- Strong fourth quarter throughout all divisions
- BRAIN Group revenues increased in the financial year 2020/21
- EBITDA loss and net loss significantly reduced
- Incubator pipeline value increases significantly
BRAIN Biotech AG today published its Annual Report for the fiscal year 2020/21. As far as the Group’s financial position and operating performance is concerned, the Management Board is of the opinion that the overall picture is positive, as the Group achieved a stable revenue level, as well as improved, albeit still negative, EBITDA, despite the generally weak economic environment. The group was able to close the year with a strong sequential sales growth as well as EBITDA improvements throughout both BioScience and BioIndustrial segments in the last quarter.
Adriaan Moelker, CEO BRAIN Biotech AG said: “We completed the 2020/21 financial year in September 2021 satisfactorily and in line with our earnings and revenue forecast. Thanks to stringent cost control, we improved our EBITDA as planned, despite continuing our high level of investment in our incubator pipeline and infrastructure. These investments build the pillars for our future growth.”
The revenue of the BRAIN Group grew to € 38.4 million in the 2020/21 financial year. Compared with the previous year (€ 38.2 million), this represents an increase of 0.4 %. On an organic basis – in other words, excluding the acquisition of Biosun Biochemicals Inc., Tampa, USA – revenue decreased by 5.2 %. This revenue decline in organic terms has also been driven by negative effects from the pandemic with a lower level of project business in the first quarters in the BioScience segment, and lower turnover at the BioIndustrial segment daughter company WeissBiotech GmbH.
At € 40.7 million, the total operating performance was 3.8 % up on the previous year (€ 39.2 million). In the 2020/21 financial year, a total of ten important milestones were achieved as planned. BRAIN’s reported EBITDA significantly improved from € -3.9 million to € -2.5 million.
Development of segments
The BioIndustrial segment consists mainly of the group’s industry scale product business. Revenue in the BioIndustrial segment grew from € 25.1 million to € 28.2 million. On an organic basis – excluding the Biosun Biochemicals acquisition – revenue also increased by € 1.0 million, or 3.9 %. In line with revenue growth, the segment’s total operating performance also reported growth of 15.8 %, from € 25.4 million in the previous year to € 29.4 million. Adjusted EBITDA for the segment grew from € 2.5 million to € 3.3 million mainly due to the higher level of turnover.
The BioScience segment includes the research and development business with industrial partners and the company’s own incubator pipeline. Revenue in the BioScience segment was down by 22.1 %, from € 13.2 million to € 10.3 million. This sales decrease is mainly attributable to some larger projects reaching their planned end-phase as well as delays in the completion of new and follow-up projects in the Tailor-Made Solutions area due to the pandemic in the first quarters.
Lukas Linnig, CFO at BRAIN Biotech AG, takes an optimistic view into the future: “In fiscal year 2020/21 we have added two projects with significant economic value to our incubator pipeline. The BRAIN-Engineered-Cas project which is based on a proprietary CRISPR-Cas9-independent nuclease has made significant progress and already started to become a driver for new business generation in the BioScience segment. In addition, the active pharma compound PHA121 to treat the orphan disease HAE promises significant milestone payments and royalties.”
BRAIN Biotech continues to expand its proprietary toolset and scientific footprint in genome editing by researching and patenting further nucleases as well as broadening the areas of application. On January 11 the company published that it had reached a milestone in the regular patent filing process confirming the management’s view, that the proprietary BRAIN-Engineered-Cas (BEC) technology is a novel and clearly differentiated genome-editing tool and is considered as patentable by the European patent authorities.
Transformation in progress
In 2020 the new executive management team at BRAIN Biotech AG had initiated a crucial transformation process at Germany´s industrial biotech pioneer. The BRAIN Group is now successfully developing from a previously research focused organization to a solutions provider for industrial customers. This is based on two pillars: leading biotechnology expertise in the service business as well as operational excellence as an independent producer of specialty B2B products like enzymes, microorganisms or bioactive natural products. This transformation process will continue in the next years and is accompanied by BRAINway: a dedicated program to build corporate identity, enhance collaboration and economic performance among group entities as well as develop individual skills.
BRAIN Biotech AG Annual Report 2020/21: