Nanoform Finland Oyj

OMXH:NANOFH

Earnings Call Transcript 2023-Q1

[Operator]

Welcome to the Nanoform Q1 report 2023.

[Henri Von Haartman, executive]

Good afternoon all, and a warm welcome to Nanoform's First Quarter 2023 Report Presentation. My name is Henri von Haartman, and I'm your Director of Investor Relations.Today, our CEO, Edward Haeggstrom; CFO, Albert Haeggstrom; and Chief Commercial Officer, Christian Jones, will present to you. This presentation is webcasted through financial hearings, and there is also the possibility to call in and listen by phone.The presentation slides are shown throughout the webcast and they can also be found on our web page in the Investors section. After the presentation, we will hold a Q&A and it's possible to ask questions by dialing in.We will today start with a short introduction to Nanoform and then move on to CEO review, then commercial aspects and then financial aspects.With these words, our CEO, Edward Haeggstrom, please go ahead.

[Edward Haeggstrom, executive]

Thank you, Henri, and welcome also on my behalf. So Nanoform is a technology platform company. We work out of Helsinki. We have approximately 150 employees, and we are listed in Helsinki and Stockholm.Next slide, please. We basically address a very big problem in the pharma industry. The fact is that there are too few new drugs coming out even though there is a lot of investment made to have more drugs on the market.Next, please. We address one of the biggest, if not the biggest problem why there are so few drugs coming out, that if poor bioavailability. It basically means that you have a molecule which is potent per se, but it's not taken up by the body. This problem is big and it's growing.Next, please. How do we do it? We're taking coarse powder, and we make it very fine. By doing that, we increase the specific surface area with the powder, which means that it's easier for the body to take up the medicine.Next, please. We have a proprietary process, which is a green technology. This process is basically a 2-step process. First, you dissolve API into CO2 and then you precipitate it up. We balance 3 processes: condensation, nucleation and agglomeration.Next, please. By being able to do this, there follows a cascade of benefits. Increased solubility drives increased bioavailability. It enables new medicines. It also enables a regimen where we can use reduce dosing. This can reduce the side effects. It can allow and enable a patent expansion game both longitudinally and in parallel by having to make less of the medicine, the production costs under CapEx goes down. Of course, when most of the drug is taken up by the body and not excreted, also the environmental footprint goes down. This is also driven by the fact that less of the medicine needs to be manufactured and shipped around.Next, please. So far, we have spoken about the small molecules. We also have an offering in the large molecules. Small molecules, think [ ibuprofen ]; large molecules, think insulin.Here in the center, you can see enhanced drug loading and the tailored release profiles. One could also say that people are interested in having a hard concentration and a low dynamic viscosity. All these 5 are relevant to what we do, and we operate between 100 and 150 kilodalton. That's a size measure.Next, please. The process we have on the large molecule side is different than the one we have on the small molecules. Here, you can see a nebulization step. You can see an operation step, an ionization step and electrostatic collections. This is also a green technology.Next, please. There are basically 3 pools that we can tip into. 58,000 failed drugs in the last 40 years, 5,800 existing drugs and 20,000 drugs in development. We use many times the acronym API that stands for active pharmaceutical ingredient.Next please. So what do we actually do? We work with global large pharma, with midsized and specialty pharma and with biotechs. They bring us bulk API that they own. We nanoform it, meaning we make the powder very, very fine. We always get paid. We get paid to show that we can nanoform. We get paid to show that nanoforming is a good thing to do. We get paid to produce kilograms of material. And later on, we also get paid royalties for having a product on the market.Next, please. I now move into the CEO review. So here, the title says we have had a strong start to 2023. So we got the multi-API license from FIMEA, which is the National Medicines Agency. This means that we can work on many different APIs in our factory. We have also started to manufacture for clinical use in Project Blockbuster. This means that now we are producing clinical-grade GMP material.On the commercial side, we have a very strong momentum, where we have signed 30 new GMP deals and 3 new major pharma relationships. Christian will talk more about this. We also see here that operating free cash flow has started to improve, and Albert will talk more about this.The gross margin has dipped a little bit, and the reason is that our GMP QC laboratory, which is operational, has not yet gotten a stance from FIMEA. It will get them later this year. This means that we have to send samples outside for quality assurance.The balance sheet is solid with EUR63 million in cash and no debt. It's clear that we have confidence in our near-term business targets, we think they are clearly reachable.Next, please. Here, I want to talk a little bit about growing up a company. When doing that, it's important to have the Xs. We can see that from the IPO to now, we have scaled up the number of customer projects. We have went from 5 to 60, the number of customers enrolled from 5 to 40 and the number of employees from 50 to 150, so 12x, 8x and 3x, respectively.Next, please. We here reiterate the near-term histories. So an increased number of non-GMP and GMP projects signed in 2023 versus 2022 as well as an improved operating free cash flow in '23 versus '22. And we are on track on both.Next, please. What's our next checkpoint. It is 2025. We will have there a cash flow positivity, 90% gross margin, and there will be approximately a little bit more than 70 new acres coming in each year. Out of this, the cash flow positivity is most important.Next, please. With this, I thank you at this moment and hand over to Christian. Christian, please.

