Earnings Release • May 10, 2016
Earnings Release
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FIRST QUARTER REPORT 2016 PHOTOCURE GROUP
2016
(Numbers in brackets and comparisons are for the corresponding period in 2015.)
| Figures in NOK million | Q1 2016 | Q1 2015 | Change | FY 2015 |
|---|---|---|---|---|
| Sales revenues | 33.5 | 28.4 | 18 % | 122.3 |
| Signing fee & milestone revenues | 1.3 | 1.2 | 12.4 | |
| Total revenues | 34.9 | 29.6 | 18 % | 134.7 |
| Operating expenses | 36.2 | 34.2 | 6 % | 144.6 |
| EBITDA | -3.7 | -6.6 | -18.1 | |
| EBITDA commercial franchise | 5.3 | 4.5 | 19 % | 28.7 |
| EBITDA development portfolio | -9.1 | -11.1 | -46.8 | |
| EBIT (Operating result) | -4.9 | -7.2 | -22.0 | |
| Profit/loss(-) before PCI and tax | -4.4 | -7.0 | -17.4 | |
| Earnings per share, diluted (NOK) | -0.03 | -0.51 | -1.69 | |
| Cash & cash equivalents | 120.6 | 134.0 |
"Photocure has started the year with continued growth in revenues as well as improved profitability in the Hexvix/Cysview commercial franchise. The revenue increase is driven by continued positive growth in the Nordics and US. The recent recommendation of Cysview in the new bladder cancer guidelines in the US provides strong recognition of the clinical benefits of Cysview/Hexvix and is an important foundation for future growth in the US. We are also pleased that the enrollment of bladder cancer patients into our phase 3 surveillance study with Cysview in the US is progressing as planned and is on track to finish by the end of 2016.
In the first quarter of 2016 we continued to deliver financial improvement. With the increased profitability of our commercial franchise, we made significant progress towards our goal of becoming a sustainable specialty pharma company. We remain committed to securing partnerships for our two phase 3 ready development products, Cevira and Visonac."
Photocure's strategy is to create a Specialty Pharmaceutical Company maximizing its commercial presence and the opportunity of its flagship brand Hexvix/Cysview in urology. In addition, the company will continue to leverage its core competence developing products based on its proprietary Photodynamic Technology Platform targeting unmet medical needs in urology, dermatology and gynecology. We will seek to develop and commercialize new products alone or in partnerships with others to capture the full potential of our products.
The commercial segment continued to improve sales and EBITDA in the quarter. First quarter total revenue increased 18% to NOK 34.9 million (NOK 29.6 million) compared to last year, driven by improvements in sales performance for Hexvix/Cysview.
Operating expenses increased to NOK 27.2 million (NOK 23.1 million) for the quarter, reflecting continued investments in US and Hexvix/Cysview market expansion surveillance trials. EBITDA for the first quarter was NOK 5.3 million (NOK 4.5 million).
| MNOK | Q1 '16 | Q1 '15 |
|---|---|---|
| Nordic - Hexvix | 10,1 | 8,3 |
| US - Cysview | 7,6 | 4,6 |
| Partner - Hexvix | 15,8 | 13,9 |
| Hexvix / Cysview Total API revenues Signing fee & milestones Total revenues YoY growth Cost of goods sold |
33,5 0,0 1,3 34,9 18 % -2,4 |
26,7 1,7 1,2 29,6 -2,0 |
| Gross profit | 32,5 | 27,6 |
| Operating expenses | -27,2 | -23,1 |
| EBITDA | 5,3 | 4,5 |
| EBITDA margin | 15 % | 15 % |
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 strategic partnerships for the commercialization of Hexvix/Cysview in Europe, Canada, Australia and New Zealand.
Global in-market sales of Hexvix/Cysview increased 19% to NOK 60 million in the first quarter. Global in-market unit sales for the first quarter increased 7% compared to 2015. The volume growth was driven by positive market development in Nordic and US markets, and positively impacted by the reduced seasonality effects in the fourth quarter last year.
Total sales revenues for Hexvix/Cysview increased 26% to NOK 33.5 million (NOK 26.7 million) in the first quarter. Revenue growth was positively impacted by increased demand in major markets, foreign exchange rates and price increases. Revenue growth in constant currencies was 15% for the quarter.
Photocure's sales revenues from its sales force in the US and Nordic region increased 38% to NOK 17.7 million in the first quarter, reflecting strong growth in both regions. Revenue in constant currencies grew 26% for the quarter compared to first quarter 2015.
Nordic revenues increased 23% in the first quarter compared to the prior year, mainly driven by customer demand, foreign exchange rates, and price increases. Revenue in constant currencies grew 14%.
Photocure's in-market unit sales in the Nordic region increased 20% in the first quarter. The increase was driven by strong development in Sweden (growth of 32%) as well as the reduced seasonality effect in the fourth quarter 2015.
