PHOTOCURE ASA BUILDING A SPECIALTY PHARMA COMPANY
RESULTS OF THIRD QUARTER AND FIRST NINE MONTHS 2015
29 OCTOBER 2015
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 2014. 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.
PROGRESS ON KEY OBJECTIVES
KEY OBJECTIVES 3Q2015 KEY ACHIEVEMENTS
-
Hexvix/Cysview global in-market unit sales growth of 10% 8% growth in-market unit sales
-
Commercial franchise profitability 9.0 MNOK
- Submit Special Protocol Assessment Request (SPAR) for Cevira by mid-2015
- Initiate Phase 3 clinical trial to expand the use of Hexvix/Cysview into the surveillance market and fulfill the US post marketing commitments in 2015
-
Secure partnership for further development and commercialization of Visonac and Cevira reflecting the product potential
-
Achieved Special Protocol Agreement for Cevira with FDA
- Patient enrollment initiated October 1
• Discussions continued with potential partners
Significant improvement of Commercial Franchise financial performance (EBIT) with 23.1 MNOK YTD
Commercial Update
HEXVIX/CYSVIEW A SIGNIFICANT GLOBAL SPECIALTY BRAND
- Value of in-market sales of Hexvix/Cysview increased YoY 19% year to date to NOK 204 million LTM
- Hexvix/Cysview global in-market volume increased YoY 8% in the quarter, and 7% year to date
- Overall franchise EBIT year to date at NOK 23.1 million, improvement of NOK 12.0 million from prior year
Global in-market unit sales (by Q)
Global in-market value NOK mill (LTM)
HEXVIX/CYSVIEW SOLID PERFORMANCE IN NORDICS AND USA
- Photocure own sales revenue in the US and Nordics increased YoY 22% in 3Q and 35% year to date to NOK 42.1 million
- US revenue increased year to date 84%
- Driven by in-market volume growth of 29%, price increases and FX
- Permanent Blue Light Cystoscope placements of 62 at the end of 3Q
- Continued progress on passage of bill to provide separate payment to hospitals for Cysview
- Nordic revenue increased year to date 17%
- In-market volume growth of 9%
- Continued double digit in-market volume
- 6 growth in Sweden
Own Hexvix/Cysview in-market unit sales Nordic and US
HEXVIX/CYSVIEW PARTNER PROGRESS
- Partner revenue increased 4% in 3Q and 12% year to date to NOK 40.5 million
- 3Q revenue driven by timing of inventory replenishments in 2014
- End user volume growth 8% in 3Q and 5% year to date
- Double digit unit growth year to date in Germany and France
- Executed distribution agreement with BioSyent Pharma for Cysview in Canada
- USD 650 000 received at signing, an additional USD 350 000 as later milestones
- Marketing Authorization Application filed in Australia by partner Juno Pharma in September
Hexvix Partner Unit Sales Per Quarter
Pipeline Update
CREATING VALUE CLINICAL DEVELOPMENT PROGRAMS
|
Technology |
Indication |
Phase 1 |
Phase 2 |
Phase 3 |
Status |
| Cevira® |
PDT |
Treatment of
precursors of
cervical cancer |
|
|
|
Positive Phase 2b results
SPA approved
Exploring partnerships |
| Visonac® |
PDT |
Treatment of
moderate to
severe acne |
|
|
|
Positive Phase 2b results
SPA and PIP approved
Exploring partnerships |
Hexvix®
Cysview® |
PDD |
Detection of
bladder
cancer,
surveillance
segment |
|
|
|
First Patient, First Visit in
October |
HEXVIX/CYSVIEW EXPANDING INTO THE SURVEILLANCE SEGMENT
- Surveillance following initial diagnosis represents a significant growth opportunity of 2-3 times current TURB segment
- First Patient, First Visit in Hexvix/Cysview Phase 3 market expansion study in October
- Study including 360 patients to examining improved detection rate of Hexvix/Cysview blue light cystoscopy vs white light cystoscopy
- Study results expected in 2017
- Secured alignment with FDA on study design necessary to obtain label extension
CEVIRA A MAJOR OPPORTUNITY
- Breakthrough single use and fully integrated drug-device technology to satisfy high need for novel therapies to treat global epidemic of HPV/CIN populations
