Thank you, operator. Good afternoon, everybody. On behalf of all Nanoformers, I would like to welcome you to our Q1 report presentation. For those of you who are watching and listening through the webcast can see the slides there. For those of you who have called in by phone, you can find the slides at nanoform.com and Investors and Presentations.
From Nanaform today, we have our CEO, Edward Hekstrom CFO, Albert Hekstrom Cbo, Gonzalo Andrade CTO, Niklas Sander and Sato Lachio, our Director of Pharmaceutical Development. In brief, the agenda today is we are starting with some highlights for the year, a short introduction to Nanoform, a short recap of the business model. Sato will present the final clinical results from the UNICON study. We have some commercial aspects and then Q1 results and business targets, both on the near term and medium term. In the end, we will conclude with a Q and A.
And for those of you who have called in and ask questions over the phone through the operator and for all others following the webcast, you are welcome to mail the questions to me. My mail is my initials, h vhnanoform.com. With these words, I would like to introduce our Founder, Professor, CEO, Edward Hoekstra.
Thank you, Henry, and welcome also on my behalf. It's my great pleasure to present to you Something which I would consider to be a very good Q1 for this year. Great start to 2021. I'm looking at Slide number 3. First of all, strong clinical results that Sato will be talking about.
Basically, we showed utility in human biology. We also signed up clients, 4 new clients and 6 new customer POC projects and we signed 3 collaborations. These collaborations serve as a vehicle to advance our strategy to basically get more APIs into the door and to get more API owners to work with us. Basically, these collaborations are with technology partners, And this means that we can together form a stronger value proposition to our API customers and prospects. Then we have expanded our commercial team in the U.
S. And Europe. And as you have seen and heard, Chris Worral And Genuine have already been very active with us, and we are very happy with their performance. Then as you can see from here, Starmap version 2.0 was launched. We raised capital for Biologics Nanoforming.
We have commissioned new GMP lines. Albert will talk to you about the revenue growth and gross margins in his section. And then also announce the midterm business targets. All in all, a strong Q1. Next slide, please.
I'm now looking at Slide number 5. So NANOFORM, Goari. Basically, we're a listed company with headquarters in Finland. We have a Significant institutional ownership. We have a manufacturing site here of approximately 3,000 square meters And we are home to the SES technology.
We are a platform technology company. And basically, we have just this year Generated the first human data that validates our proposition that nanoforming actually is important and can be useful to patients. On slide number 6, you can see that we're approximately 100 people, a strong academic pedigree and also a strong international flavor to our company. Slide number 7 shows that we work in the global pharma market that is a growing industry. We also see that many of the assets are very, very big.
So if you divide SEK 350,000,000 by SEK 100,000,000, You see that the assets are on the order of SEK 3,000,000,000. So significant market potential and our mission is to try to improve the output of the industry. Slide number 8 says that the pharma has a structural R and D problem. Basically a lot of money is put in into the RFP process and fairly few assets are coming out. You can also see from the left hand side that the fraction of biologicals is steadily increasing.
And that's why we are happy to announce that we are Nanoforming, both on the small molecule and on the biologics side. A game changer is necessary, And we propose that particle design, partly engineering can provide a solution to this structural problem that we're talking about. Slide number 9. The problem we addressed is the low bioavailability. It means that you have an active pharmaceutical ingredient that in principle is powerful, potent, but it is not dissolving the bodily fluids and hence not taken up by the body.
This is the biggest problem in the industry, and it's a problem that is growing, and it is a problem to which Nanoform is trying to provide a good solution. The solution is called CES, Control expansion of Supercritical Solutions. Nanoform basically decreases the size of powder. You can think, core sugar, we make it into fine sugar. By doing this, we can give unsuccessful drug candidates a second chance.
We can improve existing drugs and we can hopefully also enable new drugs. This is really the 3 different profit pools that we take it. Nanoform's technology is a technology that can make these nanoparticles. And we have also shown that we can sometimes making without solvent excipients and complex production processes. Sato will show you an example in human biology, the last one.
To the left, you can see on Slide number 11, a negative exponential. And this really tells the story why it is important to nanoform. By nanoforming, you increase the specific surface area and this is a very straightforward physical way to improve the low bioavailability. So by making small particles, you get more surface area and they dissolve easier in the bodily fluids. This means that you have more drug that is solved and that can be absorbed.
