Interim Report January – September 2013
· Positive gross profit SEK 222k (-449k)
· Net sales rose by about 39% to SEK 2,750k (1,972k), for the period Jan-Sep net sales rose by about 69%.
· Comprehensive income was a loss of SEK 2,740k (loss: 3,221k).
· Comprehensive income per share basic and diluted totaled SEK -0.17 (-0.27).
· Cash flow from operating activities during the period was SEK -3,286k (-3,614k).
· Genovis’ subsidiary GeccoDots introduced a groundbreaking product, FeODot EasyKit , that serves as a contrast agent in magnetic resonance imaging, PET/SPECT, optical imaging and ultrasound, and presented the results from the project in the pipeline at WMIC in Savannah, George, USA. New results from the Nanomotus project and the Sentinel Node project were also presented at the scientific portion of the conference.
· Genovis signed an agreement with Respiratorius to test and evaluate RESP-3000 as a new biomarker for early diagnosis of cardiovascular disease using a “PET” camera.
Events after the end of the period
In October Genovis launched FabULOUS, for analysis and characterization of antibody molecules, and GlycINATOR, for analysis of antibody molecules at Well Characterized Biologicals in Washington D.C.
Genovis’ Board of Directors resolved, subject to resolution by the Extraordinary General Meeting on November 19, to carry out a rights issue to existing shareholders in which three (3) existing shares entitle the holder to subscribe for one (1) issued share at a price four Swedish kronor and fifty öre (SEK 4.50). As a result of this resolution share capital could increase by a maximum
SEK 2,104,100.80 through the issuance of a maximum of 5,260,252 shares. Following the completed rights issue, share capital will amount to a maximum of SEK 8,416,403.60 and the number of shares to 21,041,009. The company will raise about SEK 23.7 million before issue expenses.
Shareholders have committed in writing to subscribe for 36 percent of the rights issue and external shareholders have committed to underwrite the remaining 64 percent.
In addition, the Board of Directors proposes that the Extraordinary General Meeting resolve to authorize the Board, provided that the rights issue for a maximum of 5,260,252 shares is fully subscribed, on one or more occasions, to decide on the issuance of a total of a maximum of 1,350,000 shares in the Company with or with or without preferential rights for the Company’s shareholders. The subscription price will be four Swedish kronor and fifty öre (SEK 4.50), payment for subscribed shares shall be made in cash, and the Board will have the option to permit payment by set-off retroactively. This authorization will be valid for the period ending on January 20, 2014. The reason for any deviation from shareholders’ preferential rights is to be able to take advantage of attracting interest from potential underwriters within the framework for issued underwriting guarantees.
Comments from CEO Sarah Fredriksson
We see a continued positive sales trend for our products and the past quarter has been the best in Genovis’ history. Sales jumped 25 percent compared with the second quarter this year. We are making the greatest progress in the US, where so far this year sales are up 110 percent over the same period last year. If we analyze the value of our products to customers, ignoring distributor discounts, our products have sold for SEK 11.5 million per rolling 12 months, compared with SEK 6.2 million at the same point last year.
Regarding financial performance, this is the first quarter where we can show a positive gross profit. In addition to staff costs, which increased by 12% compared with the third quarter last year, marketing in particular increased by about 40% for the Group compared with the third quarter last year. We are dedicating resources to spread awareness of our products. In the long term this initiative will yield more customers and stronger customer relationships for both Genovis and our subsidiary GeccoDots, which during the quarter began to participate at conferences to introduce nanostructures to the preclinical imaging market.
At the end of the period two of our development projects reached their goal, resulting in completely new product groups. Both GlycINATOR and FabULOUS were launched in mid-October. Few occasions are as wonderful as when a development project, which has required so much effort and energy, results in a commercially viable product and generates the first revenues. This time we received added support from some of our key clients, who beta tested the products alongside our internal development process.
Sarah Fredriksson
CEO, Genovis AB
Six-month report January-June 2013
· Net sales rose by 92% to SEK 2,200k (1,148k).
