Tristel (LSE:TSTL) — Investor Presentation

0:02 Good afternoon, ladies and gentlemen, welcome to the TRISTEL investor presentation. The The company may not be in a position to answer every question it receives during today's meeting. However, the company can review your questions, and we'll publish those responses where it's appropriate to do so on the Investor Meet company platform. Before we begin, we'd like to submit the following poll. And as usual, I'm sure the company will be most grateful for your participation.

0:32 I'd now like to hand over to Paul Swinney, CEO. Good afternoon. Good afternoon to you all, and a very, very warm welcome. From our side, we've myself, Liz, Julia, and Heidi. I think you know all of us, probably Liz and I more so than than Heidi and Julia, but these are colleagues who have been driving forward the North American project. And if we could just change the slide, this is it. It's a momentous moment. It's a momentous day for your company. We, over the weekend, received, a notification from the Food and Drug Administration in the in The United States that they have approved us for sale in that country.

1:21 The FDA is the best known, and I would go so far as to say, perhaps, and kindly, the most notorious, the most demanding regulatory body in the world. And we have met all of the challenges that they set us and have, received their approval of our de novo application for our high level disinfectant product, Duo. We've renamed it Alt for the disinfection of ultrasound probes, and it's a remarkable achievement. To put it in context, we've been looking at some of the chat, comments this morning. A number of people have said it's taken a long time. Well, the FDA has not approved a high level disinfectant for a new high level disinfectant for over thirteen or fourteen years, and we're the first British company to have achieved this, since a company that disappeared from from the site back in two thousand and six or seven, I believe. So I think it's a remarkable achievement and position us positions us well to build upon the global presence that we have created, of course, outside of The United States, and now embrace North America, The United States, and continue our journey in building a very significant business worldwide. So thank you for staying with us. It's taken a lot of patience and perseverance. Thank you to the team, but it really is a phenomenal achievement.

2:50 So let's go to the next slide, if we may. We've not only been focusing upon the the regulatory, challenge of the FDA, but we've, at the same time, been building, laying down the foundation stones of the business that we are going to create in North America. You will those of us those of you that have been shareholders and had our presentations over the course of the last several years will know that we have a business partner in The States, actually, in North America and South America, Parker Laboratories based in New Jersey. We have a distributor for another one of our approvals, which is for ophthalmic devices. It's a high level disinfectant, a product called Duo two for ophthalmic devices based in Toronto, medical ophthalmics, and they are very active right now in opening up the Canadian market for the high level disinfection of such devices.

3:49 And we've established our subsidiary in Massachusetts where we will be building our operation. So it's now about execution. I know that. And we are not, we've not been idle waiting for regulatory approval. We've been laying the foundation stones to build out the business. So the next slide would tell us something more about ultrasound, which is the focus of the first approval.

4:17 The picture is in the center is of a traditional ultrasound console. It is at this console that the sonographer sits, looks at the screen, and is either using a skin surface transducer, as shown on the left hand slide, or an endocavity probe on the right hand side, maneuvering it in and around the body to capture an ultrasound image and interpret it. It's a complex piece of kit. It's manufactured and sold by a whole host of different companies including GE, Philips, Toshiba, Siemens, all the great multinational medical device manufacturers. An ultrasound is a really important technology within the hospital.

5:04 Increasingly, it's used for a plethora of diagnostic purposes. It's even used in the emergency department to triage patients that have been in road accidents or other types of of experience other types of calamity, and and they're using ultrasound to see whether there's an inter internal bleeding. I've heard it described as today's equivalent of the stethoscope. The skin surface transducer comes in contact with the skin. The endocavity probe, which you can see on the right hand side, as its shape and dimension suggests, goes into one of the orifices of the body. And those two orifices of the vagina and the rectum for internal examinations. On the right hand side is how technology in the ultrasound space is developing. It's going mobile.

5:55 Wi Fi enabled smart device, a a a link to a a skin surface probe or an intracavity probe, and it becomes increasingly mobile. As you can see, the console has wheels, but to wheel it around a hospital with the electricity supply and all the rest of that goes with it is rather cumbersome. Mobile ultrasound is the way of the future. We happen to be a mobile high level disinfectant product. Let's look at the next slide. This is the Spaulding classification. It was developed by an individual called Spaulding in the fifties, and it really defines how we segment the market, how regulators segment disinfection.

6:42 It drives our branding and our marketing strategy and our regulatory approach. Skin surface ultrasound transducers come in contact normally with intact, healthy skin. And so the disinfection requirement for such devices is very low. They only require, according to the sporting classification, low low level disinfection. And in some instances, it's better to be basic, intermediate, which is a slightly higher grade of disinfection. The product that we have approved in The United States with another agency, the EPA, is classed as an intermediate level disinfectant. But those instruments that come into contact with the mucosa, the sort of semi permeable and moist membranes of the body including the vaginal wall lining or the rectal wall lining, they pose a higher risk and require they're defined as semi critical medical devices and require high level disinfection. It's a higher grade of disinfection, and the microbiologists have their terminology universally understood as to what the differences are between HLD and ILD or LLD.

