Third Quarter 2010
Svein W. F. Lien - CEO
Jan Buch Andersen - Managing Director - Marine Biochemicals AS
12 November 2010
Tromsø
15 years of research in key areas – strong IP based science
GMP approved manufacturing
Marine Biochemicals
• Cold-adapted enzymes from the
Arctic Ocean
• A number of patented enzymes
on the market
• Used in DNA/RNA analyses
(research and diagnostics)
• Close relationship with University
of Tromsø
• Strong pipeline
2
Beta -1,3/1,6-glucan
• Well documented effect in wound
care – in particular diabetic ulcer
• Failed in phase III studies - cause
found in lack of stability
• Developing first product as
medical device
• In discussion with potential
partners
Biotec PharmaconIn brief
Q3 highlights
Beta-glucans
• Final outcome from animal model verified that phase III failure was related
to the material in the product container
• Testing new gel compositions to create a more robust product and new IP
• Received feedback that a SBG wound care product could be launched as
medical device in EU
Marine Biochemicals
• Entry into the MARZymes project substantially increases pipeline and
potential
• Low sales volume in Q3 was compensated in October – healthy growth
outlook for the full year 2010
3
Agenda
Highlights and overview
Beta-Glucans
Marine Biochemicals
Q3 Financials
Summary
4
SBG - Proof of Concept is still valid
• Focus on development of an
advanced wound care product,
for use in e.g. diabetic ulcer
• First version to be launched as
medical device
• Development of drug product
remains an option, with different
technology at a later stage
• Additional applications:
– Immunotherapy of cancer, Phase I with
MSKCC
– Inflammatory bowel disease (IBD), Pre-
clinical
– Asthma - feasilibility
5
Sub-analysis of clinical data2nd phase III batch showed results in line with phase II
6
SBG in Nottingham study2nd batch (N=21)
Product stored for 3 months
Product% healed
Placebo% healed
p-value
52.4% 33.3% 0.22
SBG
Control
Clinical phase III Clinical phase II
Retesting SBG in PE- and PC-containersSBG in treatment of wounds in diabetic mice
7
Bandage only
Vehicle control
PolyEthylene
PolyCarbonate
SBG stored in polycarbonate (PC) containers performs better than SBG (same batch)
stored in the polyethylene (PE) ampoules used in the Phase III trial
0
20
40
60
80
100
120
0 4 8 12 16
Days Post-wounding
PE SBG IB274
PC SBG 252-7
Vehicle control
Bandage only
control
% w
ou
nd
are
a r
em
ain
ing
Stability and product development
• Stability studies of the 2% SBG composition used in
the clinical trials show that the product needs to be
transformed into a more robust gel
• Test show that combining 2% SBG with different
standard gel substances gives a solid and robust gel
that seems to have the same biological effect
• Different prototypes will now be tested in vitro and in
the animal model
Advanced wound care product
The development should focus on
three building blocks:
• A moist substrate providing coverage and
protection while remaining 'breathable‘
– i.e. a hydrogel, hydrocolloid, alginate or foam
• The addition of antimicrobials to prevent
infection and thus accelerate healing
– i.e. silver
• The addition of natural epithelial growth
factors to trigger tissue layer re-growth
9
"The dressings that
help the body's
outer armour repair
itself are deploying
evermore exotic
materials to meet the
needs of a growing
$7.2bn global
market.“
Ron Sills of Nerac
Medicaldevice-network.com
Regulatory status and potential launch
• Received general confirmation that a SBG topical wound
product can be classified as a Medical Device in class IIb
• This means that a product may be developed and launched
over the next 15-18 months
• There are pros and cons with the various classifications as to
e.g. product claims but this leaves us with a certain freedom
Irish Medicines Board
Partner process
• We are in dialogue with potential partners that are well
positioned in the topical wound care market
• The initial goal is to obtain a two-step partnership:
• A joint development project to ensure best possible product
design and product(s) competitiveness
• A joint launch and market penetration program to ensure
maximum growth and value creation
• The partner process will also clarify which product
classification that will be their preference
Activity plan wound healing with time line(if class 2B device)
12mid 2010 end 2010 mid 2011 end 2011
Prototype development of
a medical device Ongoing
Initial EU classification
Done - class IIb device
Partner discussions Ongoing
New IP for new compositions Likely!
