2023 has been marked by geopolitical tensions and macroeconomic uncertainty. Like most others, Nanologica has been affected by this and we have had to prioritize our resources. On the other hand, we operate in a market segment that is virtually insensitive to economic cycles. We expect a commercial breakthrough in the near future and have a clear growth strategy for how we can capitalize on the strong market growth that exists in drugs for the treatment of diabetes and obesitas.
In 2023, Ozempic, semaglutide, and GLP-1 analogues were on everyone’s lips. The ongoing development in the field, not only with semaglutide, leads us to believe that these drugs will be among the most important drug classes in the coming decade. Several drugs have been market launched and we see a large activity with over 120 candidates in the pipeline. Obesity is expected to be a strong market driver, but studies are also underway in indications such as cardiovascular disease, Alzheimer’s, NASH, and sleep apnea.
Common to the vast majority of these drug candidates is that they need preparative chromatography to be purified. This will drive an increase of the market for silica-based purification media. The positive view we had of the market a year ago has thus been reinforced.
In China, there is a strong focus on GLP-1 analogues and especially semaglutide as the patent for semaglutide expires in 2026. When biosimilars to semaglutide are developed, we believe that there will be a greater focus on drug costs. This suggests that interest in a purification media that can reduce the production cost of this type of drug will increase. At the same time, tensions between China and the rest of the world have not had an impact on our segment, but we do not consider it unlikely that this could have a negative impact on the view of all foreign suppliers.
In parallel, the need for insulin and insulin analogues continues to increase as the number of patients with diabetes increases globally. The number of doses of drugs needs to increase significantly to meet the future patient need, and our assessment is that volume growth will primarily take place among Indian producers.
Overall, the market trend is very favorable for the type of purification products that Nanologica provides – even more so than just a year ago.
After approving our silica-based purification media NLAB Saga® in May, we have started commercialization during the year. By working closely with customers in the development of their processes, our strategy is to build strong references through satisfied customers and take a market position characterized by high product quality and superior application support. The first deliveries to customers were made in 2023 and in 2024 we expect significant recurring sales.
When we are out working with customers, we see that there is a need for better products in more areas of chromatography. In parallel with the production and commercialization of NLAB Saga®, we are therefore working to broaden the product portfolio with additional purification products and services – through own development and through collaborations. This way we can offer customers additional cost-saving workflows, completely in line with our vision of working for better and cheaper medicines for more patients. At the same time, it significantly increases the size of our addressable market.
In November, we sold our first non-silica-based chromatography product, NLAB Siv™. NLAB Siv™ is a purification media that is used for the purification of a different type of molecules than peptides. Although silica-based products will continue to be Nanologica’s main area in the future, we will continue to develop complementary products and services for chromatography to meet our customers’ needs.
To create the best conditions for success in preparative chromatography, we decided in May to focus the company’s operations on chromatography, where we are on the verge of a commercial breakthrough. The drug development business area was then down-prioritized and by the end of the year discontinued altogether. As a result, the management team and workforce have been adapted, which reduces the company’s costs.
To strengthen our financial position and secure capital to be able to make an impression on the market for preparative chromatography, we recently carried out a rights issue. The issue enables continued optimizations in production and investments in sales and marketing, with the goal of creating a positive operating cash flow and reaching profitability.
It has taken significantly more time and resources than any of us thought to get to the position we are in today. However, as a producer of consumables for pharmaceutical companies, Nanologica is well positioned to capitalize on the very strong growth we see in our market.
Södertälje in March 2024
Andreas Bhagwani, CEO
CEO Comment from Annual Report 2023
2023 has been marked by geopolitical tensions and macroeconomic uncertainty. Like most others, Nanologica has been affected by this and we have had to prioritize our resources. On the other hand, we operate in a market segment that is virtually insensitive to economic cycles. We expect a commercial breakthrough in the near future and have a clear growth strategy for how we can capitalize on the strong market growth that exists in drugs for the treatment of diabetes and obesitas.
In 2023, Ozempic, semaglutide, and GLP-1 analogues were on everyone’s lips. The ongoing development in the field, not only with semaglutide, leads us to believe that these drugs will be among the most important drug classes in the coming decade. Several drugs have been market launched and we see a large activity with over 120 candidates in the pipeline. Obesity is expected to be a strong market driver, but studies are also underway in indications such as cardiovascular disease, Alzheimer’s, NASH, and sleep apnea.
Common to the vast majority of these drug candidates is that they need preparative chromatography to be purified. This will drive an increase of the market for silica-based purification media. The positive view we had of the market a year ago has thus been reinforced.
In China, there is a strong focus on GLP-1 analogues and especially semaglutide as the patent for semaglutide expires in 2026. When biosimilars to semaglutide are developed, we believe that there will be a greater focus on drug costs. This suggests that interest in a purification media that can reduce the production cost of this type of drug will increase. At the same time, tensions between China and the rest of the world have not had an impact on our segment, but we do not consider it unlikely that this could have a negative impact on the view of all foreign suppliers.
In parallel, the need for insulin and insulin analogues continues to increase as the number of patients with diabetes increases globally. The number of doses of drugs needs to increase significantly to meet the future patient need, and our assessment is that volume growth will primarily take place among Indian producers.
Overall, the market trend is very favorable for the type of purification products that Nanologica provides – even more so than just a year ago.
After approving our silica-based purification media NLAB Saga® in May, we have started commercialization during the year. By working closely with customers in the development of their processes, our strategy is to build strong references through satisfied customers and take a market position characterized by high product quality and superior application support. The first deliveries to customers were made in 2023 and in 2024 we expect significant recurring sales.
When we are out working with customers, we see that there is a need for better products in more areas of chromatography. In parallel with the production and commercialization of NLAB Saga®, we are therefore working to broaden the product portfolio with additional purification products and services – through own development and through collaborations. This way we can offer customers additional cost-saving workflows, completely in line with our vision of working for better and cheaper medicines for more patients. At the same time, it significantly increases the size of our addressable market.
In November, we sold our first non-silica-based chromatography product, NLAB Siv™. NLAB Siv™ is a purification media that is used for the purification of a different type of molecules than peptides. Although silica-based products will continue to be Nanologica’s main area in the future, we will continue to develop complementary products and services for chromatography to meet our customers’ needs.
To create the best conditions for success in preparative chromatography, we decided in May to focus the company’s operations on chromatography, where we are on the verge of a commercial breakthrough. The drug development business area was then down-prioritized and by the end of the year discontinued altogether. As a result, the management team and workforce have been adapted, which reduces the company’s costs.
To strengthen our financial position and secure capital to be able to make an impression on the market for preparative chromatography, we recently carried out a rights issue. The issue enables continued optimizations in production and investments in sales and marketing, with the goal of creating a positive operating cash flow and reaching profitability.
It has taken significantly more time and resources than any of us thought to get to the position we are in today. However, as a producer of consumables for pharmaceutical companies, Nanologica is well positioned to capitalize on the very strong growth we see in our market.
Södertälje in March 2024
Andreas Bhagwani, CEO
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