Iconovo, a leading developer of inhalation products, consolidates its financial targets for 2027 – revenues of 250 MSEK with an EBIDTA margin of 50 percent. Approximately 85 percent of the revenue is expected to come from projects that have already been initiated. In addition, the company expects to achieve profitability during one quarter as early as next year and 2025, as well as full-year profitability in 2026. BioStock contacted CEO Johan Wäborg to gain a deeper understanding of the company’s goals.

Iconovo collaborates with international pharmaceutical companies to develop new inhalation drugs. The company provides proprietary inhalers that can be used for the development of new drugs, vaccines and generic versions of established pharmaceuticals.

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 Symbicort. In 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 US.

Targets for 2027 remain firm

About a year ago, Iconovo set new financial targets and the company now confirms that the goals are still in line with these targets – sales of 250 MSEK and an EBITDA result of 125 by 2027, corresponding to an EBITDA margin of 50 percent. The company’s CEO Johan Wäborg is convinced that they will achieve these goals according to a new press release on August 16:

»We have expanded our customer base and several of our drug projects are entering the clinical development phase, which may lead to larger orders for contract development and license agreements. This together with the potential for direct sales of drug products and inhalers makes us confident that we will reach 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 within contract development (CDMO). The company has recently expanded its CDMO business with a focus on contract development of original drugs in the company’s inhaler platforms. The company has five active customer agreements in the CDMO area and is expected to add three to five agreements per year until 2027. Iconovo’s CDMO assignment provides a high profit margin overall and is expected to represent a significant share of the company’s revenue in the coming years.

Multiple license agreements

New agreements in the CDMO area can also open doors to licensing agreements or inhaler sales. The company already holds four license agreements that generate revenue through upfront payments, milestone payments and potential royalties on future product sales.

The company plans to enter into more agreements in the coming years, with a strong focus on ICOpre – a generic version of GSK‘s blockbuster inhaler Ellipta. Together with investment bank Stifel, Iconovo has initiated a structured out-licensing process that is expected to be completed in 2024, with the planned first launch in 2027.

Increased selling rights

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 Pharma. Iconovo has the capacity to manufacture and sell the company’s disposable inhaler ICOone. In addition, the company has recently taken over the global rights for ICOcap from Stevanato Group, which now instead acts as a contract manufacturer of ICOcap. As previously mentioned, Iconovo also holds the Nordic rights to sell ICOres budesonide/formoterol.

Iconovo’s CEO on the road to profitability

In summary, Iconovo has three business areas that are expected to enable the company to reach the financial targets in 2027:

• License agreements – estimated to generate approximately 50 percent of the revenue
• Product sales – estimated to generate approximately 35 percent of the revenue
• CDMO – estimated to generate approximately 15 percent of the revenue

In addition, the company expects to make a profit in a single quarter as early as 2024 and 2025. BioStock contacted Iconovo’s CEO Johan Wäborg to find out more about the future prospects.

You expect your current projects to account for about 85 per cent of revenue by 2027. At the same time, you aim to bring in several new projects in the coming years. In what way can this create a safety and potential upside in the goals?

– We have such a strong offer today that we continuously have discussions with both small and large pharmaceutical companies around the world. We will be able to build the business around projects that are profitable already in the initial phase. We aim to start  three to five projects each year, and hopefully several of them will move on 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 potential upside to the goals.

»We have such a strong offer today that we continuously have 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 potential upside to the goals.«

Last year, you announced your financial targets for 2027. What in the latest report indicates that you are on your way to reach these goals?

– We assume that the launch of Amneal’s generic equivalent to Symbicort Turbuhaler, budesonide/formoterol in ICOres, will take place in 2025 which means that the study program is on track. The road to profitability goes through some major events that can lead to profitable quarters, a profitable quarter is predicted in 2024 and 2025. Thereafter, the goal is that royalty flows, significant deals within inhaler sales and revenues via Iconovo Pharma will enable us to achieve full-year profitability from 2026 and good further growth in the coming years.

You have chosen to put more 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 good revenue flows that reduce our capital needs and take us towards profitability. At the same time, this type of development represents the first step in the customer journey towards entering into licensing agreements. In license agreements that include royalty or inhaler sale, we can get really nice return on the business model. In 2023, we have entered into three agreements in this area with Kiox Pharma, Affilogic and ENA Respiratory, and we are already working with Arcede and Monash University.

»Increased focus on contract development can lead to good revenue flows that reduce our capital needs and take us towards profitability. At the same time, this type of development represents the first step in the customer journey towards entering into licensing agreements.«

Will you need to make any changes to the cost structure to reach the margin targets?

– We work continuously to have a cost-effective business and do not expect to need to implement major active measures. Going forward, we will spend less time developing our platforms which means that we will have more capacity for our customer projects. We have put a lot of resources into developing our inhaler ICOpre and the associated formulations to become an attractive ready-to-use product. Now this work is decreasing and a shift from internal work to customer work can take place.

»We work continuously to have a cost-effective business and do not expect to need to implement major active measures. Going forward, we will spend less time developing our platforms which means that we will have more capacity for our customer projects.«

You have identified the competitive situation as a challenge to the goal of 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 available on the market in the US. Thus, it does not affect our product at all, which is a generic dry powder preparation and competes with Turbuhaler and the generic variants of Symbicort in powder form. First and foremost, our goal is to launch the product in the EU. 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 have in the global inhalation market in 2027?

– We continue to drive 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 and the type of customers we meet range from small companies up to the very largest. In 2027, we will certainly have more agreements with big pharma and I predict that we have a good position in important markets such as the US and Japan.

»We continue to drive 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«

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