Okay. Welcome to the Q4 presentation. I'm Jethro Holter, the interim CEO, and I'm joined here today by Børge Sørvoll, who's our CFO. Børge will share the presentation with me today. Just having a problem with the slides here. There we go. Now it's working. The agenda today is, what I want to do is we're going to start off recapping the new strategic direction. This is what we presented at the investor update meeting on the 10th of December. We will then look at the highlights. We'll look at the Q4 achievements, and then what we delivered in 2019. We'll then look at the ArcticZymes business, Biotec BetaGlucans. Børge will then take you through the Q4 financials, and then we'll look at the outlook to see what to expect for 2020.
In terms of the strategy, the new strategic direction, as mentioned, we had an investors update meeting on the 10th of December, and we sort of outlined where we're going to go in the future. I'm going to touch base on the key aspects of that meeting. For the company, we have one goal moving forward, and that is really all about profitability. We want to drive this organization into profit and have sustainable profits. The formula for doing this is really based on the model to the left. It's really about focusing on doing the right things. When you look at Biotec Pharmacon, for many years, we've had very strong ambitions. We wanted to do many things, and you see we're doing many things. To really realize that, we need many more people on board, 100-plus team.
We need to put much more investment behind that. What we realized is we really have to change what we're doing. We have to do fewer things and work on those things which bring the most value to the table. By doing the right things, doing fewer things, we can really focus on customer excellence, because that's what businesses are at, is serving customers. If we serve customers well, not just with good products, it's also about good service. It's about high quality. It's about all the support. A customer is like a marriage. You have your ups and downs, but you're married, you're looking for that long-term relationship. You get the recurring sales, you grow your business, that drives profits. The point is, we want that sustainable long-term profits, and that's certainly what we've been doing in building our business over the years.
What that does, it fuels shareholder value, and that's what it's about. We want to drive and build long-term shareholder value in this organization. The best way of doing that is making this company profitable and growing that profitability. To do that, we need to change course. We need to change course towards profitability, and that's what we've done. We made decisions in December to do that. Moving forward, ArcticZymes is going to be a main strategic arm of this business. How do we do that? One thing is we change the boat, we change tack, where ArcticZymes now represents 80% of our efforts, and the future will be towards ArcticZymes. Also, it's about having the right people on the right side of the boat. We have gone through a structural reorganization in December, which is completed now.
What we've done is we've moved many of the people from Biotec BetaGlucans into ArcticZymes. We've reduced scale back the support for Biotec BetaGlucans to what is needed. We've also let some people go and reduced some positions so that we've lightened the boat to what's right for this organization, and we've balanced the boat with the people on the right side. The next bit is really about having full wind in the sails. You need wind to drive the boat. What we're doing is we're putting some more investment into ArcticZymes so that we can extract the long-term profitability, so we can accelerate some of the things we're doing. The last thing is really a clear destination, and that's important. You got to know where you're going. We have a six-year business plan for growing the ArcticZymes business.
That's really key in growing that both organically and inorganically. Why? Two good reasons. One, ArcticZymes represents the best opportunities for this company to accelerate and grow the top line. Secondly, it is the part of the business which has the best margins, and we can certainly achieve the best sustainable profitability, which obviously translates into shareholder value. That is really the essence behind the strategy. If you look at the different businesses here, again, I mentioned ArcticZymes is the main business moving forward. It's the most profitable part of the business today, and I think you see that in the results that we're going to talk about today. Moving forward, it's really about organic and inorganic growth for that business. When it comes to Biotec BetaGlucans, as most of you know, there's four businesses underneath it. We have the animal and consumer health business.
They're very similar businesses. They serve commodity markets. It's low margin. They're cash cows, what they do is they do operate at a profit, and that's important. I think here they do add value. We will maintain those businesses. Why? They're profitable. The Soluble Beta-Glucan, SBG for short. Today, it's being used as an adjuvant in combination with a vaccine by Memorial Sloan Kettering Cancer Center in clinical trials for kids with neuroblastoma. Today, it's non-commercial for us. We provide it as a research service. Moving forward, we've got to translate that into commercial value, and that's what we're really going to focus on in 2020. We really want to drive that into a licensing deal moving forward with Memorial Sloan Kettering Cancer Center and the vaccine owner, Y-mAbs. Woulgan. Woulgan is a product for wound healing. For the company, it's been a loss maker.
