In 2024, PolyPeptide generated EUR 336.8 million in revenue, representing a 5.1% increase versus 2023, reported and at constant currency rates. PolyPeptide fully phased out its business related to the coronavirus pandemic, and revenue increased by 7.1%, excluding respective revenue of EUR 5.8 million in 2023.
Commercial revenue increased by 31.8% and development revenue declined by 23.5%, reflecting a higher demand for peptide-based drugs across therapeutic areas and regulatory approval for some of PolyPeptide’s phase III development projects, also impacting the revenue classification. The revenue shares related to metabolic diseases and oncology both increased by one percentage point versus 2023 to 40% and 17%, respectively.
Throughout 2024, PolyPeptide remained committed to meeting the needs of its customers. With 29 (2023: 35) projects acquired during 2024, and with other projects being completed, discontinued, or paused, the active custom projects pipeline at the end of 2024 included 201 (204) projects, with 32 (29) projects for phase III and 38 (41) projects for phase II of clinical development. The number of commercial projects supported during 2024 increased to 65 (64).
In 2024, PolyPeptide made substantial progress in restoring profitability. The gross profit for 2024 was EUR 39.3 million versus EUR 9.1 million in 2023, and EBITDA was EUR 25.4 million versus EUR -6.0 million. The EBITDA margin increased by 9.4 percentage points to 7.5% versus -1.9% in 2023.
The increase in EBITDA reflects an improvement of EUR 31.3 million, driven by operational performance and changes in product mix. With a 7.4% increase in average full-time equivalents, personnel expenses were EUR 9.5 million higher versus 2023, reflecting preparations for future growth, including the ramp-up of new assets and continued organizational development. EBITDA in 2023 included a one-off write-down of EUR -9.5 million.
The operating result (EBIT) in 2024 was EUR -7.4 million versus EUR -36.5 million in 2023. The financial result was EUR -10.8 million versus EUR -21.8 million in 2023. The result for the year was EUR -19.6 million versus EUR -51.4 million in 2023.
The increased profitability and preparations for growth with customer support contributed to a strong operating cash flow. Net cash flows from operating activities reached EUR 89.4 million in 2024 versus EUR 36.5 million in 2023. Inventories increased by EUR 17.0 million, driven by raw materials and intermediates required for planned growth and contrasting with the EUR 15.5 million reduction in 2023. Contract liabilities saw significant net inflows of EUR 89.9 million versus EUR 38.8 million in 2023, reflecting customer support for capacity expansion initiatives.
Net cash flows from investing activities were EUR -91.0 million versus EUR -59.5 million in 2023, bringing the free cash flow to EUR 2.4 million versus EUR -20.2 million in 2023. After the repayment of debt and other liabilities to the amount of EUR 25.3 million, cash and cash equivalents at the end of 2024 were at EUR 68.3 million versus EUR 95.7 million at the end of 2023.
For financing, PolyPeptide expects further improvements in profitability and cash flow, customer funding support for large capacity expansion projects, and the utilization of its credit facilities. As at the end of 2024, EUR 30 million was outstanding under the unsecured short-term credit facility with the Group’s main shareholder, which has been agreed to be prolonged. EUR 61 million remained available under the EUR 111 million committed revolving credit facility (RCF). The Group is in ongoing discussions with its lenders as part of the regular assessment of financing opportunities.
Further, with the attractive market outlook and evolving customer opportunities, the Board of Directors will propose two capital-related resolutions at the upcoming Annual General Meeting on 9 April 2025 (AGM 2025), i.e. the introduction of a capital band, and the creation of conditional share capital for financing purposes and finance instruments.
In 2024, capital expenditures reached EUR 87.8 million or 26.1% of revenue, reflecting investments across PolyPeptide’s manufacturing sites to meet the strong customer demand. Toward the end of 2024, PolyPeptide announced the production start of its large-scale solid-phase peptide synthesis (SPPS) capacity in Braine l’Alleud, Belgium. Over the last three years, it invested around EUR 100 million to support a multi-year commercial GLP-1 agreement previously announced.
In 2024, PolyPeptide finalized the debottlenecking of upstream and downstream capacity at its manufacturing site in Torrance, CA, U.S.A., and advanced the construction work to double SPPS capacity at the site in Strasbourg, France, which it expects to bring online toward the end of 2025. During 2024, PolyPeptide also launched the construction work for the doubling of SPPS capacity at the site in Malmö, Sweden, where it plans to invest around EUR 100 million as part of its mid-term outlook.
Throughout 2024, PolyPeptide engaged with customers to discuss their mid- and long-term capacity requirements as well as the evaluation of optimal manufacturing locations within the Group’s network. The Group strives for an increasing specialization within its network as it continues the transformation from laboratory-scale production to embrace a robust industrial manufacturing model. The reduction of complexity at its manufacturing sites includes the shift of projects between sites, which requires technology transfers with regulatory documentation and filings.
As part of its large-scale capacity expansion, PolyPeptide uses proprietary manufacturing technology with an integrated engineering design, advanced automation, and process control to ensure high productivity, safety, and sustainability. It is striving to leverage the potential for modularity and to optimize the SPPS reactor size to reduce project complexity while shortening time to market and enhancing flexibility for high utilization. Through its multi-site network, it seeks to maintain customer proximity and to provide customers with flexible options from different geographies to meet their evolving development and manufacturing needs.
