Nanoform Finland Oyj

OMXH:NANOFH

Earnings Call Transcript 2021-Q4

[Henri Von Haartman, Director of Investor Relations]

Good afternoon all, and a warm welcome to Nanoform's Fourth Quarter and Full Year 2021 Report Presentation. My name is Henri Von Haartman, I'm your Director of Investor Relations. Today, our CEO, Professor. Edward Haeggstrom; CFO, Albert Haeggstrom; and Chief Commercial Officer, Christian Jones, will present to you. We also have our CBO, Goncalo Andrade for the Q&A session with us.This presentation is webcasted through financial hearings, and there is also the possibility to call in and listen by from. The slides are shown here on the webcast, and they can also be found on our web page under the Investors section. After the presentation, we will hold a Q&A and it's possible to ask questions by calling in. And we would like to remind those who ask questions, to ask one question at a time, so we can answer them each one by one. And those who ask questions, you are, of course, welcome to ask many questions.Today, we will start with a short introduction to Nanoform and then move on to the CEO review and fourth quarter financials. Operator, if I may ask you to move to Slide 4, please. And with these words, our founder, Professor, CEO, Edward Haeggstrom, please.

[Edward Olof Hæggström, Co]

Henri, thank you, and welcome also on my behalf. So to briefly recap, Nanoform is a platform technology company. We are situated in Helsinki in Finland. We command approximately 3,000 square meters of manufacturing. The manufacturing is on GMP level, and we are listed on NASDAQ First North Premier in Helsinki and Stockholm. We are approximately 125 employees, and we are growing.Slide #5, please. We address a big structural problem in the pharma industry. The problem is that 2 few drugs come out on the market. Slide #6, please. The reason why so few drugs come out in the market is something which is called poor bioavailability. It means that the body cannot take up the drug, therefore, the drug cannot be effective. This problem is big and it is growing. Next slide, #7, please. There are basically 3 profit pools that we can look into. We can give unsuccessful drug candidates a second chance. We can improve existing drugs, and we can enable new drugs. Slide #8, please. We do this by taking in powder that our partners and clients own. This powder is constituted of API, active pharmaceutical ingredient. The powder comes in coarse form, and we make it very, very fine. To the left, you can see that when you make it fine, you can increase the bioavailability by increases the specific surface area.Slide #9. When that is done, a lot of good stuff happens, people can take less drugs that means that fewer kilos or drug needs to be produced and shipped and stored. It also means that when one uses a proprietary technology like ours, one can play a patenting game where one can either prolong or extend in parallel the patent protection. By doing all these things, of course, the environmental burden also can go down.Slide #10, please. We work both on small molecules and on biologicals. On biologicals, we have worked in the size range 6 kilodaltons to 150 kilodaltons, which is commercially very relevant. Here, you can see that we can do a lot of stuff. We can improve the delivery route, improve the uptake and hence the drug loading tailor release profiles, enabling new drug combinations and provide for a lighter infrastructure.Slide #11, please. Nanoforming, the thing we do has a very broad applicability. Already now we are active in oral tablets, oral Buccals, respiratory, nasal, ophthalmic and co-polymer drug delivery. Slide #12, please. We use artificial intelligence to pick winners and to set the knobs on the line in order to faster be able to start and to finish the campaigns. Here, you can see how our AI called Starmap has evolved.I now move over to the CEO review and would like to invite you to Slide #14. On Slide #14, I start down in the right lower corner. 15x is the increasing number of cumulative projects that we have started. Basically, it means that we have already now done a lot of stuff, and we are moving ever faster. After this, I would like you to look at the first line, which states employees. It has a growth of 3x. If I divide 15x by 3x, you can see that our productivity has increased. We can make more stuff with fewer people. Then I invite you to look to the second but last line, manufacturing lines, where it says approximately 4x. If I divide 15x by 4x, we can see an approximate 4x increase in the productivity to use the lines. The word productivity here is key. I have started a program to increase our productivity. This is necessary in order to make us go faster, when one wants to roll out the technology platform globally, speed is of the essence. So productivity is the key take home from this slide.Slide #15, please. There are basically 2 engines described on this slide. The PoC engine, which basically means that we take in APIs that we haven't seen before, and we answer 2 questions. Can they be Nanoformed and how should they be Nanoformed? Here, we can see that we have moved pretty fast forward, starting from a few PoCs in '19 and now done over 2 dozens of PoCs, and my target is to get to 200 PoCs as soon as I can. The other engine, the GMP engine is the one that we have just recently started. So right now, we are at the same level in 4Q '21 as we were on the PoC engine in 4Q '19. We have started the first 2 GMP projects. Here again, of course, I'll try to go as fast as I can to having started 2 dozens of GMP projects. Why are these engines so important? Because these engines are the engines with which we can get products onto the market. And while we are now optimizing these 2 engines, I always keep an eye on the end goal, having more, better and newer products on the market.Slide #16, please. In '21, we got a lot of stuff done. We completed the readout of a successful clinical P1 study. We won our first GMP project. And for the first time, we had a gross margin that exceeded the target that we had envisioned for '25. So here, we have been faster than we had envisioned. In '21, we had achieved all the targets that we set for that year. For 2022, the acceleration of the order intake is my first priority. Another priority is the GMP engine, to make it bigger, stronger and more effective. In '22 productivity, economics of scale and automation will allow me to address the fact that we are at capacity. While we do all this, again, I stress, we never lose focus on the long-term goals.Slide #17, please. Here is my 2022 map. Basically, 4 things that needs to get done, all of them are on track. They relate to building GMP line capacity, to getting GMP to biologics, to having enough new non-GMP projects and also to bring in 3 new GMP customer projects in addition to the 2 ones that we had in '21.I move to Slide #18. Slide #18, 2 balloons I want to pick out. The one which I consider most important is the journey to become cash flow positive. As Albert will detail, you will see that we are on our way to that. The other one is the more than 70 new APIs per year for a total of 100 projects per year for a cumulative total of 300 projects. And when you look at the probabilities of getting products on the market, you can see that from 300 cumulative products, there are already several products that mathematically would enter the market.With this, I thank you, and I hand over to Christian. Christian, please.