· Loss after financial items was SEK 3,903k (loss: 4,430k).
· Comprehensive income was a loss of SEK 3,852k (loss: 4,392k).
· Comprehensive income per share basic and diluted totaled SEK -0.27 (-0.53).
· Cash flow from operating activities during the period was SEK -3,251k (-4,474k).
· Cash and cash equivalents at the end of the period amounted to SEK 10,851k (14,772k).
· The rights issue in April raised about SEK 13.8 million before issue expenses for Genovis.
· Genovis and the wholly owned subsidiary GeccoDots are moving to new premises in Medicon Village, Lund, in September.
January – June
· Net sales rose by 96% to SEK 4,106k (2,092k).
· Loss after financial items was SEK 7,860k (loss: 8,438k).
· Comprehensive income was a loss of SEK 7,799k (loss: 8,363k).
· Comprehensive income per share basic and diluted totaled SEK -0.60 (-1.10).
· Cash flow from operating activities during the period was SEK -7,680k (-7,356k).
Events after the end of the period
Genovis signed an agreement with Respiratorius to test and evaluate RESP-3000 as a new biomarker for early diagnosis of cardiovascular disease using a “PET” camera. Genovis is coordinating the work, but GeccoDots AB, Genovis’ wholly owned subsidiary, will conduct the final evaluation. The evaluation is expected to be completed in late 2013 or early 2014. The agreement includes the option for Genovis to acquire technology and patents relating to RESP-3000 in preclinical applications and Genovis intends to initiate negotiations for an acquisition if the tests show favorable results.
Comments from CEO Sarah Fredriksson
We continued to prioritize meetings with clients during the spring. This strategy produces results and during the second quarter sales jumped 92%, number of orders rose by 36% and the average order value was up 42% compared with last year. An analysis of individual orders shows that the increase in number of orders is mainly attributable to new customers, while established customers account for the increase in volume per order. The number of publications and presentations at conferences featuring our products continue to grow. The FDA, Pfizer, and Bruker were among the participants at the American Society for Mass Spectrometry’s annual meeting in early June who featured methods and results based on the use of FabRICATOR. Marketing activities will hopefully yield long-term results, even if in the short-term they require an investment in staff, webinars, workshops, and an increased number of conferences and meetings.
The results for the second quarter and the first six months of the year improved somewhat compared with 2012. It is encouraging to see that our persistent long-term efforts are effective, although we have a ways to go before the protein engineering portfolio generates a positive result. To achieve this objective we will develop our business to include commercial production at the customer. Sales today are generated by products that the customer uses to screen new candidates, in production development and in preclinical development.
Our primary goal for 2013 is to continue to achieve robust sales growth. In September and October we will therefore launch two products in the protein engineering portfolio. Earlier product launches in the protein engineering portfolio have been well-received by existing customers and sales of smaller test volumes usually take off quickly. During the autumn our subsidiary GeccoDots will also introduce itself to the market and the first product will be launched in September.
Lund in August
Sarah Fredriksson
INTERIM REPORT JANUARY – MARCH 2013
· Net sales increased by 102 percent to SEK 1,906k (944k).
· Loss after financial items was SEK 3,957k (loss: 4,008k).
· Comprehensive income was a loss of SEK 3,946k (loss: 3,970k).
· Comprehensive income per share basic and diluted totaled SEK -0.33 (-0.57).
· Cash flow from operating activities during the period was SEK -4,429k (-2,871k).
· Cash and cash equivalents at the end of the period amounted to SEK 1,543k (3,959k).
· Genovis was allocated SEK 1.575 million in research support from VINNOVA (the Swedish Agency for Innovation Systems). VINNOVA chose to support the project “Nanoparticles in movement as contrast agents in medical ultrasound.”
· Genovis signed an agreement worth about USD 100,000 for a project for a major pharmaceutical company. The project will adapt Genovis’ products from the protein engineering portfolio to the customer’s technology platform.
