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Moberg Pharma

Interim / Quarterly Report May 11, 2021

3174_10-q_2021-05-11_c115d8c7-8abf-46c0-b901-167876684d32.pdf

Interim / Quarterly Report

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Interim report January – March 2021

Moberg Pharma AB (Publ)

REGISTRATION PREPARATIONSFULLY UNDERWAY

"Registration preparations for MOB‐015 are progressing at full speed, including recently received final comments on our pediatric plan from EMA. We remain on plan to submit the registration application in Europe in the second half of 2021. The spin‐off of BUPI was completed through the IPO of OncoZenge in February" says Anna Ljung, CEO of Moberg Pharma.

FIRST QUARTER (JAN‐MAR 2021)

  • EBITDA SEK ‐5.4 million (‐3.6) *
  • Operating profit (EBIT) SEK ‐6.1 million (‐4.2) *
  • Profit after tax SEK ‐5.0 million (‐3.4) *
  • Total profit SEK 18.6 million (‐3.4)
  • Diluted earnings per share SEK 0.46 (‐0.18) *
  • Cash and cash equivalents amounted to SEK 133.6 million (51.6)
  • Cash and cash equivalents SEK 142 million adjusted for effects of OncoZenge divestment (reversed in Q2)

* All comparative figures refer to continuing operations

SIGNIFICANT EVENTS IN THE FIRST QUARTER

  • A patent was granted for MOB‐015 in India, adding to previously granted patents in major markets such as the U.S., Canada, the EU, China and Japan. Patent term until 2032.
  • Moberg Pharma's rights issue of SEK 150 million was carried out and registered. The rights issue was approved by the Extraordinary General Meeting in December 2020 and was fully subscribed without issue guarantees.
  • The Lex Asea distribution of OncoZenge shares was completed. Ten ordinary shares in Moberg Pharma entitled one share in OncoZenge AB. OncoZenge was listed with February 12 as the first day of trading on Nasdaq First North Growth Market.
  • OncoZenge was granted a new European patent for BUPI. The new patent provides broad protection for sustained‐ release lozenges containing bupivacaine, for treatment or alleviation of pain in the oral cavity, and is based on a previously granted patent providing protection for pain treatment of oral mucositis in cancer patients.

SIGNIFICANT EVENTS AFTER THE FIRST QUARTER

On April 19, 2021, the Nomination Committee proposed Nikolaj Sörensen, President and CEO of Orexo, as a new member of the Board of Directors.

Conference call – May 11, 2021 at 3:00 p.m. CET

CEO Anna Ljung will present the report at a telephone conference on May 11, 2021 at 3:00 p.m. CET.

Dial‐in: SE: +46 8 566 427 03, US: +1 833 823 0586

2

STATEMENT FROM THE CEO

Registration preparations for MOB‐015 are progressing at full speed, including recently received final comments on our pediatric plan from EMA, compilation of a single safety database with data from all MOB‐015 studies and development of the product label in collaboration with our partners. We remain on plan to submit the registration application in Europe in the second half of 2021.

Preparations for registration in Europe are fully underway, based on two Phase 3 studies that combined included more than 800 patients. Since the primary endpoint was reached in both the North American and European studies, we are using this data as the basis for product registration in Europe. We intend to choose a registration route that offers the possibility of valuable data exclusivity for up to 10 years following market approval, which means that regulatory approval of a pediatric plan will be the determining factor when we can submit the registration application. We have recently received final comments on our pediatric plan from the EMA and see a good chance of coming to agreement with authorities on a realistic pediatric plan with a clinical study including a limited number of children. We expect a final decision from the EMA's Paediatric Committee this autumn. After discussions with authorities, we feel there is a strong likelihood that we can utilize this registration route and obtain data exclusivity. Regardless of the outcome of the pediatric plan, we intend to submit a registration application in Europe in the second half of the year, notwithstanding data exclusivity, since we have strong IP protection by the granted patents for MOB‐015. We expect the registration application to be granted within 18 months after submission, which means that MOB‐015 could be launched in Europe by the end of 2023.

Regarding intellectual property rights, we were recently granted a patent in India, adding to previously granted patents in all 38 member states of the European Patent Office (EPO), the U.S., Canada, Japan, China, the Republic of Korea and eight other countries. We also added a number of approvals to our trademark portfolio during the quarter. Our branding strategy includes securing global trademark and domain protection for five separate trademark families. The trademarks are required for registration application in various countries, but we also see opportunities for our own trademark in certain markets to complement our partners' established trademarks in other regions or markets.