[Christian Jones, executive]

So now I'll take us through the commercial presentation, and I'm pleased to share the slides with you. So Slide 20. We can see this represents the market, the number of drugs that are on the market. And as we can see that, that trend is only going in one direction. So there's a huge amount of molecules that can potentially be improved and can also be helped towards the market.If we go to the next slide. We also see that, obviously, with those 21,000 molecules, there are 5,500 companies supporting. I'm moving the slides. So no need to do them. Thank you. There are 5,500 companies supporting those molecules moving forward. And so a lot of companies for Nanoform to talk to, to see how we can support them in their journey.From our perspective, our business model is very simple. We operate in terms of proving the value of the technology, we call that a proof-of-concept project. And that's non-GMP. Then we move to proof of process, where once we've proven that value, we look to optimize the process further before transitioning to GMP, which is good manufacturing practice, that's a quality standard of manufacture and which is required for clinical production. And there, we support our clients in terms of clinical manufacturing at the various phases of their molecules development from Phase I all the way through to marketed products and life cycle extension. And of course, there are drugs on the market that we also look at. So whether it's life cycle extension or 505(b)(2) improvements to existing products. Nanoform very active.But what this slide also tells you is that there's a good amount of attrition at the various stages of a molecules journey. And there's this time line associated with development of compounds to the market. So we have a nice spread of molecules across that -- those pipeline. And we operate in a fee-for-service model across that pipeline until the product is commercialized, and we have a royalty component to our technology.And that really nicely brings me on to this slide. So as I said, a fixed fee per project somewhere in the region of EUR50,000 to EUR500,000 per API per project. It very much depends on the scope of the work, then a fixed fee per project in the GMP manufacturing, again, somewhere in the region of EUR0.5 million to EUR10 million, depending on the volume of material that needs to be produced and the phase of development, and then drugs on the market, we would have a commercial supply agreement with our partners to supply the material from Nanoform to them and with a commercial royalty deal associated. And that royalty is anywhere between 1% to 20% depending on the value that the technology delivers. And clearly, in some instances, it's a nice to have the royalty number will be lower. In other instances, it's a must-have. And with our technology, that molecule will not move forward. And of course, that royalty number would then be much higher.As we move on, I'm delighted to sort of reiterate some of the points that Edward made. 2023 so far has been a very strong year. That has materialized from the momentum that was built up in the second half and fourth quarter of last year, we've now been able to sign 13 new non-GMP deals. Six of those were signed in Q1. Seven so far have been signed in Q2. And of course, we still have another 1.5 month approximately left. So hopefully, that number will increase for the Q2 report.Importantly, we still continue to work with our major pharma partners and onboard new major pharma partners as well as the many biotechs that we work with. So this quarter, we saw 3 new major pharma relationships initiated, including our first Japanese major pharma. And we also were reawarded a grant from the Bill & Melinda Gates Foundation to continue the work that we're doing with them around supporting medicines for patients that need them.Project Blockbuster is an important project for Nanoform and one that saw our GMP manufacturing campaign commenced in May post the approval from the Finnish Medicines Agency for our multi-API license, and it's expected to take a couple of months of production. Once that material is produced, it will be shipped for manufacture of final drug product during Q3, and the human pilot PK study is going to commence in Q4. And the readout of that we expect Q1 of next year. So exciting times this first half so far.Looking at the commercial relationships that we've established. I'm delighted to be able to announce that we have 2 new names that we can publicly disclose of the partners that we work