Half-Yearly Report January - June 2024

A stable quarter despite subdued market conditions

April – June 2024

• Net sales totaled SEK 29,470 (29,463) thousand, with a growth rate of 0.03%. Adjusted for currency effects, the decrease is -1%. 
• Operating profit before depreciation and amortization (EBITDA) totaled SEK 5,272 (7,687) thousand.
• Operating profit (EBIT) totaled SEK 2,517 (5,981) thousand.
• Profit for the period totaled SEK 1,790 (15,219) thousand. 
• Earnings per share totaled SEK 0.03 (0.23). 
• Comprehensive income for the period totaled SEK 2,467 (16,843) thousand. 
• Cash flow from operating activities was SEK -295 (1,917) thousand.
• Cash and cash equivalents at the end of the period totaled SEK 135,809 (114,198) thousand.

January – June 2024

• Net sales totaled SEK 69,527 (100,739) thousand, with a decline of -31%. Adjusted for currency effects, the decrease is -31%. Organic growth adjusted for license revenue is 0.2%, and -0.4% when also adjusted for currency effects. 
• Operating profit before depreciation and amortization (EBITDA) totaled SEK 23,841 (52,776) thousand. Adjusted for license revenue and related costs, EBITDA is SEK 13,713 (13,909) thousand.
• Operating profit (EBIT) totaled SEK 18,350 (49,380) thousand. Adjusted for license revenue and related costs, EBIT is SEK 8,222 (10,513) thousand.
• Profit for the period totaled SEK 14,532 (58,783) thousand. 
• Earnings per share totaled SEK 0.22 (0.90). 
• Comprehensive income for the period totaled SEK 16,816 (61,186) thousand. 
• Cash flow from operating activities was SEK 17,795 (48,272) thousand.
• Cash and cash equivalents at the end of the period totaled SEK 135,809 (114,198) thousand.

Comments from Fredrik Olsson, Chief Executive Officer

In the second quarter, we maintained sales both sequentially and year-on-year. Excluding currency effects and inventory adjustments of approximately SEK -2.9 million compared to the previous year, our operating profit at the EBITDA level improved by 6%. This EBITDA level, at nearly 28%, reflects the stability of our business, where we sustain margins and earnings even in a challenging market.

We have performed well operationally despite challenging market conditions, with restrictions on venture capital for biotech companies temporarily affecting a large part of our customer base and their ability to invest in their development programs. Our sales to the major global biopharmaceutical companies continued to grow in the quarter compared to the previous year, reflecting the value of our broad customer base which, along with our strategic growth initiatives in ADC and new antibody formats, continues to deliver value in a challenging market. In recent years, we have expanded both our customer base and product portfolio through our technologies in these areas and we see growing interest in our technology platforms in ADC. I expect continued robust growth in business opportunities within this area moving forward.

In the course of our strategic review of the antibody business, which we initiated last quarter, we noted interest in the operation, which has resulted in our decision to sell the business to Leinco Technologies. After careful consideration and analysis, we concluded that the sale of the antibody business not only offers an attractive financial outcome, but also frees up resources and capacity that we will now be able to invest in exciting new initiatives that we strongly believe in, and that are in line with our long-term growth strategies. The divestment will enable us to focus even more on innovation and expansion in our most promising business areas. I am confident that this restructuring will lead to increased efficiency and better offers for our customers, while strengthening our competitiveness in the market.

At the beginning of the third quarter, we made a strategic investment in Sequrna. The investment enables Genovis to offer new products to both current and new customers, while opening up opportunities for expansion into new application areas. Collaboration with Sequrna and their unique RNAse inhibitor opens up opportunities for us to expand into new markets in genomics. RNA sequencing is expected to become an increasingly useful tool in both basic research and diagnostics. Moreover, the emerging clinical RNA-based technologies, such as mRNA, represent a major opportunity to contribute to improved human health, which inevitably requires reliable methods to protect RNA in multiple application areas. 

Our pipeline of new products continues to develop strongly. Our new infrastructure, combined with AI and a skilled team, generates completely new opportunities for developing enzyme products. We have launched three new products so far this year and I expect the pace of launches to remain high for the rest of the year. We have developed several new enzymes for both analytical and gene therapy applications, which will give us a broader offering when we regain the rights to our Xork enzyme later this year.

Even though our markets have generally seen reduced demand due to the limited availability of venture capital for biotech companies, I am optimistic when I see how our products are appreciated by customers and how our pipeline is steadily expanding – a result of the strong dedication our employees to our customers and to our strategic growth initiatives.

I would like to extend my warmest thanks to all my colleagues who, every day, with great dedication, help our customers in their quest to develop the medicines of the future to improve people's lives.

This disclosure contains information that Genovis AB is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 20-08-2024 08:00 CET.