The importance of this study lies not only in the clinical impact observed but also in the reduction of related costs, which undoubtedly adds a significant value from a public health point of view, considering the frequency of acute respiratory infections observed in young children and the impact on their quality of life.
I am very happy to be able to extend our coverage in Africa by entering Egypt with a regional and professional partner.
We look forward to new opportunities when collaborating both with Boneprox and Skinome and are convinced that this will lead to increased growth for BioGaia.
We strongly believe that BioGaia will benefit from the dynamic environment as well as the expertise in new technologies and innovations that these companies will bring.
We are really looking forward to the outcome of our next clinical study. In parallel we are working on the optimization of our production processes to prepare for commercial scale. The bacteria we work with are very sensitive to oxygen, so we have developed and patented a unique production technology which helps us overcome this challenge. We are very excited about these next steps and look forward to launching our first product.
As you know, 2020 was a very challenging year around the world. BioGaia’s sales started strongly, however, with growth in line with expectations. Although the Covid-19 crisis started seriously in March, BioGaia posted a sales increase of 7% in the first quarter followed by growth of 10% in the second quarter. But in the third quarter we could see that the pandemic would have a negative impact on sales. On 12 October, we announced that we expected reduced sales and lower earnings for both the third and fourth quarters. The fact that our sales go mainly to our partners and distributors explains the slightly delayed effect on sales.
After a decrease in sales of 21% (excluding foreign exchange effects, -17%) for the third quarter, sales fell by 10% (excluding foreign exchange effects, -4%) in the fourth quarter compared to the same period last year with continued weak sales due to Covid-19 in some of our largest and oldest markets, such as Italy and Spain. Here lengthy lockdowns have affected BioGaia’s sales since consumers have been unable to visit doctors and physical pharmacies, where the bulk of sales in these countries take place. On the other hand, we have seen good sales in countries where we have implemented an omnichannel strategy, such as the USA and China, something that strengthened our conviction that we need to invest further in direct consumer marketing in many of our markets.
In line with our already communicated strategy to accelerate the roll-out of our products for adults, we are pleased to now be able to offer the entire adult health portfolio to Swedish consumers.
The decrease in sales is of course very unfortunate, but we believe that it is related to covid-19 and that this will not affect our long-term expectations. To reduce the effect on earnings, we are reviewing our costs to partially compensate for the decrease in sales.
The result from this meta-analysis shows the potential of L. reuteri DSM 17938 in the management of children suffering from functional abdominal pain. It is of value for both patients and healthcare professionals that these positive effects have now been confirmed in a well-performed systematic review and meta-analysis
The second quarter of 2020 was also marked by the Covid-19 pandemic. We continued our efforts to protect our employees and our business from possible negative consequences. We have maintained restrictions on travel and face-to-face meetings and employees who are able to work from home have done so. Like so many other companies we have gone over to digital meetings with both internal and external participants. In the spring, together with our partners we have arranged a large number of webinars throughout the world where researchers have presented various topics for thousands of healthcare professionals. At the end of June, we also arranged our very first own webinar, a scientific discussion chaired by BioGaia’s chief scientific officer, which attracted doctors primarily from Europe and North and South America.
The first quarter of 2020 has been marked by the Covid-19 pandemic and its impact on the world at large as well as on us at BioGaia. Our main aim has been to protect our employees and our business from possible negative consequences. At the beginning of March, we introduced a ban on international flights and attendance at large gatherings for all employees, as well as a strict quarantine policy. Just a few days later, we closed all our offices and all employees who were able to work from home could do so. At BioGaia Production, our own production facility in Eslöv, Sweden, manufacturing has so far taken place without disruption. So far, BioGaia’s external suppliers have not experienced any major disruptions since they are all manufacturers of pharmaceuticals and are therefore exempt from any closure requirements.
Regardless of how the Covid-19 pandemic develops, the situation will require that we continue to adapt during the year in order to meet the challenges it brings. We are convinced that our products play a key role in these times as well and we will do everything in our power to make them available globally and to minimise the possible adverse effects of the pandemic on our business.
BioGaia has been successfully present in Latin America for a long time, thanks to strong partnerships with local distributors. I am very happy to be able to extend our coverage in this part of the world by entering Argentina with a professional distributor.
The result of this study is adding to the impressive volume of positive data with L. reuteri Prodentis – to date 47 scientific publications – and is also coupled with a growing interest in many markets for launching our oral health probiotic.
