aXichem's development during periods 2022-01-01—2022-12-31
This interim report presents aXichem, which consists of aXichem AB (publ), Incendia Pharma AB and aXichem AS (Norway). Amounts in brackets refer to the corresponding period of the previous year.
aXichem's development 2022-01-01 – 2022-12-31
Turnover and results
Net sales amounted to SEK 5,007 thousand (SEK 4,362 thousand).
The operating profit amounted to SEK -14,545 thousand (SEK -15,070 thousand).
The loss for the period amounted to SEK -17,260 thousand (SEK -15,093 thousand).
Financial net SEK -2,690 thousand (SEK 12 thousand).
Cash and financial position
The group's cash and cash equivalents on 31 December 2023 amounted to SEK 6,549 thousand (SEK 9,454 thousand).
The equity ratio amounted to 66% (96%).
Investments in intangible, tangible or financial fixed assets amounted to SEK 2,608 thousand (SEK 4,728 thousand).
Depreciation of intangible and tangible fixed assets amounted to SEK 3,511 thousand (SEK 2,474 thousand).
Earnings per share, before and after dilution amounted to SEK -1.04 (SEK -0.92).
Equity per share at period end amounted to SEK 2.44 (SEK 3.40).
aXichem's development 2022-10-01 – 2022-12-31
Turnover and results
Net sales amounted to SEK 3,539 thousand (SEK 886 thousand).
The operating profit amounted to SEK -2,253 thousand (SEK -5,013 thousand).
The loss for the period amounted to SEK -3,247 thousand (SEK -5,034 thousand).
Financial net SEK -969 thousand (SEK 14 thousand).
Investments in intangible, tangible or financial fixed assets amounted to SEK 619 thousand (SEK 1,423 thousand).
Depreciation of intangible and tangible fixed assets amounted to SEK 912 thousand (SEK 665 thousand).
Earnings per share, before and after dilution amounted to SEK -0.20 (SEK -0.30).
Significant events during the period
Significant events after the end of the reporting period
CEO Torsten Helsing comments
The result for the fiscal year 2022 amounts to SEK -14.545 thousand. Net sales amount to SEK 3.539 thousand in the fourth quarter and SEK 5.007 thousand for the year. The costs for the year amount to SEK -19.763 thousand and are in line with budget. Costs mainly relate to production, transport of produced goods, regulatory work and costs for sales and marketing of our approved ingredient aXivite.
Exciting year behind us – and ahead of us
It has been an exciting 2022 for aXichem and our phenylcapsaicin product. I’m proud to say that we have established aXivite as an innovative brand in the nutraceutical market. The most active market is the U.S., but we are also starting to see some good traction in Europe. New products with “aXivite inside” are continuously being launched and several more are in the planning. During the year aXivite has been evaluated in a high-quality study at University of Pablo Olavide, Spain, regarding sports performance in athletes. The top-line data that we received in the fourth quarter indicates high scientific relevance for sport nutrition and sport performance. We expect to see the final report with a complete presentation of the data in the coming months. Results like these will obviously add to the product’s credibility and give our distributors in this market segment a strong marketing and sales message.
Largest order so far for aXivite – 280 thousand USD
In October aXichem reached a new milestone and obtained our largest order so far. The order for aXivite amount to a total value of 280 000 USD and was placed by our U.S. distributor SEE Nutrition. In June 2022 aXichem entered into a collaboration with Iovate in the areas of research, development and commercialization of aXivite. The order in October last year is the first delivery related to this agreement. We are very pleased about the development of the collaboration with Iovate. The marketing activities promoting Muscletech Fat Burn iQ, the first consumer product containing aXivite under the collaboration, are very aggressive and well executed. Fat Burn iQ is an excellent display window for aXivite and its unique characteristics. The next step in the collaboration with Iovate was announced after the period’s end. During the second half of 2023 Iovate plan to launch three new products, under their world-leading brand Hydroxycut, containing aXivite. We expect that 2023 will be a great year for aXivite and we will continue to catch the opportunities that the growing interest in training, fitness and weight management brings, both in the U.S. and in Europe. As communicated in February this year, we believe that continued positive development for aXivite can result in revenues of approximately SEK 20-25 million over the next twelve months.
Regulatory work in EU for aXiphen progressing
In March 2022 we filed our EU Feed Additive application, to the European Food Safety Authority (EFSA), for phenylcapsaicin in poultry feed applications. The review process follows pre-defined steps and can be tracked on EFSA’s homepage. The review process includes a phase, the "risk assessment phase", where EFSA asks questions related to the application. During this phase EFSA has six months to review the applicant’s file. When EFSA asks the applicant a question, the review is paused during the time that the company works on providing an answer. This means that the actual time that an application can be in the "risk assessment phase" can vary extensively depending on the nature of the questions from EFSA and how long the applicant needs to answer the questions.
At the turn of the year aXichem received a number of questions from EFSA, which EFSA estimated would take us six months to answer. The company estimates that the questions can be answered relatively quickly, which means that EFSA should be able to resume the review already in the first quarter of 2023. Currently, EFSA has its own legal deadline for the application in September 2023, which is based on aXichem using six months for responding to the questions (responding in June) and EFSA using its remaining three moths review time (finalizing their work in September). The process is described on EFSA’s homepage, but I know it can be difficult to grasp all the details. We will follow up in our communication with status of the application as the process moves forward.
