Earnings call transcript: ArcticZymes Q3 2025 revenue growth, stock dips

ArcticZymes Technologies ASA reported its third-quarter 2025 earnings, showcasing a 24% year-over-year revenue growth to NOK 28.5 million. Despite this positive performance, the company’s stock fell by 8.93% in pre-market trading, closing at NOK 25.50. The decline in stock price came as investors reacted to a combination of financial results and market dynamics.

Key Takeaways

• Revenue increased by 24% year-over-year, reaching NOK 28.5 million.
• EBITDA improved significantly, moving from a negative NOK 2.3 million in Q3 2024 to NOK 3.5 million.
• Operating expenses were reduced by NOK 2.4 million compared to the same quarter last year.
• Stock price dropped by 8.93% in pre-market trading, reflecting investor concerns.
• The company is exploring inorganic growth opportunities and expanding partnerships.

Company Performance

ArcticZymes demonstrated robust performance in Q3 2025 with significant revenue growth driven by increased sales of its new ELISA kit, SensoPlus, and a strong focus on metagenomics applications. The company reported a 22% underlying business growth when excluding one large customer, indicating a solid market position. However, year-to-date revenue saw a slight decline of 2%, highlighting challenges in sustaining growth momentum.

Financial Highlights

• Revenue: NOK 28.5 million, up 24% year-over-year.
• EBITDA: NOK 3.5 million, compared to negative NOK 2.3 million in Q3 2024.
• Cash Balance: Approximately NOK 260 million.
• Operating Expenses: Reduced to NOK 6.7 million from NOK 9.1 million in the same period last year.

Earnings vs. Forecast

The earnings per share (EPS) forecast for Q3 2025 was NOK 0.06. However, the actual EPS and its impact on the market were not disclosed in the earnings call. The revenue forecast was NOK 31.45 million, while the actual revenue came in at NOK 28.5 million, indicating a miss of approximately 9.3%.

Market Reaction

ArcticZymes’ stock price experienced an 8.93% decline in pre-market trading, closing at NOK 25.50. This drop reflects investor concerns over the revenue miss and the company’s ability to sustain growth in a competitive market. The stock’s movement places it closer to its 52-week low of NOK 12.34, contrasting sharply with its high of NOK 31.40.

Outlook & Guidance

The company is focusing on expanding its partnerships with contract development and manufacturing organizations (CDMOs) and exploring inorganic growth opportunities. ArcticZymes expects continued growth in 2026, driven by dual sales strategies and increased investments in sales and business development.

Executive Commentary

CEO Michael Akoh stated, "We are now in a position where we have a stronger foundation, so we are going to start exploring inorganic growth opportunities." Chief Commercial Officer Paul Blackburn added, "As regulatory bodies get stricter and companies manufacturing these vectors get more risk-averse, our opportunity increases."

Risks and Challenges

• Revenue Dependence: A significant portion of revenue comes from a few large customers.
• Regulatory Environment: Stricter regulations could impact the company’s market opportunities.
• Market Competition: Increasing competition in the metagenomics and RNA enzyme sectors.
• Economic Conditions: Broader economic challenges could affect demand for ArcticZymes’ products.

Q&A

During the earnings call, analysts inquired about the potential for market share expansion, the impact of regulatory changes, and the company’s metagenomics strategy. Executives emphasized the importance of regulatory compliance and long-term value creation through partnerships like Brenntag.

Full transcript - Arcticzymes Technologies ASA (AZT) Q3 2025:

Michael Akoh, CEO, ArcticZymes: Good morning and welcome to ArcticZymes Q3 Financial Presentation. My name is Michael Akoh, I’m the CEO of the company, and I’m joined by Børge Sørvoll, the CFO, as well as Paul Blackburn, our CCO. Thank you for joining us this morning. Next slide, please. I look at our agenda for today. I’m going to go through our highlights of Q3 and also share an overview of our 2026 strategy. Paul is going to go into detail with our sales, both for the biomanufacturing as well as the molecular tools segment. Børge is going to come on and go into detail with our financials. I’m going to share an outlook as well as open up for questions and answers. Next slide, please. We had a solid quarter where our team delivered profitable growth across both segments. Our revenue was up by 24% to almost.