In February, BUPI was spun off via a distribution of shares in OncoZenge to Moberg Pharma's shareholders and a successful IPO of OncoZenge on Nasdaq First North Growth Market which provided visibility of the value of the BUPI project. In connection with the listing, OncoZenge secured SEK 70 million in capital to conduct a registration study in Europe. The spin‐off also resulted in a positive earnings effect of SEK 24 million, which is included in the total profit for Moberg Pharma in Q1 of SEK 19 million.

Altogether, I am very pleased with the team and progress made in the quarter. It is a significant commitment for a small company to get a new medication to market approval in multiple markets, and it is gratifying to see how the pieces are getting into place for the EU submission. Based on two completed phase 3 studies, MOB‐015 has significant opportunity to create value at limited risk, which over time will provide increasing awareness of the potential within Moberg Pharma. I look forward to an exciting year!

Anna Ljung, CEO of Moberg Pharma

ABOUT MOBERG PHARMA AND MOB‐015

Moberg Pharma's goal is to make MOB‐015 the leading treatment for nail fungus globally and to build a specialty pharmaceutical company with direct sales in the U.S. and sales through partners in other markets. With MOB‐015 as the lead product, the company intends to expand the portfolio with additional acquired or developed products in adjacent areas.

MOB‐015 is a next‐generation treatment for onychomycosis (nail fungus). The high antifungal effect (70‐84% mycological cure) demonstrated in two clinical Phase 3 studies, in total including more than 800 patients, indicates that the product has the potential to become the future market leader in nail fungus. License agreements are in place with partners in Europe, Japan, Canada and the Republic of Korea for MOB‐015. The annual sales potential for MOB‐015 is estimated at USD 250–500 million.

SIGNIFICANT MEDICAL NEED – MORE THAN 100 MILLION NAIL FUNGUS PATIENTS IN THE EU AND U.S.

Despite that one out of every ten people suffers from nail fungus, there currently are no good treatment alternatives available. The most effective treatment is oral terbinafine, which is associated with the risk of liver damage and interaction with other drugs. Dermatologists around the world agree on the great need for better topical treatments without the risk of systemic side effects. In a U.S. survey, 72% of responding physicians avoid prescribing oral terbinafine due to their patients' concern about side effects, and 62% would prefer a product with MOB‐015's intended target profile to current topical treatments. Only 6‐ 15% of responding physicians would continue to prescribe current topical treatments.1

1 Survey of 89 U.S. physicians (dermatologists and podiatrists), LifeSci Physician Survey, April 4, 2017

RESULTS FROM THE TWO PHASE 3 STUDIES SHOW THAT MOB‐015 HAS UNIQUE ANTIFUNGAL EFFECT

In December 2019, the results were presented from the first of two clinical studies in the Phase 3 program for MOB‐015, followed by the results of the European study in June 2020. Both studies met the primary endpoint. Mycological cure (eradicating the fungal infection) was achieved in 70 percent of the patients in the North American study and 84 percent of the patients in the European study, which is substantially higher than reported for other topical treatments (30‐54 percent). Furthermore, the onset of the antifungal effect is more rapid than for oral terbinafine, with

MOB‐015 delivering 55–78 percent mycological cure at 6 months (vs 40 percent for oral terbinafine) and 37–46 percent already at 3 months (vs 15 percent for oral terbinafine).

MOB‐015 is the first topical treatment with a mycological cure rate on par with oral terbinafine, the current gold standard for treatment of onychomycosis. Before the recently completed clinical Phase 3 studies with MOB‐015, it appeared unrealistic that a topical treatment would achieve a mycological cure rate of 70 percent. Furthermore, compared to oral terbinafine, MOB‐015 is delivering a 1000x higher concentration of terbinafine in the nail, 40x higher in the nail bed and 1000X lower in plasma. These are ideal characteristics of an efficacious topical drug with no systemic exposure.

TARGETING EU LAUNCH IN 2023

In October 2020, the company announced that it had decided to request pre‐submission meetings with regulatory authorities, with the goal of submitting a registration application in the second half of 2021 in Europe. With an expected processing time of about 18 months, this means possible approval in early 2023 and launch in Europe by the end of 2023. After the European meetings, Moberg Pharma also intends to discuss the next step for the U.S. market in an advice meeting with the FDA. For market approval in the U.S., the FDA normally requires two studies that demonstrate superiority (statistically superior to the comparator) for the primary endpoint. Consequently, an additional study is likely needed for registration in the U.S. market.

AGREEMENTS WITH STRONG PARTNERS IN PLACE – U.S. RIGHTS RETAINED

In total, four agreements are in place with commercial partners for MOB‐015: with Cipher Pharmaceuticals for Canada; Taisho in Japan; DongKoo, the market leader in dermatology in the Republic of Korea; and the Consumer Health division of Bayer AG, a world leader in OTC fungus treatments with the brand Canesten, for Europe.