There's a lot of cost that goes into that. We put a lot of marketing efforts into this product. We've never been able to really grow the sales to our expectations. We really looked at this in December. Sorry, in Q4 and in December, we made a decision to divest that. The reason for that is because we could see that the business could never be viable in our hands. We could never grow the sales to what was needed to really make that success. We believe in somebody else, in other owners' hands with the necessary marketing power. They can drive that much better than us, hence why we're divesting Woulgan. That's the strategy that we got in place in a nutshell. There's a lot more behind that, of course, and which we presented on the 10th of December.
That presentation is available online as well on our website if you want to review that. In terms of the highlights for Q4, I think, actually, we are very proud to present our Q4. I think we've had a record quarter. I think the EBITDA shows that. We had a positive EBITDA with NOK 4.6 million. There's an asterisk there, and that's because these numbers exclude Woulgan. We've done that since Woulgan now is considered assets hold for sale. We've done that to align with accounting practices. The 2018 numbers here in brackets are adjusted for comparable purposes. Also with this EBITDA, this was driven mainly through strong ArcticZymes sales. Also behind that number, we have had taken on extraordinary one-time costs associated with the restructuring.
We actually had NOK 2 million in extra costs of accruals related to the restructuring of letting some people go. I think that's why this is a very good result. Gross profits improved by 27% to NOK 18.1 million, compared to NOK 14.2 million for the same quarter last year. In ArcticZymes, we had 52% growth in Q4, where we achieved NOK 16.3 million compared to the same quarter last year. Net cash flow for Q4 was NOK 9.2 million. When it comes to myself, I was hired as interim CEO, coming in in October to replace Christian Jørgensen, and that's basically related to the new strategic direction of the organization. Being part of ArcticZymes, leading that for five years, and then ArcticZymes being the main strategic arm of the business, it's natural that I was chosen to take the company forward as interim CEO.
I mentioned already we have a new group strategy. Now that's all there, ready to go. We've done all the structural reorganization in Q4. The organization is all ready to go on that now. ArcticZymes launched its M-SAN, and this is a Salt Active Nuclease. This complements our existing Salt Active Nuclease portfolio. What this does, it allows us to gain greater market access and accelerate the growth we've had in the therapeutic market. I'm going to come back to that in a bit. Deliverables for 2019. These are some of the things we delivered on. Overall sales growth in the group was 13%. Again, these numbers are without Woulgan. If you put Woulgan back into the equation, we would have achieved 16% growth. Organic growth for ArcticZymes in 2019, we grew 40%.
We've also had significant reduction in our cash consumption. We've really cut down on burning cash. Effectively in 2019, we only burnt NOK 0.4 million, which I think that's a phenomenal achievement if you consider our past years. One thing we originally planned to do was to renew the clinical trial agreements with Memorial Sloan Kettering Cancer Center. What we did, we've delayed that, because what we want to do is we really want to ensure that we have something that translates into the commercial deal. It's something we want to work on in 2020. I think it's much better to work on things, slow it down a bit, get what you really want. That's what we're doing now. I think that's important. We have to make this commercially viable. That's going to ArcticZymes.
These are the commercial achievements for ArcticZymes. The quarterly performance we had, actually in Q3, we thought we had the highest performance ever. In Q4, we have even higher performance, reaching NOK 16.3 million. This is the best ever sales we've had per quarter. Of course, it's important to manage expectations because when you look at our business, the ArcticZymes sales fluctuate between quarters, and we do expect this moving forward as well. We expect fluctuations in both directions, up and down per quarter. One thing we know always is Q4 is always higher than Q1. That's always got to be expected. We're going to have this. I've always mentioned these quarterly fluctuations. What we do expect as we move forward is we will grow that business year-on-year, and that's the point.
