CEO Comment in Connection with the Preferential Rights Issue 2022

In 2022, Nanologica has taken important steps forward in the chromatography business area. We have scaled up the production of our commercial silica for preparative chromatography, NLAB Saga®, to tonal scale, and we have sold the first products in preparative chromatography, as well as taken orders for NLAB Saga® for production-scale evaluation from one of the world’s largest insulin manufacturers. The fact that we now have products from our large-scale production means that we can move forward in the evaluation steps with more customers and we will now be able to send products to more customers for evaluation, with the goal of signing supply agreements for larger volumes in the next step.

During the spring, we started the launch of NLAB Saga® and our products have been very well received. Interest and demand are high, and we are experiencing a higher demand for this type of product overall in the market compared to what current suppliers can deliver. This is because the need for insulin, GLP-1 analogues, and other peptide-based drugs – which generally need our type of purification technology in their production – is constantly increasing, partly as a result of the number of diabetics in the world increasing (especially in Asia), partly triggered by a general transition from small molecules to peptide-based drugs. In addition, GLP-1 analogues that were previously mainly used for the treatment of diabetes have now also been approved for the treatment of obesity, which opens up another large market for our type of product.

In light of this, we see that there is a window of opportunity in the market for preparative chromatography and we therefore believe that now is the right time to increase our investments and thereby strengthen our competitiveness. We believe that an increase in our capacity and production rate, as well as a strengthening of our resources in sales, marketing, and application support, will increase our chances of entering the market faster and with greater impact. We have therefore decided to carry out a rights issue to provide us the financial conditions to take advantage of this opportunity.

We intend to use the net proceeds from the rights issue for investments in equipment that streamlines processes and eliminates bottlenecks to increase our capacity and production rate, as well as for investments to be able to run parallel production streams in order to faster be able to meet the market’s needs for different types of products. We also intend to strengthen our efforts within sales, marketing and application support, and we further assess that a strengthened financial position puts the company in a better position in customer dialogues.

The climate in the stock market is currently far from favorable. Therefore, we are pleased that our main owner Flerie Invest AB continues to show strong faith in and great support for the company by both subscribing for its pro-rata share and underwriting the rights issue up to 85 percent, despite the fact that the subscription price was set without a discount. This means that we will receive at least approximately SEK 80 million before issue costs, which we believe is sufficient to implement our plans for intensified investments in preparative chromatography.

Now that we have proven to our customers and to ourselves that we can manufacture high-quality silica on a large scale, we are entering a very interesting phase and I believe that our business in preparative chromatography within a few years will be able to generate significant profitability for the company.  I am convinced that the future of Nanologica is bright and I am proud to be the company’s CEO and third largest owner.

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Södertälje
September 2022

Andreas Bhagwani
CEO Nanologica AB

 

For more information on the rights issue, please refer to:

Information om företrädesemission 2022 (svenska)

Information regarding the rights issue 2022 (English)

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