Enzymatica : Interim Report January - June 2021

INTERIM REPORT FOR

ENZYMATICA AB (PUBL)

JANUARY-JUNE 2021

Continued lower sales due to pandemic but some stabilization

Q2

• Net sales reached SEK 6.1 (13.9) million.
• Result after tax came in at SEK -19.7(-11.7) million.
• Earnings per share, basic and diluted, were SEK -0.14(-0.08).
• Cash and cash equivalents were SEK 64.8 (30.9) million.

Significant events in Q1

• Enzymatica's sales in the quarter decreased compared with Q2 2020 because of the pandemic resulting in fewer common colds. However, the cold remedy market in Sweden and in other markets began to recover during the quarter.
• Enzymatica's rights issue was completed on June 2nd and the company raised SEK 59.1 million before issue expenses. The issue was fully subscribed and underwritten by the company's three largest shareholders.
• The Japanese Patent Office granted Enzymatica's patent for the cod enzyme, which is one of the key components in the mouth spray ColdZyme®, for the Japanese market. The patent is valid until 2036.
• Enzymatica announced that the company is launching ColdZyme on Amazon in Sweden and the UK, which will improve consumer access to the product and generate increased exposure of the brand.
• Charlotte Andersson was appointed new Director Quality Assurance and Stefan Olsson Head of Corporate Communications.

H1

• Net sales totaled SEK 23.1 (40.7) million.
• Result after tax came in at SEK -28.5(-11.0) million.
• Earnings per share, basic and diluted, were SEK -0.20(-0.08).

Significants events after the quarter

• On July 12 Enzymatica announced that the company has licensed exclusive rights to its German partner STADA to market and sell ViruProtect® (ColdZyme) in Vietnam. The Vietnamese self-care market is estimated to about EUR 2 billion and the Ear-Nose-Throat category to about EUR 20 million.
• On July 13 Enzymatica announced that the Board of Directors has appointed Claus Egstrand, the company's current Chief Operating Officer, to new CEO for Enzymatica. He assumes the new position at the latest on January 1, 2022. Claus Egstrand replaces Therese Filmersson, who has been acting CEO since June 2020, and who will return to the role as CFO.

Impact of the coronavirus pandemic

As a result of the coronavirus pandemic, with social distancing, improved hand hygiene and fewer social contacts, the cold remedy market in Sweden and internationally was down by 50 percent during the first quarter, but the markets began to stabilize during the second quarter. Enzymatica believes that the cold remedy markets will continue to recover in H2 2021 when the vaccination campaigns in the various countries are expected to be completed, primarily at the start of the cold season in the fourth quarter. The company does not see any direct other effects of COVID-19 on the business with respect to production, logistics, sickness absence, etc.

Financial ratios

	Q2	Q2	H1	H1	Full year
(SEK THOUSAND)	2021	2020	2021	2020	2020
Net sales	6.1	13.9	23.1	40.7	111.2
Gross margin, %	29	58	47	71	68
Operating profit/loss	-20.0	-11.9	-28.7	-11.7	-12.1
Cash flow from operating activities	-14.4	-1.3	-13.1	-5.8	-10.7

Average number of employees

24

18

24

18

18

ENZYMATICA INTERIM REPORT JANUARY-JUNE 2021 | 1

From the chairman: The new rights issue secures capital for further expansion

The effects of the pandemic continued to negatively impact Enzymatica's sales in the second quarter. At the same time, we see signs that the markets are beginning to recover, albeit at low levels. During the quarter, we completed a rights issue, securing the company's capital needs to continue our international expansion. Enzymatica was also awarded patent approval in the Japanese market for one of the key components in ColdZyme, and also commissioned a new business support system.

Enzymatica's sales during the second quarter totaled SEK

6.1 million, compared with SEK 13.9 million during the corresponding period in 2020. The lower sales are attributable to the effects of the pandemic with social distancing, better hand hygiene and fewer social contacts resulting in substantially fewer common colds. During the quarter we received orders for ColdZyme on markets, such as Romania, Poland and the Balkans.