with. Those previously were AstraZeneca and BI. Now we can add to that GSK and Sanofi. So very pleased to be able to do that. We also work, as I said before, with many smaller companies, biotechs and midsized pharma and have different types of relationships as well in the co-development and collaboration moat.This is a nice snapshot of the different therapeutic areas, of which Nanoform is active. So we're working across many within the preclinical space. But clearly, we also have several that we're working on in the marketed space. And marketed really means either we're working with the innovator on a life cycle management opportunity for their product or we're working on a 505(b)(2) angle for that product with a specialty pharma company. And if you can see this slide, you'll also see that the weighting in terms of the volume of projects is clearly in the preclinical space, which is where most people come to Nanoform when they have issues around bioavailability, which is typically seen in preclinical moving into Phase I. And that's where we have the majority of our work. But you can also see clinical programs that we're working on from Phase I through to Phase II and III.I participated in a flash talk, a webinar with Drug Hunter recently with myself and Chris Worrall, who is in my team and with Dennis Hu, the CEO of Drug Hunter. Dennis is a renowned scientist in the pharmaceutical industry and set up Drug Hunter last year. He is a former Genentech employee, well known in the medicinal chemistry and drug discovery space. And Dennis wanted to talk to us about our technology. And we work together at utilizing both Nanoform and Drug Hunter resources to evaluate how drugs have changed since the 1970s. And actually, I would recommend if you have the time to watch this presentation because it is quite insightful and enlightening about the different types of molecules that are being developed. The current types of molecules that are trying to be developed today versus the ones back in the '70s. And I think this is only going to continue to become more challenging for our grandchildren's drugs as well when we look forward. And of course, these new types of compounds, they need new technologies to overcome these challenges, and that was what we were talking about as well.Small is sustainable. And we are having an increasing number of discussions now with our major pharma partners, in particular, around sustainability, helping them to achieve their net zero goals by 2030 and some of them even sooner than that. But they're not going to get there unless they adopt new technologies and new approaches and different ways of working. And so we had one of our major pharma clients that actually said CESS could be the green alternative to spray drying. Spray drying utilizes lots of organic hydrocarbon solvents. Some of those solvents actually can be really unpleasant as well and from a toxicity perspective. And our technology uses recycled carbon dioxide, which can also be captured as well. So it's a very green alternative to the current processes and manufacturing. But most importantly, if we can reduce the dosage for a product that will have a much bigger impact to the carbon footprint from a supply chain perspective than anything else. And obviously, that will also support the trends in onshoring of manufacturing from the east to the west, the smaller quantities that might be required to be manufactured, if there's an ability to do that through Nanoform's technology, that could really help to -- in a positive way for this increasing trend that we see today.So small is green, it's also lean. And we have a tool called STARMAP, which helps us to map out the projects with our partners, which molecules to take forward and really quickly identify which experiments not to do. And so as a digital twin to our CESS technology, STARMAP is being routinely used by Nanoform and an increasing interest from our pharma partners to use it as a screening tool and for their molecules. And as Dennis said in our talk, if I was a medicinal chemist, and I had 2 molecules, one of which I knew could be nanoformed, and one might be more challenging, there's no brainer, I would go with the one that I knew could be nanoformed. And it's about providing the possibilities in an early stage and increasing those possibilities so that you don't narrow your path too far in development and you keep many jaws open. So hopefully, STARMAP will continue to be a very useful tool for our pharma partners.And now over to Albert for the financial section.

