Investor Presentation • May 7, 2020
Investor Presentation
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Daniel Schneider, President and CEO Erik Dahl, CFO
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The Presentation has been produced by Photocure (the "Company") for information purposes only and does not in itself constitute, and should not be construed as, an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction. The distribution of this Presentation may be restricted by law in certain jurisdictions, and the Recipient should inform itself about, and observe, any such restriction. Any failure to comply with such restrictions may constitute a violation of the laws of any such jurisdiction.
The Recipient acknowledge that it will be solely responsible for its own assessment of the Company, the market and the market position of the Company and that it will conduct its own analysis and be solely responsible for forming its own view of the potential future performance of the Company's business. The Company shall not have any liability whatsoever (in negligence or otherwise) arising directly or indirectly from the use of this Presentation or its contents, including but not limited to any liability for errors, inaccuracies, omissions or misleading statements in this Presentation, or violation of distribution restrictions.
An investment in the Company involves significant risk, and several factors could adversely affect the business, legal or financial position of the Company or the value of its securities. For a description of relevant risk factors we refer to the Company's annual report for 2019. Should one or more of these or other risks and uncertainties materialize, actual results may vary significantly from those described in this Presentation. An investment in the Company is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of their investment.
This Presentation contains certain forward-looking statements relating to inter alia the business, financial performance and results of the Company and the industry in which it operates. Any forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts and are subject to risks, uncertainties and other factors that may cause actual results and events to be materially different from those expected or implied by the forward-looking statements. The Company cannot provide any assurance that the assumptions underlying such forward-looking statements are free from errors nor do any of them accept any responsibility for the future accuracy of opinions expressed in this Presentation or the actual occurrence of forecasted developments.
This Presentation speaks as at the date set out on herein. Neither the delivery of this Presentation nor any further discussions of the Company shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. The Company does not assume any obligation to update or revise the Presentation or disclose any changes or revisions to the information contained in the Presentation (including in relation to forward-looking statements).
This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts.
Oslo (HQ)
Norwegian commercial-stage pharmaceutical company focused on bladder cancer with commercial operations in Nordics and USA. Partners in Europe, Canada, Australia and New Zealand
Princeton (NJ)
+23% total sales revenue growth in 2019
NOK 330M global in-market sales*
500 000+ patients treated with Hexvix / Cysview worldwide
649K Avg daily volume YTD**
Oslo Stock Exchange: IPO May 2000
* Total In Market Sales including US, Nordic and Partners ** 06/05/2020
Photocure's global commercial bladder cancer platform will be the foundation for transformative deals and value growth
One Product Multiple Products
Small Partnering Deals Broad Portfolio
Hexvix®/Cysview®: Use for the 1st TURBT and for all intermediate and high-risk NMIBC patients during surgical treatment and surveillance / follow-up
*TURBT: trans-urethral resection of bladder tumors
A Drug Device combination for better visual contrast between benign and malignant cells
Hexvix / Cysview is used with a blue light enabled cystoscope, from Karl Storz, Wolf or Olympus
Incomplete resection of bladder tumors leading to increased risk of recurrence and progression to more advanced disease, if Blue Light Cystoscopy is NOT used
Burger et al. Eur. Urol. 2013
Daneshmand S et al. The Journal of Urology, Vol.199, 1158-1165, May 2018
Key therapeutic aim is to avoid progression from non-muscle invasive bladder cancer ("NMIBC") to muscle invasive bladder cancer ("MIBC")
* Ta, T1, CIS: Non muscle invasive bladder cancer tumor types
For the same patient having CIS more than doubles their probability to progress to MIBC
| Stage | Recurrence rate | Progression to MBIC |
|---|---|---|
| Low grade Ta | 70% | 2% |
| High-grade Ta | 50-80% | 14-48% |
| T1 | 70% | $30 - 50%$ |
| CIS. | 43-73% | 50% |
9
Sources: All: Global Data: Bladder Cancer Report, Sylvester RJ et al. Eur Urol 2006 Note: 1) Stages from tumor growing into the perivesical tissue and until it has spread to the prostate, uterus or vagina; 2) The tumor has spread to the pelvic wall or the abdominal wall except
2: Babjuk M et al. EAU Guidelines Non-muscle-invasive Bladder Cancer 2018 http://uroweb.org/guideline/ non-muscle-invasive-bladder-cancer/
. . . . . .
