Okay. Welcome to the Q1 presentation. Before we kick off and go through things and to usual. So with since we're all in home office and can't meet together, we're doing this by video teleconference. And so what I would kindly ask is that you ensure that you have your microphones muted.
This will help to reduce background noise. And if you are sharing your video, please turn that off because that helps us have the best bandwidth to prevent dropouts during the presentation. So today, it's myself, Jester Holter, now the permanent CEO of Biotech Pharmacyl. And we have Birger Servile, our CFO, who will join us in leading the presentation. So for those of you who are not watching the stream live, I will tell you which slide number on.
So we're going on to slide number 2, the agenda. So in terms of the agenda today, what I'm going to do is, we're going to walk you through the Q1 highlights. Then we're going to look at each of the businesses in turn, looking at Arctic Xymes first, then ViaTech beta glucans. We will then give you a quick update on our response to the coronavirus situation. Birger will take over after that, and will walk you through the Q1 financials, and I'll come back and tell you a little bit about the activities around the corporate strategy.
So we're now moving on to the next slide, which will be Slide number 4, and that is the highlights for Q1. So we had a very good quarter last quarter. That was one of the best quarters we had. And now for Q1, we had an even better quarter. For ViaTech Pharma, we've had our best quarterly performance ever.
So we're delighted and proud to share that with you. And one of the things that we said going into 2020 is that our goal for 2020 is to drive the company into profitability. And we already got off to a good start achieving for Q1, we've achieved a positive EBITDA of £13,800,000 and that's compared to minus £3,900,000 for the same quarter last year. So what was driving sales here? 30 Arty Times, again, has is best quarter ever, bringing in $18,500,000 That's growing 135% compared to the same quarter last year.
So the growth drivers for the quarter in our Exane's were strong sales in the therapeutic segment. This is supported by the salt active nuclease product portfolio, and I'll come back to that in a bit. It was also driven by upsides related to our enzymes being used in corona diagnostic tests. The VELIC LUKAS business also had a very good quarter as well. It drove sales of $15,800,000 growing by 100 almost 130% compared to the same quarter last year.
What's really important to stress and highlight here is that if we put coronavirus aside, business is progressing as planned. So we're moving on to the next slide, and that is where we're going to go into the Arty Science business, and I'll walk you through that. And we're going to move to Slide 6 and talk about the commercial achievement. So in Hardie Science, as you saw, we as I mentioned before, we had our best quarterly financial performance as yet and achieving CHF 18,500,000 in product sales. We also had a very good EBITDA.
Our EBITDA was almost NOK 15,500,000. So very, very good performance for us. And there's 2 main factors that really contributed to that growth. First was the salt active nuclease product portfolio. And this is a portfolio that is used in the therapeutic segment where the enzymes are used in the manufacturing processes of viruses used in gene therapy and vaccine production.
And if you just go back a few years ago to 2016, we had 0 sales there. We grew that business very rapidly. In 2019, it accounted for 25% of our overall sales in our enzymes. And now in Q1, the growth continues in that segment. And the growth is through new customers.
It's through existing customers putting in repeat orders. It's also the size of the orders. We're getting increasingly larger orders coming in. And I think Q1 is very interesting for us because we're now starting to see the really large individual orders coming in where we sent orders out in a magnitude of greater than NOK 1,000,000. So moving forward, we do expect this trend to continue.
And with orders increasing in size as customers mature and also as we expand the customer base in the therapeutic segments. The second part that drove Q1 sales for IDEXXAIMS was very much about upside with CoDURNG and DNAs being integrated into COVID-nineteen diagnostic tests by several of our customers. I think this is good for our economies because at the end of the day, we can contribute towards the fight against corona. And this is our way of doing it by enabling other customers. However, we do need to put this in perspective because we consider these upsides.
We consider this transient. And I think when you look at this, the corona situation is peaking. And of course, there's a lot of demand for testing. But over time, that is going to the need for testing will subside. So the need for tests will subside and also the need for our enzymes.
