Letter from the CEO

Continued growth, positive earnings and our first acquisitions

It is with great pleasure that CELLINK starts the first quarter of the year with continued growth, acquisitions, and profit on the bottom line. During the first quarter, sales increased with record net sales of SEK 20 million, with total revenue, etc. of SEK 27.2 million, resulting in a net sales growth of 148% compared with the first quarter of the previous year and a profit of SEK 0.7 million. I would like to thank the whole CELLINK Group for the fantastic work as well as the Board and shareholders who have shown continued confidence in the company and our journey. We have now started yet another exciting year for the CELLINK Group.

Sales and customer work

The demand for CELLINK’s systems and bioinks continues to increase globally and through new customer segments we see continued wide growth of new areas of use. We arranged our second Annual Collaborative Partnership Conference during the quarter, where all customers were invited to discuss the use of our products, industry successes and challenges for customers. CELLINK also presented existing products and worked in focus groups to get feedback for continued development.

During the quarter, the work continued on establishing satisfied customers around the world by involving them in the development process and being available to support their research around the clock. In connection with the autumn’s customer-centered work, CELLINK took in Dr. Mina Bissell to the Board of Advisory to expand expertise and experience in cancer research. Dr. Bissell’s role will be to help the company further develop bioinks that are specifically designed to be able to create more specific and sophisticated cancer tissues. Customer work has been of great importance for the company’s understanding of how the trends in bioprinting and cell cultivation have moved, and it is with the help of these focus groups that the company has been able to specifically develop various technologies and intellectual property protection.

Acquisition

During the quarter, CELLINK entered into an agreement to acquire the German dispensing company Dispendix GmbH. Dispendix patented technology “Immediate Drop on Demand Technology” (I-DOT) is from approximately 10 years of development within the German research institute Fraunhoffer. Their first commercially available instrument I-DOT One was launched in 2017 and is mainly used by pharmaceutical companies in application areas such as: Q-pcr, Matrigel-dispensing, Cell-dispensing, IC50-studies, array generation, single-cell dispensing and others. The company currently employs approximately 10 employees, primarily in the development of future products based on the I-DOT technology. The synergies between the companies enable the customer to print out the larger tissue structures with CELLINK’s biographers and then place single cells and bioinks at specific positions. The technology platform can be used with CELLINK’s bioink and increase the speed of the dispensing of bioinks and will primarily focus on drug development. Dispendix’s products fit well with CELLINK’s current product portfolio and will quickly be integrated into the global sales work.

Improved margins and profits

CELLINK has been working actively to improve the margins and efficiency in production during the first quarter. This resulted in a 17% increase in gross margins and more satisfied customer relationships. The result is possible through better collaboration with suppliers, continued innovative development work, and improved production control. During the quarter, a new, experienced production manager was appointed to focus on scale up production to meet the growing demand for CELLINK’s products worldwide.

Significant events after the end of the quarter

In December, CELLINK entered into a collaboration with MedImmune, the global biological research and development branch within AstraZeneca. The collaboration is to assist with 3D-bioprinted tissues as a tool in the research of new diseases in the MedImmun nuclear therapeutic areas. The collaboration will utilize CELLINK’s bioink technology, and a small team of experts from CELLINK who will work closely with MedImmune in place. The long-term goal is to validate CELLINK’s products in feed for the development of new drugs and treatments.

During the second quarter, we also launched a new product developed together with Prellis Biologics. The new product: Holograph-X enables high precision vascular network printing. The product is priced at USD 1.2 million, which means that the expected sales process is predicted to be longer than the sale of the company’s other systems.

I would like all our customers, partners and employees for a great quarter and looking forward to continuing the exciting journey of growth in 2019.

 

Gothenburg, January 22, 2019

Erik Gatenholm, CEO