[Christian Jones, Chief Commercial Officer]

Thank you, Edward. And it's my pleasure to take you through the commercial section of the presentation, and we'll go to Slide 20. As you can see here, we've had a fast but controlled growth over the last 3 years, adding in 3 senior business development members each year into the team. In 2020, we brought in our U.S. commercial team and in 2021, we brought in additional people within our European team. We have a fantastic team.And if we move to Slide 21, you can see the geographic spread of all the individuals. I'm going to focus just on our most recent additions. That's Jamie, Nathalie and Frederique. Jamie has come to us with extensive major pharma experience of competitive intelligence, portfolio assessments and product launches. And Jamie brings a very useful and valuable insight into our discussions with our pharma partners, about the competitive differentiation that our technology can add to their portfolio and to their products and to the benefits, ultimately, of patient-centric drug development that we can position with our partners for the market.Nathalie brings extensive CDMO experience, having worked for a variety of companies in the API drug substance and drug product space in Europe and also a good knowledge of crystallization science. And Frederique, has just joined us recently this month. He comes from Lonza Capsugel with a rich experience in oral and inhalation drug product development and manufacturing. We have a very talented team. And this year, we look to expand this team even further with at least another 3 team members joining us, but probably taking less senior roles to support our lead generation activities and market penetration.If we go to Slide 22. You can see here that not only has the commercial team been growing in a faster-controlled way, but so has our partner portfolio. And moving now into 2021 and looking and reflecting back on 2019, you can see a significant growth in this customer makeup.If we go to Slide 23, we'll have a little bit of a pause here, looking at the customers that we have. And I want to draw your attention to our most recent addition to this slide, which was a global major biopharma company in Q4 of last year. This is the first biopharma company that we put on this slide and a significant giant within the pharma industry. And we're delighted to have them as one of our partners. But moreover, if we look at this slide, we also see a diverse nature of partners. We have very small biotechs, and we have very large pharma companies that we work with. And for Nanoform, it's really important that we have a mixture of both, the small biotechs are equally important to us because we look at the molecules and not just at the pharma companies themselves, all of these molecules have a future and have a pathway. And it may be that they get acquired by major pharma and are taken on for further development. But we want to be able to play the development game with all partners within the industry.I think the other thing to take away from this slide is that we have a real spread of organizations that we work with, both in Europe and in U.S. and also that the types of projects we work on range from the early-stage projects in late discovery, early preclinical moving into Phase I and the projects that are in clinical developments. And finally, the projects that are on the market where there could be opportunities for life cycle management and 505(b)(2) improvements. And our technology spans that whole breadth of development time lines and we work with all these customers in different areas.So with that, I will now hand over to Albert to take us through the financials.

