Year-end Report January – December 2019
Period January – December
October – December in brief
- Net sales rose by 22 percent to SEK 12,830 (10,537) thousand.
- Gross profit improved by 1,109 thousand to SEK 12,065 (10,956) thousand.
- Operating profit before depreciation and amortization (EBITDA) totaled SEK 492 (2,954) thousand.
- Operating earnings fell SEK 2,434 to a loss of SEK 522 (profit: 1,912) thousand.
- Comprehensive income for the period declined by SEK 2,180 thousand to a loss of SEK 895 (profit: 1,285) thousand.
- Comprehensive income per share, basic and diluted, totaled SEK -0.01 (0.02).
- Cash flow from operating activities rose by SEK 3,059 thousand and totaled SEK 2,824 (-235) thousand.
- Genovis launched Immobilized SialEXO for more effective sample handling of biologicals. SialEXO is used in spectrometry, but is also adapted for analysis using capillary electrophoresis.
- At the Extraordinary General Meeting, held on December 20, 2019, Sarah Fredriksson was elected to serve as a new director and as Board Chair since Mårten Winge left the Board at his own request for personal reasons.
The full year in summary
- Net sales rose 75 percent, or SEK 25,981 thousand, to SEK 60,549 (34,568) thousand.
- Gross profit improved by SEK 23,371 thousand to SEK 56,187 (33,816) thousand.
- Operating profit before depreciation and amortization (EBITDA) totaled SEK 13,563 (4,091) thousand.
- Operating profit/loss improved by SEK 11,026 thousand to SEK 10,066 (loss: 960) thousand.
- Comprehensive income for the full year improved by SEK 11,109 thousand to SEK 9,549 (loss: 1,560) thousand.
- Comprehensive income per share, basic and diluted, improved by SEK 0.18 to SEK 0.15 (-0.03).
- Cash flow from operating activities was SEK 13,125 (loss: 1,250) thousand.
Events after the end of the year
The Board decided to advance the publication of all reports in 2020 due to more efficient financial routines.
2019 – A milestone in Genovis’ growth journey
We ended an extremely successful 2019 with our best sales quarter ever, excluding the bioprocess deal. Sales reached almost SEK 13 million, which represents growth of about 22 percent compared with the corresponding quarter in 2018. Growth was 75% for the full year, driven by the new bioprocess business area, as well as strong growth in the underlying core business.
Operating earnings for the financial year improved significantly compared with 2018 and it is with great pleasure that for the first time my colleagues and I can report a net profit for an individual financial year.
During the fourth quarter we completed the planned investments in the production plant for enzymes used in biochemical analysis of biological drugs. The facility is designed to be able to handle the production needs of the core business area Analysis for many years to come and substantially strengthens our internal production capacity. In conjunction with the investment in the production plant we have also hired additional staff for the production team.
We are therefore well equipped to continue to expand our product portfolio at a rapid pace this year. In the fourth quarter we initiated several new projects from our pipeline that we will launch in 2020. Our collaborative effort with Thermo Fisher has made good progress during the fourth quarter and prospects are good that the collaboration will culminate in a product launch in 2020.
Our marketing activities at conferences and through customer visits intensified in the fourth quarter and our sales and marketing organization have welcomed additional employees.
Because of these bold initiatives, our expenses increased during the fourth quarter, which is in line with our strategy of reinvesting our accumulated cash in future growth.
In 2020, our main focus will be on expanding the product portfolio and continuing to grow our revenues through investments and initiatives to strengthen Genovis for the future. Our strong performance in 2019 has enabled us to reinvest our generated surplus in an aggressive strategy for continued long-term growth.
To ensure that more of our product development projects reach the market in 2020, we will hire new employees to strengthen our product development organization at the beginning of the year. To keep pace with the development of the product portfolio, we will also continue to expand our marketing organization.
As we now leave 2019 behind us and look ahead, I would like to extend a special thank you to our owners who have demonstrated their confidence in our ability to develop Genovis for many years. In closing, I would like to extend a warm thank you to my colleagues for their outstanding efforts in 2019 – a milestone in Genovis’ growth journey.
