Earnings call transcript: ArcticZymes Q2 2025 sees stock surge post-earnings

ArcticZymes Technologies ASA reported its Q2 2025 financial results, showcasing a modest increase in both sales and revenue compared to last year. The company’s earnings call revealed total revenues of nearly 29 million NOK, a rise from 27.5 million NOK in the same quarter the previous year. Following the announcement, ArcticZymes’ stock surged by 32.29%, reflecting strong investor sentiment. The increase in stock price was driven by the company’s robust performance in the biomanufacturing segment and improvements in EBITDA. According to InvestingPro data, the company maintains impressive gross profit margins and holds more cash than debt on its balance sheet, with a healthy current ratio of 2.13.

Key Takeaways

• Total revenues reached nearly 29 million NOK, marking a 1% year-on-year increase.
• EBITDA improved significantly to 3.9 million NOK from 2.76 million NOK last year.
• Biomanufacturing sales grew by 50%, boosting investor confidence.
• Stock price rose by 32.29% post-earnings announcement.

Company Performance

ArcticZymes Technologies demonstrated solid performance in the second quarter of 2025, highlighted by a 1% year-on-year increase in total sales. The company benefited from a strong biomanufacturing segment, which saw a 50% increase in sales, offsetting a decline in the molecular tools segment. This growth aligns with industry trends favoring biomanufacturing, particularly in gene therapy markets.

Financial Highlights

• Revenue: Nearly 29 million NOK, up from 27.5 million NOK last year.
• EBITDA: 3.9 million NOK, a significant improvement from 2.76 million NOK in Q2 2024.
• Cash balance: Approximately 247 million SEK.
• Biomanufacturing sales: 18.1 million NOK, a 50% increase year-on-year.

Market Reaction

ArcticZymes’ stock experienced a substantial increase of 32.29%, closing at 19.2 NOK. This surge reflects positive investor sentiment, driven by the company’s strong performance in its biomanufacturing segment and improved financial metrics. The stock’s movement also positions it closer to its 52-week high of 25.4 NOK, indicating renewed market confidence. InvestingPro analysis suggests the stock is slightly undervalued based on its Fair Value calculations, with a beta of 1.06 indicating moderate market correlation. Subscribers to InvestingPro have access to 8 additional key insights and a comprehensive Pro Research Report, offering deeper analysis of ArcticZymes’ market position and growth potential.

Outlook & Guidance

Looking ahead, ArcticZymes anticipates continued growth in its biomanufacturing segment and expects a recovery in the molecular tools segment. The company is exploring potential CDMO partnerships and remains focused on market development with its current product portfolio. Additionally, ArcticZymes is open to potential mergers and acquisitions to further enhance its market position. With a market capitalization of $21.92 million and trading at a P/E ratio of -18.58, InvestingPro analysts predict the company will maintain profitability this year despite expectations of a net income decline.

Executive Commentary

Michael, CEO of ArcticZymes, highlighted the company’s focus on improving commercial execution, stating, "Our commercial execution is improving. With Paul at the helm, we’re seeing clear progress." He also emphasized the versatility of the company’s product portfolio, noting, "We have a great product portfolio and that product portfolio can be used within many different applications."

Risks and Challenges

• The molecular tools segment experienced a 40% decline, posing a challenge for recovery.
• Dependence on key customers may affect future revenue stability.
• Currency impacts, with 63% of revenues in USD and 36% in euros, could introduce volatility.
• Potential delays in CDMO partnerships reaching commercial production stages.

Q&A

During the earnings call, analysts inquired about the company’s plans for new enzyme launches, to which executives confirmed no new launches are planned for 2025. Questions also focused on the traction in emerging markets like India and China, with ArcticZymes reporting moderate growth in these regions. Analysts expressed interest in the company’s exploration of alternative therapy delivery systems, reflecting broader industry trends.

Full transcript - Arcticzymes Technologies ASA (AZT) Q2 2025:

Michael, CEO, ArcticZymes: GMP was launched mid, June. We’ve already seen the first orders come in, and we expect a lot from this product going forward. It opens up new doors to new accounts and also enables customers to use it from early research to, commercialization. MSAN was the most sold product in q two. We saw a growth of 62% versus last year.