During the second quarter the cold remedy market in Sweden and internationally began to recover; for example, in the month of June (until and including week 25) we see that the Swedish market grew by 21 % compared to previous year. In Australia, which is at the beginning of its cold season, data shows that the market continues to recover and is currently comparable to pre-pandemic levels.

During the quarter we completed a rights issue that raised SEK 59.1 million before issue expenses for the company. The issue was fully subscribed, including 55.6% with subscription rights and 4.6% without subscription rights, and Enzymatica's three largest shareholders subscribed for the remaining 39.8% under guarantee commitments. This demonstrates that our largest shareholders continue to have strong confidence in the company and its potential moving forward. The issue secures capital to continue our international expansion initiatives, conduct clinical trials, strengthen the organization and supply chain, and meet working capital needs.

Enzymatica has an extensive and growing patent protection for ColdZyme. In May the Japanese Patent Office granted a patent for the cod enzyme that is one of the main components in ColdZyme. This gives us fifteen years of protection for our product in one of the world's largest healthcare markets. An equivalent patent was granted in both the EU and Russia in 2020.

During the quarter we also deployed a new business system that provides even better support for production, demand planning and business management.

This significant investment provides important operational support to successfully manage the international expansion.

After the quarter, the Board of Directors appointed Claus Egstrand to new CEO for the company, and he will assume his new position at the latest on January 1, 2022. Claus has worked for Enzymatica since 2017, first as Chief Commercial Officer, and then as Chief Operating Officer. It is a strength that we have succeeded with an internal recruitment and Claus has a perfect background with long experience from the international pharmaceutical and medtech industries. He has proven, on several occasions, his ability to lead the development of operations generating double-digit growth, both with regard to revenues and earnings. We are most grateful for Claus' continuous, strong commitment for Enzymatica.

As in the last quarter, we will continue to work tirelessly in Q3 to support our distributors both in existing markets and in the launch of ColdZyme in new markets and secure additional distributor agreements for new geographic markets. We also continue working on clinical trials and regulatory work to prepare for the MDR, the new regulatory framework for medical devices. The sales development is estimated to be inconsistent because of the effects of the pandemic as well as due to the current expansion phase of the company. As vaccination programs are completed in Sweden and internationally, we are convinced that the cold remedy markets will recover. We have begun to see an initial recovery in Q2, and expect a more solid recovery in the upcoming cold season (Q4 2021 och Q1 2022).

Bengt Baron, Executive Chairman of the Board

ENZYMATICA INTERIM REPORT JANUARY-JUNE 2021 | 2

Enzymatica at a glance

Enzymatica AB is a life science company whose business concept is to develop products, based on the company's barrier technology and marine enzymes, for self-care in major market segments. The company developed ColdZyme®, a unique mouth spray for fighting colds, launched the product on about thirty markets and since the launch in 2013 reached a position as one of the most-sold brands in the cold category in Swedish pharmacies measured in SEK. Enzymatica has its own sales organization in Scandinavia and collaborates with a contract sales organization in the UK, as well as through distributors in other international markets. Enzymatica's partners are experienced international brand builders who are conducting extensive marketing campaigns in connection with the launch and registration of ColdZyme in a new market. In addition to ColdZyme, the company's partner STADA has sold a spray for improved oral health in Germany since early 2020.

Development work is focused on products related to upper respiratory tract infections. An enzyme extracted from deep-sea cod is a key sub-component in product development.

Enzymatica was founded in 2007, has its head office in Lund, Sweden, and has been listed on the Nasdaq First North Growth Market since 2015.

.

Product launched

Product - planned launch within the coming years

In all, Enzymatica has distributor agreements for ColdZyme in about 60 markets. The product is sold in about 30 markets on three continents. Launches in the other markets where Enzymatica has distributor agreements are expected to occur in 2021-2022.

Performance during the quarter

During the second quarter (13 weeks through June 26) the total cold remedy market in Sweden grew by 8.9% compared with the corresponding period in 2020, while sales of ColdZyme (20 and 7 ml) to consumers dropped by 10.4% according to statistics from market research firm IQVIA. During the quarter, the category started to recover as mobility in society and the traffic in pharmacies increased. Symptomatic relief products such as nasal sprays and cough medicines have recovered the fastest. ColdZyme's continued negative trend can be attributed to the strong surge in sales during the first phase of the pandemic in April last year. In May and June, however, ColdZyme's sales in Swedish pharmacies increased by 3.9% compared with the same period in 2020.

