Strategic update and outlook€¦ · • Feed ingredient - market leader with a lot of potential...

Strategic update

and CMD

This presentation contains certain forward-looking information and statements. Such forward-looking information and statements are based on the current, estimates and projections of the Company or assumptions based on information currently available to the Company. Such forward-looking information and statements reflect current views with respect to future events and are subject to risks, uncertainties and assumptions. The Company cannot give assurance to the correctness of such information and statements. These forward-looking information and statements can generally be identified by the fact that they do not relate only to historical or current facts.

Forward-looking statements sometimes use terminology such as "targets", "believes", "expects", "aims", "assumes", "intends", "plans", "seeks", "will", "may", "anticipates", "would", "could", "continues", "estimate", "milestone or other words of similar meaning and similar expressions or the negatives thereof. By their nature, forward-looking information and statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements that may be expressed or implied by the forward-looking information and statements in this presentation. Should one or more of these risks or uncertainties materialize, or should any underlying assumptions prove to be incorrect, the Company's actual financial condition or results of operations could differ materially from that or those described herein as anticipated, believed, estimated or expected.

Any forward-looking information or statements in this presentation speak only as at the date of this presentation. Except as required by the Oslo Stock Exchange rules or applicable law, the Company does not intend, and expressly disclaims any obligation or undertaking, to publicly update, correct or revise any of the information included in this presentation, including forward-looking information and statements, whether to reflect changes in the Company's expectations with regard thereto or as a result of new information, future events, changes in conditions or circumstances or otherwise on which any statement in this presentation is based.

Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any of these forward-looking statements.

Disclaimer

2

3

AgendaTime Presentation Presenter

0900 – 0910 Opening remarks CEO Svein Lien

0910 – 0940 Enzymes – taking ArcticZymes to the next level MD Jethro Holter

0940 – 0950 Q&A

0950 - 0955 Beta-glucan a versatile technology platform CSO Rolf Engstad

0955 – 1020Woulgan® - driving sales in key markets and next

generation productsVP Marketing Stuart Devine

1020 - 1030 Q&A and coffee

1030 – 1110

Other beta-glucan initiatives:

• Animal Health – securing high volumes sales

• Consumer health – competitive priced high quality

product

• Cancer – opportunity with untapped potential

CEO Svein Lien

CSO Rolf Engstad

1110 - 1120 Q&A

1120 - 1130 Execution on corporate strategy CEO Svein Lien

Beta-glucans

• A common unique immunomodulatory technologyplatform

• Strong scientific and commercial team with in-house production

• Focus on:

• Woulgan proven to reactivate wounds and with commercial progress in key markets

• Feed ingredient - market leader with a lot of potential

• Cost efficient and well documented nutrition product

• Promising results as an adjuvant in Cancer

Enzymes

• Global leader within cold adapted enzymes

• Strong pipeline of new products

• Long and rewarding relationships with core

industrial companies within molecular biology and

research

• Strong and experienced scientific team with in-

house production

4

Biotec in brief

A corporation of two independent versatile technology platforms

Value proposition Betaglucans:

To become a competitive supplier of advanced

wound care products under the Woulgan®

brand while continue to build the other

complementary business areas including cancer

Value proposition Enzymes:

Evolving ArcticZymes business to the next level

in strategically re-positioning itself as the leading

commercial supplier of unique and high quality

molecular enzyme technologies

5

Biotec in brief

A corporation of two independent versatile technology platforms

ArcticZymes Taking ArcticZymes to the next level

Agenda: Taking ArcticZymes to the Next Level

50 MNOK

2018

Core

Business Today

Current

Business

Evolve

Offerings

Longer-Term

Initiatives

Summary

&

Outlook

ArcticZymes Strategy Today-ArcticZymes Business Today

-Why Evolve ArcticZymes?

