Arcticzymes Technologies ASA

OSE:AZT

Earnings Call Transcript 2024-Q3

[Michael Akoh, executive]

Good morning and welcome to ArcticZymes Q3 earnings report. My name is Michael Akoh. I'm the CEO of ArcticZymes and as usual, I'm joined by Borge Sorvoll, our CFO.

A quick look at the agenda and what we're going to cover today. We're going to share some highlights from the quarter. Then we are going to be talking about the commercial transformation that we're currently going through as well as the next stage of that commercial transformation. And I'm going to touch upon our strategic priorities and then I'm going to follow up with a look into sales for the quarter and then the Biomanufacturing updates in regards to agreements. And then I look into the future in regards to our coming portfolio. Then Borge is going to take over and go into the financials. And finally, we are going to take questions.

There's no doubt about that Q3 was a challenging quarter in terms of revenue. We made NOK 24.1 million and it was in particular the Molecular Tools segment that had a soft quarter. That also is reflected in the EBITDA numbers, where we had loss of NOK 2.3 million. We also had a rather high activity level and Borge is going to get into the details on the financial side later on in the presentation.

I'm really, really pleased also to announce that we hired a new VP of Sales. His name is Paul Blackburn and he started his job at ArcticZymes in September. I'm going to get back to a small presentation on Paul later on in the presentation.

As we talked about during Q2, then we are working on securing an OEM agreement for one of our SAN enzymes and we have progressed further in the negotiation with one of the key partners. Moreover, we have also made progress on the CDMO partnership, where the end goal is to become the nuclease on CDMO's platform. More information on that later on in the presentation.

I'm really, really pleased to see that we, during the quarter, did a publication on a new RNA restriction enzyme and that publication was published in Nucleic Acids Research journal and that publication has really generated a lot of interest around this new RNA restriction enzyme. I'm going to also share more details about that later on in my presentation.

Then finally, we had a webinar together with our Austrian biotechnology partner acib and that was done in September. That also really highlighted some unique features with our SAN portfolio in terms of its ability to remove chromatin during the processing.

The SAN area is currently hot. By that I'm saying that there's a lot of interest in Salt Active Nucleases. It also means that we've seen the launch of a number of new competitive products in the area. What we did during the quarter was we released a whitepaper that clearly indicated that we still have a very attractive offering to our customers.

Commercial transformation. We have taken the first step towards a commercial transformation in the company, but now we have agreed with a new Board that we are stepping up our activity level and efforts within this area. We are aligned in terms of that now is our opportunity to accelerate the commercial transformation. We're going to build on some of the past successes that we've had in order to capture new market opportunities.

We often talk about ArcticZymes as a raw material component supplier. We want to get away from that notion and be known as a solution provider. Becoming a solution provider is something that is going to be core of what we're going to be working with in the coming quarters.

So we need to get closer to our customers. We need to get a deeper understanding of their challenges in order to help them do a collaborative approach to solve some of those challenges with our enzyme solutions. We've taken the first steps with various partnerships, both within the CDMO space, but also within various core viral vector facilities and we're going to intensify that effort in the coming quarters.

This is going to demand investment. It's not just going to be investment in headcount, that's part of it. Ramping up the commercial organization is also going to be investments in new activities, more marketing campaigns, more sampling campaigns. So it's going to be a comprehensive approach to ensuring that we become a customer-centric organization that focuses on providing solutions for our customers and not just an enzyme.

So I'm really excited about this. It is a significant change from where we have been and it is, as mentioned, also going to demand a significant investment in the coming quarters, which we should see also reflected on the cost side in the short run. But of course, this is also going to be something that is going to pay off in terms of revenue towards the second half of next year.

So the incremental steps in this transformation journey has been taken, as I'm going to get back to, but what we're doing now is we are going to accelerate those initiatives.

A recap of our strategic priorities. Short-term, it is to continue the journey to become customer-centric. That means investment in commercial part of our business. It means that we're going to strengthen our commercial arm significantly in regards to both tools as well as headcount.