The agreements give these partners exclusive rights to market and sell MOB‐015 in each respective market, while Moberg Pharma assumes production and supply responsibility. Within the framework of the agreements Moberg Pharma can receive milestone payments of up to a total USD 120 million upon successful development and commercialization, in addition to royalties and compensation for delivered products.

Moberg Pharma has a successful track record of commercializing products in the U.S., and has therefore retained the U.S. rights to MOB‐015. The company intends to repeat the journey with Kerasal Nail®, where Moberg Pharma combined direct sales in the U.S. with strategic collaborations in other major territories. The most important markets for MOB‐015 are expected to be the U.S., EU, Japan, Canada and China, all with patent protection until 2032.

PROVEN COMMERCIAL MODEL

Moberg Pharma commercialized its first‐generation nail fungus product – Kerasal Nail® ‐ and built an OTC business with annual revenue of SEK 440 million, reaching 30% market share in the U.S. and sold at more than 30,000 sales locations, including at the major chains CVS, Walgreens and Walmart. In 2019, the OTC business was successfully divested for SEK 1.4 billion. The company' aim is now to repeat this journey with MOB‐015, a product with much greater potential.

SPIN‐OFF OF BUPI AND IPO OF THE COMPANY ONCOZENGE COMPLETED

In November 2020, Moberg Pharma announced that the BUPI project (BupiZenge) had been transferred to the subsidiary OncoZenge AB (publ), which in turn was distributed to Moberg Pharma's shareholders and listed separately on Nasdaq First North Growth Market in February 2021. The BUPI project was accounted for at fair value at the time of distribution and is shown as a separate item in Note 2 for discontinued operations.

FINANCIAL OVERVIEW

REVENUES AND PROFIT

First quarter (January ‐ March 2021)

Moberg Pharma's operations consist of research and development, business development and administrative functions. The majority of the development expenditure incurred is directly attributable to the development project MOB‐015 and is capitalized. The largest expense items in the quarter therefore consist of business development and administration expenses of SEK 5.7 million (6.8), followed by research and development expenses of SEK 1.2 million (2.6).

The comparative figures in the consolidated income statement show the impact on earnings of the divested BUPI project as a separate item in the consolidated financials. The BUPI project was distributed to the shareholders on February 4, 2021 (Lex ASEA through the subsidiary OncoZenge AB). For the parent company, amounts reported in the income statement have not been separated for continuing operations. A profit and loss account for discontinued operations is presented in Note 2.

CASH FLOW

First quarter (January ‐ March 2021)

Cash flow from operating activities was SEK ‐14.0 million (‐29.3). This figure includes one‐offs tied to the divestment of OncoZenge, which will be reimbursed during Q2 (including VAT outlaid on the transfer of the assets). Cash flow from continuing operations was SEK ‐6 million (‐29.3). Cash flow from investing activities in continuing operations was SEK ‐4.7 million (‐18.2) and relates to capitalized expenditure for development work. Cash flow from financing activities was SEK 133.0 million (25.3) and relates to the issue decided on in December 2020 and registered in January 2021. The total change in cash and cash equivalents in the quarter was SEK 104.3 million (‐25.9). Cash and cash equivalents amounted to SEK 133.6 million (893.2) at the end of the period. Cash and cash equivalents adjusted for one‐offs from the OncoZenge divestment (will be reversed in Q2) amount to SEK 142 million.

INVESTMENTS

Investments in intangible assets in the quarter relate to capitalized expenses for R&D work of SEK 4.6 million (18.2) for MOB‐ 015.

R&D expenses (costs and investments) Jan‐Mar Jan‐Mar Jul 2019 ‐
(SEK thousand) 2021 2020 Dec 2020
R&D expenses (in statement of comprehensive income) ‐1,207 ‐1 148 ‐8,304
Capitalized R&D investments ‐4,679 ‐12,005 ‐62,130
Depreciation/amortization booked to R&D expenses 384 343 2,357
Change in R&D investments (in statement of financial position) ‐4,295 ‐11,662 ‐59,773
Total R&D expenditure ‐5,502 ‐12,810 ‐68,077

LIABILITIES

As at the balance sheet date, the Group has no interest‐bearing liabilities.

CHANGES IN EQUITY

SHARES

Share capital at the end of the period was SEK 4,460,143, where the total number of shares outstanding was 44,601,425 ordinary shares with a quotient value of SEK 0.10. Moberg Pharma holds 554,746 repurchased ordinary shares at the end of the period.

