Biotest AG

XETRA:BIO

Earnings Call Analysis

Earnings Call Transcript 2022-Q3

[Operator]

Hello, ladies and gentlemen, and welcome to the Biotest AG Conference Call regarding the Third Quarter Results in 2022. [Operator Instructions]

Let me now turn the floor over to your host, Monika Buttkereit.

[Monika Buttkereit, executive]

Hello. Good morning, ladies and gentlemen. It's a pleasure to welcome you today to our 9 months call. As usual, you will find the presentation on our website, the Investor Relations Publications and then Presentations.

With this very short introduction, I would like to hand over to Michael, who will give you further information.

[Michael Ramroth, executive]

Thank you very much, Monika. And indeed, I would also welcome you on this wonderful Monday morning. Wonderful to respect. First of all, sun is shining here in Dreieich close to Frankfurt. And secondly, you may have seen already that we have published 2 press releases this morning with pretty good and very exciting news.

And to make you familiar with those issues, I have brought my team this morning. I'm also waiting Jorg Schuttrumpf, CSO of Biotest. He will give you an update on our R&D projects. And for the first time, I welcome Peter Janssen, COO and successor of Georg Flob, and he is responsible for production, supply chain planning, product development, also for engineering and for sales and marketing. And the last responsible area of responsibility gives us the best joy for this morning. And therefore, Peter, please take over to make us familiar with the latest development.

[Peter Janssen, executive]

Thank you very much, Michael. Also, nice to meet all of you, and welcome to this morning's meeting. I'm also very happy and also honored to announce that we've got the national authorization for Yimmugo, which is our new immunoglobulin. Yimmugo, let's say, that the brand name we have chosen IMU in the name stands for -- speaks for immunoglobulins or antibodies, wwhich is one of the most important products currently coming out of plasma proteins. The goal at the end of the sentence is standing for our future-oriented vision, go for the future. Around it, we have a symbol of green and blue dots, really, these are colors from nature, which is symbolizing tranquility, but also depth and trust and that really stands for the protection of both our patients as well as our nature.

And at the very beginning of this logo, we have a Y, a letter Y, which is really a representation of immunoglobilin or an antibody, where, let's say, the top part of Y really are seeking for antigen. So yes, what is Yimmugo? It's a highly tolerable replacement therapy, and it's also sustainably delivered. Currently, the Yimmugo is a 10% immunoglobal in preparation for intravenous treatment. So it's a sterile vial with injectable liquid. It's not only produced through an innovative and unique manufacturing process resulting in IgG with higher efficacy and tolerability, but also the production process is more sustainable.

In terms of, let's say, improvements, it's certainly a product with proven higher efficacy. It's really well tolerated, favorable safety profile, injection speed is, I'd say better than the average. So we have a convenient dosing schedule, rapid infusion rate, like I said. And again, innovative and sustainable manufacturing process really speaks to this product. On the pictures you can see representations of 5, 10 and 20 gram packaging.

It's not only a product, it's also a process, together with that process a totally new manufacturing, let's say, expansion that we started in 2013. So nearly a decade ago with, let's say, planning, construction of the facility, construction of the process and also ancillary buildings, for instance, for storage for -- but also supply of ethanol, also energy, et cetera. So it's a totally new expansion of this, let's say, site here in Dreieich, Germany, which will really expand not only production capacity, but also the number of processes and products we can deliver and also, let's say, the yield of those different processes. So it's really a novel concept for the site here, but it's also something that could be later replicated to other locations.

This building is a multistory building, and actually the production process uses gravity, where plasma is really -- plasma from donors is really brought to the top level and then in successive stages further fractionated into different proteins and purified to bring high-quality intermediates or drug substances. It's a green building also. The building was made in -- with local pollution and low emission materials. Like I said, also the gravity concept conserves energy. Also during the production process, many environmentally friendly chemicals are used where possible as compared to, let's say, chemical, yes, pharmaceutical products is really a quite green production process where, let's say, starting with donated plasma. A lot of the -- yes, we use a lot of ethanol, so alcohol and water in the process and some chemicals but a really sustainable way. The yield is higher than before. That means for every protein that is produced, less plasma is consumed, but also less energy, less other materials to get to the same outcome in terms of products.