8:00 And the approval that we have received over the weekend is for TRISTEL PLC as a high level disinfectant for ultrasound probes that are invasive classified for the use on for use on semi critical medical devices. This is very relevant to the way that we build the business out and our regulatory strategy that we've pursued. So So moving to the next slide. You can see how the two regulatory bodies in The United States have shaped our approach to the marketplace. The FDA has jurisdiction over high level disinfectants. The EPA, the Environmental Protection Agency, has jurisdiction over intermediate and low level disinfection.

8:51 And so we've had to create for The United States market two products. We are in the unbelievably strong position competitively to be able to present to the market both both in an HLD and an ILD, thereby presenting a solution for every one of the ultrasound probes and transducers that are used throughout the country. On the left hand side, you can see that the probe, the part of the probe that goes inside the body, that's the part that requires high level disinfection and is colored in pink. The rest of the and on the right hand side, that's a skin surface transducer that is attached to the console by a cord.

9:37 Well, all the skin surface transducer because of its spooling classification and all of the rest of the console and the clock cord require intermediate intermediate or low level disinfection. We've colored them in blue to signify where our Duo product is to be used. And if you piece the two pictures together, you can see that our two products can do every part of an ultrasound system for whatever use that we put to in The United States with appropriate regulatory authorization. And on the next slide, we can see how we have built or laid one of those key foundation stones, which is to have put in place already a manufacturing partner for The Americas, both north and south, and in the ultra cell marketplace, our distribution partner. And it's a company called Parker Laboratories.

10:35 They it's a family owned business. They were founded in the nineteen fifties. And what they make and what they sell are the old are the gels, they're called transmission gels, that are used in every single ultrasound scan. You put the gel onto the transducer, the membrane through which the image is transmitted, and it enhances the image. So it's universally, every single ultrasound scan involves the use of a of a a gel, an ultrasound transmission gel. And Parker is both in The United States and indeed, probably worldwide, a market leader in the manufacturing sale of these transmission gels. They, in fact, invented them back in the nineteen fifties.

11:28 Parker's manufacturing facility is approved by the FDA. It's regularly audited by the agency, and they have been appointed by us some years ago, in actual fact, to be our manufacturing partner. But they're also our distribution partner. They have a national network of some some 300 distributors, cover the whole country. They are large and small. They include all of the largest, best known GPOs and and and distributors in the country, the likes of Henry Schein, Verizon, and all of the big names. And it's a sizable company albeit privately owned and has revenues of about $60,000,000.

12:18 They are our partner for both manufacture and distribution into the ultrasound marketplace. So it's in place. It's contractually signed, sealed, and delivered. We've had a renegotiation which we're gonna speak to in a short while about the commercial and financial division of spoils. But it's a very sound relationship which is all set and ready to go. So moving to the next slide, if we may. Yes. It is a strong partnership. And it's strong fundamentally because for every ultrasound scan, there are two products that need to be deployed. A gel and a disinfectant. And in combining our low level or sorry. Intermediate level and high level disinfectant products with Parker's gels and sheaths, we can be used in every single ultrasound scan in the country.

13:15 Now by our estimate, there are some 215,000,000 ultrasound scans carried out in The United States annually, and it's a growing number because ultrasound use is is increasing as I as I mentioned earlier. Of those consoles, the traditional consoles, the by a come key competitor's estimate is their data. There are 271,000 traditional ultrasound con consoles throughout The United States health care system. Many will be in hospitals. Some will be in ambulatory care, centers. Some will be in IVF clinics, obstetrics and gyne office suites in in in towns all over the country.

14:01 And on the right hand side, the picture is repeated of the growing

14:08 aspects of the technology, which is mobile ultrasound, and it will proliferate. It will become a more and more widely used mobile ultrasound as we look into the future. Moving to the next slide, if we may. So let's look at our business model. We have at least three indications that we use or that we have regulated and approved by regulators around the world for our basic duo chemistry and pack. We have an indication for ultrasound probes and transducers. We have an indication for ophthalmic devices, and we have an indication for nasal endoscopes. These are small endoscopes that are used in nasal investigations including the vocal cords. They go down the instrument goes down to the vocal cords.

15:03 We will, in time, seek further approvals from the FDA the two indications of OPH and ORL. The business model with Parker is that they will be our manufacturer for each of the indications starting with ULT for The Americas, and they will will be be our our distributor for ULT in The Americas. And for OPH and ORL, we will be free to select any distribution channel that we want to. We are not tied to Parker for for those two use patterns for our duo product. Going to the next slide. And and these these are the the commercial and financial arrangements.

