ColdZyme – third largest cold brand in Sweden

Regulatory information

Q4

  • Net sales reached SEK 22.2 (18.9) million.
  • Result after tax came in at SEK -5.3 (-7.4) million.
  • Earnings per share, basic and diluted, were SEK -0.04 (-0.07).
  • Cash and cash equivalents were SEK 29.3 (70.3) million.
     

Significant events during the quarter

  • After ending the year on a strong note, ColdZyme® surpassed Nipaxon and became the third largest cold brand in terms of sales value from pharmacies in the Swedish market, with a market share of 6.5%. In the fourth quarter, sales of ColdZyme to consu-mers increased by 7%, compared with market growth for cold products of 1.5%.
  • Enzymatica and its German partner STADA entered into an agreement for marketing and sales of a new mouth spray for the German market. The new product is based on the same barrier technology as previous products from Enzymatica. STADA has placed its first order, worth SEK 2.3 million, for the launch in early 2020.
  • Enzymatica’s subsidiary Zymetech entered into a non-exclusive agreement with Dr Bragi Company Ltd for sales and delivery of three different enzyme formulations based on Enzymatica’s patented enzyme technology, which will be included in skin care products from Dr Bragi Company. The five-year agreement applies to China and parts of Asia.

Full year

  • Net sales reached SEK 61.3 (52.6) million.
  • Result after tax came in at SEK -41.0 (-42.6) million.
  • Earnings per share, basic and diluted, were SEK -0.29 (-0.45).
     
  • Enzymatica’s CEO Fredrik Lindberg will step down after having accepted an offer from a non-competing private pharmaceutical company. Fredrik Lindberg will remain at Enzymatica until the summer and will continue to serve as CEO during the period of notice. Recruitment of a new CEO has begun. Enzymatica’s Nomination Committee will propose that the 2020 Annual General Meeting elect Fredrik Lindberg to serve on the Board of Directors.

Significant events after the quarter

  • Enzymatica announced that its partner Evergreen Health launched ColdZyme in conjunction with the Brands and Products expo in Hong Kong at the end of December 2019. Evergreen will market and sell ColdZyme in more than 240 stores in Hong Kong & Macau through the Watson pharmacy chain.
  • Enzymatica signed an exclusive 7-year agreement with Keyuan Xinhai (Beijing) Medical Products Trade Co., Ltd., a subsidiary of China’s second largest pharmaceutical company, Shanghai Pharma, for marketing and sales of ColdZyme Mouth Spray in China. Under this agreement, Keyuan Trade guarantees orders of SEK 92 million for the first five years from the launch.
  • The European Patent Office has issued a notice of allowance indicating its intention to grant a patent for the key cod enzyme component of Enzymatica’s ColdZyme cold spray. The expected patent will be valid until 2035.
Key figures for group        
(SEK million) Oct-Dec
2019
Oct–Dec
2018
Full year 2019 Full year 2018
Net sales 22.2 18.9 61.3 52.6
Gross margin, % 77 75 73 70
Operating profit/loss -7.0 -6.8 -41.7 -40.6
Cash flow from operating activities -0.1 1.8 -37.6 -28.8
Average number of employees 17 22 19 21

      
CEO statement: Broadened commercial base for continued expansion

Enzymatica had a strong performance in 2019. We had good sales growth, ColdZyme became the third largest cold brand in Sweden, we modified our growth strategy by introducing a broader product portfolio, we signed several strategic distributor agreements, we strengthened the documentation for ColdZyme with several product claims and we introduced the new strawberry flavor.

In 2019, we increased our sales by 17%, from SEK 52.6 million to SEK 61.3 million. Sales on the Swedish and Danish markets in particular developed very well. At the end of the year we passed Nipaxon in Sweden and are now the third best-selling brand in the cold segment.

During the year we took a strategic decision to broaden the use of our enzyme technology in order to better leverage its commercial potential. We have chosen three models for sales of our products: Mouth spray as a medical device, mouth spray as a cosmetic product and an enzyme formulation that is included in our customers' skin care products. As a result, we have shifted from being a single-product company to a multiproduct company. We are now able to adapt our product offering to the different regulatory conditions and demand found in each market.

