Karin Wehlin, CEO of Diagonal Bio, talks about the establishment in the equine segment, the increased business opportunities and the company's first order. The company is currently conducting a rights issue where the capital will be used to commercialize LAMPlify® in the equine, pig and fish segments. The goal for 2025 is to deliver 40 platforms.
We start by looking back. Can you get us through 2024, what are you most satisfied with and do you feel that you have lived up to your set milestones?
We had the goal of starting 6-10 pilot tests in 2024 and we started 9. We also sold an instrument to the Technical University of Denmark (DTU) and deepened our collaboration with them.
I can also reflect on how our ownership structure has changed over the past year, when the dispersed ownership has decreased to hold approximately one fifth of the company in what I consider to be strategic owners.
Internally, we have also invested some resources in cost control and reporting. I feel that we have come a long way in steering the company in both the short and long term and creating a focus in the organization around our strategy.
You have been CEO of Diagonal for a little over a year, what do you think is the biggest difference in the company from when you stepped in, compared to today?
My feeling is that things have "loosened" for us recently in terms of dialogues with important parties in the right areas. We are successful in getting into the right context and getting in touch with the right people. Behind this lies hard work in processing the leads we have developed.
During the year, we have gone from a very dispersed ownership to a current ownership list of just over 20 percent made up of strategic owners and owners who, through their networks, have been, and are, of great benefit to Diagonal Bio.
Diagonal has developed biomarkers for several animal segments. Will you invest the same amount of resources in all of them and which do you believe has the largest market to execute on?
Our greatest focus is on the horse segment and it is primarily to this segment that we will allocate capital and resources from the ongoing rights issue. However, the platform can also be used well in other segments within agri, such as the pig and fish segments, as we have shown through testing, and we are not closing any doors to conducting studies and collaborations in these areas as well. There are approximately 3,000 freshwater fish farms in Europe and monitoring fish water quality is of great importance for detecting diseases early. We have an ongoing project with the Technical University of Denmark that aims to revolutionize disease surveillance in fish farms through point-of-care analysis and that will last for 24 months, with a total value of just over 200 thousand SEK for Diagonal. LAMPlify has also shown impressive results in disease testing in the pig segment, which is a volume market where animal farmers can quickly isolate pigs to avoid the spread of respiratory viruses using Diagonal's instruments.
You are currently conducting two different issues. A directed issue and a rights issue. Can you first tell us a little about the directed issue, the takers and the ownership structure?
Absolutely. The private placement is directed to Daniel Redén – head trainer at StallZet – through Redén Trotting AB, and to Svea Bank AB. StallZet has been conducting pilot tests of LAMPlify®️ since October last year and in December we also entered into a marketing agreement with Redén, meaning that he will market LAMPlify®️. StallZet is one of Sweden's leading trotting facilities with over 190 horses and Redén, with his large network in the horse world, will play a key role in demonstrating the benefits of LAMPlify® and marketing the product. The fact that he also chooses to invest in Diagonal Bio through the private placement is proof that he sees opportunities in LAMPlify and that the product can make a difference in the arena where he operates and has enormous experience.
Svea Bank is owned by Lennart Ågren, who in addition to being a profile in the business world has also become one in trotting sport as the owner of around a hundred horses with some trotting horses that have become really successful.
It is incredibly exciting that the profiles who have trotting/horse racing as a large and important part of their lives choose to invest in Diagonal Bio and I look forward to maintaining a close dialogue for any input and feedback from both Redén and Ågren. The directed issue amounts to approximately SEK 1.7 million, where Svea Bank has an investment of around SEK 1.2 million and Redén is investing approximately SEK 0.5 million. Svea Bank has also opened the possibility for us to offer leasing arrangements on our instrument for our customers.
What will the capital be used for and how will it be distributed to each segment?
Provided that the rights issue is fully subscribed and all options issued through the directed issue and the rights issue are exercised, Diagonal Bio is financed until Q1 2026. In the meantime, it is our assessment that with completed pilot studies, studies that have been converted into sales agreements and expansion within our three main segments – horse, pig and fish – we will have established a solid platform for continued expansion. We will primarily focus on validating LAMPlify®'s commercial interest in the horse segment, by achieving the goals we have set regarding the initiation of new pilot projects and results from completed pilot projects, with the overall goal of achieving market acceptance by the end of 2025.
Diagonal Bio has attracted increased interest largely thanks to the latest flow of news with StallZet and Daniel Redén in particular – most recently it was communicated that StallZet had placed an order for LAMPlify. How do you benefit from this increased interest?
Through the partnership, Daniel Redén is marketing LAMPlify® – which he also tested in pilot tests at StallZet. Given Redén's reputation in trotting, Diagonal Bio could get a boost as our product and our name could end up on more lips in the segment. As we were able to communicate the other day, the pilot test at StallZet has been successfully completed, after which the stable decided to purchase the instrument. This is a very significant acknowledgement of LAMPlify's performance and gives Redén a good basis to talk highly of our product, which could create nice ripples in the water for Diagonal Bio.
What are your most important milestones for 2025 and how do you plan to achieve these goals?
Going forward, we are focusing wholeheartedly on pilot studies – initiating new ones and concluding ongoing ones, as well as converting completed studies into sales. Our goal is to have delivered a total of 40 LAMPlify® platforms by the end of 2025, and of these we expect a 50 percent conversion. Assuming we achieve our platform delivery goals, our assessment is that we will have achieved market acceptance by the end of 2025.
There are a few days left in the subscription period and you are investing in the issue yourself. Can you give three strong reasons to invest in Diagonal Bio?
We have a very exciting roadmap with several value-adding points within the next 6-12 months.
We see ongoing great interest in LAMPlify® from the horse segment where we have several ongoing pilot projects, which are also potential paying customers. As the pilot projects are completed, the intention is that these will be converted to paying customers.
Successful outcomes in pilot studies and collaborations with well-known players in the right segment create "buzz" and word-of-mouth that can make an important difference for us and our recognition.
Whether the market valuation of Diagonal Bio is fair or not is something each individual must decide on, but my view is that the company is worth more. In a short time, Diagonal Bio has gone from a start-up development company to having a product out with several influential stakeholders and on the market, but with great potential for immediate sales.
We thank Karin Wehlin for the interview and wish the company all the best in the future.
Disclaimer:
This is an interview that has been done on behalf of the company. Impala Nordic or people behind Impala Nordic owns no shares in the company at the time of the interview. // This is an interview that has been commissioned by the company. Impala Nordic or the people behind Impala Nordic do not own any shares in the company at the time of writing the interview.
