Sweden continues to drive growth

Positive revisions on the back of Maren agreement

We await important study findings

Continued growth driven by Swedish momentum
For the seasonally soft Q2, sales came in at SEK 6.4m (vs. ABGSCe 8.7m), growing 21% y-o-y. Sweden continues to be the key growth driver, as sales of ColdZyme from pharmacies to consumers grew by ~38% for the quarter. Additionally, UK displayed high growth due to increased pharmacy listings, and we note that the launch of ColdGuard in South Africa was well received. However, the negative sales deviation vs. ABGSCe was due to a decrease in sales in Denmark, Finland and Spain. The gross margin of 63%, which improved from 51% in Q2’18, stems from an increased share of direct sales in the Nordics. The operating expenses came in at SEK 19.8m (vs. ABGSCe 19.2m), an increase of 9.9% y-o-y. This is primarily due to higher R&D costs related to the clinical study, which could allow re-entry into the German market.

Raising our estimates to reflect the Maren agreement
Enzymatica entered into a three-year agreement with the German cosmetics company Maren. According to management, the agreement will add SEK 120m to sales over a three-year period and reduce seasonal variance. Furthermore, Enzymatica will not have to make additional investments to meet the indicated volume of the agreement, which should result in improved profitability. On top of this, we see Enzymatica increasing its geographical footprint, further supporting its positive growth trajectory.

Focus on the road back to Germany
We expect results from the ongoing double-blind, placebo-controlled multicentre study, to arrive in late autumn of ’19. If results are positive and the findings are published, Enzymatica is set for a re-launch in the German market. Currently, our estimates do not reflect a re-entry to Germany. As such, we see an upside to our estimates if the results from the study are positive.

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ABG Sundal Collier - Introduce.se