Release Date: August 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nanoform Finland PLC (STU:4YL, Financial) has achieved significant progress in 2024, including preparing to put medicines on the market and signing several new customer projects.
- The company has been awarded the GMP Quality Control lab certificate, enabling faster analysis and a lower cost position for customers.
- Nanoform Finland PLC (STU:4YL) is on track to meet its 2024 business targets, including increased project signings and improved operating free cash flow.
- The company has a strong balance sheet with more than EUR 50 million in cash and short-term government bonds, and no debt.
- Nanoform Finland PLC (STU:4YL) has seen increased traction in biologics, particularly after a presentation by Takeda, and has signed a multi-API contract with a major US pharma company.
Negative Points
- The growth rate in personnel has slowed down as the company feels it has reached critical mass, potentially indicating a plateau in expansion.
- Revenue per quarter has seen only a small sequential increase, with the 12-month rolling revenue still down slightly.
- The company has experienced fluctuations in project signings, with some quarters seeing only one or two signings.
- There is a dependency on external partners for certain aspects of R&D, which could impact timelines and costs.
- The company is still in the process of finalizing the formulation work for nanoenzalutamide, which could delay market entry.
Q & A Highlights
Q: Can you provide some color on the Takeda cooperation and how it will be moving forward?
A: (Christian Jones, Chief Commercial Officer) We have continued our relationship with Takeda following promising in vitro results from a proof-of-concept study. We are moving forward into further formulation development of a novel formulation for subsequent testing in vivo by the end of this year.
Q: Is it safe to assume that we're talking about preclinical activities at this point?
A: (Christian Jones, Chief Commercial Officer) You probably read into what is written pretty well, but I can neither confirm nor deny that. I can only comment on what is written in the press release.
Q: Regarding the grant you received earlier this year, when will you be booking that as income?
A: (Albert Haeggstrom, Chief Financial Officer) We will be booking it over the coming years in the other operating income line. It will be spread over 8 to 10 quarters, ramping up now with slightly higher numbers per quarter.
Q: Can you provide any color on the planned commercial deals, particularly related to the nanoenzalutamide project?
A: (Albert Haeggstrom, Chief Financial Officer) We aim for a mix of upfront payments, milestones, and royalties. We can do one or several deals, potentially with different partners for different markets or regions.
Q: Why has the proposal success rate been trending down despite an increase in proposals issued?
A: (Christian Jones, Chief Commercial Officer) Many biotech companies have struggled with financing, causing delays in awarding proposals. These proposals are still active and may be awarded once funding is secured.
Q: What are your plans for a bio GMP line given the Takeda collaboration?
A: (Edward Haeggstrom, Chief Executive Officer) Our strategy is to invest in the GMP line together with a partner. We have done extensive planning and are moving in the right direction, with active industrialization on the biologics side.
Q: Have you fully finalized the formulation work for nanoenzalutamide?
A: (Edward Haeggstrom, Chief Executive Officer) We have sufficient formulation results to continue both the originator and non-originator tracks. However, we continue to improve the formulation to increase its value and strategic options.
Q: What is the R&D cost per project kernel?
A: (Albert Haeggstrom, Chief Financial Officer) The cost is low due to our in-house capabilities and structured deals. External R&D expenses have been between EUR 200,000 and EUR 500,000 per quarter.
Q: How has the Takeda collaboration impacted incoming potential projects?
A: (Christian Jones, Chief Commercial Officer) The collaboration has generated significant interest, particularly in high-concentration subcutaneous delivery for biologics. We are having exciting commercial conversations and seeing a lot of interest from major pharma and smaller clients.
Q: Can you comment on the gross margin improvement plans?
A: (Albert Haeggstrom, Chief Financial Officer) We are planning to in-source GMP QC work, which should start to have an effect in Q4. Our target is to go above previous gross margin levels.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