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• Expected to be EBITDA1 accretive from full-year 2021
• Asieris payment of USD 1.5 million in Q1, according to license agreement
| Amounts in NOK million | Q1 '20 | Q1 '19 | Change | FY '19 |
|---|---|---|---|---|
| Commercial Franchise | ||||
| US revenue | 28.2 | 21.2 | 33% | 98.7 |
| Nordic revenue | 12.2 | 13.1 | -7% | 48.2 |
| Partner revenue | 14.0 | 17.0 | -18% | 66.3 |
| Total Hexvix/Cysview | 54.4 | 51.2 | 6% | 213.2 |
| Other revenue | 0.3 | 1.0 | 3.2 | |
| Total revenue | 54.7 | 52.2 | 5% | 216.4 |
| Operating expenses | -52.3 | -45.1 | 16% | -186.6 |
| EBITDA before restr. | -3.5 | 1.7 | 7.3 | |
| Development Portfolio | ||||
| Total revenue | 0.3 | - | 65.1 | |
| Operating expenses | -1.3 | -3.2 | -59% | -13.5 |
| EBITDA before restr. | -1.2 | -3.2 | 51.6 | |
| TOTAL | ||||
| EBITDA before restr. | -4.8 | -1.5 | 58.9 |
• Operating expenses Q1 reduced YOY 59%
| Amounts in NOK million | Q1 '20 | Q1 '19 | Change | FY '19 |
|---|---|---|---|---|
| Hexvix/Cysview revenue | 54.4 | 51.2 | 6% | 213.2 |
| Other revenue | 0.6 | 1.0 | 68.3 | |
| Total revenue | 55.0 | 52.2 | 5% | 281.6 |
| Gross profit | 48.8 | 46.8 | 4% | 259.0 |
| Operating expenses | -53.6 | -48.3 | 11% | -200.1 |
| EBITDA before restr. | -4.8 | -1.5 | 58.9 | |
| Depreciation & Amort. | -3.9 | -4.2 | -16.2 | |
| EBIT before restr. | -8.6 | -5.8 | 42.7 | |
| Restructuring expenses |
-1.9 | - | - | |
| Net financial items | 5.7 | -0.2 | 3.2 | |
| Earnings before tax | -4.8 | -6.0 | 45.9 | |
| Tax expenses | -12.9 | 1.0 | -14.1 | |
| Net earnings | -17.7 | -4.9 | 31.8 |
| Amounts in NOK million | Q1 '20 | Q1 '19 | FY '19 |
|---|---|---|---|
| Operations cash flow | 3.0 | -15.7 | 20.7 |
| Earnings before tax | -4.8 | -6.0 | 45.9 |
| Working capital | -6.6 | -12.5 | -7.1 |
| Other | 14.4 | 2.8 | -18.2 |
| Investments cash flow | -0.4 | 0.5 | 0.6 |
| Development exp. | -0.3 | - | -0.3 |
| Other | -0.1 | 0.5 | 0.9 |
| Financing cash flow | -0.4 | -0.2 | -2.8 |
| Share capital | - | 0.6 | 0.6 |
| Other | -0.4 | -0.9 | -3.4 |
| Net change in cash | 2.2 | -15.4 | 18.5 |
| Ending cash balance | 127.6 | 91.4 | 125.3 |
| Amounts in NOK million | 31.12 2019 |
31.12 2019 |
|---|---|---|
| Non current assets | 54.6 | 70.5 |
| Investments | 11.3 | 13.6 |
| Tax asset | 25.4 | 38.3 |
| Other | 17.8 | 18.5 |
| Inventory & receivables | 57.8 | 61.6 |
| Cash & equivalents | 127.6 | 125.3 |
| Total assets | 239.9 | 257.4 |
| Shareholders equity | 190.4 | 208.6 |
| Long term liabilities | 9.8 | 10.0 |
| Current liabilities | 39.8 | 38.7 |
| Total equity & liabilities | 239.9 | 257.4 |
| Equity ratio | 79% | 81% |
UNTAPPED EU/SAE MARKETS: UK, SPAIN, ITALY & OTHER COUNTRIES
| Europe | U.S. |
|---|---|
| Europe: 165,000 new cases and more than 50,000 deaths annually1 |
US: 82,500 new cases and more than 18,000 deaths annually1 |
| EU5: 360,000 TURBTs | US: 315,000 TURBTs |
| Ave. Hexvix price ~ EUR 415 |
Ave. Hexvix price ~ USD 1070 |
| Germany: 30% current penetration, >3,500 units per sales FTE, growing |
Penetration 5-10% Growth rate in excess of 35% Y-o-Y |
| Major markets like UK, Spain not pursued, very limited resources in Italy, France |
Increased commercial investment and focus delivering results |
* Ipsen signed contract on September 26th 2011
** Linear Trend Ipsen from 2012 – 2018 Actuals
*** Linear Trend GE from 2007 – 2011 Actuals
Total EU is average market share based on TURB's in Major EU countries (GER, FRA, UK, ITA, AUS, NLD, BEL)
