Earnings Release • Feb 12, 2015
Earnings Release
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Results for fourth quarter and full year 2014
11 February 2015
(Numbers in brackets are for the corresponding period in 2013)
| Figures in NOK million | 4Q 2014 | 4Q 2013 | Change | FY 2014 | FY 2013 | Change |
|---|---|---|---|---|---|---|
| Sales revenues Hexvix / Cysview | 24.8 | 24.5 | 1 % | 92.0 | 77.9 | 18 % |
| Sales revenues API | 0.0 | 0.7 | 1.6 | 1.4 | ||
| Signing fee & milestone revenues | 1.2 | 1.1 | 35.4 | 4.3 | ||
| Total revenues | 26.0 | 26.3 | -1 % | 129.0 | 83.6 | 54 % |
| Gross profit | 24.1 | 24.4 | -1 % | 122.0 | 76.8 | 59 % |
| Research and development expenses | 9.6 | 9.8 | -2 % | 32.6 | 34.0 | -4 % |
| Sales and marketing expenses | 13.9 | 14.8 | -6 % | 54.5 | 68.4 | -20 % |
| Operating result excl. restructuring & one-off |
-10.0 | -10.5 | -5.6 | -63.0 | ||
| Operating result incl. non-recurring | -10.0 | -19.1 | -5.6 | -75.5 | ||
| Net profit/loss before tax | -5.4 | -17.3 | 1.5 | -66.9 | ||
| Earnings per share, diluted (NOK) | -1.10 | -0.43 | -0.77 | -2.78 |
"One of Photocure's key objectives in 2014 was to strengthen the Company's financial performance. With increased sales of Hexvix/Cysview of 18%, the Salix termination payment and our focus on cost reduction we have successfully achieved this and are pleased to report break even net result before tax for the full year.
Furthermore, we have had a successful dialogue with the FDA and Cevira is now Phase 3 ready in the US. We also recently reported data demonstrating that Hexvix guided resection can significantly improve overall survival and recurrence free survival in bladder cancer compared to standard white light. Looking ahead, we will continue to pursue strategic partnerships for both Cevira and Visonac and are excited about our plans to expand the use of Hexvix into the bladder cancer surveillance market. A phase 3 post-marketing commitment trial also addressing this important market segment is expected to start during 2015."
Photocure's strategy is to:
Photocure develops innovative products and markets and sells these products through its own commercial teams and in partnerships with other companies.
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 11% to NOK 49 million in the fourth quarter. Full year growth was 19% to NOK 180 million. Global in-market unit sales for the full year increased 10% compared to 2013, in line with guidance for the year.
Total sales revenues for Hexvix/Cysview increased 1% to NOK 24.8 million (NOK 24.5 million) in the fourth quarter. Growth was impacted by a difficult comparison with the prior year which benefited in part from the timing of supply to our partner. Hexvix/Cysview continued to experience strong underlying customer demand as shown by 10% volume growth globally. Furthermore, full year revenue growth was positively impacted by price increases and foreign exchange rates.
Photocure's own sales in the US and Nordic region increased 13% to NOK 14.6 million in the fourth quarter and 20% for the full year to NOK 45.7 million.
Nordic revenues in the fourth quarter increased 2% compared to last year. Growth was affected by a lower seasonality impact than that observed in during the fourth quarter in prior years. Full year revenue growth was 12%, driven by customer demand and price increases.
Photocure's in-market unit sales in the Nordic region decreased 1% in the fourth quarter due to a lower seasonality impact, though increased 5% for the full year. Sweden, the key growth area in Nordic, continued to develop positively, posting high double-digit growth in unit sales for the full year. Overall Hexvix market share for the region is 39%.
In the US, fourth quarter revenue increased 60% compared to the same period last year, driven by volume growth, price increases and positive foreign exchange benefit (7%). Full year revenue increased 49% to NOK 12.3 million. Unit sales increased 36% in the fourth quarter and 33% for the full year.
Although the reimbursement hurdle in the US continued throughout 2014, more centers have appreciated and adopted the clinical and health economic benefits of Cysview. The total number of permanent blue light cystoscopes (BLCs) installed at leading US hospitals/urology centers has continued to increase, to a total of 51 at the end of 2014, compared to 36 at the end of 2013.
End user unit sales by Ipsen increased 3% in the fourth quarter. Full year end user unit sales increased 10%, driven mainly by increases in Germany, France and Austria.