Slide number 12, I will spend a little bit of And time on this one. When you make the small particle, you increase the solubility and from that Follows the cascade of good stuff. You can have increased blood availability. This can allow new drugs to come into the market. We can also allow a reduced dose to be used.
We don't have to dose so much API to the patient. When you reduce less amounts of API, you can potentially have reduced side effects. When you create new entities or when you improve existing assets, You can get patent expansions for customers and prospects. Of course, when you don't have to produce so much material, You get more taken up by the body, you get fewer waste problems and you can have smaller factories. So reduced production cost and smaller factories translate into reduced capital requirement.
Of course, when less material is consumed and processed, you will have a lower environmental impact, which is also good. On Slide number 13, we have detailed a few of the nanoforming provided Positive impacts to the biologicals too. So basically, we claim that we can potentially improve the delivery route. We can increase the drug loading capacity in formulations potentially. We can potentially Also have tailored release profiles and improved uptake.
And we can potentially also enable new drug combinations. And most importantly, we can and maybe also implement lighter infrastructures. I use the word potentially here because we are now in process of gathering evidence that we hopefully will be able to present to you in the future in the form of data. And move to Slide 14, STARMA Version 2. This here is an artificial intelligence, which is there to create predictions of which assets are amenable to nanoforming and also to create input to the nanoformers How to put the knobs on the machine.
This year means probability for a higher success rate In nanoforming and a potentially faster time from start to having the 1st nanoformed assets to show to our customers. I think that combining an AI in this way, relying on sparse data processing, It's really the way to go. There are 18,000 assets, which means that the big data approach will probably not be the smart one. And that's the reason why we have chosen a sparse AI approach. StarMark 2.0 has already created significant interest among both our prospects and our existing clients.
With this, I say thank you. Hope you all enjoyed this first part, and I hand over to our CFO, Albert.
Thank you, Eduard. If we now go to Page 16, there is a simplified value chain. So you can see that we serve both global large pharma, midsized pharma, specialty pharma and biotechs. And what they do is that they send their bulk API to us. We Nanoform it.
We get paid for our work done and then we ship back the Nanoformed API to the clients. So we don't produce the Original API and we don't own the API. We just sort of make it smaller, the particles smaller. That also means that we don't carry the same sort of costs related to drug development and the same sort of risk related to drug development that API Owning Companies do. Our revenue model, I will come back to on a couple of slides later.
Then if we go to Page 17, and this is showing the industry numbers. So when we have been talking about that the industry have a sort of a significant problem, Here you can see it to the right hand side. So if you take the green bars, you can see that if you have 100 APIs In preclinical phase, only 2 of them will go all the way to being approved and being on the market. If you have 100 biologicals, then 4 of them statistically will go all
the way to the market.
There is, however, a silver lining and that is drugs that already have been approved, but where you do some change to it, Formulation or delivery route or something. It's called 505(2) in the U. S. And there you have a much higher probability. So basically you Say that 1 in 5 could go to the market.
And the reason, of course, for that is that lots of the studies have already been done. So Because it's on the market already, you know that it works and it's not toxic and so forth. So therefore, by changing it and the reformulating it or changing the delivery route, likelihood of success is higher. We want to work with both kind of projects, both 505 B2s and naturally also on new molecular entities. And on the left hand side here, you can see different kind of drivers that short term impact our and top line for P and L.
If we then go to Page 18, we have used the traditional business model of the industry. We have a new technology, but we use the traditional business model of the industry, meaning that when we do non GMP projects, We get the fixed fee per project, where the fixed fee is €50,000 to €500,000 per project. A project can take between, let's say, 3 to 12 months. Initially, now when we have new clients, we are doing the first projects For them, it usually takes a little bit longer than when we and the clients are more used to us and the Nano Forming, they will start to be faster. After that, the successful ones will go to continue in the drug development pipeline and then move to clinical projects and their Nanoformers will then deliver Material for the clinical phases.
And here the fixed fee is for delivery of the material And here the fees are expected to be between €500,000 to up to €10,000,000 And this depends, of course, Whether it's a small ECA Phase 1 or whether it's a very difficult large global Phase 3 trial. So in a small Phase 1, you could have a couple of tens of healthy volunteers. And then in the really large Phase 3, you can have even 1,000 or up to 10,000 people in the trial. And then finally,
When the drugs are in
the market, we our business model goes for royalty or Supply price per kilo, that would be similar to the royalty rate. And here, we have a very wide range between 1% 20%. And the idea here is we don't want to be greedy. We want to maximize the number of APIs we bring in and therefore also maximize the number of API that goes all the way to the market, thereby helping lots of patients. And it's not important for us to try to maximize any specific project or API.
