Genovis enters licensing and supply agreement with new bioprocess customer
The new partner will initially use the Genovis enzyme for the preclinical process development and up-scaling of the manufacturing process to support regulatory submission to enable further clinical development. The initial preclinical development activities are expected to be performed during the first 12-months and generate approximately four million SEK in revenues. The agreement reflects the project spanning from preclinical process development through clinical development and commercial manufacturing. The ultimate goal is to generate a platform of novel therapeutic molecules to bring a series of new treatments to patients with high unmet needs.
“ We are proud to announce a second customer using our SmartEnzymes in bioprocess manufacturing to generate a novel type of biologics. This long-term agreement is a statement of the trust in Genovis as a high-quality supplier of key materials for clinical manufacturing. The agreement further strengthens our strategy to bring new tools and technologies to the biopharma market to meet the growing needs in a broad range of applications, including research, development and manufacturing,” comments Fredrik Olsson, CEO at Genovis.
Genovis AB enters service agreement with evitria AG for fast LC-MS analysis of recombinant antibodies
With this new service agreement, Genovis expands into a new business area that combines the ease of use of the SmartEnzymesTM with the competence and experience in the Genovis team to make advanced LC-MS analytics of recombinant antibodies available to a broader market. This agreement is a starting point for Genovis ambitions to offer advanced automated LC-MS analytical services to biopharma customers where the underlying trend to outsource research and development activities continues to grow.
- Our transient expression service is designed to provide the highest quality material within the shortest timeframe possible. The SmartEnzymes workflow from Genovis perfectly complements this approach by providing valuable insights from LC-MS analysis with rapid turnaround times. We cannot wait to offer this to the market, and empower researchers with the combination of our technologies, says Christian Eberle, CEO at evitria.
- By offering the SmartEnzymes workflow as a service to antibody developers, we demonstrate our fast and robust sample preparation technologies that allows for easy interpretation of advanced LC-MS antibody characterization data. The quality and speed of the automated recombinant antibody services provided by evitria makes them a perfect partner for us to expand our service offering and we are excited to team up with one of the leaders in this field, says Fredrik Olsson, CEO at Genovis.
About evitria AG
evitria AG is the market-leading transient CHO expression service provider. Based in Zurich, Switzerland, they have supported a global base of preclinical researchers with CHO-based transient expression for over 12 years. With a track record of more than 100,000 transfections and more than 15,000 antibodies and proteins purified, evitria has fully optimized their workflows for high quality productions in the shortest timeframes possible.
Communiqué from Genovis AB (publ) Annual General Meeting May 12, 2022
- The Balance Sheet and Income Statement as well as the Consolidated Income Statement and the Consolidated Balance Sheet were adopted.
- The Board and the Chief Executive Officer were discharged from liability.
- The Board shall consist until the next AGM of five ordinary members without deputies.
- Re-election of Board members Torben Jørgensen, Mikael Lönn, Lotta Ljungqvist and Steve Jordan.
Magnus Gustafsson was elected new Board member.
Torben Jørgensen was elected Chairperson of the Board.
- Remuneration will be paid to the Board of Directors in the amount of SEK 150,000 to Board members and SEK 300,000 to the Chairperson of the Board.
- The Meeting approved the Board of Directors’ report regarding compensation pursuant to Chapter 8, Section 53 a of the Swedish Companies Act.
- Remuneration to the auditors will be paid on approved account.
- In accordance with the Nomination Committee’s proposal, the Meeting re-elected the accounting firm Öhrlings PricewaterhouseCoopers AB as auditor for the period until the close of the Annual General Meeting 2023.
- The AGM resolved on the Board of Directors’ proposal for remuneration guidelines for senior executives.
- A Nomination Committee will be formed with representatives of the four largest shareholders at September 30, 2022.
- The AGM resolved on the authorization to issue shares with or without preferential rights for existing shareholders. As a result of this resolution, share capital could increase by a maximum of SEK 1,625,000 through the issuance of a maximum of 6,500,000 shares.
Minutes with all resolutions from the meeting will be made available on the company’s website:
https://investor.genovis.com/en/corporate-governance/general-meeting/
Interim Report January – March 2022
· Gross profit rose by 96% to SEK 29,419 (15,017) thousand.