15:49 Parker will manufacture ULT and for the ultrasound market space at cost. And for the other clinical areas, the non Parker sales channels, OPH and ORL, they will charge us a standard contract manufacturer's margin, which is typically 35%. Within the ultrasound marketplace, Parker will be paying us a royalty on their net sales of TRISTEL PLC, which is the high level disinfectant approved by the FDA. The percentage is 24%. Then the TRISTEL DUO, which is our intermediate level disinfectant approved by the EPA, the royalty is 20%.

16:36 The royalty will show in our financial statements as revenue subject to the auditors our auditors, Grant Thornton, agreeing with our treatment, we will show it as a line a separate line within revenue, but it will be included in revenue. And that's how the financial contribution will flow through our accounts from this arrangement with Parker. To the next slide. This is the competitive landscape in The United States. For endocavity ultrasound pros requiring high level disinfection. It's illustrative. We can't be precise about percentages and numbers, but we're pretty confident that this reflects the lie of the land.

17:26 There is an Australian product manufactured product called Trophon. It's made by a company called NanoSonics, which you would have heard be mentioned many times in the past. And they and we have no reason to dispute the the the their data, believe they account for about 50% of the ultrasound market in The United States. The other two methods, and and let me describe it, is the picture is on the left hand side. It's a box. It's a machine controlled by a microprocessor powered by electricity. The disinfectant chemistry that's used inside the box is hydrogen peroxide, which they make into a a vapor which surrounds the ultrasound probe.

18:13 It has a contact time of seven minutes. The chemistry has to be used, I think it's 50 degrees, so the machine has to warm the chemistry up or has to warm

18:22 up before the chemistry can be used and has to warm down before the nurse can take the instrument out because it's rather hot. So the whole cycle time is is certainly ten minutes plus. It's a machine. You open the you open the door, you put your probe in, you push a button, the hydrogen peroxide is nebulized, you wait, you open the door, and you take out the instrument and it's just high level disinfected. The other two methodologies that are commonplace in The United States and we believe they account for pretty much fifty fifty of the remaining scans that are not undertaken in TROPHON are either achieved by soaking the probe or transducer in a liquid chemical. There's a picture on the right hand side of a product called Astra that is manufactured by a company called Civco.

19:16 And you can see the healthcare worker is drop is is loading the probe into a chamber inside that, that box, and inside there is a liquid. It probably will be pericytic acid, and the instrument will soak in there for a period of time. It can be as long as ten minutes or more before the probe is taken out and then has to be rinsed before it comes into contact with the next patient. And then there's a third category of scans and the method by which they're disinfected or not disinfected, which is kind of

19:55 it's the unauthorized noncompliant practice that exists in The United States as it does in all other countries. There will be wipes that are used that are not an appropriate classification. In other words, they're not high level disinfectants. And in quite a number of instances, the sonographer or the health care establishment will be relying upon a sheath or a condom to cover the probe as it goes into the patient and presume that it acts as a barrier to to stop the transmission of pathogens from one patient to another. It's not an appropriate methodology. It's not acceptable to the regulators, but in some instances, it's just dumb.

20:43 So there are various chemistries that have been approved by the FDA as high level disinfectants, parasitic acids, and aldehydes, and there are inappropriate methodologies and products that are used. Each and every one of those segments is a target for us as we establish our market share in The United States. So moving to the next paragraph. This is a a rogue's gallery of the low level disinfectants that are widely used. For examples, they probably are the market leaders. They're all tubs of pre wetted, presaturated wipes. I think without exception, they're all quaternion ammonium compounds. It's the same kind of chemistry that we would use in the home as in a bottle or a trigger spray or a wipe like tetto tetto wipes.

21:32 And some of the products contain bleach and hydrogen peroxide. Now it's interesting to note that of those 215,000,000 scans that take place by our estimation in The United States, We estimate and it's a sort of rule of thumb that we believe holds true across the world. 20% of them are for endocavity probes. The probes going into the body require high level disinfection, 80% are skin surface probes, and they only require intermediate or low level disinfection. So the split is 80% low level disinfection or intermediate and 20% high level. And that defines the market opportunities and the total addressable market for our two approved products in The States.

22:22 On to the next. This is important to us. Mobile ultrasound, as illustrated in the couple of the previous slides, is growing far more fast at a far higher rate than the growth of traditional ultrasound as as embodied by the traditional on wheels console. And I think it's not difficult to understand why that would be. A mobile ultrasound requires mobile eye level disinfection. You're familiar with our products. We've had pack shots in the presentation. They're handheld. The foam is applied by hand. You can put the pack in your pocket, your white coat. You can walk around the hospital with it.

23:12 Mobile ultrasound has a similar characteristic. It is put into the pocket, and it's carried to the point in time and and used where it's needed. For that, you need a high level disinfection that can travel with it. You cannot wield at ease a traditional ultrasound console around a hospital to marry up with the use of mobile ultrasound. It just logistically can't happen. So we can see that the number of ultrasound scans that we're relevant to will be growing across The United States as a direct consequence of our products being available to hospitals. And there's another driver of growth of of high level disinfection scan of procedures and scans that require high level disinfection.