Partner revenue decreased 12% in the fourth quarter driven predominantly by the timing of supply to our partner in the fourth quarter 2013. Full year partner revenue increased 16% as a result of customer demand as well as 7% foreign currency exchange impact.
In the US, Photocure continues to work closely with key stakeholders to secure a long-term sustainable solution for Cysview reimbursement. A major milestone for the supporters of bladder cancer patients was achieved during 2014 when a new bill to secure US senior cancer patient access to state of the art treatment using up to date technology, including Cysview, was introduced in June. The bill was not acted upon by the Congress before the year-end recess. Photocure will continue its work to obtain reimbursement for
Cysview in the US, and for the passage of the bill in 2015.
An expansion of the use of Hexvix/Cysview into the flexible surveillance patient segment will open a market segment which is estimated to be 2-3 times the size of the current TURB/OR segment.
Following positive early clinical experience with flexible cystoscopes in 2014, Photocure will initiate a phase 3 clinical study with 360 patients for examining improved detection rates of Cysview blue light cystoscopy vs white light cystoscopy. The study design is in alignment with FDA to obtain label extension and fulfill the Cysview post marketing commitments.
Patient recruitment is planned to start 3Q 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.
In January 2015 a study on the impact of Hexvix on survival in bladder cancer patients was published in the World Journal of Urology. The study investigated the impact of photodynamic diagnosis guided bladder tumor resection, including that guided by Hexvix. The findings from this retrospective study of 224 patients demonstrate for the first time that Hexvix guided TUR-BT in bladder cancer patients, who later progressed to requiring radical cystectomy, significantly increased the three year overall survival rate (p=0.037) and the median three year recurrence free survival rate (p=0.002) compared to patients in the comparator group.
In January 2015 Photocure received the marketing approval for Cysview from Health Canada. Photocure evaluating potential commercial partners for a partnership in Canada.
| Figures in NOK million | 4Q 2014 | 4Q 2013 | Change | FY 2014 | FY 2013 | Change |
|---|---|---|---|---|---|---|
| Total own sales Nordic | 10.9 | 10.6 | 2 % | 33.4 | 29.9 | 12 % |
| Total own sales US | 3.8 | 2.4 | 60 % | 12.3 | 8.2 | 49 % |
| Revenues from partners | 10.1 | 11.5 | -12 % | 46.3 | 39.8 | 16 % |
| Total revenue | 24.8 | 24.5 | 1 % | 92.0 | 77.9 | 18 % |
Hexvix/Cysview (hexaminolevulinate hydrochloride) is an innovative breakthrough technology in 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 and US.
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 will be diagnosed with cancer of the bladder 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 |
| Lumacan® | Detection of colorectal cancer |
Phase 1/2 |
Visonac is a novel patented photodynamic therapy in combination with Photocure's innovative full face red light lamp, Nedax®, in late-stage development for treating the large unmet medical need in moderate to severe, inflammatory acne.
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 will continue in 2015.
Research from GlobalData cites Visonac as one of the most highly anticipated introductions in the acne therapeutics market1 .
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 for 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. The value of this segment globally is estimated at USD 900 million annually. Visonac is being developed as the first photodynamic therapeutic option for this large patient population, which can easily and conveniently be administered in dermatology offices. 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.
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 last year, 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 conclusion of the meeting confirmed that the phase 2 data supports the proposed phase 3 program, and are sufficiently robust to continue the development of Cevira.
Following the positive outcome of the meeting with the FDA, Photocure plans to submit the proposed phase 3 protocol for a detailed Special Protocol Assessment Review (SPAR) to the FDA in the first half of 2015.
Cevira has the potential to treat HPV induced cervical high grade disease and prevent the development of cervical cancer which 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.
1 http://healthcare.globaldata.com/media-center/press-
releases/pharmaceuticals/novel-product-launches-to-reinvigorateacne-treatment-market-by-2018-says-globaldata
Cervical HPV and precancerous lesions of the cervix are highly prevalent diseases affecting an estimated 260 million women worldwide. There is currently no medical therapeutic treatment option available. Cevira is being developed as the first novel therapeutic option for this large and growing patient population. Cevira can be easily administered by gynecologists, avoiding the potential morbidities associated with surgery.