[Albert Haeggstrom, executive]

Thank you, Christian. And I must say that considering what is happening in the world today, I'm really looking forward to what AI can do for the pharma industry as well because we have been working on this for some years, and we have already seen a lot of impact from that. But going to the numbers. Here, you can see that we added 2 employees in the first quarter. So we were 152 at the end of the quarter. As we have said previously, this is the year when we focus on productivity and processes, getting more out of the engine. So we don't plan to increase the head count very much this year. We expect it to be rather flat.Number of lines will continue to increase because we are here in the #20 is, for example, not including the GMP 2 and 3 because they will be included when they are commissioned later on in the year. The same goes for some non-GMP lines that are being built as we speak.If we then go to what Christian was talking about momentum. So in the fourth quarter, we showed that the big pharma was traveling again, we sent many proposals out, and this trend has continued. So here, you can see on the rolling 6 months, we are clearly back on track on the growth trend and we had a record number of proposals and 42 in the last half year that can be compared to 25 in the -- at the end of the third quarter. Also on a rolling 12 months, you can see that we hit a new high of 67. And this is, of course, remember that there is a 4 to 6 months lag usually between proposals issued and/or sent and them signed, the proportion of them being signed because we do really well or we do very high quality on the proposal. So we have lots of discussions with the clients already before we send the proposals.If we then go over from proposal to sign, you can see the same year, as Christian mentioned, we are back on a high level. And so we signed 13 in the first 5 months of the year. So most likely, we will end the quarter 6 months rolling for the first half as a new high. And that means, of course, that when the comparison for the second half of the year will be very easy compared to last year. We should see the 12-month rolling also start to increase again.If we look at the revenue, the revenue in the first quarter was slightly below last year, and it was, of course, impacted by the slowness in the second half of last year. However, if you look at it from a rolling 12 months point of view, the impact is very small. So we see this as a plateau until we continue to grow that again.Number of revenue-generating projects, more than 22 in the quarter that contributed to the revenue. And also, when you look at it from a 12 months rolling point of view, you can see that we had 35 projects that generated revenue in the last 12 months.Another impact we saw in the first quarter or actually already in the fourth quarter is that now when we have been ramping up the GMP for clinical manufacturer, as we not yet have internal GMP QC, we have been using outside help and that had some impact on the materials and services costs related to the projects. If you exclude them, they were more than EUR100,000 in the quarter. So if you exclude them, the gross margin would actually have increased to above 95% in the first quarter. And that is -- that is because we have now the tank -- the big tank where the cost of the CO2 has come down dramatically. And that means that excluding the GMP QC costs, the gross margin has been increasing compared to last year. So it was above 95% in the quarter.Here, you can see the quarterly numbers and the rolling 12 months. So you can also see that when you look at rolling 12 months, the impact was much smaller.And then finally, I want to talk about the free cash flow, operating free cash flow. And here, we saw also an improvement. So if you look annualized, that means 4x the last quarter, we have improved clearly. So it was below minus EUR25 million compared to its peak number of minus EUR33 million in the second quarter last year. And on the right-hand side, you can see that the bigger impact came from the smaller investments, and this will continue in the coming quarters because we now have a sizable nanoforming fleet, and that means that this year will be about improving the processes, getting more out of the machine, getting productivity up and therefore, increasing top line, decreasing CapEx. And we believe we can keep the costs rather flat. All these will impact positively the operating free cash flow, which we can see here a little bit bigger picture about how it could look like in the coming years towards our target of 2025.So to reiterate, we expect rather flattish costs and lower CapEx in this year, and this should help to improve the cash flow. All in all, our balance sheet is very strong. We have EUR63 million in cash and no debt.Then you have all the pictures -- table, sorry, here. I will not go to them. Now, I think we can go to the Q&A. Thank you.

[Operator]

[Operator Instructions] The next question comes from Christopher Uhde from SEB.

