PHOTOCURE ASA BUILDING A SPECIALTY PHARMA COMPANY
RESULTS FOR SECOND QUARTER AND FIRST HALF YEAR 2016
23 AUGUST 2016
Kjetil Hestdal, MD, President & CEO Erik Dahl, CFO
DISCLAIMER
The information included in this Presentation contains certain forward-looking statements that address activities, events or developments that Photocure ASA ("the Company") expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties. The Company is subject to a large number of risk factors including but not limited to economic and market conditions in the geographic areas and markets where Photocure is or will be operating, IP risks, clinical development risks, regulatory risks, fluctuations in currency exchange rates, and changes in governmental regulations. For a further description of other relevant risk factors we refer to Photocure's Annual Report for 2015. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in this information given above about current status of the Company or its business. Any reliance on the information above is at the risk of the reader, and Photocure disclaims any and all liability in this respect.
DELIVERING ON KEY OBJECTIVES
• Increase Hexvix/Cysview global in-market unit sales growth rate
KEY OBJECTIVES 2Q/1H2016 KEY ACHIEVEMENTS
Commercial Update
HEXVIX/CYSVIEW A SIGNIFICANT GLOBAL SPECIALTY BRAND
- Value of in-market sales of Hexvix/Cysview in the quarter increased YoY 18% to NOK 63 million. Year to date at NOK 124 million (+19%)
- Hexvix/Cysview global in-market volume increased YoY 6% in the quarter and 6% year to date
- Overall franchise EBITDA year to date at NOK 11.3 million, EBITDA margin of 16%
Global in-market unit sales (by Q)
Global in-market value NOK mill (LTM)
HEXVIX/CYSVIEW PROVIDES CLINICAL BENEFITS
- Use of Blue Light Cystoscopy with Cysview/Hexvix recommended in the new AUA/SUO bladder cancer guideline
- Recommended based on the large body of evidence supporting both increased detection and reduced recurrence of non-muscle invasive bladder cancer
- New publications in Bladder Cancer shows Blue light Cystoscopy with Cysview/Hexvix significantly improves long time outcomes
- Significantly prolongs time to progressions of bladder cancer (Kamat et al, April)
- Significantly reduces progression of bladder cancer (Gakis et al, August)
- Approval of new Hexvix/Cysview drug packaging in EU and the US
HEXVIX/CYSVIEW SOLID PERFORMANCE IN NORDICS AND USA
- Photocure own sales revenue in the US and Nordics increased YoY 12% in the quarter and 24% year to date to NOK 35.4 million
- US revenue increased year to date YoY 42%
- Driven by YoY in-market volume growth of 22%, price increases and FX
- Permanent Blue Light Cystoscope placements of 79 at the end of Q2 (2015 year end 65)
- The bill to provide separate and additional payments to hospitals was announced and recorded in Committee hearing in House of Representatives in June
- Nordic revenue increased year to date YoY 14%
- In-market volume growth of 9%, partly due to changed seasonality pattern
- Continued double digit in-market volume growth in Sweden, year to date 22% growth 7
HEXVIX/CYSVIEW PARTNER PROGRESS
- Partner revenue increased YoY 26% in the quarter and 20% year to date to NOK 32.3 million
- End user YoY volume growth 7% in the quarter and 5% year to date
- New territories & partners
- BioSyent Pharma in Canada
- Expect commercial sales Q3 2016
- Juno Pharmaceuticals in Australia and New Zealand
- Expect MAA approval in Australia 2H 2016
- Russia: Marketing approval received
- Partner search ongoing
Hexvix Partner Unit Sales Per Quarter
Pipeline Update
HEXVIX/CYSVIEW EXPANDING INTO THE SURVEILLANCE SEGMENT
- Surveillance following initial diagnosis represents a significant growth opportunity of 2-3 times current TURB segment
- Patient enrollment in Hexvix/Cysview Phase 3 market expansion progressing according to plan
-
50% of required patients enrolled
- Study results expected in 2017
- Secured alignment with FDA on study design necessary to obtain label extension
CEVIRA & VISONAC PHASE 3 READY PRODUCTS WITH SIGNIFICANT SALES POTENTIAL
- Cevira Breakthrough single use and fully integrated drug-device technology to satisfy high need for novel non-surgical therapies to treat global epidemic of HPV/HSIL populations
- Visonac Novel topical non-antibiotic/non-isotretinoin treatment to satisfy high unmet medical need among patients with inflammatory, severe acne (IGA 4)
- Cevira and Visonac both phase 3 ready with Special Protocol Agreement on phase 3 program with FDA
- Cevira and Visonac both addressing large patient populations with significant unmet medical needs
- Cevira with blockbuster sales potential based on premium pricing opportunity in large patients populations