With a market share of 6.3% on a rolling 12-month basis, ColdZyme has retained its position as the third largest brand in the cold category in the pharmacy market in Sweden. During the second quarter, Enzymatica launched a sales campaign targeting the largest pharmacies in Sweden, which provided ColdZyme with strong in-store exposure. To strengthen online sales, Enzymatica launched ColdZyme on amazon.se. This presence generates increased product exposure to potential users and allows the company to measure the impact of sales campaigns and learn more about customer behavior.

The trend on the Danish market was similar as a result of the pandemic, where sales of ColdZyme from wholesalers to pharmacies decreased by 13.7%. As in Sweden, however, the market bounced back in June and the sales of ColdZyme grew by 69.7% compared with June 2020. Enzymatica also launched a sales campaign in Denmark targeting the largest pharmacies, with strong brand exposure as a result.

The cold remedy market also began to show signs of growth in the UK during the second quarter. Increased social mixing has caused a rise in cold and flu incidence, leading to a growth in the respiratory health category of almost 15% in value according to Nielsen (latest 12 weeks, week 19, 2021 compared with week 20, 2020). Whilst some of the impact is driven by softer numbers during 2020, sales are now moving ahead versus two years ago.

As a result of the expanded agreement with STADA, Enzymatica received orders for ColdZyme in the second quarter for Poland, Romania and the Netherlands, as well as the Balkan countries such as Serbia, Bosnia, Montenegro, North Macedonia and Albania.

Sales, earnings and investments

Q2

Consolidated net sales for Q2 2021 came in at SEK 6.1 (13.9) million, a 56% year-on-year decrease. The decline can be attributed in part to the continued effect of the pandemic on sales, and in part to high comparative figures from the sharp increase in sales during the second quarter of 2020 based on large orders for the German, Austrian and Belgian markets.

The gross margin during the quarter was 29% (58%). Enzymatica has experienced fluctuations in its gross margins between individual quarters as a result of the distribution of sales via its own organization or distributors, and the product mix. The lower margin in the second quarter is mainly attributable to a higher proportion of sales through distributors and an unusual high proportion of samples for introduction to new markets in relation to the low sales.

Total operating expenses for the quarter amounted to SEK 21.3 (20.2) million. The increase in operating expenses compared with Q2 2020 is primarily due to higher sales costs. No expenses for development projects were capitalized during the quarter SEK 0 (0) thousand.

The consolidated operating loss was SEK -20.0(-11.9) million.

The Group's investments in property, plant and equipment and intangible assets for the quarter totaled SEK 1.1 (1.0) million.

Seasonal variations

Cold products have a seasonal peak in the winter, while sales level out in the summer months.

ENZYMATICA INTERIM REPORT JANUARY-JUNE 2021 | 3

H1

Consolidated net sales for H1 2021 came in at SEK 23.1 (40.7) million, a 43% year-on-year decrease.The decline can be attributed in part to the continued effect of the pandemic on sales, and in part to high comparative figures from the sharp increase in sales during the first half of 2020.

The gross margin for the period was 47% (71%). The main reason for the lower margin in the first half of the year is that a larger share of sales took place through distributors.

Total operating expenses for the period were SEK 39.3 (41.1) million. The decrease is primarily due to lower social security costs for the employee warrant plan.

The consolidated operating loss was SEK -28.7(-11.7) million.

The Group's investments in property, plant and equipment and intangible assets for H1 totaled SEK 4.5 (1.2) million. The increase compared with H1 2020 is mainly attributable to investments to upgrade and increase capacity of the production facilities in Iceland.

Research and development

Barrier technology with enzyme from deep-sea fish

An enzyme from a deep-sea cod is a key sub-component in Enzymatica's product development efforts for creating effective products with barriers. The enzyme, a cold-adapted trypsin, is formed in the cod's pancreas and becomes active when it comes into contact with the warm skin and sinuses of humans. Together with glycerol, the enzyme forms a temporary protective barrier on the skin or mucous membrane.

