THIRD QUARTER 2021 FINANCIAL REPORT
HBC had net sales revenues of NOK 13.7m (7.6m) in the third quarter and total operational revenues of NOK 61.5m (46.2) for the first nine months. Cost of Goods Sold (CoGS) amounted to NOK 13.6m (7.6m) in the quarter and NOK 43.6m (22.9m) for the first nine months of 2021. Operational profit (EBITDA) for the third quarter was NOK -36.8m (-29.2m) and NOK -84.6m (-63.0m) for the first nine months of 2021. Cash and cash equivalents decreased by NOK 27.1m during the quarter, leaving total holding of cash and cash equivalents at NOK 85.5m by the end of the period, compared to NOK 23.8m by the end of the third quarter 2020. For the first nine months of 2021 cash decreased with NOK 87.2m compared to 70.8m in the first nine months of 2020. Including credit facilities, HBC had NOK 122.5m in free liquidity by the end of the third quarter 2021.
Highlights in the third quarter
- HBC hired Dr. Tanja Schaffer as Executive Vice President for HBC's Global Ingredients division and as CEO of HBC's new Swiss subsidiary HBC Switzerland GmbH.
- Led by our CSO, Bomi Framroze, this discovery work has identified three potential pharmaceutical drug leads;
- unique lipopeptide compound in OmeGo® that targets type 2 / allergic inflammation
- set of structurally related peptides that help the body correct iron deficiency anemia and
- peptide group that reduces GI inflammation and enhances GI barrier function.
- Appointed Dr. Zubair Hussain as Senior Regulatory Consultant in September 2021 with over 25 years' experience in Regulatory Affairs and has held senior global roles, including Pfizer and Novartis.
- Stanford University have initiated the statistically significant mouse trial to confirm the effectiveness of SPH/ProGo® on reducing intestinal injuries in the classical TNBS/DDS-induced inflammatory bowel disease (IBD) model.
- Two Asthma and COPD clinical trials with OmeGo® are now both in the final stage of preparation and have received ethics committee approvals for planned start in Q4 2021.
- Our efforts at developing a pharmaceutical lead program around eosinophilia inflammation control is on-going with rapid success and US/PCT patent filings.
In the third quarter of 2021, HBC R&D delivered the following:
- Further elucidation of SPH’s GI protective properties: Our collaborators at Stanford University have initiated a large, fully powered for statistical significance t mouse trial to confirm the effectiveness of SPH on reducing intestinal injuries in the classical TNBS/DDS-induced inflammatory bowel disease (IBD) model. This trial will included using negative control peptides for calorie equivalence (to control for nutrition effects) and measure anti-oxidative gene regulation (such as HMOX-1) in serum and tissue samples to further characterize the mode of action.
- Work towards the identification of the peptides driving GI health benefits: We completed the molecular weight range fractionation of SPH to help identify the peptides in SPH driving the reduction in IBD based on HO1 (heme-oxygenase) gene regulation activity. The results were not conclusive and we have initiated a charge-based fraction effort in Q3 with results expected early in 2022.
- Isolating the peptides driving the resolution of anemia: We have identified 8 related bioactive peptides in SPH that up-regulate the FTH1 gene and these have been assessed for IP (intellectual property) novelty. Several peptides were found to be potential new chemical entities (novel structures). These peptides promote the production of the heavy chain of ferritin protein which increases the body’s storage capacity for iron. We are completing an in-silico study leading to a series of new QSAR based peptide leads. This will enable follow-up in-vitro testing as well as broaden the scope of our patent filings. Process optimization to manufacture SPH with an increased concentration of the FTH1 upregulating peptides is ongoing. with good preliminary results
- Targeting acne: We successfully completed a series of invitro assays that positively demonstrate the potential for polar bioactive peptides in SPH to modulate acne development, via both anti-inflammatory and antimicrobial modes of action. Follow-up animal model assays are planned for in 2022.
- Targeting allergic inflammation (asthma): Synthesis of the lead eosinophilia modulating lipopeptide MA-022 is on-going in preparation for a first animal preclinical trial in 2022.
- Further profiling OmeGo® in the reduction of allergic inflammation: The final House Dust Mite allergy preclinical trial to modulate eosinophilia with orally administered OmeGo® at two ranging doses (high/low) was initiated and the results are expected in Q4.
- First human data for CalGo® is expected in Q4. We have initiated our first safety in human clinical trial for CalGo®, to measure serum calcium 24h after oral administration of CalGo or calcium carbonate. The study is titled: “A randomized, blinded, calcium carbonate-controlled cross-over study of serum ionized calcium levels 24h after Strength™ oral supplementation in post-menopausal women", and the report is expected in Q4.
Please find the HBC Q3 Financial report attached.
For further information, please contact:
James Berger, Chief Commercial Officer of Hofseth BioCare ASA
Phone: +41 79 950 10 34
Jon Olav Ødegård, Chief Financial Officer of Hofseth BioCare ASA
Phone: +47 936 32 966
About Hofseth BioCare ASA:
HBC is a Norwegian consumer and pet health ingredient supplier and an incubator for new pharmaceutical drug leads. Research is ongoing to identify the individual elements within its ingredients that modulate inflammation and the immune response with pre-clinical studies ongoing in multiple clinics and university research labs. Lead clinical and pre-clinical candidates are focused on developing an oral treatment for inflammatory disease driven by eosinophils (a type of white blood cell). Clinical trial work with the oil is ongoing to ameliorate lung inflammation in eosinophilic asthma and COPD ("smokers lung") as well as in COVID. Other leads are focused on the protection of the Gastro-Intestinal (GI) system against inflammation (including ulcerative colitis and the orphan condition necrotising enterocolitis) and using peptide fractions of salmon protein hydrolysate (SPH also known as ‘ProGo’) as a Medical Food to help treat age-related Sarcopenia, and as a treatment for Iron Deficiency Anemia.
The company is founded on the core values of sustainability, optimal utilization of natural resources and full traceability. Through an innovative hydrolysis technology, HBC can preserve the quality of the lipids, proteins and calcium from fresh salmon off-cuts. Hofseth BioCare's headquarters are in Ålesund, Norway with branches in Oslo, London, Zürich, Chicago, Palo Alto and Tokyo.
This information is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act