aXichem’s development during periods 2022-01-01 — 2022-09-30

This interim report presents aXichem, which consists of aXichem AB (publ), Incendia Pharma AB and aXichem AS (Norway). Amounts in brackets refer to the corresponding period of the previous year.

aXichem’s development 2022-01-01 – 2022-09-30

Turnover and results

Net sales amounted to SEK 1,468 thousand (SEK 3,467 thousand).

The operating profit amounted to SEK -12,292 thousand (SEK -10,057 thousand).

Concern’s profit after tax amounted to SEK -14,013 thousand (SEK -10,059 thousand).

Financial net SEK -1,721 thousand (SEK -2).

Cash and financial position

The group’s cash and cash equivalents on 30 September 2022 amounted to SEK 12,313 thousand (SEK 15,425 thousand).

The equity ratio amounted to 67% (95%).

Investment

Investments in intangible, tangible or financial fixed assets have been made so far this year with SEK 1,989 thousand (SEK 3,305 thousand).

Depreciation

Depreciation of intangible and tangible fixed assets has been done so far this year with SEK 2,599 thousand (SEK 1,809 thousand).

Share data

The result as of September 30, 2022, corresponds after tax to a result per share of SEK -0.53 (SEK -0.62).

Equity per share at period end amounted to SEK 2.62 (SEK 3.71).

aXichem’s development 2022-07-01 – 2022-09-30

Turnover and results

Net sales amounted to SEK 263 thousand (SEK 3,364 thousand).

The operating profit amounted to SEK -4,300 thousand (SEK -3,006 thousand).

The group’s profit after tax amounted to SEK -5,254 thousand (SEK -3,008 thousand).

Financial net SEK -954 thousand (SEK 2 thousand).

Investments

Investments in intangible, tangible or financial fixed assets amounted to SEK 602 thousand (SEK 1,204 thousand).

Depreciation

Depreciation of intangible and tangible fixed assets amounted to SEK 890 thousand (SEK 633 thousand).

Share data

After tax, the periods result corresponds to a result per share of SEK -0.32 (SEK -0.18).

Significant events during the period

• On August 18, the company announced that a mini review, which presents the promising data generated in aXichem’s first clinical study, conducted at the Center for Applied Health Sciences in Canfield, Ohio, USA, in 2021 was published in the International Journal of Clinical Skills (2022) 16 (7), The study was conducted to evaluate the effect of phenylcapsaicin in humans with leaky gut. The result suggests that a daily intake of phenylcapsaicin, in a low dose, is likely to have a positive impact on people with leaky gut.

• On September 1, aXichem communicated that the company had been granted a patent for phenylcapsaicin for the use in treatment of leaky gut.
   
• On September 29, aXichem announced indicative positive data from a clinical trial, regarding phenylcapcaisin’s effect on sports performance in athletes, carried out at University of Pablo Olavide, Spain. The trial is now finalized, and the first phase of data analysis is concluded. The initial results have a high scientific relevance for sport nutrition and sport performance, and the aim is to have them published in a high-impact journal of sport science.

Significant events after the end of the reporting period

• On October 18, the company announced that it had obtained a new order, at total value of 280 000 USD, from its U.S. distributor SEE Nutrition. In June this year aXichem entered into a collaboration with Iovate, a client of SEE Nutrition, in the areas of research, development and commercialization of products containing aXichem’s capsaicin analogue product, aXivite. aXichem then estimated a wholesale value of this agreement with Iovate to amount to about 5 million USD distributed over the next three years. The now obtained order is the first delivery to honor this agreement.
   
• On October 27, aXichem is granted a patent for phenylcapsaicin for use in the treatment of idiopathic pulmonary fibrosis.

CEO Torsten Helsing comments

During the third quarter we have continued to see an increased interest in aXivite, our ingredient designed for the nutraceutical market. I’m very pleased that we can start disclosing, and make use of, the quite extensive amount of data that has been generated in trials and tests during the past two years. Even if phenylcapsaicin is a natural analogue product, it is still a new compound with its unique characteristics. With the support of scientifically based evidence of the product’s effect, we established aXichem as an innovative player in the nutraceutical industry and aXivite as the “new hot brand”. To confirm this aXichem received its largest order so far right after the period’s end.

For aXichem’s other focus area, animal feed, we continue to work with the regulatory processes in EU, the U.S. and in Brazil. All documentation is filed, and the review process is ongoing. Our aim is to have all three approvals in place around the turn of the year and we have so far not run into any complicated questions or requests from the authorities.

The result for the first nine months of 2022 amounts to SEK -12,292 thousand. Net sales amount to SEK 1,468 thousand. The costs for the period are in line with our budget and amount to SEK -13 901 thousand. Costs mainly related to production, transport of produced goods, regulatory work and costs for sales and marketing of primarily aXivite.

