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Iconovo develops complete inhalation products for a global market in collaboration with international pharmaceutical companies. The company's most advanced project is ICOre's budesonide/formoterol, a generic equivalent to AstraZeneca Symbicort, which is expected to be launched in 2025.
Iconovo has set financial goals to achieve profitability in 2026, as well as sales of SEK 250 million and EBITDA of SEK 125 million in 2027. In addition, the company expects to achieve profitability in a single quarter in both 2024 and 2025.
Directed issuance to achieve goals
To create the conditions for achieving these goals, the company is carrying out a directed new share issue comprising a total of 1 shares and raising approximately SEK 533 million for the company. The subscription price is set at SEK 375, which corresponds to a premium of approximately 19,2 percent compared to the closing price on September 12,50.
Gerald Engström – new main owner
The new issue not only provides Iconovo with financial resources, but also a new main owner – Gerald Engstrom, who is the founder of the ventilation manufacturer SystemairEngström is today an active investor, with around 50 companies in his portfolio, which are worth a total of around SEK 7,6 billionThe portfolio includes companies that Hansa, Volvo, Millicom and Scandic Hotels Group.
Before the issue, Gerald Engström owned 400 shares worth SEK 000 million in Iconovo, according to Holding's database as of August 5,6 this year. Through the issue, he was able to invest an additional SEK 29 million in the company. Iconovo believes that the new main owner has a positive impact on the company's ownership structure:
"We are pleased to welcome our new principal owner Gerald Engström, who is a successful investor with extensive experience in the business world. His commitment to the company shows confidence in our vision and our strategy to achieve our long-term goals," says CEO Johan Wäborg in a comment to BioStock.
More existing owners show interest
Other existing shareholders in Iconovo have also shown interest in the private placement. In addition to Gerald Engström, Second AP Fund, Mats Leander, Hops Funds, Cicero Funds and Michael Katina via Eber Holdingand Mats Johansson, who is a board member and former largest shareholder in Iconovo.
The new issue is being carried out in two tranches, of which the second tranche is only aimed at Abraxas Holding, which is controlled by board member Mats Johansson.
Directed issue instead of rights issue
Iconovo chose to conduct a directed issue instead of a rights issue for several reasons. According to the company, a rights issue would probably have required significantly more time and resources to be implemented effectively. In addition, there is no guarantee that such an issue would be fully subscribed. If the rights issue had not been fully subscribed, the remaining shares would have had to be subscribed by guarantors who often demand high remuneration in exchange.
Iconovo also assumes that a rights issue would likely have required a discount on the shares, which would have led to greater dilution for existing shareholders. The total dilution effect of the current rights issue amounts to approximately 13 percent, which is a more favorable solution for shareholders according to the company.
Launch of ICOres and out-licensing of ICOpre in sight
The private placement secures the financial resources necessary to continue working towards the company's financial targets. To achieve these targets, it is important that Iconovo successfully out-license its Ellipta generic ICOpre in 2024, and launch ICOres budesonide/formoterol in 2025. The company has initiated the contact phase in the out-licensing process for ICOpre, and the study program for ICOres is proceeding as planned.
Another important component of becoming cash flow positive is the company's contract development (CDMO) of inhaled drugs, which could ultimately lead to licensing agreements or inhaler sales.
Strengthened by the private placement, Iconovo now looks forward to driving the projects forward towards the goal of achieving sales growth and profitability:
"The proceeds from the private placement provide us with a valuable capital injection that will help us take the company to the next level. We now look forward to driving our projects forward, including the launch of ICOres budesonide/formoterol and the out-licensing of ICOpre,” says CEO Johan Wäborg in a comment to BioStock.