We also believe that it's not enough for us to do it alone. We have to also work together with partners. One approach is, of course, to do an OEM agreement on SAN that we are progressing at the moment. On the other hand, we are also working towards becoming partners with a number of CDMOs to ensure that we are their nuclease of choice on their viral vector platform. Selling scientists to scientists is key also to penetrating this market further.

During the quarter and throughout the year, we have been doing whitepapers, talks, publications as well as webinars and this has created a lot of good leads for our sales team. It's also been part of building our position as being a customer-centric organization and it is something that we are going to continue to invest in during 2025.

In order to sell into the pharma and biotech space, you have to ensure that you have your regulatory compliance in place. That's been a significant priority for us during 2024, in order to take some of our existing nucleases and make them in a GMP grade. Next month, we're going to launch a new GMP grade enzyme and before the end of first half next year, we're going to launch yet another GMP grade nuclease. Next month, we're also going to launch a more sensitive version of our ELISA kit that works in perfect combination with our nucleases.

As you're going to see, we had a weak quarter in terms of our Molecular Tools sales. We still believe that Molecular Tools, molecular enzymes, is an important part of our future, but we have without doubt, have had a focus on the Biomanufacturing part of our business, both in terms of working on the GMP upgrade of the current enzymes and in the general marketing approach.

We are going to in the coming quarters, also return to focusing more on Molecular Tools and to ensuring that we have an attractive positioning and offering to our customers. We're also going to bring in people in our business development team that have a very clear experience base within this space and within selling Molecular Tools enzymes.

If we're looking more on the long-term, then it's important for us to innovate, that's the heart of ArcticZymes. We want to provide innovative enzymes. So far, the focus has been on the Biomanufacturing part, to work within the cell and gene therapy space, but now we are also going to broaden that further by looking into the mRNA therapeutic space.

If you look at that space, you are going to discover that, first of all, there's a lot of challenges in regards to producing mRNA therapeutics and a lot of those challenges can be solved by using enzymes. I'm going to get more or get back to that later on in the presentation with our new RNA enzyme prototype.

The space where SAN is present is, as mentioned, hot, meaning that we are seeing increased interest from our customers. We've seen that the customers are really starting to see the benefits of going from a traditional nuclease to a Salt Active Nuclease and then we also, of course, seeing that competition is increasing. So that's why we also have a focus on looking into the development of next-generation SAN products.

Two, long-term, we need to develop and commercialize new Molecular Tools enzymes. During Q3, we had a strategic R&D review of our future products road map. We've now identified a clear list of new enzymes where there is a market need and that's coupled with our capability to actually commercialize and bring an enzyme to market. Long-term as well, M&A opportunities opportunistically, that's still on the table in order to build our portfolio, broaden our portfolio faster, strengthen our manufacturing capabilities as well as enhancing our commercial reach.

So what have we done during the year? And what are we going to do going forward? First of all, start of the year, we took a decision that we needed a more balanced organization that led to the closure of the Oslo Application Lab and ensured that we had the ability to invest more in the commercial organization.

We, as mentioned, have done a strategic pipeline review and we now have a very clear future portfolio road map. That has also been validated by external key opinion leaders as well as advisory boards. So we have a portfolio going forward that's aligned very closely with market needs.

GMP compliance and a broadening of our portfolio into not just cell and gene therapy, but advanced therapies in general is something that we are working with at the moment and that's going to be ongoing for the next quarters. We're going to continue to increase the use of scientific marketing and we're also going to continue to involve R&D more in that process.

We want to be able to sell scientist to scientist. That is the road to success in this market. SAN OEM and CDMO partnerships, we've also progressed on that front since Q2. It's all about increasing our market reach through external channels.

Finally, what we're working on at the moment, that is really to reorganize and transform our sales organization and also to work a lot more with our lead generation. We are going to see, as mentioned, investments in this space going forward. It's all about accelerating growth with a market-relevant portfolio.

So this is without doubt a journey. It's a journey where we have a very clear picture of what we have to do and we are executing on the key initiatives. An example of what we have done during the year is that we have had a number of activities, namely webinars, as I talked about, a number of whitepapers. We've had talks at congresses and we have had a number of publications.

