Results of Artgen Biotech activities for 9 months of 2023

Artgen Biotech PJSC (hereinafter referred to as the "Group" or the "Company"; MOEX: ABIO), a biotechnology Company with a portfolio of developments of innovative drugs and treatment methods for more effective combating of human diseases, announces the interim unaudited consolidated results of the Group for the 9 months of 2023 according to the management reporting compiled on the basis of IFRS standards.

Comment of Sergey Masyuk, the Company’s CEO:

"In terms of key indicators in the reporting period, the Company demonstrated growth compared to the same period last year. In particular, consolidated revenue for 9 months of 2023 increased by 18% compared to the same period in 2022 and amounted to about RUB 1 bln. The main drivers of revenue growth were sales of the Neovasculgen drug, as well as the provision of genetic research services.

The Company's operating profit increased by 92% compared to the same period in 2022 and amounted to RUB 147 mln, and EBITDA increased by 68% and amounted to approximately RUB 210 mln. At the same time, the EBITDA margin also showed strong growth and amounted to 22% versus 13% for the same period last year.

We also managed to reduce net debt by 36%: net debt/EBITDA ratio decreased to 1.6x compared to 3.6x at the end of Q3 2022. The main reasons for the improvement in the Company's debt burden were: growth in EBITDA, increase in cash balances in accounts, as well as a decrease in the volume of obligations on interest-bearing loans.

We continue to work diligently to maintain a high level of efficiency in our business, which is reflected in the increase in indicators such as operating profit and EBITDA margin. The company continues to implement its strategy to expand its development portfolio (drugs, medical devices and services) successfully, which in the future will generate new cash flows and, as a result, increase the value of the Group’s share capital."

Let us recall that in July 2023, the Human Stem Cell Institute (HSCI) changed its name to Artgen Biotech in connection with rebranding, which is aimed at making the Company’s activities, its strategy and values ​​more understandable to society and a wide range of investors. In connection with this, a new website was also launched - artgen.ru, and the Moscow Exchange changed the Company's ticker to "ABIO".
 
Key events of the Group in the reporting period that positively affected the value of Artgen Biotech’s share capital in the opinion of the Management:

1. IMCB, part of the Artgen Biotech Group, entered into an agreement with the biotechnological startup Swiftgen for the joint development of gene therapy drugs for the treatment of diseases of the blood and immune system (primarily such as hemophilia A and B, HIV).
2. Roszdravnadzor included the Genetico Center (CGRM, MOEX: GECO), part of the Artgen Biotech Group, in the list of medical organizations that have the right to conduct laboratory and clinical laboratory studies of medical devices for their registration in the territory of the EAEU countries.
3. NextGen, part of Artgen Biotech Group, has completed recruitment of patients to participate in a clinical trial of a gene therapy drug for the treatment of diabetic foot (DF). Monitoring of patients will continue until March 2024.
4. Genetico has begun developing gene therapy drugs to treat orphan diseases. Currently, the company is at the stage of selecting drug candidates for the treatment of eye diseases, hereditary cardiomyopathies and neurodegenerative diseases.
5. Genetico received permission from Roszdravnadzor to use the Prenetix test, designed to identify the risk of developing genetic abnormalities in the fetus using the blood of a pregnant woman. This is the first test registered in accordance with Decree No. 2026 of the Government of the Russian Federation dated November 24, 2021. Health care institutions now have the opportunity to provide legally prenatal screening services using Prenetix.
6. Based on the results of 2022, the Company paid dividends in the amount of RUB 1 per ordinary share. The company also approved a new dividend policy, according to which it is planned to allocate 40% to 60% of net profit to pay dividends.
7. The Moscow Exchange included Artgen Biotech shares in the quotation list in the "second level" section of the securities listing.
8. In April 2023, Genetico (MOEX: GECO) held an IPO on the Moscow Exchange and raised RUB 178.8 mln.
9. Vaccine developer, biotech company RBT (BioTechnologies Development), part of the Artgen Biotech Group, raised RUB 155 mln during a private placement on the Rounds investment platform.
10. The analytical credit rating agency ACRA confirmed the credit rating of Artgen Biotech at the BB+ level according to the national rating scale for the Russian Federation with a stable outlook.
11. Trading in deliverable futures and cash-settled premium options on ordinary shares of Artgen Biotech has begun on the Moscow Exchange.
12. The Moscow Exchange included Artgen Biotech shares in the broad market share index and the consumer sector index.

For 9 months of 2023, the Artgen Biotech Group (hereinafter also referred to as the "Group") demonstrated the following consolidated financial results:

1 EBITDA means earnings before interest on loans and borrowings, income tax and depreciation, excluding interest received. This indicator reflects the cash flow from the Company's operating activities, which remains at the disposal of creditors, investors and founders.
2 For the calculation, the estimated EBITDA indicator for the 12 months preceding the reporting date was used.