Third Quarter Svein W. F. Lien CEO Jan Buch Andersen - ArcticZymes

Transcription

1 Third Quarter 2011 Svein W. F. Lien CEO Jan Buch Andersen - ArcticZymes

2 Agenda Business areas and Highlights Q3 Financials Beta-Glucans Enzymes Summary 2

3 Biotec Pharmacon Business areas Tromsø Beta-Glucan Well documented effect in wound care - diabetic ulcer but also projects in cancer, oral mucositis, and IBD Company focus on medical device product for topical ulcers/wounds Partner interest to take such product to market Pharma path retained through partner interest and dormant development programs Enzymes ArcticZymes Business based on unique cold adapted enzymes Core role in PCR contamination control Strong IP position for marketed products Large unexploited market Strong pipeline secured through strategic alliances and acquisition 20 years of research in key areas strong IP based science 3

4 Q3 Highlights Good sales growth and positive operating cash flow ENZYMES ArcticZymes Regained marketing control over SAP - the most important product Secured long term supply agreement to Affymetrix Positive development for Cod-UNG and DNases BETA-GLUCANS The Woulgan Biogel product development moving steadily towards 1 st prototype product Continuing good growth in sale of beta-glucan bulk products to the dietary supplement market Commercial partnering process continuing with the regulatory positioning being an important part of it 4

5 Agenda Business areas and Highlights Q3 Financials Beta-Glucans Enzymes Summary 5

6 Financial Highlights (MNOK) Q Q M M 2010 Beta-Glucans ArcticZymes Revenues (sales) Beta-Glucans ArcticZymes EBITDA Profit before tax All costs are allocated to a given segment as from Q1-11 and restated for 2010 for comparison 6

7 Cash Flow Q Q M M 2010 Operating activities Investing activities Financing activities Net Cash Flow Cash at end of period Improved Cash Flow from Operating activities: Q1: -5.0, Q2: -3.9, Q3: +1.0 Cash at end of 2010 was NOK 43.4 million Invested in production and research equipment for marine enzymes 7

8 Marine Enzymes - ArcticZymes (MNOK) Q Q M M 2010 Sales Revenue Other income Operating expenses Operating profit (EBITDA) Depreciation Operating profit (EBIT) Q Q Q1-Q Q1-Q Still low SAP-sales awaiting new orders new agreement in place Positive development for Cod-UNG (+23%) and the Dnases Continuing international sales expansion Total income Operating profit (EBIT) 8

9 Beta-Glucan development (MNOK) Q Q months months 2010 Sales Revenue Beta-Glucan products Other income Operating expenses Operating profit (EBITDA) Depreciation Operating profit (EBIT) Good growth in sale of beta-glucan bulk products Significantly reduced cost base Q Q Q1-Q Q1-Q Operating profit (EBITDA) Total income 9

10 Agenda Business areas and Highlights Q3 Financials Beta-Glucans Enzymes Summary 10

11 Available market of USD 3.5bn for SBG within professional wound care Global Wound Care (Total value USD 13bn, 2009) Advanced Wound Care -professional use (Total value USD 5.1bn, 2009) Traditional consumer use; $4,7bn ; 36 % Traditional professional market; $3,15bn; 24 % Advanced wound care products Professional use; $5,10bn; 40 % NPWT; $1 540M; 30 % Biologics; $345M; 7 % Other, $105M, 2% Moist; $3,145M; 61 % Source: Espicom Woulgan will represent a high-end moist gel with biological effects 11

12 Europe offers a large and growing market opportunity Moist and Biologics market by regions USDm Moist and Biologics market Growth projections ROW $604M 17 % USA $1,175M 33 % Total $3.5bn Europe $1,1816M 50 % Source: Espicom Moist Biologics Woulgan will address a growth segment in search of new products 12