See if I have a sound. Can somebody?

Paul Blackburn, VP of Sales and Marketing, ArcticZymes: I can hear you, Michael.

Michael, CEO, ArcticZymes: Alright. I’m not sure if everybody can hear me at the moment, so I need a notice. Alright. I think we had a sound issue. I’m really sorry about that.

So I’m going to recap, the highlights if everything was not audible. We had a strong quarter. The total revenues were up 5% to almost €9,000,000 We saw the effects of our customer centric strategy. We also saw a positive EBITDA. It was up 50% to almost NOK4 million.

One of our flagship products was launched, HQ GMP mid June, and we expect a lot from this product going forward. MSAN HQ was the most sold product in Q2 with a growth of 62% versus last year. The big star of the show in the quarter was the biomanufacturing business. We saw growth accelerate up to 18,100,000.0 for the quarter, which was a 50% increase year over year. I hope that you are able to see the slides.

I believe that we’ve had some technical issues, unfortunately, during the first part of this presentation. I apologize, but now it is supposed to work. But biomanufacturing surpassed our expectations for the quarter and we had a lot of customers. It was a diversified customer base that ordered within the segment. That leads me to the fact that we saw an increased diversified customer portfolio.

We are not in this quarter dependent on any single customer. The revenue was spread broadly. Molecular tools was more soft due to the absence of orders from a key partner within this segment, but this key partner has confirmed their commitment to us going forward. And we’ve received orders totaling almost NOK 16,000,000, NOK 16,000,000 that are going to be revenue recognized from Q3 and the subsequent two quarters. So we’re going to be back on a growth path or a recovery path with our molecular tools business as well.

So I’m really, really happy to see what the team has done in terms of both being able to bring a new product to the market in direct response to customer needs. And also, I’m really pleased to see the commercial momentum that we’re having, especially within the biomanufacturing area at the moment. Next slide, please. Taking a look at our strategic priorities, short term, we’re going to continue to fuel the commercial train. We have more to do.

We have to work more with establishing more solid commercial processes. We have to work more with lead generation. We have to work even more with also getting better better systems into place. We also have to dig deeper into developing the channel side of our business. It means through CDMO partners, but also looking into potential distribution agreements.

We have a great product portfolio and that product portfolio can be used within many different applications. So one of the short term focuses is to explore how our current portfolio can be used within new applications. And one of those application areas is metagenomics as we talked about the last time. And we expect that we can develop an interesting business with our nucleases within metagenomics. We are already integrated into a number of protocols within this space.

So that is a focus, both for 2025 and 2026 to develop this area further. We also, as we have communicated before, started the development of our advanced therapies portfolio to broaden that portfolio. And we’re looking into RNA at the moment, and we have an enzyme in development and more to follow. We’re also exploring partnerships within go to market of this new enzyme and making progress. Long term, it’s about developing and commercializing more enzymes within the molecular tool space.

And here, we are probably going to focus in on the NGS space in the future. As we have seen a significant increase in business within biomanufacturing. We are also looking at our operational scalability. We have decided to invest in new equipment in our manufacturing facilities in order to be able to meet future demand. Last, M and A opportunities is also an inorganic optionality that we have on the table.

Next slide, please. A few words about mSAN HQ GMP. As mentioned, we launched on time due to a great effort by the whole company mid June, and we’ve already seen the first orders. It’s an important product for us. It’s one of our flagship products.

It is really competitive, and now it’s available with a full regulatory documentation package. It’s already opened new doors. It’s already established new dialogue for the sales team. And I’m really, really excited about the future potential that this product can unlock. We launched the product just before the summer, so the full commercial launch is expected to take place during Q3.

And with that, I’m going to turn it over to our VP of sales and marketing, Paul Blackburn.