24:00 And that is because ultrasound is increasingly being used to help the catheterization of patients. In aged patients where it's difficult to find a vein, it is growing obesity, we all recognize it as a huge problem. It's very difficult to find a vein. It's very difficult to catheterize. And rather than stick a patient multiple times trying to find that vein, if you've got an old skin surface ultrasound transducer, you can find it at ease, it's safer, and it's certainly a lot less painful for the patient. But when that skin surface ultrasound transducer, which classically has been considered to be low risk, is in the proximity of a skin puncture site, all of a sudden that procedure becomes high risk. And if it was affordable and if it was available, I think most sonographers in The United States, as evidenced by lobbying that is that is very prominent and and current at the moment, they would prefer to use high level disinfection if it was available to them. And one of the key characteristics of our, alt alt product is, as I've said, I repeat again, it's mobile. It's easily deployable. It never breaks down, and it doesn't require capital investment.

25:17 So we do believe that the number of ultrasound procedures that require high level disinfection in The United States over the course of the next decade will in fact increase as a as a direct result availability of our technology to the market. So to the next slide, please. We're not we may be a new entrant to The United States. This is virgin territory for us. But we compete with Trophon, and we compete with the low level disinfectants that have been shown in the earlier slide all around the world. Benchmarking ourselves against Trophon, which is our key competitor, We were both companies would recognize that. In markets outside of The United States, including Australia, which is their own home market and throughout Europe and The Middle East and a number of countries in Southeast Asia, we disinfect more ultrasound scans than they disinfect.

26:17 Their business is very US centric because they have FDA approval. I would say that over time, we our business is unquestionably going to become, I don't think, US centric because I think we've maintained an equilibrium between our business outside of The United States and that within North America. But we we do more business in the ultrasound space than Trophon does, and we're about to enter the marketplace that they dominate. And the advantages that our product has, once again, we're mobile. We can take high level disinfection to where ultrasound is needed. But another great advantage is in the efficacy of our our chemistry.

27:06 Our contact time, as is being approved by the FDA, is two minutes. And in the Trophon machine, it requires seven minutes of uninterrupted contact between the hydrogen peroxide and the probe before the probe can be taken out of the machine. Other disinfectants, the liquid soaks, they can take as long as twenty minutes. And disinfection is a rate limiting step for the number of patients that can be seen by an ultrasound probe or an endoscope. The quicker that you can disinfect it and make it available safe and available for use on the next patient, the more patients you can see in a in a in a clinic. So it is a very contact time for us is holy grail. One of the great benefits of trisel chloride duct site chemistry is the speed with which it can kill all organisms and the contact time then that is permitted by regulators. And at two minutes, we are the fastest, shortest fastest disinfectant and shortest contact time that has been approved by the FDA in The United States in time immemorial.

28:10 And just to just to say again, there's no capital cost. The disinfectant is applied by the hands, by a skilled health care worker with natural fat minimal training. The The hands don't break down. So if we move on to how the business builds out over the course of the next decade, We start with ultrasound. We immediately move on to seeking regulatory approval for the other two indications, OPH and ORL. We will start with OPH where we have got approval from Canada Health. I think I mentioned earlier that it's being very actively rolled out across Canada by our partner.

28:57 And one very salient point to make about the significance of this FDA approval of our de novo. It was the de novo because they advised us that we couldn't follow the more conventional route of five ten k because there were no predicates. By as a consequence of the FDA approving the de novo, they now have created a new classification of high level disinfectant. And it said high level disinfectant that is in the form of a gel or a foam. And so we actually have created a new class of high level disinfectant in the country, which can serve as a predicate for other companies' products in the future.

29:48 But what it means for us is that we can use our TRISTEL Alt approval as the predicate for TRISTEL OPH and TRISTEL OARL and move speedily on with seeking or putting together the dataset so that we can get approval for these two two other indications. It's gonna take time. Everything does in The United States, but it is within our gift to have it to to to to perform or or to work toward work within this Gantt chart that sets out a a product development and regulatory approvals timeline through the next five years.

30:33 And finally, I think we'll talk a little bit about ophthalmology. The instruments that are depicted in the in the slide on the left hand side is the tonometer. It's used in a for glaucoma assessments. It comes into contact with the cornea and it help well, it enables an intraocular pressure to be taken. There are millions of such tonometer uses globally because of the prevalence of glaucoma. The middle instrument is a pequemeter and the lens on the right hand side. Each one of these instruments comes into contact with the cornea, which is a mucosa. And if we go back to that sport sporting classification, they're semi critical devices, and they require high level disinfection.