I think when you look at the quarters, it's always good to look at the year trajectory as well. In terms of annual performance, I mentioned it before, we have 40% growth. When it comes to the EBITDA, we actually had a double-digit EBITDA in 2019, where we landed on NOK 14.3 million, and that's over double what we achieved last year. It really shows that we are growing the profitability of the business. We're maintaining costs, and growing the top line. The model, how we're driving ArcticZymes is really working as we'd like. When you look at the growth, there's some key contributors there, and I think it's very good to break this down. The Salt Active Nuclease, that product line, represents 25% of total sales.
If you go back just a few years ago, 2016, we almost had a big fat zero in sales of SAN. I think this just shows how quickly you can grow a new portfolio of enzymes. Once you're in there, it grows nice. After a few years, you can see it starts accelerating up. The launch of the new M-SAN, which I'll come onto again a bit in more detail, just will help to accelerate that moving forward. With the molecular biology and molecular diagnostics segments, we've had nice growth there. Also we have a nice opportunity pipeline that we've been working on with customers for many years. As you know, when people start trying to use our enzymes, it takes them several years to develop products.
We've been there with our polymerases, and also now with our new ligase and things, we're there working with our customers. There's two interesting areas we're looking at. One is liquid biopsy. To make this simple, when you go into hospital for looking for cancer, or if that's something like a woman for prenatal testing, most biopsies are invasive. You have to stick a needle into you, for prenatal testing, into the uterus, or for cancers, you have to be opened up, and a tissue has to be removed. Liquid biopsies does it the easy way. It just takes a blood sample, and then you do a DNA test to look for that disease. One of the things which is, for us, is there's a lot of companies who are developing these liquid biopsies.
The beauty of our enzymes work very well in developing the DNA test associated around them. This is one of the areas we are really focusing on, and we have a lot of opportunities in the pipeline in that area. Another thing is with this, in this world, is there is a technology called LAMP. I won't even try and explain the technology because even for me it is complicated. LAMP is a way of amplifying DNA. Until last year, that was heavily protected by patent, this technology. Last year, some of the patents have started to expire. This year, all the remaining patents are going to expire with the use of that technology. The beauty of that is there is a lot of companies looking to exploit that technology. For ArcticZymes, we are working with those companies who want to exploit that technology.
We've actually, our polymerases, when we designed our polymerases, we intentionally designed them and engineered them for LAMP technology back in when we started to develop them in 2016. We are ready to start exploiting that, and that's really exciting for us. In the next few years, we really expect to be growing our sales in those two areas in the molecular diagnostics field. Everybody's always asked about the main customer. I think it's always been, "Oh, your main customer is the majority of your business." No, that's not the case. At the end of the day, our main customer today represents one third of our business. I think that sort of puts it in perspective. Going back maybe five years ago, it was certainly the vast majority of the business, but not today.
It sort of gives you an indication of how we've built the customer base out. We have a much broader customer base, and also we've had an expanding product range. All this help is what is helping the growth in the sales, and we're going to continue expanding that product base through new innovations. I mentioned we launched M-SAN. That's the seventh product we launched in 2019. M-SAN, as I mentioned, it's a Salt Active Nuclease. In the therapeutic world, in gene therapy, there's a lot of different types of viruses that are used. Today, our current SAN products only work for certain viruses. The M-SAN will work for some of the different viruses we can't tap into today. We can take a broader market share moving forward and accelerate growth. If virus is complicated for you, maybe I can talk about computers.
I tried this this morning, and it worked. Consider, if you think about SAN as an operating system on a computer today, we can target all PC users, okay? We can't target Android or Mac users. Basically, M-SAN is equivalent of making a software that works on Android and Mac at the end of the day, so we can capture everybody. That's the point is why we've beefed up our portfolio in that way. Sometimes I like to look at everyday objects to make it easy to understand our technology. I hope that puts some perspective on that for you. ArcticZymes also collaborated with Cell and Gene Therapy Catapult, which is a U.K. academic institute. This institute is a leader in working with companies to help them commercialize their gene therapy technologies.
