Continued strong sales increase and positive cash flow in third quarter
- Net sales reached SEK 28.3 (19.5) million.
- Result after tax came in at SEK -1.9 (-7.7) million.
- Earnings per share, basic and diluted, were SEK -0.01 (-0.05).
- Cash and cash equivalents were SEK 33.7 (30.7) million.
Significant events in Q3
- The results from Enzymatica’s in vitro study showed that ColdZyme® deactivates over 98% of the SARS-CoV-2 virus that causes COVID-19. At the end of the quarter the results of the study were reviewed, approved and published in the Journal of Medical Virology.
- The results form Enzymatica’s placebo-controlled, randomized study show shorter period for common cold and favorably perceived treatment effect with ColdZyme.
- New patents for ColdZyme were approved in Japan for microbial infections in patients with immune-deficiency and in Russia for use in combination therapy with antibiotics for treatment of streptococcal biofilm of the upper respiratory tract.
- Because of the coronavirus pandemic, Enzymatica’s subsidiary Zymetech renegotiated its agreement with the German company Maren Cosmetics regarding delivery of its enzyme formulation for Maren’s skin care products. The order value of the original agreement was SEK 120 million. Given the uncertainty in the market, it is difficult to assess the impact over the next few years, but clearly the agreement will generate substantially lower sales than indicated in earlier estimates.
First nine months
- Net sales reached SEK 69.0 (39.2) million.
- Result after tax came in at SEK -12.9 (-35.6) million.
- Earnings per share, basic and diluted, were SEK -0.09 (-0.25).
Significant events after the quarter
- Enzymatica signed an agreement with Sanofi – one of the world’s largest pharmaceutical companies in consumer health care – for sales of ColdZyme in France and Italy, with product launch expected in 2020-2021. The two countries comprise some of the largest OTC markets in Europe and their common cold markets are estimated at about EUR 1.9 billion.
- The agreement with the German pharmaceutical company STADA for the sale of the ViruProtect® cold spray was expanded to also include Russia, Ukraine, the Commonwealth of Independent States (CIS, formerly the USSR) and Poland, with product launch expected in 2021. The common cold markets in Russia and Poland are estimated at about EUR 2.6 billion.
- New launches: Chemipal launched ColdZyme on the Israeli market. STADA launched ViruProtect in Italy and Bulgaria.
|(SEK THOUSAND)||Q3 |
|Full year |
|Gross margin, %||74||73||72||71||73|
|Cash flow from operating activities||3.4||-9.7||-2.4||-37.5||-37.6|
|Average number of employees||18||18||18||19||19|
From the chairman: Strong performance in Q3 and several strategic distributor agreements after the quarter
During the third quarter Enzymatica increased its sales by 45% compared with the same period in 2019, as a result of both a favorable trend in home markets, as well as new orders from STADA. During the summer an in vitro study was conducted which showed that ColdZyme® deactivated over 98% of the SARS-CoV-2 virus. A German placebo-controlled multicenter study showed favorable results for ColdZyme. In addition, new patents were approved for ColdZyme in Japan and Russia. However, the most significant events occurred after the quarter when Enzymatica signed a number of strategic distributor agreements. We entered into an agreement with Sanofi, one of the world’s largest pharmaceutical companies in consumer health care, for sales of ColdZyme in France and Italy. In addition, we expanded the agreement with STADA for ViruProtect® (ColdZyme) to also include Russia, Ukraine, CIS and Poland.
Enzymatica’s sales during the third quarter totaled SEK 28.3 million, compared with SEK 19.5 million the corresponding period in the previous year. The markets that mainly contributed to this increase are Sweden, Germany, Austria, Belgium and South Africa. In addition, we received initial orders from STADA for the Italian and Bulgarian markets, as well as from Chemipal for Israel.
Operating result for the third quarter, which totaled SEK -2.2 million, was negatively impacted by social security costs for employee warrants due to rising share prices. Excluding these costs, the operating result was SEK 0.9 million for the quarter.
