Hi, and welcome to this presentation of the Q4 update for Arctic Bioscience. With me today, I have our CFO, Jone R. Slinning, and our medical director, Runhild Gammelsæter. Arctic Bioscience is a Norwegian biotech located on the northwest coast of Norway, developing and commercializing pharmaceutical and nutraceutical products. This is the agenda for today. Moving on to the highlights. Early 2024, the HeROPA study was fully recruited, a key milestone for Arctic Bioscience. The primary readout will follow when the last patient has been in the study for a minimum of six months. Of course, with a few weeks added time for data analysis, expected in Q3 2024. Sales development in the Nutra business continues to develop well, though some of the expected 2023 revenues are pushed into 2024, especially for the Chinese market.
Our liquidity position end of 2023 is in line with expectation and according to development plans. Our nutraceutical business is global, with distribution through B2C, B2B, and partner channels. Looking at the Norwegian market, we realized a revenue growth of 22% from the B2C sales and 20% from sales over-the-counter. The primary growth in B2C revenues came from the new Romega Brain product, launched in 2023. The products are both available through e-commerce subscription at Romega, romega.no, and over the counter at various supplement shops in Norway. Further on the Nutra business, B2B in general had an overall growth of about 12% in 2023. In Europe, excluding Norway, we had a revenue growth of 46% compared to 2022. The American market dropped by 27% in 2023, mainly affected by changes in customer delivery plans.
Several strong consumer brands in the Nutra business is expected to launch new products based on Romega in 2024. The sale of Romega products in China was strong and doubled year on year in 2023. However, this is being reflected in the 2024 revenues for Arctic Bioscience due to stock changes and manufacturing delays at the end of the year, resulting in a drop in Arctic Bioscience sales revenues from China by 29% year on year. Key products in the Chinese market are Romega Prenatal, Romega Eye, and Romega Brain. The APAC region, excluding China, grew by 30% year on year, though from low numbers. Moving on to the operational review on pharma. The most advanced asset for Arctic Bioscience is HRO350 in mild to moderate psoriasis.
The mild to moderate patient population makes up more than 80% of the total psoriasis patient population, with a market potential of plus 18 million patients in the US and Big Five in Europe alone. HRO350 has the potential to become a blockbuster drug by tapping into just 2% of the mentioned patient potential, leading to a potential peak annual revenue of more than $1 billion. With the pediatric indication, we see an added potential with the HRO350 for the population younger than 18 years of age. For this patient population, there are limited treatment options today. With HRO350, we see the potential for a first-line treatment option for mild to moderate psoriasis in children. With that, I hand it over to our medical director, Runhild Gammelsæter. Thank you.
Thank you, Christer. So the HeROPA Phase IIb clinical trial is in progress, and this study will investigate the efficacy, the safety, and the dose of HRO350 versus placebo in mild to moderate psoriasis. So we're happy to announce that the study is fully recruited with the 519 required patients. And I would like to express my gratitude to the investigators and patients in five countries who are participating in this study. The study will be running in Norway, Finland, Poland, Germany, and the U.K., and the patients will be treated with either HRO350 or placebo for a total of 52 weeks.
After receiving the regulatory approval for this clinical trial in all these 5 countries in March 2023, we have been recruiting, and this has taken a few months longer than estimated, partly due to a little bit slower start than anticipated and a slowdown over summer. However, recruitment speed took up this fall, and it has not been a problem to find the required number of patients in these countries. The primary endpoint is after 6 months of treatment, and data readouts are planned thereafter. So the overall clinical plan for the full development of HRO350 is mainly unchanged, and the most time-consuming activities in this clinical development program is, of course, the clinical studies themselves. We will provide an updated timeline after completion of the Phase IIb when we have more details on the planned Phase 3 clinical program.
So as Christer mentioned, we've also agreed with the EMA on a pediatric investigation plan, which, where we'll develop a liquid formulation for potential use in children. There will be a separate pediatric clinical study planned, and the potential here is for a future pediatric extension of the planned indication for adults with mild to moderate psoriasis. Our R&D department, they have, for the last three years, been working on a large research project on the mechanism of action of HRO350 in psoriasis, and this has been conducted in collaboration with cellular researchers at Nofima and Møreforsking. While most existing treatments for psoriasis work by reducing inflammation, commonly by inhibiting signaling substances from immune cells, which affect skin cells, and this includes the cytokines IL-17 and IL-23.