More Than Cold-Adapted Molecular Enzymes-Evolving ArcticZymes enzyme offering

-Sourcing: gaining access to other novel enzymes

Offerings Beyond Enzymes-Service offerings through partnerships:

>Contract enzyme discovery

>Custom kit development/manufacturing

-Strategic acquisitions and joint ventures

What does 2020 and beyond look like?-Summary: commercial impact from evolving offerings

-Outlook: towards and beyond 2020

??? MNOK

2020

7

2017

2020

50 MNOK

2018

Core

Business Today

Current

Business

Evolve

Offerings

Longer-Term

Initiatives

Summary

&

Outlook











??? MNOK

2020

8

2017

2020


9

ArcticZymes Business Today

• Strong brand position as a B2B supplier

• Reputation for robust and quality enzymes

• Broad commercial customer base

• Regular new product introductions

• Annual product sales growing >20%

• Positive EBITDA since 2015

• Market views ArcticZymes as a niche supplier

of cold adapted enzymes

Today: take a glimpse at how ArcticZymes will strategically take the business to the next level

beyond a niche supplier

On track to deliver

50 MNOK in 2018

Dynamic Shift in the Business as Company Matures

10

Why Evolve ArcticZymes?

• About building strong brand and deep rooted

commercial customer base

• Reputation as a niche supplier of cold-adapted

enzymes

• About building out product range and offerings

• Why?

• Customers demand more innovations from AZ Unique enzymes with other properties

Broader enzyme range and supportive products

2013 - 2016 2017 - Onwards

50 MNOK

2018

Core

Business Today

Current

Business

Evolve

Offerings

Longer-Term

Initiatives

Summary

&

Outlook











??? MNOK

2020

11

2017

2020

Agenda: Taking ArcticZymes to the next level

Doing more than just cold adapted molecular enzymes

Evolving ArcticZymes Business

Todays Offering

Unique cold adapted enzymes

Sourcing Beyond Tromsø

Obtaining enzymes from

other sources

12

Expand Offering

Other unique enzymes

Innovating other unique enzymes beyond cold adapted enzymes

13

Evolving ArcticZymes Enzyme OfferingsD

isco

very

Lib

rari

es

En

zym

e

Pro

pert

ies

Thermal stable

(hot) enzymes

Hot

Springs

High Salt

Environments

Fast Growing

Organism

Diverse

Viruses

Robust enzymes Faster enzymes Genome editing

enzymes

Dry

Environments

Stable enzymes

All these properties are highly desirable to Molecular Diagnostic and Molecular

Research companies

New novel enzymes will be obtained from different sources

14

Sourcing: Gaining Access to Other Novel Enzymes

Screen for new enzymes• Discovery Libraries

Uncommercialised enzymes • Prototypes (Technical Transfer; TTO)

Commercialised Enzymes• Existing Products (other companies)

Academic Sourcing:

Fuels internal R&D development

Commercial Sourcing:

Leverage external developments

• Todays model with UiT

• Complement beyond UiT’s libraries

• New approach for AZ

• License-in prototypes

• New approach for AZ

• Exploring with other companies

0

5

10

15

20

25

30

35

40

2015 2016 2017 2018 2019 2020

No

. o

f u

niq

ue e

nzym

es

Year

15

Sourcing: Ramp Commercial Potential Through R&D InvestmentNumber of Unique Enzymes Commercially Available 2016: 7 enzymes effectively generated 28 MNOK

in product sales

2020: At least 38 unique & diverse enzymes

commercialised

How?

• Incremental investment in R&D personnel

needed to drive “Sourcing” initiatives

Commercial Benefits

• 2018 and onwards – double capacity in

commercialising unique enzymes

• Accelerate commercial traction sooner via a

wider product rangeRamping innovation rate (R&D investment)

Current innovation rate (no investment)

50 MNOK

2018

Core

Business Today

Current

Business

Evolve

Offerings

Longer-Term

Initiatives

Summary

&

Outlook











??? MNOK

2020

16

2017

2020


17

Contract Discovery & Research in Tromsø

Discovery

Libraries

Screening/

Feasilbity

Engineering/

Optimisation

Prototype

(license to AZ)

Product

Development

Manufacture &

Launch

External Competences (Today) AZ Competences (Today)

Custom screening of libraries Re-engineering/optimisation of

customers OWN enzymesArcticZymes Services• Partnership is key in being

able to provide such services

Custom polymerase’s likely to trigger our 1st projects

ArcticZymes could take more of the value chain by offering:

• Contract Research Services: custom kit development around customers own biomarkers

• Contract Manufacturing Services: exclusively manufacturing kits or custom bulk components

What ArcticZymes needs to do in being able to offer such services?