The waste in terms of heat is reutilized for air conditioning. So a lot of the waste streams are reutilized, also water is reduced -- water consumption is reduced and less waste produced. So really novel concept, like I said, later stage could probably be expanded, replicated at other locations.

So, and to summarize, if you go to the last slide, Slide #8, it's really something that -- that will be very important for the future profitability of Biotest. It's the first product we make from this new facility, which is a big milestone after, let's say, 10 years of preparation. It gives us the future of intravenous IG. It's a profitable product with a higher capacity, higher yield. Like I said, manufacturing will be based here in Dreieich to protect local shops, but also provide options for the future. Really sustainable focus, sustainable mindset, and that also translates into the DNA of the company, which is, yes, where we see that this is really important for our future. And again, also, this product could be also brought to the U.S. market that we are preparing for this, and the U.S. market is also a very important market for this product.

And with this, I would also -- because I was, let's say, bringing the message really. Thank my colleagues here in the room, but also the many colleagues at Biotest who have been involved in the planning for this, the preparation, the projects, the development, the research activities, but also will now be responsible for manufacturing the product, selling and marketing the product, and also all the support functions. So many thanks. And yes, big success for -- yes, that we can announce today.

[Michael Ramroth, executive]

Yes, indeed, Peter. Thank you very much. I think we can now really summarize that we have really BNL, Biotest next Level, with the first market authorization for the first product produced in this new facility in Dreieich. But coming now back to the figures of the first 3 quarters of 2022. Those numbers do, of course, not reflect the expected success of the new Yimmugo product, but of course, incorporate the costs which were invested here in order to get to this successful step of getting the market authorization.

So if we look at the income statement, which is printed on Page 10 of our presentation, it all starts, of course, with sales, which is EUR 360.8 million were being achieved in 2023. This is minus 3% less than in the same period in 2021. And you can see, if you look at the different segments, we have lost 3.6% compared to last year in therapy, while we earned 6% more revenues in plasma and services due to higher manufacturing activities. While on the other segments, the merchandise was EUR 0.8 million lower than in 2021. So altogether, as I said, we ended up with EUR 361 million in revenues and sales compared to EUR 371 million the year before.

That brings us after deducting all costs and expenses to an operating profit and earnings before interest and tax number of minus EUR 19 million compared to minus EUR 11.2 million in the year before. And you will see later on where this difference -- negative difference is coming from. Financial results and taxes, we had also to pay -- reduces the loss further to earnings after tax of Biotest Group in 2022, end of October -- end of September, sorry, with minus EUR 34.2 million compared to minus EUR 28.3 million in the year before.

If we look a little bit deeper into the sales development in the different regions of the world, you will see that we have been able to increase our sales and revenues in Central Europe and also in our intercontinent business, while in Middle East, Africa, France as well as in East South Europe, Central Asia and America our sales were lower due to lower business with the plasmatic Factor 8 preparations. And mainly if you look at the countries, it's not surprisingly that we have achieved less sales in Russia, Turkey and Iraq. And that explains why we are in total 3% below the last year's sales revenue.

Turning to the EBITDA reported. You know already that we differentiate a little bit between the operating income of the normal active business and then show also what we have paid for getting Biotech's next Level facility ramped up as well as our costs for the 3 Biotest next level R&D projects, which Jorg Schuttrumpf will explain in detail a little bit later on.

So starting with the reported earnings before interest and tax number of minus EUR 19 million, if we would add back all the EUR 33.6 million we had invested in getting Biotest's next level facility running and also adding back the EUR 29.8 million which we spent for Trimodulin, Fibrinogen, and IgG next generation in Yimmugo in the last 9 months, I think also the Biotest next level administration costs, we would end up with an adjusted EBITDA of EUR 44.9 million, which is the income -- the operating income generated by our existing products produced here in Dreieich at the site -- on the existing site.