· With the authorization of the 2012 Annual General Meeting, the Board of Directors of Genovis decided to conduct a rights issue for existing shareholders. The company will raise about SEK 13.8 million before issue expenses, which are expected to be SEK 600,000, if the rights issue is fully subscribed.
Comments from CEO Sarah Fredriksson
Net sales during the first quarter increased by more than 100 percent compared with the same quarter last year, which is gratifying since we want to continue to maintain a strong pace in sales and business growth. The average order value increased by 42 percent and the number of orders increased by 40 percent. We are pleased that we continue to reach completely new customers. Consolidated expenses increased by 19 percent compared with the first quarter of 2012; the increase is mainly due to increased marketing expenses as well as increased payroll costs. When comparing expenses on a consolidated basis with the preceding quarter, Q4 2012, however, they decreased by about 16 percent, mainly due to significantly lower royalty costs, and because we invested in more long-term marketing efforts during the fourth quarter.
During the first quarter we signed an agreement for a development project with a major pharmaceutical company. The one-year project is worth about USD 100,000 for Genovis. Recording of revenues will begin in the second quarter. The project will adapt Genovis’ products from the protein engineering portfolio to the customer’s technology platform. We look forward to starting the project, which in turn can have a positive impact and strengthen sales in the medium term.
In late March we also learned that VINNOVA, the Swedish Agency for Innovation Systems, chose to support a project in the nano portfolio with about SEK 1.6 million. The project has already been running for about 18 months and resulted in a new method for creating contrast for ultrasound. The contrast occurs when nanoparticles move in tissue. This small movement can be perceived with ultrasound. We developed this completely new and unique method together with Associate Professor Tomas Jansson’s research group at the Faculty of Engineering, Lund University (LTH). This grant from VINNOVA provides an injection of capital, inspiration and encouragement, while facilitating and strengthening our partnership with the research group at LTH.
Sarah Fredriksson, CEO
YEAR-END REPORT JANUARY-DECEMBER 2012
(compared with the same period 2011)
· Net sales increased by 88% to SEK 2,017k (1,071k).
· Operating loss before depreciation, amortization and impairment was SEK 4,335k (loss: 3,333k).
· Loss after financial items was SEK 8,465k (loss: 3,956k)*.
· Comprehensive income for the period was a loss of SEK 8,331k (loss: 3,835k)*.
· Comprehensive income per share basic and diluted totaled SEK -0.70 (-0.60).
· Cash flow from operating activities during the period was SEK -3,889k (-2,503k).
· Cash and cash equivalents at the end of the period totaled SEK 6,684k (7,563k).
Full-year 2012
(compared with full-year 2011)
· Net sales increased by 113% to SEK 6,080k (2,856k).
· Operating loss before depreciation, amortization and impairment was SEK -14,975k (- 12,435k).
· Loss after financial items was SEK 20,161k (loss: 13,758k)*.
· Comprehensive income was a loss of SEK 19,915k (loss: 13,608k)*.
· Comprehensive income per share basic and diluted totaled SEK -2.88 (2.37).
· Cash flow from operating activities during the period was SEK -14,848k (-12,150k).
*The impairment charges for the technology platform and patents have a negative impact of SEK 3,790k.
Events after the end of the period
Genovis’ Board of Directors has decided that the nano portfolio, which focuses primarily on new contrast agents intended for both the preclinical and clinical markets, will be placed in the wholly owned subsidiary GeccoDots AB (formerly Eijdo research AB). Genovis will provide the subsidiary with about SEK 6 million in 2013. Operations will focus on product development of products for imaging of lymph nodes in malignant diseases, as well as for stem cell tracking.
