Since the spring of this year, Iconovo has quickly transitioned from a company in establishment phase to a company more focused on growth, setting its sights on more sustainable profitability with a secure profit margin through growing royalty revenues.

A big step in that transition came during Q2, when Iconovo hired Johan Wäborg as new CEO. This move secured international strategic business development experience at the very top levels of management, which is essential for Iconovo’s future growth. Read more.

Best quarter for Iconovo in three years

Wäborg gave a presentation to investors at Erik Penser Bank’s Company Day, on September 24, giving a detailed overview of the company’s four inhalation platforms and overall business model. Thanks to Iconovo’s in-house inhalation expertise, which pertains to both inhalation devices and dry-powder formulations to match those devices, generic pharma companies could potentially save three to four years in product development time by partnering with Iconovo, who, in turn, would receive revenue in the form of milestone payments and royalties from the market sales.

Thanks to a strong sales performance equal to SEK 5.8 million in Q3 (a 66 per cent increase compared to the same period last year) Iconovo recently posted its best quarterly results in the last three years. Overall, the company’s Q3 report highlights the progress made so far this year and is a testament to its business model.

Business model pays off

During that period, Iconovo received milestone payments from its partnership with Amneal. The pharma company is developing a generic version of AstraZeneca’s Symbicort Turbuhaler (budesonide/formoterol) for treating asthma and chronic obstructive pulmonary disease (COPD) using Iconovo’s ICOres platform.

Furthermore, in July, Iconovo was able to announce a new licensing deal with BNC Korea. This is the fourth royalty agreement for the company, and this one relates to generic formulations of Novartis’ Seebri Breezhaler and Ultibro Breezehaler for Iconovo’s ICOcap platform. Read more details about the deal and why it is important for Iconovo here. In connection with signing, a technology access fee of EUR 150 000 was paid to Iconovo.

Good cash position

In Q3, Iconovo also invested significantly in expanding its team with highly qualified workers, including a formulation specialist, a mechanical design engineer, a personal responsible for commercial partnerships and customer relationships, and a senior project manager. Furthermore, Iconovo made investments in the adaptation of the quality system to meet the requirements of the US Food and Drug Administration (FDA), as well as lab upgrades. And the company is continuing to make investments in the development of their new ICOpre platform.

However, the company’s cash position, SEK 72 million in cash and cash equivalents at the end of September, shows a good balance between investments and invoicing. In fact, Iconovo estimates its cash balance to last just over three years given its current burn rate. By then, Iconovo is expecting to receive royalties, which will translate to positive cash flow and good profitability for the company.

Analysts forecast jump in share price

The good Q3 report was picked up by analysts from Danske Bank and Erik Penser Bank, both of which ran positive valuations for Iconovo and a significant upside in the company’s share price.

Both analyses expect Amneal’s ICOres-based product to commercially launch in Europe during the first part of 2023, which will result in Iconovo collecting its first royalty payments from this deal. Meanwhile, Penser expects royalty payments from the BNC Korea deal to come in 2025.

It is also worth noting that the Danske Bank analysis forecasts first royalty payments from Stevanato Group to come in 2022. The Italian healthcare service provider sells Iconovo’s ICOcap platform, which has been CE-marked for use in clinical trials.

Overall, analysts see a medium risk in Iconovo’s stock, and with Iconovo expecting the same high pace in delivery of milestones for the rest of the year, high invoices are expected for Q4 as well.

The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.