Photocure ASA

Investor Presentation • Aug 9, 2023

Photocure ASA 2nd Quarter 2023 Results

August 9, 2023

Dan Schneider, President and CEO Erik Dahl, CFO David Moskowitz, VP Investor Relations

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2nd Quarter 2023 Highlights:

Sequential growth from Q1' 2023 recovery despite phase down of flexible BLC

+16% Revenue growth

Units up 2% excl. German stocking prior year

Hexvix/Cysview revenue up 9% from Q1'23; units up 6% sequentially

Installed base of blue light (U.S.):

• ⁻ 8 new Saphira™ towers in Q2
• ⁻ 5 upgrades from existing accounts
• ⁻ 40 quotes, 12 new Saphira™ purchase orders so far in Q3

Ongoing challenges:

• ⁻ phase down of flex BLC utilization
• ⁻ staffing shortages slowly resolving

EBITDA NOK 23.4 million

NOK 6.1M ex-BD exp. & Asieris payment

Asieris Cevira milestone NOK 26.9 million

OPEX mostly level excl. FOREX & BD last 7 quarters; Continued investment behind Hexvix/Cysview

Biz Dev expense NOK 9.6 million

Positive cash flow in Q2 NOK 259 million in cash and equivalents; term debt fully paid off in Q2 2023

Key news and events

AUA 2023: Nordic registry data & multiple scientific programs focusing on BLC® (April/May)

2 urology journal publications: reduced recurrence risk & detection of CIS with BLC® (May)

Asieris completes Hexvix phase III study enrolment in China (July)

Citizen's Petition* to re-classify BLC equipment: process ongoing

Segment Trends

North America and Europe markets

Sequential Growth Achieved in Both Territories

Q1 & Q2 Hexvix/Cysview Unit Sales by Region (Last 3 Years)

North America

Europe

Q2 2023 Trends in North America

• Q2 revenues & in-market unit sales increased 19% & 3%, respectively; Unit sales rose 4% sequentially Q2'23/Q1'23; Higher unit sales in new and upgraded Saphira™ accounts were partially offset by the phase down of flexible BLC usage
• Continued expansion of blue light tower installed base: 8 new Saphira™ installations, 5 upgrades in Q2 (40 quotes, 12 new tower POs so far in Q3)
• Demand for new blue light equipment remains strong: New Tower pipeline remains robust, Karl Storz discount programs (July 1 – Sept. 30) expected to accelerate Saphira™ adoption
• Strong advocacy for Citizen's Petition continues for the reclassification of blue light equipment; if approved, would enable an expedited pathway to expand the number of capital equipment manufacturers in the U.S.
  • Public comments by KOLs, BCAN (U.S. Patient Advocacy), Equipment Manufacturers, Health systems and others
  • Flex tower discontinuation highlights the need for BLC reclassification
  • Photocure customers continue to voice support for reclassification
  • FDA gathering information: Karl Storz and FDA have had correspondence, Photocure requested & participated in informational Q-Sub meeting with the agency

Karl Storz SAPHIRA™ Blue Light System

April 2023: Satellite Symposium + AUA congress booth

Saphira™ now 28% of rigid BLC installed base in U.S.

13 Installations in Q2 2023: 8 new account placements & 5 upgrades

New Account Tower Installations Q3 2022: 10 installations (6 Rigid & 4 Flex) Q4 2022: 31 installations (24 Rigid & 7 Flex) Q1 2023: 18 installations (Rigid only) Q2 2023: 8 installations (Rigid only)

Saphira™ towers installed since Q4 2022 launch; 48 New & 45 Upgrades

Cumulative Installed Base in U.S. (Rigid Only)

the Photocure booth Photocure – presentation of 2nd quarter 2023 results

Q2 2023 Trends in Europe

• Q2 revenues increased 14%, unit sales off 5% (up 0.5% ex-stocking); Unit sales rose 6% sequentially Q2'23/Q1'23; Positive effects of price increases and FX outweighed significant stocking by German hospitals in the 2022 comparable period and further unit sales decline in Denmark..
• 2023 is first year where access is fully open since re-acquiring the territory in Oct. 2020 (focused on the 80% of existing accounts that are underpenetrated)
• Image quality upgrades remains a key initiative in 2023 Europe impacted overall by slow delivery of Saphira™ equipment but good pipeline
• Blue light gaining traction in urology community Increasing KOL support broadly, high visibility at EAU, Additional data strengthens EAU guidelines
• Photocure 2023 Bladder Cancer Bus Tour: high demand from German hospitals interested in BLC