[Albert Alexander Haeggstrom, CFO & Director]

Thank you, Christian. If we can go to Slide #25, please. Here on the left-hand side, you can see the number of employees and as you know, you -- first, you need the employees. And here, our target is to have 200 to 250 by '25. We have already reached 125, and we last year added some 50 employees, meaning at a quite fast pace. Now we are in a very good position, but we don't need to add so many people in the coming years anymore. And most people, we will be hiring are technicians and engineers. And we are also in a fortunate position from that way that we are not having big problems or problems finding good recruits. So many companies talk about the issue in the -- issues in the recruiting, but we have been very lucky, and we have been very strong in recruiting with people. So we feel that we have proven that we can hire great people, and we will continue to do that in the future towards our '25 target.If you then go on to the number of lines. First, you have the people and then you build the lines. Here we are in a little bit similar situation that 1.5 years ago when we -- before the IPO, we had 6 lines and no GMP line up and running. And now we are already in a situation where we have 15 lines, and we are -- have #2 and #3 GMP lines coming online this year. And that means, of course, that we are very strong, much stronger now on the knowledge level how to implement efficiently by the equipment, [ plantable ] lines and then build the lines. And here again, you can see that we only need to do 5 lines per year to reach the [ 35% ] target. So we feel that we are in a very good trajectory towards the '25 targets also on the line side.And on the line side and on the CapEx, I would like to say also that as we are getting more efficient and as we learn, we have also been able to make it more productive and efficient, meaning that even if there have been some increases in raw materials and stuff like that, actually, the cost per line for us has not gone up very much because of the productivity. So going forward, we don't expect any significant growth in the CapEx needs because of the new ones. So we are fully funded and for the projects that we are -- underlines that we are doing, and we are on target.If we then go to page -- the following page, where it says about annual projects signed. And here, you can see on the left-hand side that the target for '21 was to have 13 projects, 1 GMP, to have non-GMP, we ended up the year with 16 non-GMP and 2 GMP total of 18. And now for this target -- this year's target it's 20 plus 3, 23. On the right-hand side in the picture, we have now added an indicative '25 target. The official target is for 70 new APIs annually by '25. This here shows if you use the industry probabilities for moving forward in the development pipeline, what would be the number of new projects signed in 2025. And here, you can see that it's more than 100, including a significant part of GMP projects.If we then go to the next slide. And this is potentially the most important slide when it comes to a number of projects, because this shows the cumulative number. So every year, we do more projects, but it's actually the cumulative number of projects, which teaches how to do it efficiently, cost efficiently, time efficiently and most importantly, to increase the probability of us getting new products on the market and at that time, help patients. And here, you can see that by the end of '22, that is this year, we should have started already 53 projects and by '25, we should have started more than 300 projects, again using the industry probabilities for moving forward in the development pipeline.If we then go to the following slide, and here, I'm very happy to start to talk about the P&L. So if you look at the left-hand slide, again, 1.5 years ago when we did the IPO and we had a negative gross margin. But what we have been doing now is to making the cost of goods or materials and services costs much more efficient. So we have stopped using some external services, and we have also made the process much more efficient. So here, you can actually see on the right-hand side that the rolling 12 months materials and services costs have fallen to roughly -- from 600,000 to less than 200,000 on an annual basis. At the same time, as the number of projects, of course, have increased a lot. So that means that the cost of goods or the materials and services cost per project has been diminishing much faster than this [ chart ] shows.But all in all, this is the reason why we now already in 2021, reached our 2025 target of having a gross margin above 90%. And here, it's important to remember that this was done on non-GMP projects alone. So when we are entering the GMP world with several GMP projects, we expect that the margin will be actually -- should be slightly higher rather than slightly lower on the GMP side. So we are very confident in our 2025 target of having a gross margin above 90%. And this is, of course, important because when you have a high gross margin means that when you get additional revenue, it will fall down in the P&L.If we then go to the following page and talk a little bit about economics of scale and efficiency. One other thing we have seen is that I will be coming to the total other operating costs. But here, you can see already that as we have grown the number of employees, actually, the total other operating cost per employee has been going down fast. So it has basically halved in the last 2 years. And this is important because this helps us to create the total cost under control. So when again, the revenue increases, we will see a positive impact on the EBITDA and the levels below EBITDA.One of the most important efficiency improvements we foresee going forward is the number of projects per line per year. And on the right-hand side, you can see that last year, we increased it from 1.3 to 1.5, but believe that in the long term, the potential is to do more than 5 projects per line per year. And this