Then I say thank you, and Fatu can continue with our interesting data.
Thank you, Albert. So I'm Fatou Lakia, the Director of Pharmaceutical Development. And I have a PhD in Pharmaceuticals And I've been working with academia with different universities and have several associate professorships. After working in academia, I also worked in pharma industry in several position, for Sample in AstraZeneca in Sweden and Orion Pharma in Finland before joining Nanofarm a bit more than 2 years ago. So next couple of slides, I'm happy to introduce the summary of the results from this clinical trial called UNICON.
So Slide 20, please. Nonsterolite anti infiltamatory drug, peroxacam, was used in the study. And the TMP grade biroxicam was Nanoformed. And then we also developed the immediate release tablet formulation at Nanoform. And then this drug product, so tablet in this case, manufacturing method was technology transferred to Ocean Sciences in U.
K. And we also ship the Nanoform GMP grade peroxigam to their facility. And then Quotient manufactured the TMP grade tablets and dosed them to the healthy volunteers. Quotient Sciences were was chosen as our partner in this important study due to their excellent track record. And it's Generally recognized in pharma industry that they are really professional.
And after conducting this study, we are happy also to confirm that. The primary aim of the study was to determine the pharmacokinetic properties as well as the safety of nanoform pyroxicon. So Nanoform tablet was compared to Felden, which is the originator product by Pfizer and also with Brexido, which is the Betacyclodextrin coupled pyroxicam by Kiesi. And that one has a really fast drug release. And we are happy to tell that the dosing and the study went as planned, and there was no like issues and all clinical objectives at Weromet.
So then Slide 21, please. So the clinical trial results Confirm Nanoform's value proposition that Nanoform material has faster dissolution rate and thus very rapid absorption also in vivo. In addition, by nanoforming, there is no need for complex excipients such as beta cyclodextrin. And thus, there's more room to drug itself in the dosage form. All the dosage form size can be smaller to aid administration.
It is also good to realize that Nanoform Pyrox income was safe and well tolerated As there were no adverse effects reported. So then to the Slide 22. And this slide represents the Plasma PK parameters and showcase the very fast absorption, so the Tmax values. And there's also indication that the variability in plasma levels are smaller with nanoform tablets, which could lead then to more consistent patient response. As a summary, it can be stated that The absorption of Nanofour material was really fast, and the Nanofour material showed excellent overall performance that we were really pleased about.
So I can proudly say that small is a powerful ingredient. So lastly, I want to mention that if you want to learn more about the study, please check the presentation by Quotient Sciences using the link provided on the slide and also the presentation can be found on our web page. And over to you, Gonzalo.
Thanks, Sato. Thank you very much and for introducing this exciting data package as well. We're delighted to showcase this the outcome and also demonstrate the value with the UNICRON study. So If we go to the next slide, Slide 23, I would like to briefly introduce you to our global commercial team. And as stated in the Q1 We have been expanding also in that front.
And if you go to Slide 24, perhaps I could take you through also the history of the buildup About commercial teams. So first, we have Christian Jones that joined Nanoform in October 2018. He joined us from Johnson Matti and distinguished career at other companies as well to lead the commercial activities. Then I joined in January 2019, so 2.5 years ago more or less. And I joined from the Hovian Group, A company specializing in solubility enhancement, value proposition as well.
And then After that, during 2019, we both myself and Christian and also Britta together We're working together to bring in customers' project and also support the commercial role at Nanopharm. But then in 2020, we actually added 2 additional people because we felt that there was the need To expand into the U. S. So we added in September both Eric Peter that joined us from Goveon and Patheon And also Sergey Lester that joined us from Porton and Johnson Matthey as well. So and as you can appreciate, one is located in the East Coast, The other one is located in basically Central U.