Fredrik Olsson, Chief Executive Officer
Genovis AB (publ) to publish 2020 reports ahead of schedule
The new publication dates for the reports 2020 are:
Year-end Report January 1 – December 31, 2019 February 5
Interim Report January 1 – March 31, 2020 April 29
Half-Yearly Report January 1 – June 30, 2020 August 13
Interim report January 1 – September 30, 2020 November 5
COMMUNIQUÉ FROM EXTRAORDINARY GENERAL MEETING FOR GENOVIS AB (PUBL) DECEMBER 20, 2019
The Meeting resolved in accordance with the principal owner’s recommendation to dismiss Mårten Winge, who is leaving the Board at his own request for personal reasons, as well as to elect Sarah Fredriksson to serve as a new director and as Board Chair.
Genovis launches Immobilized SialEXO[®]for efficient biopharmaceutical sample preparation
Genovis enzymes are used as platform methods in analytical workflows using mass spectrometry within the biopharma industry. Immobilized SialEXO benefits mass spectrometry but will significantly impact analytical workflows using capillary electrophoresis (CE). Charge variants of proteins are often analyzed using CE and the technology is well established for protein analysis and quality control. From our collaboration with ProteinSimple, a leading instrument provider, Genovis has developed a product and associated methods that are well adapted to CE instrumentation and routine analysis of proteins. The poster presented at the Antibody Engineering and Therapeutics conference demonstrates rapid sample preparation of a range of biologics followed by analysis using the CE instrument Maurice™ from ProteinSimple. Immobilized SialEXO is available for purchase starting today.
“Our products are increasingly popular in routine analysis of biologics and Immobilized SialEXO is designed to be robust, fast, and easy-to-use – properties well suited to quality control analysis using for example CE instrumentation. Immobilized SialEXO expands Genovis product line within Glycobiology and is developed based on customer requests and with input from our collaborators. I especially want to thank the team at ProteinSimple for an excellent collaboration regarding the development of application data”, comments Fredrik Olsson CEO of Genovis.
More about Immobilized SialEXO®
When analyzing biopharmaceuticals, enzymes are often used in sample preparation to simplify the analysis of large and complex molecules such as therapeutic proteins. Proteins are often glycosylated and certain sugar residues could mask underlying protein variations. After 30 minutes incubation, Immobilized SialEXO hydrolyzes the charged sialic acid glycans and enables further analysis without leaving the enzyme in the sample.
Genovis AB (publ) announces Extraordinary General Meeting
Details of the proposals for the Meeting are set out in the notice, which is presented below. The notice will be published in Post- och Inrikes Tidningar and on the company’s website within the next few days.
Genovis AB (publ) will hold an Extraordinary General Meeting on Friday, December 20, 2019 in Genovis premises at Scheeletorget 1 (The Spark) Medicon Village, Lund.
12:00 p.m. – 12:20 p.m. Registration 12:30 pm ExtraordinaryGeneral Meeting convened
Right to participate. Registration
Shareholders who are registered in the register of shareholders maintained by Euroclear Sweden AB on December 13, 2019 and who have notified the company of their intention to attend the Annual General Meeting by no later than December 16, 2019, preferably before 3:00 p.m., have the right to attend the Annual General Meeting. Notification may be made by mail at Genovis AB (publ), Box 790, S-220 07 Lund, Sweden, by phone +46 (0)46-10 12 30 or by email: info@genovis.com. Upon notification, shareholders must provide their name/company name, personal identity number/corporate identity number, address and phone number. Information about the number of assistants (maximum two) that the shareholder intends to bring to the meeting should also be included.
Shareholders who are represented by proxy shall issue a written, signed and dated power of attorney for the proxy. Shareholders should submit the power of attorney together with the notification of their intention to participate at the AGM. The expiry date of the proxy document may be no more than five years from its issue. Proxy forms are available on the company’s website, www.genovis.com. Representatives of legal entities must present a copy of the certificate of registration or equivalent authorization documents showing the authorized signatory.
