly.

In U.K., Ireland, we've got 3 sales [revision one marketer], which was an expansion of that team. The U.K. was the one site that was heavily impacted by COVID lockdown. Pleasingly, they're now through that and are able to visit sites, and we've now got sales into 5 NHS' as of today, and things are looking very positive and very strong for us with pent-up demand in the U.K., Ireland, and we're in the process of appointing somebody patently based in Ireland as well at this point.

Next slide, please. With the capital works, you'll see from the numbers in the spend we had a significant capital investment this year and fitting out the factory of the Hernia manufacturing. That capital program is essentially closed on what we call Stage 1.

Stage 2, there's a small capital program for this financial year of a couple of million dollars, which is basically looking at non-cleanroom production add-ons to that factory of a Hernia. So we're in a very solid position meeting our production and delivery to market timelines on Hernia.

The commissioning and validation of that factory process -- of that factory is now in process, and that will consume the next few months of our quality team and scientific and productions team to normalize production processes and standards that need to be there for the auditors when we have the regulatory audit.

The office REIT, it is being completed. And again, that was rather fortuitous ahead of COVID. Since COVID, there are some additions that we've made to that office fitout. There's an isolation room, hand sanitizer stations, temperature checking stations, and we'll be putting up some prospects as green dividers in some areas of improved staff safety.

We're in a very solid position for office return to work as soon as the lockdown requirements are completed by the government.

Next slide, please. With the inventory, we've got significant inventory on the ground in the U.S., New Zealand, Australia and England. Now this is to ensure that we can meet the growing sales demand, but also to ensure that we have plenty of buffer stock to cope with increased sales, but also to make sure that we derisk any COVID closure of the production side. So we've got -- we normally aim 6 months of stock and on some SKUs, we're between 9 and 12 months of stockholding. So we're in a very solid position inventory-wise to weather any COVID eventuality in the future.

I'd like to emphasize that the COVID situation today, we're ahead of it, and we've seen very minimal impact. What we do have is the ability to very strongly service our customers.

I'll now hand over to Jan Gielen, CFO, to run through the financial slides. And so next slide, please.


Jan-Marcel Gielen, PolyNovo Limited - CFO & Company Secretary [2]


The next slide. Thanks for that. Great. Thank you. FY '20 financial results. So the highlights for the year. BTM product sales are 104%, up from last year's $9.3 million, so a really good result and a really good second half with the June quarter, particularly June sales were $5.9 million, which equates to a run rate of $24 million.

Some other highlights. Second half, up 87.5% on the first half. And the June quarter itself, up 33% on the March quarter. So having a good training period through challenging times with COVID.

The next graph down, we're looking at our international expansion. So record sales results in the U.S. were up in June, 36% on March. And we've also seen just entering into other markets with some small figures there in the graph, entering the DACH region with strong sales that might add we've also had first sales in Singapore and the U.K. in July. Next slide.

And I move on to operating expenses. So as expected and within plan, OpEx has increased, but the investment is working, as you saw in the previous slide, where revenue is growing double for the year. We continue to invest for growth. Our headcount has increased from 47 to 78 staff. So we continue expand our sales and marketing teams and able to partner where required.

We've also entered new markets and expanded our regional operations in the U.K. and Singapore, which is going well. For our effect from all of the above. Obviously, the operating loss reducing significantly from last year, down 59% to only $1.1 million loss. So that's come about from the strong revenue growth, and we've been strategic with our expansion. And this has helped minimize the loss, and we'll add that we've also been close to breaking even right throughout FY '20. Next slide, please.

Cash flow from operations, again, that has improved significantly with only a cash flow from operations of negative $427,000. So an improving trend. We ended year with $11.6 million cash on hand, and that's partly due to drawing down $7.3 million of the NAB facility prior to the end of the financial year. We start the new year, often in a good position in cash. We've had, obviously, an increased spend in CapEx as we're finishing off the Hernia production facility. We have new equipment recently arriving. But CapEx will reduce next year, and we're expecting to spend around $2.3 million in CapEx to be funded mostly from the net -- remaining net facility, of which we have $2 million remaining, and the the sales with even cash flowing.

So starting the year off in a good position there. Next slide, please. P&L. So as we mentioned, product sales up 104%. Revenue -- total revenue, including BARDA 54%. We've also had an improvement in our gross margin. That's been assisted through the increased sales and increased production output, but also efficiency gains in how we run our operation. Employee-related expenses are 76%, but as expected, and it's working because it's driving sales.