With the authorization of the 2012 Annual General Meeting, the Board of Directors of Genovis has decided to conduct a rights issue to existing shareholders in which three (3) existing shares entitle the holder to subscription for one (1) new share at a subscription price of SEK 3.50/ share. As a result of this decision share capital could increase by a maximum of SEK 1,578,075.60 through the issuance of up to 3,945,189 shares. Following the completed rights issue, share capital will amount to a maximum of SEK 6,312,302.80 and the number of shares to 15,780,757.The company will raise about SEK 13.8 million before issue expenses, which are expected to be SEK 600,000. The issue will have a dilutive effect of 25% on the holdings of those who do not subscribe for their full stake.
Record date, March 28, 2013
Subscription period, April 4 – April 17, 2013
Principal owners Mikael Lönn and LMK Ventures AB have provided written subscription undertakings and will subscribe for their respective shares of the issue. In addition, Mikael Lönn and LMK Ventures AB have provided a guarantee along with subscription commitments guaranteeing 70% of the total issue volume. Guarantee fees of 5% will be charged on the amount exceeding the sum of the underwriters’ subscription undertakings. The guarantee fee is SEK 256,141 to be divided equally among the underwriters.
CEO COMMENTS
During the fourth quarter, sales of products from our protein engineering portfolio increased by 88% compared with the same period in 2011–our strongest quarter ever. Looking at performance for the for twelve-month period of 2012 sales increased by 112%. FabRICATOR® continues to be our best-selling product, while our more processed products have increased the most in relative terms. The increase in sales is driven by a higher order value from established customers and a continued increase in the number of customers.
We also made some investments and hired more staff in 2012. Overall, our costs rose 38% during the year excluding impairments of patents and the technology related to the Nano portfolio of SEK 3,790k. We launched the campaign for a stronger team in sales and production in late 2011 and now I believe we have shaped an organization that will be able to take advantage of all of the opportunities that await in 2013.
We participated at two international conferences during the fourth quarter and worked with direct customer meetings. During the year as a whole we attended ten conferences, including seven at which we introduced new customers to the products from the protein engineering portfolio. We still have much work to do to reach out to our entire customer base. Our more experienced team enables us to take a more customer-focused approach and as a result our key customers are helping us to a greater extent in our marketing efforts by acting as ambassadors for the products.
Although we are prioritizing sales and delivery capacity for our existing products, during the fourth quarter we also worked intensively with the development of two new enzyme products. The first one, which we call FabULOUS, is an enzyme that supplements FabRICATOR and we are just starting to introduce it to our key customers in Europe and the United States. We will hold a broader launch later this spring, and later this year we are planning to add yet another new product.
In 2012, we worked with our nanostructures to strengthen the portfolio in terms of technology and patents, partly through collaborations with Lund University researchers. One of our most important tasks this year has been to meet potential customers, competitors and partners and in various ways we have analyzed the information, gained experience and identified needs for new technology and business models. As a result we will focus exclusively on new contrast agents that are based on our multimodal nanostructures. Although the preclinical market is a first step, the platform also has potential in the clinical market.
During the year we phased out operations in the subsidiary that consisted of providing medical imaging services. The restructuring of the operation in 2012 has resulted in an impairment of the holdings in the subsidiary since the business is no longer conducted in the way that was intended at the time of acquisition of Eijdo research AB in 2009, which affects the result of both the parent company and the Group.
We are already moving full speed ahead in 2013 and our two product portfolios will take the next step into each market. For the nano portfolio the main objective is to transition from testing and introduction of the technology into sales. Our unique enzymes have made progress and we now have our sights set on a positive cash flow for the protein portfolio at the end of the year.
Lund February
Sarah Fredriksson
CEO
Continued strong sales in third quarter
· Net sales increased by 152% to SEK 1,972k (784k).
· Loss after financial items was SEK 3,259k (loss: 3,018k).
· Comprehensive income per share basic and diluted totaled SEK -0.27 (-0.43).
· Cash flow from operating activities during the period was SEK -3,614k (-3,040k).
· Cash and cash equivalents at the end of the period totaled SEK 10,917k (11,035k).
January – September 2012 (compared with the same period 2011)
· Net sales increased by 110% to SEK 4,064k (1,932k).
