HALF-YEARLY REPORT JANUARY – JUNE 2016
January - June
- Net sales rose by about 31 percent to SEK 8,403k (6,412k).
- Expenses increased by SEK 6,610 to SEK -25,101k (-18,522k). The increase relates to the settled patent dispute in the US. Excluding legal fees, Genovis reduced its expenses during the six-month period by SEK 2,058k to SEK 13,462k (15,520k).
- Operating result was a loss of SEK 11,402k (loss: 10,260k). Excluding legal fees and reimbursement from the insurance company the operating result was a loss of SEK 4,861k (loss: 8,741k).
- Comprehensive income was a loss of SEK 11,574k (loss: 10,355k). Excluding legal fees and reimbursement from the insurance company, comprehensive income was a loss of SEK 5,033k (loss: 8,836k).
- Comprehensive income per share basic and diluted totaled SEK -0.31 (-0.45). Excluding legal fees and reimbursement from the insurance company, comprehensive income per share was a loss of SEK 0.13 (loss: 0.38).
- Cash flow from operating activities during the six-month period was SEK -10,997k (-9,478).
- Cash and cash equivalents including short-term investments amounted to SEK 10,011k (9,240k) at the end of the half-year.
- In June Genovis reached a settlement in the patent dispute with Promega Corporation and entered into a royalty-based global licensing agreement regarding the patent involved in the dispute.
- In May, Genovis carried out a rights issue that was oversubscribed by 10 percent. The rights issue raised about SEK 23 million before issue expenses for the company.
- Genovis launched a further development of FabULOUS®. The new product is being marketed under the name FabULOUS® kit.
- Genovis launched GingisREX®, a new enzyme aimed at customers throughout the proteomics market. The products that Genovis has launched to date have solely been used for modification of antibodies, while GingisREX can be used for proteins in general.
- Net sales rose by about 30 percent to SEK 4,595k (3,526k).
- Comprehensive income was a loss of SEK 8,121k (loss: 5,348k).
- Comprehensive income per share basic and diluted totaled SEK -0.21 (-0.22).
- Cash flow from operating activities was SEK -8,499k (-4,624k).
Comments from CEO Fredrik Olsson
The second quarter showed continued strong sales growth for the Company’s products and was the single best quarter in the history of the Company. Sales amounted to SEK 4.6 million, an increase of 30 percent year over year and 21 percent quarter over quarter. For the six-month period as a whole sales rose 31 percent, demonstrating stable organic growth in the product portfolio. It is particularly gratifying that we see growth in all product groups during the period.
At the end of the second quarter, we reached a settlement in the legal dispute that has been ongoing since 2014. We are pleased to have reached an agreement that gives us royalty income at good levels, but above all, the agreement is strategically important to increase the size of the market and to improve conditions for faster adoption of FabRICATOR in the production of antibody drugs. Now that there are two suppliers of the enzyme, the prospects have improved for the enzyme to be included in critical methods of analysis for the production of antibody-based drugs.
The market for antibody-based drugs is undergoing strong growth and there is a clear need to simplify and improve the analytical methods associated with production. We are now also seeing more requests for larger volumes for use specifically in quality control in the production of antibodies, for which reason I expect continued growth for FabRICATOR since we are still in an early stage.
While revenues from sales have increased sharply, the cost base--excluding the legal costs of the dispute with Promega--has declined 13 percent compared with the first half of 2015. However, the legal expenses associated with the dispute have had a negative impact on earnings for the period. As a result of the settlement, these expenses will end during the beginning of the third quarter.
It is worth noting that organic growth continues without any negative effect on gross margin, indicating efficient use of resources in the production of our products and that the price level remains at a satisfactory level.
As I look ahead to the rest of the year I expect continued good organic growth. We will increase our efforts in sales and marketing to further drive growth. A clearer presence in the Asian markets will be prioritized, while strengthening our own sales organization in North America and Europe. We will also continue to work to broaden the market for our existing product portfolio with new products aimed at new applications, at the same time that we follow the strategy of expanding the product portfolio by introducing new products. In line with this strategy, in the second quarter we launched two new products – GingisREX and FabULOUS Fab Kit. GingisREX opens a new market for us because the product can not only be used for antibodies, but also within general protein analysis. FabULOUS Fab Kit simplifies handling of antibody fragments for a certain type of antibody during production.
In May we carried out a rights issue that was oversubscribed. The additional capital, together with the strong growth we continue to demonstrate, will provide good conditions for further investments in market expansion and a continued positive trend for Genovis.
I would like to thank all of our engaged shareholders and dedicated employees for their efforts, which have resulted in yet another successful six months and created good prospects for a positive development moving forward.
For more information, please contact: Fredrik Olsson, CEO, Genovis AB Tel: 0046 (0)46 -101233 email@example.com
This information is information that Genovis AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, on August 28, 2016.
Genovis is a global company that offers enzyme products that facilitate development and quality control of biologics to customers in the pharmaceutical and medical technology industries. The Company markets several enzyme products (“SmartEnzymes”) in innovative product formats all over the world.
The organization consists of Genovis AB and the wholly owned subsidiary Genovis Inc. in the US. Genovis Inc. handles all sales of enzyme products on the North American market and Genovis AB handles sales in the rest of the world. Genovis shares are listed on Nasdaq First North Stockholm and Consensus is the Company’s Certified Adviser, t: +46(0) 31 745 50 00.
This press release is a translation of the Swedish original. In the event of any discrepancy between this translation and the Swedish original, the Swedish version shall prevail.