Basis of the Group
Group business model
BRAIN Biotech AG (“BRAIN”) is an European supplier of bio-based products and solutions such as enzymes and proteins, microbial production strains, natural substances, and biotechnological solutions for more sustainable industrial processes. The company focuses on the areas of nutrition, health, and the environment.
The Group organizes its business activities into three operating segments plus a holding entity: the BioProducts segment comprises the product business with specialized enzymes and other proteins, for the manufacture of which the Group operates fermentation plants in the UK and production facilities in continental Europe and the USA. The BioScience segment offers research-intensive customized solutions based on enzyme technology, strain development, bioprocess development, and natural product screening. In the BioIncubator segment, the company conducts its own R&D projects or those initiated with partners offering high value-creation potential.
Through its own R&D activities, the Group is continuously expanding its product portfolio in the area of speciality enzymes and small molecules. The latter form the starting point for screenings, such as for novel drug candidates for pharmaceutical applications. Our subsidiaries for enzyme products, microorganisms, and bioactive natural compounds offer specialized production and application expertise and market access: WeissBioTech GmbH (Ascheberg, Germany), Biocatalysts Ltd. (Cardiff, UK), Biosun Biochemicals Inc. (Tampa, Florida, USA), and Weriol Group B.V. (Nieuwkuijk, Netherlands, hereafter the “Breatec Group”). Moreover, as part of the spin-off of SolasCure Ltd., based in Cardiff, UK, an ingredient for enzymatic wound healing is to be approved for marketing.
The targets in terms of a “bioeconomy” are to replace chemical-industrial processes with innovative, resource-conserving bio-based processes, as well as to establish new processes and products. The BRAIN Biotech Group utilizes biotechnological processes in its production.
Management system
BRAIN’s financial control parameters include revenue and adjusted EBITDA.1 In the company’s view, revenue appropriately reflects the Group’s overall financial performance during the respective reporting period. Adjusted EBITDA better reflects the Group’s sustainable earnings trend than EBITDA, as it excludes exceptional items. Adjusted EBITDA is calculated by eliminating expenses from the share-based payments of BRAIN Biotech AG, as well as acquisition and integration costs from BRAIN Biotech Group’s expansion. In the previous year, an adjustment was also made for other income from the divestment of L.A. Schmitt GmbH, Ludwigsstadt.
As financial performance indicators, the company refers to milestones reached in the context of cooperation agreements and option exercises. The number of milestones reached serves as an important measure of the technological targets achieved in the strategic industrial partnerships, and consequently of BRAIN’s technology expertise. The management metrics underlying the planning and steering are calculated based on International Financial Reporting Standards (IFRS).
Research and development
Biotechnology research and the development of biotechnology processes and products represent an important expertise and form the foundation of the business activities of BRAIN Biotech AG. As early as 1999, BRAIN applied proprietary metagenome technologies to develop production organisms, enzyme products, and genetic libraries. Today, BRAIN’s portfolio consists of various patented special technologies, as reflected in the patent portfolio. These include the genome engineering technology developed by BRAIN (G-dase E and G-dase M, formerly known as BEC/BMC), a molecular biology technique for the targeted and precise modification of DNA. For this purpose, nucleases (special enzymes) are utilized as so-called “gene scissors”. BRAIN is also active in the areas of wound healing as well as green and urban mining.
Here, BRAIN Biotech AG achieved important milestones together with its partners. In the area of wound healing, clinical trial Phase 2a was successfully completed. The “Gold from Waste Streams” project is being continued with an industrial partner. The active substance outlicensed to Pharvaris for the treatment of hereditary angioedema (HAE), a rare genetic disease, is showing promising progress in clinical development.
BRAIN’s proprietary BioArchive includes around 53,000 comprehensively characterized microorganisms, isolated natural substances, chassis microorganism strains to develop production organisms, as well as genetic libraries encompassing new enzymes and metabolic pathways. The assets of subsidiary AnalytiCon Discovery GmbH, Potsdam, include a unique collection of pure natural materials and semisynthetic substances based on natural material building blocks. These collections aggregated within the BioArchive are being expanded in ongoing projects, enabling the identification of hitherto uncharacterized enzymes and natural substances, and new access to microorganisms that have not proved cultivatable to date.
Expenses for research and development amounted to € 5.0 million in the 2022/23 financial year, compared with € 4.9 million in the 2021/22 financial year. This corresponds to 9 % of revenue in the 2022/23 financial year, compared with 10 % in the previous financial year. In the 2022/23 financial year, investments in research and development primarily include expenses for innovative product developments (such as investments in Akribion Genomics AG in the context of developing a new genome editing technology, new sweeteners, and biological metal extraction processes from waste and by-product streams) at the Zwingenberg and Potsdam sites. Research and development expenses include € 0.1 million of third-party services (previous year: € 0.4 million).
The Group currently employs 213 people in research and development functions (previous year: 195).