Photocure ASA

Regulatory Filings • Apr 7, 2020

Photocure ASA: Market update #2

Photocure ASA: Market update #2

Oslo, Norway, 7 April 2020: The Board of Directors and Management of Photocure

ASA (OSE:PHO) follow the COVID-19 situation closely and have implemented strict

measures to ensure the safety of patients, customers, employees and business

partners while maintaining an uninterrupted level of service and supply. The

company today provides the second COVID-19 Oslo Stock Exchange notification to

ensure updated and transparent stakeholder information.

"The pandemic continues to bring tremendous hardship on those affected by the

virus; families, communities and business. The Photocure team expresses its

sincere gratitude to the many healthcare professionals around the world

providing lifesaving care and support. Our main priority is to ensure safe

operations and an uninterrupted supply of Hexvix[®]/Cysview[®] while maintaining

business in this new uncharted business and healthcare environment. Bladder

cancer treatments are a prioritized procedure for the healthcare systems, but we

must expect short-term postponements as resources are reallocated to prepare for

the exponentially growing number of COVID-19 patients in the coming weeks and

months," says Daniel Schneider, President & Chief Executive Officer of

Photocure.

Photocure has adapted a framework for disclosure of COVID-19 related

information*, suggesting several topics for a risk and effect assessment,

including the following:

· COVID-19 impact on financial condition and results of operations.

Photocure comment: Bladder cancer treatments are prioritized procedures for the

healthcare systems, but Photocure expects restricted access to hospitals. Short

-term postponements of procedures and cystoscope installations will be

temporarily slowed. Hospitals are reallocating health care providers and

resources to handle the increase of COVID-19 patients. The long-term outlook

remains strong, but the visibility, especially in the U.S. remains limited for

the coming weeks and months.

· COVID-19 impact on capital and financial resources, including overall

liquidity position and outlook.

Photocure comment: The company had a cash position of NOK 123 million at the end

of March 2020 and carries no interest-bearing debt. Cost saving exercises are

being implemented to reduce cash burn through the restricted access period. In

addition, the company is pursuing various governmental subsidies and programs to

further help bridge this short-term period.  Postponements of procedures will

affect the short-term kit shipments, impacting the working capital, but

Photocure has a solid financial position.

· COVID-19 impact on balance sheet and the ability to timely account for those

assets.

Photocure comment: The company expects the COVID-19 situation to have short-term

impact on the balance sheet, but an extended and profound virus situation in the

U.S. with a major and lasting impact on the business environment, may challenge

booked values.

· COVID-19 impact on impairments, increases in allowances for credit losses,

restructuring charges, other expenses, or changes in accounting judgments that

have had or are reasonably likely to have a material impact on the financial

statements.

Photocure comment: The company expects the COVID-19 situation to have impact on

the short-term financial statements, but an extended and profound virus

situation in the U.S., with a major and lasting impact on the business

environment, may affect the financial statements.

· COVID-19 impact on circumstances such as remote work arrangements adversely

affecting the ability to maintain operations, including financial reporting

systems, internal control over financial reporting and disclosure controls and

procedures.

Photocure comment: The company has implemented remote work arrangements across

its locations and is fully operational. All functions are designed to

accommodate remote work and no disruptions are expected. The main priority of

the organization is the health and welfare of all Photocure employees and

stakeholders. Business and travel policies which supported work from home and

social distancing were implemented prior to governmental orders. Where access to

hospitals and clinics is restricted because of the situation, Photocure's sales

force maintains contact as needed through remote channels in order to guarantee

optimal service and support.

· COVID-19 impact on implementing business continuity plans.

Photocure comment: In light of the seriousness of the current COVID-19 global

health care crisis, the evolving circumstances require a different way of

working between Photocure and the health care providers. In a changing

environment, the company will continue to adapt to any new way of working to

provide our partners with uninterrupted service in treating patients with

bladder cancer. The company intends to keep the lines of communications open and

plans to offer a variety of means to keep Blue Light Cystoscopy with Cysview in

the forefront of patient care.

· COVID-19 impact on the demand for products or services.

Photocure comment: Bladder cancer treatments are prioritized procedures for the

healthcare systems, but the company expects short-term postponements, especially

in the low and medium risk patient category, as resources are reallocated to

prepare for the exponentially growing number of COVID-19 patients. In addition,

the opening of new accounts and placement of new scopes will be affected in the

short-term. The long-term outlook remains strong, but the visibility, especially

in the U.S. will stay low for the coming weeks and months.

· COVID-19 impact on supply chain.

Photocure comment: The company has increased the inventory of

Hexvix[®]/Cysview[®] to accommodate the estimated procedures through the first

quarter of 2021 and production remains at full capacity and on schedule. The

international distribution lines are uninterrupted and the inventory levels of

kits at partners and hospitals remain satisfactory.

· COVID-19 impact on human capital resources and productivity.

Photocure comment: The company has a highly specialized workforce committed to

improving patients' lives. The majority of their work requires interaction with

healthcare providers.  In the short-term, many institutions are restricting

access to protect patients, providers and suppliers from contracting COVID-19.

Photocure supports any employees willing to volunteer their medical expertise to

the communities in which they reside.

The U.S. sales team is supporting customers remotely and dedicating

administrative time to develop business plans to accelerate recovery after the

quarantine measures are lifted. Training sessions and virtual educational events

with leading urologists are also being organized and executed.

· COVID-19 impact on ability to operate and achieve business goals following

travel restrictions and border closures.

Photocure comment: Border closures do not affect the company´s national and

regional sales force. However, in many cases, hospital restrictions prohibit

supplier sales representatives from entry into the buildings. The long-term

outlook remains strong, but short-term business development initiatives will be

limited in the coming weeks following the travel restrictions and social

distancing measures.

"Photocure has a cash position of NOK 123 million at the end of March 2020 and

carries no interest-bearing debt. We have a strong underlying sales momentum in

the U.S when returning to a normalized business environment, providing a solid

platform for long-term growth. Short term business development and operations

will be affected by this unprecedented crisis in various ways, but we remain

confident in the significant commercial opportunities in the U.S. and reiterate

our long-term ambitions", Schneider concludes.

*Division of Corporation Finance Securities and Exchange Commission CF

Disclosure Guidance: Topic No. 9. Date: March 25, 2020.

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All trademarks mentioned in this release are protected by law and are registered

trademarks of Photocure ASA

This press release may contain product details and information which are not

valid, or a product is not accessible, in your country. Please be aware that

Photocure does not take any responsibility for accessing such information which

may not comply with any legal process, regulation, registration or usage in the

country of your origin.

For further information, please contact:

Dan Schneider

President and CEO

Photocure ASA

Tel: + 1-609 759-6515

Email: ds@photocure.com

Erik Dahl

Chief Financial Officer

Tel: +47 450 55 000

Email: ed@photocure.no

About Photocure ASA

Photocure: The Bladder Cancer Company delivers transformative solutions to

improve the lives of bladder cancer patients. Our unique technology, making

cancer cells glow bright pink, has led to better health outcomes for patients

worldwide. Photocure is headquartered in Oslo, Norway and listed on the Oslo

Stock Exchange (OSE: PHO). For more information, please visit us at

www.photocure.com, www.hexvix.com, www.cysview.com