[Christopher Uhde, analyst]

So you've made some really pretty phenomenal progress on the underlying business. And this has all been driven from your production site and our manufacturing site in Finland. You've raised capital to build a site in the U.S., and I think I saw something about a site in the U.K. as well. What can you tell us about what the status is of that? And I mean yes, why we -- I guess I may have some follow-ups on that.

[Christian Jones, executive]

Sure. Christopher. So happy to take the question about bald eagle. Basically, bald eagles is in a slow holding pattern in the U.S. So we have identified 4 states. We have, in every state identified 1 or 2 facilities. We are, as we speak, having drawings with sort of specific technical details for a copy-paste operation to be possible for that. The reason why we have it in a holding pattern is the slower growth that we saw in the end of last year. And we wanted to make sure that the cost outlies and the top line growth were synchronized in a proper way. Albert, do you want to say something else to this?

[Albert Haeggstrom, executive]

Yes. I would also add that we have all seen what has happened to the interest rates. And we all know that there is a lot of new capacity coming online. By capacity, I mean, new facilities, R&D and manufacturing facilities in the U.S. and the pricing and the rent levels have not yet been impacted fully by the higher interest rates. So we have seen the REITs coming down. Many of them -- share prices have fallen by 50 or more percent, but the rent levels have not changed that much. So we are also, in that sense, opportunistic that we don't want to sign too long, let's say, 10, 20 leases at the previous peak levels, we want to see that we certainly find the right place with the right partner at the right price. So we are, in that sense, not in a big hurry to do it. But of course, as Edward said, this has also to do with the fact that we now have a significant amount of lines in Helsinki. And we have also learned that we believe we can do more than 5 projects per line per year, both on the CESS and on biologics side. And that, of course, means that when you have 20 lines and soon 3 GMP lines, there is ample capacity in Helsinki that we also take into consideration.Related to the U.K., we have not established or planned to establish a plant there, at least not yet. However, what we have done during the quarter is that we established a subsidiary in the U.K. So we have one in the U.S. and we have one in the U.K. now.

[Christopher Uhde, analyst]

Okay. That's great. Very clear. So a follow-up to that is do you feel convinced that you have the sufficient funds to build this U.S. facility once you decide to pull the trigger? And then a separate question. Very nice to see the slide on projects by therapeutic area or, let's say, the various therapeutic areas in which you have products. Is that a slide of projects that are ongoing?

[Edward Haeggstrom, executive]

Yes. So if I take the first question first, whether there is sufficient funds for our U.S. expansion, the answer is yes. And reason is that it's clear to us that we have learned a lot, which is relevant to keep the cost down for the copy-paste function there. It's also very possible that people who want to partner up with us in the U.S. may want to contribute to the financing of those. So short answer, yes.Then on the therapeutic areas, those areas are areas that we work in actively yes.

[Albert Haeggstrom, executive]

And if I just add to what Edward said about the funding. So remember that, as Edward said, we can do it with a partner, but there are also different alternatives. You can lease or you can buy or you can do a combination. So from that point of view also, we have enough capital to go to the U.S. as well.

[Operator]

The next question comes from Max Herrmann from Stifel.

[Max Herrmann, analyst]

Great. Congrats on now having, I guess, 10 out of the top 20 pharma companies, quite an achievement in the number of years you've been operating.So a couple of questions. One is on, way back when you were initially floated, you were kind of gave a very large range of what APIs would be nanoformable. And I wondered whether given you now have quite a lot more track record, you're getting a better idea of chances of success in that -- in the field for the APIs that you're working on? And then secondly, just Albert really on the cash flow. Clearly, you're working on an awful lot of non-GMP assets at the moment, and that's contributing nicely, but not hugely significantly. And so to get to that breakeven in 2025, you're going to have to be, I assume, working on a lot more GMP assets. And I wondered where do you -- how many do you think you'll need to have in the hopper as it were in active, I guess, working on programs in 2025 to get to that target?