31:21 Around the world, there are no high level disinfectants apart from Duo where it's been registered and is widespread use available for ophthalmic devices. Canada Health was approached maybe two, two and a half years ago. We sought approval from them as a high level disinfectant, and it was granted. And we have now launched the product in conjunction with our partner, and it is receiving a very, very, very strong reaction from the infection prevention and optometrist and ophthalmologist community in the country. Worldwide, opiate cells, are in The United Kingdom, in in Germany principally, in Australia, and in New Zealand, They've reached 1,000,000 pounds.

32:19 We are involved in one and a half million procedures worldwide, disinfection procedures. We know that from the sales of our products. And we are informed by our partner in Canada that the number of tonometer uses requiring high level disinfection in The United States is 16,000,000. So another very significant market for us to address when we get regulatory approval from the FDA for TRISTEL OPH. And on the next slide so we haven't been sitting idle waiting for an FDA decision. I think most of you know that we got approval from the EPA a year or so ago. We now have all of the states registered for for TRISTEL which is the EPA product.

33:08 We have a board. We conduct our business in The United States via this board, you know, with the same disciplines that we use as PLC level for TRISTEL. We have the three of us, Julia, who's on the call and has led the charge in The United States, and Liz. And we have an independent and nonexecutive director, Mika Nishimura, who has a deep, deep, deep experience in building companies in The USA. She's Japanese. Thank you. And she's also an NED at Hoya, which is a Tokyo Stock Exchange company and actually owns Pentax and various has an interest in infection prevention. So we're putting together the team.

33:57 And on the final slide, we'll skip that. We'll be operating from Massachusetts, but Paul, if we could go to the final slide. This is the operational model. We describe it as infrastructure light. It's purposeful. This is the reason why we've appointed Parker as our exclusive manufacturer and our distribution partner. So we have two master distributors, Parker and Innova. Our role will be liaison with them, education and training of them, their people, and their distributors, strategic marcoms. They've got both companies have got very good marketing teams. It's tactical marketing. It's conferencing. It's collateral production. Social media, all all that stuff is their responsibility.

34:44 But at the strategic level, leading to key opinion leader development, we will help them with our vast, deep experience of infection prevention in the ultrasound space and in the ophthalmic arena to develop their knowledge and their know how and make the right contacts and nurture them. And, of course, we will be at conferences together, joint conferencing. They have sub distributors. We will play our part in helping educate and train them and provide key account support. And all of this is tied together by a platform that we've developed, which is a digital traceability probe a platform called which we call three t. And whether it's for high level disinfection or intermediate level disinfection, every aspect of the disinfection procedure can be monitored, recorded, validated, verified by three t. It's an app on a handheld tablet or mobile phone.

35:44 It's easily deployable. It's very affordable, and it is what you need for a mobile disinfection product. You need mobile traceability. In terms of resource, a lot of the TRISTEL business development, product development, marketing, and science teams have been involved in the FDA project. We will continue to transfer people in and out of of North America. That doesn't necessarily mean relocating them, but they're they are in and out of each and every one of the tasks and specific projects and workflows that need to be done. And we are going to take two or three, quite quite probably three of our very senior people out of our operational headcount and transfer them to North America from group overhead.

36:42 We will recruit. We have two recruits that are earmarked, a strategic marketeer and a regulatory expert that would be located in The United States. And so the OpEx budget number that we have there for f y twenty four, three hundred and fifty thousand pounds, what that represents is incremental spend that is directly, linked to having a presence in The United States and Canada market. But, of course, there is a lot a a very significant part of the corporate OpEx budget that is being devoted to this business plan. So on that note, I'll sign off. I'll hand back to Mark. That's great. Paul, thank you very much indeed, and Liz, for updating investors today I'd like like to remind you that the recording of this presentation along with the copy of the slides and the published q and a will be accessed via your investment company dashboard, and we'll notify you when they're ready for review.

37:53 Paul, as you can see, you've had a number of questions from investors this afternoon. So firstly, thank you to everybody for engagement. I wondered if I may just hand back to you guys. If I could ask you to read out the questions and give a response where it's appropriate to do so, and then I'll pick up from you at the end. Okay. Absolutely. Thank you, Mark. Okay. So our first question says congratulations. Having done all the hard work in getting FDA approval, how will you prevent a predator taking the spoils? I'm reading that as a potential for takeover. And I think the the reality of that is that it would be unlikely, we feel, at this stage, having having just received approval for anyone to approach the company before the risk of building market share has been conquered as it were.

38:42 Of course, as a board, we're just custodians of value for the business. And and if any offers were to come forward that were worth considering, then it would be our shareholders who we would ask to establish whether that properly represents the value in the business. But as things stand at the moment, that isn't something that we are expecting. Moving on to our next question. FDA regulatory approval is one important step in making sales, but I assume the expert buyers need to both decide that ALT is better in terms of effectiveness and or better commercial value.