- A well tolerated non-systemic treatment option for patients which preserves fertility and avoids the morbidities of invasive surgery
- Results of the Phase 2b trial are significant
- Statistically significant HSIL (CIN2,3) regression in the FDA agreed phase 3 patient population (p=0.004)
- Statistically significant virologic clearance of oncogenic HPV at 9 months after first treatment (p=0.045)
- Excellent tolerability and high physician & patient acceptance
- Achieved Special Protocol Agreement with FDA in August for patients with HSIL
- Alignment on clinical phase 3 program of two similar double blind, placebo controlled studies with 200 patients in each study with primary efficacy end point 6 months after treatment
- Further strengthened patent portfolio with issuance on new patent in EU
CEVIRA SIGNIFICANT SALES POTENTIAL
- Large patient population based on biopsy confirmed histology of HSIL
- ~1M cases HSIL annually in US & West EU1,2 detected through routine cervical screening programs; 50% of these are caused by HPV strain 16 or 183
- ~30% risk of progress to cervical cancer4
- Upside exists in Latin America, Asia and East EU, where burden of HPV is higher
- LCM Opportunity for clearance of oncogenic HPV in patients with normal cytology/LSIL
- It is estimated that ~35M are HPV infected in US & EU, with a prevalence of HPV strains 16 or 18 of 32% (~11M)
- 10-15M cases oncogenic HPV annually in US & West EU6 detected through routine cervical screening programs
- Persistent infection occurs in 10-20% of the cases7
- Blockbuster sales potential based on premium pricing opportunity
- At premium price levels, cost impact model demonstrates cost savings / benefit to the US health care system as compared to current treatment practice5
- Additional significant savings when avoidance of costs associated with preterm births factored in5
- Continued discussions with potential partners for development and commercialization
12
VISONAC PHASE 3 READY ASSET WITH CONSIDERABLE SALES POTENTIAL
- High unmet need for novel treatments for moderate/ severe acne
- Positive Phase 2b results
- Significant reduction in inflammatory lesions and improvement of overall acne severity
- Well tolerated regimen
- Phase 3 Ready with significant reduced regulatory risk
- SPA (US) and PIP (EU) agreed for global registration program
- Further strengthened patent portfolio with issuance on new patent in EU
- Value of moderate to severe acne pharma market segment estimated at ~\$900 MUSD globally
- Dermatologist main prescriber of oral antibiotics and retinoids
- Visonac positioned as second line alternative
- In US and EU, >2M patients in need of second line treatment options
- Favorable benefit/risk profile compared to existing treatment options and sustained efficacy allows for premium price
- 13 • Continued interest from potential partners for development and commercialization
Financials
HEXVIX/CYSVIEW CONTINUED GROWTH THIRD QUARTER 2015
- Revenue from own sales of Hexvix/ Cysview increased YoY 22% in 3Q and 35% year to date
- Nordic 3Q revenue growth of 11%
- US 3Q revenue growth of 42%
- Partner 3Q revenue increased YoY 4% and 12% year to date
- Changed timing of supply to partner compared to the same period in 2014
- Total in market sales value increased YoY 22% in 3Q and 19% year to date
- LTM value NOK 204 million
| SALES - MNOK |
Q3 '15 |
YTD '15 |
| Hexvix - Nordic |
8,1 |
26,4 |
| YoY growth |
11 % |
17 % |
| Cysview - US |
5,3 |
15,7 |
| YoY growth |
42 % |
84 % |
| Hexvix own sales |
13,5 |
42,1 |
| YoY growth |
22 % |
35 % |
| Hexvix partner sales |
13,5 |
40,5 |
| YoY growth |
4 % |
12 % |
| Total Photocure |
27,0 |
82,6 |
| YoY growth |
12 % |
23 % |
| Revenue in-market (*) |
51,2 |
155,6 |
| YoY growth |
22 % |
19 % |
| Units in-market (*) |
12 965 |
40 222 |
| YoY growth |
8 % |
7 % |
(*) Calculated in-market sales
PROFIT & LOSS THIRD QUARTER 2015
| MNOK |
Q3 '15 |
Q3 '14 |
Change |
YTD '15 |
YTD '14 |
Change |
