Nanoform Finland Plc
November 22, 2023
08:10 a.m. Finnish time / 07:10 a.m. Swedish time
Nanoform Q3 2023: Nanoformed blockbuster drug enters clinic and another nanoformed drug received FDA orphan designation
Project Blockbuster is progressing well. The clinical manufacture of nanoformed material for the project has been done and our partner has successfully made tablets. The clinical trials are expected to start before year end and the results are expected in 1Q24. If the results are positive, the targeted timeline for one or several license/commercial supply agreements is during 2024. Revenues continue to be hampered by low signings in 2H22 and the gross margin by costs related to Project Blockbuster, but the operative free cash flow continues to improve. The balance sheet remains solid with EUR 52m in cash and no debt. In October, Nanoform announced that it had granted AstraZeneca Plc a global online STARMAP® license.
7-9/2023 key financials
- Revenue was impacted by slow signings during 2H22 and decreased to EUR 0.6 million, compared with EUR 0.9 million in 7-9/2022.
- The gross profit decreased to EUR 0.3 million, with a gross margin of 53 % (EUR 0.8 million, 96 % in 7-9/2022) due to GMP QC costs related to the Blockbuster project.
- Total operating costs* remained unchanged at EUR 5 million (EUR 5 million).
- The number of employees grew to 165 (143) compared with one year ago.
- EBITDA came in at EUR -4.4 million (EUR -4.2 million).
- The operative free cash flow improved to EUR -4.9 million (-6.0 million).
- Basic EPS was EUR -0.05 (EUR -0.07).
- Cash position** was EUR 51.8 million on September 30, 2023 (EUR 76.3 million).
1-9/2023 key financials
- Revenue came in at EUR 2.2 million, stemming from 32 different customer projects (EUR 2.5m, 33 projects in 1-9/2022).
- The gross profit decreased to EUR 1.4 million, with a gross margin of 66 % (EUR 2.3 million, 93 %) due to GMP QC costs related to the Blockbuster project.
- The number of employees increased to 165 (143).
- Total operating costs* decreased by 2 % to EUR 16.4 million (EUR 16.7 million).
- EBITDA came in at EUR -14.2 million (EUR -14.2 million).
- The operating loss was EUR -16.4 million (EUR -16.0 million).
- The operative free cash flow improved to EUR -17.2 million (-21.2 million).
- Basic EPS was EUR -0.20 (EUR -0.22).
(Numbers in brackets refer to the corresponding last year reporting period, unless otherwise mentioned.)
* Defined as materials & services expenses, employee benefit expenses, and other operating expenses
** Including Treasury bills. Part of the cash has been invested in short-term government bond
We continue our progress on multiple fronts. During Q3 we set a new production record towards kg scale per hour with more than 90% collection efficiency on a R&D line. This achievement is important as we prepare for 2024’s major milestone of manufacturing 100kg of nanoformed GMP material for the pivotal EU&US studies and registration batch related to project Blockbuster. This project has progressed well and all involved parties are excited. We also see significant external interest in the project. The nanoformed material for the pilot PK study was shipped during Q3 to our partner, who now successfully has produced tablets. Clinical trials are expected to commence soon and the results are expected in 1Q24. If the results are positive, the targeted timeline for one or several license/commercial supply agreements is during 2024.
We also saw positive momentum in our ongoing GMP project with TargTex, as the Portuguese biotech company was granted Orphan Drug Designation by the FDA for its nanoformed drug candidate TTX101 to be used in patients with malignant gliomas. The orphan drug designation followed the generation of a preclinical rodent data package in which a survival advantage was shown for this nanoform-enabled medicine candidate. The hydrogel nanoformulation developed by Nanoform enabled a 200-fold increase in drug load compared to bulk and a 5-fold increase in drug load compared to nanomilling. Hence Nanoform’s proprietary technology and nanoformulation expertise enabled TargTex’s drug candidate TTX101 to move towards clinic. TargTex, currently raising funds to take this innovative treatment to a phase 1/2a clinical trial in recurrent glioblastoma patients across the US and EU, recently received positive news that it had been awarded EUR 14m for clinical validation by the EU-EIC accelerator program.