- Cevira and Visonac have granted patents with extensive patent life and additional patent applications can provide additional extension
- Continued interest from potential partners for development and commercialization
Financials
SEGMENTS SECOND QUARTER 2016
Commercial franchise:
- Continued revenue growth for Hexvix/Cysview, YoY quarter growth 18%, year to date 22% (in constant FX: 12%)
- Total revenues negatively impacted by API revenues and milestone revenues
- Increased operating expenses, sales & marketing in US and trials to support surveillance market, spending related to partner activities
- EBITDA margin at 16% year to date
Development portfolio:
• Activities related to regulatory work and intellectual property. Cysview post marketing commitment phase 3 capitalized
| MNOK |
Q2 '16 |
YTD '16 |
YTD '15 |
| Commercial Franchise |
|
|
|
| Nordic revenues |
10,6 |
20,7 |
18,2 |
| US revenues |
7,1 |
14,7 |
10,3 |
| Partner revenues |
16,5 |
32,3 |
27,0 |
| Hexvix / Cysview |
34,2 |
67,7 |
55,6 |
| API revenues |
0,0 |
0,0 |
4,3 |
| Signing fee & milestones |
1,3 |
2,6 |
4,5 |
| Total revenues |
35,5 |
70,3 |
64,4 |
| Cost of goods sold |
-2,1 |
-4,5 |
-4,2 |
| Gross profit |
33,4 |
65,9 |
60,2 |
| Operating expenses |
-27,4 |
-54,6 |
-45,4 |
| EBITDA |
5,9 |
11,3 |
14,8 |
| Development Portfolio |
|
|
|
| Operating expenses |
-8,3 |
-17,3 |
-22,5 |
| EBITDA |
-8,3 |
-17,3 |
-22,5 |
| Total |
|
|
|
| EBITDA |
-2,3 |
-6,1 |
-7,7 |
|
|
|
|
PROFIT & LOSS SECOND QUARTER 2016
- Total revenue increase YoY 9% year to date
- Negatively impacted by sales of API and reduced milestone revenues
- Operating expenses increase YoY 6% year to date
- R&D reduction 43%
- Sales & marketing increase 17%
- Other Opex increase 22%
- EBITDA at NOK -2.3 million for the quarter, NOK -6,1 million year to date
- EBIT impacted by amortization of phase 3 Cysview
- Tax net income (non-cash) driven by change in transfer pricing method
| MNOK |
Q2 '16 |
YTD '16 |
YTD '15 |
| Hexvix / Cysview revenues |
34,2 |
67,7 |
55,6 |
| Other sales revenues (API) |
0,0 |
0,0 |
4,3 |
| Signing fees and milestones |
1,3 |
2,6 |
4,5 |
| Total revenues |
35,5 |
70,3 |
64,4 |
| Cost of goods sold |
-2,1 |
-4,5 |
-4,2 |
| Gross profit |
33,4 |
65,9 |
60,2 |
| Operating expenses |
-35,7 |
-71,9 |
-67,9 |
| EBITDA |
-2,3 |
-6,1 |
-7,7 |
| Depreciation & Amortization |
-2,0 |
-3,2 |
-1,3 |
| EBIT |
-4,4 |
-9,2 |
-9,1 |
| Net financial items excl PCI |
0,7 |
1,2 |
1,7 |
| Profit/loss(-) before PCI & Tax |
-3,6 |
-8,0 |
-7,4 |
| Impairment loss shares PCI |
- |
- |
-7,7 |
| Tax expenses |
21,8 |
25,4 |
-6,7 |
| Net profit/loss(-) |
18,1 |
17,4 |
-21,8 |
| Other comprehensive income |
-0,9 |
1,4 |
0,1 |
| Total comprehensive income |
17,2 |
18,8 |
-21,6 |
CASH FLOW SECOND QUARTER 2016
| MNOK |
Q2 '16 |
YTD '16 |
YTD '15 |
| Cash flow from: |
|
|
|
| - Operations |
-12,8 |
-22,1 |
-14,4 |
| - Investments |
-3,1 |
-8,3 |
-5,1 |
| - Financing |
-0,2 |
0,7 |
0,9 |
| Net change in cash |
-16,2 |
-29,6 |
-18,6 |
| Ending cash balance |
104,4 |
104,4 |
146,7 |
- Year to date cash flow from operations at NOK -22.1 million (prior year NOK 14.4 million)
- Change in working capital NOK -15.7 million (prior year NOK -6,4 million) year to date. Increased outflow driven by inventory & receivables (revenue driven) and movements for accounts payables
- Year to date cash flow from investments NOK -8.3 million, includes investments of NOK 7.8 million in intangible assets mainly related to the initiation of the phase 3 postmarketing commitment trial for Cysview
- Quarter end cash balance at NOK 104.4 million
- Payment from Galderma 2016.12.31 of EUR 4.0 million
BALANCE SHEET PER 30 JUNE 2016
- Non current assets include NOK 20.7 million in investments in tangible and intangible assets, NOK 7.9 million in shares in PCI Biotech and deferred tax asset of NOK 48.9 million
- Current assets include NOK 35.0 million in remaining settlement sale of Metvix, due 31.12.2016
- No interest bearing debt
- Shareholder's equity of NOK 232.9 million. Equity ratio of 89%
- Photocure held 809 own shares at end of Q2
| MNOK |
30.06 |
31.12 |
|
2016 |
2015 |
| Non-current assets |
77,4 |
43,6 |
| Inventory & receivables |
80,1 |
70,4 |
| Cash & equivalents |
104,4 |
134,0 |
| Total assets |
262,0 |
248,1 |
| Shareholders equity |
232,9 |
210,1 |
| Long term liabilities |
3,2 |
4,0 |
| Current liabilities |
25,9 |
34,0 |
| Total equity & liabilities |
262,0 |
248,1 |
| Equity ratio |
89 % |
85 % |
Outlook
DELIVERING ON KEY OBJECTIVES
• Increase Hexvix/Cysview global in-market unit sales growth rate
KEY OBJECTIVES 2Q/1H2016 KEY ACHIEVEMENTS