· Operating profit before depreciation and amortization (EBITDA) totaled SEK 11,717 (1,958) thousand.
· Operating profit jumped SEK 9,554 thousand and totaled SEK 10,105 (551) thousand.
· Comprehensive income for the period improved by SEK 11,476 thousand and totaled SEK 13,083 (1,607) thousand.
· Comprehensive income per share totaled SEK 0.20 (0.02).
· Cash flow from operating activities was SEK -1,622 (3,512) thousand.
· Cash and cash equivalents at the end of the period totaled SEK 78,119 (45,929) thousand.
Comments from Fredrik Olsson, Chief Executive Officer
The year got off to a strong start and our sales totaled about SEK 33 million, which is an increase of 107% compared with the corresponding period last year. Growth is driven by revenue from the agreement in gene therapy and strong growth in the enzyme business, where sales increased by 37%. The enzyme business grew in all major geographic markets. It is particularly gratifying to note that the locations which we have now strengthened by adding local product specialists are off to a good start with strong growth. In the antibody business, we again see growth compared with the previous quarter, and the sales trend for the antibody products that were developed for synergies with the enzyme business continues to be strong.
It is particularly satisfying to note that our antibody labeling technologies continue to show strong growth and now represent an increasing share of our total revenue streams, which strengthens us in our ambitions in enzyme-driven workflows for antibody labeling.
During the first quarter, we were able to act on several of our strategic goals, which affected costs compared with the first quarter of 2021. This is fully in line with our plan and related to the expansion we are currently implementing in our commercial organization with local representation in Shanghai and the UK. At the beginning of the second quarter, we also recruited staff to serve as local representatives in Germany and Switzerland. It is also gratifying that at the beginning of the year, we were able to invest and participate in several physical conferences and fairs compared with the previous year. In addition to the above, the total cost base has also been affected by higher raw material prices and costs related to the licensing deal with Selecta Biosciences.
World events, with the continued effects of Covid-19 on logistics, along with the war in Ukraine, have had a limited impact on our business to date. We have seen some cost increases in raw materials and supplies, but the effects moving forward are currently difficult to assess. The logistics chain is still under pressure, with delivery delays and higher prices. Many of our suppliers are still able to deliver and our exposure to Russia is deemed to be very limited. Similarly, an assessment of our markets and revenue streams also shows limited impact at this time. We work actively to make sure our products are not sold or distributed in the Russian market. Our thoughts and sympathies lies firmly with the Ukrainian people and all pepole suffering from the unjustifiable attack on democratic and human values.
Although the impact of external factors is currently difficult to assess in the short term, I maintain my positive basic view of Genovis’ future growth opportunities and the resources provided to enable us to continue to invest for further expansion.
I am pleased to welcome several new teammates to Genovis now at the beginning of the year and would also like to thank the entire team for their efforts and a good start to 2022.
Published reports can be downloaded from the Genovis website: https://investor.genovis.com/en/financial-reports/
Genovis Annual Report 2021 published
To read or download the annual report in Swedish, go to:
https://investor.genovis.com/wp-content/uploads/genovis-ar-2021-sv.pdf
To read or download the annual report in English, go to:
https://investor.genovis.com/wp-content/uploads/genovis-ar-2021-en.pdf
NOTICE CONVENING THE 2022 ANNUAL GENERAL MEETING
In view of the COVID-19 pandemic, the Board of Directors has decided, under the temporary legal rules applicable in 2022, that the Annual General Meeting shall be conducted without the physical presence of shareholders, representatives and third parties, and that shareholders shall only be entitled to exercise their voting rights by postal voting before the Meeting as prescribed below. Information on the resolutions passed at the Annual General Meeting will be disclosed on May 12, 2022, as soon as the outcome of the postal voting has been finally confirmed.
Registration and notification
Shareholders who wish to participate in the Annual General Meeting by postal voting must:
- be recorded as shareholder in the share register maintained by Euroclear Sweden AB on Wednesday, May 4, 2022; and
- give notice of their intention to participate by submitting their postal votes (in accordance with the instructions under the heading Postal Voting below), so that these are received by attorney Arne Källén not later than Wednesday, May 11, 2022.