And I'm really, really pleased to also report back that after the European large congress in cell and gene therapy, the ESGCT that occurred 2 weeks ago in Rome, we saw a number of posters from external parties highlighting the uniqueness of our SAN portfolio. So although the market has changed in terms of players, we are still offering a very competitive portfolio and that's confirmed by external parties.

In order to drive up transformation, you need to have the right people onboard. One of those employees or people is our new VP of Sales, Paul Blackburn. He started in September 2024. He has a Ph.D. in vaccine development and a degree in Medical Microbiology. He has more than 20 years of experience in life sciences with a strong technical and commercial track record. He's built his leadership experience from very successful companies such as 10x Genomics, Thermo Fisher, Bio-Rad and GE.

He has started out by conducting a comprehensive assessment of the sales team, our structures and processes. And his focus areas are going to be looking into and working with the team dynamics, looking at the capabilities and developing the team as well as optimizing their ways of working.

And the end goal of this is to ensure that we are really customer-centric, that we are close to our customers, that we know what our customers expect from us. And I am going to present Paul at one of the upcoming quarterly earnings calls.

Moving on to our sales update for the quarter. It was, as mentioned, a weak quarter, especially in terms of the Molecular Tools segment. We had quarterly sales of NOK 23.3 million and 58% of sales came out from the U.S., which is a larger percentage than normal, but that's due to the fact that we had a key account that did not place the amount of orders that we anticipated.

A deeper look into Molecular Tools. A weak quarter, but also a quarter that was really impacted by the lack of a major order from a key account. And part of this is also due to the fact that the key account still has a lot of stock at hand. It accounted for 44% of sales, the Molecular Tools sales and we still expect good organic growth opportunities within this segment going forward, especially within our Endonuclease as well as Polymerase product offerings.

Turning to Biomanufacturing. Then, of course, this has been a major focus for us, both in terms of upgrading our compliance as well as our sales and marketing initiatives. Sales came out at NOK 12.7 million. So I'm pleased to see that during the last 3 consecutive quarters, we have managed to grow this business.

Without doubt, 2024 so far has been an extremely challenging macroeconomic environment for especially smaller gene and cell therapy biotechs. It has been extremely difficult for these companies to get funding. And these companies are part of our core customer group within this segment.

So seeing a positive development in this environment shows a lot in terms of both our team as well as our product's performance. It accounted for 56% of total Q3 sales. What we're also seeing that is positive within this space is that our SAN HQ GMP is starting to pick up in terms of sales.

As mentioned, there's a high interest in this segment also from competition. And this means that there's also a validation in regards to the Salt Active Nuclease segment on the market. We've also seen an increase in the number of unique customers. So the customer base has expanded throughout the year.

Then I'm going to move on with a Biomanufacturing update in terms of the competitive picture. With all the new salt active nucleases that have been launched within the past quarters, it was important for us also to publish a whitepaper in regards to the performance of our Salt Active Nuclease portfolio.

And on the right hand, you can see the result of our investigations. And you'll see that with M-SAN, we still have a very competitive offering for lower salt conditions. And with SAN HQ GMP, we have a very attractive offering for higher salt environments. So in total, we still have a very strong portfolio that we're going to grow in the coming quarters.

We've also received, as mentioned, positive feedback from CDMOs during the congress in Rome that I mentioned. And we saw posters presented from CDMOs where they also clearly showed that our enzymes, our nucleases still stand out. So it's great to see validation like this from external parties.

An update on the SAN OEM. It's proceeding according to plan. We are in ongoing discussions, not just with one potential partner, but with several partners. One of the discussions has come further. And here, we are discussing the terms of reaching an agreement in regards to the new Salt Active Nuclease GMP grade that we're going to be launching next month.

And in terms of how the agreement is going to look like, then it is an OEM agreement. This means that we are most likely going to be providing bulk material and that bulk material is going to be repacked and rebranded under the partner's label.

We are working currently on the term sheet where we are having negotiations as we speak. We expect that there is a possibility to conclude the term sheet, execute the term sheet either late Q4 or early Q1. But that's all going to be contingent on successful negotiation. But so far, things are progressing according to plan. And we are, in many aspects, aligned in terms of the objectives with our partner.