We collaborated with them in presenting a poster with them at their gene therapy manufacturing and gene therapy congress in December in Amsterdam, and we got a very good reception there. I think our business, it's not normally we talk about who we work with because a lot of what we do is under confidentiality. That's what the business is. I think it's nice when we can sort of share and give you some flavor of who we work with. In this case we can because an academic institute and a lot of companies are working with this academic institute. I think that this poster is available, and information about Catapults available if you look in the reports, there's links to these, so if you want to dig a little bit deeper. We're also growing our portfolio of new enzymes. We have a nice pipeline.
One good example of this, we've had funding and been working on Horizon 2020 funded project called Virus-X. Now this project is entering the final stages. There's been a lot of prototypes being developed in this project, which is really exciting for us. We've now been selecting the most exciting prototypes. They're going into product development now. I think over the next few years, we're going to really bring some very novel, interesting enzymes to market. I think here we're going to see a lot of interesting stuff coming from our enzymes over the next couple of years. An essential part of growing our business is really operations. I think the important thing is you've always got to scale your operations and to maintain security of supply with your customers.
Since we have an expanding product range, we have to ensure we have the capacity to manufacture all these different products. One of the things we did during Q4 is to implement a second production line. That's important so that going into 2020, it's important that they're fully operational. It's also about scaling up. Several of our products are going through process development to scale up their production. We're scaling up, certain products are being scaled up 10, 100 fold. That's important because at the end of the day, it's about meeting future demand. Also it's about economies of scale. As you grow your business with a customer, customers want more product, bigger orders. They expect a better price.
Of course, what you need to do is scaling up, you improve your margin, and you pass some of those cost savings on to your customer. You can get a better margin too, so it ends up being a win-win situation, and you remain competitive. We're working on those scale-up projects right now. The last thing I'm going to talk about at ArcticZymes is about inorganic growth. You've seen how we've been growing the business organically. We also, to move forward, we want to grow the business inorganically by doing M&A. The reason for that is we want to become Europeans' leading one-stop enzyme company. In order to do that, you can't do that alone. I think there's a lot of other small companies out with very nice enzymes, nice products, and capabilities that we don't have. We don't have to reinvent everything ourself.
By bringing another company together with us or several companies, we can really strengthen our brand position as that one-stop shop with a broader and deeper offering. That's important. We need to grow in both directions then. By doing that, having more of the expanded value chain really helps us to accelerate our growth in sales, enhance our operational and innovation capabilities. Very important is if you want to be a leading European company, you need a central European base. I think here, Norway is good. We'll always have our Norway base, but it's important to have a base in central Europe. I think this is one thing the M&A will achieve. The status, we are in advanced discussions with several companies. We're getting very close, and we do expect our first transaction to happen in the first half.
I'm confident we will do that. I'd like to switch gears and talk a little bit about Biotec BetaGlucans. When it comes to Woulgan, as I mentioned, we made a decision to divest, and we've, of course, spoken to all of our customers. As we expected, there's been a mixed response. Some customers are totally okay with it, some are okay. But our position here is it's business as usual. We are still going to provide product and the same service we have to our existing customers. We're seeing positivity around Woulgan with potential business development consultants. What we want to do is bring a business development consultant on board to help us to drive the divestment process. The consultants we've spoken to are very positive towards the divestment here.
We've had some interested parties already approach us as well about purchasing Woulgan. I think here, we're seeing a positive response to this. From the commercial side, even though we've got growth in Woulgan sales for the quarter and for the year, these sales are far below our expectations. Again, that helps to support our decision to divest Woulgan. Germany still represents the key market and a driver for sales for us. The majority of the sales of Woulgan have been there. What is interesting, in December, we actually signed a new distribution agreement with a company, BioLogiQ, in the Netherlands. They were fully aware. We talked about that, about the divestment of Woulgan. They're fully on board with that. They still signed up. That's encouraging. I think that is a very positive signal.
People still want to come on board even though we're going through a divestment process. When we look at the other Biotec BetaGlucans segments, the adjuvant, the SBG, as mentioned, we really want to extract the commercial value moving forward. We've had discussions in Q4, and we're continuing those discussions with a vaccine owner, Y-mAbs, and Memorial Sloan Kettering Cancer Center in really translating those research shows, those clinical trials that have been done over the last few years into that commercial value. That's really important now. We need to make sure that the work we're doing pays for itself and brings profit into this company. That's what we're working on right now. Consumer health, we've got growth in the M-Gard product in Q4, and this growth is actually mainly due to bringing new customers on board.