NOK 30 million, and we also had a significant increase in our profitability. That ended at NOK 3.5 million. A significant event after the quarter ended was the execution of a European partnership deal with Brenntag. Paul is going to go into more details with this exciting new partnership deal. Looking at our GMP nucleases, we saw significant growth, and the nuclease sale in GMP grade now accounts for 26% of biomanufacturing sales in the quarter. This highlights that the strategic decision to do GMP-grade enzymes is starting to pay off. It also allows our customers to seamlessly go into the latest stages of drug development. Another notable event in the quarter was our molecular tools sales. They are back on a growth path, 45% up compared to Q3 last year. As earlier communicated, this was largely driven by the return of a key account.

We also saw growth from other accounts that contributed to a very solid performance within molecular tools. Other accounts grew by approximately 13%. Looking at biomanufacturing, we had a more reasonable quarter. Year to date, we are seeing solid growth, up 23%. Very encouraging, we are also seeing that our customer base is continuing to expand. We are also seeing an increased uptake amongst our CDMO partners. That is going to be a nice foundation for future growth. Next slide, Børge. I’d like to take you through our strategic direction and the core pillars we have in the company. It’s all about scaling through getting closer to our customers. As we announced approximately 12 months ago, we embarked on a journey to transform the company from being focused on products and being an enzyme supplier to becoming a more customer-driven, market-driven solutions partner.

We have come far into transformation, but we are not there yet. I am really encouraged by the foundation that we are building for the future for the company. We are currently working with strengthening our customer relations, both in regards to improving our processes, but also in regards to implementing new tools. We are also looking into the future to meet the increased demand. We have a number of projects where we are looking into our capacity. We are right for 2026 and way into 2027. From there, we are going to be needing to implement new measures to also increase our capacity, especially within the nucleases. We are working internally right now with a project to increase our yield, as well as working with an external partner to discuss upscaling projects. Last but not least, we are also evaluating inorganic growth opportunities.

That’s everything from in-licensing of products to larger activities. It’s in its early stages. Looking at the pillars, molecular tools first. As we have earlier communicated, we see a big opportunity within metagenomics. We have a detailed strategy and plan of how to capture market share within that segment. We have already been implemented into metagenomic protocols. We’re working closely with key opinion leaders. We have upcoming webinars as well. We expect that this is going to be one of the growth vehicles we have both for 2026 and beyond. We are also looking into expanding our portfolio into the NGS area. Next, biomanufacturing. Here, it’s about doing more of what we’re already doing. It’s about accelerating the adoption in viral vector workflows at our customers. It’s also very much about deepening the integration with CDMOs on their manufacturing platforms.

We have come far with one partner where we are seeing significant growth. Sales year to date with this partner is up almost 200%, and we expect that that’s going to continue going into 2026 as well. Looking at the customers or the CDMOs that we are currently working with, where we currently have a foot in the door. We’re working with nine out of the ten largest CDMOs within advanced therapies. We have a good base to continue the talks and the integration with more CDMOs. Finally, we’re also looking into expanding into new application areas, and we’re also working on a project in order to increase and protect our IP. Next, the RNA market. We’ve talked about that, and we’ve also communicated that we believe that this is a strategically important area for ArcticZymes going forward.

Enzymatic usage is great within manufacturing, within QC processes of RNA therapeutics. We have our first restriction enzyme under development. We want to build a full portfolio for RNA customers. Currently, we are also working together with one partner in order to explore both development and go-to-market options. The last core pillar is channels. You’ve already seen the first execution within this pillar with the Brenntag deal. It’s also important for me to say that we’re not abandoning our direct sales approach. That’s going to be core to ArcticZymes going forward as it has been in the past. It’s important for us to be close to the customers, to be able to support them, to be able to also receive feedback that’s also going to generate ideas for new innovation. We believe that it should be complemented by expanding and activating a greater distribution network.

What we have done this week, actually, we have onboarded a new channel manager. He’s going to start. His task is to work actively together with all our distributors, including Brenntag, to ensure that we support them in the right way, to ensure that we motivate them, and also, at first, of course, to ensure that we have the right partners that we believe are right for the company. We are going to do an evaluation of all our distributors and work with those where we have mutual interest and good chance of becoming successful together. There is a big focus on channel going forward. As mentioned, it does not mean that we are abandoning the direct sales route, but we are expanding and also putting more focus on developing an active managed distribution partner network. That sums up the strategic direction for ArcticZymes going into the future.

We’ve already, as mentioned, executed on several fronts. We are building a strong foundation for the future. Next slide, please. Now it’s over to you, Paul, to take us through sales in the quarter.

