I-Tech

In one line: The prettiest small-cap business found — a patented marine antifouling agent at 57% gross margins — whose patent protection expires this year.

Turned up by a small-cap sweep of 571 Swedish listings and looked, briefly, like the best business on the list. I-Tech owns the intellectual property to Selektope, an active substance that prevents barnacle growth on ship hulls, in use on more than 2,500 vessels.

Capital-light, net cash of SEK 148m, 12.7× EV/EBIT and a 6.4% free cash flow yield after a 44% fall in the shares over a year.

Then the disqualifying fact: Selektope's patent protection across the key shipbuilding and repair jurisdictions runs out in 2026. For a single-product company whose entire moat is that patent, a cliff arriving this year is not a risk to be discounted — it is the central fact.

Management's counter-argument has substance. The practical barrier in marine biocides is not the patent but regulatory registration: getting a new active substance approved under the Biocidal Products Regulation takes years and substantial money, and a generic competitor would have to repeat that. That is a genuine secondary moat. It is also entirely unproven as a substitute for patent protection, and revenue already fell 6% in 2025 before any generic entered.

Too binary to own on the evidence available. Worth revisiting once there is observable pricing behaviour on the other side of expiry.

A note on method: the same claim was checked for BioGaia, where a widely repeated "patent expires 2026" line turned out to belong to a different, spun-out company. Here it checks out. Patent-cliff claims are worth verifying against the actual registrant every time.