Following the proposed merger agreement between Salix and Cosmo Pharmaceuticals S.p.A announced in July 2014, Photocure and Salix agreed to terminate the 2010 global licensing agreement for Lumacan. Photocure received a payment of USD 5 million from Salix in the third quarter and has regained the global rights, all technical data and all intellectual property to Lumacan.
Photocure has evaluated the clinical data, competitive landscape, pricing and reimbursement scenarios to determine the optimal way forward for Lumacan. Photocure has decided not to pursue additional clinical trials or efforts to out-license Lumacan at this time, but will continue to monitor market dynamics to potentially identify a future application for Lumacan.
(Numbers in brackets are for the corresponding period in 2013).
Group performance in 2014 was positive, with continued strong growth in revenues from Hexvix/Cysview combined with reduced operating costs.
Total revenues in the fourth quarter were NOK 26.0 million, in line with the same quarter last year (NOK 26.3 million). Full year revenues were NOK 129.0 million, an increase of 54% from 2013. This increase was driven by continued market penetration of Hexvix/Cysview and a one-off termination payment of USD 5 million from Salix. Excluding this payment, revenues were up 17% to NOK 98.2 million.
Total Hexvix/Cysview sales revenues for the fourth quarter were NOK 24.8 million, an increase of 1% from NOK 24.5 million fourth quarter 2013. The fourth quarter growth rate was negatively impacted by lower seasonality impact in the Nordic region and timing of supply to Ipsen compared to the same period in 2013. Full year in-market unit sales growth was 10% and growth in sales revenues was 18% to NOK 92.0 million. Changes in currency exchange rates accounted for approximately 6% of sales revenue growth in 2014.
Fourth quarter operating costs were 22% below operating costs in fourth quarter 2013. Excluding one-off expenses relating to payment to Galderma for Visonac in 2013, the decline was 2%. Total operating costs net of other income amounted to NOK 34.1 million (NOK 43.8 million) in the fourth quarter. Full year operating costs were NOK 127.6 million, a reduction of 9% from 2013 before restructuring costs and one-off items.
| MNOK | FY '14 FY '13 Change | ||
|---|---|---|---|
| Research & Development | 32,6 | 32,4 | 1 % |
| Sales & Marketing | 54,5 | 68,4 | -20 % |
| Other Opex | 40,5 | 39,0 | 4 % |
| Operating expenses | 127,6 | 139,8 | -9 % |
| Restructuring | 0,0 | 3,7 | |
| One-Off items | 0,0 | 8,9 | |
| Total | 127,5 | 152,3 | -16 % |
Fourth quarter research and development (R&D) costs were NOK 9.6 million (NOK 9.0 million). The R&D costs relate to patent protection and regulatory work as well as the development of the current pipeline. The primary development activity in the fourth quarter and year to date has been work related to the re-analysis of the phase 2b Cevira data, per the request of the FDA. Full year R&D costs were in line with last year (NOK 32.6 million, versus NOK 32.4 million in 2013).
Marketing and sales costs decreased 6% to NOK 13.9 million (NOK 14.8 million) in the fourth quarter compared to last year, mostly driven by reduced costs related to commercial activities in the US. Cost for the full year was NOK 54.5 million, a reduction of 20% from 2013 (NOK 68.4 million). The full year decrease in costs is mainly due to completion of the contractual co-funding arrangement of the marketing activities with Ipsen as well as reduced costs related to commercial activities in the US which were capped pending progress with reimbursement.
Operating loss before restructuring and one-off items was at NOK 10.0 million for the quarter, an improvement from NOK -10.5 million last year. Full year operating loss was NOK 5.6 million compared to loss of NOK 63.0 million in 2013, before restructuring and one-off items.
Net financial items were NOK 4.6 million (NOK 1.8 million) in the fourth quarter, mainly driven by foreign exchange gains, and NOK 7.2 million (NOK 8.7 million) for the full year.
Photocure recorded a net profit before tax from continued operations of NOK 1.5 million for the full year, an improvement of NOK 68.4 million from last year (loss of NOK 66.9 million). Fourth quarter improvement from last year was NOK 12.0 million to a NOK -5.4 million.
Tax expenses of NOK 18.0 million for the fourth quarter and full year reflects reduction in deferred tax assets at the end of the year. The parent company had a profit before tax in 2014 of NOK 66.5 million to be utilized by the tax loss carried forward.