The revenue impact, we anticipate that contingent on a successful agreement that contribution of this agreement is going to start Q2 or Q3 2025. Then I'm sure that some of you are going to ask why is it taking so long in order to reach the agreement in order to get the revenue impact.

This is because this is really an agreement where the partner and ArcticZymes, we are committed to making this a success. So in other words, the partner is going to also take on full product ownership. The partner is going to generate their own data and the partner thereby also needs time to do this.

As mentioned, we're talking about a deal on a product that we haven't launched yet. We're going to launch it next month. But I am excited about the possibility of reaching an OEM agreement because it is going to provide an extra arm into the market and going to help us penetrate the market with more accounts and also some larger accounts.

CDMOs is also an important part of our commercial strategy. The end goal is, as mentioned, to become the standard nuclease on the CDMO platform. And if you look at the trend in general, then there is a return to the CDMO model in the market space, meaning that people are going to outsource to where the expertise is. It's challenging to produce viral vectors. So through a partnership with a CDMO or with several CDMOs, we're going to be able to expand our reach significantly into several new projects at once.

So where are we? M-SAN and SAN have been tested in an initial study with a very, very good data outcome at a leading viral vector CMO. That data was presented a couple of weeks ago at the European Society of Gene and Cell Therapy in Rome that I've talked about. Looking on the right-hand side, it's very clear, I think to everybody that when we benchmark or when they benchmarked our M-SAN up against the industry standard nuclease, they saw significant improvements in everything from downstream recovery to the reduction of DNA contamination to a minimization of the vector aggregation.

So all leading to a cleaner, higher quality lentiviral vector. I think the data really speaks for itself. So it was great to see this data being presented at a major conference last month. Next step for this CDMO is to start utilizing M-SAN for new projects on their platform. We expect now that this integration is going to take place next year.

So what about the future? What's the portfolio going to look like? How are we going to expand our Biomanufacturing portfolio? Here, the clear strategy is to be able to expand into a more broad field, expand into advanced therapies, all new modalities. And the reason for this is that if you look at the cell and gene therapy space, then the use of enzymes is limited to nucleases.

When you look at, for example, the production and analytical process of mRNA, then you see that enzymes are in widespread use, not just in one phase, but in several different applications. So that's why mRNA is so interesting for us.

Secondly, it's extremely challenging to manufacture mRNA. It's extremely challenging to analyze mRNA. So there's a lot of pain points that we, with our enzyme knowledge can help solve. We have a project that I have also talked about previously, where we are exploring new innovations within the field.

That project is supported by the Norwegian Research Council. But our first major innovation within this space, that is a so-called sequence-specific RNA cleaving enzyme. That enables a very -- yes, a very specific and controlled fragmentation of RNA. And that is extremely difficult to do currently, but it's very important to do in order to analyze, for example, RNA with LC-MS. What is even better in terms of this enzyme prototype is that we have filed a patent last year, February 7 and further filing is ongoing to secure a broad IP and lead the market.

Currently, in regards to also our customer-centric transformation, we are in close dialogue with a number of potential partners/customers. We see multiple applications that are possible and we are currently testing it for improving analytical methods.

So as we speak, we are in contact with a number of different interested partners with testing ongoing at 7 sites. And of course, what has really generated interest and made a lot of potential partners reach out to us, that's the excellent work that our R&D team has done in regards to putting this publication together that you see on the right-hand side and getting it published in a very prestigious journal, the Nucleic Acids Research journal.

So we are going to continue to work more with getting our research published because this is an excellent way to generate interest, go to market and also really establish strong customer links, partner links from the start and also to ensure that we understand all the various application areas for our new enzymes because this is really cutting-edge innovation. So we are going to be able to position the enzyme in the right way for the right application when we launch in close collaboration with partners and customers. So exciting stuff.

Now Borge is going to look into the expenses and the profitability of the quarter.

[Børge Sørvoll, executive]

Thank you for that thorough introduction, Michael. And as in previous quarters, I will take you through some of the profit and loss and some of the highlights for the quarter.

