Inhalation Sciences published its year-end report earlier today. With me to discuss this report in more detail, I have the company CEO, Manoush Masarrat. Manoush, what are the most important take-home messages would you say from this report?
2025 was a tough year for Inhalation Sciences and many other companies in the industry. We started off the year with a huge pipeline of over SEK 40 million, especially after FDA's latest guidelines to include dissolution as part of inhalation studies. Our discussions lasted throughout the year, where the customers faced some financing challenges and the timing of different inhalation projects. That said, we ended off the year with a fantastic Q4 where we had sales numbers over SEK 5 million, of which we have brought majority of these numbers as order stack, which means orders received but not yet shipped nor invoiced into 2026. In terms of operating expenses, we continue to work effectively with a lean organization to keep the costs down and are continuing to have our dialogues in our pipelines to convert as many leads to firm orders as possible in the meantime.
Have you seen any increase in the order pipeline of the presentation of the FDA-supported DissolvIt study in December last year? Are any orders in December and January a direct result of what was presented then?
Well, we have seen an increase in our pipeline throughout the whole process from announcing the start of the study over two years ago, and in conjunction with FDA's guidelines in November 2024, as mentioned earlier. We can now refer to this study in our ongoing dialogues, and we definitely can see a difference now. As for late orders in December and January, I would say one order of over SEK 2 million, which was announced in late December, was a direct result of our work with FDA. We have several ongoing discussions in our current pipeline, which are directly linked with the FDA collaboration on DissolvIt.
In Q4 last year, you ran an awareness and marketing campaign. Can you tell us more about that one and as well as the outcome of it?
Sure. We ran our awareness campaign for three months between September to November, mainly through LinkedIn and outreach by email. To give some exact numbers, so the campaign generated 190,000 impressions, which at the end led to 30 new leads. Based on the same campaign, we also received several inquiries directly to our website, where some of them led to firm orders and some ongoing discussions in the current pipeline. The main purpose of the campaign has been to increase the awareness about Inhalation Sciences, and our plan is to continue the campaign for another three months in first half of 2026, together with other commercial activities such as announcing an Inhalation Magazine with over 3,000 subscribers in the industry.
As for the M&A process with the PharmaVentures, can you explain why a M&A process at this point would be the best for ISAB and its investors?
ISAB has a fantastic technology that we know is best in class, and this has been confirmed by several customers and authorities such as FDA throughout the years. This said, we believe the company and its technology would be best suited with a partner that can complete our offering on both products and or services so ISAB can reach its real potential, serving the market with a much more comprehensive offering.
Any information or milestones in the process that you can share with the market?
We started the process end of last year, and as announced, our goal is to finalize the process within 9- 12 months, i.e. first half of 2026. Through PharmaVentures, we have reached out to several potential partners and companies which we believe would suit ISAB best, and currently several, which is more than one direct discussions are ongoing with interested parties.
Finally, what can investors expect in terms of more substantial information on this process?
All the ongoing discussions are obviously confidential now, and with signed NDAs in place. By the time, and if we receive firm letter of intents with potential partners, we will surely inform the market and follow the normal procedures according to the Swedish public takeover regulations.
What are your thoughts then on ISAB's valuation despite positive FDA results and increased interest in your products and services?
We firmly believe the current valuation of the company is misleading and does not reflect company's real value. As we all know, there are factors that affect the company's valuation in which we cannot control nor affect. Nevertheless, we continue our work and follow the company's set strategy, which should increase the valuation at the end.
Regarding the warrants, the TO2 warrants, why do you have a guarantor in place in this context? Is the dilution affecting the ongoing M&A discussions, would you say?
The warrants were announced already in last financing round, and we have another set of warrants later this year in August. As for a guarantor and given us being a middle of M&A process and negotiations, the last thing we want to be is to be short in liquidity. That's the main reason we decided to take in a guarantor, and we don't think that will affect the ongoing M&A process. The real value of the company is the IP, our knowhow, and the list of existing and recurring customers that we have gained throughout the years, and that's going to be the most important part in the M&A process.
Any last words for investors and the market from your end?
First, I would like to thank the investors to have been with us so many years and continue to believe in us and the technology. We have an exciting 2026 ahead of us and firmly believe we have had the worst years behind us. During the ongoing M&A discussion, it has been confirmed by several companies and parties that ISAB has a unique and superior technology, which is highly appreciated and recognized by the industry. We are working closely with our partners, PharmaVentures, in this process. As explained earlier, we will inform the market as soon as we have firm interest and a letter of intent as a result of the discussions, and until then, obviously, we cannot disclose any information.
In the meantime, our work continues to perform the signed orders by the end of last year, as well as our sales and marketing efforts and activities to convert and generate new leads to firm orders.
Thank you very much, Manoush.
Thank you.