Evolva secures US$22M from Nice & Green to recover COVID-19-related EBITDA loss
17 May 2021 --- Evolva has signed a new deal with Swiss investment firm Nice & Green for additional funding, totaling up to CHF20 million (US$22.17 million) in possible financing until the end of 2022.
Evolva will use the money principally for the expansion and diversification of manufacturing capacities in its contract manufacturer network. It will also invest in commercial activities to sustain high growth in its Health Ingredients segment and Health Protection business.
For these purposes, the company says it may draw the investment in tranches, depending on its operational needs.
“The additional funding provided by Nice & Green allows us to establish major building blocks on our way to become EBITDA positive by 2023,” says Oliver Walker, CEO of Evolva.
COVID-19 losses
In November 2020, the biotech company updated its 2020 financial outlook in light of the pandemic. At the time, it anticipated that its EBITDA loss for the full year would come in around CHF16 to CHF17 million (US$17.7 to US$18.8 million).
Evolva aims to break even by 2023 through financing.The total EBITDA loss for 2020 was released as CHF16.7 million, including extraordinary costs of CHF3.6 million, mainly related to the scaling up of manufacturing.
This loss came despite record order intakes, driven by the Health Ingredients sector. Organic sales growth of 18 percent was recorded compared to 2019 – significantly behind potential, says Evolva, due to delays in manufacturing and sluggish demand in Flavors and Fragrances.
In December 2020, Evolva signed an agreement with Nice & Green to reverse the EBITDA losses to achieve a cash break-even by 2023. The deal secured CHF12 million (US$13.3 million) in possible financing over a year-long period.
New agreement
Under the new agreement, Nice & Green is committing an additional incremental investment in the form of convertible notes. The principal amount of each convertible note is, at Evolva’s discretion, either repayable by way of conversion into ordinary shares of the company or in cash.
The conversion price is 95 percent of the lowest daily volume-weighted average price for a share on the SIX Swiss Exchange during the six trading days immediately preceding the conversion, notes Evolva.
Evolva says its Health Ingredients segment is experiencing success due to NPD and strong distribution partners.
The success of its Veri-te resveratrol ingredient is also boosting commercial interest. Last year, a study found daily supplementation with Evolva’s Veri-te resveratrol ingredient can improve cognitive performance and reduce the decline in cerebrovascular responsiveness of postmenopausal women.
The company says a boom in interest for the ingredient among Asian consumers is occurring.
Edited
By Louis Gore-Langton