Paul Blackburn, CCO, ArcticZymes: Thank you very much, Michael. Next slide, please. Before we get into the revenue aspects of the quarter, let’s talk a little bit and go into a little bit more detail about one of our key commercial milestones this year. That is, of course, our new European partnership with Brenntag. This partnership represents a really exciting step forward for ArcticZymes. We have entered into an exclusive distribution arrangement with Brenntag for our salt active nucleases across Europe. As Michael mentioned, importantly, ArcticZymes retains direct engagement with our strategic and our key accounts. We are expanding our reach while still maintaining control where it matters the most. Both parties get a significant advantage from this. We believe there is an excellent match. We are both very motivated, and there is a really great spirit of partnership around this deal. Why does this matter?

The rationale behind this partnership is very strong. First of all, the strategic alignment. Brentag’s life science division, or its pharma division, has a very deep focus on biomanufacturing and on cell and gene therapy viral vector customers, which perfectly matches the direction that we’re taking with SAM. Secondly, we’re gaining expanded reach. Brentag has a large network, a large sales network across Europe. This gives us immediate access to many biotechs and CDMO customers that may otherwise take us years to reach directly. Thirdly, it’s also, of course, about brand amplification. Brentag is marketing ArcticZymes branded enzymes. This increases our visibility and reinforces our position as a trusted enzyme supplier across multiple applications. Now, it’s really important that we set expectations around timing. This partnership is not about short-term volume. It’s about long-term reach and brand establishment.

We’ve mentioned before many times adoption cycles are long. Sales cycles are long. Customers evaluate, they validate, and they scale over many months or even years. Traction is going to build gradually as Brenntag introduces SAM across its customer base and as projects mature through their own development pipelines. What we are building here is a sustainable commercial platform. It’s one that will drive adoption. It’ll strengthen our European presence, and it will support long-term revenue growth. Next slide, please. Now, let’s take a look at our Q3 performance and how it reflects the continued progress across both biomanufacturing and molecular tools. Overall, total sales were up 24% year on year, reaching NOK 28.5 million versus NOK 23.3 million in Q3 last year. This is a really strong result that demonstrates the resilience and the diversity within our portfolio.

Within biomanufacturing, I would say that sales were reasonable this quarter following an exceptionally strong Q2, where we saw several large SAM orders. I’d like to remind that this pattern is entirely consistent with our business model. Volumes in biomanufacturing do fluctuate quarter to quarter, but our underlying trend remains positive. This is supported by ongoing validation and scale-up activities at multiple customers. Molecular tools performed really strongly, even excluding one large customer. Growth was broad-based and particularly driven by enzymes like COD UNG, dsDNase, and proteinase. This shows that we’re continuing to see healthy demand across multiple product lines and applications. Regionally, EMEA led the way with 70% growth. This reflects our strategic focus and our increased traction for both direct and new channel activities. APAC grew by nearly 50%, demonstrating continued success in diversifying our global base.

As Michael mentioned, we have now put a channel partner in place who will be responsible for all distribution channel partners. The US was softer at -10% versus Q3 2024. This was primarily due to timing of customer projects rather than any structural issue. We expect to see a rebound as the pipeline projects progress into 2026. In summary, Q3 underscores steady momentum with a strong 24% overall growth and sustained product diversity and regional balance that positions ArcticZymes well heading into Q4 and beyond. We remain confident in our long-term trajectory, even with normal quarter-to-quarter variability that is typical of the enzyme supply business and biomanufacturing’s longer adoption cycles. Next slide, please. Biomanufacturing sales came in at NOK 13 million for the quarter, which is a reasonable result following an exceptionally strong Q2, which included some large customer orders.

This reflects a typical variability that we can expect in biomanufacturing. The underlying trend is positive as more customers move through validation and into routine use. What is really interesting and exciting is that GMP versions of SAM continue to gain traction, and sales reached NOK 3.3 million compared to around NOK 1.2 million in Q2. This quarter-to-quarter demand shows that the requirement for higher-grade compliant enzymes is expanding as our customers progress towards clinical and commercial manufacturing. The adoption of our recently launched ELISA kit, the SensoPlus, has been very, very strong, and sales are actually around 10 times higher than the previous kit. This highlights the growing need for high-sensitivity analytical tools that support customers’ quality and regulatory expectations.