We are also making clear progress with rolling out STARMAP®, our digital AI version of a CESS® line, in the pharma industry. Last month we granted AstraZeneca Plc a global online STARMAP® license that will enable AstraZeneca to screen molecules from drug discovery through to lifecycle management to determine which molecules should be nanoformed. As part of this licensing agreement, Nanoform will receive access to compound libraries and large data sets to undertake STARMAP® screenings and propose innovative product development concepts and strategies in collaboration with AstraZeneca. After the press release we have seen a clear increased interest in the AI tool also from other large pharma organizations.
We have continued to be busy on the regulatory side. As you remember, in May, after an inspection by Fimea, Nanoform’s Manufacturer’s Authorization and GMP Certificate were updated to include nanoforming of multiple APIs in our GMP facility. In June, we submitted a notification to Fimea to include our new production facilities and equipment (GMP2&3), our new GMP QC laboratory (this will help our gross margin return to the 90+ levels we target) and the nanoforming of APIs to be used in products with a Marketing Authorization. The ‘used in products with a Market Authorization’ is important from a strategic point of view and is related to our Blockbuster project. As a result of the June filing, a GMP inspection is now expected to take place during 1Q24, slightly later than the November slot we had prepared for, but still it would mean our second inspection within 12 months, which can be considered impressive for a company our size. As we expect several GMP projects to materialize in the coming quarters, keeping planned timelines is key both from a service quality and a cost perspective. Our ambition is clear, we want to get as high customer net promoting scores when executing multiple GMP projects in parallel as we have received when running many non-GMP projects in parallel.
On the BD side we are making solid progress among large pharma, while the biotech sector still is hampered by tough funding conditions. While we only signed one new non-GMP deal during the summer, the ongoing discussions point to a solid interest in our technology and we expect to sign more deals in 2023 and 2H23 compared with the same period last year. We also have clearly more – by number and depth – strategic discussions with large and mid sized pharma compared to a year ago.
Progress has also been made on the operating free cash flow, which continued to see an improvement in 3Q23 without help from the topline yet. We expect the improvement in operating free cash flow to continue, despite the temporary increased costs from project Blockbuster and the fact that we do not yet have our otherwise ready GMP QC laboratory approved by Fimea. This is a clear testimony to the determination and teamwork of the Nanoformers. The swiftness with which we have been able to change focus from investing & building to improving productivity & cash flow while at the same time serving a large number of customers has been impressive.
For Nanoform the previous years were about building a capable organization and making large investments. During 2023 we have focussed on productivity increases and improved operating free cash flow, working towards our 2025 midterm business target of becoming cash flow positive. The way to execute that is nontrivial but clear; to grow the topline and keep the operating costs and capital expenditure under control. We have already made tangible progress on the two latter areas and expect the former to improve as well in the coming quarters and years, as we do an increasing amount of GMP work. Any larger milestone payments would naturally also have a significant impact. We’ve now reached a critical mass where we can serve dozens of clients in parallel on non-GMP projects, manufacture GMP material for several clinical trials annually, while helping our clients overcome their pharmaceutical development challenges. At the same time, we see significant potential to improve productivity and to increase the output of our quite impressive fleet of nanoforming lines and related capabilities.
I look forward with confidence and excitement to the coming quarters and years. The problem with bioavailability is enormous, our brand recognition and service offering have continued to strengthen, the global pharma industry’s response to that has been growing, and our strong balance sheet is a positive aspect when partners evaluate us. We’ll continue to work relentlessly towards our 2025 mid-term business targets, while executing as fast as possible on our near-term targets. None of this can be done without our amazing employees and great partners. My sincere THANK YOU to you all for your continued dedication to Nanoform and for the inspiring and innovative work for which we’re known.
Prof. Edward Hæggström, CEO Nanoform
Project Blockbuster and ASDs (amorphous solid dispersions)
During the reporting period we completed the manufacture of nanoformed active pharmaceutical ingredient (“API”) for Project Blockbuster, an important milestone in preparation for the clinical trial due to start before year end. This is a great opportunity for us to show that small is a powerful ingredient in formulation.
