Arctic Bioscience — Earnings Release 2021

Apr 7, 2022

Arctic Bioscience announces full year 2021 results

Arctic Bioscience announces full year 2021 results

Highlights

· Successful private placement and IPO raising NOK 300 million in growth

capital on Euronext Growth

· Phase IIb clinical study on HRO350 in mild-to-moderate psoriasis remains

largely on track and on budget with site feasibility completed and sufficient

number of patients secured

· Announced collaboration to develop new drug candidate for brain development

in extremely premature infants with Smerud Medical Research International

(Smerud)

· Awarded NOK 4.85 million grant from The Research Council of Norway to

elucidate the Mechanism of Action (MOA) in HRO350

· Granted a new patent in the USA in the field of Diabetes type 2, expanding

our potential pipeline

· Deployed three products in the Chinese market via e-commerce platforms -

ROMEGA Prenatal, ROMEGA Brain Health and ROMEGA Eye Health. ROMEGA Brain

launched in B2C market in Norway.

· Available cash totaling NOK 227 million as of 31 December 2021, securing

financial strength to execute ongoing development programs

Financials

(NOK million) 2021 2020

Revenues 21.5 20.6

Gross profit 5.2 5.4

Adjusted gross profit* 5.8 5.4

EBITDA -38.1 -20.5

Adjusted EBITDA* -29.3 -20.5

CAPEX -36.5 -13.5

Cash holdings 227.3 12.6

* Adjustments to operating expenditures are made for costs associated with the

listing on Euronext Growth

* Adjustments to operating expenditures are made for costs associated with the

listing on Euronext Growth

CEO Christer Valderhaug comments:

"2021 was undoubtedly a year to remember, with the crowning achievement our

successful NOK 300 million private placement and IPO on Euronext Growth this

past February.

2021 also marked the start of our international pharmaceutical development

venture as we proceed with the drug development program on our investigational

medicinal product HRO350 in mild-to-moderate psoriasis. In 2022, 519 patients in

five European countries are to be recruited in our phase IIb clinical trial -

one of the largest clinical trials ever carried out by a Norwegian Company.

Our Nutra business continues to develop both from a product and market

perspective. In 2021 we have seen a strong entry into the Chinese market for

Nutra products through our partnership with Kotler Marketing Group, and we

expect strong improvement in the B2B, B2C and China nutra business segments in

the coming years.

Our investments in science and research show our dedication to R&D and building

a pipeline in several disease states with the possibility to enter multiple

international markets. Throughout the year our R&D team have also worked with

developing production methods according to pharma standard Good Manufacturing

Practice (GMP), preparing the clinical materials for the Phase IIb clinical

trial and preparing for our planned GMP production facility.

In summary, 2021 was the year Arctic Nutrition became Arctic Bioscience - a

listed company with attractive prospects in both Nutra and Pharma with two drug

candidates under development and nutraceutical sales in the global market."

Outlook

Strategically, the main focus for Arctic Bioscience remains the phase IIb

clinical study on HRO350 for the treatment of mild-to-moderate psoriasis. The

main goals for 2022 are to deliver the Clinical Trial Application (CTA) and

recruit the first patient into the study around mid-2022.  With a 6-month

inclusion period, the Group expects to have the 6- month data read out around

mid-2023, after which a commercial licensing deal will be pursued.  Arctic

Bioscience will also continue collaborating with Smerud on the new drug

candidate for extremely premature infants.

In Nutra, Arctic Bioscience expects strong improvement in all areas. In B2C, the

focus will be on doubling the subscriber base while bringing down customer

acquisition costs. The B2B pipeline is strong, and the focus will be on

increasing the pipeline, improving qualified lead conversion rates and entering

new geographies.  Based on current and forecasted orders, revenue from China is

expected to increase substantially in 2022.  Arctic Bioscience will invest in

sales & marketing as we look to set the stage for longer term growth. The

forecast is for Nutra revenue to increase at least 40% in 2022.

From a financial perspective, Arctic Bioscience expects the overall budget for

the phase IIb clinical study to be slightly higher than original forecasts but

by less than 10%. As investment in our own GMP manufacturing facility will be

postponed, overall capex in Arctic Bioscience during 2022 will be significantly

less than originally forecast.

Webcast presentation of 2021 annual report and full year results

At 12:00 CEST today, the company will host a webcast and Q&A to present the

results.

Webcast Details:

Arctic Bioscience AS FY 2021 webcast presentation:

Date: Thursday April 7, 2022

Time: 12.00 CEST

Format: Webcast and Q&A

Language: English

Link:  https://streams.eventcdn.net/arcticbioscienceas/financial-results-fy

-2021 (https://www.google.com/url?q=https%3A%2F%2Fstreams.eventcdn.net%2Farcticbi

oscienceas%2Ffinancial-results-fy

-2021&sa=D&ust=1649157182461000&usg=AOvVaw3XfKkRo23hCmsUFKEIyIRt)

Participants will be required to register to view the webcast and participate in

the Q&A.

For more information, please contact

Christer L. Valderhaug

CEO Arctic Bioscience

Phone: +47 920 84 601

E-mail: christer@arctic-bioscience.com

About Arctic Bioscience

Arctic Bioscience is a biotech company developing and commercializing

nutraceutical and pharmaceutical products based on unique bioactive marine

compounds from herring roe.

The company is developing HRO350 - a novel investigational drug candidate based

on herring roe. HRO350 is being developed for treatment of patients with mild-to

-moderate psoriasis. This is a large patient group in need of new effective

medicines with beneficial safety profile.

Herring roe contains lipids that are essential in maintaining cell membranes and

omega -3 fatty acids that contribute to the normal functioning of brain, heart,

and vision. Nutraceuticals from Arctic Bioscience are sold globally as bulk

ingredients as well as finished goods under the ROMEGA® brand. The strategy is

to switch sales from bulk to finished goods and focus markets are USA and China.

Arctic Bioscience is led by a team of highly competent people with experience in

developing marine oils and experience from global pharmaceutical companies.

This information is subject to the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.