Given that an earlier in vitro study showed that ColdZyme deactivated 99.9% of corona 229E, which causes the common cold, we conducted a similar study on SARS-CoV-2, which causes COVID-19. The results showed that ColdZyme is 98.3% effective in deactivating the COVID-19 virus. Even though the results cannot be directly translated to clinical efficacy, they indicate that ColdZyme could offer a protective barrier against SARS-CoV-2.
At the end of the summer the final results came in for a placebo-controlled, randomized study of ColdZyme in Germany. The study’s primary endpoint of improved quality of life did not display a significant difference between ColdZyme and placebo. By contrast, statistically significant results were registered with respect to reduced duration of common colds and perceived favorable treatment effect with ColdZyme compared with the placebo group, which was confirmed in earlier studies. In addition, again it was confirmed that ColdZyme is a safe and well-tolerated medical device product againt common cold.
Enzymatica continues to deliver according to its growth strategy by strengthening its position in its home markets, entering into new distributor agreements and strengthening the product portfolio which also includes the addition of new patents.
Although the total Swedish common cold market decreased during the quarter compared with the previous year, ColdZyme continues to capture market share. Over the past seven years Enzymatica has built a loyal customer base, which is constantly growing, and which also has a high repeat repurchase rate. A product could not receive a better endorsement.
We have continued the geographic expansion by signing new agreements with leading international distributors. The agreement with Sanofi acknowledges their strong confidence in Enzymatica as partner and in ColdZyme’s demonstrated efficacy. Sanofi specifically mentioned positively the strong scientific and clinical documentation for ColdZyme and will now launch the product under its already established brands. We see this as a further stamp of quality, especially since such world-leading players only work with high-quality products. By launching our spray under strong brands in collaboration with global pharmaceutical companies that have large marketing resources, we see great potential for achieving strong market positions for ColdZyme.
Similarly, we see how our German partner STADA is now engaged in an extensive campaign to market ViruProtect® – with over 20 markets in Europe previously, they are now expanding with additional significant markets, such as Russia, Poland, Ukraine and the CIS.
During the quarter we expanded our patent portfolio with new patents in Japan and Russia. The patents enable us to focus on new indications for ColdZyme, within upper respiratory tract infections or as part of combination therapy for biofilm. However, these will require additional clinical trials first.
In order to handle our growth we have strengthened the organization with experienced employees in both production on Iceland and central functions in Lund. Another example of how we our are gearing up our business is the decision to invest in a new business system.
The coronavirus pandemic has resulted in increased demand for ColdZyme during the first nine months of the year. At the same time, we see that social distancing and improved hand hygiene have resulted in fewer and milder colds and influenza, which have decreased the total common cold market.
To date, we have not noted that COVID-19 has impacted our production plans, nor have we had any issues with outstanding accounts receivable.
With COVID-19 on the rise again after the summer, it brings some uncertainty regarding forecasts related to future demand, logistics and production. However, we view the upcoming fourth quarter with confidence. We are successfully maintaining and growing our position in our home markets and through our partners, we will enter a number of large markets during the coming quarters. Not the least as the foundation, we have a product which is trusted and much appreciated by the consumer.
Bengt Baron, Executive Chairman of the Board
For questions about this report, please contact:
Bengt Baron, Executive Chairman of the Board, Enzymatica AB
Tel: +46 (0)708- 59 30 09 | Email: email@example.com
Therese Filmersson, CFO, acting CEO, Enzymatica AB
Tel: +46 (0)708- 40 72 24 | Email: firstname.lastname@example.org
This information is information that Enzymatica is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 8:30 a.m. CET on Tuesday, November 3, 2020.
Enzymatica AB (publ) Corporate identity no.: 556719-9244
Enzymatica is listed on the Nasdaq First North Growth Market. The Company is traded under the ticker symbol ENZY and ISIN code SE0003943620.
Enzymatica’s certified advisor is Erik Penser Bank.
Tel: +46 (0)8-463 83 00