In the US, first quarter revenue increased 66% compared to first quarter the prior year. The increase was driven by volume growth, positive foreign exchange rates and price increases. In constant currency, revenue grew 49% for the quarter compared to 2015.
Unit sales in the US increased 37% in the first quarter compared to first quarter the prior year.
US growth was driven both by the number of permanent blue light cystoscopes (BLCs) installed at leading US hospitals/urology centers and by increased average usage per center. The total number of permanent BLCs installed at leading
US hospitals/urology centers at the end of the fourth quarter was 73, an increase of 8 compared to end of 2015 and 21 (40%) compared to end of first quarter 2015.
Photocure continues to work closely with key stakeholders to secure a long-term sustainable solution for Cysview Medicare reimbursement. A bill to secure coverage for US Medicare bladder patient access to state of the art treatment using up to date technology, including Cysview, was introduced in 2015 and during first quarter the bill continued to gain additional support of Congressional members and progress through the legislative process. Photocure will continue its work to obtain reimbursement for Cysview in the US.
Partner revenue increased 14% in the first quarter to NOK 15.8 million (NOK 13.9 million), positively affected by foreign exchange and increased volumes. First quarter sales included the first shipment to BioSyent Pharma in Canada. Revenue in constant currency grew 4% in the quarter.
End user unit sales increased 2% in the first quarter. It is anticipated that the first commercial sale of Cysview in Canada will take place second or third quarter 2016.
Juno Pharmaceuticals, our partner in Australia and New Zealand, is expected to obtain marketing authorization in Australia in fourth quarter 2016.
Marketing approval for Hexvix in Russia was received in 2015. Photocure is evaluating potential commercial partners in Russia.
After quarter end, a study was published in Bladder Cancer, demonstrating that Blue Light Cystoscopy (BLC) with Hexvix/Cysview significantly prolonged time to disease progression and showed a trend in the reduction of the rate of progression in patients with nonmuscle invasive bladder cancer (NMIBC).
A significant milestone and recognition of the medical benefits of Cysview was achieved in April 2016 with recommendation of blue light enabled cystoscopy with Cysview in the new AUA/SUO Guidelines for bladder cancer. In recommending the use of Cysview, the guidelines highlight the importance of Cysview in increasing the detection and decreasing the recurrence rate of non-muscle invasive bladder cancer.
Hexvix/Cysview (hexaminolevulinate hydrochloride) is an innovative breakthrough technology for the diagnosis and management of non-muscle invasive bladder cancer. It is designed to selectively target malignant cells in the bladder and induce fluorescence during a cystoscopic procedure using a blue light enabled cystoscope. Using Hexvix/Cysview as an adjunct to standard white-light cystoscopy enables the urologist to better detect and remove lesions, leading to a reduced risk of recurrence. Hexvix/Cysview is approved in Europe, US, Canada and Russia.
Bladder cancer has a high incidence, and is the fourth most common type of cancer in males in the US. An estimated 75,000 new cases of bladder cancer were diagnosed in 2014, with an estimated 15,600 people dying from the disease, according to the American Cancer Society. In Europe bladder cancer is the fifth most common cancer with an estimated 167,000 newly diagnosed cases and 59,000 deaths due to the disease in 2012 (Witjes JA et al., Eur Urol 2014). If bladder cancer is detected at an early stage, management and outcome for the patient is improved.
| Indication | Status | |
|---|---|---|
| Visonac® | Treatment of moderate to severe acne |
Phase 3 ready |
| Cevira® | Treatment of HPV associated diseases of the cervix including precancerous lesions |
Phase 3 ready |
| Hexvix® Cysview® |
Detection of bladder cancer, surveillance segment |
Phase 3 initiated |
An expansion of the use of Hexvix/Cysview into the surveillance patient segment will open a market segment estimated to be 2-3 times larger than the current segment. Hexvix/Cysview is currently used to optimize patient management through improved diagnosis and bladder cancer resection (TURB) in a surgical procedure. After patients are initially diagnosed and treated by TURB, they undergo cystoscopy examinations every 3-9 months. This surveillance is performed in the out-patient/office setting using flexible
cystoscopes to detect any suspicious new lesions requiring referral for additional TURBs.
In the fourth quarter last year, the first patient was enrolled in a 360 patient phase 3 clinical study examining bladder cancer detection rates using Cysview blue light flexible cystoscopy vs white light flexible cystoscopy. In first quarter, patient enrollment was in accordance with our plans and is on track to be completed by end of 2016 with final results expected in 2017 and possible FDA approval in 2018.
Visonac is a novel patented photodynamic treatment in late-stage development for treating moderate to severe, inflammatory acne. Visonac has been developed in combination with Photocure's innovative full face red light lamp, Nedax®. The estimated global market value of available treatments in this segment, oral antibiotics and retinoids, is USD 900 million annually. Visonac will address a large unmet medical need as a second line treatment option for patients with moderate to severe acne estimated to affect more than 2 million patients each year in the EU and US.
