Earnings Release • May 6, 2015
Earnings Release
Open in ViewerOpens in native device viewer
Results for first quarter 2015
5 May 2015
(Numbers in brackets are for the corresponding period in 2014)
| Figures in NOK million | 1Q 2015 | 1Q 2014 | Change | FY 2014 |
|---|---|---|---|---|
| Sales revenues | 28.4 | 19.5 | 45 % | 93.6 |
| Signing fee & milestone revenues | 1.2 | 1.2 | 35.4 | |
| Total revenues | 29.6 | 20.7 | 43 % | 129.0 |
| Operating expenses | 34.8 | 32.9 | 6 % | 127.6 |
| EBIT (Operating result) | -7.2 | -13.7 | -5.6 | |
| EBIT commercial franchise | 4.2 | 0.0 | 15.9 | |
| EBIT development portfolio | -11.4 | -13.7 | -21.5 | |
| Profit/loss(-) before PCI and tax | -7.0 | -13.0 | 1.5 | |
| Earnings per share, diluted (NOK) | -0.52 | -0.61 | -1.16 | |
| Cash & cash equivalents | 149.7 | 149.7 | 165.2 |
"Photocure started the year with a strong first quarter, driven by solid performance of Hexvix/Cysview in the Nordics and US. We have made encouraging progress in the US with increased revenues driven by improved productivity of installed base of blue light cystoscopes (BLCs). We were also pleased to see in the UK that the National Institute for Health and Care Excellence (NICE) recommend photodynamic diagnosis for improved detection of bladder cancer in its first guideline on bladder cancer treatment.
In the first quarter of 2015 we continued to deliver strong financial improvement. With the increased profitability of our commercial franchise we made significant progress towards our goal of becoming a sustainable Specialty Pharma Company."
Photocure's strategy is to create a Specialty Pharmaceutical Company maximizing its commercial presence and the opportunity of its flagship brand Hexvix/Cysview in urology. In addition, the company will continue to leverage its core competence developing products based on its proprietary Photodynamic Technology Platform targeting unmet medical needs in urology, dermatology and gynecology. We will seek to develop and commercialize new products alone or in partnerships with others to capture the full potential of our products.
Commercial performance continued to progress through the first quarter. First quarter revenue has increased 43% from prior year, driving an EBIT improvement of NOK 4.2 million.
| MNOK | Q1 '15 | Q1 '14 | YoY |
|---|---|---|---|
| Hexvix / Cysview | 26,7 | 19,3 | 38 % |
| API revenues | 1,7 | 0,2 | 848 % |
| Signing fee & milestones | 1,2 | 1,2 | 5 % |
| Total revenues | 29,6 | 20,7 | 43 % |
| Gross profit | 27,6 | 19,1 | 44 % |
| Operating expenses | -23,4 | -19,1 | 23 % |
| EBIT | 4,2 | 0,0 | #REF! |
Hexvix/Cysview is the first approved drug-device procedure for improved detection and management of bladder cancer. Photocure is commercializing Hexvix/Cysview directly in the US and the Nordic region, and has a strategic partnership with Ipsen for the commercialization of Hexvix in Europe, excluding the Nordic region.
Global in-market sales of Hexvix/Cysview continued to grow at double digit rates, and were up 10% to NOK 51 million in the first quarter. Global in-market unit sales for the quarter decreased 1% compared to 2014. The decline was partly driven by increased purchase patterns at hospitals in the first quarter 2014 in advance of an April price increase in Germany.
Total sales revenues for Hexvix/Cysview increased 38% to NOK 26.7 million (NOK 19.3 million) in the first quarter. First quarter revenue growth was positively impacted by price increases, timing of supply to our partner and distributors in 2014, and foreign exchange rates.
Photocure's own sale revenues in the US and Nordic region increased 44% to NOK 12.8 million in the first quarter, reflecting strong growth in both regions. Sales in constant currencies grew 31%.
Nordic revenues in the first quarter increased 22% compared to last year. Growth was driven by customer demand and price increases.
Photocure's in-market unit sales in the Nordic region increased 6% in the first quarter. Sweden, the key growth area in Nordic, continued to develop positively, posting 21% growth in unit sales for the quarter. Overall Hexvix market share for the region is 39%.
In the US, first quarter revenue increased 116% compared to first quarter last year, driven by volume growth, price increases and positive foreign exchange rate effects. Revenue in constant currency grew 70%.
Unit sales in the US increased 61% in the first quarter. The growth was driven both by the number of permanent blue light cystoscopes (BLCs) installed at leading US hospitals/urology centers and by increased average usage per center. The total number of permanent BLCs installed at leading US hospitals/urology centers at end of first quarter was 52, an increase of 19% from the same quarter 2014. During the first quarter the focus has been to increase productivity at current accounts, therefore the increase in the installed BLC's from year end was limited to one unit.
In the US, Photocure continues to work closely with key stakeholders to secure a long-term sustainable solution for Cysview reimbursement. A bill to secure US senior cancer patient access to state of the art treatment using up to date technology, including Cysview, originally introduced in June, is actively being pursued. Photocure will continue its work to obtain reimbursement for Cysview in the US and for the passage of the bill in 2015.
Partner revenue increased 33% in the first quarter driven primarily by the timing of supply stocks to our partner in the first quarter 2014.