To mitigate the environmental impact of its business, PolyPeptide has embedded sustainability into its growth strategy. In 2024, it continued its research project to increase the throughput of its SPPS infrastructure by using proprietary resin formulations. In line with its green chemistry agenda, it advanced its research efforts for PFAS-free SPPS alternatives, identifying viable options for industrial applications in the future. The Group continued the optimization of its solvent consumption, maintaining the deployment of its proprietary washing concept by percolation at a high level of 82% (2023: 84%). With the evolution of the product mix toward more complex peptide sequences that required more solvents, the Group’s overall solvent consumption increased to 3.1 mt/kg versus 2.6 mt/kg in 2023.
During 2024, PolyPeptide finalized its climate strategy and transition plan, including greenhouse gas (GHG) reduction targets, which will be submitted for validation to the Science-based Targets Initiative (SBTi) in 2025. Subject to this validation, the Group has set the absolute near-term target to reduce Scope 1 and Scope 2 GHG emissions by 2030 by 42% versus 2023. For scope 3, the Group set an intensity near-term target to reduce GHG emissions until 2033 by 61% versus 2022. As part of its commitment, the Group continued to participate within the framework of CDP’s climate change program, improving to a “B” rating in 2024 from “B-” in 2023, marking progress for the third consecutive year.
During 2024, PolyPeptide began preparing for the enhanced disclosure requirements for the financial year 2025 under the Corporate Sustainability Reporting Directive (CSRD) of the European Union and the European Sustainability Reporting Standards (ESRS). Supported by a specialized sustainability advisory firm, PolyPeptide conducted a Double Materiality Assessment (DMA), including conducting stakeholder and management surveys. The results of the updated DMA will be published in the Group’s first report according to ESRS as part of the Annual Report 2025. The material topics identified are broadly consistent with the topics reported for 2023 and 2024 and were approved by the Board of Directors during the reporting period.
PolyPeptide is committed to continuously improving the management of risks and opportunities that might arise. Based on the annual risk assessment, the enterprise risk management (ERM) report provides a consistent, Group-wide perspective of key identified risks and was presented to and approved by the Board of Directors in November 2024. During 2024, the Group enhanced its ERM framework with an assessment of impacts, risk, and opportunities in context of its material topics as well as the identification and assessment of climate-related risks and opportunities.
For more details on PolyPeptide’s efforts related to corporate responsibility and climate-related risks and opportunities, refer to the Corporate Responsibility Report and the Climate Report. For more details on the Group’s ERM framework and Internal Audit, refer to the Corporate Governance Report.
PolyPeptide operates in an attractive market and competes with a track record of over 1,000 distinct therapeutic peptides manufactured, customer proximity driven by the multi-site network, and a culture of agility and responsiveness. These strengths are reflected in PolyPeptide’s rich pipeline of custom and commercial projects with large exposure to metabolic disorders including GLP-1 receptor agonist drugs and the large commercial agreements communicated in December 2022 and March 2024.
Taking into consideration these commercial agreements, the expected rapid market growth and its strong market position, PolyPeptide sharpened during 2024 its growth strategy. Its vision is to be the most innovative peptides CDMO, strengthening competitive advantages in 1) innovation focused on green chemistry and process intensification, 2) superior pipeline development capabilities, and 3) rapid and flexible capacity expansion leveraging the potential for modularity.
For more details on PolyPeptide’s market and growth strategy, refer to the chapter Strategy.
Preparing for growth, PolyPeptide undertook further transformational steps throughout 2024 to strengthen its organization with additional industrial-scale manufacturing and commercial capabilities. This included the appointment of new directors for its manufacturing sites and the strengthening of Group functions with an enhanced focus on operational and commercial excellence. In its efforts to enhance the scalability of its organization, PolyPeptide also started evaluating a new enterprise resource planning system (ERP) to further bolster its control mechanisms and drive process standardization and harmonization.
As part of its organizational development, PolyPeptide continues to promote internal collaboration across its network and global functions. To achieve its goals, PolyPeptide focuses on the needs of its customers, the sharing of best practice across its site network and the alignment of priorities. It thereby adopts an approach of continuous improvement with a dedication to employee development and engagement to position PolyPeptide as an attractive employer.
The progress made in 2024 positions PolyPeptide well to meet its mid-term outlook communicated with H1 results in August 2024. PolyPeptide targets the doubling of revenue reported for 2023 by 2028, with profitability approaching an EBITDA margin of 25%. Capital expenditures over that period are required to be between 15% to 20% of revenue, to ensure capacity also beyond 2028.
For 2025, PolyPeptide’s priority is to meet the strong and increasing customer demand. Production at the new large-scale SPPS facility in Belgium has started successfully. Subject to the ramp-up of commercial production, PolyPeptide expects accelerated growth of 10% to 20% in 2025 versus 2024. The EBITDA margin is expected to continue to rise based on top-line growth and further progress in operations, which will be partially offset by preparations for future growth and scalability. Capital expenditures in 2025 are expected to be around 20% of revenue, supported by customer pre-payments.
As PolyPeptide continues to invest for growth, it will not be proposing the payment of a dividend to the AGM 2025.