[Edward Haeggstrom, executive]

Okay, Max. So first, you asked about the API range and chance of success. I think that it's clear as we have moved forward that the range is more towards the higher numbers than to the lower numbers. So we have become really good at processing those APIs. Then as you also know, there are many, many other factors playing into whether they then become products on the markets. And therefore, I would like to keep the range sort of broadish.Then the chance of success, we have a fairly good understanding of the chance of winning a PoC. We are building an understanding of the transition probability to GMPs. I would like to be a little bit careful in still guesstimating that. And then when it comes to probabilities for having the products in the market, for me, it's fairly clear that we will have one. But the exact timing and exactly sort of how fast we will have one or many, it's too early to tell. And then over to Albert for the cash flow.

[Albert Haeggstrom, executive]

Yes. Just to repeat what Edward said, I would put it like this. We have not seen anything that would suggest that our estimates of how big a proportion of all the APIs we could nanoform or what the probabilities of successes will be in the mid to long term has changed. So it would be lower than we believe 2, 3 years ago. We are still seeing that we can nanoform very many of the APIs out there. And now when we also added the 3(b) category with high potency that increased a lot. So there are very few APIs that we can't handle. And many of the ones we can handle, we can nanoform and we are getting better at it. And at the same time, the number of success, there are so many factors that depends on whether a project continues and very few of them has to do with nanoforming. So it's -- I would say that we have seen nothing yet that would diminish the probabilities compared to what we believed in when we did the IPO.Then when you look at the cash flow and how many GMP projects and how many non-GMP projects do we need to become cash flow positive. I would put it like this that it's not very difficult to calculate from the slide which Christian showed about the value of the GMP projects and the value of the non-GMP projects. So remember, our non-GMP projects is at 50 to 250 roughly, if it's PoC. And then when you go into PoP, it's double that, so [ 50 to 500 ]. So in general, the non-GMP is between 50 and 500. And then when you do a small early, let's say, Phase 1, you can have from EUR0.5 million or EUR1 million upwards. And then when the size of the clinical trials go to Phase II and Phase III, and then the value of that can go up even to EUR10 million.And considering our cost base today, you can quite easily calculate how many GMP projects do we need to be cash flow positive. So -- but I will not give you a more detailed answer than that.

[Max Herrmann, analyst]

Maybe a follow-on just in terms of the Project Blockbuster then. That's obviously an existing drug that you're nanoforming, 505(b)2 route. You're in collaboration there. How are you going to account for the GMP that I assume will go into revenues, but some of the costs will go into the JV as it were? Just trying to understand the accounting for that. And would that be one of your therefore, larger GMP runs given it's likely to be closer to commercial, or it's just the Phase 1 at the moment. So that's going to be in the smaller range?

[Edward Haeggstrom, executive]

So maybe I can divide your question into 2 parts. One that has to do with kilograms and one that has to do with euros and Albert can take the euro part and if I take the kilogram part. You're right. It seems this is a 505(b)(2). It's clear that we are going to need to produce first probably a few kilos and then a few tens of kilos and then for the market, probably a lot more than that. I actually know the numbers. I think the important part here is that we have already done internal tests that show that we should have no problems meeting the time lines and the kilogram lines that are required for this project. And this is, of course, important both for us and for the consortium and then ultimately also for the patients out in the field. So this kind of security of supply and the fact that people start to look into our ability to manufacture larger quantities, I'm not afraid of talking about the [ 10 or so ]. So I think it's just a natural part of our maturation. Albert, euros, please.

[Albert Haeggstrom, executive]

Yes. And otherwise, it's in -- from an IFRS point of view, it's booked just like any project. So you book revenue according to percentage completion of the project in the top line and then you have the direct materials costs. And then you have the -- we will -- most of the other costs will be in the other operating costs in the line external R&D. That is the most likely scenario. But remember also that if we then receive any income from that in one form or the other, then that would be sort of we would get 25% of that as we own 25% of the project. But all in all, we have also said that as we do a lot of the work because a very important part of the total project is the nanoforming part, so we expect the impact from the project to be cash flow positive for Nanoform despite the fact that we hold 25% of the project.