To be entitled to participate in the Annual General Meeting, shareholders whose shares are held in the name of a nominee must, in addition to giving notice of participation in the AGM by submitting their postal vote, re-register the shares in their own name so that the shareholder is registered in the share register as of the record date on May 4, 2022 Such registration may be temporary (so-called “voting right registration”) and is requested from the nominee in accordance with the nominee’s procedures at such time in advance as determined by the nominee. Voting rights registration that has been made by the nominee not later than Friday, May 6, 2022 will be taken into account in the preparation of the share register.
Postal voting
The Board of Directors has decided that shareholders should be able to exercise their voting rights only by postal voting in accordance with Section 22 of the Act (2022:121) on temporary exceptions to facilitate the execution of general meetings in companies and other associations. A special form must be used for the postal vote. The postal voting form is available on the Genovis website: https://investor.genovis.com/en/corporate-governance/general-meeting/
The completed and signed postal voting form shall be sent by mail to Genovis AB c/o Advokatfirman Källén AB, Klostergatan 10, 222 22 Lund, Sweden, or by e-mail to arne@advkallen.se. Completed forms must be received by attorney Arne Källén no later than Wednesday, May 11, 2022. Shareholders may not assign specific instructions or conditions to the postal vote. The postal voting form will be deemed to be invalid in its entirety if this happens.
Proxies
If a shareholder votes in advance via a representative, a written and dated proxy form, signed by the shareholder, must be attached to the advance voting form. The proxy form is available on the Genovis website https://investor.genovis.com/en/corporate-governance/general-meeting/. If the shareholder is a legal entity, a certificate of registration or other authorization document must be attached to the advance voting form.
Proposed Agenda
- Election of Chairman of the Meeting.
- Election of two persons to verify the minutes.
- Preparation and approval of voting list.
- Approval of the agenda.
- Consideration of whether the meeting had been duly convened.
- Presentation of the annual report and the consolidated accounts, as well as the audit report.
- Resolutions on:
- adoption of the Income Statement and the Balance Sheet, as well as the Consolidated Income Statement and the Consolidated Balance Sheet,
- allocation of the Company’s result in accordance with the adopted balance sheet
- on discharge from liability to the company of the Directors and the Chief Executive Officer.
- Determination of number of members of the Board and deputy members.
- Determination of fees for members of the Board of Directors.
- Election of members of the Board of Directors and Chairman of the Board.
- Torben Jørgensen as Board member. (re-election)
- Mikael Lönn as Board member. (re-election)
- Lotta Ljungqvist as Board member. (re-election)
- Steve Jordan as Board member. (re-election)
- Magnus Gustafsson as Board member. (election)
- Torben Jørgensen as Chairman of the Board. (re-election)
- Determination of fees for the auditor.
- Election of auditor.
- Resolution on approval of the remuneration report.
- Resolution on the Board of Directors’ proposal for remuneration guidelines for senior executives.
- Appointment of members to the Nomination Committee and adoption of guidelines for the Nomination Committee.
- Resolution authorizing the Board of Directors to decide on the issuance of shares.
- Authorization of the Chief Executive Officer to make such formal adjustments to the resolutions as may be necessary in conjunction with registration and implementation thereof.
- Adjournment.
Item 1. Election of Chairman of the Meeting
Genovis’ Nomination Committee, which includes Mikael Lönn, Erik Sprinchorn – TIN Funds, Johan Sjöström – Second AP Fund and Markus Lindqvist – Aktia Fondbolag AB proposes: Attorney Arne Källén to chair the meeting, or, in the event he is unable to participate, the person appointed by the Board of Directors.
Item 2 Election of two persons to verify the minutes
The Board of Directors proposes Gunnar Björdal, and Laila Borg, or in the event one or both of them are unable to participate, the person(s) appointed by the Board of Directors, to verify the minutes of the meeting. The duties of the minute-checkers also include verification of the voting list and ensuring that the postal votes received are correctly recorded in the minutes of the meeting.
