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Hofseth Biocare ASA: FIRST QUARTER 2021 FINANCIAL REPORT

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HBC had net sales revenues of NOK 16.8m (10.4m) in the first quarter and gross operating revenues of NOK 16.8m (18.5m). Gross revenues in first quarter 2020 included NOK 8.2m in insurance claim settlements. Cost of Goods Sold (CoGS) amounted to NOK 8.4m (6.2m) in the quarter. Operational profit (EBITDA) for the first quarter 2021 was NOK -18.8m (-10.2m). Gross margin was 50 % in the first quarter compared to 39 % in the first quarter 2020, adjusted for insurance claim pay out of NOK 8.2m in March 2020. Net financial items in the first quarter were NOK -1.8m (-1.9m). Loss before tax was NOK 26.8m in the quarter, compared to a loss of NOK 17.9m during first quarter in 2020. Cash and cash equivalents decreased by NOK 34.2m during the quarter, leaving total holding of cash and cash equivalents at NOK 138.5m by the end of the period, compared to NOK 68.0m by the end of the first quarter 2020. Including credit facilities, HBC had NOK 175.5m in free liquidity by the end of the first quarter.

Highlights:

- HBC received the first Salmon Protein purchase orders from US-based organic health supplement firm Garden of Life. The Nestlé-owned company intends to launch new ProGo® consumer protein products which will be available online and for the North American markets in Q3 2021.

- Development of a pharmaceutical lead program around eosinophilia inflammation control is on-going with rapid success. We have made and tested several analog compounds of which two have shown better biological activity than the original lead MICR-001 for asthma/COPD treatment via eosinophilia control.

- Successfully completed the invitro phase of our gastrointestinal injury / inflammation therapeutic collaborative program and now progressing to a preclinical DSS-induced colitis animal model simulating the pathology of necrotizing enterocolitis (NEC) and inflammatory bowel disease (IBD).

R&D focus areas in Q1:

i) Identification of the bioactive peptides in SPH that up-regulate the FTH1 gene. The FTH1 gene encodes the heavy chain of ferritin, the storage protein for iron, and this increase has been shown to result in an increase in haemoglobin and correct iron deficiency anaemia (IDA). The identification process has led to 7 closely related peptides which are being individually elucidated for filing a new patent application. The company believes that in 2021 we will be able to carry out the required clinical trials with an IDA-Enhanced-SPH product targeted to anemia and begin the process to file for “new chemical entity” (NCE) status with the FDA.

ii) Completed the synthesis of and invitro assays for 12 novel analog compounds based on our MICR-001 lead structure for asthma/COPD treatment via eosinophilia control. One MICR-001 analog (MA-005) showed superior activity to MICR-001 and is being developed further. New patent filings are being prepared. Recruitment for hospitalized Covid-19 patients in Brazil, Mexico, Hungary and Serbia is on-going.

iii) The second House Dust Mite allergy mouse animal trial on modulating eosinophilia with OmeGo® was completed successfully and the results are being written up for publication.

iv) Successfully completed the invitro (hIESC) phase of our gastrointestinal injury / inflammation therapeutic collaborative program and now progressing to a preclinical DSS-induced colitis animal model simulating the pathology of necrotizing enterocolitis (NEC) / inflammatory bowel disease (IBD) / Leaky gut.

v) A second invitro assay for sarcopenia treatment has shown a positive dose response for SPH peptides and myostatin inhibition.

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

James Berger, Chief Commercial Officer of Hofseth BioCare ASA
Phone: +41 79 950 10 34
E-mail: jb@hofsethbiocare.no

About Hofseth BioCare ASA:
HBC is a Norwegian biotech company that develops high-value ingredients and finished products currently targeting the consumer health market. Research is ongoing to identify the individual elements within the products that modulate inflammation and the immune response with pre-clinical studies in multiple clinics and university research labs in several countries. Lead clinical and pre-clinical candidates are in development for the protection of the Gastro-Intestinal (GI) system against inflammation, including ulcerative colitis and the orphan condition necrotising enterocolitis, as a Medical Food to help treat age-related Sarcopenia, and as a treatment for Iron Deficiency Anemia, all using peptide fractions of Salmon Protein Hydrolysate. Preclinical trial work with the oil is ongoing to ameliorate lung inflammation in eosinophilic asthma and COPD ("smoker’s lung") as well as clinical work in COVID.

The company is founded on the core values of sustainability and optimal utilization of natural resources. Through an innovative hydrolysis technology, HBC can preserve the quality of lipids, proteins and calcium from fresh salmon off-cuts.

Hofseth BioCare's headquarters are in Ålesund, Norway with branches in Oslo, London, Zürich, Chicago, Mumbai, Palo Alto and Tokyo.

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

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