And looking at the financials for the third quarter and the first 9 months of the year, sales continue to be challenging, as Michael has stated out -- stated. But we do, however, have fairly good control on our cost, even though expenses are a little bit higher than previous year. They are also a little bit higher than the second quarter this year, but that was expected as well, but it is NOK 1.5 million lower than we saw in the first quarter this year.

As Michael also said, our revenues ended up on NOK 23.3 million. It's a decrease from the same period last year. But you can see revenues in this quarter are also positively impacted by NOK 0.8 million related to grant recognition here in the third quarter here.

Cost of materials are back to normalized levels after a challenging second quarter where we had to dispose some ELISA kits in our inventory and we ended up with NOK 1 million in cost of goods for third quarter.

Personnel expenses are slightly higher than the same period last year with NOK 16.2 million versus NOK 14.8 million in the same period and capitalization of projects and personnel expenses is something we experienced to a larger degree over the last few years. And in the third quarter, NOK 1.8 million were capitalized on projects, whereas NOK 0.9 million on that is related to our personnel.

In the second quarter this year, NOK 2 million were capitalized on projects, whereas NOK 1.2 million was related to personnel. And to compare with 2023, we actually capitalized NOK 2.5 million in the same period related to personnel expenses.

And if you do an adjustment on the personnel expenses with the capitalization here, our personnel expenses would have been NOK 17.3 million last year, whereas in this year, they would be NOK 17.1 million. So basically meaning that in general, we have reduced our personnel expenses this year compared to what we did last year. And that also includes that we have had a 5% salary increase across the board in the organization here.

Our other operating expenses are slightly higher this quarter with NOK 9.9 million compared to NOK 8.1 million in the same period last year. And the main difference is and primarily explained by the ERP project that we have talked about in the past and I will also come back to that one, where we expensed NOK 1.2 million in the third quarter.

We have also, as Michael stated, ramped up our commercial activities this year with travels, scientific documentation and market data through external parties that has impacted our numbers as well. And part of the increase is also related to the grant recognition here because we are using external parties as well to support us with the grants. And in the third quarter, we had NOK 0.8 million in external costs related to the grants that we had in the first -- in the quarter as well.

Our third quarter EBITDA ended up on a negative NOK 2.2 million versus NOK 7.3 million in the same period last year. But as we talked about, there are some extraordinary items that impacted the underlying results and that is something I will highlight in the next slide as well.

For the first 9 months, revenues are at almost NOK 80 million versus NOK 90 million in the same period last year or a reduction of NOK 10 million or 11% decline. The expenses are at NOK 79.1 million versus NOK 70.4 million in the same period last year or an increase of 12%. And the majority of this increase is related to extraordinary items such as the ERP project and that we have capitalized less on projects compared to what we did in the previous year. And of course, the ERP project is something that we have talked about at least over the last few quarters and this is something that we plan to finalize now in the fourth quarter.

And looking at the graph on the left-hand side, you can also see that our EBITDA margin has -- is actually negative for the first time in several years with minus 10% in the quarter. And this is something that we, of course, want to improve moving forward.

Next slide, please. And as I talked about in the previous slides, there are some extraordinary items that have impacted both the first quarter, second quarter and also the third quarter. And in the third quarter, we spent NOK 1.2 million on the ERP implementation.

This is a project that is expected to be finalized in the second half of 2024 and we do actually have a go-live date on the 1st of December or in 3 weeks' time do we plan to go live with this project here. And the ERP investment is a key project now in 2024 as our current solution is outdated. And the new solution will ensure a more forward-looking platform, incorporating new tools and efficient ways of conducting our business.

And it will also ensure that we can scale up the business when the growth comes again. Also, when eliminating extraordinary items for the quarter, adjusted EBITDA for this quarter would be NOK 1 million compared to NOK 7.3 million in the same period last year.

Next one. The cash balance and changes in cash is, of course, a result of our sales and the investments that we carry out on a regular basis. And changes in cash and short-term investments were actually positive with $0.9 million in the third quarter. And this is primarily influenced by we had a $0.5 million in positive cash flow from operating activities.