In the U.S. the regulatory process for approval of new feed ingredients, such as aXiphen, has undergone structural changes during the second half 2022. The changes include new requirements for documentation on effect and tolerance of the ingredient. The consequence for aXichem is that we are now preparing an updated file, with the requested data and continue the process. The approval process in Brazil is according to our contacts with the regulatory authorities proceeding. We have had no questions on the filed documentation. However our impression is that the regulatory authorities are affected by the political situation in Brazil and it is not possible to know exactly foresee the next step in our approval process.
Pre-launch activities for aXiphen
Together with our aXiphen distributor, CHR. Olesen, we are working with pre-launch activities in the EU, introducing the aXiphen to a selected group of poultry feed producers and are keeping them informed of the status of the approval process. The team is also working on production planning and logistics in order to minimize the production – delivery lead-time once the Feed Additive approval is in place.
After the period’s end, in February, we announced that aXichem has entered into a production collaboration with the Swedish unit of an established, major manufacturer of chemical substances, for the production of our raw material phenylcapsaicin. With the new collaboration we add yet another source for production of the raw material to support the planned demand for aXichem's product in the area of poultry feed. The interest in aXiphen continues to be high and we expect that sales of approximately SEK 60–80 million are possible during the first 12–18 months after market approval in the EU and in Brazil.
Patent for phenylcapsaicin in treatment of IPF
aXichem is following its established patent strategy and continues to protect the rights for phenylcapsaicin for use in commercially interesting applications. In October we could add the patent for phenylcapsaicin in treatment of idiopathic pulmonary fibrosis (IPF). IPF is a chronic disease characterized by progressive fibrosis (scarring) of the lungs, which means that symptoms worsen over time. Phenylcapsaicin for IPF could, in the future, be further investigated in a pharmaceutical context in aXichem’s subsidiary Incendia Pharma.
Continue working for a successful 2023
Together with our team I will continue to build aXichem’s business, step by step, towards success. The date for aXichem’s Annual General Meeting is June 16, 2023. All shareholders are welcome to our office in Malmö. I hope to see you there.
Torsten Helsing, CEO
About aXichem AB (publ)
aXichem's business concept is to develop, patent and market nature-analog industrial compounds. aXichem's product is a natural analog substance called phenylcapsaicin, which is a synthetically produced and patented capsaicin. As phenylcapsaicin is synthetically produced and has a number of advantages compared to natural capsaicin, such as controllable quality and production process.
The product has benefits that makes it commercially interesting in several application areas, for example as ingredient in animal feed, as ingredient in dietary supplements, as a bio-enhancer and as a bio-repellent in marine applications. aXichem is currently marketing the product under different brands in two prioritized areas: aXivite® for dietary supplements and aXiphen® for poultry feed. aXiphen® has shown properties as a growth promoter and anti-salmonella ingredient in studies made in commercial poultry production settings. In the neutraceutical - and sports nutrition market segment aXivite® is today included in several products for weight control, improved metabolism and gut health.
aXichem aims to become a global supplier of industrial natural analogue chemicals to players in the chemical industry who manufacture products containing aXichem's raw materials. The company’s share is listed on NASDAQ First North since 2013.
aXichem's commercialization of phenylcapsaicin under the brands aXiphen® , in the animal feed market, and aXivite®, in dietary supplements market continues. The production capabilities and logistics through subcontractors are in place as well as a production process optimized for commercial volumes.
The pace of development in the establishment of the products is determined by obtaining market approvals in the strategically important countries or regions, starting with EU, U.S., Brazil and India.
aXichem cooperates with specialized distributors, who either have their own production or collaborate with innovative leading producers.
The company has market approval for aXivite in the EU and in North America. A continued positive development for aXivite can result in revenues of approximately SEK 20-25 million in the next twelve months.
aXiphen is not yet approved for the animal feed market, but is expected to obtain approval in EU, U.S. and Brasil during 2023. The interest in aXiphen continues to be high and the company expect that sales of approximately SEK 60–80 million are possible during the first 12–18 months after market approval in the EU and in Brazil.
The board of aXichem decided on April 5, 2022, subject to the general meeting's approval, which was obtained at the extraordinary general meeting on April 22, 2022, to take out a convertible loan of SEK 20 million from Formue Nord Fokus A/S. The proceeds are intended to be used to ensure the company's growth and business development in line with the objectives that have been communicated. The nominal amount of the convertible loan amounts to SEK 20 million and carries an annual interest rate of 12 percent and is due for payment on October 31, 2023, unless the convertibles have been converted before then. The conversion rate amounts to SEK 20. If the convertible loan is converted in its entirety, the number of shares in the company will increase by 1,000,000 and the share capital by SEK 200,000. aXichem's board works continuously to ensure the company's long-term financing.
Redeye has been the company's Certified Adviser during 2022. From January 2, 2023 Västra Hamnen Corporate Finance is aXichems Certified Adviser.
For information about the company's owners and insiders, see the company's website www.axichem.com. For information on insider trading, see the Financial Supervisory Authority's register.
Q1 report Jan – March, 2023 2023-05-24
Annual Report 2023-05-26
Annual General Meeting 2023-06-16
Q2 report Jan – June, 2023 2023-08-23
Q3 report Jan – Sept, 2023 2023-11-22
Year-end report 2023 2024-02-21
The board and managing director assure that the interim report provides a fair overview of the company's operations, position and results and describes the significant risks and uncertainty factors that the company is facing.
Lund, 23 February, 2023
The board of aXichem AB (publ)
The information was submitted, through the contact person below, for publication on February 23, 2023, at 07:30 AM CET. The report is published on the company's website under Investor Relations. Direct link to the report: https://www.axichem.com/investors-relations/#financial-reports