Statement by Management on the annual report
Identifikation af den godkendte årsrapport:Today, the Board of Directors and the Executive Board have discussed and approved the annual report of Tetra Pharm Technologies ApS for the financial year 1 January - 31 December 2023.
Management's review
Beskrivelse af virksomhedens væsentligste aktiviteter:Tetra Pharm Technologies ApS ('Tetra Pharm Technologies') is a Danish biopharmaceutical company with a vision to become a leader in research and development of pharmaceutical drugs for the treatment of diseases related to the endocannabinoid system. The endocannabinoid system is a complex cell signaling system that plays a critical role in maintaining homeostasis (i. e., a state of balance) by regulating and controlling several of the most critical body functions, such as learning and memory, mood, sleep, temperature, pain, immune response and appetite.
Tetra Pharm Technologies' research and development activities focus on identifying and evaluating therapeutic options within the endocannabinoid system. This includes basic research into understanding the complexity of the system as well as developing drug candidates tailored to target specific cannabinoid receptors in the human body.
Alongside the company's research and development activities, Tetra Pharm Technologies has a commercial track that includes production and sales of pharmaceutical drugs based on cannabinoids targeting the endocannabinoid system. The purpose of the commercial track is to contribute financially to strengthening the company's long-term research and development activities.
Highlights in 2023
Tetra Pharm Technologies' research and development activities resulted in a significant expansion of the company's pipeline of drug candidates in 2023, which now counts a total of 11 candidates. In addition, Tetra Pharm Technologies submitted a patent application covering the company's platform technology to the European Patent Organization during the year.
The leading drug candidate, TPT0301, underwent preclinical trials - so-called in-vitro and in-vivo tests - during the year. Based on very promising results of the tests, the company plans to begin clinical trials in humans with TPT0301 during 2024.
Strategic partnerships form a fundamental part of Tetra Pharm Technologies' long-term strategy. In 2023, the company strengthened its scientific collaboration with a number of external parties, including the University of Copenhagen, i. a. with the publication of a joint scientific, peer-reviewed article.
Within the commercial track, in 2023 Tetra Pharm Technologies launched its first product, XATEPA®, on the German market. XATEPA® is a prescription based pain-relieving drug based on cannabinoids.
Internally, Tetra Pharm Technologies strengthened its executive management with the appointment of a Chief Financial Officer, a Chief Marketing Officer, a Chief Medical Officer and a Chief Development Officer. In addition, the company employed a number of other key employees, so that the total number of employees increased from 11 to 31 during 2023.
During the year, Tetra Pharm Technologies inaugurated its new purpose-built headquarters, which covers approximately 4,000 square meters. The modern headquarters will provide the foundation for the company's ambitious research and development activities and support the company's long-term growth plans by ensuring a significant expansion of the production capacity.
Long-term objectives
The primary objectives for the coming years are to advance a number of the company's drug candidates into preclinical and clinical trials as well as ensuring continued development and protection of the company's intellectual rights.
In addition, Tetra Pharm Technologies expects to initiate an international expansion of its research and development activities and to expand the production and sale of the company's commercial drugs in a number of European and overseas markets.
As a basis for these long-term objectives, Tetra Pharm Technologies aims to significantly strengthen its financial base within the next 12-18 months.
Change in accounting policies
The Company's management has changed the presentation of the income statement by nature to by function. The reason for the change is that the functional income statement is better suited to the Company's activity and industry.
The comparative figures are adapted to the changed accounting principles. The change døs not have any effect in terms of profit before tax, the balance sheet and equity. Research and development expenses and general and administrative expenses are presented under individual lines in the income statement going forward.
Apart from the above, accounting principles remain unchanged from prior year.
Accounting for prior period material misstatements
In 2023, the Company identified material misstatements ascertaining to prior financial years that have been corrected as material misstatements by restating comparatives and opening equity figures at 1 January 2022 and 1 January 2023 in the current year financial statements. The corrected misstatements relate to: A – expensing of research and development expenses, B – write down of inventories, C – capitalization of deferred tax assets, D – understated expenses, E – recognition of capital injection, F – application and recognition of eligible tax credits and G – deferred tax liabilities related to capitalized development projects.
The restatements impacted the comparatives and opening equity as follows:
Shareholder’s equity at 1 January 2022 has decreased by DKK 4,184 thousand
Loss for the year 2022, before and after tax, has increased by DKK 10,005 thousand and DKK 11,796 respectively
Income tax benefit for the year 2022 has decreased by DKK 1,791 thousand and deferred tax liabilities related to capitalized development projects for the year 2022 have decreased by DKK 1,091 thousand
Shareholder’s equity at 1 January 2023 has decreased by DKK 14,889 thousand
Total assets at 31 December 2022 has decreased by DKK 16,552 thousand
Total liabilities at 31 December 2022 has decreased by DKK 1,663 thousand
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