Arctic Bioscience — Earnings Release 2024

Feb 27, 2025

Arctic Bioscience - Q4 2024 Operational update - Strong ending to 2024

Arctic Bioscience - Q4 2024 Operational update - Strong ending to 2024

Highlights Q4 2024:

· Arctic Bioscience is now funded to cash positive through a NOK 30 million

loan facility

· Strong \~\30% growth in sales revenues in 2024 and prospects of continued

strong growth

· Higher prices and product mix of goods sold results in increase of gross

margin

· Psoriasis drug candidate HRO350 on track for 12 months readout end of Q1

2025

Arctic Bioscience had a strong ending to 2024 with highest ever quarterly sales

of the company's nutraceutical products. In Q4 2024 total sales amounted to NOK

15,6 million, a significant increase compared to the same period in 2023. 2024

had a sales increase of 29 % compared to 2023, ending at NOK 43,5 million.

Especially the European market showed a strong growth, ending 50 % above sales

in 2023.

"We guided on a total sales growth of 25 % to 30 % for 2024, and I am very

pleased to see that we achieved this goal. We continue to develop our existing

business and expanding with new exciting customers. Our plan for further

development of the Asian markets is a key growth driver. Overall, the pace of

development is very good", says CEO Christer L. Valderhaug.

The HeROPA study did not meet its primary endpoint after 6 months of treatment

due to an unexpectedly high placebo rate. We are now looking forward to the

final read-out after 12 months of treatment, expected at the end of Q1 2025.

Arctic Bioscience is also in the process to develop a novel orphan designation

drug candidate for brain development in extremely premature infants, Arctic

Orphan. In Q4 2024 the company received a public grant from Innovation Norway of

NOK 2,3 million to develop the pre-clinical material. The project will run

alongside the HeROPA study and will provide a further basis for development of

the company's pharmaceutical business.

In January 2025 a NOK 30 million loan facility was secured. The establishment of

this facility was in accordance with previously communicated strategic financing

initiatives after the 6 months readout.

"I am very pleased that we were able to secure the new financing facility. This

gives us headroom on our pathway towards cash positive operations. It also

underlines the trust the investors have in our further development. I would also

like to thank Innovation Norway for their strong support and important

contribution to our innovation and international development. The potential in

our nutraceutical business and our pharmaceutical projects gives very promising

prospects for the future", ends CEO Christer L. Valderhaug.

Financials

Key figures - Q4 2024:

· Revenues from sales: NOK 15,6 million (NOK 9,9 million)

· Gross profit: NOK 5,4 million (NOK 1,7 million)

· Gross margin: 34,4 % (17,1 %)

· Adjusted EBITDA: NOK -7,4 million (NOK -9,9 million)

Comparable figures for Q4 2023 in brackets.

Key figures as of year-end 2024:

· Revenues from sales: NOK 43,5 million (NOK 33,8 million)

· Gross profit: NOK 14,2 million (NOK 9,8 million)

· Gross margin: 32,7 % (29,0 %)

· Adjusted EBITDA: NOK -36,8 million (NOK -38,6 million)

· Available liquidity end of period: NOK 7,0 million (NOK 109,6 million)

Comparable figures as the end 2023 in brackets. The 2024 figures are unaudited.

Sales revenues in Q4 2024 were strong, and amounted to NOK 15,6 million, an

increase of 57 % compared to the same period in 2023. Total revenues for 2024

amounts to NOK 43,5 million, representing a year-over-year growth of 29 %. The

European market ex. Norway has still the highest market share of total revenues

in 2024 with 42,8 %, followed by the APAC region with 30,0 %. The revenues from

the European market had an annual growth of 50 % in 2024. The Norwegian market,

including the B2C segment, delivered an annual growth of 15 % in 2024 compared

to 2023.

Gross profit in Q4 2024 increased with NOK 3,7 million compared to the same

period in 2023. Gross margin in Q4 2024 was 34,4 %, compared to 17,1 % in Q4

2023. The gross margin during 2024 has been stable, and full year gross margin

was 32,7 %, compared to 29,0 % for 2023. The main explanation for this increase

relates to higher prices and a more advantageous product mix of goods sold in

Adjusted EBITDA was NOK -7,4 million in Q4 2024, compared to NOK -9,9 million in

the same quarter of 2023. In total for 2024, the adjusted EBITDA amounts to NOK

-36,8 million, compared to NOK -38,6 million in 2023. Cost reduction initiatives

were implemented in the last quarter of 2024. These initiatives are followed up

closely and has been strengthen at the beginning of 2025. Effects from these

will be materialized going forward in 2025.

Available liquidity end of 2024 amounted to NOK 7,0 million. In January 2025 a

new loan facility of total NOK 30 million was established, which will strengthen

Arctic Bioscience's liquidity position going forward.

Outlook

The 12 months readout from the HeROPA study is expected end of Q1 2025 when all

patients have completed 52 weeks of treatment.

Together with cost reduction initiatives and positive revenue growth

expectations, the NOK 30 million loan facility is estimated to contribute to

bringing the company into a positive cash flow position. Further development of

the HRO350 in mild-to-moderate psoriasis, beyond the current phase IIb, will be

funded separately through partnerships or specific project funding.

The growth potential for the nutraceutical business is very positive. In 2025

the company will continue its work to establish a joint venture operation

together with Kotler Investment Ltd. to further develop the Chinese and

Southeast Asiatic market.

Webcast

Arctic Bioscience will host a webcast and Q&A session to present the results

today at 11:00 CET. The presentation can be accessed through the company's

website, or with the following link:

https://channel.royalcast.com/landingpage/hegnarmedia/20250227_6/

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

-12 of the Norwegian Securities Trading Act.

For further information, please contact:

Christer L. Valderhaug

CEO

Mobile: +47 920 84 601

Email: christer@arctic-bioscience.com

Jone R. Slinning

CFO

Mobile: +47 948 75 469

Email: jone@arctic-bioscience.com

About Arctic Bioscience

Arctic Bioscience is a biotech company developing and commercializing

pharmaceutical and nutraceutical products based on unique bioactive marine

compounds.

The company is developing HRO350 - a novel oral drug candidate. 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.

Nutraceuticals from Arctic Bioscience are sold globally as bulk ingredients as

well as finished goods under the ROMEGA® brand.

Arctic Bioscience is led by a highly skilled team of talents with diverse and

highly relevant background