A rights issue was approved by the Extraordinary General Meeting on December 1, 2020. The rights issue was fully subscribed and in January 2021 Moberg Pharma thereby received approximately SEK 150 million before deducting transaction costs. The rights issue was registered in January 2021 and increased the number of shares and votes by 23,175,576. In January 2021, the number of shares and votes also increased by 1,006,323 ordinary shares due to the decision by the Board of Directors to approve the request by Nice & Green S.A. to convert a number of convertible notes. The above events increased the number of shares and votes to 44,601,425 ordinary shares.

SHAREHOLDER INFORMATION

The company's largest shareholders per March 31, 2021:

Shareholders Number of shares % of votes and capital
ÖSTERSJÖSTIFTELSEN 4,405,943 9.88
FÖRSÄKRINGSAKTIEBOLAGET, AVANZA PENSION2 4,031,768 9.04
BANQUE CANTONALE VAUDOISE, W8IMY 1,866,872 4.19
NORDNET PENSIONSFÖRSÄKRING AB 1,805,473 4.05
LUNDMARK, SVEN ANDERS 784,166 1.76
FORMUE NORD MARKEDSNEUTRAL A/S 703,114 1.58
ABN AMRO GLOBAL CUSTODY SERVICES NV, W8IMY 676,138 1.52
U.S. BANK NATIONAL ASSOCIATION, W9 660,843 1.48
PENSION, FUTUR 566,993 1.27
MOBERG PHARMA AB3 554,746 1.24
MIÖEN, JENS CHRISTIAN 507,221 1.14
ATTERKVIST, STELLAN 410,000 0.92
ÖHRN, MARTIN LENNART 367,647 0.82
GUNNARSSON, MIKAEL 340,000 0.76
BALTICUM, INVESTMENT AB 266,666 0.6
SWEDBANK FÖRSÄKRING 236,062 0.53
GAMLA LIVFÖRSÄKRINGSAKTIEBOLAGET, SEB TRYGG LIV 235,697 0.53
BERG, NILS GUSTAF ERIK 235,507 0.53
SAXO BANK A/S CLIENT ASSETS 227,322 0.51
PERSSON, JAN CHRISTER 223,678 0.5
TOTAL, 20 LARGEST SHAREHOLDERS 19,105,856 42.9
Other shareholders 25,495,569 57.2
TOTAL 44,601,425 100

SHARE‐BASED COMPENSATION PLANS

As of March 31, 2021, the number of outstanding instruments was 85,854 employee stock warrants and 351,404 performance share units4 . If all employee stock warrants were exercised, the total number of shares would increase by 85,854. Performance

2 Includes 435,399 shares owned by the company's Chairman, Peter Wolpert, through an endowment insurance policy.

3 Repurchased own shares held to satisfy performance share units.

4 The number of performance share units for program 2018:1 is recalculated upon execution to adjust for the payment of SEK 46.50 per share in November 2019.

share units are issued and held in trust, where the actual number of shares that can be transferred varies depending on the share's performance. The exercise price for the option program is SEK 13.00, and the performance share units are linked to the value of the increase in the share price from the date when the performance share units were allocated.5 For detailed information on the incentive programs, see the 2020 Annual Report.

The following table gives an indication of the maximum levels of dilution at different levels of share price:

Instruments granted based on strike price
Share price 10 20 30 40
Number of new shares due to diluting warrants 0 85,854 85,854 85,854
Number of shares allocated by performance share units 123,419 157,590 373,409 367,908
Theoretical dilution 0.3% 0.5% 1.0% 1.0%
Company's market capitalization, SEK million 445 891 1,329 2,216
Gain for instrument holders 6, SEK million 1.2 3.8 12.7 17.0
Actual dilution7 0.3% 0.4% 1.0% 1.0%

PARENT COMPANY

Moberg Pharma AB (publ), corp. reg. no. 556697‐7426, is the parent company of the Group. The operations of the Group are primarily conducted in the parent company and consist of research and development, business development and administrative functions.

For the period January to March 2021, the parent company's net revenue amounted to SEK ‐5.9 million (41.8), while profit after financial items was SEK ‐5.9 million (41.2). Cash and cash equivalents amounted to SEK 133.6 million (893.2) at the end of the period.

OTHER INFORMATION

ORGANIZATION

Per March 31, 2021, Moberg Pharma had 11 employees, of whom 91% were women. All were employees of the parent company.

RISK FACTORS

Commercialization and development of pharmaceuticals are capital‐intensive activities exposed to significant risks. Risk factors considered of particular significance for Moberg Pharma's future development are linked to the results of clinical trials, regulatory actions, patents and trademarks, key personnel, sensitivity to economic fluctuations, future capital requirements, and financial risk factors. A description of these risks can be found in the company's 2020 Annual Report on page 21.

