Nanoform 4Q and full year 2021 report: accelerating GMP growth

HELSINKI, Feb. 22, 2022 /PRNewswire/ -- The strong momentum continues: first two customer GMP projects signed, full-year gross margin exceeds 2025 target, the rapid growth in orders received and revenue recognized accelerates further, the first clear signs of economics of scale emerges, while the near-term focus shifts to triple our GMP capacity and thereafter being able to run many GMP projects in parallel.

10-12/2021 key financials:

• Revenue in the last quarter of the year EUR 0.66 million, more than three times the EUR 0.19 million recognized in 10-12/2020.
• Orders received* almost EUR 2 million, five times the roughly EUR 0.4 million received in 10-12/2020.
• The gross profit more than quadrupled to EUR 0.61 million as the gross margin jumped to 93% (EUR 0.14 million, 73% in 10-12/2020).
• EBITDA came in at EUR -4.8 million (EUR -4.2 million).
• The operating loss was EUR -5.4 million (EUR -4.6 million).
• The loss for the period was EUR -5.6 million (EUR -3.9 million).
• Basic EPS was EUR -0.08 (EUR -0.06).
• The number of employees grew to 125 at the end of the review period (74).
• Cash position was EUR 75.7 million on December 31, 2021 (EUR 61.0 million).

1-12/2021 key financials:

• Orders received* exceeded EUR 5 million, five times the roughly EUR 1 million received in 2020.
• Revenue nearly tripled to EUR 2.0 million, stemming from 22 different customer projects (EUR 0.69 million, 12 customer projects in 1-12/2020).
• The gross profit more than tripled to EUR 1.8 million as the gross margin jumped to 92% (EUR 0.50 million, 72%).
• EBITDA improved to EUR -17.7 million (EUR -18.2 million).
• The operating loss came in at EUR -19.7 million (EUR -19.4 million).
• The loss for the period was EUR -19.7 million (EUR -19.4 million).
• Basic EPS was EUR -0.29 (EUR -0.35).
• EUR 40 million (gross) was raised in a new share issue in March.

*Part of orders received may not turn into revenue as customers have the right to change or cancel orders

Numbers in brackets refer to the corresponding last year reporting period, unless otherwise mentioned.

CEO's review

Nanoform continues to take logarithmic steps. In two years, we went from two PoC projects signed in 4Q19 to two GMP projects signed in 4Q21. During the same time the cumulative number of started PoCs grew from two to beyond two dozen. Now I look forward to working relentlessly to see how fast we can reach cumulatively two hundred started PoCs, more than two dozen started GMP projects, and the first two products on the market.

At Nanoform we seek to grow by factors, where it counts, rather than by percentage points. When I look at 2021, I see many areas where the growth has been tremendous: the number of APIs examined by our Starmap team, the size of the largest API our Biologics team has nanoformed so far, the cumulative line hours and the amount of nanoformed API produced by our non-GMP and GMP teams, the number of formulation samples done by our pharma development team, the number of applicant CVs read and interviews held by our HR team and last but certainly not least, the total value of orders received by our commercial team. The growth has continued in 2022: during the first three weeks of January 2022, our QC analyzed more samples than during the entire 2019, our commercial team have already won projects worth five times all projects signed in 2019 and so on.

On the costs side, we target slower and focused growth. I am pleased to see positive productivity jumps and economics of scale emerging in many places as our organization grows and matures. The difference between doing something for the first time versus the hundredth time is enormous. As they say in sports, post 10,000 hours one has achieved a certain level of mastery. The fact that we already in 2021 reached our 2025 target of having a gross margin above 90 percent speaks volumes about the potential of our technology platforms and business model. I foresee slower growth in total costs during the coming years - with most likely even a negative growth in total costs per employee as we grow our staff from today's 125 to the targeted 200-250 by 2025. With our revenues expected to continue to grow rapidly this lays a solid foundation for a journey towards first becoming EBITDA, then EBIT, and finally cashflow positive by 2025.

I`m happy to share with you that Nanoform has begun to evaluate the possibility of transferring to the official list of Nasdaq Helsinki Stock Exchange and Nasdaq Stockholm Stock Exchange during 2022. The company was listed on the Premier-segment of Nasdaq First North Growth Market in Helsinki and Stockholm in June 2020. A move to the main list would be a natural step on Nanoform's continued development and growth journey.