It also shows that customers are now reaching that stage in their pipeline development where they are starting to use these tools more routinely. Critically, we now supply salt-active nucleases to 9 out of 10 of the top global CDMOs. Now, that’s a major validation of both our technology and the trust that the market has got in ArcticZymes as a reliable and specialist enzyme supplier in biomanufacturing. For many of those, they are not yet platform enzymes. They have been introduced when a company, a pharma company, a biotech brings its viral vector manufacturing into a CDMO. Of course, that is an excellent way for us to then work on penetrating those accounts to increase the number of platform offerings within CDMOs. It’s great news. While quarterly fluctuations are normal, our underlying indicators are very strong.

We’ve got broad adoption, we’ve got deep integration, and we’ve got rapid growth of GMP and our high-quality analytical ELISA products. These trends reinforce our confidence in our sustained long-term growth as designs mature and become reoccurring commercial demand. Next slide, please. Let’s take a closer look at biomanufacturing order patterns. These continue to give us confidence in the strength of our growth pipeline. What we’re seeing here is a classic leading indicator of future growth. While the average order value is lower, down 16.6%, this is actually a positive signal. It reflects an increasing number of smaller validation projects from both new and expanding customers, particularly those still in R&D or in process development phases. As we know, these customers typically start with smaller validation quantities before progressing into much larger GMP and commercial scale orders once their validation is completed.

The data here clearly supports this trend. The unique biomanufacturing customers are up by 3%, and order volume has increased by nearly 22%. This tells us that engagement is broadening and that we’re successfully penetrating deeper into the CDMO and biotech customer base. You can see from the chart on the right that this steady growth in unique biomanufacturing customers year-round is reaching 110 in 2025 Q3, compared with 106 last year and just 27 back in 2018. This trajectory reflects the kind of compounding value of our long sales cycle model. We invest early in customer relationships, and over time, these validation projects, they convert into substantial long-term supply positions. While the average order values are temporarily lower, this trend is highly encouraging.

It demonstrates to us that adoption is widening, there is strong R&D engagement, and there is a healthy pipeline of customers moving towards GMP scale-up. All of this is underpinning our long-term biomanufacturing growth story. If we turn now to molecular tools. Next slide, please. The underlying business, I’d like to point out, is strong and resilient. Actually, of course, our headline is 45% growth versus Q3 2024. Even outside our one large customer, we saw growth of 13%. This demonstrates that our broader business remains healthy and that our growth is not dependent on any single account. As I’ve mentioned before, the quarter was driven, the molecular tools quarter was driven primarily by COD UNG and dsDNase, both of which continue to perform well and be adopted across multiple applications.

As well as some significant proteinase orders that contribute meaningfully to this result. Overall, molecular tools continues to deliver. It shows a broad application-based strength, healthy customer diversification, and consistent year-on-year progress. These results reinforce that our underlying business remains intact and it is growing. Even though individual customer orders fluctuate, there is a sign of resilience and maturity in this part of the portfolio. Next slide, please. To close out the commercial section, let’s take a look at our year-to-date performance through to the end of Q3, both including and excluding our one significant customer to give a clearer view of the underlying business. Total nine-month revenues are down 1.9%. When we exclude our one large customer, they are actually up by 22%. This shows again that the underlying growth across our broader base remains very healthy. Regionally, we see a mixed but encouraging picture.

The US is up by 16%. EMEA is down by 21%, but it’s actually up by 26% if we exclude that large single account. APAC is up by 52%. This is clear evidence that our customer diversification strategy is working and that growth is broadening beyond our largest accounts. In biomanufacturing, we have sales that are up by 22% year-to-date with continued expansion across GMP qualified SAM and regular process grade enzymes. Growth remains broad-based, up by 10% in the US, 49% in EMEA, and 20% in APAC. This highlights balanced regional progress and increasing depth within our customer base as more customers advance through validation and scale-up stages. For molecular tools, sales are down by 21% year-to-date, but that figure improves significantly when we remove our one large customer. Within that, the US is up by 32%. EMEA is down by 43%.

It’s also down by 9% excluding this one large account, again due to a couple of other accounts that. The phasing of the orders did not work yet. This reflects timing differences in some of these larger orders and really not a structural decline. We are also seeing healthy demand beyond our core products such as COD UNG, dsDNase, and HLSAM, particularly in metagenomics applications. Overall, the underlying business continues to strengthen. When we exclude the impact of our one major customer, we are seeing broad-based double-digit growth. This confirms that ArcticZymes’ revenue base is becoming more diversified, more balanced, and more resilient. This sets us up for a strong foundation as we move towards 2026. I would like to thank you for your attention and pass over to Børge. Thank you, Paul and Michael, for the introduction.