Research from GlobalData cites Visonac as one of the most highly anticipated introductions in the acne therapeutics market1 .
With alignment with regulatory authorities in both the US and Europe on the design and analysis of the global pivotal phase 3 registration program, Visonac is phase 3 ready.
Photocure's strategy is to establish a strategic partnership for Visonac for further development and commercialization. Discussions with companies that are leaders in dermatology continue to take place.
Visonac (methyl aminolevulinate 80mg/g) is in development for the treatment of moderate to severe acne. Acne is the single most common skin disease worldwide and affects up to 85% of all 12-24 year olds. There is a high unmet medical need for patients with moderate to severe acne, where the current mainstay of treatment is oral antibiotics and/or retinoids. By avoiding the risks of increased antibiotic resistance from long term exposure and providing a better tolerated alternative than systemic retinoids, Visonac has the potential to satisfy a high unmet medical need.
Cevira is a unique, non-invasive photodynamic therapy under development for the treatment of oncogenic human papilloma virus (HPV) infection and pre-cancerous cervical abnormalities. Cevira is the first in class of possible new medical treatments in this therapeutic area. The market opportunity for a successful product is significant. Each year in EU and the US approximately 1 million women are diagnosed with high grade lesions and an estimated 10-15 million women are diagnosed with oncogenic HPV.
Photocure has consulted key regulatory agencies in both the US and EU to agree the design and target patient population for the pivotal phase 3 registration program.
With alignment with FDA on Phase 3 clinical studies now obtained, Photocure continues to interact with FDA to finalize necessary documentation for the Cevira device to ensure readiness for the Phase 3 trial.
During the first quarter, a new patent for Cevira was issued by the European Patent Office (EPO). The newly granted patent provides protection for the Cevira drug, its use and its combination with a drug delivery device, such as the Cevira device, until 2030. This new key patent in Photocure's Cevira portfolio complements the company's two proprietary European patents which protect different aspects of the Cevira device, and which expire in 2029.
Cevira has the potential to treat HPV induced cervical high grade disease and prevent the development of cervical cancer, which globally affects more than 500,000 women annually. Photocure will continue discussions with leading companies in women's healthcare to secure a strategic partnership to support the phase 3 development and commercialization of Cevira.
1 http://healthcare.globaldata.com/media-center/pressreleases/pharmaceuticals/novel-product-launches-to-reinvigorateacne-treatment-market-by-2018-says-globaldata
(Numbers in brackets are for the corresponding period in 2015; references to the prior year refer to a comparison to the same quarter 2015, unless otherwise stated).
Photocure has continued improving its financial performance in the first quarter with double-digit growth in revenues from Hexvix/Cysview and improved operating results.
Revenues in the first quarter were NOK 34.9 million, an increase of 18% from the same quarter last year (NOK 29.6 million).
This increase was driven mainly by positive effects of currency exchange rates, continued market penetration of Hexvix/Cysview and price increases.
Total Hexvix/Cysview sales revenues for the first quarter were NOK 33.5 million, an increase of 26% from last year (NOK 26.7 million). Sales to US and Canada accounted for half of this growth. In constant currencies the revenue grew 15% for the quarter.
Total operating costs excluding depreciation and amortization were NOK 36.2 million (NOK 34.2 million) in the first quarter, an increase of 6%. The increases in operating costs were driven by changes in currency exchange rates, increased investments in US operations as well as increased activities related to expanding the use of Hexvix/Cysview into the flexible surveillance patient segment.
| MNOK | O1 '16 |
|---|---|
| Research & Development | 5,0 |
| YoY growth | $-28%$ |
| Sales & Marketing | 20,1 |
| YoY growth | 17% |
| Other Opex | 11,1 |
| YoY growth | 10% |
| Operating expenses | 36,2 |
| YoY growth | 6 % |
| Depreciation & Amort. | 1,1 |
| Total | 37,3 |
| YoY growth | 7% |
First quarter research and development (R&D) costs were NOK 5.0 million (NOK 6.9 million). The R&D costs relate to regulatory work and maintenance and expansion of our intellectual property as well as the development of the current pipeline. Expenses related to the Cysview phase 3 market expansion trial are capitalized.
Marketing and sales costs increased 17% to NOK 20.1 million (NOK 17.2 million) in the first quarter compared to same period prior year, significantly impacted by changes in currency exchange rates, particularly the USD/NOK.
EBITDA was at NOK -3.7 million for the first quarter, an improvement of 44% as compared to prior year (NOK -6.6 million). Impact from currency translation was approximately NOK 1.0 million positive for quarter.
EBITDA in the commercial segment was NOK 5.3 million for the first quarter compared to NOK 4.5 million first quarter prior year. The development portfolio had an EBITDA of NOK -9.1 million for the quarter compared to NOK -11.1 million last year.