39:28 So what documentary material can you provide to the end customer that is convincing, improving that your product is better than your specific competitors in The US? Do you have a detailed case study of the considerations undertaken by a similar site that is convincing? Are your indirect agents capable of delivering this material, or do they have a path to call you to help close sales? Okay. So I'll address first part of that. The FDA has granted us market clearance, and it's gone granted those of our competitors that can claim high level disinfection market clearance.

40:15 So the FDA has leveled the playing ground. We are a high level disinfectant, and Tropon is a high level high level disaffectant. And that's unambiguous. It's actually one of the great benefits is this this The United States is the best market for us to do business in now that we have approval because it's unequivocal. We are a high level disinfectant. In Europe, you there are companies that claim to be high level disinfectants, and they produce all sorts of data, but there's no one unitary body that says you are approved or you're not approved. And they make stuff up, and they present all sorts of flimsy data. It's not the case in The States. So let's just compare ourselves with Tropon. It's it's the simplest way that I can answer this. Our contact time is two minutes.

41:05 Their contact time is seven minutes. They have a capital cost of, let's say, $10,000. We have no capital cost. We got the same efficacy because we both have been approved as an f as a by the FDA as a high level disinfectant. So we can kill bacterial spores, both of us. We can kill mycobacteria, both of us. We can kill organisms organisms of concern. Both of us can kill human papillomavirus. We kill in two minutes. They kill in seven minutes. I think for the skilled professional in infection prevention, that suggests that our chemistry is better than theirs, albeit that they have the same moniker as a high level disinfectant. So we have no capital I'll I'll I'll go back to those USPs of our product versus our competitors.

41:58 We don't require support services. We don't require power. We don't have to have a space built into a a a, you know, a tiny space in a a sonographer's consulting room where machines are it's difficult to find space for anything. We are a small, compact, handheld package that can sit on the console itself. To answer that question, the the in the sales situation, a pitch is very from our team, it's very straightforward, and the features and benefits are very easy to describe. And and the the level level playing field that the FDA grant gives us in The United States makes this, I believe, I really do think this, a lot an easier marketplace to penetrate than any other one that we have penetrated and succeeded in elsewhere in The United States.

42:56 So that that's the pitch, Us versus competitor. Case studies, lots of them around the world. And it's both case studies and published science. We have, with respect to the chemistry and its use of medical devices, way over 30 published peer reviewed publications, some of which actually do compare us with the alternatives ultrasound marketplace to to to the likes of Tropon and other companies. I'm gonna touch upon something that I think is really significant. If you it can think back to the console and the end and the endocavity probe. There was the pink bit that goes inside the body that requires high level disinfection.

43:45 But it's attached to the console by a cord, and the cord is attached to the console upon which there's a keyboard and there's a screen. It's well well documented that not only the bit that goes inside the body, but the cord that hangs around the sonographer's neck and the keyboard and you keep going there, Paul. There we go. One more. One more. One more. More. Next one. There There we go. On the right hand side, the cord, the console itself, there are probe holders on either side where you put the probe.

44:33 They they they are very highly contaminated. The keyboard is contaminated. The screen, which is often a touch screen on modern consoles, is contaminated. What we can deliver to the user is a compelling three sixty degree answer to the disinfection of all of those surface areas. The FDA has given us approval for the pink bit. The EPA has given us approval for the blue bits. The hospital, the clinic, the IVF clinic can buy one product. It's not one product. It's two products, but with great similarity with the same training package tied together by three t, and it can do everything that is in screen for us right now.

45:20 I think, and from my experience of selling to hospitals over many, many years, that is a very, very compelling proposition. Are our indirect agents, the the master the distributors and then the subdistributors capable of delivering this material? Well, I think the the Parker and Innova get it, and they're they're already pretty expert by dint of us being at conferences together. We are exhibiting at the end of June at the American Infection Prevention Society meeting. We were last week in in Vancouver at the Canadian Infection Prevention Society with Innova. They get it. It's a very good question.

46:07 Will the small distributor in, you know, a small county in Iowa get it? Well, that's we need to provide them with good materials, great collateral. A very important part of this is that we have extensive materials compatibility with every single ultrasound manufacturer in the world. The first question that gets by any prospective user is, is your product compatible with my Philips x y zed model? And for us to be able to say, well, go to our website, go to materials or instrument compatibility page, scroll down or sort by Philips, and find your model, and you will find that we've been approved by them. And if you want to double check that and counter reference it, go to Philips' website, and we give you a link, and that makes it easy for you.

47:03 All of those tools are available. They're available to our master distributors and to their sub distributors. And that's, you know, that's part of our our our asset base, really. It's that domain knowledge and expertise that's been built up over many, many years. Okay. Next question. The US market is no doubt highly competitive. And after so many years without a new product, will TRISTEL's pricing strategy reflect this? Will TRISTEL be able to maintain current margins on new sales? Okay. So the I would imagine that The United States market is looking for a new product. Our pricing strategy is to be competitive with TROPHON because they're our benchmark product for the high level disinfectant.