The deep dive into the sales side of the business. So far this year and for the third quarter. Like previous quarters, I will take you through some more of the other sides of the business, looking at the expense development and also a little bit about the cash position that we have. Looking at the financials here. As Paul stated, our sales revenues ended up on NOK 28.5 million compared to NOK 23.3 million in the same quarter last year, or a growth of 22%. For the first nine months, sales are at NOK 78.5 million compared to NOK 79.8 million in the same period last year, a reduction of NOK 1.3 million or a 2% decline. It is, however, important, as Paul stated, that taking out the largest customer, the growth in the underlying business has been strong.

As previous quarters, we’ve also had a positive contribution from other revenues, where we recognize almost NOK 1.2 million in other revenues. NOK 0.9 million of this is related to the grants we were awarded in the second quarter last year, and NOK 0.3 million is related to tax grants. We do, however, expect a lower other revenue number in the fourth quarter this year, as we have utilized most of the project-related revenues in the first nine months of the year. Also, with sales and other revenues for the third quarter, total revenues ended up just shy of NOK 30 million, up from NOK 24.1 million last year. For the first nine months, revenues are at almost NOK 84 million, compared to NOK 81.7 million last year, or an increase of 2%. You can see the main differentiating factor here is the other revenues that have gone up significantly from last year.

Cost of materials and change in inventory were in the low end this quarter, with a cost of NOK 0.7 million compared to NOK 0.8-NOK 1 million in the same period last year. We have NOK 3.1 million for the first nine months. Our personnel expenses are slightly higher than the same period last year, with NOK 18.9 million versus NOK 16.2 million. As I talked about in the first and the second quarter, we have increased our expenses related to the commercial team. We have hired a lot of people, especially on Paul’s team, which impacts our personnel expenses. We have also capitalization of projects, and new product developments have also been part of the financial statements the last few years. These have an impact on our personnel expenses. In the third quarter this year, we did not capitalize anything on any other project.

Whereas in the same period last year, we capitalized NOK 1 million. For the first nine months, we have capitalized NOK 1.1 million versus NOK 4 million in the same period last year. If we are to add capitalization to our personnel expenses in 2024, you can say that the personnel expenses for the first nine months would have been similar to what we have seen so far. There is one more important thing on the personnel side. As I talked about in the first and second quarter, part of our remuneration is associated with variable remuneration. NOK 1.7 million was accrued in the third quarter this year. In the same period last year, we hardly accrued anything at all. There is a big delta there on the variable remuneration.

If we are to pay out this variable remuneration, it depends on KPI achievement and performance towards the end of the year. Our operating expenses are, you can see, reduced in the third quarter compared to the same quarter last year. We ended up on NOK 6.7 million compared to NOK 9.1 million in the same period last year. Part of this explanation is that we have reduced our IT expenses. We changed our IT provider earlier in the year. We have also reduced some of the software licenses, some of the more expensive software licenses that we had in the previous year. Of course, we have reduced our external services. The use of consultants has been reduced significantly compared to last year. If you remember last year, we spent quite a lot of money on the ERP integration project.

That project was finalized in, you can see, in the fourth quarter last year. There are no more consultancy hours going into that project in 2025. Hence, there is a lower use of consultants this year. It is, we have. Continued to spend money on marketing efforts. I think most of you can see that we are spending a lot more on LinkedIn, social media platforms. We are attending conferences and. Shows a lot more than we did just a year ago. We will, of course, continue moving into 2026. We will continue to invest in these kinds of commercial efforts to drive the top-line growth in the business here. Currency impacts our business for sure. We have had some headwinds in the third quarter as well, as we saw in the second quarter.

As most of you know, most of our revenues are denominated in $ and euros. Only a small fraction of our revenues are in NOK. In the third quarter this year, 70% of our revenues was in $ and 30% of our revenues was in euro. Looking at the same quarter, at the second quarter this year, we had 63% in $ and 36% in euros. If you look at the spread from last year, you can see that the third quarter pretty much represents the same as we saw in 2024, with 73% in $ and 27% in euros. It is especially the $ that has impacted our figures this year, whereas the Norwegian krone has strengthened towards the dollar, whereas the euro NOK has been fairly stable across the year here.