Sales in the fourth quarter of 2019 decreased by 1%, mainly due to reduced royalties from Nestlé and delivery problems. Product sales increased by 6% due to favourable growth primarily for the Paediatrics segment with a sales growth of 10%. The operating margin reached 33% despite lower sales and our increased investments in the subsidiaries MetaboGen and BioGaia Pharma. We started the year knowing that Nestlé had terminated the royalty agreement for Growing Up Milk and we understood that it would be difficult to achieve our normal growth rate. The plan to compensate for this within other areas succeeded. Product sales for the full year rose 12% while total sales increased by 4%. This despite suffering serious delivery delays in the third and fourth quarters due to problems at one of our suppliers. The problem with delivery delays from our supplier in Belgium eased steadily during the fourth quarter.
I have had 23 fantastic years at BioGaia and an incredible journey with the company, but now it is time for me to move on
Sales in the third quarter decreased by 4% (excluding foreign exchange effects, 9%) compared to the corresponding period last year. As earlier mentioned the reduction was due to delivery delays from our supplier in Belgium and lower royalty revenues. Sales of products increased by 3% (excluding foreign exchange effects a decrease of 1%). Our increased focus on Asia Pacific (APAC) and Americas continues to yield results. Sales in the region rose 16% and 17% respectively during the quarter.
In the past 12-month period, sales rose by 10%, driven by higher consumer demand as well as product launches in both existing and new markets. Due to delivery problems at our supplier in Belgium, sales of primarily BioGaia Protectis tablets to our distribution partners decreased. These delivery delays are of course very unfortunate but we believe that the decline in sales is temporary and that the delays will not affect our long-term expectations and sales and marketing strategies. We are continuing our close cooperation with our suppliers in order to reduce the risk of similar problems in the future
The delivery delays are of course very unfortunate, but we believe that the decline in sales is temporary and that the delays will not affect our long-term expectations and sales and marketing strategies. However, we are reviewing our procurement procedures to reduce the risk of similar problems occurring again
Sales in the second quarter increased by 11% (excluding foreign exchange effects, 5%) compared to the corresponding period last year. Sales of products, net sales excluding royalty revenues, increased by 20% (excluding foreign exchange effects, 14%). Product sales within Pediatrics increased by 19% and were mainly driven by our largest product, BioGaia Protectis drops, but also by BioGaia Protectis tablets. Our Adult Health portfolio, primarily BioGaia Prodentis and BioGaia Protectis tablets, grew by 27%. The launch of BioGaia Osfortis during the quarter also contributed to this increase. The increase within Adult Health is the result of a focused investment on this target group. Operating expenses increased by 7% during the quarter which resulted in an operating profit of SEK 78.5 million, an increase of 8% compared to the second quarter of 2018 and an operating margin of 35%. We continue to launch our products in new markets at the same time as we invest in operations to continue our growth
Abbott has been our partner for many years in a number of Latin American and also some Asian countries. We see great potential in this partnership and look forward to a successful launch in Uruguay
Sales during the first quarter increased by 9% (excluding foreign exchange effects, 2%) compared to the corresponding period last year. Sales of products, excluding royalty revenues, increased by 19% (excluding foreign exchange effects, 11%). Our largest product, BioGaia Protectis baby drops, increased in all markets and our Adult Health portfolio, with above all BioGaia Protectis tablets and BioGaia Prodentis lozenges, grew by 54% which is the result of focus on this target group. Sales in the Americas decreased by 9% which is a consequence of quarterly variations. Costs increased by 28% for the core business (excluding the research-intensive subsidiaries BioGaia Pharma and MetaboGen) due to strategic investments to accelerate future growth. Including the subsidiaries, costs rose by 34%. The higher cost trend compared to the sales increase meant that operating profit decreased by 17% compared to the first quarter of 2018. Naturally, I do not see this as a lasting trend but rather a short-term effect of the change in our royalty agreement with Nestlé at the start of the year at the same time as we are making substantial investment in our operations.
Our study shows that supplementation with Lactobacillus reuteri 4659 twice a day for 10 days during the acute phase of uncomplicated diverticulitis results in reduction of both pain and inflammation, as well as shorter hospital stay. Based on these findings we suggest that patients with acute uncomplicated diverticulitis should be supplemented with this strain as a complement to standard antibiotic treatment
Osteoporosis is a common, global disease. Consequently, a way of maintaining good bone health and preventing osteoporosis constitutes an important focus area for BioGaia. I am very happy that our partner Everidis will launch BioGaia Osfortis in the USA. It is an important market with great potential for this product. Step by step more markets will launch BioGaia Osfortis.