18

Custom Development and Manufacturing of Kits

Valu

e

Ch

ain

Business Today

• Offer single components

(e.g. Cod UNG)

Long Term

• Build out product range via

evolving offering

• Obtain all the building blocks

needed to build kits

Medium Term

• Seek partners with kit development

competence to assist AZ in providing

services

19

Strategic Acquisition & Joint Ventures

Longer-term initiative

Acquisition of a commercially operative, synergistic & complementary business

Likely an existing partner. Value and business fitness known

Strategically strengthen our commercial position and capabilities that would be unattainable alone

50 MNOK

2018

Core

Business Today

Current

Business

Evolve

Offerings

Longer-Term

Initiatives

Summary

&

Outlook











??? MNOK

2020

20

2017

2020


Summary: Commercial Impact from Evolve Offerings

21

Without additional investment

Higher commercial risk

× Still viewed as a niche supplier: slim and

fewer enzymes portfolios

× Displacement by competitors

Investment: laboratory & commercial personnel

Commercialise more enzymes (100%)

Drive higher revenues; greater potential post 2020

Maintain a positive EBITDA

Greatly lowers commercial risk

Broader portfolio range and enzyme diversity

More attractive as AZ moves towards being a

leading supplier of unique enzymes

Other initiatives not included. Business cases will be developed further as business matures.

Evolve Offering Initiatives

0

20

40

60

80

100

2013 2014 2015 2016 2017 2018 2020

MN

OK

Pro

du

ct

Sale

s*

Existing Approach Evolve Offerings Initiatives

*Product sales only. Other revenues not included

Existing Approach

22

Outlook: Towards and Beyond 2020

Vision

Mature towards next level

in being a solution and

broader content supplier

Ambition

Become Nordic’s largest

molecular company

2020

Evolve business towards other kinds of unique enzymes (38+ enzymes)

Diversify and leverage synergistic technologies beyond Tromsø

Leading B2B supplier for uniqueand quality molecular enzymes

Beta-glucan technology and products

with exciting commercial potentials

2

3

24

AgendaTime Presentation Presenter

0900 – 0910 Opening remarks CEO Svein Lien

0910 – 0940 Enzymes – taking ArcticZymes to the next level MD Jethro Holter

0940 – 0950 Q&A

0950 - 0955 Beta-glucan a versatile technology platform CSO Rolf Engstad

0955 – 1020Woulgan® - driving sales in key markets and next

generation productsVP Marketing Stuart Devine

1020 - 1030 Q&A and coffee

1030 – 1110

Other beta-glucan initiatives:

• Animal Health – securing high volumes sales

• Consumer health – competitive priced high quality

product

• Cancer – opportunity with untapped potential

CEO Svein Lien

CSO Rolf Engstad

1110 - 1120 Q&A

1120 - 1130 Execution on corporate strategy CEO Svein Lien

Biotec versatile beta-glucan technologyplatform - trigger of basic immune functions

• Macrophages are found throughout the whole animal kingdom

• Macrophages are known as Metchnikoffs soldiers – killing pathogens & instructing theimmune system

• Beta-glucans stimulates macrophages to become more active – «pathogen-like structure»25

Metchnikoff Elia (1887). "Sur la lutte des cellules de l’organisme contre l’invasion des microbes- On fighting cells of the body against invading microbes. Ann. Inst. Pasteur 1: 32

Innate immunity Adaptive immunity

Main functionPrevent microorganisms (bacterial, fungal and viral pathogens) to

invade the host & eliminate «non-self»

How are pathogensrecognised

By fixed structures onpathogen groups

Learn to recognise any structureon pathogens

Response time Immediate Need days/weeks

Cells involved Neutrophils, NK-cellsMacrophages

T- and B-cells (antibodies) assisted by Macrophages

WoulganDriving sales in key markets and next generation products

European** sales

New products

New markets, esp. U.S.

