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Fermentalg publishes results, previews new products

12 Mar 2018

Fermentalg's road map includes the launch of an algal protein in 2019 and an initial algal colourant in 2020 as a result of a pipeline bolstered by the strategic partnership with DIC Corporation.

Fermentalg has published its 2017 annual results.

Philippe Lavielle, Fermentalg Chairman and CEO, said: “2017 was above all a year of consolidation. From a financial standpoint, the successful fund-raising carried out enabled us to end the year with cash assets of €21.8m. From a business standpoint, the market launch of our first algal oil, naturally rich in Omega-3, and the signing of an initial distribution agreement with European company IMCD, marks the beginning of a new chapter for our company. Finally, a strategic agreement signed with DIC Corporation, a Japanese leader in the global chemicals industry, enables us to step up the development of two new innovative products intended for the health and nutrition market. Fermentalg also maintained a high level of operating expenses in 2017, both in terms of technology and industrial investments, in order to strengthen its product pipeline over the short and medium term. All of these factors enable us to tackle 2018 with increased confidence in the company's business potential."

2017 was marked by the success of two financial operations; a €12.6 million capital increase largely subscribed by current shareholders and new investors, and a €5 million convertible bond issue subscribed by DIC Corporation as part of the strategic partnership entered into by the two Groups.

These operations significantly bolstered the company's cash position, enabling it to roll out its industrial and commercial strategy. Cash used by operations remained stable in 2017 at €7.3 million. The industrial ramp-up and ongoing investment in R&D were offset by a decrease in fees and other non-recurring expenses. The change in working capital was negative in 2017 at €1.9 million, compared to a €2.0 million positive change in 2016, while capital expenditures (excluding R&D) significantly decreased to €1.1 million in 2017, compared with €6.8 million in 2016

Cash assets amounted to €21.8 million at 31 December 2017, up from €15.7 million at 31 December 2016, and shareholders' equity of €41.2 million. Borrowings of €8.0 million comprise repayable advances on innovation programs and the convertible bond issue.

Two new programs have been added to the company’s three algal product ranges already being developed for the health and nutrition market (Omega-3, phycocyanin and protein), in close cooperation with its Japanese partner DIC Corporation. All of these products are said to reflect the major fundamental trends changing the agri-food sector: the growing demand for natural products (fewer synthetics in our foods), the increasingly close link between nutrition and health (maintaining health through food) and the growing concern for the environment (no GMOs or overly-intensive practices).

In accordance with its business plan, Fermentalg launched its first product in 2017, a DHA-rich algal oil (DHA ORIGINS 350 with a minimum oil concentration of 350 mg/g). In just a few months, Fermentalg says it reached all of its technological and regulatory milestones, produced the first industrial work packages and signed a European distribution agreement with IMCD Group.

These key milestones, the company believes, combined with the numerous sales contacts made, give Fermentalg the best chance for a successful launch in 2018 of its second product DHA ORIGINS 550, which it claims is the most naturally concentrated algal Omega-3 on the market (minimum oil concentration of 550 mg/g).

In addition, Fermentalg's road map includes the launch of an algal protein in 2019 and an initial algal colourant in 2020. This pipeline is bolstered by the strategic partnership with DIC Corporation, whose operational focus is the joint development of two new products, including an innovative phycocyanin.

Finally, the company said that major advancements were made in the development of an urban and industrial "carbon sink", designed to purify the atmosphere by capturing CO2 and other pollutants, in partnership with the SUEZ Group. In 2017, the partners launched two test programs: one for the capture of incinerator fumes, and the other in the heart of Paris dedicated to exhaust gases.