“Free from” is a consumer driven trend and products without sugar, gluten and other additives are increasingly demanded. Within the nondairy probiotic market capsules is an important product formulation that matches the requirements. We are therefore happy to launch our first capsule product. The Finnish market is a mature probiotic market and we look forward to a successful launch. Later this year the capsules will be launched in more markets.
2018 was yet another year of strong growth for BioGaia. We achieved sales of SEK 742 million which represents growth of 16% excluding foreign exchange effects. Sales increased in all regions, EMEA, Asia Pacific and the Americas, and in both the Pediatrics and Adult Health segments. Our growth continues to outpace the market which is expected to grow by approximately 10% per year. As the new Managing Director, I am taking charge of a business with a positive trend – and with major potential.
I look forward to working in the fast-growing probiotics market, in a company with a unique combination of leading-edge research and a strong brand.
The third quarter of 2018 was yet another strong quarter with growth of 18% (10% after foreign exchange effects) compared to the corresponding period last year. The increase was driven by sales of BioGaia Protectis drops as well as by favorable growth for BioGaia Prodentis lozenges. Geographically, growth was strong across all three regions, EMEA, Asia Pacific and the Americas. It is worth noting that sales increased significantly in the USA and the rollout of BioGaia Gastrus tablets continues with good growth. Sales for the past 12-month period totaled SEK 702 million (584), an increase of 20% (19% after foreign exchange effects).
We are very satisfied to have reached such an important milestone in product development and look forward to coming studies and continued work together with BioGaia and our partners.
With an established and highly professional partner like bWellness I hope that sales of our well-documented BioGaia Protectis tablets in Australia will become a success
Our second quarter performance was very strong, with growth of 29% (26%, after foreign exchange effects) compared to the same quarter of last year. Thanks to solid growth in both the Pediatrics and Adult Health segments, we achieved sales of over SEK 200 million for the first time ever. Geographically, growth was strong across all three regions, EMEA, Asia Pacific and the Americas. At the same time, we would like to communicate that we foresee significantly lower royalty revenues from Nestlé as a consequence of the ongoing negotiations of our royalty agreement which terminates at the end of the year.
MetaboGen has quickly achieved the set milestones, which means that we will get a more extensive and even closer cooperation with the University of Gothenburg and Chalmers University of Technology within the hot microbiome area. We are looking forward to these collaborations with confidence.
Up to 50 percent of older women are affected by fractures. The fact that Lactobacillus reuteri ATCC PTA 6475 was shown to reduce bone loss in this group is therefore very promising. We hope that further studies will confirm the results, so that this new way of maintaining good bone health and thereby reducing the risk of fractures in old age can be of use both for the individual and the society.
We are very pleased that we have been able to recruit Isabelle. She has extensive knowledge and a solid international experience of leading positions in sales and consumer marketing, which has become an increasingly important component of our business development. Isabelle also has the intellectual curiosity and energy needed to be able to embark on the advanced research in our business areas including the microbiome field. Here, her experiences from the Swedish Childhood Cancer Fund are also well-suited.
I am happy that we are continuing our expansion in the Asian market by launching our products in yet another country.
Sales for the first quarter of 2018 amounted to SEK 157 million, which was an increase of 13% (excluding foreign exchange effects) compared to the corresponding period last year. Revenue for the first quarter of 2017 included compensation, from the agreement with Kabaya Ohayo in Japan, for knowhow, education and launch preparations. Adjusted for this revenue, sales rose by 18% (excluding foreign exchange effects). The growth in revenue was fueled mainly by robust development in the EMEA and Americas regions. I am also particularly pleased with the continued fine performance in Eastern Europe and Brazil as well as strong sales to the USA where our close collaboration with our partners is now yielding results.
The microbiome is a hot research area, and MetaboGen’s business is therefore perfectly in line with the development of the BioGaia Group. BioGaia’s core business, together with the subsidiary BioGaia Pharma and now also MetaboGen, provides us with a solid platform to continue to be at the leading edge of probiotic research
With a well-established and highly professional partner like Dr. Reddy’s, and considering the size of the Indian market, I hope for a good launch of our drops in India.
I am happy that Sunstar now launches our well documented oral health probiotic in several European markets. As the market for probiotics in oral health is growing we see a large potential for BioGaia Prodentis within the coming years.