Explaining a little bit more, our spending for Biotest next level activities on Page 14 of the presentation, you see that we spent EUR 33.6 million in the 9 months for facility costs, energy, building costs, maintenance, et cetera. Depreciation included in this EUR 33.6 million as well as personnel costs for commissioning, validating, and ramp up the facility, and also project administration accounts for EUR 0.5 million administration costs shown on the previous page.

The R&D costs of the first 9 months in 2022 amounts to almost EUR 30 million. We spent EUR 5.6 million for the development Yimmugo, the IgG next-generation product. We spent EUR 16.1 million for the development of Trimodulin, our IgM concentrate, and EUR 8.1 million have been necessary to be invested in the mainly Phase III studies for Fibrinogen. So all in all, we spent EUR 64 million in the first 3 quarters of 2022.

On Page 15, you see the reference sales, EBIT and adjusted EBIT figures in comparison to the last year. And as I've explained those numbers in detail right now. Jumping to the balance sheet. You see there's less movement over there. You see some -- on the current asset side you see a decrease in trade receivable, also decreasing cash, and on the other hand you see an increase in inventories and financial assets. So overall, is nevertheless, a decrease in the total amount of assets, and of course, corresponding a total decrease also in the total amount of equity and liabilities, end of September 2022 compared to end of December in 2021.

The decrease in cash is mainly driven by negative cash flows generated by the increase in inventories. Spending for working capital in total was minus EUR 13.7 million and also to pay interest and taxes of EUR 11.8 million. And therefore we ended up with this decrease in cash of EUR 51.1 million because also CapEx, cash flow for investing activities in the amount of EUR 24.8 million is also included in the numbers.

Now it's interesting probably -- most interesting to see what will happen in the remaining 5 to 6 weeks of this year. We in March projected that our sales will probably end at the same level as in 2021 with EUR 516 million. There might be some risk that it will be between 5% and 10% lower. I think we can reduce this range here to a minus 5%. With regards to year-end numbers, you see that currently we are minus 3% below last year's sales level, and this may prevail also the right number to the year-end.

On the EBIT side, I would like to remind you that end of March in 2022 we have given an operative guidance of minus EUR 20 million to minus EUR 25 million, but as the caveat with regard to the further development of possible negative impacts of the Russian war in Ukraine, we didn't know what's going on with COVID-19 activities we have seen and seeing right now, still a very high thickness rate in our facilities here. And of course, we were not aware how the gas shortage will develop over the year 2022. And therefore we said that we might end up with a minus EUR 40 million to minus EUR 60 million EBIT level at the end of 2022. Now since the year is almost over, we can exclude that the worst case will happen. So you want -- you can't expect that we end up with minus EUR 40 million to minus EUR 60 million, but we would keep the guidance that keeping all different influential factors, still existing -- seeing all those existing risk factors in place here, we might end up with a minus EUR 20 million to minus EUR 25 million on the EBIT level in 2022.

So nothing has, of course, changed. All the negative impacts and risks we have seen over the years that our sustainability goals are the same, our products, of course, based and made from renewable raw materials, we have a low environment impact in producing our prosperity in preparations. And also we are increasing our efforts to change to a climate neutral production as well as Scope 1 and Scope 2 on the international measurement scale by switching to green electricity, have voluntarily compensated measures for all greenhouse gas emissions and are actively, of course, installing additional photovoltaic installations here in order to reduce our emissions further.

With this general outlook on what's going on, sales and EBIT-wise until year-end and also on the sustainability level, I would now hand over to Jorg, and giving us an update on the R&D projects.

[Jörg Schüttrumpf, executive]

So good morning, everyone. It's my pleasure that I can give you today the R&D update. And I immediately switch to Slide #23. So what I want to do first is, of course, giving you an overview on -- with 2 different aspects. The first one is that with our development, and this you see here for the therapeutic areas, we really concentrate on our core experiences and core areas. The first one is clinical immunology, where we already have a fully pecific immunoglobulin Intratect but also a different hyperimmunoglobulins. -- In hematology, where we currently have Haemoctin and [indiscernible] with 2 coagulation factors and intensive care medicine, where we have 2 products, also with IgM and IgA antibodies, Pentaglobin and [indiscernible] and also human albumin.

