Hi, and welcome to this half year reporting for Arctic Bioscience. I'm Christer Valderhaug, the CEO. With me today, I have Jone Sl inning, our CFO, and Runhild Gammelsæter, our Medical Director. Arctic Bioscience is a Norwegian biotech company developing pharmaceutical and nutraceutical products based on unique marine compounds. Our focus is on natural resolution of inflammation. Today, we will present the operational highlights, operational review, and consolidated group financial review. We will round it off with a business outlook and a Q&A session. Moving on to the 2024 highlights. The Phase IIB clinical trial for HRO350 was fully recruited in January 2024, and is progressing well. We are approaching a significant milestone in the clinical trial, with a six-month primary endpoint readout expected to be released ultimo September, early October this year. Data from the cellular studies project on mode of action of HRO350 has been published.
Research shows positive data on anti-inflammatory effects from herring roe in immune cells, which supports the potential effect in psoriasis. On the Nutra side, more than 100% of the 2023 sales is already secured through sales and received purchase orders. The strategic partnership with Kotler in China also continues to develop well. The Chinese consumer market is challenging, but we do see a strong sales growth of omega products in the Chinese market. In Norway, our B2C sales of omega products is increasing by 20% year on year. The liquidity position is according to development plans, with approximately 50 million NOK available by the end of June. With the acquisition of Arctic Algae back in 2023, Arctic Bioscience took an important step into development of microalgae as a natural source of new products.
Recent findings of a new microalgae species may open up for new and exciting future commercial opportunities. I will now move on to a short operational review of the Nutra business. As mentioned, more than 100% of 2023 sales of Nutra products are already secured through sales and received purchase orders, with more to come. The total sales revenues from the nutraceutical business are slightly lower in 2024, compared to the same period in 2023, mainly driven by customers' delivery plans and slower than expected sales in some areas, such as the U.S. market. The e-commerce sales in the Chinese market by our partner remain strong, despite weak consumer spending among Chinese consumers. I will now hand it over to Runhild for an operational review of our pharma business.
Thank you very much, Christer. I'm pleased to give you an update on the HEROPA phase IIb study with the investigational medicinal product, HRO350, in mild to moderate psoriasis. This study is part of the planned clinical development program, which aim is for HRO350 to be a prescription medicine in the future. HRO350 would be a first-in-class treatment option for this patient population, which they have limited treatment options, primarily topical corticosteroids. The study was fully recruited with over 500 patients in 5 countries early this year, and there are three treatment arms, two doses of HRO350 versus placebo. The primary endpoint is at week 26, 6 months of treatment, which is visit 8 in the study, as indicated at point 1 in the figure. The final patients are now in process of completing their six-month visit at the clinics.
After the visits, the data will be cleaned, and analyses are conducted according to the statistical analysis plan, and we expect the six-month readout in the end of September, early October. Analysis of the primary endpoint will show if there is a statistically larger number of patients in each of the treatment arms, achieving a 50% improvement in PASI versus placebo. This is a very large milestone, not just for the clinical trial, but for Arctic Bioscience. The study will continue until all patients have completed one year of treatment, and a following eight weeks no treatment period to look for rebound and follow up the patients. There are a number of the endpoints, of course, including safety.
The data from this study will give us information about how to fine-tune the further clinical development program of HRO350, which I will get back to later in this presentation. So HRO350 is a unique, novel, oral drug candidate undergoing clinical development for treatment of mild to moderate psoriasis. And the active pharmaceutical ingredient, pHERO, is also novel, having been registered by us in relevant medicinal and substance databases. So phospholipid esters from herring roe are biologically active phospholipids. And being polar lipids, they are soluble in both oil and water and are important components of cell membranes. In addition, these phospholipid esters have a number of biologically active metabolites.
