Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ArcticZymes Technologies ASA (FRA:B4V, Financial) achieved an all-time high number of orders for the quarter, indicating strong demand for their unique enzymes.
- The company made significant progress in partnership talks within the CDMO area and on the distribution front, which could enhance future growth.
- Successful scientific marketing efforts, including a presentation at the American Society of Gene & Cell Therapy, have accelerated partnership discussions.
- ArcticZymes Technologies ASA (FRA:B4V) is focusing on building a platform for long-term growth, with plans to launch two new GMP nucleases and an ELISA kit within the next 12 months.
- The company received a NOK12 million grant from the Norwegian Research Council to support the development of new enzymes for the advanced therapies biomanufacturing market.
Negative Points
- Sales for Q2 2024 were slightly lower than Q1, with a decrease in average order size value, indicating potential challenges in market conditions.
- The company had to dispose of some ELISA kits from inventory due to expiration, impacting cost of materials.
- Personnel expenses and other operating expenses were slightly higher compared to the same period last year, affecting profitability.
- The cash position was negatively impacted by changes in accounts receivable and payables, leading to a temporary cash flow issue.
- Despite progress, the company acknowledges that it is too early to determine if the increased number of orders will convert into larger, sustained sales.
Q & A Highlights
Q: Are the increased number of orders relating to a pickup in evaluation orders from customers? If so, any early feedback and any signals when this can be converted to larger orders?
A: Michael Akoh, CEO: We had approximately 43 evaluation orders this quarter. While it's early to draw conclusions from Q2, the positive feedback indicates continued interest and activity in both molecular tools and biomanufacturing. However, more quarters are needed to determine if this is a trend.
Q: Is it possible to share some expectations on the magnitude of our CDMO supply agreement in relation to the current biomanufacturing revenues?
A: Michael Akoh, CEO: It's premature to provide figures, but both the OEM distribution and CDMO agreements are expected to gradually increase sales volume. Investment in partner training and customer engagement is crucial for converting these agreements into sales.
Q: Do CDMOs normally decide what nucleases customers use in their manufacturing processes, or is it the CDMO customer who decides?
A: Michael Akoh, CEO: Typically, CDMOs prefer using their own platforms, which they are comfortable with and can ensure success. While there are exceptions, most clients rely on the CDMO's expertise and recommended platforms for manufacturing processes.
Q: What are the strategic priorities for ArcticZymes moving forward?
A: Michael Akoh, CEO: Our focus is on building a platform for long-term growth by becoming more market-driven, enhancing commercialization efforts, and developing partnerships. We aim to launch new GMP-grade nucleases and an ELISA kit within the next 12 months to strengthen our portfolio.
Q: How is ArcticZymes addressing regulatory compliance in the biomanufacturing market?
A: Michael Akoh, CEO: Regulatory compliance is crucial, and we are progressing with GMP-grade nucleases. We plan to launch new GMP-grade enzymes within the next 12 months, ensuring we have competitive products in the biomanufacturing segment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