Our R&D spend is down, but that's just due to Hernia progressing through the development phase. The spend in R&D will increase next year as we are expanding the R&D team, and we're also looking at developing new products. So the net effect of all that. Net loss after tax of $4.19 million. But do note that this includes $2.06 million share-based payments, which are basically expensing the share options, the noncash and nonoperational expense. So to keep that in mind.

Next page, please. So just summing up the FY '20 financial results. We've more than doubled product sales of 104%, we've entered new markets successfully at lower [rate]. Improved our gross margin on product sales by 7.6%. General cash burn, a great result. Secured our funding with BARDA at USD 15 million for the program to run through August 2025. Healthy cash on hand, 11.6, and we've got in that facility of $9.3 million.

Just some observations from FY '21, as we look ahead. So based on Q4, we had product sales of $5.99 million. So that equates to a run rate of $24 million as we start the new financial year. Employee expenditure based on Q4 headcount, the run rate there is $12.1 million.

As mentioned earlier, next year is a CapEx-light year. We don't spend any revenue as much as the current year. So we forecasted to spend $2.3 million that will be funded from operating cash, but mainly from the remaining debt facility. And as we move forward, we're going to continue to reinvest our cash flows to enter new markets, expand market share and develop new products. Thanks, Paul.


Paul Brennan, PolyNovo Limited - CEO, MD & Director [3]


Next slide, please. And next slide again. So in the new products, you've got 3 products on the screen there. One is the NovoSorb BTM, where we'll be releasing some additional smaller sizes and respond to customer demand and also for some markets, reimbursement such as Korea will require a 20 by 20 centimeter size. And so that will be rolled out into some markets.

To the right of that, you'll see NovoSorb

Syntrel, U.S. alternative care muni market. This essentially NovoSorb BTM in different shapes and sizes, specifically for the reimbursed chronic wound care market. We are starting now for recruitment into a diabetic foot ulcer and venous leg ulcer health economic study. I want to emphasize it is not a regulatory requirement study. It is purely a reimbursement study to achieve unique reimbursement price from U.S. insurers to cover outpatient and alternative care use of BTM in chronic wounds. That's a $400 million market opportunity for us. And that program will run over 2 years.

So in 2 years' time, we anticipate having an additional salesforce focused on that market segment. To the right of that, you'll see NovoSorb Syntrel and that is the brand name of our Hernia products, and there'll be 2 products within that portfolio, one for the intraperitoneal placement, one for the retroperitoneal, muscle layer placement. And we'll enter the U.S. market in FY '22. Factory that we now have stage 1, that is going through its process validations, and that will enable us to make commercial-grade product rather than lab design prototypes. They can be used all of the certification work to enable the U.S. 510(k) approval.

So we'll be filing our U.S. 510(k). At this stage, we anticipate June, July, and that is a little bit later than we had originally planned, and that was effectively from the COVID commissioning delays and build delays of the factory in the last few months, but we're on top of those. And we're all steam ahead. Next slide, please.

So the near-term products are our breast products. And this Hernia factory is enabling us to then make the breast products in a commercial level. So we'll be developing those further in parallel with Hernia devices. We've done some early work on sports medicine products, and there have been some animal tests done on tendon and meniscus repairs with various parties around the world, and they are looking promising. So we've still got significant work to still do on those, but they've now entered our new product pipeline.

The beta cell diabetes treatment has progressed quite well. They've done better animal studies testing pilot cells derived from stem cells, and that has shown that in the diabetic pigs that those islet cells are successfully excluding insulin and diabetes of those animals has been well controlled. Doing some refinement on both sell implant technique and defining the final specification for the shape and the size, the NovoSorb BTM, they are required for that process. They're still telling us that they will enter human trials this calendar year, but that is dependent on beta cells program. We're not in control of that.

So the drug elution, you would have seen during the year, we had patents awarded for our NovoSorb polymer for the use in drug elution, and that's good. We've done initial promising work on that. And our goal there is to put more resources at their expanded R&D team onto the pharmacokinetics to develop good database of information there that would enable us to exploit license opportunities to pharmaceuticals. PolyNovo does not intend to become a pharmaceutical company. However, the polymer does afford us the opportunity to establish license agreements with pharmaceutical companies down the track on drug elution. Next slide, please.

For the business outlook in FY '21, we'll continue to drive our BTM growth strategy. We'll be opening new markets in Europe, and that'll be a mix of direct and with distributors. The key markets for us in Europe, France, Benelux, Scandinavia, Italy and Greece, and there will be some others that may make that list this year as well.

We anticipate being in Taiwan in H2. We're just awaiting our Taiwanese regulatory approval, which is due shortly. And for Korea, we anticipate entering that in H2 as well. The Korean FDA has been doing a virtual audit of our facility, and that's been new for them and new for us. So it has caused some delays in that process, but we're on track for H2 entry into Korea at this point. Next slide, please.