We're seeing a nice expanding funnel of potential leads in the U.S., Asia, and Europe. For animal health, for the sales in glucans in the feed sector, sales are down for Q4, and for 2019, sales are down compared to last year. I think some of the reasons for the sales are down is there are some seasonal effects when it comes to sales of these products, particularly in the salmon feed market. With that, I'm going to hand over to Børge, and he's going to go through the financials.
Thank you, Jethro. As Jethro has talked about, Q4 was actually the best quarter ever we've had so far, it's actually the best quarter since the company was listed on the stock exchange since 2005. It's also following a really strong third quarter this year. That was also one of the best quarters in the history of the company. We have seen a really good positive trend in the second half of the year now this year. Even though some areas have underperformed this quarter, other areas have definitely excelled, and we've seen significant growth in the quarter. By combining sales and controlling our expenses, the fourth quarter and the full year 2019 turned out really good. As I said, the best so far. Looking at the cash flow for the year, it is easy to see that sales are generating good cash flow.
Our fourth quarter changes in cash and cash equivalents were actually NOK 9.2 million. It's a really good quarter. Of course, what is the explanation behind this? Also, I think we have to come back to third quarter. We had really good sales in the third quarters. We saw the revenues coming in the fourth quarter from those sales. We also had a really strong start in the fourth quarter in October, where also we see that all of the cash from those sales came in the fourth quarter as well. There are tax grants from previous year are being paid out in October as well. That has also a positive cash effect for the quarter. That gave us NOK 9.2 million in changes of cash for the year.
Even though we see that our cash flow was increased, our payables has remained unchanged, whereas our receivables are reduced slightly also. It's gone down NOK three million compared to the same quarter last year. I would say we have a good situation here going into 2020. As Jethro said, our cash balance at the end of 2019 was NOK 31.3 million. At the end of last year, we had NOK 31.6 million. Our ambition to significantly reduce our cash consumption is we have exceeded that statement by far. I think 2018, we had a cash consumption of around NOK 12 million for the year, excluding the capital increase within June last year.
Going over to sales, as Jethro has talked about, ArcticZymes grew their sales for more than 50% in the fourth quarter compared to the same quarter last year and generated NOK 16.3 million. Animal and consumer health, we saw a decrease in that area by close to NOK 2 million, in excess of NOK 2 million, and it's primarily explained by reduced sales in animal health, and that, as Jethro also said, we see some seasonality in that area of the business. We also saw on an annual level, sales in that area were down by NOK 4 million for the full year. Woulgan generated NOK 1.1 million in quarterly sales, compared to NOK 0.9 million last year. Of course, our expectation in this area has been higher. We expected higher revenues, we expected higher growth.
Of course, both Q3 and Q4, it was a disappointment based on our own internal expectations, even though we have seen growth in that area. Also, I think it defines or it's the correct decision to divest Woulgan because we don't have enough marketing power, we don't have enough resources to give this product the proper attention to get those revenues in. As I said, even though it's an amazing product, but we don't have the necessary resources to get the sales here. Anyway, sales for the quarter, they were up to NOK 23.1 million compared to NOK 19.5 million in last year. You can also see if you look at the graph on the right-hand side, you see that, of course, it's the ArcticZymes business that is driving it, and you can see there's a really nice trend from Q1, Q2, Q3, and Q4 now.
Of course, we said that we will have some quarterly fluctuations in this one, you will not see a continuous trend just going straight up. There will be bumps along the road here. Of course, we want to see that annual growth in the annual figures for especially for ArcticZymes. Looking at the profitability, it is the same as with sales. Of course, it is the best quarter so far. We delivered an EBITDA of NOK 4.6 million in the quarter. The numbers have been adjusted slightly, both the Q4 2019 and the Q4 2018 numbers, they have been adjusted for IFRS 5, which is assets held for sale. After we made a decision to divest Woulgan, we basically had to take all the direct expenses relating to Woulgan. We had to take them out of the P&L and put them on a separate line, basically.