will, of course, have a lot of impact on revenue, costs, margins, client happiness because when you do a project fast and with high quality and with low cost, everybody is very happy.If we then go to the following page, we talked earlier about the materials cost, but here you see the other 2 cost lines in the P&L. If we start with the other operating costs. So on the previous slide, you saw other operating cost per employee, it had gone down a lot. But here, you can see that actually rolling 12 months it has also gone down on an absolute number. So in the last 4 quarters over the last year, we had EUR 7 -- EUR 5.7 million in other operating costs. And this includes everything else, excluding materials costs and employee costs. And this is, again, very good because this keeps the leverage going forward and revenue goes up. That means that if you can keep the costs flat or slightly increasing it only, then you will get an improvement in EBITDA and so forth.And then the final cost item, which is the employee cost. And here, you can see that despite the fact that we have increased the number of employees by 70% last year, the rolling 12-month cost has not gone up by more than roughly 10%. And going forward now, if we hire 20 to 30 technicians and engineers to our lines, we don't expect employee costs to go up very much. So overall, when it comes to all the cost lines, we have seen a trend where actually, despite the fact that we have increased the employees by 70% last year, we have been very efficient on the cost side, and that means that the EBITDA has been flat or even slightly improved during the last year. And this is very important because this again, if we can keep this very tight cost control, it means that when we then start to add revenues, the EBITDA will start to turn north and that means that we are on our way to getting first EBITDA positive, then EBIT positive and by 2025 cash flow positive.Next slide. So what about the future revenues? Future revenues can partially be described by orders received already. And here on the left-hand side, you can see that what we have earlier been talking about that there is a lag between orders received and when they are recognized as revenues. So last year, our revenue increased by some 200%, and we reached EUR 2 million in revenue, but actually, our orders received increased much more and was more than EUR 5 million. And on the right-hand side, you can see the number of projects contributing to revenue. You can also from that calculate that the value per project has been increasing. And actually, we have seen that there is a positive pricing momentum in the marketplace when it comes to our situation.If we then go to the following slide showing orders received and look a little bit deeper into it. So on the left-hand side here, you can see that in 2020, orders received exceeded EUR 1 million, and then it increased by a factor of EUR 5 million -- to more than EUR 5 million in 2021. At the same time, the revenue recognized went from EUR 0.7 million to EUR 2 million. And if you look at the right-hand side, you can see that actually the orders received in the fourth quarter of last year, in the most recent quarter was EUR 2 million, equaling the full year revenues recognized. And that was also 5x or EUR 0.4 million orders received in fourth quarter of 2020. We have seen a fivefold increase in orders received and the revenues have been increasing slower than that and that, of course, indicates that our order book has been growing faster than 5x. When it comes to going forward, of course, the EUR 5 million will help us. And then, of course, for this year, we expect naturally to sell more than we sold last year.Next slide, please. If we look at the KPIs, I want to draw your attention to 2 numbers. First of all, the CapEx, the investments in property, plant and equipment on the left-hand side was EUR 7.7 million last year. And this is in a year when we have built or are building have ordered 2 GMP lines, we have started the ERP project. We have started the project with putting in a big CO2 tank and so forth. So I think that this has been a sort of a very busy CapEx year, and this means that going forward, we think that this is on a good level, very good CapEx level, meaning that we don't expect significantly higher CapEx on an annual level in the coming years. This is on a very good CapEx level already. And as you know, our lines are not so expensive and as we become better at planning and building them and so forth we feel that this is a good CapEx level.And related to that, I want to draw your attention also to the cash. So we had EUR 75.7 million in cash. That's almost SEK800 million. And that, of course, gives us a very, very strong position. So we are very, very strongly financed and for all the CapEx needs for building out the 35 lines in the coming years that we have communicated.If we then go to the final slide, the income statement. I would just point out that there is actually one line where I expect a little bit of growth also in this year when it comes to the cost side, and that is the IT expenses. So it grew from EUR 309,000 in 2020 to EUR 780,000 in 2021. And the reason for this is that, of course, we are doing the implementation of the ERP system and other IT systems, but also the fact that we believe strongly as Edward would say in automation and computers. So as we want to be more productive, we want to make sure that we are on of the edge of the technology from that point as well. And that is the situation where we want to invest a little bit more in IT in the coming year than in 2021. But basically, that is the line where we see the clearest change versus 2021 on an aggregate level, as I've said, we don't see big expense -- big growth in the cost lines. On the contrary, we see very marginal growth. And that means that when we get more top line revenues, you should have a positive impact on the EBITDA, EBIT and cash flow situation. That was my final slide.So I think we can go over to Q&A. Henri, please.