And then the second aspect in our R&D development is that we really focus on the late-stage development of our products. And here, the main focus are the new products. And you listened already from Peter, the great news that we have now the marketing authorization for Yimmugo, our IgG next-generation product. And we are also developing Fibrinogen. And here we are already in Phase III, 1 Phase III trial is already completed. The other one is ongoing, and I will show you a little bit more details later. Then on Trimodulin also here, we started this year 2 Phase III trials, and I will show you also more details in the later slides.

Now it's not all the new products, but we are also developing further our existing products here, especially the immunoglobulins where we see a great potential for Cytotec, where we do a Phase III trial in a Cytomegalovirus infection during pregnancy. But we also have more activities where we collect real-life data and also work with different key opinion leaders on investigator-sponsored study to really develop these products further and collect data concerning indications where we see additional commercial potential.

Now let's switch to Slide 24 to show you the progress of our R&D pipeline. And here I have to say this year so far a very successful year for us. And a big part of this is also our new setup with Grifols as major shareholder, which had us really to accelerate our key developments. And this is not only reflected in the financials. Michael just showed that we are spending more money, but you can also see that we are progressing much faster. And this you will see also over the coming months and years how our programs will progress.

Now IgG next generation. Now Yimmugo, we already talked about the new registration. So what is coming next? And this is really to focus here on extending the usage in new fields, in new indications. And here we are preparing in the dermatology field a new high dose indication and a new trial with focus on Europe and the U.S. For Fibrinogen, we had a very successful interim analysis in the first half of this year in which we included a new indication, and I will show you some more on this also in the next slide. And we are planning a second interim analysis. And for this we are currently recruiting patients.

For Trimodulin, we started the first 2 Phase III studies, 1 in COVID-19 and 1 in severe community acquired pneumonia or SCAP. Both trials are now in the setup phase and we expect the first patient included in the first trial every day now - from now on. For Cytotect, we also performed a Phase III trial and this trial is recruiting as expected and going well. And then as I mentioned, for the hyperimmunoglobulin in Cytotect, Varitect, Zutectra, and Hepatect, we are performing noninterventional studies to collect real-life data. For Cytotect, this is especially in heart and lung transplantation. We see there for cytomegalovirus different antivirus coming up, and we see that there is a good option for us to combine our treatment also with new therapy options that are coming to the market.

For Varitect, we are focusing on herpes softer infections. Herpes Zoster, as you probably know, is a big problem for many, many people, and we see here additional commercial perspective and we see a lot of patients suffering where we think that Varitect could really make a difference in the treatment of this disease. For Zutectra and Hepatect, we are currently working on chronic hepatitis B virus infection, and this is together with different KOLs where we sponsor and support the investigator-sponsored studies from these investigators.

Now I want to go in the next slide really a little bit deeper. So we go to Slide #25. So for Yimmugo. One question that very often comes why do we need really a new immunoglobulin when we have Intratect, which is a great drug. And there are different things that are really important. First is we want to maintain the excellent efficacy, both in immunodeficiency, but also in autoimmune diseases. We want to maintain the excellent safety profile and the high quality we have. With Yimmugo now, we could further improve this with all the experience we have for concerning user friendliness, but also higher totality, then the optimized yield that Peter already mentioned, and this is the first immunoglobulin suitable for worldwide commercialization. We further can, with Yimmugo also use our new manufacturing process to get other proteins out of the plasma. And therefore Yimmugo is really the base for our development in the decades to come and a very important milestone today with this first approval.