**European and also EU-similar markets

Woulgan® status and mid-term* objectives

*Mid-term 2018-2020

European* sales

Commercial traction

Short-term profit

Commercial reference for new markets

*European and also EU-similar markets

Clinical practice

Market access

Go-to-market

European sales - priorities

*Management estimate based on in-market sales reports

Clinical practice: Key opinion leader engagement & support

Market access: Ensure tender and reimbursement listing

Go-to-market: Sales generation, sales & marketing

organization

European sales- status

Clinicians** prescribed Woulgan for over 1,350* patients (1,000* patients from January to June)

Attended 28 congresses and presented 30 posters, organized 2 clinician led symposia, 6 multi-media campaigns

Woulgan featured in 5 journal publications & 2 KOL-led webinars with over 1,500 unique viewers

Germany: Woulgan reimbursed by payers (Sick Funds)

Nordics: tenders slower to renew but making progress to establish “beta glucan gel” as a specific category

UK: producing evidence for 2nd application if needed. Q3 decision to potentially re-open 1st application

2.1 MNOK sales ex-Biotec (1.3 MNOK from January to June)

Q2 in-market sales (consumption) more than trebled from Q1 and sales pipeline looks good

Continue building effective sales & marketing organization

**Since previous capital markets presentation- February 2016

*Source: Industry expert

Clinicians rely mostly on personal experience* to decide on wound care treatments

Clinical practice

Personal clinical

experience

Treatment decision

Manufacturer

Local institution

KOLs & national association guidelines

Further develop KOL endorsements for faster, smoother adoption

• In time KOL support potentially leads into national guideline

Continue selling evaluations as key step in sales process

• Personal experience is essential stage in treatment choice

31

Filter 3:Local listing (UK, Nordics & Germany)

Filter 1: National reimbursement (UK & Germany)

Filter 2:Regional reimbursement/Tender listing (Nordics & Germany)

UK Drug Tariff delay:

▪ Delay in “license to hunt”

▪ Targeting off-Drug tariff accounts

▪ N.B. alternative models, e.g. available OTC but Drug Tariff is 1st option

Germany reimbursed & selling

▪ Homecare companies and GPs buying Woulgan

▪ Sick funds reimbursing Woulgan

▪ G-BAs view on hydrogels as dressings remains open, so clarify reimbursement with G-BA positive list

Nordics adding to tenders

▪ Targeting 30% listing on county tenders by end 2017

▪ Extend wholesaler listings needed for community supply

Market access

Where clinicians have free access to product, e.g. Germany, they are responding very positively to Woulgan

• Sales outlook is very positive

• 2017 sales growth according to expectations• Germany ahead• Nordic/UK behind

• Sales outlook 2018-2019• Expect to achieve sales growth and demonstrate sufficient traction

to open opportunities for commercial partnerships in new markets

Go-to-market - sales outlook

• Stalled wounds are a growing global

problem

• 1-2% of population experience chronic

wound during lifetime

• >60% chronic wounds become stalled

• >6 million stalled wounds accessible

globally*

• Pricing varies significantly by market

• U.S. pricing potentially multiple of EU

US 2 17

Germany3346 %

UK2204 %

Nordics1062%

Other European

1 15719 %

ROW1 92432 %

US Germany UK Nordic Other European ROW

*Biotec internal analysis and public journals

# Wounds accessible by region

Woulgan opportunity# in 1000

Woulgan opportunity - example UK market

34

Management estimates from IMS data

2012 2013 2014 2015 2016 2017

0

25

20

30

15

10

5

# o

f p

atie

nts

/(0

00

’s)

2nd line #1 New market entrant

Why Woulgan competes in the market on efficacy

• Strong clinical evidence in Diabetic Foot Ulcer (DFU)

• Strong feedback from multiple clinicians & Key Opinion Leaders

• Repeating customer orders shows positive user experience

Examples of wounds treated by equivalent* brands

• Conservative estimate of 200K UK stalled wounds- €32m potential sales

• 2nd line Brand #1 reaches approx. 12% of stalled market

*Proxy brands selected for being new market entrants or commonly used as 2nd line

=€4m @Biotec selling price

0%

10%

20%

30%

40%

50%

60%

Intrasite St care dressing Promogran SBG/Woulgan

Wound healing in DFU

8 weeks 10 weeks 12 weeks

Source: Whalley et al 2002; Veves et al 2002; Zykova et al 2014

New products

Broader offering

Substantial additional market potential

Existing, attractive reimbursement

Illustration

New products

5 %

20 % 40 …

20 % 5 %

10 %

Exudate

Dry to Moderate

Low toHigher

VeryHigh

Wo

un

dA

rea

<5cm2 GelDry

layer

>5cm2 SprayDry

layer

Woulgan positioning by wound characteristics• Market research for new product formats