Due to the inherent poor solubility of the API, the current formulation of this blockbuster medicine has been an amorphous solid dispersion (“ASD”). Amorphous API materials are notoriously unstable, and therefore require high amounts of polymers to stabilize the API – leading to a low drug load in the product and therefore, in the case of oral solid products, often to a high number of large tablets that need to be taken by the patient. This is a known problem, in particular for patient populations with challenges to swallow. The nanocrystalline formulation developed by Nanoform offers an attractive alternative with a substantially higher drug load in the final drug product and consequently a reduced tablet burden for the patient. We are encouraged by the early interest shown in this patient centric reformulation from both the originator as well as value added medicine companies and we look forward to the readout from the study, expected in 1Q 2024.
In addition to the patient benefit, we can with our proprietary technology offer opportunities to extend IP protection for the reformulated and improved product, expecting that in many cases our innovative formulations will be patentable. Importantly, current ASD based medicines are often protected by secondary patents that claim aspects of the ASD formulation. These secondary patents, such as in the case of the product in Project Blockbuster, often extend by several years the expiration of the primary patent claiming the API. In the case of Project Blockbuster, we believe that our nanocrystalline formulation is not in the scope of the patents claimed in the ASD formulation. This would potentially enable entry earlier into the market, in the jurisdictions where the ASD formulation patents remain active, compared to ASD based generic formulations.
ASDs remain a leading formulation strategy for poorly soluble APIs, particularly for oral solid dosage forms. There are currently some 50 marketed medicines that are ASDs and these sell in aggregate for more than USD 15bn in the US annually. We are currently looking at several other marketed ASD opportunities to replicate our early successes with Project Blockbuster in addition to those ASDs still in the global drug development pipeline. According to STARMAP®, almost 80 per cent of the 46 ASDs we so far have starmapped may be well suited to be nanoformed by CESS®.
Nanoform’s Q3 2023 interim report can be found at: https://nanoform.com/en/financial-reports-and-presentations/
Nanoform online presentation and conference call November 22, 2023, at 3:00 p.m. Helsinki time / 2:00 p.m. Stockholm time
Nanoform will publish its Q3 2023 interim report on November 22, 2023, at 8.10 a.m. Finnish time / 7.10 a.m. Swedish time.
The company will hold an online presentation and conference call the same day at 3.00 p.m. Finnish time / 2.00 p.m. Swedish time. Nanoform will be represented by CEO Edward Hæggström, CFO Albert Hæggström and CCO Christian Jones. The presentation will be delivered in English.
The presentation will be broadcast live as a webcast available at:
Teleconference dial-in numbers:
Dial-in number to the teleconference will be received by registering on the link below. After the registration you will be provided phone numbers and a conference ID to access the conference.
Significant events during 1-9/2023
- As of January 1, 2023, Antonio da Silva was appointed CBO and a member of the management team.
- Nanoform established a new subsidiary in the UK, Nanoform U.K. Ltd on January 3, 2023.
- On January 10, 2023, the Board of Directors approved share subscriptions based on stock option programs 3/2019, 5/2019 and 1/2020. A total of 29,000 Nanoform Finland Plc new shares were subscribed and the entire subscription price for subscriptions made with the stock options of EUR 34 thousand was entered in the Company’s reserve for invested unrestricted equity.
- On February 28, Nanoform announced two new near-term business targets for 2023: “Increased number of non-GMP and GMP projects signed in 2023 vs 2022” and “Improved operating free cash flow in 2023 vs 2022”.
- Nanoform’s Annual General Meeting (the “AGM”) was held on April 12, 2023. The AGM approved the financial statements and discharged the Board of Directors and the CEO of the Company from liability for the financial year 2022. The Meeting decided that no dividend will be paid for the financial year that ended on December 31, 2022. The AGM further resolved the number of members of the Board of Directors to be four and the AGM re-elected Miguel Calado (Chairperson), Mads Laustsen, Albert Hæggström and Jeanne Thoma as ordinary members of the Board of Directors for the next term of office.
- On April 12, 2023, the Board of Directors approved share subscriptions based on stock option programs 2-3/2019 and 1/2020. A total of 37,000 Nanoform Finland Plc new shares were subscribed and the entire subscription price for subscriptions made with the stock options of EUR 41 thousand was entered in the Company’s reserve for invested unrestricted equity.
- In April, Nanoform won a new grant from the Bill & Melinda Gates Foundation to work on several of the foundation’s drug development projects.
- In May Nanoform’s Manufacturer’s Authorization and GMP Certificate were updated to include nanoforming of multiple APIs in the GMP facility.