I am very pleased that we are now launching new products together with Medhouse and look forward to building the BioGaia brand in our local market. Vitamin D deficiency is common here, especially during the winter, and therefore it is logical to introduce products containing a combination of L. reuteri Protectis and Vitamin D.
2017 was yet another successful year for BioGaia. With growth of 15%, we were able to boost our sales by SEK 80 million and achieve an annual turnover of SEK 615 million. We have thus continued our excellent trend of expanding our share of a market that is expected to grow by around 7% annually. Our operating profit exceeded 200 million for the first time and reached SEK 234 million, an increase of 17% that resulted in an operating margin of 38%. With the proof at hand, it is clear that we have very successfully managed to combine our development initiatives with a focus on sales.
We have a strong focus on growing our Asian business and I am very pleased that yet another of BioGaia’s products will be available in China. Based on the positive experience we already have in collaborating with Abbott in Latin America and Thailand, I look forward to a successful launch of BioGaia Protectis tabs with Abbott in China as well.
I am very pleased that we are now launching new products together with Medhouse and look forward to building the BioGaia brand also in our local market. Vitamin D deficiency is common among people living in the North, especially during the winter months. Therefore, it is logical that we now choose to introduce products containing both our patented lactic acid bacteria L. reuteri Protectis and vitamin D
These new meta-analyses once again confirm our position as the number one treatment for infants with colic. Health care professionals around the world can be totally reassured that they are suggesting an effective and safe treatment when recommending BioGaia Protectis drops to their patients.
Up to 50 percent of older women are affected by fractures. The fact that Lactobacillus reuteri ATCC PTA 6475 was shown to reduce bone loss in this group is therefore very promising. We hope that further studies will confirm the results, so that this new way of maintaining good bone health in old age can be of use.
We announced the results of this study already in October 2015 but now have the opportunity to highlight them again. The fact that L. reuteri Protectis may mitigate terrible consequences of diarrheal disease, like stunting, cognitive deficiencies and eventual adult accomplishments, and contribute to decrease in recurrent diarrhea, increased growth and improved quality of life for children in sub-Saharan countries is very encouraging.
Sales in the second quarter of 2017 reached SEK 156 million, which is an increase of 15% compared to the same period of last year. The strong second quarter, when sales to our important market Brazil gained new momentum, meant that for the first six months we achieved sales of SEK 297 million, a gross margin of 75% and an operating profit of SEK 115 million. We are on the right track and continue with the implementation of our strategic initiatives. I am also very pleased that in the quarter we established the subsidiary BioGaia Pharma AB to take advantage of the opportunities to develop drugs identified in the R&D activities conducted as part of our core business.
Sales during the first quarter of 2017 amounted to SEK 141 million, which was an increase of 5% compared to the corresponding period last year. This in combination with a strong gross margin meant that the operating profit reached SEK 56 million and increased by 9%. After the strong end of 2016, some countries had a slower sales start in 2017. Therefore, it was gratifying that we could compensate for this through revenues linked to the new agreements signed in December 2016 with Kabaya Ohayo Holding in Japan and continued growing royalty revenues by Nestlé.
We have a very strong focus on developing our oral health business and our sales of Prodentis, for which we have strong clinical evidence. I am therefore very happy that we have signed another three agreements with solid partners in both Canada and Asia.
I am very happy that we have signed this exclusive agreement which further confirms the fruitful collaboration we have with Nestlé. The Australian launch of our Protectis drops, which fits perfectly with Nestlé’s offering, is a great opportunity for us to broaden BioGaia’s reach in the Asia Pacific region.
Looking back at 2016, we can only feel satisfied. With sales growth of 9% excluding foreign exchange effects, we were able to pass the half billion mark and achieve annual sales of SEK 534.7 million. This enabled us to increase our market shares despite the fact that the sales to Brazil, one of our most important markets, were low as a result of the inventory build-up during 2015. The operating profit, excluding the distributed former subsidiary IBT, reached SEK 199.4 million, an increase of 14% excluding foreign exchange effects, which leads to an operating margin of 37%. Our strong financial development, while we were building a platform for future growth and signing new distribution agreements in Japan and Thailand, demonstrates the strength of our business model, our employees and our products, and gives us reason to look to the future with continued confidence.
We have a strong focus on growing our Asian business and I am very pleased that BioGaia’s products will be available in another important country in the region. Based on the positive experience we already have in collaborating with Abbott in Latin America, I look forward to a successful launch of our products with Abbott in Thailand as well