If you look at the currency implications on the finance side of the business, it has impacted our net finance by a decrease of NOK 0.4 million in the third quarter, whereas we had a zero gain in the third quarter last year. For the first nine months of the year, we have a decrease of NOK 1.5 million versus NOK 0.2 million in the same period last year. This will also kind of explain the difference when you look at the net financials for the business year-to-date. You can see that the numbers are lower in the first nine months compared to the same period last year. This is primarily explained by the currency headwinds that we see on our bank accounts. We are not only exposed to currency fluctuations on the finance side, we are also exposed to currency on our sales and on our trade receivables.

These can be seen under other expenses in the organization. Our expenses were actually increased by NOK 0.1 million in the third quarter this year, whereas we did not have anything in the third quarter last year. Year-to-date, we have seen an increase in our expenses by NOK 0.8 million for the first nine months, whereas last year we had a reduction of NOK 0.5 million. If you eliminate the currency effects under other operating expenses for the first nine months, you can see the NOK 3 million less in spend we have had so far this year would have been close to NOK 4.5 million if we eliminate currency effects. We are actually spending less this year compared to last year. That makes a lot of sense, especially now that we had that huge ERP project last year that impacted our P&L significantly.

That one is not part of the business or not part of our activities in 2025. With the sales and the expenses that we have talked about now, our EBITDA ended up on NOK 3.5 million, compared to a negative NOK 2.3 million in the same period last year. For the first nine months of the year, EBITDA is on NOK 3.7 million. This is also strengthening. We remember we had a negative first quarter and a strong second quarter, and now we have a good third quarter as well. Now we are above what we had last year, as we said, NOK 3.7 million for the first nine months versus NOK 2.6 million in the first nine months of 2024. Also, looking at the graph on the left-hand side, you can see that our EBITDA margin has improved, and it is on similar levels that we saw in the.

Second quarter this year, and we had a 12% margin now. In this quarter here. The cash balance and the changes in cash have been fairly stable over the last few quarters when we also include kind of the short-term investments in low-risk mutual funds. Also, as you can see now from the green line here, changes in cash have had a positive trend over the last two years. In the third quarter, especially in the third quarter this year, we saw an increase of NOK 11.5 million compared to the end of the second quarter this year. So far this year, we’ve seen a net change in cash of close to NOK 14 million for the first nine months. This gives us a balance towards the end of the third quarter of close to NOK 260 million.

Which is a fairly healthy financial position for the company. With that kind of strong financial position, I will also hand it over to Michael now to kind of give us more on the outlook and open up for Q&A. Yes, thanks a lot, Børge. Looking into biomanufacturing first, we believe that the Brenntag partnership is going to be a strong long-term growth driver. Paul has already elaborated on the dynamics of this deal. Important deal. We currently have a smaller market share of the nuclease market, and we believe that one of the things that can help us penetrate the market further is through selected partnerships such as the one with Brenntag. We’ve also seen a really positive development in the latest quarters in regards to the CDMO partnerships that we have, especially one early one where we have seen significant growth, almost 200% year-to-date.

As I said early on in the presentation, we expect that this is going to continue to accelerate into 2026. Molecular Tools, our major partner, is back on track, and we have also seen growth from other accounts within the segment, signaling that we have a renewed momentum. Going into Q4, we are also seeing that new applications, such as the metagenomic area, are opening a number of new opportunities. It is also opening up to consideration of new go-to-market strategies, and we are seeing 81% growth within this space year-to-date. The strategic focus ahead is really to take—we have a rather unique narrow enzyme portfolio, but we have a wide range of application areas. That is what we are going to focus a lot on in order to increase our penetration of new business opportunities. Metagenomics is one of them. RNA, important for us in the future.

There’s a huge use of enzymes within that space. We have our first enzymes in development for juicy purposes, and we expect to add more enzymes to the portfolio, which could also happen in organic ways. We have a focus on developing and managing our CDMO partnerships, strengthening them, and ensuring that they accelerate as they are a key foundation for our future growth. We are going to continue to invest in our direct sales force. We are going to very soon also onboard further sales business developers in the company. We have also decided to invest in the channel manager position. We are going to focus on a dual approach, both direct and selected indirect sales channels, to broaden our reach significantly forward. With that, I would like to thank both the ArcticZymes team for delivering a solid quarter and also.