We'll continue to expand our R&D team, and we'll accelerate our product development pipeline with those increased resources. We'll commence recruitment of the pivotal trial with BARDA in this first half of the year, and we'll recruit patients into the U.S. chronic wound reinvestment study. The contracts signed with the CRM. The sites were all identified. The missions are all identified. So we expect this to start almost immediately. We'll complete the validation and testing of our central Hernia devices in early H2, and that will enable the filing of our 510(k) with the U.S. FDA in June, July. So I'll now hand back to all of you for questions. We do have some questions online. I'd encourage those who do want to ask questions to get busy on their to typewriters and type in, and we can answer those questions.

So I might start if Dennis, our controller, is there. Are we good to go over to Q&A. If you can all still hear me. Jan, can you hear me?


Jan-Marcel Gielen, PolyNovo Limited - CFO & Company Secretary [4]


Paul, carry on with the Q&A. I'll just go to the platform and the questions are there.


Questions and Answers


Paul Brennan, PolyNovo Limited - CEO, MD & Director [1]


Cool. Well, on the platform, one of the questions we're asked is to what extent is COVID-19 restrict access to doctors and hospitals, given the deterioration of situation in the United States, in particular?

The United States is effectively 50 different markets, and each one of those states run things differently. So the COVID response is unique to each state. So we have wild variability across the U.S. of access and minimal access. In the majority of states, we still have face-to-face access for surgeries going on in (inaudible). But -- or on doing a normal sales call, the majority of those now being done as digital FaceTime calls.

And then when the surgeons are doing surgery, they formally invite the salesperson into the operating room to assist them in the beta process of BTM application. So you can see from our sales and from June being a record month in the U.S., we're not overly encumbered by the COVID situation in the U.S. The U.K. is emerging from that COVID restriction and sales picking up quite nicely there.

Here in Australia, COVID isn't too much of a problem for anyone outside of Victoria. But our Victorian team, a lot of digital work going on with surgeons, but not a lot of in-theater time for our Victorian teams.

Next question was, does PolyNovo's 3D scaffold differ from midlines highly running matrix device?

Yes, it does. The important thing with this scaffold is to provide a tangible, ongoing structure for sales to migrate into over many weeks. This gives normalized sales structure and regeneration of that dermal layer.

Highly requested is inherently not a terribly stable product and dissolves quite quickly, and it is not used in large area wounds. It's only used in the majority of small chronic wounds. We'll be entering the chronic wound space as through that reimbursement study in 2 years' time, so it's of no consequence to us in our hospital environment.

Another question was whether we're doing anything with the NICE Group for approval in the U.K. And yes, we've really started dialogue with NICE, which is National Institute of Clinical Economics. And that's in progress, and we'll be working with them to establish economic verification of the benefits of BTM.

The critical point for us in the U.K. is to get our surgeon cohort engaged and onboard, and we're well advanced on that. So once we've got a significant number of those surgeons, they can generate a lot more of that information in the format required by NICE, and that would then give us a healthy economic recommendation in the U.K. market space.

Robert has asked about drug elution devices. And would they be solid or burn, it's a solid pallet in effect that would be dry injected under the skin through a hollow bore needle. There are several drug depots currently used on the market, particularly in oncology. And they're all wax and oil-based pellets, and they have some of their own unique challenges, which limits built of use.

NovoSorb, in our opinion, from the early work we've done with drugs such as progesterone, paracetamol, steroids and other drugs, shows a very consistent drug elution profile, which has some advantages over current incumbents on the market. So we see that as something with a large potential, and we'll be doing further work on that.

Next, loving the music. Thank you very much. COVID-affected sales. Should I buy stock? I'll leave that to you to determine your own financial position.

Also we got here, pardon me while I just scroll through. When will the Hernia product be commercially available for sale? In FY '22.

Another question here is how we've begun marketing in India and China.

As previously announced, yes, we have a distributor in India called [My Overtech]. We have good surgeries, we have good sales in India. The Indian market has been slow, but we do have a foothold in India.

In China, we haven't begun work there other than the legal work related to our patent filings for the IP protection that will be some way down the track. until all the legal position is finalized. And that, I think, covers the questions that I have. And I'm loading more questions.

Lots of comments on the synchronizing of slides. So I apologize for that. It's up to the event. Can I provide sales growth in July, August, with particular focus on Europe?

I don't want to get into monthly sales. Suffice it to say, things are on track for us in July, August, very pleasing to see that we've got sales into 5 NHS' in the U.K., and that number is growing. So we're in a good, solid position there.