First quarter depreciation and amortization was NOK 1.1 million (NOK 0.6 million). The increase from the prior year was driven by amortization on the investments in intangible assets related to the initiation of the phase 3 market expansion trial for Cysview.
Net financial items were NOK 0.5 million (NOK 0.3 million) in the first quarter.
Photocure's net loss before tax was NOK 4.4 million in the first quarter (net loss of NOK 7.0 million).
Photocure had at quarter end 9.96% of the shares in PCI Biotech Holding ASA. The market value of the shareholding was NOK 8.6 million at quarter end, resulting in a positive market value adjustment of NOK 2.6 million for the first quarter.
Net cash flow from operations was negative NOK 9.3 million in the first quarter (negative NOK 11.9 million). Net cash flow from investments was negative NOK 5.1 million in the first quarter (negative NOK 3.6 million). This includes investments in intangible assets of NOK 4.1 million mainly related to the phase 3 market expansion trial for Cysview.
Cash and cash equivalents were NOK 120.6 million at end of first quarter 2016. First quarter net change in cash was negative NOK 13.4 million (negative NOK 15.5 million).
Shareholders' equity was NOK 213 million at quarter end, an equity ratio of 86%. At the end of 2015, shareholders' equity was NOK 210 million (equity ratio of 85%).
As of 31 March 2016, Photocure held 809 own shares.
Photocure is exposed to risk and uncertainty factors, which may affect some or all of the company's activities. Photocure has financial risk, market risk as well as operational risk and risk related to development of new products.
The most important risks the company is exposed to for 2016 are associated with market development for Hexvix/Cysview, progress of partnering 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 2015.
Photocure expects increasing unit sales growth rates for Hexvix/Cysview through continued positive sales development of Cysview in the US, launch in new markets as well as growth in key mature markets.
Photocure has built considerable experience in the urology sector through the Hexvix/Cysview franchise. The Company will continue to expand its commercial presence in urology by furthering the Hexvix/Cysview opportunity in the bladder cancer surveillance market with finalization of the new phase 3 clinical trial. The Company expects this trial to cost USD 8.5 million in total, of which an estimated USD 3.5 million will be invested in 2016.
Operating expenses are expected to increase moderately in constant currencies due to increased sales and marketing activities supporting increased revenues and activities in the surveillance market. In 4Q 2016 Photocure is entitled to receive Euro 4 million from Galderma as the final payment related to the 2009 Metvix asset purchase agreement. Cash position is expected to remain solid throughout 2016 including committed deferred payments and milestones.
Photocure is committed to establishing strategic partnerships for its non-urology pipeline products.
The Board of Directors and CEO Photocure ASA
Oslo, 9 May 2016
Bente-Lill B Romøren Chairperson
Synne H. Røine Tom Pike
Xavier Yon Grannum R. Sant Kjetil Hestdal
President and CEO
| 2016 | 2015 | 2015 | ||
|---|---|---|---|---|
| (all amounts in NOK 1 000 except per share data) | Note | 1.1-31.03 | 1.1-31.03 | 1.1-31.12 |
| Sales revenues | 33 531 | 28 369 | 122 330 | |
| Signing fees and milestone revenues | 1 321 | 1 206 | 12 387 | |
| Total revenues | 34 852 | 29 575 | 134 717 | |
| Cost of goods sold | -2 371 | -1 986 | -8 221 | |
| Gross profit | 32 481 | 27 589 | 126 496 | |
| Indirect manufacturing expenses | 3 | -2 752 | -2 393 | -10 410 |
| Research and development expenses | 3 | -5 615 | -7 105 | -31 337 |
| Marketing and sales expenses | 3 | -20 146 | -17 186 | -73 399 |
| Other operating expenses | 3 | -8 836 | -8 112 | -33 336 |
| Total operating expenses | -37 349 | -34 795 | -148 482 | |
| EBIT | -4 868 | -7 206 | -21 986 | |
| Financial income | 1 282 | 2 529 | 8 856 | |
| Financial expenses | -768 | -2 274 | -4 304 | |
