Bio-Works Technologies AB (publ) Year end Report January - December 2022

2023-02-17 14:40:00

Profitability in sight

July – December 2022 

  • Net sales increased by 70% to 23,175 (13,622) KSEK with very good growth in all regions. Sales growth in North America continued in the second half of the year and sales in the region grew by 228% as compared to the same period 2021.
  • Order intake increased by 99% to 34,272 (17,247) KSEK. “Order intake” is defined as orders received and confirmed during the period.
  • Profit in the second half of the year was –21,494 (-21,819) KSEK.
  • Basic earnings per share in the second half of the year amounted to –0.61 (-0.68) SEK and diluted -0.61 (-0.68) SEK.
  • Cash flow from operating activities was –13,143 (-22,762) KSEK.
  • Bank balances amounted to 65,875 (102,745) KSEK at the end of the period.

January – December 2022

  • Net sales increased by 89% to 41,320 (21,910) KSEK with good growth in all regions. Sales in North America totaled 16,046 KSEK, an increase of 227% as compared to year prior.
  • Order intake increased by 94% to 56,468 (29,078) KSEK. “Order intake” is defined as orders received and confirmed during the period.
  • Full year profit was –44,823 (-12,942) KSEK.
  • Basic earnings per share for the full year amounted to –1.28 (-0.41) SEK and diluted 1.28 (-0.41) SEK.
  • Cash flow from operating activities was –39,872 (-13,369[1]) KSEK.
  • Bank balances amounted to 65,875 (102,745) KSEK at the end of the period.
  • The Board of Directors proposes that no dividend be paid for the financial year 2022.

Message from the CEO
For eight consecutive quarters, Bio-Works has grown net sales, and the second half of 2022 ended strong for the company, with sales growing 70% and order intake growing 99% versus the same period 2021.

On full-year basis, sales grew 89% and order intake grew 94%. Our order stock for delivery in 2023 was a record 27.6 MSEK on December 31. I am once again proud of the company’s achievements during the year.

Bio-Works saw strong growth in the North American market in the second half with sales growing +228%, up from +131% in the second half of 2021. Growth in the European and Asian markets was positive (+35% and +12% versus 2H21, respectively), and the period ended positively with a large order for WorkBeads affimAb worth 15.2 million SEK.

An important factor to sales growth has been the launch of the GoBio prepacked columns. GoBio generated 3.1 million SEK in revenue during the second half, with an order intake totaling 6.0 million SEK. We believe that the trend towards prepacked will continue during 2023.

Bio-Works products in large-scale production
New production customers continue to be the key factor to Bio-Works’ success. Eight companies introduced WorkBeads and GoBio products into their manufacturing facilities during 2022, and these projects contributed 25.1 MSEK in sales. In addition, we successfully hosted three customer audits during the year. 

Flexibility as a strength
During 2022, the industry continued to see long lead times for chromatography resins from legacy suppliers, and this provided a tailwind for Bio-Works during the year. However, lead times are starting to improve. As such, we have intensified our efforts to ensure that we are prepared for a post-COVID market, and we are confident that our flexible organization will provide many advantages.

Moving forward, our focus will be on the development of more differentiated products which demonstrate Bio-Works ability to innovate and to meet unmet customer needs.

Favorable market trends
The molecular structures being used to develop new biological medicines is rapidly diversifying, creating a need to new production tools (including chromatography resins) which are tailored to the specific needs of these new structures.

This diversification is occurring in two directions simultaneously—at one end of the spectrum we have simpler molecular structures such as peptides and oligonucleotides, while at the other end of the spectrum we have highly complex structures such as viral vectors, exosomes and whole cells (so called, Advanced Therapeutic Medicinal Products, or ATMPs).

Bio-Works is well-positioned towards these markets. Our flexible production facility is well-suited to produce high-volume products (such as WorkBeads 40S) and niche products which are focused on more specific customer needs.

A cornerstone to our innovation strategy in 2023 will be a significantly stronger focus on custom resin projects which are driven through direct customer collaboration. These projects allow Bio-Works to focus development resources on opportunities coupled to a direct customer need.

Simultaneously, we will continue to improve our service levels to ensure that customers view Bio-Works as a premium supplier with best-in-class service.

Focus on cost management and high-value products
At the end of 2021, we stated that 2022 would be the year in which Bio-Works would demonstrate that we can grow sales faster than costs. The plan was to achieve this goal through two main initiatives—first through a stronger focus on costs and second by focusing on high-value products which deliver more profit per sold liter of resin.

As we look in the rearview mirror, we see that this goal has been partially achieved, although transitory costs and an un-forecasted product mix worked against us during the year.

Nonetheless, we succeeded in reducing the six-month rolling burn-rate by 43% in the second half of the year, a trend that we expect to continue if not accelerate during the coming 12 months.

Our strategy to achieve profitability remains unchanged. We will continue to focus our sales & marketing efforts on high-value products which return a higher margin per liter of resin produced by our manufacturing team while having a strong focus on cost-management.

The path forward is clear
In October, we announced that the company is well-positioned to breakeven during 2024 without the need for additional financing. I am more certain than ever that this goal is within reach.

I want to thank all Bio-Workers for their great efforts during the past year. We recognize that there is plenty of hard work ahead of us, but the path forward is clear, and I am confident in the year that lies ahead.

Thank you for your continued confidence and support.

Together we continue the journey towards profitability.

Uppsala, February 2023
Jonathan Royce
Chief Executive Officer

Report presentation
An interview about the report with CEO Jonathan Royce is available on YouTube. The interview is in English.