Another question. No, actually, it's a complement. So thank you very much to Christian of Capital Markets. Appreciate your support.

What is the design of the health economic study [BOU]? We're not publishing our design of the study publicly. That's with us and (inaudible) is working through that, but it's provided into stages where we can review the data in milestone periods and review the effectiveness of how that data is generating. But effectively, we're looking at single application of BTM in the treatment of diabetic foot ulcers and venous leg ulcers compared to recurrent treatments that are currently used on the market so that the insurers will get a much more effective bang for the buck with our product.

Demand for production. Those -- sorry, just reading the questions as I go here. Our demand reduction as COVID had on sales. I think I've covered that saying that COVID hasn't particularly impacted our sales.

Can we give an overview of investor position short to medium term? I'm not quite sure what you're asking there, Bradley. Shares are traded on the stock market daily, and the shares position has been high in PolyNovo for a while, thanks to one well-publicized fund out there. But our business is to focus on running our businesses as we can commercially.

The share price will take care of itself. We've got adequate cash in the bank. So we're in a good, solid position. And the fundamentals of the business of commercial sales growth, R&D pipeline growth and all of those aspects are well under control and in a good position. So we'll leave it to the spot markets M&A acquisitions. But the business itself, which is our focus, is in very solid vision.

Another question, can I get into FY '21? I think that is about FY '20. I think you'll see that our performance in FY '20 has been outstanding. And I'm very confident with how we finished the year and what the year ahead looks like. And as we go through this uncertain time of COVID, we'll make further announcements in due course, whether they're quarterly, half, yearly results. But we're in a solid position. With BTM sales under $20 million, we will be eligible for the R&D government rebate. And at this stage, looks like we will not be eligible for R&D rebate because total revenues, the PolyNovo exceed $20 million. That's actually a highly positive statement, which I'd see is a endorsement of PolyNovo rather than being dependent on government grants or tax refunds.

We do have significant tax credits and benefits to carry forward for the business in years ahead. So we're in a very strong position, but Jan, if you'd like to comment on that, feel free. Can't hear you, Jan.


Jan-Marcel Gielen, PolyNovo Limited - CFO & Company Secretary [2]


Apologies, Paul. What question was that you're referring to, sorry?


Paul Brennan, PolyNovo Limited - CEO, MD & Director [3]


About the R&D tax incentive.


Jan-Marcel Gielen, PolyNovo Limited - CFO & Company Secretary [4]


Sorry, sorry. Sorry, with that, it's not just based on BTM sales. It's total revenue for the group. So we had BARDA revenue as well, which tipped us over the $20 million mark.

But you must remember as well, we still get the benefit of the tax offset, which gets added to our tax losses. So all is not lost. We just don't get the cash back in that form. So that's the explanation. Thank you.


Paul Brennan, PolyNovo Limited - CEO, MD & Director [5]


Thanks. One question here, has PolyNovo poised to complete with a [ROA] surgery. I'm not worried about a ROA in any form. Their product is (inaudible). And is effectively just another biologic. They're not in our current market segments. We will compete with them in chronic wounds, and we will compete with them in the Hernia segment, where they sell through another company called TELA Bio. But I think we've got a resoundingly unique polymer and a very strong offering, and I'm not perturbed by a router at all, there's probably 30 biologics on the market. To me, they're just another, doesn't distract us from what we're doing.

What is the general sentiment of hospitals and doctors regarding NovoSorb? Outstanding, particularly in the DACH regions, Germany, Austria, Switzerland. We're getting very exciting surgeon groups. And they're now running their own peer-to-peer webinars with each other, talking about NovoSorb BTM. We're not party to those webinars. Because they're private surgeon groups, but what they then feed back to us is the [palpable] excitement of what they're seeing in their patients and improved clinical outcomes. So that's all good.

What progress can be made on the composite skin Greenwoods'? That project is with Professor Greenwood and his group called et al treating in Adelaide. They have had success with one patient who is 95% burned and treated with composite skin grown in NovoSorb substrate, and that's extremely exciting for the patient also, for all of us. John has done outstanding work.

But where that goes commercially, there's a long way to go before that will be proved on a business case to have commercial success.

What's our time limit, Jan?


Jan-Marcel Gielen, PolyNovo Limited - CFO & Company Secretary [6]


It is 9:20. You can do a few more questions. That's fine, 10 minutes.


Paul Brennan, PolyNovo Limited - CEO, MD & Director [7]


Just a couple more questions and then we'll close. Discussion about continues to be discrepancy between our market capitalization and our turnover. I'll leave that to the share market to determine share value.