- In June, Nanoform submitted a notification to the Finnish Medicines Agency (Fimea) to update our Manufacturer’s Authorization (MIA). The objective of this notification was to include the following in our MIA: Our new production facilities and equipment (GMP2&3), our new Quality Control laboratory (GMP QC) and Nanoforming of APIs to be used in products with a Marketing Authorization. Due to this notification, a GMP inspection is expected to take place during 1Q24.
- Nanoform previously disclosed on November 15, 2021, that it has signed an agreement to manufacture nanoformed GMP material for a European headquartered international company. Following 12 months of preclinical development work, two privately held European pharmaceutical development and manufacturing organizations decided to join Nanoform and the European headquartered international company in funding the development and commercialization of this more patient centric version of a current blockbuster drug. For this purpose, the parties entered into a collaboration agreement on November 17, 2022. Under the terms of the agreement, Nanoform and the three other parties will fund in equal shares the completion of this development program. In the event that the commercialization is successful, Nanoform expects to retain a 25 % share of the net-income received by the parties. In May 2023, after Fimea renewed Nanoform’s GMP Certificate, Nanoform commenced the clinical manufacture related to this project.
- In June, Nanoform and Celanese Corporation, a global specialty materials company, provided an update on their collaboration to evaluate the synergies between their respective technologies in the field of nanoparticle-enabled drug delivery. The result, presented at the Biotech Outsourcing Strategies Conference in Basel on July 3, 2023, demonstrated significant reduction in the initial burst effect seen commonly in high drug load implants by combining Nanoform’s CESS® particles with Celanese’s Celanese VitalDose® EVA copolymer delivery technology for drug-eluting implants. Notably they also demonstrated that nanoformed particles can enable longer sustained release properties for long-acting drug products and smaller implants. This opens up many possibilities for drug developers.
- The clinical manufacture related to project Blockbuster was successfully completed and the produced nanomaterial was released and shipped for manufacture of the final drug product. Clinical trials are expected to commence in 4Q23 and the results are expected in 1Q24. If the results are positive, the targeted timeline for one or several license/commercial supply agreements is during 2024.
- Quality Director and Accountable Director Johanna Kause became a member of Nanoform’s management team as of September 1st, 2023. Johanna Kause, who is responsible for all matters related to quality, has been with the company since January 2021.
- We received notice of allowance from the United States Patent and Trademark Office (USPTO) for our US patent application (US17947490) directed at the process we have developed to nanoform biological molecules. We are encouraged by this positive response that reflects our innovative work also in the field of large molecules. We have filed several patent applications directed at the biologics nanoforming technology in other jurisdictions that are currently pending. Following granted patents in the United States, Japan, and Canada, we also received notification from the European Patent Office (EPO) of their intention to grant our corresponding European patent application (EP15793857.2) directed at the CESS® technology for manufacture of our small molecule nanoparticles.
- We conducted promising initial in vitro trials with two major pharma companies looking at monoclonal antibodies (mAb’s). These results further strengthen our proposition that nanoparticles are relevant for improved product development and more patient centric commercial products in the field of mAb’s and we look forward to advancing these developments with our pharma clients.
- During 1-9/2023 17 new non-GMP projects and one GMP project were signed, both with new and repeat customers, both US and Europe based. We also signed our first major pharma customer from Japan.
- During 1-9/2023 one new non-GMP line was commissioned, taking the total number of lines to 19 non-GMP lines and one GMP line. GMP lines 2&3 will be commissioned after they are inspected and approved by Fimea, with a recently updated new expected timeline of sometime during 1Q 2024.
Significant events after 1-9/2023
- In October, Nanoform announced that its customer TargTex S.A. had been granted Orphan Drug Designation by the FDA for its nanoformed drug candidate TTX101 to be used in patients with malignant gliomas. The orphan drug designation follows the generation of a preclinical rodent data package in which a survival advantage was shown for this nanoform-enabled medicine candidate. The hydrogel nanoformulation developed by Nanoform enabled a 200-fold increase in drug load compared to bulk and a 5-fold increase in drug load compared to nanomilling. Hence Nanoform’s proprietary technology and nanoformulation expertise will enable TargTex’s drug candidate TTX101 to move towards clinic. TargTex is currently raising funds to take this innovative treatment to clinic and is planning a phase 1/2a clinical trial in recurrent glioblastoma (GBM) patients across the US and EU, in which nanoformed TTX101 is applied as adjunct to surgery after tumour excision.
