The sales for Q1 came in at SEK9.4m (SEK13.0m), 43% under our sales estimate of SEK16.6m. The declining sales compared to Q1 2023 are attributed to low partner orders. Enzymatica has had problems with partner sales since last year. The plan is to find a new partner in existing markets or in new markets. We argue this will be highly important in terms of future sales growth. However, sales in the company’s own markets grew during the quarter, for example, 21% in Sweden compared to last year’s Q1. As the sales mainly came from Enzymatica’s own markets, the gross margin was solid at 69% (61%) compared to our estimate of 61%. Moreover, operating expenses amounted to SEK-24.9m (SEK-22.3m) compared to our estimate of SEK-22.5m. Lastly, EBIT came in at SEK-18.4m compared to our estimate of SEK-12.4m, where the main difference is because of the lower sales.

Enzymatica announced that it has received an MDR certification for its mouth spray, ColdZyme, which treats and relieves cold and flu-like symptoms. MDR replaces the previous EU regulation MDD and demands stricter clinical evidence, safety design, and market surveillance requirements.
ColdZyme is now one of the first flu- and cold products to be certified under the new regulation. In our view, the certification did not come as a surprise; however, it is an important and essential milestone for Enzymatica. The new certification validates ColdZyme, which is positive from a commercial perspective, as ColdZyme’s benefits and efficacy can be more clearly communicated to customers. It is also positive in conversations with partners in current and future markets.

We decrease our sales estimates between 2024e-2026e. As a result, our fair value range based on our DCF model (2024e-2036e) is updated. We now have a base case of SEK5.5 (6.0), a bull case of 12.5(13.0), and an untouched bear case of SEK1.5. In our base case, we expect the company to become profitable in 2026e, reaching an EBIT margin of 17% where the sales growth is based on traction in major markets such as USA and China. Moreover, we apply a terminal growth rate of 2% and a terminal EBIT margin of 25%. The Enzymatica share is currently traded between our bear and base case. We argue that the main trigger throughout 2024 will be rising partner sales, where upcoming quarterly reports could decrease the valuation gap to our base case.