A key symptom of psoriatic skin, as you see in the picture on the right, is the overproliferation of keratinocytes, which is a type of skin cell, and this leads to the psoriatic plaques, which are one of the symptoms of psoriasis. So we have studied the effects on HRO350 in skin cells using skin cell cultures and also some advanced skin cell models, and we've also studied immune cells. We've looked at response genes and psoriasis markers in these cells, and we've also looked at the uptake of HRO350 to various cell types. There's also been done an analysis of lipid mediators, and some of these lipid mediators are called specialized pro-resolving mediators, the SPMs, and they're a type of bioactive lipid that are implicated in inflammation and are known to be elevated in psoriatic skin.
These data are under patent review, and we will be publishing the data and disclosing the results thereafter. I'll also mention that these data are, of course, very important for a future marketing authorization application for HRO350. In parallel with the R&D we're doing on HRO350 in psoriasis, we're also developing our pipeline, and that includes a novel treatment for extremely premature children, and the internal name for this is ABS302. This will be a lipid-based product with a novel API. We're currently at the chemistry, manufacturing, and composition stage of this, and we're working on the regulatory pathway. Obviously, the regulatory aspects, as well as the chemical development, is very complex in such a vulnerable patient population.
We do anticipate a possible orphan designation for this product, and that would significantly shorten the clinical development timeline and time to market. So with that update, I will now hand over to our CFO, Jone R. Slinning.
Thank you, Runhild. I will now take you through the key figures for the consolidated financial figures for 2023, and also some key areas. We start with a brief overlook. The last two years, Arctic Bioscience has had a total growth in Nutra revenue of almost 60%. As we'll comment on a little later, 2023 had a flat revenue development compared to 2022, where the total revenues ended at approximately NOK 34 million. In total, over the last two years, we have also seen a positive development in gross margin. The gross margin ended at 29% for 2023. We have a satisfying liquidity position at end of 2023, with a total available liquidity of NOK 109.6 million, including a credit facility of NOK 30 million.
The cash burn last 12 months for the group, excluding the new available credit facility, was NOK 64 million. This included also the acquisition of Arctic Algae in Q1 2023. If we look more into the details from the income statement, we see that we had a relative flat development in the top-line revenues from 2022 to 2023, as mentioned earlier. In the first half of 2023, we had a very positive development in Nutra revenue compared to 2022. What we experienced in the last part of 2023, which is the main driver for the revenue development this year, is that several of our larger customers postponed the deliveries into 2024. We had a very positive development in 2023 in the B2C segment, with more than 22% year-over-year growth.
Also, the European B2B market had a significant growth compared to 2022, with a year-on-year growth of 46%. The gross margin has increased in total five percentage points compared to 2021. In 2023, the gross margin was affected by the mix of products sold compared to 2022. A large part of the mentioned postponement of deliveries into 2024 are finished goods, which normally has a positive contribution on the total gross margin. In total, the operating expenses has been in line with our total budget for the fiscal year. Included in the 2023 numbers are also effects from the acquired Arctic Algae. Our adjusted EBITDA ended at -NOK 38.6 million, which is in the range we have earlier guided on.
The distribution of this adjusted EBITDA to our main operating segments is NOK -19.2 million to Nutra, NOK -16.9 million to Pharma, and NOK -2.5 million to the subsidiaries. Now, some short comments on the revenue distribution between business lines and region. Over time, we have had a relative stable distribution between the B2B segment versus the B2C segment. In 2023, we have seen a positive B2C development with, as mentioned, more than 22% year-over-year growth in 2023. We had also a positive development for the sales to the European customers, excluding Norway, and this market became our largest in 2023, with a 37% revenue share. The revenue share from the APAC market declined from 38% in 2022 to 29% in 2023.
This is mainly explained with lower deliveries to China, as guided on in Q3. The sales to end customers in China in 2023 had a significant growth. However, this sales growth was not reflected in the 2023, 2023 figures for Arctic Bioscience due to stock changes at our Chinese partners. The sales trend we see in China is expected to have a positive effect on the 2024 revenues. Our liquidity position at end of 2023 is satisfying, with a total available liquidity of NOK 109.6 million, including our unused credit facility of NOK 30 million. The last 12 months, the liquidity has been reduced with net NOK 64 million. The cash burn is affected by the progress in our pharmaceutical development projects. As we have gone through different stages of the HRO350 program, the cash intensity has changed from period to period.