• Woulgan dry layer will address 60% of stalled wounds not available to gel product

• Proof of concept established

• Reimbursement for dry dressing more widespread & more attractive

• Pilot production plant is being built

New products

>20202018-20192016-2017<2016

Development & proof of concept

Market research feedback from wound experts

Develop new production technology / securing IPR

Pilot plant production for clinical trial and

approval

Clinical documentation

Notified body filing &

approval

Woulgan dry layer development path(Dry layer and gel have the same principle composition and ingredients)

• Currently exploring production technologies to make cost-effective, competitive dry layer, with the desired qualities as defined by wound care expert panel

CE-approved and ready for market,FDA approval in

process

Technical dossier development


Commercial traction

Compelling plan for US reimbursement

Partner opportunities

*European and also EU-similar markets


US market

• Largest wound care market $3.1B in 2017

• US system has an established referral path to specialised clinics for non-healing wounds

• This leads to a greater use of active healing products (Actives), benefiting from substantially higher product reimbursement

• Currently validating how Woulgan would qualify as an “Active”

Soure: Industry expert

1 059

387

902

769

0 200 400 600 800 1 000 1 200

Sales

2017 Sales/m$

Actives AWC dressings Other biologics External devices

Sales growth and new products create

opportunities for new markets with US as top

priority

Woulgan dry layer expands

market and broadens offering

Delivering European sales

gives confidence and

profit

Outlook

Animal Health

M-Glucan®

Status

• Biotec is the market leader in supply of beta-

glucans to the salmon feed industry in the

North Sea market

• Current supply is in excess of 150 tons

• This product is a similar substance to what is

further refined into Consumer Health, Wound

care and Cancer in Biotec’s own factory

• It is thus a clear synergy between these

substances even though the market segments

are different

• Until recently, Biotec has sold most of the

production capacity available at supplier

• However, supplier are now further expanding

production capacity which enable the

development of additional customers and new

animals segments

• This increases the opportunity for Biotec

• There are a lot of opportunities in new

territories and for use in additional animals

The opportunity going forward

42

Status and opportunity in animal health

• Biotec has a good name, a lot of

contacts and good documentation, in

particular for Atlantic salmon feed

• The sale of M-Glucan® products has

much of the same characteristics as

the consumer health segment =

ingredient sales

• The product helps the animal to fight

diseases with their own immune

defence – reduce need for drugs

43

The competitive advantage

44

Why is M-Glucan® important for animals?The antiviral type I Interferon is upregulated with M-Glucan®

Inte

rfer

on

exp

ress

ion

M-Glucan® priming

No priming

0

100

200

300

400

500

600

700

800

0

20

40

60

80

100

120

140

160

180

The macrophage activator IFN-γ is upregulated with M-Glucan®

IFN

-γ e

xpre

ssio

n

No priming M-Glucan® priming

The inflammatory cytokine TNF is upregulated with M-Glucan®

0

100

200

300

400

500

600

700

No priming

TNF

exp

ress

ion

M-Glucan™ priming (24 h)

Wash out

Poly(I:C)Stimulation (6 h)

Day 1 Day 7

RegularMedium (5 days)

M-Glucan® priming

ND

ND ND ND

ConPoly(I:C)«Simulated» viral infection

Pigs

• Regular feed €1400 / ton

• Dose 250g / ton feed

• Price M-Glucan approx. € 22 / kg

• Increased cost €5.5 per ton feed =

0,4%

Salmon

• Regular feed €1500 – 2000 / ton

• Dose 1 kg / ton feed (health feed)

• Price M-Glucan approx. € 22 / kg

• Increased cost € 22 per ton feed = 1.2%

45

What is the cost of M-Glucan®?

