Glycorex Transplantation AB (GTAB): Interim Report January-March 2021
Sales recovery after weak start
January - March 2021 (compared to the corresponding period last year)
- Net sales: SEK 4.9 million (7.7).
- Operating income: SEK -5.3 million (0.2).•
- Net income for the period: SEK -5.3 million (0.3).
- Earnings per share: SEK -0.07 (0.00), no dilution effects.
- Covid-19 continued to affect sales, but with large variation between countries.
- Europe continues to be the most important region with good growth in Spain, the Czech Republic and France.
- Positive trend in our largest market Germany in the latter part of the quarter, but overall COVID-19 impacted negatively with a 36 percent decrease in sales.
- Sales recovery in India indicates improved transplant activities, but the market is difficult to assess due to the current COVID-19 situation.
- Continued severe pandemic condition in Mexico with a major impact on sales.
- Strong end to the quarter and positive signals from the market inspire optimism.
- Glycosorb® ABO received approval from the Ministryof Health in Turkey – the world’s 3rd largest market for kidney transplants from living donors.
- New website and graphic profile launched – focus on strengthened communication.
| First quarter | Full year | |||
| SEK Thousands | Jan-Mar 2021 | Jan-Mar 2020 | Jan-Dec 2020 | Jan-Dec 2019 |
| Net sales | 4 923 | 7 674 | 27 000 | 36 105 |
| Change in stocks of finished goods | -159 | -252 | -81 | 1 098 |
| Own work capitalized | 191 | 602 | 1 640 | 3 477 |
| Other operating income | 103 | 272 | 1 654 | 604 |
| Total | 5 058 | 8 296 | 30 213 | 41 284 |
| Operating expenses | ||||
| Raw materials and supplies | -427 | -966 | -3 929 | -4 479 |
| Other external expenses | -2 367 | -1 965 | -9 284 | -7 925 |
| Personnel expenses | -5 373 | -3 787 | -16 419 | -15 803 |
| Depreciation and amortization of fixed assets | -2 114 | -1 258 | -7 830 | -5 089 |
| Other operating expenses | -64 | -143 | -475 | -488 |
| Operating income | -5 287 | 177 | -7 724 | 7 500 |
| Net financial items | -85 | 156 | -326 | -624 |
| Income before tax | -5 372 | 333 | -8 050 | 6 876 |
| Taxes | 26 | - | 10 | 30 |
| Net income | -5 346 | 333 | -8 040 | 6 906 |
| Earnings per share, SEK | -0,07 | 0,00 | -0,11 | 0,10 |
CEO comments
Positive sales development after weak start of the year
The COVID-19 pandemic continued to affect our sales during the first quarter of the year. The recovery in transplant operations varies greatly between countries, which is also reflected in our sales. After a very weak January, the trend has been positive with increasing demand in several markets. During the quarter, we continued our marketing efforts in the blood bank and transfusion segment with our new universal blood plasma (UBP) product. Furthermore, we have worked intensively to build a completely new communication platform with the launch of a new website and graphic profile, clearly reflecting our continued growth ambitions.
Covid-19 continued to affect sales in the first quarter
Sales during the quarter amounted to SEK 4.9 million (7.7) after continued negative impact from the pandemic. We see signs of recovery in the field of transplantation, but with large regional and national differences. In Europe, sales recovered in February and March with good performance in Spain and the Czech Republic, among others. France also accounts for stable growth. Germany had a weak performance for the quarter as a whole but showed strong pickup in February and March. As previously reported, sales in India and Mexico have been heavily affected by COVID-19. It was therefore particularly gratifying that India had a sales increase of 62 percent in the quarter. However, given the recent rapid spread of COVID-19 in India, it is difficult to assess transplant development in the country in the near future. Mexico continues to have a difficult pandemic situation and the same applies to Turkey, which negatively affects our sales in these countries.
Overall, sales decreased by 36 percent during the quarter as a result of the pandemic. After the end of the quarter, we have received continued positive signals from the market, which gives optimism for the future. Our current assessment is that the number of transplants will return to normal levels once the vaccination programs take effect. After that, we will have the opportunity to complete our planned market expansion. Exactly when this will happen is, of course, difficult to predict.
Market development in the field of transplantation
Europe continues to be the driving force of our sales, accounting for more than 80 percent of sales in the first quarter. We continue our efforts to create the conditions for growth in the major markets in India, Mexico, and Turkey, which are estimated to have an annual potential of up to SEK 185 million for Glycosorb® ABO. As previously communicated, Glycosorb® ABO has received approval in Turkey and our distributor has initiated sales activities. For broad market penetration, it is important to be part of the reimbursement system and initiatives for this process have been started by our partner in Turkey.
The United States is the country where the most of kidney transplants is carried out in the world, with a market potential for Glycosorb® ABO estimated at SEK 160 million. The preparatory work required to start an FDA registration in the United States, has resumed in 2021, having previously been paused due to COVID-19.
Commercialization of UBP
Our strategy to pre-launch the UBP product through our own sales channels is ongoing. The ambition is to allow well-selected reference customers in Europe and the United States to evaluate UBP and publish the results, thereby creating a platform for a broader launch of the UBP product. The level of activity towards key customers has been high during the quarter resulting in several ongoing evaluations of UBP. To build our network within this for us new segment, we have engaged in the International Society of Blood Transfusion (ISBT), as a corporate partner. I would also like to mention the ongoing evaluation of UBP for whole blood in the United States, which is progressing according to plan.
Development of a new product for the treatment of rheumatoid arthritis (RA)
Our work to develop a treatment for RA (rheumatoid arthritis) continued during the quarter. Up to 10 percent of patients do not respond to today’s treatments and here we see great potential for Glycorex to improve medical treatment. Our ambition is to start clinical studies within the RA project in 2021 given that the COVID-19 situation allows this. Given the great potential and medical benefits, the RA project is a high priority in our development work.
New communication platform and IR activities
Communication with our customers, partners and shareholders is important to us and here the website is a central part. During the first quarter, we have therefore developed a new website. With the new website, we are starting with increased communication in general and digital communication in particular. In addition, we have launched a new graphic profile to reflect our ambitions. We have also expanded our social media presence and it is now possible to follow us on LinkedIn, Twitter, and Facebook. Our new communication platform breathes forward thinking and confidence, which is fully in line with the opportunities I see for Glycorex. Furthermore, We will increase our IR activities and next up are presentations at the Biostock Life Science Spring Summit and RedEye Growth Day in May and June respectively.
Priorities in 2021
To conclude, we will continue to work to strengthen our positions in the transplant field both in the important European market and in our emerging markets India, Mexico, and Turkey. Another prioritized area in this segment is the registration work in the United States. The commercialization work for UBP will continue unabated with the ambition that UBP will be included in several scientific publications during the year. On the development side, we prioritize the RA project, and our goal is to start clinical studies in 2021 that, in the event of a positive outcome, will form the basis for an upcoming CE marking.
It is with confidence that I look forward to the coming quarters and our efforts to create value for patients, healthcare, society and ultimately our shareholders!
Pontus Nobréus,
CEO Glycorex Transplantation AB
THE COMPLETE INTERIM REPORT FOR Q1 IS ATTACHED
This is a translation of the Swedish version of the Interim report. When in doubt, the Swedish wording prevails.
This disclosure contains information that Glycorex Transplantation is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person, on May 19, 2019 08:00 CET.