We've been exploring the cellular activity of HRO350 and its metabolites for the last three years in a large research project, which was supported by a grant from the Research Council of Norway, and I will now present some of our key findings. Specialized Pro-resolving Mediators, SPMs, are key metabolites of phospholipid esters. SPMs are endogenous bioactive lipids which promote resolution of inflammation. These lipid mediators have previously been shown to have a role in psoriasis, where they can impact key cytokine pathways, driving the inflammation, which is a hallmark of psoriasis. In June, we presented cell data from this research project at an international conference. Key findings are that when primary immune cells, which have been pretreated to be inflamed, mimicking psoriasis, are treated with HRO350, they produce SPMs involved in the resolution of inflammation, as well as tissue regeneration.
And this is state-of-the-art research, and findings elucidate a potential mode of action for HRO350, which supports an anti-inflammatory effect. This resolution of inflammation could be a promising treatment modality in inflammatory conditions, including psoriasis. So resolution of inflammation is also called immunoresolution, and this is a therapeutic frontier in the treatment of inflammatory disease. SPMs are key in promoting the resolution of inflammation. And figure one here shows how inflammation in the body involves a required increase in cytokines. However, this should naturally be resolved by a shift in the involved cell types resolving that inflammation. And if this natural resolution does not occur, as shown in figure two, a chronic inflammatory state can follow. Today, most treatment modalities for chronic inflammatory diseases like psoriasis involve reducing the inflammation by, for example, inhibiting cytokines, and this is shown in figure three.
When that treatment is stopped, the underlying chronic inflammation is still there because it's not been resolved by the body. There is currently ongoing a lot of research in how to promote that natural resolution of inflammation rather than inhibiting it, and increasing key SPMs would be one such treatment concept. In addition to the recently published data on SPMs, we have conducted cellular research on skin cells, and further data will be presented later this year. Finally, I will briefly review the planned drug development program for HRO350 towards the marketing authorization application. As mentioned, the phase IIb clinical trial will be complete when all patients have been treated for one year and having a further eight-week follow-up.
Since we're doing a readout now after all patients have been treated for six months, we can start planning for the phase three program while the phase 2B study is being completed. As previously announced, we have agreed with the EMA on the pediatric investigation plan for HRO350 to develop it also for children, and we will be working on this in parallel with the clinical development program for HRO350 for adults. Our strategy is to find a partner prior to the phase three program to get support and also help to prepare the marketing authorization application. By that, I will hand over to Jone Sl inning, our CFO, for the financial review.
Thank you, Runhild. I will now guide you through the key figures for the first half year of 2024. We have had a relative stable revenue development the last three half-year periods. We ended first half year of 2024 with a total revenue of NOK 16.7 million, down NOK 2.4 million compared to the same period in 2023, but up NOK 2 million compared to the last part of 2023. The last years, we have seen a positive development in gross margin, and the level has been stable the last periods. Gross margin in first half year of 2024 ended at 30.6%, above both first and second part of 2023. Available liquidity end of June 2024 was NOK 49.8 million, including a credit facility of NOK 30 million.
Cash burn last six months is highly affected by the HEROPA study, which is as expected. Looking at the income statement, we see a small decline in revenues of NOK 2.4 million compared to the same period in 2023. Compared to the second part of 2023, the sales revenues have risen with NOK 2 million. Second quarter of 2024 has also shown a positive development compared to first quarter, with a total sales revenue of NOK 10.7 million, compared to NOK 6 million in the first quarter of 2024. By end of June 2024, more than 100% of the total 2023 revenues are secured via booked sales and received purchase orders for the rest of the year.
As earlier mentioned, the gross margin development has been stable the last periods, and at a higher level than what was the case just some years ago. Compared to total gross margin in 2023, this is 1.6 percentage point above in first half year of 2024. Operating cost has been in line with the budget for the period. Compared to the same period in 2023, the total cost for first half year 2024 include both a higher headcount and full effect from the acquired Arctic Algae. Our adjusted EBITDA ended at negative 20.9 million NOK in first half of 2024. The B2C segment has had a continued positive development, with a year-over-year growth above 20%.
