Enzymatica AB: Lower sales in Q2 but 31% increase for the first half of the year

2018-07-17

                                                                                  Interim report for
Enzymatica AB (publ)

JANUARY-JUNE 2018
Lower sales in Q2 but 31% increase for the first half of the year

Q2          

  • Net sales reached SEK 5.3 (5.9) million.
  • Net profit after tax came in at SEK -15.5 (-10.8) million.
  • Earnings per share, basic and diluted, were SEK -0.17 (-0.12).
  • Cash and cash equivalents were SEK 3.2 (18.4) million.
      

Significant events in Q2

  • ColdZyme® Mouth Spray continued to capture market share in the Swedish market in terms of both value and volume.  
  • Enzymatica published favorable results from a study of elite athletes who used Coldyme.
  • At the Swedish Ear-Nose-Throat Meeting in Linköping on April 11, Enzymatica presented the results of an in vitro study which demonstrated that ColdZyme reduces the quantity of the Coronavirus, the second most common cold virus, by 99.9%.
  • Enzymatica entered into a distribution agreement with Qualia Pharma for marketing and sales of ColdZyme on the Greek and Cypriot market.
  • Enzymatica's quality management system was certified according to EN ISO 13485:2016.

H1                                                                                                                                                                              

  • Net sales reached SEK 20.4 (15.5) million.
  • Net profit after tax came in at SEK -25.7 (-22.3) million.
  • Earnings per share, basic and diluted, were SEK -0.28 (-0.25)

Significant events after the quarter

The regional court of Frankfurt decided to put restrictions on the marketing of the mouth spray ViruProtect® in Germany. Enzymatica's partner STADA is analyzing the consequences, and as soon more information is available Enzymatica will communicate how the sales of ViruProtect will behandled in Germany. The court ruling only concerns the marketing of ViruProtect in Germany, not in Belgium and Austria, where the product also is sold.

Financial ratios              
(SEK THOUSAND) Q2
2018
Q2
2017
H1
2018
H1
2017
Full year
2017
Net sales 5.3 5.9 20.4 15.5 59.4
Gross margin, % 51 46 66 56 61
Operating profit/loss -15.0 -11.8 -24.6 -23.3 -30.2
Cash flow from operating activities -16.9 -7.4 -18.4

 
-16.3 -22.5
Average number of employees 21 21 21 21 21

         CEO statement: ColdZyme continues to capture market share

During the second quarter Enzymatica's sales declined by 10%, mainly because of the warm early summer in Northern Europe. Since STADA placed follow-up orders for the German, Belgian and Austrian markets in the fourth quarter of 2017 and the first quarter of 2018, no additional orders were placed during the second quarter. At the same time the increase in sales for the first half of the year totaled 31%.

During the second quarter the total cold segment in Sweden declined by 1%, while ColdZyme sales increased by more than 3% to consumers. Thus ColdZyme continues to capture market share despite a slight decline in the segment as a whole. On a rolling 12-month basis our market share (7 and 20 ml combined) increased from 4.9 percent to 5.2 percent compared with the same period the previous year.  

Important factors underlying our continued sales growth on the domestic market include the digital campaigns and influencer marketing initiatives, with involvement of about 20 people such as health, sports and parent bloggers.

During the quarter Enzymatica achieved two important milestones. Our quality management system was certified according to EN ISO 13485:2016 and we commissioned our new facility for production of enzymes on Iceland in accordance with Good Manufacturing Practices (GMP).

After the reporting period the regional court of Frankfurt decided to put restrictions on the marketing of the mouth spray ViruProtect® in Germany. The issue is driven by Schutzverband, a trade organization and not by an authority. The reasons for the court decision seem to be the strict requirements on the design of clinical studies under German jurisdiction. Our partner STADA is analyzing the conse-quences of the decision. Restrictions on the marketing of ViruProtect means that sales of the product on the German market might suffer and in worst case be ceased until new clinical data has been presented. This is most likely to have a negative impact on our sales in Germany. In the meantime, Enzymatica continues to strengthen the clinical documentation for ColdZyme.

At the end of the quarter we received a bridge loan of SEK 30 million from three of our major shareholders to finance operations, which meets the need of liquidity for the rest of 2018.  At the same time, we continue to work on ensuring long-term funding for the company's growth. I consider it to be extremely positive that three of our principal shareholders support us with funding so we can pursue our international expansion. Thus, we continue our efforts to enter into future agreements with major international distributors for ColdZyme.

 Fredrik Lindberg, CEO


Enzymatica at a glance
Enzymatica AB is a life science company whose business concept is to develop medical devices based on barrier technology and marine enzymes for self-care in major market segments. The company developed ColdZyme®, a unique mouth spray for fighting colds, launched the product on about ten markets and since the launch in 2013 reached a position over the past winter as one of the most-sold brands in Swedish pharmacies measured in SEK. Enzymatica has its own sales organization in Scandinavia and collaborates with a contract sales organization in the UK. Enzymatica also sells via distributers in Spain, Greece, Finland, Iceland, Belgium, Germany and Austria.

Our development focuses on products for upper respiratory infections, dermatology and oral health. An enzyme extracted from deep-sea cod is a key sub-component in product development.

Enzymatica was founded in 2007, has its head office in Lund, Sweden, and has been listed on the Nasdaq First North since June 15, 2015.

ColdZyme is sold both directly and through distributors and partners in Sweden, Denmark, Norway, Finland, the UK, Greece and Spain, and from fall 2017 under the ViruProtect® co-brand in Belgium, Germany and Austria. An equivalent product under the PreCold® brand is sold in Iceland through the acquired company Zymetech.  In Spain, the product is sold under the brand Cortagrip®. 

   
For questions about this report, please contact:

Fredrik Lindberg, CEO, Enzymatica AB
Tel: +46 (0)708-86 53 70 | Email: fredrik.lindberg@enzymatica.com

Therese Filmersson, CFO, Enzymatica AB
Tel: +46 (0)708-40 72 24 | Email: therese.filmersson@enzymatica.com  

Publication
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, July 17, 2018.

Street address
Enzymatica AB (publ) Corporate identity no.: 556719-9244
Mailing address: Ideon Science Park, 223 70 LUND
Street address: Scheelevägen 19, Ideon, Lund
Tel: +46 (0)46-286 31 00 | info@enzymatica.se | www.enzymatica.se

Enzymatica is listed on the Nasdaq First North. The Company is traded under the ticker symbol ENZY and ISIN code SE0003943620. 

Enzymatica's certified advisor is Erik Penser Bank.