Now let's switch to Slide #26. Our second new product coming out of the Biotest next Level plant, and this will be Fibrinogen. So we are developing this in 2 indications, cognitive fabinogene deficiency and acquired fibrinogen deficiency. For congenital fibrinogen deficiency, we already completed the trial. This was a Phase I, Phase III trial. These 2 parts. In the first part we demonstrated pharmacokinetics and pharmacodynamics. And in the second part we established the excellent efficacy and safety of the product. We overall recorded 175 bleeding events in 36 patients. And with this, this is the largest clinical trial in congenital fibronogen deficiency worldwide performed so far. The overall hemostitic response was excellent. We saw basically in all treated cases a successful treatment and this study is completed.

Now the other Phase III study is still ongoing, and this one is in spine surgery and pseudomyxoma peritonei surgery. This is a kind of complicated tumor surgery. And on the right bottom of the slide you can see the setup. Patients getthe surgery and then they have a major blood loss, and this is a decision to treat, and patients are then randomized either to Fibrinogen or standard of care. And standard of care can be fresh frozen plasma for spinal surgery or cryoprecipitate for tumor surgery. And then we measure the blood loss during and after the surgery and compare this to standard of care. The trial has a noninferiority study design. We had an interim analysis after 120 patients in June of this year, and this confirmed the planned patient number. So for us was very positive news. And in this first interim analysis it was really to see if our concept with 2 indications in this trial is working well.

Now we have another interim analysis plant after we included 80% of the patients in this trial, and this is expected to be in the first quarter 2023. We already recruited 168 of 200 patients. Now if you say 20% -- 80% of this is only 160, but I want to remind you that there are some dropouts in the trial in a setup like this is around 20% and then we have also a 2-month follow-up for these patients. So this is how we end up in the first quarter of next year with this interim analysis.

Okay. And then we switch to the third new product out of the Biotest next level facility. This was -- one is Trimodulin. And here I mentioned it already, we started 2 Phase III trials. Both trials are in the setup quite similar, but they are also very important differences and also the scope of these trials is very different. The first one is the Tri COVID trial. And this is the first one we started. The trial is for COVID-19 patients and the scope of the trial is to be very fast to include most of the patients already this winter and then during the next year. The trial is supported by a EUR 29 million grant from the German Ministry of Education and Research, and we intend here to include 334 subjects. These are patients on low flow oxygen or high flow oxygen, but noninvasive ventilation, and these patients show early signs of inflammation. So this is really to be fast on the market in this special COVID setting and as response to the pandemic.

Now our core indication here where we see also on the long term the big potential of this drug is severe community-acquired pneumonia. And here we started the ESsCAPEtrial. This trial has really a worldwide focus, also with many centers in the U.S. We plan to include 480 to 590 subjects here. Patients will be on invasive mechanical ventilation and with signs of inflammation with the CRP above 70 milligrams per liter. And all these patients included are [indiscernible] egative.

And then we switched to our last trial on Slide 28. This is the Phase III trial with Cytotect to prevent maternal to fetal transmission of cytomegalovirus. Most of you probably have not heard of cytomegalovirus in pregnancy. However, this is very important because it's the most frequent reason for mild formation during pregnancy, so even more frequent than for example [indiscernible] HIV. And there is currently no approved drug for this indication, and this we want to change with this Phase III trial. It's an open-label single-arm trial prospective multicenter and we use here in historical control group. We currently recruited 22 patients of the 80 patients planned. And there's a little disclaimer also. Of course, here the recruitment depends a lot on the course of the pandemic. We saw that with increased hygiene measures like washing hands or using masks, we have less infections with this trial. But overall I can say, it's really great to report to our progress on the R&D side. I hope you enjoyed the short update. And with this, I will hand over again to Michael.

[Michael Ramroth, executive]

Yes. Thank you very much, Jorg. Indeed, very exciting to walk through what's going on, on our R&D activities here. But of course, you will probably also be interested in our basics of our business. And here we can report that the demand for our products is still intact and it's still growing year by year. So on Page 13, you will see that the global IgG market development foresees a 5% increase year-by-year until the year 2027 and the same, even a little bit higher increase -- annual increase of 6% year-over-year. Now you will see -- we see right now and you will see also in the immunoglobulin market here, this high increase in demand or a yearly increasing demand is mainly driven by the Chinese demand for albumin.