Does the substance work
Yes!
Clinical trials
Product
development
QA documentation and regulatory approval Ongoing
LAUNCH
H1 2012
Agenda
Highlights and overview
Beta-Glucans
Marine Biochemicals
Q3 Financials
Summary
13
Q3 2010 PresentationMarine Biochemicals AS
Jan Buch Andersen, Ph.D.Managing Director
E-mail: [email protected]
Telephone: +47 46 74 61 71
Website: www.marinebiochem.com
November 12, 201015Q3 2010 Presentation Biotec PharmaconOslo
Healthy outlook for 2010
On track for doubling of revenue in 2009-12, with >95% of sales
in 2012 from existing products
Building international sales organisation to increase
customer contacts
Long sales-cycles from first contact to first sales
Essential to increase customer oriented trials
Long development and introduction periods
Increasing R&D activities to support new product development
Overview and outlook
November 12, 201016Q3 2010 Presentation Biotec PharmaconOslo
Increased market activity
Exhibitions and trade shows increase customer
awareness and are the primary lead generators
9 exhibitions in 2010 vs. none in 2009
Sales processes are typically based on customer
trials with a high level of customer involvement
13 new trials in Q3 2010 vs. 1 trial in Q3 2009
72 new trials YTD vs. 8 new trials in H2 2009
Increasing recognition among Key Opinion Leaders
Gregg Shipley at XGen, San Diego, PCR Insider
and Labmanager.com webcast 23 July
Independent publications from French group
state the qualities of using our enzymes in
hypersensitive PCR applications (ancient DNA)
New Roche kit with our
dsDNase:
Key Opinion Leader testimonial
Their Transcriptor runs at 55˚C, which is
actually a pretty toasty reverse transcriptase
reaction; but they run the DNase reaction,
even though it's suboptimal, at 29˚C to do the
DNAse, and then they go on and make the
cDNA… boy, the data looks pretty nice so far
Gregg Shipley, Professor UTHSC-Houston,
PCR Insider 31 March 2010
November 12, 201017Q3 2010 Presentation Biotec PharmaconOslo
Gearing for international expansion
Expansion of customer portfolio
OEM accounts
Large core-labs
End-users
Planning US sales representative for 2011
Satellite supply centers: Looking for
alternatives that are cheaper, with shorter
delivery time and larger capacity
Establishing web-shop in order to take
unsolicited high-margin end-user orders
Establishing e-marketing activities to
increase customer awareness
Obtaining strong customer statements
Customer testimonial
– Cod UNG at Siemens:
Siemens also uses Cod UNG in its Versant
kPCR assay for HCV, which is not yet on the
market.
Wagner said that Marine Biochem is "just
terrific to work with. They have amazing
customer service and … even though they
are so small, they manufacture really high-
quality products, which is really unusual in
this industry. It's easy to find little research-y
things that you can buy, but to be able to use
them in an IVD product is great.“
Cynthia Wagner, Senior Research Scientist,
Siemens Healthcare Diagnostics, Berkeley
PCR Insider 1 April 2010
November 12, 201018Q3 2010 Presentation Biotec PharmaconOslo
Increased R&D activity
Entry into the MARZymes project significantly
increases the long-term growth potential
Acquisition of Marimol secured exclusive option to
the commercial outcome of the MARZymes project
Also exclusive enzyme partner in:
MabCent
UNIS project on eukaryotic microorganisms
KMB project on viral enzymes
Establishing an integrated product development
platform, to be further accelerated if Research
Council project is approved
Application development and support essential in
customers buying decision3D structure of Cod UNG
Smallstruct
FUGE
Marbank
Start-ups
at University
MabCent
Norstruct(Norwegian Structural
Biology Centre) Marbio
MARZymes
Specific projects
UNIS, Virus etc.