Thank all the investors for your support. We have a strong foundation. We are building it to become even more resilient for the future. We have a number of growth initiatives that are going to turn out in the coming time. I am excited for the future. With that, I would like to thank you for tuning in this morning and also open up for the Q&A session. I already see that we have a lot of questions in there, so let’s get that started. Thank you for that. Closure, Michael here. I will try and combine some of the questions that you have posted online, but also the first question is here. Now that you have returned to a profitable growth, do you have any plans what to do with the large cash position you have?

Are there any kind of acquisition targets you are looking at, or are you thinking about dividends, or are you looking at a share buyback potentially here? I think that it has been essential for me during the past years to bring some stability into the company to strengthen the foundation. We are now in a position where we have a stronger foundation, so we are going to start exploring inorganic growth opportunities. I think the first step is going to be to look into in-licensing agreements to expand the product portfolio. We are also open for doing larger activities, but it is essential that we have the right foundation, that we have the right match, and we are stepping lightly within that space at the moment. We are moving towards inorganic growth opportunities. I will follow up.

Today, you have approximately 1% of the total addressable market for the SAN portfolio. Long term, how much do you think—how much of this market do you think is possible for you to take? I think that’s a very difficult question to answer, but luckily, we have Paul Blackburn on the call. Who can. Maybe. That question. I believe that, of course, our market share should be bigger than it currently is, but. An exact number is probably difficult. What is your take, Paul? Yeah, so clearly, I mean, there is a dominant incumbent nuclease that. Has been. A. Default enzyme, if you like, for biomanufacturing. Now, within that total accessible market, of course, the market that we can service is primarily the cell and gene therapy market, the viral vector production market. But we’ve also seen. Good growth in vaccine development.

Exosome production, and another kind of what you might regard as adjacent markets. There are a couple of things that we should consider here. One is the regulatory environment. We produce a very, very high-quality enzyme. Frankly, the cost of that enzyme is higher than some alternatives. As regulatory bodies get stricter and companies manufacturing these vectors get more risk-averse, our opportunity increases, and the value of our enzyme increases. I think we kind of helped with that tailwind of regulatory. When we read about issues with gene therapies, for example, sometimes the perception from an ArcticZymes point of view is perhaps that will drive customers towards greater quality requirements, which we can serve well. I think we’ve seen a move towards certainly discussions and some early development work for in vivo therapies.

That is likely to be an incredibly high level of regulatory requirement. As customers’ regulatory requirements get tighter, as we find adjacent markets, as we position ourselves from a brand point of view and a commercial sales point of view in a stronger way. As Michael says, we are incredibly ambitious to take share as appropriate. Yeah, it is difficult to give a number, of course. Significant is the word that I would like to use. Thank you, Paul. On that topic, with regards to our SAN portfolio, you mentioned in the presentation that you are now talking to nine of the ten largest CDMOs. The question is, are these only in Europe, or is it also outside of Europe? Absolutely global. Just so I am clear, this is not—we are not addressing 90% of all CDMOs out there. That is not the message.

The message is that if we look at a list of the top 10 CDMOs by revenue or by project number, we are in 9 out of 10 of those. As I mentioned during the presentation, a lot of the time, or some of the time at least, it is with projects that have been brought in from their customers. That is an excellent way to start to influence platform integrations. Okay. Thank you. Just one comment also to the 9 out of 10. I think it is important also to state that, to my recollection, this is 9 out of 10 of the CDMOs that are top within advanced therapies. That is how it is specified. Yeah. Okay. A few questions on the Brenntag deal that they kind of are missing out on. How will our margins be affected on this kind of Brenntag deal?

I guess you will have to take a cut on the sales. Also, do you have any kind of minimum requirements for sales through them, or what’s the expectation on this agreement with them? Yeah. Of course, there is a margin for Brenntag, but what we’ve done is we’ve structured it in such a way that it’s favorable for both parties. As you know, typically within these agreements, for small volumes and small amounts and sort of project initiations, we need to make it worth Brenntag’s while. The margins are loaded so that as customers progress through clinical phases and to commercial to larger pack sizes, the margins decrease. I think it’s really important, though, to point out that this isn’t purely about revenues and margin. Certainly, the spirit of the partnership with Brenntag is very much around value creation for the customer.