| Net financial profit/loss(-) excluding PCI shares | 515 | 255 | 4 552 | |
| Profit/loss(-) before PCI and tax | -4 353 | -6 951 | -17 434 | |
| Impairment loss shares in PCI Biotech Holding | - | - | -10 636 | |
| Profit/loss(-) before tax | -4 353 | -6 951 | -28 070 | |
| Tax expenses | 4 | 3 647 | -4 000 | -8 108 |
| Net profit/loss(-) | -706 | -10 951 | -36 178 | |
| Other comprehensive income | 5 | 2 373 | 2 860 | 865 |
| Total comprehensive income | 1 667 | -8 091 | -35 313 | |
| Net profit/loss(-) per share, undiluted | 6 | -0,03 | -0,51 | -1,69 |
| Net profit/loss(-) per share, diluted | 6 | -0,03 | -0,51 | -1,69 |
| (Amounts in NOK 1 000) | Note | 31.03.2016 | 31.03.2015 | 31.12.2015 |
|---|---|---|---|---|
| Non-currrent assets | ||||
| Machinery & equipment | 7 | 1 980 | 2 977 | 2 289 |
| Intangible assets | 7 | 16 926 | 5 094 | 11 877 |
| Other investments | 8, 9 | 8 574 | 45 290 | 5 933 |
| Deferred tax asset | 4 | 27 137 | 27 063 | 23 490 |
| Total non-current assets | 54 617 | 80 424 | 43 589 | |
| Current assets | ||||
| Inventories | 17 620 | 13 331 | 13 800 | |
| Accounts receivable | 9 866 | 7 616 | 12 259 | |
| Other receivables | 10 | 46 759 | 9 094 | 44 384 |
| Cash and short term deposits | 8 | 120 622 | 149 737 | 134 026 |
| Total current assets | 194 867 | 179 777 | 204 469 | |
| Total assets | 249 484 | 260 201 | 248 058 | |
| Equity and liabilities | ||||
| Equity | ||||
| Share capital | 11 | 10 738 | 10 697 | 10 738 |
| Other paid-in capital | 49 805 | 38 694 | 43 073 | |
| Retained earnings | 152 968 | 183 643 | 156 249 | |
| Shareholders' equity | 213 511 | 233 034 | 210 060 | |
| Long-term liabilities | ||||
| Pension liabilities | 4 216 | 3 261 | 3 960 | |
| Total long-term liabilities | 4 216 | 3 261 | 3 960 | |
| Current liabilities | 31 757 | 23 906 | 34 038 | |
| Total liabilities | 35 973 | 27 167 | 37 998 | |
| Total equity and liabilities | 249 484 | 260 201 | 248 058 |
| 2016 | 2015 | 2015 | |
|---|---|---|---|
| (Amounts in NOK 1 000) | 1.1-31.03 | 1.1-31.03 | 1.1-31.12 |
| Equity at beginning of period | 210 060 | 240 058 | 240 058 |
| Capital increase | 2 415 | ||
| Share-based compensation (share options employees) | 800 | 1 066 | 2 899 |
| Treasury shares decrease | 984 | - | |
| Comprehensive income | 1 667 | -8 091 | -35 313 |
| Equity at end of period | 213 511 | 233 034 | 210 060 |
| 2016 | 2015 | 2015 | |
|---|---|---|---|
| (Amounts in NOK 1 000) | 1.1-31.03 | 1.1-31.03 | 1.1-31.12 |
| Profit/loss(-) before tax | -4 353 | -6 951 | -28 070 |
| Depreciation and amortisation | 1 148 | 591 | 3 899 |
| Gain sale of financial asets | - | -1 342 | -1 342 |
| Impairment loss shares | - | - | 10 636 |
| Share-based compensation | 800 | 1 066 | 2 899 |
| Net interest income | -771 | -590 | -986 |
| Changes in working capital | -5 219 | -4 775 | -2 250 |
| Other operational items | -867 | 104 | -5 819 |
| Net cash flow from operations | -9 263 | -11 897 | -21 033 |
| Investments in fixed assets | -1 759 | -236 | -520 |
| Development expenditures | -4 137 | -5 308 | -14 410 |
| Received financial payments | 771 | 1 932 | 2 328 |
| Cash flow from investments | -5 126 | -3 612 | -12 602 |
| Cash flow from financing activities | 984 | - | 2 415 |
| Net change in cash during the period | -13 404 | -15 509 | -31 221 |
| Cash & cash equivalents at beginning of period | 134 026 | 165 246 | 165 246 |
| Cash & cash equivalents at end of period | 120 622 | 149 737 | 134 026 |
Photocure ASA is a public limited company domiciled in Norway. The business of the Company 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 2015 (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 9 May 2016.
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 2016 did not have any significant impact on the reporting in 2016. 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.
Photocure has two segments; Commercial Franchise and Development Portfolio. Commercial Franchise includes Hexvix/Cysview by sales channel, own sales and partner sales, and other sales, currently including sale of active ingredients. Development Portfolio includes development of commercial products and pipeline products.