Growth acceleration in Europe expected

		Q2 2023
Established Markets Nordic (excl. DK)/DACH 26% to 58% range of penetration	• Continuous Investment in Commercial Excellence • Good Penetration, Guidelines & Procedure Funding • Germany/Austria (70% of EU unit sales) consistently increasing market share YoY • Addressing DK situation pulling down Nordics	• Steady Growth in DACH continues • Outdated equipment in Nordics; upgrade anticipated H1 2024
Priority Growth Markets France, UK, Italy, Be/Ne 2% to 14% penetration	• Active Pipeline for Image Quality Upgrades (Reactivation) & New Installations • Mostly good installed base of equipment but dated, underpenetrated, clinical practice & awareness differs • Stabilized sales during the pandemic after years of decline before re-acquisition	• Be/Ne first markets to move from stabilization to growth, other markets good pipeline but capital equipment delivery delays
Untapped EU Markets Spain, Poland, Baltics, Czech Rep, Hungary, Ireland, Greece, Portugal: ~0% penetration	• Evaluating key launch factors in each territory: - Availability of capital equipment - Local treatment guidelines - KOL engagement - Coverage/reimbursement - Decision on direct/distribution strategy

Q2 Financials

Consolidated Income Statement Second Quarter 2023

in NOK million Amounts	Q2 '23	Q2 '22	Change	YTD '23	YTD '22	Change
Hexvix/Cysview Revenue	115.9	99.9	16%	221.8	181.2	22%
Other Revenue	28.4	0.7		28.7	1.0
Total Revenue	144.3	100.6	44%	250.6	182.2	38%
Gross Profit	137.4	95.3	44%	237.2	170.9	39%
Operating Expenses excl BD	-104.4	-88.8	18%	-205.3	-175.3	17%
Business Development Expenses	-9.6	-5.1		-9.7	-8.0
EBITDA – excluding BD	33.0	6.5		31.9	-4.5
EBITDA – including BD	23.4	1.4		22.2	-12.5
Depreciation & Amortization	-6.6	-6.0		-13.1	-12.0
EBIT	16.8	-4.6		9.2	-24.5
Net Financial Items	-4.9	-4.5		-7.3	-11.8
Earnings before Tax	12.0	-9.1		1.9	-36.3
Tax Expenses	-7.6	-9.4		-9.3	-4.1
Net earnings	4.3	-18.5		-7.4	-40.4

Revenue

• Q2 total revenue increased YoY 44%, driven by Hexvix/Cysview and a milestone payment from Asieris
• Q2 Hexvix/Cysview revenue increased 16% vs. last year, driven by price and FX. Sequential revenue growth of 9% from Q1
  • Consolidated volume impacted negatively by the phase down of Cysview usage in the flexible BLC setting as well as German hospital stocking last year ahead of a July 2022 price increase

Operating Expenses

• Q2 operating expenses excluding business development costs increased 18% YoY, mainly due to FX and inflation
• Operating expenses within business development projects relate to life cycle management for Hexvix/Cysview

EBITDA

Q2 EBITDA including business development expenses improved NOK 22.0 million YoY, driven by revenue growth including milestone payments

Segment Performance Second Quarter 2023

North America Segment

in NOK million Amounts	Q2 '23	Q2 '22	Change	YTD '23	YTD '22	Change
Total revenues	46.2	38.7	19%	88.3	69.2	28%
Gross profit	44.8	37.7	19%	85.5	67.0	28%
% of revenue	97%	97%		97%	97%
Direct costs	-44.8	-40.2	12%	-88.4	-78.2	13%
Contribution (1)	0.0	-2.5		-2.8	-11.1
EBITDA, excl BD	-10.3	-11.1		-22.0	-28.5
of % revenue	-22%	-29%		-25%	-41%

• Q2 revenue growth 19% driven by volume, price increases and FX.
  • In-market unit sales increased 3%, USD appreciated 14%, price increase 3% in US
• Q2 direct costs as planned in local currencies
• Contribution improved NOK 2.5 million YoY driven by revenue