This is, again, part of our customer-centric strategy. Brenntag is especially excited about offering our enzymes as one of the kind of—to address one of the customer pain points that they are encountering when they have conversations. It is really about allowing Brenntag to access our special enzymes and enable them to have more scientific, supported by us, deeper conversations. I would say as we get towards large pack sizes, it balances roughly with our cost of sales, so the cost of commercial. I think there will be positive consequences for the customer. I think there will be positive consequences for Brenntag, and there will be positive consequences for ArcticZymes. There is more to it than margins, absolutely. Just to add also in regards to the Brenntag partnership, I think that this has been a really, really positive, fruitful discussion with them throughout from start till finish.

We have been looking for finding common wins for both parties. I am really excited about this. They are, of course, a company that is a bit bigger than we are, but in no way have we felt that through the negotiations. It has been really, really good up to this point. I think it is also important just to add that there are some customers in Europe that we are going to continue to serve directly from ArcticZymes. They are going to focus a lot on, of course, expanding our reach through their sales team. I believe they have, is it 50 business developers in Europe working within Brenntag Pharma. We have had the first training session with them. It is going to take time to realize, fulfill the potential, but we have got off to a really positive, good start with them. I am excited about this partnership. Okay. Thank you.

Looking at the metagenomics side of the business here, to what extent is your increased focus on metagenomics and NGS and SAM being driven by specific customer or partner demand, for example, through kind of Brenntag or OEM discussions versus kind of an internal-driven strategic decision to reposition ArcticZymes towards now the sequencing market? I will take that one if that’s okay. We had involvement. We were mentioned in some very interesting publications and patents regarding metagenomics. That’s kind of where the excitement, if you like, started. Because our enzymes are enabling host cell depletion and therefore infectious disease recognition and characterization that wouldn’t otherwise be possible. That’s super exciting. The customers that did these studies, that published and wrote the patents, did a review of the nucleases on the market and ours performed incredibly well.

Since we saw those very early signs of adoption, we have put together an incredibly robust strategy to take advantage of the opportunity ahead. There are several different aspects to that strategy that we do not have time to go into the details now. It is a very different market. If we imagine that there are lots of individual clinical test sites likely to be set up, that we are perhaps better to serve through partners or through sort of bigger agencies. We are already starting to work with some of these and have conversations with some of these about how that network might be satisfied, that diagnostic network. The short answer to the question is, yes, we have a strategy. That strategy is built on publications and patents that came out some time ago. You will see a lot more marketing activity around metagenomics in the next six weeks or so. Okay.

How do you foresee kind of the revenue potentially, or how much of your revenues do you expect in this segment moving into 2026, 2027? Do you have active customers that are in kind of trials and considering our products? When do you expect kind of these metagenomics customers to contribute on the revenue side? We do. In fact, we’ve got quite a few new customers that are testing and validating our nucleases. The revenues are very small to start with. We do not anticipate a short-term revenue uplift, anything noticeable in the coming months. Of course, as adoption increases and as volumes increase and as we put in place these partnerships and these network relationships, we do expect to see growth. That is many, many months away yet. We have lots of small-scale trials being undertaken at many customer sites.

At this time, many tens of customer sites at this time. Okay. Thank you. One more going back to the SAN here. Can you say a little bit about kind of rough estimate about how much annual sales you hope to get from your two existing CDMOs in kind of the next couple of years? Probably more than two CDMOs, but at least this was the question. Two existing CDMOs. Yeah. I can’t give a rough estimate, I’m afraid. I don’t know which two CDMOs. Oh, that’s fine. I have two more questions, and then we’ll round off this kind of Q&A. We have one question regarding the other under OpEx. It was the lowest level for the last three years at NOK 6.7 million. And what level can we expect going forward on that side? And maybe I can answer that one as well.

I think third quarter was in the low end of what to expect in the future as well. I think we’ll be a few million higher on a kind of average OpEx here. We do not expect any kind of significant increases in our OpEx in the coming year as such. We do expect, however, that our personnel will go slightly up compared to this year as we have more people on board, and there might be some projects that will drive a little bit more expenses as well. Not any kind of significant increase in our expenses year over year. I think the last question before we will round off this presentation is, can you say something about how sales have progressed so far in the fourth quarter? I can answer that. We’ve had a start like we had in Q3.

I think that’s fair to say we are seeing a similar sales uptake as we did during the start of Q3. Okay. I think with that, we will round off this Q&A and this third quarter presentation. I think we will wish you all a great day and have a good day, basically. Yep. Thank you.

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