Q3 2020

Agenda

Highlights Q3 2020

ArcticZymes update

BetaGlucans update

Q3 Financials

Outlook

Chapter 1 Highlights

Highlights Q3 2020 Strong underlying growth

Group sales YTD exceed NOK 100 mill.

Largest Therapeutic order received yet NOK 3.0 mill

ArcticZymes 2nd best quarterly sales performance NOK 19.5 mill. (NOK 12.0 mill)

Molecular Diagnostic sales efforts towards China and India

Biotec BetaGlucans continues to operate profitably

Chapter 2

ArcticZymes update

ArcticZymes Updates

Commercial - Strong underlying sales growth

Therapeutics

✓ Strong growth continues
✓ 52% contribution to total sales
✓ Largest order yet NOK 3.0 mill.
✓ ReiThera enters into Phase I clinical trials
✓ 3 day cGMP audit from a top tier Pharmaceutical company

Research & Diagnostics

✓ Molecular Diagnostics sales continues to grows
✓ First customer integrates our technology into their Covid-19 LAMP based diagnostic test
✓ Molecular Research sales temporary slow down due to Coronavirus lockdowns

Covid-19 Upsides

✓ Lower upsides compared to Q2
✓ 20% contribution of total sales
✓ Supply chain is complex and uncertain
✓ Expect quarterly fluctuations in future

Geographical Expansion Sales in China and India

Efforts to enter developing and new Asian markets are materialising with new business
China
- Supply agreement signed with Simcere Diagnostics > integrated HL -SAN into a diagnostic Next Generation Sequencing (NGS) technology
- This marks our first step into the Chinese market
India
- Providing COD UNG to a diagnostic company in India for use in Tuberculous testing
- India bears a disproportionately large burden of the world's tuberculosis cases: 2.2 Mill. cases/year
- Longer -term sales are expected to exceed 1 MNOK

ArcticZymes Update Innovations

Salt Active Nuclease Upscaling*

Soon initiate the first medium-scale pilot production batch
Assuming successful, this will be followed by a large-scale pilot batch

Viral Diagnostics Components*

Progress underway in the expression and purifying of thermostable polymerase and reverse transcriptase enzymes
Optimised for use in viral diagnostics e.g. HIV, Hepatis C and Covid-19

Other pipeline innovations

New SAN products, novel ligases, DNase-like enzymes, other novel polymerases and reverse transcriptases as well as new formulations of existing enzymes and non-enzyme support products.

Hiring

Several personnel hires made to support above organic growth initiatives

*Above are partially funded by Innovation Norway grants

ArcticZymes Update

Organic Growth: Operational Expansion

Preparing to expand both production and R&D
Today the enzymes business is operating on 2 separate sites in Tromsø
Plan to bring the business together onto one site at SIVA
R&D lab space will be expanded in order to capitalize on ramping up its innovation efforts
Production will be relocated into a new state of the art and larger production facility at SIVA. Thus, enhancing capacity and capabilities to serve both GMP and diagnostic grade enzymes to a growing customer base
Process is expected to take approximately 1 year

Chapter 3

BetaGlucans update

Biotec BetaGlucans

Operating profitably

Animal Health

M-Glucan® sales continue to fluctuate quarterly
Expected due to large order from main customer in Q1

Consumer Health

Continued to achieved growth in M-Gard® sales
Attract a handful of new customers each quarter
Growth is attributed by an expanding customer base and growth within individual customers

(Adjuvant)

Expedited 3rd SBG® order relating to commitments supporting clinical trials
Licensing deal progressing. Negotiation phase ongoing

Sales deliver to expectation
Following discontinuation of Woulgan® last remaining stocks shipped
Divestment progress drawing to a close

Chapter 4

Financials

ArcticZymes Sales Q3 2020 Still at high levels

Sales growth of 63%
- Underlying business growth (excl. COVID-19 upsides) of 30%
Therapeutics segment (SAN) continues to deliver strong sales: 10.2 MNOK
COVID-19 upsides estimated at 4 MNOK in Q3
Research & Diagnostics decline 7%, due to slow down in industry
- Underlying business decline of 49% (excl. COVID-19 upsides)

Sales per segment

ArcticZymes Performance

Enzymes	Q3		YTD
(Amounts in NOK 1.000)	2020	2019	2020	2019
Sales revenues	19 546	11 986	71 395	28 857
Operating expenses	-10 657	-8 535	-28 649	-25 078
EBITDA	9 510	3 831	44 612	5 289

BetaGlucans Sales Q3 2020

Another good quarter

Sales segments

Upsides of NOK 1.2 million in Consumer Health sales of M-Gard® related to COVID-19
Final sales of Woulgan® in the third quarter as stock is completed. No more sales the remainder of the year
Adjuvant supply continued for third consecutive quarter
Animal Health will continue to fluctuate from quarter to quarter. Expects to be flat on annual basis

BetaGlucans Performance

Positive EBITDA for third straight quarter

BetaGlucans	Q3		YTD
(Amounts in NOK 1.000)	2020	2019	2020	2019
Sales revenues	11 205	10 490	37 950	25 288
Gross profit	6 647	4 140	21 348	11 607
Operating expenses	-4 119	-6 651	-10 575	-18 311
EBITDA	2 528	-1 809	10 986	-4 655