| Hexvix / Cysview revenues |
27,0 |
24,1 |
12 % |
82,6 |
67,2 |
23 % |
| Other sales revenues |
2,3 |
0,8 |
>100% |
6,5 |
1,6 |
>100% |
| Signing fee and milestones |
6,6 |
31,9 |
-79 % |
11,1 |
34,2 |
-68 % |
| Total revenues |
35,9 |
56,8 |
-37 % |
100,2 |
103,0 |
-3 % |
| Gross profit |
33,9 |
55,2 |
-39 % |
94,0 |
97,8 |
-4 % |
| Operating expenses |
-36,6 |
-31,4 |
16 % |
-105,8 |
-93,4 |
13 % |
| EBIT |
-2,7 |
23,8 |
|
-11,8 |
4,4 |
|
| Net financial items excl PCI |
2,8 |
0,3 |
>100% |
4,5 |
2,5 |
78 % |
| Impairment loss shares PCI |
- |
- |
|
-7,7 |
- |
|
| Profit/loss(-) before tax |
0,1 |
24,2 |
|
-15,0 |
6,9 |
|
| Tax expenses |
-5,0 |
- |
|
-11,8 |
- |
|
| Net profit/loss(-) |
-4,9 |
24,2 |
|
-26,7 |
6,9 |
|
• Total revenue decrease YoY 37% in 3Q and 3% year to date
- Driven by termination fee paid by Salix in 2014, NOK 30.8 million
- Operating expenses increase YoY 16% in 3Q and 13% year to date
- Mainly driven by FX, year to date 2% increase in constant currencies
- Operating loss (EBIT) at NOK 2.7 million in 3Q and NOK 11.8 million year to date
SEGMENTS THIRD QUARTER 2015
- Commercial franchise:
- Continued improvement in revenues and EBIT
- EBIT margin year to date at 23%
- Development portfolio:
- Activities related to Cevira SPAR
- Cysview post marketing commitment phase 3 capitalized
| MNOK |
Q3 '15 |
Q3 '14 |
YTD '15 |
YTD '14 |
LTM |
| Commercial Franchise |
|
|
|
|
|
| Total revenues |
35,9 |
26,1 |
100,2 |
72,2 |
126,2 |
Gross profit
Operating expenses |
33,9
-24,8 |
24,5
-18,8 |
94,0
-70,9 |
67,1
-56,0 |
118,2
-90,2 |
| EBIT |
9,0 |
5,7 |
23,1 |
11,1 |
28,0 |
| Development Portfolio |
|
|
|
|
|
| Total revenues |
0,0 |
0,0 |
0,0 |
0,0 |
0,0 |
Gross profit
Operating expenses |
0,0
-11,7 |
0,0
-12,6 |
0,0
-34,9 |
0,0
-37,4 |
0,0
-49,8 |
| EBIT |
-11,7 |
-12,6 |
-34,9 |
-37,4 |
-49,8 |
| Total |
|
|
|
|
|
| EBIT |
-2,7 |
-6,9 |
-11,8 |
-26,4 |
-21,8 |
(*) One-Off's excluded
Salix termination fee |
|
30,8 |
|
30,8 |
0,0 |
CASH FLOW THIRD QUARTER 2015
| MNOK |
Q3 '15
Q3 '14 |
|
YTD '15
YTD '14 |
|
|
| Cash flow from: |
|
|
|
|
|
| - Operations |
-4,8 |
25,2 |
-19,2 |
-3,2 |
|
| - Investments |
-3,9 |
0,9 |
-9,0 |
2,8 |
|
| - Financing |
1,5 |
0,0 |
2,4 |
0,0 |
|
| Net change in cash |
-7,2 |
26,1 |
-25,8 |
-0,4 |
|
| Ending cash balance |
139,5 |
166,8 |
139,5 |
166,8 |
|
- 3Q cash flow from operations NOK -4.8 million, year to date NOK -19.2
- Year to date improvement of NOK 14.8 million from last year, excluding impact of Salix NOK 30.8 million
- Year to date cash flow from investments NOK -9.0 million.
- Includes investments of NOK 10.5 million in intangible assets mainly related to the initiation of the phase 3 post-marketing commitment trial for Cysview
- Quarter end cash balance at NOK 139.5 million
18
BALANCE SHEET PER 30 SEPTEMBER 2015
- Non current assets includes NOK 8.6 million in shares in PCI Biotech and deferred tax asset of NOK 19.8 million
- No interest bearing debt at quarter end
- Shareholder's equity of NOK 217.7 million
- Equity ratio of 87%
- Photocure held 35,476 own shares at end of quarter
| MNOK |
30.09 |
31.12 |
|
2015 |
2014 |
| Non-current assets |
71,0 |
76,5 |
| Inventory & receivables |
39,0 |
28,8 |
| Cash & equivalents |
139,5 |
165,2 |
| Total assets |
249,5 |
270,6 |
| Shareholders equity |
217,7 |
240,1 |
| Long term liabilities |
3,7 |
3,1 |
| Current liabilities |
28,1 |
27,5 |
| Total equity & liabilities |
249,5 |
270,6 |
|
|
|
| Equity ratio |
87 % |
89 % |
Outlook
OUTLOOK
FINANCIAL
• Hexvix/Cysview global in-market unit sales growth of 10% in 2015
CLINICAL
- Initiate necessary documentation for the Cevira device to ensure readiness for the Phase 3 trial following the SPA approval
- Reporting of clinical results of Hexvix/Cysview phase 3 market expansion study in 2017
PARTNERSHIP
• Secure partnership for further development and commercialization of Visonac and Cevira reflecting the product potential