Of course, to produce all those wonderful products which are requested by the markets, you need plasma. And we have reported over the last 24 months that it's really difficult to collect plasma in the United States. We have seen the COVID impact in the United States throughout dramatically in the year 2020 and 2021. It was almost 20% below the pre-COVID plasma collection level in 2019, but you can report that the centers in the United States have caught up a little bit and are collecting now more and more plasma and getting back to the pre-COVID levels. Those pre-covid levels we have already reached our European plasma collection centers, and you have probably noticed that over the last months we have steadily increased the number of centers we own and operate in Europe.

So on Page 32 you'll see that in the meantime we have opened 34 centers in Europe, in Germany, Hungary, and in Czech Republic. And we are doing that in order to really stabilize the supply of plasma in Europe -- collected in Europe. But of course, as you all know, in only 4 countries in Europe allow the commonization of common the plasma collection on commercial terms. We still are depending on the U.S. plasma supply -- the supply of U.S. plasma. And here we have, of course, the advantage of being able to take advantage of the huge network of Grifols U.S. centers in the United States, so that on a long-term basis also our facility will be filled with U.S. plasma coming from the Grifols centers.

So, and with this overview also on the basic of our business, I would thank you all for the interest in our presentation here and would open now the session for questions, and then, of course, answers from our side. Thank you very much.

[Operator]

[Operator Instructions] And we have -- the questioner is Marietta Miemietz of Pareto.

[Marietta Miemietz, analyst]

I actually have quite a few. The first is congratulations on the Yimmugo approval. Can you just talk a little bit about your European rollout plans and so the sales ramp you expect? The second question is on your guidance. So you touched downside scenario, which is obviously great news. But are you still expecting a loss of no more than EUR 25 million? Or could the loss be a little bit higher than that given that you're already at $19 million at the end of Q3, I mean to get to the $20 million which is the upper end of your guidance, you would obviously need to have an absolutely fantastic Q4 to try and understand the dynamics there.

And then I was just wondering if you could give us a brief update on the German energy situation, any risk of production disruption from gas shortages in 2023? And finally, just very briefly on the Cytotect pregnancy trial. I mean, if the pandemic hyegine measures that are currently in place were basically going to stay for the foreseeable future, then what is your best guess as to how long recruitment would take? I mean, are we talking about a year or 3 years or 5 years? Just any feel would be really helpful.

[Michael Ramroth, executive]

Okay. Then let us start with Yimmugo.

[Jörg Schüttrumpf, executive]

Yes. So for Yimmugo, the production actually started, yes, somewhere second quarter this year in advance of the approval. Now we have the approval. And the plan is, first of all, to switch or to supply the German market for which we just received the approval. We will also, let's say, now subsequently file for all other countries in Europe, but I think it also will depend on, yes, I would say, the production volume being ramped up throughout the remainder of this year and next year. And so we will basically, let's say, switch market by market in order to make sure that once the market is switched, we can also supply sufficient volumes. So the effect is that, let's say, a number of countries, it will go a bit slower. But in terms of volume, the ramp-up will, let's say, be quite significant. And yes, starting this year already, we want to have, let's say, the first product on the market this year. And then certainly the remainder of next year will be mainly Germany and Austria and some other countries. But maybe, Michael, you're going to also allude to that.

[Michael Ramroth, executive]

Yes, indeed, what you said, we are starting selling in to Red Cross right now next week already and we expect those sales of Yimmugo over this year for the magnitude of EUR 3 million and then ramping up into also more and more for Germany and other countries as well next year. So probably maybe between EUR 30 million and EUR 50 million in sales volume next year on top of what we have sold up to now with our products.