Strengthening the clinical documentation for ColdZyme is a key part of Enzymatica's R&D activities. Total consolidated research and development expenses in the Group were in line with the plan and amounted to SEK 5.0 (5.7) million for the second quarter.

During the second quarter, the Japanese Patent Office granted a patent for the cod enzyme that is one of the main components in ColdZyme. The patent is valid until 2036.

Funding and cash flow

The Group's available funds at the end of the period totaled SEK

65.1 (32.2) million, of which SEK 64.8 (30.9) million were in cash and cash equivalents and SEK 0.3 (1.3) million in unutilized credit facilities. In addition to the above available funds, there is an unutilized credit facility with a maximum amount of SEK 7 million via factoring in the parent company.

During the second quarter, Enzymatica's rights issue was completed, raising SEK 59.1 million before issue expenses for the company in June. The issue was fully subscribed and underwritten by the company's three largest shareholders. Through the issue,

Enzymatica has secured capital to continue its international initiatives, conduct clinical trials, strengthen the organization and supply chain, and meet working capital needs.

Cash flow from operating activities for the period totaled SEK -13.1(-5.8) million. The difference is mainly due to lower operating profit as a result of lower sales. Cash flow from operating activities for Q2 came in at SEK -14.4(-1.3) million.

Total cash flow for the period amounted to SEK 40.8 (1.7) million.

Parent company

The parent company's sales for the period reached SEK 24.8 (46.1) million. Profit/loss before tax came in at SEK -27.9(-7.6) million.

The parent company's investments in property, plant & equipment and intangible assets for the period totaled SEK 0 (0) million and cash flow was SEK 42.9 (2.2) million.

Please see the consolidated figures for more information.

Staff

The number of people employed by the group, converted to full-time positions, was 24 (19) at the end of the period. The employees included 8 (7) men and 16 (12) women.

Other information

Group

Enzymatica AB (publ) (corporate identity no. 556719- 9244), with its head office in Lund, Sweden, is the parent company of the following subsidiaries: Zymetech ehf (corporate identity no. 6406830589), with its head office in Reykjavik, Iceland, and Enzymatica Care AB (corporate identity no. 556701- 7495), with its head office in Lund.

Warrants program

The Annual General Meeting on May 5 resolved to implement an incentive program for senior executives and key personnel in the group. The Warrants Program 2021/2024 entails an issue of maximum 1,000,000 warrants. Subscription of shares by virtue of the warrants may be effected during the period as from 15 May 2024 up to and including 30 September 2024. The maximum dilution due to the program is approximately 0.70 per cent.

ENZYMATICA INTERIM REPORT JANUARY-JUNE 2021 | 4

Accounting policies

This interim report has been prepared in compliance with IAS 34 Interim Financial Reporting. The consolidated financial statements have been prepared in compliance with the International Financial Reporting Standards (IFRS) as adopted by the EU and the Swedish Annual Accounts Act. The parent company's financial statements have been prepared in compliance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities. The recognition and measurement policies as well as the bases of estimates and judgements applied in the 2020 Annual Report have been applied in this interim report as well.

Segment reporting

Enzymatica's business currently only spans a single operating segment, Medical devices. Please see the income statement and balance sheet for reporting on this operating segment.

Audit

This report was not reviewed by the Company's auditors.

Information about risks and uncertainties

Enzymatica's business is exposed to several risks, both operational and financial risks. The operational risks mainly comprise uncertainty concerning product development, supplier agreements, competition, regulatory permits, product liability, key personnel

dependance, legislation and regulations, intangible rights, and distribution, as well as sales as a result of the pandemic. The financial risks primarily consist of currency, credit, and financing- and liquidity risks. For a more detailed description of the risks and uncertainties Enzymatica faces, please see the prospectus from May, 2021 in relation to the new rights issue that was carried out. Regarding the impact of the coronavirus pandemic on business, please see the last point on page 1 of this report.

Upcoming financial information

Interim report, January-September 2021 November 1, 2021

Year-end report 2021

February 17, 2022

The interim reports and annual report are available on Enzymatica's website www.enzymatica.se.

ENZYMATICA INTERIM REPORT JANUARY-JUNE 2021 | 5