Paul Blackburn, VP of Sales and Marketing, ArcticZymes: Good morning, and, thank you. As Michael said, I’m the VP of sales and marketing, and I’ve got the great privilege of leading our commercial team as we deliver for our customers and we open up new opportunities for growth. I’m really looking forward to sharing our latest sales highlights with you and how we’re laying the foundations for the months ahead. So could we move to the next slide, please? So during q two, we delivered total sales of 26,800,000.0 NOK, which represents a 1% year on year increase.

Now while that might seem a little subdued, it’s really important to look beneath the surface of that growth. As Michael suggested, the quarter was really shaped by strong execution in biomanufacturing, and this remains the key growth engine for our company. Our GMP product lines continue to gain market traction, and in particular, M San HQ performed particularly well. And I’ll share a little bit more on that shortly. On the molecular tools side, we are seeing underlying momentum.

COGU NG and our double stranded DNAs are both showing really encouraging signs of growth. So while the volumes and revenues here are still stabilizing, the fundamentals are healthy. What’s critical if we exclude one key customers who did not place orders in q two, our revenue would have been at the highest level since q four twenty twenty two. And as Michael suggests or or mentioned, that customer has since returned, and that’s really very reassuring as we move into h two. Geographically, our strategy is working, and we actually saw, if we exclude that key customer, 75% growth in EMEA and 44% growth in The USA.

So this reflects our our improved customer engagement and our broader uptake of our portfolio. So while the the the headline of growth is relatively flat, the quality of our revenue, the geographical breadth, and the customer mix are all improving. And that positions us well for the second half of the year and beyond. Could we move to the next slide, please? So biomanufacturing absolutely continues to be a key pillar of our growth strategy, and this quarter was a clear example of its potential.

Our customer centric strategy is working. So we delivered 18,100,000 in biomanufacturing revenue, which is one of our strongest quarters on record. And this performance was underpinned by sustained demand and broader adoption of our GMP product versions, which continue to gain traction with customers scaling up and their manufacturing processes. The standout in our portfolio this quarter was mSAN HQ, which delivered a record performance, up 62% versus its previous high, which was q three last year. And what is very nice is that this was not due to one large order or one single customer, but it reflects a broad based demand across a diverse set of accounts and geographies.

Notably, MSAN is now our number one best selling product in biomanufacturing, and this marks a significant milestone. It shows that the market is really evolving towards higher quality nucleases and that our technology, ArcticZyme’s technology, is meeting the performance and the regulatory expectations that GMP environments expect. So finally and importantly, this growth is coming from a well diversified base. We’re not relying on a single account here, and this gives us greater confidence in the durability and the scalability of this momentum as we go into the second half of the year and beyond. Could we go to the next slide, please?

So moving on to molecular tools, this was a more mixed quarter, but the underlying business remains intact and fundamentally sound. So revenues came in at 8,700,000.0 NOK, which is a 40% decline year on year, but this softness was driven by the absence of a single key customer during the quarter. I really want to emphasize that this customer has returned to active ordering, and this appears to have been a a timing issue that impacted us in h one, and not a loss of business. So, regionally, the picture for molecular tools is split. The US was a particularly bright spot with sales up 70%, 70%.

As I mentioned, this was continued by a strong performance in in DSDNAs, CODUNG, and RSAP. And these products are showing good momentum across both research, and OEM accounts. In EMEA, we did see a 75% decline due to this key customer. Excluding that outlier, the region actually posted moderate growth, which we do find reassuring. So what’s important here is that the core molecular tools portfolio continues to demonstrate resilience.

Multiple product lines are growing, and demand remains stable outside those timing driven fluctuations caused by the key customer. As we look ahead, our focus is on expanding this customer base, improving our world of order regularity, both of which will strengthen predictability in this part of the business. Next slide, please. Now let’s look at our customer dynamics in a little more detail. So in q two, we did see a slight decline in our total unique customers.

This was down 10% compared to q two twenty twenty four, and this is driven primarily by a 20% drop in molecular tools customers. This reflects timing effects and some churn from smaller and less engaged customers that we see within molecular tools. In biomanufacturing, the customer count was broadly stable at just under 3% down, and that segment continues to show healthy levels of engagement. The story gets more interesting when we look at orders and average order value. In biomanufacturing, order numbers were up 4%, and the average order value increased by nearly 50%.