[Henri Von Haartman, Director of Investor Relations]

Thank you, Edward, Christian and Albert. Operator, we are ready for questions.

[Operator]

[Operator Instructions] Our first question comes from Lars Hevreng with Danske.

[Lars Hevreng, Research Analyst]

Can I just start, regarding your first target for 2022, 2 new GMP lines for the year? Does that mean they're going to be approved by regulators and to tech transfers, et cetera, intact and ready for shipments to clients? Or how far have you possessed with that they're going to be ready for 2022?

[Edward Olof Hæggström, Co]

Okay. Lars, thanks for the question. So it's clear that we have progressed very well. We have the clean room at very high levels. We're starting the [ IQ, OQ, PQ ] for that after that comes the isolator and then the lines and, of course, also the filing with FIMEA. FIMEA is always a little bit of an uncertainty they have the right to take 3 months' time. Short answer to your question is, I would like to see at least one of the lines operational and decide both lines to support. Operational means that we would have the FIMEA stand in place.

[Lars Hevreng, Research Analyst]

And just another question on the other target you have for the year. Biologics pilot line for GMP, could you elaborate a bit on what you may actually be able to deliver without having reached that target?

[Christian Jones, Chief Commercial Officer]

Yes, sure. So basically, it means that we have aligned that from a hardware and software perspective could be filed to FIMEA to obtain GMP stamps for it. It means also that we don't foresee to be able to do both the small molecule and to biologics line filings this year. What we can do with it is all the bullet points we showed in the deck basically help our customers on the biologic side with Nanoforming and the Nanoform biologics API could then be used in clinical trials by our clients and customers.

[Operator]

[Operator Instructions] Our next question comes from Christian Glennie with Stifel.

[Christian Glennie, Analyst]

Three and if we take them in order. The first one relates to, obviously, a key focus here, productivity. And the reference to doing 1.3 projects per line last year, 1.5 in 2021. What are sort of the gating factor and what do you need to do to get to that sort of 5 projects per line? Obviously, at the moment, presumably there's an element of having the project -- the incoming APIs and customers on time and all that sort of side of things as well as having your lines ready to move on between one and the next. So just elaborate how you -- what are the key gating items there to get to that 5 per year?