End user unit sales decreased 5% in the first quarter. This was mainly a result of increased purchase patterns by hospitals in Germany in first quarter 2014 in advance of a planned price increase in Germany in April 2014. In France, the sales growth delivered consistently throughout 2014 has strengthened even further in the first quarter.
The National Institute for Health and Care Excellence (NICE) in the UK has published its first guideline on bladder cancer, recommending photodynamic diagnosis for improved detection of bladder cancer. NICE makes evidence-based recommendations for healthcare, with the aim of improving treatment and reducing variations in care.
| Figures in NOK million | 1Q 2015 | 1Q 2014 | Change |
|---|---|---|---|
| Nordic revenue | 8.3 | 6.8 | 22 % |
| US revenue | 4.6 | 2.1 | 116 % |
| Partner revenue | 13.9 | 10.4 | 33 % |
| Total revenue | 26.7 | 19.3 | 38 % |
Hexvix/Cysview (hexaminolevulinate hydro-chloride) is an innovative breakthrough technology for the diagnosis and management of non-muscle invasive bladder cancer. It is designed to selectively target malignant cells in the bladder and induce fluorescence during a cystoscopic procedure using a blue light enabled cystoscope. Using Hexvix/Cysview as an adjunct to standard white-light cystoscopy enables the urologist to better detect and remove lesions, leading to a reduced risk of recurrence. Hexvix/Cysview is approved in Europe, US, and Canada.
Bladder cancer has a high incidence, and is the fourth most common type of cancer in males in the US. An estimated 75,000 new cases of bladder cancer were diagnosed in 2014, with an estimated 15,600 people dying from the disease, according to the American Cancer Society. In Europe bladder cancer is the fifth most common cancer with an estimated 167 000 newly diagnosed cases and 59 000 deaths due to the disease in 2012 (Witjes JA et al., Eur Urol 2014). If bladder cancer is detected at an early stage, management and outcome for the patient is improved.
| Indication | Status | |
|---|---|---|
| Visonac® | Treatment of moderate to severe acne |
Phase 3 ready |
| Cevira® | Treatment of HPV associated diseases of the cervix including precancerous lesions |
Phase 3 ready |
| Hexvix® Cysview® |
Detection of bladder cancer, surveillance segment |
Phase 3 initiated |
An expansion of the use of Hexvix/Cysview into the flexible surveillance patient segment will open a market segment estimated to be 2-3 times the size of the current segment. In the current use Hexvix/Cysview is used to optimize patient management through improved diagnosis and resection (TURB) in a surgical procedure. As patients are initially diagnosed and treated by TURB they undergo cystoscopy examinations every 3-9 month. This surveillance is performed in out-patient/office setting using flexible cystoscopes to be able to detect any suspicious new lesions requiring referral to new TURBs.
Following positive early clinical experience with flexible cystoscopes in this new segment, Photocure has initiated a 360 patient phase 3 clinical study examining bladder cancer detection rates using Cysview blue light cystoscopy vs white light cystoscopy. The study design is in alignment with FDA to obtain label expansion and fulfill the Cysview post marketing commitments.
Patient recruitment is planned to start in the second half of 2015, with final results expected in 2017 and possible approval in 2018. In addition to the registration study Photocure will generate additional clinical data by supporting Investigator Initiated Trials.
Visonac is a novel patented photodynamic treatment in late-stage development for treating moderate to severe, inflammatory acne. Visonac has been developed in combination with Photocure's innovative full face red light lamp, Nedax®, The estimated global market value of
available treatments in this segment , oral antibiotics and retinoids, is USD 900 million annually. Visonac will address a large unmet medical need as a second line treatment option for patients with moderate to severe acne estimated to affect more than 2 million patients each year in the EU and US.
Research from GlobalData cites Visonac as one of the most highly anticipated introductions in the acne therapeutics market1 .
Photocure's strategy is to establish a strategic partnership for Visonac for further development and commercialization. Discussions with companies that are leaders in dermatology took place during 2014 and have continued in the first quarter of 2015.
Visonac successfully completed a phase 2b study that showed a statistically significant reduction in inflammatory lesions and overall improvement in acne severity. In addition, through the FDA Special Protocol Assessment (SPA) process and approval of the European Pediatric Investigational Plan, the design and analysis of the global pivotal phase 3 registration program has been secured.
Visonac (methyl aminolevulinate 80mg/g) is in development for the treatment of moderate to severe acne. Acne is the single most common skin disease worldwide and affects up to 85% of all 12-24 year olds. There is a high unmet medical need for patients with moderate to severe acne, where the current mainstay of treatment is oral antibiotics and/or retinoids. By avoiding the risks of increased antibiotic resistance from long term exposure and providing a better tolerated alternative than systemic retinoids, Visonac has the potential to satisfy a high unmet medical need.
Cevira is a unique, non-invasive photodynamic therapy under development for the treatment of oncogenic human papilloma virus (HPV) infection and pre-cancerous cervical abnormalities. Cevira is the first in class of possible new medical treatments in this therapeutic area. The market opportunity for a successful product is significant. Each year in EU and the US approximately 1 million women are diagnosed with high grade lesions and an estimated 10-15 million women are diagnosed with oncogenic HPV.
