We all get a cold from time to time, and the market offers a plethora of treatment options for those who want to relieve their symptoms. Over-the-counter medicines and self-care products for colds and coughs are currently sold for approximately USD 18 billion in the ten largest markets globally.
Enzymatics contribution to the product range is called ColdZyme, an oral spray that creates a barrier on the mucous membrane that traps viruses and prevents their ability to infect the cells in the oral cavity and pharynx. The product can be used preventively or at an early stage to relieve symptoms and shorten the course of the disease.
Aiming for increased presence in major markets
ColdZyme has been launched in over 30 countries worldwide. Enzymatica has a presence in several major cold markets but has not yet launched ColdZyme in the three largest; the USA, China and Japan. Marketing is handled by Enzymatica in Sweden, the UK and Iceland and by distributors in other markets, where the company has, among other things, entered into agreements with two of the largest players in the market for over-the-counter medicines, WHAT TO and Sanofi.
Sales have been steadily increasing since launch, peaking in the midst of the raging Covid-19 pandemic. After seeing an explosive increase in sales at the beginning of the pandemic, Enzymatica noticed that customers were moving from wanting preventative products to preferring symptom relief. In addition, the pandemic was followed by two seasons where common colds were barely present. It was only last year that we were back to more normal seasonal levels.
Working to reverse sales trend
The result for Enzymatica has been a downward trend in sales instead of an upward trend. In the first half of 2024, sales amounted to SEK 15,8 million, which corresponds to a decrease of 27 percent compared to the same period last year. According to the company, the decrease in sales is due to a lack of international sales through partners, while sales in its own markets of Sweden, the UK and Iceland are increasing steadily.
In response to this development, the company has terminated the exclusivity enjoyed by STADA and Sanofi in its markets, as order intake from them has been at a too low level. Enzymatica is now working to bring in new partners with whom to further drive international expansion.
In these discussions, several parties have raised the desire for a slightly adjusted business structure. Today, Enzymatica is responsible for the entire value chain up to marketing, i.e. the company produces, fills and packages the finished product in collaboration with contract manufacturers. What has been requested is a structure where the partner instead takes over the manufacturing of the final product, including filling and packaging.
Adjusts financial goals
What is the benefit of this arrangement? According to the company, this would lead to better margins, for both Enzymatica and the partner. In addition, the product's shelf life could be extended because international transport of the final product would then be avoided. Management and the board are currently exploring the possibilities of acting as both a producer of the final product and a supplier of enzyme formulations that partners can use to make the finished product locally.
The financial impact of a new business model is that a higher EBIT margin is expected, but sales will be somewhat weaker than previously expected. Therefore, Enzymatica has now updated its financial targets. The target of reaching an EBIT result of SEK 170 million remains, but has been postponed until the end of 2027.
In order to be practically ready for an increase in sales, the company has expanded its production capacity in its factory in Iceland, which now has four times the capacity compared to before.
Research results provide support
A key milestone in market establishment was reached in March when the company received CE marking for ColdZyme under the MDR, the EU's new regulation for medical devices. Another important piece of the puzzle is to continue to generate solid data around the product.
Recently, results from a study were presented at University of Kent which showed that ColdZyme shortens the course of upper respiratory tract infections by up to five days. Interim results from the study have also previously received international attention, including at International Olympic Committee conference on sports-related injuries and illnesses, which led to several Olympic teams using ColdZyme during the 2024 Paris Olympics and Paralympics.
In addition, the company has presented results from a study at Medical University of Innsbruck which shows that ColdZyme reduces the amount of virus in cells that have been infected with influenza virus.
The research groups at both universities plan to publish a joint scientific article in the fall of 2024.
Rights issue strengthens finances
To finance the ongoing investments, Enzymatica is now carrying out a rights issue, which, if fully subscribed, will strengthen the cash position by approximately SEK 130 million, before issue costs.
The majority of the proceeds from the issue will be used for negotiations and registration in new markets, GMP certification of the factory expansion in Iceland, expanded marketing and loan repayment. In terms of geographical expansion, the company plans to focus on FDA registration and launch in new major cold markets.
In addition, the capital from the issue will be used for clinical studies and strengthening the organization.
Summary of the offer
| Terms & conditions | Five existing shares entitle you to subscribe for two new shares. |
| Subscription period | 28 August – 11 September 2024 |
| Subscription price | SEK 1,9 per share |
| Volume | SEK 130 million |
| Pre-money valuation | SEK 329 million |
| Underwriting and guarantee commitments | The issue is covered by subscription commitments and guarantee commitments to just over 90 percent. |
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This material has been prepared for marketing purposes and is not and should not be considered to constitute a prospectus under applicable laws and regulations. The full terms and conditions of the rights issue and further information about the company have been set out in a prospectus. which has been announced and published on the above-mentioned company's website.