Photocure was at year end the largest shareholder in PCI Biotech Holding ASA with 19.20% of the shares. The market value of the shareholding was NOK 16.6 million at 31 December 2014, resulting in a negative market value adjustment of NOK 16.1 million for the year and negative NOK 15.3 for the fourth quarter.
Cash and cash equivalents were NOK 165 million at 31 December 2014, level with the cash balance at 31 December 2013. Fourth quarter net change in cash was negative NOK 1.6 million compared to last year negative NOK 15.0 million. Full year net change in cash was negative NOK 2.0 million, compared to negative NOK 135.6 in 2013.
Shareholders' equity was NOK 240 million at 31 December 2014, an equity ratio of 89%. At the end of 2013, shareholders' equity was NOK 269 million (89%).
As of 31 December 2014, Photocure held 35,476 own shares.
The extraordinary general meeting in PCI Biotech Holding ASA held on 6 January 2015 resolved to conduct a rights issue of 7 million shares in the company at a subscription price of NOK 10.00 per offer share. As shareholder in PCI Biotech Holding ASA Photocure received 1,343,905 tradable subscription rights. These subscription rights were sold 21 January 2015 at a price NOK 1.00 per subscription right. After the issue of 7 million shares Photocure will hold 10.07% of the shares in PCI Biotech Holding ASA.
Photocure is exposed to uncertainties and risk factors, which may affect some or all of the company's activities. Photocure has financial risk, market risk and operational risk factors and risk related to research and 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 2013.
Photocure expects revenues to continue to grow in 2015 driven by increased in-market unit sales of Hexvix/Cysview of minimum 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 to securing regulatory pathways to market access. The Company plans to submit the proposed phase 3 protocol for Cevira for a detailed Special Protocol Assessment Review (SPAR) to the FDA in the first half of 2015.
The Board of Directors and CEO Photocure ASA
Oslo, 11 February 2015
Bente-Lill B Romøren Chairman
Synne H. Røine Mats Pettersson
Xavier Yon Kjetil Hestdal President and CEO
| 2014 | 2013 | 2014 | 2013 | ||
|---|---|---|---|---|---|
| (all amounts in NOK 1 000 except per share data) | Note | 4Q | 4Q | 1.1-31.12 | 1.1-31.12 |
| Sales revenues | 24 771 | 25 180 | 93 586 | 79 307 | |
| Signing fee and milestone revenues | 1 186 | 1 140 | 35 366 | 4 309 | |
| Total revenues | 25 957 | 26 320 | 128 951 | 83 616 | |
| Cost of goods sold | -1 821 | -1 926 | -6 996 | -6 829 | |
| Gross profit | 24 135 | 24 394 | 121 955 | 76 787 | |
| Other income | - | 765 | - | 1 591 | |
| Indirect manufacturing expenses | 2 | -3 197 | -2 555 | -9 187 | -7 751 |
| Research and development expenses | 2 | -9 562 | -9 758 | -32 554 | -33 976 |
| Marketing and sales expenses | 2 | -13 932 | -14 828 | -54 561 | -68 418 |
| Business development and administrative exp. | 2 | -7 474 | -17 380 | -31 284 | -40 079 |
| Operating profit/loss(-) recurring | -10 030 | -19 362 | -5 631 | -71 846 | |
| Restructuring costs | 3 | - | 295 | - | -3 694 |
| Operating profit/loss(-) incl. non-recurring | -10 030 | -19 067 | -5 631 | -75 540 | |
| Financial income | 5 189 | 2 366 | 9 787 | 10 119 | |
| Financial expenses | -543 | -615 | -2 630 | -1 431 | |
| Net financial profit/loss(-) | 4 646 | 1 751 | 7 157 | 8 688 | |
| Profit/loss(-) before tax | -5 384 | -17 317 | 1 526 | -66 852 | |
| Tax expenses | 4 | -18 047 | 8 204 | -18 047 | 8 204 |
| Net profit/loss(-) continued operations | -23 431 | -9 113 | -16 520 | -58 648 | |