Photocure has consulted key regulatory agencies in both the US and EU to agree the design and target patient population for the pivotal phase 3 registration program. Discussions with Health Authorities in key European markets have been completed and support has been achieved to continue with the proposed phase 3 program, targeting women with HSIL (CIN2) as the first indication.
Following the discussions with the US FDA in 2014, Photocure has completed a re-analysis of the clinical data in accordance with the recently published diagnostic consensus classification system and guidance provided by FDA. The reanalysis demonstrated that Cevira provides improved treatment efficacy compared to placebo among patients with cervical high grade lesions (HSIL).
Photocure discussed the results, including target population and statistical sample size, in the end of phase 2 meeting with FDA in December 2014. The minutes of the meeting from FDA received in January 2015, confirmed that the phase 2 data support the proposed phase 3 program, and are sufficiently robust to continue the development of Cevira for patients with HSIL.
Following the positive outcome of the meeting with the FDA, Photocure submitted the proposed phase 3 protocol for a detailed Special Protocol Assessment Review (SPAR) to the FDA in the first quarter of 2015.
Cevira has the potential to treat HPV induced cervical high grade disease and prevent the development of cervical cancer which globally affects more than 500 000 women annually. Photocure will continue discussions with leading companies in women's healthcare to secure a strategic partnership to support the phase 3 development and commercialization of Cevira.
(Numbers in brackets are for the corresponding period in 2014).
Photocure has continued improving its financial performance in the first quarter, with double-digit growth in revenues from Hexvix/Cysview and improved operating results.
1 http://healthcare.globaldata.com/media-center/press-
releases/pharmaceuticals/novel-product-launches-to-reinvigorateacne-treatment-market-by-2018-says-globaldata
Total revenues in the first quarter were NOK 29.6 million, an increase of 43% from same quarter last year (NOK 20.7 million). This increase was driven by continued market penetration of Hexvix/Cysview and inventory reductions with distributors and partner in 2014, as well as changes in currency exchange rates. In constant currencies the total revenue grew 34%.
Total Hexvix/Cysview sales revenues for the first quarter were NOK 26.7 million, an increase of 38% from NOK 19.3 million first quarter 2014. In constant currencies the revenue grew 29%. Inmarket unit sales declined 1% in the first quarter compared to first quarter 2014. The decline was primarily driven by increased hospital purchase patterns in Germany during the first quarter 2014 ahead of a planned price increase in April 2014.
First quarter operating costs were 6% higher than the previous year. Total operating costs were NOK 34.8 million (NOK 32.9 million) in the first quarter. The increase was mainly within sales and marketing expenses and to a large extent driven by changes in currency exchange rates.
| MNOK | Q1 '15 Q1 '14 Change | ||
|---|---|---|---|
| Research & Development | 7,1 | 8,7 | -19 % |
| Sales & Marketing | 17,2 | 14,1 | 22 % |
| Other Opex | 10,5 | 10,0 | 5 % |
| Operating expenses | 34,8 | 32,9 | 6 % |
First quarter research and development (R&D) costs were NOK 7.1 million (NOK 8.7 million). The R&D costs relate to regulatory work and maintenance and expansion of our intellectual property as well as the development of the current pipeline. The primary development activity in the first quarter and year to date has been preparation for the Cevira phase 3 SPAR submission and clinical trial site preparations for the Cysview post marketing commitment trial in the U.S.
Marketing and sales costs increased 22% to NOK 17.2 million (NOK 14.1 million) in the first quarter compared to last year, significantly impacted by changes in currency exchange rates, particularly the USD/NOK.
Operating loss (EBIT) was at NOK 7.2 million for the quarter, a significant improvement compared to last year (NOK -13.7 million).
Our commercial franchise, including Hexvix/Cysview and other sales recorded an EBIT of NOK 4.2 million compared to break even last year. Development products had an improvement of EBIT of NOK 2.4 million to NOK -11.4 million.
Net financial items were NOK 0.3 million (NOK 0.7 million) in the first quarter, negatively impacted by unrealized foreign exchange losses in the period.
Photocure recorded a net loss before tax of NOK 7.0 million in the first quarter, an improvement of NOK 6.0 million from last year (loss of NOK 13.0 million).
Photocure had at quarter end 10.1% of the shares in PCI Biotech Holding ASA. The market value of the shareholding was NOK 19.3 million at 31 March 2015, resulting in a positive market value adjustment of NOK 2.7 million for the quarter.
Net cash flow from operations was negative NOK 11.9 million in the first quarter (NOK -18.7 million), reflecting improved results from last year and negative effects of working capital in line with last year. Net cash flow from investments was negative NOK 3.6 million. This includes investments of NOK 5.3 million in the initiation of a phase 3 postmarketing commitment trial.
Cash and cash equivalents were NOK 150 million at 31 March 2015. First quarter net change in cash was negative NOK 15.5 million compared to last year negative NOK 17.5 million.
Shareholders' equity was NOK 233 million at 31 March 2015, an equity ratio of 90%. At the end of 2014, shareholders' equity was NOK 240 million (89%).
As of 31 March 2015, Photocure held 35,476 own shares.
Photocure is exposed to risk and uncertainty factors, which may affect some or all of the company's activities. Photocure has financial risk, market risk as well as operational risk and risk related to development of new products.
