Genovis

Comments from Fredrik Olsson, Chief Executive Officer

In the fourth quarter we continued to have strong sales growth of 38% in the core business. For enzymes in analytics, sales increased 30% and in the antibody business growth was 80% year over year. We also see continued high customer activity in all geographic markets at the start of the year.

We experienced continued good customer activity in our markets during the quarter. New products continue to expand our business toward multiple applications and future medicines in a very satisfying manner. Over the course of the year we added a total of four new products that have been very well received by our customers. Products developed and launched in recent years are showing strong growth and taking an increasing share of our overall business. This is very gratifying and validates our ability to execute our strategy of customer-driven innovation.

Our collaboration with Selecta Biosciences for the Xork enzyme in gene therapy is being developed with several potential customers who are interested in our joint offering. At the beginning of the new year, Selecta sublicensed the enzyme to Astellas Pharma for use together with their gene therapy candidate for treatment of Pompe Disease. In addition to the early revenue of approximately SEK 42 million, this is an important reference deal that opens up further business opportunities for Xork in other gene therapy indications.

The expansion of our sales and marketing organization initiated during the year was fully implemented by the end of 2022, completely on track. We have consistently seen results from our efforts in different geographies and segments. Excluding license revenue from Selecta, our enzyme business grew by 29% during the year and antibody sales increased by 38%.

I am of course not satisfied with the operating profit and cash flow in the fourth quarter 2022. However, they were weighed down by a one-time cost after we decided to refund parts of an insurance claim related to a patent dispute in 2014, therefore disconnected from our business, which continues to develop well. Our liquidity remains robust and together with license revenue from Xork we will have over SEK 100 million in cash and cash equivalents in the first quarter 2023, providing us with both strength and opportunities for continued aggressive investment.

I would like to thank all of my colleagues at Genovis for their fabulous efforts in 2022. Our growing team has, despite a challenging environment and economic turbulence, done an outstanding job of navigating through the year.

I look forward with confidence to developing Genovis’ business together with our growing team in 2023 and continuing our growth journey based on innovative solutions for our expanding customer base in the biopharma industry and their aspiration to develop medicines for the future.