Interim Report January-September 2024

Our Best Quarter in the Enzyme Business: Strong Growth and improved profitability

July – September 2024

• Genovis executed a strategic acquisition of a 25% stake in Sequrna AB
• Genovis successfully completed a strategic divestment of its Antibody Business to Leinco Technologies Inc.
• Net sales totaled SEK 32,895 (30,186) thousand, with a growth rate of 9%. Adjusted for currency effects, the growth was 13%. Net sales for the enzyme business (excluding the antibody business) amounted to SEK 31,625 (25,426) thousand, reflecting a 24% growth, or 28% when adjusted for currency effects.
• Operating profit before depreciation and amortization (EBITDA) totaled SEK 24,566 (7,555). EBITDA for the enzyme business (excluding the antibody business) amounted to SEK 10,828 (6,801) thousand.
• Operating profit (EBIT) totaled SEK 22,054 (4 488) thousand. EBIT for the enzyme business (excluding the antibody business) amounted to SEK 8,545 (4,405) thousand.
• Profit for the period totaled SEK 13,798 (3,138) thousand.
• Earnings per share totaled SEK 0.21 (0.05).
• Comprehensive income for the period totaled SEK 14,570 (4,051) thousand.
• Cash flow from operating activities was SEK 723 (9,611) thousand. Adjusted cash flow from operating activities excluding the antibody business was 4,937 thousand.
• Cash and cash equivalents at the end of the period totaled SEK 155,534 (119,131) thousand.

January – September 2024

• Net sales totaled SEK 102,422 (130,925) thousand, with a decline of -22%. Adjusted for currency effects, the decrease is -21%. Net sales for the enzyme business (excluding the antibody business) amounted to SEK 92,432 (115,520) thousand. Growth for the enzyme business, adjusted for license revenues, was 11%, and adjusted for currency effects as well, 12%.
• Operating profit before depreciation and amortization (EBITDA) totaled SEK 48,407 (60,330) thousand. EBITDA for the enzyme business (excluding the antibody business), adjusted for license revenue and related costs amounted to SEK 22,917 (18,528) thousand. 
• Operating profit (EBIT) totaled SEK 40,404 (53,867) thousand. EBIT for the enzyme business (excluding the antibody business), adjusted for license revenue and related costs amounted to SEK 16,618 (14,057) thousand.
• Profit for the period totaled SEK 28,330 (61,920) thousand.
• Earnings per share totaled SEK 0.43 (0.95).
• Comprehensive income for the period totaled SEK 31,386 (65,237) thousand.
• Cash flow from operating activities was SEK 18,518 (57,884) thousand. Adjusted cash flow from operating activities excluding the antibody business was 22,732 thousand.

Comments from Fredrik Olsson, Chief Executive Officer

In the third quarter, we implemented several of our growth strategies and achieved robust growth in our enzyme business. Even with the sale of our antibody business, finalized mid-quarter, we grew sales organically by 13% year-over-year.

When adjusted for the antibody business revenue, this strong growth can be attributed to the solid sales performance in the enzyme segment. Sales growth in enzymes was fueled by large orders in our ADC technology and we saw growth across all major geographic markets. Enzyme sales in analytics totaled SEK 31.6 million, setting a new record for a single quarter and representing growth of 24%. Growth in the enzyme business was 28% when adjusted for currency effects, and 13% when further adjusted for a significant ADC order

In the third quarter, we implemented several of our growth initiatives. In July, we invested in Sequrna and their unique technology platform for RNAase inhibitors, which will pave the way for our expansion into new application areas. Market-preparation activities are underway as part of the partnership, where we now own 25% of Sequrna, gearing up for product sales and distribution, including through our own sales organization. In the middle of the third quarter, we completed a strategic sale of our antibody business to Leinco Technologies to focus our operations on our enzyme business and the growth opportunities we foresee moving forward

Our operating profit in the third quarter demonstrates a strong improvement over last year. The sale of the antibody business contributed to the improvement, but even adjusted for this we show a strong improvement in earnings. Operating profit adjusted for the antibody business almost doubled compared to the third quarter last year. This solid performance has further strengthened our cash position, providing flexibility and the capacity to pursue continued investments in future growth initiatives.

We are experiencing growing interest in our technologies in antibody conjugation and ADC. These technologies are a key component of our strategic growth initiatives, where we are working to broaden and improve our offerings to customers in a market with strong underlying drivers. We intend to continue our efforts in ADC to position ourselves as a clear partner to our customers who want to apply our technologies also in the manufacturing of ADC and related products.

We launched a new enzyme for the analysis of new antibody formats, which occupy an increasing share of biopharma companies’ pipelines. The product has initially been well received by our customers and we see continued opportunities to add new enzymes as our customers develop new and improved antibody-based drugs.

Toward the end of the quarter, we filed patents for no less than four newly developed enzymes with potential therapeutic applications. We have thereby expanded our offering, which together with Xork, creates a differentiated portfolio of enzymes to address challenges in gene therapy and other autoimmune diseases.

I am highly satisfied with both our growth and performance in the third quarter. Genovis remains strong amid challenging geopolitical factors and macroeconomic uncertainty that have impacted our end markets throughout the year. The long-term underlying growth in new and improved pharmaceuticals remains the foundation of Genovis’ business. Our strategic decision to sell the antibody business allows us to focus our resources on our core business and new growth initiatives, such as genomics and ADC.

In closing, I would like to extend my warmest thanks to the employees at Genovis who made several advances during the quarter and continue to do a fantastic job for our customers in their efforts to develop drugs and new treatment methods for patients around the world.

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 08-11-2024 08:00 CET.