THIRD QUARTER 2020 FINANCIAL REPORT
During Q3 2020, Hofseth BioCare continued to develop along its strategic path of extracting high value nutrition and medical products from low value waste from salmon production, and invested significantly in clinical and pre-clinical studies to explore the health benefits of the products.
“It is a fantastically sustainable business model. We are transforming yesterday’s waste into high value health nutritional ingredients for people and pets. In the future, through R&D, the compounds of our products will form the basis of new medical therapies. Thus, sustainability and efficient use of marine resources are at the heart of everything we do,” Roger Hofseth, CEO of Hofseth BioCare says.
Hofseth BioCare has worked intensively in expanding the production capacity, adding an integrated spray drying unit and adding R&D laboratories at the main hydrolysis plant, which resulted in unavoidable temporary disruption to production and hence lower volumes and revenues in the quarter.
Operating revenues in Q3 2020 were of NOK 7.6 million, compared to NOK 29.2 million in Q2 2019, when the production was fully operational. Operating profit (EBITDA) in the third quarter was negative NOK 23.2 million (7.6 million), was also affected by continued higher than expected investments in successful R&D projects and optimisation of production processes.
“Q3 has been an eventful one for Hofseth BioCare. We have strengthened the distribution of our products in Asia and Europe through partnerships and acquisitions and we have worked hard to expand and improve the production capacity at our hydrolysis plant in Midsund. This will be important for the future growth of HBC and the future partnership with Nestle owned, Garden of Life.,” Roger Hofseth, says.
“At the same time, we have taken additional steps in terms of medical R&D. We continue to gain scientific support for the positive health effects of our products, and we will continue to invest significant amounts in research. During the third quarter we strengthened our scientific research team in Norway with the recruitment of Dr. Erland Hermansen, who has taken the position as Medical Director for Clinical Development,”
After the end of Q3, Hofseth BioCare received approval from Health Canada for Qualified Health Claims for our Salmon Protein Hydrolysate, ProGo® and CollaGo®. Hofseth BioCare also now has similar Health Claims for its Salmon Protein Hydrolysate as “Bioactive Peptides” for OTC use in the US market.
“We have now support in saying that our bioactive peptides have positive claims on maintaining healthy levels of ferritin and hemoglobin for people with iron deficiency. Our product will be a better alternative than iron supplements for millions of people who struggle with the negative side effects of iron supplements. This opens up a tremendous market opportunity for us,” Roger Hofseth says. “Up to 8% of the North American population and higher levels in developing countries suffer from iron deficiency.”
“After the successful capital increase of NOK 200 million which was executed in October 2020, we also have a strong capital base to continue to deliver on our strategic and R&D roadmap,” Roger Hofseth says.
HIGHLIGHTS IN THE THIRD QUARTER 2020
- Successful extension to manufacturing plant at Midsund, adding new spray drier facility, creating new R&D laboratories and tripling overall footprint for the benefit of Garden of Life in 2021.
- HBC acquired 34 per cent ownership in the Asia-Pacific distributor Atlantic Delights Ltd. in Hong Kong for approx. NOK 6.5m in August.
- Dr. Erland Hermansen hired as Medical Director for Clinical Development.
- Secured distribution with a Global Retailer giant in the UK, Spain, Iceland and online for Brilliant Salmon Oil™ for pets.
- Published an in-vitro study in the journal Functional Foods in Health and Disease which demonstrated the therapeutic potential of HBC's OmeGo® salmon oil for the treatment of certain types of asthma and chronic obstructive pulmonary disease.
POST PERIOD HIGHLIGHTS
- Successful completion of a private placement of NOK 200m by issuance of approx. 24.69m new shares into existing and new institutional shareholders to diversify the holders list and prepare the company for a listing on the main Oslo stock exchange in Q4 2020.
- Received approval from Health Canada on ProGo® and CollaGo® for qualified health claims focused on maintaining healthy levels of ferritin and hemoglobin and the blood components required for oxygen transport.
- ProGo®'s bioactive peptides to support healthy iron levels allowed to be used in the US with a unique label of six structure function claims permitted by the FDA.
Please find the Third Quarter 2020 Financial Report enclosed.
For further information, please contact:
James Berger, Head of Investor Relations & Strategy of Hofseth BioCare ASA
Phone: +41 79 950 1034
Jon Olav Ødegård, CFO of Hofseth BioCare ASA
Mob: +47 93632966
About Hofseth BioCare ASA:
HBC is a Norwegian biotech company that develops high-value ingredients and finished products. Ingredients are further developed into discovery and pre- clinical studies in multiple clinics and university research labs in several countries. Lead clinical and pre-clinical candidates are development towards a Gastro-Intestinal (GI) Protective Medical Food, Medical Food to help treat age- related Sarcopenia, and future phase 1 studies on treatment of Anemia and NEC- IBS with Salmon Protein Hydrolysate fractions.
The company is founded on the core values of sustainability, traceability and optimal utilization of natural resources. Through an innovative hydrolysis technology, HBC can preserve the quality of lipids, proteins and calcium from fresh salmon off-cuts. Hofseth BioCare's headquarters are in Ålesund, Norway with branches in Oslo, London, Zürich, Chicago, Mumbai, Palo Alto and Tokyo.
HBC is listed on Oslo Stock Exchange Axess list with ticker "HBC". More information about Hofseth BioCare at hofsethbiocare.com and facebook.com/hofsethbiocare
This information is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act