Shareholders whose shares are registered in the name of a nominee must, in order to be entitled to attend the meeting, request that their nominee re-register their shares in their own name, so that the shareholder is registered in the shareholder register on December 13, 2019. Such registration may be temporary.
Proposed Agenda
- Opening of the Meeting.
- Election of Chairman of the Meeting.
- Preparation and approval of voting list.
- Approval of the agenda.
- Election of one or two persons to verify the minutes.
- Determination of whether the Meeting was duly convened
- Dismissal and election of director and chairperson of the Board.
- Meeting adjourned.
Item 7 Dismissal and election of director and chairperson of the Board
The company’s principal owner proposes the dismissal of Mårten Winge, who is resigning from the Board of Directors at his own request. Sarah Fredriksson has been proposed to replace Mårten Winge. The company’s principal owner propose that Sarah Fredriksson be elected to chair the Board.
Sarah Fredriksson in brief
Sarah Fredriksson, MSc, PhD; born 1968
Sarah is the CEO of Aqilion AB, a Swedish life science company that starts, develops and sells pharmaceutical projects at an early phase in the drug discovery process. In addition, she is a member of the board of directors of Sweden Bio, Respiratorius AB and LU Holding AB, as well as chairperson of the board of Edvince AB.
Sarah Fredriksson is the founder of Genovis and served as CEO of the company until 2015, after which she was chairperson of the board until 2016. In 2016 she was a finalist for the EU Prize for Women Innovators for her work at Genovis.
Lund, December 2019
Genovis AB (publ)
Board of Directors
Interim Report January–September 2019
July – September in summary
- Net sales rose by 164 percent to SEK 24,279 (9,206) thousand.
- Operating profit before depreciation and amortization (EBITDA) totaled SEK 7,987 (1,747) thousand.
- Comprehensive income for the period improved by SEK 7,131 thousand to SEK 7,473 (342) thousand.
- Comprehensive income per share, basic and diluted, improved by SEK 0.11 to SEK 0.12 (0.01).
- Genovis delivered an order worth 13,5MSEK of SmartEnzymesTM for use in the manufacturing process for a biological drug. This is a new application for the company’s products. The customer intends to use Genovis’ enzyme for production of a drug candidate for a phase 1 clinical study.
January – September in brief
- Net sales rose by 99 percent to SEK 47,719 (24,031) thousand.
- Gross profit improved by SEK 21,265 thousand to SEK 44,123 (22,858) thousand.
- Operating result improved by SEK 13,463 thousand to SEK 10,589 (loss: 2,874) thousand.
- Comprehensive income for the period improved by SKE 13,290 thousand to 10,444 (loss: 2,846) thousand.
- Comprehensive income per share basic and diluted improved by SEK 0.22 to SEK 0.17 (-0.05).
Comments from Fredrik Olsson, Chief Executive Officer
The third quarter was our best quarter ever, in terms of both sales and earnings. Sales rose by 164 percent and adjusted for currency effects, growth was 147 percent. This strong growth was mainly driven by our single largest order for a bioprocess application and accounted for SEK 13.5 million of our sales. Adjusted for this order our growth in the third quarter was 17 percent and for the period it was 34 percent.
The quarter was characterized by intensive efforts to produce and deliver the large order of enzymes that will be used in the manufacturing process of a biological drug for a phase 1 study. I am both pleased and proud that as a result of the hard work of my colleagues we have successfully met challenging demands for both volume and quality standards, and that the order was delivered in its entirety, as requested, during the third quarter. The order has temporarily required redistribution of lab resources for production, but we have now resumed operations in our development projects. The same applies to implementation of our plans for long-term investments in increased capacity for production of enzymes for analysis. These investments will be fully implemented during the fourth quarter and are expected to total approximately SEK 2 million, which is according to plan.
Operating profit totaled SEK 7.0 million and was adversely affected by an impairment loss of SEK 3.5 million. The impairment loss relates to a claim on our insurance company in conjunction with a legal dispute in 2016. However, we will continue to pursue the claim for compensation.