We had a negative NOK 1.8 million in changes in cash flow for investment activities and we had $1.1 million in positive cash flow from financing activities, primarily from a capital increase we did beginning of the third quarter here.

Our short-term investments in liquid assets also increased by $1.1 million as well. And per end of the quarter, our cash position was more or less unchanged from the last quarter, where we had just in excess of NOK 170 million. And as I've mentioned in kind of previous quarters as well, due to technical reasons, we have reclassified some of our investments in short-term assets into -- from cash equivalents to short-term investments. And this means that we had to change around NOK 72 million in cash over to short-term investments or other assets.

And with a cash and short-term investments position of around NOK 240 million per end of the quarter, I will hand it over to Michael now, who will also give us some further insight into what the outlook and what to expect now.

[Michael Akoh, executive]

And that was better when I switched on my mic. Thank you, Borge. The outlook, SAN OEM opportunity, we are working on a term sheet currently and contingent on a successful negotiation, we expect that to be finalized late Q4 or early Q1. And the expected contribution to SAN revenue growth is going to come from Q2/Q3 2025.

CDMO platform progress, we've seen the successful evaluation of SAN by a CDMO partner presented at the congress in Rome last month. So it's being positioned now for platform implementation in 2025. In terms of expanding the portfolio, then over the next 8 months, we're going to launch 2 new GMP grade nucleases and a more sensitive ELISA kit. So that's going to solidify our position with a leading nuclease portfolio in the cell and gene therapy space.

In terms of strategic investments, then we're going to have an increased focus on the commercial transformation to enhance our market penetration and in general, establish a more customer-centric organization. This is currently the outlook.

Planning is ongoing in regards to the commercial transformation. So the exact number of headcounts, the exact investment level remains to be seen. But we are also talking about focusing the current resources that we have more towards the commercial transformation to support the commercial team. So an example of that could be R&D personnel that would enter into a more commercial position.

Then I would like to thank you for your attention. I'd like to thank you for your support. And I would like also to now enable some questions that we'll be happy to answer.

[Børge Sørvoll, executive]

Okay, Michael, we have received a few questions online here.

And I think with one of the last things that you said, can you please quantify a little bit more on the significant investments that you're making? How will OpEx be affected? How many people will be hired? Or is it still too soon?

[Michael Akoh, executive]

It is still early days as what has really been important for me is that we got the correct, right leadership team in place. Our new VP of Sales, Paul Blackburn, he started in September. So he is currently working on the plan and that plan has to be approved by the Board during the December meeting.

So I'm not going to comment currently on the exact numbers for OpEx spending. But I'm going to say this much, we have to be bold. We know we have a great product portfolio. We know that things are heating up in the market space. We know that there's increased interest from customers as well as from competition within the SAN space. So it's really time now for us also to ramp up and be able to penetrate the market faster.

[Børge Sørvoll, executive]

Okay. Thank you. Can you also provide some additional information around the lack of order from the key customer within the Molecular Tools now? Do you know if this is isolated to Q3? Or is it more a destocking that can be expected going forward? And also, why do they have such a big stock? Have they not used so much enzymes as before? Or how do you see this? And also, what do you think we can expect for the fourth quarter?

[Michael Akoh, executive]

Yes, there was a lot of questions in regards to Molecular Tools. As mentioned, Molecular Tools is expected to grow during 2025. In regards to the key accounts that we're currently working with, they without doubt, have enough stock of some of our core enzymes also going into Q4.

So it's not a matter of just an order phasing. It is also because they have enough of the enzymes that they purchased from us in stock. I do, however, expect that we are going to be able to see an improvement on the Molecular Tools sales in Q4. But it is, of course, extremely dependent on one key partner that we are currently in close dialogue with, but it's premature to go into more specific details in regards to an actual number.

[Børge Sørvoll, executive]

Okay. Thank you. Moving into the Biomanufacturing side of the business here. Can you say something about how many CDMOs you have tested M-SAN or SAN GMP?

[Michael Akoh, executive]

What I can say is just in general, we have seen an increased interest from CDMOs working with -- in the viral vector field. But in regards to the specific details, then we are, of course, trying to work very closely at the moment with one specific CDMO that is an expert within viral vector manufacturing. And there, we have come really far in becoming a standard nuclease, something that we have not been close to before.