S. And in this quarter, we have added 2 additional Team members that contribute significantly not only to increase the global reach, namely Chris Worrall that is located in San Diego will allow us to serve better our U. S. West Coast partners, but also Jamie Anwind that joined us from Janssen and GSK for supporting us in the commercial insights Basically conducting the business intelligence activities that support the overall commercial team in identifying Great opportunities and matches for where nanoforming can make a difference to our partners' portfolios and to expand the opportunities for us To support them and ultimately deliver value to patients as well. So if you consider the rough, The broad span of the company's commercial team at this stage, we are in preparation for Major successes in the coming months as well.
And if we go to the next slide, Slide 25, There is already a glimpse of what the overall power This amazing team is going to be able to deliver. If you look at what Christian and I were able to bring during 2019, we brought in Three customers, we brought in AstraZeneca, a U. S. Major farmer and U. K.
Biotech. Then in 2020, We brought in additional partners. We brought in 2 global major pharma companies. We brought in a West Ghost U. S.
Biotech, the U. K. Respiratory Biotech and Orion as well. And then in 2021, in the Q1 only, We have already signed, as you've seen, Erantes Pharma in the basically looking at the natal we delivered biologic program. We have added East Coast U.
S. Biotech. We have added a NACQUITY Pharmaceutical Company. So basically, looking at the ocular ophthalmology delivery routes for their API. We have added the European Biotech, And we have also added 3 additional collaborations.
So we've added Apricia with their ZYP DOS 3 d printed technology. We have added Celonis Corporation with their modified release polymer offering. And we have added today And notified today a U. S.-listed metabolic pharmaceutical company. And this is aligned with the overall strategy of the business in expanding The use case is expanding the alternatives that we offer our partners in order to deliver value patients and further enable more products to go into the clinic.
And in this regard and ultimately onto the market. And in this regard, we feel that By combining our technology with these other technology companies, we can actually make 1 plus 1 not equal 2, but actually 3 And enable more benefits to the partners and also to the ultimately to the patient. And I would leave it at that, and I would leave the floor to Albert to take us through the Q1 milestones and financials. Albert? Thank you, Gonzalo.
And then we can go to Page 27. So here you can see that we have as you have heard, we have been busy during the 1st part of the year And we expect to continue to be busy during the coming months and years as well. If you then go to Page 28 and look at the financials. One thing I'm very happy about is that 1 year ago when we did the IPO And we set one of the targets for 2025 was to have a gross margin above 90%. We have now clearly seen that already with Quite small amounts of revenue.
We have a gross margin that's already very close to that. So we have Had 88% in the Q1 versus 68% in Q1 last year. And we actually have had already a couple of months with above 90% gross margin. So we feel very comfortable that our business model will deliver a high gross margin. If you look at the EBITDA, it improved a little bit, the same with the loss for the period, Our operating loss was flat compared to last year.
And then if you look at the last sentence on the left, you can see that Thanks to our investors. We have a very strong balance sheet. So we had the SEK94,800,000 cash balance And we had SEK 4.8 billion last year at the same time. If you look at the table to the right, We have now added 3 non GMP lines in the quarter, meaning that we now have 11 non GMP lines. And of course, we have said that was a target for the full year, so we achieved it already in the Q1.
We have one GMP line and there we plan to add to GMP lines during next year. The number of employees grew from 50 Q1 last year and 74 at the end of the year, 87 at the end of the quarter and today we are closing in already on on 100. And of course, as you have seen, we started 6 new projects in the Q1. So we're really happy about that. If we go to Page number 29, basically similar numbers as you saw on the previous slide, A little bit more details.
So here you can see that we recognize the revenue from project based on hours worked over the lifetime of the project. So this means in plain English that there is some lag between When you start a project and when you start to recognize revenue. But in the Q1, we recognized revenue from 14 different projects and compared to 6 different projects in the Q1 last year. Then When you look at other operating expenses, no major drama there. The only thing, of course, I'm waiting for eagerly is When the travel expenses start to go up a little bit because due to COVID nobody is traveling, otherwise You can see that the consultant and professional fees have been coming down.
This is also a thing we have as a sort of a strategy that When we grow, we want to be able to do more things internally. So that means that we will rely less on external consultants. Next slide, please. If we go to Slide 30. And here you can see on the left hand side, Q3, how many new projects we have started.
And it's interesting to see when you see that the trend over the last 6 quarters. There might be some COVID effect. We don't know. We never felt like there was a COVID effect. But let's see now in the coming quarters Whether there is an industry trend that some quarters have higher numbers and some don't have or whether it's stable and growing over For the quarter, that we will see.