· Loss after financial items was SEK 11,696k (loss: 9,803k).
· Comprehensive income per share basic and diluted totaled SEK -1.25 (-1.72).
· Cash flow from operating activities during the period was SEK -10,959k (-9,647k).
COMMENTS FROM THE CEO
During the third quarter we continue to see an increase in sales, as well as interest from completely new customers, and we are pleased that demand from existing customers gives larger volumes. It is evident that the products have reached the market through numerous publications and conference papers from our customers, including Pfizer, Amgen, Bruker, FDA and SigmaAldrich, in which they demonstrate the advantages of using our products.
Gross income improved during the third quarter compared with same period last year. We continue our strategic efforts with a strong focus on increased sales of the products in our protein engineering portfolio and as a result, to date this year we have seen increased costs in production as well as in sales and marketing. Three people have joined our staff, two in sales and one in production. However, costs for research and development as well as administration have not increased during the period.
Sarah Fredriksson, CEO
HALF-YEARLY REPORT JANUARY-JUNE 2012
· Loss after financial items was SEK k 8,438 (loss: SEK 6,784k).
· Comprehensive income per share, based on a weighted average of the number of outstanding shares, totaled SEK -1.10 (-1.48).
· Cash flow from operating activities during the period was SEK -7,346k (-6,607k).
· Cash and cash equivalents at the end of the period totaled SEK 14,772k (14,161k).
Second quarter highlights
· Genovis introduced FabRICATOR®96-well plate for HTS applications at conferences in Canada and the UK.
· Genovis signed exclusive distribution agreement with Sigma-Aldrich®for sales in Asia, Southeast Asia and South America.
· Genovis hired international sales manager to strengthen organization.
· Reverse share split 1:10 with record date April 10.
· Fully subscribed rights issue with preferential rights for existing shareholders brought Genovis SEK 12.1 million before issue costs.
· Private placement to LMK Ventures AB brought Genovis SEK 5 million.
COMMENTS FROM THE CEO
The most important events for Genovis during the second quarter were the agreement with Sigma Aldrich, doubled net sales compared with the same period last year and the addition of a sales manager. The distribution agreement is essential for us to quickly and more effectively reach customers in rapidly growing markets for production of biologics and biosimilars, especially in Asia, Southeast Asia and South America. With a partner like Sigma Aldrich, which has a well-established and recognized brand, we can supply products to customers anywhere, with short delivery times and local technical support. Adding a sales manager enables us to strengthen our direct sales and focus on Genovis’ key customers and distributors, mainly in the US and Europe. These two measures have been high-priority objectives for 2012. Taken together, they create the conditions to meet the trend we are now seeing with growing demand from new customers and rising average order value from established customer accounts. During the period Genovis carried out a successful rights issue which provides the Company with the necessary strength and focus to commercialize its products.
Cost increases for the period are mainly due to an increase in marketing and sales campaigns. Production costs also increased slightly during the period, mainly because we implemented measures to increase production volumes and we developed improved and more efficient quality control procedures. In the slightly longer term, these initiatives will result in lower production costs per unit produced.
During the fall, we will continue to aggressively market all products in the protein engineering portfolio. Although we clearly prioritized our sales and marketing campaigns, our development projects are progressing according to plan and they are all generating good results. I look forward to discussing these results and products from our nano portfolio with customers in medical imaging. As a first step we will have a booth at the World Molecular Imaging Congress in September.
Lund in August
Sarah Fredriksson
CEO Genovis AB
INTERIM REPORT January – March 2012
Loss after financial items was SEK 4,008k (loss: SEK 3,469k).
Loss after tax was SEK 3,970k (loss: 3,458k).
Earnings per share totaled SEK -0.06 (-0.08).
Cash and cash equivalents at the end of the period amounted to SEK 3,959k (1,008k).
Genovis’ nanoparticle project has been published in the prestigious Journal of Nuclear Medicine.