The EBITDA here is excluding Woulgan. This is the EBITDA from our continued operations, how the business would look like without Woulgan as such. Of course, personnel is still our biggest driver for expenses, but it's also the biggest asset we have in the company. Without the highly knowledge and educated personnel, we will not be able to drive sales, and we won't be able to generate new products either. That is important. Also, I think from an EBITDA perspective, as Jethro said, we took some restructuring costs in December, close to NOK 2 million. That, of course, we have seen the cost effect. We saw that one in the fourth quarter, but the cash effect we will see that one in 2020, when we have the payables from those restructuring costs.
Also, I think it's important to say that IFRS 16 leases was implemented on January 1st, 2019. It's been implemented in all of the numbers, basically it has an effect on the way we book our property, plant, and equipment, our rent, the housing, et cetera. All of those expenses are now being booked on the balance sheet and depreciated, and that has an annual effect of around NOK 3 million that has been taken out of the profit and loss statement. All figures have been recalculated for comparison purposes, this one shows how we have improved the business, basically. Going into ArcticZymes, some of the details in ArcticZymes. As we have said, I'm not going to say it, I think it's a nice story. We have grown it from NOK 10.6 to NOK 16.3 million on the quarterly sales.
Even better, we also see on the annual figures, we have grown now ArcticZymes from NOK 32.5 million to NOK 45.2 million. That's a growth of almost 40% on an annual basis, which I think is a number that we are really proud of. Operating expenses have, of course, increased. We have invested more into this business. We have reallocated resources from the BBG side of the business over to ArcticZymes. We also now in 2019, we have the full effect from the BDs, the business developers that we hired in the last year, so they are all in this year. We have also taken on some expenses relating to M&A or inorganic growth consultants. That is also part of driving some of the operating expenses, at least for 2019. Looking at the bottom line, of course, Q4 was an amazing quarter.
Our EBITDA went from NOK 3 million to NOK 9 million, close to 200% up. Also, if you're looking at our EBITDA on an annual level, it grew by 100%. We went from NOK 7 million to NOK 14 million, basically. It's a good achievement on an annual level as well. Then going into the beta-glucan side of the business. The beta-glucan numbers are now based on continued operations. The numbers here are excluding Woulgan as such, all of the direct expenses and sales and revenues. Also, I think you can see I have a net profit line here that's basically showing what is Woulgan contributing to the numbers here. We see that, of course, our sales were down, as we said. It's down to NOK 5.6 million compared to NOK 8 million in the same quarter last year.
We also see that the annual figures are lower. These numbers are actually better than our own internal expectations that we had when we started the year. We have sort of exceeded what we saw. It's not going to be a business that will grow a lot here when you look at the animal and consumer health. Gross profit is, of course, down as well. When you have reduced sales, the gross profit will go down. We have also reduced our activity levels in this area as well. Our expenses have gone down as well, especially if you look at the fourth quarter. You also see that our EBITDA is worse than the last year. We go from minus NOK 1 million to minus NOK 2 million.
When you look at an annual level, we have actually managed to improve it slightly by NOK 600,000 when you are going from NOK 5.7 million to minus NOK 5 million. As I said, if you look at Woulgan as a separate entity, fourth quarter, they had a net loss of NOK 1 million compared to a net loss of NOK 1.9 million in the same quarter last year. On an annual basis, this year we had NOK 3.5 million compared to NOK 6.9 million in the last year. This, of course, also this is direct expense. This excludes all of the, for instance, internal hours that I use and then Jethro use and Christian use as well. Of course, that is expenses that are gone as well now, based on the expenses we had for Christian, that we won't see those in the future.
Of course, we expect the numbers to improve. I think with that, I think Jethro will talk a little bit about the future now and where we see that 2020 will go.