| Discontinued operations | 3 | - | -43 | - | -302 |
| Net profit/loss(-) | -23 431 | -9 156 | -16 520 | -58 950 | |
| Other comprehensive income | 5 | -14 915 | 3 870 | -15 573 | -14 015 |
| Total comprehensive income | -38 346 | -5 286 | -32 093 | -72 966 | |
| Net profit/loss(-) per share, undiluted | 6 | -1,10 | -0,43 | -0,77 | -2,78 |
| Net profit/loss(-) per share, diluted | 6 | -1,10 | -0,43 | -0,77 | -2,78 |
| (Amounts in NOK 1 000) | Note | 31.12.2014 | 31.12.2013 |
|---|---|---|---|
| Non-currrent assets | |||
| Machinery & equipment | 3 094 | 3 681 | |
| Other investments | 7, 8 | 42 355 | 51 969 |
| Deferred tax asset | 4 | 31 063 | 49 109 |
| Total non-current assets | 76 512 | 104 759 | |
| Current assets | |||
| Inventory | 13 237 | 12 624 | |
| Receivables | 15 585 | 17 085 | |
| Cash & cash equivalents | 7 | 165 245 | 167 258 |
| Total current assets | 194 067 | 196 967 | |
| Total assets | 270 579 | 301 726 | |
| Equity and liabilities | |||
| Equity | |||
| Share capital | 9 | 10 697 | 10 697 |
| Other paid-in capital | 37 801 | 34 777 | |
| Retained earnings | 191 560 | 223 649 | |
| Shareholders' equity | 240 058 | 269 123 | |
| Long-term liabilities | |||
| Other non-current liabilities | 3 055 | 2 296 | |
| Total long-term liabilities | 3 055 | 2 296 | |
| Current liabilities | 27 466 | 30 307 | |
| Total liabilities | 30 521 | 32 603 | |
| Total equity and liabilities | 270 579 | 301 726 |
| 2014 | 2013 | 2014 | 2013 | |
|---|---|---|---|---|
| (Amounts in NOK 1 000) | 4Q | 4Q | 1.1-31.12 | 1.1-31.12 |
| Equity at beginning of period | 277 253 | 271 836 | 269 123 | 380 268 |
| Treasury shares, net change | 686 | 1 907 | 686 | 2 125 |
| Share-based compensation (share options employees) | 464 | 666 | 2 343 | 2 177 |
| Dividend | - | - | - | -42 481 |
| Other items | - | - | - | - |
| Comprehensive income | -38 346 | -5 286 | -32 093 | -72 966 |
| Equity at end of period | 240 058 | 269 123 | 240 058 | 269 123 |
| 2014 | 2013 | 2014 | 2013 | |
|---|---|---|---|---|
| (Amounts in NOK 1 000) | 4Q | 4Q | 1.1-31.12 | 1.1-31.12 |
| Profit/loss(-) before tax | -5 384 | -17 360 | 1 526 | -67 154 |
| Depreciation and amortisation | 372 | 404 | 1 469 | 1 460 |
| Share-based compensation | 465 | 666 | 2 343 | 2 176 |
| Net interests | -3 062 | -1 519 | -6 018 | -7 362 |
| Changes in working capital | 5 304 | 1 339 | -497 | -7 000 |
| Other operational items | -562 | -1 302 | -4 911 | -21 842 |
| Net cash flow from operations | -2 868 | -17 771 | -6 089 | -99 722 |
| Cash flow from investments | 577 | 899 | 3 390 | 4 518 |
| Cash flow from financing activities | 686 | 1 907 | 686 | -40 356 |
| Net change in cash during the period | -1 605 | -14 965 | -2 013 | -135 560 |
| Cash & cash equivalents at beginning of period | 166 850 | 182 224 | 167 258 | 302 819 |
| Cash & cash equivalents at end of period | 165 245 | 167 258 | 165 245 | 167 258 |
| 1 Jan - 31 Desember 2014 | Cancer | Dermatology | Total | |||||
|---|---|---|---|---|---|---|---|---|
| Own | ||||||||
| (Amounts in NOK 1 000) | sales | Partner | R&D | Sum | Partner | R&D | Sum | |
| Sales Revenues | 45 693 | 46 320 | 92 014 | 1 572 | 1 572 | 93 585 | ||
| Milestone revenues | 0 | - | 30 754 | 30 754 | 4 612 | 4 612 | 35 366 | |
| Cost of goods sold | -2 175 | -4 821 | -6 996 | 0 | -6 996 | |||
| Gross profit | 43 519 | 41 499 | 30 754 | 115 772 | 6 184 | 0 | 6 184 | 121 955 |
| Gross profit of sales % | 95 % | 90 % | 92 % | 93 % | ||||
| Operating expenses | -57 068 | -17 545 | -42 235 | -116 848 | -846 | -9 894 | -10 740 | -127 588 |
| Operating profit/loss (-) recurring | -13 549 | 23 955 | -11 482 | -1 076 | 5 338 | -9 894 | -4 556 | -5 632 |