During the last months we've continued to expand and polish the different parts of Nanoform (R&D, non-GMP, GMP, pharma development, QC, QA, safety, legal, finance, procurement, HR, IT, business development), continued to win more projects, sign new clients, add exceptional new Nanoformers and set new near-term business targets for 2022, after already having achieved all goals set for 2021. Based on all this action in combination with client interaction, sales pipeline, and our recently strengthened commercial teams in the US and Europe, I'm confident that the coming quarters and years will continue to show strong commercial momentum.

Again, none of this could have been achieved without our amazing employees and great partners. My sincere THANK YOU to you all for your continued dedication to Nanoform and for the inspiring and innovative work for which we're known.

Best Regards,

Prof. Edward Hæggström, CEO Nanoform

Nanoform's complete 4Q and full year 2021 report can also be found at: https://nanoform.com/en/financial-reports-and-presentations/

Nanoform online presentation and conference call February 22, at 3:00 p.m. Helsinki time / 2:00 p.m. Stockholm time

Nanoform will publish its Q4 and full year 2021 report February 22, 2022, at 8.10 a.m. Finnish time / 7.10 a.m. Swedish time. The company will hold an online presentation and conference call the same day at 3.00 p.m. Finnish time / 2.00 p.m. Swedish time. Nanoform will be represented by CEO Edward Hæggström, CFO Albert Hæggström and CCO Christian Jones. The presentation will be delivered in English. The presentation will be broadcast live as a webcast available at:

https://financialhearings.com/event/13598

Teleconference dial-in numbers:

Finland: +358981710522
Sweden: +46850558353
Norway +4723963688
Denmark: +4578723252
France: +33170750737
Germany: +4969222239167
United Kingdom: +443333009266
United States: +16467224956

Significant events during 1-12/2021

• Early January, a new near-term business target was announced: "At least 12 new non-GMP and at least one GMP customer project in 2021".
• In January, Nanoform announced positive interim results from its clinical study. The interim results suggested that a nanoformed oral piroxicam tablet achieved significantly faster absorption when compared to the reference tablet from the originator Pfizer.
• In February, Nanoform and Herantis Pharma Plc signed a Biologics Proof of Concept Agreement aiming to enhance nasal drug delivery to the brain of Herantis' CDNF therapies for Parkinson's disease using Nanoform's proprietary biological nanoparticle technology. As a result, Nanoform achieved its near-term business target of "First Biologics PoC project signed in 2021".
• In February, a PoC agreement was signed with an East Coast US Biotech Company.
• In February, Nanoform announced further positive interim results from its clinical study. The fast absorption data from the second part of the study implied that nanoforming might offer viable alternatives to complex formulation approaches such as cyclodextrin based technologies.
• In February, Nanoform appointed Dr Jamie Unwin as Commercial Insights Officer, based in Oxford UK, starting in April.
• On February 26, a new near-term business target was announced: "At least three new non-GMP lines in 2021 and two new GMP lines in 2022".
• In March, Nanoform and Nacuity Pharmaceuticals, a Texas-based clinical stage pharmaceutical company, signed a technology Proof of Concept agreement to enhance ophthalmic drug delivery of Nacuity's NPI-001 and NPI-002 drug candidates.
• In March, a PoC agreement was signed with a European Biotech Company.
• In March, Nanoform launched the next generation of its STARMAP^® artificial intelligence platform, v2.0. The technology utilizes sparse-data AI to augment experimental results from its CESS^® nanoparticle engineering process with detailed expert knowledge, allowing reliable predictions to be made regarding partners' potential success of nanoforming their drug molecules. STARMAP^® is a digital version of the CESS^® technology that enables in silico experiments in large quantities, creating fast predictions of which molecules should be nanoformed.
• In March, EUR 40 million (gross) was raised in a successful new share issue through an accelerated bookbuilding process. The considerably oversubscribed capital raise attracted strong interest from Nordic and international investors, including a considerable number of large global Tier 1 institutional investors.
• In March, Nanoform appointed Dr Christopher Worral as VP Business Development US, based in San Diego, starting in May.
• During 1-3/2021 three new non-GMP lines were commissioned. As a result, the near-term business target "at least three new non-GMP lines in 2021", was achieved.
• On April 6, at the AGM, the Board of Directors, chaired by Miguel Calado, was re-elected.
• In April, Nanoform and Aprecia, a US-based three-dimensional printing pharmaceutical company, announced that they are exploring the synergies between their respective technologies in the field of nanoparticle-enabled 3DP dosage forms. The collaboration targets to combine Nanoform's fast dissolution nanoformed particles with Aprecia's ZipDose-technology platform for rapid disintegration to enable high performance buccal and oral delivery of medicines to patients where rapid absorption is essential.
• In May, Nanoform announced the completion and final results of its clinical study. The primary, secondary and optional exploratory objectives of the study were all met. The results showed that Nanoform's CESS® technology enabled development of a fast-acting piroxicam immediate release tablet formulation with more rapid absorption and improved drug delivery performance in comparison to a standard reference IR tablet. The study outcome confirmed earlier published interim results and supports the clinical utility of Nanoform's technology and its potential applicability for producing fast-acting dosage forms for poorly soluble drugs.
• In May, Nanoform and a US listed metabolic pharmaceuticals company signed a collaboration agreement.
• In May, Nanoform and Celanese Corporation, a global specialty materials company, announced plans to explore the synergies between their respective technologies in the field of nanoparticle-enabled drug delivery. The goal is to assess the utility of combining Nanoform's nanoparticle platform technologies with Celanese's VitalDose^® EVA copolymer delivery technology for drug-eluting implants. The aims are to enable the development of next-generation drug delivery devices that support increased drug load and possess enhanced sustained release properties. Nanoform and Celanese intend to work on formulation development, leveraging each organization's unique formulation expertise.
• In May, a PoC contract was signed with a new client, a US Biotech company.
• On June 2, Nanoform raised its mid-term business targets for 2025. The new targets are:

To nanoform annually at least 70 new active pharmaceutical ingredients, or `APIs' (40% increase from the previous target of at least 50 new APIs annually)

To have in place 35 operating production lines, of which 7 to 14 are expected to be GMP compliant (40% increase from the previous target of 25 operating lines of which 5-10 are GMP compliant)

To have 200-250 employees (0-25% increase from the previous target of ~200)

To have a gross margin over 90 percent (unchanged; re-iterated)

To be cash flow positive (unchanged; re-iterated)

The raised midterm business targets were a consequence of several factors: the additional market opportunity foreseen for Nanoform's new biologics technology, the significant interest in Nanoform's service offering shown by the global pharma market, and the fact that both the number of companies developing novel drugs and the total number of APIs in the global pipeline continue to grow rapidly.

• In June, a letter of intent was signed with a European headquartered international company for the development, manufacturing, and commercialization of a by nanoforming improved version of a current blockbuster drug. The expected improvements will be focused on patient convenience. Nanoform has already started a PoC study on the asset, paid for by the partner, and are simultaneously in discussions for the execution of the definitive agreement for the further co-development and GMP manufacturing. The execution of the definitive agreement is dependent on the outcome of the PoC study and agreement on customary contractual terms with the partner.
• In July, a PoC contract was signed with a new global major pharma customer.
• In July, a Master Services Agreement was signed with Boehringer Ingelheim. Proof of Concept studies may now be performed to assess the added value Nanoform's CESS^® technology can deliver to Boehringer Ingelheim's drug development projects.
• In August, a fourth PoC project was started with a global major pharma customer.
• In September, Herantis Pharma Plc announced successful results from its project with Nanoform, where the aim is to enhance nasal drug delivery to the brain of Herantis' CDNF therapies for Parkinson's disease by using Nanoform's proprietary biological nanoparticle technology.  The PoC project showed that the nanoforming process was successfully applied to rhCDNF. During the nanoparticle formation process, rhCDNF protein remained stable, retaining its structure, function, efficacy, and neuroprotective effects in line with CDNF controls.
• In September, Nanoform appointed Dr Nathalie Huther as VP Business Development Europe, based in the UK, starting in November.
• In September, Nanoform signed a contract for the implementation of a new enterprise resource planning system. The ERP system will be based on SAP's S/4HANA solution and Nanoform's partners in the implementation will be NTT Data Business Solutions, a leading global business and IT services provider with significant experience from the pharmaceutical industry as well as Enfo, a highly experienced Nordic SAP partner headquartered in Finland.
• In September, Nanoform announced that PoC studies will be funded by the Bill & Melinda Gates Foundation to assess the added value Nanoform's CESS^® nanoparticle engineering technology can deliver to several of the foundation's drug development projects.
• On November 12, Nanoform announced that it had received ISO/IEC 27001:2013 certification for its Information Security Management System (ISMS). The ISMS applies to all information, systems, processes, and people that operate, store, handle, and process Nanoform's and its client's trusted data.
• On November 15, Nanoform announced that it had signed a GMP agreement with a European headquartered international company and that as six new non-GMP projects were signed in the third quarter, the near-term business target "At least 12 new non-GMP and at least one GMP customer project in 2021" was achieved.
• On November 17, Jeanne Thoma was appointed ordinary member of the Board of Directors at the EGM.
• On November 25, a new near-term business target was announced: "Biologics pilot line for GMP in 2022".
• In December, a PoC contract was signed with a new global major biopharmaceutical customer.
• In December, Nanoform and TargTex, a European biotech company, signed a PoP and GMP manufacturing program to enhance TargTex's Glioblastoma Multiforme drug candidate.