But anyway, we are very happy about the fact that the total number of projects that we have started is growing quite nicely. So we have already started 18 projects. And if you look on the right hand side on the targets for 2025. So if we were to achieve at least 50 new API projects per year By 2025, that would mathematically, if you think of it linearly, roughly mean that by that time we would have started more than 200 projects. And that is, of course, very important for our strategy because as you remember, if only 1 in 50 go all the way, And it's very important that you get lots of projects in.
Even if we get paid for GMP projects and so forth, The real upside is when you can start to help patients by having drugs in the market and therefore to get to a situation where we Every year process more than new 50 APIs per year is very important for our strategy. On the line side, we have already now 11 non GMP lines and here the mid term business Target is to have 15 to 20 non GMP lines by 2025. So we are, of course, on very good track towards reaching that. If we go to Page 31, we checked a couple of checked the box in a couple of near term business targets, 1st biological biologics project and at least 3 non GFP lines in 2021. And now we have 2 more To check during this year and next year, meaning also start the first GMP project And get at least 12 non GMP projects in this year.
And then as I said, add 2 GMP lines in 2022. And then the business targets for 2025 to get more than 50 new APIs in every year Have 25 lines, have a gross margin about 90%, having roughly 200 employees and most importantly being cash flow positive. These midterm business targets, we will update in conjunction with the CMD next week. So stay tuned to that. And then as a final slide, here we have a list of our institutional shareholders And we are, of course, very proud of this list.
And it's all very glad also to see that during the Q1, we have added a few interesting names to the list. And then finally on Page 34, a reminder that next Friday, we will have the Capital, our first Capital Markets Day. Unfortunately, it's going to be virtual because of the corona, but please Join us, we will have lots of interesting things to talk to you about. It will start at afternoon Helsinki time, where you can see the data. And with that, I turn over to Henry and Q and A.
Thank you.
Thank you, Albert, and everybody else. Operator, back to you for questions from the teleconference.
Thank Our first question comes from the line of Christopher Udi of SEB. Please go ahead. Your line is open. Hi there, everyone. I guess first I'd just like to say I enjoyed the postscriptum in your letter, Edward.
Would this be SES III? And since it's a short question, I'll just move on to the next one right away. I noticed In the text that you said that you would look forward to accelerating revenue growth in the coming quarters. To me accelerating means growing at a faster or Percentage rate, is that how what it means to you?
Yes, I'm a physicist and it's absolutely clear that 1st derivative needs to be positive.
Okay. And I guess the Turnover time to about 2 to 3 months per API, but That it is has been 4 to 6 months during the past year. Now Can you give any flavor for how that is evolving at the moment? Would you say it's still about 4 to 6 months? Or should we start to think
a little bit more quickly.
Okay. So there are 2 parts to your question. First, how are we going to go from 4% to 6% to 2% to 3% And right now, as you know, we are building, polishing and serving at the same time. And that means that we work Sort of weeks to weeks to bring all this forward. But at some point, the building will go down and that means that we can divert resources to the polishing, which really means to speed up.
The second part of your question is when. And I think that the correct answer is that every week. And then the follow-up question is, okay, when can you see the difference? And I would say that we should be able to see a difference already on this year. And as I said, Nicolas, I and Gonzalo, we are working continuously I'm sort of getting this faster.
And there are many details to it, but all of them add up to the state if 46 goes to 2 to 3.
If I may add, you are very polite when you are talking about 4 to 6 months. As a CFO, I would call it more like 6 to 12 months because if you look at it from a revenue recognition point of view, a project starts when the Contract, the purchase order is signed and then it's ended when the final report has been approved by the client. And there is also quite a lot of time in the before you sort of start to Nanoform and after you have Nanoform. So for the 6 months might be the sort of the actual work at the line, but we still have a situation where The line is sort of the line and the project is light. And if the client wants to do some additional work or something, And we cannot leave that one to another project in between.
So I think of it more like if we can go from 300 days 200 days to 100 days in a project over the coming year. That would be Think of it every year, you take a big step, whether we can do it in 1 year, 2 year, 3 years, that's to be seen, but that's the way you could think about it. As Edward said, we are measuring it very clearly and we want to make improvements all the time.