Thank you, Børge. I'd just like to give you a flavor of what to expect now we're in 2020. I think the important thing is really it's about going full speed ahead with a new strategic direction. We're there. We're ready for that. Of course, it's about executing the number 1 goal, is driving the whole business into profitability in 2020. It's also go beyond that. We want to ensure we grow that profitability, make sure we're sustainable moving forward. We've gone through all the restructuring. In December, we reorganized, did a whole reorganization of the personnel, so that it really supports ArcticZymes. As I mentioned earlier, ArcticZymes is 80% of our focus now and will be the main strategic business. We also have been working and will ensure that we drive the acquisition process as fast as possible.
We want to get that first acquisition in the first half. I think that's important. We really see some very nice synergies with the targets we're looking at, which will help us accelerate the growth. When it comes to the beta-glucans, it's important that we now operate that as a profitable business. Part of that is, of course, we've reduced the personnel there, but also how we work in those individual businesses are going to be different to how we have done before. It's the same thing when I came to ArcticZymes five years ago. We had to look at a business and really be very smart and put a strategy behind how do we make those work. It's the same thing here with the BBG. Even though we've changed personnel, how we work will be different moving forward.
It is about making that business profitable. Of course, when it comes to Woulgan, this is obviously working on that divestment process. As mentioned, we have consultants who are going to help us. We should be hiring a consultant very soon and get that process going. I think this is really the recipe that we see that will drive long-term shareholder value. With that, we'll stop and thank you. We open for questions.
What will the business look like in years' time?
Please. Sorry. Take it.
In three years' time, what we did in the investor update in December, we sort of put a kind of outlook, a more longer term financial outlook. I think the goal is what we're looking at. What we set is in 2023, that is the goal to at least have the ArcticZymes business bring in NOK 100 through organic growth.
100 million.
100 million, yes. Of course, that's through organic growth. Of course, if we do M&A and we're successful with that, bring another company in, that will allow us to potentially accelerate that and hopefully make that happen earlier. That is the financial outlook we have, and we have very good visibility to ArcticZymes. We have a good 6-year plan. BBG, that's a little bit more complicated. I think to have a kind of long outlook there, we have to take this stepwise. I think the focus now is Woulgan. Of course, I think the most, when you look in terms of the BBG business, I think the SBG, the adjuvant, is the most exciting thing that we have there. The important thing is we need to translate that into a commercial value now. We have to get some licensing.
We have to get that licensing deal, whatever it is, to really get the value out of it. As mentioned, the animal and consumer health that we have to monitor very closely. That needs to pay for itself. That is a commodity market, and there's stiff competition. I think that we take stepwise as well. Like I said, we will maintain those. While they're profitable, three years down the road, that is difficult to say how those businesses will look.
Thank you. Have you taken all the restructuring costs in 2019, or is there more to be expected in first quarter?
No, we're taking them all in Q4. Do you want to comment any further?
No, I think you are right. We have taken all of the expenses in the fourth quarter. We do not expect to have any more restructuring costs in the first quarter or in 2020 as such.
Another question regarding turnover, how much is recurring? Have you a proportion of the turnover be recurring?
Maybe you want to.
No, I think you have to, as Jethro talked about, I think they said we have a marriage with our customers, and of course, we are trying to grow the business with them as well. Of course, most of it will be long-term recurring revenues as well. Of course, some of the customers are buying only in one quarters, where others are buying every quarter. On an average level, of course, most of them is a long-term relationship. That is what we try to get with all of our customers here.
Yeah.
We lock them in for a long time when we have them, when we are part in their product range.
That's particularly in ArcticZymes, because, of course, we are a B2B OEM business. What that means is we serve companies who develop products. They have to go through a long time, maybe one to four years, to develop a product. With that, they select you as a supplier, which you work with. They take your, say, if an enzyme is a component that they integrate into their product, they've invested a lot of money to do that. Some of those companies then have to then take their products and get regulatory approval in order to sell it if it's a diagnostic. You're really locked in. As a supplier, you become a critical raw material supplier. That's often the status we have with our customers. We're a critical raw material supplier. That means that you are locked in.
It's that marriage I talk about. For a lot of the business, particularly in ArcticZymes, it is all about that. It is that long-term value. We do get the reoccurring turnover. It's different to an end user business. If we were just selling to the end user business to universities, that's a very transient business. Researchers at the bench will sometimes use the what's the flavor of the month. They might buy this product now for a few months for a project, then move on to something else. Your sales with individual customers are very transient in that world. I think that's a kind of difference. It's really about understanding the dynamics we have with our customers.