OUTLOOK

Moberg Pharma's goal is to create value and provide attractive shareholder returns through the successful commercialization of its pipeline assets.

In the near term, the focus is on registration preparations for MOB‐015 with the goal of submitting a registration application in the second half of 2021 in Europe. With an expected processing time of about 1.5 years, this means possible approval in early 2023 and launch in Europe by the end of 2023. Moberg Pharma also intends, after pre‐submission meetings have been completed with regulatory authorities in the EU, to discuss the next step for the U.S. market in an advice meeting with the FDA. In parallel with the registration preparations, commercialization preparations are underway to maximize value and create future growth.

5 The redemption price has been recalculated in accordance with the terms of incentive program 2017:1 after payment of SEK 46.50 per share in November 2019.

6 Total pretax gain for warrant holders.

7 Calculated from the gain made by instrument holders through market capitalization at the given share price.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

2021
2020
Dec 2020
(SEK thousand)
Continuing operations

50,488
Net revenue



Cost of goods sold



50,488
Gross profit
Selling expenses

‐158
‐472
‐5,688
‐5,309
,‐32,672
Business development and administrative expenses
‐1,207
‐1,148
‐8,304
Research and development costs
827
2,402
6,968
Other operating income



Other operating expenses
‐6,068
‐4,213
16,008
Operating profit (EBIT)


23
Interest income and similar items
‐88
‐47
‐2,598
Interest expenses and similar items
‐6,156
‐4,260
13,433
Profit after financial items from continuing operations (EBT)
1,206
857
‐3,219
Tax on profit for the period
‐4,950
‐3,403
10,214
PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS
Discontinued operations
Profit after tax for the period from discontinued operations (see
23,589
‐1,575

Note 2)
18,639
‐3,403
8,639
PROFIT FOR THE PERIOD
‐3,403
18,639
8,639
Items that will be reclassified to profit
‐4,950
10,214
Translation differences of foreign operations
‐3,403
Reclassification of translation differences to profit from sale of
23,589
‐1,575

discontinued operations
18,764
,8,798
Profit for the period attributable to parent company shareholders
‐3,403
‐125

‐159
Profit attributable to non‐controlling interests
18,764
‐3,403
8,798
Total profit attributable to parent company shareholders
‐125
‐159
Total profit attributable to non‐controlling interests

0.47
‐0.18
0.47
Basic earnings per share
Diluted earnings per share 8
0.47
0.46
‐0.18
‐0.12
‐0.18
0.54
Basic earnings from continuing operations per share
Diluted earnings from continuing operations per share 9
‐0.12
‐0.18
0.54
‐5,421
‐3,584
19,790
EBITDA FROM CONTINUING OPERATIONS
‐647
‐629
‐3,782
Depreciation/amortization
Jan‐Mar Jan‐Mar Jul 2019 ‐
Operating profit (EBIT) ‐6,068 ‐4,213 16,008

8 In periods when the Group reports a loss, no dilution effect arises. The reason for this is that a dilution effect is only recognized when a potential conversion to ordinary shares would result in lower earnings per share.

9

CONSOLIDATED STATEMENT OF FINANCIAL POSITION IN BRIEF

(SEK thousand) 2021‐03‐31 2020‐03‐31 2020‐12‐31
Assets
Intangible assets 300,412 296,295 295,733
Capitalized Development 9 300,412 289,445 295,733
Patents 6,850
Property, plant and equipment 33 1
Right‐of‐use assets 6,456 8,642 7,102
Deferred tax asset 12,091 4,931 10,930
Total non‐current assets 318,959 309,901 313,766
Trade receivables and other receivables 10,639 7,765 3,010
Subscribed for equity 111,735
Assets held for distribution 32,782
Cash and cash equivalents 133,611 51,616 19,286
Total current assets 144,250 59,381 166,813
TOTAL ASSETS 463,209 369,282 480,579
Equity and liabilities
Equity attributable to parent company's shareholders 445,121 332,630 387,870
Non‐controlling interests 7,707
Total equity 445,121 332,630 395,577
Non‐current leasing liabilities 4,084 6,456 4,753
Non‐current non‐interest‐bearing liabilities 65 65 65
Total non‐current liabilities 4,149 6,521 4,818
Current leasing liabilities 2,656 2,493 2,642
Current non‐interest‐bearing liabilities 11,283 27,638 30,199
Liabilities related to assets held for distribution 2,218
Dividend payable 45,125
Total current liabilities 13,939 30,131 80,184
TOTAL EQUITY AND LIABILITIES 463,209 369,282 480,579