So I think that's why we consider this a transient short term thing, but we expect this to continue while the peak is in place. However, what's important here is not just focus on the short term. It's really about the long term here. So what we really want to do is really support our customers, partners in developing what we call the next generation COVID-nineteen tests. Because at the end of the day, what we're going to have to learn to coexist with coronavirus, it's not going to go away.
It's going to be there. And we're always going to need tests. So what we want to do is to support those customers, develop those tests that will be needed in the future. So then what I must stress again, as I stressed on a bit earlier, we have to when you look at coronavirus, it's great. It's giving us nice upsides.
But if we put it to aside and we look at our business, we have good we have growth in the sales are growing according to plan. And we got the when you take corona to one side here. So with that, I want to move on to the next slide, number 7. And this is about innovations. And with IDXymes, we're continuing to innovate.
We have launched a new formulation of DNase and of our DSDNAs. And when it comes to DNAs, we need customers need these in different formulations. So by by formulating them differently, it means that we capture all customers out there that maybe need the enzyme at different concentrations like different chemicals in and that's what we do. We change the formulation so that we can provide different formats to our customers. We also filed a new patent application relating to one of our novel ligases in the pipeline.
And this ligase is interesting because it has desirable features that have been specifically requested by our customers. And these features you cannot get in other commercially available ligases today. And to put this into perspective so you sort of understand what a ligase is. A ligase is really like a DNA glue. It sticks DNA together, genetic material together.
It's a bit like in a home, you get something, you get your nice precious vials and you drop it on the floor and you need to stick it together. And you know if you have the wrong glue, you can't stick your vials back together. It's the same thing in the DNA world. You know, ligases can stick certain parts of DNA together, but not all. So sometimes you need a specialty glue or a specialty ligase in this case.
So hopefully that makes you understand what a ligase is. We plan to launch this enzyme later in the year. What we need to do is get it up to a commercial manufacture at commercial scale quantities first before we launch that product. Once we get it up to that level, then we will launch this enzyme. I'd like to give you an update on the Arctic Syme's M and A status.
We during the quarter, we initiated acquisition discussions negotiations actually with a European based enzyme company. Despite our best efforts, we were unable to reach a fair price to make a transaction worthwhile without excessively overpaying. So I think with that, both parties realized that it was best that we terminated the negotiations in good faith. So what next? Well, we have obviously other targets we've been talking to, and we are advancing those negotiations further.
However, with what we will see is the progress on M and A activities will be limited at this time due to the international corona lockdowns we're seeing. Until they're lifted, it's going to make it difficult for us to progress those discussions. Originally, our target was to do an M and A deal in the first half. But with the corona situation, that's going to delay that. So I do not see us managing a deal in the first half of the year.
Anyway, if you put the M and A to the side, you see the our organic business is growing very nicely. So I think that's fine. We can live with delaying the M and A until after the corona situation has moved on. So I'd like to switch gears and talk about beta glucans and give you an update there. And overall beta glucans had a very, very good quarter.
We achieved just over just under 130% growth in sales compared to the same quarter last year. Also Q1 for Q1, beta glucan operated as a profitable business. And that links to what we said, we want to make sure that Biotech PharmaCon and its subsidiaries operate profitable, and that's what we've achieved for Q1. If we go through each of the businesses in turn for Animal Health, we achieved growth in sales for the quarter compared to the same period last year. This was mainly due to a large order that came in actually earlier than expected from the main customer.
So with that, we do need to expect fluctuations in sales in the remaining quarters. Our expectations for the year are unchanged. For Animal Health, we know that this is for the year, it will not be a growth business. It will be a steady state business, but that is to expectation. When it comes to consumer health, we achieved growth in sales of the MGuard product compared to same period last year.
Growth a lot of growth here continues to be through new bringing in new customers. And also, since the Artexyme, we suspect there's upsides related to bulk B2B sales to manufacturers who are targeting immune defense against coronavirus. Again, if you put coronavirus aside, we do see growth in the business as well. On the adjuvant, SPG, we have secured 2020 purchasing commitments to support the continuation of the clinical trials in neuroblastoma. So with that, we expedited the first SPG order in the Q1, and we expect to expedite further orders in later in the year.