Yes. And then, Christopher, I think this is an important distinction that some of the duration we can affect directly and some of the duration It's really affected by the internal dynamics of our prospects and customers. So I focus very much on the sort of internal parts And Albert then focuses on the sort of totality in the way he described. So there is no discrepancy in our answers, basically.
No, sure. I understood that. Yes. Okay. And I mean, just stop me if you think I should get back in the queue.
I have more questions. But I guess, could we just briefly talk about the R and D cost trajectory? I guess it's been a little bit fluctuating. Should we expect it to continue to rise Sort of at the average pace
or So if I take that one. So remember that When we do the Unicorn study, that shows up in the R and D line. And so that impacts. But I would say like this that we should not this should not be a campus. This should not be university.
This is a business. So we can of course, we can spend money on R and D, but that's not the main point. So if you look at the last 4, 6 quarters, It should not be sort of very much higher at least than the average during that period. Okay.
All right. That's very helpful. Okay. And then, yes, when it comes to the so Gross margin. I guess just for clarification, should we expect This level was better going forward.
And then related to that, obviously, I get that the gross margin should be going up. But why are COGS going down in absolute terms? Is that also because of the peroxy chem
trial?
You're also looking especially at the 2019 comparison as well where it was much higher back then. And just a clarification on that. Sure.
Yes. Excellent question. And that's actually there are 2 things that is going down From a cost point of view, and that is one is that when we hire more people, we don't need to use so much outside Consultants. So that's a trend when we have more internal capabilities. We don't need so much external help.
If you were to have a there are these virtual companies and they need or very small companies, they need to use lots of external help. But as we hire more people, we can do it internally. And I find it for us, it's a very cost efficient way to do it. But then related to your gross margin, you can see the same trend there. So when we started, we did not have a big QC lab.
But now we have been adding capabilities for QSi. So for example, if you take you will see it in our EMD, I can give a small, small bit of information. We have invested in the next RPD line or machine. And that is one of those that we have previously used as outsourced service. But now we have the capabilities within house.
So when we have invested in QC, we have been using less external cost. And that is the reason why the gross margin has been going down sorry, up And the cost have been materials costs have been going down. And therefore, we don't see any reason why the gross margin should be going sort of south. We don't see any reason why the gross margin in the biologics side shouldn't be on a very good level also. So I'm very we're very comfortable with our guidance for more than 90% gross margin in the coming years.
Okay. Well, that's terrific. And I guess, yes, so just to you Kind of touched upon my last question, but just to confirm. So in terms of the employee benefit, You've increased headcount, let's say, but the expense is flat. Is that something to do with consulting?
I guess, I
thought there was a Yes. So it's consulting and it's also related to variable compensations. So how we book them. Okay, great. So look at if you want to have trends for the coming quarters, you should look at, let's say, the last 2, 3 quarters.
That gives Quite to share a number on that. And also remember to look at the in the Cash flow, you can see the option programs. So you calculate according to Black and Scholes And then you calculate the theoretical costs from the auction program, which is not the cash cost and that is also impacting the employee costs. And If you launch a program, it can impact the coming quarter quite a bit.
Okay, great. Thanks very much.
And that's all from me.
Take care.
Thank you. Thank you. Thank you.
Our next question comes from the line of Christian Glenny at Stifel. Please go ahead. Your line is open.
Hi, everybody. Thanks for taking the question. Christian Oey from Stifel. 3, please. First one, taking an order.
You made very nice progress so far this year, ticked off a number of milestones already. I guess I need to push you maybe for a bit more insight on The one of the targets obviously to get through proof of process and into GMP for a customer project. Just wondering if you could maybe provide a bit more insight into how you're thinking about that for the rest of the year and your confidence in in delivering that, what discussions there may be going on there?
Sure. So I think it's clear that, as we have stated, The important part is to get a POP contract and then As a continuation to that, get a GMP contract for this year. And from my perspective, Christian and his team are working Hard on getting the POP project, whereas as me and Christian then look at the GMP projects. We are in negotiations already. So I think that therefore the level of confidence This is okay.
And it is also clear that going forward, whereas the POP is a logical step, the decisive cases or the GMP cases. And in the negotiations that we're having now, it has also become clear that when you sell a Proprietary technology for GMP, there are not so many such technologies in the industry. And that means that it's also A learning process on both sides of the table how to relate to that. Of course, it's very nice to have a strong commercial team that has sold the Previous sort of dominant technology, but we have to all remember that that technology was not proprietary. So we are all sort of vanguards now.
So I think that briefly, we are working on both. We are making good progress and confidence is there.
Okay, great. Thank you. Second question then, I'm interested, you signed a number of more clients, Say more traditional clients in the Q1, that's very encouraging again. But on the collaboration side, just interested a bit more in terms of the drivers for that motivation. As I understand that these are companies coming to you to try and help them to fix some of the problems they may be having or the services they can offer.
Have they come about because of the snowball effect ultimately of the collaborations you have, maybe the clinical data? And what could be The end game here, what how does Nanoform get rewarded if they help to produce some nice projects for Celanese, for example?
Okay. So there are 2 parts to your question, if I got it right. One is, what's the reward? The ultimate reward, I believe, is that Together with the collaboration partner, we will be able to get an API company to go with us all the way Royalty bearing marketed products and that's really what we are doing and that's part of our strategy to create as many of those And then, you asked me also why are we striking up these collaborations and what's the drivers for that? And I think that the simple answer is, these are not owning API Sterile Technology Companies.
And together by combining these technologies, we look for synergistic effects. Basically, for instance, if you have a printed thing And they can't do nanoformed particles because we're the only one who can, then that basically means that A printed dosage form with nanoparticles is something which is unique. And then when we ask API, okay. So would you like to go for this, for instance, for a fast buccal response or something alike? Then you have a very cute value proposition.
And basically, you wave your magic wand, you make the collaboration partners Technology even stronger. And of course, together, it means that there will be more API Owners potentially who are interested in trying to reduce the time and the risks to the market.
If I may add to that, so you can think of this. So these collaborations, they also have, of course, some of them. I mean, Celanese is supplying lots of stuff in the pharma industry as a specialty Chemicals company, big company, but also Aprecia, they have a drug on the market that's already and 3 d printing and so forth. So the idea here is to together with these Find applications where we together can help bring our APIs all the way to the market. And if that happens, probably that could be both a 505(2) or a new molecular entity.
And in these cases, most likely, we would, together with the collaboration partner, Not to be the one that brings it all the way to the market, but we would probably license it out at some point to some big pharma or something like that. So but this is, of course, we have just started these collaborations. And let's see, but the idea that this could be very broad And they could be both on the 505(2) and new molecular entity side. They could potentially be both on small molecules on the biologics side. And the idea here that this gives us more APIs, more potential client relationships and then we do jointly try to Bring yourself to the
market. Okay. Thanks for that. That's very helpful. Finally, I don't know if this is maybe something you'll be looking at your CMD, but or whether it's a fair question at this point given the data.
But You highlighted obviously the 25% industry success rate for preclinical through into 1st in Phase 1. And obviously, you haven't taken one of those all the way through yet. But in terms of those 18 or so POCs that you've done so far. Is there anything you can say in terms of how you think you're tracking above that 25% at this point? Any way you could try and address that?
If I may add sort of as a number. So remember, we have started 2018, but we have not finished 2018. So we have finished 4 projects. So The number we have finished is quite small yet. And we are, of course, talking to the clients.
And these clients might be one that have Tevriol or one API. So but we will start to give you more details where we had bigger samples. We might give you something at the CMB, but at the moment, we are not sort of giving any numbers on that.
Great. Okay. Thanks all.
Thank you.
Thank you. Our next question comes from the line of Lars Heffern of Danske Bank.
Please go ahead. Your line is open.
Yes, thanks. Can I just ask about the
study with
the collaboration with Quotient? And it seems like that Quotient seem pretty keen on presenting this data. Could you just give us a fair Idea of how this collaboration will be the follow on effects from this collaboration, both commercially in terms of What do you think industry players will say about this argument around cyclodextrin? And also, of course, I mean, technically, what kind of products are that you would see You will continue in terms of collaborating with Quotient. Now you're done with an N side, but what kind of products you would consider to continue on?
Okay. So there were many questions in one. Let me see if I can address them. And then if I forget 1 or 2, then maybe somebody can pick up. First of all, we have very much enjoyed the professionalism and efficiency of Quotient.
