Nanologica AB (publ)

Yes, welcome to RedEye and especially welcome to NanoLogica and not least to the CEO Andreas Bagvani.

Thank you very much.

And you have just come out with your signing committee. The sales are increasing and it is also an increased development of teams. What is the most important thing here?

I think that the most important thing in the report is of course that we have sales. We come from a history of that we have fought a lot with our production and then we have succeeded with our production and now we have sold and we have sold recurring to one customer. We of course talk to several, but I would say that it is the most important factor that you should look at in the whole report.

Yes, that's right. And a technicality of how much warehouse construction when it starts, there are such effects too, of course.

Yes, it does. But I would say that warehouse construction is not directly linked to that, because we have historically produced in campaigns and not against customer orders. And we are now switching between that during 2025 and 2026. But historically, we have switched to campaigns, so it is more of a natural effect of what we have done throughout 2024. Of course, it's good to have on storage and that it's good with storage construction, but it's also so that you should have storage of the right products. And now we're starting to get that more and more, and we'll mostly get it in 2025. But a lot, as I said, of what we did in 2024, it was things that we planned already in 2022 and 2023.

So it will be more of a pull and less of a push. It comes from a customer and there will be a different level of caution as well.

Yes, I think that when we end up at the end of 2025, we will hopefully be able to have walked around so that it will be a little easier to analyze the company, also based on both sales and warehouse construction. But when you look at the rest of the figures, we have always been very clear about keeping the money. And you can see that this year, we don't burn much more than what we put into production. That's right.

We have also received questions about the Enlab Idun product. Can you explain more in-depth how it complements your current product?

I am very proud of that. Enlabidium is a new product and I have held a lot of presentations over the years where I usually have a schematic picture of, for example, a production process of a GLP-1 or insulin that is produced in exactly the same way. Our product is used at the end, the final cleaning step. But just before that, you usually use a cleaning step where you do not use silica. You use another type of media, also chromatography media. I have talked about this for a long time and we have had two customer projects where we have been able to apply the product development we have done. Now we have a customer project that has come a little longer, so we have sold a little smaller parts of one of these products. So it's actually a way to make both diabetes products and these overweight products, the production there, a little more effective. So instead of having the most expensive step and using it almost as a filter, you have a cleaning that becomes much more effective. Similar products have existed before, but there is no one that combines both silica and this type of product. So that's why I really like to talk about it, because it's our own developed product, it's our own idea and we are unique about it.

There are very dynamic market segments and there are challenges in capacity and production. I'm thinking of Nordisk who recently bought a large acquisition. From your side, do you expect to sell something already in 2025?

It's really hard to say. We have a project that has gone very well, but how much it will drop to 25 or not, I don't know. But what is also interesting is that many who have worked in this GLP 1 world have been completely cost-sensitive. But now when the patent rolls off here, 26, especially in China, and there is a fairly large production that goes to countries that are not protected by a Nordic patent. That is, you sell their products in return, but on other markets. And there you have not been particularly cost-sensitive, but it has also made that you have had semaglutide, which is one of the molecules that Novo Nordisk has, which they build Osempic on, has been very ineffective, you have produced very ineffectively. And when you look at making this a little more efficient, this has become a very good offer, that we both have a silica that allows them to save money, but that you also have a slightly more workflow-related solution that makes it more efficient.

Yes, you can also go into this phase where it becomes more fragmented, there are more actors and then it becomes very important to be able to produce effectively, often on a smaller scale. These giants can be good at producing, getting the coke down to huge volumes. This is a completely different game plan, dynamic.

I would say that all the big biosimilar companies have been working on it and have been doing it for quite a long time. And as I said earlier, Lille & Lilly and Novo Nordisk have slightly different production strategies, where Novo Nordisk does everything themselves. They bought a huge CDMO, while Lilly manufactures more of it themselves, but has also put it out on other CDMOs. They don't act quite the same, but it's clear that for us to get into that market is very, very good.

And then what potential do you see in Enlab Saga to be integrated into the workforce for your products, for more products that are manufactured by

They started by buying one product and they bought it several times and now they have bought other products from us as well. So I would say that we are already on our way to eating Xinhan. Now it is like a medium-sized peptide manufacturer in China. There are bigger ones that we also talk about, of course. But to have delivered to someone now, it helps us with others because we realize that they have not delivered once, they have delivered several times and it seems to work. Everyone understands that our product is now used in GLP-1 manufacturing and not just in a smaller scale, but in a production scale. A prerequisite to talk about the biggest is that someone else has gone ahead. It doesn't work once, it works several times. The customers are pleased. It is of course necessary to get a seat at the table with the biggest.

Right. And are there many who are on the move with deliveries in these markets?

I would say that when it comes to customers, in addition to these two big ones that we don't need to talk about so much, there are at least a dozen peptide manufacturers that we talk to that have tested our products and are interested in buying. And the quality is exactly where we expect it to be, it is very good. It's more about what has been our problem, namely that they ask, okay, what kind of production capacity do you have? Will you be able to deliver if we need to? Because they are of course very risk-averse in that they don't want to end up in a situation where they start to buy our product is good, it is as good every time, but then we can't deliver if they need a lot of material. So I would say that we are really just at the beginning of our journey.

That's right. Their investments are of course related to the fact that you have a lot of reliability in your offer.

Exactly. If they use us and really want to use us and we can't deliver, then they can't release any product. They can't do anything else. Then they have to buy from someone else. And there is something now. There is no constraint on the market. There is not as much silica as there is. So no one wants to end up in a situation where they are left out. And then they may have contracts with large pharmaceutical companies that they cannot deliver on.

How confident are you that there will be no problems?

More and more, I would say. We are coming from a situation where it has been very difficult and now we are starting to get products out. But there is nothing that we put so much energy and money on right now as securing production. More than half of our organization works to increase production capacity, to ensure that what we have comes out. We are not particularly worried about the quality of the product. It is consistent, as we say in Swedish. It is even, high and even. It's more about making sure, can we deliver this year, can we deliver next year and so on. I also put a lot of time into understanding, will we need to sell for 100 million, 200 million or 800 million in 2026. That it will increase, there is no doubt about it, but how much will it increase? This means that we have to think about what production capacity we should have. That it will increase is clear, but whether it will increase like this or like this, I don't know.

Yes, and we were just going to ask this and what it looks like with customer dialogues, but you have already been involved in that process.

Yes, but we are really involved in that process, so it's a lot about when we will be able to deliver. And I mean, there are a lot of people who ask when the next big sale will come, and that is impossible to say. But that it will increase, I think, is beyond any doubt.

Yes, exciting. And also questions about the previous statement about the expected brand rate on sales. How are the prospects here when we get into 2025?

I always get the question, when are you going to convert 100 million a year? And to convert 25 million per quarter, we will certainly do that, but I don't know when. And I have to repeat that. It's completely within range, but close, it's very hard to say.

And given the expected product optimization, how does the cash position look and how dependent are you on the coverage options?

Now we have started to get revenue and we have shown that it comes in more under 25, which has not yet been included in the result calculation per book deadline last December. Since we do not have such a high burn rate, we have a very large effect on our cash flow. So it's not that we need more money. And I don't think either that we would really like to make sure that we get the coverage options, but we haven't counted that. Right now, we're not in the money. We could be, but it's not something you can count on.

And can you say something about OPEC's cost base, run rate?

Yes, we are somewhere around 10-11 million per quarter.

And finally, what should we keep an eye on after this?

Exactly, what everyone should keep an eye on is even less.

Good luck and thank you for today. Thank you very much.