The discussions that we've had are very much advancing regarding the long term licensing agreement. We have several discussions backwards and forwards now, and that process is advancing and looking promising. When it comes to Walgett, we our sales there's a small increase in sales compared to the same quarter last year. You got to put in perspective that we are only supporting our existing customers, so sales are very much in alignment with our expectation. In terms of the divestment process, that is going very well and as planned.
We're now in that stage where we've been reaching out to potential targets we've approached, and we're already getting positive responses back from some of those targets. And now it's really following up on those targets, and that's where we are today. So I'd just like to say a little bit about the corona pandemic and company responses. Every company has a response in how they're handling that. Some businesses, it has a negative impact.
Other businesses, it has a positive impact. For Aartexxaynt, we have a positive impact. We're on Slide 12 now. And since and that's good because we are able to offer something to help the fight against corona through our customers. So what's important here is that we need to ensure that we protect our core business to ensure we can manufacture and deliver product to our customers, and that's what we've done.
So our first priority has been to protect our employees, the supply chain and our customers. And these are just some of the measures that we've implemented. Firstly, we've implemented strict hygiene measures in everything we do. The important thing is we also ensure that we are able to continue our daily operations. So we have also backup resources and we keep those separated from the main resources.
So when people are manufacturing, if somebody gets sick, which we hope not, we have backup resources that can go in to ensure that we continue manufacturing. For some of the products, we've increased the manufacturing capacity to help in order to take advantage of upsides as we did in Q1. In terms of personnel, we have non operational staff are working from home office. We want to keep only the essential personnel for production, shipping, packaging in the office. Everybody else is working from home office.
And then the last component is we've put more we're stocking our warehouses more frequently. But more importantly, we are working very closely with logistic partners and freight companies to ensure that we get prioritized with our products so they get to ship out to our customers. So at the end of the day, I think we have despite the corona situation, we're very much working in terms of doing business, we are doing business as normal by implementing these measures. And this is across the business. This is for Alixymes.
This is for biotech beta glucans as well. So with that, I'm going to stop and hand over to Birger, who's going to walk you through the Q1 financials.
Yes. Thank you, Jethro. And as you say, even though you can take one back. Even though the world around us changes, I would say that our financials remains the same. It's been good to be here in to talk about our performance for the Q1.
And of course, the growth in our and performance we achieved in the Q4 has now continued into the Q1 as well, and we have been delivering historic good figures. So even though we have reduced our resource base and our expense base, we have managed to drive sales and production in the Q1. And that brings us straight into the cash flow for the Q1. And as you can see, we are now delivering a positive cash flow for the Q3 in a row. We had 1st quarter changes in cash of SEK 4,440,000.
And you can see that we have increase in our receivables. They have gone up now to SEK 24,700,000. They're actually up from SEK 13,200,000 at the beginning of last or at the end of the Q1 last year, and they are also up by almost SEK 10,000,000 from end of the year 2019. And of course, this is a result of solid sales during the quarter and especially in the you can say in the second half of the first quarter. And of course, as some of our payables, especially within the beta glucan side, it's driven by sales.
It is natural that we see an increase in the payables. So the payables have gone up from SEK10,400,000 to SEK17,300,000 this year. But looking at the change from end of last year, there's a we actually have a reduction in our payables. So we actually have a pretty good position now going into the 2nd quarter. We are also experiencing a significant in our cash flow from operations.
We can see an improvement of close to SEK 9,000,000 when looking at Q1 this year compared to Q1 this year. We had SEK5.9 million in cash flow from operations this year and minus SEK2.6 million in Q1 last year. And of course, with all of these figures, this gives us a cash balance of SEK 35,700,000 at the end of Q1, a position that we are actually quite comfortable with right now. And I think it's also important to say that we are still seeing some cash effect of the restructuring that we did in December last year. This is a cash effect that will continue well into 2020.
But of course, in the second half of twenty twenty, all of that, the restructuring cash effects are out of the balance sheet as well. Okay. Moving over to our sales. And of course, we had growth in all the areas of the business this quarter. Both companies have been driving sales in the Q1.