Expenses for the quarter rose compared with the previous year, mainly because of increased costs for raw materials and personnel costs related to the bioprocess order. We also expanded our premises during the quarter to permit continued growth, as we welcomed two more employees to our growing team.
We are entering the fourth quarter with a strong cash flow from the previous quarter and stronger liquidity. We are now generating a surplus, which we plan to initially invest in product development projects in order to increase the launch rate of new products in 2020.
I would like to conclude by sending a huge thank you to my co-workers, who did an amazing job of completing one of our most challenging projects during the quarter! This valuable experience has given us confidence that will contribute to our continued growth and expansion at Genovis.
Half-Yearly Report January – June 2019
· Net sales rose by about 34 percent to SEK 11,509 (8,578) thousand.
· Operating result before depreciation and amortization (EBITDA) improved by SEK 2,986 thousand and totaled SEK 2,390 (loss: 596) thousand.
· Operating result (EBIT) improved by SEK 3,553 thousand to SEK 1,628 (loss: 1,925) thousand.
· Comprehensive income for the periodimproved by SEK 3,173 thousand to SEK 1,380 (loss: 1,793) thousand.
· Comprehensive income per share, basic and diluted, improved by SEK 0.05 to SEK 0.02 (-0.03).
· Cash flow from operating activities was SEK 145 (80) thousand.
· Genovis signed a collaboration agreement with Thermo Fisher Scientific for the development of new methods for automatic sample handling and analysis of biopharmaceuticals based on chromatographic and mass spectrometric analytical methods (LC-MS).
· Genovis signed a distribution agreement with FUJIFILM Wako Pure Chemical for the markets in Japan, Singapore and Taiwan. The agreement includes distribution of current and future SmartEnzymes.
· Genovis launched SialEXO® 23 for improved glycan analysis. SialEXO 23 is a specific enzyme that can be used to study glycan profiles in biological drugs.
· Genovis has hired Johny Humaloja to serve as CFO. Humaloja assumed the position in August and is responsible for financial management and ongoing financial reporting at Genovis.
Half year in brief
· Net sales rose by about 58 percent to SEK 23,440 (14,825) thousand.
· Gross profit for the period improved by SEK 9,247 thousand to SEK 23,309 (14,062) thousand.
· Operating result EBIT improved by SEK 6,863 to SEK 3,571 (loss: 3,292) thousand.
· Comprehensive income for the six-month period improved by SEK 6,160 thousand and totaled SEK 2,971 (loss: 3,189) thousand.
· Comprehensive income per share, basic and diluted, improved by SEK 0.10 to SEK 0.05 (loss: 0.05).
Events after the end of the half year
Genovis received an order for SmartEnzymes that will be used in the manufacturing process for a biological drug. The order amounts to about SEK 13 million This is a new application for the company’s products. The order is the result of the positive outcome of an evaluation study conducted at a global biopharma company in early 2019. The customer now intends to use Genovis’ enzyme for production of a drug candidate for a phase 1 clinical study.
Comments from Fredrik Olsson, Chief Executive Officer
The Company’s strong growth continued during the second quarter. Sales rose by 34 percent compared with the same period the previous year. Operating profit continued to move in the right direction and improved by about SEK 3.5 million compared with the second quarter of 2018. Over a rolling twelve-month period, our sales volume passed SEK 43 million, and operating profit during the same period was about SEK 6 million.
Production, product development and the marketing organization have all been extremely active, at the same time that we successfully achieved several key milestones for Genovis’ future development.
Our collaboration agreement with Thermo Fisher has generated activities in both product development and our marketing organization during the second quarter. We have participated in several marketing activities organized by Thermo Fisher where we had the opportunity to showcase our products. In addition, we jointly initiated product development projects primarily aimed at automatic quality analysis. For example, during the summer we had instrumentation from Thermo Fisher installed in Lund in order to be able to maintain the pace of the projects and develop new solutions for efficient quality analysis for the biopharma market.