| 1 Jan - 31 March 2016 | Commercial Products | Development products | ||||||
|---|---|---|---|---|---|---|---|---|
| Hex/Cys | Hex/Cys | Other | Total | Hex/Cys | Total | Grand | ||
| (Amounts in NOK 1 000) | Own sales | Partner | Sales | Sales | Develop. | Pipeline | R&D | Total |
| Sales Revenues | 17 725 | 15 806 | - | 33 531 | - | - | - | 33 531 |
| Milestone revenues | - | - | 1 320 | 1 320 | - | - | - | 1 320 |
| Cost of goods sold | -648 | -1 722 | - | -2 371 | - | - | - | -2 371 |
| Gross profit | 17 077 | 14 084 | 1 320 | 32 481 | - | - | - | 32 481 |
| Gross profit of sales % | 96 % | 89 % | 93 % | 93 % | ||||
| R&D | - | - | - | - | -822 | -4 148 | -4 970 | -4 970 |
| Sales & marketing | -17 365 | -1 889 | - | -19 254 | - | -828 | -828 | -20 082 |
| Other & allocations | -3 013 | -4 726 | -159 | -7 897 | -827 | -2 426 | -3 253 | -11 150 |
| Operating expenses | -20 378 | -6 615 | -159 | -27 151 | -1 649 | -7 402 | -9 050 | -36 202 |
| EBITDA | -3 301 | 7 469 | 1 162 | 5 330 | -1 649 | -7 402 | -9 050 | -3 721 |
| 1 Jan - 31 March 2015 | Commercial Franchise | Development Portfolio | ||||||
|---|---|---|---|---|---|---|---|---|
| Hex/Cys | Hex/Cys | Other | Total | Hex/Cys | Total | Grand | ||
| (Amounts in NOK 1 000) | Own sales | Partner | Sales | Sales | Develop. | Pipeline | R&D | Total |
| Sales Revenues | 12 836 | 13 853 | 1 680 | 28 369 | - | - | - | 28 369 |
| Milestone revenues | - | - | 1 206 | 1 206 | - | - | - | 1 206 |
| Cost of goods sold | -565 | -1 420 | - | -1 985 | - | - | - | -1 985 |
| Gross profit | 12 272 | 12 433 | 2 886 | 27 590 | - | - | - | 27 590 |
| Gross profit of sales % | 96 % | 90 % | 100 % | 93 % | 93 % | |||
| R&D | - | - | - | - | -1 481 | -5 465 | -6 946 | -6 946 |
| Sales & marketing | -14 388 | -2 127 | - | -16 515 | - | -639 | -639 | -17 154 |
| Other & allocations | -2 715 | -3 725 | -145 | -6 585 | -732 | -2 785 | -3 517 | -10 102 |
| Operating expenses | -17 103 | -5 852 | -145 | -23 101 | -2 213 | -8 889 | -11 102 | -34 202 |
| EBITDA | -4 832 | 6 581 | 2 740 | 4 490 | -2 213 | -8 889 | -11 102 | -6 612 |
| 1 Jan - 31 December 2015 | Commercial Franchise | Development Portfolio | ||||||
|---|---|---|---|---|---|---|---|---|
| Hex/Cys | Hex/Cys | Other | Total | Hex/Cys | Total | Grand | ||
| (Amounts in NOK 1 000) | Own sales | Partner | Sales | Sales | Develop. | Pipeline | R&D | Total |
| Sales Revenues | 61 684 | 54 101 | 6 545 | 122 329 | - | - | - | 122 329 |
| Milestone revenues | - | 7 450 | 4 939 | 12 388 | - | - | - | 12 388 |
| Cost of goods sold | -2 483 | -5 738 | - | -8 221 | - | - | - | -8 221 |
| Gross profit | 59 201 | 55 812 | 11 484 | 126 497 | - | - | - | 126 497 |
| Gross profit of sales % | 96 % | 89 % | 100 % | 93 % | 93 % | |||
| R&D | - | - | - | - | -4 709 | -24 849 | -29 558 | -29 558 |
| Sales & marketing | -61 568 | -8 684 | - | -70 252 | - | -3 021 | -3 021 | -73 273 |
| Other & allocations | -11 169 | -15 769 | -602 | -27 541 | -3 069 | -11 134 | -14 203 | -41 744 |
| Operating expenses | -72 737 | -24 453 | -602 | -97 793 | -7 778 | -39 004 | -46 782 | -144 575 |
| EBITDA | -13 536 | 31 359 | 10 881 | 28 704 | -7 778 | -39 004 | -46 782 | -18 078 |
| 2016 | 2015 | 2015 | |
|---|---|---|---|
| (Amounts in NOK 1 000) | Q1 | Q1 | 1.1-31.12 |
| Sales revenues | 33 531 | 28 369 | 122 330 |
| Signing fees and milestone revenues | 1 321 | 1 206 | 12 387 |
| Cost of goods sold | -2 371 | -1 986 | -8 221 |
| Gross profit | 32 481 | 27 589 | 126 496 |
| Payroll expenses | -22 100 | -21 250 | -80 358 |
| R&D costs excl. payroll expenses/other operating exp. | -2 229 | -3 244 | -15 117 |
| Ordinary depreciation and amortisation | -1 148 | -595 | -3 899 |
| Other operating expenses | -11 872 | -9 707 | -49 108 |
| Total operating expenses | -37 349 | -34 795 | -148 482 |
| EBIT | -4 868 | -7 206 | -21 986 |
| (Amounts in NOK 1 000) | 31.03.2016 | 31.12.2015 |
|---|---|---|
| Income tax expense | ||
| Tax payable | 535 | |
| Changes in deferred tax | -3 647 | 7 573 |
| Total income tax expense | -3 647 | 8 108 |
| Tax base calculation | ||
| Profit before income tax | -4 353 | -28 070 |
| Permanent differences | 500 | 13 390 |
| Temporary differences | 16 334 | -11 150 |
| Utilisation of tax loss carried forward | -1 754 | -9 294 |
| Change in tax loss carried forward | -10 727 | 35 124 |
| Tax base | 0 | 0 |
| Temporary differences: | ||
| Total | -121 765 | -137 885 |
| Tax loss carried forward | 428 129 | 438 793 |
| Net temporary differences | 306 364 | 300 908 |
| Write down of deferred tax benefit | -197 818 | -206 948 |
| Deferred tax benefit | 108 546 | 93 960 |
| Deferred tax asset | 27 137 | 23 490 |
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 had a profit before tax year to date March 31, 2016 of NOK 1.8 million compared to NOK 9.0 million same period in 2015. Photocure has in 2015 changed the transfer price method in the Group from a resale method to a profit/loss split method for the business in US. The taxable profit in the parent company is related to changes in temporary differences. The deferred tax asset is in 2016 increased by NOK 3.6 million to NOK 27.1 million. The basis for the recognition is the assessment that it is more-likely-than-not that the deferred tax benefit will be utilized. There is no expiry on losses to be carried forward in Norway while it expires after 20 years in US.