The European nutraceutical market, excluding Norway, is still our largest market, with a market share of 38% year to date in 2024. Total revenues year to date in 2024 are somewhat lower than expected, mainly due to lower sales in American market and changes in customers' delivery plans. The American market accounts for 8% of the total revenues in first half of twenty twenty-four. In first half of 2024, the APAC market accounted for 33% of total sales. Given purchase orders, it is expected that this market will contribute positive in the second half of the year. Available liquidity at end of June was 49.8 million NOK. The last six months, the liquidity has been reduced with 59.8 million NOK. The cash burn is, of course, affected by the progress in our pharmaceutical development projects and the phase these are in.
Year to date, approximately NOK 34 million has been capitalized related to these pharmaceutical development projects. By end of June, we have an unused credit facility of NOK 30 million. Lastly, some comments on our total financial position. At end of first half 2024, we still have a strong financial position. Total assets amount to NOK 273 million, of which non-current assets amount to NOK 198 million, and current assets of NOK 75 million. The long-term liabilities relate to financial leasing agreements originated as part of the Arctic Algae acquisition. Arctic Bioscience has an equity ratio of 86% at end of June 2024. With this, I will give the word back to Christer, who will comment some more on our business outlook. Thank you.
Now, moving to the business outlook. The HEROPA study remains our primary strategic focus, with finalizing and securing the HEROPA study for HRO350. Presentation of the six months primary endpoint readout is expected ultimo September, early October this year. Our liquidity situation is closely monitored. As previously communicated, various financing alternatives will be considered to secure further funding post the six-month data readout. This includes the process of pursuing partnerships for HRO350. The continued international commercial development of our Nutra business has a strong focus. We forecast a year-on-year growth this year of 20%-30%. With that, we conclude our presentation, and we'll shortly move on to a Q&A session. Thank you.
Then we welcome you all to this Q&A session. During the presentation, we have received some questions, which we will go through and try to answer it in the best manner we can. The first one we have received are: "What are the key drivers to get yearly revenue growth back to 20%-30%?
As mentioned in the presentation, we see this year growth both in Norway, Europe, and the Asian markets, and we see that these three growth areas will deliver the growth we expect between 20 and 30%.
Okay.
Mm-hmm.
Previously, you have guided for EBITDA breakeven at end of 2025. When do you currently expect to turn EBITDA breakeven?
What we have communicated previously is a Nutra business EBITDA, positive EBITDA in 2025. And, this is also still our target going forward, that during 2025, the Nutra business will deliver positive results.
Mm-hmm. We received one more here. "The Q1 operational update referred to obtaining... obtained financing of a new in-house manufacturing line. Please, update on the status on this issue." Can you take that first?
... Yes. The project is moving forward with engineering and detailed design, and we expect starting the build phase in early 2025.
There is no mentioning of R&D of the possible medication relating to prematurely born babies. Would appreciate an update on this.
Runhild?
Yeah, sure. We did not include it this time, as we wanted to focus on an update on the clinical trial, but that is still ongoing in-house on developing the CMC part of that product. So we'll be sure to give you an update at the next possible event.
Mm-hmm.
Mm.
Concerning algae, what kind of products are likely to be developed? Magnitude of R&D costs, timeline to possible products, et cetera.
The investments and development within the microalgae space will still have the same focus as we have today within the autoimmune and inflammatory space. So what we see is that in the future, on the nutra side, expanding our current product portfolio and focus in the, like I said, autoimmune and inflammatory space. In terms of timeline, our current timeline, we expect finished products in 2028, 2029, entering the market.
We have one more question. Can you explain more the de-risk comment related to the HEROPA study?
Yeah, sure. Drug development program is a risky venture, and I think for every step on the way, you have a de-risking element, and that goes back to having scientific advice, having a clinical trial approved in many countries, having the trial fully recruited, and now we're being at the stage where, from a mathematical perspective, we know how many patients we need to conduct the necessary statistics on this trial, and of course, you always over-recruit because you'll lose some on the way. We're there, and we're very excited for the forthcoming readouts.
I believe that was the questions we have received. So with that, we round this presentation up, and thank you for watching.