Item 3 Preparation and approval of voting list
The voting list that is proposed for approval is the voting list based on the meeting’s shareholder register and received postal votes, verified by the minute-checkers.
Item 8 Determination of number members of the Board and deputy members
The Nomination Committee proposes that the Board shall consist of five members without deputies.
Item 9 Determination of fees for members of the Board of Directors
The Nomination Committee proposes that fees until the close of the next Annual General Meeting shall be paid in the amount of SEK 150,000 to each Board member who is not employed by the company and SEK 300,000 to the Chairman of the Board.
Item 10. Election of Directors and Chairman of the Board.
The Nomination Committee proposes:
Re-election of Board members Torben Jørgensen, Mikael Lönn, Steve Jordan and Lotta Ljungqvist. Election of Magnus Gustafsson.
Re-election of Torben Jørgensen as Chairman of the Board.
Magnus Gustafsson is currently employed as Chief Business Officer at Biovian a Nordic CDMO. He has more than 15 years of experience from different commercial positions such as and Head of Global Business Development at Biovian, Director Strategy; Search and Evaluation at Cytiva/GE Healthcare Life Sciences and as Corporate and Business Development Director at Cobra Biologics (now Charles River). Magnus holds an MSc in Biochemical Engineering, a PhD in Medical Biochemistry and Biophysics and an MBA in Business Administration.
Item 11 Resolution on fees to auditors
The Nomination Committee proposes that remuneration to the auditors shall be paid on approved account.
Item 12 Election of auditor
The Nomination Committee proposes re-election of registered auditing firm Öhrlings PricewaterhouseCoopers AB (“PWC”). PWC has announced that in the event that PWC is elected, Neda Feher will be appointed auditor in charge.
Item 13 Resolution on approval of the remuneration reportThe Board of Directors proposes that the Annual General Meeting resolves to approve the Board of Directors’ report on remuneration pursuant to Chapter 8, Section 53 a of the Swedish Companies Act.
Item 14 The Board of Directors’ proposal for remuneration guidelines for senior executives
These guidelines concern remuneration and other terms of employment for the Chief Executive Officer and senior executives. The guidelines are forward-looking and applicable to remuneration already agreed, and amendments to remuneration already agreed, after adoption of the guidelines by the 2020 Annual General Meeting. These guidelines do not apply to any remuneration decided or approved by the general meeting.
Promotion of the company’s business strategy, long-term interests and sustainability
A prerequisite for the successful implementation of the Genovis Group’s business strategy and safeguarding of its long-term interests, including its sustainability, is that the company is able to recruit and retain qualified personnel. These guidelines enable Genovis to offer senior executives a competitive total remuneration package. For more information about the company’s business strategy: https://investor.genovis.com/sv/bolagsoversikt/
Types of remuneration
The Genovis Group’s remuneration shall be on market terms and may consist of the following components: fixed cash salary, variable cash remuneration, pension benefits and other benefits. The Annual General Meeting may also – regardless of these guidelines – adopt remuneration based on, for example, share and share-price-related incentive schemes.
The satisfaction of criteria for awarding variable cash remuneration shall be measured over a period of one or several years. The variable cash remuneration shall be capped at a maximum of 50 per cent of the annual fixed cash salary.
Further variable remuneration may be awarded in extraordinary circumstances, provided that such extraordinary arrangements are limited in time and only made on an individual basis, either for the purpose of recruiting or retaining senior executives, or as remuneration for extraordinary performance beyond the individual’s ordinary tasks. Such remuneration may not exceed an amount corresponding to 35 percent of the fixed annual cash salary and may not be paid more than once each year per individual. Any resolution on such remuneration shall be made by the Board.
For the CEO, pension benefits, including health insurance (Sw: sjukförsäkring), shall be defined-contribution schemes. Variable cash remuneration shall be pensionable. The pension premiums to defined-contribution schemes shall amount to not more than 35 percent of the fixed annual cash salary. Other benefits may include, for example, life insurance, medical insurance (Sw: sjukvårdsförsäkring), and company cars. Such benefits may amount to not more than 10 percent of the fixed annual cash salary.