| 1 Jan - 31 Desember 2013 | Cancer | Dermatology | Total | |||||
|---|---|---|---|---|---|---|---|---|
| Own | ||||||||
| (Amounts in NOK 1 000) | sales | Partner | R&D | Sum | Partner | R&D | Sum | |
| Sales Revenues | 38 134 | 40 430 | - | 78 564 | 743 | - | 743 | 79 307 |
| Milestone revenues | 0 | - | - | 0 | 4 309 | - | 4 309 | 4 309 |
| Cost of goods sold | -2 411 | -4 418 | - | -6 829 | - | 0 | -6 829 | |
| Gross profit | 35 723 | 36 012 | - | 71 734 | 5 052 | 0 | 5 052 | 76 786 |
| Gross profit of sales % | 94 % | 89 % | 91 % | 91 % | ||||
| Operating expenses | -62 096 | -25 735 | -39 325 | -127 156 | -10 628 | -10 849 | -21 476 | -148 633 |
| Operating profit/loss (-) ctnd oper. | -26 373 | 10 276 | -39 325 | -55 422 | -5 576 | -10 849 | -16 424 | -71 846 |
| Q4 2014 | Cancer | Dermatology | Total | |||||
|---|---|---|---|---|---|---|---|---|
| Own | ||||||||
| (Amounts in NOK 1 000) | sales | Partner | R&D | Sum | Partner | R&D | Sum | |
| Sales Revenues | 14 649 | 10 121 | 24 770 | 0 | 0 | 24 770 | ||
| Milestone revenues | 0 | - | 0 | 0 | 1 186 | 1 186 | 1 186 | |
| Cost of goods sold | -671 | -1 150 | -1 821 | 0 | -1 821 | |||
| Gross profit | 13 978 | 8 972 | 0 | 22 950 | 1 186 | 0 | 1 186 | 24 136 |
| Gross profit of sales % | 95 % | 89 % | 93 % | 93 % | ||||
| Operating expenses | -14 077 | -5 040 | -11 199 | -30 316 | -213 | -3 639 | -3 852 | -34 167 |
| Operating profit/loss (-) recurring | -99 | 3 932 | -11 199 | -7 366 | 973 | -3 639 | -2 666 | -10 031 |
| Q4 2013 | Cancer | Dermatology | Total | |||||
|---|---|---|---|---|---|---|---|---|
| Own | ||||||||
| (Amounts in NOK 1 000) | sales | Partner | R&D | Sum | Partner | R&D | Sum | |
| Sales Revenues | 12 976 | 11 521 | - | 24 496 | 683 | - | 683 | 25 180 |
| Milestone revenues | 0 | - | - | 0 | 1 140 | - | 1 140 | 1 140 |
| Cost of goods sold | -1 087 | -839 | - | -1 926 | - | 0 | -1 926 | |
| Gross profit | 11 889 | 10 681 | - | 22 570 | 1 823 | 0 | 1 823 | 24 393 |
| Gross profit of sales % | 92 % | 93 % | 92 % | 92 % | ||||
| Operating expenses | -15 543 | -4 857 | -10 740 | -31 140 | -9 516 | -3 098 | -12 614 | -43 754 |
| Operating profit/loss (-) ctnd oper. | -3 654 | 5 824 | -10 740 | -8 570 | -7 694 | -3 098 | -10 791 | -19 362 |
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 2013 (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 11 February 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 2014 did not have any significant impact on the reporting in 2014. 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.
| 2014 | 2013 | 2014 | 2013 | |
|---|---|---|---|---|
| (Amounts in NOK 1 000) | 4Q | 4Q | 1.1-31.12 | 1.1-31.12 |
| Sales revenues | 24 771 | 25 180 | 93 586 | 79 307 |
| Signing fees and milestone revenues | 1 186 | 1 140 | 35 366 | 4 309 |
| Cost of goods sold | -1 821 | -1 926 | -6 996 | -6 829 |
| Gross profit | 24 135 | 24 394 | 121 955 | 76 787 |
| Other income | - | 765 | - | 1 591 |
| Payroll expenses | -19 274 | -16 999 | -73 008 | -73 388 |
| R&D costs excl. payroll expenses/other operating exp. | -4 721 | -6 625 | -15 197 | -15 729 |
| Ordinary depreciation and amortisation | -372 | -404 | -1 469 | -1 460 |
| Other operating expenses | -9 798 | -20 493 | -37 912 | -59 647 |
| Total operating expenses | -34 165 | -43 756 | -127 586 | -148 633 |
| Operating result recurring | -10 030 | -19 362 | -5 631 | -71 846 |
Restructuring costs have been incurred with NOK 3.7 million in 2013 and relates to implemented headcount reductions and organizational changes. The costs incurred in this process are reported as non-recurring restructuring costs from Q2 in 2013.
