Arctic Bioscience — Interim / Quarterly Report 2022

Oct 31, 2022

Arctic Bioscience - Q3 2022 Operational update - Positive progress in both pharma and nutra

Arctic Bioscience - Q3 2022 Operational update - Positive progress in both pharma and nutra

Highlights Q3 2022:

· HRO350 development on track with CTA submitted start of October 2022

· First patient expected to be enrolled in Q4 2022

· Record high deliveries of Nutra products to the Asian market during Q3 2022

· Total revenues almost doubled in Q3 2022 compared to Q3 2021, and YTD

revenues has already surpassed full year revenues in 2021

· YTD revenues of NOK 23,9 million as of Q3 2022, compared to NOK 16,8 million

as of Q3 2021

· Solid financial position with NOK 171,0 million in cash by 30. September

2022

During Q3 2022 Arctic Bioscience had a positive progress both in the

pharmaceutical development program and in the nutraceutical segment. In both

areas important milestones were reached during this quarter.

"Q3 was eventful for Arctic Bioscience. On the pharma side, we have concluded on

significant work packages to make sure we are in line with earlier communicated

milestones. With the submission of the Clinical Trial Application at the

beginning of October, we expect the first patient enrolled in the clinical trial

in Q4. Sales of our nutraceutical products was strong, and we have delivered a

record high volume to the Asian market. We are well situated to reach a total

year-on-year revenue growth of 60-70 %", says CEO Christer L. Valderhaug.

In the quarter a significant effort was made to finish the Clinical Trial

Application and preparing it for submission. During Q3 2022 a new pharma Quality

Assurance system has been implemented, making the Company prepared for the next

steps in the pharmaceutical development program.

The Nutra segment is developing well with a steady increase in total subscribers

in the B2C market in Norway, as well as strong growth in the B2B market. The B2B

Nutra segment materialized on the large order intake from the first half of

2022, which gave record high deliveries of nutraceutical products to the Asian

market. The overall development is positive and in line with the Company's sales

forecasts. The Nutra-team was strengthened in September with a new EVP Nutra

Sales B2B, Kim Thorup.

Financials

Key figures - Q3 2022:

· Revenues from sales: NOK 9,3 million (NOK 4,8 million)

· Gross profit: NOK 2,9 million (NOK 1,0 million)

· Gross margin: 31,5 % (20,8 %)

· EBITDA: NOK -7,8 million (NOK -7,4 million)

· Capex: NOK 2,3 million (NOK 3,9 million)

Comparable figures for Q3 2021 in brackets.

Key figures as of end Q3 2022:

· Revenues from sales: NOK 23,7 million (NOK 16,8 million)

· Gross profit: NOK 6,9 million (NOK 4,4 million)

· Gross margin: 29,1 % (26,2 %)

· EBITDA: NOK -22,2 million (NOK -27,4 million)

· Capex: NOK 33,7 million (NOK 25,7 million)

· Cash end period: NOK 171,0 million (NOK 246,5 million)

Comparable figures as of the end of Q3 2021 in brackets.

Sales revenues amounted to NOK 9,3 mill. in Q3 2022, a growth of 94 % compared

to the same period in 2021. YTD sales revenues amounted to NOK 23,7 mill. as of

end September, NOK 6,9 mill. higher than YTD revenue as of end Q3 2021. The B2B

-segment accounted for 91 % of the total revenues in Q3 2022.

The gross margin was 31,5 % in Q3 2022, compared to 20,8 % for the same period

in 2021. The Company has experienced some cost increases during the year, but to

some extent these cost increases has been managed through increased product

prices.

YTD EBITDA as of end Q3 2022 of NOK -22,2 mill. is in line with expectations.

Total YTD capital expenditures (Capex) amounts to MNOK 33,7 mill., mainly

related to the pharmaceutical development program. It is expected that these

expenditures will increase during Q4 2022 based on the progress in the

development program.

The liquidity position is strong, ending at NOK 171,0 million by end September

Subsequent events

10. October 2022 the Company announced that the Clinical Trial Application (CTA)

for the Phase IIb clinical trial had been submitted. The CTA contains key

information about the Investigational Medicinal Product (IMP) HRO350 and the

planned clinical trial activities.

Outlook

Approval of the Clinical Trial Application by authorities will allow for the

first patient to be enrolled in the Phase IIb clinical trial as planned in Q4

2022. Sites for the clinical trial with access to sufficient number of patients

to conduct the studies are localized in five European countries. With a 6-month

inclusion period, it is expected that the 6-months data read out will be

available in second half of 2023. A process regarding pursuing a commercial

partner for HRO350 has started as planned and as earlier communicated.

Arctic Bioscience will continue to pursue opportunities in several drug

-development projects in the pipeline, including a novel drug candidate for

support for brain development in extremely premature infants. The Company is

also working closely with Møreforsking and Nofima in an ongoing research project

funded by the Norwegian Research Council to investigate underlying mechanisms of

action for HRO350, research relevant for the treatment of other inflammatory

diseases.

The Company maintains the earlier communicated financial outlook of a y/y

revenue growth in 2022 of 60-70 %, and a FY EBITDA in the range of MNOK -35 to

MNOK -30.

The company's liquidity situation at the end of the year is expected to be

strong and expected to be sufficient to handle the pharmaceutical Phase IIb

clinical trial.

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 of Arctic Bioscience AS

Mobile: +47 920 84 601

Email: christer@arctic-bioscience.com

Jone R. Slinning

CFO of Arctic Bioscience AS

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 team of highly competent people with experience in

developing marine oils and experience from global pharmaceutical companies.