[Operator]

The next question comes from Jon Berggren from Kepler Chevreux.

[Jon Berggren, analyst]

I have one for Albert. So I was wondering about finance income in the quarter, EUR2.3 million. So you mentioned in the report FX gains, EUR653,000; interest income, EUR362,000. So what were the other elements that contributed to finance income here?

[Albert Haeggstrom, executive]

In the finance, you have the fluctuation in the shares that we own also.

[Operator]

The next question comes from Lars Hevreng from Danske Bank.

[Lars Hevreng, analyst]

You mentioned in the report about the capacity at your biologics lines. Could you say anything about expected utilization of these and any potential client intake?

[Edward Haeggstrom, executive]

Yes. So Henri help me here. We have disclosed that we are commercial on the biologics side. And we are also clearly able to provide the quantities that are needed for the PoC level where we work now. Related to biologics GMP, we are still not at biologics GMP. Basically, there are 2 parts to Biologics GMP. One is a material part where you need to be compliant and compatible. And then the other one is to have the stamps. Here again, it's a synchronization of how our sort of commercial evolution takes place there versus how we invest money in it. When it comes to the compatibility and compliance with the materials, there we're already on a level where we could sort of do it already right now. Then when it comes to build out the infrastructure, there are certain investments which are sort of fairly straightforward. That has to do with containment that we haven't done yet, but we know how to do them. And basically, you can think of the biologics as following the small molecule development on the commercial side with a certain lag. And I don't want to put an exact number there, but something may be between 2 and 4 years to give you a range.And maybe Albert and Christian wants to give a commercial and financial aspect to these 2?

[Albert Haeggstrom, executive]

Yes. I would put it like this that we have several non-GMP lines on the biologics side. And as you know, we have now been talking to clients about the biologics. During the first year, we did not show the or talk any details about the process. But then when it was published, we have been deepening the discussions, and we have seen a clear increasing interest in the biologics side during the last quarters when Christian and his team have been able to talk about the specifics around the process and how it works and show the schematic and bring clients to the site to see it and so forth. But Christian, please, if you have some additional comments.

[Christian Jones, executive]

Yes, I would just say, echo what you've said already, I think without disclosing things that we can't, there is a lot of interest there. As we can see in the marketplace, there is a significant interest as well in nanoparticles associated with biologics, which perhaps in the light of COVID and vaccines, there has been, I'd say, a lot of companies that are also looking in this space. But what we're doing is quite different and really opening up novel delivery routes, potentially increasing drug load per unit volume for injectable formulations. And those are the areas where we see the most interest from our pharma partners. There are some big challenges out there that need to be addressed with biologics. And we have a lot of interest from major pharma and smaller biotechs into seeing whether our technology can help to address those challenges.I think the plus side around the biologics technology is we've advanced the CESS technology at quite a rapid rate. When I came into the business 5 years ago to where it is today, it's a very different technology, and we've achieved a lot. But because we've had that rate of innovation and growth from an operational perspective, we have established a lot of expertise in engineering and in technology commercialization that has helped the biologics technology. And I think biologics technology as a function will then accelerate faster than the CESS technology did over time. So I think it's a very big positive for that technology as we move forward.

[Albert Haeggstrom, executive]

And also as a reminder that when we went public, our target for year '25 was to have 50 new APIs and 25 lines. And just to remind you that when we launched then the biologics, we increased that number from 50 to 70 new APIs by '25, and we increased the number of lines from 25 to 35. So that implicitly then gave you that we believe that we could have 20 projects per year from biologics side and 50 from asset side and 10 and 25 lines. That was the thinking. And on a general level, I think that these assumptions are still quite valid.

[Operator]

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

[Henri Von Haartman, executive]

Thank you, operator. On behalf of Nanoform, I would like to thank all participants today. If someone has additional questions, then you are most welcome to contact us after this, and we wish everybody a great Thursday afternoon and evening. Thank you, and goodbye.