The most important risks the company is exposed to for 2015 are associated with market development for Hexvix/Cysview, progress of outlicensing activities, as well as financial risks related to interest rates, liquidity and currency fluctuations.
There are no significant changes in the risks and uncertainty factors compared to the descriptions in the Annual Report for 2014.
Photocure expects revenues to continue to grow in 2015 driven by an increase of Hexvix/Cysview in-market unit sales of at least 10%.
Photocure has through the Hexvix/Cysview franchise built considerable experience in the urology sector. The Company will in 2015 explore strategic alternatives to capitalize on its strength in the sector, and expand the Hexvix/Cysview franchise into the bladder cancer surveillance market with the initiation of a phase 3 postmarketing commitment trial. The Company expects this trial to cost USD 8.5 million over 3 years, of which an estimated USD 2.5 million (NOK 19 million) will be invested in 2015.
Operating expenses are expected to increase moderately due to increased sales and marketing activities supporting increased revenues and activities in the surveillance market.
Photocure is committed to establishing strategic partnerships for its pipeline products and securing regulatory pathways to market access. The Company has submitted the proposed phase 3 protocol for Cevira for a detailed Special Protocol Assessment Review (SPAR) to the FDA in the first quarter of 2015, according to plan.
Oslo, 5 May 2015
Bente-Lill B Romøren Chairperson
Synne H. Røine Tom Pike
Xavier Yon Lars Rønn Kjetil Hestdal President and CEO
| 2015 | 2014 | 2014 | ||
|---|---|---|---|---|
| (all amounts in NOK 1 000 except per share data) | Note | 1Q | 1Q | 1.1-31.12 |
| Sales revenues | 28 369 | 19 511 | 93 586 | |
| Signing fee and milestone revenues | 1 206 | 1 152 | 35 366 | |
| Total revenues | 29 575 | 20 663 | 128 951 | |
| Cost of goods sold | -1 986 | -1 538 | -6 996 | |
| Gross profit | 27 590 | 19 125 | 121 955 | |
| Other income | - | - | - | |
| Indirect manufacturing expenses | 2 | -2 393 | -1 898 | -9 187 |
| Research and development expenses | 2 | -7 105 | -8 730 | -32 554 |
| Marketing and sales expenses | 2 | -17 186 | -14 097 | -54 561 |
| Business development and administrative exp. | 2 | -8 112 | -8 149 | -31 284 |
| Operating expenses | -34 795 | -32 874 | -127 586 | |
| Operating profit/loss(-) | -7 206 | -13 749 | -5 631 | |
| Financial income | 2 529 | 1 393 | 9 787 | |
| Financial expenses | -2 274 | -687 | -2 630 | |
| Net financial profit/loss(-) excluding PCI | 255 | 706 | 7 157 | |
| Profit/loss(-) before PCI and tax | -6 951 | -13 043 | 1 526 | |
| Impairment loss shares in PCI Biotech Holding | - | - | -8 181 | |
| Profit/loss(-) before tax | -6 951 | -13 043 | -6 655 | |
| Tax expenses | 3 | -4 000 | - | -18 047 |
| Net profit/loss(-) | -10 951 | -13 043 | -24 701 | |
| Other comprehensive income | 4 | 2 860 | 15 830 | -7 392 |
| Total comprehensive income | -8 091 | 2 787 | -32 093 | |
| Net profit/loss(-) per share, undiluted | 5 | -0,51 | -0,61 | -1,16 |
| Net profit/loss(-) per share, diluted | 5 | -0,51 | -0,61 | -1,16 |
| (Amounts in NOK 1 000) | Note | 31.03.2015 | 31.03.2014 | 31.12.2014 |
|---|---|---|---|---|
| Non-currrent assets | ||||
| Machinery & equipment | 6 | 2 977 | 3 297 | 3 056 |
| Intangible assets | 6 | 5 094 | 96 | 38 |
| Other investments | 7, 8 | 45 290 | 68 141 | 42 355 |
| Deferred tax asset | 3 | 27 063 | 49 109 | 31 063 |
| Total non-current assets | 80 424 | 120 643 | 76 512 | |
| Current assets | ||||
| Inventory | 13 331 | 12 561 | 13 237 | |
| Receivables | 16 709 | 17 151 | 15 585 | |
| Cash & cash equivalents | 7 | 149 737 | 149 723 | 165 245 |
| Total current assets | 179 777 | 179 435 | 194 067 | |
| Total assets | 260 201 | 300 078 | 270 579 | |
| Equity and liabilities | ||||
| Equity | ||||
| Share capital | 9 | 10 697 | 10 697 | 10 697 |
| Other paid-in capital | 38 694 | 35 726 | 37 801 | |
| Retained earnings | 183 643 | 226 499 | 191 560 | |
| Shareholders' equity | 233 034 | 272 922 | 240 058 | |
| Long-term liabilities | ||||
| Other non-current liabilities | 3 261 | 2 476 | 3 055 | |
| Total long-term liabilities | 3 261 | 2 476 | 3 055 | |
| Current liabilities | 23 906 | 24 680 | 27 466 | |
| Total liabilities | 27 167 | 27 156 | 30 521 | |
| Total equity and liabilities | 260 201 | 300 078 | 270 579 |
| 2015 | 2014 | 2014 | |
|---|---|---|---|
| (Amounts in NOK 1 000) | 1Q | 1Q | 1.1-31.12 |
| Equity at beginning of period | 240 058 | 269 123 | 269 123 |
| Treasury shares, net change | - | - | 686 |
| Share-based compensation (share options employees) | 1 066 | 1 012 | 2 343 |
| Other items | - | - | - |
| Comprehensive income | -8 091 | 2 787 | -32 093 |
| Equity at end of period | 233 034 | 272 922 | 240 059 |
| 2015 | 2014 | 2014 | |
|---|---|---|---|