13 Initial Woulgan focus on diabetic ulcer Strong documentation in DU More than 50 million people have diabetes in Europe, US and Japan and the disease is rapidly increasing 15% of diabetics will ultimately develop diabetic foot ulcers; Representing about 8 million ulcers in the Western World Annual incidence of at least 1.2 million new ulcers 71,000 amputations in people with diabetes in the US alone US medical expenses of USD 27 billion for diabetes care Improved diabetic ulcer treatment needed to reduce amputation rates and cut costs 13

14 % wound area remaining We have a good product -with a lot of documentation on the SBG substance Successful animal study for reformulated product Successful phase 2 study in diabetic ulcer ve control Water 1% CMC moister gel Intrasite moister gel Woulgan +ve control not for humans SBG Control Days Post-wounding The animal study in diabetic mice shows that the performance of the reformulated SBG product (Woulgan ) with proven stability is close to the positive control and well above typical moister gels used for wound healing Placebo controlled double blinded study of 60 patients Statistical significant after 8 weeks 14

15 How to create a commercial success? Regulatory classification Compelling clinical evidence Reimbursement / Pricing / Commercial Product Claims Strong distribution/ partner Commercial Success Follow-up products Substantial market in need of new products 15

16 Likely time line for launch of product as Class IIB or III, rule 7 medical device Official Journal of the European Union: Council conclusions on innovation in the medical device sector (2011/C 202/03) Supportive clinical evidence for marketing (not required for launch) TBC Notified body approval time class IIb CE Mark Allocation and Device Approval If class III rule 7 Label claims and patient information Clinical Evaluation Protocol and Reporting (established SBG data and published material) LAUNCH Q Q Technical dossier file for final product Stability studies final formulation Technology transfer Subcontractor filling, packaging and labelling ISO approval Stability studies final formulation in final container...q Q Q Q Q

17 Other business developments Wound care: Initiated project to develop next generation topical wound care application SBG to be combined with a dressing in a combination device Cancer adjuvant: Awarded new and improved patent protection for use of SBG as adjuvant in antibody based cancer therapy Confirms ambitions, although the company currently spends little resources in this area 17

18 Agenda Business areas and Highlights Q3 Financials Beta-Glucans Enzymes Summary 18

19 Highlights Sales of Q3-2011up 150% against weak Q Sales YTD-2011 up 12% against previous year. All products under ArcticZymes sales control are growing well Cod UNG continues good development after weak Customer base expanded with new contracts. Key role in Carry-over prevention in PCR The two dsdnases are establishing a key role in contamination control in PCR SAP agreement on release of exclusivity Geographical marketing/sales expansion 19

20 The SAP opportunity SAP is still over 60% of sales, so the opportunity of regaining control is substantial Free to develop new customers and new applications where SAP is included Good feedback from customers Entered into long term supply agreement with Affymetrix 20

21 Other products also picking up volume Cod UNG unit volume up 23% after 9 months High sales in earlier years due to extraordinary events dsdnase continues establishment in marketplace HL-dsDNase unit sales by Q is 2x the 2010 total Products under ArcticZymes sales control make up an increasing share of the sales mix dsdnase - Unit/kU Cod UNG Unit Shipments ku HL-dsDNase Unit/kU Q3 21

22 ArcticZymes expanding activities US office opening Q4 Asian distributors being added Webshop introduced Full version with payment solution by the end of 2011 Established Gardermoen warehouse Secure faster and cheaper shipments to customers November shipments and number of active customers more than doubled vs

23 Agenda Business areas and Highlights Q3 Financials Beta-Glucans Enzymes Summary 23

24 Summary ArcticZymes: Regained control over SAP together with increased investments in marketing and sales activities opens a substantial expansion opportunity for ArcticZymes Good growth in other enzyme products like Cod UNG and the Dnases Beta-glucans: Woulgan Biogel product development continues towards 1 st prototype in the beginning of 2012 Work to secure best possible long-term partnerships and distributors will progress in parallel with the product development High reward-to-risk of bringing product closer to launch 24