47:53 And for the other low level disinfectants, we'll be price competitive with them. And in terms of margins for for Parker, they will match ours, but we are actually not involved in margin in the margin consideration because we are being rewarded by a royalty from net sales. So I'm very comfortable that Parker will make very strong gross profit margins, but it is not actually our primary concern because the royalty is linked to their sales. Ourselves, of course, because it's a royalty, it's a 100% gross margin, so it won't dilute our corporate margins. Next question. You mentioned you expect to grow the number of all ultrasound procedures that elect high high level level disinfectant disinfecting rather. Just wondering, are we looking at a percent per year in favor of that mix, and where do you think it levels out?

48:49 How far can it go from the current 20%? Well, we've, in our modeling, assumed that that twenty eighty split shifts year in and year out over the course of the next I think our model goes out six or seven years by a percent a year. It's rather arbitrary. It's it it's our best guess. We are pretty confident that we will shift the user to elect high level disinfectant more often than they might have in they would have in the past because of the ease of use of our product and its affordability. Okay. Next Are you going to be working with Parker in The UK too, helping to increase their gel sales? The answer to that is most definitely not.

49:41 They've got global distribution. I don't think they need us, and it's not our core business. We're We're a fantastic adjunct to what they do in The United States, but it doesn't work outside of The United States. Next question. Many congratulations on the FDA approval. Has the FDA assured you that it will accept Duo Alt as a predicate such that you will not need to go the de novo route for Duo OPH and Duo HLD. I think that means o p Yeah. ENT. Will that necessarily translate into much reduced supporting evidence requirements? We have that assurance. It's it's within the legal framework. So, yes, we have a predicate for OPH and ORL.

50:31 Will it reduce the level of data that were required? Most definitely, it will. The composition is the same. The formulation is the same. The packaging is the same. We've established stability. You have to present to the agency real time stability. If you want a two year shelf life, you have to wait two years before you can go to market. All of those things are in our dataset that has already been accepted by the FDA. So I do believe it will accelerate the future approval of these two additional indications. And then just on that same point, why have you decided to stagger the OPH and ORL FDA applications submitting simultaneously? It's a question of resource.

51:18 OPH is well understood by us now having got approval from Canada, and it is a growing, you know, activity for us worldwide. The instruments are very simple. They're very small. Nasenoscopes are more complex, and so it's the easier door to push upon. And did I hear you correctly in that you believe Nanosonics has a 50% plus share of the market for ultrasound scan procedures in The US, I e, well over 100,000,000 procedures? That's an incredible share. That's a that's what the slide shows, and you're absolutely right. The number of consoles that they believe they can address in The United States, They they address a half or or their they have half of the number of potential installations that they believe is their TAM in The United States.

52:18 So they say that they have 50% market share. Do they do 50% of all the ultrasound scans in the country? I think of the high level disinfection ultrasound scan. So it's 20% of 215,000,000, not 50% of 250,000,000. So it's 50% of 20% of 215,000,000. Yes. I think they probably do do that number of procedures are involved in that number number of of disinfection procedures a year. It corroborates to the data that they provide through their investor relations messaging. But it's 50 it's 20% of it's fifth it's it 's it's Two. 20% of 215,000,000 times 50%.

53:06 Yep. Next question. You mentioned Parker's presence in Latin America. Would you have any estimates that you can share for the addressable market opportunity and procedure volume in any of the key LatAm geographies? And to what extent will the FDA approval help you access those markets? We've kind of got a rule of thumb. We're not very familiar with Latin America. We have a presence distributor that's doing reasonably well in Chile, but it's not a it's not a continent that we've yet invested time and resource in, principally because you need FDA approval. That's what they look to throughout the the continent. As a rule of thumb, I think it's 10 to 20% of The US.

53:51 It can be viewed as being it is a representative of South America. In the same way there's a rule of thumb, people talk about Canada being 10% of The United States. It's very vague, but I think it is a a decent rule of thumb. But with FDA approval, there's not a country in the in South or The Caribbean, Central, And South America that will not be be accessible to us in in in reasonably short order. With respect to Nanasonics, what are you anticipating their response to be to your approval, if at all? Is it, the case that you think there is enough to go for for the both of you? We coexist with them in Australia, which is their home market. We gained approval from the TGA, which is the regulatory body in in Australia in, I think, in 2011.

54:44 You know, we've we've shared the spoils in that country. There are lots of hospitals that have got a a TROFUN machine and use a TRISTEL high level disinfectant at the same time. Because we're quicker, we may be used through the day, And then to sort of appease the requirements of of some individuals within the hospital, they might put the probes to a a machine at the end of the day because it's kind of a belt and braces makes everybody feel more comfortable if it's something's happened by machine. I think there's more than enough space in The United States market for us both to prosper continue to prosper. And just on that, we're being asked here, would you expect Trophon to engage in a price war? I'm not sure what's the win in that for them.