| (Amounts in NOK 1 000) | 1Q | 1Q | 1.1-31.12 |
| Profit/loss(-) before tax | -6 951 | -13 043 | -6 655 |
| Depreciation and amortisation | 591 | 373 | 1 469 |
| Gain sale of financial asets | -1 342 | - | - |
| Impairment loss shares | - | - | 8 181 |
| Share-based compensation | 1 066 | 1 012 | 2 343 |
| Net interests | -590 | -1 216 | -4 138 |
| Changes in working capital | -4 775 | -5 631 | -497 |
| Other operational items | 104 | -157 | -6 791 |
| Net cash flow from operations | -11 897 | -18 662 | -6 089 |
| Machinery & equipment investment | -236 | -90 | -748 |
| Intangible asset investment | -5 308 | - | - |
| Received financial payments | 1 932 | 1 216 | 4 138 |
| Cash flow from investments | -3 612 | 1 126 | 3 390 |
| Cash flow from financing activities | - | - | 686 |
| Net change in cash during the period | -15 509 | -17 536 | -2 013 |
| Cash & cash equivalents at beginning of period | 165 245 | 167 258 | 167 258 |
| Cash & cash equivalents at end of period | 149 737 | 149 723 | 165 245 |
Photocure has evaluated the group use of segments in the reporting to align internal and external reporting. Based on this the group has decided to change the segment reporting from 2015. The new segment structure is Commercial franchise and Development portfolio. Commercial franchise includes Hexvix /Cysview by sales channel, own sales and partner sales, and other sales, currently including sale of active ingredients. Development portfolio is split by development of commercial products and pipeline products.
The change is implemented from first quarter 2015. Segment reporting for 2014 has been restated to comply with new structure.
| 1 Jan - 31 March 2015 | Commercial Products | Development products | ||||||
|---|---|---|---|---|---|---|---|---|
| (Amounts in NOK 1 000) | Hex/Cys | Hexvix | Other | Total | Hex/Cys | Total | Grand | |
| Own sales | Partner | Sales | Sales | Develop. | Pipeline | R&D | Total | |
| Sales Revenues | 12 836 | 13 853 | 1 680 | 28 369 | - | - | - | 28 369 |
| Milestone revenues | - | - | 1 206 | 1 206 | - | - | - | 1 206 |
| Cost of goods sold | -565 | -1 420 | - | -1 985 | - | - | - | -1 985 |
| Gross profit | 12 271 | 12 433 | 2 886 | 27 590 | - | - | - | 27 590 |
| Gross profit of sales % | 96 % | 90 % | 100 % | 93 % | 93 % | |||
| R&D | - | - | - | - | -1 544 | -5 560 | -7 105 | -7 105 |
| Sales & marketing | -14 420 | -2 127 | - | -16 547 | - | -639 | -639 | -17 186 |
| Other & allocations | -2 850 | -3 873 | -149 | -6 871 | -756 | -2 878 | -3 634 | -10 505 |
| Operating expenses | -17 269 | -6 000 | -149 | -23 418 | -2 300 | -9 077 | -11 377 | -34 796 |
| Operating profit/loss (-) | -4 998 | 6 433 | 2 736 | 4 171 | -2 300 | -9 077 | -11 377 | -7 206 |
| 1 Jan - 31 March 2014 | Commercial Products | Development products | ||||||
|---|---|---|---|---|---|---|---|---|
| (Amounts in NOK 1 000) | Hex/Cys | Hexvix | Other | Total | Hex/Cys | Total | Grand | |
| Own sales | Partner | Sales | Sales | Develop. | Pipeline | R&D | Total | |
| Sales Revenues | 8 907 | 10 427 | 177 | 19 511 | - | - | - | 19 511 |
| Milestone revenues | - | - | 1 152 | 1 152 | - | - | - | 1 152 |
| Cost of goods sold | -496 | -1 042 | - | -1 538 | - | - | - | -1 538 |
| Gross profit | 8 411 | 9 385 | 1 329 | 19 125 | - | - | - | 19 125 |
| Gross profit of sales % | 94 % | 90 % | 100 % | 92 % | 92 % | |||
| R&D | - | - | - | - | -852 | -7 789 | -8 641 | -8 641 |
| Sales & marketing | -11 995 | -1 160 | - | -13 155 | - | -942 | -942 | -14 097 |
| Other & allocations | -2 709 | -3 030 | -216 | -5 956 | -406 | -3 774 | -4 181 | -10 136 |
| Operating expenses | -14 704 | -4 191 | -216 | -19 111 | -1 258 | -12 505 | -13 763 | -32 874 |
| Operating profit/loss (-) | -6 293 | 5 194 | 1 113 | 14 | -1 258 | -12 505 | -13 763 | -13 749 |
| Development products | |||
|---|---|---|---|
| Hex/Cys | Total | Grand | |
| Develop. | Pipeline | R&D | Total |
| 19511 | |||
| 1 152 | |||
| $-1538$ | |||
| 19 125 | |||
| 92 % | |||
| $-852$ | $-7789$ | $-8641$ | $-8641$ |
| $-942$ | $-942$ | $-14097$ | |
| $-406$ | $-3774$ | $-4181$ | $-10136$ |
| $-1258$ | $-12505$ | $-13763$ | $-32874$ |
| $-1258$ | $-12505$ | $-13763$ | $-13749$ |
| 1 Jan - 31 December 2014 | Commercial Products | Development products | ||||||
|---|---|---|---|---|---|---|---|---|
| (Amounts in NOK 1 000) | Hex/Cys | Hexvix | Other | Total | Hex/Cys | Total | Grand | |
| Own sales | Partner | Sales | Sales | Develop. | Pipeline | R&D | Total | |
| Sales Revenues | 45 693 | 46 320 | 1 572 | 93 585 | - | - | - | 93 585 |
| Milestone revenues | - | - | 4 612 | 4 612 | - | 30 754 | 30 754 | 35 366 |
| Cost of goods sold | -2 175 | -4 821 | - | -6 996 | - | - | - | -6 996 |
| Gross profit | 43 519 | 41 499 | 6 184 | 91 201 | - | 30 754 | 30 754 | 121 955 |
| Gross profit of sales % | 95 % | 90 % | 100 % | 93 % | 93 % | |||
| R&D | - | - | - | - | -4 088 | -28 467 | -32 555 | -32 555 |
