Sustained dynamic sales development and rising profitability

BRAIN Biotech AG has now pub­lished its half-year fig­ures for 6M 2021/22. After a dynam­ic start to the finan­cial year, the Group has now con­tin­ued its strong rev­enue momen­tum in the sec­ond quar­ter. Both busi­ness units con­tributed to a dynam­ic rev­enue devel­op­ment and a pos­i­tive oper­at­ing lever­age effect. Tak­ing into account the acqui­si­tion of Breatec B.V. and exclud­ing the con­tin­ued high invest­ments in the pro­pri­etary CRISPR genome edit­ing plat­form, man­age­ment now expects sales of around €50 mil­lion and a slight­ly pos­i­tive adjust­ed EBITDA for the fis­cal year. CRISPR-relat­ed invest­ments for the full year will remain at around €2.5 — 3.5 million. 

“We are very pleased that we were able to main­tain the pos­i­tive oper­at­ing momen­tum of the last two quar­ters despite increas­ing chal­lenges in the glob­al sup­ply chain and ris­ing mate­r­i­al costs. The con­tin­ued pos­i­tive momen­tum is clear­ly notice­able in both busi­ness units and also makes us opti­mistic for the devel­op­ment in the fur­ther course of the fis­cal year. With­out sup­ply chain con­straints, we would have been able to grow even more dynam­i­cal­ly, par­tic­u­lar­ly in the BioIn­dus­tri­al seg­ment. The inte­gra­tion of our bak­ing enzyme spe­cial­ist Breatec is pro­ceed­ing accord­ing to plan and we expect to lever­age exten­sive syn­er­gies with­in our BioIn­dus­tri­al busi­ness­es in the com­ing years.” 

- Adri­aan Moelk­er, CEO 

In the first six months of fis­cal 2021/2022, the Group gen­er­at­ed sales of €23.3 mil­lion com­pared to €18 mil­lion in the same peri­od last year, an increase of 29.3%. Sales in the sec­ond quar­ter of 2021/22 amount­ed to €13.1 mil­lion. This cor­re­sponds to an increase of 31.9% com­pared with the sec­ond quar­ter of the pre­vi­ous year. On an organ­ic basis, i.e. exclud­ing the acqui­si­tion of Breatec, sales in the sec­ond quar­ter increased by 20.4% to €11.9 million. 

Adjust­ed Group EBITDA increased sig­nif­i­cant­ly by €2.2 mil­lion in the first six months of fis­cal 2021/22, from €-2.0 mil­lion in the pre­vi­ous year to €0.2 mil­lion. Adjust­ed EBITDA in the sec­ond quar­ter increased year-on-year from € ‑0.6 mil­lion to € 0.5 mil­lion. Fol­low­ing the pay­ment of the pur­chase price for the acqui­si­tion of Breatec B.V., ongo­ing invest­ments in the expan­sion of fer­men­ta­tion capac­i­ties at Bio­cat­a­lysts Ltd. and a Series B financ­ing at Solas­Cure Ltd. the cash posi­tion at the end of the quar­ter was a sol­id € 16.4 million.

Significant events 

Genome Edit­ing Tool­box: The com­pa­ny received an inter­na­tion­al search report and writ­ten opin­ion from the Euro­pean Patent Office (EPO) in Jan­u­ary 2022. The pos­i­tive writ­ten opin­ion states that the engi­neered cas (BEC) nucle­as­es for which patent pro­tec­tion is sought under the Patent Cor­po­ra­tion Treaty (PCT) con­sti­tute an inven­tive step with respect to the BEC nucle­ase sequences and are indus­tri­al­ly exploitable and not oth­er­wise exclud­ed from patent pro­tec­tion. The cor­re­spond­ing sequences of BEC nucle­as­es are there­fore con­sid­ered patentable by the EPO. This is an impor­tant mile­stone in the reg­u­lar patent appli­ca­tion process and con­firms the view of the man­age­ment and the sci­en­tif­ic team that the pro­pri­etary BEC tech­nol­o­gy is a nov­el and clear­ly dif­fer­en­ti­at­ed genome edit­ing tool. 

New Group mem­ber Breatec B.V.: In Feb­ru­ary, the Group entered into an agree­ment to acquire an ini­tial 62% stake in Breatec B.V. from its cur­rent own­ers. In addi­tion, an agreed call/put option allows BRAIN to acquire the entire com­pa­ny by the end of the first quar­ter of 2027. Breatec was found­ed in 2006 and is locat­ed in the south cen­tral region of the Nether­lands near the Bel­gian and Ger­man bor­ders, sur­round­ed by many lead­ing inter­na­tion­al com­pa­nies in the food indus­try. In cal­en­dar year 2021, Breatec gen­er­at­ed rev­enues of approx­i­mate­ly €7 mil­lion with a pos­i­tive EBITDA con­tri­bu­tion. The acqui­si­tion will be ful­ly con­sol­i­dat­ed by the com­pa­ny as of Feb­ru­ary 1, 2022. 

Coop­er­a­tion with For­mo GmbH: BRAIN and For­mo launched a strate­gic coop­er­a­tion in Feb­ru­ary to fur­ther advance the pro­duc­tion of ani­mal-free milk pro­teins. For­mo is a pio­neer­ing foodtech start­up in the field of alter­na­tive milk pro­teins and will expand its pro­duc­tion of bioiden­ti­cal milk pro­teins with a genome edit­ing tech­nol­o­gy; lever­ag­ing its exper­tise as well as the pro­pri­etary BEC plat­form. The strate­gic alliance aims to opti­mize microor­gan­isms to fur­ther expand nov­el and sus­tain­able pro­tein pro­duc­tion for com­mer­cial use through pre­ci­sion fermentation.