- In October, Nanoform announced that it had granted AstraZeneca Plc a global online STARMAP® license. STARMAP® is a digital AI version of the CESS® technology that enables in silico experiments to determine which molecules should be nanoformed. The license will enable AstraZeneca to screen molecules from drug discovery through to lifecycle management. As part of this licensing agreement, Nanoform will receive access to compound libraries and large data sets to undertake STARMAP® screening and propose innovative product development concepts and strategies in collaboration with AstraZeneca. This comes after several years of early-stage collaboration between Nanoform and AstraZeneca and a successfully completed technology evaluation partnership including STARMAP® which has resulted in clinical candidate feasibility studies. STARMAP® is well aligned with AstraZeneca’s ambitious sustainability goals.
STARMAP® Online has been created as a direct request from Nanoform’s current and future partners who seek to maintain the level of confidence STARMAP® offers, while integrating it into their own in-house molecule-selection processes. STARMAP® Online creates the opportunity for clients to perform large numbers of in silico CESS® experiments from their desktop. This approach further supports Nanoform’s green ambition by ensuring that Nanoform progresses the molecules with the greatest probability of success. STARMAP® Online offers:
- Security and safety – the interface has been developed in alignment with ISO27001:2017 standards.
- Client submissions are confidential and seen only by clients (not by Nanoform), allowing molecules to be screened without sharing structures. Outputs are presented directly to the client via the system.
- Scalability and agility: The ability to manage thousands of molecules in a single submission to support the selection of candidates from molecule libraries is possible.
- Novel insights: STARMAP® Online holds a database of some 20,000 pre-analyzed, public-domain disclosed drugs and candidates. Clients can request thematic evaluations and understand the power of CESS® in different therapeutic areas, target classes, and disease areas.
Company near-term business targets 2023 (reiterated)
- Increased number of non-GMP and GMP projects signed in 2023 vs 2022
- Improved operating free cash flow in 2023 vs 2022
Company mid-term business targets 2025 (reiterated)
- To nanoform at least 70 new Active Pharmaceutical Ingredients (API) annually
- To have in place 35 operating production lines of which 7 to 14 are expected to be GMP production lines
- Over 90 percent gross margin
- To have 200–250 employees
- To be cash flow positive
For further information, please contact:
Albert Hæggström, CFO
firstname.lastname@example.org / +358 29 370 0150
For investor relations queries, please contact:
Henri von Haartman, Director of Investor Relations
email@example.com / +46 7686 650 11
Nanoform is an innovative nanoparticle medicine enabling company. Nanoform works together with pharma and biotech partners globally to provide hope for patients in developing new and improved medicines utilizing Nanoform’s platform technologies. The company focuses on reducing clinical attrition and on enhancing drug molecules’ performance through its Nanoforming technologies and formulation services. Nanoform’s capabilities include GMP manufacturing, and its services span the small to large molecule development space with a focus on solving key issues in drug solubility and bioavailability and on enabling novel drug delivery applications. Nanoform’s shares are listed on the Premier-segment of Nasdaq First North Growth Market in Helsinki (ticker: NANOFH) and Stockholm (ticker: NANOFS). Certified Adviser: Danske Bank A/S, Finland Branch, +358 40 744 1900. For more information, please visit www.nanoform.com.
This press release contains forward-looking statements, including, without limitation, statements regarding Nanoform’s strategy, business plans and focus. The words may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements in this press release are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events or results to differ materially from those expressed or implied by any forward-looking statements contained in this press release, including, without limitation, any related to Nanoform’s business, operations, clinical trials, supply chain, strategy, goals and anticipated timelines, competition from other companies, and other risks described in the Report of the Board of Directors and Financial Statements for the year ended December 31, 2022 as well as our other past disclosures. Nanoform cautions you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. Nanoform disclaims any obligation to publicly update or revise any such statements to reflect any change in expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Any forward-looking statements contained in this press release represent Nanoform’s views only as of the date hereof and should not be relied upon as representing its views as of any subsequent date.