Arctic Bioscience – Q4 2022 Operational update – Key pharma milestones achieved and significant growth in revenues
Highlights Q4 2022:
- Positive development for psoriasis drug candidate HRO350 according to plan, with approval of the Clinical Trial Application in the UK in January 2023 and first patient included in the UK
- Total sales revenues more than doubled in Q4 2022 (NOK 10,6 million) compared to Q4 2021 (NOK 4,8 million)
- First delivery of nutraceutical products to the Japanese market in Q4 2022
- Total sales revenue growth of 60 % in 2022, NOK 34,3 million in 2022 compared to NOK 21,5 million in 2021
- Strong development in gross margin in 2022, 34 % in 2022 compared to 24 % in 2021
- Solid financial position with NOK 144,2 million in cash by end of 2022
Arctic Bioscience’s positive development continued through Q4 2022. In Q4 the Company delivered 120 % increase in sales revenue compared to the same period in 2021. The gross margin development in the quarter was also positive, supported by a beneficial product mix. This, along with deliveries on important milestones in the pharmaceutical development project, sums up both the quarter and the total year in a positive manner.
“2022 has been a year of positive changes for Arctic Bioscience. Focus and dedication in all operational areas has given positive results for the Company. We have built a solid foundation for the nutraceutical operations during the year, and we have reduced the risk in the pharmaceutical development project by being successful on key milestone deliveries. I am proud of the efforts from all the employees in Arctic Bioscience and what we have achieved and delivered during the past year”, says CEO Christer L. Valderhaug.
Arctic Bioscience submitted the Clinical Trial Application for the HeROPA study, a Phase IIb clinical trial in mild-to-moderate psoriasis, in Q4 2022 with the investigational medicinal product HRO350. The application was approved in the UK in January 2023, and the first UK-patient is already included in the trial. The pharmaceutical team works diligently and dedicated to secure the progress of this international clinical trial, with 519 patients in five countries.
The HeROPA study positions Arctic Bioscience in a multibillion USD psoriasis market that saw significant deals in 2022.
In the nutraceutical segment the large order intake from first half of 2022 materialized further into deliveries in Q4 2022. This segment delivered according to previous guiding, with a solid growth both in total revenues and positive development in gross margin. In Q4 2022 Arctic Bioscience delivered its first ever nutraceutical products to the Japanese market, which underlines the great commitment and long-term focus from the Company’s sales team.
Financials
Key figures – Q4 2022:
- Revenues from sales: NOK 10,6 million (NOK 4,8 million)
- Gross profit: NOK 4,7 million (NOK 1,2 million)
- Gross margin: 44,9 % (25,0 %)
- EBITDA: NOK -11,4 million (NOK -11,8 million)
- Adjusted EBITDA*: NOK -8,8 million (NOK -11,8 million)
- Capex: NOK 24,8 million (NOK 9,0 million)
Comparable figures for Q4 2021 in brackets.
* Adjustment is related to provisions for severance costs.
Key figures as of end Q4 2022:
- Revenues from sales: NOK 34,3 million (NOK 21,5 million)
- Gross profit: NOK 11,6 million (NOK 5,2 million)
- Gross margin: 34 % (24 %)
- EBITDA: NOK -33,7 million (NOK -38,1 million)
- Adjusted EBITDA: NOK -31,0 (NOK -29,3)
- Capex: NOK 58,6 million (NOK 36,4 million)
- Cash end period: NOK 144,2 million (NOK 227,4 million)
Comparable figures as of the end of Q4 2021 in brackets. The 2022 figures are unaudited.
Sales revenues amounted to NOK 10,6 million in Q4 2022, a growth of 121 % compared to the same period in 2021. Total revenues from sales in 2022 amounted to NOK 34,3 million, which represents a year-on-year growth of 60 %.
Gross margin was 44,9 % in Q4 2022, compared to 25,0 % for the same period in 2021, an improvement partly due to a favorable product mix of delivered goods. A strong focus on gross margin development along with increased product prices have offset experienced cost increases related to input factors during 2022, resulting in a gross margin for 2022 of 34 % compared to 24 % in 2021.
YTD EBITDA as of end Q4 2022 of NOK -33,7 million is in line with earlier communicated expectations. Adjusted for provisions for severance costs the 2022 EBITDA ended at NOK -31,0 million.
Total YTD capital expenditures (Capex) amounts to NOK 58,6 million, which mainly relates to the pharmaceutical development program. As planned, these expenditures increased in Q4 2022 compared to earlier quarters in 2022.
The liquidity position is strong, ending at NOK 144,2 million by end December 2022.
Subsequent events
Arctic Bioscience announced on January 12th 2023 that the Clinical Trial Application for the Phase IIb clinical trial had been approved in the UK. February 1st 2023 the Company announced the first patient was included in the clinical trial in the UK, a significant milestone in the pharmaceutical development project which marks the kickoff for the HeROPA clinical trial.
Outlook
After inclusion of the first patient into the clinical trial, a six-month period is expected for inclusion of all 519 patients to the HeROPA clinical trial. This international clinical trial will be conducted in five countries, and the first data readout is expected six months after the inclusion of the last patient. A process regarding pursuing a commercial partner for HRO350 started as planned in the Autumn of 2022.
Arctic Bioscience will continue to develop the novel drug candidate for brain development in extremely premature infants.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