And as Jesu talked about, Adesam's sales, now they have gone up by more than 135%. They are now at SEK 18,500,000 compared to SEK 7,900,000 in Q1 last year. And we are also experiencing good growth in a better glucan side of the business, where we have seen sales excluding Volgren that we go up from SEK 5,700,000 to SEK 14,600,000. That's close to 150% increase in sales. And of course, Animal Health is the one that has been driving this one, where we have close to SEK 10,000,000 in sales.
But we also have seen an increase, as Jester talked about, we also see an increase in consumer health and we also see an introduction of revenues for the adjuvant side of the business. So even though as Jeshu also talked, but even though we have decided to divest Volcan, we secured SEK 1,200,000 in revenues for this part of the business as well. So it was just a marginal increase, but it is sort of the same as we had last year in Q1. And we will, of course, continue to serve our customers now until we see a closing of the divestment process. And given these figures, we have group revenues of SEK 34,300,000, up from SEK14.8 million or close to 130% now this year.
And this is a number that we are really proud of now for this year. Okay. Going into the profitability and our figures are now starting to look like kind of the standard financial models that we all like to see where you see an improvement on a regular basis. And in Q1, of course, we the group delivered SEK 30,700,000 on an EBITDA level, and this is by far the best quarter we've ever had. It's actually an improvement of SEK 17,000,000 compared to the same quarter last year.
Of course, the majority of this can be explained by increased sales, but we have also managed to reduce our operating expenses. We have reduced them from SEK 17,000,000 in Q1 last year to SEK 13,600,000 this year. SEK2 million of these 1000000 can, of course, can be explained by reduction in personnel expenses. We had the restructuring that we did last year, but we also have seen some natural exits last year as well that influences these numbers. And these savings are do we expect to really are we expecting to continue going further on in 2020.
External services that have been a bigger part of our expenses, It's just a small part of our expenses now if you look at the pie chart, the yellow side. Now it represents only around, I would say, around 10% of our expenses. But we expect this one to increase as we as the world opens up again and we see that the activities are picking up. But of course, we are we want to secure our good EBITDA going forward as well now. Going into the Alexeym side of the business.
Alexeym continues its good trend that we've seen in the last few quarters, and now they had revenues of SEK 18,500,000. And as we said, they were up by 135% compared to the same quarter last year. Operating expenses are marginally up by SEK 300,000. And of course, this is due to the restructuring we did last year where we transferred personnel and also Aartex Hyams is taking a larger portion of the group allocation expenses now that we have the majority of our focus is towards this part of the business. And this is, of course, something we expect that will continue going into the second half or the second and third and the Q4 of 2020 as well.
But, Aleseyne's EBITDA ended up on SEK 10 point 5,000,000 for the quarter, and of course, this is an increase of close to SEK 11,000,000 for the year, comparing quarters to quarters. And this is also SEK 1,500,000 better than the historic good Q4 2019 results that we coronavirus. Of products that is outside of the coronavirus. Yes. Going into the beta glucan side of the business.
We have seen improvements in all areas of the business. And as I said a little bit earlier, sales in Animal Health, they account for almost NOK 10,000,000 in the first quarter, which was, of course, a significant increase compared to the Q1 last year. We also see that with strong sales, we also experienced that we have that our expenses go up as well, and that can be seen by our gross profit. So even though our revenues have increased by SEK 9,000,000, our gross profit has only increased by SEK 3,500,000. And this is because we experienced the majority of growth in our low margin business now, at least for the Q1.
But due to that and also because of the divestment process we initiated last year, we have scaled down our activities within the Guggen part of the business. And as a result of that, that we have reduced our operating expenses by close to 50% now. We have gone down from SEK 6,500,000 last year to SEK 3,500,000 this year. And this for the first time ever, we have managed to drive a profitable quarter for the beta glucan side of the business. And this gave it and our Q1 performance was SEK 4,300,000 on an EBITDA level compared to minus SEK 2,000,000 last year.
And this is, of course, in alignment with what Jester said out that we wanted to drive this business into profitability going forward now. And this is the first steps in the right direction now. And I think with that, I will leave it to Jethro to take us through now the corporate strategy and some of the outlook for 2020.