Significant events after 1-12/2021

• On January 3, Nanoform announced two new near-term business targets for 2022: "At least 20 new customer non-GMP projects in 2022" and "At least 3 new customer GMP projects in 2022".

Company near-term business targets for 2022

• 2 new GMP lines (announced Feb-21)
• Biologics pilot line for GMP (announced Nov-21)
• At least 20 new customer non-GMP projects (announced Jan-22)
• At least 3 new customer GMP projects (announced Jan-22)

Company mid-term business targets 2025

• To nanoform at least 70 new Active Pharmaceutical Ingredients (API) annually
• To have in place 35 operating production lines of which 7 to 14 are expected to be GMP production lines
• Over 90 percent gross margin
• To have 200-250 employees
• To be cash flow positive

In conjunction with the approval of the Report of the Board of Directors and Financial Statements for the year ended December 31, 2021, the Board of Directors has in its meeting also approved the Corporate Governance Statement for Nanoform Finland Plc 2021 and the Remuneration Report for Governing Bodies of Nanoform Finland Plc 2021. All reports and statements can be found on the Company's webpage at www.nanoform.com.

For further information, please contact:

Albert Hæggström, CFO
albert.haeggstrom@nanoform.com / +358 29 370 0150

For investor relations queries, please contact:

Henri von Haartman, Director of Investor Relations
hvh@nanoform.com / +46 7686 650 11

About Nanoform

Nanoform is an innovative nanoparticle medicine enabling company. Nanoform works together with pharma and biotech partners globally to provide hope for patients in developing new and improved medicines utilizing Nanoform's platform technologies. The company focuses on reducing clinical attrition and on enhancing drug molecules' performance through its nanoforming technologies and formulation services. Nanoform's capabilities include GMP manufacturing, and its services span the small to large molecule development space with a focus on solving key issues in drug solubility and bioavailability and on enabling novel drug delivery applications. Nanoform's shares are listed on the Premier-segment of Nasdaq First North Growth Market in Helsinki (ticker: NANOFH) and Stockholm (ticker: NANOFS). Certified Adviser: Danske Bank A/S, Finland Branch, +358 40 744 1900. For more information, please visit www.nanoform.com.

Forward-Looking Statements

This press release contains forward-looking statements, including, without limitation, statements regarding Nanoform's strategy, business plans and focus. The words may," "will," "could," "would," "should," "expect," "plan," "anticipate," "intend," believe," "estimate," "predict," "project," "potential," "continue," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements in this press release are based on management's current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events or results to differ materially from those expressed or implied by any forward-looking statements contained in this press release, including, without limitation, any related to Nanoform's business, operations, clinical trials, supply chain, strategy, goals and anticipated timelines, competition from other companies, and other risks described in the Report of the Board of Directors and Financial Statements for the year ended December 31, 2021 as well as our other past disclosures. Nanoform cautions you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. Nanoform disclaims any obligation to publicly update or revise any such statements to reflect any change in expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Any forward-looking statements contained in this press release represent Nanoform's views only as of the date hereof and should not be relied upon as representing its views as of any subsequent date.

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