Rights issue
On March 20, the Annual General Meeting adopted a proposal for a rights issue to existing shareholders in which two (2) existing shares entitle the holder to subscription for one (1) new share at a subscription price of SEK 3.50/ share. The rights issue, which is fully guaranteed, will raise SEK 12.1 million for Genovis. The AGM also resolved on a private placement to LMK Ventures AB, which can raise an additional SEK 5m for the Company.
Changes in Board of Directors
Two new directors were elected at the Annual General Meeting, Peter Ragnarsson and Erik Walldén.
Change in share capital
On March 20, 2012, the AGM resolved to reduce share capital by SEK 24,925,363.2 which means a new par value of SEK 0.04.
Events after the end of the period
Change number of shares
On March 20, 2012, the AGM resolved to reduce the number of shares in the Company by consolidating the shares in the ratio 1:10, which entails that every ten shares will be consolidated into one share. As a result of the change, share capital shall amount to a minimum of two million four hundred thousand Swedish kronor (SEK 2,400,000) and a maximum of nine million six hundred thousand Swedish kronor (SEK 9,600,000) and the number of shares shall be a minimum of six million (SEK 6,000,000) and a maximum of twenty-four million (24,000,000).
The record date for consolidation was April 10.
COMMENTS FROM THE CEO
Spring has gotten off to a good start for Genovis. The trend from last year continues, with a strong increase in sales of products from the protein engineering portfolio. Meanwhile, development of the nano portfolio has made great strides. Several scientific papers have been published illustrating the benefits of Genovis’ nanoparticles, and we are following our development plan toward a launch in the third quarter of this year.
One year ago, we launched new product concepts from the protein engineering portfolio: FragIT, DeGlycIT and FragIT kits. The new products are intended to simplify and standardize work for our customers, making it easier for them to scale up their processes. They are marketed at a higher price per test, but save working hours for the customer. We are now beginning to see results and so far we can say that customers want the new products and the number of products sold in that category will increase more than the average increase for all products. During the quarter we increased sales from the protein engineering portfolio by about 150% compared with the same quarter last year and revenues from the new products now account for 35% of income from the protein engineering portfolio.
We are planning the next launch in the protein engineering portfolio for June. The time is now right for a high-throughput product that makes it possible to handle hundreds of samples quickly and reliably. We have plenty of work left to do in the market. We want to reach more customers in our target market and develop product concepts that can help to increase volumes with existing customers. It is an exciting challenge to try to reach as many of our potential customers as possible. To do so we are expanding our marketing campaigns in terms of both quantity and new formats, and I expect 2012 expenses to increase 15% as a result of these initiatives. We are pleased that we are being helped along by our customers, who are publishing the excellent results they achieve with our products. Recognition by customers also facilitates the process of finding the right partners that can expand our marketing activities to more geographic areas than those we are covering today. The process is ongoing and is obviously a high-priority strategic measure.
Lund in April
Sarah Fredriksson
YEAR-END REPORT JANUARY-DECEMBER 2011
· Net sales climbed to SEK 2,856k (1,596k)
· Revenues from the protein portfolio increased by 160%
· Loss after financial items was SEK 13,758k (loss: 11,334k)
· Comprehensive income for the year was SEK -13,608k (-11,292k)
· Earnings per share SEK -0.20 (-0.33)
· Cash and cash equivalents at the end of the period totaled SEK 7,563k (4,074k)
In February, Genovis acquired an exclusive license for a new technology that uses so-called upconverting nanoparticles as contrast agents in optical biomedical imaging. Genovis acquired the license from Lumito, a LUAB company, including an option to acquire the technology in its entirety.
In April, Genovis launched the FragIT™ Kit, a scalable and efficient technology for producing antibody fragments with extremely high yield and short process time. The product is a further development of Genovis’ unique technology and targets customers in pharmaceutical, biotech and diagnostics companies that develop antibody-based drugs and analyses.