| Sales & marketing | -46 186 | -4 555 | - | -50 741 | - | -3 819 | -3 819 | -54 560 |
| Other & allocations | -10 826 | -12 889 | -838 | -24 553 | -1 552 | -14 367 | -15 919 | -40 473 |
| Operating expenses | -57 012 | -17 444 | -838 | -75 295 | -5 640 | -46 653 | -52 293 | -127 587 |
| Operating profit/loss (-) | -13 494 | 24 055 | 5 346 | 15 907 | -5 640 | -15 899 | -21 539 | -5 632 |
Photocure ASA is a public limited company domiciled in Norway. The business of the Group is associated with research, development, production, distribution, marketing and sales of pharmaceutical products and related technical medical equipment. The Company's shares are listed on the Oslo Stock Exchange. The Company's registered office is Hoffsveien 4, NO-0275 Oslo, Norway.
Photocure Group (Photocure) comprises Photocure ASA and the wholly owned subsidiary Photocure Inc. that is a US registered company.
These condensed interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. These interim financial statements should be read in conjunction with the consolidated financial statements for the year ended 31 December 2014 (the Annual Financial Statements) as they provide an update of previously reported information. The accounting policies used are consistent with those used in the Annual Financial Statements. The presentation of the interim financial statements is consistent with the Annual Financial Statements. The interim report has not been subject to an audit. The Board of Directors approved the interim financial statements on 5 May 2015.
Photocure has Norwegian kroner (NOK) as its functional currency and presentation currency. In the absence of any statement to the contrary, all financial information is reported in whole thousands. As a result of rounding adjustments, the figures in the financial statements may not add up to the totals.
The new and amended standards and interpretations from IFRS that were adopted by the EU with effect from 2015 did not have any significant impact on the reporting in 2015. Photocure has not chosen an early implementation of any new or amended IFRS's or IFRIC interpretations.
Preparation of the accounts in accordance with IFRS requires the use of judgment, estimates and assumptions that have consequences for recognition in the balance sheet of assets and liabilities, the estimation of contingent liabilities and recorded revenues and expenses. The use of estimates and assumptions is based on the best discretionary judgment of the Group management.
| 2015 | 2014 | 2015 | 2014 | |
|---|---|---|---|---|
| (Amounts in NOK 1 000) | 1Q | 1Q | 1.1-31.03 | 1.1-31.12 |
| Sales revenues | 28 369 | 19 511 | 28 369 | 93 586 |
| Signing fees and milestone revenues | 1 206 | 1 152 | 1 206 | 35 366 |
| Cost of goods sold | -1 986 | -1 538 | -1 986 | -6 996 |
| Gross profit | 27 590 | 19 125 | 27 590 | 121 955 |
| Other income | - | - | - | - |
| Payroll expenses | -21 250 | -20 056 | -21 250 | -73 008 |
| R&D costs excl. payroll expenses/other operating exp. | -3 244 | -3 538 | -3 244 | -15 197 |
| Ordinary depreciation and amortisation | -595 | -373 | -595 | -1 469 |
| Other operating expenses | -9 707 | -8 907 | -9 707 | -37 912 |
| Total operating expenses | -34 795 | -32 874 | -34 795 | -127 586 |
| Operating result | -7 206 | -13 749 | -7 206 | -5 631 |
| (Amounts in NOK 1 000) | 31.03.2015 | 31.12.2014 |
|---|---|---|
| Income tax expense | ||
| Tax payable | ||
| Changes in deferred tax | 4 000 | 18 047 |
| Total income tax expense | 4 000 | 18 047 |
| Tax base calculation | ||
| Profit before income tax | -6 950 | -6 653 |
| Permanent differences | 1 300 | 10 636 |
| Temporary differences | -9 977 | -7 148 |
| Utilisation of tax loss carried forward | -4 762 | -61 610 |
| Increase tax loss carried forward | 20 389 | 64 775 |
| Tax base | 0 | 0 |
| Temporary differences: | ||
| Total | -138 457 | -130 092 |
| Tax loss carried forward | 410 931 | 407 756 |
| Net temporary differences | 272 474 | 277 664 |
| Write down of deferred tax benefit | -172 241 | -162 614 |
| Deferred tax benefit | 100 233 | 115 050 |
| Deferred tax asset | 27 063 | 31 064 |
The Company has recognized a deferred tax asset regarding net temporary differences in the parent company in Norway but not for the subsidiary Photocure Inc. The parent company has a profit before tax in 2014 of NOK 66.5 million and a profit of NOK 13.8 million as of end March 2015 to be utilized by the tax loss carried forward in Norway. The deferred tax asset is of this reason decreased by NOK 18.0 million as of 31 December 2014 to NOK 31.1 million and decreased by NOK 4 million as of end March 2015 to NOK 27.1 million. The basis for the recognition is the assessment that it is more-likely-than-not that the deferred tax benefit will be utilized. There is no expiry on losses to be carried forward in Norway while it expires after 20 years in US.