| 2016 | 2015 | 2015 | |
|---|---|---|---|
| (Amounts in NOK 1 000) | Q1 | Q1 | 1.1-31.12 |
| Market value adjustment PCI Biotech Holding ASA | 2 640 | 2 715 | 0 |
| Currency translation | -267 | 146 | 865 |
| Total other comprehensive income | 2 373 | 2 860 | 865 |
Items may be subsequently reclassified to profit or loss.
Earnings per share are calculated based on the profit/loss for the year after tax but excluding other comprehensive items. The result is divided by a 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.
| 2016 | 2015 | |
|---|---|---|
| (Figures indicate the number of shares) | 1.1-31.03 | 1.1-31.12 |
| Issued ordinary shares 1 January | 21 476 295 | 21 393 301 |
| Effect of treasury shares | -809 | -35 476 |
| Effect of share options exercised | -20 191 | -49 639 |
| Effect of shares issued | - | 82 994 |
| Weighted average number of shares | 21 455 295 | 21 391 180 |
| Effect of outstanding share options | 78 176 | 83 495 |
| Weighted average number of diluted shares | 21 533 471 | 21 474 675 |
| Earnings per share in NOK | -0,03 | -1,69 |
| Earnings per share in NOK diluted | -0,03 | -1,69 |
| Machinery & | ||
|---|---|---|
| (Amounts in NOK 1 000) | equipment | Intangible |
| Net book value 31.12.15 | 2 289 | 11 877 |
| Net investments 31.03.16 | -7 | 5 895 |
| Depreciation and amortization | -301 | -847 |
| Net book value 31.03.16 | 1 980 | 16 926 |
Photocure has from 2015 capitalized a new clinical study for Cysview in US and a project for new solvent device.
| (Amounts in NOK 1 000) | 31.03.2016 | 31.12.2015 |
|---|---|---|
| Market value PCI Biotech Holding ASA | 8 574 | 5 933 |
| Total other investments | 8 574 | 5 933 |
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 | 8 574 | - | - | 8 574 |
| - Money market funds | 100 084 | - | - | 100 084 |
| Total | 108 657 | - | - | 108 657 |
| (Amounts in NOK 1 000) | 31.03.2016 | 31.12.2015 |
|---|---|---|
| Booked part of remaining settlement from sale of Metvix/Aktilite | 33 774 | 32 805 |
| Prepayments and other receivables | 12 985 | 11 579 |
| Total other receivables | 46 759 | 44 384 |
Registered share capital in Photocure ASA amounts to:
| No. of shares |
Nominal value per share |
Share capital in NOK |
|
|---|---|---|---|
| Share capital at 31 December 2015 Share capital at 31 March 2016 |
21 476 295 21 476 295 |
NOK 0.50 NOK 0.50 |
10 738 148 10 738 148 |
| Treasury shares: Holdings of treasury shares at 31 December 2015 |
35 476 | 17 738 | |
| Buy-back of treasury shares | - | NOK 0.50 | - |
| Share option exercise | -34 667 | NOK 0.50 | -17 334 |
| Holdings of treasury shares at 31 March 2016 | 809 | 405 |
The table below indicates the status of authorizations at 31 March 2016:
| (Figures indicate the number of shares) | Purchase, treasury shares |
Ordinary share issue |
Employee share issues |
|---|---|---|---|
| Authorisation issued at the General Meeting on 30 April 2015 | 2 139 330 | 2 139 330 | 800 000 |
| Share issues after the General Meeting on 30 April 2015 | - | - | 82 994 |
| Purchase of treasury shares | - | - | - |
| Remaining under authorisations at 31 March 2016 | 2 139 330 | 2 139 330 | 717 006 |
Shares owned, directly or indirectly, by members of the board, the President and CEO and senior management and their closely related associates as of 31 March 2016:
| No. of | |||
|---|---|---|---|
| No. of | subscription | ||
| Name | Position | shares | rights |