Personally, I think PolyNovo is a very strong stock. In the last 5 years, we have delivered each year what we've promised to deliver. We being consistent. And whatever we said we will deliver. We have delivered. So I think our performance has been solid, and we remain committed to that.

I'll leave the beta cell questions because I don't work for beta cell. We have covered that in the annual report.

Ireland compared to England and Scotland as a market. It's not a large market, but it is an adjacent market. It's very easy for us to service. So we don't really want to leave money on the table when the market can be serviced cheaply. So putting a salesperson on in Ireland and looking after those Irish patients, who would desperately love to have our product is really a no-brainer. So it will add to the U.K. island sales and be a meaningful contribution to that market.

A question about continued expansion of the U.S. sales team. Yes, the U.S. sales team will continue to expand over the next few years. There's still a lot of market penetration ahead of us. We've had very good success. But realistically, we need to keep pushing harder to drive into plastics, reconstructive and general surgery. We're well down that track, but we'll still be adding new sales people to the business, as we move forward, service customer inbound demand as well as that we generate ourselves when we see opportunity.

The take-up in U.S. hospitals, a question on that. The U.S. hospital we're still acquiring new accounts every month. That is not stopped during COVID. We still acquire new accounts and we're still growing in the existing accounts that we've got. We're not penetrated that market a significant extensive, I think there's $1 billion on the table then and do the math and you can see we've got a lot of blue sky ahead of us and further penetration to make. So we'll continue down that path.

More questions about FY '21. I'll stick to FY '20. Can I talk about why we used direct salesforce in the U.S. rather than distributors in other markets. The U.S. market is the high reimbursement price. The U.S. market is also a very specialized market in the call points and surgeons that you're going to call on a very discrete and easily identifiable. So salespeople are not expensive in the scheme of things, and the margins are significant. So if we're going through a distributor, that would be just another product in their bag, maybe not good as much airtime, certainly not good as targeted and in control of the message that we want to give about NovoSorb BTM. And going direct in the U.S. enables us to make very good margins that we can then reinvest back into the company.

So I think that's been a very wise choice to go direct. Scanning through many of the questions are very similar to previous questions that we've had. There have been repeat hospitals sales, yes, of course. I think that might conclude today.

There's another nearly a week of virtual presentations with institutional funds in the week ahead with Jan and I. And I think this has been a very positive year for us and the year just closed, and FY '21 is positioned to be another strong year for PolyNovo. And on a personal level, I'd like to thank all of our staff who work incredibly hard to make all of this happen, particularly Jan and his team for pulling together the financial results at the end of the year. There's a lot of work goes into the annual report. I'd encourage you to actually read the report. It's got a wealth of information in it, including a new product pipeline and strategies and regional activities.

And lastly, also, our Board we've had new Board members join our Board this year, which has been fantastic for us. It's for a whole new level of inquiry and also skills we can tap into. And David and the Board have been extremely supportive of the business, and we couldn't do what we do with that being constantly challenged by our Board, but also supported in equal measure.

So as investors, I think, you should be aware that we have a very good and supportive Board, but we don't have a Board who is lacking in challenge, and that should give you comfort that us the management team do have to deliver for our Board and our shareholders, and we have you as well as our patients, family and our focus. David, would you like to make any closing comments?


David Williams, [8]


Thank you, Paul. I think you've covered everything, and Jan has covered everything. Well, as I've been sitting here, I've had a number of SMS' from people talking as you've had questions about '21.

Just to be clear, we're not going to give any guidance at the moment that if you're reflecting on '21, think about the comments that Jan made about half-on-half growth, very significant. Quarter-on-quarter growth to the end of June, very significant uplift. And we ended the year on a run rate of 24-point something million compared with '19 full-year sales. So already significantly up.

And on top of that, the new NHS traction we're getting out of the U.K. in particular. Numbers of hospitals ordering and the number of hospitals using, very significant growth in Germany and the DACH countries like Switzerland, Belgium, Germany and so forth, plus a number -- quite a number of new salesmen into the U.S. in the next few months.

So I think it's -- have a look at that and also have a look at the runoff in the losses that we've been making. It's a very small number now. So we're going to go to profits pretty quickly and on a very high-margin product. I think put all those things together and make your own judgment, but there's obviously some significant upside in all of these markets for us, and we're trying to do to get that growth in a considered and responsible way, but to still keep quite a bit of traction up. So that's all I got to say, Paul.


Paul Brennan, PolyNovo Limited - CEO, MD & Director [9]


Okay. I'll bring it to a close. But I would like to inform you all that this webcast is being recorded and will be available for you for use later on. Links to that will be placed on our website under the Investor tab. And thank you very much for your participation.