Artgen Biotech operating results for 2023 according to IFR

list

Artgen Biotech (formerly HSCI, MOEX: ABIO) published consolidated operating results for 2023 according to the international financial reporting standards (IFRS). The company's consolidated revenue amounted to RUB 1,368.6 mln, which is 20.4% more than in 2022.

Key events of the Group in the reporting period:

  1. In July 2023, the company rebranded, changing its previous name Human Stem Cell Institute (HSCI) to Artgen Biotech. The rebranding was aimed at making the Company’s activities, its strategy and values ​​more understandable to society and a wide range of investors.
  2. With the support of the Artgen Biotech ecosystem, the group's company, Genetico (MOEX: GECO), held an IPO on the Moscow Exchange and raised RUB 178.8 million rubles. Vaccine developer, biotech company RBT (BioTechnologies Development) raised RUB 155 mln during a private placement on the Rounds investment platform. Currently, RBT shares are available for trading on the over-the-counter (OTC) share market of the Moscow Exchange. Trading symbol: RBTY.
  3. At the end of 2023, the Board of Directors adopted an updated strategy, according to which Artgen Biotech plans to form a portfolio of 10 drug candidates for the treatment of genetic, age-dependent, infectious and oncological diseases by 2026, for the subsequent launch of 5-6 drugs on the market. It is also planned to launch work on the design and creation of a production biotechnological base for the group companies and external developers. In 2024, the company will continue work on expansion of the markets and geographic presence of company services (Gemabank, Genetico, Reprobank) and market developments: Neovasculgen drug, products of Histograft. It will also continue work on product launch of advanced developments and obtaining MA: for vaccines (Betuvax-Kov-2, Tetraflubet, Combi 5V) and the Histograft product line of gene-activated matrices.
  4. 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.
  5. The Moscow Exchange included Artgen Biotech shares in the quotation list in the "second level" section of the securities listing.
  6. 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.
  7. Trading in deliverable futures and cash-settled premium options on ordinary shares of Artgen Biotech has begun on the Moscow Exchange.
  8. IMCB (Gemabank) began financing the development of gene therapy drugs for hemophilia A and B, and HIV infection. In the next 2-3 years, Gemabank plans to form a portfolio of gene therapy drugs.
  9. Genetico has opened a new medical genetic center on the territory of the Medtech Technopark. The center will combine the expertise of doctors and developers. Exchange of experience and cooperation will accelerate the introduction of advanced genetic technologies in Moscow healthcare.
  10. Roszdravnadzor included Genetico 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.
  11. NextGen has completed recruitment of patients to participate in a clinical trial of a gene therapy drug for the treatment of diabetic foot (DF).
  12. 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.
  13. 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. Health care institutions now have the opportunity to provide legally prenatal screening services using Prenetix.
  14. Nextgen received resident status of the Lomonosov cluster of the "Sparrow Hills" Innovative Science and Technology Center of the Moscow State University (ISTC).

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

RUB thous.

2023

2022

change
%

Revenue

1 368 551

1 136 904

20,4%

Operating expenses, incl.

-1 093 036

-1 025 990

6,5%

Depreciation of fixed assets, intangible assets and right-of-use assets

-70 896

-53 479

32,6%

Operating profit

275 515

110 914

148,4%

Operating margin, %

20,13%

9,76%

n.a.

EBITDA1

 299 189

 138 119

116,6%

EBITDA margin, %

21,86%

12,15%

n.a.

Net profit

 194 657

23 075

743,6%

Net margin, %

14,22%

2,03%

n.a.

EBITDA R&D2

 329 019

 217 894

51,0%

EBITDA R&D margin, %

24,04%

19,17%

n.a.

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 EBITDA R&D means earnings before interest on loans and borrowings, income tax and depreciation, excluding interest received, and excluding research expenses. This indicator reflects the cash flow from the Company's operating activities, which remains at the disposal of creditors, investors and founders before investing in scientific research.
 
Consolidated revenue and income for the main companies of the Artgen Biotech Group

The Group's consolidated revenue for the 12 months of 2023 amounted to RUB 1,368,551 thous., which is 20.38% more than in 2022.

 

For the 12 months ended
December 31, 2023

For the 12 months ended
December 31, 2022

change %

Neovasculgen drug

454 747  

313 083  

45,2%

Genetic studies

340 442  

285 337  

19,3%

Gemabank services for storage of biomaterials

287 072  

256 747  

11,8%

Reproductive materials bank services

205 931  

178 428  

15,4%

SPRS therapy services

64 412  

54 315  

18,6%

Other revenue

15 054  

24 439  

-38,4%

Covid -19 testing services and test systems

893  

24 555  

-96,4%

Total 1 368 551 1 136 904 20,4%

Operating expenses, operating profit/(loss), EBITDA, EBITDA R&D

Consolidated operating expenses

The Group's operating profit amounted to RUB 275.5 mln, operating margin - 20.13%. EBITDA increased by 116.6% compared to the same period in 2022.  EBITDA R&D, presented in the annual report for 2022 and, in our opinion, giving a more objective understanding of the Group’s operating profitability and margins, at the end of 2023 increased to RUB 329.0 mln, which is 51.0% higher than in the same period in 2022. This indicator excludes expenses for research and development (RUB 29,830 thous.), which, although reflected according to accounting rules in the Profit and Loss Statement, actually represent investments in the development and creation of new drugs and medical devices.
 
Other profit and losses, profit/(loss) before tax

In 2023, the Company showed other losses in the amount of RUB 64,122 thous. (the sum of the result from participation in associated companies, net interest, net other non-operating expenses and net exchange rate differences), which is 21.4% less than in 2022. As a result, the Company's profit before tax amounted to RUB 211.4 mln (+621.4%).
 
Profit / (loss) for the reporting period (net profit / (loss))
The Company's consolidated net profit amounted to RUB 194,657 thous. (+743.6%).
 
Consolidation

Consolidated financial statements for the 12 months of 2023 include the results of: Artgen Biotech PJSC and its subsidiaries - IMCB PJSC, GENETICO CGRM JSC, Reprolab LLC, NextGen JSC, HSCI Pharma LLC, Vitacel LLC, Skincel LLC, HSCI Ventures LLC, Betuvax LLC, Histograft LLC, as well as associated companies Biotechnologies Development JSC, Genotarget LLC, HSCI Consulting LLC and INMT JSC.
 
ANNEXES:

  1. Consolidated statement of profit and loss and other comprehensive income for 2023 and 2022 (in RUB thous. - in abbreviated form).
  2. Consolidated statement of financial position as of January 31, 2023 and January 31, 2022 (in RUB thous. - in abbreviated form).

The consolidated financial statements of Artgen Biotech PJSC and its subsidiaries according to IFRS can be found on the Company’s corporate website in the "For investors" section (Financial statements / IFRS statements).