55:34 Okay. Next question. How much is success now now a function of breaking into procurement networks in The US and changing clinical behaviors? What can be done to help change awareness amongst physicians, and how do you overcome the audit trail element? I autoclaving whilst not very flexible provides a black and white readout tape to confirm that a surface is sterile. Procurement, we will work our way through. We we have partners that work with procurement all the time. With respect to the second part of that question, the the medical instruments that we're disinfecting are very different to those that are autoclaved. Autoclaved instruments or autoclaving for those, unfamiliar with the term means sterilization through heat.

56:25 And you can't and you can heat a a a a stainless steel forcep, but you can't heat an ultrasound probe. It will melt. So these are instruments that our whole marketplace is driven by the disinfection of heat sensitive medical instruments. Having a very a simple indicator that the instrument has been disinfected is complex with these complex heat sensitive medical instruments such as ultrasound probes. But our three t traceability process, which observes each and every one of the steps of the of the procedure, gets as close as is possible to recording the temperatures that take that is done in an autoclave to say the temperature was held at the right for long enough at the right temperature. That's not a very succinct answer.

57:22 But through three t, we get very close this to the level of validation that can be achieved in an autoclave. Another quick question about Trophon. Can the Trophon system actually disinfect a mobile ultrasound system? I don't think it can. I we are in touch with the two manufacturers. We work quite closely with the two two manufacturers of mobile ultrasound systems. And unless it's held inside the chamber by way of some kind of, I don't know, cradle, I don't think they that that is possible. Okay. And now our last question, you've stated that Trophon is your main competitor with approximately 50% of the existing market.

58:07 Given that Trophon uses a machine and that this machine has a useful life of about seven years, what incentive is there for hospitals to switch before the machine needs replacing? And what chance is there that Trophon will start to deeply discount the machines in order to lock in customers for a further seven years? There are, according to Nanosonics' excellent investor investor relations information that you can find on their website, something like, I think it's 27,000 installations or machines around The United States. And they also age them. So they give the age profile of them. And I think it's something like 50% of them are more than seven years old now.

58:56 Now that for them, I think, is a revenue opportunity on the assumption that no one is going to move from Tropon to anything else because at the moment, there is no alternative to Tropon, really. But it means it's an aging fleet. And we know from experience when a machine is coming to the end of its useful life and it's starting to break down or maybe the manufacturer doesn't want to continue to service it or provide warranty cover, That's a decision making point. It's an inflect it's a decision making point for the infection prevention team and for procurement. Ah, well, this is a moment where we can look at something new. We just heard that FDA has approved TRISTEL. We've seen TRISTEL at conferences overseas. We need to re replace our TROPHON machine.

59:44 Now is the point in time to do a review of the alternatives that are available. So I think that the marketplace is ripe for a new entrant that has FDA approval and has all of the advantages that TRISTEL does. Okay. And one last last question's just popped up. The presentation seems to focus upon equipment for human medicine. Do you see a market in animal health? Ultrasound is widely used in in animal health. It's not our focus. It could well be. And maybe a company like Henry Schein that is big in animal health might approach us as they have here in The United Kingdom, in fact, and said, can we carry the ultrasound duo product into animal?

1:00:31 We there are there are possibilities there. It's not our focus at the moment. Okay. That's the end of our questions. If anybody has not had the opportunity to to to log their question, then it where it comes to them later. If you could email us via tristel@Wahlbrookpr.com. And and I know our colleagues at Wahlbrook will send those questions on to us for answering. And, of course, as you'll see, if if you would like a link to the FinCap research note, then, again, email tricell@woolbrookpr.com, and they will send you a link. That's that's great, Liz. Paul, thank you very much indeed. And as you say, you've taken all questions from investors. So thank you once again for everybody's engagement this afternoon.

1:01:16 Paul, Liz, I know investor feedback will be important to you both following today's news. I wondered if I may, Paul, before we direct investors to give you their thoughts and expectations, if I could just ask you for a few closing comments. I just, like to say, that I think this heralds an enormous turning point. No. It's not not a turning point. We don't need to turn. This is a moment where TRISTEL can accelerate its growth. It can continue its profitability that we have been able to achieve in the rest of the world possibly exponentially. I think it's a remarkable moment. Not many of you may know, but we actually started the business 30 ago with an ambition. And, actually, the only thing that we bought into was the rights to get an FDA approval, but we had $250,000 of capital from our founding shareholder.

1:02:13 And it's taken an awful long time to get to this point. So I've lived and breathed it, and I we have an organization that is very, very skilled and capable. We have a brilliant technology, and I really think that this is a a moment, to rejoice for all shareholders and stakeholders in the company. That's great. Paul, Liz, thank you once again for updating investors. Could I please ask investors on the call not to close this session as we're now automatically redirect you in order you can provide your feedback so the management team can better understand your views and expectations? This may take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of TRISTEL PLC, we'd like to thank you for attending today's presentation.

1:02:59 Good afternoon to you all.