Arctic Bioscience (ABS) H1 2024 earnings summary

Executive summary

• HeROPA Phase IIb clinical trial for HRO350 fully recruited, with six-month primary endpoint readout expected late September or early October 2024.

• Over 100% of 2023 sales already secured via orders; B2C omega product sales in Norway up 20% year-over-year; strong eCommerce sales in China despite market challenges.

• Gross margin stable at 30.6% in H1 2024, up from 30.0% in H1 2023.

• Acquisition of Arctic Algae in 2023 led to discovery of a new microalgae species and new IP opportunities.

• Liquidity position at NOK 49.8 million at end H1 2024, including an unused NOK 30 million credit facility.

Financial highlights

• H1 2024 revenues: NOK 16.7 million, down NOK 2.4 million year-over-year, but up NOK 2 million sequentially from H2 2023.

• Gross margin for H1 2024 was 30.6%, up from 30.0% in H1 2023.

• Adjusted EBITDA for H1 2024 was negative NOK 20.9 million.

• Net loss after tax for H1 2024 was NOK -23.5 million; EPS NOK -0.93.

• Cash and cash equivalents at period end: NOK 49.8 million; equity ratio: 86%.

Outlook and guidance

• Six-month primary endpoint readout for HeROPA study expected late September/early October 2024, forming basis for phase III and commercialization.

• Revenue growth of 20–30% targeted for full-year 2024, supported by strong order book and new sales prospects.

• Nutra business targets positive EBITDA in 2025.

• Liquidity closely monitored; various financing alternatives and commercial partnerships for HRO350 under consideration post-readout.

• Microalgae product commercialization expected in 2028-2029.