EU General Manager recruited to lead initial organization of 20 FTEs
Supported by global functions with established training, medical and marketing programs and tools
Drive use of Hexvix in existing clinics
Expand the number of clinics
Leverage Photocure's relationship with equipment suppliers
Increase KOL advocacy & engagement
Improve market access & reimbursement
Build strong Patient Advocacy relationships as in U.S.
Leverage infrastructure, synergies, global approach and consistent global brand
Implement Best practices
Leverage investment in U.S. marketing and medical – scalable into global platforms
Accelerate / Expand / Acquire / Transform:
Establish global bladder cancer footprint in line with our strategy
Ambitions – driving change in our area of expertise
Continuity – dedicated team and performance-based culture
. . . . . . . . . . . .
Tower placements by year
• Inclusion in Bladder Cancer treatment guidelines BLC™ with Hexvix® /Cysview® is strongly recommended by US, European and national guidelines as well as expert panels.
growing awareness and active preference as shown in recent BCAN survey
Recent early stage studies show a potential treatment effect of Blue Light Cystoscopy (BLC™) with Hexvix1
Study results: a treatment effect could be related to
US Patent issued Feb 11th 2020 covering the use of Hexvix as a neoadjuvant agent in the treatment of patients scheduled for cystectomy
– Other areas of early investigation include enhancing the detection and physician experience and the use of Hexvix/Cysview in combination therapy
Review multiple patents, regulatory data protection in the US with market exclusivity for office use/flex
No straightforward access to sales data and performance – different hospital distribution paths, ATC classification "Other diagnostics"
API manufacturing or sourcing – meet EU/US pharmacopeia monograph specifications
Freeze dry API under aseptic conditions. Solvent in vial or prefilled syringe. Manual/semi manual packaging/labeling
Photocure exclusivity with only commercial medical API supplier in the world
process
A drug-device combination product. ANDA1 for drug, PMA2 for device. Multiple FDA offices. Participation by 2 companies, requires device manufacturer relationship and coordinated
No clear drug approval standard: How to document "bioequivalence?"
Note: 1) Abbreviated new drug application; 2) Premarket approval
Active product support incl. training of physicians and nurses, facilitate workflow
* European patent expired September 2019, US patent valid until November 2020, Data exclusivity on flex valid until February 2021 PDT patent in the US granted until December 2036, Additional patents pending
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IN ADDITION, PHOTOCURE IS CONTINUOUSLY FOCUSING ON KEY STRATEGIC INITIATIVES TO FURTHER STRENGTHEN ITS LONG-TERM COMPETITIVENESS
ASIERIS MEDITECH CO., Ltd.
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BLCTM with Hexvix®/Cysview® can play an integral part in this situation: postponed procedures* do not postpone aggressive cancer progression
34 * Low and medium-risk patients category will be postponed, not the high-risk patient category. According to this, roughly 45% of patients should not be postponed and they represent close to 50% of TURBTs Internal data: USA, EU5 & Nordics figures: Please note market breakout 30% TURBTs and 70% Cystoscopies.
Ambition of world wide revenues in range of NOK 1 Billion in 2023 and approximate 40% EBITDA margin in 2023
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