In line with our growth strategy, Enzymatica entered into several strategic distributor agreements in 2019. We signed an agreement with our German partner STADA for marketing and sales of a new mouth spray for the German market. The new product is based on the same barrier technology as previous products from Enzymatica and is a cosmetic product that complies with the regulations for cosmetic products in the EU. We also signed an agreement with the German cosmetics company Maren to deliver an enzyme formulation based on our patented barrier technology for Maren’s cosmetic skin care products. The value of this agreement is SEK 120 million over a three-year period. We also signed a non-exclusive agreement for China with Dr Bragi Company Ltd for sales and delivery of three different enzyme formulations, which will be included in skin care products from Dr Bragi Company.

Finally, in early 2020 we entered into an agreement with Keyuan Xinhai (Beijing) Medical Products Trade Co., Ltd., a subsidiary of China’s second largest pharmaceutical company, Shanghai Pharma, for marketing and sales of the mouth spray ColdZyme in China. The agreement was largely prepared in the second half of 2019. Under this agreement, Keyuan Trade guarantees orders of SEK 92 million for the first five years from the launch. The contract provides Enzymatica with access to one of the world’s largest healthcare markets, with a population of about 1.3 billion and a cold remedy market with annual sales of about CNY 27 billion (MENET, 2018), corresponding to SEK 37 billion, with an annual growth rate of about 8%. The product is expected to be launched on the Chinese market in 2022.

In early 2019 we published the final results from the German multicenter study for assessment of ColdZyme for colds. The convincing results enabled us to broaden and strengthen ColdZyme’s product claims with alleviation of cold symptoms and sore throat. A follow-up double-blind placebo-controlled study from Germany in 2019 did not reach the primary goal of significantly improved quality of life. A final report for the latter study is expected in the second quarter of 2020.

At the end of the year ColdZyme was launched by our partner Evergreen in Hong Kong. It is the first market in Asia where we sell the product. In 2018 we signed an agreement with one of the largest life science companies in Japan. Japan is one of the world’s largest healthcare markets, which is why we see substantial potential in this market. However, the registration process is taking a long time, for which reason we are planning for a launch at the end of 2021.

In the fourth quarter Enzymatica had sales of SEK 22.2 million – a 17% increase compared with the same period in 2018. Sweden and Denmark were mainly responsible for this strong sales growth, but the first order from STADA for the new mouth spray and delivery of enzyme formulations to Maren Cosmetics and Dr Bragi Company Ltd. also contributed to the trend. During the fourth quarter ColdZyme was the third largest brand in Sweden in colds, with a market share in sales value of 7.1% during the quarter. The strong demand for ColdZyme Strawberry contributed to this sales growth.

In early February we announced that the European Patent Office had issued a notice of allowance indicating its intention to grant a patent for the key cod enzyme component of Enzymatica’s ColdZyme cold spray. The expected patent will extend protection for ColdZyme and other Enzymatica products based on the same technology platform for an additional 15 years.
This is a considerable strengthening of Enzymatica’s patent portfolio and increases the chances of signing new distribution agreements with major global life science companies and developing spin off products for other applications.

After having re-entered the German market through the agreement with STADA for the new mouth spray, signing the agreement for China, entered several new agreements for enzyme formulations, broadened product claims for ColdZyme, introducing a new flavor, receiving a notice of allowance for our patent and achieving double-digit growth in existing markets, we have laid an outstanding foundation for continued growth and international expansion in 2020.

Fredrik Lindberg, CEO

     
Enzymatica at a glance

Enzymatica AB is a life science company whose business concept is to develop products, based on the company’s 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 of the cold category 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 and Austria. During the second quarter of 2019, ColdZyme also began to be sold in South Africa through our partner ABEX Pharmaceuticals. In the winter of 2019/2020, Enzymatica’s partner Evergreen Health launched ColdZyme in Hong Kong & Macau. In early 2020 a spray for improved oral health was launched in Germany.

Development work is currently focused on products related to upper respiratory tract infections. 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 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® brand in Belgium and Austria. An equivalent product is sold in Iceland under the PreCold® brand and in Spain under the Cortagrip® brand. During the second quarter of 2019, ABEX Pharmaceuticals began to sell ColdZyme under the ColdGuard® brand on the South African market. In late 2019, Evergreen Health launched ColdZyme in Hong Kong & Macau. A new mouth spray was launched by STADA in Germany in early 2020.

    
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 Thursday, February 13, 2020.

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 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
Email: certifiedadviser@penser.se

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