Thank you, Virgo. A very nice overview there. So we're going on to Slide 20 now, and this is the corporate strategy. And in December, if you recall, the December Investor Update meeting, we talked about implementing a new strategic direction, which we're doing. And part of that was that Artixymes is will be representing the core business moving forward.
And so with that, one of the things we need to do is look at the corporate brand. And we're looking at doing corporate rebranding now. We think it's certainly timely to refresh Biotech Pharmakon's brand position and its external facing image. So the proposal here is to rebrand Biotech Pharmakon under the new name of Arctic Symes Technologies. Now we think this resonates very well with the company's core business.
As we said, that is going to be Arctic Symes moving forward. Secondly, it fits with the future corporate strategy because with ALLEXYMES, we want to build out, we want to grow it, we want to evolve it beyond enzymes with other technologies. Hence, why the word technologies sits very well and future proofs is a name that future proofs the business. And you cannot forget, ArlySigns has a positive and strong brand position out there, particularly with its customers out there. ArtExymes is very well known.
It's trusted. There's a lot of motivation around ArtExymes. And of course, and I think as well as our shareholders yourselves have a lot of trust and in ALLEXZYNS. So it's only natural and fitting that Aardixyme becomes part of the parent company name moving forward. So it's a process we kicked off, and you will hear more about it in the coming months.
As said, we have we kicked off a new strategic direction, which we implemented we implemented in December and now we're executing on it. And this has got off to a really good start, and we're certainly progressing according to plan. We're already seeing the benefits of the structural reorganization in terms of reprioritizing the activities we do. And we're also starting to see the evidence with respect to performance. And I think Q1 is a testament to that.
You see the Q1 performance really contribute to the number one goal we have for this year in driving Biotech into profitability. So with that, that's where I'm going to stop. I just want to say thank you for your attendance and listening. I just want to remind you that we do have the AGM on the 14th May and that's in Tromsa. And one thing we ask is since we do have the corona situation, we have to respect social distancing to protect all of ourselves that you do not physically turn up in trumpsa.
I hope you understand we have to follow these really strict rules to protect ourselves the employees and yourselves. So we do ask that you kindly send in your proxies. So with that, we are very much open for questions. And if you have questions, then please just unmute your microphones and after that, put back on mute so that we keep the noise level down. So thank you.
And also if you are You're
not Ridley speaking. Thanks for the presentation. Can you hear me?
Yes.
Just a question on the sort of how do you see the sales development continuing through the year? Obviously, the Animal Health side is a bit of a batch sale with large orders coming in every now and then and not sort of a regular basis. But on Arctic Symes and the growth you see now, which is fantastic, how do you see sort of the rest of the year
continuing? So on the Arctic Syme side, firstly, Arctic Syme, we see 2 things. If we take corona aside, the sales outside of coronavirus, we expect to continue as planned. And with you can see the numbers before, the historical numbers, and you can see the kind of growth expectations and the guidance we gave for the next 6 years. And I think that we are very confident in, that trend will continue.
Of course, what is also we're getting a little bit extra headwinds right now, which is short term. That's with the coronavirus. And we can't say how long that trend will last. So I think here, we will see it continue a little bit longer, but I can't say how long that will continue for. So we do expect continued growth in the Arctic Sciences business.
And with biotech fitted glue caps, as you quite rightly mentioned, animal health, we do not that will be a flat business. And that's what we've always communicated. That's to expectation. We have seen growth in the Consumer Health business. And that again is setting aside coronavirus.
We have seen that growth in that business. And adjuvant isn't something where we have typically had sales before. So now this is new business. I can't say anything about those numbers due to confidentiality with our customers. But we have we do have expectations for more revenues in the year related to that.
And then Wahl Gan, I think at the end of the day, we are supporting existing customers. So I think we it's about and we're not actually outgrowing business with new customers due to the divestment. So I think that is the best kind of guidance we can give at this time. We and of course, we're able to continue as a business and produce and get products out. So that's important as well.
It is about being able to operate as well during the corona situation. So I think here, I think it's that too.
Any other questions?
Hello, Mick is calling in. For the medium term post the COVID, which initiative do you see driving the sales growth for Arctic Times the most? Would that be better marketing and in house or marketing and customer education with existing products? Or would it be more like new products or M and A?