For other senior executives, pension benefits, including health insurance, shall be defined-contribution schemes, to the extent that the executive is not covered by a defined benefit pension under compulsory collective contract provisions. Variable cash remuneration shall be pensionable. The pension premiums to defined-contribution schemes shall amount to not more than 35 percent of the fixed annual cash salary.
Other benefits may include, for example, life insurance, medical insurance (Sw: sjukvårdsförsäkring), and company cars. Such benefits may amount to not more than 15 percent of the fixed annual cash salary.
For employments governed by rules other than Swedish rules, pension benefits and other benefits may be duly adjusted for compliance with mandatory rules or established local practice, taking into account, to the extent possible, the overall purpose of these guidelines.
Termination of employment
For notice of termination served by the company, the maximum notice period is twelve months. Fixed cash salary during the notice period and severance pay may together not exceed an amount corresponding to fixed cash salary for eighteen months for the Chief Executive Officer and one year
for other members of senior executives. For notice of termination served by the executive, the maximum notice period is six months, without right to severance pay.
Additionally, remuneration may be paid for non-compete undertakings. Such remuneration shall only be paid to compensate for loss of income in so far as the previously employed Group Management member is not entitled to severance pay. The remuneration shall be based on the fixed cash salary at the time of termination of employment, amount to not more than 60 percent of the monthly income at the time of termination of employment and be paid during the time the noncompete undertaking applies, however not for more than nine months following termination of the employment.
Criteria for awarding variable cash remuneration, etc.
The variable cash remuneration shall be linked to predetermined and measurable criteria which can be financial or non-financial. They may also be individualized, quantitative or qualitative objectives. The criteria shall be designed so as to promote the company’s business strategy and long-term interests, including its sustainability, by for example being clearly linked to the business strategy or promoting the long-term development of the executive.
The extent to which the criteria for awarding variable cash remuneration have been satisfied shall be determined when the measurement period has ended. The Board is responsible for the evaluation so far as it concerns variable remuneration to the Chief Executive Officer. The Chief Executive Officer is responsible for evaluation regarding variable cash remuneration to other senior executives. For financial objectives, the evaluation shall be based on the latest financial information made public by the company.
Salary and terms of employment for employees
In preparation of the Board’s proposal for these remuneration guidelines, salaries and terms of employment for the company’s employees were taken into account in that information about employees’ total remuneration, the remuneration components, the increase in remuneration and the rate of the increase over time formed a part of the decision basis used by the Board to evaluate whether the guidelines and the limitations set out herein were reasonable.
Decision-making process to determine, review and implement the guidelines
The Board of Directors shall prepare proposals for new guidelines at least every four years and submit the proposal to the Annual General Meeting for resolution. The guidelines shall be in force until new guidelines are adopted by the general meeting. The Board shall also monitor and evaluate programs for variable remuneration for the senior executives, the application of the guidelines for senior executive remuneration, as well as the current remuneration structures and compensation levels in the company. The Chief Executive Officer and other members of the senior executives do not participate in the Board’s processing of and resolutions regarding remuneration-related matters in so far as they are affected by such matters.
Derogation from the guidelines
The Board of Directors may resolve to derogate from the guidelines, in whole or in part, if in a specific case there is special cause for the derogation and a derogation is necessary to serve the long-term interests of the company, including its sustainability, or to ensure the financial viability of the company.
Item 15 Appointment of members to the Nomination Committee and adoption of guidelines for the Nomination Committee
The Nomination Committee proposes that the Committee for the 2023 Annual General Meeting will consist of representatives of the four largest shareholders as of September 30, 2022. The Nomination Committee shall appoint a chairman from among its members. It is incumbent upon the Chairman of the Board to convene the Nomination Committee. Should a shareholder decline to participate in the committee the right to appoint a representative shall be transferred to the next largest shareholder not represented in the committee. If deemed appropriate as a result of
ownership changes, the Nomination Committee shall invite additional shareholders to join the Nomination Committee, though the total number of members may not exceed five. In the event a member of the Nomination Committee leaves the Committee before its work is completed, the Chairman of the Board, if the Nomination Committee deems necessary, shall invite the same shareholder or, if the latter is no longer one of the major shareholders, the shareholder next entitled, in terms of size of shareholding, to appoint a replacement. Such a change shall be announced on the Company’s website.
