CEO Comment Q1 2024

The year has started both positively and negatively. On a positive note, we have started delivering chromatography media to customers and we achieved net sales of MSEK 5 in the first quarter. This is the company’s highest sales of chromatography products in a single quarter to date and in line with the expectations of a a sharp increase in sales of chromatography media in 2024.
At the same time, the work of optimizing the production process faced a setback when material was lost.  Together with our production partner Sterling, we are analyzing the incident to determine the underlying cause. In this report, we have made an impairment loss of MSEK 4 corresponding to the lost material. I have previously stressed the need to stabilize and improve production, and this incident underlines this.

On the customer side, the largest delivery was NLAB Siv™, our first non-silica-based product. NLAB Siv™ is a purification media for chromatography used for products outside the peptide range and which we have developed together with a customer in Asia. The customer is currently evaluating the product in its manufacturing. In the event of a positive outcome, we expect that NLAB Siv™ will gradually replace the product they use today. Based on the dialogue we have with the customer, we believe that this may become be a significant business for Nanologica.

The insulin manufacturer in Asia that is evaluating our silica media NLAB Saga® on a production scale has not yet provided us with full results from the evaluation. They are now conducting life cycle tests and preliminary results look promising. If the final results are also positive, we expect negotiations for deliveries of larger volumes over a long period of time, starting in 2024.

The timing of when these two customers will start placing larger orders is uncertain and will have a major impact on our sales in 2024. We have therefore decided to update our estimate of sales for 2024 as it is largely based on sales to these two customers. We continue to expect a sharp increase in sales during the year and consider it reasonable to achieve sales corresponding to an annual rate of MSEK 100 by the end of the year.

In China, we have been working with a distributor, Yunbo Technologies, since 2018. The cooperation has been successful and opened up the Chinese market for us. However, in several dialogues, it has emerged that end customers wish to buy preparative silica directly from Nanologica, and not through a distributor. We have therefore renegotiated the agreement with Yunbo so that we can sell silica for preparative chromatography directly to end customers in China. This has several positive effects for us, including an improved margin.

During the quarter, we also noted with interest price increases in certain segments of the chromatography media market. Of course, this is also beneficial for our business.

The rights issue that we carried out during the quarter provided the company with approximately MSEK 40 in cash payment and set-off of loans of approximately MSEK 6.2. The share issue was supported by most of the company’s major shareholders and enables continued optimization of the production process, as well as investments in sales and marketing with the goal of creating a positive operating cash flow and reaching profitability.

We look forward to the rest of the year with confidence and expect sales to continue to grow substantially in the coming quarters.


Södertälje in April 2024
Andreas Bhagwani, CEO

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