This signals deeper customer engagement, larger project based purchases, and better sales discipline. For molecular tools, the decline in orders in AOV reflects reflects the impact of a few purchasing customers, but the portfolio does remain resilient. And we’re focused on rebuilding that momentum in h two through targeted outreach, account activation, etcetera. It’s notable when we exclude one, our large key customer, that didn’t repeat this year. Our adjusted AOV is up nearly 80% for molecular tools, which again is incredibly encouraging.

So the overall takeaway from this is while the number of customers dipped, those that are buying are spending more, and they’re engaging more deeply with our technology. This is true especially in biomanufacturing where we’ve certainly built a solid and scalable commercial foundation with a very good reputation. So to summarize, q two was a quarter of strategic progress even if the top line growth was plus 1%. The real story lies beneath that headline. Biomanufacturing had a record quarter led by strong adoption of GMP and outstanding performance from M Sun HQ.

This is now our top selling product. Importantly, and this is really important, this growth came from a diversified customer base, and this reinforces the robustness of our our business model. So molecular tools, while it was impacted by timing, and customer concentration, it continues to demonstrate underlying resilience. There are several key products in our portfolio that are absolutely gaining momentum, and the return of our key customer provides confidence in our recovery trajectory. So thanks for your attention.

I’m gonna turn over to Berger, who’s going to run through the financials. Birger, you’re on mute.

Berger, CFO, ArcticZymes: Sorry. Thank you for that introduction, Paul and Michael. And as with previous quarters, I will also take you through some of the headlines in our other accounts relating to our financial statements. And moving into the financials for the second quarter and the first six months of the year. And as Mikael and Paul alluded to, our sales revenues ended up on 26,800,000.0 or a 1% increase from the same period last year.

And also, as you heard from Paul, the majority of this increase came from the biomanufacturing side of the business. For the first six months of the year, sales ended up on CHF 50,000,000 sharp or a reduction of CHF 6,500,000.0 or 12% from the same period last year. But we also had a positive contribution under other revenues here, where we recognized almost 2,100,000.0 in other revenues, and 1,500,000.0 of this is related to the Adapt project that we were awarded in the second quarter last year, and 600,000.0 of this is related to tax grants. And also with the sales and other revenues, our total revenues ended up just shy of 29,000,000 in the quarter, up from 27,500,000.0 in the same quarter last year. And also for the first six months of the year, revenues are at almost 54,000,000 compared to NOK 57,600,000.0 at the same period last year or a 7% decrease.

Cost of materials, and change in inventory is similar to what we have expected, or what we have experienced in the first quarter this year and what we saw in the second quarter last year. We ended up on a $1,500,000 in cost. Other, our personnel expenses are slightly higher this year than the same period last year. We ended up on 13,700,000.0 versus 12,900,000.0 in the same period last year. And as I talked about in the first quarter this year, our expenses are reduced in Norway, whereas we have increased our expenses related to the commercial organization outside of Norway.

As we talked about, over the last few years, we have started to capitalize more on the R and D projects that have ongoing. And in the second quarter this year, we capitalized 700,000.0, versus 1,200,000.0 in the same quarter last year. And for the first six months, we have capitalized 1,200,000.0 versus SEK 2,900,000.0 in the same period. And if we are to add the capitalization to our personnel expenses, our personnel expenses in the second quarter this year or our personnel expenses so far this year would have been unchanged basically. So we would have had the same personnel expenses this year as last year.

And also what we have talked about in the first quarter, part of our personnel expenses are also associated with variable, remuneration. And NOK 1,500,000.0 was accrued in the second quarter, with a combined consolidated number of NOK 3,500,000.0 so far in the year. And if this money is to be paid out, it also depend on the performance of the company and that we meet the KPIs that has been set by the Board towards for the rest of the year. Other operating expenses are slightly reduced from 10,000,000, last year to 9,800,000.0 in the second quarter this year. And we have the sort of the following headlines here.

