Enzymatica announced today that it has entered into a agreement regarding the registration, marketing and distribution of the company's cold spray ColdZyme Munspray for the Japanese market with one of the country's largest pharmaceutical companies. Entry into the Japanese market is conditional on approval from relevant authorities and product launch is expected in 2020, which is why Enzymatica's new partner wishes to remain anonymous for the time being for competitive reasons.
Japan – a market with great sales potential
The agreement gives Enzymatica access to one of the world's largest markets, surpassed only by the US and China. With a population of 127 million, Japan has annual sales of cold products equivalent to approximately SEK 10 billion. Through the new partner, the cold spray will be sold in between 22 and 000 pharmacies and grocery stores under a so-called co-brand, i.e. a Japanese product name and the ColdZyme brand.
– This is the second agreement that Enzymatica has signed with a large international pharmaceutical company, after the one we entered into with STADA in 2017. The fact that we have succeeded in entering into an agreement with one of Japan's largest pharmaceutical companies represents further recognition of our technology and the commercial potential of our product, emphasizes CEO Fredrik Lindberg.
A strategically important step into Asia
Enzymatica's cold spray is sold under its own management in Scandinavia and through partners in other European markets. The company has had an agreement with a distributor in Oceania since 2016 and this summer the company also signed an agreement for South Africa. The current agreement will be an entry into a fourth continent and according to the company, Japan is the most important Asian market that it has long focused on. In its work, Enzymatica has hired Takanawa Zymetech KK, which specializes in helping European companies enter the Japanese market.
– It started with us starting to explore the terrain among potential partners in Japan just over two years ago and shortly thereafter our newfound partner emerged as the most suitable alternative. We have been in regular contact since then and have now managed to sign an agreement. Contact with the Japanese authorities for the approval process has also been initiated. It is estimated that it will take approximately 1,5 years before such approval is in place with a planned launch in 2020.
CEO Fredrik Lindberg explains why Japan is so important to Enzymatica by saying that many of the other Asian markets often look to Japan, both in terms of which agreements are signed and in terms of product approval. The company therefore chose Japan as its first Asian market and has waited to move forward with discussions in other countries. Lindberg believes that the newly signed agreement with a well-known Japanese company will facilitate future negotiations with other potential partners in the rest of Asia.
Issue to finance further international expansion
Shortly after the announcement of the new distribution agreement, another press release which announced the company's intention to carry out a new share issue of SEK 98,7 million during the autumn. The issue amount is fully guaranteed and the majority of both management and the board have subscribed. However, the issue requires an extraordinary general meeting to be held in early November. The intended subscription period then extends between November 14 and 28.
According to the press release, the proceeds from the issue will be used to support the company's increasing international expansion, primarily by financing further studies aimed at both strengthening and broadening ColdZyme's product claim. In addition, the proceeds will be used to repay a bridge loan of SEK 30 million that was taken out this summer from three of the company's main owners.
Logical explanation for duplicate news
It's a bit unconventional to release price-driving news and an announcement about an issue so close together. But Fredrik Lindberg believes that in Enzymatica's case there are several logical explanations.
– We have known for a long time that we need to carry out a capital raise. Since three of our guarantors for the issue sit on our board or have been involved in our business processes, and are therefore on our insider lists, it has not been possible until the deal in Japan was announced. Another reason why we want to carry out the capital raise before Christmas is that the bridge loan must be repaid by December 20th. In order to meet the deadline, we had to announce the issue by this week.
– When the Japanese company signed the agreement yesterday, which we are of course very happy about, we are also obliged to release this information to the market immediately, explains Lindberg.
Entrance to 4 of 6 continents
With the agreement for the Japanese market behind it, Enzymatica has now secured entry into 4 of the world's 6 populated continents. Only North and South America remain, and Fredrik Lindberg believes that, after Europe, North America and Asia are Enzymatica's focus markets.
– We are of course also keeping an eye on the North American market and are currently considering various routes in. Enzymatica's strategy for creating value for our owners is to work methodically and build long-term relationships with great potential, as our recent agreement with one of Japan's largest pharmaceutical companies demonstrates. We will use this successful method even when we start looking west.
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