Revenues improved during all four quarters compared with the same period last year and showed an increase on a rolling twelve month basis of between 80 and 100% over the year compared with 2010, which is a higher growth rate than the company had achieved between 2010 and 2009. Major pharmaceutical companies and several of the leading biotechnology companies that develop drugs based on antibody molecules became Genovis customers during the year. Several of these companies have published scientific papers demonstrating the benefits of Genovis products or in which Genovis products had a decisive role in the development process.
During the spring Genovis completed a rights issue that was subscribed at over 90% and raised about SEK 18m before issue expenses.
Events after the end of the period
The first scientific article from the Sentinel Node project has been published in the Journal of Nuclear Medicine, a highly ranked journal in its field and a forum for the exchange of clinical and scientific information for nuclear medicine practitioners.
The Board of Directors of Genovis has decided to hold the Annual General Meeting earlier on March 20, 2012. On February 21 the notice convening the AGM will appear in Post och Inrikes Tidningar and an ad will be published in Dagens Industri.
The Interim Report for January-March, which would have been announced on April 26, was postponed, and the new publication date is May 22. The Interim Report for January-June, which was to be announced on August 23, was postponed and the new publication date for the report is September 6.
Interim Report January-September 2011
· Loss after financial items was SEK 9,803k (loss: 8,023)
· Loss after tax was SEK 9,771k (loss: 7,991)
· Earnings per share increased to SEK -0.14 (-0.19).
· Cash and cash equivalents at the end of the period amounted to SEK 11,035k (7,125)
· All top ten pharma companies are paying customers.
· Major pharmaceutical companies have published scientific results in which Genovis products played an important role.
· The Extraordinary General Meeting in July elected Kenth Petersson to serve as a new board member.
ABOUT GENOVIS
Genovis has a strong product portfolio of innovative technologies that can facilitate and improve production of antibody-based drugs. The technology offers customers who use mass spectroscopy (MS), an analytical technique to determine the chemical composition of substances such as proteins and peptides, more cost-effective quality control. These customers, who currently include the top ten pharma companies, several well-known biotech enterprises and academic groups, mainly work with drug discovery, new diagnostic methods, and basic research.
Genovis has developed cutting-edge expertise in coating and functionalization of nanoparticles and conducts research and development projects focused on design, production, and characterization of nanostructures such as contrast agents in medical imaging. The nanostructures and methods that Genovis focuses on can also be used as carriers of various substances in the development of new drug delivery methods. The life sciences industry and the academic research community comprise the target group for commercialization.
CEO COMMENTS
The third quarter developed favorably with several new customers and an increase in the average value of orders. All in all the result was our best quarter to date. All top ten pharma companies and several leading biotech companies are now Genovis customers. It is gratifying to note that interesting scientific articles, in which our customers describe how they are using our products to develop new methods for quality control and analysis of monoclonal antibodies, were also published during this period. Such publications are the best marketing Genovis can have and it is extremely rewarding to meet customers and discuss their results and future product concepts.
Our goal is to offer the formats that customers need in order to implement the new analyses on all levels: from screening of new pharmaceutical substances to quality control in production. My assessment is that we are still in an early phase when customers are testing the technology and comparing it with the standard analyses they are currently using. The products in our protein engineering portfolio have great potential if the new analyses become “state of the art” in the industry and naturally that is what we are aiming at right now.
In January Genovis bought a license for a new type of optical technology, known as upconverting nanoparticles. We have now made good progress toward integrating the technology into our nano portfolio. We have applied our technology to coat nanostructures with a biocompatible surface and tests in cells are now in progress. We are satisfied with developments so far, with good test results and the project is also on schedule. Development of nanoparticles as contrast agents in stem cell research and cell transplantation has now progressed to a testing phase by reference customers. Activity in the sentinel node project has increased in all modalities—MRI, PET/SPECT and ultrasound—and we expect the first scientific publications from this interdisciplinary development project shortly.