We have reduced our IT expenses, in the second quarter due to we have changed our supplier. We have a lower cost with a new supplier, and there’s also been a credit note in the second quarter that in excess of 100,000 that also reduced that expense. One of the biggest drivers under operating expenses is external services, and this was slightly increased in the quarter compared to last year. And this is even though we have taken out the ERP project that cost us 1,400,000.0 in the second quarter last year. Almost 2,300,000.0 of the 3,300,000.0 we have in external services is actually services provided by our grant partners.

And this expense is partly offset by the increased revenues we see in under other revenues, 2,100,000.0 I talked about a little bit earlier here. Our marketing efforts, is significantly increased in the second quarter this year compared to both the first quarter this year and the second quarter last year. We have increased our activities under the commercial side of the business, and we will continue to invest further in these kind of activities to drive growth in the business moving forward now. In the second quarter also, we realized a loss of €700,000 related to trade receivables. And this is basically the first time ever we, a company, have taken a material loss on our receivables.

Historically, our annual losses have been somewhere in the range between NOK5000 and NOK50000, and that is what we expect to see in the future as well. So we believe this loss we have recognized now in the second quarter is a onetime event. But also, you can see that currency impacts our business now. And as I also talked about, we work in an international market, and our revenues are impacted by fluctuations as our sales currencies are primarily USD and and the euro. And the currency fluctuations is is partly offset by expenses we have in the same currencies, but it doesn’t account for everything.

And it is especially the U. S. Dollar now that has impacted our figures so far this year, as the NOK has been strengthened towards the USD. And also for the second quarter, 63% of our revenues were in USD, whereas 36% were in euros. And compared to 2024, 73% of our revenues were in the USD versus twenty seven percent in the euro side of the business.

Currency fluctuations impacted the finance side of the business, as you can see on the profit and loss statement. And this, we saw a decrease of 500,000.0 in the second quarter versus 200,000.0 in the second quarter last year. And for the first six months of the year, we have a decrease of 1,100,000.0 in the currency versus a positive gain of SEK 200,000.0 for the first six months of last year. And this is also the main explanation why you can see that our finance revenues are lower in the first six months of the year compared to the first June 2024. But we are not only exposed to currency under finance, but we are also exposed to currency under sales and trade receivables.

Our expenses were increased by EUR 200,000.0 in the second quarter, and it’s similar to what we saw in the second quarter last year. But, for the first six months of the year, there is a larger difference where we’ve had a loss of, increase of 700,000.0 compared, to a reduction of 500,000.0 in the same period last year. And if we are to eliminate the currency effects on our other operating expenses, our operating expenses would have been 1,000,000 lower in the first six months of twenty twenty five compared to the first June 2024. And with the sales we have talked about now and a little bit of some of the expenses I also talked about in the previous slide, our second quarter EBITDA ended up on NOK 3,900,000.0, versus NOK 2,760,000.00 in the same time last year. And for the first six months, we have an EBITDA of NOK 100,000.0 compared to NOK 4,900,000.0 in the same period last year.

And the weaker YTD numbers is primarily explained that we had a slow start to the year in 2025. Looking at the graph on the left hand side, you can also see that our EBITDA margin ended up on 15%, which is the best performance that we’ve seen in the last Point The cash balance and changes in cash has been fairly stable over the last few quarters. And we have a balance well in excess of CHF240 million. This includes short term investment in low risk interest rate funds.

The second quarter gave us an increase of SEK4.2 million compared to the end of the first quarter this year, and we have an increase of SEK2.9 million for the first six months of twenty twenty five. The cash and short term investments balance ended up on close to SEK $247,000,000 at the end of the first half this year. And with that financial position, I will also hand it over to Mikael. Now we will round off the presentation and also open up for questions.

Michael, CEO, ArcticZymes: Thanks a lot, Berger and Paul, for good overviews of both the sales side of our business as well as the finances. If we look to the future, the outlook, we believe that we’re going to see continued biomanufacturing growth long term. We’re going to see strong growth in The U. S. As well as in Europe.

We also believe that we’re going to see a recovery in Molecular Tools driven by incoming orders of a key partner within that segment. CDMO partnerships are also going to be explored further. We are seeing a gradual revenue ramp up within this space and we are seeing that mSAN GMP is going to add to that. We are still in the initial phases, but long term, it is a really promising opportunity for the company. We’re going to look into how we can sell more of our great products to new markets.