37 %

23 %

13 %

11 %

16 %

Aqua feed market 40 Mtons

Carp

Tilapia

Shrimp

Salmonids

Other

43 %

26 %

20 %

4 %7 %

Feed Market 1,026 Mtons (2016)

Poultry

Pig

Ruminant

Aquaculture

Other

46

Total feed market

* Source: Kontali analyse, Marine Harvest (2016 numbers)

Atlantic Salmon 83% of Salmonids = 3.7 Mtons

28 %

46 %

26 %

Salmonid Feed Regions

Chile

Norway

Other

• Atlantic Salmon 3.7 Mtons * 46%

Norway = 1.7 Mtons Atlantic Salmon

Feed Norway

• Health Feed approx. 10% of market =

170,000 tons

• Beta-glucans 1% mix in health feed =

170 tons M-Glucan®

• This means we currently have the

majority of this market in Norway

47

Supply the majority of the Atlantic Salmon Feed market in Norway

* Source: Kontali analyse, Marine Harvest (2016 numbers)

Risks:

• If one of the few large customers leaves, lost volume will be hard to compensate short term

• Documentation to support arguments in additional animals are the key differentiator in each animal segment

• New market development should be done carefully as certain sectors may not have a culture for such products even though compelling clinical evidence may be obtained

Opportunities

• Strong and profitable business with a clear synergy to the other business segments

• Strengthen the animals own immune system:

• Increased focus on animal wellbeing

• Reduce the use of antibiotics

• Increased production capacity enables Biotec to work on new businesses:

• Alternative territories

• Other animals

48

Opportunities and risks

Consumer Health

M-Gard®

4

9

• Biotec re-entered consumer health market in late

2016 after arbitration with NutraQ was concluded

• Currently high level of activities with a number of

leads and processes

• Biotec has a purpose built factory in Tromsø to

produce M-Gard® products with a current

capacity of 20Mtons that easily can be increased

when needed

• Due to high fixed cost of factory, sale of M-Gard®

products represents a substantial contribution to

Biotec

• Thus to get this business up and running is an

important focus area for the Company 50

Status of consumer health

0

2 000

4 000

6 000

8 000

10 000

12 000

2013 2014 2015 2016 2017 Bud

Historic sales - Norway

• M-Gard® is a naturally occurring

complex polysaccharide found in the

cell walls of baker’s yeast

• M-Gard® is an immunomodulator that

enhances the body’s vital defense

mechanisms against pathogens such as

bacteria, virus, fungus etc

• M-Gard® represents an excellent

immune enhancing compound for

human use

51

Value proposition consumer health

Product characteristics and applications

• M-Gard® can be obtained in a

variety of different

concentrations and formats

• M-Gard® is odour-free and easy

to blend into existing formulas.

• M-Gard® is a stable ingredient

with a shelf life of 5 years

• Typical applications for these ingredients are

capsules, gummy candy like gummy bears,

liquid shots, syrups, bars, post-work out

recovery products, chewing gums and

functional food

• Nutritional applications are those relating to a

compromised immune system like e.g.

prevention of viral and bacterial infections,

improving overall physical health, protecting in

periods of exceeded stress and support of

respiratory health, prevention of allergies

53

Utility of M-Gard®

54

Main focus is direct sale of bulk ingredient

B2C B2B

Webshop

(direct)

Bu

sin

ess

Seg

men

t

Tran

sact

ion

al

Rela

tio

nsh

ip

Pro

du

ct

off

eri

ng

Bulk

(direct)

Standard M-Gard

also consider an

affordable soluble

version

Ingredient supplier

and brand owners.

Promotional Main focus

Food safety status

• GRAS in the US (2008)

• Regarded as safe (Novel Food approved)

by EFSA in 2012

Health claim status

• No claims in the US, but this is weaker

enforced by the FDA/industry

• No claims in the EU (EFSA) strongly

enforced in Europe

• Oat derived beta glucans have a claim in

Europe (cholesterol lowering effect) – not

relevant for M-Gard®

55

Regulatory processes

• Total market for yeast beta-glucans is

estimated to USD 120M (2017) with a

CAGR of 6.9%

• However, a large proportion of this

market is supplied with low quality /

low cost products

• Biotec internal analysis estimates the

total available market (TAM) for high

quality yeast based nutrition grade

beta-glucan to be around USD 40M

with a volume of around 200 Mtons56

Market Yeast Beta-Glucans Consumer Health

Source: Future Market Insights Report

Yeast Beta-glucan market value 2015-2025

Key

success

factors

Gaining

momentum

with 5-6 key

customers

Push and

market

access to

Europe and

the US

Approved

claim(s)

Europe and

US

Continued

development

of scientific

data

Ensure

regulatory

approval

where

appropriate

57

Key success factorsShort/Medium term

Opportunities and outlook:

• The product(s) are developed and documented and are entering into a developed market

