Interim report January – March 2017

First quarter in brief

• Net sales rose by about 26 percent to SEK 4,794k (3,808k).

• Gross profit totaled SEK 4,128k (8,776k).

• Gross margin was 89 (91) percent.

• Operating loss improved to a loss of SEK 2,863k (loss: 3,449k).

• Comprehensive income for the period improved by SEK 582k to a loss of SEK 2,872k (loss: 3,454k).

• Comprehensive income per share, basic and diluted, improved by SEK 0.04 to SEK -0.05 (-0.09).

• Cash flow from operating activities was SEK -1,586k (-2,498k).

Comments from Fredrik Olsson, Chief Executive Officer  

Increasing sales volumes and strong growth from new products  

The favorable sales trend we saw last year, especially in the last quarter, has continued and 2017 is off to a great start. In the first quarter sales increased by 26 percent to SEK 4,794k. This means we have had strong sales growth for ten consecutive quarters. Our gross margin remains at a high stable level of 89 percent for the quarter.

It is particularly gratifying to see increased volumes of products used for analysis of materials in the early clinical phase. As order volumes increase, large orders may influence the figures from one quarter to another. In general, sales have stabilized at a high level and are constantly growing. However, we can continue to expect fluctuations between the quarters.

Growth during the quarter is organic and shows an increase in all product categories in the entire product portfolio. In the first quarter FabRICATOR® stands out in terms of sales. There is a huge underlying demand in the industry, driven by the pursuit for simpler, more effective and more reliable analytical methods, as well as new antibody formats for immunotherapy. Our goal this year is to maintain the high pace of both sales and product launches.

During the quarter we recruited two new employees, which along with intensified marketing and product development initiatives, affected current costs. We believe that it is crucial to strengthen both our production and our application work in order to handle the number of products in our pipeline, which has grown faster than expected, as well as to continue to develop customer relations. 

During the quarter, we worked intensively to prepare for the launches of GlyCLICK™ in April and FabALACTICA™ in May. FabALACTICA is yet another product in our enzyme family with a focus on antibody analysis, while GlyCLICK is a new technology for labeling antibodies. GlyCLICK was developed in collaboration with Life Technologies and enables development of a new and complementary business area in our product portfolio. Initially, demand will come from the global pharmaceutical companies in the discovery and preclinical phase.

Our efforts to identify appropriate partners or distributors to introduce our portfolio in a few strategically important markets in Asia are a priority. The goal is to have a partner in place before the end of the year.

We see continued strong demand for our products, especially from global pharmaceutical companies that focus on biopharmaceuticals. We have established a strong position in this niche as both a knowledge partner and a provider of effective analytical tools. Close customer relationships are part of our success and enable us to transform customer needs into concrete products that generate sales right from the start. We will continue to develop and improve this formula. Based on our recent experience in the first quarter, I believe we will see additional business opportunities in the coming quarters.

Events after the end of the period 

• Genovis launched two new products.  

GlyCLICK™ is a product for specific labeling of antibodies for purposes such as development of biopharmaceuticals. GlyCLICK™ is the first of a series of products based on a technology platform in which Genovis’ unique GlycINATOR enzyme isÒ combined with SiteClick™ technology from Life Technologies. GlyCLICK is a new technology in an expanding market for applications in antibody development, preclinical imaging and antibody drug conjugates (ADCs). The market for biopharmaceuticals is large and many pharmaceutical companies are looking for new and improved technologies that link chemotherapy to antibodies.

The SiteClick™ brand belongs to Life Technologies Corporation. 

FabALACTICA™ is an enzyme that is of particular interest to pharmaceutical companies that develop biological drugs in the growing immunotherapy segment. With the launch of FabALACTICA™ Genovis now has nine products in its enzyme family for analysis of antibodies.

• Genovis completed a private placement 

In accordance with the authorization granted by the Annual General Meeting on May 12, 2016, Genovis raised SEK 11.5 million for the Company through a directed share issue of 5,000,000 shares. The rights issue was subscribed by selected qualified investors. The subscription price was set at SEK 2.30, which corresponds to approximately 92 percent of the average share price during the 10 trading days prior to the day of subscription. After the rights issue the total number of shares and votes in the Company is 60,294.62 and the share capital is SEK 15,073,540.50.  

ABOUT GENOVIS

Genovis’ business concept is to apply its knowledge and imagination to design and provide innovative tools for the development of the drugs of the future. Today Genovis sells several enzyme products known as SmartEnzymes all over the world in innovative product formats that facilitate development and quality control of biological drugs.

The Group consists of Genovis AB and the wholly owned subsidiary Genovis Inc. (USA). Genovis shares are listed on NASDAQ First North Stockholm and Erik Penser Bank is the Company’s Certified Adviser.

T: +46 (0)8-463 83 00.

This information is information that Genovis AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the contact person set out above, on May 8, 2017.

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.