Europe Segment

million Amounts in NOK	Q2 '23	Q2 '22	Change	YTD '23	YTD '22	Change
Total revenues	69.7	61.1	14%	133.3	111.6	19%
Gross profit	65.2	57.3	14%	123.7	103.0	20%
of % revenue	93%	94%		93%	92%
Direct costs	-27.6	-26.3	5%	-56.6	-47.9	18%
Contribution (1)	37.6	31.0		67.2	55.1
EBITDA, excl BD	19.5	16.0		33.2	24.2
% of revenue	28%	26%		25%	22%

• Q2 revenue increased 14% YoY. EUR appreciated 16%
  • In-market unit sales decreased 5% YoY; excluding German stocking effect in 2022 volume mostly level with prior year
• Expenses were driven by phasing of activities and FX
• Contribution improved NOK 6.6 million YoY, driven by higher revenue

Cash Flow & Balance Sheet Second Quarter 2023

in NOK million Amounts	Q2 '23	Q2 '22	YTD '23	YTD '22
Operations Cash Flow	29.1	-1.9	20.0	-24.1
Earnings before tax	12.0	-9.1	1.9	-36.3
Depreciation & amortization	6.5	6.0	13.1	12.0
Working capital	-1.1	-11.6	-11.7	-20.1
Other	11.7	12.8	16.7	20.3
Investments Cash Flow	0.1	-2.5	0.7	-2.0
Financing Cash Flow	-16.3	-8.0	-29.8	-23.8
Net Change in Cash	12.9	-12.4	-9.1	-49.8
in NOK million Amounts			31.06.23	31.12.22
Non-current assets			345.4	360.8
Inventory & receivables			102.2	90.2
Cash & short-term deposits			258.9	268.1
Equity			467.5	462.7
Long-term liabilities			162.1	167.1
Current liabilities			77.0	89.2

Cash Flow

• Net cash flow from operations in Q2 NOK 29.1 million, mainly driven by milestones received
• Net cash flow from financing NOK -16.3 million includes loan repayment of NOK 6.3 million and earnout payments of NOK 8.1 million
  • Term loan is fully repaid
• Net cash flow in Q2 NOK 12.9 million, cash balance end of Q2 NOK 258.9 million

Financial position

• Non-current assets includes intangibles and goodwill from Ipsen transaction totaling NOK 264.9 million
• Long-term liabilities includes deferred Ipsen earnout totaling NOK 130.3 million
• Equity NOK 467.5 million, 66% of total assets

Summary

Summary of Q2 results

• 16% rev. growth/+2% unit sales excl. German stocking; 9% sequential rev. growth despite U.S. Flex phase down
• 13 Saphira™ towers installed in U.S. (8 new, 5 upgrades); 40 quotes/12 new BLC tower POs so far in Q3
• Saphira™ now 28% of rigid towers in U.S.; New technology cycle, strong pipeline, KS discounts driving adoption
• EBITDA of NOK 23.4 million (NOK 33 million excl. BD); Commercial business EBITDA-positive in the quarter
• Term debt fully paid off in Q2, cash balance strong at NOK 259 million
• BLC awareness continues to rise in urology community, KOL support, and equipment/image quality upgrades
• Reiterated guidance; flex phase-down, remaining staffing shortages and strikes in EU remain challenges in 2023
• Potential re-classification of BLC equipment could "unlock" the market for Cysview in the U.S.

2023 Anticipated Milestones & Corporate Objectives

• Deliver 65-75 Saphira™ installs, product revenue growth above 20%, and generate positive EBITDA in 2023
• Continue to grow the base of rigid blue light towers in North America, upgrade BLC® image quality throughout Europe, and pursue strategy to establish a durable solution for flexible BLC equipment globally
• Proactively support the Citizen's Petition for the U.S. FDA to reclassify BLC equipment from Class 3 to Class 2, potentially creating an expedited pathway for additional BLC manufacturers to enter the U.S. market
• Continue to geographically expand commercial business by penetrating untapped European markets, and through additional Hexvix® licensing agreements ROW
• Present/publish additional data from patient registries and other studies on the use of BLC® with Hexvix/Cysview
• Milestone events anticipated for partner, Asieris: Phase III data for Hexvix in China and Cevira® in H2 2023

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