• Biotec has an existing purpose built factory to produce these products

• This means Biotec can provide existing products into an existing market from an existing factory

• Limited sales expected this year with ramp up from 2018

Risks

• Only one existing customer. Last sale in Q1

2016

• To develop B2B relations takes time

• Documentation needs renewal and updating

58

Opportunities and risks

SBG® in immunotherapy of cancer

August 2017

Rolf E Engstad

60

Clinical studies within cancer – ongoing and discontinued

Indication Therapy Preclinical Phase I Phase II Phase III

High–risk

Neuroblastoma

(m)mAb 3F8 (i.v.) +

increasing doses of SBG (oral)

High-risk

Neuroblastoma

Bivalent vaccine (s.c.) +

fixed dose of SBG (oral)

Breast cancer mAb Herceptin (i.v.) +


Non-Hodgkin

lymphoma

mAb Rituximab (i.v.) +


Discontinued,

frequent HAMA titer

Discontinued

Discontinued

Ongoing

Excellent safety profile established for all tested combinations of SBG + monoclonal antibody

or vaccine

• Potentiating the cytotoxicty of

leukocytes – macrophages, neutrophils

and NK-cells through interaction with

Dectin-1 and iCR3.

• Immune-mediated tumour cell killing

can be carried out by the induction of

phagocytosis; complement activation;

antibody-dependent cellular

cytotoxicity (ADCC)

• Macrophages & Dendritic cells can

induce immunity to tumor antigens

(“natural vaccination”)

61

SBG® - Mode of Action – basic «effector» role

The Lancet 2009 373, 1033-1040DOI: (10.1016/S0140-6736(09)60251-8)

• Adjuvant effect in combination with anti-

neuroblastoma (mouse)mAb

• Adjuvant effect in combination with anti-

neuroblastoma vaccine

62

SBG® in cancer therapy: pre-clinical w/controls

Mice were treated with a combination of anti-cancer

antibody 3F8 (200 ug per day) i.v. twice weekly x 5

doses, and oral β-glucan (SBG) at 400 mg per day

given per oral for a total of 18 days.

0 10 20 30 40 50 60 70 800

10

20

30

40

50

60

70

80

90

100

110PBSGD2-KLHGD2-KLH + B-glucanB-glucan

Duration in Days

Pe

rce

nt

su

rviv

al

Survival of mice after footpad challenge (day -28),

amputation (day 0), GD2-KLH conjugate plus QS-21

vaccinations (days -4, 0, 3 and 16) and oral beta-glucan

(days 1-20).

mAb 3F8 +SBG

mAb 3F8

SBG adjuvant

increased survival

rate by >50%

• Neuroblastoma is one of the most frequent cancers in children, but still very rare

(prevalence 1 of 7000 live births).

• Neuroblastoma is categorised according to risk: low-, intermediate- and high-risk.

• Low-risk group & Intermediate-risk group: : Children in the low-risk group have a 5-year survival

rate that is higher than 95% and above 90% for the intermediate-risk group.

• High-risk group: The 5-year survival rate in children in the high-risk group is around 30% to 50%.

• High-risk neuroblastoma account for about 50% of all neuroblastoma cases, equals

about 750 patients per year in US and Europe in total.

63

Neuroblastoma: Prevalence and risk groups

• Current treatment regime typically consist of either (or sequences of) chemotherapy,

surgery, myeloablative therapy and stem cell transplant (SCT), and radiation therapy.

• From 2015 the anti-GD2 mAb Unituxin, markedet United Therapeutics Corporation,

has been approved in for treating high-risk neuroblastoma (62 mUSD sales in 2016).

• Introduction of Unituxin increased the 5 year Overall Survival rate from below 40% to

just above 50%.

• From 2017 Unituxin has a black box warning due to a number of serious adverse

events in the US and is withdrawn from Europe.

64

Neuroblastoma: High-risk group treatment

65

SBG® in current neuroblastoma vaccine trial

SBG® administered orally (p.o.) in combination with anti-

neuroblastoma vaccine given as subcutaneous (s.c.) injection

Vaccine given s.c. at week 1, 2, 3, 8, 20, 32 and 52.

A fixed dose of oral β-glucan (40 mg/kg/day) is started at

week 6 or 7 (to allow time for generation of antibodies), and

continued for 2 weeks on, 2 weeks off, up to 1 cycle after the

last vaccination. SBG is given as a 2% aqueous solution.