| Kjetil Hestdal | President and CEO | 103 873 | 116 000 |
| Ambaw Bellete | Head, US Cancer Commercial Operations | - | 54 100 |
| Erik Dahl | Chief Financial Officer | - | 69 000 |
| Kathleen Deardorff | Chief Operating Officer | - | 135 095 |
| Inger Ferner Heglund | Vice President Research and Development | 8 200 | 82 280 |
| Grete Hogstad | Vice President Strategic Marketing | 10 500 | 74 050 |
| Espen Njåstein | Head, Nordic Cancer Commercial Operations | - | 57 650 |
| Gry Stensrud | Vice President Technical Development & Operations | 1 845 | 70 050 |
| Tom Pike | Board member | 3 400 | - |
At 31 March 2016, employees in Photocure had the following share option schemes:
| Year of allocation | ||||
|---|---|---|---|---|
| 2015 | 2014 | 2012/2013 | 2012 | |
| Option programme | 2015 | 2014 | 2012 | 2011 |
| Number | 344 870 | 183 002 | 260 743 | 253 794 |
| Exercise price (NOK) | 32,78 | 27,39 | 38,50 | 48,75 |
| Date of expiry (31 December) | 2019 | 2018 | 2017 | 2016 |
| Q1 2016 | 2015 | ||||
|---|---|---|---|---|---|
| Average | Average | ||||
| No. of | exercise | No. of | exercise | ||
| shares | price (NOK) | shares | price (NOK) | ||
| Outstanding at start of year | 1 119 543 | 37,00 | 1 153 312 | 39,05 | |
| Allocated during the year | - | - | 407 700 | 32,78 | |
| Become invalid during the year | 42 467 | 40,40 | 129 725 | 38,66 | |
| Exercised during the year | 34 667 | 28,37 | 86 994 | 29,02 | |
| Expired during the year | - | - | 224 750 | 42,00 | |
| Outstanding at end of period | 1 042 409 | 37,15 | 1 119 543 | 37,00 | |
| Exercisable options at end of period | 927 452 | 37,69 | 768 728 | 39,57 |
The number of employee options and average exercise prices for Photocure, and developments during the year:
Average exercise price for allocated, invalid, outstanding and exercisable options are all adjusted for paid dividend of NOK 2.00 in 2013.
Overview of the major shareholders at 31 March 2016:
| Account | No of | |||
|---|---|---|---|---|
| Shareholder | type | Citizen | shares | % |
| J.P. MORGAN CHASE BANK N.A. LONDON | NOM | GBR | 3 151 024 | 14,67 % |
| HIGH SEAS AS | NOR | 1 575 000 | 7,33 % | |
| RADIUMHOSPITALETS FORSKNINGSSTIFTELSE | NOR | 1 429 000 | 6,65 % | |
| KLP AKSJE NORGE VPF | NOR | 1 279 984 | 5,96 % | |
| FONDSFINANS NORGE | NOR | 905 000 | 4,21 % | |
| KOMMUNAL LANDSPENSJONSKASSE | NOR | 900 000 | 4,19 % | |
| MP PENSJON PK | NOR | 823 000 | 3,83 % | |
| SKAGEN VEKST | NOR | 626 466 | 2,92 % | |
| DANSKE INVEST NORSKE INSTIT. II. | NOR | 418 103 | 1,95 % | |
| VERDIPAPIRFONDET EIKA NORGE | NOR | 406 517 | 1,89 % | |
| FONDSFINANS GLOBAL HELSE | NOR | 380 000 | 1,77 % | |
| BERGEN KOMMUNALE PENSJONSKASSE | NOR | 370 000 | 1,72 % | |
| DANSKE INVEST NORSKE AKSJER INST | NOR | 358 314 | 1,67 % | |
| VICAMA AS | NOR | 345 384 | 1,61 % | |
| RUL AS | NOR | 281 475 | 1,31 % | |
| EUROCLEAR BANK S.A./N.V. | NOM | BEL | 273 832 | 1,28 % |
| POLAR CAPITAL GLOBAL HEATHCARE GROWTH | GBR | 254 537 | 1,19 % | |
| VERDIPAPIRFONDET DNB NORGE (IV) | NOR | 248 088 | 1,16 % | |
| HOLMEN SPESIALFOND | NOR | 200 000 | 0,93 % | |
| VERDIPAPIRFONDET DNB SMB | NOR | 197 992 | 0,92 % | |
| Total 20 largest shareholders | 14 423 716 | 67,16 % | ||
| Total other shareholders | 7 052 579 | 32,84 % | ||
| Total number of shares | 21 476 295 | 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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