November 12, 201019Q3 2010 Presentation Biotec Pharmacon
Oslo
Unparalleled bioprospecting environment
November 12, 2010Q3 2010 Presentation Biotec Pharmacon
Oslo20
Marine BiochemicalsNORUT BioMabCent
Joint labNorStruct
Relocating around 1 February
Strong interface: academia - industry
Rational structure and resource utilization
New premises at the Barents BioCentreMoves us close to our research partners
Biotec Pharmacon
Remain committed to doubling of revenue in 2009-2012
Large unexplored potential in current product range
Increasing international sales footprint
Program for further development of marketing platform
and activities
Established strong R&D partnering structure
Essential to develop new product candidates and
secure long-term growth
November 12,
2010
Q3 2010 Presentation Biotec Pharmacon
Oslo21
Summary and Conclusions
Agenda
Highlights and overview
Beta-Glucans
Marine Biochemicals
Q3 Financials
Summary
22
Financial Highlights
Split into new segments as from Q4-09 and restated for the divestment of Consumer Health.
(MNOK) Q3-2010 Q3-2009 9M-2010 9M-2009 2009
Beta-Glucans 0.2 1.4 3.3 4.9 6.5
Marine Biochemicals 2.0 4.2 12.1 12.2 17.6
Revenues 2.2 5.6 15.3 17.0 24.1
Beta-Glucans -4.6 -20.3 -23.0 -51.2 -71.1
Marine Biochemicals -1.4 2.5 3.1 6.4 8.4
Corporate/ unallocated -1.2 -9.8 -5.1 -16.0 -19.4
EBITDA -7.3 -27.7 -25.0 -60.9 -82.1
Profit before tax -7.9 -27.8 -26.6 -59.6 -81.2
Net profit, continued
business-7.9 -27.8 -26.6 -59.6 -111.9
(MNOK) Q3-2010 Q3-2009 9M-2010 9M-2009 2009
Sales revenue 2.0 4.2 12.1 12.2 17.6
Operating expenses, net -3.4 -1.8 -9.0 -5.8 -9.2
Operating profit (EBITDA) -1.4 2.4 3.1 6.4 8.4
Depreciation -0.1 0.0 -0.2 0.0 -0.1
Operating profit (EBIT) -1.5 2.4 2.9 6.4 8.3
Marine Biochemicals
-2
-1
0
1
2
3
4
5
Q3'09 Q3'10
NO
Km
Revenue EBITDA
0
2
4
6
8
10
12
14
9M'09 9M'10
NO
Km
Revenue EBITDA
(MNOK) Q3-2010 Q3-2009 9M-2010 9M-2009 2009
Sales revenue 0.2 1.4 3.3 4.9 6.5
Operating expenses, net -4.8 -21.7 -26.3 -56.1 -77.6
Operating profit (EBITDA) -4.6 -20.3 -23.0 -51.2 -71.1
Depreciation -0.7 -0.7 -1.9 -2.0 -2.7
Operating profit (EBIT) -5.3 -21.0 -24.9 -53.2 -73.8
Beta Glucan developmentCompleted clinical Ph. III costs and staff reductions
-25
-20
-15
-10
-5
0
5
Q3'09 Q3'10
NO
Km
Revenue EBITDA
-60
-50
-40
-30
-20
-10
0
10
9M'09 9M'10
NO
Km
Revenue EBITDA
Summary
Beta-glucans
New gel compositions = stable product and potentially new IP
Animal study will further clarify the effect of various product
compositions on wound healing
First wound healing product to be developed as medical device
Marine Biochemicals:
On track for doubling of revenue from 2009-12
The new MARZymes agreement significantly expands the
potential of the enzyme business in the longer term
26
27
Questions / Discussion