January 2014 (15 patients): 93% overall survival (>25

months) Kushner et al 2014 Clin Canc Res 20:1375

In 2015 the study was expanded to include patients in 1st

remission – a total of 185 patients to be recruited (currently

almost 140 patients recruited)

April 2017 : overall survival rate still very promising0

20

40

60

80

100

120

140

2009 2014 2015 2016 2017 (H1)

Patients under treatment

• Biotec BetaGlucans holds a drug manufacturing lisence from The Norwegian Medicines Agency for

production of SBG® for clinical trials

• Biotec BetaGlucans holds a manufacturing lisence for product release of SBG® as final drug

product to use in patients

• SBG’s common technical document (CTD 3.2.S.1-S.7) has been reviewed and approved by MHRA

(part of class III rule 13 approval process).

• SBG® is likely to be classified as a natural product of herbal origin (botanical) in the US

• SBG® as a 2% gel like solution has IP-protection until 2031

66

Regulatory & IP status in cancer therapy

Neuroblastoma

• Small but high impact indication in children

• Will serve as a proof of concept for use of

SBG® in immunotherapy of cancer

• The treatment regime has a possibility of

becoming approved without a regular phase III

trial

• Biotec is in discussion with MSKCC on

alternative ways to commercialise the

combined treatment. MSKCC has licenced the

rights to the vaccine to a US company, but is

producing themselves for the trial

Other cancer areas

• A number of immunotherapeutic treatment

regimes are still lacking full efficacy

• Combination therapies to enhance the efficacy

of the primary antibody/vaccine is desirable

• Biotec has initiated discussions with other

companies having products in early phase

development

• Publication of positive results from the

neuroblastoma trial will boost the interest for

SBG® as an adjuvant in immunotherapy of

cancer and in general support the Biotec

business

67

Outlook SBG® in cancer therapy

Execution on

Corporate Strategy

69

Biotec investment proposition

• Global leader within cold adapted

enzymes – now going to the next levelGlobal

• Unique position for immunomodulatory

beta-glucan ingredientsUnique

• Cost efficient and well documented

nutrition and animal health productsEfficient

• Woulgan® proven to reactivate stalled

wounds Proven

• SBG® as adjuvant showing promising

potential in cancer treatmentPotential

70

Credible and reliable!

2016 outlook

• Enter into distribution agreement(s) for

Woulgan® in Germany

• Grow business further in Animal Health and

Nutrition

• Achieve important milestones in the organic

development of the ArcticZymes business and in

the new enzyme development projects

• Full launch in UK and Scandinavia

• Finalize the UK reimbursement process in the

high-end category of the market

Outlook presented at previous CMD Feb 2016!

2018 outlook presented is still our

ambition

• Full commercialization of Woulgan® in key

markets

• NOK100M in Group Revenues

• A cash positive and fully funded operation

• A strong product pipeline

• Enhance the value creation of ArcticZymes

through organic growth, partnerships and

strategic opportunities in the fast growing

market for molecular enzymes

71

Short term potential achievements

Reimbursement by UK Drug Tariff German sales growth continues

Nordic tender access New supply agreements for

M-Gard® and M-Glucan®

Product launch of new IsoPol™

polymerases New agreements for ArcticZymes

Product launch and sales relating

to SAN Elisa kit

72

2020 Ambitions

Revenues : MNOK 150-200+

ArcticZymes

Sales: MNOK 75 -100+M-Gard M-Glucan Woulgan

Sales MNOK 75 – 100+

Biotec will continue to generate sales over the next few years with an

ambition of NOK 150-200 mill in revenues by 2020. Focus on partnerships

and value creating activities will be key priorities

The following are key factors for obtaining our ambition:

• Expand sales and product portfolio in ArcticZymes through partnerships, joint ventures and/or

strategic initiatives

• Recurring and growing Woulgan® revenues in key markets

• Product expansion and market access to the US for Woulgan®

• Securing long-term and committed supply agreements for our unique ingredients M-Glucan®

and M-Gard®

• Establish commercial initiatives within cancer adjuvants 73

2020 Ambitions

74

Thank you!

Strategic update and outlook€¦ · • Feed ingredient - market leader with a lot of potential...

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