| 2015 | 2014 | 2015 | 2014 | |
|---|---|---|---|---|
| (Amounts in NOK 1 000) | 1Q | 1Q | 1.1-31.03 | 1.1-31.12 |
| Market value adjustment PCI Biotech Holding ASA | 2 715 | 15 278 | 2 715 | -7 884 |
| Currency translation | 146 | 551 | 146 | 491 |
| Total other comprehensive income | 2 860 | 15 830 | 2 860 | -7 392 |
Items may be subsequently reclassified to profit or loss.
Earnings per share (EPS) are calculated on the basis of the profit/loss for the year after tax excluding other comprehensive items. The result is divided by weighted average number of outstanding shares over the year, reduced by acquisition of treasury shares. The diluted earnings per share is calculated by adjusting the average number of outstanding shares by the number of employee options that can be exercised. Anti-dilution effects are not taken into consideration.
| (Figures indicate the number of shares) | 31.03.2015 | 31.12.2014 |
|---|---|---|
| Ordinary shares 1 January | 21 393 301 | 21 393 301 |
| Effect of treasury shares | -35 476 | -72 154 |
| Effect of share options exercised | - | - |
| Weighted average number of shares | 21 357 825 | 21 321 147 |
| Effect of outstanding share options | 51 437 | 15 618 |
| Weighted average number of diluted shares | 21 409 262 | 21 336 765 |
| Earnings per share in NOK | -0,51 | -1,16 |
| Earnings per share in NOK diluted | -0,51 | -1,16 |
| Machinery & | |||
|---|---|---|---|
| (Amounts in NOK 1 000) | equipment | Intangible | |
| Net book value 12.31.14 | 3 056 | 38 | |
| Net investments Q1/15 | 281 | 5 291 | |
| Depreciation and amortization Q1/15 | -360 | -234 | |
| Net book value 03.31.15 | 2 977 | 5 094 |
Photocure has from 2015 capitalized a new clinical study for Cysview in US and a project for new solvent device
| (Amounts in NOK 1 000) | 31.03.2015 | 31.12.2014 |
|---|---|---|
| Market value PCI Biotech Holding ASA | 19 283 | 16 569 |
| Booked part of remaining settlement from sale of | ||
| Metvix/Aktilite | 26 007 | 25 786 |
| Total other investments | 45 290 | 42 355 |
The table below analyses financial assets recognized in the balance sheet at fair value according to the valuation method.
