I thought I’d bring up the Norwegian company ArcticZymes Technologies, which develops and manufactures enzymes primarily for the pharmaceutical industry, in its own thread. Thanks to @SuperB for first mentioning the company here.
There are two business areas:
The ArticZymes area focuses on developing cold-adapted enzymes for use in various types of RNA and DNA-based assays and processes. The company’s history dates back to the late 1980s, based on the utilization of residual raw materials from the fishing industry in Northern Norway. In the mid-1990s, Biotec Pharmacon acquired Marine Biochemicals AS and built a department for the development and production of enzymes used in DNA analysis.
The BetaGlucans area researches the properties of glucan and produces medicines and health products. The company has long conducted basic research on the effects of beta-glucan. Earlier work can be traced back to the 1980s, when it focused on the characterization of yeast beta-glucan combined specifically with aquatic animal structures. This work was followed by a series of studies on warm-blooded animals and later also on humans.
(apologies for the poor translations from Norwegian descriptions)
founded in the 1980s
originally listed in 2005
changed its name in the summer of 2020 to its current name, according to its main business area, previously Biotec Pharmacon ASA
I’ve also been looking at this for a while. Unfortunately, the stock took off pretty quickly after a very strong quarterly report. But on the other hand, it tells that this company is in good shape and we are only in the early stages. I listened to the earnings webcast, and what excites me most about AZ is that the biggest potential is still completely untapped because the projects of their over 100 different customers are only just moving towards commercialization phases. Which would mean a tenfold increase in their order volumes for AZ.
Below is a good Swedish analysis of AZ for all of you who can handle the second national language or have Google Translate at hand
@LakeBoodom did you manage to get in from the dip or did you remain a follower? Either way, please continue to share your knowledge here. Thank you
A worthwhile read about vaccines, use Google Translate to the language of your choice. The connection to ArcticZymes becomes clear by reading the article.
Not yet because I increased a couple of existing investments in the dip. But I am coming aboard AZ, yes. One cannot but join with these Q2 growth figures. And as mentioned earlier, the biggest potential is still within, waiting for some of the customers’ hundreds of research projects to advance to the commercial scaling phase, which, according to the company’s own information, will multiply the size of AZ’s deals.
Sales growth of 270%
Underlying business growth (excl. COVID-19 upsides) of 150%
In connection with its interim report, AZ announced that the additional sales generated by the coronavirus would have been a temporary boost. But could significantly higher testing volumes change this demand? Can you say how AZ’s products are needed/used in coronavirus testing?
Arcitin’s guidelines are conservative and cautious.
Also, during Q2, things were quieter on the COVID front. Recently, infections have been on the rise.
My own view is that Jethro and Arctic wanted to be cautious in their outlook, as the company has been doing extremely well. Why go all American-style, hyping up results in advance when you can let the results speak for themselves? It’s also worth looking beyond this to the potential post-COVID era; biotechnology will be invested in completely differently in the future.
"The Cod UNG enzyme, derived from cod liver, is now being used in several COVID-19 tests.
Cod enzyme is used in COVID tests, while a marine bacterial enzyme found through a bio-claim made for our marine areas is used in vaccine development against COVID-19, says Kjelstrup."
Prevents false positive tests
ArcticZymes AS has been marketing Cod UNG since 2004, and it has been used in HIV and hepatitis tests.
The enzyme reduces the risk of a false positive test. So you have a patient who is negative, and then you get a positive test from a negative patient, then you have a false positive test. This enzyme is used to prevent false positive tests, says Olav Lanes, Head of Research and Development at ArcticZymes AS, who holds the patent for the enzyme.
Olav Lanes, Head of Research and Development at ArcticZymes AS
I’d like to raise a question among Arctic’s followers; is Genovis being followed and how do the companies’ operations differ?
I’ve been playing with the numbers in Excel just for fun; the most relevant is probably the P/S ratio due to Genovis’s negative P/E or EPS. Also, PEG is not suitable either because of the aforementioned negative EPS or a one-time growth spurt (163% Q on Q growth for Arctic).
Arctic’s P/S ratio at the current share price appears to be 1.82, which seems low for a growth company. For comparison, I calculated Genovis’s P/S to be 2.26.
Similar broadly scalable companies, but with differences on the product side.
Genovis, to my knowledge, is not involved in coronavirus vaccines or testing in the same way.
Jethro Arctic’s management has certainly convinced me.
Arctic’s largest owner is Swedish. I also consider the Oslo stock exchange more favorable than the Stockholm stock exchange.
I don’t actively follow Genovis, although it probably wouldn’t hurt.
With Arcticzymes’ corona deliveries, doors have also opened to an increasing number of customers, as the news has shown. Corona is an accelerating factor in Arctic’s journey, but by no means the main thing.
Found on a Norwegian website, great potential in the health sector, and considers acquisitions likely:
A positive signal for Arctic regarding COVID testing. Arctic gave more conservative guidance for the rest of the year concerning its coronavirus revenues in connection with Q2, though at that time the outlook was different:
My view is that even if a vaccine becomes available within one to two years and enough people are vaccinated, testing will continue even after that.
For Arctic, coronavirus acts as a locomotive, and the freight train carrying gold is propelled by the locomotive:
Yeah, Genovis focuses on general testing and enabling testing, and coronavirus testing isn’t in their portfolio. Their current products are from before the coronavirus pandemic.