The Nomination Committee will prepare proposals for the 2023 Annual General Meeting for resolution as regards chairman at the meeting, Chairman of the Board and other directors, remuneration of directors and auditors, and principles for appointing the Nomination Committee. The Nomination Committee mandate runs until a new committee is appointed.
The Nomination Committee proposes that remuneration will only be paid for direct costs associated with the assignment.
Item 16 The Board’s proposal authorizing the Board of Directors to decide on the issuance of shares.
The Board proposes that the Meeting authorize the Board, on one or more occasions until the next Annual General Meeting, with or without preferential rights for shareholders, to issue new shares, convertible bonds or warrants. New shares may be paid for in cash and/or in kind or set-off or on other terms. This decision would mean that the share capital could be increased up to a maximum total of SEK 1,625,000 through the issuance of a maximum total of 6,500,000 new shares. When deciding on issuances without preferential rights for shareholders, the subscription shall be market-based at the time of the issue resolution.
The reason for the possible deviation from shareholders’ preferential rights is to broaden the ownership group, acquire, or facilitate the raising of working capital, increase the liquidity of shares, carry out acquisitions, or procure or permit the raising of capital for acquisitions.
For a valid resolution under this item, the Meeting’s resolution must be supported by shareholders representing at least two thirds of both the voting rights and the shares represented at the Meeting.
Documents
The annual report, audit report, articles of association, postal voting form, proxy form and the other proposals for motions will be available at the Company’s office at Scheelevägen 2, Box 790, S-220 07 Lund, Sweden, and on the Company’s website www.genovis.com as of April 21, 2022, and will be sent, upon request, to shareholders who provide their mailing address.
Number of shares and votes
At the time of issuance of this notice, the total number of shares and votes in the company is 65,465,714.
Information at the Annual General Meeting
Shareholders are reminded of their right to request information from the Board of Directors and the Chief Executive Officer pursuant to Chapter 7, sections 32 and 57 of the Swedish Companies Act. A request for such information shall be submitted in writing to Genovis AB, Attn: Legal, 220 07 Lund, or by e-mail to: legal@genovis.com, no later than May 2, 2022. The information must be sent to the shareholder who has requested it and be kept available in writing at the company and on the company’s website no later than May 7, 2022.
Lund, April 2022
Genovis AB (publ)
Board of Directors
Year-end Report January – December 2021
· Net sales rose by 112% to SEK 42,060 (19,850) thousand. About SEK 20 million relates to licensing agreements with Selecta Bioscience. Growth is 108%, adjusted for currency effects.
· Gross profit rose by 97% to SEK 39,024 (19,761) thousand.
· Operating profit before depreciation and amortization (EBITDA) totaled SEK 23,361 (6,196) thousand.
· Operating profit jumped SEK 17,291 thousand and totaled SEK 21,895 (4,604) thousand.
· Comprehensive income for the period improved by SEK 16,828 thousand and totaled SEK 23,175 (6,347) thousand.
· Comprehensive income per share totaled SEK 0.35 (0.10).
· Cash flow from operating activities was SEK 37,368 (-672) thousand.
· Cash and cash equivalents at the end of the period totaled SEK 81,315 (44,118) thousand.
· Magnus Långberg has been hired as the new CFO for the group; his most recent position was at Hemocue AB. Before that he worked at companies such as QPharma and BD Medical.
· Genovis has entered into an exclusive licensing 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. Under the terms of the multi-year agreement, Genovis will receive USD 6 million in advance payment and early milestone payments, and is entitled to up to USD 598 million in development, regulatory and commercial milestone payments. Genovis will also receive double-digit royalties on sales of Xork.
January – December 2021
· Net sales rose by 52% to SEK 93,018 (61,030) thousand. Growth is 56%, adjusted for currency effects. About SEK 20 million relates to licensing agreements with Selecta Bioscience.
· Gross profit improved by 44% to SEK 85,600 (59,370) thousand.
· Operating profit before depreciation and amortization (EBITDA) totaled SEK 30,314 (8,573) thousand.
