Doubled sales and positive earnings for the first quarter

Regulatory information

First quarter                  

  • Net sales reached SEK 26.8 (13.3) million.
  • Result after tax came in at SEK 0.7 (-12.2) million.
  • Earnings per share, basic and diluted, were SEK 0.01 (-0.09).
  • Cash and cash equivalents were SEK 33.9 (53.9) million.

Significant events in Q1 

  • Enzymatica doubled sales during the quarter driven by  extremely strong orders in March as a result of the coronavirus outbreak. This is also the first single profitable quarter for Enzymatica.
  • 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.
  • Enzymatica signed an agreement with Chemipal for marketing and sales of ColdZyme in Israel.
  • Enzymatica published favorable results from two user surveys with ColdZyme, one on children and one a review of prophylactic (preventive) use.
  • Enzymatica’s Nomination Committee proposes resigning CEO Fredrik Lindberg to be elected as a member of the Board of Directors at the Annual General Meeting on May 5.
  • The European Patent Office issued a notice of allowance with the intention to grant Enzymatica’s patent for the cod enzyme which is one of the key components in ColdZyme. The patent expires in 2035.

Significant events after the quarter

  • The strong order intake due to the corona situation has continued in the beginning of the second quarter, which will have a positive effect on Enzymatica’s sales for the quarter. Enzymatica’s contract manufacturers continue to deliver according to committed production plans – so far without disruptions. Enzymatica therefore do not currently foresee any problems in relation to production capacity to meet the increased demand. Also, Enzymatica has not experienced any issues so far in collecting accounts receivables. However, the uncertainty created by the corona pandemic makes any prediction regarding demand, logistics and production more uncertain.
  • To limit virus exposure for employees, Enzymatica has introduced strict meeting rules, possibility to work from home and social distancing if necessary to visit the office or customers.
  • ColdZyme received CE marking according to the highest class, which implies that the product can be sold as class III MDD (Medical Device Directive) within the EU until May, 2024. ColdZyme and its documentation have been reviewed by Eurofins Product Testing, a notified body for certification of medical device products within the EU. Eurofins has reviewed the complete documentation of ColdZyme including data for safety, efficacy and product benefits.
     

Key figures for group

(SEK million) Jan-Mar
2020

 
Jan-Mar
2019
Full year
2019
Net sales 26.8 13.3 61.3
Gross margin, % 78 74 73
Operating profit/loss 0.2 -11.9 -41.7
Cash flow from operating activities -4.5 -15.6 -37.6
Average number of employees 17 20 19

        

CEO statement: A quarter with strong sales, new patent and new distributor agreements
 

Enzymatica has had a successful start of 2020 with significant progress during the first quarter. Our sales more than doubled and for the first time we generated a positive operating result in a single quarter. We signed a very important strategic agreement for the Chinese market as well as an agreement with the largest pharmaceutical distributor for the Israeli market. During the quarter the European Patent Office issued a notice of allowance with the intention to grant our new patent for one of the key components of ColdZyme, which will give our product a very strong long-term protection in the market.

Enzymatica’s sales during the first quarter totaled SEK 26.8 million, compared with about SEK 13.3 million the corresponding period in 2019. The quarter began with lower sales compared with 2019 because of a milder than usual cold season in Europe. In March, the situation changed dramatically and Enzymatica received orders for several of its markets because of the coronavirus outbreak. Consumers are buying our ColdZyme cold spray to reduce and prevent cold symptoms in light of the current coronavirus situation.

The sales increase for Enzymatica in Q1 was particularly strong in the Swedish, Danish and British markets. In Sweden, ColdZyme sales more than doubled, with a similar development in Denmark. In the UK, sales growth of our cold spray was even higher, increasing several times, albeit from a relatively low level.

In Germany, the launch of the new mouth spray to promote oral health was well received and our partner STADA placed follow-up orders. In Hong Kong & Macau, ColdZyme was launched during the second half of December 2019 and sales in stores began in January. The product quickly sold out and our partner Evergreen placed a follow-up order. Our partner ABEX also placed a small follow-up order of ColdGuard (ColdZyme) for the South African market.

In the beginning of the quarter, Enzymatica signed an agreement with Keyuan Trade for marketing and sales of ColdZyme in China. Keyuan Trade is a wholly owned subsidiary of Shanghai Pharma, the second largest pharmaceutical company in China. Under this agreement, we secured a minimum order of SEK 92 million for the first five years from the launch, which is expected in 2022.

In March Enzymatica signed a distribution agreement for the Israeli market. Our highly respected partner, Chemipal, is the largest pharmaceutical distributor in the country. Once ColdZyme is registered, we hope that the product will be able to be launched in the fall.

In February we were notified that the European Patent Office had intended to grant a patent for the cod enzyme that is one of the key components of ColdZyme. The patent will be valid until 2035. With this strong patent protection for ColdZyme, our offering will be even more attractive to both current partners and also large potential international distributors with whom we are engaged in discussions.

In the first quarter, we published the results from two user surveys. The first addressed use of ColdZyme for colds in children and the second addressed a report that compiled four user surveys to study the preventive effects of ColdZyme with respect to colds. Both showed convincing results for, among other things, fewer colds, and fewer sick days as well as milder common cold symptoms. We are extremely pleased with these results, which again demonstrate the confidence and loyalty consumers have for our product.

Another milestone is that ColdZyme in April was re-certified and the classification of the product changed from class I to class III. This means that Eurofins Product Testing, a notified body within the EU, has reviewed Enzymatica’s processes and ColdZyme, and found that the product corresponds with the requirements of the highest class for medical device products within the EU. The certification is a clear quality stamp and strengthens the trust for our cold spray on an international level.

As a consequence of the coronavirus outbreak we see continued strong demand for ColdZyme. At the end of the first quarter and the beginning of the second we have experienced a strong increase in orders – which will have a positive impact on our sales in the second quarter.

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 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 and Austria. During the second quarter of 2019, ColdZyme also began to be sold in South Africa through the partner ABEX Pharmaceutica. 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 Pharmaceutica 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 Tuesday, May 5, 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 adviser is Erik Penser Bank. Tel: +46 (0)8-463 83 00
Email: certifiedadviser@penser.se

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