Why invest in BRAIN Biotech?

Five good reasons to invest in BRAIN Biotech AG

1. Clear strategy of profitable growth in specialty segments

Our goal is to become one of the top ten global enzyme companies.

For several years, we have been on a clear growth path again. We aim to establish BRAIN Biotech as one of the top ten enzyme companies on the global market. We plan to almost double revenue in the BRAINBiocatalysts* segment to a level of € 100 million in the medium term, while at the same time boosting the adjusted EBITDA margin. We are aiming for an adjusted EBITDA margin of 15 % within the next five years.

Our integrated product business in the BRAINBiocatalysts segment is the Group’s primary growth segment. We have already invested heavily in expanding production capacities at our sites in recent years.

Our growth strategy is geographically focused on Europe and North America. We are aiming for organic growth augmented by targeted, value-enhancing acquisitions. We have identified an addressable target market that offers structural growth and a revenue volume of around € 2 billion.

Having realized significant investments over the past few years, we have now accelerated the commercialization of projects from our BioIncubator. Investments in highly efficient production strains and in our own genome editing technology are already leading to greater license income in our business with customized client solutions.

We are constantly working on even more closely integrating the BRAIN Biotech Group companies, on realizing more synergies, on expanding our product portfolio and on enhancing our efficiency. We have already achieved good results in this area in recent years and we expect that the growth rate of adjusted EBITDA will outstrip our revenue growth rate in the future.

^{* New segment reporting from 3M 2024/25 onward;}^{the BRAIN Biocatalysts segment is a combination of the former}^BioProducts^{segment and the R&D activities of}^BioScience^Zwingenberg^.

2. A large, growing and addressable market offering excellent profitability

We enjoy excellent growth opportunities in our four focus areas.

As a leading integrated supplier of high-quality enzymes for special applications and innovative biotechnological solutions, we support industry in making products more natural and processes more efficient and sustainable. We are focusing on areas that offer structural growth: Nutrition, Life Science and the Environment. Our market presence entails three business models: 1) Enzyme products and food specialties 2) Contract Research Organization (CRO) 3) Contract Manufacturing Organization (CMO).

The main drivers of this structural growth include a growing world population with the need to increasingly provide protein sources of non-animal origin, the general trend towards healthier and more natural diets, biotechnologically produced active pharmaceutical ingredients (APIs) and the search for alternatives to petrochemical process chains.

Our four focus areas:

Alternative proteins that replace animal proteins: for animal welfare, vegan food and a more sustainable diet for a growing world population.
Biotechnology for more natural and sustainable food: for industrially produced food without chemical additives, and with improved flavor profiles, more pleasant textures and better appearance.
Biotechnology for life sciences applications: enzymes for the production of pharmaceuticals through biocatalysis or for use in diagnostics.
Biotechnology for environmental protection: for a longer food shelf life; to utilize food industry side-streams; to boost production yields; to reduce energy and water consumption or avoid waste; for biorecycling processes.

3. Growing demand for providers of integrated biological solutions

We are responding to industry’s increasing outsourcing of R&D activities for bio-based products with integrated offers and solutions for research, development and production.

Our Group of companies forms a hotbed of innovation and we are constantly working to push the boundaries of what is possible: towards optimized specialty enzymes, high-performance production organisms and highly efficient fermentation processes.

We offer an integrated service for specialty enzymes: Since BRAIN Biotech was founded in 1993, we have developed from a specialized R&D company into a provider of integrated solutions. Today, we cover the entire specialty enzyme value chain. We find and develop previously undiscovered enzymes, provide starter cultures for their microbial production and develop intelligent bioprocesses for industrial-scale production. This comprehensive service ensures competitive advantages for us and for our customers.

We combine a broad product portfolio with a comprehensive technology portfolio: With around 600 products, our product portfolio offers an extensive selection of enzymes and ingredients. We also offer our clients customized innovative products and solutions. Unlike many other biotechnology companies, we do not limit ourselves to individual technologies and methods. Rather, we make judicious selections from our tech portfolio.

Our interdisciplinary approach encompassing various scientific disciplines also helps us to develop innovative products and biological solutions. With the help of bioinformatics, our proprietary MetXtra™ database and AI-supported prediction models, we are advancing the discovery and optimization of previously unused enzymes – not only to benefit our customers but also to expand our own product portfolio.