So, development is a key focus in the second half, especially within the metagenomic space. So, nucleases for metagenomic applications is going to be a focus area for us to penetrate that market further through partnerships as well. In regards to innovation, product portfolio expansion, then we already mentioned that we’re looking into RNA. We have a restriction enzyme in development. We’re also going to look further into NGS portfolio development.

And we expect that we, either during the Q3 or Q4 presentation, are going to take a more deep dive into our innovation and portfolio expansion plans. I’m really, really pleased with the execution by the team during this quarter that goes both for the commercial side of our business as well as the operational side of our business. Everybody has pulled together and managed to deliver a solid quarter. We’re well positioned for an exciting second half of the year, and I see multiple growth drivers for the company ahead. And, with that, I would like to thank you for listening in this morning.

And once again, I apologize for the technical issues we had early on. And, let’s see if we have any questions that have come in so far.

Berger, CFO, ArcticZymes: Thank you, Michael. I can also try and we have quite a few questions from online here. But you also said something about innovation now, and I have one question. Do you expect to launch any new enzymes in the 2025?

Michael, CEO, ArcticZymes: No. The focus is going to be on market development during the second half and working with our current portfolio. We see a huge opportunity with the current products that we have. We’ve had great products for many years, but we have not been great at our commercial execution. What I see now is that our commercial execution is improving.

With Paul at the helm, we’re seeing clear progress. And I expect that we’ve come part of the way, but we still have a lot of work to do.

Berger, CFO, ArcticZymes: Okay. We have received quite a few question about CDMO engagement here. Can you there any more large customers, or CDMO customers trying out the the SAN M sign? And how is the stickiness of this business once they have taken up our product for these CDMOs?

Michael, CEO, ArcticZymes: Thank you for that question. I think I’m going to pass it on to you, Paul. But I think just a general comment for me before you go into it, Paul, is that, as you talked about as well, we are seeing a diverse customer base for the quarter. We’ve seen initial revenues being recognized from our CDMO partners, but we’re talking about revenues that are still below 2,000,000 NOK. So this quarter is really made up of a large customer base buying product and not one single customer placing huge orders as it was last year.

So that’s a development that I’m really pleased to see because our business is more resilient, more robust with a larger, more dispersed customer base. Paul?

Paul Blackburn, VP of Sales and Marketing, ArcticZymes: Yes. Certainly. So we we are we do continue to see, our SAM portfolio being sampled. I think it’s important to point out a couple of things. One is the way that we, engage with customers when they sample has changed.

And, I think that’s really important because what we what we are now doing and seeing success with is better adoption. Because if a customer tests a a sample of San, without guidance, without support, and we simply ship the enzyme to them, it’s more difficult to differentiate ourselves and, show the the clear benefits that our enzymes have. Maybe they won’t run the right analytics on the experiments, etcetera. So I you know, we do continue to to to to work with customers, to, sample our enzymes. That that’s absolutely, something that we’re we’re doing.

The other thing that we’ve seen is more customers that have been using SANHQ are excited by MSAN. That’s partly driven by some workflow changes. Customers are working their AAV slightly differently and requiring physiological salt. And that is very, very favorable for us because, of course, mSAN is is a jewel in our crown. It’s a it’s a flagship product for us.

So, you know, in some cases, is new, CDMOs and and primary producers that are testing our enzymes. In some, it’s existing SAM customers that have come back to us. And although they’re impressed with SanHQ, they want to make this workflow change so that they they they test our mSAN. So that that’s what I would say to that. Thank you.

Berger, CFO, ArcticZymes: Do you know any anything about the pipeline, how far they’ve gotten now? Are they in in of clinical trials or the the test phase, or are they in the commercial phase, our CDMOs with our products?

Michael, CEO, ArcticZymes: The general picture sorry, Paul. The general picture is that our times at CDMOs are being applied in the early phases, and we don’t have any enzymes yet in commercial product. That’s, of course, the end goal, but that’s going to also take some time. And we can still deliver significant growth within this space without being in a commercial process. That is the picture, especially also after the quarter we’ve just delivered on biomanufacturing.

