PHOTOCURE ASA BUILDING A SPECIALTY PHARMA COMPANY
RESULTS FOR FIRST QUARTER 2016
10 MAY 2016
Kjetil Hestdal, MD, President & CEO Erik Dahl, CFO
DISCLAIMER
The information included in this Presentation contains certain forward-looking statements that address activities, events or developments that Photocure ASA ("the Company") expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties. The Company is subject to a large number of risk factors including but not limited to economic and market conditions in the geographic areas and markets where Photocure is or will be operating, IP risks, clinical development risks, regulatory risks, fluctuations in currency exchange rates, and changes in governmental regulations. For a further description of other relevant risk factors we refer to Photocure's Annual Report for 2015. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in this information given above about current status of the Company or its business. Any reliance on the information above is at the risk of the reader, and Photocure disclaims any and all liability in this respect.
DELIVERING ON KEY OBJECTIVES
• Increase Hexvix/Cysview global in-market unit sales growth rate
KEY OBJECTIVES 1Q2016 KEY ACHIEVEMENTS
- Hexvix/Cysview global in-market volume increased YoY 7%, with 25% volume growth in own markets
- Hexvix/Cysview in-market value increased YoY 19%
- BLC with Cysview recommended in new American Urology Association bladder cancer guidelines
- Finalize recruitment and reporting of clinical results of Hexvix/Cysview phase 3 market expansion study in 2017
- Secure Partnership for further development and commercialization of Visonac and Cevira reflecting the product potential
• Patient enrollment according to plan
• Discussions ongoing with potential partners
Commercial Franchise financial performance (EBITDA) improved 19% to 5.3 MNOK in 1Q2016
Commercial Update
HEXVIX/CYSVIEW A SIGNIFICANT GLOBAL SPECIALTY BRAND
- Value of in-market sales of Hexvix/Cysview in the first quarter increased YoY 19% to NOK 60 million
- Hexvix/Cysview global in-market volume increased YoY 7% in the first quarter
- Overall franchise EBITDA for the first quarter at NOK 5.3 million, improvement of 19% from first quarter prior year
Global in-market unit sales (by Q)
Global in-market value NOK mill (LTM)
HEXVIX/CYSVIEW CONTINUED VALIDATION OF CLINICAL BENEFITS
- Use of Blue Light Cystoscopy with Cysview/Hexvix recommended in the new AUA/SUO bladder cancer guideline
- Recommended based on the large body of evidence supporting both increased detection and reduced recurrence of non-muscle invasive bladder cancer
- New publication in Bladder Cancer shows Cysview/Hexvix significantly prolongs time to progression of bladder cancer
- Publication at European Association of Urology on "real life experience" with Hexvix/Cysview confirms the clinical benefits in routine clinical practice
HEXVIX/CYSVIEW SOLID PERFORMANCE IN NORDICS AND USA
- Photocure own sales revenue in the US and Nordics increased YoY 38% in 1Q to NOK 17.7 million
- US revenue increased YoY 66% in the quarter
- Driven by YoY in-market volume growth of 37%, price increases and FX
- Permanent Blue Light Cystoscope placements of 73 at the end of 1Q (2015 year end 65)
- Continued progress on passage of bill to provide separate payment to hospitals
- Nordic revenue increased YoY 23% in the quarter
- In-market volume growth of 20%, partly due to changed seasonality pattern
- Continued double digit in-market volume growth in Sweden, first quarter 32% growth 7
Own Hexvix/Cysview in-market unit sales Nordic and US
HEXVIX/CYSVIEW PARTNER PROGRESS
- Partner revenue increased 14% in 1Q to NOK 15.8 million
- First quarter sales included the first shipment to BioSyent Pharma in Canada
- End user YoY volume growth 2% in 1Q
- Strong visibility for Hexvix at European Association of Urology congress
- New territories & partners
- BioSyent Pharma in Canada
- Expect commercial sales 2Q/3Q 2016
- Juno Pharmaceuticals in Australia and New Zealand
- Expect MAA approval in Australia 2H 2016
- Russia: Marketing approval received
Hexvix Partner Unit Sales Per Quarter
Pipeline Update
HEXVIX/CYSVIEW EXPANDING INTO THE SURVEILLANCE SEGMENT
- Surveillance following initial diagnosis represents a significant growth opportunity of 2-3 times current TURB segment
- Patient enrollment in Hexvix/Cysview Phase 3 market expansion progressing according to plan
- Study including 360 patients 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 & VISONAC PHASE 3 READY PRODUCTS WITH SIGNIFICANT SALES POTENTIAL
- Cevira Breakthrough single use and fully integrated drug-device technology to satisfy high need for novel non-surgical therapies to treat global epidemic of HPV/HSIL populations
- Visonac Novel topical non-antibiotic/non-isotretinoin treatment to satisfy high unmet medical need among patients with inflammatory, severe acne (IGA 4)
