Basis of the Group

Group business model

BRAIN Biotech AG (“BRAIN”) is a 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 both its own R&D projects as well as those initiated with partners offering high value-creation potential. In the BioScience segment, Potsdam-based AnalytiCon Discovery GmbH was merged onto BRAIN Biotech AG in Zwingenberg during the financial year under review. This legal reorganization will further optimize and simplify the structure of the BRAIN Biotech Group. The operating activities of the two business units remain unaffected by the merger and will continue unchanged at their respective locations.

BRAIN has an extensive research and development infrastructure at its Zwingenberg site and the branch operation in Potsdam, which specializes in natural compounds. Through its own R&D activities, the Group is continuously expanding its product portfolio in the area of specialty enzymes and small molecules. The latter form the starting point for screenings, such as for novel drug candidates for pharmaceutical applications. Our companies for enzyme products, microorganisms, and bioactive natural compounds offer specialized production and application expertise as well as direct market access: WeissBioTech GmbH (Ascheberg, Germany), Biocatalysts Ltd. (Cardiff, UK), Biocatalysts Inc. (Chicago, Illinois, USA), Biosun Biochemicals Inc. (Tampa, Florida, USA), and Weriol Group BV (Nieuwkuijk, Netherlands, hereafter the “Breatec Group”). Moreover, as part of the spin-off of SolasCure Ltd., which is based in Cardiff, UK, an ingredient for enzymatic wound healing is targeted for market approval.

Targets of the “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 also utilizes biotechnological processes in its own 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 compensation scheme of BRAIN Biotech AG, as well as extraordinary personnel expenses and other expenses in connection with the Royalty Pharma transaction. In the previous year, acquisition and integration costs from the BRAIN Biotech Group’s expansion were also adjusted.

As financial performance indicators, the company refers to milestones reached in the context of cooperation agreements and exercised options. 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 on the basis of 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 its 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 environmental technology.

Here, BRAIN Biotech AG achieved important development progress together with its partners. The “Gold from Waste Streams” project is being further developed with an industrial partner. The active substance outlicensed to Pharvaris for the treatment of hereditary angioedema (HAE), a rare genetic disease, is continuing to exhibit promising progress in clinical development. This project is very important for BRAIN from an economic perspective. Expected future license payments have been sold in advance to Royalty Pharma as part of a royalty monetization agreement. As a consequence, the Group has already received a prepayment of € 18.41 million. This transaction could generate total payments amounting up to € 128.88 million.

BRAIN’s proprietary BioArchive includes more than 50,000 comprehensively characterized microorganisms, chassis microorganism strains to develop production organisms, as well as genetic libraries encompassing new enzymes and metabolic pathways. The assets of AnalytiCon Discovery, Potsdam, include a unique collection of pure natural materials and semisynthetic substances based on natural material building blocks. These aggregated collections 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 € 6.2 million in the 2023/24 financial year, compared with € 5.0 million in the 2022/23 financial year. This corresponds to 11 % of revenue in the 2023/24 financial year, compared with 9 % in the previous financial year. In the 2023/24 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: € 0.1 million).

The Group currently employs 217 people in research and development functions (previous year: 213).