Iconovo collaborates with international pharmaceutical companies to develop new inhaled medicines. The company offers patented inhalers that can be used for the development of new medicines, vaccines and generic versions of existing medicines.
One of the products expected to contribute to the company's sales target is ICOres budesonide/formoterol, a generic version of the asthma and COPD drug SymbicortIn the Nordic region, the product will be marketed by the subsidiary Iconovo Pharma, while Amneal Pharmaceuticals has the rights in other parts of Europe and the USA.
The goals for 2027 are set
For a little over a year ago Iconovo set new financial targets for 2027 and the company now confirms that the targets are still in line with these targets with sales of SEK 250 million and an EBITDA result of SEK 125 million in 2027, corresponding to an EBITDA margin of 50 percent. The company's CEO Johan Waborg is confident that they will achieve the goals according to a new press release from August 16:
»We have expanded our customer base and several of our pharmaceutical projects are entering clinical development, which could lead to larger orders for contract development and licensing agreements. This, together with the potential for sales of pharmaceuticals and inhalers under our own management, makes us confident of achieving our financial targets for 2027.«
Increased focus on CDMO
Since the long-term goals were communicated last year, Iconovo has continued to develop at a high pace, not least in contract development (CDMO). The company has recently expanded its CDMO operations with a focus on contract development of original pharmaceuticals using the company's inhalation platforms. The company has five active customer agreements in the CDMO area and expects to add three to five agreements per year until 2027. Iconovo's CDMO assignments generally provide a high profit margin and are expected to constitute a significant share of the company's revenues in the coming years.
Multiple license agreements
New agreements in the CDMO area could also open doors to licensing agreements or inhaler sales. The company already has four licensing agreements that generate revenue through initial payments, milestone payments and potential royalties on sales.
The company plans to enter into more agreements in the coming years, with a strong focus on ICOpre – a generic equivalent of GSK best-selling inhaler ElliptaTogether with the investment bank stifel Iconovo has initiated a structured out-licensing process that is expected to be completed in 2024, with a planned first launch in 2027.
Increased rights to sell
The company's third business area includes sales of inhalers to partners or external customers, as well as future direct sales of pharmaceuticals in the Nordic region via Iconovo PharmaIconovo has the capacity to manufacture and sell the company's single-use inhaler ICOone. In addition, the company has recently acquired the global rights to ICOcap from Stevanato Group, which now acts as a contract manufacturer of ICOcap instead. As previously mentioned, Iconovo also holds the Nordic rights to sell ICOre's budesonide/formoterol.
Iconovo's CEO on the path to profitability
In summary, Iconovo has three business areas that are expected to enable the company to reach its financial targets by 2027:
- Licensing agreements – estimated to generate approximately 50 percent of revenue
- Product sales – estimated to generate approximately 35 percent of revenue
- CDMO – estimated to generate approximately 15 percent of revenue
In addition, the company expects to make a profit in a quarter as early as 2024 and 2025. BioStock contacted Iconovo's CEO Johan Waborg to learn more about the future prospects.
You expect your current projects to account for approximately 85 percent of revenue by 2027. At the same time, you are aiming to bring in several new projects in the coming years. How can this create security and potential upside in your goals?
– We have such a strong offering today that we are continuously having discussions with both small and large pharmaceutical companies around the world. We will be able to build the business around projects that are already profitable in the initial phase. Of the three to five projects that we aim to start each year, hopefully several will proceed to the next phase when we enter into licensing agreements with the companies. If we are successful in selecting the right projects and if they proceed to licensing agreements, there is a nice upside to the goals.
»We have such a strong offering today that we are continuously having discussions with both small and large pharmaceutical companies around the world […] If we are successful in selecting the right projects and if they proceed to licensing agreements, there is a nice upside to the goals.«
Last year you announced your financial goals for 2027. What in the latest report indicates that you are on track?
– We indicate that the launch of Amneal's generic equivalent to Symbicort Turbuhaler, which is budesonide/formoterol in ICOres, is planned for 2025, which means that the study program is on schedule. We also want to guide the path to profitability and it goes through some major events that will lead to profitable quarters, a profitable quarter is indicated in 2024 and one in 2025. After that, the goal is that royalty flows, larger deals with inhaler sales and revenues via Iconovo Pharma will allow us to reach full-year profitability from 2026 and good further growth in the coming years.
You have chosen to place increasing focus on CDMO. Can you share some examples of successful collaborations and how these contribute to the company's growth?
– Increased focus on contract development can lead to nice cash-positive revenue streams for us that reduce our capital needs and take us towards profitability. At the same time, this type of development is the first step in the customer journey towards entering into a license agreement. In license agreements with a royalty or inhaler sales, we can get really nice returns on the business model. In 2023 alone, we have entered into three agreements in this area with Kiox Pharma, Affilogic and ENA Respiratory, and we have previously worked with Arcede and Monash University.
»Increased focus on contract development can lead to nice cash-positive revenue streams for us that reduce our capital needs and take us towards profitability. At the same time, this type of development constitutes the first step in the customer journey towards entering into a license agreement.«
Will you need to make any changes to the cost structure to reach the margin targets?
– We are continuously working to have a cost-effective operation and do not expect to have to implement major active measures. We will spend relatively less time developing our platforms and then we will have capacity that we can invest in customer projects. We have invested a lot of resources in the last two years to develop our inhaler ICOpre and the associated formulations into an attractive finished product. Now this work is reduced and a shift from internal work to customer work can take place.
»We are continuously working to have a cost-effective operation and do not expect to need to implement major active measures. We will spend relatively less time developing our platforms and then we will have capacity that we can invest in customer projects.«
You have identified the competitive situation as a challenge to achieving profitability. Recently, Viatris has introduced the first generic version of Symbicort. How does this affect your development of a generic Symbicort?
– Viatris has a generic version of the liquid spray variant of Symbicort that is on the market in the US. This does not affect our product at all, which is a generic dry powder formulation and competes with Turbuhaler and the generic variants of Symbicort in powder form. First and foremost, the goal is to launch in the EU and if Amneal wants to launch in the US, they have the opportunity after a so-called 505(b)(2) regulatory application process.
Finally, what role do you think Iconovo will play in the global inhalation market in 2027?
– We are pushing forward to become a world-leading company in powder inhalation and my hope is that by 2027 we will be a company with a number of products launched on the market through our business partners. We are already seeing an increasing influx of potential customers and the type of customers we meet ranges from small companies up to the very largest. In 2027 we will certainly have more agreements with big pharma and I predict that we will have a good foothold in important markets such as the USA and Japan.
»We are moving forward towards becoming a world-leading company in powder inhalation and my hope is that by 2027 we will be a company with a number of products launched on the market through our business partners. We are already seeing an increasing influx of potential customers«