It's at the moment, yes, the what it's the product mix we have today. At the end of the day, there's 3 market areas we focus on in our enzymes. 1 is the therapeutic area, which is relatively new to us. And that's through the SAM portfolio, and we're building out the product range there. We launched the MSAN product back in Q4.
We're working on other developments there as well. So it's really about supporting that business. So there's a lot of focus there. Obviously, molecular diagnostics, very much viral diagnostics, which have been in a long time. We've been our enzymes are used in, for instance, HIV testing, hepatitis C testing, and that's just a couple of viruses.
And more recently, of course, now corona, our enzymes are used in that for the because it's a virus, of course. As well as that, yes, we our enzymes are used in cancer testing, all different types of diagnostic tests. And then the other element is also the bench scientists, where we focus on selling our products into the molecular bench scientists use. So we're pushing in all those directions through the whole product mix. And of course, today, we have a very small portfolio and hence why we initiated the M and A process so that we don't have to invent everything ourselves.
We can bring in other enzymes. So I think, yes, we're working on driving sales as much organically with the portfolio we have. We are we have a lot of R and D initiatives in place to bring new enzymes out. So I think this is everything we're pushing on. In terms of sales activities, we are essentially our customer focus is B2B, and we focus on targeting other companies who are developing products or manufacturing.
And I think that's where we have our core strength and that's our core focus. We are not in the business of doing end user sales. That is a wrong approach and a wrong strategy for us. We don't have the product range, a large enough range or a product mix to go out and sell to academics at
the bench.
We are very much B2B focused, and that's why we're very geared in terms of how we've how we're set up to ensure that our customers get the security supply, they get the highest quality products they can rely on and trust. So this is a little bit about our marketing positioning and sales. So I hope that helps to answer your question.
Thank you.
My name is Trond Reinzen. I'm wondering about if we can expect some updates on the study regarding Memorial Sloan Kettinger and neoplasts done and when we can expect that?
What I can say is the clinical trials are still ongoing. And of course, what we're doing is we're supporting them through now providing the SPG and under commercial terms. So at the end of the day, we are they're getting product and we're making money on that. And that's what's important. We have to operate as a business there.
But the main transition there is not really the clinical trials at MSK. It's more about the long term securing the licensing deal. So that's something we're working on right now. In terms of time lines, I cannot due to the confidentiality we have there, I cannot tell you the time lines. But the point is it is timely now to work on that licensing deal.
And that's all kind of linked together. So that's the kind of so really what we're focusing on is really now the commercial potential there is there. And that's the most important thing because clinical trials can go on and on and on. But of course, what we want to do as a company is to get the commercial potential there. So that's where we are at this stage.
Thank you.
Yes. Hi.
My name is Knut Eilertsen. I would like to step back a quarter. You said the manufacturing was decreased by at least 10 times. How is that progressing? And
how do
you see any restrictions on that at the moment? Thank you.
So yes, what we're talking yes, so I think you're referring to what in terms of alizymes. So what we've done is we're increasing the yield in production of some of our enzymes, and that's for meeting future needs. An example is in the gene therapy area. When customers start out to develop their manufacturing processes, they start at small scale, then they start building into a very large kind of reactors. So they need a lot more product.
And of course, we have to scale our business as well and so that we can supply those materials. There's different ways of doing that. So one way we do it is you can buy bigger equipment. You don't necessarily have to do that. What you can do is improve the yield through molecular biology and cloning, and that's what we're able to do.
We're able to increase the get higher concentration of enzymes in the same reactor space. So that's one of the ways we're able to do that, and we can do that without investing in new equipment. But of course, as well as that year, we are looking at scaling up with larger equipment as well. But for that, we will we do that also internally, but also using outside help as well. So I think here in terms of how that's going, that's going very well.
Today, we're very well positioned to be able to continue serving our customers' needs with the quantities of products they need. But those projects are progressing as planned.
Any more questions? Unless there are any more questions, I think we will just wrap up this presentation and the Q and A session. And then I would like to thank you all for listening in and wish everyone a nice day going forward now.
Likewise. Thank you.
Goodbye. Goodbye.