- Cevira and Visonac both phase 3 ready with Special Protocol Agreement on phase 3 program with FDA
- Cevira and Visonac both addressing large patient populations with significant unmet medical needs
- Cevira with blockbuster sales potential based on premium pricing opportunity in large patients populations
- Cevira and Visonac have granted patents with extensive patent life and additional patent applications can provide additional extension
- Continued interest from potential partners for development and commercialization
Financials
SEGMENTS FIRST QUARTER 2016
- Commercial franchise:
- Continued revenue growth for Hexvix/Cysview, First quarter growth 26% YoY (in constant currencies: 15%)
- Main growth drivers own sales in US (+66%) and Nordic (+23%)
- Increased operating expenses driven by sales & marketing in US and trials to support surveillance market
- EBITDA increased 19%, margin at 15%
- Development portfolio:
- Activities related to regulatory work and intellectual property
- Cysview post marketing commitment phase 3 capitalized
| MNOK |
Q1 '16 |
Q1 '15 |
Change |
| Commercial Franchise |
|
|
|
| Nordic revenues |
10,1 |
8,3 |
23 % |
| US revenues |
7,6 |
4,6 |
66 % |
| Partner revenues |
15,8 |
13,9 |
14 % |
| Hexvix / Cysview |
33,5 |
26,7 |
26 % |
| API revenues |
0,0 |
1,7 |
-100 % |
| Signing fee & milestones |
1,3 |
1,2 |
10 % |
| Total revenues |
34,9 |
29,6 |
18 % |
| Gross profit |
32,5 |
27,6 |
18 % |
| Operating expenses |
-27,2 |
-23,1 |
18 % |
| EBITDA |
5,3 |
4,5 |
19 % |
| Development Portfolio |
|
|
|
| Operating expenses |
-9,1 |
-11,1 |
-18 % |
| EBITDA |
-9,1 |
-11,1 |
-18 % |
| Total |
|
|
|
| EBITDA |
-3,7 |
-6,6 |
-44 % |
|
|
|
|
PROFIT & LOSS FIRST QUARTER 2016
- Total revenue increase YoY 18% in first quarter
- Sales revenue negatively impacted by reduced sales of API
- Operating expenses increase YoY 6% in first quarter
- Sales & marketing increased 17%
- R&D reduced 28%
- EBITDA at NOK -3,7 million for first quarter
- EBITDA improvement from 2015 of 44%
- EBIT impacted by amortization of phase 3 Cysview
- Tax expenses are non cash, tax asset
| MNOK |
Q1 '16 |
Q1 '15 |
Change |
| Total sales revenues |
33,5 |
28,4 |
18 % |
| Signing fee and milestones |
1,3 |
1,2 |
10 % |
| Total revenues |
34,9 |
29,6 |
18 % |
| Gross profit |
32,5 |
27,6 |
18 % |
| Operating expenses |
-36,2 |
-34,2 |
6 % |
| EBITDA |
-3,7 |
-6,6 |
-44 % |
| Depreciation & Amortization |
-1,1 |
-0,6 |
93 % |
| EBIT |
-4,9 |
-7,2 |
-32 % |
| Net financial items excl PCI |
0,5 |
0,3 |
>100% |
| Profit/loss(-) before tax |
-4,4 |
-7,0 |
|
| Tax expenses |
3,6 |
-4,0 |
|
| Net profit/loss(-) |
-0,7 |
-11,0 |
-94 % |
| Other comprehensive income |
2,4 |
2,9 |
-17 % |
| Total comprehensive income |
1,7 |
-8,1 |
|
| Net result per share, diluted |
-0,03 |
-0,51 |
|
CASH FLOW FIRST QUARTER 2016
| MNOK |
Q1 '16 |
Q1 '15 |
Change |
| Cash flow from: |
|
|
|
| - Operations |
-9,3 |
-11,9 |
-22 % |
| - Investments |
-5,1 |
-3,6 |
42 % |
| - Financing |
1,0 |
0,0 |
|
| Net change in cash |
-13,4 |
-15,5 |
-14 % |
| Ending cash balance |
120,6 |
149,7 |
-19 % |
- First quarter cash flow from operations NOK -9.3 million, reduction of 22% from 2015
- Change in working capital NOK -5.2 million, last year NOK -4,8 million
- First quarter cash flow from investments NOK -5.1 million.
- Includes investments of NOK 4.1 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 120.6 million 15
BALANCE SHEET PER 31 MARCH 2016
- Non current assets include investments in tangible and intangible assets, NOK 8.6 million in shares in PCI Biotech and deferred tax asset of NOK 27.1 million
- Current assets include NOK 33.8 million in remaining settlement sale of Metvix, due 31.12.2016
- No interest bearing debt
- Shareholder's equity of NOK 213.5 million. Equity ratio of 86%
- Photocure held 809 own shares at end of 1Q
| 31.03 |
31.12 |
| 2016 |
2015 |
|
43,6 |
|
70,4 |
|
134,0 |
| 249,5 |
248,1 |
|
|
| 213,5 |
210,1 |
| 4,2 |
4,0 |
| 31,8 |
34,0 |
| 249,5 |
248,1 |
|
85 % |
|
54,6
74,2
120,6
86 % |
Outlook
DELIVERING ON KEY OBJECTIVES
• Increase Hexvix/Cysview global in-market unit sales growth rate
KEY OBJECTIVES 1Q2016 KEY ACHIEVEMENTS
- Hexvix/Cysview global in-market volume increased YoY 7%, with 25% volume growth in own markets
- Hexvix/Cysview in-market value increased YoY 19%
- BLC with Cysview recommended in new American Urology Association bladder cancer guidelines in April
- Finalize recruitment and reporting of clinical results of Hexvix/Cysview phase 3 market expansion study in 2017
- Secure Partnership for further development and commercialization of Visonac and Cevira reflecting the product potential
• Patient enrollment according to plan
• Discussions ongoing with potential partners
Commercial Franchise financial performance (EBITDA) improved 19% to 5.3 MNOK in 1Q2016