But one of the inflection points, of course, is, once we get into a commercial product. Paul?

Paul Blackburn, VP of Sales and Marketing, ArcticZymes: Yeah. I can only echo that. And, you know, we all know that designing is a critical part of biomanufacturing and, and and, you know, continued customer adoption. So that although we’re in the early phases and, in some cases, phase two, phase three clinical trials, the the revenues are still reasonable from those from those projects. So just to echo what Michael said.

Berger, CFO, ArcticZymes: Alright. And and as the CD CDMO adaptation and commercial orders increase now, are there any manufacturing or supply chain bottlenecks that could limit our growth as a company, or how quickly can you scale up our production if several CDMOs are to move into full commercial adaptation?

Michael, CEO, ArcticZymes: That’s a good question. I just touched a bit upon it during the presentation. We have a lot of capacity still, but we are also looking three years, four years out into the future. And that has meant that we have now invested in more bioreactors internally. And at the same time, we are also exploring if we are going to partner up or increase our partnership with an external CDMO on the fermentation side.

So we have a lot of optionality within this area as well, and we are well positioned to be able to meet future need.

Berger, CFO, ArcticZymes: Okay. Another question on the sales. Have you seen any significant progress in China, India or other new developing markets?

Michael, CEO, ArcticZymes: Maybe you can take that, Paul, and also speak a bit about our channel.

Paul Blackburn, VP of Sales and Marketing, ArcticZymes: Yeah. Absolutely. So certainly in India, we have seen an uptick, in sales, and we’ve got some very significant projects there, particularly in vaccine manufacture, in fact. In China, the the picture is a little more mixed. We have what you might regard as stable growth, moderate growth.

We do have plans to to enhance our focus, on working with distributors in in these markets. Historically, perhaps we haven’t had that focus. So that that’s the the the plan for the coming six, eight, twelve months.

Berger, CFO, ArcticZymes: Alright. I also have a question. How how is sales tracking so far in the into now in the middle of q three now? Do do we still see sequential growth in the bio do we still see sequential growth for the biomanufacturing side in into q three?

Paul Blackburn, VP of Sales and Marketing, ArcticZymes: So I don’t wanna give exact numbers, of course, but we have had good momentum into into q overall.

Berger, CFO, ArcticZymes: Okay. Thank you. On the market segmentation here, in the bio manufacturing, are you seeing greater, traction within, GNSL therapy or or other vital vector markets here? And what do you expect will drive the the growth, through 2026 or towards second half of this year and into ’26?

Paul Blackburn, VP of Sales and Marketing, ArcticZymes: Yeah. So so far, there’s been an explosion in AAV production for gene therapy. That’s the the most worked on, virus that we are involved in. We are seeing a move in lentivirus and and a move towards in vivo therapies where the removal of nucleases is even more important. So we’re really excited about that that’s happening.

We’re also involved in some very nice oncolytic, virus projects. And within the last four, five months, we’ve also been engaging with, exosome, companies, And that that’s another exciting field where nucleases are absolutely required for for for cleanup of of therapies. So these alternative delivery systems require nucleases or typically require nucleases. So we we are busy exploring these, kind of adjacent markets, next to AAV and LV. I already mentioned vaccines.

You know, nucleases are required during viral vaccine manufacture, typically. So, yeah, that that that’s my answer to that one.

Berger, CFO, ArcticZymes: Okay. Do you think sales, in the second quarter might have been partly boosted by the the customer stocking up ahead of potential tariffs now, especially in the on The US sales, or do you think that it’s kind of it’s it’s it’s good underlying growth?

Paul Blackburn, VP of Sales and Marketing, ArcticZymes: Yeah. I can take this one as well. So, no, we’re not. So we we didn’t see anything that we would regard as a stock in order. The enzymes that we’re selling are are being sold to use.