9 For further details, see note 3

CONSOLIDATED STATEMENT OF CASH FLOWS IN BRIEF

Jan‐Mar Jan‐Mar Jul 2019 ‐
(SEK thousand) 2021 2020 Dec 2020
Operating activities
Operating profit before financial items from continuing
operations ‐6,458 ‐4,213 16,008
Operating profit before financial items from discontinued ‐1,983
operations
Operating profit before financial items ‐6,458 ‐4,213 14,025
Financial items, received and paid ‐88 ‐47 ‐3,027
Taxes paid
Adjustments:
Depreciation/amortization and capital gains 647 629 3,782
Employee share‐based adjustments to equity 10 276 202 1,420
Cash flow before changes in working capital ‐5,623 ‐3,429 16,200
Change in working capital
Increase (‐)/Decrease (+) in inventories
Increase (‐)/Decrease (+) in operating receivables ‐1,704 ‐3,598 ‐4,180
Increase (+)/Decrease (‐) in operating liabilities ‐6,645 ‐1,095 ‐27,638
OPERATING CASH FLOW ‐13,972 ‐8,122 ‐15,618
Investing activities
Net investments in intangible assets ‐4,679 ‐4,353 ‐62,130
Net investments in subsidiaries ‐9,999 ‐3,760
CASH FLOW FROM INVESTING ACTIVITIES ‐14,678 ‐4,353 ‐65,890
Financing activities
Issue of loans
Repayment of loans ‐23,642
Repayment of leases ‐655 ‐616 ‐3,614
Payment in the form of redemption procedure ‐837,401
Issue of new shares less transaction costs 133,631 56,316
CASH FLOW FROM FINANCING ACTIVITIES 132,976 ‐616 ‐808,341
Change in cash and cash equivalents 104,326 ‐13,091 ‐889,849
Cash and cash equivalents at beginning of period 29,285 64,707 919,134
Exchange rate differences in cash and cash equivalents
Cash and cash equivalents at the end of period 133,611 51,616 29,28511

10 Note that revaluation of estimated costs for social security contributions for employee stock options is reported in change in operating liabilities.

11 Of which 9 999 thousand SEK relates to cash held by OncoZenge AB which forms part of assets held for distribution

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Share capital Other capital
contributions
Accumulated
profit/loss
Non‐
controlling
Total equity
(SEK thousand) interest
July 1, 2019 – December 31, 2020
Opening balance, July 1, 2019 1,818 555,639 563,573 1,121,030
Total profit
Profit for the period 8,798 ‐159 8,639
Transactions with shareholders
New shares issued 306 43,815 10,050 54,171
Ongoing share issue 1,727 110,008 111,735
Transaction costs ‐16,670 ‐2,184 ‐18,854
Payment in the form of redemption procedure ‐934 ‐836,468 ‐837,402
Payment in the form of subsidiary ‐45,125 ‐45,125
Bonus issue 934 ‐934
Repurchase own shares ‐37 ‐37
Employee stock options 1,420 1,420
CLOSING BALANCE, DECEMBER 31, 2020 3,814 693,278 ‐309,222 7,707 395,577
Share capital Other capital
contributions
Accumulated
profit/loss
Non‐
controlling
Total equity
(SEK thousand) interest
1 January – 31 March 2021
Opening balance, January 1, 2021 3,814 693,278 ‐309,222 7,707 395,577
Total profit
Profit for the period 18,764 ‐125 18,639
Transactions with shareholders
Distribution OncoZenge AB ‐7,582 ‐7,582
New shares issued 591 37,620 38,211
Transaction costs
Employee stock options 276 276
CLOSING BALANCE, MARCH 31, 2021 4,405 731,174 ‐290,458 445,121

KEY RATIOS FOR THE GROUP

Jan‐Mar Jul‐Sep Jul 2019 ‐
(SEK thousand) 2021 2019 Dec 2020
Net revenue * 50,488
EBITDA * ‐5,421 ‐3,584 19,790
Operating profit (EBIT) * ‐6,068 ‐4,213 16,008
Total profit 18,639 ‐3,403 8,639
Cash and cash equivalents 133,611 51,616 19,286
Balance sheet total 463,209 369,282 479,704
Equity/assets ratio 96% 90% 81%
Return on equity 4% neg 2%
Diluted earnings per share, SEK 0.46 ‐0.18 0.46
Equity per share, SEK 10.11 17.82 19.53
Basic average number of shares 40,016,363 18,668,764 18,810,496
Diluted average number of shares 40,393,634 18,760,770 18,922,135
Number of shares at the end of the period excluding
repurchased own shares
44,046,679 18,668,764 19,864,781
Share price on balance sheet date, SEK 5.68 11.90 7.21
Market capitalization balance date, SEK million 250 222 143

*continuing operations

DEFINITIONS OF KEY RATIOS

Moberg Pharma presents certain financial performance measurements in the year‐end report that are not defined in accordance with IFRS. In Moberg Pharma's opinion, these performance measurements provide valuable additional information to investors and company management as they enable an evaluation of the company's performance. These financial performance measurements are not always comparable with those used by other companies since not all companies calculate them in the same manner. Accordingly, these financial measurements are not to be regarded as a replacement for the performance measurements defined in accordance with IFRS.

