Hofseth Biocare’s Q2 financial report shows 42% annual sales revenue increase

23 Aug 2024 --- Norway-based bioactive marine ingredients innovator Hofseth Biocare (HBC) reports gross operating revenues of NOK 80.4 million (US$7.6 million) for Q2 and NOK 132.8 million (US$13 million) for the first half of the year.

Sales revenues, adjusted for the sale of assets, increased by 42% compared to the same timeframe in 2023 and stood at NOK 72.2 million (US$7 million), up from NOK 50.7 million (US$4.8 million). 

Jon Olav Ødegård, CEO of HBC, says: “I am pleased to see the significant sales growth in the second quarter, truly showing the increasing value that our customers see in our premium products.” 

“HBC continues on its mission of science-led marine nutrition by a notable transfer of another pharmaceutical lead candidate to our daughter company in the US. In summary, as set at the start of 2024, HBC is still targeting circa 50% growth in sales, a higher capacity utilization and positive EBITDA (earnings before interest, taxes, depreciation and amortization) at the end of the year,” says Ødegård.

Cash and credit

Cash and cash equivalents increased by NOK 3.1 million (US$300,000) during the quarter, leaving total holding at NOK 25.3 million (US$2.4 million) at the end of June, compared to NOK 22.4 million (US$2.11 million) at the end of March. Including credit facilities, HBC had NOK 26.7 million (US$2.5 million) in free liquidity from the end of June.

There is a growing interest in HBC’s premium pet products, both the functional ingredients and palatability enhancers. The company has offices in Oslo, London, Zürich, New Jersey and Palo Alto, California, US.

Production volumes were high in the quarter, up 9% from Q1 to Q2 and 31% higher than Q2 last year. In addition, the company received deliveries from new raw material suppliers. The gross margin in Q2 was 34%, lower than in Q1, which the company attributes to the change in the product mix sold. 

In April, the laboratory in Midsund was accredited according to ISO 17025, allowing HBC to perform most of its microbiological analyses in-house.

Earlier this month, a clinical trial found that OmeGo, HBC’s enzymatically liberated salmon oil, has the potential to improve immune responses and reduce inflammation in people with mild to moderate COVID-19 infection caused by the SARS-CoV-2 virus.

Sale of assets

In June, the company made a NOK 8.2 million (US$770,000) profit from its second sale of assets and patents to its associated company, HBC Immunology (HBCI), registered in the US. The latest spin-off relates to eosinophil-targeting drug candidate MA-022a. Eosinophils are immune cells that become overactive in allergic and hypersensitivity conditions, including allergic asthma. HBC is a 72% shareholder in HBCI.

HBC’s research is ongoing to identify the individual elements within its ingredients that modulate inflammation and the immune response, and pre-clinical studies are continuing in multiple clinics and university research labs.

Other leads are focused on using the company’s bioactive peptides as a medical food to protect the gastrointestinal system against inflammation. HBC preserves the quality of the lipids, proteins and calcium from fresh salmon off-cuts through innovative and patent-protected hydrolysis technology.

Meanwhile, further studies demonstrate the potential health benefits of HBC’s salmon-derived protein hydrolysate powder and its salmon fish oil OmeGo, featuring 21 fatty acids and the company’s salmon-based calcium supplement. 

By Inga de Jong