In Q1 2023, we finalized the acquisition of Arctic Algae. The purchase price was NOK 60.3 million. This acquisition did not have a liquidity effect for Arctic Bioscience, as the transaction ultimately was settled through debt conversion into shares in Arctic Bioscience. I end with some comments on our total financial position. At end of 2023, we still have a strong financial position. Total assets amounts to NOK 300 million, of which non-current assets amounts to NOK 167 million, and current assets NOK 133 million. The long-term liabilities relates to financial leasing agreements originated as a part of the Arctic Algae acquisition. Arctic Bioscience has a solid equity ratio at 86% by end of 2023. With that, I will give the word back to Christer, who will comment some more on our business outlook. Thank you.
Thanks, Jone. Moving on to the business outlook. Earlier plans to build a full-scale manufacturing facility were set on hold at the beginning of 2022. Since then, Arctic Bioscience has worked with alternative in-house manufacturing solutions, which are better adapted to future operations and demands. A concept development project has decided to go forward with a GMP manufacturing line established in Ørsta. The decided solution will secure production volumes in the years to come, both for our pharmaceutical and nutraceutical operations. In February 2024, an agreement with the company's primary bank and with Innovation Norway was reached, with a debt funding of NOK 65 million plus NOK 3 million in additional soft funding. Next phase of the project is estimated to commence in Q4 2024, depending on timing of other key processes and projects. The HeROPA clinical trial will be the main focus in 2024.
With all needed patients now recruited, the six months primary endpoint is expected in second half of 2024. We continue pursuing potential commercial and development partnerships for HRO350, which will have strong focus in the forthcoming periods. Regarding the Nutra business, we will continue to build our customer base and introduce new products. Given the prospects and market outlook we see today, we forecast a break-even contribution from the nutraceutical business by end of 2025. In the algae development project, we have delivered the first stage of oil production from selected algae species, a project involving NORCE and NIVA, and funded by Regionalt Forskningsfond with NOK 500,000. The phase two of the project continues in 2024, with upscaling from bench top to pilot production. The project has received another NOK 2 million in soft funding from Regionalt Forskningsfond.
Moving on to financing plans for future activities and projects. When Arctic Bioscience was listed on Euronext Growth in 2021, it was stated that one of the main reasons for both the capital increase and the listing was to fund the HRO350 Phase 2b study. This study is now well underway. At the end of 2023, the financial position is satisfying. Arctic Bioscience has constant focus on ensuring a satisfactory capitalization to secure progress in ongoing projects. In 2024, the company will work with various financing alternative to secure the future funding of the company's activities, post the six-month data readout. That also includes continued pursuing a search for commercial and/or development partners for HRO350. By that, we will be moving over to the Q&A session. Thank you.
We welcome you to the Q&A session of this presentation. We have received a couple of questions, which we will try to answer during this session. The first one, I believe this is for you, Christer. Could you elaborate on your financing plans after the HeROPA study readout to finance phase 3 preparations and development? Are you aiming for a licensing, licensing agreement with a pharma company active in the psoriasis space?
A good question. We are, as a company, continuously working with future financing of the company. If we look back, we established a credit facility last year of NOK 30 million to finance the growth of the nutraceutical business. As mentioned in the presentation today, we have also secured funding for the GMP manufacturing line, which will be key to produce clinical material for a future Phase 3 study. Again, back to the question, we are also attending all the most important meeting places for biotech and pharma, having meetings, repeated meetings with the pharma companies focused within the dermatology space. So, yes, that is one of our key strategic financing future options to secure development and/or commercial deals with pharma companies.
But, in addition to that, we are also looking at and evaluating various other financing options to fund future activities.
Mm-hmm. The next question which we have received is: Why did large customers postpone nutraceutical deliveries into 2024?
Well, there were two reasons for that. The first reason is, we had some manufacturing issues end of the year from a contract manufacturer delaying some deliveries into 2024. Secondly, some of our large customers did not want to end the year with a big stock, so they wanted to push that into 2024.
Mm-hmm. Another one: When do you expect to have a commercial product from Arctic Algae?
Good question. As mentioned in the business outlook on the presentation, we are now entering into a pilot production scale-up. If successful, during 2024 and into 2025, next step will be a first step commercial production. We don't have a very specific projected timeline for that, but within... I would say, within a couple of years, we expect that, but at least in smaller commercial volumes, we'll be ready.
Mm-hmm. I believe that was the question which we have received. So any closing remarks, Christer?
Well, as usual, just thank you all for attending this webcast. If you have any follow-up questions, please contact either Jone or myself. Thank you very much.
Mm-hmm. Thank you.