Management Report - Editorial

PolyPeptide Annual Report 2023


Peter Wilden, Chair of the Board of Directors, and Juan José González, Chief Executive Officer

2023 – Transformational progress continues

We started the year with a clear focus to address the operational challenges that had emerged in 2022. While these obstacles continued to impact our performance, PolyPeptide’s agenda for operational improvements gained traction and delivered notable results in the second half of 2023:

  • In H2 2023, we achieved revenue growth of over 40% compared to H1 2023, which we also see as supporting evidence of the market attractiveness and strong reputation of PolyPeptide among its customers. With this acceleration, revenue growth for the full year reached 14%.
  • While continuously ramping up capacity for further growth, profitability improved in H2 2023, with EBITDA of EUR 13.4 million versus EUR -19.4 million in H1 2023.
  • Cash flow from operating activities strengthened in H2 2023 to EUR 84.8 million versus EUR -48.3 million in H1 2023, also reflecting progress with our commercial model as evidenced by the increase of customer prepayments to secure capacity.

Though we are pleased with our progress, PolyPeptide finished the year with a negative EBITDA margin of -1.9% and a substantial net loss of EUR 51.4 million. There is still work in front of us to restore the profitability of the Company.

To ensure we have the financial flexibility to begin executing our agenda, we secured a revolving credit facility of EUR 111 million with the option to increase by EUR 40 million (uncommitted). In parallel, the Group’s main shareholder agreed to extend its EUR 40 million credit facility.

On the customer front, we concluded three large mid-term commercial agreements, complementing the commercial agreement announced in December 2022, and positioning PolyPeptide for strong growth and value creation moving forward.

Throughout the reporting period, we also advanced our green chemistry program, which is vital for further improving our environmental footprint. In 2023, we were able to reduce solvent consumption relative to manufactured products by 24%, benefiting from the deployment of the Group’s proprietary washing by percolation concept.

Attractive market

Based on third-party reports, we estimate the global peptide therapeutics market to be valued at around USD 40 billion. These reports forecast a robust high single-digit annual growth rate to the end of the decade. We believe these projections do not yet reflect the full potential from the emerging GLP-1 market, which in our view has significant momentum after recent drug approvals and the advancement of several drug candidates in clinical development.

Beyond GLP-1-related drugs, the market dynamics for peptide therapeutics is underpinned by the large number of ongoing development projects in areas including, but are not limited to, oncology, cardiology, neurology, and gastroenterology.

We anticipate an attractive growth trajectory for the CDMO market for peptides, given the strong pipeline of complex molecular entities under development and the rising demand for substantial volumes of manufactured peptides. We believe this marks a pivotal point for the industry, signaling a shift from laboratory-scale production to a robust industrial manufacturing model.

PolyPeptide well positioned

PolyPeptide is a leading peptide CDMO player, producing around one third of all commercial therapeutic peptides, with a rich and diversified development pipeline of new chemical entities. Our global GMP-certified production network, with facilities in Europe, the U.S. and India, ensures proximity where needed and provides the flexibility required by our customers for effective supply chain management.

Through this network, we serve our customers with innovative leading-edge process development and manufacturing capabilities. We are advancing over 250 pipeline peptides for therapeutics, vaccines, and diagnostic applications, of which 55 are for phase III of clinical development.

We are particularly active in GLP-1 therapies, where we are supporting customer efforts to develop treatments for type 2 diabetes, obesity, and related medical conditions.

2024 and beyond

As we enter 2024, our priority will be to meet increasing customer demand, continue to strengthen our operations and profitability, while further expanding capacity related to the GLP-1 opportunity.

The financing arrangements put in place last year, coupled with the Group’s ability to secure prepayments, have strengthened our position to partner with customers strategically and support our growth ambitions.

On behalf of the Board of Directors and Executive Management, we would like to thank our customers and shareholders for their continuous support, confidence, and trust. We would also like to take this opportunity to thank our staff for their dedication, professionalism, and contributions in advancing our agenda. At PolyPeptide, we are truly excited about the journey ahead.

Baar, 12 March 2024


Peter Wilden

Chair of the Board of Directors

Juan José González

Chief Executive Officer