EBITDA Operating profit before depreciation/amortization and impairment of intangible
assets and property, plant, and equipment
Equity/assets ratio Equity at the end of the period in relation to balance sheet total
Return on equity Profit for the period divided by closing equity
Earnings per share* Profit after tax divided by the diluted average number of shares
Equity per share Equity divided by the number of shares outstanding at the end of the period

* Defined in accordance with IFRS

PARENT COMPANY INCOME STATEMENT SUMMARY

Jan‐Mar Jan‐Mar Jul 2019 ‐
(SEK thousand) 2021 2020 Dec 2020
Net revenue 50,488
Cost of goods sold
Gross profit 50,488
Selling expenses ‐158 ‐472
Business development and administrative expenses ‐5,688 ‐5,309 ‐34,136
Research and development costs ‐1,207 ‐1,148 ‐8,605
Other operating income 1,036 2,402 7,551
Other operating expenses
Operating profit ‐5,859 ‐4,213 14,826
Capital gain from divested subsidiary and similar income 23
Interest expenses ‐88 ‐47 ‐2,598
Profit after financial items ‐5,947 ‐4,260 12,251
Tax on profit for the period 1,161 857 ‐2,976
PROFIT ‐4,786 ‐3,403 9,275

PARENT COMPANY BALANCE SHEET SUMMARY

(SEK thousand) 2021‐03‐31 2020‐03‐31 2020‐12‐30
Assets
Subscribed for equity not yet paid 38,211
Intangible assets 300,412 296,295 295,733
Property, plant and equipment 33 1
Right‐of‐use assets 6,456 8,642 7,102
Non‐current financial assets 100 150 22,151
Deferred tax asset 12,091 4,931 10,930
Total non‐current assets 319,059 310,051 335,917
Trade receivables and other receivables 10,540 7,765 8,931
Subscribed equity 111,735
Cash and cash equivalents 133,611 51,567 19,286
Total current assets 144,151 59,332 139,952
TOTAL ASSETS 463,210 369,383 514,080
Equity and liabilities
Equity 445,122 332,631 449,632
Non‐current interest‐bearing liabilities
Non‐current leasing liabilities 4,084 6,456 4,753
Non‐current non‐interest‐bearing liabilities 65 65 65
Total non‐current liabilities 4,149 6,521 4,818
Liabilities to Group companies 99 99 99
Current leasing liabilities 2,656 2,493 2,642
Current non‐interest‐bearing liabilities 11,184 27,639 34,837
Dividend payable at book value 22,052
Total current liabilities 13,939 30,231 59,630
TOTAL EQUITY AND LIABILITIES 463,210 369,383 514,080

PARENT COMPANY CASH FLOW STATEMENT SUMMARY

Jan‐Mar Jan‐Mar Jul 2019 ‐
(SEK thousand) 2021 2020 Dec 2020
Operating activities
Operating profit before financial items ‐5,859 ‐4,213 14,826
Financial items, received and paid ‐88 ‐47 ‐3,027
Adjustments:
Depreciation/amortization and capital gains 647 629 3,782
Employee share‐based adjustments to equity 276 203 1,420
Cash flow before changes in working capital ‐5,024 ‐3,428 17,001
Change in working capital
Increase (‐)/Decrease (+) in inventories
Increase (‐)/Decrease (+) in operating receivables ‐1,609 ‐3,598 1,333
Increase (+)/Decrease (‐) in operating liabilities ‐7,339 ‐1,095 ‐33,951
, ,
OPERATING CASH FLOW ‐13,972 ‐8,121 ‐15,617
Investing activities
Net investments in intangible assets ‐4,679 ‐4,353 ‐62,130
Net investments in subsidiaries ‐3,710
CASH FLOW FROM INVESTING ACTIVITIES ‐4,679 ‐4,353 ‐65,840
Financing activities
Issue of loans
Repayment of loans ‐23,642
Repayment of leases ‐655 ‐616 ‐3,614
Payment in the form of redemption procedure ‐837,401
Issue of new shares less transaction costs 133,631 46,316
CASH FLOW FROM FINANCING ACTIVITIES 132,976 ‐616 ‐818,341
Change in cash and cash equivalents 114,325 ‐13,090 ‐889,798
Cash and cash equivalents at the beginning of the period 19,286 64,657 919,084
Cash and cash equivalents at the end of the period 133,611 51,567 19,286

NOTE 1 ACCOUNTING POLICIES AND MEASUREMENT PRINCIPLES

The interim report was prepared in accordance with IAS 34 and the Swedish Annual Accounts Act. The consolidated financial statements were, like the annual accounts for 20202, prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and the Swedish Annual Accounts Act. The parent company financial statements were prepared in accordance with Swedish Annual Accounts Act and Recommendation RFR 2 of the Swedish Financial Reporting Board, Financial Statements for Legal Entities.