[Edward Olof Hæggström, Co]

Thanks for your question. First of all, it's important to remember that so far, we have only built capacity. We have not optimized for productivity basically at all. Starmap and Nano-targeting will help us choose molecules that are more suitable for Nanoforming, which means that there is a smarter -- faster ramp-up and also a faster way to get them Nanoformed to the specifications. Secondly, we will start to run recipes, which means that we have already now Nanoform so much that we know basically what kind of recipes one should try first, second, third, fourth. This will speed up things. Then, of course, the lines have been used much more. So we have basically gotten out all the bugs that there is always in the technology. And third or fourth, all the operators, they have more line hours under the belt, which basically means that they are just faster. Maybe a fifth bullet point will then be that we have put in place a system where we manage the lines as a fleet, which means that line utilization will go up. All these taken together, according to our calculation, should take us well above 5x.

[Albert Alexander Haeggstrom, CFO & Director]

Yes. If I may continue on that. So we already have examples of projects where the time for the project has been much less than what the time indicates from the 5 year. So we have actually have single projects where we have implemented this, and we know that it's possible. But then to do it on a large scale on all lines and all crews takes a little bit of time, but we are confident with that. Then related to your question about we need, of course, to get APIs in a sort of orderly way and getting them in an optimal way. And I think that is also one thing that will help us. But when the client knows us more when we have a more broad client base, we could actually have a situation where we have a -- with a large pharma, especially kind of a subscription model where they give us a certain amount of APIs every year to work on and also the fact that we have many clients make it easier for us to sort of book the lines a little bit like a hotel with different hotel rooms. So when you know that people are coming there and there and there, you can optimize it better both from a cleaning and from an API sourcing and then from an operating point of view.

[Christian Glennie, Analyst]

Okay. Then turning maybe to the -- on the commercial side, a couple of questions there. The first one was on -- Christian mentioned the significance of the major biopharma company. I just wonder if I could get a bit more insight into the importance, I guess, of that contract, what are you seeing there? And is it because it's multiple APIs? Is it the nature of that partner? Just a bit more detail that would be interesting.

[Edward Olof Hæggström, Co]

Christian, would you like to start and then Albert can [indiscernible] from a finance perspective?

[Christian Jones, Chief Commercial Officer]

Yes. I mean, I guess, we can't reveal identities of some of our partners, and we try to describe them in such a way that at least it gives an indication of the types of partners that we have. And I think the traditional major global pharmas that start up on the small molecule space, we would call them a global major pharma company. And then the companies that would have started off perhaps as biotechs and grown into large companies that would classify themselves as biopharma companies that potentially have both small and large molecules in that portfolio, we would describe it in that way. And the latter is the type of client that we brought on board more recently in the last quarter. So it's really as new clients. It's an important relationship. And we can't really say much more than that, unfortunately, in terms of the scope of the work because, where we can say that, we certainly will tell you and it's likely to be a press release, but we can't see any more than that now.

[Christian Glennie, Analyst]

Okay. That's helpful. And then maybe -- and then the follow-up on the commercial, what's the expectation of the focus of the team on sort of business development, you've had a nice progression, obviously, in terms of the client wins per year over the last few years. Is that pace sort of continuing? Or is it more expanding and delivering within some of these existing larger businesses? What's the areas of focus?

[Christian Jones, Chief Commercial Officer]

Yes, great question. So it's actually on both. So we have, as you saw, a really, really good group now of partners. And they are very important to us. So we want to work with them. We want to build the relationships to broaden and deepen those relationships, whether it's on a single molecule or on several compounds and ultimately support them long-term strategically as a partner. So those -- that effort from a business development perspective is, I would say, focused in that area. But equally, we want to bring on as many assets and partners as we can. And so I would say we're sort of focusing in both areas. However, what I would say we're doing probably slightly differently with both our existing partners and also new partners is really understanding the value that the technology can deliver to certain products, but also understanding the value that by Nanoforming that product, it could deliver to the end product and ultimately to the patients. And I think that, as Edward described, that Nano-targeting approach to be able to go into a client and talk a bit more specifically around the advantages of technology is something that's helping us to win new business with new clients and also build on existing business with our existing partners.