On the guidance side, Marietta, I'm pretty, pretty sure that we won't end up lower than the minus EUR 25 million we have seen or we have seen at the lower end of our range in projections of our EBIT level for this year because we are just 5, 6 weeks away from year-end and I don't see that any of our big customers will completely fail in the remaining weeks so that we would not be able to collect the money they owe us. And also if there's some bigger interruption in the world markets, I guess it's only the case if really a force majeure happens above all those things we have seen up to now. So otherwise we can really exclude that the loss will be bigger than minus EUR 25 million. And therefore I can really exclude this -- not only worst scenario we have preexisted in March 2022 this year, but also say that the minus EUR 25 million will be really the lowest end of our guidance here for this year.

Energy market with regard to 2023. Of course, we have contractualized, secured our gas supply for 2023. But you know that if there's really a gas shortage in Germany declared officially, then even the contractual agreed prices would no longer prevail. So for that, I cannot give a complete assurance that we will end up with overall energy bill here of additional, up to now EUR 9 million to EUR 11 million. That's our expectation of additional energy costs for the site here in Dreieich for 2023, reflecting higher gas prices as well as higher power prices, electricity prices in '23, based on the existing contracts we have. But as I said, if there is officially gas shortage declared by the government, those contractual arranged pricing no longer prevail, and then I can really not give you any idea how big then the negative impact would be on top of that, that I've just mentioned.

[Jörg Schüttrumpf, executive]

The last topic was Cytotect in pregnancy concerning the time line. So of course, we see this increased hygiene measure. We now implemented some countermeasures, awareness -- concerning awareness, but also including new sites so that we want to keep up the speed also in the trial. I believe that we will switch probably with termination of the trial a little bit. It might be not early '24, but more late '24 when we have all patients included, but this is the range. So we are not expecting really here many years of delay, but a delay by several months, and we try everything to keep the time line.

[Marietta Miemietz, analyst]

Just wanted to follow up on the energy situation. So you would definitely be getting all the gas you need. So the supply contract actually say that you have reserved that contingent and you're going to get it, you're just not quite sure at what price you're going to get it. But Germany cannot say because of the gas shortage we're just going to reallocate that to private households or whatever?

[Michael Ramroth, executive]

No, and totally I can't exclude this risk at all. It's indeed. As I said, we have, for us, secured supplier for gas for 2023 and have fixed prices for that. But if there is an overall gas shortage declared by the government, then of course, allocation of gas can happen, and the existing prices are no longer valid. So if the situation is as it is right now, we are secure. But if there will be a gas shortage, officially gas shortage next year declared by the government, then all the risks are back again.

[Operator]

We have one more questioner as Mr. pascal, [ Elbe Pascal ] of [indiscernible].

[Unknown Analyst]

Hello. Pascal speaking here. The first one is, can you give some -- provides some information for the Factor VIII issue from last year in December? And what's the improvement here in 2022? And in this case, maybe how is the gross profit margin developing as well?

And second one is how can you ensure that you get enough plasma for the more capacity in Biotest's next level, especially the plasma from the U.S. Thank you.

[Michael Ramroth, executive]

Okay. Thank you had for the 2 questions. Indeed, the question for Factor VIII is really valid. If you recall, we have had this onetime write-off in 2021 at the end of 2021 because we had foreseen that the demand for Factor VIII, especially for the plasmatic Factor VIII was significantly decreasing over time. And combined with that, also pricing went down. And therefore we had to write off the inventories we had with regard to Factor VIII. And we have also said at the time that we would reduce the production of factor VIII in our facility here in Germany. So that's the amount of Factor VIII produced will be in balance to the demand -- with the demand we are seeing in the market. And for the time being, yes, compared to last year we have lower sales in Factor VIII, but we are producing in line with the reduced Factor VIII demand in the markets right now. And the prices we have seen are in the lower range, we have seen at the end of 2021. So the gross margin out of this business with Factor VIII has been not declined anymore. It's still in the range of 5% to 10% for this plasmatic Factor VIII.

With regard to the plasma supply, especially in the U.S., plasma supply, it's indeed a significant channel for us to secure that because we would meet in the end up to 750,000 liters for our B&L facility here in Dreieich to produce for the U.S. market. But we have the promise of triples to suppliers with such U.S. plasma out of the huge number of plasma center, Grifols, owns that operate in the United States. So therefore I'm pretty confident that even if Biotest has no longer own centers in the United States, as we had earlier and earlier times, we will get enough U.S. plasma from our major shareholder, Grifols.