· Operating profit improved by SEK 21,403 thousand and totaled SEK 24,543 (3,140) thousand.
· Comprehensive income for the period improved by SEK 24,856 thousand and totaled SEK 26,828 (1,973) thousand.
· Comprehensive income per share, basic and diluted, totaled SEK 0.41 (0.03).
· Cash flow from operating activities was SEK 45,411 (3,755) thousand.
Comments from Fredrik Olsson, Chief Executive Officer
We show strong growth for the fourth quarter, driven in part by revenue related to the license business in Gene Therapy, as well as from a recovery in our core business in Analytics, where we saw higher customer activity in all geographic markets.
Revenue from Gene Therapy increased almost six times compared with the corresponding quarter last year and totaled about SEK 20 million, mainly attributable to license revenue from our collaboration agreement with Selecta Bioscience.
We are also pleased to see that enzyme sales in Analytics grew by 35%, reflecting the improved market situation we experienced during much of the quarter as a result of eased restrictions, with customers able to return to work in laboratories to a greater extent.
Sales in our antibody business showed a weaker trend compared with the corresponding period last year, mainly because they relate to service operations with lengthy projects, where shifts in revenue between individual quarters are not uncommon. Several development programs are currently underway for products that complement the enzyme business in gene therapy, where the first products, which were launched in 2021, were well received by our customers.
We launched two new products during the fourth quarter, which means that we launched an impressive six products in the enzyme business in 2021. Both products were well received, which confirms our ability to pay close attention to the market in order to guide our product development and create value for our customers. Continuing to broaden the product portfolio is one of our key strategic goals for both current and future application areas for our enzyme technology. We have also expanded our antibody offering with products for research in Alzheimer’s Disease and will add additional products during 2022.
Despite periods of challenges in different parts of the business in 2021, we can once again report yet another year of strong growth and it is particularly rewarding to note that we achieved our best earnings to date. Our focus on customers and on new applications for our enzyme technology is the basis of our success. In the short term, uncertainties persist regarding Covid-19 developments, but in the longer term, Genovis’ growth opportunities remain intact. We have built up a good cash base, which enables us to be enterprising and invest in Genovis’ continued growth journey.
Our successes in 2021 lay an excellent foundation for expansion as a result of license revenue and a strong expansion of the product offering through six launched products. The final quarter of the year was therefore characterized by additional bold initiatives through the expansion of our organization. We are now implementing several strategic initiatives within both the sales and business development organizations. In addition to a new vice president of global sales and marketing, at the beginning of 2022 the sales organization was strengthened with sales representatives in local markets to increase our opportunities to be even closer to our customers. In Europe, we began with a presence in the UK and we intend to expand to more geographic markets during the year. In Asia, beginning in January, for the first time we have our own sales staff in the strategically important Shanghai region in China. We also added resources for our strategic efforts in business development in order to take advantage of more opportunities in new application areas, licensing and potential acquisition opportunities in the future. At the beginning of 2022 we strengthened the commercial organization in San Diego with the aim of expanding our products and services for the antibody business.
I would like to close by thanking the Board of Directors and shareholders for their support and commitment over the past year. I would also like to warmly thank my colleagues at Genovis, who have done an amazing job of handling a challenging year with great dedication, for which reason I look forward with confidence to 2022.
INTERIM REPORT FOR 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.
Reports (https://investor.genovis.com/en/financial-reports/)
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.
Genovis announces exclusive license agreement with Selecta Bioscience to develop and promote a novel IgG Protease in Gene Therapy and Autoimmune Disease
Under the terms of the license:
· 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. Additionally, Genovis will receive double digit royalties on sales.
· Genovis will retain its rights to the Xork enzyme for all applications outside therapeutic use to support its core enzyme innovation business within discovery, preclinical research, diagnostics and bioprocess markets.