The different levels have been defined as follows:
| Market value hierarchy | ||||
|---|---|---|---|---|
| (Amounts in NOK 1 000) | Level 1 | Level 2 | Level 3 | Total |
| Financial assets available for sale: | ||||
| - Shares in PCI Biotech Holding ASA | 19 283 | - | - | 19 283 |
| - Money market funds | 134 958 | - | - | 134 958 |
| Total | 154 241 | - | - | 154 241 |
Registered share capital in Photocure ASA amounts to:
| No. of shares | Nominal value per share |
Share capital in NOK |
|
|---|---|---|---|
| Share capital at 31 March 2015 | 21 393 301 | NOK 0.50 | 10 696 651 |
| Share capital at 31 December 2014 | 21 393 301 | NOK 0.50 | 10 696 651 |
| Treasury shares: | |||
| Holdings of treasury shares at 31 December 2014 | 35 476 | 17 738 | |
| Buy-back of treasury shares | - | NOK 0.50 | - |
| Share option exercise | - | NOK 0.50 | - |
| Holdings of treasury shares at 31 March 2015 | 35 476 | 17 738 |
The table below indicates the status of authorizations at 31 March 2015:
| (Figures indicate the number of shares) | Purchase, treasury shares |
Ordinary share issue |
Employee share issues |
|---|---|---|---|
| Authorisation issued at the General Meeting on 27 May 2014 | 2 139 330 | 2 139 330 | 800 000 |
| Share issues after the General Meeting on 27 May 2014 | - | - | - |
| Purchase of treasury shares | - | - | - |
| Remaining under authorisations at 31 March 2015 | 2 139 330 | 2 139 330 | 800 000 |
Shares owned, directly or indirectly, by members of the board, the President and CEO and senior management and their closely related associates as of 31 March 2015:
| No. of | |||
|---|---|---|---|
| No. of | subscription | ||
| Name | Position | shares | rights |
| Kjetil Hestdal | President and CEO | 103 873 | 166 000 |
| Ambaw Bellete | Head, US Cancer Commercial Operations | - | 54 100 |
| Erik Dahl | Chief Financial Officer | - | 69 000 |
| Kathleen Deardorff | Chief Operating Officer | - | 135 095 |
| Inger Ferner Heglund | Vice President Research and Development | 8 200 | 104 930 |
| Grete Hogstad | Vice President Strategic Marketing | 10 500 | 97 450 |
| Espen Njåstein | Head, Nordic Cancer Commercial Operations | - | 57 650 |
| Gry Stensrud | Vice President Technical Development & Operations | 6 | 106 100 |
At 31 March 2015, employees in Photocure had the following share option schemes:
| Year of allocation | |||||
|---|---|---|---|---|---|
| 2015 | 2014 | 2012/2013 | 2012 | 2011 | |
| Option programme | 2015 | 2014 | 2012 | 2011 | 2010 |
| Number | 407 700 | 285 000 | 290 443 | 283 694 | 239 300 |
| Exercise price (NOK) | 32,78 | 27,39 | 38,50 | 48,75 | 42,00 |
| Date of expiry (31 December) | 2019 | 2018 | 2017 | 2016 | 2015 |
The number of employee options and average exercise prices for Photocure, and developments during the year:
| 31.03.2015 | 31.12.2014 | |||
|---|---|---|---|---|
| Average exercise price |
Average exercise price |
|||
| No. of shares | (NOK) | No. of shares | (NOK) | |
| Outstanding at start of year | 1 153 312 | 39,05 | 1 013 637 | 41,14 |
| Allocated during the year | 407 700 | 32,78 | 326 000 | 27,39 |
| Become invalid during the year | 54 875 | 39,60 | 107 575 | 38,52 |
| Exercised during the year | - | - | 37 500 | 18,30 |
| Expired during the year | - | - | 41 250 | 18,30 |
| Outstanding at end of period | 1 506 137 | 37,34 | 1 153 312 | 39,05 |
| Exercisable options at end of period | 1 139 337 | 39,25 | 852 631 | 41,84 |
Average exercise price for allocated, invalid, outstanding and exercisable options are all adjusted for paid dividend of NOK 2.00 in 2013.
Overview of the major shareholders at 31 March 2015:
| Account | ||||
|---|---|---|---|---|
| Shareholder | type | Citizen | No of shares | % |
| J.P. MORGAN CHASE BANK N.A. LONDON | NOM | GBR | 2 957 334 | 13,82 % |
| RADIUMHOSPITALETS FORSKNINGSSTIFTELSE | NOR | 2 029 000 | 9,48 % | |
| FONDSFINANS SPAR | NOR | 1 705 000 | 7,97 % | |
| KLP AKSJE NORGE VPF | NOR | 1 274 356 | 5,96 % | |
| KOMMUNAL LANDSPENSJONSKASSE | NOR | 950 000 | 4,44 % | |
| MP PENSJON PK | NOR | 850 000 | 3,97 % | |
| SKAGEN VEKST | NOR | 626 466 | 2,93 % | |
| BERGEN KOMMUNALE PENSJONSKASSE | NOR | 500 000 | 2,34 % | |
| DANSKE INVEST NORSKE INSTIT. II. | NOR | 422 703 | 1,98 % | |
| VERDIPAPIRFONDET EIKA NORGE | NOR | 406 517 | 1,90 % | |
| DANSKE INVEST NORSKE AKSJER INST | NOR | 360 714 | 1,69 % | |
| FONDSFINANS FARMASI | NOR | 352 000 | 1,65 % | |
| VICAMA AS | NOR | 345 384 | 1,61 % | |
| VERDIPAPIRFONDET DNB SMB | NOR | 312 418 | 1,46 % | |
| HOLMEN SPESIALFOND | NOR | 300 000 | 1,40 % | |
| VERDIPAPIRFONDET DNB NORGE (IV) | NOR | 287 193 | 1,34 % | |
| RUL AS | NOR | 281 475 | 1,32 % | |
| ARTAL AS | NOR | 254 639 | 1,19 % | |
| POLAR CAPITAL GLOBAL HSBC BANK PLC. | GBR | 254 537 | 1,19 % | |
| SVENSKA HANDELSBANKEN | SWE | 250 000 | 1,17 % | |
| Total 20 largest shareholders | 14 719 736 | 68,81 % | ||
| Total other shareholders | 6 673 565 | 31,19 % | ||
| Total number of shares | 21 393 301 | 100,00 % |
Kjetil Hestdal, President and CEO Mobile: +47 913 19 535 E-mail: [email protected]
Erik Dahl, CFO Mobile: +47 450 55 000 E-Mail: [email protected]
Hoffsveien 4 NO – 0275 Oslo Norway Telephone: +47 22 06 22 10 Fax: +47 22 06 22 18
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.