Simris Alg presents CEO Letter
Simris Alg AB hereby provides a CEO letter that covers the strategic direction set out by the Board where Simris will enter high profit sectors through a mixture of organic investments and targeted acquisitions accretive to shareholders, the re-launch of Simris branded supplements reaching new geographies (including Europe), and current events within the company’s industry and field of business.
Dear Shareholders,
As this is my first communication with Simris’ Shareholders, and as you are the owners, I want to thank you for your continued support of the company despite its performance in recent years. Whilst I don’t have a magic wand that I can wave to magically turn things around in the blink of an eye, I do have a clear vision of the future and understand the strategies that will need to be executed to realise this.
The microalgae industry is highly fragmented, comprised of hundreds of operators ranging from small start-ups to multinationals. Whilst some are focused on producing foods for fish and livestock farming, others are producing biomass that they on-sell to other companies that extract compounds. In turn, these companies then sell on to specialty chemical companies who finally sell the extract as ingredients to be included in various consumer products such as cosmetics and dietary supplements. For the microalgae producer, this business model is relatively low margin and requires significant production capacity, with low input costs, to be profitable.
The long-term vision brought into Simris with the appointment of the new Board in May 2021, and that I wholeheartedly embrace, is that the Simris of today is a platform upon which we will build an enterprise operating across a number of high margin verticals, each selling a refined product (not just a biomass).
In the past, microalgae (and their close relative, cyanobacteria) have been largely ignored by drug researchers and yet they undoubtably contain thousands of novel lead substances. Rightly so, there is currently a huge wave of research and investment globally uncovering novel, natural substances that show potential as a new generation of antibiotics, have antiviral and anti-inflammatory properties, boost the immune system and some even have applications in the treatment of cancer. As of today, the Federal Drug Administration (FDA) in the USA has approved 12 Antibody Drug Conjugates (ADCs) for the treatment of cancer, and several of these are based upon the dolastatin class of cyanobacterial toxins.
From our study, it is evident that the market potential of natural, bioactive secondary metabolites from cyanobacteria and microalgae is substantial. The ADC market alone was worth $5.8bn in 2021 and is projected to grow to $30bn by 2030. Why is this of interest to Simris? A closed, horizontal photobioreactor, such as that operated by Simris, is the ideal platform to grow and harvest the biomass from which these rare and ultra-high-value compounds can be extracted.
Whilst large-scale production of such bioactive substances is several years away, due to the length of time required for novel drug development, we anticipate that Simris can generate a revenue stream from contract research & development "milestone payments" by partnering with larger pharmaceutical companies active in this space in the near- to mid-term.
Our long-term vision is that Simris will become a leading biotech company producing natural bioactive compounds, extracted from cyanobacteria and microalgae, that will enhance the quality and length of life of humans and animals. We will achieve this through focused organic investment in downstream processing, expanding our specialist biomass production capability with substantially enhanced biosecurity (minimising contamination risk), and through establishing GMP ("Good Manufacturing Practice") quality certification. We will supplement this with profitable acquisitions that are accretive to the Simris share price and bring additional synergies and capabilities to the company. This is the overall direction that the Board has tasked me to take the business in the coming years.
In the short-term we are planning the re-launch of our Simris branded Dietary Supplements in Q4 of this year. Our new strategy allows us to sell supplements extracted from microalgae, including Omega-3 oil, in all major markets, including, for the first time, Europe. We have sourced new packaging that facilitates eCommerce, is fully recyclable, and substantially lowers our production cost. This enables us to improve quality, yet at the same time reduce the price to the end consumer, hopefully resulting in a significant increase in the volume of product sold. The re-launch will begin in the USA in Q4, before rolling out in Europe in Q1 of 2023. Considering the size of the existing market for Omega-3, the growing interest in vegan product sourced from microalgae (vs. fish), and the Simris brand awareness previously created, we are targeting retail sales of more than €2m in 2023.
What has impressed me most since joining Simris has been the knowledge, passion, and engagement of the team and of the Board. With their full commitment to the vision for the company, I am excited about the years ahead and confident that Simris now has a bright and prosperous future.
Thank you again for your loyalty and support.
For further information, please contact:
Julian Read, CEO
Email: [email protected]
Phone: +46 76 788 82 12
About Simris Alg
Simris Alg is a pioneering biotechnology company dedicated to the enormous potential of microalgae in the discovery and production of high-quality bioactive substances and alternatives to unsustainable marine ingredients. We are engaged in research, development, and production of bioactive substances from microalgae, for nutraceutical, cosmetic and pharmaceutical applications. Our technology provides access to bioactive substances with new functions, while at the same time replacing unsustainable raw materials from endangered marine species and ecosystems.
Amudova AB is Simris Alg AB certified adviser. Phone +46 8 546 017 58 E-mail: [email protected]