Genovis AB (GENO), a world leader enzyme technology innovator company, and Selecta Biosciences, Inc. (NASDAQ: SELB), a biotechnology company leveraging its clinically validated ImmTOR™ platform to develop tolerogenic therapies that selectively mitigate unwanted immune responses today announced a strategic licensing agreement to advance a next-generation IgG protease. This partnership leverages Genovis’ proprietary immunoglobulin G (IgG) protease, Xork, and Selecta’s ImmTOR platform to enable the dosing of transformative gene therapies in patients with pre-existing adeno-associated virus (AAV) immunity and treat certain IgG-mediated autoimmune diseases.
Most IgG proteases are derived from human pathogens and have a high prevalence of pre-existing antibodies. Xork is derived from a streptococcal bacterial strain that does not infect humans. The pre-clinical data generated to date highlights Xork’s differentiated profile – demonstrating very low cross-reactivity with naturally occurring antibodies in human sera while retaining efficient and specific cleavage of human IgG antibodies.
Currently, pre-existing IgG antibodies against AAV gene therapy vectors are a major exclusion criterion for AAV gene therapy eligibility, affecting upwards of 40% of the population. Additionally, de novo immunogenicity that follows treatment by AAV gene therapy results in the formation of high titers of neutralizing antibodies. These neutralizing antibodies preclude re-treatment of those patients who may need additional dosing to maintain therapeutic benefit. The combination of Xork and ImmTOR has the potential to both mitigate pre-existing antibodies to AAV, expanding access to gene therapy to a wider range of patients, and prevent de novo immunogenicity, keeping patients eligible for re-treatment. Together, this novel combination has the potential to address two of the key hurdles in gene therapy today.
Additionally, bacterial-derived IgG proteases are themselves immunogenic. Currently, IgG proteases can only be administered once due to the formation of high titer antibodies against the protease itself. The combination of Xork and ImmTOR is further differentiated by the potential of ImmTOR to mitigate the immunogenicity of Xork and enable re-dosing of Xork, an important benefit for the application of IgG proteases in autoimmune diseases mediated by pathogenic autoantibodies.
“We see this strategic collaboration with Genovis as an important step in expanding our pipeline of novel therapeutics in combination with our ImmTOR platform,” said Carsten Brunn, Ph.D., president and chief executive officer of Selecta. “Our preclinical findings in gene therapy indicate that ImmTOR has the potential to increase transgene expression and durability, enable re-dosing by inhibiting the formation of neutralizing antibodies and potentially lead to safer, more efficacious gene therapy treatment regimens. The partnership between Selecta and Genovis focuses on those patients who would otherwise be unable to be treated due to preexisting immunity to AAV. The combination of ImmTOR with Xork has the potential to significantly expand access to life changing gene therapies for those patients in need.”
Fredrik Olsson, chief executive officer of Genovis, commented, “We are excited to partner with Selecta as we look to expand into the gene therapy field and address the challenge of pre-existing immunity to AAV vectors. While IgG proteases have shown promise, overcoming the immunogenicity of the enzyme remains a significant hurdle. We believe Selecta’s ImmTOR platform, which is designed to mitigate unwanted immune responses, in combination with Xork has the potential to be transformational in both gene therapies and autoimmune diseases.”
About Selecta Biosciences, Inc.
Selecta Biosciences Inc. (NASDAQ: SELB) is a clinical stage biotechnology company leveraging its ImmTOR platform to develop tolerogenic therapies that selectively mitigate unwanted immune responses. With a proven ability to induce tolerance to highly immunogenic proteins, ImmTOR has the potential to amplify the efficacy of biologic therapies, including redosing of life-saving gene therapies, as well as restore the body’s natural self-tolerance in autoimmune diseases. Selecta has several proprietary and partnered programs in its pipeline focused on enzyme therapies, gene therapies, and autoimmune diseases. Selecta Biosciences is headquartered in the Greater Boston area. For more information, please visit www.selectabio.com.
Genovis AB (publ.) hires new CFO
Magnus Långberg has over 20 years of experience from a variety of positions within finance and management at international life science companies. He will be joining Genovis from his most recent position at Hemocue AB. Before that he worked at companies such as QPharma and BD Medical.
“I’m pleased to be able to welcome Magnus Långberg as the new CFO of Genovis. Magnus will have an important role in Genovis’ continued development and I look forward to working with him,” says Fredrik Olsson, CEO of Genovis.