The results of the Allumera segment is restated as discontinued operations in the 2013 quarterly financial statements according to IFRS 5.
| 2014 | 2013 | |
|---|---|---|
| (Amounts in NOK 1 000) | 1.1-31.12 | 1.1-31.12 |
| Income tax expense | ||
| Tax payable | 65 | |
| Changes in deferred tax | 18 047 | -8 269 |
| Total income tax expense | 18 047 | -8 204 |
| Tax base calculation | ||
| Profit before income tax | 1 527 | -67 154 |
| Permanent differences | 2 743 | -1 922 |
| Temporary differences | -3 704 | 18 223 |
| Utilisation of tax loss carried forward | -63 496 | |
| Increase tax loss carried forward | 62 930 | 50 853 |
| Tax base | 0 | 0 |
| Temporary differences | -126 711 | -123 007 |
| Tax loss carried forward | 407 467 | 413 941 |
| Net temporary differences | 280 756 | 290 934 |
| Write down of deferred tax benefit | -165 710 | -109 034 |
| Deferred tax benefit | 115 046 | 181 900 |
| Deferred tax asset | 31 063 | 49 109 |
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 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. 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.
| 2014 | 2013 | 2014 | 2013 | |
|---|---|---|---|---|
| (Amounts in NOK 1 000) | 4Q | 4Q | 1.1-31.12 | 1.1-31.12 |
| Market value adjustment PCI Biotech Holding ASA | -15 323 | 3 708 | -16 064 | -14 092 |
| Currency translation | 408 | 161 | 491 | 76 |
| Total other comprehensive income | -14 915 | 3 870 | -15 573 | -14 015 |
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.
| Continued operations | ||
|---|---|---|
| (Figures indicate the number of shares) | 12.31.2014 | 12.31.2013 |
| Ordinary shares 1 January | 21 393 301 | 21 393 301 |
| Effect of treasury shares | -72 154 | -152 619 |
| Effect of share options exercised | - | - |
| Weighted average number of shares | 21 321 147 | 21 240 682 |
| Effect of outstanding share options | 15 618 | 61 074 |
| Weighted average number of diluted shares | 21 336 765 | 21 301 756 |
| Earnings per share in NOK | -0,77 | -2,78 |
| Earnings per share in NOK diluted | -0,77 | -2,78 |
| (Amounts in NOK 1 000) | 12.31.2014 | 12.31.2013 |
|---|---|---|
| Market value PCI Biotech Holding ASA | 16 569 | 32 633 |
| Booked part of remaining settlement from sale of | ||
| Metvix/Aktilite | 25 786 | 19 336 |
| Total other investments | 42 355 | 51 969 |
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:
Level 1: Noted prices in active markets for corresponding assets or liabilities
Level 2: Available value measurements other than the noted prices classified as Level 1, either directly observable in the form of agreed prices or indirectly as derived from the price of equivalent.