Amounts are presented in Swedish kronor and rounded to the nearest thousand unless otherwise stated. Rounding to the nearest thousand may mean that certain amounts do not match when added up.

NOTE 2 DISCONTINUED OPERATIONS

The operations attributable to the BUPI project are reported as discontinued operations. The Extraordinary General Meeting on 1 December 2020 decided, in accordance with the Board's proposal, to distribute Moberg Pharma's interest in the BUPI project through shares in the subsidiary OncoZenge AB to Moberg Pharma's shareholders. The dividend was paid in accordance with Lex ASEA on 4 February 2021. In accordance with the decision to distribute the shares in OncoZenge AB on 1 December 2020, a liability for this distribution was recorded at fair value of 45 million was recorded, whereas the intangible assets transferred were reported at cost of 22 million. When the assets were distributed in February 2021, the asset amount was adjusted to fair value and reported as a revaluation of discontinued operations.

INCOME STATEMENT DISCONTINUED OPERATIONS

Jan‐mar Jan‐mar Jul 2019 ‐
(TSEK) 2021 2021 dec 2020
Net revenue
Cost of goods sold
Gross profit
Selling expenses
Business development and administration expenses ‐355 ‐1,682
Research and development expenses ‐55 ‐301
Other operating items
Operating profit ‐410 ‐1,983
Finance costs
Tax benefit/(expense) 52 408
Post‐tax profit/(loss) of discontinued operations ‐358 ‐1,575
Revaluation of discontinued operations 23,927
Profit after tax for the period from discontinued operations 23,569 ‐1,575
TOTAL PROFIT FOR THE PERIOD 23,569 ‐1,575

NOTE 3 SPECIFICATION OF MAJOR INTANGIBLE NON‐CURRENT ASSETS

(SEK thousand) 2021‐03‐31 2020‐03‐31 2020‐12‐31
Capitalized expenditure for MOB‐015 300,412 274,885 295,733
Capitalized expenditure for BUPI12 14,560
TOTAL CAPITALIZED EXPENDITURE FOR DEVELOPMENT WORK 300,412 289,445 295,733

12 The BUPI project was reclassified to non‐current assets held for distribution as of December 31, 2020

NOTE 4 SEGMENT REPORTING

Moberg Pharma's operations comprise only one area of operation, which is the development and commercialization of medical products. The statement of comprehensive income and statement of financial position as a whole comprise one operating segment.

NOTE 5 RELATED PARTY TRANSACTIONS

No material changes have occurred in relationships and transactions with related parties compared with information in the Annual Report.

INFORMATION AND FINANCIAL CALENDAR

This information is such that Moberg Pharma AB (publ) is obliged to disclose pursuant to the EU Market Abuse Regulation and the Securities Market Act.

Interim report for January–June 2021 August 10, 2021
Interim report for January–September 2021 November 9, 2021

The Annual General Meeting of Moberg Pharma will be held on May 18, 2021. Due to the coronavirus and to reduce the risk of spread of infection, the Board has decided that the Annual General Meeting shall be held without the physical presence of shareholders, proxies and outsiders, and that shareholders vote by mail. Information on the resolutions passed by the Annual General Meeting will be published on May 18, 2021, as soon as the outcome of the postal vote is finally compiled.

FOR FURTHER INFORMATION, PLEASE CONTACT

Anna Ljung, CEO, tel. 08‐522 307 01, [email protected] Mark Beveridge, VP Finance, tel. 076 ‐ 805 82 88, [email protected]

For more information on Moberg Pharma's business, please see the company's website, www.mobergpharma.com.

The interim report has not been reviewed by the Company's auditors.

DECLARATION

The undersigned hereby declare that the interim report provides a true and fair overview of the operations, financial position, and results of the parent company and Group, as well as a fair description of significant risks and uncertainties faced by the parent company and Group companies.

Bromma, May 11, 2021

Peter Wolpert Chairman

Fredrik Granström Board member

Andrew B. Hochman Board member

Mattias Klintemar Board member

Anna Ljung CEO

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