INTERIM REPORT FOR July – September 2021
July – September 2021
- Net sales rose by 10% to SEK 15,699 (14,216) thousand. Growth is 13%, adjusted for currency effects.
- Gross profit declined by 8% to SEK 14,195 (15,487) thousand.
- Operating profit before depreciation and amortization (EBITDA) totaled SEK 2,202 (3,262) thousand.
- Operating profit declined by SEK 968 thousand and totaled SEK 747 (1,715) thousand.
- Comprehensive income for the period improved by SEK 351 thousand and totaled SEK 1,013 (662) thousand.
- Comprehensive income per share totaled SEK 0.02 (0.01).
- Cash flow from operating activities was SEK 4,613 (1,191) thousand.
- Cash and cash equivalents at theend of the period totaled SEK 45,210 (46,231) thousand.
Events after the end of the period
Genovis has entered into an exclusive license agreement with Selecta Bioscience Inc. to develop and promote a novel patent pending antibody-cleaving enzyme, Xork™,as a potential pretreatment prior to the administration of gene therapy and for autoimmune diseases. Genovis will retains its rights to the Xork enzyme for all other applications to support its core business of innovative enzymatic tools for use in preclinical drug discovery, diagnostics and bioprocess applications. Under the terms of the agreement, Genovis will receive USD 6 million in upfront and early preclinical milestone payments and is eligible for up to USD 598 million in development, regulatory and sales milestone payments. Genovis will also receive double digit royalties on sales of Xork.
January – September 2021
- Net sales rose by 24% to SEK 50,957 (41,180) thousand. Growth is 34%, adjusted for currency effects.
- Gross profit improved by 18% to SEK 46,577 (39,609) thousand.
- Operating profit before depreciation and amortization (EBITDA) totaled SEK 6,954 (2,377) thousand.
- Operating profit improved by SEK 4,114 thousand and totaled SEK 2,649 (loss: 1,465) thousand.
- Comprehensive income for the period improved by SEK 8,029 thousand and totaled SEK 3,653 (loss: 4,376) thousand.
- Comprehensive income per share, basic and diluted, totaled SEK 0.06 (-0.07).
- Cash flow from operating activities was SEK 6,377 (4,030) thousand.
Comments from Fredrik Olsson, Chief Executive Officer
Organic sales grew 13% during the third quarter of 2021, while growth was 34% for the first nine months of the year. Historically, the third quarter is a seasonally weaker quarter for our business. Restrictions on operations at major pharmaceutical companies put a damper on growth of enzymes in Analytics during the quarter. Changing customer priorities regarding projects and limited lab staffing due to restrictions have had a dampening effect on our sales, especially in early-stage discovery and preclinical projects, which continue to account for the majority of our sales. Volatile elements in order bookings and shifts in orders between individual quarters have had a short-term impact. We expect to see improved customer activity in the fourth quarter, with a return to higher growth moving forward. Changes in inventory and other revenue had a negative impact of SEK 2 million on operating profit compared with the previous year.
In October, we licensed out the therapeutic rights related to a novel enzyme to Selecta Bioscience, our largest licensing deal to date. Genovis has filed a patent application for this previously unknown enzyme, which we have named Xork. As a result of this deal we have now added gene therapy as one of the areas in which our enzymes and antibodies can be used to develop treatments for patients in need. The deal confirms our agile and customer-focused business model, in which we can quickly connect market needs with innovative enzymes in order to deliver solutions and create value.
With the Selecta Biosciences deal, Genovis also demonstrates the potential of the model to develop enzymes for the biopharma industry. Our enzymes have previously been used in bioprocessing applications and in the case of Xork, Selecta will develop the Genovis enzyme for use as a treatment. Our entrance into the gene therapy market with our new Xork enzyme has also generated product development in order to develop antibodies against Xork and other related antibody-cleaving enzymes. These antibodies will be needed during the development and commercialization of these enzymes for therapeutic use. The antibodies we have under development also offer the potential of being combined with our antibody labelling technologies, which our customers in the gene therapy field will demand in the future.
We have continued to maintain the high pace of our development pipeline and broadened our offering with additional products for modifying antibodies with the new TransGLYCIT technology. In October, we also launched a glycosidase (PNGase F) in a unique new format. PNGase F is one of the most frequently used enzymes within glycan analysis and we are convinced that our improved product can add value for our customers moving forward, especially within automated workflows. Both products have been warmly received by our customers.
We will enter 2022 with significantly strengthened liquidity to enable continued enterprising initiatives. Over the coming months, we will further strengthen our commercial organization with a new sales and marketing manager, as well as sales representatives in local markets. A strong focus on business development activities is important to Genovis and we are investing to dedicate our efforts to this strategy moving forward. Along with the recruitment of a new CFO, we will have an organization that is well positioned to continue building Genovis in the future.
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 12-11-2021 12:00 CET.