We are a reliable and valued partner: We have an impressive track record, with more than 200 development projects successfully completed with industrial partners. Many of our customers are returning customers, reflecting their trust in our solution expertise and innovative capabilities.

A cross-Group technology platform feeds three attractive business models:

Products: Specialty enzymes, microorganisms (starter cultures) and ingredients for food, life sciences and environmental technology.
Contract Research Organization (CRO): Customized solutions, from enzyme engineering, production strain and bioprocess development through to screening for bioactive substances.
Contract Manufacturing Organization (CMO): Production of enzymes and other proteins; services with a focus on the life sciences industry.

With this integrated approach, we support our customers on their path to sustainable growth and establish a clear competitive advantage for BRAIN Biotech.

4. Successful commercialization of BRAINBioIncubator projects creates considerable value

We are financing our future with the commercialization that has only just begun.

The BRAINBioIncubator encompasses a pipeline of research-intensive development projects that offer high value creation potential. We have only just begun to transition the high investments that we have realized over recent years into the commercialization phase. Two examples:

BRAIN Biotech has concluded an agreement with Royalty Pharma for the monetization of the licensing rights to the investigational compound Deucrictibant for an amount of up to € 128.88 million. BRAIN has already received an advance payment of € 18.41 million for this agreement. In addition, the company may receive potential regulatory milestone payments of up to € 18.42 million as well as additional potential long-term revenue-related milestone payments of up to € 92.05 million.
BRAIN Biotech has concluded an exclusive technology license agreement with Akribion Therapeutics GmbH for the genome editing nuclease G-dase E® for the pharmaceutical sector. BRAIN Biotech will receive up to € 92.3 million in R&D and commercial milestone payments from Akribion for granting these exclusive rights for use in the pharmaceutical area. Moreover, BRAIN Biotech is entitled to license fees from future net revenues. The payment structure is based on progress in clinical development and future commercialization successes.

Our BRAINBioIncubator includes further promising projects offering high value creation potential such as BioGold from recycled materials, natural sugar substitutes and enzymatic wound cleansing utilizing Aurase®, which has been developed by SolasCure.

5. Our products and solutions directly address several UN Sustainable Development Goals

We develop products and solutions for our customers that directly address six SDGs.

Industrial biotechnology has become an important driver of innovation and sustainability in the global economy. People are already referring to the dawning of an “era of biology”, as industrial biotechnology enjoys the potential to transform traditional industries into more sustainable and environmentally responsible companies.

We enable companies in the food, life sciences and environmental sectors to reduce their greenhouse gas emissions, reduce their dependence on non-renewable resources and boost their contribution to a more sustainable global economy. The integration of our biotechnological solutions in manufacturing processes can also lead to significant cost savings and productivity enhancements for our partners.

Industrial biotechnology has already achieved considerable growth in recent years with its aim of harnessing biological processes and organisms to produce goods and services. The volume of the biotechnology market was estimated at USD 1.21 trillion in 2022 and is expected to grow from USD 1.38 trillion in 2023 to USD 3.90 trillion in 2031, which corresponds to an average annual growth rate of 13.9 % over the forecast period (2024 – 2031).¹

As a service provider, we develop products and solutions that directly address the following UN Sustainable Development Goals: 2, 3, 6, 9, 12 and 13.

Our proprietary development projects and those with partners as well as our products are aimed at solutions that lead to a better, healthier and more sustainable life. Some highlights from recent years:

Extensive product portfolio of enzymes and microorganisms for production using biological processes;
Highly efficient production strains for the manufacturing process in bioreactors (“biofactories”);
Proprietary genetic engineering tools for targeted DNA/RNA modification for precision fermentation;
Identification and development of new nature-based sweeteners, flavor enhancers and texturizers;
Recycling of gold and other precious metals from waste streams (computer scrap, slag and other waste of mineral origin): biological extraction processes replace conventional chemical processes;
Battery recycling: biological processes for recycling precious metals and lithium;
Enzymatic cleansing of chronic wounds: painful and higher-risk methods can be bypassed; the spin-out in 2018 of SolasCure to conduct clinical trials and the pharmaceutical approval process;
Circular economy processes in which production by-products are turned into new raw materials: carbon dioxide as a raw material for chemicals, nature-based antioxidants and fermented foods.

^{1 Source: Global Biotechnology Market, 2024 https://www.skyquestt.com/report/biotechnology-market}