Sarah Fredriksson
CEO
Half-Yearly Report January-June 2011
· Net sales climbed to SEK 1,030k (558k)
· Loss after financial items was SEK 6,784k (loss: 5,148k)
· Loss after tax was SEK 6,763k (loss: 5,127k)
· Earnings per share totaled SEK -0.10 (-0.12)
· Cash and cash equivalents at the end of the period amounted to SEK 14,161k (11,863k)
Other events during the quarter
· Genovis conducted a rights issue during the period that was subscribed to more than 90% and provided the company with about SEK 18 million.
· Genovis launched the FragIT™ Kit, a scalable and efficient technology for producing antibody fragments with extremely high yield and short process time. The product is a further development of Genovis’ unique technology and targets customers in pharmaceutical, biotech and diagnostics companies that develop antibody-based drugs and analyses.
· Hans-Göran Arlock left the Board of Directors at the annual meeting of shareholders and was replaced by Jacob Engellau, associate professor at Lund University stationed at both Skåne Oncology Department, Lund University, and the Oncology Department at Finsencentret, Copenhagen University Hospital.
· During the period Genovis customers published numerous scientific publications demonstrating the benefits of Genovis products from the protein portfolio.
Other events after the end of the period
Fredrik Lindgren declined election at the Extraordinary General Meeting in July, and Kenth Petersson was elected to serve as a new Board member. Mr. Petersson is chairman of the board at AlphaBeta AB, Biocrine AB, Spiber Technologies AB and Science Pacific AB. He is a board member of Alligator Bioscience AB and BioInvent AB.
ABOUT GENOVIS
Genovis develops and sells innovative technologies from two unique product portfolios. The first involves nanotechnology in new contrast agents and the second consists of unique enzymes that facilitate development and quality control of drugs. Research and development have largely dominated the company’s business activities, but over the past two years commercialization has begun. Today, sales and customer-based development projects account for an increasingly important part of business. The customers are mainly biotechnology and pharmaceutical companies and research groups associated with universities. By combining direct sales with marketing through a few distributors in the US and Europe, Genovis sells products to customers in the global Life Science industry. Research and development projects are mainly in-house in the company’s facilities in Lund and Malmö, as well as collaborations with research groups at Lund University.
COMMENTS FROM THE CEO
One year ago we launched products specifically designed for an application, a kit with products for analysis of antibodies using mass spectroscopy. We chose to do so to become more focused in our marketing strategy. We shifted from only offering our enzymes to offering customized products and protocols to biotechnology and pharmaceutical companies. Now a year later, we see the results of this strategy – not only in terms of sales, but also in terms of scientific publications from our customers. During the first half of the year, in just a short time period our customers published three scientific articles showing that Genovis products open opportunities for completely new technologies, which in turn increase the speed and quality of the customer’s analyses. In June we presented our products at the 59th ASMS Conference on Mass Spectrometry & Allied Topics, the biggest conference and meeting place for all mass spectroscopy users and developers. Our customers also presented papers at the conference showing the high performance of our products compared with competing technologies. Interest in and attention to our products has grown and naturally serves as an extremely welcome enhancement of our marketing.
I am pleased with the progress of our internal development projects and look forward to the commercialization of products from the nanotechnology portfolio and new applications from the protein portfolio this autumn. We have chosen to prioritize our resources by focusing on one defined application at a time when launching products from the nanotechnology portfolio. The first product group to be launched involves nanoparticles as contrast agents to track cells in preclinical stem cell research.
The collaboration within the LUPAS EU project submitted the first report to the EU. A summary of the results is available at the project website, www.amyloid-lupas.com. The project is inherently interdisciplinary and, although the research is at an early stage, the project has already provided Genovis with a unique opportunity to apply our technology and to learn about the use of nanostructures as contrast agents. We also gain insight into what tools are greatly needed in preclinical research.
During the second quarter Genovis raised funds in a rights issue. With this infusion of capital we can meet our customer obligations and continue to drive our development projects toward established goals during the coming year. We would like to thank all of our shareholders, existing and new, for their confidence. It means so much to our business.
Sarah Fredriksson, CEO
