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Hofseth Biocare ASA: FIRST QUARTER 2022 FINANCIAL REPORT

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Hofseth Biocare ASA
Hofseth Biocare ASA

HBC had gross operating revenues of NOK 30.8m (16.8m) in the first quarter 2022. Cost of sales (CoGS) amounted to NOK 22.1m (8.4m) in the quarter. Operating profit (EBITDA) was NOK -26.2m (-18.8m) and Operating loss (EBIT) amounted to NOK 33.5m (25.0m). Adjusting for one-off bulk sales of ProGo inventory and R&D costs associated with the build-up of the CTU but not to be recognized as intangible assets, gives an adjusted EBITDA of NOK -18.2m in the first quarter.

Cash and cash equivalents decreased by NOK 19.3m during the quarter, leaving total holding of cash and cash equivalents at NOK 30.6m by the end of the period, compared to NOK 138.5m by the end of the first quarter 2021. Including credit facilities, HBC had NOK 67.6m in free liquidity by the end of the first quarter 2022.

Commercial update

The first quarter started will with a growth in sales in the ingredient business of 93.5 % vs the previous period last year. The quarter ended with a sales of NOK 31m compared to NOK 17m in Q1 of 2021. This is in line with the strong order book of NOK 40m which was created in Q4 as indicated in the previous quarterly report and during Q1.

The increase is coming from a significant improvement of sales prices throughout all ingredients and a shift into higher value application like super premium pet food, human nutrition, and nutritional supplements. This conversion from feed and basic pet food is expected to continue in the remaining quarters of 2022 and will contribute not only to the top line, but also to the bottom line.

Highlights in the first quarter

  • The first quarter started with a growth in sales in the ingredient business of 93.5 %, compared to the same period last year and record order book.

  • Our first preclinical assay work of SPH peptides in prostate cancer was published in the journal Marine Drugs this quarter. This work demonstrated that, in combination with androgen deprivation therapy, the SPH peptides enhance anti-tumour activity.

  • Our first clinical trial for CalGo®, demonstrating the enhanced absorbability of CalGo® compared to calcium carbonate in post-menopausal women has been accepted for publication in the Biomedical Journal of Scientific and Technical Research.

  • We have identified 8 structurally similar peptides which drive the FTH1 actions of SPH. These peptides have previously unknown structures with novel composition of matter claim potential. This will lead to a broader IP claim set for HBC.

Please find the HBC Q1 2022 Financial report attached.

For further information, please contact:

Jon Olav Ødegård, Chief Financial Officer of Hofseth BioCare ASA
Phone: +47 936 32 966
E-mail: joo@hofsethbiocare.no

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, Ningbo, New Jersey and Palo Alto.

This information is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act

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