Level 3: Value measurements of assets or liabilities that are not based on observed market values
| 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 | 16 569 | - | - | 16 569 |
| - Money market funds | 143 368 | - | - | 143 368 |
| Total | 159 937 | - | - | 159 937 |
Registered share capital in Photocure ASA amounts to:
| Nominal | Share | ||
|---|---|---|---|
| No. of | value per | capital in | |
| shares | share | NOK | |
| Share capital at 31 December 2014 | 21 393 301 | NOK 0.50 | 10 696 651 |
| Share capital at 31 December 2013 | 21 393 301 | NOK 0.50 | 10 696 651 |
| Treasury shares: | |||
| Holdings of treasury shares at 31 December 2013 | 72 976 | 36 488 | |
| Buy-back of treasury shares | - | NOK 0.50 | - |
| Share option exercise | -37 500 | NOK 0.50 | -18 750 |
| Holdings of treasury shares at 31 December 2014 | 35 476 | 17 738 |
The table below indicates the status of authorizations at 31 December 2014:
| (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 December 2014 | 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 December 2014:
| No. of | No. of subscription |
||
|---|---|---|---|
| Name | Position | shares | rights |
| Mats Pettersson | Board member | 5 000 | - |
| Kjetil Hestdal | President and CEO | 103 873 | 126 000 |
| Ambaw Bellete | Head, US Cancer Commercial Operations | - | 29 300 |
| Erik Dahl | Chief Financial Officer | - | 45 000 |
| Kathleen Deardorff | Chief Operating Officer | - | 110 295 |
| Inger Ferner Heglund | Vice President Research and Development | 8 200 | 79 430 |
| Grete Hogstad | Vice President Strategic Marketing | 10 500 | 73 450 |
| Espen Njåstein | Head, Nordic Cancer Commercial Operations | - | 34 350 |
| Gry Stensrud | Vice President Technical Development & Operations | 6 | 79 100 |
At 31 December 2014, employees in Photocure had the following share option schemes:
| Year of allocation | ||||
|---|---|---|---|---|
| 2014 | 2012/2013 | 2012 | 2011 | |
| Option programme | 2014 | 2012 | 2011 | 2010-I |
| Number | 298 000 | 306 043 | 300 444 | 248 825 |
| Exercise price (NOK) | 27,39 | 38,50 | 48,75 | 42,00 |
| Date of expiry (31 December) | 2018 | 2017 | 2016 | 2015 |
The number of employee options and average exercise prices for Photocure, and developments during the year:
| 31.12.2014 | 31.12.2013 | |||
|---|---|---|---|---|
| Average | Average | |||
| exercise price | exercise price | |||
| No. of shares | (NOK) | No. of shares | (NOK) | |
| Outstanding at start of year | 1 013 637 | 41,14 | 1 050 792 | 41,27 |
| Allocated during the year | 326 000 | 27,39 | 346 649 | 38,50 |
| Become invalid during the year | 107 575 | 38,52 | 178 525 | 42,09 |
| Exercised during the year | 37 500 | 18,30 | 205 279 | 29,01 |
| Expired during the year | 41 250 | 18,30 | - | - |
| Outstanding at end of period | 1 153 312 | 39,05 | 1 013 637 | 41,14 |
| Exercisable options at end of period | 852 631 | 41,84 | 680 175 | 40,81 |
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 December 2014:
| Account | ||||
|---|---|---|---|---|
| Shareholder | type | Citizen | No of shares | % |
| RADIUMHOSPITALETS FORSKNINGSSTIFTELSE | NOR | 3 029 000 | 14,16 % | |
| J.P. MORGAN CHASE BANK N.A. LONDON | NOM | GBR | 1 957 334 | 9,15 % |
| FONDSFINANS SPAR | NOR | 1 750 000 | 8,18 % | |
| KLP AKSJE NORGE VPF | NOR | 1 279 984 | 5,98 % | |
| KOMMUNAL LANDSPENSJONSKASSE | NOR | 940 000 | 4,39 % | |
| MP PENSJON PK | NOR | 850 000 | 3,97 % | |
| SKAGEN VEKST | NOR | 626 466 | 2,93 % | |
| BERGEN KOMMUNALE PENSJONSKASSE | NOR | 500 000 | 2,34 % | |
| VERDIPAPIRFONDET DNB SMB | NOR | 435 000 | 2,03 % | |
| 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 % | |
| VICAMA AS | NOR | 345 384 | 1,61 % | |
| FONDSFINANS FARMASI | NOR | 300 000 | 1,40 % | |
| HOLMEN SPESIALFOND | NOR | 300 000 | 1,40 % | |
| VERDIPAPIRFONDET DNB NORGE (IV) | NOR | 287 193 | 1,34 % | |
| RUL AS | NOR | 281 475 | 1,32 % | |
| POLAR CAPITAL GLOBAL HSBC BANK PLC. | GBR | 254 537 | 1,19 % | |
| ARENDALS FOSSEKOMPANI | NOR | 200 000 | 0,93 % | |
| MYNA AS | NOR | 198 000 | 0,93 % | |
| Total 20 largest shareholders | 14 724 307 | 68,83 % | ||
| Total other shareholders | 6 668 994 | 31,17 % | ||
| 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
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