During the period we initiated collaboration with Fujifilm for sales, marketing and distribution of our products in Japan, Singapore and Taiwan. Their marketing organization now has our material and I am confident that we will have continued growth opportunities in the Asian markets going forward.
In terms of operations, the quarter has been influenced by continued expansion of the business at every level. An important step was taken in association with the expansion of our production facility with modern new premises, which were also taken into operation during the second quarter. We have invested in modern new production equipment that will be able to offer increased productivity and flexibility with retained high product quality for our customers. We will continue to invest in our production facility in the coming quarters to meet the increased demand for our current product portfolio, as well as future product launches. Investments have affected our cash flow according to plan during the second quarter. At the beginning of the third quarter, we further expanded our total area to enable continued expansion of our operations.
In August we received our largest single order to date. The order is linked to the previously announced evaluation of Genovis’ enzyme in a new application. Our product was evaluated as part of a process in the production of a biological drug and the order is the result of a successful evaluation study conducted at a global biopharma company. Unlike our current main market in quality analysis, where our enzymes are used to determine whether a drug has desired or expected properties, our product will now be used as a step in the actual production process for a biological drug in phase 1 trials. This means that our products must meet increasingly stringent quality requirements, at the same time that we need to increase production capacity, since volume requirements and safety are crucial in bioprocess applications. We have acquired the necessary capacity for this initial order and if the bioprocess business area continues to develop favorably, we will make additional investments in production capacity.
I am both pleased and proud of the years of effort that my colleagues have dedicated to building the Genovis brand and a whole array of quality products that are now proving to have high customer value even in the production of biological drugs.
We have demonstrated continual strong annual sales growth on a twelve-month basis for almost five years with retained margins and we have now achieved an operating profit for four consecutive quarters. I look forward to working with my fabulous colleagues to help our customers in their efforts to develop tomorrow’s medications and to continue to build Genovis for the future.
Genovis receives order worth about SEK 13 million
Since the order relates to production of medications for a phase 1 clinical study, the outcome of this study could represent potential revenue flows moving forward. Exactly when this additional revenue could come is difficult to determine and is related to the success of the customer’s clinical project. In the event that Genovis receives repeat orders as a result of increased demand from the customer, the company has prepared the necessary delivery capacity. With the current production plan, the order will be delivered during the second half of 2019. Genovis will receive a partial payment corresponding to half the order value when the production commence.
“It is a great stamp of quality for Genovis when global biopharma companies entrust us with producing enzymes for critical steps in the production of biological drugs for clinical trials. This clearly shows that we are perceived as a reliable innovator and producer of high-quality enzymes that can also have high customer value for new applications within biopharma industries,” says Fredrik Olsson, CEO of Genovis.
Genovis AB hires CFO
Johny Humaloja, has extensive experience of financial control and management, primarily in biotechnology. He has previously worked as chief financial officer at international pharmaceutical companies such as Biogen and Boston Scientific. At Biogen’s North Carolina manufacturing plant in the US, which manufactures biological drugs, Johny mainly worked as Plant Controller.
Genovis launches SialEXO®23 to enhance glycan research
Most biopharmaceutical drugs are glycoproteins and the glycan composition is of interest to biopharma companies since it can impact the function and half-life of a particular therapeutic. The new product, SialEXO 23, is a specific sialidase for complete removal of α2-3 sialic acids and can be used to study the glycan composition on biopharmaceuticals.
“As the implications of glycosylation becomes increasingly more important for quality monitoring in the biopharma sector, we perceived a need for tools directed at sialylation analysis. SialEXO 23 provides our customers with easy way to probe sialylation of glycosylated biopharmaceuticals using their existing instrumentation like LC-MS.” says Fredrik Olsson, CEO, Genovis AB.
SialEXO 23 is the first new product launched by Genovis in 2019. The product will be presented at the annual conference of the American Society for Mass Spectrometry (ASMS) in Atlanta, Georgia which will be held June 2 – 6.
For more information about SialEXO® 23: https://www.genovis.com/products/enzymes-for-o-glycans/sialexo/