[Operator]

Our next question comes from Max Herrmann with Stifel.

[Max Stephen Herrmann, Head of European Healthcare Equity Research & MD]

Just a follow-up on Christian's. Just in terms of the number of projects you talked about having 30 cumulative projects now at the end of 2021. I wondered what the makeup of that was between 505(b)(2) opportunities and NCEs. And then maybe a bit more color in the NCEs in terms of what stages of development the programs are?

[Henri Von Haartman, Director of Investor Relations]

Okay. If I start and then Albert, you can check the fraction. So basically, there are both 505(b)(2)s and NCEs. Then when it comes to the various phases, we have basically from all the faces assets, and this is something that we have always expected. Still the numbers are too small to know whether they will be predominantly from a certain phase later on. But from a truly logical point of view, we think that there will be certain customers who want to come in already very early. And then there will be certain customers who want to come in around Tier 1, I would assume. Of course, the 505(b)(2) will be later than that. Albert, do you have anything to add on the ratio of 505(b)(2) and NCE?

[Albert Alexander Haeggstrom, CFO & Director]

I think that, as we have said earlier that we see a growing trend in 505(b)(2) interest, and we are still at a sort of quite low levels. We have them, but they are not a big part of the total, but we are seeing clearly a growing trend. We have also said that we don't want to do only 505(b)(2)s, even if it's lower risk and faster paybacks. We want to do both. I think that the industry is really waking up to 505(b)(2) probably in the coming -- it has already started a lot of interest, but it's clear that it's growing. Then if you look at the different segments like oncology and [indiscernible] and so forth, I think that we resemble quite a lot the industry numbers. And what is very good is that it is clear that this is a very broadly applicable technology. So we had very many different areas of APIs. So we are not only in oncology or only in something else. We have many, many different segments. And as Edward would say, the APIs are in different stages. We have preclinical, we have Phase I, we have Phase II, we have Phase III actually also. And then we have some type of [indiscernible] in the market. But the numbers are roughly according to industry and according to the numbers we've shown on the Capital Markets Day last year.

[Operator]

Next, we have a follow-up question from Lars Hevreng with Danske.

[Lars Hevreng, Research Analyst]

The 505(b)(2) projects, are they typically related to the IP holders, i.e., the big companies that have developed the companies originally? Or are they more typically related to other companies?

[Edward Olof Hæggström, Co]

That's a very good question. And if I answer like this, we have had discussions with both those groups, both people who own IP, which means that it's a question of prolonging IP and also people who want to use what I call the magic, which basically means that if you can take something on the market and make it a super generic. Christian, do you want to add something to this?

[Christian Jones, Chief Commercial Officer]

I would say that it's both on providing novel differentiation within existing products to improve them. And it's the other, which is basically looking at marketed products where the originator might not actually be interested in the product, but finding opportunities to add further value for patients. And I would say that we are flexible in both camps.

[Lars Hevreng, Research Analyst]

Okay. And can it also be that a collaboration you have with, for example, the non -- the company that does not have the IP, that these rights later may be transferred to the IP holder?

[Edward Olof Hæggström, Co]

So this is, of course, logically a construct, which is possible.

[Lars Hevreng, Research Analyst]

And the GMP collaborations that you have announced with the mid -- I think you described as a midsized European pharma, something like that. Is that IP holder or not?

[Edward Olof Hæggström, Co]

Henri, here I need to ask you for what have we publicly stated so far?

[Henri Von Haartman, Director of Investor Relations]

Yes. We haven't detailed that and we will not detail it today either. We have said that we work with the European international company on a [ dock buster ] draft.

[Operator]

As of right now, we have no further questions. I will now hand back to the speakers for a final remark.

[Edward Olof Hæggström, Co]

Henri, please.

[Henri Von Haartman, Director of Investor Relations]

Excellent. Thank you very much, everybody. So on behalf of all the Nanoformers, we would like to thank our guests today, also financial hearings and a special thanks also, of course, to the management presenting today. If somebody has some more questions, you are most welcome to contact us after this event, and we wish everybody a great Tuesday afternoon and evening. Thank you so much.