[Unknown Analyst]

Okay. Just one follow-up maybe on the overall gross margin. What's the overall gross margin for the first 9 months?

[Michael Ramroth, executive]

The overall gross margin for the first one was 24%.

[Unknown Analyst]

24% Okay.

[Operator]

There are no further questions in the queue. [Operator Instructions] And we have one more questioner is Mr. Klaus Schlote of Solventis.

[Klaus Schlote, analyst]

What is the situation with regard to ADMA? I saw that you have some positive effects -- have had some positive effect, I guess, because the price of ADMA went up? Or what is the reason for that? And another question is regarding pension liabilities. They are pretty stable compared to last year, end of last year, I would have expected some reduction because of increased interest rates. So maybe that will happen towards the end of the year then, but you might explain to us, please? And there was, I would say, now in Germany [indiscernible] what is behind that issue? And exactly you get some public money for COVID-19 in regard to Trimodulin. And you have received already EUR 8.8 million. I don't know whether we have received, but you have some earnings effect from that, some positive. And what about the rest of the money? Or when will that flow? And when will be the earnings effect and when will the money flow? Thank you.

[Michael Ramroth, executive]

Yes. Thank you, Mr. Schlote for questions. Let me start with the last one. Jorg Schuttrumpf mentioned already that we got a grant of in total EUR 29 million for conducting this Phase III study with COVID patients. And it's, of course, a more complicated formula saying that based on milestone developments, we get 80% of our expenses reimbursed. We have, as you rightly said, already received EUR 8.8 million this year and the remaining EUR 20 million are then depending on the further progress of the Phase III study. So over the next 2 years, if the -- if we can see the progress with the study, then the remaining EUR 20 milion will be being paid by the government as reimbursement of those Phase III studies.

[Klaus Schlote, analyst]

So no further positive effect this year, only then starting next year?

[Michael Ramroth, executive]

Maybe in the last 3 months you see another EUR 1 million or something like that.

[Klaus Schlote, analyst]

Okay.

[Michael Ramroth, executive]

With regard to this difficult to explain [indiscernible] that's just a write-off of. You have to look at the risk profile of different countries. And here we had a write-off of Turkish invoiced claims in that amount. Pension reduction, to be honest, I rather foresee an increase in our pension reserves due to increased interest rates. So you should expect just the opposite, but it's probably a minor issue until year-end. And with regard to ADMA shares, you may recall that we have been forced by CFIUS, the Committee on Foreign Investment in the United States to get rid of all our U.S. assets included at that time the ADMA shares. They are still owned and hold by a trustee.

And we have, of course, the claim of getting the money if the trustee sells off those shares. And as long as he owns the shares, the value of this claim is, of course, based on the actual share price of ADMA. And you have seen that the ADMA share price went down to $1.5 per share, and now it's just this morning above $3 per share. So this increase is also shown in our numbers. So the claim we have against this trustee has gone up value-wise because the value of ADMA shares has gone up over the last 9 months.

[Klaus Schlote, analyst]

I might add a follow-up question with regard to pension liabilities. Do you have -- can you tell us the interest rate you use for discounting end of last year and end of September this year, please?

[Michael Ramroth, executive]

Actually, I don't recall the actual numbers. But we can provide you with that [indiscernible].

[Operator]

There are no further questions in the queue. I hand over back to the company.

[Monika Buttkereit, executive]

All right. So thank you very much for listening to our 9 months call and, of course, the great news of Yimmugo today. We will see you back again on March 23rd next year, and wishing you all the best until then. If you have further questions, just give us a call. Have a good day and bye-bye.

[Michael Ramroth, executive]

Thank you. Bye-bye.

[Jörg Schüttrumpf, executive]

Thank you.

[Peter Janssen, executive]

Thank you.