[Børge Sørvoll, executive]

Okay. Can you also say something about the number of unique customers for SAN GMP here? Can you also quantify this number?

[Michael Akoh, executive]

I'm not going to go out with specific details on specific enzyme. Other -- what I'm going to say is that in terms of the SAN HQ GMP launch, then we are seeing increased traction throughout the past quarters. So that is important due to the significant investment that we have done in launching this enzyme.

[Børge Sørvoll, executive]

Okay. Thank you. Regarding SAN HQ GMP neo and the M-SAN GMP, why have you prioritized the neo before the M-SAN product? And how does it differ from the other SAN products? Can you say something about that?

[Michael Akoh, executive]

It's not a product that we have launched yet. But what I can say in regards to the -- why we have prioritized as we have, it's simply a matter of getting the most enzymes out as fast as possible. So this was how it could be done. The M-SAN version of GMP would not be able to be launched that much faster due to the development processes that we have. So that was why we decided to go with the neo version first.

[Børge Sørvoll, executive]

Okay. And one more question regarding new customers within Biomanufacturing field. I see that you have stopped reporting on it now in the third quarter. Can you elaborate a little bit on the number of new customers in this quarter?

[Michael Akoh, executive]

In general, what we are seeing is that the competition also monitor our calls very closely. So we are going to be careful in the future to go out with too many specifics in regards to customers and specific sales on specific enzymes.

So I'm going to just say what I said previously that we have seen an increase in our customer base throughout 2024 in the Biomanufacturing space. And a lot of this is really related to the marketing activities that we have done throughout the year, especially we have had 2 very successful webinars and we've also had a successful couple of talks at various congresses. So that has generated increased attention. It's also generated an increased number of samples going out to customers, meaning that customers are testing out our enzymes.

[Børge Sørvoll, executive]

Okay. Thank you. A few more questions before we will round this off. When can we expect [ EcoToxN ] enzymes on sale? Do you have a view on it?

[Michael Akoh, executive]

On when we can expect EcoToxN enzymes on sale? I don't have any comment on that. If you can ask a follow-up question or what you're thinking, then that would be good.

[Børge Sørvoll, executive]

Okay. We can see if we get some more on that one. I have a last one here then. Investments going forward, do you have any numbers on it? And what do you expect, what kind of investments do you plan to make now in the coming year?

[Michael Akoh, executive]

Yes. It's going to be a continuation of what we have already done in terms of investments in marketing activities. So what you have seen this year is you have seen we have been working on getting publications out. We've been working on webinars.

We've been working actively at our congress participation in terms of talks. Those activities will be continued. But we are also going to look into the commercial organization and going to add resources where it makes sense.

To give you a bit more flavor on it currently, then I can say that we are looking into also resources that can support the sales team with generating leads. So we can expect that that is going to be an area where we are going to focus and we can also expect that that is also where potential new headcount is going to be invested.

But also want to just emphasize, we are not talking about a doubling of the sales force. That's not what we are talking about. But we are talking about a significant restructuring of the way the commercial organization works.

[Børge Sørvoll, executive]

All right. I don't think there are any more further questions that we have, or any last words from your end before we round this off or...

[Michael Akoh, executive]

No. I want to thank you for spending your morning with us. There is no doubt that the quarter was weak, especially on Molecular Tools sales. But being out talking to customers, being at the congress last week in Rome, that gives me a lot of confidence in the future.

If you look at how many potential customers that visited our booths, how many dialogues we had, how many posters that also mentioned our enzymes, that paint a clear picture to me that we are on the right track, but we are also challenged currently by especially a difficult macroeconomic environment. We are making progress on key fronts in regards to partnerships, both with CDMOs as well as in terms of a SAN OEM agreement. And those initiatives are going to be key to a successful 2025.

[Børge Sørvoll, executive]

I think we round it off with those final words here, Michael. And I think we thank you, everyone, for participating and joining this conference call.

[Michael Akoh, executive]

Yes. Thank you.

[Børge Sørvoll, executive]

Okay. Bye.