They are considered to be a valuable blue chip CRO and everything we have seen has supported that. Interesting is also to recognize the fact that it was we who developed we means Sato who developed the formulation that we tech transferred to them. So already at this point, we were able to teach them something. Of course, they were also Able to teach us a lot of things, but I think this is important to underscore. Quotient is well renowned And this has clearly helped us with the customer relation work that we have been doing.
Then you asked about going forward. And to that, I would like to say that I very much look forward to working with Quotient again. And I think that the fact that they wanted to sort of go out with our results, It speaks highly what we have achieved together. And I think it's also important to remember that For them, this was something they do for a living and have been doing for a long time. For us, this was our first clinical study.
And I was immensely proud both by our solar manufacturing team, but also Satoan and who are conglomerates here to be able to pull through this thing at a level which made them confident enough to go out and speak about our results. So hopefully, this answers at least partially a question.
And I also want to emphasize that it's now with the COVID sort of starting to potentially be a little bit behind us. If you think about it, this was done during the height of the COVID pandemic. And they certainly delivered. So I think we have seen Many, many clinical trials that have been postponed during the last year. And this combo of Nanoform and As Crochant delivered on time and delivered great results.
And I think that when you find partnerships like that, You should try to stick to that.
I concur.
I would add only one item that I think was asked and we didn't cover from a commercial standpoint. We have had a number of partners that were tracking effectively the outcomes of the study. And now that we have had The closing of the clinical study report and we have introduced them to the outcomes of the study. Some of those discussions are resuming and progressing nicely as well. So there may be opportunity to to build upon the outcome of the study and capitalize on the momentum that we've generated so far.
So that's something that we are also Actively pursuing and I think that there's very good momentum that we have also riding on the back of the demonstration of the clinical benefit.
Okay. That's very helpful. Thanks all of you. Thank you. Thank you.
Thank you. As we have one further question in On your telephone keypads now. And so the question comes from the line of Max Herrmann of Stifel.
Please go ahead. Your line is open.
Hi, guys. Thanks very much for taking my questions. Just a couple questions. Firstly, maybe to Gonzalo on the BD Piviti, just wanted to understand whether there's been a change in incoming versus sort of Your outreach activity in terms of now that you've obviously presented the clinical data, you've been public for Now around a year, have you seen as in more incoming What people have been maybe what they see is intractable problems and you've got the solution? Or is it still more outreach?
That's the first question. The second question is just to get a little bit more clarity on the target for this year, Following on from Christian's question about the one new GMP project, do you mean assigning a partner that would be wanting their program to go through or completion of proof of process that then leads to using the GMP facility. Just trying to understand what
that target is specifically? Thank you. Okay. So I start then with the commercial outreach, then we can follow-up with the targets, our to network team, you can take that one for me. So in terms of the Commercial outreach.
So not only are we seeing a lot of incoming traffic as well related To the clinical study and the fact that we have clinical data already, but also some of the past That we have had that were stalled due to either Not having demonstrated the clinical benefit or not having already conducted a clinical study from our GMP facility, that some of those discussions that were part waiting for that outcome, they have now resumed and that's something that is also very important. On top of that, as you can appreciate, we've Expanded our commercial team significantly and they also brought in a lot of new relationships and also other size of relationships It's across different organizations. So what we are seeing is a multitude and the multiplication of contact points into also larger organization. And we are seeing there's an increase of traction also from previous discussions as well. So that's very positive.
And Even though we still have a lot of outbound contacts and are reaching out to partners for basically showcasing what we can do for them. There has been there has also been an increasing inflow of inbound traffic as well. So that's also very positive. If I then comment on your question relating to what exactly the guidance means. So for us, it's like if a client has a clinical campaign that they need the material in some time.
And of course, that's the important question that when do they need the GMP material. And so for us, it's like If it's earlier, then we try to do it earlier. If it's a little bit later, then it's a little bit later. But of course, It's the most important thing is to sign the contract and get the material shipped when the client wants the material.
Great. Thanks very much. That's very clear.
Thank you. And as there are no further questions in the queue at time, I'll hand back to our speakers for the closing comments.
Okay, excellent. This is Henry talking. So on behalf of all Nanoformers, thank you to the audience and thank you for the questions, especially also including analysts. Next week, Friday, June 4, we will have our 1st Capital Markets Day that is on exactly 1 year as a listed company, you are welcome to register to that event, and you can do it on our homepage under the calendar section. With these words, we are complete for today.
Thank you also to all managers at Nanaform presenting.