Largest order so far for aXivite – 280 thousand USD

After the period’s end, on October 18, aXichem reached yet another milestone in the company’s development, and could announce its largest order for aXivite so far. The company obtained a new order, worth 280 thousand USD from its U.S. distributor SEE Nutrition. SEE Nutrition markets and distributes aXichem’s product, aXivite, in the U.S. market, targeting suppliers in the space of sports, fitness, pre-workout and weight management nutrition products and supplements. The order is a result of the supply and research agreement, announced in June this year, with one of SEE Nutrition’s clients, Iovate Health Sciences International Inc. The agreement include collaboration in the areas of research, development and commercialization of products containing aXivite. The order we now obtained is the first delivery under the agreement, that we expect will generate sales of about 5 million USD distributed over the next three years. Iovate is the company behind leading brands such as MuscleTech® and Hydroxycut™.

Exciting first results from aXivite study at the University of Pablo Olavide

In my Q2 CEO statement I commented on the study on aXivite, carried out in collaboration with the Spanish companies LIFEPro Nutrition and Indiex Sport Nutrition. aXivite was evaluated in a study with elite athletes, with the aim to map the effect phenylcapsaicin has on physical performance. At the end of September, we got the top line data from the study. The initial results have a high scientific relevance for sport nutrition and sport performance, and the aim is to get them published in a high-impact journal of sport science. I’d like to repeat the quote from Pablo Jiménez and Carlos Alix, research directors of the project, who summarized the results in a nice way: “Capsaicinoids are the future of ergogenic aids in different disciplines, due to their unique molecular mechanisms. The results of this trial were greater than what we expected in the first meeting. We are very excited regarding the publication of these results. Moreover, it has been a pleasure working with our Swedish partners of aXichem. We are sure that this trial is the start of a promising path together.” The trial was conducted at Universidad Pablo Olavide (UPO), Seville, Spain, in collaboration with University of Valencia, Madrid Autonomous University and National School of Strength and Physical Conditioning (ENFAF).

aXiphen for the feed segment

As said above we are in the regulatory approval process for the volume sales to the feed market in EU, Brazil and the U.S. Our distributor for EU and South America, CHR. Olesen, confirms that the demand for aXichem’s product is solid and that the results from the trials, conducted at several production farms before the pandemic, impresses bird feed producers. We keep an active dialog with our partners and potential customers in the feed space. As soon as the Feed Additive approval is ready and published by EFSA the feed producers are ready to put aXiphen to work in Europe, and Brazil and the U.S. will follow successively.

New patents granted

aXichem continues to work according to its communicated strategy and expands its patent portfolio with two new commercially important patents. During and after the period aXichem got two new patents granted: patent for phenylcapsaicin for the use in treatment of leaky gut and patent for phenylcapsaicin for use in the treatment of idiopathic pulmonary fibrosis (IPF). Phenylcapsaicin for treatment of leaky gut as well as for IPF are areas that, in the future, could be further explored for pharmaceutical applications in aXichem’s subsidiary Incendia Pharma.

Excellent representation at Supply Side West

It was a great experience to visit one of this year’s main nutraceutical events, SupplySide West & Food ingredients North America in Las Vegas, in November. Together with our U.S. distributor, SEE Nutrition, we presented a new whitepaper and displayed the exciting new products with aXivite inside. The white paper is featuring the result of the joint studies that have been done with phenylcapsaicin. This early report is showing a positive result such as decrease of zonulin amounts – indicating less leaky gut, improved weight management and decrease in BMI. The result has previously commented on in a press release and published in an article in International Journal of Clinical Skills (2022) 16 (7).  SupplySide West was a great event for us with a lot of interaction with current partners and potential customers, that will continue to build our business moving forward.  

Torsten Helsing, CEO

Financial calendar

Year-end report 2022                          2023-02-23

Q1 report Jan – March, 2023              2023-05-24

Annual General Meeting                      2023-06-16

Q2 report Jan – June, 2023                 2023-08-23

Q3 report Jan – Sept, 2023                 2023-11-22

Year-end report 2023                          2024-02-21

The board and managing director assure that the interim report provides a fair overview of the company’s operations, position and results and describes the significant risks and uncertainty factors that the company is facing.

Lund, 24 November 2022
The board of aXichem AB (publ)

The information was submitted, through the contact person below, for publication on November 24, 2022, at 08:30 CET.
The report is published on the company’s website under Investor Relations. Direct link to the report: https://www.axichem.com/investors-relations/#financial-reports

Torsten Helsing, CEO, aXichem, Ph+46 70 686 33 55. Email: torsten.helsing@axichem.se

aXichem’s business idea is to develop, patent and market natural analogue industrial compounds. The Company primarily works with phenylcapsaicin a structural analogue of capsaicin with a wide range of applications, such as feed additives, nutrition and supplements, marine anti-fouling products and certain pharmaceutical areas. aXichem’s shares are listed on NASDAQ First North Growth Market under AXIC A. Certified Adviser: Redeye AB. Read more about aXichem at www.axichem.se