Yeah. Finally, regarding Woulgan or the divesting of Woulgan, have you started this activity? Has there been any interest? When do you expect things to happen?
Yes. I sort of talked about that. One thing is, we're working with hiring somebody who it's their day job to divest. This is what they do. We're hiring a consultant. We're in this process right now. We've spoken to several consultants right now, and now we're selecting the one, very shortly, who we think will be the best to drive this process. I think everybody we've spoken to is very positive about this project. These people you hire, these consultants, they won't take this project on unless they think, they believe they're going to be successful here. I think what we're seeing is we're very positive, and they're positive, too, to what we are seeing. Now it's deciding who is the best one to hire moving forward. That's where we are.
We have had already some parties come to us directly about interest in buying Woulgan. I think it is positive out there.
Any value assessment on Woulgan?
That's something is not at this stage. Of course, that's something it would be foolish to disclose that publicly because there's a negotiation that needs to happen with interested parties. I think it's not smart to put something on the table anyway, even if we did know it.
Hello.
Just wanted to say that the prospects for ArcticZymes is looking even better. just wondering, the SAN product?
Yes
The lifespan of this product. Is it for many, many years to come, or how is that?
Oh, most definitely. A very good question. And thank you for that. When you look at the gene therapy market, it's actually been around for a very long time. It started out in the 1990s, where there actually was an experimental gene therapy that was done, but unfortunately, the patient died. It actually stalled the market for many years. Since then, the kind of technology and the understanding has improved. Now I think we're at a different stage with different thinking, and I think the regulatory authorities are also important here because they really control what you do, and they have a different mindset. They really see that they're changing the way in how they regulate that. I think here we have all the stakeholders, the regulatory authorities have a different picture of this. The investor community has a different picture. The science has advanced.
We understand more about making good quality, safe products. Remember, our SAN is used to make that product safe. When you make the virus, SAN is used to clean up the contamination on the outside of the virus to avoid adverse effects. I think here, the industry, it's new. When you look at growth of some of the new companies out there, they're growing over 100% annually, some of these. Now we're starting to see the real commercial, real-life examples coming to market. Spark Therapeutics was the first company to commercialize a viral-based gene therapy. If you have a look, they've been acquired by Roche. We're just seeing every day new companies coming up. I think every week we have a new customer who wants to try SAN. I think the momentum's there. I think there will be often bumps in the road.
There are going to be, like with any, even in traditional medicine, when you're developing drugs, there are patients have adverse effects. Some patients die. That's the nature of developing a drug. It's going to be the same in this, in the gene therapy area. It's not going to be like the '90s where one patient died, everything stopped. Here, it's accepted, this technology. The only thing right now, it's in the early stages, it's very expensive. It's $1 million-$2 million for a therapeutic. Of course, that cost is being driven down, and that's what makes it accessible. Companies like Oxford Biomedica, they've already said, "Look, in future, our technology is what we want to do is bring this down to $200,000 per treatment. Eventually get it down to maybe $20,000." These things are achievable because these happened in the sequencing world.
In the sequencing world, it costs millions and millions of dollars to sequence the first genome. Today, it's under $1,000 to sequence the genome. It's going to be the same in the gene therapy space. I think we're just at the beginning. Yeah. I believe future medicine, in 20 years' time, or 15, let's say 10, 20 years' time, new era medicine will be genetic medicine. That's my phrase for it, genetic medicine. I think now, modifying your genome is going to be something very acceptable in 10, 20 years' time. Today, it's a bit Star Trek or science fiction. Really, this is the reality we're in. I think, long story short, we're at the beginning and that's why we're there. That's why we're developing more products. We see where this market is going, and our sales is demonstrating that.
I don't see it going away.
Thank you.
Any other questions? I didn't have anyone online either. Any questions online? Well, I don't think we have any more.
Nice. Thank you.
Thank you for today and have a good day, everyone.
Thank you.