You can see that by the the magnitude, the size of the orders, and the spread of the orders as well. So, as mentioned during the presentation, there was a good diverse mixture of customers spending a a moderate amount rather than any outlying customers that appeared to be stocking up. We also we’re improving the relationship that we have with our customers. It’s one of the the key things that we’re we’re focused on, and, we have no evidence to suggest that they’re stocking up because of tariffs.

Berger, CFO, ArcticZymes: Okay. Thank you. I think we will have a few more questions, and then I think we’ll round off this this this session here. You have a healthy financial position at the moment. You have SEK $247,000,000 in cash.

Are you looking into targets here? What about inorganic growth opportunities? Are you in talks with companies for m and a as such, or where where are you at the moment, and what are the plans moving forward here?

Michael, CEO, ArcticZymes: Yes. I can I can take that? What has been the focus for the company since I joined as CEO has been to create a strong base, a strong foundation for future growth. As I’ve talked about a couple of times, we are a company that has great products, but we have not been as good in terms of the commercial execution. We’re now seeing that that part of the business is becoming much stronger.

But to answer the question, we believe that inorganic growth has to be part of Arctic Time’s future path. But we also believe we have more to do before we take that step. So we are not in talks with any companies at the moment in regards to M and A.

Berger, CFO, ArcticZymes: Okay. We have one question regarding the the methadoneomic market that you talked about. How big is this opportunity? How is the market? What is the go to market strategy here?

Is it kind of a is it a are you gonna go direct, or are you planning to go with partners here? Or

Michael, CEO, ArcticZymes: I think that one is for you as well, Paul.

Paul Blackburn, VP of Sales and Marketing, ArcticZymes: Yeah. Absolutely. I think we should go into some more detail on this in a future call because we do have a very strong, strategy for metagenomics. We have particular traction in the moment, in The UK. We’ve been involved in, several posters, and a patent, which is very exciting.

And we are seeing adoption of our our nucleases, in this market. It offers a massive opportunity to, diagnose infectious diseases and also characterise, some features of the infectious disease that will help with treatments, etcetera. So it’s a, an incredibly good opportunity for us, and we’re well positioned to take advantage of it. But what I’d rather do is give more details in a future call.

Berger, CFO, ArcticZymes: Okay. Thank you. There, we have one question regarding other income, and also if we expect the same income from R and D, the Adept project and the tax grants in the third quarter and fourth quarter this year as the same level as we have seen in the second quarter this year, with SEK 2,100,000.0. And Maybe I can answer that question. I think the answer to that question, we will not see the same amounts of revenues in the third and the fourth quarter.

We are more likely to come back to the levels that we’ve seen in the first quarter this year within somewhere in the range of 1,000,000 to 1,500,000.0, which also will be dependent on how much time we spend on this project, on the grant related projects here. And also, it depends a little bit on how much activities we have ongoing with our external partners here. I think that that is the answer to that one. It will be lower. I think kind of the last question I think we we should talk about today, it’s more about the long term vision here.

And what are the two or three most important milestones you want investors, analysts to watch over for the next year, year and a half now as a proof that the commercial, that the commercial transformation is successful and that we have the sustainable value creation. A little bit tricky.

Michael, CEO, ArcticZymes: That was a good question to to end on, but I think that, as I touched upon a bit early on, we’re seeing that partnerships is the way forward for us, And we’re seeing that long term, the CDMO partnerships are going to be significant revenue drivers. We’re also seeing that it’s maybe going to take a bit longer time than we had at first anticipated. So that’s one major growth driver for the future. And as I also talked about, getting into a commercial product is also more or less the holy grail for us as a company. We’re getting closer, but we’ve also seen that we can grow the business significantly without being in a commercial product.

But it is an inflection point, of course, and the day it happens would be will be a good day for for Arctic Science, and I’m sure that that day is going to come. Right now, we are also we’ve just had a board meeting in in where we all are now, and we’ve done a strategic update. And for an upcoming call, we are going to share more about our new, umbrella, strategy.

Berger, CFO, ArcticZymes: Okay. I think we will round off now the the the this session for today. And I want to thank all everyone listening in to this presentation, and I think we wish everyone a nice and a good day now moving forward now. So thank you, everyone.

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